YORKVILLE – Nearly a year after the city initially considered tearing it down, the United City of Yorkville and a for-profit developer have a draft agreement for the sale and hopeful preservation of the old county jail.
The terms of the agreement between the city and developers Peter McKnight and Cary Cole were outlined during of the city’s economic development committee meeting Tuesday, Aug. 6.
Yorkville City Administrator Bart Olson said some of the terms of the agreement includes the city paying the developer a total of $115,000 in out-of-pocket tax increment financing, or TIF, funds, with the developers receiving those funds contingent on finishing the roof of the building, removing the lead-based paint in the house, completing the residential units and completing the entire project. He said there is also a deed restriction that the historic, eastern part of the building may never be torn down.
Olson said the developers would receive 100% of whatever TIF tax revenue the building might generate during construction if its assessed value goes up. He said the developers would then receive 90% of those revenues as a rebate from the city during the first four years after the project is completed, 85% during the next three years and 80% during the three years after that.
If the building was torn down, Olson said, the property would be worth nothing and wouldn’t generate any tax revenue.
He said that had been the case up to present and the remaining 10% to 20% a year over that decade following construction would be new tax revenue for the city.
“That’s all money that we’re not getting now,” Olson said.
The sale terms sheet creation and consideration comes after the project was last discussed during the July 23 City Council meeting. McKnight and Cole were not at the committee meeting Tuesday, Aug. 6.
The TIF district that the old jail is located within expires in 2041, according to city officials.
Olson said the terms also include the sale not including the parking lot and protections for the city in a scenario where the project is not completed, abandoned, or both. He said other terms, such as whether a leasing agreement for city-owned parking spaces could be worked out for the developer as part of the building, have yet to be determined.
Depending on how responsive the developers’ lawyer is, Olson said, the goal is to get a purchase, sale, and TIF agreement ready for the next council meeting Tuesday, Aug. 13.
Lynn Dubajic, the city’s economic development consultant, said in her August economic development report for Tuesday’s meeting that she is working with tenants who are interested in the commercial space of the old jail. She said after the meeting the two potential tenants were not retail or nonprofit but were more personal service-based types of businesses, such as a nail salon.
Ward 2 Alderwoman Jackie Milschewski said she recently got approached by a member of the public about the issue and that the perception is that the city is giving away all of its tax dollars. She said that’s not entirely the case, since the building hasn’t been on tax rolls.
“So it’s going to generate money for itself,” Milschewski said.
Ward 3 Alderman Joel Frieders said he feels a lot better about the amount of money that is coming directly out of the city’s pockets, as opposed to the originally proposed $306,000 that the developers wanted in city TIF funds. Despite the city borrowing against a deficit with about $30,000 of the out-of-pocket amount, he said, it’s an inventive use of saving residents money on the back end.
Frieders said he didn’t see any other way of making the old jail advantageous to a developer because properties like this are money pits. He said the use of TIF dollars would be used as intended and help the property go from nothing to something.
“This is exactly how I would want to see the TIF used,” Frieders said.
The potential sale terms come after city officials, including former Yorkville Mayor Gary Golinski, wanted to tear down the building within the past year or so. The old jail building started to crumble from lack of upkeep after the county built a new jail in 1992.
Lisa Wolancevich, chairwoman of the Yorkville Historical Preservation Society, also attended the Tuesday, Aug. 6 meeting along with a few other residents in support of saving the old jail from being torn down. While the city is helping the developer in so many other ways, she said, she hopes the city and developers can work out the parking issue.
“Giving a business no parking is like setting someone up to fail,” Wolancevich said.
Wolancevich said the society has been working with the developers ever since the group was first tipped off to the developers being contenders to purchase the building. She said she thought the meeting was productive overall and she’s pleased the possibility of saving the old jail is starting to become more real.
“I think it’s fantastic,” Wolancevich said. “I think we did it.”