The proposed development at Uptown One starts with a six-story apartment building on the circle with rents ranging from $1,650 to $2,100. A shared pool, fitness center and spa would be in an adjoining building next door. A third building would house a Hyatt hotel across the street from the Marriott Hotel and Conference Center. (Stephanie Pawlowski/WJBC)
By Stephanie Pawlowski
NORMAL - The developers hoping to add apartments, a health spa and hotel to the Uptown One site say talks have started with three lenders.
And, town staff Monday night explained how much money Normal would offer for the project, in the form of a $7.4 million bond issue. The developers, Harlem Irving and Tartan Realty have proposed a $32 million project including a 34 unit apartment building, pool, health spa, restaurant, stores and Hyatt hotel within the site.
Most of the funding for the project would come from bank loans. Normal's Town Council is considering a $7.4 million, 20 year general obligation bond. City Manager Mark Peterson said the town would pay off that bond with revenues from the project. That would include a projected $2.7 million from the Tax Increment Financing district, $1.7 million from sales tax revenue, $1.4 million from food and beverage tax revenue and $3.6 million from hotel motel taxes.
"Without the public investment, the project is not viable," Peterson said. "Right now we have a hole in the ground with a foundation that is deteriorating over time, and I think it drags the entire Uptown project down because it remains an unsightly foundation."
The revenue numbers are just projections, but Peterson said he thinks the town's finance department has been conservative.
"We also have excess capacity in our bond fund in addition to the cushion we built into the revenues to cover those costs. Beyond that we have other sources in the Uptown to draw upon if we had to, but we don't think that will be necessary," Peterson said.
Mayor Chris Koos said during the presentation that he feels the community is ready for the project.
"This is a great project moving forward and I like it. I ask myself two questions, is it good for the community and can we afford it?" Koos said. "And, I think the answer to both questions is yes."
Town administration and the council have been criticized for publicly funding private developments in the past. Peterson made a list of those partnerships which include the Marriott Hotel and Conference Center, Heartland Bank, Uptown Crossings, Commerce Bank, and the Garlic Press.
"The hole in the ground is never going to generate any money for anybody, never. This project will," Peterson said. "It will immediately generate indirect tax revenue, it will immediately generate indirect economic benefit that helps all businesses, and it will eventually be a tax benefit for all taxing bodies."
Peterson also said it is good timing for the project because interest rates on borrowing are so low, construction costs are low and the project would keep momentum going in Uptown Normal.
"You've got low interest rates and low construction costs, that's a fabulous combination," Peterson said.
Developer Doug Reichl and architect Matt Wylie said there have been a few changes to the design since the last presentation in July. The apartment building is three stories shorter, but Wylie said the building is longer and still houses the same number of apartments. And, the roof of the building that houses the pool, spa and fitness center would be green.
Reichl said the group has also found another investor, Campus Acquisitions, to back the project. Council member Jeff Fritzen expressed concern over a college-oriented business getting involved. Reichl said the group is a large student housing developer but said it is doing two other market-rate apartment projects in Chicago and the company wants to diversify.
The council has two weeks to get questions on the funding portion answered. The bond issue is expected to come back before the council for a vote on Dec. 17.