Naperville working on Water Street details
Naperville is moving forward with plans to redevelop Water Street with shops, restaurants and condominiums.
The city council gave the green light Tuesday for staff to draft an agreement with developer Marquette Properties that includes restrictions on banks and restaurant space and details funding measures for a new parking deck.
Through a public-private partnership, the two will make an estimated $25 million in public improvements to the area south of the riverwalk along Water Street between Webster and Main streets.
In December, the city council gave that area the designation of a tax increment financing district, allowing it to raise the funds to make these improvements.
Tuesday, the council approved some of the business terms it has tentatively reached with the developer, one of which involves building a new 557-space parking deck.
Under the agreement, the developer would pay 27 percent of the cost of purchasing land for the deck.
The city would pay the remaining 73 percent, putting its share at just over $3.6 million. Purchasing the land will then cost the city just over $3.6 million, which will be funded through revenue from the special taxing district as well as the new 1.5 percent food and beverage tax in the downtown area.
The city has also stipulated that it will not fund any of the private parking spaces in the deck and the developer will relinquish its rights to use the 80 spaces at the nearby municipal center parking deck.
Construction on the new parking structure is scheduled to begin in the fall.
The agreement will also include square-footage restrictions on drinking establishments and fast food and carryout restaurants and limits the number of banks to one.
Marquette Properties would also be able to recapture a proportionate share of the costs for public improvements at 315 S. Main St. such as street construction, water mains, streetscape and underground electric.
Resident Kathy Benson questioned this stipulation in the agreement.
"It seems to me developers are the ones pursing the TIF so I don't know that the individual property owner should bear the costs even though I do recognize they get the benefit," Benson said.
But City Attorney Margo Ely said the developer has that right because the improvements will benefit the entire area.
"We will own the benefits that will be built that will be partially financed through the developer," Ely said. "The developer needs assurance it will get reimbursement for their portion of those public improvements."
Ely also said the city will be protected financially in terms of the bonds it will issue to pay for public improvements.
"We will not have an obligation to issue the revenue bonds until certain performance measures have been met, certain construction timelines have been achieved and we have assurance that the project is well under way and will be completed before we have to issue the bonds," she said.
Because the area is now a TIF district, the amount of property tax revenue that other taxing bodies can collect from it is frozen for up to 23 years. While the property value of that area goes up during that time, it will generate additional tax dollars that will then go toward improvements.