The developer of The Courtyard at 40 apartment complex will receive an additional $2.8 million in TIF funds from the city of Elgin to help complete work set back by unexpected structural issues and higher material costs.
Elgin committed to providing $3.9 million in Tax Increment Financing District funds to the downtown building renovation in July 2021 but the project’s cost has skyrocketed from an estimated $11.6 million to $18 million, officials said.
Since construction began this summer, developers have discovered a series of issues with the 1890s-era building, including steel roof trusses that are twisted and/or resting on wood framing and an elevator shaft that’s different on every floor and must be replaced.
In addition to more TIF money, which the Elgin City Council approved Wednesday night, developers will close the gap with nearly $1 million in additional historic tax credits, which is more than anticipated, and a loan commitment for $2.67 million, City Manager Rick Kozal said.
City staff feel this is “an inflection point for this development,” Kozal said. “It’s imperative that Courtyard 40 LLC understand what the city’s commitment is so it can make determinations about whether it is able to proceed with this development.”
Councilwoman Carol Rauschenberger said she had no problem with giving the development more funds.
“That’s what TIF money is for,” she said. “I know we gave extra funds to the Tower building, and I think that’s been a success in our downtown. I’m sure Courtyard 40 LLC did not envision the problems they have come up against.”
Rauschenberger added that Elgin needs the type of housing that Courtyard 40 is creating. When completed, the building at DuPage Court and North Spring Street will have 40 studio, one- and two-bedroom apartments with market-rate rents and 4,500 square feet in commercial space.
“I think it’s the best thing for new housing in our downtown and to support the vitality of our downtown,” she said.
Councilwoman Tish Powell agreed, saying “(it) sounds like you guys ran into a whole lot of unanticipated and very unique and interesting problems as you started this project. It couldn’t be fun. And, obviously, it’s rather expensive. I do support the proposed additional TIF money to help bring this over the finish line.”
City officials created the Central Area TIF district 20 years ago to help stimulate downtown development. Over the years, Elgin has used $6.2 million in TIF funding to help redevelop the historic Tower building and spur other developments and projects.
With the most recent release of money, there is about $1.8 million remaining in the fund, Kozal said. There’s one developer in preliminary talks with the city who may apply for $500,000 in funds, he said.
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The district expires in 2025. Elgin can expand it another 12 years but would need state legislative approval to do so, Kozal said.
Before seeking an extension, Powell, Rauschenberger and Councilman John Steffen said they want to see a plan for how future TIF money might be spent.
“We need to identify some priorities so the process of obtaining TIF dollars for our downtown businesses is transparent. I’ve heard complaints from folks that they don’t feel it’s transparent,” Powell said.
Gloria Casas is a freelance reporter for The Courier-News.