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Confessions of a Naperville Curmudgeon
Final Legal Review May Signal Water Street Construction Start
If all goes according to plan, Naperville City Council’s February 17th agenda will include a half dozen or so detailed legal documents needing approval. After we have been hearing for the past three months that the Water Street Redevelopment project’s initiation was imminent, pending Council action ground finally may be broken .
This latest delay, to a controversial project discussed and debated for eight years, is the need to reach consensus on various development agreements spelling out the division of authority and responsibility between the developer, Marquette Properties, and the City of Naperville. With Water Street a very unique “public/private” partnership (including the new municipal parking deck with spaces dedicated to the planned hotel), legal issues have been extensive and each side strove to best protect itself from what may go wrong.
With various and sundry easements, contracts, and other enabling agreements in play, both sides have been carefully crafting their whereas’s and heretofore’s. Further adding to the legal wordsmithing, the project’s primary lender, Fifth Third Bank, had lawyers reviewing and commenting. Senior city staff told me last week that this three way round robin was approaching conclusion and a positive City Council vote, followed by affixing of seals and signatures, would allow the long delayed work to begin.
It may come as a surprise to anyone who has followed my columns or comments for the past six years, but I hope Council approves these final covenants. Naperville taxpayers need progress. The consequences of further developer inaction and delay are increased community costs and a widening gap in municipal finances.
To meet its responsibilities, including Riverwalk improvements, the parking garage, and street and alley reconstruction, Naperville is planning to borrow $4.6 million in the upcoming fiscal year. This is in addition to $6M borrowed last year when the presumed imminent start and good interest rates made those bonds seem like a good idea.
Borrowings and debt service are anticipated to be covered by TIF District proceeds, developer contributions, and food and beverage sales taxes. Unless and until the proposed restaurants are open and operating, there will be no additional Food and Beverage tax receipts. Adding further uncertainty, construction delays held TIF collections since 2007 to around $700K.
Exacerbating the financial picture, Naperville Township Assessor Warren Dixon reported to the assembled taxing bodies at the January 29th TIF District Joint Review Board Annual Meeting that assessed valuation within the district recently dropped $196,000 from the 2006 baseline. This reduces the city’s TIF benefits until construction leads to increased property values.
To cover this shortfall, one of the legal documents needing council approval will extend the TIF through 2037. This gives the city a shot at receiving more revenue while delaying any new dollars for School District 203, Naperville Township, the Park District and other taxing bodies.
As much as it pains me to say this, and absent any particularly egregious terms, Council needs to approve and Marquette needs to get shovels in the ground. The project is still not ideal, but waiting will probably not make it any better. Let’s go!