Belleville aldermen: Should city should assist nonprofit home for seniors?

News-DemocratOctober 15, 2013 

AP GRAPHIC

— Two senior living centers asked the city of Belleville for aid in demolition costs, but one has full support from officials so far and the other does not.

What is different?

Ward 3 Alderman Kent Randle and Ward 7 Alderman Trent Galetti said they support the building of both St. Paul's Home, a $29.5 million project, and The Cottages at Cathedral Square, an $8.2 million project.

But St. Paul's is a nonprofit that will not produce sales tax or pay property tax whereas St. Peter's Cathedral conveyed a lot to the for-profit Cottages Limited Partnership to build The Cottages, the aldermen said.

Susan Franklin, executive director of St. Paul's, said the senior home is very much a part of the community, and she hopes city leaders see good reason to support a nonprofit that has been in Belleville for a long time and on a large scale.

"We provide services for the residents of this city, seniors and their families, and we've always done it charitable care," Franklin said. "That's the reason we're a nonprofit."

Randle said he is concerned that giving $250,000 in tax increment financing money to St. Paul's will set a precedent of the city giving tax dollars to other nonprofits that do not generate revenue for the city.

Randle also said it could pave way for St. Paul's to ask for more TIF help in the future.

Franklin said even before St. Paul's request for demolition help for the $29.5 million project, the nonprofit has talked to city leaders about financial help to demolish a vacant building that was part of the old Stag brewery. City leaders have not committed to money for the vacant building.

If the City Council approves tax incentives for St. Paul's on Monday, it will be the first time the city has given TIF money to help a nonprofit with demolition.

St. Paul's estimated demolition to cost $268,792. The nonprofit asked the city for up to $250,000, to be paid after the facility is finished and occupied in 2015. Demolition will occur after current tenants move into the new building.

In return, St. Paul's has to retain 54 full-time jobs and 16 part-time jobs; create five full-time jobs in the first year and stay open at the site for at least five years.

"It amounts to a taxpayer gift to a nonprofit," Randle said. "I just don't believe the government should be in that type of business."

The development of The Cottages, however, mean the parcels that previously had an exemption will return to property tax rolls, Randle said.

The Cottages asked for up to $175,000 to pay for an estimated $288,500 in demolition costs. The project is estimated to be done in 2014.

In return, The Cottages has to create two on-site management jobs within the first year and stay open at the site for at least five years.

Eric Schauster, economic development specialist and grants coordinator for Belleville, estimated The Cottages will pay $128,000 in property taxes yearly.

The Cottages will be built next to St Peter's McCormick Center at 100 W. Harrison St. in downtown Belleville.

The McCormick Center sits on a property divided into eight parcels. The parcels will be reconfigured into two lots.

The parish will continue to own and operate McCormick on one lot and the for-profit will develop The Cottages on the other lot.

At a Finance Committee meeting on Monday, and an Economic Development and Annexation Committee meeting earlier this month, both Randle and Galetti voted not to give TIF money to St. Paul's.

Randle and Galetti approved TIF money for The Cottages.

"The reason I voted for The Cottages is because the money we leant them will get paid back to the city and it will continue to generate property tax money for years and years and years," Galetti said.

Galetti, a first-term alderman, said he is acting on what he promised voters because his election platform focused on TIF reform.

Galetti said it is hard for him to believe that St. Paul's could not find the money elsewhere for the project at 1021 W. E St.

"Who can write a $29.5 million check who can't write a $29.75 million check?" Galetti said.

Galetti said he is glad St. Paul's is expanding in Belleville and providing the city with services for the elderly, but he just wants them to use their own money to expand.

Schauster and Belleville Mayor Mark Eckert have said St. Paul's situation is unique.

"Most not-for-profits don't do a $30 million development," Schauster said. "No project would have a greater impact on an area than this project will. It should raise property values in that neighborhood. We're hoping it also spurs other development, see some more support type services, and give people hope things will be better in that area."

St. Paul's is expected to break ground in a couple of months and be completed within 18 months, weather permitting.

Franklin said it was crucial for the nonprofit to get support from the city to secure all pieces of financial support.

"The lenders all look at the support of the city because we're not located in an up-and-coming area," Franklin said. "So people want to make sure there's support from the city and the surrounding neighborhood."

Contact reporter Jacqueline Lee at jlee@bnd.com or 239-2655. Follow her on Twitter at https://twitter.com/BNDBelleville.

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