A city panel today threw a $10 million lifeline to a prominent South Side shopping center that has struggled since losing a Dominick’s grocery store there in 2013.
The tax-increment financing approved by the Chicago Community Development Commission will help finance the acquisition and redevelopment of Jeffery Plaza, a 113,000-square-foot retail property in South Shore. The shopping center’s new owner, a venture led by the Jakubowski family, plans to fill the empty Dominick’s space, totaling 62,000 square feet, with a new Shop & Save market, according to a report prepared for commission members.
The city has been pressuring Jeffery Plaza’s current owner, Los Angeles-based Cannon Commercial, to find a new tenant for the former Dominick’s store or sell the shopping center, which sits at the southeast corner of Jeffery Avenue and 71st Street. The city had threatened to use its powers of eminent domain to seize the property.
Cannon, which put the shopping center up for sale in May 2017, is facing a big loss on its investment. The investment firm is selling the property for just $13 million, well below the $19.5 million Cannon paid for it in 2006.
The closing of the Dominick’s was a blow to a neighborhood with already limited grocery options. The closest grocery store, a Jewel, is more than a mile away, according to the report.
“After a five-year absence, the project will once again provide a retail destination where community residents can obtain fresh meats, fruits and vegetables,” the report said.
The Jakubowski family will own both the shopping center and the Shop & Save store. The family already owns and operates six Shop & Save markets in the Chicago area, the report said.
The entire project will cost $23.8 million, with the $10 million in tax-increment financing as the largest funding source, according to the report. The new owners will finance the rest of the development with $9.2 million in debt, $4.0 million in new market tax credits and $595,000 in equity, the report said.
In exchange for receiving the TIF subsidy, the Jakubowskis must operate a full-service grocery store at Jeffery Plaza and maintain a 50 percent occupancy rate for the other space in the shopping center, according to the report. They also cannot sell the property for 10 years.
The financing still must be approved by the Chicago City Council.