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Montgomery tables La Chiquita incentive pact : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
Montgomery tables La Chiquita incentive pact
Framework for sales tax rebates 'worked out'; board vote expected Aug. 25

by John Etheredge

8/14/2014

The Montgomery Village Board agreed this week to table a vote on a proposed $1.5 million sales tax rebate incentive agreement with the La Chiquita supermarket store chain.

La Chiquita has asked the board to approve an agreement to help the firm pay the cost of purchasing and renovating the Montgomery Marketplace store at 1525 Douglas Road.

Established in Chicago in 1986, La Chiquita currently operates six grocery stores, including a store on Ashland Avenue in Aurora, one in Rockford and two in Chicago.

In addition to being a full-service grocery store with a large produce section, deli and bakery, the Montgomery La Chiquita would include a 100 seat restaurant and employ between 50 and 60 full-time workers, according to an attorney for the firm.

Richard Young, the village's community development director, told the board Monday evening that village staff and representatives for La Chiquita have "worked out the framework" for a sales tax rebate agreement.

Young said village officials received an updated version of the agreement from La Chiquita's attorneys earlier that afternoon and need additional time to review it.

However, Young said village staff plan to present a finished document to the board for their consideration and possible final vote during the board's next meeting on Monday, Aug. 25.

In a memo to the board, Young listed a proposed set of terms for the agreement, which would span 15 years.

Under the terms, the first $25,000 in sales tax generated annually by the store would go to the village. After the first $25,000 in years one to five of the agreement, La Chiquita would receive 60 percent of the sales tax revenues, while the village would receive 40 percent. In years six to 10 of the agreement, La Chiquita and the village would split the sales tax revenues 50-50. After the first $25,000 in years 11-15 of the agreement, the village would receive 60 percent of the revenue and La Chiquita would receive 40 percent.

In addition, the agreement terms would set a total cap of $1.5 million on the amount La Chiquita could receive in rebated sales tax revenues over the 15 year term of the agreement.

When questioned by board member Steve Jungermann, Young said La Chiquita officials have indicated they expect their Douglas Road store would generate "two to three times" the $100,000 in annual sales tax revenues currently generated by the Montgomery Marketplace store.

Board member Denny Lee noted the agreement would expire after 15 years-even if La Chiquita has not received $1.5 million in sales tax revenues.

Village President Matt Brolley told the board he has heard "very good feedback" from village residents concerning the La Chiquita store and the sales tax rebate incentive.

"I do like the idea of tabling this (agreement) until the next meeting. It's kind of an added benefit to give residents more time to hear about the project, just so they are aware of what's going on," Brolley said.

In a related matter, Young reported that several village staff members and board member Theresa Sperling visited the La Chiquita store in Cicero.

"I also visited their Rockford store last Friday," Young said, adding, "It's a little bit of a newer store up in Rockford, but both stores seemed to be very clean and well run and organized. I think we were all impressed with the different departments, including the produce and the meat departments at both locations.

Young continued, "I think we are on the right track and I believe we'll come to you (the board) with an agreeable document next time after a little more review time."

The 37,000 square foot building that now houses Montgomery Marketplace was constructed in the early 1980s and opened as an Eagle Foods Store in 1984. The Eagle store closed in 2003 after its parent company filed for bankruptcy. Montgomery Marketplace moved into the building in 2004.




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