The Lofts on Madison gets go-ahead; city council adds labor agreement amendment
The full Springfield City Council Tuesday gave its approval to a $28.3 million proposed development by a New York company at Fifth and Madison streets, but not before adding an amendment ensuring that a Project Labor Agreement has to be negotiated in the future.
The unanimous vote signals the go-ahead for Adirondack Community Development to move forward with its lenders on The Lofts on Madison project.
There was an initial motion to hold the ordinance for two weeks after some council members pointed out that they only received the developer’s agreement at 5 p.m. Tuesday.
An amendment was added about the PLA, but Victor Salerno, the chief executive officer of Adirondack, said he has already had “a number of discussions” with the Central Illinois Building & Construction Trades Council and “we’ve given verbal commitments that we would enter into a PLA.”
“(I was) a little surprised it got added into the legislation, but at the end of the day we were going to enter into one anyway,” Salerno said afterward the meeting. “We’re happy about it. We’re excited to move forward.”
Under a PLA, terms and conditions of employment for specific building projects are negotiated between the developer and unions, including percentages of the local workforce, women, and minorities on the project.
The project would bring 136 “market rate apartments” to downtown Springfield and the Mid-Illinois Medical District.
The landing spot for the complex, 301 N. Fifth St.– the north side of Madison Street between Fourth and Fifth streets — has been a vacant lot for at least the last 50 years, city officials said.
It includes 87 one-bedroom, 30 two-bedroom and 19 three-bedroom units on the upper five floors. Rent would range from $1,100 to $1,450m monthly.
There would be retail space on the first floor and Salerno said again Tuesday “he would love to see a Trader Joe’s” or some other market go into the spot.
The project is unique because the 1.1-acre site will be its own TIF district. Details of the TIF will need to go back to city council for approval.
“This is a self-financed project in the sense that you’re only going to get money from that TIF if the assessed value of that vacant parking lot somehow becomes so much valuable with (a 136-unit development),” pointed out Ward 7 Ald. Joe McMenamin.
School District 186 board member Bill Ringer said Monday that D186 personnel wasn’t contacted about the property going into “a targeted TIF.”
“It’s important to us that we’re going to possibly be giving up a future revenue stream for a very long time,” Ringer said after Monday’s school board meeting. “We educate our kids using property tax money.”
Salerno said lenders are looking closely at interest rates.
The approval moves the project, Salerno said, from “pie in the sky to an actual working path.”
“We’ve been telling them that there’s going to be a TIF and there’s going to be expansion of the enterprise zone, but until there’s legislation passed that says the city is going to do this, there wasn’t much further we could go (with lenders).
“We would like to go lock in our financing as quickly as possible. This is still a very rate-sensitive environment, and all our numbers are predicated on rates not going up that much more.”
Adirondack would put in about $3 million in private equity and independent financing of about $21 million.
The Lofts on Madison would create 40 full-time retail and commercial jobs and 10 full-time employees working on the property side as leasing agents, maintenance supervisors and a community manager.
Mayor Jim Langfelder said he wasn’t surprised about the PLA because it has come up as a talking point with other projects, like Poplar Place.
“What I appreciate now with the city council,” Langfelder said, “is they had the foresight to move forward with the project instead of delaying it because the developer is taking the risk and it’s important that he does get his financing in place before the end of the year.
“Everybody is in agreement that it is going to be a great project of rejuvenation for downtown and the medical district. This was an important step.”
Contact Steven Spearie: 217-622-1788, firstname.lastname@example.org, twitter.com/@StevenSpearie.