Progress on Mendota’s community space project took a step in the right direction with the announcement that a construction company was awarded a bid.

H & H Builders, a Mendota-based company, was awarded the contract for the project for $3.38 million after some details were hammered out to finalize the contract and bring the cost down over the life of the project.

“We guaranteed that there will be change orders with this to bring the price down that we will know shortly,” Economic Development Director and City Clerk Emily McConville said. “The contractor knows that, everybody knows that, it’s just not in writing [for this bid].”

The project at 704 Illinois Ave. is to refurbish the existing two-story building and outfit it to become a community event space on the first floor and a co-working space on the second.

H&H Builders has already communicated to the City two or three ways to help save money on this project, McConville said, without disclosing how.

McConville said the lowest acceptable bid for the 704 Illinois Ave. project was $3,380,448, with grant funding covering $1,988,625 and a $651,500 match from the City, resulting in a shortfall of $1,391,823.

“It’s at this amount right now, but we will not pay that and [H&H] knows that,” McConville said. “We will be working with the contractor to bring the budget down somewhere around $2,650,000.”

Project Director Annie Short said she will attempt to help alleviate the cost of the project through applying for additional grants.

One concern is the timeline of the Illinois Downtown Economic Development grant being used to help support this project, with the City and H&H having until May 2027 to complete work on the project before the grant lapses.

“If all else fails and we can not come up with the money, the upstairs won’t be finished, is what it comes down to,” McConville said. “We’re hoping that we can come up with that money and [Short] is going to look for those grants to cover the rest of its shortfalls and the rest of it.”

Finance Chairman John Holland said that the 10% contingency on the project’s costs could bring the cost down to around $3 million, along with other means at the City’s disposal.

“There is high confidence that we will have TIF (tax increment financing) funds available for the difference between the proposed $2.7 million and $3 million,” he said.

Mayor Dave Boelk echoed Holland’s sentiments, saying that the TIF funds will be available, avoiding what McConville said was the alternative.

“We may have to do things in phases, to get what we can get done,” she said. “Then we may have to strategize and figure out what we have to leave until later.”

Construction for the project is expected to begin later this month.