The Homewood Village Board approved a revised redevelopment agreement with HCF Homewood for the Hartford Building, located at the southwest corner of Ridge Road and Martin Avenue on April 8.
The opening of the Hartford Building in 2023 increased the population in the Homewood downtown area, and increased property values, Director of Economic and Community Development Angela Mesaros said.
Certain qualified costs will be reimbursed by the village using the Homewood Downtown transit oriented development (TOD) tax increment financing (TIF) Fund, she said.
The four-story, 36-unit apartment building required village guarantees to receive
initial finacing. The village board approved on April 8 an amendment to the
agreement that lets the village off the hook. (Chronicle file photo)
The initial agreement for the building was made between the village and HCF Homewood in November 2019, Mesaros said. The project was on hold during the pandemic.
Previous amendments to the agreement had been made since July 27, 2021, up until December 2023. These included technical corrections, and changes with assigning the redevelopment agreement and TIF notes, she said.
“The lender at the time, as a condition for financing, required some kind of guarantee that there would be sufficient revenue from this building in order to service their loan,” Village Attorney Chris Cummings said, adding, “this being a relatively small project … there was a lot of risk involved, and the lender at that time said, this is the only way we’re gonna make it fly.”
According to Mesaros, the current redevelopment agreement had issues with use of complicated language. Revising it prevents misunderstandings with potential future building owners, she said. The building is currently on the market.
The developer requested to correct the redevelopment agreement by removing language ensuring minimum return on costs, Mesaros said.
According to Cummings, the revisions were made due to the change of lenders.
“The new lender has agreed to remove that language, which is a great thing for the village. So it is now 100% on the developer,” Cummings said.
If not corrected, it may have cost the village money from the general fund, as well as prevent revenue sharing with the village once profit metrics were met, Mesaros said.
“If they came in under a certain amount, then we had to make a difference. If it came in over a certain amount, we would’ve gotten a little piece back. That’s an imperfect solution,” Cummings said.
According to Cummings, this change now “takes the village off the hook,” he said.
“It was a win-win all around,” Cummings said.
The revision also means that the developer’s financial records to verify return on cost are no longer required, Mesaros said.
