Brenden Moore
The State Journal-Register
An out-of-town developer’s request for $3.15 million in tax-increment financing funds for a long-stalled redevelopment of three historic downtown buildings was tabled by members of the Springfield City Council on Tuesday night.
The new developer, Chesterfield Faring Ltd., a New York-based real estate merchant bank, is aiming to complete the long-delayed project, which would add 41 one- and two-bedroom apartments and ground-level retail to the Ferguson, Booth and Bateman-Kennedy buildings at the southwest corner of Sixth and Monroe streets.
But worries over the project’s troubled past, including concerns over the limited-but-continued involvement of previous developer Rick Lawrence and uncertainty over unpaid union benefits, sank the project with council members, who discussed the proposal at their bimonthly committee-of-the-whole meeting.
Aldermen were also critical of Mayor Jim Langfelder’s process, saying that they had little to no time to review the proposed agreement between the city and developer before it was discussed last night. Council members received a copy about an hour before the meeting.
Also at issue was the lack of clear information regarding funds available in the downtown TIF. But the main issue remains the continued presence of Lawrence, who was also the center of discussion when the proposal was considered at the Springfield Economic Development Commission on Monday.
With reservations, the EDC, which gives non-binding recommendations to the City Council, voted 4-2 in favor of the project.
Though developer Tom Lee attempted to reassure council members that Lawrence would only serve in an advisory capacity, it was not enough to assuage concerns.
After more than an hour of discussion, the council voted 8-2 to table the proposed TIF agreement, with Ward 4 Ald. John Fulgenzi and Ward 7 Ald. Joe McMenamin voting “no.”
The parliamentary procedure is often used by legislative bodies to effectively kill legislation. Now, if the council wants to reconsider the ordinance, it will require the support of at least eight members. If they decided to just leave it in committee, it would only require a simple majority.
The vote left Langfelder clearly frustrated.
Council members said they want the project to move forward but that there were too many questions left unanswered and red flags unchecked.
Chief among them: Lawrence’s involvement. Several council members indicated that they would not vote to approve TIF funding if Lawrence is involved, even in the smallest capacity.
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Lawrence had been working to redevelop the property since purchasing it in 2012. But things began to unravel in 2015, when he made the scope of the project bigger to include the Bateman-Kennedy building, which caused enough concern for his lender, First Bankers Trust, to halt financing. Lawrence continued work on the project, thinking he would resolve his financing. Instead, he accumulated more than $1 million owed to both union workers, for benefits, and vendors.
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Under the proposed development agreement, the new developers agreed to pay $1.2 million owed to contractors and union members for work already done on the property. Lee said the group has been in communication with several of the unions involved.
However, Laborers Local 477 business manager Brad Schaive said the city was putting the cart before the horse. He said that union benefits should be paid before the city agrees to award any TIF funds.
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And then there’s the question of the TIF itself.
At one point, more than $3.8 million in TIF funds was committed to the project. But the City Council voted in June 2018 to rescind the agreement amid Lawrence’s financing troubles and inability to pay union benefits.
The city had already paid out $975,615.42 in TIF funds for the project before it was cut off.
Under the new agreement, TIF funds would be distributed in equal annual increments of $350,000 over nine years.
After getting answers from administration officials that were perceived to be unclear, some council members were not certain there would be enough funds in the TIF to support the request.
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Fielding tough questions from a skeptical City Council, Lee, the developer, said the group would be transparent with them, even inviting aldermen to sit in on their monthly draw meetings with the bank.
Lee also pointed out that Chesterfield Faring is invested in Springfield. The group purchased the bank notes on the Illinois Building on Adams Street and the PNC Bank Building at Fifth and Washington streets earlier this year and hopes to invest more, he said.
Insurance will cover the cost of repairs for Dallman Unit 33, City Water, Light and Power chief utility engineer Doug Brown told council members Tuesday night. The unit has been offline since November 2019, when a battery system failure caused it to trip.
Joe McMenamin for Ward 7 