March 9 was a rough day for the village of North Riverside. First came news that Toys R Us was on the verge of liquidation. Then later that afternoon, came word that Tony’s Finer Foods was heading to Berwyn, lured by a multimillion dollar city-funded incentives package.
The Berwyn City Council on March 13, after the Landmark’s press time, was expected to vote to approve reimbursing the grocer about $5.2 million in sales taxes over a period not to exceed 25 years.
The company also will not be charged building permit and utility tap-on fees, according to an economic incentive agreement that’s part of the Berwyn City Council’s online meeting packet.
“It’s a bad situation,” said North Riverside Mayor Hubert Hermanek Jr., who received a phone call from Berwyn Mayor Robert Lovero about the deal on Friday afternoon.
Hermanek called the conversation “difficult.”
“Villages just don’t do that to their neighbors,” said Hermanek of Berwyn’s move to poach a valuable sales tax generator. “That’d be like me calling my friend [Forest Park Mayor] Tony Calderone and saying we were taking Currie Motors.”
In a statement emailed to the Landmark through a spokeswoman, Lovero said the city of Berwyn never reached out to Tony’s. Rather, he said, the business contacted the city.
“The owner of Tony’s reached out to me to express interest in moving to Berwyn,” Lovero said in the email. “At that point, Tony’s had already been in negotiations with Meijer and Cermak Plaza. Because this move was in the best interests of the city of Berwyn and its residents, we helped carry out this agreement.”
Lovero also made reference in the email to Costco, a business he said the city of Berwyn lured to the area as a result of its “Why Berwyn?” marketing campaign, only to see it locate in North Riverside.
Berwyn, according to Lovero, was “mapping a couple of locations” for Costco, including the Cermak Plaza.
“The city of Berwyn had originally been having discussions with Costco, however, North Riverside ultimately struck a deal with them,” Lovero said in the email to the Landmark. “While it was a blow to Berwyn, we were confident it was still a win for the area.”
Hermanek called Lovero’s claim about Berwyn luring Costco to the area “absolutely false.”
According to a site plan obtained by the Landmark, Tony’s will occupy about 71,500 square feet in the Cermak Plaza shopping center, 7111 Cermak Road, a space that formerly housed Meijer.
It does not appear from the site plan that Tony’s will occupy the space that housed Meijer’s pharmacy. Even without the pharmacy space, the move will allow Tony’s to increase its retail footprint by almost 25 percent.
The new store is expected to open in the latter part of 2018.
Hermanek said he was aware that Tony’s had been looking to expand its operation, and that North Riverside officials had also been negotiating a package of incentives that might have allowed the store to expand its current location at 7401 25th St.
According to Hermanek, North Riverside had agreed to a $2.5 million incentive over 10 years.
But there was another factor that may have been just as important, said Hermanek. The city of Berwyn had been courting large grocery chains to take over the former Meijer spot, which opened in 2012 and lasted just five years before closing its doors.
Pete’s Fresh Market reportedly had expressed some interest, as had Cermak Produce, which was a competitor Tony’s did not want so close by, according to Hermanek.
By taking over the Meijer location, Tony’s will be better able to control competition, at least in the short term. The reason for that is that the parent company of Tony’s owns the entire shopping center where its North Riverside store is located.
The company bought the strip mall in 2007 for $21.75 million. Tony’s Finer Foods opened there in 2008.
“I don’t like the argument, but I get it,” Hermanek said. “Cermak Produce was nosing around Berwyn and they didn’t want the competition.”
Hermanek said he would like Tony’s parent company to give some attention to redeveloping their current property, which has many vacancies and areas that are rundown, such as the area in the parking lot where a bank drive-thru facility once stood.
“I’d like to see some large development and for them to clean it up,” Hermanek said. “I hope they spend some money and refurbish it.”
This story has been changed to reflect that the information regarding Costco’s interest in Berwyn came from Berwyn Mayor Robert Lovero. That info was relayed through a public relations firm.