When Bel-Air Bowl relocated from the corner of North 17th Street and North Belt West in 2007, the city of Belleville was concerned about what would fill the vacant space left at such a prominent intersection. During the nearly six years that the building has been vacant, city officials have discussed several potential projects with developers, but, unfortunately, nothing came to fruition.
Then late in 2012, Ruler Foods, a division of Kroger, came to the city with a potential project.
Ruler Foods identified several potential locations throughout the region and they are looking for the site that is the best fit for their business model. The North Belt West site is their first choice. However, if the project falls through, there are other potential sites outside of our community at which they will build stores. The ability to use TIF money to help the project move forward will make this site more competitive when they make their final decision as to which sites to locate their stores.
During this economic recovery, more and more businesses are in need of assistance to make projects happen. This is happening all across the country so Belleville must do what it can to remain competitive in attracting new business. This is particularly true given the fact that we do not have an interstate running through our city, which, for many national companies, is a high priority in the site selection process.
Some people say that this store will hurt our existing businesses. Others say competition is a good thing. Arguments could be made on both sides. However, if Ruler Foods abandons this site and locates just outside of the city limits, any potentially negative effects of competition will still affect Belleville businesses, which would be doubly bad for our tax revenue.
This administration recognizes the desire for a grocery store on the south side of town. However, after doing its research, as all good companies do, Ruler Foods chose this site as the best fit. We are pleased and excited that they recognize Belleville's potential as a good place to do business. They also recognize there will be competition and that competition is a good thing.
Ruler Foods is willing to invest more than $3 million in a site that has been vacant for nearly six years. The project is expected to generate $6.5 million in sales per year (which would put $75,000 per year into the city's General Fund), create 12 full-time equivalent jobs, and generate more than $30,000 in incremental property taxes annually. Those incremental property taxes will go into the TIF fund and can be used for infrastructure improvements, etc.
When the city negotiates a development agreement for incentives, typically the city strives to participate at a level of 5 percent to 7 percent of the total project cost. The Ruler Foods project comes in at 6.6 percent. The total project cost is estimated at more than $3 million. Ruler Foods requested $200,000 to assist in demolition of the existing building and other site improvements, all of which are eligible under the TIF statute.
Opposition to TIF is a philosophical debate that needs to be focused on the state legislature, which created the program. Some say that city money should not be used to attract or retain business. Whether you agree or not, TIF is the primary economic development tool that the state of Illinois has given cities to use.
Belleville is simply using the tools at our disposal to grow our community in a competitive manner within the region.
The city has been criticized for its use of incentives. Yet, it has also been criticized for not doing enough to further economic development. How, then, do we spur economic growth and become more attractive to businesses without using the tools available to us?
Ruler Foods is a good project for Belleville and is a good use of TIF money.
Mark W. Eckert is mayor of Belleville.