North Riverside could lose its single largest sales-tax producing business next year if a new lease deal can’t be worked out in the meantime.

Edward Don and Company, the foodservice equipment and supplies distribution giant, has been settled comfortably for 40 years at its unassuming, well-manicured corporate headquarters at 2500 Harlem Ave.

But its lease is due to expire at the end of 2012, and the land owner has the 19-acre property on the market. A pair of large “For Lease” signs went up at the corner of 25th Street and Harlem Avenue around the beginning of April.

“It would be devastating to the village, even if they brought someone in with the same sales tax,” said North Riverside Village Administrator Guy Belmonte.

The property’s owners, meanwhile, said there is a major retailer with a strong interest in the property if it should become available. But luring that retailer might take concessions from the village and would result in a lengthy transition from one use to another.

“It would definitely hurt the village, because there would be a dead period,” he said. “It could be anywhere from eight to 12 to 14 months.”

Just how much money Edward Don accounts for in sales tax annually is a figure North Riverside officials say they can’t divulge. But in a village driven by sales tax giants, including mall-sized department stores, two car dealers and large supermarkets, Edward Don stands alone.

“Edward Don is our No. 1 sales tax provider,” said Sue Scarpiniti, the village’s finance director.

Jerald Much, president of Lincolnwood Developers, which partnered with Monroe Investment Partners in August 2007 to buy the property, said the possibility of a deal with Edward Don “is not dead. But [are negotiations] active? They’re shopping and they have been,” said Much.

Several calls to Steven Don, president and CEO of Edward Don and Company, were not returned.

Part of the reason Edward Don is shopping is that for the past 40 years, according to Much, the company has paid rent far below what is considered market value. The property was at one time owned by part of the Don family.

In 2007, that branch of the family, which did not have a stake in the company, put the property up for sale. While Edward Don and Company bid for the property, it was outbid by Much’s partnership, which bought the property for $14.75 million.

According to information found on LoopNet.com, a commercial real estate services website, the property owners are looking to charge $4.35 per square foot for rent. Much says that Edward Don pays far below that figure.

“Their rent is very, very below market,” Much said. “They’re paying half of what the normal rent should be.”

There are other issues with the 309,000-square-foot warehouse/office building. The building needs a new roof, which is going to be a significant expense and one Edward Don would have to take on, according to Much.

The company reportedly has inquired about what the village can do to help it with that expense, but North Riverside wants a commitment from the company that it will stay put long-term.

The village has granted the company money in the past. In 2007, North Riverside handed Edward Don a $150,000 grant to expand parking at the site. In exchange the village got an agreement from Edward Don that the company wouldn’t move prior to the end of 2012, when its lease expired.

But, according to Much, Edward Don isn’t inclined to give any long-term commitments to the village at this time.

“The village would be justified in helping out if they were going to stay,” Much said.

North Riverside Mayor Ken Krochmal confirmed that Edward Don approached the village, but said they never made a concrete proposal.

“We talked to them,” Krochmal said. “But they never asked us for anything. We’d look favorably on a long-term lease. A short-term lease would not help us out.”

However, Edward Don has actively been seeking out new locations for a headquarters complex. The company reportedly was working on a deal to buy land that’s now a municipal golf course in Bensenville for a new home.

Such a deal was reported by Elmhurst Trib Local on April 4. The Legends Golf Course is part of a TIF district in Bensenville. According to the Trib Local report, village officials were looking to extend the life of the TIF to accommodate “a major food service corporation” which was “interested in building a 365,000-square-foot headquarters on that site.”

The Trib Local report did not mention the name of the company seeking the property, but Much revealed Edward Don was that company. He also stated last week that the Bensenville deal was off.

But while Edward Don appears to be actively shopping for a new site, the cost to build a new headquarters and move the operation is a big factor.

“They like the location and a number of employees take public transportation to work,” said North Riverside’s Belmonte. “It’s easy to get to. When they look into having a building elsewhere they have to take into account travel costs.”

It will also take time to build a headquarters, and Edward Don has a lot of office space in its complex – 56,000 square feet, according to Much – something that won’t be easy to find in an existing warehouse set up.

“Some buildings further out are cheaper, but there’s a terrible moving cost and personnel have to consider if they want to make the move,” said Much.

Krochmal said he believes Edward Don wants to stay in North Riverside.

“From my understanding they do not want to move,” Krochmal said. “They’re a very good neighbor to the village of North Riverside.”

In the meantime, Much said, the property owners would prefer it if Edward Don remained in North Riverside and have not closed the door to that possibility.

“Nothing is finalized,” Much said. “We’re still hoping they’ll stay, but there’s nothing we know about yet.”

Much does know one thing, however. Should Edward Don decide to move elsewhere, there is interest in the North Riverside site right now. While he wouldn’t disclose who it is, “There is interest from a major retailer in that property,” Much said.

“The alternative we have in mind is a great opportunity,” he said. “The retail option would be a dream for the village in my opinion, but they’re going to have to stretch for it.”

Just what kind of retailer could fit on the Edward Don property? A very large one.

The size of the property is deceptively large at nearly 20 acres. The building itself covers 365,000 feet or more than double the average size of a Costco warehouse (145,000 square feet, according to Costco’s corporate website), for example.

“If Don’s mind is made up to go elsewhere, [North Riverside] should consider the option that’s on the table, which means some creative thinking,” said Much.

Krochmal said if there is a specific retailer interested in the property, the property owners haven’t made that known.

“Nobody has approached us,” Krochmal said. “They have not shared any information with us or asked us for anything.”

Any large retailer is going to be looking for incentives, which are limited in North Riverside. The village doesn’t have any TIF districts and has been reluctant in the past to create any. In any case, it’s unlikely that the area including the Don property would even qualify for such a designation.

The village’s principal tool in the past has been to give businesses development grants, ones that can be recouped within a few years through additional sales taxes. In 2007, the village gave two of those grants, the one to Edward Don and a $600,000 grant to the Joe Rizza car dealership. In 2006, the village handed out $600,000 to assist Best Buy in expanding its store.

But those grants have been curtailed in recent years as the village has struggled to balance its budget. With revenues down across the board in 2009-10, for example, the village issued $2 million in short-term debt to cover operating expenses, according to that year’s financial audit. That debt is scheduled to be repaid in December 2011.

“As a municipality in the past we’ve given grants, but that was for remodeling and expansion,” said Belmonte. “But I’m sure there are things we can do.”

Krochmal said that he’s willing to discuss incentives with any potential end-user of the Edward Don property.

“You’re absolutely correct that we’re willing to work with them,” Krochmal said.