A $12.8 million bid to convert the former Hotel Belleville/Meredith Home building into senior apartments and retail space will have a new twist because the city of Belleville has agreed to help pay rental vouchers worth up to $426,000 for 12 units for 10 years.
The Southwestern Illinois Development Authority, or SWIDA, and St. Louis-based Bywater Development Group in 2016 proposed to renovate the six-story, brick building that towers over downtown’s Public Square. But in September, a state housing board refused to offer $9 million in financing for the project dubbed Lofts on the Square.
A new application for financing is due this Friday and the developers believe the city’s vow to help will increase the chances that the Illinois Housing Development Authority will approve the $8 million in low-income housing tax credits and a $1 million loan necessary to get the project rolling. The state is expected to make a decision later this year on the downtown Belleville project.
City leaders said the amount of rental payments made by the city may be offset if the developers can obtain federal rental assistance funds administered by St. Clair County.
Also, SWIDA and Bywater have agreed to pay Belleville $600,000 for the building instead of the initial offer of $500,000. Mayor Mark Eckert said this $600,000 or TIF funds could be used for the rental assistance if federal funds are not obtained by the developers.
Mike Lundy, executive director of SWIDA and former treasurer for the city of Belleville, said it is possible that federal funds would cover the vouchers for all 12 of the units. Eckert said he hopes the county grants the vouchers.
"We think it’s a perfect project and a good fit," Eckert said.
The estimated rents at Lofts on the Square would range from $525 to $725. Plans call for 47 units on the second to sixth floors. The apartments would be for people who earn less than 60 percent of the area's median income and are 55 and older.
Under these guidelines, a one-person household can earn a maximum of $31,320 annually and a two-person household can earn a maximum of $35,760.
The rental vouchers would be used in 12 units for persons who can't afford the advertised rent but could pay $300 a month or can pay all but $50 of the rent.
Lundy gave an example of a person who could qualify for the vouchers as a woman working in a low-wage job and the rent would be too burdensome for her.
"This could be a help to her to live a decent quality of life," Lundy said.
Aaron Burnett, the president of Bywater Development Group, said the Illinois Housing Development Authority rates applications on a point-scoring system and that the rental vouchers included in this year’s application will make the Lofts on the Square bid "a lot more competitive."
"This is the single largest point scoring item because they want to make sure that the vulnerable seniors …. are taken care of," Burnett said.
If the Lofts on the Square is built, the site would return to the property tax rolls and could yield $30,000 annually in property tax revenue.
The City Council voted 12-1 during a special meeting on Monday night to amend the development agreement it has with SWIDA and Bywater to show the city would cover rental vouchers worth $38,940 in the first year and culminating at $46,537 in the 10th year.
Aldermen who favor the project said the city’s investment is worthwhile for such a prominent structure on the city’s skyline.
"The return on our investment is bringing people … into an urban center," Ward 8 Alderman Roger Wigginton said. "This could spur other buildings being built up. It could spur other loft apartments being occupied."
Ward 8 Alderman Roger Barfield cast the lone vote against the amended agreement. He raised a question about the number of parking spaces available at the site.
David Dodson, the CEO of the Bywater Development Group, noted that senior households do not have as many vehicles as younger families. He said a parking plan is still being developed.
"We’re working hard on it and we intend to have a marketable parking plan for our residents," Dodson said.
Dodson thinks the parking issue is more of local concern than a concern of the state housing agency.
Also, Dodson said zoning questions the Illinois Housing Development Authority had last year have been resolved.
The building, which was named one of the 10 most-endangered places in the state in 2014 by the preservation group Landmarks Illinois, first opened in 1931 as the Hotel Belleville. The Belleville Diocese established the Meredith Memorial Home for seniors in 1962 and then sold the building to the city in 2010 for $487,500.
Fans of the art deco style building have created a Facebook page called Save the Belleville Meredith Home.
City leaders once considered tearing down the vacant building but put those plans on hold to see if someone would buy it. Belleville attorney Bruce Cook had donated $500,000 to the city so the space could be converted into green space in honor of his late daughter. Belleville has since returned Cook's donation.
Since the city purchased the building, it has spent over $120,000 to repair the roof. With the purchase price and the roof work, the city has spent a total of about $607,500 on the former Meredith Home.
As part of the redevelopment plan, the developers are seeking to have the building placed on the National Register of Historic Places. If this designation is granted, the developers plan to request $2.1 million in historic building tax credits.
The project was initially valued at $12 million in 2016 but is now valued at $12.8 million, Dodson said.
Bob Brunkow, historian for the Belleville Historical Society, urged aldermen to support SWIDA’s plan.
"The building is poised once again to become an economic engine for the city," he said. "Now is a good time to seize the opportunity to make it happen."