The city of Aurora is in the process of launching new lending programs aimed at enhancing economic development, sustainability, and community projects. City officials outlined their plans during a recent discussion of the 2026 budget, noting that these initiatives would be designed to be low-risk and self-sustaining through the repayment of loans.
According to Aurora Mayor John Laesch, the city is still conducting research before officially implementing these loan programs. However, preliminary concepts were presented to the Aurora City Council earlier this month. One of the proposed programs focuses on providing loans to stimulate economic growth and assist small businesses. Shannon Cameron, the Chief of Staff for the city, highlighted the demand from local business owners and developers for access to affordable capital.
Cameron stated, “We have businesses that have been in our area for a long time that want to make improvements, but cannot afford to for a variety of reasons.” The new program aims to offer loans with below-market interest rates and flexible repayment terms. The initiative seeks to foster community development by enabling businesses to expand, creating jobs, and enhancing commercial corridors.
Details of the Proposed Loan Programs
Another potential program under consideration is the special service areas capital improvement loans. This initiative would fund neighborhood enhancements such as sound walls and streetscape updates through upfront loans, which would be reimbursed via an additional property tax levied on local residents. Cameron explained that this approach could save taxpayers money, as it would allow the city to offer lower interest rates.
The additional two proposed loan programs would also utilize property tax repayments but would be limited to individual buildings. These loans, known as Property Assessed Clean Energy (PACE) financing, would assist property owners in funding energy-efficient upgrades, including solar panels and HVAC improvements. Currently, Illinois state law permits only commercial PACE loans, which are often referred to as C-PACE, while residential PACE loans are dubbed R-PACE.
Cameron noted that PACE loans pose minimal risk to the city, as property owners typically save more on utility costs than they pay towards loan repayments.
Funding for these initiatives is expected to come from the city’s Transformation Fund, which was established last year following a $16 million payment from data center company CyrusOne as part of a redevelopment agreement. Some of these funds have been earmarked for the proposed lending programs, and the Aurora City Council has already sanctioned economic development loans from the Transformation Fund. Earlier this year, the council approved $450,000 in loans for a diner planned in downtown Aurora, a decision made before Laesch assumed the mayoralty.
Cameron pointed out that previous development incentives had relied on revenue from food and beverage taxes, which have proven unreliable. “Most of the loans, if they aren’t in default, are being underpaid,” she mentioned during the City Council meeting on December 9, 2023.
Future Steps and Considerations
Aurora is looking to allocate approximately $6.6 million from the Transformation Fund for these loan programs. This figure, however, is contingent upon the city recovering some of the $3 million allocated last year to the Aurora Regional Economic Alliance, a repayment that remains under negotiation.
Laesch emphasized that the loan programs are not finalized and will require further approval from the Aurora City Council. Cameron stated that they are currently working to establish necessary banking regulations and are in discussions with regulatory agencies to ensure compliance.
The commercial PACE lending program is expected to be the first initiative presented to the City Council for approval, with state funding. The city’s own commercial or residential PACE programs will follow at a later date. Council member Patty Smith raised concerns about the use of Transformation Fund dollars, questioning whether these lending initiatives are the most effective solution given the city’s budget crisis.
Cameron responded by indicating that operational costs should not be linked to one-time funding, as this may solve immediate issues without addressing long-term sustainability. The development of these new loan programs reflects Aurora’s commitment to fostering economic growth and supporting local businesses in a structured, responsible manner.
