A key piece of state funding has come through, allowing Elgin to move forward with a 55-unit artists' co-op planned for downtown.
Elgin city officials announced Monday that the Illinois Housing Development Authority has released a $1.1 million annual federal grant for the next 10 years to ArtSpace.
"We are very, very grateful to the state housing authority having the confidence in us and Elgin," said Heidi Kurtze, ArtSpace director of property development. "I think they realize the public-private partnership."
The grant will enable the group to move forward with the project, slated for the Fountain Square building at 15 S. Spring St. that the city acquired by trading with Elgin Community College some 16 acres near the college's main campus earlier this year.
ArtSpace is a private, Minneapolis-based organization that specializes in converting older buildings into lofts and studio space for artists who make less than the median income of a specific area.
Elgin and Waukegan are ArtSpace's two projects in the Chicago suburbs. Overall, the group has completed 26 projects in 12 states.
Outside of the land it traded, Elgin committed $750,000 to the project, which has an overall cost of $14.5 million.
City officials hope the 83,319-square-foot final product, which includes a 42,319-square-foot addition and 6,800 square feet of retail space, will spur spending by artists in the downtown and attract visitors for exhibitions and visiting bars and restaurants afterward.
Plus, the city will now be able to collect property taxes on the building; the city couldn't tax the Fountain Square building when it was owned by ECC.
"That's why it is so exciting. We put in very, very little and we get a huge benefit," said Elgin City Manager Sean Stegall. "This is an investment for the city. The return on investment is so lopsided in our favor."
ArtSpace will fund the rest of Elgin's project by seeking other federal and Kane County grants, along with a loan.
Elgin Mayor Ed Schock said the ArtSpace project will help the reinforce the city's reputation as an arts destination and bring more residents to the downtown area, which hopefully will spur development for other arts-related businesses.
"This is going to be a real game changer for the downtown and our arts community," he said. "It's great on two levels."
Kurtze said the remaining money will come from fundraising, more federal funds and a loan.
"We're looking at a late spring or summer 2011 construction start. It's estimated to be 14 months of construction," she said.
Efficiency apartments will start at $600 a month with three-bedroom units going for $1,100 a month.
The Fountain Square campus will shut down after the fall semester, but ECC officials have not set a specific date.
The Illinois Housing Development Authority awarded a $9.3 million grant to the Waukegan project that will convert a nine-story building, the Karcher Hotel, into 36 lofts. This project will cost $12.6 million.