Batavia considering new plan to keep One Washington Place alive

Batavia officials are considering dissolving one special taxing district and creating another to facilitate the development of the proposed One Washington Place project.

Aldermen this week unanimously directed staff members to pursue an eligibility study for a new downtown tax increment financing district, which would potentially cover the existing Washington-Wilson TIF area, as well as some surrounding properties.

The mandated study is the first step in what officials call a "de-TIF, re-TIF" plan, aimed at advancing the roughly $40 million mixed-use development project slated for North River and State streets. But before committing to that strategy, some aldermen said they want a better understanding of its impact on the city and its bottom line.

"The thing that kind of concerns me is, this is another time that we're changing something to keep this project alive," Alderman Marty Callahan said. "We have to figure out what our options are before that, and weigh those pros and cons and consequences."

One Washington Place plans presented in 2018 call for constructing 190 apartments, a 365-space parking garage and 5,725 square feet of retail along River Street.

During a virtual meeting Tuesday, Shodeen Group President David Patzelt presented an alternative option, as requested by some aldermen, that would add storefronts along Wilson Street - a net increase of 8,455 square feet of retail - as well as 2,370 square feet of second-floor office space fronting River Street. The changes would result in a loss of about 32 parking spaces and four residential units.

Per a deal with the Geneva-based developer, Batavia initially planned to issue $16 million in bonds to fund the public parking component and other eligible costs. Those expenses would be reimbursed through the Washington-Wilson TIF.

In a TIF district, property taxes generated above a certain level are funneled into redevelopment, rather than to local governments.

But multiple delays have pushed back the project by about three years, resulting in an anticipated $3 million shortfall when the 23-year TIF expires, city Administrator Laura Newman said. An effort to extend the taxing district by 12 years - which requires approval of all taxing bodies affected - was shot down last month by the Batavia Unit District 101 school board.

For either One Washington Place proposal to come to fruition, Newman said, the only other option is to eliminate the Washington-Wilson TIF and establish a new taxing district. Doing so would reset the clock to 23 years, allowing the city to recoup as much of its investment as possible.

"If we don't de-TIF or re-TIF, then (Patzelt) is going to come to us with the off-ramp that it is no longer financially feasible," she said.

It's unclear whether the city could be reimbursed for any of the $2 million already spent on acquiring the project site and preparing it for construction, officials added.