Investment pays off as Machesney Park sells old J.C. Penney Outlet

By Bob Balgemann

Reporter

After six years of owning the former J.C. Penney Outlet at 8702 N. Second St., the village is close to completing its goal of redeveloping that building at the Town Center.

That’s being accomplished through sale of the building to local businessman James Michalsen (JM Commercial Properties, LLC), who offered $995,000 for the property. The original negotiated purchase price in 2015 was $900,000. But Machesney Park paid $782,000 for the 80,000-square-foot building, after receiving a $118,000 asbestos remediation credit upon closing.

“The asbestos was limited to a small portion of the building’s flooring tile, and we remediated that in 2016 for $49,500,” Village Administrator James Richter II explained. “The costs to divide and repurpose the building are being paid for through the rent, leasehold improvements and taxes paid by the tenants.”

By acquiring the property, he said the village was able to use the former tire and battery area of the Outlet building as its public works garage for five years, and provide land for the development of the $12-million, 60-unit TLC assisted living project. (The public works department since has relocated to a new building on Gregory Road, on the north side of town).

He continued: “The village took an empty building and brought in five tenants, including a school (Menta Academy) that provides important services to children on the spectrum, and as a result, we’ve made the building viable again.

“And finally, we are selling the building to a private owner for more than what we paid for it. This has been a successful venture for the village, and we’re hoping that our efforts will serve as a catalyst for additional redevelopment at the Town Center.

“The pending sale is the final step and will place the building back in the hands of private ownership.”

In his presentation to the administration and finance committee (A&F) on March 15, he reported that six years later the village had leased all of the space in the building to five tenants and had sustained stable occupancy levels. That provided rent to repay the North Second Street Tax Increment Financing (TIF) and cover expenses of repurposing the building for sale.

“The village has had the building on the market for sale for several years, without success,” he said. “The combination of a fully-occupied building, the asking price adjustment and advanced marketing, have helped us to bring in a full-price offer for the building.

“Now the village must follow a statutory procedure to sell a village-owned asset and as with other village-owned property sales in the past, the TIF Act has allowed us to acquire, revitalize, own and sell real estate in the TIF.”   

New squad car 

Also March 15, A&F voted 6-0 to recommend approval of the purchase of a new squad car for use by Winnebago County sheriff’s deputies, who provide law enforcement services for village residents and businesses.

Later that night the village board gave final approval to the purchase from Morrow Brothers Ford in downstate Greenfield, near Jacksonville, for the state bid cost of $31,470. The new vehicle will be a 2021 Ford Explorer SUV. The board vote was part of the consent agenda and therefore was unanimous, with no discussion.

The village since incorporating in 1981 has contracted for police services with the sheriff’s department. At the March 15 A&F meeting, Finance and Human Resources Manager Michelle Johannsen explained the police services’ current agreement with the county includes a fee schedule, which outlines the costs to be reimbursed by the village. One of the line items, for squad cars, stated the purchase of three such cars and a total expenditure of $165,000.

The county already has purchased the three squad cars and has been reimbursed by the village, with the total amount coming to $133,000.

During budget projections and review of mileage on cars, and the status of the village fleet, she said, “We determined a shift in usage of cars was necessary. As explained at the budget meeting, the Ford Edge that was a deputy car will now be used by code enforcement, and therefore we need to replace the deputy car.

“Since the line item budget for squad cars still has $32,000 available, we are requesting the purchase to be made in the current budget year (before April 30) and we will still remain within the original budgeted amount. Further, to clarify, two squads will still be budgeted and replace in next year’s budget.”

Manager Johannsen continued: “The purchase is over the state limit and therefore requires a two-thirds vote of the corporate authorities (village board) to approve the purchase, when not publicly bid. While Morrow Brothers does have the state bid, we went ahead and still obtained quotes from two other regional companies. However, Morrow Brothers was the lowest cost proposed.”

The other quotes came from Manley’s Belvidere Ford Lincoln, for $33,713.45, and Rock River Block in Rockford, at $36,092.

“Due to timing, we are requesting this be approved by both the A&F committee and village board on March 15.”

That did happen.