How has controversial $200K Belleville TIF fared for Ruler Foods?

Three years ago, Mayor Mark Eckert cast a rare tie-breaking vote after aldermen voted 7-7 on whether to give $200,000 in TIF funds to Ruler Foods to demolish the vacant Bel-Air Bowl and build a new store on North Belt West.

The controversial vote on Feb. 4, 2013, highlighted the division among city leaders about how TIF, or tax increment financing, funds are used in Belleville.

Since the Ruler Foods development agreement was approved, Ruler Foods demolished the Bel-Air and built a new store that opened in late 2014. And Eckert says the discount grocery store, which is owned by Cincinnati-based Kroger Co., has so far met all of its obligations to receive the $200,000.

Eckert, who said he may have had to break tie votes only one or two other times since becoming mayor in 2004, said he has no regrets on the Ruler Foods vote.

“I pass there quite often, and I have to smile because the place is always busy,” Eckert said.

He supported the Ruler Foods agreement because Kroger promised to tear down a bowling alley that had been vacant for about six years, had some boarded up windows and wasn’t producing any sales tax revenue for the city. Also, neighbors complained about people trying to sell cars they left on the parking lot.

“It didn’t look real pleasant,” Eckert said.

But opponents of the plan said didn’t want to give incentives to a company as large as Kroger, which had annual sales of $108.5 billion in 2014 and is now the nation’s second largest retailer behind Walmart. Aldermen also were concerned about the market’s impact on sales at other nearby grocery stores and whether the store would bring full-time jobs with benefits.

Ward 7 Alderman Phil Elmore is the only current member of the council who voted against the plan in February 2013.

Elmore said the city should have negotiated with Kroger to build the grocery store where the city doesn’t have one.

“We have pockets of Belleville that are in need of a grocer, for example, the southern corridor of Belleville has no grocery.”

Elmore said the city should have said, “We’ll give you an incentive … if you build it where we as a city need it.”

“We should have held their feet to the fire a little bit more to benefit Belleville.”

Eckert said he agrees a store is needed on the south end of the city but Ruler Foods liked the North Belt West site.

“When somebody comes out of their corporate office and says, ‘This is where we want to go. Will you work with us?’ What am I going to say to them?” Eckert said.

“I’m thinking to myself, ‘How can you look at a piece of property that’s got boarded up windows for six years that sat empty, doing zero on return as far as sales tax or anything and tell them we’re not interested?”

At the time of the Ruler Foods vote, Elmore was running for mayor against Eckert, who won the April 2013 election. Consequently, Elmore lost his seat on the council because his aldermanic term expired. He successfully ran last year to return to the council.

Elmore said he examines each TIF request individually. He recently voted in favor of incentives for a hotel, restaurant and sports field complex planned for Illinois 15.

“I don’t have a problem with an incentive if it’s going to benefit our needs and our long range plan and things like that.”

Elmore added that the city should use TIF funds more for road and sidewalk improvements instead of giving the aid to for-profit companies.

“TIF is not used enough in infrastructure as a whole now,” Elmore said.

He added that the city has “a moral obligation to make our infrastructure our priority over granting” aid to businesses.

Lillian Schneider, a former alderwoman who voted against the Ruler Foods development agreement in February 2013, said the Ruler Foods site is too close to other existing grocery stores. Also, she opposed the plan because she thought Kroger could afford to tear down the bowling alley without getting financial aid from Belleville.

Schneider said she didn’t vote against the store, but voted “against giving money” to Kroger.

She also was concerned about the salaries paid to the Ruler Foods employees.

“People can’t live on part-time wages,” Schneider said.

“I wanted them to offer them a decent wage because the company isn’t poor,” she said. “The corporate people are going to be the ones making money.”

Details of Ruler Foods agreement

As part of the development agreement, Kroger Co. promised to:

▪  Invest at least $2.9 million, within a year of acquiring the property, on work such as property acquisition, demolition of the existing structure and construction of a new store.

▪  Create at least 12 full-time equivalent jobs in the first year.

▪  Generate annual sales of no less than $5.5 million for each of the first two years and $6.5 million for each of the third, fourth and fifth years.

▪  Operate at the site for at least five years.

Kroger would be paid $200,000 for site improvements, including demolition of the Bel-Air and building a 19,260 square foot store, according to the development agreement.

Eckert and Finance Director Jamie Maitret said Kroger so far has met all of its requirements as of this month.

Maitret said state law forbids her from releasing an individual store’s sales figures but she does receive a report from the state Department of Revenue so she can monitor the store’s performance. She said Ruler Foods has exceeded the sales goal since it opened.

After the original Ruler Foods vote, Eckert had said he estimated the store would yield $75,000 in sales tax revenue for the city.

Ruler Foods is operated by JayC Food Stores, which is a subsidiary of Kroger.

Mark Belleville, executive director of merchandising for Ruler Foods and JayC Food Stores, declined to release sales figures for Ruler Foods store at 1703 North Belt West store.

But he said the store has started off well.

“The community support has been absolutely incredible,” Belleville said. He noted with a laugh how he loves the store located in the city with the name he shares.

As far as the number of employees at the store, Keith Luther, the assistant manager, said the store has 25 to 30 employees and about half are full time.

Schneider she believes the city’s development agreements with companies such as Kroger should require the companies to state how much employees will be paid.

She also calls for the development agreements to require companies to reveal their sales figures.

“We should be able to see their total sales that they turn into the state because they accepted money from the whole public, not just the finance director,” Schneider said.

TIF funding

Belleville will use $200,000 from the city’s TIF 3 fund to pay Kroger for the Ruler Foods site improvements.

Maitret said Kroger has not yet sent in the paperwork requesting the payment because of “turnover” in the corporate office. She said city officials have talked with Kroger about this and the city expects the request to arrive soon.

The TIF 3 district covers most of the city and was established in 1986.

In a TIF district, property values in the district are frozen at their current levels for a 23-year period and any additional revenue generated by a rise in property values is channeled into a special fund earmarked for infrastructure improvements and economic incentives in the district. It is intended to help property that would not see new growth “but for” the public investment.

Cities can extend the life span of a TIF district one time and Belleville exercised this right with TIF 3, which will expire in 2021.

TIF supporters say the incentives help raise commercial property values and support businesses that produce significant retail sales tax revenue for the city. Opponents say the property getting TIF assistance would be developed anyway. They also believe the districts hurt other businesses outside the zone, drawing customers and stores to one area and away from another.

Bag your own groceries

Ruler Foods says it keeps prices low because it doesn’t have specialty departments such as a pharmacy or bakery.

Also, customers pay 10 cents for a plastic bag if they didn’t bring their own bags and then they bag their own groceries. To use a cart, you pay a 25-cent deposit. Since you have to return your cart to get your quarter back, the store saves money because it doesn’t have to pay someone to collect carts from the parking lot.

And Luther, the assistant manager, notes there less chance of a cart smashing into your car in the parking lot.

Ruler Foods also has metro-east stores in Collinsville, Godfrey, Granite City and Highland. The store’s name plays off the company’s motto that you can “measure your savings.”

Luther said Kroger brands comprise 85 percent to 90 percent of the store’s products.

James and Linda Meadows of Centreville filled up two carts of groceries while shopping at Ruler Foods on Wednesday. They started going to the store about three months ago.

“The savings are unbelievable,” Linda Meadows said. “You end up paying half the price you normally pay.”

Mike Riffle of Belleville said one of his friends drives from New Athens to shop at the Belleville Ruler Foods. And he’s seen people lined up at the door to get in on a Sunday morning.

“I guess that’s a good sign,” he said. “We need another one of these stores in town.”

This story was originally published February 13, 2016 at 8:43 AM with the headline "How has controversial $200K Belleville TIF fared for Ruler Foods?."