More TIF cash for Elgin’s Artspace?

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Updated: October 29, 2011 12:42AM

ELGIN — The city council will consider using $250,000 in TIF district money Wednesday to fill a shortfall in the funding needed to launch the Artspace project in downtown Elgin.

Ground-breaking is set to take place at the end of this month for the construction of the long-in-the-works artists’ colony at what was the Elgin Community College Fountain Square Campus at 51 S. Spring St. The proposed project is to hold 55 rental units, a new three-story building along the southern edge of the property, and retail space of more than 6,000 square feet along Spring Street. The city swapped property with ECC for the downtown campus, giving the college land that once held the city’s Spartan Meadows Golf Course next to the school’s main campus.

Late Monday morning, City Manager Sean Stegall said that the city learned of the funding gap within the last few weeks from Minnesota-based Artspace.

According to documentation for the meeting, the total budget for the development is $14.5 million. The project lost nearly $800,000 in funding sources after being declared ineligible for certain tax credit revenue and the Illinois Housing Development Authority lowering the valuation of the property for tax credits.

“Artspace has been able to make up most of that $800,000 gap through working with Bank of America to secure a better rate, working with Shales McNutt to bring bids in under budget, soliciting $500,000 in private donations, and by deferring their own developer fees,” the document states. “In spite of those efforts, there remains a $250,000 gap.”

Half the TIF (tax increment financing) money would be doled out at the start of the project and the rest at the completion of construction.

The building is in the city’s Central Area TIF District and is expected generate money back to the city for capital projects within the boundaries of that area. Prior to consideration of the additional $250,000 on Wednesday, the city already has put $725,000 of Central Area TIF money and $32,500 from its general fund into the Artspace effort.

According to an analysis done for the city by an outside party and revised in-house to reflect the economic downturn, the facility should generate more than $1.38 million in TIF money for Elgin.

The city also points to the success of other Artspace projects, which have helped redeveloped neighborhoods in other cities and towns.

Mayor Dave Kaptain said Monday that he is in favor of moving forward with the proposal to keep the project on schedule to open in the autumn of 2012.