Walgreens delays construction in SG

By on January 30, 2009

by Susan O’Neill

The Walgreen Company will delay building in Sugar Grove until 2012.

Until a couple of weeks ago, Sugar Grove officials had been told Walgreens would break ground for a drug store on a 2-acre site at the northwest corner of Route 47 and the Galena Boulevard extension, with plans to open by year’s end.

However, Sugar Grove Community Development Director Rich Young said Walgreens representatives said they are taking a step backward and waiting for the economy to pick up before building in Sugar Grove.

“We’re told it does fit their business model,” Village President Sean Michels said. “We’re disappointed they’re not going to open it sooner.”

At the end of last year, the Village Board reviewed the Walgreens’ plan, as well as plans for the first phase of the 44-acre Prairie Grove Commons development, in which the store would be located. The first phase covers the portion of the property south of The Landings and north of Galena Boulevard extended, on the west side of Route 47.

Michels said the Village Board still plans to approve the annexation agreement with Prairie Grove Commons developers at the next regularly scheduled board meeting on Tuesday, Feb. 3. The agreement will include approval of the preliminary and final plat of the Walgreens site and a rezoning of the entire property for a commercial Planned Unit Development (PUD).

The developers would have to come back before the board for approval on plans for the remaining lots, those north of Galena Boulevard and west of where the Walgreens will be, as well as those south of Galena to Route 30.

Michels said the developers hope to attract some big box stores, such as Kohl’s, as well as others to the development. They had hoped that the presence of a Walgreens would be a factor in encouraging the others to come.

Although the annexation agreement does not include an economic incentive for Walgreens, the village has worked out the details of an incentive plan to attract some of the larger users. He said the incentive will be in the form of a sales tax rebate to offset some of the developer’s costs for roadway and other improvements.

Michels said the time clock for the incentive package begins running once the annexation agreement is signed. Young said the timeframe for the agreement, which gives the developers a certain percentage of sales tax receipts each year, is for a term of 14 years. He said the agreement is set up to encourage development sooner.

The Walgreen Company, which announced a new chief executive officer on Monday, unveiled a strategy in October 2008 to increase its overall performance, including slowing future store openings to focus on leveraging its more than 6,600 existing stores across the country and Puerto Rico.

According to its website, the company, which remains committed to convenient shopping for its customers through locating stores within five miles of two-thirds of all Americans, is also committed to decreasing its capital spending by $1 billion over the next three years.

“We’re still hopeful that they’ll come sooner than 2012,” Young said. “That’s what we’ve been told for now.”