The City Council on Tuesday approved key pieces of a deal to move forward on the next $21.1 million phase of the Royster Corners redevelopment on the East Side, including a new home for the Pinney Library.
The council approved $820,000 in tax incremental financing (TIF) support for the next $18 million private phase of the project at the corner of Cottage Grove and Dempsey roads and to buy space there for the new library with $3.1 million.
The council approved the $820,000 in TIF despite differences among city staff about whether a financing gap for the coming phase of the project exists.
City TIF coordinator Joe Gromacki said he’s unaware of the city ever providing TIF to a real estate project with no proven financing gap, but that the city has approved two “Jobs TIF” projects this year that required no analysis of a gap.
A seven-page memo by Gromacki says Ruedebusch Development and Construction had submitted seven versions of a TIF application between May 2015 and January 2017, with requests ranging from $922,000 to $2.97 million in the latest submittal. The memo says “no gap exists in any version of the TIF application,” and that a council decision to provide the money would be guided by policy, not an analysis of a financing gap.
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But a follow-up memo by Planning, Community and Economic Director Natalie Erdman says a financial gap of $820,000 is “reasonable and supportable.”
The memo says a “sensitivity analysis” shows a gap of $515,000 to $1.1 million is reasonable, and further argues that there are notable public benefits to the development, including growth in the tax base, re-use of an obsolete, deteriorated property, and creation of a more complete neighborhood.
Erdman said state law doesn’t require a gap finding to make a TIF investment and that a community can find that a “sufficient public benefit” exists to do so.
The next phase would include 86 apartments, 16,000 square feet of commercial space, 96 underground and 141 surface parking spaces, and a 20,000-square-foot condominium space for the new library.