By Igor Studenkov
For the Bugle
The Village of Morton Grove Board of Trustees will vote on whether to give Chicago-based Ala Carte Entertainment more time to build a Moretti’s Ristorante & Pizzeria location during its Dec. 11 meeting.
In Dec. 14, 2015, the board signed off on the original package of incentives – so long as they completed construction by March 1, 2017. On Oct. 16, 2016, it gave the company more financial incentives to cover environmental mediation and some construction costs, and extended the deadline to the end of 2017. During the Nov. 20 meeting, it held the first of the two readings to extend the deadline until March 31, 2018.
Morton Grove Village Administrator Ralph Czerwinski told the Bugle that the company ran into delays while trying to get some utilities-related permits. The issue has since been sorted out, but la Carte Entertainment needs more time to actually finish it. Czerwinski said that he isn’t worried about the company missing this deadline; if anything, he expects it to open the restaurant earlier than that.
Moretti’s is an Italian-American restaurant chain with locations in Bartlett, Fox Lake, Lake in the Hills, Mount Prospect, Schaumburg, Hoffman Estates and Chicago’s Edison Park neighborhood. It is building the Morton Grove location at the former site of Maxwell’s Restaurant, at 6415 Dempster Street. The village purchased the land in 2014 for $1.4 million.
Under the original agreement, Ala Carte Entertainment would buy the land back, and it would be able to at least partially pay off the principal and interest from two sources – any property tax increases that would happen between 2016 and 2023, and it would use 65 percent of food and beverage tax and sales tax revenue generates over 15 years after it opens. That second source would only use the revenue for 15 years, but if the company manages to pay off the principal and interest before that, it would keep the revenue.
The village board subsequently agreed to reimburse the company for environmental mediation costs and certain construction and infrastructure costs using revenue from Lehigh/Ferris Tax Increment Financing district, where the property is located.
Czerwinski told the Bugle that the latest delay happened because Ala Carte Entertainment was trying to use some of the utilities infrastructure left over from Maxwell’s. But doing that required permits from the Metropolitan Water Reclamation District of Greater Chicago. While they waited for permits, they had to wait to pave the parking lot. The permits have since been granted and construction kicked in full gear, but the delays were enough that the company couldn’t guarantee it would be able to open by the end of the year.
“Plan as you might, one thing can set you back a bunch,” Czerwinski reflected.
He said he was confident that there would be no delays.
“They’re back on track now, so we know they’re going to open ahead of the [deadline] approved,” Czerwinski said.
TIF funds transferred to pay off debts
The Village of Morton Grove Board of Trustees held the first of the two readings required to pay off the bond obligations of the Waukegan Road Tax Increment Financing district with the funds from Lehigh/Ferris TIF district.
The first reading took place during Nov. 27 meeting. Village Administrator Ralph Czerwinski explained that the $1,910,613 transfer would improve improve Morton Grove’s bond rating by getting rid of debt. The TIF was created to improve the area and get rid of cheap motels, he said, and issuing bonds made sense at the time. But now that the TIF accomplished its purpose, it made sense to focus on addressing debt it incurred.
When a TIF district is created, the mount of property tax revenue the village, the park district, the school districts and other taxing bodies get is frozen for at least 23 years. If the property taxes increase, the extra money that would otherwise go to the taxing bodies gets deposited into a TIF fund.
Out of three TIFs currently active in Morton Grove, Wakengan Road TIF is the oldest. It was created in 1995. Unless it is renewed, it will automatically expire next year. The TIF includes the stretch of Waukegan Road between Emerson Street and Meadow Lane, as well as several shopping plazas around the intersection of Waukegan Road and Dempster Street. The village website says that the TIF was created to encourage new commercial development in the area, but Czerwinski was more blunt.
“One only has to think back a decade, decade and the half,” he told the board. “One has to think back of what Waukegan Road was then and what it is now. Some of the motels in the area caused us higher level of service, and it was a blight on our area.”
To help fund redevelopment costs, the village took out general obligation bonds – the cheapest option at the time. But now, Czerwinski said, it was time to pay off the remaining debt.
“Village has been caring it as general obligation debt for a while and paying it down,” he said. “Now, it’s time for taking area that’s thriving very well and thinking holistically to pay this down. [It would] stabilize our Moody’s rating by taking this obligation off our books.”
Under the state law, municipalities can move money between TIFs, so long as those TIFs are “contiguous” to each other. Because Waukegan Road TIF isn’t contiguous to Lehigh/Ferris TIF, the village board will actually have to move on two ordinances. The first will move the money to the TIF that is contiguous – the Waukegan/Dempster TIF – and the second one will move the same money from there to Waukegan Road TIF.
Czerwinski said that Lehigh/Ferris TIF will still have enough money to address its redevelopment costs.
The final vote is expected to take place during Dec. 11 village board meeting.