Fox River Grove is looking to create another downtown tax increment financing district – this time specifically to incentivize redevelopment of a vacant block that was demolished last year.

Block B is described by the village as a 2-acre downtown area between Illinois Street and Lincoln Avenue that extends from Northwest Highway to Opatrny Drive, excluding the municipal center.

The block is already within a 23-year downtown TIF district that was established in 2015. The village plans to pull Block B out and create a separate 23-year TIF known as Downtown TIF No. 3.

Older buildings on the property facing Route 14 were demolished in 2024, and the block has been sitting as an empty, grassy lot. The goal is to help support the anticipated construction of a five-story building with commercial space and residential apartments.

“It basically, financially, would perform better than if it were left in the existing TIF,” Village Administrator Derek Soderholm said.

Developers Harlem Irving Companies, Hamilton Partners and Zeller are partnering for the project to construct the building with about 7,000 square feet of commercial space and about 95 apartments. The plan calls for studio, one- and two-bedroom units with 3,500 square feet of tenant amenities on the ground floor, including a gym and a workspace area.

Next steps will be a formal proposal to the village’s Planning and Zoning Commission, and then the plan will move to the Village Board, Soderholm said.

A Joint Review Board, which included representatives from the village, county, fire protection district, public library, and School Districts 3 and 155, voted on the proposed TIF district earlier this month. The school districts and fire district abstained, while other parties voted in favor of the new TIF, Soderholm said.

Pete Iosue of the planning consulting firm Teska and Associates presented the new TIF district proposal during a recent Village Board meeting. Though the area is now vacant land, it still qualifies as a “blighted area” for the buildings that were there before demolition, Iosue said.

“I am very confident that the area qualifies,” he said. “Without doing this, redevelopment is unlikely to occur.”

According to village documents, the redevelopment project is estimated to cost $21 million. Upon completion, the equalized assessed valuation of real property will be approximately $10 million.

The village board will need to formally approve the new TIF district within approximately 90 days, Soderholm said.