The former Traughber Junior High School on Franklin Street near downtown Oswego may be renovated for a new use as an apartment building for active senior citizens.
The SD308 Board of Education reviewed a $2.1 million bid proposal from 3 Diamond Development of Lincolnwood to purchase the building during a meeting Monday evening, June 11. The firm previously developed the Diamond Senior Apartments on Orchard Road on the village’s far west side.
The board voted in March to place the former school up for sale. Bids were due May 30 and 3 Diamond Development submitted the only bid proposal.
When the board put the property up for sale, it was offered as three options: The vacant lot between the school and Rt. 71, the “improved” lot including the former school and parking area, and both lots combined. The board also set the minimum price for selling the building and improved lot at $2.1 million.
No bids were received on the vacant lot or the combined lots, which Stu Whitt, an attorney for the district, said means the board could reopen bidding and reduce the purchase price. However, the board decided against lowering the minimum sales price. As a result, the vacant lot will be removed from the market and held for the time being.
According to their bid proposal, 3 Diamond would put an estimated $17.5 million towards converting the former school’s classrooms and gymnasium into 40 one-bedroom apartments with 650 square feet of living space, and 10 two-bedroom apartments with 850 square feet of living space.
The energy-efficient apartments would feature all-new wood cabinets, solid entry doors, plank flooring, tenant-controlled heating and air conditioning systems. The kitchen appliance package would include a refrigerator, dishwasher, electric range, exhaust hood and microwave oven, according to the firm’s proposal.
The “character found within the historic corridors and stairways will largely be retained,” the bid states, while a “robust” landscaping package is proposed, along with energy-efficient LED lighting for pedestrian circulation and parking areas. Repairs to the asphalt parking surfaces and existing brick walls would also be completed. Twenty new window openings would be constructed with aluminum windows to match existing construction and to accommodate the configuration of the apartments. The main gym, referred to as the “Wood Gym” when the building was a school, would be split into two floors to serve as residential space, while the “New Gym” would be redesigned as a common space.
All of the improvements proposed by 3 Diamond would be contingent upon the firm obtaining the necessary financing. To assist in the process, SD308 would waive some contingency requirements, including a five percent bid deposit of more than $100,000, a 65 percent financing contingency, and a time period for the closing.
“In the sale of property like this, where it’s contingent on these different things, it’s not uncommon for these deadlines and closings to start getting pushed out,” Whitt said.
The former school is currently occupied by the Oswego Senior Center and the Oswego Family YMCA. As stated in the bid proposal, the Senior Center would remain in the building, and is considered a “tremendous asset to the project.” The Senior Center’s cafeteria and kitchen would remain, incorporated into the design plans, and the Senior Center would receive “minor upgrades.” The YMCA would be moved out of the building.
Due to the nature of funding for the project, 3 Diamond’s involvement is contingent upon receiving the necessary funds. The bid proposal details plans to finance the project through a combination of public and private resources including: equity generated by Low Income Housing Tax Credits (LIHTC), issued by the Illinois Housing Development Authority, a HOME loan from the Illinois Housing Development Authority, a private first mortgage, and any TIF (Tax Increment Financing) resources from the village.
As the LIHTC application is competitive, there is no guarantee that the project would be approved, though it has already earned preliminary approval, “contingent on no other projects being approved in the market area,” according to the proposal. The IHDA will re-evaluate its approval this summer, and if it is maintained, 3 Diamond will submit a full financing application in March of 2019, with approvals made in May 2019.
The contingency conditions listed above were waived by SD308 due to this style of funding for the project. After questions from board member Toni Morgan, Whitt confirmed that the deal would not go through if the district did not waive those conditions, because the project cannot be funded without the funds from the LIHTC.
According to Whitt, district administrators have discussed the bid with village officials who they say seem, “genuinely excited about the prospect of the building being repurposed in this fashion.”
Whitt added that village officials had indicated that they will, “do anything they can to make certain that 3 Diamond Development gets these low-income housing tax credits issued by the department.”
Whitt said that he had discussed the LIHTC application process with Ben Porush, head of 3 Diamond, who said that he believed the building’s previous status as the District 308 Center and junior high, and the continued use of the Oswego Senior Center would give the project a “leg up” in the application.
The board will vote on whether or not to approve the sale at its next meeting on Monday, July 16, at 7:15 p.m. at Oswego East High School.