Yorkville: $10,000 incentive for people to build, buy houses

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The Raintree Village subdivision had paved roads and curbs but no houses along Parkside Lane in Yorkville, as construction stopped in the subdivision three years ago. The Yorkville City Council this week approved offering incentives to get homes built on vacant parcels in the city. | Sun-Times Media File

Updated: March 24, 2012 11:41PM

YORKVILLE — The city will be offering a financial incentive to entice people to build new homes in Yorkville during the next year.

The program, narrowly approved by the City Council this week, will feature a $10,000 payment to new homeowners at the time they occupy the new house.

The money will come from a fund that both the city and developers who take advantage of the program contribute to. The city’s share for each home would be the amount paid for permit fees up to $5,000; the developer would match that.

In addition, the city would have permit and impact fees paid at the time of the certificate of occupancy, rather than prior to construction. That would allow the builder flexibility to move forward with construction without incurring the fee up front.

The city also is proposing a reduction in the current municipal building fee from $5,509 to $1,759.

When the new homebuyer occupies the house, they receive a check for $10,000.

City officials proposed the program to try to get some action going on the almost 9,000 platted but vacant lots throughout the city. Any developer in any subdivision can take advantage of the program.

The program will be limited to 30 lots and to the next 12 months. City officials will review how the program worked after that to see if they should consider doing it for another year.

Modeled on Minooka

Yorkville officials got the idea for the program from the nearby village of Minooka, where a similar program worked for the past year. Minooka entered into a similar deal with Meadowbrook Homes Inc., developers of Arbor Lakes.

Alladin Nassar, Meadowbrook Homes vice president, said the program was responsible for the developer building 49 new homes during the second half of 2010 and during 2011, after selling “a whopping zero homes” between 2008 and mid-2010.

“Before then, we had sold about 80 homes a year,” he said.

Nassar said his company also discounted prices, offering a four-bedroom, 2œ-bath house for $169,900. With the program, the homebuyer ended up paying $159,900.

Builder eyes Yorkville

Nassar said his company is looking at some lots in two different Yorkville subdivisions. He said the program likely would work better in Yorkville, because Yorkville has better business infrastructure and demographics than Minooka. Nassar said his company likely would charge between $180,000 and $190,000 in Yorkville.

“Yorkville has a lot of things going for it,” he said.

Nassar said for the small, paper cost of permit fees, the city would gain new residents who spend money in town and support the businesses. They also will pay property taxes into the tax base.

“You give us a little in permit fees upfront, but get the increased tax base, long-term,” he said.

The Yorkville council voted 5-3 in support of the program. The three dissenters were Aldermen Carlo Colosimo, George Gilson and Rose Spears.

Gilson said the only things that will bring homebuilding back are markets, the economy and demographics. He said the city has “been stung” by deals offered to developers in the past.

“All these deals struck in the past with developers have hurt us,” he said. “The real developers, the solid ones, are positioning themselves now to be in a good position when the economy rebounds.”

‘Got to do something’

Another developer, Bill McCue, of McCue Builders, said the only way Yorkville can sustain and grow its business community is “through rooftops.” He said the average house brings $160,000 to a community.

“This is a long haul situation,” he said. “You watch, fees are going to be dropping everywhere. This is going to be great for everybody.”

Lynn Dubajic, Yorkville Economic Development Corporation director, said this kind of stimulus program helps in marketing to retail businesses looking to locate in Yorkville.

“If we’re not doing something out of the box, they will just look at the towns getting rooftops built,” she said.

Mayor Gary Golinski, along with five other aldermen, said the program would be a sign Yorkville is doing something.

“We have too many vacant lots,” said Alderman Marty Munns, 3rd Ward.

“We’ve got to do something.”