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Elgin set to create sprinkler grant program to spur residences downtown

Elgin is likely to establish a grant program to help downtown business owners front sprinkler costs if they want to upgrade or convert upper floors into residential units.

The city council's committee of the whole gave a unanimous "yes" last week to the $500,000 program to be funded by revenues from the Central Area Tax Increment Financing District. The grant would cover $4 per square foot for the cost of new or upgraded sprinklers, which staff members said are estimated at $3.50 to $5 per square foot. A final council vote is expected Feb. 28.

Any grant proposals from property owners will be evaluated by the city council, and owners will be required to get occupancy permits before receiving the grants, City Manager Rick Kozal said.

City staff members identified about 40 downtown buildings that in the past had residential units on upper floors or that appear able to accommodate residential units. Those 40 buildings have an estimated combined floor area of 150,000 square feet - or an equivalent $600,000 in grant assistance if all the owners applied - and could yield an estimated 110 units.

Another 20 or so downtown buildings could become residential after "substantial adaptive reuse," according to city staff members who used city directories, fire insurance maps and other city records to make their assessment.

One of the buildings staff members deemed feasible, 30 DuPage Court, would require substantial work, owner Dan Strojny said. "Very rough" preliminary research shows converting the empty three-story, 24,000-square-foot building into residential would cost about $100 per foot, including sprinkler work.

Strojny also owns 40 DuPage Court next door, which has businesses on the first floor and offices on upper floors. The buildings were bank-owned and a good real estate opportunity when he purchased them, he said. Both are listed for sale. "I liked the location. I believe in the future of Elgin."

Although he's glad for the sprinkler grant program, Strojny said, he hopes the city will contribute more TIF funds to conversion projects, like it did for the Tower Building, which received $6.35 million.

The 2018 Central Area TIF fund has $387,700 in unallocated funds for "high impact economic development projects" downtown, city spokeswoman Molly Center said. A TIF freezes property tax money going to local governments for 23 years while added tax revenue from an area's increased value afterward is funneled back into development.

Building permits, plan reviews, inspections and utility and tap fees will be waived as part of the new grant program. Also, property owners could take advantage of provisions within the recent federal tax legislation that allow fire sprinklers to be fully expensed, city officials said.

  The building at 30 DuPage Court in Elgin is within the footprint of a new $500,000 sprinkler grant program being established by the city of Elgin. Brian Hill/bhill@dailyherald.com
  Dan Strojny enters his building at 30 DuPage Court, which used to be occupied by a state unemployment office and more recently a nightclub. Brian Hill/bhill@dailyherald.com
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