Evanston’s Economic Development Committee gave unanimous preliminary approval Wednesday to providing a $500,000 sales tax rebate to the proposed Farmers Best Market at Asbury Avenue and Oakton Street.
The rebate would be used to recoup a portion of an estimated $2.2 million in work planned by owner Nick Merikas to rehab and equip the store at the site of the former Osco Drug store that’s been vacant for over two years.
The city’s tax consultant, Bob Rychlicki of Kane, McKenna and Associates, told the committee that while the projected costs for the new store are relatively high, he’s convinced that they are appropriate to achieve the high end look required in a highly competitive sector of the grocery industry.
Under the proposed agreement the city would rebate half of the sales tax payments it receives from the store each year until the store has received the $500,000.
Rychlicki said the amount of the subsidy is less than what Merikas initially requested.
The store has a 12-year sublease on the property with the CVS drug store chain, which bought the free-standing Osco stores in the area in 2006.
Estimates prepared by the city consultant suggest that the rebate should be fully paid by 2014, and that over the 12 year period of the lease the city should net $1.5 million in sales tax revenue from the project after making the rebate payments.
The estimates also forecast that the store will have sales rising from $11.5 million in the first full year of operation to $18.8 million in the last year of the lease.
The store project has drawn strong community support, with more than 200 people turning out at a community meeting held in the vacant store building last month.
The plan still requires another vote by the EDC after contract documents are prepared and City Council approval to take effect.
Merikas has said he hopes to have the store open before Thanksgiving.