Chicago approves $7 million subsidy for Mariano's

Key part of proposed development at Monroe and Halsted

07/13/2011 10:00 PM


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Renderings show the glass and steel façade of the new Gateway complex in the West Loop.
Great Lake Principals LLC & Chitown Development

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.”

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By Claudea from United Center
Posted: 09/21/2011 8:05 AM

Jon--The west end of his ward is mixed income housing (think a lot of CHA). Also, they maybe able to employ some of the folks staying at Haymarket house (several hundred), which is in the West Loop. Just more TIF money from the 2nd Ward going to Burnett\'s pet projects. Gotta love it. I wonder what is really going on behind the scenes for him to get all this TIF money from those in poorer parts of the city to fund projects in his nicer parts of the ward. The remapping will be interesting.

By Claudea from United Center
Posted: 09/21/2011 8:05 AM

Jon--The west end of his ward is mixed income housing (think a lot of CHA). Also, they maybe able to employ some of the folks staying at Haymarket house (several hundred), which is in the West Loop. Just more TIF money from the 2nd Ward going to Burnett's pet projects. Gotta love it. I wonder what is really going on behind the scenes for him to get all this TIF money from those in poorer parts of the city to fund projects in his nicer parts of the ward. The remapping will be interesting.

By Jon from West Loop
Posted: 09/20/2011 8:14 PM

I'm not sure what Ald. Burnett is getting at with his statement about bringing jobs to the neighborhood. The only employees of a hotel or grocery that can afford to live in this area will be the managers.

By Brian from East Garfield Park
Posted: 09/16/2011 10:11 AM

Yes! Where is Pete's??? It originally was to have opened this past Spring. My patience is wearing thin, there's no reason why it should have to take this long! But -- if it ends up getting designed more like the Dominicks on Chicago Ave with majority of parking up top instead of large surface parking then it'll be worth the wait. Parcel seems too small to accomodate lots of parking though so fingers crossed!

By grace from united center park
Posted: 09/15/2011 10:23 AM

oh my! my blood is BOILING about this since we have been waiting since 2009 when they announced pete's coming to our neighborhood. this is unreal and no other neighborhood would be ignored like we are. claudea, your berlin wall feels so very true as we continue to be cut off. there is so much great potential in our neighborhood, i dont understand why developers are not investing in it / us.

By claudeah from united center
Posted: 09/15/2011 7:57 AM

Rick--did they get TIF money when they replaced that Dominicks? You are missing the point that grocery stores are needed in other areas of the ward. Did you realize that there is no grocery store from Halsted until you reach an Aldi at 3300 W. Madison? Now you will have three you can walk to within four blocks of each other, lucky you. And the city is being more cooperative with out of state grocery stores than a locally owned one. Doesn't make sense to me.

Posted: 09/14/2011 5:32 PM

If you haven't been to Mariano's then you should at Belmont and Western. I found so may items that Jewel and Dominicks don't have.

By melissa from east pilsen
Posted: 08/04/2011 4:37 PM

What a waste. echoing everyone else, we don't need another grocery in the area, especially one this huge.

By Instagator from West Haven
Posted: 07/24/2011 8:12 PM

Claudea--I think we're pretty much in violent agreement on this.

By claudea from united center
Posted: 07/22/2011 8:47 AM

Also, you missed the point. I was trying to make a point about how TIF money from the near west side, where an EL stop is badly needed, is being used to fund an EL stop in an area that isn't all that residential. It would have made more sense to put one on the Pink line at Madison or at Damen or at Western, where major bus lines are at.

By claudea from united center
Posted: 07/22/2011 8:43 AM

Instigator--I never said Burnett's ward went past Damen, but in community meetings and in TIF dicussions that friends attended, money paid into the TIF from 2nd ward residents, including those west of Damen went into paying for Skinner School and the Morgan street stop. Those are in Burnett's ward. His ward is cut up to exclusively include the UC, the main building for Whitney Young, 911 center and Skinner School. It cut up so badly it is hard to tell what is in what ward.

By Instigator from West Haven
Posted: 07/20/2011 8:36 PM

Claudea--I don't think Burnett's ward goes beyond Damen anywhere. The Pete's site is in the 2nd Ward.

By claudea from united center
Posted: 07/20/2011 2:00 PM

Yeah, but you would think he would want a grocery store closer to his Warren and Ashland address and serve his constituents west of the United Center Berlin Wall. But then again, he got TIF money for the Skinner school from taxpayers who couldn't even send their kids there and for an EL stop in the middle of the meat packing district, yet a lot of that TIF money came from west of Ashland, were there is no stop until California. I can hardly wait for redistricting. It will be interesting.

By Instigator from West Haven
Posted: 07/20/2011 12:18 PM

Hmmm--looks like the quote from Burnett about wanting to exhaust the TIF is behind some of this. He wants to have come favors to call in down the road. Like a Senate seat, the TIF is *bleepin'* golden.

By Sid from West Haven Park
Posted: 07/19/2011 8:05 PM

Echoing the comments of the others here! The way the city seems to work is to give neighborhoods that already have options even more options while depriving the residents of a food dessert by not giving out necessary permits on time or giving interested stores tax benefits! All this while a portion of TIF dollars from our under served neighborhood is used for an already saturated and crowded market. How do we expect of these children and families to eat healthy?

By Larry from West Loop
Posted: 07/18/2011 10:34 AM

We need more grocery stores near Halsted? Am I missing something? Let's see, Dominick's at Halsted/Madison, Jewel at DesPlaines/Kinzie, a new Target w/grocery store is being built at 1100 W. Jackson, a new Costco at 1440 N. Ashland is being built, an under-utilized (albeit ultra-expensive) "Kava" grocery store at 112 N. May, a new Walmart going into Presidential Towers... can anyone say saturation? If anything we need more retail on Ashland. Ashland near the United Center is a disaster.

By claudea from united center
Posted: 07/18/2011 8:04 AM

What the heck? Another grocery store for the west loop, Dominick's, Walmart and now this and we are still waiting on the near west side? Come on city, be cooperative and fair. I bet if Pete's had gotten TIF funds, or even the alley that they had been waitinf for months to get from the city they would have been up and running by now. I guess they just didn't have the proper connections, but a grocery store from Wisconsin does. So frustrated.

By Melbe from West Loop
Posted: 07/14/2011 9:50 PM

While I'm excited for a new grocery destination in the West Loop, please be sure there's enough parking to support the project. 180 spots doesn't sound large enough to me. Also, can we get some better traffic light synch., and some left turn arrows while we're at it, at both Monroe/Halsted and Madison and Halsted? Traffic flow east/west on Madison at Halsted is already rough at best and adding a new destination on Monroe/Halsted is only going to add to the gridlock during peak hours.