Chicago approves $7 million subsidy for Mariano's
Key part of proposed development at Monroe and Halsted
07/13/2011 10:00 PM
A new grocery store that’s planned for the West Loop got a $7 million subsidy approved by a key city commission Tuesday, giving the developer a chunk of cash to get the project started.
The city’s Community Development Commission gave preliminary approval for the subsidy, which will go towards building a Mariano’s grocery store and retail in the Gateway development that’s slated to go in at Halsted and Monroe streets.
The money will come from the city’s Near West Tax Increment Financing, or TIF, District, a pool of money that skims property taxes and doles out the cash for economic development within certain boundaries.
The $7 million dollars represents roughly 17 percent of the total costs to build the grocery store, according to numbers released by the city. It’ll bridge the gap between the project developer’s loans and the actual cost of building out the space for Mariano’s.
“Because of the extraordinary costs associated with this project, this development could not move forward without utilizing TIF in order to help bridge the financing gap,” the city’s report on the project said.
Though the subsidy was approved by the Community Development Commission, it still needs to be approved by the full city council to get dished out. That’ll happen after the full project goes before the city’s plan commission and the council’s zoning committee. Then, the full project will go before the full council — possibly sometime later this year.
As the centerpiece of the Gateway development, Mariano’s is a “fresh market” designed by Milwaukee-based Roundy’s Supermarkets as the grocer moves into the Chicago market. Mariano’s only has two locations: one in Arlington Heights and one in Vernon Hills. They’ve already signed a lease to be in the Gateway building, taking up 70,000 square feet, mostly on the second of the main building’s three stories.
The first floor will have roughly 23,000 square feet of street-facing retail space along Halsted. Though the tenants have yet to be named, the developers are targeting a national cosmetics chain for between 9,000 and 10,000 square feet, claim a local restaurateur is interested in 4,000 square feet, as well as two “national tenants” who would provide “sit-down food service” that would take up 7,000 square feet collectively, according to the city report.
The third floor and the roof of the building will have 180 parking spaces that’ll be open to the public.
Ald. Walter Burnett (27th), whose ward the project sits in, threw his approval behind the project, and gave the Community Development Commission his blessing on dishing out the TIF money.
“We have a project that will give another choice of groceries to the community, and it’ll bring 450 jobs to the community,” Burnett said, citing a number from the developer that combines construction jobs and retail jobs. “We have a TIF that’s getting ready to exhaust in the West Loop. Once the TIF is over in 2013, it goes back to the city. Even after this $7 million is gone, we still have $11 million left.”
What’s yet to be hammered out is the proposed tower that’s being pitched for the Gateway’s second phase. That structure was most recently pitched as being a 200-room extended stay hotel, which would stand 250 feet tall, according to a presentation from a community meeting held in January.
Burnett emphasized that the TIF money was only designated to help the project’s developers build the low-rise phase of the project. Even though he’s in favor of the tower, the city’s not putting any money towards it (right now, at least). Besides, he doesn’t think they can get the money together.
“I wanted the hotel personally to get jobs for the community … I never have been shy about that,” Burnett said. “I know the community has been very concerned about competition with existing properties. Quite honestly, I don’t think they’re going to get any money to build anything residential for a long time.”
At least one community group is on board with the plan — the Greektown Special Service Area, a business improvement district focusing on economic development along Halsted. That group’s advisor, Dean Maragos, said he’s in favor of the project, which sits towards the north end of the Greektown strip.
One of the main reasons, he said, is because those 180 spaces should make it easier for visitors to park when they come in to visit Greektown.
“Parking is always important, because you want to make it easy for people to come and enjoy the neighborhood and then drive back to their homes in the city and the suburbs,” Maragos said. “It’s an important element to us in the area because we want to have a diverse patron base that continues to grow.”