Tin­ley Park mulls deal with de­vel­oper

Apart­ment project in­cen­tives need OK from board

Daily Southtown (Sunday) - - Front Page - By Mike Nolan

Tin­ley Park of­fi­cials are con­sid­er­ing in­cen­tives worth more than $7 mil­lion for the de­vel­op­ers of a large down­town apart­ment project.

A ten­ta­tive agree­ment with South Street De­vel­op­ment, which plans to build Boule­vard at Cen­tral Sta­tion, still needs ap­proval from the Vil­lage Board.

Tin­ley Park, us­ing tax in­cre­ment fi­nanc­ing money, would re­im­burse South Street for $2.2 mil-

lion in in­fra­struc­ture work and re­bate the de­vel­oper as muc has $4.83 mil­lion in prop­erty tax rev­enue over a pe­riod of a decade or pos­si­bly more, ac­cord­ing to the ten­ta­tive agree­ment.

A pre­lim­i­nary vote on the deal could come at Tues­day’s Vil­lage Board meet­ing. Trus­tees dis­cussed the in­cen­tives at a re­cent com­mit­tee meet­ing and voted to ad­vance the mea­sure to the full board.

To be built in two phases, Boule­vard would con­tain 165 one- and twobed­room apart­ments as well as nearly 32,000 square feet of com­mer­cial

space. In to­tal, the de­vel­op­ment would have a lit­tle more than 296,000 square feet of space and be lo­cated on the south side of South Street, just east of Oak Park Av­enue.

It would be built im­me­di­ately south of the Oak Park Av­enue Me­tra sta­tion, and South Street hopes it will ap­peal to young pro­fes­sion­als who want to live close to the train to com­mute to and from jobs in Chicago.

An at­tor­ney for South Street, David Sosin, has said there is strong in­ter­est from restau­rant op­er­a­tors and other com­mer­cial ten­ants for the ground floor space.

Boule­vard is es­ti­mated to cost $36 mil­lion, ac­cord­ing to the vil­lage.

Tin­ley Park would, un­der the agree­ment, re­im­burse the de­vel­oper a max­i­mum of $2.2 mil­lion to help cover an es­ti­mated $3.3 mil­lion in pub­lic in­fra­struc­ture im­prove­ments in and ad­ja­cent to the site, such as road­work, util­ity lines and bury­ing over­head elec­tric lines. South Street would have to show the work had been com­pleted be­fore be­ing paid.

South Street also would see an ad­di­tional max­i­mum of $4.826 mil­lion in shared, or re­bated, in­cre­men­tal prop­erty tax rev­enue gen­er­ated by the New Bre­men tax in­cre­ment fi­nanc­ing district that Boule­vard would be lo­cated in.

Dur­ing the du­ra­tion of a TIF, typ­i­cally 23 years, vil­lages and other tax­ing bod­ies con­tinue to see prop­erty tax rev­enue gen­er­ated by an es­tab­lished base of the equal­ized as­sessed value of all prop­erty, of­ten re­ferred to as the “frozen” EAV, within a TIF district.

In­cre­men­tal in­creases in prop­erty tax rev­enue as a re­sult of de­vel­op­ment or higher prop­erty val­ues within the TIF district are fun­neled into a sep­a­rate fund. TIF money can be used for things such as in­fra­struc­ture work, in­clud­ing util­i­ties and streets, or to re­im­burse a de­vel­oper for tak­ing on those costs.

Tin­ley Park es­ti­mates that, as­sum­ing no other de­vel­op­ment hap­pens in the TIF district, the Boule­vard would boost in­cre­men­tal prop­erty tax reve- nues by more than $17.3 mil­lion over the life of the TIF.

The prop­erty tax re­bate agree­ment would be in place for 10 years, and the in­cre­men­tal in­creases in prop­erty tax rev­enue be­ing set aside would be shared be­tween Tin­ley Park and the de­vel­oper un­til the vil­lage gets its ini­tial $2.2 mil­lion back.

While the agree­ment pro­poses a 50-50 split, the per­cent­age of the split could vary depend­ing on how much of the com­mer­cial space is leased, ac­cord­ing to the ten­ta­tive agree­ment.

Af­ter Tin­ley Park re­coups its money, the de­vel­oper would get all of the in­cre­men­tal in­crease, up to a max­i­mum of $4.826 mil­lion, ac­cord­ing to the agree­ment.

Get­ting the full amount is con­tin­gent on South Street com­plet­ing both phases, with the in­cen­tive agree­ment call­ing for Tin­ley Park re­bat­ing $2.2 mil­lion, or a lit­tle less than half the amount, if just the first phase is built.

The agree­ment could be ex­tended, al­though the max­i­mum dol­lar amount wouldn’t change, pro­vided South Street meets cer­tain de­vel­op­ment bench­marks.

The rev­enue shar­ing could be ex­tended to 12 years if the first phase is ready for oc­cu­pancy within two years, and could be ex­tended to 15 years if both phases are ready for renters within four years.

The ex­ten­sions would give South Street a longer win­dow to cap­ture in­cre­men­tal in­creases in prop­erty tax rev­enue, and in­crease the like­li­hood of see­ing the max­i­mum $4.82 mil­lion pro­vided in the in­cen­tive agree­ment, ac­cord­ing to the vil­lage.

Tin­ley Park is will­ing to con­sider sep­a­rate agree­ments that would share sales tax rev­enue with in­di­vid­ual com­mer­cial ten­ants in Boule­vard, ac­cord­ing to the agree­ment.

The to­tal dol­lar amount of the in­cen­tive for South Street is $7.526 mil­lion, al­though some of that comes from the vil­lage agree­ing to cap things such as per­mit fees, re­view fees and im­pact fees at $130,000.

The vil­lage es­ti­mates that, if not for the cap, fees for a project of this scope could range be­tween $450,000 and $600,000.

The ten­ta­tive agree­ment rep­re­sents sev­eral months, if not years, of back-and­forth ne­go­ti­a­tions be­tween the vil­lage and South Street, and which ap­peared to have fal­tered at one point re­cently.

At Tues­day’s com­mit­tee meet­ing, Trustee Cyn­thia Berg said she would pre­fer to see an out­side con­sul­tant re­view the in­cen­tives pack­age be­fore the board takes ac­tion to de­ter­mine if there is un­due risk to the vil­lage. A mo­tion by her to de­fer the com­mit­tee’s vote on the mat­ter failed for a lack of a sec­ond, and she voted against rec­om­mend­ing it go to the full board for con­sid­er­a­tion.

Vil­lage Man­ager Dave Niemeyer said at the meet­ing that he be­lieved the agree­ment was fair to both the vil­lage and de­vel­oper.

“The num­bers are good com­pared to what they were” ear­lier in talks, he said.

Niemeyer said that he, Mayor Ja­cob Van­den­berg, Trustee Michael Glotz, Eco­nomic De­vel­op­ment Direc­tor Pa­trick Hoban and vil­lage at­tor­ney Pa­trick Con­nelly were among those in­volved in ne­go­ti­a­tions on the vil­lage’s be­half.

Trustee Michael Pan­nitto said that if of­fi­cials want to at­tract com­mer­cial de­vel­op­ment to the down­town area, “it’s go­ing to cost the vil­lage some­thing.”

South Street De­vel­op­ment’s prin­ci­pals are Robert Hansen and auto deal­er­ship owner Joseph Rizza. Hansen was the de­vel­oper of Tin­ley Pointe Cen­ter, a mixed-use build­ing at 183rd Street and Con­ven­tion Cen­ter Drive com­bin­ing com­mer­cial space on the ground floor and res­i­den­tial units above.

He also has­won ap­proval from Or­land Park of­fi­cials to build The Pointe, which would have 64 apart­ments and be built at the north­west cor­ner of 143rd Street and South­west High­way, just west of the Nine­ty7Fifty on the Park apart­ments. The 103,000square-foot de­vel­op­ment would in­clude a rooftop ter­race, a lounge, a fit­ness cen­ter, a com­mu­nity room and un­der­ground park­ing.

VIL­LAGE OF TIN­LEY PARK

A ren­der­ing shows the Boule­vard at Cen­tral Sta­tion apart­ment de­vel­op­ment planned in Tin­ley Park. Vil­lage of­fi­cials are con­sid­er­ing in­cen­tives for the project.

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