Lombard trustees approve Mariano's incentive agreement

Construction work on a new Mariano's grocery store in Lombard is expected to move quickly, now that final approvals are complete on a $3 million economic incentive agreement that helped bring the business to town.

Lombard trustees unanimously approved the incentive agreement Thursday to assist the developer, Bradford Real Estate, with acquiring the property on the southeast corner of Roosevelt and Finley roads and demolishing the former Kmart store — which has stood vacant on the land since 2013 — to make way for the new 74,000-square-foot Mariano's.

The developer said the agreement would also help with site re-engineering, utility improvements and construction costs for the $25.5 million project.

The closing date on the property is scheduled for July 5, and site razing is expected to move quickly so Bradford can hand it over to Mariano's for construction, which is expected to take 12 to 18 months.

Bill Johnston, who serves as chairman of the economic and community development committee, thanked the city staff for crafting the agreement, noting that it makes the village competitive with surrounding areas when trying to draw in new businesses.

“The Kmart site was a troubled site that needed a big, strong business to go in there and we've got one,” he said.

Village Manager Scott Niehaus said the village relies on a third party consultant to look at such requests and make sure they are “not beyond what the village should be doing to overly enrich the developer.”

“In this case the developer did start off asking for more money and then we negotiated down to $3 million,” he said.

The incentive agreement affects the village and two other government taxing bodies: Glenbard High School District 87 and Lombard Elementary District 44, both of which approved of an intergovernmental agreement allowing for the incentive earlier this week.

The Lombard Park District issued a statement Wednesday stating that a park district attorney and a review of the Illinois Park District Code determined it did not have “statutory authority” to authorize the intergovernmental agreement.

Under the agreement, Bradford Real Estate will receive reimbursements from future sales tax rebates.

“This site is what's supporting the incentive, not other taxes from the village,” Niehaus said, adding that the incentive is entirely “performance based.”

The village will retain the first 20 percent of sales tax generated from goods sold at the store when it opens.

The remaining sales tax will be divided equally between the village and Bradford for 19 years, or until the $3 million is met.

It will be the same situation for the school districts, although the length for them is only 10 years.

In addition, as part of the agreement, the village will complete roadway improvements along Finley and Roosevelt roads and install a new traffic signal on Roosevelt Road, on the far eastern end of the property.

Niehaus said the store is expected to generate a total of $37.5 million in sales annually.

In the end, it will benefit all the taxing districts by providing them with a total of approximately $12.5 million in new combined property and sales tax over the life of the agreement.

“We seek to provide these kinds of agreements so that the village can have both permanent and temporary construction jobs,” he said. “We like to improve our commercial sector such as Roosevelt Road. We also see this project as a potential catalyst (for future developments).”