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Rebate request puts Montgomery on spot : Editorials : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
Rebate request puts Montgomery on spot
8/7/2014

For the past several years the Montgomery Village Board has sought to bolster existing businesses and lure new businesses to its Douglas Road retail corridor.

It's been an uphill climb all the way. During its heyday in the mid-1980s through the 1990s, the stores along Douglas Road in the village and just south of Route 30 in Oswego served as the shopping destination of choice for many area residents. But the Douglas Road retail corridor was eclipsed in the early 2000s as big box retailers and restaurants opened in new shopping centers along U.S. Route 34 in neighboring Oswego.

Montgomery took a hit in 2002 when the Dominick's Food store that was an anchor in the Settlers Landing shopping center on Douglas Road moved to a new center on Route 34 in Oswego. Then, the very next year, the parent company of Eagle Foods filed for bankruptcy and closed its store, also on Douglas Road in Montgomery. Earlier this year, Kmart, which had also anchored Settlers Landing, closed after 30 years in operation.

The village recently received some good news that a regional supermarket chain, La Chiquita, is interested in locating in the former Eagle Foods store. Since 2004 the building has housed an independent grocer, the Montgomery Marketplace. La Chiquita is negotiating to purchase the building and spend upwards of $4 million to renovate its interior and resurface the parking lot.

La Chiquita would certainly be a welcome addition to the village and the Douglas Road corridor. Established in Chicago in 1986, the grocer is known for its selection of fine deli foods, fresh produce and in-house Mexican restaurants. (The proposed Montgomery La Chiquita would include a 100 seat restaurant)

But as we reported last week, La Chiquita's store plans come with a big catch. The retailer is asking the village board to approve a sales tax rebate agreement that would require the village to rebate 50 percent of the sales tax revenues the store would generate back to La Chiquita for the store's first 15 years of operation. The board agreed to consider the request and instructed village staff to research a possible agreement. Village Administrator Jeff Zoephel told the board village staff will work to present them with an agreement proposal during the their next meeting on Monday, Aug. 11.

La Chiquita's request for a sales tax rebate puts the board in a very interesting situation. If the board rejects the request out of hand, they run the risk of sending an established retailer interested in locating on Douglas Road packing while at the same time losing the sales tax revenues and 50 to 60 full-time jobs the store is expected to generate. However, if the board approves the rebate, the village will be returning sales tax revenues to La Chiquita to help the firm pay start-up costs that traditionally have been borne by businesses and their financiers. Certainly, granting the rebate to La Chiquita will serve to prompt still more retailers-large and small-to make similar requests.

We've said before here that we don't like sales tax rebate agreements that provide revenues for non-public improvements, but we also understand that this form of corporate welfare has grown increasingly pervasive locally and across the country. Years ago it would have been the height of audacity for a company to ask for a rebate on its sales or property taxes; now it's just part of doing businesses. What do companies have to lose by asking local government for a bit of a break?

We look forward to seeing the agreement proposal that village staff will present to the board next Monday evening.




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