Aurora will be giving a planned grocery store on the city’s West Side a forgivable loan of $325,000 after City Council members voted to approve the loan Tuesday night.
The Rodriguez family owns two El Paso Grande Super Mercado locations in Aurora, both on the city’s East Side, but they have been trying to open a third store in the former Aldi location at 2134 W. Galena Blvd.
City staff members have said the family has invested upwards of $3.4 million in the planned store on the West Side, but they are having a perfect storm of issues that have kept the store from opening.
Among those issues are the coronavirus pandemic, a fire in one of their East Side stores, roof damage at the planned West Side location and a vendor that, after being paid around $500,000, did not deliver the promised equipment, officials said.
While the family’s company has been able to stay afloat despite these issues, it is currently lacking the cash it needs to get the proposed West Side location open, a city staff report about the resolution voted on by the City Council said.
“It is in the best interest of the city and El Paso to get the West Side location open as soon as possible and ensure the long-term viability of this now second-generation business,” staff said in the report.
It is estimated that the loan will help to get the store open by the start of August by providing the funds needed to stock the store’s shelves, finish paying off roof repairs and provide working capital, among other uses, according to the report.
Officials said in the report that the city is expected to get roughly $10,000 per month in sales taxes from the store, which will likely employ around 60 people and bring in customers from the city’s West Side as well as the surrounding communities of Montgomery, Sugar Grove and Yorkville.
The shopping center where the store is planned will also get a boost from the proposed store, as the spot has been empty for more than eight years, the report said.
Aurora aldermen voted 9-1 in favor of the forgivable loan, with Ald. John Laesch, at large, voting against it and Ald. Edward Bugg, 9th Ward, absent.
As approved, the loan is set to be repaid over six years using half of the tax revenue generated from the proposed grocery store. If the store underperforms or does not open, the company and the Rodriguez family be on the hook for the amount not recovered from those tax dollars.
Laesch said he took issue with the way the loan was to be repaid, which is why he voted against the resolution. If the company was required to repay the full loan using its own revenue, instead of the loan being repaid with tax dollars, he likely would have been in favor, he said.
City staff members said that the store will not be able to generate any tax revenue for the city until it is open.
“Every month the store’s not open the city loses, literally loses, $10,000,” Aurora Economic Development Director David Dibo said at the Tuesday meeting. “If, for some reason, 50% of these sales taxes do not fully repay the loan, then the family will repay the difference. So, in that regard, its actually better than a traditional loan.”
Once the loan is paid off in at most six years, either through tax revenue or repayment, the city will get the full tax revenue from the store, according to the staff report.
rsmith@chicagotribune.com
