The Joliet City Council on Tuesday in a 5-2 vote authorized $105 million in bonds that depend on the success of the Rock Run Crossings project.
The bonds will finance infrastructure improvements for the 309-acre project promoted as a future regional draw for retail, restaurants, hotels, entertainment and more at the crossing of Interstates 55 and 80 in Joliet.
The tax revenue from the new business will be used to pay off the bonds, unless the development is stalled.
“If this never happens, we’re on the hook for all of it?” Councilwoman Jan Quillman asked.
“Correct,” replied city Finance Director James Ghedotte.
Quillman and Councilman Larry Hug were the two no votes on the bonds.
She and Hug did not attend a June 21 meeting at which the council essentially committed to issuing the bonds by approving a development agreement with Cullinan Properties, the company that will develop Rock Run Crossings. The council vote then was 6-0 for the agreement.
The 5-2 vote on Tuesday reflected the absence of one council member, Bettye Gavin.
Ghedotte on Tuesday outlined the means for paying off the bonds at the request of Councilman Cesar Guerrero.
Ghedotte noted a Tax Increment Financing District has been established for the site, which would allow property tax dollars to be used for the bonds.
“Once the development gets going, we hope to pay the bonds off with TIF,” he said. “There will be a food and beverage tax. If they put a restaurant in, that would be used to pay off the bonds. Also, there will be a hotel/motel tax to pay off the bonds.”
Ghedotte said the city also plans to create a business district at the site that would generate additional tax revenue for the bonds.
Those revenue sources, however, depend on business development. Ghedotte said the city will have to look at its own resources to pay the bonds if development is slow or non-existent.
He said the city could create a general property tax to pay off the bonds or use its cash reserves. The city could pay itself back if Rock Run Crossings develops later than expected by using tax revenue from the businesses when they come in.
The city has been looking for a major development at the site since 2007, when a previous developer acquired by the site, but was stymied by the recession that hit then. Cullinan bought the property in 2015.
Public investment in infrastructure to make the site accessible was always contemplated, and a new interchange is being built at I-55 and Route 59 for Rock Run Crossings.