The City Council Monday discussed three requests for Tax Increment Financing (TIF) funds.
One was partially approved and one will likely be rejected. The third was sent back to the applicant, who is to explore other ways of funding a building upgrade he has planned.
TIF funding uses the increased property tax revenues resulting from a business development to help pay for the development. In Kewanee, TIF grants have been made to a number of businesses over the years.
The biggest TIF request handled Monday was from KTown Real Estate, a group of local investors who are building a new car wash behind the Community State Bank building on Tenney Street.
Chris Roginski, representing KTown, said the “soon to be opened” car wash will cost around $2 million. KTown is seeking TIF funds totaling about $443,000 over the next five years.
The funding would be broken down into two parts: A $220,161 grant to start with, then the balance to be paid over five years.
Roginski said the new car wash will be brushless, meaning no mechanical equipment will touch vehicles being washed. Customers will buy monthly memberships which will entitle them to have their vehicles washed as many times as they like.
Mayor Gary Moore asked how much is in the city’s TIF fund. James Webb, the city’s finance director, said the balance is over $900,000.
Council members were willing to approve the $220,161 initial payment, but held off on approving the second part of the funding.
The second TIF application was from the Flemish Club to help pay for a new roof on its building on East Third Street.
Since the club is a non-profit organization and doesn’t pay taxes, council members felt that application should be denied. Moore noted that the council has previously denied TIF applications from nonprofits.
Chad VanDeVelde of the VanDeVelde Wellness Center had applied for around $16,000 in TIF money for internal improvements to his Hollis Street facility.
Council members noted that VanDeVelde has previously received TIF funding for a new parking lot and improvements to the exterior of his building. Both of those improvements added to the value of the property and to the property tax valuation.
But the upgrades VanDeVelde wants to make to the interior of the building wouldn’t affect the property’s valuation. Council members suggested that VanDeVelde explore the possibility of applying for a low-interest loan from the city.
