St. Charles looking to jump-start First Street project

St. Charles' stalled First Street project may soon be rejuvenated with new financing techniques made available when Kane County declared itself a "Recovery Zone" under the federal stimulus.

City officials had originally hoped to welcome the third and largest phase of the massive First Street redevelopment project at the end of October. The First Street project is considered the cornerstone of the future for the downtown area.

But getting the necessary financial backing for the project stalled as borrowing virtually halted amid the economic recession. Now there's new optimism the project can get going again.

The city believes the use of special bonds made available by the federal stimulus can put the First Street project back on track. City Administrator Brian Townsend said the city is planning a presentation on the options to the city council in coming weeks.

Recovery Zone bonds are targeted to areas particularly affected by job loss and help local governments obtain financing for much-needed economic development projects. The county would issue the bonds - borrowing money from people buying the bonds and paying them interest - and the federal government would pay nearly half of the interest for the county.

"We believe that obtaining the ability to use Recovery Zone Bonds could provide a lower cost of financing and allow the development to proceed much sooner than it otherwise would with traditional bank financing," Townsend said.

If the city can get both the city council and the development group on board with the idea, then the city would submit an application to Kane County to receive a portion of the bond allocation for the project. U.S. Rep. Bill Foster announced in June that Kane County is set to receive about $42 million of bonding authority as a "Recovery Zone."

If all goes according to plan, the third phase of the First Street project would bring three new buildings to St. Charles' downtown for office, retail and residential use. An additional parking deck with 211 spaces is also part of the next phase.

Project: Plan includes three new buildings, parking deck