Developer Eying Countryside Property

A commercial developer is interested in the Countryside Center TIF property after to relax some of their demands needed for financial incentives, leaders said Tuesday.

Executive Director Lynn Dubajic met with two groups of developers, with one deciding to negotiate with the Bank of America subsidiary that owns the property, City Administrator Bart Olson said in a memo to aldermen. The city has about $2 million in the Countryside TIF (tax increment financing district) fund that can be used for developer incentives.

Officials did not reveal much about the possible development other than it was a medium-sized commercial entity. The developers aren't ready to publicized their plans because they haven't come to terms on a purchase contract, Olson said.

“Right now they are looking at our ordinances and our plans and how everything would work in conjunction," Dubajic said.

The property - about 18 acres northwest of routes 34 and 47 - has presented a headache for city leaders and potential developers for years. It previously was the subject of two TIF-related developer agreements that fell through: One in 2005 included 80,000 in retail space; another in 2008 included 166,000 square feet in retail space.

In April, the city's Administration Committee members and possibly refinancing the bonds associated with the TIF fund. They decided they were willing to be flexible on aesthetics and retail square-footage for development proposals there. They also figured a multi-phase project was more realistic than expecting a developer to build a shopping center.

Developing the property is becoming financially urgent for the city, though. The city is paying more than $300,000 a year on bonds issued in the Countryside TIF fund, which is receiving less than $10,000 a year from investments and taxes. That means the $1.88 million TIF fund balance – which could provide incentives for a developer – is eroding as the property sits vacant.

If the property is developed, any increases in property tax revenue associated with the parcel's increased value would be funneled toward the TIF fund and could be used for the bond payments. If the property isn't developed, the TIF fund is expected to run out of bond money in about five years, when the city will still have about seven years of payments to make repaying the bonds.

Refinancing the bonds would eat up the $1.88 million or so city leaders could use for developer incentives, so they are not pursuing refinancing while developer negotiations continue.