After more than a decade of planning, developer Bob Hansen is getting closer to striking a deal with that will propel his vision for a South Street development forward.
The $34.8 million project includes a five-story building comprised of 167 residential units and 24,000-square feet of commercial space. It would be wedged in the area between South Street, 66th Court, 174th Street and 67th Court in , adjacent to .
Though the project is independent, Hansen—owner of South Street Development LLC—said Tuesday that without incentives from the village, he would not be able to complete the project.
A financial proposal includes a 50 percent sharing between the village and the developer of the Tax Increment Financing, or TIF, eligible increment of up to $3.7 million.
Because the development falls within the Main Street South Tax Increment Finance District, the village would reimburse the developer for general public improvements to landscaping, streets and sidewalks, according to board documents. That amount wouldn't be more than $2 million, officials said, and could be paid for with dollars from existing road, water and sewer surtax accounts.
Also included among incentives is a Class 8 Real Estate tax reduction for the commercial section of the property. That would reduce the tax rate from 25 percent to 10 percent for a 10-year period, which officials hope would lure area businesses.
All incentives total a potential of about $6.3 million for the developer, according to village documents. Trustee David Seaman, who is also the chairman of the Finance and Economic Development Committee, said any money owed by the village would come from multiple to-be-determined funds. Peripheral road or sewer funds were mentioned as examples.
"This is essentially a private venture," he said. "The village have been asked by the developer basically to provide incentives. But the liabilities are theirs, not ours."
The mixed-use development conforms to the village's Legacy Plan, which the board over the next 50 years. The board that they said would pave the way for the downtown's future commercial core.
Assistant Village Manager Mike Mertens presented a general concept Tuesday night for the South Street project, which includes a curved, triangular-shaped building with residential and public parking areas.
He said the residential units would stay apartments for several years but are designed to be made into condominiums. They would not be for sale unless an assessment of the real estate market yielded positive results, he said.
"They would remain residential for seven years and then we would go ahead and do that market study to determine if they can be converted to condos," he said. "Then every two years, if necessary, we can request another market study."
The 1,250 square-foot spaces would primarily be two-bedroom units but 44 of them would be one-bedroom units, said David Sosin, Hansen's attorney.
"These are designed so they can be converted years down the road, if needed," Sosin noted. "The whole concept is going to be market driven. … Right now, this is a marriage of the market conditions, the availability of funding and the village standard."
Seaman said he believes that if the project and all its financial incentives get the go-ahead from the village board, will be one step closer to transforming into the .
"It's still a work in progress, but it's been a long time coming …" Seaman said. "The developer is attempting to put this in the context of the market. … It's a trigger project for this downtown area that we're really trying to get moving."
The proposed incentives will go before the village's Planning Commission May 17.
On the prowl for more government news?