Paying for downtown
REVITALIZATION | Bruce Rushton
Subsidies are key as the city strives to redevelop downtown Springfield.
The city would provide $700,000 in tax increment financing under a proposal by the developer of a proposed complex for student housing that would be built on a parking lot at the intersection of Fourth and Madison streets, according to Michael Farmer, city economic development director.
The Springfield project, first reported last week by Illinois Times, would be aimed at students from University of Illinois Springfield and at Southern Illinois University School of Medicine students. The five-story building would have 70 units with room for 90 tenants and mixed-use development, possibly including retail, on the ground floor. Bluffstone, an Iowa company that has built more than a dozen complexes for student housing in the Midwest, hopes to break ground this year and be ready for occupancy by the fall of 2016.
“I think it’s an important part of our revitalization strategy,” Farmer said.
Farmer said that the city’s downtown TIF fund is approaching a zero balance.
“It’s getting pretty tight,” Farmer said. “It’s a moving number.”
The downtown TIF district expires at the end of 2016, but the city intends to replace it with a new downtown TIF district, according to a draft document prepared by an advisory committee tasked with helping lure a developer to downtown to redevelop a block near the Executive Mansion where a vacant YWCA building now stands on property that is otherwise a parking lot. The 2.34-acre site, which the city purchased from the state in 2014 for $1.5 million, is dubbed the North Mansion Block in the draft document that describes the property and invites proposals.
The document is now in the hands of city staff for “final touches,” said Mayor Mike Houston.
“It basically is written,” Houston said. “I assume it will be out very shortly.”
The draft document sets a deadline of July 31 for developers to submit proposals to the city, but Houston said he believes that the deadline will be extended to Aug. 28. He said he has a specific idea about what he’d like to see on the block, but declined to share his thoughts.
“I’m not trying to prejudice anything,” Houston said. “There are people out there who do these types of things all the time. They’re probably a lot smarter than I am. I’d like to wait and see what comes back.”
The draft request for proposals says that the city is seeking “a qualified partner” to develop housing, retail and “hospitality developments with related amenities such as urban landscaping and public use areas.” Ward 6 Ald. Cory Jobe, chairman of the advisory committee, said that the city should donate the land to a developer and either pay to demolish the YWCA building or contribute $500,000 – about what demolition would cost – in TIF money toward the structure’s renovation if it is retained and included in a project. The city has already earmarked TIF money for either remediation or demolition of the building, according to the draft document.
“My feeling is the city should offer up the land,” Jobe said. “That’s a big incentive.”
A developer can expect tax credits if the YWCA building remains standing and is rehabilitated, according to the draft document.
Jobe said that developers have already shown interest.
“There’s people kicking tires all day long,” Jobe said.
New housing is a priority for downtown, Jobe said, and he believes that all remaining money in the downtown TIF fund should go toward shovel-ready residential projects of 10 units or more. As it stands, he said, the city’s TIF funding list for downtown that he’s seen includes nearly $4 million for improvements to parking garages. Such improvements, he suggested, should be paid for with bonds as opposed to TIF money.
Jim Langfelder, city treasurer who is due to be sworn in as mayor on May 7, talked about establishing a community development finance commission during his successful mayoral campaign and said that downtown TIF projects are good candidates for the commission to consider and prioritize. He said he doesn’t want the downtown proposals to be fast-tracked so that they are done deals before he and new city council members are sworn in.
Langfelder said he favors a mix of retail, business and housing for the North Mansion block. He said that he hasn’t decided how much, if any, the city should contribute toward development costs.
Langfelder said that he’s not familiar with the student housing complex proposed by Bluffstone. The city’s proposed TIF contribution is nearly identical to the asking price for the property. The land is currently owned by a trust, but it’s not clear who controls the trust. Langfelder said that the city would have to know the identity of the trust’s principals before committing any money toward land-acquisition costs.
“We’re not going to have invisible partners,” Langfelder said. “When you put out that kind of money, you want to know who you’re dealing with.”
Langfelder said he would give out TIF money in increments for the Bluffstone project instead of writing one big check, and he wants to see a building on the site before money goes out.
“We’re not going to give out money to buy property,” Langfelder said. “The TIF is about increasing property values and creating jobs. … It’s not going to be a blank check.”
Contact Bruce Rushton at [email protected]
