DANVILLE — Kohl's is open and selling, and the walls of the T.J. Maxx store are going up, but the city still hasn't received the federal grant money it needs to cover the $600,000 it took out of its general fund in 2011 to complete the $2 million incentive package for the retail development on North Vermilion Street.
At Tuesday's public-works committee meeting, administration officials will ask aldermen to give them another year to try to recoup those federal dollars and pay back the general fund. The committee, which meets at 6 p.m. in the city council chambers, 17 W. Main St., Danville, will also consider approving an already-agreed-to incentive payment to the Village Mall ownership for the successful recruitment and opening of two new retailers, Dunham's and Ross Dress for Less.
Altogether, the city provided about $2 million in funding and incentives to Continental Properties, the Milwaukee-area developer that bought the former K's Merchandise site on North Vermilion Street from the city for $1. That included a $1.2 million loan that the city is paying back over five years and $800,000 in other funding — $600,000 of which was to come from federal Community Development Block Grant dollars the city receives on an annual basis.
But in 2011, the city hadn't yet received its share of federal grant money as of the closing date on the property between the city and Continental, so it took $600,000 out of its general fund so the closing could go through and the development project could get started. According to city officials, the grant funds did not come in time for the city to qualify any of the phase-one project expenses, so it couldn't use any of the funding it finally received to pay back the $600,000 to the general fund.
Since then, administration officials have been waiting for phase two of the Continental development project to begin, so the city can submit to the federal government some of the costs of that part of the project that qualify for grant funding and pay back the $600,000 to the general fund.
Mayor Scott Eisenhauer said phase two of the Continental project would involve out-lot space near the Kohl's and T.J. Maxx stores.
The second phase may begin soon, however, as Oakbrook-based Quattro Development bought that out-lot space from Continental, according to Kevin Barnes with Quattro. And, Barnes said, Quattro will be leasing the building it constructs to two tenants, All About Eyes and Cellular One.
Quattro Development also bought space in the southwest corner of the Village Mall parking lot and built a store that it's leasing to Aspen Dental.
And now that Dunham's and Ross Dress for Less are both open at the Village Mall, the city is ready to take $337,500 out of its general fund to pay the incentive payment to the Village Mall owners.
According to the agreement with the Tabani group, the Houston-based company that owns the Village Mall, the city would pay a lump sum of 50 percent of the projected sales-tax revenue generated over the first five years of both businesses, but the total amount could not exceed 50 percent of the costs to renovate the mall for the businesses.
Based on sales-tax projections, it was determined that the city's payment to Tabani would be $337,500 if local labor is not used and $506,250 if local labor is used. But according to the agreement, the city would not pay the incentive money until construction was complete and the city provided a certificate of occupancy for both retailers.
Now that both retailers are open, the public works committee will consider approving that $337,500 payment at Tuesday night's meeting.