Mariano’s Fresh Market, the high-end grocery store chain, is seeking to make its mark on the site of a Sears store at the corner of Harlem and North avenues in Galewood.
According to conceptual plans for the site, the present building will be torn down and replaced by a smaller, one-story building, with roughly 50,000-square feet devoted to Sears and about 72,000 square feet for the Mariano’s store.
The site plan also features landscaped buffering around the perimeter of the new stores, with greenery separating the retail experience from the bustling traffic of the intersection. The project would be paid for, in part, by tax increment financing (TIF) funds.
The concept plan was presented by a group of developers at 29th Ward Ald. Deborah Graham’s monthly community meeting Wednesday at Shriner’s Hospitals for Children Chicago, 2211 N. Oak Park. About 60 residents and community leaders attended. Others at the meeting included Austin state Sen. Don Harmon (39th) and state Rep. Camille Lilly (78th), as well as Ald. Nicholas Sposado, whose 36th Ward currently occupies the proposed site.
Graham and the developers, whom presented the plan, emphasized that it was only an initial step in the development process, subject to revisions as it winds its way through the Chicago City Council. The developers haven’t determined any cost estimates or concrete timeframes for the project. But they all stressed the importance of including the public in the process at the outset.
“We haven’t submitted applications with the City of Chicago or signed any agreements or developed any agreements with anybody,” said Steven Wagner, co-founder of Continental Properties, the development company that’s been shopping the site. Continental, which has a national portfolio of projects, has worked with retailers such as Target, Kohl’s and Costco.
John George, an attorney representing both Mariano’s and Continental Properties, said that the proposed project must be categorized as a “planned development,” a distinction given to any commercial development over 75,000 square feet. Before the proposal is approved by the City Council, it has to be vetted by various city departments and recommended for passage by the Chicago Plan Commission and the Council’s Zoning Committee, of which Ald. Graham is a member.
“In an ideal world, construction would start anywhere between 13 and 17 months from now,” Wagner said. “From that point on, I can’t give approximations, but I know it’s going to be longer than the typical construction period to sequence [the construction of] the Sears store and then the Mariano’s, so we haven’t worked through that part yet.”
Attorney George added, “What is being built should be exactly what was shown to the community. What we will be showing you is exactly what we will be doing.”
Graham said they also wanted to get community input at the start.
“We’re at the very ground stages of where we’re trying to go and we wanted to bring these designs to you. We will be back with elevations as we move forward [and] get a more realistic picture of what this will look like.”
Mariano’s, which is a subsidiary of the Milwaukee-based retail grocer Roundy’s, features sit-in dining options, a butcher shop, a florist and sushi offerings, among other amenities. It’s most comparable competitors are Whole Foods Market and Trader Joe’s.
The chain has experienced a rapid-growth surge recently.
Since last fall, Mariano’s has bought 11 Dominick’s stores and have been opening new locations every three-to-four weeks this year, according to Wagner. In its quest for more market share, the Harlem and North site is particularly appealing, he noted.
“There’s quite a void in this area right here,” Wagner said. “This store would be important for Mariano’s because it’s part of a geography that’s not covered for them.”
But a Mariano’s in this section of Austin, however, is only a dream without the necessary TIF funding — without which the project won’t go forward, according to TIF consultant Michael Laube of Laube Companies, a real estate finance company.
“What we have here is an obsolete building on a site that has a lot of constraints to it,” he said. “The present Sears building needs to be demolished and the basement needs to be built in. We have a lot of costs that otherwise would prohibit the plan. So, we’re in discussions with the city right now for proposing an appropriate TIF deal; the key features of which are to reimburse us for the extra cleanup costs, the demolition, site reparations and site infrastructure.”
The TIF expenditures, he added, would be justified based on the broader benefits the project would bring to the area. His team is proposing a “pay-as-you-go” TIF, which doesn’t generate value if the development is not financially successful.
“The average store [makes] around $50 million a year,” Laube said. “This project will look to create around 200 to 250 full-time equivalent, temporary construction jobs and about 150 to 250 full-time equivalent retail jobs. In terms of municipal sales tax, we’re estimating that, given the current site plan, it would produce between $600,000 and $800,000 in city sales taxes alone.”
Both Laube and Graham noted that they would push to link the development site with the commercial corridor going north on Harlem and east on North Avenue, so that local businesses can benefit from the extended TIF as well. The site sits at a point where the communities of Oak Park, RiverForest, Elmwood Park and Austin merge, creating both benefits and challenges.
Residents from all four communities at Wednesday’s meeting were overwhelmingly in favor of the proposal, although many had concerns about potential traffic and parking issues.
“Have you thought about having the Mariano’s right on North and Harlem and the parking back [off the street], much like the Sears is now?” asked Judith Alexander, president of the North Avenue Neighbors Association of Oak Park and a resident of the suburb.
Elmwood Park resident and Mariano’s enthusiast Larry Campbell noted that North Avenue is heavily congested around Harlem currently, adding “with Mariano’s and Sears there, I don’t know what we’re in store for.”
Attorney George said that most of the residents’ concerns would be reviewed during a series of traffic studies. The Chicago Department of Transportation will also conduct its own traffic analysis, George said.
Graham stressed that Mariano’s has learned a lot about potential traffic issues from the many other stores it owns.
Regardless of the logistical issues, though, residents and community leaders felt most optimistic about the prospects of a snowball effect from Mariano’s presence.
In April, it was announced that Walgreens and First Merit Bank, both located in Elmwood and right across the street from the proposed site, are scheduled to be rebuilt.
Elmwood Park Mayor Angelo “Skip” Saviano told the Chicago Sun-Times that his village intends to capitalize on the proposed Mariano’s development, something that many residents in attendance hoped would be the mindset of many businesses and government officials to the east.
“Hopefully, there will be a domino effect that will go from Harlem all the way to Austin Boulevard,” said Lee Owens, president of the North Avenue Business Association. “When people see the businesses, those will thrive; a new one will come in, and so forth.”
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The Enterprize Zone is a regular business feature in Austin Weekly News