The Heights Apartment project, previously given preliminary approval in February 2024, dominated the meeting due to its financial and community impact. Jason Ha, Executive Director of the Cook County Housing and Redevelopment Authority, and Gary Latz from the Cook County Real Estate Fund, presented detailed insights into the project’s financial structure and the necessity of the tax abatement. The initial request for a tax abatement of up to $450,000 over 15 years was reduced to a lower, necessary figure. The introduction of a “look back clause” was a notable development, allowing for an evaluation of the project’s financial performance after a stabilization period marked by 90% occupancy. This clause would enable the county to assess whether the full tax abatement remained necessary after the first eight years, based on actual performance data.

Despite the abatement, the project is expected to generate an estimated additional $133,000 per year for the county and city during the abatement period, contrasted with the current $3,000 annual tax revenue from the parcel. The representatives emphasized the critical role of accurate financial projections and the importance of a structured approach to determine the project’s needs. They noted the inherent uncertainties in economic projections, stating, “everything’s a projection until reality happens.” The budget for the project had increased by $500,000 due to underestimations of costs.

Further discussions detailed a development project involving over 40 local investors and a deferred development fee. The developer plans to defer the fee, typically between 2% and 3% of the total development cost, for eight years, which is uncommon in the industry. The development cost is approximately $8.6 million, with an assessed value upon completion projected at around $6.1 million, creating a substantial $2.5 million gap. Commissioners noted that without public-private partnerships and grants, such as the ITR Grant, the financial feasibility of these developments becomes questionable. Local investors have pledged $2.4 million towards the project, driven more by the desire to provide housing than by profitability.

The financial discussions extended to the implications of Area Median Income (AMI) on rent prices. The project includes 18 apartments for individuals earning 80% or less of the AMI, and 18 units at market rates. Maximum rent for a studio at 80% AMI was noted to be $1,358, subject to annual adjustments. Clarifications were sought regarding eligibility criteria for tenants, confirming that rents would be set at approximately 30% of income for individuals earning less than 80% of the AMI. Concerns were raised about the potential for rents to increase faster than anticipated, highlighting the need for accurate demand assessments and competitive market conditions to drive down prices.

In addition to the Heights Apartment discussions, the meeting addressed broader budgetary concerns. The preliminary levy was set at 9.81%, with a desire to achieve a final levy of around 5% to avoid spikes and maintain consistent funding. Discussions included the need for new HR and maintenance positions, driven by a recent strategic plan and challenges posed by staff burnout. The board acknowledged the limited scope for budget trimming without impacting services, emphasizing the necessity of balancing immediate needs with long-term planning.

Commissioners also explored potential revenue generation strategies, including reviewing the county’s fee structure. It was suggested that while essential services should remain free, other services might warrant a fee to better reflect the actual costs of service delivery. The fees associated with vacation rentals were discussed, with proposals to increase current fees to generate additional revenue. The idea of appointing a dedicated county grant writer was also considered.

The dialogue extended to tourism-related revenue, specifically the lodging tax. A commissioner questioned ways to capture more revenues generated by visitors, given the services provided to them. The potential for property tax reform was identified. The discussion acknowledged the complexities involved and the need for legislative action to implement such changes.