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07/06/2015C.O.W – July 6, 2015 COMMITTEE OF THE WHOLE – Minutes of Meeting July 6, 2015 The Village Board met as a Committee of the Whole in the Council Chambers of the Village Hall at 6:30 p.m. on Monday, July 6, 2015. In attendance were: Village Board Staff Harriet Rosenthal, Mayor Kent Street, Village Manager Alan Farkas, Trustee Andrew Lichterman, Asst. to the Village Manager Thomas Jester, Trustee Jeff Ryckaert, Principal Planner Dan Shapiro Eric Burk, Finance Director William Seiden, Trustee David Fitzgerald, Management Analyst Barbara Struthers, Trustee Barbara Little, Director of Public Works and Engineering John Sliozis, Police Chief Petitioners Present Dave Hene, Sr. Real Estate Manager, Jewel Michelle Panovich, Mid America Richard Skrodzki, Attorney representing Jewel-Osco Peter Theodore, Architect Public Comment None on non-agenda items Deerbrook Jewel-Osco Redevelopment Proposal Mr. Skrodzki thanked the Board and staff for this opportunity and introduced the petitioner’s team. Mr. Hene noted the store is not meeting the needs of the community. Jewel wants to put the best product forward and replace the current 46,000 sq. ft. store and construct a new 62,000 sq. ft. store. Jewel would like to continue to operate a store during construction and believes this offers the best opportunity for them to be successful. Additionally, there is $1.3 million in extraordinary costs to sequence construction of a new store to maintain operations. Mr. Theodore noted the goal is to create a store that is functional and allows customers to shop the old store and new store without feeling the impact of construction. To do this, Jewel proposes to build the store around the (old) operating store. Mr. Theodore showed the Board the proposed staging and store rendering. He stated this is a viable solution that has been successful in other locations. He noted that the new building would have a contemporary design and would have high-quality materials, timeless architecture and feature architectural designs that would improve the look of Deerbrook. He stated the new site plan would create space for two additional retail outlot buildings to the north, maintain the current parking count and improve traffic flow. Trustee Seiden inquired whether the new store would be bigger than the Highland Park Jewel- Osco. Mr. Theodore stated the new store would be about 20,000 square feet larger than the existing store but slightly smaller than the Highland Park location. Mr. Street noted it would also include a new pharmacy drive-thru. C.O.W – July 6, 2015 Trustee Jester inquired about the shipping/receiving area. Mr. Theodore noted that the consolidation of the receiving area should be an enhancement and he will review the parking situation to determine if parking spaces will be lost. Trustee Struthers noted that the parking area to the north is heavily used. Trustee Jester inquired about the anticipated types of tenants for the new outlot buildings. Ms. Panovich noted small-space outlots are in high demand and ownership currently has two tenants in a bidding war for the former Chase Bank space. Mr. Street noted that as part of this deal, the outlots are required to be retail uses. Trustee Jester also inquired about the traffic study with Deerpark Plaza. Ms. Panovich noted that the traffic study took this project into account. Mr. Street noted that the traffic study will be considered by the Plan Commission during the land use review. Trustee Struthers noted that the Jewel-Osco employees are great and commended the company for hiring people with disabilities. She hopes the current employees are kept on during the project. Trustee Farkas inquired about the timeline. Mr. Hene noted Jewel anticipates 12 weeks to complete their documents, one month for permitting, and another 30 weeks for construction of three-quarters of the store. The store will soft-open at that point with a connection to the old store. Jewel will then finish construction of the remaining quadrant in 12 weeks. Following that, the remainder of the pharmacy will be completed. In summary, a soft opening is anticipated at 44 weeks and grand opening is anticipated for 63 weeks. Mr. Street noted the proposed agreement stipulates a construction start within 12 months of completion of the land use approval. Mr. Street summarized economic terms outlined in the proposed agreement and noted that a true- up of actual extraordinary expenses will be provided to the Village. Payment will start after the first month following the store operating in its full capacity. He noted that under the agreement, Jewel-Osco would receive 75 percent of the incremental sales tax and home rule sales tax revenue from annual retail sales above a base level of $17.5 million for up to 20 years or until the net present value of $1.2 million is reached. Mayor Rosenthal noted that Deerbrook is participating as well by investing approximately $6 million directly to Jewel and the Village is just looking to assist with the actual dollars spent to keep the store operating during construction with a cap of $1.2 million at net present value. Ms. Panovich noted Deerbrook is also paying for the demolition and site work, which brings their total investment to over $7 million. Trustee Farkas inquired if the agreement would still be in effect if Jewel or its parent company were to be sold. Mr. Hene noted that the agreement would still be in place if the parent company were to be sold, but not if this location were sold. C.O.W – July 6, 2015 Mr. Street noted Jewel will have a 10-year lease with 3 - 5 year extensions. Also, this lease permits for a wholesale club to operate in the mall. Trustee Seiden requested that the non- propriety lease terms be shared with the Village. Mr. Street noted this is a key window of opportunity. Mayor Rosenthal noted that she, Mr. Street, and Trustee Nadler strongly recommend that the Board endorse the proposal and then consider a formal economic incentive agreement at the next Village Board meeting. This agreement will be contingent upon Jewel successfully completing the land use approval process. Mayor Rosenthal thanked Jewel for their presentation. Trustee Farkas made a motion to adjourn. Trustee Struthers seconded the motion. The meeting adjourned at 7:10 p.m. Respectfully submitted, David Fitzgerald, Management Analyst