DANVILLE — The developer of the future Kohl's department store site is scheduled to take ownership of the property Thursday (Sept. 15) from the city along with $800,000 in incentives.
The closing on the property at 3707 N. Vermilion St. is slated for today and marks the beginning of the developer's portion of the project that will include utility placement, construction of a parking surface and the pad where the Kohl's building will sit, according to Mayor Scott Eisenhauer.
He said the developer, Continental Properties based in the Milwaukee area, is working very diligently to find a junior anchor store to complement Kohl's. He said the developer wants to make sure it's a retailer that would be a good fit for the development as well as the community. Developers have been in constant contact with local officials, he said, about opportunities for the two other spots, the junior anchor and one out lot.
"We know they have narrowed their search but are not yet ready to announce," said Eisenhauer, who added that the city also continues to field inquiries from other areas of the retail sector.
Eisenhauer said the city's portion of the work at the new retail site is now finished, but city officials will have input in site planning as the project moves forward.
Earlier this year, the city bought the former K's Merchandise site from its Decatur-based owner for $825,000 and, per the city's agreement with Continental, demolished the vacant K's building and completed other site preparation work. The agreement also included the city turning over the construction-ready site and $800,000 to the developer.
The city's total incentive package, which includes purchase of the site, demolition and the money at closing, is expected to total $2 million or less and is being paid for with $800,000 in federal Community Development Block Grant dollars and a $1.2 million loan that the city intends to pay back over five years using the sales tax generated by the new development.
However, the city has not yet received the federal block grant dollars, and in anticipation of the closing, city administrators got approval from the city council to pull $800,000 from the general fund, solid waste fund and sanitary sewer fund to make the payment to the developer at today's closing.
City Comptroller Gayle Lewis said the city has exhausted its $1.2 million cash flow loan from First Financial Bank, which was secured at a 3.01 percent interest rate. She said the city has already started making payments on that loan using money appropriated in this year's budget. Lewis said the city will pay about $94,000 in interest over the five-year payback period unless the city can pay it off sooner if sales tax revenue from the new development exceeds expectations.
Eisenhauer said the developer is expected to immediately begin work on utilities and parking lot construction with the hope of completing that phase by winter, and construction on the department store will begin next year with a projected opening date in fall 2012.