Champaign to finalize cost-share plan with developer for Green Street sewer upgrade

Champaign city staff on Aug. 26 recommended a cost-share agreement with developer Core Spaces to construct a new 12-inch collector sewer behind properties on East Green Street to increase sanitary capacity in the University District.

The study-session presentation by city staff member TJ said the project would address inadequate sewer capacity at the southeast corner of Green and Second streets for a proposed 16-story student housing tower at 201 E. Green St. and would create additional connection points for future developments. TJ said Core Spaces would pay construction costs up front and the city would reimburse the developer for 67.7% of the capacity that the developer is building for the city’s benefit.

The city’s engineering analysis, updated from a 2018 Donahue & Associates hydraulic study, recommends building a new collector sewer routed through the alley behind Green Street, turning north on Third Street and across the boneyard to connect to the Urbana-Champaign Sanitary District interceptor at Healy Street. TJ said the total construction cost is estimated at $2,800,000 and the city’s share would be about $1,900,000 under the proposed reimbursement percentage. Based on the city’s estimate of the project’s property tax yield, the city’s portion could be paid back in just under five years at roughly $405,000 per year; if a second nearby Core Spaces project proceeds, TJ said that would increase tax revenue and shorten the repayment period to about four years.

TJ summarized three nested requests to the council: (1) direct staff to finalize a cost-share agreement with Core Spaces for the Third Street sanitary sewer project and begin design with construction planned for 2026 and delivery by 2028; (2) direct staff to draft an ordinance establishing a proportional connection fee by population equivalent (PE) so future developers who tap the pipe will contribute to its cost (TJ said the pipe has about 6,000 PE capacity, the primary project would take roughly 2,000 PE, and the proposed per-PE fee is about $464); and (3) give direction to return later with a larger capital plan to implement additional elements of the Donahue recommendations across Campus Town.

Council members who spoke—Council Member Shannon and Council Member Pampetti—expressed support for the partnership. Shannon said increasing housing close to campus reduces pressure on traditionally affordable neighborhoods and noted, “I appreciate you making it very clear that this is not a subsidy.” Pampetti said the proposal and an ordinance to allow other developments to pay into the system were attractive because they would spread costs among beneficiaries. The mayor and other council members verbally consented to give staff direction to finalize the agreement and draft the ordinance for formal council consideration at a regular meeting.

City staff emphasized constraints on capacity imposed by existing large interceptor pipes in the boneyard and said the design maximizes capacity where possible. Staff cited the 2018 Donahue & Associates study as the basis for the site-specific analysis performed this year.

Next steps identified in the presentation: staff will finalize the cost-share agreement with the developer, begin design work to avoid major Green Street disruption (with most construction planned in 2026), draft an ordinance to establish a proportional connection fee for future taps, and return to council with the agreement and ordinance for formal consideration at a future regular meeting.