Developer may seek funding help for downtown Wheaton project
Wednesday, February 27, 2013 2:30 AM
WHEATON -- Officials say a developer is expected to seek assistance from the city for costs associated with a proposed project to demolish the former downtown Jewel store and build a three-story medical office building on the long-vacant site.
Talks with Mokena-based Location Finders International Inc. indicate the developer will seek about $1.1 million in tax increment financing from the city's second TIF district, Wheaton officials say.
In a TIF district, property tax payments to local taxing bodies such as school and park districts are frozen for up to 23 years. The municipality funnels any additional property tax revenues within the district into a special fund that can be used to help cover the cost of improving the area.
The former Jewel store, considered a downtown eyesore, has been vacant since February 2008 at 114 E. Willow Ave. If approved, the project would raze the 20,000-square-foot structure and construct a roughly 40,000-square-foot medical office building on the northern edge of the property with parking on the southern portion, according to design plans under review by the city's planning and zoning board. The building would be operated by DuPage Medical Group.
The developer has not yet formally submitted a request detailing what expenses could be offset by TIF dollars. But several city council members made it clear during a planning session Monday that they would only consider the costs of public improvements to the site.
"I think the way we need to look at this is the context, 'What's the public benefit associated with this development?' If it's just building an office building, I don't think that makes the hurdle," Councilman Phil Suess said.
Suess said he wants the council to examine a breakdown of expenses before the city hires a financial adviser to review the developer's numbers to determine if the TIF money makes the project economically feasible. City officials say a contract is pending for the sale of the property, but they are unaware of the possible price.
"If the numbers don't work out, then they're probably paying too much for this land," Councilman John Rutledge said. "[…] We've got some major needs downtown, and I'm just not ready to give away money unnecessarily."
Another issue surrounding the use of TIF dollars is the potential cost to improve the downtown's infrastructure and streetscape if the council decides to pursue recommendations in a plan being developed by Design Workshop Inc. The Denver-based consulting firm is set to present long-term strategies and gauge community feedback during a public open house Thursday.
"I don't have a hard number, but something tells me it's going to be expensive to do what they suggest," Mayor Michael Gresk said.
The latest analysis by the city's finance department shows the city's first TIF district will expire in fiscal year 2017-2018 with a projected fund balance of about $2.7 million, city officials say. The second TIF district will expire in fiscal year 2022-2023 with a projected fund balance that could fall anywhere from $12.4 million to $17.3 million, depending on whether a developer is successful in seeking a property value reassessment for a downtown retail-office building.
Some council members initially are supporting using the remaining TIF dollars for downtown upgrades to generate foot traffic and shopping and spur sales tax revenue.
"I would rather see our monies being spent in the redevelopment of the downtown and making it a showcase rather than assist the development here," Councilman Tom Mouhelis said.
Although she acknowledged the area including the former Jewel store "does appear to be quite blighted," Councilwoman Evelyn Pacino Sanguinetti said she's inclined to oppose the TIF assistance because the developer "will benefit from the fruits of our strategic planning labor," she said.