Rockford Register-Star – May 4, 2015 | Original article

By Brian Leaf

ROCKFORD — It's budget-approval month in Springfield. And when a spending plan is adopted, it could have a big impact on the historic downtowns of Rockford and four other cities, where a state incentive has kindled redevelopment investment and lots of interest in old, significant buildings.

That's the message proponents of Senate Bill 1642, which would extend the state River Edge Historic Tax Credit until 2022, sent south Monday during a Rockford hearing on legislation proposed by Sen. Steve Stadelman, D-Rockford. The bill is in the Senate's Revenue Subcommittee with other tax credit measures. The hearing was a way to elevate conversation about the importance of tax credits to River Edge cities: Rockford, Aurora, Elgin, Peoria and East St. Louis.

"We just need to get it discussed when major decisions are taking place," Stadelman said on why he hastily scheduled the Commerce and Economic Development Committee hearing two days earlier.

More than 30 states have historic tax credit programs. Illinois' 25 percent tax credit, which has resulted in $120 million in investment in Rockford's central city, doesn't expire until Dec. 31, 2016. But the date looms large for developers, who said that the 20 months left make it too risky to start a tax credit project because work may not finish — and building occupancy may not occur — by the New Year's Eve 2016 deadline.

Those who support renewing the tax credit program say the incentive has attracted interest from out-of-state developers, who will take their capital elsewhere if the program expires. Frantz Community Investors of Cedar Rapids, Iowa, already did. Last month, it rescinded a letter of intent to redevelop three downtown Rockford buildings. Mitch Hallgren, director of construction for Frantz, said his company will focus attention on historic renovations in Wisconsin and Iowa.

Representatives of Wisconsin-based Gorman & Company are feeling the tight deadline. The company plans to take ownership this month of the downtown riverfront Amerock/Ziock building and turn it into a $67 million hotel-conference complex. Renovation work begins this summer.

"A project this size, you don't want to be right on the periphery," said Andre Blakely, Illinois market president at Gorman.

Stadelman and Sen. Linda Holmes, D-Aurora, were the only two of 14 committee members at the hearing. Holmes urged people to write Gov. Bruce Rauner and ask him to support the program extension, which backers say turns vacant properties in distressed neighborhoods into tax-paying, job-producing businesses that give the state a $10 return on every $1 in tax credit it provides.

Tax credits are an important financial tool for developers. Property values have plunged 30 percent in Rockford since 2009, Mayor Larry Morrissey said. Banks won't lend money for redevelopment projects for that reason, but because of state tax credits, developers can make a project work.

"Private developers wouldn't be investing in cities without tax credits," he said.

Read more at RRStar.com.

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