March 27, 2013
"FOOD FIGHT" ERUPTS IN HARWOOD HEIGHTS

ANALYSIS & OPINION BY RUSS STEWART

For taxpayers in Harwood Heights, a dinky village of 8,612 nestled inside Chicago's Northwest Side, the cost of groceries allegedly is getting a wee bit expensive -- like about $9 million over the next 20 to 40 years. That's the tab for givebacks and "shared" sales tax revenue on the $25 million Mariano's Fresh Store due to open in May.

Not surprisingly, a political "food fight" has erupted in the 2013 mayor's race. Incumbent Arlene Jezierny did her utmost to entice Mariano's to build their upscale food emporium at Harlem and Lawrence avenues, while Trustee Jimmy Mougolias, a onetime Jezierny ally, did his utmost to scuttle it. Mougolias is challenging Jezierny in the April 9 election.

According to Jezierny, it's a swell deal. As she explains it, gross sales from Mariano's will be in the realm of $40 million to $60 million annually. Of sales taxes charged, 1 percent goes to Harwood Heights, which would amount to $400,000 to $600,000 in revenue annually. The Mariano's developer, Bradford Equities, which owned the front 3.7 acres on Lawrence at Oketo Avenue, claimed the parcel was too small, that it needed the rear 2.2 acres, and that it was "short" the $3.85 million to buy the so-called "Tarson Property." The developer demanded a giveback.

They got it, and they bought the parcel. Jezierny and five of the six trustees approved an end-user agreement that gave Bradford, which built and is leasing the store to Mariano's, half of the village's sales tax entitlement until Bradford's loan, including principal and interest of 5.5 percent, is satisfied, which may take 20 to 40 years. Trustee Mike Gadzinski, a Jezierny ally, said, "It's a win-win situation. They (Bradford) built the store. We get the sales taxes. Mariano's provides the security and pays for the police. What's the complaint?"

If it takes Bradford until 2043 or later to pay off its loan, Harwood Heights will still reap between $6 million and $9 million in total sales taxes, Gadzinski said. "They (meaning Mougolias and his allies, Trustees Mark Dobrzycki and Les Szendlak) are trying to spin this as a 'loss' to the village. They're liars. We benefit. If they don't build it, we get nothing. What's the 'loss'?"

"It's a shared revenue agreement," Trustee Larry Steiner said. "That means we're generating tax revenue, not spending it." "We did the deal with no loans, no taxes, no debt," Jezierny emphasized.

In addition, Gadzinski adds, by improving the property, the village gets a chunk of the property taxes. Bradford has a 20-year lease with Mariano's.

According to Mougolias, it's a raw deal. Mariano's is a subsidiary of Roundy's, a Wisconsin-based corporation which operates 160 stores throughout the Midwest, employs 18,000 people, and has a capital debt of $800 million. Harwood Heights will be "lucky to net $30,000 a year and maybe less" from the deal, Mougolias said.

Mougolias said that people who shop at Mariano's won't be shopping elsewhere. There are 10 food marts within 2 miles of Harwood Heights, including three Jewels, two Dominick's and a Produce Mart, and in the village, Butera, Aldi's and Rich's Foods, which sells Polish ethnic items. Mariano's will "simply be taking business away from the other stores," Mougolias said. "The revenue we gain will be offset by that we lose."

In Arlington Heights, the site of another Mariano's, which has booming sales, there are 3.8 people per household; in Harwood Heights, there are 2.45 people per household, Mougolias said. There are fewer local shoppers in Harwood Heights than in Arlington Heights, and residents of Park Ridge, Des Plaines and the northern suburbs can just as easily go to the Arlington Heights facility, while Chicagoans can go to the new store on Elston Avenue, he said. "It won't be the magnet everybody expects," Mougolias said.

Szendlak said that the pricing is "deceptive." He said that Bradford borrowed $3.85 million with interest at a rate of prime plus 3 percent, amortized over 40 years. That's about $212,000 annually in interest alone. Add in the principal payment, which would be about $100,000 a year, and it will take until 2060 to repay the loan, Szendlak said. "And that's only if sales are $60 million or more every year," he said.

Harwood Heights has 50 employees and an annual budget of $7 million, so the Mariano's spat resembles a food fight with the combatants hurling Twinkies rather than watermelons. Sales taxes from Mariano's will be, at best, 2 to 4 percent of gross village expenditures. It's not the economic catastrophe prophesized by Mougolias and Szendlak, nor is it the economic godsend foretold by Jezierny and Gadzinski, but, unquestionably, Mariano's adds, not subtracts, from the village revenue stream and adds 400 jobs..

In any political campaign, truth is hard to discern from fiction, and if it is repeated relentlessly, fiction becomes truth. The Mougolias/Szendlak/Dobrzycki clique is trying to persuade voters that the Jezierny/Gadzinski/Steiner bunch is using their tax dollars for a "rich grocery store." Fliers have been circulating claiming that taxpayers "bought" the land for $4 million, that the land was "sold to the developer for $100," and that Jezierny and her pals are "giving your money to their friends the developers and lawyers." What total nonsense.

However, in Harwood Heights, nonsense is the norm, not the exception. Containing just five precincts, with slightly more than 4,566 registered voters, of whom almost a third are senior citizens, the village's current politicians seem to revel and excel in arts of hypocrisy, duplicity, mendacity and chicanery. Yesterday's ally is today's enemy. Yesterday's promises are today forgotten. Say today whatever it takes to win and worry about tomorrow later.

For 28 years, from 1973 to 2001, Harwood Heights was ruled by Ray Willas, a benign mayor, a nominal Democrat, and artful consensus builder. Like Nick Blase in Niles (who served from 1961 to 2008) and Joe Sieb in Norridge (who served from 1951 to 1998), Willas provided what voters want: low taxes and good services. His 2001 retirement heralded a new era, replete with persistent and petty bickering, egregious spending (especially for lawyers), breathtaking opportunism and shifting alliances.

Trustee Norb Pabich, a Republican, was elected mayor in 2001, with 599 votes (31.1 percent of the total cast). After demonstrating his ineptitude, and inciting the "Gang of Four" led by Trustee Peggy Fuller, Pabich was ousted in 2005 by Fuller, a Democrat. She won by 895-857 (with 45.5 percent of the total), with 217 votes to Joe Scott. After conclusively demonstrating her egotism and incompetence, Fuller quit in 2009; her ally, Dobryzcki, a Democrat, was trounced 1,027-756 by then-trustee Jezierny, a Republican who got 57.6 percent of the vote. On Jezierny's 2009 slate were Mougolias, Szendlak and Steiner for trustee, all of whom won, getting 843, 809 and 773 votes, respectively. On taking office, Jezierny had her "Gang of Five," meaning a 5-1 trustee majority, with only Dobrzycki remaining. Was Jezierny the next Willas? Not a chance.

Mougolias said he dissociated himself from Jezierny because of her "gross mismanagement," as did Szendlak. They joined Dobrzycki, who whines that the $12 million surplus under Willas is now an $11.8 million debt, but which the mayor says is $7.6 million. The board is 3-3, with Jezierny the tie-breaker.

The 2009 hiring of Roy McCampbell as a $3,000-a-month economic development consultant caused the fissure, Mougolias said. At the time McCampbell, Bellwood's village manager, was under investigation. Wayne Peshek, McCampbell's aide, also was hired. They began preparing a "comprehensive development plan" which cost $1 million and "which was an exact duplicate of what we prepared" while Fuller was mayor, Mougolias said. In 2011 McCampbell was charged with fraudulently drawing salaries from 10 jobs and earning $480,000 a year in Bellwood. Jezierny fired him and Peshek took his place, for $1,500 a month.

"Quite simply, she (Jezierny) cannot handle the job," Mougolias said. "She's incompetent." Mougolias said that Jezierny and the trustees raised the garbage, vehicle sticker and parking fees, and that attorney fees, which were $70,000 under Fuller, are now close to $250,000 a year. "She was elected to put our village in order and didn't do it," he said.

Mougolias also faulted Jezierny's handling of the shuttered Life Storage building, situated on a 3-acre parcel at Gunnison and Harlem avenues. "That should have been retail," he said. Instead, a Public Storage facility took over, which generates no sales tax dollars, he said. "There is a 3 percent service tax," Jezierny said.

Jezierny is no shrinking violet, and she blasts Mougolias and Szendlak as "obstructionists and opportunists." She hypes such "accomplishments" as an updated building code, the new comprehensive development plan, complete rezoning, street resurfacing, settling of lawsuits relating to the Fuller era, and hiring a forensic accountant to unravel theft by the village's former accountant. "I cleaned up a mess," she said. "We have better control, more transparency." Jezierny accused Mougolias of spreading the rumor that she was planning to fire the 22 police officers and hire the Cook County Sheriff's police to patrol the village. "Totally false," she said.

Gadzinski said the Mougolias campaign is "built on falsehoods. They're manufacturing issues."

   Harwood Heights' mayor is paid $30,000, and the trustees are paid $12,000. "I will continue to be a full-time mayor," Jezierny pledged. Mougolias, who operates a restaurant, said he would serve on a "daily basis."

Prediction: To Mariano's or not to Mariano's, that is the question. Mougolias says we're paying for what we're not getting. Jezierny says we're getting what we're not paying for. In a turnout of 1,800, Jezierny will win the food fight by 125 votes.