City of Rockford Planning & Development Committee Met Jan. 4.
Here is the minutes provided by the committee:
I. CALL TO ORDER
| Attendee Name | Organization | Title | Status | Arrived |
| Tim Durkee | City of Rockford | Alderman | Remote | |
| Linda McNeely | City of Rockford | Alderman | Remote | |
| Chad Tuneberg | City of Rockford | Alderman | Remote | |
| Natavias Ervins | City of Rockford | Alderman | Absent | |
| Bill Rose | City of Rockford | Alderman | Remote |
II. COMMITTEE REPORTS
A. 2021-1-CR - Proposed Tax Increment Financing Development Agreement between the City of Rockford and Bush Development, LLC for the property located at 227 N. Wyman Street (New Library).
Alderman Durkee stated that he believes the property has a lot of value, and he knows the purpose of TIFs and supports them when well applied. Residents who live on the river pay higher taxes, and the Assessor recognizes the value of this property. Alderman Durkee stated he has trouble supporting a TIF for this
development. City staff gave it a score of 225 points, and he does not consider waterfront & riverfront properties that big of a challenge.
Alderman Hervey stated that she believes that the City should not be involved with approving this development. The library is an independent taxing body, and they do not report to the City anymore in the way that they use to. In her opinion, this is not the best use for a riverfront property. The City already has private developers in the City of Rockford area who are currently working on residential projects. Alderman Hervey asked for clarification about the $22 million dollar amount.
Karl Franzen, Director of Community and Economic Development, explained that the $22 million dollar figure is the total development and construction cost. The $4 million dollars will be included in that amount, and that would be rebated back. This rebate will be part of our future property taxes.
Alderman Hervey asked Mr. Franzen if we would be rebating approximately twenty percent (20%) of the total construction cost. Mr. Franzen explained that it has been a couple of years since the initial bid. The construction cost is estimated to be $25 million dollars at this time. $4 million of the $25 million dollars is a little under the twenty percent (20%).
Alderman Hervey stated that she can see some TIF consideration but 100% is a lot, especially over that period of time. There should be some type of return to tax payers now. For example, a TIF was not considered for the hotel project. She would like us to support our local developers who have not asked for TIF assistance. She does not agree that we should be giving away twenty percent (20%) of project costs.
Mr. Franzen responded that this TIF ends in the year of 2031, however due to the development timeframe, the developer is not likely to receive a reimbursement until the year of 2023. The City anticipates nine years of reimbursement to support this development.
Mayor McNamara stated that nearly every development downtown, if not every single one has utilized TIF.
Alderman Tuneberg responded to Mayor McNamara’s statement that he can concur on that. Alderman Tuneberg explained that some of our local developers have utilized various means and sources through the City, including TIF.
Mr. Franzen explained further that the rebate to the developer is not the dollar for dollar value that is discounted. They have a pay-as-you-go for the protection of the tax payers. The developer utilized the development agreement to secure financing through a loan at a discounted rate. The impact supports that the $22 million dollar development is estimated to be approximately in the 2.7 to 2.9 range.
Alderman Tuneberg stated that aside from the TIF he believes the development is sending out a statement. He would like to applaud our local developers because they have taken on some of our older buildings, and getting them back in line. As a result, it has been encouraging people to move downtown, and to frequent those businesses. He asked when was the last time that we had a new residential development in the downtown area.
Alderman Rose responded that it has been 45 years since we have had a new residential building built downtown.
Alderman Tuneberg stated that coming from an outside developer that shows that there is value here. It really sends a statement to our community as well as individuals outside of our community that downtown Rockford is open and ready to reside in.
Alderman Rose further stated that he believes the tax money generated from this development will be between $85,000 to $95,000 dollars in tax revenue per year, when the TIF is up. That would be 44 years where we would pay back those dollars, and anything on top of that goes into our coffers. He stated that residential lasts longer, and developers try to get 100 years out of those types of buildings.
Alderman Durkee asked what parking agreement we have in place, and why we are paying a third on the switchgear. The developer usually pays the upgrade to an access road, and he asked whether the upgrade is needed for fire and emergency access.
Mr. Franzen responded that the parking “vista element” structure will have underground parking. However, it will not be sufficient to support all the new residential units and the commercial tenants. Similar to other development agreements, we have provided for parking in the agreement. The difference being that this one is at market rate, and the developer does have some certainty of where those parking stalls will be. As it relates to the switchgear relocation, the City is not committing to paying for a third of it in this agreement, the developer will be responsible for the cost. The City has been facilitating conversations with ComEd, the developer and the Library and the need to relocate the switchgear, which is currently underneath the building. The switchgear is located in what would be one of the prime commercial spaces, so to leave it there would eliminate the ability to have one of those commercial spaces and negatively impact the cash flow of this project. The developer is agreeing to pay up to a third of that which is approximately estimated to be $120,000 dollars. Lastly, the access road under Jefferson Street is not an additional commitment of City funds. This is covered by ComEd funds to the City, and the City has already engaged in this through the Library IGA.
Mr. Franzen further explained that the City has agreed to start the process and assure that this relocation is not negatively delayed, and potentially impede the project. The City has agreed to partner with the Library and the developer and
pay $10,000 dollars. That will determine the final cost of the switchgear, and the City will engage with the Library and developer to have them cover the costs. Any additional funds needed to proceed on this project would be presented to City Council for approval. It is his understanding that the switchgear takes power from the grid, and then distributes it and power locally. This serves much of the downtown area, and it is an old asset of ComEd. These are relatively simple machines that could last for decades.
Alderman Hervey asked for a quick synopsis about the 85 residential units and the other plans for the development. Mr. Franzen responded that the development will be six (6) stories. The first will be a commercial river front restaurant, two commercial retail spaces, a shared use as a co-working space, and lastly there will be residential units that will have studios, 1 bedrooms and 2 bedrooms.
Alderman McNeely made motion to approve the Committee Report and
Alderman Rose seconded the motion. MOTION PREVAILED 3-1.
Alderman Durkee made a motion to adjourn, seconded by Alderman McNeely. MOTION PREVAILED 4-0. Meeting Adjourned at 6:15 pm
| RESULT: APPROVED BY COMMITTEE [3 TO 1]
MOVER: Linda McNeely, Alderman SECONDER: Bill Rose, Alderman AYES: Linda McNeely, Chad Tuneberg, Bill Rose NAYS: Tim Durkee ABSENT: Natavias Ervins |
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