NORMAL — Town redevelopment districts helped two long-delayed projects come to fruition this year.
Normal's Main Street and Interstate 55 tax increment financing district will help pay for the remodeled Radisson Hotel at 8 Traders Circle, and its One Normal Plaza TIF could pay for razing and acquiring the former Illinois Soldiers' and Sailors' Children's School administration building site at Beech and Oglesby streets.
TIF districts are areas designated by municipalities that use additional property tax revenue generated by rising property values there to fund infrastructure improvements and private incentives.
The districts often draw scrutiny for diverting property tax money from local governments, including local schools, but some projects, which will generate other revenue such as sales tax for the town, are impossible without TIF and other incentives, said Normal Economic Development Director Sally Heffernan.
Radisson developer Swift Hospitality Group will receive up to $3 million in TIF funding, plus $1.85 million in hotel/motel tax revenue, after spending $18 million to fix up the former Holiday Inn by the highway. The Radisson opened in July.
Other projects don't hinge on TIF money but could benefit from it, like those in One Normal Plaza. Nicholas Africano won't receive TIF money for demolishing the ISSCS administration building this summer, but the town could repay itself the $500,000 paid to Africano for the demolition and the site acquisition.
Africano has also pledged to redevelop the former ISSCS infirmary building with no TIF proceeds, Heffernan confirmed. That project is in the early stages.
Future business development also could compensate for the town's costs for fixing up the former Sprague's service station, which opened in August as a Route 66 attraction on the edge of the One Normal Plaza TIF district.
Other town TIF districts include uptown, where the One Uptown on the Circle mixed-use building is nearly complete, and Main and Osage streets, where the new Normal Fire Department headquarters station just finished construction. Those projects don't involve TIF funding but use TIF-funded infrastructure.
The fifth and final Normal TIF district is far north Normal, where the former Wildwood Industries warehouse languishes at U.S. 51 and Kerrick Road.
When the districts paid out last year, it was mostly for infrastructure improvements rather than private incentives. During fiscal year 2017, from April 1, 2016, to March 31, 2017, only two Normal TIF districts paid out significantly, quantified as $10,000 to a single vendor, according to annual reports.
The uptown TIF paid $1.58 million toward bonds that funded parking decks and the Children's Discovery Museum and $355,000 in interest to private entities: $254,650 to MCP Uptown Owner LLC for the uptown CVS store; $56,458 to Heartland Bank and Trust, which has an uptown location; $23,010 to Frederick J. Hafner Jr., for a student housing development on Broadway Avenue; and $21,463 to Steinbach for the Medici restaurant.
The Main and Osage TIF, which includes several developments near Illinois State University, paid $387,608 for interest and $246,552 for site development for SH Flats Normal LLC for The Flats at ISU student apartments, as well as $64,000 in infrastructure.
The uptown and Main and Osage districts paid out about what they brought in, $1.93 million for uptown and $700,000 for Main and Osage. One Normal Plaza produced $13,000 in revenue; the Main/I-55 and north Normal TIFs had no revenue for the year.
TIF districts are required to return unused revenue to local taxing bodies.
Heffernan said officials continue to try to sell the former Wildwood warehouse, but the TIF could be re-evaluated if the area continues to be dormant. She said the Radisson is an example of a TIF project that didn't progress for a long time but later succeeded.
“It’s a very large building, partially finished and not occupiable, and it would cost $8 (million) to $10 million to make it occupiable,” she said of challenges for the 500,000 square-foot building, started by a maker of lawn, leaf and vacuum bags that went bankrupt. “If nothing happens in the next two years ... we’ll need to work with the owners to see what the next step might be.”