Unforeseen permitting costs and rising construction costs were cited by village officials as the reasons for increasing benefits for Homewood Brewing Company from $970,000 to $1.7 million over the next two decades.
The craft brewery and restaurant is under construction at 18225 Dixie Highway. Trustees approved the amended redevelopment agreement at the board’s April 25 meeting.
In 2022, the village entered into a redevelopment agreement with the owners of HBC that included a promise to reimburse $970,000 of qualified expenses. The plan called for reimbursing the company for demolition and construction of the parking lots; reconstruction of Miller Court, including curb, gutter and paving improvements; underground stormwater detention; and site utilities, including re-routing and burial of electric power lines.
The original estimates were figured before the company’s plan was reviewed by Thorn Creek Sanitary District, and it turned out there were unexpected storm and sanitary sewer requirements to be met and additional costs to meet village requirements, according to village officials.
That, plus higher than expected inflation and continued supply chain problems pushed the cost of qualified expenses up by $730,000.
Village officials note that none of the benefits will be paid out of the village’s budget.
The site is a tax increment financing district. That means the assessed value of the property was frozen when the district was formed, and any increase in assessed value goes into a TIF fund. The base rate, in this case, was zero, so all the increase in coming years will be included in the fund.
The benefits are paid from that fund, and because the fund will be built mainly from HBC property taxes, the company will generate the money to make the reimbursement.
The TIF is expected to generate at least $3 million before it expires in 2043, so the budget remains viable, according to Economic Development Director Angela Mesaros.
She noted that the situation was a classic case for TIF districts, which are intended to enable redevelopment of property that is not contributing to the local tax base and economy.
The property was vacant and tax delinquent when the village acquired it in 2018. By now, it has been vacant for more than a decade.
Village Manager Napoleon Haney said the TIF funds are making possible a project that will become an asset for the downtown area.
“It’s an investment,” he said. “And not only in the property but in the downtown, to spur pedestrians walking downtown, to give some variety to people, residents and visitors.”
The owners of the company, Carmela Wallace, Robert Lauderdale and Brian Wallace, expect the establishment to open during the first quarter of 2024. When it does, it will begin generating sales and places-for-eating tax revenue for the village.
Current estimates of the tax revenue the business could generate were not immediately available.