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Developer asks for $109 million in aid for controversial Sugar Grove proposal

A developer is asking for $109 million worth of aid for the proposed The Grove development in Sugar Grove, according to a redevelopment agreement the village board is considering.

  Looking southeast to intersection of I-88 and Route 47 with Seavey Road to the bottom left. The land could be redeveloped with a business park, homes, stores and more, under a proposal Sugar Grove is considering. Brian Hill/bhill@dailyherald.com

The village board on Tuesday night began digging into the agreement’s details, a proposed annexation agreement, zoning requests and whether the property qualifies to be a tax increment financing district. It will resume its discussion at 6 p.m. Thursday. It expects to vote on them Sept. 3.

An artist's rendering of what a Town Center could look like at The Grove development proposed for Sugar Grove. Courtesy of Crown Community Development

The 761-acre Grove development would straddle I-88, with most of it east of Route 47. There would be housing and some commercial south of I-88, and offices, warehouses commercial and industrial uses on the rest.

A TIF eligibility study by a consultant estimated that it could take as much as $350 million worth of TIF-eligible work to develop the site. In a TIF district, any increase in property taxes collected on the site can be used to pay for infrastructure work that increases the value of the land. In this case, Crown would pay for the work upfront and be reimbursed.

The annexation agreement is contingent on the creation of the TIF district. Crown Community Development, the owner, says that without the financial aid from the TIF, they don’t consider the project financially feasible.

A consultant hired by the village says the site, which is farmland, qualifies for a TIF because it is blighted. It is blighted because it contributes to flooding in the Blackberry Creek watershed, according to the consultant.

Many area residents dispute that, and so does Trustee Heidi Lendi. She argued on Tuesday that’s not what the state TIF law intended when it was enacted in the 1970s. Lawmakers meant to improve rundown areas, according to Lendi.

“‘Blighted’ is something that needs to be fixed, not farmland upland of a watershed,” Lendi said, calling the designation a loophole. “This is basically saying, ‘We (the village) want a development and this is the way we can do it.’”

Trustee Sean Michels, who was village president when Crown first proposed a development in 2018, questioned why TIF aid was needed to develop the residential part of the plan. The village has never done so, he said. A Crown representative responded that the residential portion needs at least $45 million of infrastructure and grading work.

An Aug. 9 memo from the consultant about the development states that with the aid, Crown’s internal rate of return on its investment would be about 9.54%. Without the aid, there would be a negative return, it says.

More than 150 people attended the meeting, and public comment about the proposals went on for two hours. Most were opposed. Four spoke in favor: A Sugar Grove plan commissioner, a former Sugar Grove Township supervisor, a Sugar Grove resident and the president of the Fox Valley Building and Construction Trades Council, who lives in Sugar Grove.

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