City Council approves $1.725 million package to help redevelop two downtown buildings

Waukegan City Council on March 3 approved a $1,725,000 incentive package intended to help redevelop two vacant downtown buildings at 200 North County Street and 38 North Genesee.

The measure authorizes a $900,000 upfront development assistance payment and a long-term, TIF-backed incentive of $825,000 to be paid from increment generated by the properties, for a total package of $1,725,000. The council approved the motion after lively debate about whether the city should supply the upfront grant from its casino-tax revenue (the so-called RAP or “wrap” funds) and whether the city must guarantee any shortfall in TIF increment at the end of the TIF term. The final roll-call vote was 6 in favor and 3 opposed.

Why it matters: The two buildings are vacant and under discussion as early “first mover” projects intended to catalyze further downtown redevelopment. Supporters said the combined incentive structure will make the financing stack viable for the developer and speed rehabilitation; opponents warned the city could be exposed if the properties do not generate the expected tax increment.

Developer and city presentations Sam Yingling of the Waukegan Community Development Partnership and other project representatives told the council the financing package was needed to close on the acquisitions and secure construction financing. City legal staff and the city’s TIF consultants advised that the long-term, $825,000 payment could be funded out of future TIF increment and that the $900,000 upfront assistance could instead come from the casino-tax fund if the council preferred not to use TIF dollars for a non-reimbursable grant.

Council debate and safeguards Alderman Tom Hayes said he opposed any motion that left the city “on the hook” to write a check if increment did not materialize. Alderman Victor Felix and others argued the full package was necessary to keep the developer at the table and to begin downtown momentum. Counsel told the council the development agreement would contain customary protections: construction escrow controls, proof of private financing before any public disbursement, and detailed draw controls so the city would not issue a “blank check.” The council directed staff and counsel to draft the development agreement with those protections and to return it for final approval.

Vote and next steps Alderman Victor Felix moved the motion; Alderman Rick Guzman seconded. The motion passed on a roll call (ayes: Martinez, Felix, Turner, Donaldworth, Bolton, Guzman; nays: Newsom, Florian, Hayes). Council instruction to staff: prepare a final development agreement that (1) uses $900,000 from casino-tax/RAP funds as the upfront assistance, (2) memorializes an $825,000 long-term incentive payable from TIF increment, and (3) includes draw controls, proof-of-funds and construction-escrow protections. The council asked staff to consider contiguous TIF capacity if necessary and to work with the school and park districts on any statutory contribution requirements.

The development agreement will return to the council for final approval once drafted.