ROCHELLE — At its June 13 meeting, the Rochelle City Council unanimously approved a development agreement with Seldal Properties, LLC for the redevelopment of five downtown properties on Lincoln Highway.
The agreement is for 318, 320, 322, 324 and 326 Lincoln Highway and the redevelopment will consist of mixed-use retail and residential space. The total project will be just over $1 million. The city will reimburse Seldal Properties, LLC $300,000 in five separate $60,000 payments, starting upon the acquisition and completion, but no sooner than Dec. 31, 2023. The money will come from the city’s downtown and southern gateway tax increment funding (TIF) district.
The work planned by Seldal Properties, LLC Owner Bruce Seldal includes an extensive remodel of the front facade of the downtown building and remodeling to 10 rental units upstairs and three of the commercial units below for potential future tenants to open businesses in.
City Manager Jeff Fiegenschuh said June 15 that the project is “exactly why” the city established that TIF district.
“It's to redevelop older, blighted vacant buildings and beautify them, get them up to code, replace roofs and facades and all those types of things,” Fiegenschuh said. “And then in turn, people will want to rent commercially or live upstairs. We have people who are investing significant dollars into our downtown, which is great and it means people believe in our downtown and know there's an opportunity to turn a profit. People open businesses to make money. Obviously there are people who believe they can sustain their business in our downtown. And I'm very happy about that.”
Fiegenschuh said that mixed-uses of commercial and residential are used in “a lot of successful downtowns” such as in DeKalb. The Lincoln Highway project is going to redevelop older rental units and address issues such as beautification, windows and energy efficiency that haven’t been addressed in the past, he said.
“I think part of any vibrant downtown is having a nice residential component to it,” Fiegenschuh said. “And this goes along with that theory. Housing is definitely an issue in our community. And we've got the new workforce housing project coming on the south end of town. We've had some discussions about some additional senior housing maybe coming to the community. Again, this is just one component of an overall issue that needs to be addressed and that's good quality housing for our residents. If you want people to move to your community, they have to have a place to live."
TIF is a geographically-targeted economic development tool that captures the increase in property taxes, and sometimes other taxes, resulting from new development, and diverts that revenue to subsidize a development. Construction of new buildings is not TIF-eligible.
Development agreements are “based on the financial need” of entities like Seldal Properties that the city works with, Fiegenschuh said.
“Our job at the city is not to pay for the project,” Fiegenschuh said. “It's to close the funding gap to make the project possible. And that's what that TIF district does. [$300,000] was the need Mr. Seldal requested. Those TIF dollars are just us rebating a portion of his tax dollars back to him. Everything Mr. Seldal wants to do is TIF-eligible. To get reimbursed, he'll bring in all of his receipts and we'll verify them through our legal and finance teams and every year for five years in December after the project is completed, we'll pay $60,000.”
Fiegenschuh said having renovated spaces for new businesses is “great” and hopes they’ll bring in new business types the city doesn’t currently have or give a business that’s currently home-based to chance to find a storefront.
The city manager has enjoyed seeing new downtown businesses open up recently and people investing in the buildings. The Lincoln Highway project could yield “a lot of positive economic and social impacts,” he said.
“It's one of the projects I'm most proud to have been part of because with everyone who has put money into downtown properties, it shows that people are willing to invest in our downtown and that's a good thing. It says a lot when someone wants to make that kind of investment downtown.
“And what it says is they believe in the downtown and the direction of our community.”