Put-Call 101: Colt Building deal was well-considered, in 2001

Opinion

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Galen Gockel, One View

This responds to your editorial of June 1 titled "Taxman plays his cards downtown." Your analysis of the present situation was accurate, and you were right on the mark in urging the present village board to bestir itself and "enter into serious negotiations with Taxman."

But I quibble with your characterization of the now (in)famous Colt Building "put/call agreement" which the board signed with Taxman almost four years ago. You called it "ill-considered." (Full disclosure: because I cast the deciding vote in that 4?#34;3 decision, perhaps I have an unusual interest in amending your view.)

For your first-time readers, here are the basics of that 2001 agreement. If the village board failed to enter into an agreement with Taxman to redevelop the site of the scruffy "Colt Building" (immediately east of Pier One), which Taxman had just purchased, he had the right to "put" that building to the village. That is, to sell it to the village for almost $5 million dollars, that amount coming, presumably, from the downtown Tax Increment Financing (TIF) fund.

To be sure, Taxman's vision did not stop with that one building, but it was a key element of a possible badly-needed mixed-use redevelopment of that entire stretch on the south side of Lake Street, going east to Alphabet Soup. It was a logical extension of his successful "Shops" which he had built a few years earlier at Harlem and Lake which included Pier One as its easternmost anchor.

One factor in his planning was the village's previous purchase, over the years, of about half the nearby properties on the south side of Lake Street. It was public knowledge that village boards had hoped for the eventual redevelopment of that area anyway. When public bodies buy key property, it's hard to keep that a secret.

Clearly something was going to happen there sooner or later.

But sooner became later. Why?

The village's Colt building put/call agreement with Taxman became an unanticipated hostage for two reasons.

First, the village board decided to seek professional assistance in developing a master plan for downtown Oak Park...a wise decision in the long run. A plan, after all, would permit future village boards to establish upfront criteria by which to judge developer's proposals, rather than reacting without context to whatever came in over the transom. To his credit, then-Trustee David Pope was the catalyst in advancing the idea that a master plan was needed.

After spending months drafting and discussing a detailed request for qualifications, so that planning firms could apply to be our consultant; after a comprehensive staff review of the responses; and after personal public interviews with four finalists, the village board finally hired Crandall and Arambula to develop a master plan for downtown.

So far, so good.

But it became obvious to all, including Sy Taxman, that the Crandall Arambula process would introduce a delay of well over one year in the execution of the put/call agreement and therefore a delay in his hope to redevelop some of downtown. To his credit, Taxman gladly accepted these delays. He awaited the outcome of the lengthy master planning process; it would obviously impinge on what he could do?#34;or not do-downtown.

So the expiration of the put/call Colt building agreement was deferred from its original August, 2004 date...a date which itself was a full three years after it was crafted.

Second, personalities matter. (I do not expect complete agreement with the following.)

While this was all going on, another redevelopment project was underway, the now-famous "Drechsler-Maple Furriers" site on the north side of the Lake Street.

Taxman was one of six developers submitting proposals to the village board. Unfortunately for him, he had entered into a prior agreement with the Historical Society of Oak Park and River Forest, a (gasp!) non-profit agency which would use a major portion of the historic Drechsler building as its new headquarters under his plan.

Strategic error. He had not cleared that Historical Society agreement with the village's powers that be. End of project. The village board almost unanimously voted against Taxman's proposal, and instead entered into an agreement with the RSC firm, which is now constructing its mixed-use building on the north side of Lake Street including an upscale health club on its upper floors.

As a result of the Drechsler contretemps, relations between the Taxman group and village hall went into a deep freeze for many months, from which they are now, fortunately, starting to thaw.

But back to the put/call Colt building agreement, to which the Journal referred in its June 1 editorial.

Almost four years have elapsed since the agreement was first signed. For the reasons given above, nothing has happened, and Taxman (as the Journal says), is now playing his cards downtown.

Was that agreement "ill-considered" as the Journal claims? Go back to 2001, when it was signed. Three factors were in play then and, in my judgment, made the put/call agreement a wise move.

1. Taxman was finishing an attractive development covering most of the intersection of Lake and Euclid streets in the Avenue district, whose plans were well received in the community. It would be tasteful, well built, and in scale with the neighborhood. He had demonstrated credentials, and he understood the community. His preservation record had been secured by his careful restoration of the historic train station in Skokie. In short, he had an exemplary track record for all to see.

2. Perhaps as important, viewed from the perspective of 2001, three years was plenty of time to discuss, negotiate, and agree to his redevelopment of the south side of Lake Street...or for the village to decide to buy the Colt building. No intervening delays were anticipated or intended then. Both parties could have moved ahead promptly.

3. The village already owned about half the properties on the south side of Lake Street near the Colt building, and these purchases had not generated any redevelopment activity there. Taxman's interest would have been the spark needed finally to move forward with badly-needed improvement of that key downtown stretch.

It thus is my hope that the village board will take to heart your editorial of June 1. Except, of course, for your characterization of the village's put/call agreement with Taxman as "ill-considered!"

Galen Gockel finished a four-year term as village trustee in March

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