The Oswego School District 308’s plan to sell the former Traughber Junior High School building near downtown Oswego has hit a snag.
Board of Education members learned Monday evening that 3 Diamond Development of Lincolnwood, the prospective buyer of the property, has been unsuccessful in obtaining necessary funding from the state to complete the purchase.
Last March, 3 Diamond Development submitted a bid of $2.1 million for the former school on Franklin Street that in recent years has served as the site of the Oswego YMCA and Oswego Senior Center. The YMCA vacated the building last month, while the senior center remains in operation.
3 Diamond Development has proposed renovating the building at an estimated cost of $17.5 million for use as apartments for seniors. The senior center would remain in the building, according to the firm’s plans.
The purchase of the property has been contingent, in part, on the firm obtaining low-income-housing tax credits from the Illinois Housing Development Authority. The firm’s request for the credits had received the IHDA’s preliminary approval, but that approval has been withdrawn. Instead, the IHDA awarded the tax credits to the Chelsea Commons Senior Living Apartments now under construction in Sugar Grove.
Stu Whitt, an attorney for the district, said that the IHDA made the decision to deny 3 Diamond’s tax credit request because Oswego and Sugar Grove are “the same, basically competitive market, and they did not want to start the project here until the Chelsea apartments in Sugar Grove are completely built and rented out.”
However, due to the demand for low-cost senior housing, Whitt said that he did not anticipate a long wait until the Chelsea apartments are full.
The original timeline for 3 Diamond, Whitt said, started in the winter of 2017, when the company first applied for preliminary approval of the tax credits with the IHDA. Had the approval gone through, the tax credits would have been issued in May or June of this year, and construction loans would have been closed in early 2019. Because of the Sugar Grove apartments, 3 Diamond cannot reapply until November or December of 2019, meaning that the funding would not be received until 2020, and the project would be closed in 2021, Whitt said.
“We’re basically pushed out about two years,” Whitt said.
As a result of the authority’s decision, Whitt said that the board now has several options: Stay with 3 Diamonds and wait until the funding is acquired, hire a realtor to put the property back on the market, or attempt to sell the property without a realtor.
The topic was listed on the board’s agenda Monday evening as an information item, meaning that the board could only discuss options, not vote on them.
During the discussion, board members seemed to lean toward hiring a realtor, but if the property were not sold by the time 3 Diamond acquires the necessary funding, then the board could seek to complete the sale with the firm.
“Oswego needs that energy right now,” member Toni Morgan said, citing growth in sales for residential properties, and the percentage of the sale that a realtor would earn.
“My thought is, based on the circumstances, I would option looking at hiring a realtor to put this back for sale,” Board President Brad Banks said. “If we don’t sell it in the next 14 months, then we can go back through the process.”