Glen Ellyn OKs tax incentive to bring Pete's to former Dominick's site
Randy Horn's toy shop in a Glen Ellyn shopping center has managed to survive in the four years since Dominick's closed as the anchor tenant.
He's watched businesses come and go as sales at his Learning Express store dropped.
But he and other business owners now are expressing optimism with the anticipated opening of Pete's Fresh Market — another grocer that can drive traffic to their storefronts in the Baker Hill shopping center just northeast of Roosevelt Road and Route 53.
They also are eager for a major revitalization of the center. The multiyear project took a key step forward this week when village trustees awarded an economic incentive to Phillips Edison & Co., the real estate company that has owned Baker Hill since 2011.
“We do need some more overhauls because the center has not had an anchor for so long, and it does need a lot of attention,” Horn told trustees before they approved the deal. “And I think that will only bring a lot more tax dollars to the village, and I think a lot more jobs.”
The board approved an agreement allowing the property owner to recoup up to $1.25 million in sales taxes generated by a Pete's Fresh Market in the old Dominick's spot.
To fill a funding gap in the project, Phillips Edison initially sought a $2 million incentive, but trustees informally rejected that request earlier this summer.
On Monday, Trustee Mark Senak applauded village staffers for their effort in lengthy negotiations.
“The product of that is I think an agreement that's very favorable to the village,” Senak said. “It shows a partnership with the public and the private sector that I think will benefit both sides. I know our residents are excited about this as I am.”
The village would not provide the money upfront but instead rebate a portion of the sales taxes collected from the new grocery store.
The rebate agreement would expire in 10 years — or until developers get back up to $1.25 million in sales tax revenue, whichever occurs first.
The village would receive a base amount of $75,000 annually in sales taxes generated by the grocery store. The remaining sales tax revenue would be shared, with the village keeping 50 percent and rebating 50 percent to the shopping center owner over the life of the agreement.
That $75,000 base amount will provide a cushion to the village for any “possible cannibalism” across Glen Ellyn's existing grocers, a village memo to the board states.
“We wanted to make sure we weren't losing any of our existing sales tax dollars,” said Meredith Hannah, the village's economic development coordinator.
Phillips Edison plans to invest just more than $8 million in the shopping center and grocery store improvements. As the tenant, Pete's Fresh Market also would kick in roughly $5 million toward converting the 72,397-square-foot former Dominick's store. Both parties have reached a lease agreement.
To accommodate a Pete's store, the landlord would pay for interior demolition, a new facade, bathrooms, flooring, lighting, fire sprinkler systems, outdoor seating, consultant costs and other infrastructure work, the board memo states.
Elsewhere in Baker Hill, Phillips Edison plans to add new lighting to the 135,000-square-foot shopping center, install signs and bike racks, remodel facades to tie in with the Pete's storefront, repair and re-stripe the parking lot and beautify landscaping.·
Dominick's parent company, Safeway, shuttered stores across the region in 2013. But Safeway still continued to pay rent, seemingly leaving property owners with little incentive to attract new tenants.
Safeway merged in 2015 with Albertsons, the parent company of the Jewel-Osco grocery chain.
Alex Demos, the former Glen Ellyn village president, joined other suburban mayors about a year ago in calling on Albertsons to stop extending leases on former Dominick's stores.
Amid that public pressure, Albertson's terminated its lease on the Baker Hill store in July.