Kankakee council approves amended TIF deal for downtown redevelopment, reduces long‑term city guarantee

The Kankakee City Council approved an ordinance Feb. 18 amending a tax increment financing (TIF) agreement with Jay Jeffers and Company LLC, JD Finance LLC and East Station Street LLC to scale and reset deadlines for a downtown redevelopment project at 310 South Schuyler.

Council members approved the amendment 9‑0 with one abstention (recorded for an alderman with property in the TIF). The ordinance shortens the city’s long‑term exposure under a rent guarantee and reduces the TIF reimbursement amount available to the developer, while establishing completion deadlines and a settlement framework for a prior city predevelopment loan.

The amendment scales the previously proposed project down from 92 residential units to a new‑construction, three‑story development of 47 units, according to city remarks during the meeting. The revised plan includes studio, one‑ and two‑bed units; an off‑site secured parking area; a community room at grade; aesthetic exterior revisions and, according to the developer team, a rooftop deck area. City presenters said the renovation of the existing 310 South Schuyler building will continue and that a tenant is being sought for the first‑floor commercial space.

City officials and the developer told council that the total project cost estimate for the revised plan is approximately $19.3 million. The city said it has reduced the maximum amount of eligible reimbursement from the TIF increment from about $16.8 million under earlier terms to about $3.7 million for the amended agreement.

A previously negotiated master rent guarantee remains capped at $300,000 in year one and is split 50/50 between the city and the developer; the amendment shortens the city’s exposure under that guarantee from a previously discussed 20‑year term to seven years. The council emphasized the shorter guarantee period as a fiscal protection for the city.

The ordinance also addresses a $1,000,000 predevelopment loan the city made to the developer in November 2021. The amendment contains a settlement provision that acknowledges the loan has not been repaid to date, specifies conditions under which the city would release the mortgage and sets out defaults and remedies if the project does not meet the amended completion requirements. The council’s presentation said subordination of the city loan will not occur until the developer obtains the full construction loan for the relevant project phases.

The amendment establishes phase‑specific deadlines the developer must meet to keep the agreement on schedule: phase‑one zoning/permitting and permit issuance dates in mid‑2025, substantial completion of phase one by March 15, 2026, and phase‑two permitting and an end‑of‑year 2026 completion target for the new construction apartments. The agreement conditions the schedule on state certification of the River’s Edge Incentive Zone; the amendment provides a day‑for‑day extension of deadlines if that state certification is delayed.

Council discussion included requests for clarity about local hiring and contracting. Alderman Jones pressed the developer team for commitments reflecting the city’s diversity; the developer said the project team has considered diversity goals and that the contract requires “reasonable efforts” toward minority, women and local participation though there are no mandatory quotas in the contract text as presented. Other council members spoke in support of the scaled project, and the administration framed the amendment as a lower‑risk step toward bringing new downtown housing to the city.

Outcome and next steps: the ordinance passed, and city staff and the developer were directed to proceed with zoning and permitting consistent with the new deadlines. The city flagged the state certification of the River’s Edge Incentive Zone and the developer’s ability to secure construction financing as critical dependencies for implementation.