East Dundee to give tax incentives to downtown developers

Investors of a new mixed-use development in downtown East Dundee will get some financial assistance from the village.

The East Dundee village board Monday approved the redevelopment agreement for an estimated $3.5 million project coming to 311 Barrington Ave. The two-story building will include retail and restaurant space, as well as 11 apartments on the second floor.

The village agreed to reimburse investors for 28 percent of the total cost of the project, capped at $971,351, through tax increment financing funds and business development taxes.

Because the lot sits empty, the village receives little tax revenue from that property, Village President Lael Miller said.

"The village is not out any of its own money," he said. "This project is paying for itself."

In a TIF district, property taxes that go to local governments are frozen at a certain level for 23 years. Any taxes generated above that level can go back to the village to be used toward development projects and improvements.

As part of the agreement, the village will give developers 75 percent of all incremental property taxes for the first two years, at which point that amount goes down to 50 percent.

Investors will also receive all of the business development taxes - or 0.75 percent of incremental sales tax - generated from the new development.

"This encourages (developers) to find retailers that bring in a lot of business," Village Administrator Bob Skurla said.

Developers will also create a parking lot on the property, which the village will then purchase for $150,000 to add more public parking downtown. "Any increase in parking is a good increase," Miller said.

Trustees Allen Skillicorn and Alan Hall voted against the agreement, and Trustee Rob Gorman abstained because he owns property within the TIF district.

Business broker Tracy Burnidge, of TurnKEY Business Brokers Inc., said he has locked in two restaurants to open in the new building: Joe's Cantina, a Mexican Restaurant, and Matt O'Shay's Irish Pub, owned by Ireland native Shay Clark.

"This is going to be a beautiful, wonderful place," said Clark, who has lived in the area for several years. "I was sold on the whole development and particularly what I've seen happening down here."

The development was supposed to be completed by July of 2016, but Burnidge said problems with the property's soil have pushed back the start date.

"Other than that setback, we're full steam ahead," he said.