TIF bonds generate $2.6M for Northpoint improvements

The Streator City Council will soon amend its agreement with the developer of Northpoint Plaza.

City Manager Scot Wrighton passed out a proposed agreement to council members during the city's Oct. 17 meeting, featuring six terms and conditions.

The city issued tax increment financing alternative revenue bonds in 2016 and 2017 in the amount of $3,645,000. These loans will be repaid from new tax increment proceeds that are raised from the increases in property value resulting from commercial property improvements. Since the TIF freezes the amount of property taxes collected within a district, this is the amount paid above that set level into the fund.

The city did not use any money from its General Fund for this project.

Of this amount, $340,000 went to the Streator Eagle 6 Theater project, $2.6 million for Northpoint Plaza improvements and $705,000 for other TIF-eligible projects in the city's TIF districts, which included grant matches for downtown streetscape improvements in 2019, Streator Incubator improvements in 2019 and building the Public Safety Training Facility in 2018.

About $500,000 of the $2.6 million allotted to Northpoint Plaza is earmarked for the new HiltonTru Hotel, which will be located just west of First Federal Savings Bank, and will be released only for that project. Construction is expected to begin soon on a proposed 82-room Hilton Tru hotel geared to corporate travelers and the weekend wedding crowd.

The city of Streator is working to enact a Property Assessed Clean Energy (PACE) program to allow the Northpoint developer to get additional financing leverage to build the hotel.

This program provides financing for energy efficiency projects such as installing solar panels, HVAC improvements, roof repairs, updating insulation and installing LED lighting, among other items. The property owners repay the long-term loan through the real estate tax bill.

Northpoint Development Holdings may be entitled to additional tax increments if the TIF district generates incremental tax proceeds above the amounts required to meet principal and interest payments on the 2016 and 2017 bonds, but only after the completion of the Hilton Tru hotel, according to a proposed agreement with the city.

The city will pay these amounts over the remaining life of the Northpoint TIF.

Additionally, the city will assist the developer of the new hotel in marketing the facility and in getting local businesses to use only local lodging establishments for their business partners, employees and customers who travel to Streator.

The city also will consider establishing a Business Improvement District to include the Northpoint Plaza once key retailers show they are in favor of creating one. Known as a Special Service Area, this allows the city to tax for and deliver services to limited geographic areas within their jurisdictions.