The long-awaited redevelopment of the Capitol Theater in Logan Square faces another major setback, with developers risking losing millions in key city funding.
Developer Baum Revision has applied to the city for $27 million in tax-increase financing to restore the historic theater at 2135 North Milwaukee Avenue, along with surrounding retail stores and condominiums. But the project is now in jeopardy because the Fullerton/Milwaukee TIF district — the source of the funding — is due to expire next year, Block Club said. Report.
Tax Increase Financing Zones capture new property tax increases in designated areas, redirecting them to fund projects aimed at stimulating economic development and fighting recessions. Under current TIF terms, all projects using these funds need to be completed by the end of 2024.
Alderman Daniel La Spata hopes to salvage the project by extending the Logan Square District’s deadline for another three years, although the Illinois Legislature recently approved a 12-year extension.
“It is not an exaggeration that the development of the Capitol Theater would not have happened without the expansion of TIF,” La Spata told the press.
Baum will need more time to complete the redevelopment, which will require restoring the 2,900-seat theater while adding approximately 5,400 square feet of retail and restaurant space, 16 apartments and office space.
The developer has encountered some setbacks since taking over the property in 2021, including labor disputes and rising costs. High interest rates, combined with deteriorating theater conditions, increased the estimated cost of the project from $70 million to $88 million.
“It’s a bit of a game of whack-a-mole. Every time we think we’ve solved the problem, the price goes up,” David Baum, head of Baum Revisions, previously told the press.
La Spata’s handling of the expiring TIF district has drawn criticism from some city officials, who say councilors should have been more cooperative with the community and transparent in their decision-making. However, La Spata promises that residents will have the opportunity to weigh how any additional funds received by the special tax zone should be spent.
— Quinn Donoghue