Consultant: Hilltop needs modern market‑rate apartments and targeted incentives to spur retail

Pete Dalvo, president of Dalvo Development Advisors LLC, presented a market analysis of the Augustana Hilltop area to the Rock Island City Council on June 8, saying the neighborhood’s housing stock is old and that the biggest shortcoming is a lack of modern market‑rate rentals.

Dalvo said the study evaluated more than 5,000 rental units citywide and roughly 600 within the Hilltop study area. “For the first time that we’ve seen since we’ve been here over 10 years, market‑rate rental housing is outperforming income‑restricted housing,” he said, noting higher occupancy among market‑rate units. He estimated short‑term demand for as many as 250 market‑rate units in the next two to three years and identified more than 1,300 renters in the city with incomes above $50,000 who could afford new market rents.

On retail, Dalvo reported a modest nominal vacancy (about 6.8 percent) but said roughly 40 percent of vacant space isn’t actively marketed, producing a lower effective vacancy rate. He estimated about $40 million in local spending potential for dining and said the area could support roughly 60,000 square feet of retail and food service split evenly if appropriately configured for neighborhood demand.

To entice the “first mover” developers who typically avoid unproven markets, Dalvo recommended three incentive approaches: property‑tax abatements in the first 10 years to ease early debt service, creating a business development district to capture incremental retail/hotel sales tax for project finance, and tiered lease structures that allow new tenants to ramp rent up over several years to reach levels that support new construction.

Dalvo also reviewed four sites. He suggested a vertical mixed‑use development at 14th and 30th that would target young professionals and college staff and include 10,000–14,000 square feet of ground‑floor space for food and beverage. He recommended preserving Reservoir Park as parkland in the near term while considering longer‑term mixed uses that respect the adjacent historic district, and combining a complicated site near the water tower with adjacent parcels to create a feasible development footprint.

Kirk Anderson of Augustana College joined Dalvo for the presentation. Council members asked for clarification on student demand and on the meaning of “outperforming” market‑rate housing — Dalvo explained that market‑rate units have had higher occupancy than the area’s subsidized units and that the shortage is causing some households to move outside the city. Staff said the city and the Augustana Hilltop CDC are actively marketing the 14th and 30th site to attract development.

The council did not take immediate action on incentives but heard the study as a basis for future redevelopment planning and targeted investments.