September 17, 2021

Montgomery Village Board backs grants, sales tax rebate pact for Gray's Mill project

The Montgomery Village Board has instructed their attorney to prepare documents for two incentive grants totaling $400,000 to a development group seeking to renovate and locate five businesses in the historic Gray's Mill building at River and Mill streets in the village's downtown.

In addition, the board voted 5-1 to enter into a sales tax rebate agreement worth up to $150,000 with the developers, Gray's Mill Partners, LLC.

The village's development fund committee previously reviewed the developers' grant request and recommended it for board approval.

The board voiced support for awarding the $400,000 grant in two phases. The village would award the first grant of $200,000 to the developers upon the village's issuance of an occupancy permit for the first phase of the project, and then a second grant of $200,000 upon the completion of the project's second phase improvements.

Under terms of the sales tax rebate agreement, the village would split the sales tax receipts generated by the new businesses that would locate in Gray's Mill for up to 15 years, capped at $150,000.

Board member Tom Betsinger cast the lone negative ballot on the motion to approve the sales tax rebate agreement.

Betsinger explained he is in favor of the project, but expressed concern at the amount of money--$550,000--the village is committing to what is a private project.

"The sales tax rebate agreement is a little over and above, given the projected revenues and expenses for this project," Betsinger said. "That extra $10,000 a year (in rebated sales tax for 15 years) is not going to stop the project. It's not going to make or break it. There needs to be a line somewhere and I'm not suggesting I know where that line is."

Between the grants and sales tax rebate agreement, Betsinger said the village will be funding approximately one-third of the project and expressed concern about the village setting a precedent for funding future redevelopment projects.

Richard Young, the village's community development director, told the board that when the village has approved financial incentive agreements in recent years they have been for projects in vacant buildings, such as the former Applebee's on Route 30 which was renovated in 2014 and is now the home of 9er's Grill.

Laura Julien, village attorney, noted the village has set eligibility requirements for sales tax rebate agreements that include a provision that buildings targeted for renovation have had to be vacant for at least a year.

During a board meeting Oct. 26, Phil Cullen, owner of Ballydoyle's Irish Pub & Restaurant of Aurora and Downers Grove and a partner in Gray's Mill Partners. LLC, detailed the development group's plans to locate The Gray's Mill Estate in the former mill, which was constructed in 1854 along the west bank of the Fox River by the village's founder, Daniel Gray.

Cullen said the proposal calls for five business concepts for the property, including a neighborhood speakeasy and gaming parlor on the building's lower level, a wedding banquet and event space on the building's first and second floors, and a loft on the building's top level for use by wedding parties and as an Airbnb.

On the building's grounds, Cullen said project plans call for a cocktail bar to be housed in a converted farm grain bin and a German-style beer garden.

In addition, Cullen said the partners are proposing to construct a two-story deck on the east side of the Mill building with a retractable roof, similar to one he added to the building that houses Empire Burger & Brew in downtown Naperville. The deck area would provide additional space for wedding banquets and events inside.

Referring to his Gray's Mill proposal, Cullen told the board the partners' mission is to provide "families a place where they can come, sit down and relax. They can have great food, great drinks, enjoy entertainment in a great atmosphere and just kind of enjoy themselves inside and outside."

Cullen said his firm's investment in the project would total over $1 million.

John Etheredge

John Etheredge

Covering Kendall County news since 1981