The Commercial-News, Danville, IL

December 13, 2012

New grocery store receives city financial assistance

BY JENNIFER BAILEY
Commercial-News

DANVILLE — Ruler Foods is the latest business to receive city economic development funding for its renovations.

The discount supermarket, a subsidiary of Kroger Co., is going into the former Save-A-Lot store space at Main and Griffin streets, north of Dollar General.

The grocery store is expected to open early next year.

To help with purchasing refrigeration, cold storage and other equipment and fixtures, the city is providing Kroger Co. $225,000 in funding.

The Kroger Co. is one of the worlds’ largest grocery retailers, with fiscal 2011 sales of $90.4 billion. Kroger’s Family of Stores spans many states with store formats that include grocery and multi-department stores, discount, convenience stores and jewelry stores.

Also for the project, Danville Public Development Director John Heckler said $30,000 is coming from the city’s revolving loan fund.

The remaining $195,000 is coming from the city’s Community Development Block Grant funding earmarked for economic development projects.

Danville Neighborhood Development Manager John Dreher said these types of projects and any city assistance are “always initiated by way through Vermilion Advantage.”

The city earmarks a certain amount of money each year for economic development projects. The money can be used for acquisition of land, construction, infrastructure such as roadway or sewer work, tools and machinery, inventory and other renovations.

In the Ruler Foods case, with an empty building, the funding is assisting with putting in refrigerated food storage which can cost a couple hundred thousand dollars, Dreher said.

Dreher said the $30,000 from the revolving loan fund is a “forgivable loan.”

The revolving loan fund has been around in the city for about 30 years.

The program would involve low-interest loans for business renovations and help businesses get established, or assist established small businesses in growing their business, with payments returned to the city.

In recent years with rock-bottom interest rates and business people saying they can’t pay the money back, the city has given out the “forgivable loans,” Dreher said.

“The revolving loan fund has been dwindling,” he added. “In all fairness, it re-circulated for 30 years.”

As for the city’s CDBG funding allocated for economic development projects, on any given year there can be money left over.

In 2008, the city had $326,350 in CDBG money for economic development projects.

Funding was used for pedestrian sidewalk improvements downtown on Hazel Street and also a Systrand Presta project received $75,000 for equipment. Other businesses benefiting from CDGB economic development funding since 2009 include: Illini Castings, Ecofit Inc., Towne Machine, T.h. Snyder for its relocation and HRW.

For HRW, 1850 E. Voorhees St., it received $175,000 in CDBG funding to assist with the initial purchase of product inventory.

The business’ product is a high-quality milk replacement ingredient known as Cheese Meal used in feed for baby pigs. The $1.3 million investment was expected to employ up to 25 full-time employees within the first year of operation.

For the current 2012-2013 program year, the city started off with $280,000 in economic development CDBG funds.

Dreher said because the money was not moving a lot this year, $150,000 was transferred for demolitions of dilapidated buildings.

In exchange for the CDBG funding, agreements differ, but in general the business must build the facility/store and offer jobs. According to a formula of $15,000 in funding per job, for the $195,000 for Ruler Foods, the business should employ 13 people.

Dreher said some businesses can reach the jobs number in a few months, but for others it could take a year or two.