Urbana to sell downtown block for $1 in development deal

Urbana to sell downtown block for $1 in development deal

URBANA — With the promise of about 42 new townhouse units near its downtown, the city of Urbana plans to sell a vacant block for $1.

The city reached a deal with Green Street Realty to convert the 200 block of South Vine Street into a townhouse-style development that could be completed by May 2020.

The $5 million project would include two- and three-story townhouses, with garages for some units.

The agreement still needs to be approved by the Urbana City Council, and Urbana is hosting an open house at 6:30 p.m. Tuesday at the City Building for the public to learn about the project.

The city bought the property previously occupied by Urbana True Tires in 2011 for $400,000, completing its purchase of the block, and continued to lease it out until 2015. Altogether, the city spent about $950,000 to buy the properties on that block.

Urbana Mayor Diane Marlin said this is the first residential development downtown since Stratford Residences was built in 2005 at 202 N. Race St.

"It literally is the first residential development in over 13 years, which is remarkable," Marlin said. "I think this is a turning point. It's taken us a very long time to get to this point."

Urbana Economic Development manager Brandon Boys said it will be worth it for the city to give the property to Green Street Realty for a buck.

"The city acquired it to redevelop it," he said. This "property, which was paid for primarily with (tax-increment-financing district) funds, is under city ownership, which generates no revenues and isn't helping meet community goals."

With the redevelopment, the property will bring residents downtown, which should help businesses, schools, parks and mass transit, Boys said.

On top of that, the property will start generating property taxes in its second year, Boys said.

According to the agreement with Green Street Realty, 100 percent of its property taxes from the increased value of the property will be reimbursed the first year, 80 percent the next year and no property taxes will be reimbursed the sixth year.

The project also sits in Urbana's Enterprise Zone, which means it should be eligible for sales tax exemptions for new construction materials.

Since the city bought the property, it has tried twice to find developers for it.

In 2011, architect Gary Olsen proposed an $84 million "Metro Centre" that never came to fruition.

And in 2016, Indianapolis-based TWG Development planned to build a four-story, $30 million complex with nearly 200 apartments and commercial space on the first floor.

But TWG declined to move forward on that project, Boys said.

Earlier this year, Urbana issued another request for proposals to develop the land and received two proposals, Marlin said.

"We did get two viable respondents, and one of the proposals just wasn't financially feasible from the city's perspective," she said.

The units in Green Street Realty's project are meant to attract anyone from families and empty-nesters to professionals and grad students.

"It's the type of diversity and population mix we want to see," Marlin said. "Once you get some density of population, then you get more customers for businesses downtown."

Under the letter of intent with the city, Green Street Realty projects starting construction in February 2019.

Green Street Realty owner Chris Saunders did not respond to a request for comment.

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