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Politics & Government

Council Passes Lemon Tree Sales Tax Rebate

The Lemon Tree Grocer entered into a new agreement with the village.

scored a new sales tax rebate agreement at Tuesday night’s village council meeting.

The agreement means the village will give approximately $14,000 to Lemon Tree in the form of a rebate in 2012. This $14,000 is 100 percent of the sales tax paid on the sale of groceries and packaged liquor—which is based on estimated annual sales of $1.4 million.

This issue was previously discussed at a , but actually dates back to 2009 when Lemon Tree and Michael’s Fresh Market had a sales tax agreement with the village.

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The agreement required both stores to stay in business, but when Michael’s went out of business the agreement became void.

Under the new agreement passed last night, the village will rebate 100 percent of sales tax on groceries and packaged liquor for eight years. Lemon Tree is required to operate as a grocery store for a minimum of 13 years and 51 percent of the sales each quarter must be groceries. 

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Commissioner William Waldack was the only council member to vote against it.

Waldack said Lemon Tree was a great business, a “great destination,” but that’s not why the council was talking about it Tuesday. He called the tax rebate “corporate welfare" and said Lemon Tree wants retroactive payments.

Waldack mentioned how Downers Grove residents had wanted a neighborhood grocery store and that even with Lemon Tree in the downtown area, village seniors still ask for a neighborhood grocery store. He said that when he suggests Lemon Tree they laugh and say they can’t afford to shop there.

He mentioned that while the village is giving away tax dollars they’ve cut Meals on Wheels and other programs.

“It’s not the sort of grocery store we imagined,” he said. "It’s a specialty store.”

“Folks aren’t going to differentiate between groceries and beverages and sandwiches,” Waldack said. “The Lemon Tree starts with a $14,000 advantage.”

When you give money to a for-profit business, what you’re doing is subsidizing a free market, Waldack said.

Commissioner Bob Barnett was in full support of the agreement, saying, “It’s an incentive [for Lemon Tree] to sell more groceries in the future.”

Mayor Martin Tully said the question was about how the village could adapt and innovate with a business that’s trying to do just that. He also clarified that the $14,000 was not giving away tax money—it’s a rebate to Lemon Tree based on money that their business generated.

“This is a rebate that we do with businesses all the time and there are stringent requirements,” he said.

OTHER BUSINESS

• Michael Baker, deputy village manager, presented a quarterly report for the first quarter of 2012. Listing key accomplishments—like passing the electrical aggregation referendum—he said the revenues for the first quarter were $8.4 million, higher than the expected $7.8 million.

On the downside, the state is four months behind in income tax distributions—a revenue that municipalities rely on. The village is part of a consortium of municipalities monitoring that situation. 

• Commissioners Becky Rheintgen and Waldack exchanged words over a recent bit of "drama" centered around the appointment of . Rheintgen said Waldack has attempted to tarnish her reputation, while Waldack said his problem with the process centered on Thoman's name being leaked before a consensus was made, leaving Thoman open to the embarrassment of having his name publicized only to have his .

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