Developer seeks tax rebate for convenience store in St. Joseph
ST. JOSEPH — A proposed convenience store in the center of the village is being met with skepticism.
At village board meeting this week, officials from Wortman-Keller Development LLC of Effingham presented plans for a $1.5 million gas station and convenience store at the corner of U.S. 150 and Third Street.
The developers are asking the village to enter into a sales tax incremental refund agreement, in which the village would give back a portion of sales taxes generated by the store over five years. The total tax refund could run as high as $367,500.
According to the developers, the cost of the project, including getting the property ready for construction, would be too high without the agreement.
Wortman-Keller Development owns 13 stores, including a newly opened store in Arthur, which they are basing their St. Joseph store on. The proposed development would be 5,270 square feet and construction would begin in the second quarter of 2014.
The Wortmans said the goal of the project was to keep tax dollars in St. Joseph.
"Part of our marketing program is changing patterns," John Wortman said. "We want I-74 customers to get gas here."
At Thursday's finance committee meeting, IGA owner Gary Woods said it would be inappropriate for the village to make a tax agreement that would go to an out-of-town business and that wouldn't benefit the entire village.
The developers have proposed that in the first year the they would receive 85 percent of their sales tax money back, not to exceed $89,250; the second year it would be 80 percent not to exceed $84,000; 75 percent in year three not to exceed $78,750; and 70 percent in year four not to exceed $73,500. In the final year of the agreement the village would return 40 percent of the sales tax revenue to the developers not to exceed $42,000.
Resident Tiffany McElroy-Smetzer said she found the developers' request unprecedented.
"The amount of money they are asking for is crazy," she said. "The money they are asking for makes me sick."
Trustee Bob Rigdon agreed the amount was high.
"In effect we would be building their building for them," he said.
The village has entered into sales tax incremental refund agreements before. Recently, it agreed to reimburse Roch's Place, a sports bar, up to $10,000 for two years.
Trustee Tony Spurlock said he felt the precedent the village set with the refund agreements was important.
"I don't know if I feel comfortable with that level of rebate," he said. "It's close to $360,000."
Spurlock said he understood that if the developers did not receive the refund they were not interested in building in St. Joseph.
"If we can't reconcile it then it's a fairly easy decision," he said.
Resident Deb Calvo said she was also concerned with the refund agreement.
She said she appreciated that Casey's was willing to come to town without asking the village for any money.
"It's commendable that Casey's is willing to come to town and stand on its own two feet," she said.
Darrell Ramey, the area supervisor for Casey's General Stores, also said he was concerned with the possible tax refund agreement.
"It isn't fair business practice to exempt a business that is in direct competition to us," he said.
Ramey said Casey's is looking for land to build a larger store in St. Joseph. He said the company had even looked at the financial ramifications of buying the lot that the current St. Joseph Stanton-Fire Protection District building is on and building the department a new building on a new lot.
Trustee Tami Fruhling-Voges pointed out that a 2010 Champaign County Regional Planning Commission report found that St. Joseph could support another fast food restaurant and another gas station but not a convenience store.
The developers are going to do a market study of their own and provide the results to the village.