Deerfield Gives Green Light to Peapod

Online company will upgrade former Amcore Bank at 677 Lake Cook Road and support the village’s “engine turn-off” policy, but operations won’t generate sales tax for Deerfield.

At the board of trustees meeting Tuesday, Peapod officially got the go-ahead to open a grocery pick-up and drive-thru in the former Amcore Bank building at 677 Lake Cook Rd near Home Depot.

A first consideration of Peapod’s request for a zoning text amendment and special use request occurred Aug. 20.  The village approved both requests, but asked for a follow-up response to three areas of concern before the final stamp of approval.

Those included an explanation as to why the village would not generate sales tax from items picked up at the future Deerfield location, and questions on whether Peapod was willing to make aesthetic improvements to the building and support the “engine turn-off” policy.

Bruce Chanen, attorney for Peapod, said the company was agreeable to the last two requests.

“We completely agree, and wish to achieve a more colorful and visually pleasing building, and we certainly will help to educate drivers about the benefits of turning off their engines while waiting for pick-up, instead of letting them idle,” Channon said.

But when the discussion came around to the generation of local sales tax, Chanen said the issue normally comes up in each municipality Peapod locates their parcel pick-up centers.

“Unfortunately, Peapod is a very traditional example of [an] online retailer. Customers go online, place orders at our central location in Lake Zurich and finalize their purchase there,” Chanen said.

Chanen said because taxing authorities deem the Lake Zurich location the point of sale, the company has not found a way to distribute sales tax generation to all of its pick-up locations.

When asked if Lake Zurich would receive sales tax dollars from purchases made by Deerfield residents, Chanen said he did not have the answer to that question.

He did however point out the benefits in welcoming Peapod into the village.

“We think the company will bring vitality to a currently dark space, including increased traffic to existing businesses in the area which leads to new customers,” Chanen said.



Thinking for the future September 05, 2012 at 01:11 PM
Wait what? “We think the company will bring vitality to a currently dark space, including increased traffic to existing businesses in the area which leads to new customers,” Chanen said. HOW? People aren't LEAVING THEIR HOMES when they order peapod! They do leave their homes when, you know, they go out food shopping.
RB September 05, 2012 at 02:27 PM
It's a pickup center, people have to leave there home to pickup the groceries at this new location. I think they should work on the sales tax issue. The bank did not generate sales tax either. The Village lets banks establish themselves on every corner, so it would have been difficult not to justify this business going into a bank location. However, the Village should not roll over on the sales tax issue, figure it out. The customer is taking possession of the groceries in Deerfield.
RB September 05, 2012 at 02:28 PM
Something else. Deerfield has a deal with Walgreens headquarters regarding sales tax and a rebate. I wonder if Lake Zurich has a similar deal with Peapod?
Deerfield Tire Co. September 05, 2012 at 07:57 PM
Until these Internet purchases are properly taxed our city will continue to loose brick and mortar stores in addition to loosing the sales tax revenue needed for the city to function. Maybe we the people should act and stop buying on the Internet and start shopping in our local businesses that support us our schools and public offices
McCloud September 05, 2012 at 08:11 PM
Why would people deliberately punish themselves by not shopping where they pay less for goods or services? Maybe the sales tax is too high in the brick and mortar? The schools have overblown pensions and health care insurance benefits that are driving the customers out of the state or to other markets where they find better values.
Walter White September 05, 2012 at 08:12 PM
Why would I stop buying on the internet if that's where I get the best deal? Brick and mortar stores (and local governments for that matter) need to get their costs down to compete with companies like Amazon. Like any business, when the revenue declines, you'd better get your costs in order or you will not survive. You can't just tell the consumer not to shop on the internet to "save" our Village. We're all looking for the best deal.
Deerfield Tire Co. September 05, 2012 at 09:36 PM
Please do not misunderstand, I understand about getting the best deal. We talk about local governments and brick and mortar stores getting costs down. I am saying how about they get to compete on a level playing field. If 2 business are selling a product for the same price. One business which is in the middle of nowhere supporting no town or municipality or school and ship their product into Deerfield they do not have to charge tax. The brick and mortar store located in your town has a higher rent or mortgage to be there to serve you and must charge sales tax to provide schools and sidewalks and police and fire..Its the law its not the brick and mortars stores choice to do this he must or he is closed down. To me this is a big problem and is why we no longer have a Best Buy or Borders. These business used to create revenue for the town. They also used to bring people into the town to shop other business. Without that revenue coming into the town eventually what happens to your real estate taxes? What happens to the quality of your kids education. Who pays for the things you need to live in this beautiful town? Eventually somebody has to pay!!!
RB September 05, 2012 at 10:00 PM
As far as Pea Pod pick up, what does Wal Mart do when you buy on line and do ship to store? You go pick it up and you do pay sales tax. Which municipality is getting the tax revenue? Home Depot is doing order on line, pickup at store. Again, where is the tax revenue going. I contend the Pea Pod pickup situation is the same as order and pickup at Walmart - Home Depot etc. The Village should look into that!
Walter White September 05, 2012 at 10:11 PM
Absolutely agree. This shouldn't be as much of an issue as with purely online transactions where the question is what sales tax applies since every state and county has a different one. If you physically go to the store you pay the tax that applies to that municipality.
Deerfield Tire Co. September 05, 2012 at 10:59 PM
Here is pea pods statement to village on sales tax. With regard to the first question (sales tax generation), Peapod appreciates the importance of sales tax generation to the communities it serves but does not see a logistically feasible modification to its operations and practices to allow a change of its sales tax treatment for ANY of its contemplated Parcel Pick-Up Points (the same answer it is providing to every municipality in which it seeks to locate such centers). Peapod is a prototypical "online business" and the Parcel Pick-Up Point is merely an alternative delivery method for its online sales. As a home-delivery alternative, no sales are completed or processed at the pick-up location. However as I have been explained there is no law that they base this on. The revenue dept. set this up as their opinion or choice with no basis as I have been told. Yet if a tool guy drives his truck into Deerfield and sells tools he must charge and collect sales tax for Deerfield because the sale was negotiated in Deerfield. Yet this is different? And how is the example given by others of home depot or Walmart any different? As I said earlier it seems it would be in everyone's best interest if all businesses would be put on an even level playing field.
Walter White September 05, 2012 at 11:06 PM
OK but that is not what you said initially. "Maybe we the people should act and stop buying on the Internet and start shopping in our local businesses that support us our schools and public offices". The internet is here to stay. Best Buy and Borders couldn't compete. Somehow Abt is still going strong, aren't they? Maybe they have a better business model than Best Buy. Totally different buying experience. BB was horrible. Abt is a fun place to go on a Saturday afternoon. Adapt or die. It's always been that way.
RB September 05, 2012 at 11:59 PM
I agree, they have interpreted the law and Deerfield has not. Deerfield should fight for the sales tax. As I said, Deerfield has a sales tax deal with Walgreens. Deerfield gets sales tax based upon the corporate location being in Deerfield. Deerfield rebates a portion back to Walgreens. A win win. I'm guessing Lake Zurich may have a similar deal with Pea Pod, or perhaps Skokie if that's where they are still headquarted.


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