FOX LAKE – The return of an Ace Hardware to Fox Lake will cost the village up to $50,000 under an economic incentive agreement approved unanimously by the Fox Lake Village Board this week.
The agreement is the result of a yearlong negotiation process, Village President Donny Schmit said, adding that it includes two items that some previous economic incentive agreements didn't have: an end date and a cap.
Under the agreement, Ace Hardware will receive 50 percent of the sales tax generated by the store twice a year for the next four years. The total amount it can receive over that period is capped at $50,000.
The number is based on Ace Hardware's projected sales, which the company puts at $1.5 million. The amount the village would receive in sales tax from those sales would be 1 percent, or $15,000, but under the agreement, Ace Hardware would get half of that revenue.
The Ace Hardware opened at 107 Towne Centre Lane on July 1 after spending about $80,000 on tearing out the store, making structural improvements and installing all the shelving, Schmit said.
The location has sat empty for a year after the bar and pool hall that was located there closed, he said. The village has also been without a hardware store since the Ace Hardware on Grand Avenue closed at the end of 2012.
The vacancy of the building is one of the criteria a business is required by village ordinance to meet in order to qualify for a sales tax rebate agreement. It also stipulates that the project will create jobs, enhance the village's tax base, stimulate development and would not be possible without the assistance.
The village currently has four outstanding sales tax rebate agreements, Schmit said.
The last agreement – which was with Thorntons gas station at Route 12 and Grand Avenue – required then-Village President Ed Bender to break the Village Board's tie.
Schmit voted against that agreement, which gives Thorntons up to $150,000 in sales tax to repay the company for the landscaping it did on village-owned land.
"It was our 13th gas station in town," he said. "For a sales tax incentive, it should be something unique for our village. We don't have a hardware store. It's going to draw dollars to our village that are going to other villages."
The three other economic incentive agreements are with Ray Suzuki; Val's Grocery Store; and KRG Fox Lake Crossing LLC, which owns the plaza where the former Dominick's building is.