East Dundee is donating land to developers who plan to construct two 18-unit apartment buildings along Main Street.
The village acquired the property at 811 E. Main when it purchased part of the former Summit School next door, Village Administrator Jennifer Johnsen said. The village has tried unsuccessfully to sell the unusually shaped parcel for years.
"We quickly realized there wasn't much of a market for it," Johnsen said. "In order to incentivize some development, it was best to structure a deal where we'd gift the land to the developer."
In exchange, the developers must complete the first apartment building by next June and the second by February 2021, according to an agreement approved this week by the village board. Both structures will be three stories and contain a mix of one- and two-bedroom units, developer Joe Billitteri said.
If the buildings don't come to fruition, he will have to pay the village $360,000 for the land, according to the deal. He'll owe $180,000 if only one apartment building is constructed.
East Dundee has agreed to waive water, sewer and impact fees for the project.
While debating the property's best use, officials ruled out retail and other commercial uses, Johnsen said. However, there appears to be a demand for market-rate rental residences, she said, pointing to a handful of new apartment complexes that have filled up quickly.
One of those projects is at 201 Penny Ave., where Billitteri converted office space into eight apartments. The residents who moved into the units have been seen visiting local shops and restaurants and helping to enhance the downtown, he said.
Billitteri has similar goals for the new development, which is about a mile from the Penny Avenue property.
"It's one of those rare projects where I feel like it's a good winning project for everybody," he said.
East Dundee will reap some financial benefits, Johnsen said. The now empty parcel is within a tax increment financing district, meaning any new construction will generate incremental property tax revenue that can be collected and used for redevelopment.
Under the deal, the village is entitled to retain all TIF funds generated by the apartments to use for other eligible projects, Johnsen said.
The project needs to go through a formal approval process, which includes rezoning the property, before construction can begin. Billitteri said he hopes to break ground this fall.