At the May 7 Human Services Committee meeting, City staff laid out their case for spending slightly more than $2 million to create a parking lot for a Trader Joe’s grocery store that will open on Chicago Avenue next year.
Johanna Nyden of the City’s Department of Community and Economic Development presented figures that showed the City’s return on investment on the purchase of 1229 and 1223-25 Chicago Ave. to pave way for a Trader Joe’s at 1211 Chicago Ave.
The cost of the purchase of the two parcels is $2,050,000, or about $114 per square foot of land. The expected return on revenues from home-rule sales tax, general merchandise sales tax, liquor taxes and property taxes is estimated to be, at the low end, $487,000 per year and, at the high end, $669,500 per year. Thus even the conservative estimates show the City’s recouping their investment within four-and-a-half years, and the City would also have its asset: the new parking lot, said Assistant City Manager Martin Lyons.
The Chicago Avenue location is within easy walking distance of two other grocery stores, a Jewel Food Store at 1128 Chicago Ave. and a Whole Foods Store at 1111 Chicago Ave.
Ms. Nyden said Trader Joe’s prefers that its stores be located near other grocery stores, and many are located near Whole Foods stores.
The lease between the developer, Terraco, and Trader Joe’s will be 15 years, with an option for it to be extended up to 25 years.
The City will own the 78-space parking lot and will license it to Gendell/WNBLLC under two separate licensing agreements, one for the 1223-25 Chicago Ave. parcel and a second one for the 1229 Chicago Ave. parcel. Terraco will pay the City a one-time licensing fee of $25,000 for each of the two parcels. In addition, the City will retain the right to allow permitted parking at 24 spaces at the north end of the lot during “non-operating hours” at Trader Joe’s. The estimated revenue from these 24 spaces is between $35 and $60 per space per month, according to the City. Gendell/WNBLLC will add the City as an insured entity on its umbrella policy, said Scott Gendell of Gendell/WNBLLC.
The votes on the purchase of the properties and the licensing agreements were not unanimous but allowed the measures to pass on to City Council. Alderman Coleen Burrus, 9th Ward, abstained from voting on the matters relating to the 1229 Chicago Ave. parcel, because the parcel is owned by Northwestern University, her employer.
Alderman Donald Wilson, 4th Ward, voted against the measures, a vote consistent with his other votes on recent economic development proposals. Although he did not voice the reason for his “no” vote at the May 7 meeting, he told the RoundTable his concerns about the City’s economic development policies remain: “These types of programs are not in our budget,” he said. A second reason, he said, has to do with fairness: City Council is asked to vote “yea” or “nay” on a project that is brought to them, rather than being able to choose among projects after giving notice that economic development funds are available and allowing businesses to submit proposals for the funds.
Two Buck Chuck and other of Trader Joe’s signature products may be available in Evanston within a year – in the “second quarter of 2013,” Ms. Nyden said.