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Montgomery OKs La Chiquita incentive pact : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
Montgomery OKs La Chiquita incentive pact
Supermarket chain to use sales tax rebates to renovate Douglas Road store

by John Etheredge

8/28/2014

A La Chiquita supermarket is a step closer to opening in the Village of Montgomery as a result of action taken this week by the village board.

In a unanimous ballot Monday evening, the board approved a 15-year, $1.5 million sales tax incentive agreement with La Chiquita to assist the firm in its planned purchase and renovation of the Montgomery Marketplace supermarket at 1525 Douglas Road in the village.

Richard Young, the village's community development director, told board members the agreement calls for La Chiquita to make extensive repairs to the 30 year-old building and the adjoining parking lot.

In addition to a full service supermarket, Young said the La Chiquita will offer customers an in-store restaurant and a bakery.

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

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

Alfredo Linares, La Chiquita founder and president, thanked board members for their support and positive vote on the agreement.

"I will show you what I can do," Linares said.

Representatives of La Chiquita, village staff and Steve Andersson, village attorney, negotiated the agreement over the past few weeks.

In presenting the agreement to the board, Andersson noted the agreement requires La Chiquita to make "a variety of improvements" in the store "which is the whole reason for the reimbursements."

"I think everything in the agreement reflects what the board was looking for," Andersson said, adding, "You have a cap both in terms of the reimbursement (to La Chiquita) and the time (of the agreement). It does not go on forever."

Andersson also noted that he and other village officials recently toured a La Chiquita store.

"We were able to go behind the scenes-not just the public areas-and we saw the full area (of the store) and what we saw was a very well oiled machine," he said, adding, "Not speaking strictly as the village attorney, but as someone who saw the operation that provides a level of assurance that you are, in a way, getting into a partnership with someone you can rely on."

When questioned by board member Stan Bond, Kerry Lavelle, an attorney for La Chiquita, told the board his clients are very excited at the prospect of opening a store in the village.

"Attorney Andersson has been wonderful to work with and we got through this process very easily," Lavelle said, adding, "We do appreciate everyone's support and cooperation."

Board member Steve Jungermann questioned how much more in annual sales tax revenues the La Chiquita store will generate than the Montgomery Marketplace store that currently occupies the building.

Lavelle said his clients expect total annual sales from the store at $15 million.

Under terms of the agreement, Lavelle said his clients expect to receive at least $50,000 annually.

"If we win, everyone wins," he said, adding, "Our hope is we will draw people from other area communities to come to this store."

In requesting the agreement last month, Lavelle told the board that the economic landscape had changed since the recession of 2008.

"This is an expensive, expensive venture," Lavelle said, adding, "It is impossible to put in a modern-day grocery store in this day and age without some sort of sales tax sharing arrangement between the retailer and the municipality. It is a very, very expensive proposition."

Village President Matt Brolley said he has heard "nothing but positive responses" from village residents who had read recent news articles about the La Chiquita store and the incentive agreement.

Referring to the agreement, Brolley said, "I really like that we have a document here that we can show residents and say, 'This is the gentleman (Lanares) who came in to us, this is what he said he wants to do to the property, and because he is going to improve the property we're going to rebate some of his sales tax to help with that.'

Brolley added, "God forbid if anything happens to this user and he leave town, we actually will have a building that is in better shape than when we started. Actually, I don't see that happening and you (Lanares) don't either, but it gives me a great level of assuredness that you will be here and the property will be maintained."

Bond said in discussing La Chiquita with village residents they decided that "sharing the growth" was a better term to describe the agreement than sales tax rebates.

"This is good for the entire community and what we are sharing here is the additional growth and development we hope to enjoy together. It's kind of a shared experience," Bond said.

"We think so too," Lavelle said.

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.

Established by Lanares 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.




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