Batavia leery of $400K grant for redevelopment

Batavia city officials want more financial information about a plan to revamp a crumbling building before giving the owner $400,000 for the project.

A city council committee last week tabled an agreement Kluber Inc., which is looking to construct a two-story building of up to 11,000 square feet at 10 S. Shumway Ave., incorporating the shell of the former opera house, at an estimated cost of about $2 million.

The building could house offices, stores and restaurants, but Kluber has had trouble obtaining financing for the full project cost

"I'm not interested in spending $400,000 on a building that might sit empty for two years," Alderman Vic Dietz said.

Dietz is skeptical of occupancy projections for the building, as well as how much the property's value will increase. He said the city should have more information about Kluber's equity in the project before signing an agreement.

The proposal calls for an upfront grant of $200,000 from the city, with the second half to be paid when the first occupancy permit is issued. The money would come from the downtown tax-increment financing district 1 fund. In that district, established in 1989, additional property tax revenue resulting from increased property values is earmarked for improving the district.

The current proposal is scaled back from an earlier $8 million project planned for the site.

"Our goal in this project is to have a new building built downtown," said Jerry Swanson, the city's community development director. "It will have the added benefit of eliminating what is an eyesore."

Alderman Garran Sparks worries that using $400,000 on this project could hamper the city "when other projects may be coming that are retail and bring sales tax.". At the start of 2010, there was about $1 million in the TIF fund.

Dietz also was critical of the project, calling it a "landlocked building with no unique purpose." The downtown situation has changed since 2008, he said, with talk of a new recreation center being built nearby and a second bridge creating new corners for development.

"We're grasping at straws," he said.

Another downtown landowner, Batavia Enterprises, raised concerns about the lack of parking in the plan. Batavia Enterprises President Dan Stellato said tenants at its nearby shopping plaza, office buildings and fitness center already have trouble finding parking, especially when patrons of other businesses use its lot across from the Shumway property.

But city planners say because the new proposal is in the downtown, it isn't required to provide parking. Patrons could park on the street or in a nearby city lot.

The committee voted 5-1 to table the ordinance for a month to collect more information about the design, the finances and the parking. Chairman Dave Brown vast the 'no' vote.

"It's a development that we would like to see downtown, and have already agreed that we should use TIF money," Brown said. "All we talk about in this town is (improving the downtown) ...if we can't make this building work on this site with our assistance, how are we ever going to make anything work?"