The $28.3 million Lofts on Madison project, on the north side of Madison between North Fourth and North Fifth streets, would cater to people who work in the Mid-Illinois Medical District and others who want to live downtown, said Victor Salerno, chief executive officer of Adirondack Community Development.
Members of the Springfield Economic and Community Development Commission voted 7-0 to support the project Dec. 7 after hearing Salerno’s presentation.
The non-binding recommendation will go to the Springfield City Council, which is expected to vote Dec. 20 on whether to chip in more than $5 million in economic incentives to offset Adirondack’s costs.
“We believe that this development will be very well-positioned to serve the medical district,” Salerno said, adding that the complex – to be built on the site of a one-acre parking lot owned by Springfield Downtown Parking Inc. – could open in the summer or fall of 2024.
The six-story, 120,000-square-foot complex would include 15,000 square feet of space for as-yet-undetermined retail and commercial use on the ground floor, Salerno said.
The project would bring 350 to 400 more permanent residents downtown and create 400 temporary construction jobs, 40 permanent commercial/retail jobs and 10 full-time staff jobs at the complex, he said.
The upper five floors would feature one-, two- and three-bedroom apartments of 610 to 1,050 square feet apiece. Rents would range from $1,100 to $1,450 per month.
Family-owned Adirondack, which operates about 120 apartment communities in the United States, mostly in Texas and other parts of the South, would act as the project’s general contractor through its affiliated Mayfair Management Group. Local subcontractors would be used, so most of the construction jobs would go to Springfield-area residents, Salerno said.
Lofts on Madison, at 301 N. Fifth St., would be an “economic growth engine” for the downtown area, he said.
Real-estate broker Steve Myers, vice president of Springfield Downtown Parking’s board, said, “I think it’s going to be a great project to connect the medical district with the historic downtown.”
Springfield’s Office of Planning and Economic Development supports the project, according to Ravi Doshi, the city’s business projects manager and TIF administrator.
“It’s a huge win for the city of Springfield, and it’s a huge win for our downtown area,” he said. Officials from Springfield Memorial Hospital and HSHS St. John’s Hospital back the project, too, he said.
Zoning to accommodate the new use was approved by the City Council in February 2021.
“This is going to bring exactly what our downtown community needs,” Doshi said.
Many of the young doctors going through medical residency programs, as well as other employees of hospitals and clinics in the medical district, would like to live downtown but have a hard time finding apartment vacancies there, Doshi said.
The medical district covers the residential and commercial areas bounded by Madison on the south, North Grand Avenue on the north, Walnut Street on the west and 11th Street on the east.
Unless a proposal to create 200 or more apartments at the Wyndham City Centre hotel proceeds, The Lofts on Madison would become the downtown’s largest apartment complex, Doshi said.
Adirondack officials initially wanted to build an “affordable housing” complex at the site and offer lower rents. But Doshi said the federal tax credits needed to help finance such a project, dispensed by the Illinois Housing Development Authority, weren’t available at this time because of other ongoing affordable housing projects underway in Springfield.
The $4.5 million in tax-increment financing and $551,000 in sales tax savings on building materials that Adirondack is requesting from the city would serve a similar role in helping the company pay for the project, Salerno said.
The $4.5 million would come through the creation of a targeted TIF district and would be generated by the incremental increase in property taxes for up to 23 years on the project site, Doshi said. The abatement of sales taxes on building materials would come through an extension of an enterprise zone to include the property.
Adirondack would pay $900,000 for the land and contribute almost $2.3 million in equity to the project, Salerno said. Adirondack would be a long-term owner of the complex and would manage it as well, he said.
“Our philosophy is to build high-quality developments that are economically attainable, energy-efficient, environmentally focused and socially respectful,” he said.
When it comes to expanded apartment options at the Wyndham, Mayor Jim Langfelder said the New York-based developer who received multiple denials from the City Council in his quest for a zoning variance to renovate the building and convert it into an apartment complex plans to decide by the end of 2022 on how he will proceed.
David Mitchell of GoodHomes proposed a $40 million acquisition and renovation of the Wyndham, 700 E. Adams St., to create 274 market-rate apartments and preserve more than 100 of the building’s hotel rooms. That was his latest proposal, but the council voted 6-4 on Oct. 18 to deny GoodHomes a zoning variance to provide more than the 200 residential units allowed under current zoning.
A majority on the council was concerned that Mitchell’s plans would remove too many hotel rooms from the rolls downtown, potentially harming the city’s ability to attract and retain conventions.
But the council’s position, which Langfelder disagreed with, may result in the hotel closing altogether if current owner Al Rajabi of Tower Capital Group and Mitchell can’t work out a deal under current zoning restrictions. Rajabi said the way the COVID-19 pandemic changed the hotel industry nationwide made lenders unwilling to finance his original proposal to renovate the 30-story, 49-year-old building – formerly known as The Forum 30 – and rebrand it as a Delta by Marriott.
According to Langfelder, Mitchell is looking into whether he can obtain financing and determine the financial worthiness of renovating the building for 200 apartments, but with units larger than originally proposed. Whether hotel rooms would remain part of the building under that scenario is unknown, the mayor said.
The fate of another proposal for downtown apartments is more certain. The council voted Dec. 6 to approve more than $560,000 in TIF funds to support the creation of nine apartments in vacant sections of upper floors at 526 E. Adams.
The apartments will range from 600 to 1,200 square feet and will rent for $900 to $1,800 per month, Doshi said. The total project cost for Springfield resident Aaron Acree, who owns Michael Von Behren Builders, will be $1.7 million, Doshi said.
“We’re definitely very excited about what he’s doing,” Doshi said, adding that the building to be renovated dates to the 1850s. The project could spur other similar residential developments downtown, Doshi said.
