Wheaton short $2M in TIF funds due to 2005 bond sale
WHEATON – Years after Wheaton sold bonds to fund the redevelopment of the Courthouse Square, officials haven't seen the return on investment they were hoping for – and the loss could cost the city $2 million over the next five years.
Wheaton issued the bonds as a TIF district incentive for the Courthouse Square Redevelopment Project, which was originally intended to bring more than 100 condominiums to the area. The large scale development stopped when the recession hit, Wheaton City Manager Don Rose said, and the senior housing facilities that were intended to replace it have yet to materialize.
Now, the city may have to refund those bonds before their December 2015 call date.
It is unlikely that the Wheaton City Council will take action before hearing another proposal by the city's financial director and those behind the senior housing project, Rose said. However, its members are weighing several options, ranging from restructuring the payments to about $700,000 per year for a 10-year term – resulting in a net loss of $211,574 – to refunding portions of the outstanding debt for the next five years and reassessing the debt each year.
Director of Finance Robert Lehnhardt recommended the former, saying that interest rates could increase and the future of the development site is unclear.
Another option proposed by Council member John Prendiville is that the city make the regular $700,000 payments until the 2015 deadline, then use a portion of its reserves to cover whatever remains, assuming that the development will eventually be profitable.
"Philosophically, I agree, the TIF should live on its own independently," said Council member Evelyn Pacino Sanguinetti. "But if we have the money, why one earth are we contemplating paying interest?"