After more than eight years of trying, the Town of Normal may be able to move ahead with landmark developments on Uptown Circle. Town officials said they hope to bring a development agreement on the Trail East and West projects to the council later this year.
And if council members who face a likely vote next month on another potential cost increase for the Uptown Underpass show a reluctance to pay more, the town could have to repay millions in grant funding already spent.
Trail East and West
The Normal Town Council may get to decide on a revived Trail East and West development proposal in Uptown this year. That follows the town’s creation of a Tax Increment Financing [TIF] District that encompasses the north side of Uptown Circle and other properties.
City Manager Pam Reece said the town has worked with several developers since the municipality first asked for proposals in late 2017. She said the town has been in talks with the current prospective firm for a couple of years but the seven-year lifespan of the old TIF did not offer enough of an incentive to move forward. Hence the action to create a new TIF, which took some of the land from the old district.
“It creates a whole new 23-year period for developers to take advantage of that incentive and redevelop or develop sites,” said Reece. “With the cost of development these days, and to make the numbers work … there has to be … something to fill the gaps.”
The intent of the project remains unchanged: to create residential space in Uptown with businesses on the ground floor of the two buildings that would straddle the Constitution Trail.
“I believe we're in a good position to come to council with a prospective development for Trail East and Trail West this fiscal year,” said Reece.
The town and developer have not finalized an agreement. Reece said the town’s goal is to get construction started before the year ends.
“We are still in the concept phase, but they have a great team that they're working with which gives us confidence that we're making progress,” said Reece.
Underpass
The town had hoped to bring an Underpass agreement to the council in April involving a new contractor after the old one pulled out. Reece said she remains optimistic they can pull project details together, though she is now targeting the first half of May.
“We also want to make sure we're giving council all the information they need to make an informed decision, and that would include confirmation with the Federal Railroad Administration on the timeline and the grant details, as well as, what is the risk if council chooses to not move forward?” said Reece.
The project is likely to have yet another price increase. There are various reasons for previous cost hikes over the years.
Reece said the town has already spent more than $3 million of a federal BUILD grant. That funded items such as phase one design and environmental studies. If the council decides to abandon the below-grade connection between the north and south side of the railroad tracks in Uptown, the town will have to pay that money back.
“It’s not just the federal BUILD grant dollars that are funding this. We have quite a bit in state grant dollars as well that we want to work through and find out the risks of that as well. There are a lot of I’s to dot and T's to cross before we come back to council,” said Reece.
The town began collecting increased food and beverage and hotel-motel taxes April 1 which were intended to fund bonds that will pay for the Underpass. The town did not pause the collection of that tax, under the presumption the project is still a go. If council members balk at the higher price tag, they would face another set of choices.
“Council can theoretically choose to rescind or cancel that tax, or perhaps, if we're not moving forward with an Underpass project, redirect those dollars to some other capital investment. We would make that information available to council,” said Reece.
The tax increases would generate $900,000 to $1 million per year for Underpass debt service.
“If council continues to be comfortable with the Underpass project and wants to move forward, then we'll know that revenue stream remains intact,” said Reece.
If the project goes to the council as anticipated, the town would have collected about six weeks’ worth of revenue for the project at the time of decision.
The town also wants to make sure that when they issue debt, it’s done at a time market conditions benefit the municipality, said Reece.
