Tinley Park mulls deal with developer
Apartment project incentives need OK from board
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.
A rendering shows the Boulevard at Central Station apartment development planned in Tinley Park. Village officials are considering incentives for the project.