Filling former Menards space with ‘exemplary’ company good news

By Bob Balgemann

Reporter

Second of 2 Parts

In looking back at how the village’s five tax increment financing (TIF) districts fared during a difficult 2020, Village Administrator James Richter II had good things to say about all of them.

He gave his first annual presentation in December to the Joint Review Board, during an   annual review required by the state of Illinois. Those in attendance included village Finance and Human Resources Manager Michelle Johannsen and Village Attorney Tom Green.

Also participating were five of the 10 taxing bodies located in various districts. They included Harlem Township, Winnebago County, Harlem School District 122, North Suburban Library District and Rock Valley College. Those entities and five others share each year in surplus dollars from one of the older TIFs, at the intersection of Illinois routes 251 and 173, amounting to $788,456 last year.

That was the first district reported on by Administrator Richter, where during 2020 a longtime marketing effort became reality. That was filling the vacant, former Menards building on the north side of Route 173, with what he called “an exemplary manufacturer.”

Taking up residency in that building was the Spider Company, which serves the aerospace industry.

Founded in 1978, information provided by the company online states, in part, “Spider deploys state of the art inspection equipment and skilled, experienced inspectors to achieve the exacting requirements of aerospace and medical parts and machinery. Spider boasts a wide assortment of inspection gages and measurement tools, coupled with a team of highly experienced staff. With a culture built around quality first, Spider can assure the highest degree of precision for manufactured parts.”

“Buildout is complete,” Richter said of Spider’s move. “Without the (recent) TIF extension, this development would not have happened. It’s really amazine what they do there. They have invested $7 million in that property” and have about 115 employees.

He added that Spider currently is utilizing all but 57,000 square feet of the building and plans to eventually move into that space.

Further, the administrator recalled that the outlot in front of Lowe’s Home Improvement Center was sold to Freddy’s Frozen Custard and Steakburgers last year. But construction has been delayed due to the COVID-19 pandemic. He added there only is one remaining outlot in front of the Machesney Crossing shopping center.

This TIF was established in 1991 and with the 12-year extension it won’t expire until 2026.

During the past year Manager Johannsen said this TIF generated revenue of just over $1.114 million with an increased tax increment of $998,000, which is up $15,000 from last year. Expenses totaled $1.490 million including $695,000 in redevelopment costs for resurfacing the service drive to McDonald’s, Kohl’s and Spider, sale of the 9901 Orlando Street property and the Alpine/173 outlot inspections. Professional services (legal fees) came to $7,000.

This TIF had an ending fund balance of minus $257,574.

251 corridor

Richter’s second report was on the North Second Street – Route 251 corridor, extending south from Route 173 to Harlem Road. The former Machesney Park Mall, renamed Machesney Town Center, is on the west side of this area and continues to be a busy place.

He said the TLC Assisted Living Community received its certificate of occupancy March 24, 2020, with landscaping being completed in the fall. About 20 of the 61 residential units had been filled as of December. He called that “an incredibly well constructed building with studio, one and two-bedroom units.”

Next door to this new project is the former J.C. Penney Outlet, 8702 N. Second St., which the village bought several years ago for $900,000. It now is fully occupied, he said, with five tenants. Recently, the village leased garage space in the building to TLC for storage.

He continued: “Menta Academy is going through its first full year with virtual studying. It’s been on and off as to how many students they’ve had. They’re hanging in there and we’re glad to have them.”

Meanwhile, efforts are continuing to sell the entire building.

Following up on the proposed Robust Entertainment Trampoline Park, he said he may have talked about that last year. They’re pursuing 25,000 square feet of space between the J.C. Penney building and Burlington Coat. “They’re on hold, understandably,” he said. “The developer’s other parks have been closed due to the pandemic, so we’re hoping they will come out of okay. We’re reviewing plans and they have had multiple contractors through the building.”

The village also is working with interested parties in the vacant Bergner’s building at the other end of the complex. “We had contractors out last week for a particular user,” Richter said. “The building is in good shape; it will need new mechanicals and roof repairs, and whatever buildout will be needed. We’re hopeful it will be sold in 2021.

Finally, he said the village is looking at some residential uses for the green space between the mall building and the residences in back.

Johannsen reported this TIF generated $870,859 in revenue last year, an increase of $63,000 over 2019. There were $932,852 in expenses, $551,000 in redevelopment costs and $365,000 in debt payments. There was an ending fund balance of minus $695,321. 

The area had an equalized assessed value (EAV) of $8.60 million when the TIF was created in 2008. In 2018, the EAV had increased to $10.799 million. The district will expire in 2031.

Weststone TIF

There is one TIF at Route 173 Interstate 90, on the western edge of Machesney Park, comprised of two industrial parks: Park 90 and Interstate Crossings.

Quantum Design Inc. has relocated to Park 90, with a new building and a new access road. In addition, design of a water tower for this area is done, with the tower being built as soon as there is a demand for it, Richter said.

“We are anticipating growth at Park 90 and Interstate Crossings,” he said. “We hope the (new) primary road will jump start activity in that area.”

Revenue at Weststone totaled $485,827, Johannsen reported, which was consistent with last year. Expenses amounted to $1.514 million, with $1.314 million in redevelopment costs, $150,000 in debt payments and $59,000 in professional fees. The ending fund balance was a negative $380,728.

The EVA of this area was $188,388 in 2011, when the TIF was established. It had increased to $4.350 million in 2018. The TIF will expire in 2034.

Municipalities originally created TIFs with the intent to stimulate private investment in a blighted area, which was designated as being in need of economic revitalization. They typically divert property tax increases in those properties away from government coffers and toward economic development projects, or public improvements, in the community.