You are here
The developers proposing to build a $36-million, four-story mixed-use development in downtown Tinley Park have requested over $7 million in economic incentives from the Village after back-and-forth negotiations.
The Village’s Committee of the Whole met on Oct. 9 to discuss an agreement for the Boulevard at Central Station that includes up to a $4.8-million rebate for the project’s completion, $2.2-million in upfront TIF funds to assist with public infrastructure improvements, and a $130,000 cap of permit and review fees while both parties would agree to land swaps upon completion of the first and final phase of the project. The total public and private incentive request is $7,526,000, according to Village documents.
South Street, comprised of Robert Hansen of Hansen Development and Joseph Rizza of Joe Rizza Auto Group, have been working on the project for approximately 12 years with the goal of building a Transit Oriented Development on roughly 3-acres of land, approximately one acre of which is owned by the Village, adjacent to the Oak Park Avenue train station. Plans for the mixed-use development include 165 one and two-bedroom apartments and 29,853 leasable square feet of commercial space. Located in the recently formed New Bremen TIF District, Village staff estimated $17,367,227 in projected TIF increment for the project over the TIF’s 23-year lifespan. The return rate of investment was projected to be over 250-percent.
“It’s really tricky,” Economic Development Manager Patrick Hoban said. “We’re talking about future money.”
The first phase of the project calls for the construction of 66 residential units with 15,310 square feet of leasable commercial space and amenities such as a fitness center and outdoor grilling area with 5,000 square feet dedicated to a white table cloth full service restaurant. The second phase would add 99 more residential units and another 14,723 square feet of leasable commercial space in addition to a 181-space parking garage and swimming pool. A total of 40 on-street public parking stalls are also expected to be created from the development. The apartments range from 749-square feet to over 1,311 square feet.
In regards to the economic incentives, the developers estimate a cost of $3.3 million for public infrastructure improvements with the Village’s incentive capped at $2.2 million even if the costs overrun the estimates. Public Works Director Kevin Workowski said some infrastructure projects such as a water main replacement for the project area would need to be done by the Village eventually regardless. Off-site improvements required by the developers under the agreement include the completion of public streets abutting the site, realignment of the South Street and 67th Court into a traditional T-intersection, as well as the additional parking spaces in the form of parallel stalls on the south side of South Street and both sides of 174th Street.
The $4.8 million private incentive rebate is directly linked to the project’s completion. Phase one consists of 46-percent of the total project, which equals a rebate of approximately $2.2 million with the remaining $2.6 million released upon the completion of phase two. According to the agreement, the Village has proposed sharing up to 50-percent of the yearly TIF increment with the developers until the Village receives all of its $2.2 million in the public infrastructure incentive back.
The developers would then receive 100-percent of the TIF increment up to the maximum $4.8 million. The percentage of the shared rebated is based upon half the percentage of the available commercial square footage being leased. The developers must have 50-percent of the space leased in order to access a 25-percent share of the TIF increment with the other 75-percent going to the Village in that scenario. For example, if 100-percent of the space was leased both the Village and the developers would receive 50-percent of the TIF increment each.
The fee cap includes the Village’s internal permit fees, tap-in fees, internal review fees, impact fees and meter fees at no more than $100,000 while external review fees are capped at $30,000. The building department estimated those fees for a project of this scope could range between, $450,000 to $600,000, according to Village documents. The clause related to land swaps dictates that the Village convey its one acre of land to the developer for the construction of phase one in exchange for a portion of the developers' land for phase two. According to the agreement, once phase one is complete the Village would then convey the phase two portion of the land back to the developer. If phase two is completed, the developer would convey the parking lot from that phase back to the Village. Developer Joseph Rizza said South Street would secure a $1.2 million line of credit for the project.
Trustee Cynthia Berg said she’d like to have a third party review the economic incentives agreement and expressed concerns over the total amount of the incentives being considered. Trustees John Curran and Michael Pannitto asked questions related to parking in the area and the displacement of Metra commuters as well as access to the residential amenities such as the pool and parking garage. The Village’s Economic and Commercial Commission, who also reviewed the agreement at its Oct. 8 meeting, expressed concern over parking during and after construction.
Planning Manager Kimberly Clarke said the plans met the Village’s code requirements for one parking stall per residential unit with the construction of the parking garage as well as the surface lot providing more than 165 total stalls. Rizza said the amenities are only available to residents of the apartment complex, while the businesses are open to the public. The parking garage would have an identification system as well on site security for the complex, he said. Trustee Michael Glotz reiterated that some of the public improvements covered under the proposal would otherwise have to be solely undertaken by the Village.
“The risk is on the developer,” Village Attorney Patrick Connelly said.
Hoban said the proposal meets short and long-term strategic plan goals and offers a wide variety of benefits to Tinley Park, especially the Legacy District corridor where other proposed projects such as the Harmony Square Plaza, a public gathering space, and Bremen Station, a mixed-use development with 39 apartments, are also under various stages of development planning. Benefits he listed include offering starter homes for young professionals while creating population density in downtown, generating employment opportunities, and increasing Tinley Park’s consumer spending on the new and existing businesses.
The project was unanimously recommended for approval by the Village’s Plan Commission after a public hearing was held on Sept. 6. A motion to move the agreement to the Board of Trustees for a first reading on Oct. 16 passed by a vote of 5 to 1 with Berg casting a dissenting vote. The Board will also consider a special use permit and variance to allow for the residential amenities.