City of Edgerton expands loan to spur warehouse renovations
After meeting behind closed doors Monday, the council voted to add $24,000 to a $260,000 economic development loan it gave Rinehart. The loan will be used to redevelop one of two former tobacco warehouses Rinehart owns at 315 W. Fulton St.
The redevelopment is nearly complete, and apartments are slated for full occupancy in July. All that's left is $24,000 worth of work on a storm-water system in a parking lot between the apartments and the remaining warehouse, which Rinehart also plans to re-develop.
The storm sewer work is tied to a state mandate and came up mid-stream in planning the redevelopment, City Administrator Ramona Flanigan said.
Flanigan said Rinehart had told city officials he didn't include the work in his original project cost estimates. While it's a relatively uncommon move, the council agreed to write the cost of the extra work into the development loan, she said.
Flanigan said the loan expansion will make it easier for Rinehart to finish the redevelopment and transition over to making apartments out of the second warehouse.
Rinehart of Cottage Grove runs a taxidermy company out of another of Edgerton's former tobacco warehouses at 203 S. Main St. He has owned the warehouses since 2003, along with several single-family rental homes in Edgerton.
Rinehart's real estate management company, Rinehart Properties, financed the bulk of the estimated $1.3 million development through a bank loan. The city's loan for the project will be paid back through tax increment financing, officials said.
The first apartment development required extensive repairs to the brick fašade and roof of the former warehouse. The inside of the 19,000 square-foot, two-floor building is now broken up into 16 two-bedroom apartment units.
All but one unit is already leased, Rinehart said Tuesday. He added that he's on pace to offer a proposal to renovate the second warehouse to potential lenders in July, when his first apartment building will be fully occupied.
The second warehouse, which like the first stands three stories tall, is in need of extensive repair, Rinehart said.
Rinehart said he hasn't submitted a formal request to the city for possible incentives for the second warehouse, but he envisions creating a proposal similar to the one for the first building.
Rinehart said the lending landscape is tight, especially for redeveloping old buildings.
"The first building wouldn't have gotten funding without the TIF (city development loan) agreement," he said. "I suspect that the bank would want a similar agreement for the second building."
Rinehart said "a good portion of the conversation" he had with the council Monday was about redeveloping the second building.
"They wouldn't have approved what they approved if they hadn't understood we're going to be going forward with the second building," he said.
Last updated: 8:37 pm Thursday, December 13, 2012