Wheaton officials have approved plans for a luxury apartment complex downtown and reached an agreement with the developer to reimburse about 2 percent of the costs associated with the project.
The deal ends months of negotiations and comes after the developer cautioned June 18 that delays were crippling momentum on the $64 million project: a six-story, 306-unit apartment complex bounded by Wesley, Scott, Front and Cross streets.
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Officials say the city's investment -- $1.3 million in tax increment financing district funds, property taxes above what go to local governments that go instead into development -- poses little financial risk and supports visible, public improvements to the site, just across from Wheaton Public Library.
The city council Monday voted 5-1 to approve the agreement with Morningside Wheaton LLC, with Councilwoman Jeanne Ives absent.
Roughly $500,000 in upfront TIF funds will be used to bury overhead utility lines at the site. As part of the agreement, a letter of credit will guarantee the city repayment of the upfront TIF money if the project isn't completed.
The city also will reimburse the fees associated with the letter of credit with TIF money once it issues a final certificate of occupancy. That's expected to cost $10,000 each year for the life of the letter of credit, and set to expire when the city has issued all the temporary certificates of occupancy for the complex in roughly two years.
The city will provide the remainder of the TIF funds once the developer obtains the final certificate of occupancy. That money will be used for work including landscaping, bike racks, street lighting, sidewalks and street improvements.
Councilman Phil Suess supported the use of the TIF money.
"Those are physical things, physical investments in the improvement of the downtown," Suess said. "This deal is very much different from any other TIF deal the city has done. We are not supporting the private payment of debt and interest as we have done with other projects."
In March, Nancy Hill of Ehlers and Associates presented an analysis that showed the TIF money makes the project economically feasible.
Still, Councilman John Rutledge, the lone "no" vote, said the TIF accounts for roughly 2 percent of the entire project's costs.
"I think they (Morningside) can cover that," Rutledge said. "I think it's going to succeed or fail regardless of whether or not we give them this money."
Another highlight of the agreement requires the developer to pay $150,000 in park district impact fees.
Under a formula required by city code, Morningside would pay $343,177 in lieu of a land donation for park purposes. In March, the park district's board of commissioners approved a $60,000 waiver in response to Morningside's request for a full waiver of the fees.
In May, the council agreed the agreement should impose $150,000 in total impact fees.
Monthly rent at the complex -- with plans for a fitness center, outdoor pool and patio -- is expected to range from $1,000 to $2,300 a month.