Nearly 18 months of work came down to Wednesday night, as the city council approved an amended agreement with the group set to redevelop the iconic Tower Building in downtown Elgin.
The Tower Building’s redevelopment will go forward and the development group hopes to have it finished by the end of the year to capitalize on $3 million in state tax credits.
“We may never see the opportunity again. We may never see another developer. Eighteen months comes down to tonight,” Mayor David Kaptain said prior to the vote.
The Elgin City Council voted 5-2, with one abstention, on an amended development agreement, giving developer Capstone Development Group an additional $1.65 million in development assistance and $200,000 in additional tax increment financing rebates to complete the renovations.
Council members Tish Powell, Rose Martinez, Terry Gavin, Toby Shaw and Carol Rauschenberger, as well as Kaptain, voted in favor of the amended agreement. John Prigge and Richard Dunne voted against the agreement.
John Steffen abstained from the vote.
In total, the city has now provided $6.35 million in development assistance for the Tower Building redevelopment for the project which now has an estimated $16.6 million construction budget.
According to Capstone representatives, the additional city funding was need as final construction bids have come in higher than initial budgets — in part because lawsuits against the city have drawn out the sale process.
The city and Capstone first reached a development agreement about 18 months ago. However, state and federal lawsuits filed by Marco Muscarello, owner of the now-closed Gasthaus Zur Linde, held up the sale and financing. Muscarello’s state suit alleged the city had violated its own zoning by allowing the Tower project and the suit has been dismissed twice in state court already. His federal lawsuit alleges the city, the developer and others conspired to put him out of business and is in the court system now.
With the amended agreement allowing the building’s sale to go through.”We will be closing a week from now and beginning the work right way,” said attorney Peter Bazos.
The seller, the Stickling Foundation, should be completely out of the building in 45 to 60 days, Bazos said.
Once completed, the 15-story, 1929 Tower Building will house 45 one- and two-bedroom apartments, with rents set at between $863 and $1,200 a month. Residents will pay for monthly parking passes to park in eligible downtown Elgin parking spots — 55 of which will be set aside for Tower residents, Kaptain said.
This development option was the last, best deal for the Tower Building, Kaptain said in opening remarks.
Elgin’s history with the Stickling Foundation and its manger, Neal Pitcher, has been contentious for many years. The city ordered 23 life-safety improvements in 2006, which were never completed. In 2013, the city filed a complaint seeking to have those fixes made.
Finally, with the city threatening to condemn the building as part of its limestone and granite facade began to crumble, a fire in the building’s lobby and elevator shaft, set by a homeless man, caused the building to be condemned by the city. It has not been inhabited for nearly two years.
Then, this winter, large portions of the facade began to fall. The city obtained a court order Friday to force the Stickling Foundation to place — or the city to pay for — a canopy to protect those below from falling debris. That would be in addition to fencing which has surrounded the building since it was condemned two years ago.
The final sale price was reduced from the original $1.2 million to the current $900,000 sale price, in part because of the falling facade and other interior deterioration of the building, Capstone officials said.
The agreement with Capstone was the last, best deal Elgin could expect for redeveloping the downtown building, Kaptain said.
A previous development deal fell through, and with the state tax credit sunsetting, and the cost of redeveloping the building, it is not likely another developer would come along, Kaptain said.
If the council would have voted against the agreement, Capstone would have walked away from the deal and the city would likely have had to pay for stabilizing the facade and a safety canopy, said City Manager Sean Stegall.
Courier-News reporter Mike Danahey contributed.
Janelle Walker is a freelance reporter.
