The Wheaton City Council approved a redevelopment agreement with Morningside Equities Monday night for the construction of Wheaton 121, a luxury apartment complex at 218 Wesley Street in downtown Wheaton.
Morningside will use TIF District 2 funds for public improvements, including public plazas, street lighting, curb improvements and public benches.
The council approved the details of a letter of credit and subordination agreement with the developer. The letter of credit is for $500,000, with interest payments from the city as part of the TIF reimbursement. City Manager Don Rose said the payments are expected to be about $10,000 a year for about two years.
The most expensive public improvement will be the burial of overhead utility lines along the west and north sides of the property for an estimated $500,000, Rose previously told Council.
Councilman John Rutledge cast the only "no" vote for the agreement. "I don't think they need this money (from the city) to be successful," he said.
Councilman Phil Suess said the money Wheaton spends on Wheaton 121 will result in physical benefits to the city, as the funds the city provides are "in conjunction with public improvements."
He said with investments from the city of about $500,000 up front and about $800,000 near the completion of the project, "We can point to the benefits we're getting from that."
He added the project will bring the city an estimated $700,000 a year for seven years in tax increment funds, starting in 2015.
"This deal is very much different than any other TIF deal the city has done," he said.
, Morningside initially requested $2.3 million for assistance with several planned improvement projects, including utility relocation and improvements, site amenities such as light poles, benches, trash, recycling receptacles and bike racks, public plazas with fountain features and seating, a detention and lift station required because of the depth of Wheaton’s sewers, environmental remediation, design, construction and management. Rent for the apartment complex is expected to range between $1,000 and $2,300 per month, excluding utilities.