Mayor on Portillo's Rebate: 'It Is A Lot Of Money'
Circumstances on the existing plot of land targeted for a Portillo's requires public participation to draw the restaurant that is one of "the most talked about things in the last 3 or 4 months in the community," according to the Town of Normal Mayor.
"Because it's a redevelopment site, it's more expensive," said Chris Koos, during Sound Ideas. "The cost of taking that facility down, the Motel 6, is cost prohibitive. At the end of the day, we would not have gotten that restaurant."
The developer will get a tax rebate of $1.825 million over five to seven years to make up for a rate of return lower than the developer says is reasonable. Koos said of the incentive package, "it is a lot of money" and that he didn't think any council members would deny that. Costs associated with demolition of the Motel 6 and site prep will eat into the developer's return. Interest payments on the rebated amount could drive up the amount the amount the town has to pay to as much as $2.5 million dollars, unless the town is able to pay off the total amount to the developer early.
"We're taking a very hard look at that (paying the rebate off early)," said Koos. "Possibly an internal borrowing from a reserve fund to pay that immediately, which would significantly reduce the interest costs. But we've not made that decision yet."
The restaurant announced its location late last week along Parkway Plaza Drive between Landmark Drive and Veterans Parkway. Koos said there is language in the agreement to protect the town's investment in the event the restaurant closes or moves.
"The agreement stipulates that Portillo's corporation will pay that tax money back and/or put another viable restaurant in that location, so we're pretty well protected on that," said Koos.
He also said he expects the Portillo's to help with other development in the area, including helping to fill a soon to be vacant Kroger's grocery store.