The Aurora City Council Tuesday night approved a $1.3 million incentive to a local developer who plans to put micro-apartments in the historic former Galena Hotel downtown.
The overall $6.65 million project would turn the one-time hotel at 116 W. Galena Blvd. into 21 micro-apartments of between 250 and 650 square feet. Rents would run from $1,050 to $1,100 a month.
With the city providing the $1.3 million incentive, the rest of the about $5.35 million cost would be provided by developer Fernando Barrera, an East Side Aurora native and Aurora Central Catholic High School graduate.
His financing is largely provided from the sale of historic tax credits. The building is eligible for both federal and state tax credits because it’s on the National Register of Historic Places, and because it’s in Aurora’s Riveredge Redevelopment Zone.
Barrera settled on the micro-units, instead of a boutique hotel, because of the size of the building, and because his experience is in rehabbing apartment buildings.
The micro-units are a new concept for Aurora, something which some city officials have referred to as a game-changer for the city.
The building is one of the oldest in the city, built in 1862. It was actually the second building on the site along Galena Boulevard, between River and Lake streets. The first building was built there in 1837 but burned down and was replaced by the building there now.
It was owned by E.D. Huntoon, a one-time board member of the town of Aurora, and was known as Huntoon House, the finest hotel in Aurora.
The Galena Hotel building has been closed and vacant since 2020, and Barrera bought it in 2023.
The floor plans of the apartments include thing such as Murphy beds – which fold up into the wall – and fold-down desks, to make the small size work. Barrera described the units as “market rate, but affordable.”
Barrera’s schedule shows the building being ready in early 2026.
The building is in a tax increment financing district, included in the same micro-TIF that was created for the historic Hobbs Building project across Galena Boulevard from the Galena Hotel.
The developer also will get 80% back from the TIF increment for the 18 years left on the district. City officials said the building currently generates about $4,000 in taxes – which remains the baseline for taxes and is not part of the increment – but they estimate it would increase to about $20,000 to $25,000 in property taxes.
That means the developer would get back 80% of the difference between $4,000 and whatever taxes are generated by the development.
The actual $1.3 million incentive will come from the city’s gaming tax.
The vote on the redevelopment agreement was unanimous. It was the first time Ald. John Laesch, at large, voted in favor of any redevelopment involving a TIF district.
“It’s not ideal,” he said. “But it’s a good start.”
slord@tribpub.com