City of Moline Reaches Tentative Agreement with Moline Place Development
& Northwest Bank & Trust on Demolition of Nurses Dormitory Building

Posted 07/24/09

The City of Moline, Moline Place Development and Northwest Bank & Trust Company have reached a tentative agreement to finance the removal of asbestos from the Nurse’s Dormitory at One Moline Place on 6th Street, followed by its subsequent demolition. Under the terms of this agreement, the City would issue $4 million in new debt to pay off outstanding obligations owed the City and NWB&T for previously incurred TIF eligible expenses. Moline Place Development has completed Phase 1 of the project and has a sale pending for the remaining lots. Phase I of the development will provide sufficient property tax generation to service the new bonding debt. The remaining lots on the east side of 6th street which are being sold to a builder who will construct approximately 30 new residential units to complete phase I with the City retaining all future tax increments to retire the bond debt. NWB&T will finance the removal of asbestos from the Nurse’s Dormitory and the demolition of the building. This demolition will complete the removal of over 750,000 SF of building that once occupied this site. The Developer will transfer ownership to the City of Moline of the remaining undeveloped property so the City can create a new TIF District and solicit a new developer for construction of a new residential development on the west side of 6th Street once the property has been released by the Illinois Environmental Protection Agency following the removal of the asbestos and building demolition. The sale of the undeveloped property and the new bond issuance will cover the outstanding debt owed to the City and NWB&T by the current developer for expenses related to the One Moline Place Development.

One Moline Place Developer, Mike Shamsie, purchased the former Hospital property for $1 million and demolished two hospital buildings (after removal of asbestos from both) to facilitate the construction of public infrastructure improvements. This investment has resulted in the construction of about 25 new residential units that are presently generating over $150,000.00 in incremental property tax revenues for the City to repay existing debt. This tentative agreement is expected to generate about $10 million in new residential development over the 8 to 9 years at the One Moline Place redevelopment site.

A qualified asbestos remediation contractor is expected to begin work on the site in mid-August. The Moline City Council is expected to consider this tentative agreement during its Committee of the Whole meeting on Tuesday, July 28, 2009.