The developer of a proposed $18.5 million housing project near downtown Bloomington said he remains hopeful despite Monday’s city council decision delaying approval.
The project would add 24 townhomes and a five-story apartment building on a mostly vacant property surrounded by East Jefferson, East Washington, and North Gridley streets. The developer is asking for $4.5 million in incentives from the city. The divided council chose to delay its vote until June 12, amid debate about whether the city should require the developer to pay prevailing wages and if the project will alleviate a communitywide shortage of affordable housing.
“I’m not gonna lie. There’s a little bit of disappointment,” Robbie Osenga, one of the lead developers on the project, said Tuesday on WGLT’s Sound Ideas. “At the same time, I’ve got a lot of hope. … I trust our local government to make the decisions that are best for our community.”
Osenga said the project will unravel if the council delays action beyond June 12. Osenga said they need to start construction this fall, and that the ticking-clock nature of Tax Increment Financing, or TIF, districts (which provide the incentives but expire after a set number of years) make it imperative to move quickly.
“I believe (the council) will do the work, to come together and ask good questions, to lean into the city staff and TIF experts to understand what we’re really talking about here. And ultimately, I trust they’ll make the best decision for our community. And we’ll respect that, whatever it is,” Osenga said.
Luxury or not?
The project comes as Bloomington-Normal faces a major housing shortage, amid a hiring boom at companies like Rivian and Ferrero. Home prices and rents are soaring.
This project would add 24 townhomes and 48 apartment units. City staff initially described the project as “luxury” housing – only to back away from that descriptor Monday night in favor of “market rate.”
Osenga acknowledged that miscommunication was his fault – “I’m not a great wordsmith,” he said – and that the “luxury” label does not reflect the reality of what they’re looking to build. He said the units will include “higher-quality design elements and competitive amenities,” as was described as an area of need in a 2022 study from the Bloomington-Normal Economic Development Council.
“What we’re shooting for is market rate. We believe that by the time we’re completed it will place this in the higher end of the market. But we believe there’s a need for that,” Osenga said.
Osenga, who is also a real estate broker, noted Bloomington-Normal’s housing market has a dearth of inventory.
“This is a part of the puzzle,” he said. “When we bring on these units – or single-family units in some of the (other) new developments in town, or 55+ (housing), or affordable housing – any new unit that’s brought on will create movement. … There are people who are wanting to move, but they don’t see what they’re looking for, so they don’t put their home up for sale or release their lease to be occupied by somebody else. We believe that any unit added is part of the solution to meet the housing needs of our community, ours included.”
On the prevailing-wage issue, Osenga reiterated that including such a requirement in their redevelopment agreement with the city would sink the project. (Prevailing wages are a standard based on an hourly rate for similar jobs. It’s usually considered in relation to union wages.)
Osenga said the state’s TIF laws do not require a prevailing wage.
“Here’s the hard part when we talk about prevailing wage: There’s this misnomer that anyone who is not a union shop is not providing fair pay and benefits and work culture to their employees. That does a disservice. We here in central Illinois have a vibrant labor force, of both union and non-signatory contractors. Both of which are brave, who have stepped in (to do a hard job), under tough deadlines, and both have to still abide by the laws and expectations that our municipalities have put forward with safety, building codes, and inspection requirements.”
Osenga is also involved in the redevelopment of the former CII East building downtown into the Northwestern Mutual Building. Osenga said that project successfully used both union and non-union contractors.
“All we’re asking for on this project, and on all the projects we serve, is the continued ability to invite both union and non-signatory companies to participate here,” Osenga said. “We live in a capitalistic culture and economy. And at some point in time, if the costs exceed the value that is needed to move forward, then there is no project.”
Redemption and potential
Osenga was born and raised in Bloomington-Normal. He’s been working on the housing project for three years. He and development partner Andy Kaufmann work at Catalyst Construction in Bloomington. Earlier in his career, he worked with special-education students at a LeRoy school.
“I didn’t pursue becoming a real-estate developer. This is not my ‘why,’” he said. “Helping things and people reach their potential is my why.”
There’s real potential in the former Coachman motel site that the city has been shopping for years, he said. He thought so immediately when he saw the conceptual renderings that the city commissioned, envisioning a walkable development that bucked the community’s otherwise car-centric culture.
“I love redemption,” Osenga said. “Honestly, the first time I saw those renders, I was like, ‘Oh wow, that could be so meaningful for our downtown.’ To be able to have these Chicago-style walk-up townhomes. And I just thought it would be really neat if I could be part of bringing that to fruition.”
He said they’ve felt that on the CII East/Northwestern Mutual project, a smaller project which is now nearing competition after some delays. Northwestern Mutual’s staff is moving in next week, he said.
“There’s something about a quality of place that speaks to people’s identity, that’s deeper than just a building and rent and mortgages. That speaks to whether they’re valuable, and whether their community is worth it,” Osenga said.
That potential is also subject to the shifting economy, where interest rates are up and there are concerns about a recession, even a modest one.
“The interest rates and financing that we were able to secure for that project (CII East/Northwestern Mutual) just two years ago compared to what we’re looking at today with this one … to say they’re significantly different is an understatement. And all the more reason that if not for the city’s assistance on this project, it just won’t be able to happen,” he said.
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May 23, 2023 at 05:53PM