City of North Chicago Economic Development/Planning/Zoning Committee met Jan. 4.
Here is the minutes provided by the committee:
Alderman Allen called the meeting to order.
ROLL CALL:
Present: Jackson, Mayfield, Evans, Allen, Markham, Runnels, January Absent: None
DISCUSSION OF ADAM AUTO SHOP – PETITION FOR ZONING MAP AMENDMENT AT 1026 SHERIDAN RD. FROM B2 TO CW/ PETITION FOR SPECIAL USE PERMIT AT 1026 SHERIDAN RD. FOR AUTO REPAIR SERVICES, AUTOMOTIVE SALES AND AUTOMOBILE RENTAL:
Nimrod Warda, Senior City Planner explained the auto shop had been previously leased and was considering purchasing. Adam’s Auto Shop didn’t have plans for a dealership currently but would rent the vehicles to customers.
Alderman Allen stated that the business was clean and professional. Alderman Jackson echoedAlderman Allen’s sentiments.
The Mayor added that they worked with the City and he agreed to move forward.
II. DISCUSSION OF LOAN AGREEMENT TO GEORGE’S FRESH FOODS 1490 LEWIS AVENUE:
Chief of Staff, Deb Waszak explained she was speaking on behalf of Victor Barrera, Economic & Community Development Director who was absent. Continuing, it was a $300,000 maximum amount forgiveable loan at 1.92% and $30,000 annually within a 10-year time period. If the 10-year term is not met the loan would be due. She noted a type-o in the agreement.
Peter Geronis, Business Owner, explained his history in retail; family business. He currently was importing/exporting produce in the United States and had several other taco establishments. The opportunity was recently available in North Chicago; the original name was Pete’s Fresh Foods though the family requested a franchise fee. He apologized for any confusion. He decided to initiate his own chain, George’s Fresh Market with a non-family member, George Anderson.
Treasurer, Kenneth Robinson questioned pg. 3; Term of Loan Plan when the first payment following its opening; monthly or annually payments and time it started? Mrs. Waszak stated she understood it was annually. Mr. Robinson clarified nothing was stated in the agreement. He had high concerns of the City not recouping the $30,000. Mrs. Waszak explained the Economic Development IncentivePlan “claw-back” provisions that the City would be reimbursed and she elaborated further.
George Anderson, business partner clarified his current investment was $600,000 with equipment etc. They also signed a 20-year lease. Mr. Robinson cared more with the financial burden of the taxpayers if they depart.
Alderman Markham questioned pg. 14; borrower monthly payments and suggested some guarantee clause in the agreement. Mr. Anderson personally guaranteed the forgiveable loan. They had to create an LLC.
Mr. Robinson strongly indicated it wasn’t stated in the agreement.
Attorney Welch was aware of the project and it had not been finalized yet. Municipalities statewide offered an incentivized plan; it would allow the business property returning to the tax rolls; there was a risk; the business agreed to pay the City if they left within the terms and the goal was an agreement and the business succeeding.
Alderman Allen strongly stated they were reputable; had invested in other cities and this opportunity presented itself. He suggested council review.
Alderman Markham questioned the Chief of Staff when Economic Incentive Plan was budgeted; date initiated and if grant funded; Mrs. Waszak explained it was approved in the 2020/2021 Budget Amendment, the funding was from the Build IL State Grant for economic incentives included. Alderman Markham questioned line item and Alderman Jackson explained.
Treasurer Robinson strongly supported a grocery store and city incentives; nothing specified in promissory note of an annual payment and needed better understanding of the documentation with ensuring city protection. He suggested not forgiving the entire amount of the loan exclusively for one business. The economic development dollars resulted in a windfall and probably wouldn’t receive it again. He was also unaware there was funding annually to cover for economic incentives.
Alderman January agreed with the Treasurer of economic growth/city incentives. She advised caution of City becoming of a “bank” as previous history. She suggested that their attorney should have reviewed the agreement prior to the presentation; not comparing North Chicago with other municipalities; the City was struggling; and wasn’t the best method moving forward with particular entities.
Mr. Anderson emphasized out of pocket expenses estimated $300,000+; it was a long-term business, there a risk with both parties; North Chicago was a food desert and was discussion of changes to the agreement.
Alderman Evans appreciated Mr. Anderson and Geronis with bringing a restaurant and grocery store to North Chicago. He disagreed that the City of North Chicago was poor; there seemed to be a problem with the purpose of the economic incentive; the citizens were longing for a grocery store and he perceived city growth and future opportunities.
Alderman Mayfield agreed with Alderman Evans; North Chicago was a food desert and the economic incentive utilized for a grocery store was requested by the Citizens. The business was willing to invest in a grocery store. She suggested attorney draft review.
Mr. Robinson clarified he strongly supported a grocery store and was opposed with inconsistencies in the agreement. He echoed suggestion of Alderman Mayfield for further attorney review.
Alderman Markham explained there was no dispute of a grocery store. The Aldermen have a right to question the agreement. He was also very aware of both establishments and no question on their integrity.
Attorney Welch stated it was a policy discussion from the council members. The legal issues would be managed by the attorneys protecting the City’s best interest. This wasn’t a final form at this time.He reiterated the same. He explained the term “forgiveable loan.” The City would loan the amount of $300,000 to the investors; the annual payments; page 14 read a clause waiver of payment; no payments were due while conducting business the payments would be waived; they were a tax generating business during the period of the contract. Upon their departure, they would owe the remaining balance for contract term at 1.65% through litigation process.
Alderman Jackson questioned alternative if economic incentive wasn’t approved; Mr. Anderson stated they had out-of-pocket costs already. Mr. Geronis stated everything was in stock; they would create opportunities and support the community in all events inclusive of the Chamber of Commerce and non-for profit. They were an independently operated-owned business; both supporting each party; tax generating $30,000+ annual business; they had chosen the specific location for the business; signed a 20-year lease and consideration of expansion within 6-months to a year.
Secondly, if they would consider 1⁄2 the amount vs. $300,000 for incentive; Mr. Geronis explained it was budgeted accordingly and also had (2) other projects in progress.
Alderman Jackson stated was able to tour the whole facility in December 2020 and he was very impressed. It was shaping into something to be proud as North Chicagoans. He was hoping that the amount could be reduced.
The Mayor explained the funds were vital for the community; they did their due diligence and were asking financial assistance from the City. He agreed that the City needed to be supportive, engaging together; discussion already for expansion; Hoping that City Council moved it forward.
Alderman Allen noted the City funded $200,000 for an animal shelter.
Alderman January questioned clarification if they were renting space from Paris Banquet Hall; Mr. Geronis acknowledged they were; Alderman January stated the building was vacant for 15+ years; Mr. Geronis clarified it was a new and remodeled building and thoroughly remediated;
Mr. Anderson stated there was a risk with both parties. Alderman January appreciated their endeavors and financial investment in the community. She preferred a correct and germane method ensuring a sound decision and the City’s protection.
Alderman Allen would provide a rendering of elevation. He appreciated all questions and concerns; the information would be sent for attorney review. He was looking forward to engaging with them.
III. PENDING MATTERS:
There was nothing for discussion.
Alderman Mayfield moved, seconded by Alderman Evans that Economic Development/Planning/Zoning Committee Meeting stand adjourned.
ROLL CALL:
Ayes: Jackson, Mayfield, Evans, Allen, Runnels, January
Nays: None
Absent: Markham
The meeting adjourned at 7:51 p.m.
https://www.northchicago.org/vertical/Sites/%7B52959CF2-969E-41D9-A9CF-CF0A11D0BEA9%7D/uploads/COM.1.04.21.pdf
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