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St. John Redevelopment Commission pledges 95% of TIF revenues to support Jewel Osco project
Summary
The commission approved a resolution pledging most tax increment revenues from a new allocation area to revenue bonds for redevelopment of the former Kmart site into a Jewel Osco grocery, with the town retaining no obligation for bond shortfalls.
The Town of St. John Redevelopment Commission on April 23 approved a resolution pledging 95% of tax increment revenues from the newly created TIF allocation area for the former Kmart site to pay economic development revenue bonds that will fund part of the proposed Jewel Osco grocery project.
The vote was 4 to 0 to adopt Resolution 2025-04-23A, which caps bonds at $3.5 million and limits interest to no more than 8%. Tom Everett, attorney with Barnes & Thornburg, told the commission the bonds "would be solely payable from tax increment revenues that are generated by the project itself," and that "no funds or taxing authority of the town is pledged to these bonds." He added the commission would retain the remaining 5% of those funds for uses allowed under the redevelopment statute.
Why it matters: Commissioners and financial advisers said the transaction is intended to attract private investment to a property that has been vacant for years and to avoid using town general revenues. Andy Mauser of Baker Tilly, the town's financial adviser, described the approach as "a very traditional use of TIF" and explained that only the increase in assessed value from new development — not the existing base tax revenue — would be captured to pay the bonds.
Details and local impacts: Mauser said the existing Kmart property has an assessed value of about $1,700,000, producing roughly $28,000 a year in taxes today, of which about $6,000 returns to the town. The presenters said the project aims to raise the property value into the $10 million–$15 million range and to increase annual taxes into a projected $200,000–$300,000 range; those increases would be captured within the TIF. Jimmy Shanahan, speaking for the developer, said the project would involve at least $25,000,000 in private investment and estimated 12 to 15 months of development time beginning around mid-July if the commission moved forward.
Bond and liability limits: Presenters repeatedly emphasized that if TIF revenues fall short, the developer — not the town or its taxpayers — would be responsible for any difference. Everett summarized that if there were a shortfall "there would be no obligation of the town to make up that shortfall." The commission also noted the bonds "would have no impact to the town's credit rating," according to Everett.
Project work and other improvements: The developer and commission members described substantial site work planned as part of the proposal, including an internal service road to improve access and safety. Commissioners praised town staff, consultant teams and the developer for securing a user for a site they said had been vacant and blighted for more than a decade.
Votes at a glance: The commission voted 4–0 to adopt Resolution 2025-04-23A, pledging the described TIF revenues to payment of economic development revenue bonds for the Air Alchemist LLC project (the recorded name in the meeting record). The motion to adopt was made on the record and seconded; the motion carried 4 to 0.
