BLOOMINGTON — Work has started to create about 57 affordable apartments for older tenants at the former Bloomington High School, and the project could be completed by the end of next year.
"We're already doing the roof and other outside work in anticipation of moving inside and starting that work before the end of this year," developer James Bergman told The Pantagraph.
Bergman-owned Iceberg Development Group LLC of LeClaire, Iowa, plans to convert the second and third floors of the more than 100-year-old building at 510 E. Washington into apartments for people 55 years and older and lease spaces to commercial and nonprofit users on the first floor.
"We should have it completed by the end of next year," said Bergman."So the project is still on slate for completion, as presented."
That timetable is well ahead of city deadlines setting the start of renovations on or before June 15, 2019, and completion by Aug. 15, 2020.
At its meeting at 6 p.m. Monday at City Hall, the City Council is expected to take the next step to move the project forward by formally setting the amount of rental assistance from the city at $228,720 over a 10-year period, or $22,872 per year for four apartments.
To offset development costs, Iceberg secured nearly $1.4 million in low-income housing tax credits (LIHTC) through the Illinois Housing Development Authority (IHDA). The private developer also obtained tax credits after the property was placed on the National Register of Historic Places.
At his request, the city provided a letter supporting the application for the tax credits through IHDA that are awarded through a competitive process.
To bolster its LIHTC application, Iceberg also asked the city to pledge low-income rental assistance for four apartments.
The applicants for the four city-sponsored rental assistance apartments must be 55 years or older and meet certain income guidelines.
The LIHTC program provides a dollar-for-dollar federal tax credit for affordable housing investments. In exchange, the developer agrees to rent the units at below market rates for a minimum of 15 years.
"Nine out of 10 developers don't get the credit. So we're really fortunate, due to the strong backing of this project and the developer by the city, that this developer, on its first application, was able to secure those credits," said Austin Grammer, the city's economic development coordinator.
"The availability of quality, affordable housing is needed in the community, and based upon Iceberg's track record in renovating buildings like the Rosenwald Courts apartments in Chicago, they will do really quality work," said Grammer.
In addition to providing more affordable apartments for seniors, the project will help preserve a historical old building, said City Manager Tim Gleason.
"I think it's very positive," he said. "The $17 million investment that's going to be made into that building is quite an opportunity that communities don't oftentimes have with old schools and old churches."
In 2016, Iceberg purchased the former BHS building for $400,000. The city adopted a TIF redevelopment agreement with Iceberg in June 2017.
In a TIF district, additional property tax money generated by improvements is set aside to pay for economic development incentives and infrastructure work. Taxing bodies would receive during the 23-year term of the TIF agreement only the money they would have collected from the TIF district before any improvements were made.
In this case, the city would rebate to Iceberg 80 percent of property tax increment generated by the developer's improvements, but the amount would not exceed the $1.3 million limit, said Grammer.