Posted Online: Sept. 30, 2012, 6:42 pm
R.I. considers TIF for new downtown housing
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By Jonathan Turner, firstname.lastname@example.org
At Monday night's Rock Island City Council meeting, aldermen will consider contributing $2.1 million toward a planned $6 million downtown rental housing development called The Locks.
Rock Island Economic Growth Corporation (Growth) will build the three-level complex (including secured covered parking) at 1st Avenue and 20th Street by March 2014, according to the proposed agreement.
The total cost of the project is estimated to be more than $6 million with a mix of one-, two- and three-bedroom units (28 units at market rate), with rents ranging from $550 to $1,200 a month, with the top rate including three bedrooms, two baths, balconies with river views, and just less than 2,000 square feet of living space, Renaissance Rock Island President Brian Hollenback said.
The city-owned property -- which includes Parking Lot C -- now generates no property taxes, and the development will feature a tax-increment financing (TIF) district, which will capture new taxes that can be used in the existing downtown TIF, he said.
"This is a very exciting project that continues our plans for building a genuine, urban neighborhood in our downtown," Mr. Hollenback wrote in an Aug. 29 letter to the city, which cites past Growth residential successes such as Voss Brothers Lofts, McKesson Lofts, Clipper Condominiums and most recently, Jackson Square.
The Locks will include six lower-cost units for renters making 60 percent of the area median income (or $31,200 a year for a two-person household). Financing would not be possible without the inclusion of the units with income restriction, Mr. Hollenback said.
City funding will be from the existing downtown TIF ($350,000) and a new project-based TIF ($1.75 million). The proposed agreement calls for the city to rebate all property tax in excess of $40,000 back to Growth each year, for 10 years. The amount rebated will change each year, as that threshold is raised 5 percent annually, Mr. Hollenback said. The new taxes collected help replenish the city TIF, he noted.
In order to create the new project-based TIF for The Locks, a modification of the downtown TIF and development of a new site-specific TIF are required. The council will vote on hiring a TIF consultant (not to exceed a cost of $29,000) to undertake these tasks.
The agreement calls for Growth to start work on the development no later than February 2013, and the city expects to issue the new TIF-backed bonds before Dec. 31.
The city council meeting starts at 6:45 p.m. on the third floor of city hall, 1528 3rd Ave., Rock Island. The council agenda can be found at www.rigov.org.