By Charlie Feldman
Two incentives for the economic growth of Pete’s Market were put into action at the Troy City Council’s Zoom meeting held on Monday, November 16.
Pete’s Market is scheduled to open in February in the remodeled Schuette’s Market building.
The first was an Enterprise Zone Tax Abatement. When Troy’s Enterprise Zone was redrawn, the new boundaries included the empty Schuette’s Market.
“There are several items within the Enterprise Zone statute which allow for incentives,” Mayor Allen Adomite explained, The biggest, he said, is sales tax exemptions on building materials purchased from businesses within the state of Illinois. The second biggest, he said, is property tax abatement for up to the first 10 years.
“We’re limiting the EAV [Equalized Assessed Value] growth,” Adomite said. “It completely abates it. Then it grows back to one hundred percent at the end of ten years and it does it with a percentage growth.”
The abatement is only on the incremental increase on the value of the property over that period, said City Attorney Fred Keck.
Tax revenues will be smaller than in the old store. “There was thirty-something thousand dollars in taxes paid when the Schuettes were there,” Adomite said. “It’s been reassessed for about a quarter of that value because it was originally assessed at a $1.6 million market value. It actually sold through the bankruptcy court for about $425,000 and reassessed down to that level.
“So the taxes on that property area going to shrink for everyone in terms of revenue that other taxing districts will receive,” he said.
The ordinance approving of an Enterprise Zone Tax Abatement for Pete’s Market means that only the city, Keck said, not other taxing districts like the school or the library or the fire department, is currently abating the increase in the value of the tax on that property.
“Once we act on it we can ask other taxing districts to consider it as well,” Adomite said.
“We represent about ten percent of that tax bill,” he said. “The school district represents about 60 percent of it. So it is my intention to take Mr. Patel and go to other taxing districts in our area, most importantly, the school district” to ask them to pitch in as well as far as to incentivize bringing a grocery store back to Troy.
He said that if the school district abates it, it could actually get money back through general state aid and get reimbursed for that difference.
There are other incentives as well. The city also approved a Business District Redevelopment Agreement in which the city will assign the tax proceeds from the sales that would happen within the grocery store property to repay the developer for the term of the district. And there’s more.
“We’re taking our portion of the existing property tax, “ Adomite said. “Pete Patel will pay that at the county. We’ll get it – and again I’m talking about that’s $750 or maybe $800 at most in terms of the way it’s been reassessed – and we’re going to rebate that back to him … for a term of ten years as well. And then we’ll be taking proceeds of the extra 1 percent that’s collected from the business district and rebating that back.” And there are still more incentives.
The council also passed an ordinance abating this year’s tax levy to pay the principal and interest on General Obligation Bonds Series 2016. This is the fourth year in a row this has happened, according to Keck. Ten million dollars in bonds were issued for the water plant project in 2016 and a direct annual tax was levied to pay the principal and interest.
“We’re just saying we’re not going to collect the property tax,” Adomite said. “We’re eligible to, but we’re not going to. We won’t be collecting the property tax because our Enterprise Fund revenue has been robust enough to cover the general obligation bonds that were specifically issued in 2016 covering the water plant.”