St. Charles City Council approves economic incentives for Blue Goose Market successor

ST. CHARLES – A “premium national grocer” is set to fill the vacant Blue Goose Market in downtown St. Charles, and City Council members voted to give the grocery store developers up to $2.6 million in tax rebates at Monday night’s meeting.

City Council members also voted to approve a Planned Unit Development agreement amendment to allow the grocer a 20-foot sign on the northwest corner of the lot and to execute a restated declaration of covenants, conditions, restrictions and easements for the site at 300 S. Second St.

The ordinances were approved in three unanimous votes. Alderpersons Paul Lencioni, who is the former CEO of Blue Goose Market, and Ryan Bongard recused themselves from voting.

All three ordinances were recommended for approval by the planning and development committee at a meeting June 12.

The lot has been vacant since March 2022, when Blue Goose Market closed after more than 90 years in business. The city is working with Swanson Development Group & Fort Union, or SDGFTU, LLC, on the new development project.

With the sale of the property still not official, the former Blue Goose Market still is owned by Lencioni. City officials are keeping the name of the proposed grocer a secret while approving incentives for developers.

Under the approved economic incentive agreement, the city will pay a portion of the sales tax generated by the grocery store back to the developer. Developers will receive up to $2.6 million in sales tax rebates over the next 15 years.

In the first four years of the agreement, the developer will receive a return of 100% of the city sales tax and 66.66% of the home rule tax generated by the store. Beginning in year five, the developer will receive a 50% return of both the city sales tax and the home rule tax.

The rebate will remain at 50% until the 15-year agreement expires or the $2.6 million maximum is received by the developer. Sales projections estimate the maximum amount will be achieved in year 12 of the agreement.

The grocery store is projected to generate $8.3 million in taxes during the length of the agreement. Of that, the city will receive a net share of $5.7 million.

According to the agreement, developers will front the cost for resurfacing and streetscape improvements to both their own property and city-owned parking lots along First Street.

Upon completion, the city will reimburse the developer for construction costs not to exceed $915,000. The quality of work and materials will match the city’s adjacent First Street redevelopment and developers would be responsible for all future maintenance of the lots.

The projected total development cost for the project is $10.6 million, including acquisition, construction and financing but not including the $11.6 million interior buildout to be done by the grocer tenant. Construction is expected to start next spring, with the grocery store opening by spring 2025.

The incentive agreement will be terminated if the grocery store does not open by May 1, 2026. If the developer does not invest at least $10 million on the project, the city has a right to reduce the maximum sales tax rebate proportionally.

Should the grocer never open, the city would not release any tax rebate incentives to the developer, but still would reimburse the developer for the improvements to the city-owned parking lot and streetscape.

City Council members also approved a restated declaration from the developer that modifies the terms of the shared use agreement for city-owned parking lots adjacent to the store parcel. The lot has 80 private parking spaces.

The adjusted declaration will allow the grocer access to 61 city-owned spaces, increased from 31. The developers will be responsible for maintenance and repair of driveways, pavement, signage and lighting on all private and adjacent public lots.

Developers also are proposing the installation of a 20-foot pylon sign at the northwest corner of the parking lot.

Because the proposed 20-foot, 64-square-foot circular sign is in violation of zoning standards, a PUD amendment granting deviations from the standard sign height and area requirements was approved by the City Council.