The Highland City Council voted unanimously against a resolution March 20 that would have given incentive to developers for building single-family homes in newly platted subdivisions.
“I’m really kind of surprised,” said local developer Jason Mettler. “In our opinion, it’s a really good idea for the city.”
Mettler developed the Prairie Hills subdivision. He spoke during the meeting and explained why he thought the new incentive was a good idea.
“Money will be generated that wouldn’t be generated without (the incentive),” Mettler said.
According to the City Manager Mark Latham, inventories of single-family residential lots have hit the lowest point since 2001 and the majority of new developments from 2001-2005 have been filled. Latham said remaining single-family lots can only be found in five subdivisions, but builders are hesitant to build in those areas for unknown reasons.
“You are looking at two subdivisions in the last three or four years where people are building, and the other ones have had hardly any activity,” Latham said. “And the question is, ‘Why?’”
One of the reasons might be people leaving the entire state.
According to Latham, developers consider Illinois “risky,” because of the state losing population. That means someone might not buy a speculation home for years.
The resolution would have given developers in newly platted subdivisions within city corporate limits reimbursement on water and sewer tap-on fees. The developer would have had 60 days to file a request to receive a maximum rebate of $3,601 per property, after the home passed final inspection.
“It is a risky business to get into development,” Latham said. “This is just a way to get people to get out here and encourage them to develop.”
Council foresees problems
The discussion about the resolution immediately started off with questions.
Councilman Rick Frey asked about specifics and was concerned about the cost to the city.
“The state still doesn’t have a budget plan,” Frey said. “We just raised the electric rate, and now we will be giving huge incentives away?”
Councilman Aaron Scharwz was worried about using public money to benefit private entities. He said that he was afraid the incentive would be expensive and might not solve the problem.
“I don’t want to throw money at it to try to make it better,” Schwarz said.
When developing the incentive, Latham said the biggest concern was potentially causing anger amongst developers who did not receive an incentive when they first came to Highland. He said that it may deter them from developing in the future. Chris Korte of L&G Real Estate, who owns 62 lots in town, confirmed those beliefs during the meeting.
“If you are going to give incentives, you better give them to everybody,” Korte said.
Schwarz then said that there would be problems with identifying a “cap” to the resolution if all subdivisions were included. He said retroactively implementing the incentive would “open a can of worms” that the city would have to deal with.
The idea of a retroactive incentive was what swayed Peggy Bellm, who originally thought the incentive was a good idea, to a no vote.
The council was not fully deterred from the incentive idea and made the decision to have staff rework the resolution.
According to Latham, city staff is working on a new plan to include existing subdivisions. However, he mentioned that while the city will try to be as fair as possible, there is no way the incentive could ever be implemented retroactively.
Latham plans to develop a spreadsheet that will look at the last 20 years of single-family home development and research surrounding cities and what types of incentives they provide.
Latham hopes that the new draft of the resolution will be brought up at the second council meeting in April.