The Village Board previously adopted the Hickory Kensington Tax Increment Financing District in July, 2014 in order to implement the redevelopment plan for the area. The Village has been negotiating a redevelopment agreement with developer Guido Neri and Ben Pecoraro. The developer proposes a 76 unit apartment building with approximately 3,500 square feet of commercial space. The developer has submitted for zoning approvals and anticipates construction starting in August 2018. The proposal is consistent with the Hickory Kensington Area Plan.

Terms of the redevelopment agreement include the following:

1. The Village will pay for the costs of public improvements in an amount not-to-exceed $800,000, including the construction of Campbell Street at the northern portion of the site and the streetscape improvements along Hickory Avenue and Kensington Road.
2. The land north of the Campbell Street roadway will be acquired by the Village from the developer for $700,000. This land will be landbanked for possible future development, but also in the near future may be used for business employee parking.
3. The developer seeks up to $120,000 annually for up to 8 years to meet their net operating income requirements relating to their debt coverage ratios. The developer will be required to submit their financials for the building on an annual basis for review by the Village.

The current fund balance for this TIF District and projected tax increment will be sufficient to cover all obligations of the Village per the agreement. The current fund balance is $825,000 and the Village is receiving approximately $450,000 annual TIF increment. This project is estimated to add an additional $250,000 in annual increment.

Recommendation

It is recommended that the Village Board approve the attached Ordinance Approving a Redevelopment Agreement between 4 North Hickory, LLC and the Village of Arlington Heights and authorize the Village President to sign the Agreement.