St. John is moving forward with financial arrangements for its new Jewel-Osco store. The town council Wednesday agreed to issue economic development revenue bonds to help the developer upgrade the vacant Kmart building.
Attorney Tom Everett with Barnes & Thornburg said those will be paid back using the increase in property tax revenue generated by the project. "No other funds or taxing authority of the town are pledged to these bonds, just the incremental tax revenues from the increase in the property value for the property," Everett told council members.
Any shortfall would have to be made up by the developer.
Currently, the land and vacant Kmart building generate about $28,000 a year in property tax revenues, according to Andrew Mouser with municipal advisor Baker Tilly. The hope is that this project will bring that up to $200,000 to $300,000, with 90 percent of that increase being used initially to pay off the debt.
Council member Wayne Pondinas said that the developer is making a big investment. "He's going to put in $26 million, and Jewel's going to put in another five to seven million, so it's worth around $31 million to take a blighted area and put that improvement in there," Pondinas said. "It's a win-win for the town. It's a win-win for everybody."
Construction is expected to start in July and take 12 to 15 months to complete.
