Mariano's a step closer to coming to former Lombard Kmart site
The Glenbard High School District 87 school board has agreed to ink a decadelong agreement that will award financial incentives to developers of a proposed Mariano's grocery store in Lombard.
Three other taxing bodies are set to vote this week on the pact with Bradford Real Estate, a Chicago firm planning to purchase and redevelop a site containing the long-vacant Kmart store at the southeast corner of Roosevelt and Finley roads.
Without the public investment, the project — estimated to cost $25.5 million — would not be economically feasible, financial consultants have told the village.
As the property owner, Bradford would demolish the Kmart and make other improvements to the blighted lot in preparation for its tenant, Mariano's, to build a roughly 74,000-square-foot store.
If Lombard trustees approve the deal Thursday night, the village would contribute the largest share — about $3.8 million over 19 years — of the incentive package.
The village would not provide the money upfront but instead rebate a portion of the property, sales, and food and beverage taxes generated by the Mariano's.
The Lombard Elementary District 44 school board also will decide Thursday morning whether to rebate $720,000 in property taxes over the next decade.
It's still unclear whether the Lombard Park District commissioners will get on board during their meeting Tuesday night.
They are considering rebating a total of $76,000 in property taxes, or roughly 1 percent of the overall package.
“I believe that the deal will work without the park district,” Lombard Village Manager Scott Niehaus said.
In a 6-0 vote Monday night, the Glenbard District 87 school board approved an agreement with Bradford Lombard 1, LLC that is substantially complete “subject to such minor modifications” recommended by attorneys. Niehaus said those tweaks likely would be finalized Tuesday.
“There won't be any substantial changes, especially as it relates to the school districts,” said Chris McClain, Glenbard's assistant superintendent of finance and operations.
Board members made few comments, but McClain called the deal “a very creative approach from the village.”
The incentives operate like a tax increment financing district, but don't “hamstring” taxing bodies for as long, Niehaus has said.
In a TIF district, as redevelopment boosts property values, the extra tax revenue that otherwise would go to taxing bodies is used to pay for improvements to the area for up to 23 years.
For District 87, the site generated about $55,039 in property taxes paid this year.
Under the agreement, the district will still receive that amount, and any additional property taxes from the redevelopment of the site will be split 50/50 with developers for a decade, the maximum time frame allowed under state law.
Based on a village analysis, the district could stand to collect roughly $421,000 in additional property taxes during the life of the agreement.
After the 10 years, the district would keep its full share of property taxes generated by the site.
The incentives would reimburse Bradford costs associated with tearing down the Kmart store — empty since early 2013 — acquiring the property and parking lot improvements, among other expenses.
Bradford has entered into a contract to buy the prominent site and expects to finalize the purchase by July 5, Niehaus told the Glenbard board.
Construction could begin this fall. Building the Mariano's store would take a year to 18 months.