ROCHELLE — At its July 22 meeting, the Rochelle City Council unanimously approved an ordinance to hold a future public hearing for the potential designation of a new tax increment financing (TIF) district at the Caron Ridge Shopping Center, the former site of Sullivan's Foods that has been vacant for seven years.

The new TIF district would be called the Eastern Gateway TIF. The city already has three TIF districts, which grow funds after development is seen in an area based on the difference in improved value. That money is then used to incentivize developers. The Eastern Gateway TIF district would include the entirety of the building Sullivan’s used to be housed in, along with some vacant farm land near the truck stops in the city’s eastern gateway.

“We want to address that vacancy and blight and bring some new life into that space,” City Community Development Director Michelle Pease said. “And then it includes three parcels to the east, two long strips of farmland and one smaller parcel that's contiguous with Road Ranger. That's to help that corridor develop where people come into our community. There's a lot of opportunities already there with hotels and restaurants and truck stops. This TIF will assist with developing that corridor coming into town.”

City Manager Jeff Fiegenschuh called the city’s already-existing TIF districts “very successful”. Its Northern Gateway TIF recently helped to attract projects including Benny's Corner Market and Breakthru Beverage.

TIF funds can be used for infrastructure and site development and improvement. They cannot be used to construct new buildings, but can be used to redevelop existing buildings. The funds can also be used to mitigate flooding issues, which have occurred in the farmland areas in the eastern gateway that are included in the potential new TIF. 

“I commend the mayor and council and our staff for being progressive and proactive,” Fiegenschuh said. “I think these TIFs have done exactly what they're supposed to do, which is redevelop blighted property or bring in a new business we don't have.”

The city’s move towards the potential new TIF district came after the Sullivan’s Foods company and the Caron Ridge Shopping Center building changed hands into new ownership. The city has had conversations with the new ownership and developers interested in opening businesses in the building.

“We've had multiple meetings with the new owners of the building that have some big box retailers that are talking about their gaps in financing and not being able to do the project with some sort of assistance with the TIF district,” Pease said. “Those conversations have been going on for quite some time and they're still ongoing. The current owner would probably lease that space and develop it as the big box stores see they need to.”

Fiegenschuh said that developers have expressed interest in development deals involving TIF funds to make a project work financially. Conversations have included the possibility of repurposing the larger former grocery store space for a different use utilizing less space, Fiegenschuh said, which could prove to be a “very expensive endeavor.”

“The financials just aren't there and they say the sales may not be there for the right rate of return if they redeveloped the space because all 40,000 square feet isn't needed,” Fiegenschuh said. “They want to repurpose the building and develop a portion of it. The TIF can go in and help repurpose the building. That's why the Caron Ridge Shopping Center makes so much sense for a TIF because you have a building. There are some tenants, but a majority of the square footage has been vacant for 7+ years. You can redevelop the site and make infrastructure upgrades. Because it's been vacant, 100 percent of those TIF dollars can go to redeveloping the building.”

Pease called the process of establishing the potential new TIF district “lengthy”, and it will include a joint review board meeting Aug. 19 and a public hearing in September. The final ordinance to accept it will be in October. Once that takes place, the city can start talks on deals with developers. 

“All of this absolutely makes us excited for the future of that space,” Pease said. “And we don't want to get ahead of ourselves, but there are already conversations with developers on the vacant farm land to the east as well. They're looking at us as a location they might want to build on.”

The big box retailers that have been looking at the former Sullivan’s Foods space are not grocery stores, Fiegenschuh said. Since the closure of Sullivan’s, the city has worked to bring a third grocery store back to town, but the interest has not been seen, he said. 

“Who we've been talking to is not a grocery retailer,” Fiegenschuh said. “I know that disappoints some people. Michelle has worked the phones hard to get another grocery store and there just isn't an interest at this point because of the market and where we're at. There are other types of national retailers that are interested. Maybe we don't get a third grocery store, but maybe we get some retail that we've never had before that brings people from DeKalb or Rockford here. There's definitely synergies there. I'm super excited. Michelle and her team are doing a great job.”