City of Geneseo aldermen voted to move forward on a project that would provide $500,000 in funding to Mel ?Foster Co. for the construction of a turn lane off Highway 82 and into the company’s proposed Maple Leaf Heights subdivision.
City of Geneseo aldermen voted to move forward on a project that would provide $500,000 in funding to Mel? Foster Co. for the construction of a turn lane off Highway 82 and into the company’s proposed Maple Leaf Heights subdivision.
At a special Aug. 18 meeting, city council members voted 5-1 for the project. Alderman Curt Spensley cast the lone opposing vote. Alderman Linda Van Der Leest abstained from voting because her property is adjacent to Mel Foster’s, and alderman Lowell Ewert was absent from the meeting.
Plans for the 228-lot Maple Leaf? Heights started nearly five years ago. At that time, Illinois Department of Transportation officials approved the proposed subdivision plans.
IDOT later changed its requirements and now mandates a turn lane be installed. “The IDOT requirements were an ever-changing target,” said alderman Keith? Kennett. He called the situation a “Catch-22.”
Attempts to have the speed limit on that section of Highway 82 lowered have failed. If the speed limit was lowered, a turn lane would not be required. However, IDOT officials won’t lower the speed limit until the traffic into the subdivision warrants it. The subdivision can’t be built without a turn lane.
To fund the project, Mel Foster president Rob Fick asked the city to spend? $500,000 in bonds.
Fick said Mel?Foster would repay the city with? $2,000 from each lot sold. The total repayment amount would equal $456,000 once the subdivision is filled. The city would be responsible for paying the approximate $115,000 interest on the bond.
Once finished, Fick said the subdivision would add annually about $2.2 million in property taxes, school district state aid and utility revenue.
A memo provided to aldermen by city administrator Teresa Savage outlined several options the city could offer to Mel?Foster, including requiring a more stringent pay back schedule to protect the city’s interests in the event that lot sales are slower than anticipated.
“Our responsibility for the interest starts on Day 1, and some of the benefits won’t come until several years down the road,” she said.
“The payback is $2,000 when a lot is sold, and the city’s on the hook to make payments on the bond. That’s not much of a guarantee for us,” said Spensley.
Alderman Arnie Schmid proposed issuing a 10-year bond and requiring Mel?Foster to pay a set amount regardless of if the lots had sold. “At the end of 10 years, it would be paid for,” he said.
Fick rejected all alternative suggestions, saying the city issuing a $500,000 bond and Mel Foster repaying at a rate of $2,000 a lot was the only option that would work. Any other option, he said, would require Mel Foster to price the lots too high for the market.
“We were not going to move forward with this project, but we were invited by the city to see if we could find a way to move this forward,” he said. The option proposed by Mel Foster “is not a threat, it’s not anything. It’s strictly a financial decision,” he said.
“We’re coming into this community to invest $2.5 million (in construction costs) in the next 12 months,”? he said. If the project doesn’t move forward, the land will revert to being used as farmland said Fick.
“I’m troubled that Mel Foster has come before us to say, ‘It’s my way or the highway,’ when we’ve offered other options,” said alderman Ed?Deener.
“I’m not trying to gouge the city,” said Fick. “If I was trying to gouge the city, I’d demand they put in services.”
Fick said, in many communities, the cities themselves are responsible for placing city services such as water and sewer and roadways within subdivisions. “We’re not asking for anything within the development,” ?he said.
“We need to find a happy medium that can work for all parties and one where we don’t have such a staggering debt load,” said Spensley. “I don’t like the 90 percent repayment.? We’re ?losing money before we’ve even started.
“The city has $12 million in bonds right now, and we have a downtown with a 100-year old water and sewer system. We have to be pretty careful when we do bonding,” he said.
If the city accrues too much debt, its bond rating will suffer, he said. “We don’t want factors to come down against us because of the amount of debt we have.”
“Whether you agree with it or not, there is a precedent. We’ve forgone large amounts of sales tax (for other projects),” said Kennett. “I don’t think our money should be spent frivolously, but this might be a smart investment in the future of our community, and at least there’s some form of payback in place. The city also would have a lien against the property to the extent of its loan.
“We’ve talked a lot about economic development, and we’ve ?always ?heard rooftops are the most desireable type of economic development,” he said.
Mayor Pat Eberhardt said there was a bit of “sticker shock” to the project’s price tag, but added “there’s almost a desperate need for the lots in town.”
“For the most part, there aren’t many buildable lots left in town,” said Kennett. “I’m not sure we’re helping ourselves in the long run if we view this as only a financial thing now. There are a lot of merits to what they’re proposing. This is literally developable property you can’t get to.”
Though Mel ?Foster is requesting $500,000 in bonding, city officials are considering issuing a larger bond.
The cost of pre-bond work required is the same regardless of the size of the bond, said Savage. By bonding more money, the city will have funds to compete several larger projects — such as water and sewer infrastructure improvements — that need to be completed in the near future.
“If we’re going to do this, we want to take some time and do this right,” said alderman?Kevin Peterson of the bonding process.
Savage said she’ll also look into other options, such as applying for county stimulus funds, which may refund a portion of the interest costs.
Spensley said he’d like to see other taxing bodies that will benefit from the subdivision — such as the school district — approached about contributing to the project.
Geneseo? School Board president Doug Ford, who attended the special city council meeting, said he didn’t feel the school board “was in the business of economic development” ?but added board members would be happy to talk with city officials.
At the special council meeting, aldermen also:
• Voted to donate up to $18,000 in rock to the Millikin Baseball/Softball Complex project for a planned parking lot. The council also voted to waive building permit fees.
“This will be a huge asset for our community when this is done. It’s been a real community effort all along,” said Peterson.
The board approved the donation 5-1. Spensley voted against the issue. Van Der Leest abstained from voting because she works for the school district.