Batavia officials are considering an extension to a tax increment financing district that would keep a $40 million downtown mixed-use development plan alive.
With a 9-4 vote, the committee of the whole this week moved along a resolution supporting the tax increment financing, or TIF, extension for the One Washington Place project, at North River and State streets where Route 25 jogs. The plan includes apartments, a parking garage and retail space.
Multiple delays have put the project on a schedule that won't allow enough time to pay off $16 million in bonds the city planed to issue to finance the project. The project is getting started three years after the city established the TIF.
The delays were mostly caused by environmental issues when lead-contaminated soil forced remediation plans in 2018.
"This is the situation we find ourselves in because of that delay," City Administrator Laura Newman said.
Besides adding an additional 12 years to the TIF, the city also could consider a re-TIF of the site or scrapping the current project and look at other options.
"It's not a shock to me that we have a situation," said David Patzelt, president of Shodeen Group, the developer of the project. "These are difficult projects and issues come up."
Patzelt said they knew the plan was "very thin" from the start but he is a partner with the city and views the delay as another hurdle they need to get over.
"I am committed to this project," he said.
Alderman Marty Callahan, chairman of the Community Development Committee, said he understood they had a thin margin with the time allowed by the TIF and that's why the council didn't want to put the burden on the taxpayers.
Callahan said there was not enough communication from the developer and they believed construction would begin in May.
"If there were changes, we needed to know sooner," he said. "All we heard is 'it's a go, it's a go, it's a go.'"
Mayor Jeff Schielke said the city has a history of successful projects while working with the Shodeen Group and urged the council to give this one a chance.
"We should take it to the very last step to see if we can make this work," he said.
"At what cost?" Alderman Nick Cerone said. "This extension isn't free money. There's a cost to extending."
But Newman said there is also a cost to begin a new project.
"If you like this project, you should vote to extend," she said. "If we re-TIF we're limited and we won't get a project of this size again."
"This is an economic engine," Alderman Michael O'Brien said. "I believe that retail will come to the downtown."
Alderman Alan Wolff said any other project will take time.
"If we don't extend the TIF, I don't know what's going to end up on that corner," he said.
Patzelt said he would have the architect draw up different options for the development after Alderman Abby Beck said they should consider eliminating the parking garage.
"Building for cars and building for parking is making cities go broke," she said. "Offer that choice to live as a one-car family or a no-car family."
Even if the city council approves the extension, there are other taxing bodies involved who must also approve it.
"Each taxing body has the ability to say no," Newman said.
Following the meeting, Patzelt said he was pleased with the outcome.
"The project is still alive," he said.