Elgin puts $2.8M more in TIF money into mixed-use project after unexpected issues
Elgin will kick in an additional $2.84 million from a special taxing district to help developers transform a 130-year-old downtown office building into a mixed-use apartment complex.
The Courtyard at 40, which will bring 40 new apartments and a 4,500-square-feet of ground floor commercial space to the corner of Spring Street and DuPage Court, was budgeted at $11.34 million originally but has seen that price rise to $17.85 million due to rising costs from unexpected structural issues and material price increases.
In 2021, the city gave the project roughly $3.9 million from a tax increment financing district. In a TIF district, property taxes above a certain point are funneled into development rather than to local governments.
Last week, city council members unanimously approved more funding, bringing the total TIF commitment on the project to $6.77 million.
"That's what TIF money is for. I know we gave extra funds to the Tower building, and I think that's been a success in our downtown," council member Carol Rauschenberger said.
City Manager Rick Kozal said the city's financial commitment to the redevelopment of the 44-unit Elgin Tower building was $6.35 million in 2018, the equivalent of about $7.73 million in today's dollars.
Developers have experienced several unexpected issues since comprehensive demolition began in 2021 on Elgin's first steel-frame building at 40 DuPage Court, which dates back to 1893.
The additional funds will pay for straightening and reinforcing steel roof trusses, which were found to be torqued and twisted.
In addition, the developers will address the size of the elevator shaft, which is different on every story, and multiple issues with the floor system, which is constructed differently on each floor. The second floor and part of the first floor are made of crumbling fly ash, which must be removed by hand and require special disposal.
Developers Courtyard 40, LLC will close the rest of the project gap with nearly $1 million in additional historic tax credits they recently received and a loan commitment of $2.67 million, Kozal said.
They now expect the project to be complete in spring 2025.
Each of the top four floors will have ten units. The unit mix includes eight two-bedroom apartments with rents expected to average $1,825 per month, 24 one-bedroom apartments with rents expected to average $1,550 per month, and eight studio apartments with rents expected to average $1,275 per month.