Elgin commits downtown tax dollars to new dorm for nonprofit Judson University
Elgin officials are banking on an unusual plan that will use city property tax dollars to help finance the development of a new dorm for Judson University.
The project, which city council members supported unanimously, will renovate an abandoned building in the middle of downtown. It will also add new residents who may shop at local businesses and put new sales tax money into the city's coffers.
But the deal also marks a departure from the types of organizations officials have traditionally supported with taxpayer dollars.
The plan commits up to $484,000 in tax increment financing money to support the $2.4 million construction project. That means the city's contribution represents up to 20% of the total projected cost.
Tax increment financing districts work by keeping the new property tax dollars created by developments within the district set aside to maintain and foster even more new development. But Judson University is a nonprofit organization. As such, it doesn't pay the city any property taxes.
That means the new dorm won't add any direct value by putting any new property taxes back into the TIF district.
That reality fueled hesitancy about supporting the plan by several city council members, including Tish Powell.
"This is probably not what I wanted to see downtown, but I understand," Powell said. "I would challenge Judson University to extend the partnerships with the city even further. I would really like to get some public benefit from this beyond the sales tax revenue.
"This is a stretch, in my mind, for how we should be spending this money. I will support it, but I will be watching and expect some give back from the university."
Councilmember Toby Shaw, who is a Judson alum, also expressed concerns. He said he would rather see the city's contribution come in closer to $288,000.
That might still be possible depending on what the actual construction costs prove to be. Supply chain delays are ramping up the cost of construction materials throughout the country.
"I'm happy Judson is moving forward with this project," Shaw said. "It's a good investment for our downtown, but it wasn't a slam dunk for me."
Other council members spoke of the unquantifiable benefits of amping up the prestige of the downtown by adding a university presence and putting life into a property that's stood vacant since 2017.
The location at 26-28 N. Grove Ave. for the new dorm is the former home of a PNC Bank, located across the street from the downtown post office. There is a nearby bike path students can use to get to Judson's main campus.
Once completed, the dorm will host up to 42 students in Judson's graduate-level architecture program. Councilmember Carol Rauschenberger said those students will be a foundation for the downtown's vitality.
"We would like to have more business in our downtown, but it is also exciting to have more residents downtown," she said. "That's what makes a city -- when you have people who live and work downtown."
Judson officials expect to begin the building renovations as soon as Friday.