South Central Reporter

City of Litchfield Economic Development Commission met March 30.

Here are the minutes provided by the commission:

Class 1 Members Present: Vice-Chairman Paul Osborne, Jen Compton, Ron Norris, Kent Redfern, Dan Fleming, John Winans, Nancy Hyam

Class 1 Members Absent: Lindsay Garner, Tim Burenga, Earl Flack, Chairman Lonnie Bathurst, Meghan Hyam, Ken Elmore

Class 2 Members Present: Alderman Ray Kellenberger; Dr. Kelly McClain

Guests Present: Mike Fleming, Shannon Hall, Chris Short, Erik Hyam, Eric Heyen, Tyler Heyen

Other City Representatives Present: Mayor Steve Dougherty, City Administrator Breann Vazquez, Alderman Jake Fleming, Tourism Coordinator Stacie Peecher, Alderwoman Sara Zumwalt

Chairman’s Comments:

Vice-Chairman Osborne called the meeting to order. There were no chairman’s comments.

Approval of Minutes: Kent Redfern made a motion, seconded by Ron Norris, to approve the meeting minutes from December 30, 2024. All in favor, motion carried. Ron Norris made a motion, seconded by Dan Fleming, to approve the meeting minutes from January 27, 2025. All in favor, motion carried.

Mayor’s Report: There was no Mayor’s report.

Old Business: Vice-Chairman Osborne opened discussion on an assistance request from the Litchfield Unlimited Corporation for a recreational center. The request was presented by Shannon Hall at the January EDC meeting and the committee requested that Hall return with more information. Hall provided a budget projection to the EDC. Hall stated that the LUC is in the fundraising stage for a recreational center and they are requesting $250,000 from the City.

Osborne asked how they plan to bridge the gap in funding to build the facility. Hall replied that they are preoared to take out a $1.5M loan and will need to fundraise the rest. Jewell asked how much the project has received from the Kilton Fund and how much of that has been spent. Hall replied that over $2M has been received from the fund and some of the funds have been used toward planning.

Vazquez gave an overview of the long term economic development fund, its uses, and noted that the LUC has agreed that a City contribution could be in the form of a reimbursement toward infrastructure. They understand that prevailing wage would need to be used for any portion of the project the City contributes toward, as these are general fund dollars.

Norris asked about ongoing fundraising and Hall shared efforts to date, noting that they have contracted with a marketing/fundraising firm and have been having conversations with major donors. One donor has agreed to contribute $100,000/year for 10 years.

Winans asked if a loan has been secured and whether conversations with local banks have taken place. Hall replied that they have a verbal commitment from a local bank for a $1.5M loan. Jewell asked how much funding was still needed to be able to construct the facility and Hall stated $3.5M is needed, not including the loan amount. The EDC discussed fundraising efforts and received clarification from Hall on questions regarding the LUC budget.

Alderman Fleming asked whether the LUC has considered utilizing an existing building for the rec center, noting that there are a couple of contenders that may be a good fit that are within TIF districts. Hall shared that they looked at the former Russell School and have considered other existing buildings, but that none of the options have made financial or logistical sense to pursue further.

Winans asked about the use of general funds on this project and asked whether this is a typical use. Vazquez noted that it is best to do incentive agreements for projects out of special funds such as TIF or business district, but it is an allowed use to use general fund dollars so long as prevailing wage is used and the Council approves of the use of funds for the project.

The EDC held further discussion on fundraising, inquired about next steps in fundraising efforts, the grant received by the LUC through Avery Bourne’s office, and the City’s role in the project.

Kent Redfern made a motion to table the request, seconded by Nancy Hyam. All in favor, motion carried. New Business:

- Vice Chairman Osborne opened discussion on a TIF assistance request for 608 N. State Street. Erik Hyam presented the project, noting that this is a blighted building with significant code issues. CETE is under contract for the property contingent upon receiving the requested assistance from the City. Hyam detailed the building’s history and noted that the proposed renovations would bring the building to white box status, meaning all code enforcement issues would be resolved, blight would be eliminated, and the building would be a blank canvas that would then need to be built to suit for future tenants. The proposal is for a 0% interest 24 month loan for $1,162,171. At the end of the loan term, the applicants would pay the City half of the appraised value of the property.

- Osborne asked what the building may be used for once it is rehabilitated. Hyam replied that he would love to see it be used for a rec center. He has had conversations with restaurant/brewery/distillery operations and they have considered professional spaces as a use. No matter who the tenant may be, it can be tailored to fit their needs.

- Vazquez updated the EDC on code enforcement efforts to date on the property. The City is prepared to pursue demolition on the property should all code enforcement issues not be reconciled. The City is estimating spending approximately $500,000 total on the property including demolition, but the exact amount is unknown at that time.

- Compton asked the applicants what they think the building may appraise out to. The applicants replied that it is an unknown at this time.

- Winans asked about doing a pro-forma instead of an appraisal. The applicants and EDC discussed that this would be more helpful, but may not be possible by the end of the loan term. Chris Short stated that the applicants will likely be taking out approximately a $250,000 loan at the end of the term if a tenant is not found.

- Kent Redfern asked if the members of the LLC would put up collateral if a bank issued a loan. Hyam replied they are prepared to assume personal liability for that amount. Vazquez noted that the City would want the same assurances that a bank would in terms of collateral should the City issue a loan. Hyam replied that they are open to discussions with the City. Vazquez also noted that she does not typically like the idea of the City issuing loans and we would need to box this in to not set a precedent.

- The EDC asked questions about securing a tenant, to which Short replied they are open to all options and it benefits them to have a tenant identified as well, but the right tenant has to come along. Vazquez stated that the EDC needs to approach this knowing that the applicants cannot guarantee a tenant by the end of the term.

- Winans noted that if there is a tenant identified, the project will then cash flow and more funding could be returned to the City. Compton mentioned the possibility of giving the applicants what the City would put into demolishing the building. Short replied that that would not be enough to resolve code enforcement issues. The EDC discussed the financial position of demolition versus the proposal at hand.

- Dougherty mentioned that the purpose of the TIF is to eliminate blight and fix structural issues, not finish out an entire project.

- The EDC discussed the idea of the LUC’s rec center occupying the space. John Winans proposed to table the proposal and set a special meeting for April 11, 2025 at 12pm.

Economic Development Director’s Report: Vazquez provided the board with a report. No comments.

Comments by Commissioners or Guests: Dr. McClain noted that the SCI center’s enrollments are up and Spring sports are going great.

Adjournment: Mandy Jewell made a motion, seconded by Jen Compton, to adjourn the meeting at 2pm.

https://www.cityoflitchfieldil.com/AgendaCenter/ViewFile/Minutes/_03312025-385