The Oak Park Village Board of Trustees granted the seventh extension Monday to a proposed four-story office and retail building on Madison Street, giving developers 14 months to find tenants and a buyer.
Trustees questioned whether the extension, which runs to July 1, 2015, is a sign that construction of new office space is no longer financially feasible in Oak Park.
The Madison Highland mixed-use development, proposed for the southwest corner of Madison and Harvey, was first approved by the village in 2009. Nevin Hedlund, an architect with the development team Madison Highland LLC, said the group also is considering options other than office space, including assisted-living and medical uses.
"The land has no debt, we're paying our taxes, obviously. We're leasing spaces to the village and the park district for parking onsite since we've owned the property, and again, we are the first ones, beyond the village or the neighbors, who would want to complete this development," Hedlund said. "So if we had a magic tenant or a magic buyer who met the [planned unit development] requirements, we would make that happen."
Hedlund noted that the development group had not contacted neighbors about potentially repositioning for a possible medical and assisted-living use because "the people we are trying to court want their story kept to themselves until they are ready to go public."
He added that not approving the extension — and thus the planned unit development (PUD) — would cause the land to lose value.
"Right now, with the approved PUD, [the land] not only has a dirt value, but a value for potential development," he said. "If you would throw out the PUD and tell us to start over, immediately the land would decrease in value along Madison Street. That's the main concern."
He said the development as proposed is the "highest and best use," which translates to "the highest and best tax value for the property."
Two neighbors of the development were not so certain that the plan would come to fruition and told trustees to send Madison Highland LLC back to the drawing board.
Oak Park resident David Kralik reminded board members that the Oak Park Plan Commission originally rejected the proposal, a recommendation not accepted by village trustees.
"If it has taken this long for the developer to secure tenants, and somehow they magically do, what happens when those tenants turn over?" Kralik said. "The high cost associated with this design will again make it difficult to lease or sell, and we could be left with a blighted, empty building."
If the Madison Highland team does restructure the proposal to cut the office use, Trustee Colette Lueck questioned what it would say about the village's potential to construct new office space anywhere in the village.
Hedlund said 1968 was the last time new office space was built in Oak Park, aside from medical office space built for Rush Hospital a few years back.
"We thought Oak Park was ready for new office space, and it's still been a struggle," he said.
Trustee Peter Barber said the trouble getting a tenant and buyer on the Madison Street project could be more a reflection of the location, rather than an inability to get new office construction anywhere in the village.
"I still think there's a lot of potential," he said.
Lueck said high taxes are the culprit in preventing tenants from moving in.
"There has been no office space other than the hospital building, and it has to do with the tax rates, Cook County versus Chicago, and that's what makes it difficult to do office [construction] here," she said.
Village Planner Craig Failor said businesses have not been clamoring to move into the Madison Street corridor, but the Highland project could help spur development.
"We've had some really nice developments along Madison Street over the last few years with the Walgreens and the Interfaith Housing development [Grove and Madison]," he said. "Madison Street, in my opinion, is an up-and-coming development corridor. I think it needs a little help to get there, but I think we can get there."
In addition to the 14-month extension, the development team was directed to return to the board in October or November this year to report on progress in securing a tenant and buyer.