New apartment project to receive financial incentives from East Dundee
East Dundee is offering tax incentives to help a developer expand his residential project with two additional apartment buildings.
Joe Billitteri of Billitteri Enterprises recently completed two 18-unit structures at 811 E. Main St., a previously vacant property donated by the village. The project has had success so far in attracting tenants who spend money in the area and frequent the downtown shops and restaurants, he said.
Billitteri now plans to build two more buildings, nearly identical to the first two, on an adjacent lot at 855 E. Main St. But to move the project forward, he's asking for the village's financial assistance in acquiring the property from PAR Development.
The village board voted 5-1 this week to approve a development agreement with Billitteri that includes terms similar to what initially were offered for the 811 E. Main St. project, Village Administrator Jennifer Johnsen said.
Instead of donating the land, however, the village will use tax increment financing dollars to reimburse the developer for up to $390,000, covering the cost of buying the parcel, plus some interest on his loan.
In a TIF district, the property tax revenues that go to local governments are frozen at a certain level, and any taxes generated above that base assessed value can go back into redevelopment.
According to the deal, 75% of the incremental property tax revenues generated at 855 E. Main St. will be paid back to Billitteri until the maximum reimbursement is reached or the TIF expires at the end of 2029. The village also agreed to waive the developer's impact fees and water and sewer connection costs, estimated at a total of $415,364.
Trustee Jeff Lynam cast the lone "no" vote, citing concerns over the rate at which the village would be reimbursing Billitteri. He also opposed waiving the water and sewer fees, saying "there should be something coming in as a result of taking on this added stress to our systems."
The development agreement is centered around a pay-as-you-earn method that requires the property to generate revenue before receiving any money back, Village President Lael Miller said. Whether the return rate is 75% or a lower percentage, the village would still be reimbursing the developer for the same amount of money.
"We've gotten what we've gotten accomplished in the downtown and everywhere else through the proper use of TIF dollars," Miller said, noting such incentives have proved beneficial in spurring economic growth.
Billitteri plans to invest about $5.1 million into the new development, which will operate under the same homeowner association as the first two apartment buildings, according to village documents. Of the 36 total units, 24 would be one-bedroom apartments, which Billitteri said are in high demand in the area. The remaining units would have two bedrooms.
The site will have to be rezoned to accommodate a multifamily residential development and other zoning variances before construction can begin, Johnsen said. After closing on the property and securing village approval, developers say they hope to break ground by June 1.
"We're bringing more residents to this town that are hopefully going to shop (and) eat," Trustee Scott Andresen said. "(Having) more residents is actually good for this village."