URBANA – The owners of Lincoln Square Village would receive a $1.1 million interest subsidy from the city of Urbana to revitalize the mall under a proposed redevelopment agreement.
The agreement, along with a second agreement concerning parking around Lincoln Square, will be considered by the Urbana City Council at 7:30 p.m. Monday at the Urbana City Building, 400 S. Vine St. The council will be meeting as the committee of the whole.
Urbana Mayor Tod Satterthwaite said the planned $10 million revitalization of the downtown mall into a mixed-use facility offering office space, retail and apartments would, in effect, pay for the financial incentive.
Because Lincoln Square is located in a city tax increment financing district, increases in assessed valuation for the mall will generate additional income for the tax district, which would in turn be rebated to the mall's owners, The New Lincoln Square LLC.
The rebates would be made over time until a maximum of $1.1 million is reached. City projections are that the payments would be made over 14 years.
"This is all pay as you go," Satterthwaite said.
Developer obligations under the agreement would be to complete construction of office space at the mall by June 30, 2005, and complete planned retail and residential space by Aug. 1, 2007.
Under the announced plans, Health Alliance Medical Plans, a managed care company, would be the primary office tenant at Lincoln Square, occupying 54,000 square feet in the lower level, 10,800 square feet on the main level and 8,000 square feet on the upper level.
Most of the retail space would be located in the former footprint of the former Bergner's department store space on the main level. A total of 8,500 square feet of retail space would be located on the east side of Lincoln Square facing Vine Street, and 9,000 square feet of retail would be created that faces the high court in the mall.
A fitness center, Cardinal Fitness, will occupy the north side of the former Bergner's.
Twenty-five upscale loft apartments or condominiums would also be developed, with the units designed around a center courtyard on the roof.
Satterthwaite said local taxing districts will benefit from the Lincoln Square project, in part because the mall's current assessed valuation is so low at $416,000.
When the tax increment financing district was created, the base year of 1985 put the assessed value of the mall at $1.7 million. That means property tax dollars will not go into the tax district to provide the financial incentive until the assessed value exceeds the base year level.
That means increased property tax income for city taxing districts, such as the Urbana school district.
City estimates are that the school district will see a $63,000 annual increase in property taxes. The city would see a $10,000 increase and the Urbana Park District would see an $8,000 increase.
"This really helps out the school district and the park district, since this property has been underdeveloped for so long," Satterthwaite said.
The city projects the assessed valuation of Lincoln Square will rise to $2.4 million by 2007, enough to pay $52,000 toward the developer incentive.
The separate parking agreement recognizes that parking around Lincoln Square is changing from a retail focus to a combined retail, office and residential focus, Satterthwaite said.
"There will be not as many retail spaces and more employee spaces," he said.
Office employees and apartment residents will be expected to pay market rate rent for parking at Lincoln Square, he said.
You can reach Mike Monson at (217) 351-5370 or via e-mail at email@example.com.