Originally Posted Online: Jan. 22, 2013, 9:52 pm
Last Updated: Jan. 22, 2013, 10:21 pm
Black Hawk College dorm now headed to East Moline
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By Dawn Neuses, email@example.com
MOLINE -- A planned student housing development at Black Hawk College will be moved across the campus to East Moline, according to the developer.
On Tuesday, Moline aldermen voted 4-2, with one abstention, to rebate 60 percent of the property taxes paid byBluffstone LLC, which proposed to build a $5.7 million, 42-unit student housing development on a portion of the college campus in Moline that now collects no property taxes. Therebate, totaling about $85,084, was to be paid over six years.
Bluffstone, however, had asked the city to rebate 100 percent of property tax for six years, and then drop the rebate from 80 percent to 20 percent over the next four years. The total abatement sought from the city by Bluffstone is $193,556.
Bluffstone managing member Tim Baldwin said the amount was needed for the project to get financed. Two banks have already declined to finance the project, he said, even with a full abatement from Moline, as well as Rock Island County, the Moline School District and BHC.
BHC and the school district supported the project, he said, and Rock Island County had approved a 100 percent property tax abatement, but Moline staffers said they would not recommend the full rebate request.
"We kept saying it is not going to work, it is not going to work," Mr. Baldwin said. "By the council making this decision tonight, the city is throwing away $2 million in property tax revenue over the 50-year lease term."
City staff estimated Bluffstone would pay $246,600 in property taxes in 10 years.
"We have been running a concurrent plan," Mr. Baldwin said, adding he had begun discussions with East Moline about the project and possible property tax abatement. He said he expects the proposal to be presented to the East Moline City Council next month.
In other business, aldermen approved twodevelopment agreements for downtown projects and gave city staff permission to negotiate a development agreement with The Amin Group to develop the O'Rourke building at 12th Street and 4th Avenue.
The Amin Group has proposed retail space on the first floor to compliment the planned passenger rail station to be located there and an extended-stay hotel on Floors 2 through 6.Once finalized, the development agreement must be approved by the city council.
The agreements for the downtown projects also will be forwarded to the city council for formal approval next month. Terms of those agreementsinclude Moline granting:
-- A property tax rebate -- up to $5,000 each year for eight years -- to Covariance Holdings, LLC., to help redevelop the former Moline Community Center at 1615 5th Ave. into offices for The Planning Center. The equalized assessed value of the remodeled building must be at least $200,000 or no rebate will be given.
-- A property tax rebate -- up to $1.72 million -- to Moline Hotel Group LLC. to help redevelop the former Deere Collectors Center and property at 320 16th St. into a Hyatt Place Hotel or Hilton Garden Inn. The total rebate cannot exceed 15 percent of project costs and would be paid over seven years. The $11.5 million project is proposed to include a 100-room hotel, an indoor swimming pool, a fitness center, a restaurant and lounge, meeting rooms and parking.
The rebates would be paid out of the Tax Increment Finance district fund.The city created the 21-year TIF in 1986 and has since extended it for an additional 12 years. It will expire in 2021.
The assessed value of the property was frozen when the TIF was created. Redevelopment and new development downtown has increased the assessed value, with all new property tax increment captured only by the city.
The new increment can be used to make improvements within the district or to give rebates to developers.