Resident looks to City Council for banquet center project

By Ali Combs

Area residents may soon be able to hold large events without leaving downtown.

At the April 22 City Council meeting, Bill McMahon, DeKalb resident and local business owner, requested a TIF forgivable loan in the amount of $330,000 to redevelop the former DeKalb Clinic Annex, 302 Grove St., and make the space a banquet center that can hold up to 450 guests. McMahon is the owner of the Lincoln Inn, 240 E. Lincoln Highway.

The total project cost is an estimated $1.7 million. The majority of the cost will be covered by private investment from the McMahon and his wife, Joy. The banquet center is 14,295 square feet, the majority of which would be dedicated to one large banquet hall, while the rest of the space would be partitioned into smaller rooms for parties of 12 to 150 guests.

First ward alderman David Jacobson said this project satisfies the TIF requirements.

“When tax money is being used, it should be a mutual benefit to the community,” Jacobson said, noting his history of voting no on other TIF projects the council has decided on. “This is the definition of a TIF project as far as I’m concerned: creating jobs, curing blight, remediating property, bringing in new taxing needs. This is what TIF money is for.”

TIF forgivable loans do not require recipients to pay the city back out of pocket. Rather, the money is paid back by way of sales and property taxes brought in by the new development. If the new development does not deliver this increase in sales and property taxes within a period of time specified in the loan contract, the recipient of the loan then must pay the city back with personal funds.

This banquet center would be the first of its kind in DeKalb, McMahon said. He thinks creating new tax revenue for the city shouldn’t be a problem.

“Right now if you were looking for a place to have a wedding in DeKalb then there’s only one place in town that can hold 250 people or more,” McMahon said. “We want to bring this business back to DeKalb. Between the new sales tax and utility tax, and with new jobs, it should more than pay back the city, and if it doesn’t we’ll pay it back.”

Currently, the only facilities capable of hosting the number of guests McMahon’s center would potentially hold are located on NIU’s campus. The city does not collect taxes from these locations, as they are part of a state-owned institution.

Economic development consultant Roger Hopkins thinks the project is a sound investment for the city and a good use of TIF funds.

“It will renovate a building on the verge of being blighted,” Hopkins said. “With this loan, he’ll [McMahon] have the financial capabilities of renovating a building and putting it back in business and bringing in new revenue for the city.”

Hopkins said $40,000 to $50,000 in new tax revenue for the city are expected as a result of this redevelopment effort.

The City Council has faced criticism from community members in the past in regard to its voting on various TIF projects, including the possible Olive Garden TIF project. Mayor Kris Povlsen doesn’t think the approval of this loan will receive such criticism.

“It’s certainly an appropriate use of TIF funds,” Povlsen said. “TIF is designed to deal with rundown or dilapidated properties, to produce new revenue for the city, and there’s a need for this in the community. It will not be a transfer of taxes, which is something we’ve been criticized for in TIF funding in the past. There are no other facilities similar to this in DeKalb.”