Fri February 12, 2010
City Wants Stimulus Money To Rehab Hotel
Macomb, IL – The city of Macomb wants to take advantage of what it calls a well kept secret to spur economic development.
City Administrator Dean Torreson and Fourth Ward Alderman Mike Inman approached the McDonough County Finance Committee Wednesday night and asked them to consider making McDonough County an "Economic Recovery Zone," which would make the entire county eligible for federally subsidized bonding. The ERZ is a benefit of the federal stimulus package that both men say is underutilized.
Torreson and Inman say all the county has to do is designate the zone, the city will take care of the rest. That includes selling the bonds, and paying the interest associated with them.
The finance committee jumped on board with the idea, and expects to offer a recommendation to create the zone to the full board on Wednesday.
They say the city is eyeing a massive redevelopment project for the old Lamoine Hotel in downtown Macomb. At least a couple of developers want to turn the site into viable residential and commercial properties, a project which could cost up to $4 million.
"You can look at the building, you know what it's doing now," says Inman. "We just think that this is probably the one good shot we're going to have at moving this corner of the downtown into a good project that will benefit downtown and the city as a whole."
Inman says developers are looking to add condiminiums to the upper floors and commercial space on the ground floor. The project has been "shovel ready" for some time. That's an important stipulation, because counties have until the end of the year to apply for ERZ status.
Inman says there are two types of bonds available in this zone. The first is called a recovery zone facility bond. With this, the city can bond up to $1.35 million, which would be federally subsidized at 35 percent. The second type is a general recovery bond, which has a bonding limit of $900,000 subsidized at 45 percent.
Essentially, Macomb can bond up to $2.25 million toward any shovel ready project in McDonough County -- in this case, the Lamoine Hotel. When the time comes to pay back the bonds, the federal government will pay the city 35 to 45 percent of the interest accrued on them.
Inman and Torreson hope the rest of the money needed to finance the project can come from TIF District funds. Macomb's Historic Preservation Commission is also trying to secure the building as a national historic site, which would come with substantial tax credits.