Joliet panel OKs $1 million incentive deal for El Guero supermarket

The city would provide more than $1 million in incentives to attract a supermarket to a former Certified Warehouse Foods store, according to terms that received preliminary approval on Tuesday.

Supermercados El Guero plans to open a new store at the Jackson Street site by summer 2020, city officials said at a meeting of the Joliet City Council Economic Development Committee.

The committee voted, 3-0, to recommend that the full City Council approve the incentive package.

The incentives include 15 years of sales tax rebates as high as 75 percent, five years of property tax abatements and a $100,000 grant from the city.

The total value of the incentives is estimated at a little more than $1 million, although they could top $1.2 million depending on how much business the store does over 15 years. The company plans to spend nearly $5.8 million renovating the store and neighboring retail property, city officials said.

“It’s an unusual situation where a retail business is being targeted for tax abatements,” Economic Development Director Steve Jones said.

But, he added, the city wants to bring the supermarket into an area that meets federal standards for being labeled a food desert.

“When the stores closed, everyone was freaking out because this was such a loss on the East Side,” Jones said.

Certified Warehouse Foods in April 2017 closed its two East Side stores, and the city soon got involved in the effort to find replacement grocers at both locations.

There are no grocery stores near the former Certified Warehouse Foods at 1225 Richards St., although there are a few independent Hispanic grocers in the vicinity of the store at 118 E. Jackson St.

The Richards Street store has been acquired by the Existential Counselor Society, which is converting the building to a drug rehabilitation center.

Jones said Save-A-Lot Food Stores at one time appeared to have “strong interest” in both locations. He said city staff also talked with Aldi about the vacant stores.

“We worked and worked and worked before El Guero came forward,” he said.

El Guero is a regional chain of six supermarkets, including one in Crest Hill. It has two stores in Aurora and three others in Chicago.

The Garcia family that runs El Guero has been in the business for 44 years, Andres Garcia, general manager for the stores, told the Economic Development Committee.

“There was one time that we had 16 stores altogether,” Garcia said. “But the small mom-and-pop stores just started dying off.”

The Crest Hill store replaced a former Eagle supermarket.

Garcia said that the Crest Hill store at first was stocked primarily for an Hispanic market, but merchandise selection was broadened to appeal to other ethnic groups. He expected the Joliet store would be similar to the Crest Hill location.

“We try to provide full service and give something to everybody,” he said.

Derek Conley, economic development specialist, said the 36,000-square-foot grocery store will “require a significant investment” before it reopens. The future store is expected to employ 85 people.

El Guero will remodel an additional 19,000 square feet of adjacent retail space.

Conley said Joliet has been losing East Side grocery business to stores in Lockport and New Lenox.

“People are literally leaving our town to buy goods in another town, which is not good from a financial standpoint,” he said.

The incentive package provides El Guero with a 75 percent rebate on its sales taxes for the first three years and a 50 percent rebate in the following 12 years. The rebates are capped at $1,156,000, although Conley said they are estimated to be closer to $890,000 based on expected sales.

Property tax abatements would provide an additional $78,000.

The $100,000 grant would come through the City Center Partnership.