The Meredith Home developers have requested a state-sales-tax exemption worth an estimated $486,000 for construction material used in the proposed $12 million redevelopment of the hulking building into senior apartments and commercial space on the Public Square in downtown Belleville.
Belleville aldermen are expected to consider the tax break request, which is part of a proposed redevelopment agreement, on Dec. 19.
The Southwestern Illinois Development Authority and its partner, St. Louis-based Bywater Development Group, announced a plan last summer to gut the former Meredith Home/Hotel Belleville at 16 S. IIlinois St. The first floor would be renovated for commercial use and the second- to sixth-floors would be converted into apartments for people over 62 who earn less than 60 percent of the area median income.
Mike Lundy, executive director of the Southwestern Illinois Development Authority, which is also known as SWIDA, said the sales tax exemption is necessary for the $12 million project.
“Any savings is critical because it gives us the ability to do other things, especially for seniors to provide other services and other amenities,” Lundy said of the “key” sales tax break.
“It just gives a developer the opportunity to try to do some extra things on the building itself,” Lundy said.
Aaron Burnett, president of the Bywater Development Group, said the renovation could be finished by the end of 2018, but that depends upon how long it takes to get financial approval from the Illinois Housing Development Authority.
Here are highlights of the proposed redevelopment agreement:
▪ The developers would buy the building from the city for $500,000. The city had purchased the building from the Diocese of Belleville for $487,500 in 2010 and this fall spent $126,000 to fix the roof.
▪ Belleville would certify the building as a being in the city’s enterprise zone. This means the developers would get a state-sales-tax exemption worth an estimated $486,000 on construction material used in the renovation.
▪ Belleville would consider reducing the number of parking spaces normally required for an apartment building because seniors need fewer spots than others.
▪ Belleville would work with the developers to identify “parking opportunities and help facilitate prospective parking options that best serve the project and the larger community.”
▪ The developers would be required to invest at least $12 million on the project and submit a preliminary parking plan within six months of the agreement being approved.
▪ The developers would be required to submit at least two applications to the Illinois Housing Development Authority because getting financing from this agency is “highly competitive.”
▪ The developers would pursue getting the six-story, brick building listed on the National Register of Historic Places. The building opened in 1931 as Hotel Belleville, and in the 1960s the Belleville diocese opened a home for senior citizens. Jim Nations, chairman of the SWIDA board, noted this would require the developers to keep the “historic structural elements that are the key part to that building.”
Lundy said it is too early to say what type of business would go into the first floor. He said restauranteurs have contacted him, and Nations noted it would be an attractive space for lawyers, since the courthouse is across the street.
The city’s Finance Committee will consider the draft agreement on Monday. The Economic Development and Annexation Committee on Wednesday unanimously recommended the city accept the plan.
Federal affordable housing and historic building tax credits would be used for the majority of the financing. The proposal calls for $8 million in funding from affordable housing tax credits and $2.1 million from historic building tax credits. Also, the funding includes an Illinois Housing Development Authority loan of $1 million.
According to the Illinois Housing Development Authority, Illinois is allocated low-income housing tax credits based on population. Developers can apply for the tax credits, which they can then sell to investors, who use the credits to offset their tax liability.
SWIDA and Bywater Development Group in September announced a plan to build Metro Landing of Swansea, a $10.5 million apartment building for seniors who meet income guidelines. It will be built next to the Swansea MetroLink station.
As they did in August, Belleville leaders praised the Meredith Home project.
“The building is part of our skyline; it’s got a lot of history,” Mayor Mark Eckert said. “I was never excited about tearing it down, but when nothing came forward, it was an option. I think it will be good for downtown.”
The city at one time was going to tear down the building. Belleville attorney Bruce Cook had donated $500,000 to have the site converted to a park in honor of Cook’s late daughter. The city later gave back the money to Cook and declared a moratorium on demolishing the building.
Residents who want to keep the building have formed a Facebook page to show their support.
“We don’t want that building to go away, and we’ll figure out the parking,” said Ward 8 Alderman Roger Wigginton. “It’s going to solidify downtown.”