OREGON – A plan approved by the Oregon City Council 3 years ago aimed at moving a dormant subdivision on its way to development is meeting with success.
Five homes recently built in the Stonegate Subdivision on the city’s east side have brought $25,726 into the city coffers, Finance Commissioner Terry Schuster told the City Council recently.
The council approved an agreement in January 2016 with Sycamore National Bank & Trust for a $107,000 loan to get the stalled development project, formerly called Settler’s Ridge, moving along.
The subdivision was taken over by the bank about 10 years ago in a foreclosure that was fueled by the recession.
Under the terms of the agreement, the city would provide $107,000 toward project costs, and the bank would provide $75,000.
So far the city has spent $42,059 from the low-interest loan to provide utilities, including fiber optics, so that lots could be sold and homes built.
The city is recovering its costs as the lots are developed.
The money comes back to the city through refunds from ComEd, lien refunds, sewer and water hook-up fees, and building permit fees.
The returns will increase this year when Nicor begins paying refunds and sewer and water hook-up fees increase, Schuster said.
The hook-up fees were reduced to $500 for the first 3 years to encourage construction to get started, but are back to the normal $3,000 this year.
The funds to repay the bank loan come from the Capital Improvements Fund, which gets its revenues from the 1 percent sales tax enacted several years ago.
In addition to the five homes built in the last 2 years, one more is almost completed and another is in progress, Schuster said.
None were built in the 9 years prior to the agreement.
The city will break even once 13 or 14 homes are built, he said.
“Every home after that will be above and beyond the loan amount. At the current pace, we should have our money back within 3 years.”