DeKALB – The Balli family, longtime owners of Eduardo’s Mexican Restaurant in downtown DeKalb which closed just before Christmas, will head to the city council Monday to ask for help as they look to bring more luxury apartments downtown.
The total cost to remodel the second floor of the former restaurant at 206 E. Lincoln Highway totals $476,700, according to city documents. Of that amount, 86% is eligible for tax increment finance money, which Rosa Balli will request during Monday’s meeting, set for 6 p.m. at the DeKalb Municipal Building, 200 S. Fourth St.
“I am optimistic,” Balli said Friday. “We feel pretty positive about putting our money into the downtown again and hopefully getting the support we need in order to get the project off the ground.”
The Eduardo’s building has been in a TIF district since the city’s first foray into tax increment financing in 1986, with the district known as TIF 1, or the central business TIF. That TIF remains open and will be closed in 2021. With the creation of TIF 3 in 2019 – significantly smaller, about one-tenth the size of TIF 1 in what city staff have said is intentional to focus on revitalization efforts downtown – the building remains in the area approved for utilizing the money.
When a tax increment finance district is created, the boundaries of that zone are often defined by state and local criteria. According to the Illinois TIF Act, certain characteristics must define what properties are eligible to be included in a district. As time passes and property values inside the TIF grow due to development and new businesses coming in, the increased tax revenue is collected by the city but split into two different pools. The first collects property tax revenue based on the original assessed value of the properties at the start of the TIF. The second collects excess tax revenue generated by the growing property values, and then is stored as tax increment.
The money collected in the second pool is then designated to redevelopment of blighted areas within the TIF.
In the past, the council has contended they wish to cap all TIF requests at 30% of total project costs. That means that $162,500 would be the most TIF money the Balli family could receive, pending council approval.
Second floor rental units have become popular among downtown business owners.
DeKalb-based Pappas Development has a number of upscale apartments buildings with retail on the ground level either in the works or complete, including Plaza DeKalb, Cornerstone DeKalb and Agora Tower.
The Ballis have said before they intend to lease the first floor of the Eduardo’s building, which was used for the restaurant, to interested parties, whether in retail, dining or hospitality. The building was listed for sale by the owners in December 2018 for $875,000.
“I do believe within a year that bottom section of our building will be leased out,” Balli said. “I have faith in that all happening.”
In July of 2019, Chicago-based brewers made multiple appeals to the council for TIF aid in a proposed project, the Alulu Brewery and Pub of Chicago, to utilize the space at 263 E. Lincoln Highway vacated by The House Cafe. While the project was supported by the council, their TIF request was not, since it continuously exceeded council’s desire to cap costs at 30%.
For the Balli’s rental renovations, their hope is to turn the upstairs – formerly used by Northern Illinois University students as an art studio – into four upscale apartment units.
One unit would be one bedroom, and the other three would be two bedrooms, with a washer and dryer and other amenities included.
City staff are not making a recommendation for action at this time, but requesting direction from council on how to proceed, documents show.
If the renovations were approved and the apartments created, the building’s estimated value would rise to an estimated $180,000, documents show, and generate property tax revenue from the apartments estimated at $29,800 per year.
Source: The Daily Chronicle