Continuing efforts by the City of Fairview Heights to attract new business have led to an agreement that will involve the demolition of a vacant, old structure and replacing it with a drive-through restaurant specializing in coffee.
An ordinance approved by the council in late July supports plans of a group calling itself 6000 North Illinois Partners LLC to take down the building that formerly served as the Mattress & Futon Outlet so the site can be redeveloped.
The “adaptive reuse” of the property at 6000 N. Illinois St. includes a rebate of some of the sales tax it generates, the city said.
The St. Louis-based development group, formerly known as First & Main Properties, will be eligible to receive a reimbursement of the sales tax the new business brings into the city totaling $220,190.73 over a 10-year period.
That figure is based on the projected sales tax revenue during that same timeframe, which is estimated to reach $22 million.
The city’s director of economic development, Paul Ellis, said the physical site plan is still subject to the review of the appropriate local bodies before the project is completely approved. The process would consist of passing it through the city planning commission, an aldermanic committee and the entire city council before it is formally authorized as a special use per local regulations.
The rebate of the sales tax has been set up incrementally with 75 percent to be provided by the city to the developers each of the first four years, then 50 percent for each year four through six before going down to 30 percent the eighth, ninth and 10th year.
Called “Project Java” with the exact name of the business tenant not yet revealed, Ellis describes it as high-quality operation representing a “national retailer.”
Correspondence from Ellis to one of the council’s committees stated the developers felt the project could not move ahead without assistance from the city. He was quick to add his support of the rebate concept because it will improve a site that is currently the location of a building dilapidated to the point of almost being considered blighted. Development would also potentially encourage reinvestment in surrounding parcels on the same side of North Illinois Street, he said.
The developer, Ellis noted, has a good track record for completing attractive projects in the area, such as the strip center at 1411 West Highway 50 in O’Fallon where there are three tenants currently operating: Starbucks, Chiro One and A Q Nails & Spa. At one time, there was a restaurant called Grand Buffet located at that O’Fallon center, occupying all three of the spaces in use by the businesses there now. The development firm also recently received approval for a similar project in south St. Louis County, Ellis said.
A letter of intent that is part of the agreement with the city says that 6000 North Illinois Partners LLC is investing no less than $2,325,500 in the project and is to provide the city with documentation of its expenses as part of the sales tax rebate process.
The developer says 20 full-time jobs would be created within the first year of the coffee business opening; agrees not to petition the county for a reduction in its assessed valuation without the consent of the city; and would reimburse the city all of the public monies provided if there is a failure by 6000 North Illinois Partners to meet its obligations.
The drive-through restaurant, referred to by the development group as representing a “global brand,” is planned to be a structure of 2,100 square feet. A narrow frontage but very deep lot will be configured to allow drive-through traffic to have ample space on the property, located just south of the existing Captain D’s restaurant. Plans include 27 parking spaces.
During a recent city committee presentation, Ellis stressed the benefit of stimulating interest in the redevelopment of this property, which is now not producing any sales tax income.
Negotiations about the project have been going on “for quite some time,” Ellis said. 6000 North Illinois Partners had an option to buy the property that had expired before being extended. This and other factors created a “short time window” for moving the project ahead.
He additionally stressed, “They don’t get any money if they don’t build the project, if they don’t bring it in, if it doesn’t make the money. They have to produce the sales tax for them to get rebated.”
Mayor Mark Kupsky said he has “always been a proponent of sales tax rebates,” especially at a location where there are no other incentives for developers like what exists in tax increment financing districts elsewhere in the city.
He added that he knows the name of the tenant which will be doing business at 6000 North Illinois Street but cannot divulge it as part of the requirements of the agreement and due to the competitive nature of area communities trying to lure income producing development.
“Bodies in town” is an expression Kupsky said he uses to characterize the benefits such a project will provide to Fairview Heights because it not only attracts people to that specific site but the strong possibility exists that they will visit other businesses while they are here, infusing more sales tax income into the city.
If the business produces the anticipated sales tax sooner than the projected 10-year period, Kupsky said the rebate will cease, having been paid off earlier based on the total the city has pledged. Conversely, if it would fail to bring in at least the $220,193.73 spelled out in the agreement within 10 years, the rebate would stop at whatever the amount is reached by then.
Alderman Bill Poletti, one of the 10 council members offering unanimous support for the agreement, commented, “This is currently a non-producing property so if they begin to produce and start providing sales tax, we can afford to provide some back because right now, we’re getting zero. So, let’s make it a producing property.”
Reporting by Randy Pierce of the Fairview Heights Tribune.