Montgomery OKs Sam's Club incentive pact : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
|Montgomery OKs Sam's Club incentive pact |
|Village to rebate 75% of sale tax revenues up to $7.5 million |
|by John Etheredge|
The Montgomery Village Board has approved an incentive agreement to secure the development of a Sam's Club store in the village.
Board members passed the $7.5 million agreement with Sam's Club West, Inc., owners of the chain of warehouse stores, in a 5-1 ballot Monday evening.
Under terms of the agreement, the village will reimburse 75 percent of the sales tax revenues generated by the store to Sam's Club West until $7.5 million is rebated or Aug. 15, 2028.
Sam's Club West will, in turn, use the revenues to construct the store and to make other improvements at the store site in the Ogden Hill shopping center at U.S. Route 34 and U.S. Route 30.
Another agreement provision requires Sam's Club West to begin construction on the store by Nov. 15.
The store is expected to open next year, according to village officials.
Jeff Zoephel, the village's finance director and acting village administrator, told board members, that he estimates the store will generate about $750,000 in sales tax revenues during its first year of operation.
Under the agreement, Zoephel said the village will retain 25 percent or $187,500, while the remaining 75 percent or $562,500 will be reimbursed to Sam's Club West.
Zoephel noted the store is expected to generate 150 to 180 jobs.
He also told the board the construction of the store is expected to help bolster efforts by the village and the Montgomery Economic Development Corporation (MEDC) to attract additional retailers and restaurants to the Ogden Hill shopping center.
Earlier during the meeting, Greg Nelson, a candidate for a village board seat in the April 9 election, told board members he was concerned about the incentive agreement.
"There is no clause in there if they pull out like Lowe's did (in Oswego)," Nelson said. "Four months or four years down the road if they leave, we're stuck with $7.5 million. Stuck. We don't have anything in there to make sure we get covered. We got to make sure we have a clause in there."
Responding to Nelson's comments later during the meeting, Zoephel said the incentive agreement is a rebate agreement. As a result, he said, the village would not be obligated to pay any money to Sam's Club West in the event they were to close the store.
"If they were to leave in four months or four years they won't be generating any more sales tax so we will not be responsible for reimbursing to them any tax revenues," Zoephel said.
Board member Andy Kaczmarek cast the lone negative ballot on the motion to approve the agreement.
Kaczmarek questioned the size of the rebate and length of time the village must make the payments to the developers.
"It just seems like a lot; couldn't we pro-rate it?" he asked.
Zoephel said village staff negotiated the agreement based on prior discussions with the board.
Voting in favor of the agreement were board members Stan Bond, William Keck, Matt Brolley, Pete Heinz and Denny Lee.
The board approved site plans for the store last month.
Library officials, nearby
store managers pleased
Managers at businesses near the Sam's Club site are looking forward to the new store opening, according to a press release issued Tuesday morning by the village.
"We are just thrilled at this development," said Maureen Fisher, the business manager for the Oswego Public Library District. The district's Montgomery Campus library is located at 1111 Reading Drive, just west of the store site.
"Anything to get more people to the area will be a good thing," Fisher said.
"We are excited. There is going to be a bigger pull to this area now," Jeremy Pope, manager of Buona Beef, also in Ogden Hill, is quoted as saying in the release.
"This will be a great addition to the area," said George Antolik, Goodwill General Manager. "[Sam's Club] moving in will definitely benefit this shopping center."
"I'm excited not only for the traffic it will bring, but for the shopping too," said Sarah Skilton, library district director in the release.
"I will be getting my Sam's Club card as soon as they open," Skilton said.