Glen Ellyn microbrewery could get tax incentive

Glen Ellyn trustees are set to award a tax incentive to developers who have run into mounting costs to convert an aging retail building into a restaurant and microbrewery downtown.

Developers sought a sales tax rebate to fill a funding gap in the roughly $3.1 million project to purchase and renovate the former Schmid store into the Two Hound Red Microbrewery off Pennsylvania Avenue.

Glen Ellyn Brewing LLC bought the property for $760,000. Now that crews have started demolition work, developers have more specific estimates of the project's cost. That price tag is significantly higher than expected in part because of the age and condition of the building - vacant for more than six years.

Developers also say they are installing new infrastructure to serve a spacious restaurant and brewery in the 7,900-square-foot building.

Last November, trustees agreed to provide $30,000 for interior and facade renovations. The village would use tax increment financing dollars to reimburse developers once that work is complete.

Next month, trustees could approve an additional $120,000 in financial assistance. Of that, $15,000 would go toward installing a sprinkler system.

The rebate agreement expires in 10 years - or until developers get back up to $105,000 in sales tax revenue, whichever occurs first.

The village would receive a base amount of $15,000 in sales taxes generated by Two Hound Red Microbrewery. The remaining sales tax revenue would be shared, with the village keeping 25 percent and rebating 75 percent to developers over the life of the agreement.

Trustees informally expressed support for the incentives earlier this month. They could vote to approve the package June 12.

"I think this is a business that we want in our downtown area," Trustee Mark Senak said. "It occupies a space that's been a chronic vacancy. I think it's the type of business that makes Glen Ellyn attractive as a destination for people who are from Wheaton or Lombard or Lisle or Downers Grove."

The family-owned Schmid store, a popular spot for homemade fudge and gifts, closed in 2011 after 44 years in business at 486 Pennsylvania Ave.

Jon With, a managing partner in the business, hopes to open Two Hound Red Microbrewery this Halloween. He's also invested in restaurants around Kane County and owns the Gammon Coach House in Batavia.

The Glen Ellyn microbrewery would produce craft beers - including seasonal ales - for both the restaurant patrons and wholesale distribution.

Developers estimate that the restaurant and brewery could make roughly $1.79 million in sales from food, beverages and packaged beer in the first year.