IL: MTD, developer still working on deal for Illinois Terminal expansion

Jan. 19, 2024
The MTD is still working on a development agreement with Royse Witte Downtown LLC for the Illinois Terminal expansion project, following the withdrawal of their original private development partner, Core Spaces.

CHAMPAIGN — Karl Gnadt, managing director of the Champaign-Urbana Mass Transit District, is hoping to make some progress in 2024 on a project that has been in the works for some time.

The MTD is still working on a development agreement with Royse Witte Downtown LLC for the Illinois Terminal expansion project, following the withdrawal of their original private development partner, Core Spaces.

"I am very hopeful that we will be able to come together on a project that we all think is viable in the next couple of months," Gnadt said.

They would then be able to begin negotiating the actual agreement in earnest.

He added that while he's unsure if the agreement will be completed this calendar year, he hopes it will be.

A project known as "The Yards" was previously rolled out pre-pandemic as an 11-acre mega-development in downtown Champaign that included an expansion of the Illinois Terminal, a sports arena, hotel, apartments, retail space and more.

In its current state, the project includes the terminal expansion and remodeling with a new parking deck over bus platforms and apartments with first-floor retail space, Gnadt said.

Additionally, while the project was previously known as "The Yards," he said this name was generated with the original development team at a time when the University of Illinois's Division of Intercollegiate Athletics was still a part of the project.

"The project is quite a bit different from what it was envisioned with when they were involved, and so we're setting that name aside," Gnadt said.

Mike Royse, majority owner of Royse and Brinkmeyer apartments; his business partner, Collin Carlier; and Colorado developer Dennis Witte — all partners in The Inman — have purchased a Christie Clinic employee lot at Walnut and Logan streets for the project.

Royse said that this land is intended for new apartments, among other things.

While the group is still working on their agreement with MTD, he told The News-Gazette that he feels good about the project.

"I will have to say that urban development is complicated, and there's a lot of details that you've got to consider," he added. "You don't have as much ground to work with as green development and that kind of thing. And also, this project would be using federal dollars, and there are a lot of requirements for that."

Once a development agreement is finished, whether that's in 2024 or early 2025, partners can then focus on design, Gnadt said.

He declined to estimate when construction could begin, stating that there are "too many variables" to speculate and the design work alone could take nine to 12 months.

"When you switch development partners after having spent years working on the first version of the project, in a large respect, you have to start over," Gnadt said.

In December of 2022, Jane Sullivan, external affairs director for MTD at the time, said that Phase 1 of The Yards was estimated to cost $85.27 million, with MTD's share of the cost being $35.27 million.

Phase 1 was envisioned as the terminal remodel, reworking of bus platforms, new parking deck, apartments and commercial spaces.

When asked about the project's current price tag, Gnadt said the team has to finish "conceptualization" before getting a cost estimate.

"The city (of Champaign) is very involved with the conceptualization portion that we're working on," he said. "The area is in a TIF (Tax Increment Financing) district, and so the city would be providing some TIF incentives to the project."

Additionally, the developers will bring their own funds to the project, and MTD will contribute "a significant amount of federal grant dollars" and likely some local capital reserve funds as well, he said.

They are also looking at other ways to finance portions of the project through some federal financing programs.

One of the challenges facing the project is inflation, he said, with capital costs being "significantly greater" than pre-pandemic.

Another unknown is what will happen to land south of Logan Street.

Previously, officials had described The Yards as occurring in two phases, with Phase 1 focusing on the area north of Logan and Phase 2 focusing on the area south.

Initial plans for Phase 2 called for an arena for a Division I men's ice hockey program that the University of Illinois no longer plans to add, plus a hotel, convention center and another parking structure.

Land south of Logan is currently for sale for $5.95 million. The 10 parcels on South Neil, Chestnut, Market, Walnut and Logan streets are being marketed by Coldwell Banker Commercial Devonshire Realty as a prime development opportunity.

When asked if there was a chance of his team becoming involved with developing this land, Royse replied, "Who knows?"

"We don't own that ground, and our priority is north of Logan," he continued. "As that comes together, we always talk to our neighbors and we're interested in helping the community, but it's not obvious that that would be the case. I certainly hope a project forms there. That would be very good for the community and particularly for us if this project is feasible."

Gnadt said that it is unlikely that the MTD will be directly involved with the land south of Logan, and it's undetermined, at this point, who might take on the development of that area.

Their focus, at this point, is on the land north of Logan.

"That hopefully will kickstart the whole area," Gnadt said.

___

(c)2024 The News-Gazette (Champaign, Ill.)

Visit The News-Gazette (Champaign, Ill.) at www.news-gazette.com

Distributed by Tribune Content Agency, LLC.