STERLING – After setting up its new downtown TIF, the city took the next step in the Lawrence Lofts project during Monday’s Sterling City Council meeting.
The council unanimously approved a redevelopment agreement between the city and Lawrence Lofts LP, a limited partnership set up by the developer, Rock Island Economic Growth Corp.
The East Central Business District TIF was a key financing element for the 20-unit low-income housing project that will be in floors two through five, above the Whiteside County Courthouse in the Lawrence Building.
The new TIF will have a life span of 23 years, while the West Central Business District TIF is set to expire in 2019.
The pact calls for the developer to acquire the building at 101 E. Third St. In addition to building the apartments, the work list will include putting a laundry area in the basement, roof, chimney and window replacement, masonry repair, plumbing, and installing a new elevator.
The developer is responsible for all project costs, and will be reimbursed by the new TIF. The cost of the project is estimated at $5.5 million, and is expected to take about a year to complete.
“From everything we’ve heard, the TIF should start making money in 3 to 4 years,” said Alderman Joe Martin, who led the council meeting in the absence of Mayor Skip Lee.
The city also needs to be reimbursed from the TIF, after initially kicking in about $250,000 for the project for engineering and other costs, Martin said.
“The city takes $8,000 off the top for our reimbursement in the first year after the apartments are occupied,” Martin said.
The city’s share will increase by 4 percent each year after, and the money will be used for other development projects within the TIF district.
The money contributed by the city came from the general fund, so there are no bond payments to make.
The Rock Island Economic Growth Corp., a national nonprofit development organization, put together the financing for the project. In addition to the city’s contribution through the new TIF district, other funding sources include Sterling Today, low-income housing tax credits, state affordable housing tax credits, Federal Home Loan Bank of Chicago, and national foreclosure settlement funds.
Lawrence Lofts will have four studio apartments, 12 one-bedroom units, and four two-bedroom units. Nineteen of the apartments will be covered under the federal low-income housing tax credit program. Income guidelines call for renting to tenants at 60 percent or more below the area’s median level.
Alderman Bob Conklin asked how long the building would have to provide affordable housing.
“At least throughout the life of the TIF, which would be 2040,” said Tim Zollinger, a city attorney from Ward, Murray, Pace & Johnson.
Because a nonprofit is coordinating the project, the city will waive its fees for building permits and inspections.
Another nonprofit, Sterling-Rock Falls Family YMCA, was also granted an exemption from city permit fees. The YMCA, at 2505 Ave. E, plans to build a new parking lot.
Amanda Schmidt, the city’s building and zoning superintendent, said some nonprofit waivers have been granted in the past.
“The YMCA had its fees waived, except for sewer connection, in April 1999, when its new facility was built,” Schmidt said.
Although there is a precedent for granting the waivers, Schmidt said she believes the petitions should be brought before the council.
Conklin at first voted no, but then changed his mind on the YMCA petition to have $769 waived.
“This is a business, and I’d like to look at it further,” Conklin said. “We need to collect these fees so we don’t have to hit up the taxpayers again.”
Martin had voiced his concerns earlier, saying the city might need to re-evaluate and at least collect part of the fees. He said he would vote for the YMCA’s request, but suggested the council then take a closer look at city fees for nonprofits.
NEXT MEETING
The Sterling City Council meets at 6:30 Aug. 1 at City Hall, 212 Third Ave., in the first-floor Council Chambers.
Go to sterling-il.gov or call City Hall at 815-632-6621 for an agenda or more information.