Including a floor of offices in the planned nine-story mixed use development at 835 Chicago Ave. may end up costing the city $2.9 million in tax subsidies.
The mostly residential rental development is up for approval by City Council Monday night after the developer agreed to lease additional parking for the building.
But a staff memo in the City Council packet indicates the developer believes including the office space the city wants to see in the development will put a $2.9 million hole in the project’s financing.
The memo indicates that the developer plans to ask the city for funds from the recently-approved Chicago-Main Tax Increment Financing District to cover that gap.
The memo justifies the subsidy based on statements from nearby merchants that daytime shopping traffic dropped off in the district after the previous two-story building on the site, which included offices on the second floor, was demolished.
After plans for a condo development on the site failed in the housing market collapse, city officials pushed for a multi-story office development — but the developer was unable to find credit-worthy tenants to support the financing needed for that plan.
The project appeared to be on the verge of approval until complaints from neighbors about the limited amount of parking included in the development led city staff to seek an indefinite delay in a scheduled final vote in May.
In the revised plan up for a vote Monday, the developer will lease 35 spaces in an existing parking lot a half-block away at 935 Chicago Ave., just north of Hemenway United Methodist Church.
Since that doesn’t increase the total parking available in the neighborhood above what was in the developer’s previous plans, it not clear whether the revisedp proposal will quiet the neighbors concerns.
The developer and project supporters have argued that the project needs less than the typical amount of parking because it’s adjacent to two train lines.