The Bloomington City Council on Monday will consider a developer’s $18.5 million plan to build luxury apartments and townhomes on a long-vacant property just east of downtown. The developer is asking for $4.5 million in incentives to do it.
The project aims to build 24 two-bedroom townhomes and 48 apartment units on the city-owned property surrounded by East Jefferson, East Washington, and North Gridley streets. The apartments would be in a five-story building, with parking on the first floor. There will also be a 60-space surface parking lot and a small centralized shared green space.
“If approved, the project will develop luxury apartments and townhomes to complement the historic aesthetic of the downtown area while creating a new and vibrant residential community as a new asset to the city,” city staff wrote in a memo ahead of Monday’s meeting.
The proposed redevelopment agreement comes as Bloomington-Normal struggles with a housing shortage, with some elected officials seeking more opportunities for infill development closer to the city’s urban core where infrastructure already exists. The proposal made public Thursday does not specify any possible cost or rents of the townhomes or apartments.
The developer is 402 E. Washington LLC, managed by Andrew Kaufmann and Robert Osenga of Bloomington-Normal, records show.
They’re seeking up to $4.5 million (or 24.3% of the project cost, whichever is less) in incentives to do the project. 75% of that money would come from a Tax Increment Financing, or TIF, district that includes the property, with the remaining coming from city's Short-Term Rental Tax generated by the development. (The developer has proposed using two townhomes and five apartments as short-term rentals.)
TIF is an economic development tool that allows a city to capture and spend the new tax revenue generated in a specific area on that area. The property is not currently generating any property tax revenue.
“Through financial analysis done by both the city and the city's third-party consultant, PGAV, it was determined that the developer was in need of financial assistance from the City in order to make this project viable, and but for the assistance from the city, the project would not move forward,” city staff wrote in the memo.
Part of the property was home to the former Coachman Motel, which was demolished in 2008. The other part of the property is owned by City of Refuge Ministries. The church building is “in poor condition,” and “the developer entered into a Memorandum of Understanding with City of Refuge Ministries for the church property and provided a Letter of Support from their board to the city in support of the project moving forward,” city staff said. The developer would acquire all of it.
