While Oak Park officials expressed disappointment last week that a hotel and condos are no longer being considered at the corner of Lake and Forest, taxpayers might take a different tune. With the planned high rise now switching to apartments, village hall will be kicking in $1.5 million less toward the project, though another $10 million for a public parking garage will be coming from village coffers, if the project is ever built.
A Chicago-based developer and village hall have been talking for several years about teaming up to reinvent the northeast corner of Lake and Forest. Both sides own pieces of property there, and wanted to join them together to build a new public parking garage, and 20-story hotel and condo tower.
The corner is right down the street from a swath of Frank Lloyd Wright-designed homes, and local officials thought it was a perfect spot for a new hotel. Village hall was willing to kick in a $500,000 incentive to the developer, Sertus Capital Partners, to build the hotel, and another $1 million because the public garage would encroach on the developer's land.
But last week, the developer announced publicly that the economy wouldn't allow for the hotel there. Instead, Sertus wants to build apartments, and as such, would delete the $1.5 million from the agreement.
In an interview last week, Michael Glazier, the principal for Sertus, said the only thing Oak Park would pay for is 300 public parking spaces, to replace the aging 340-space garage on the corner. In the original agreement, that was to cost about $9.8 million.
The developer is also making use of the land under Oak Park's current public garage, which was last appraised at $3 million. In a public meeting last week, Glazier asked the village board not to charge the developer for using the piece of land, as it would make the project financially unfeasible.
According to a May 5 letter to the village, the development is using about 78 percent of the village's land. And charging the developer for the parcel would up the per-unit cost in their apartment building by $20,000.
"It would undermine the ability of the deal to get financed," Glazier said by phone last week.
Essentially, the two sides are performing a "land swap," according to Glazier, and putting both of their pieces of land into the deal. And when it's done, Sertus would own the apartment tower, while Oak Park would own its public parking spaces.
Jason Smith — the owner of The Book Table in downtown Oak Park, and a vocal opponent of the project — declined to comment last week until he saw the particulars of the new agreement. But in a public comment to a Wednesday Journal reporter last week, from the bookstore's Twitter account, he took issue with the proposed land swap.
"When you take out the $500,000 hotel incentive, but still have the $3M land incentive, there's still a lot of Village $$," The Book Table wrote.
Village Trustee Ray Johnson said the village board will be talking about its land costs, and the new proposal, when it refers the project back to the Oak Park Plan Commission in July. Nothing has been decided yet, he said, but he called a potential land swap a "win-win" for the village.
Oak Park is letting Sertus use its land to gain equity for financing, and in exchange, would get a new garage, along with increased tax revenues.
"People can say whatever they want about what the land is worth, but we're not going to sell it. It's worth something on paper, it's not worth anything in dollars, because it's not for sale," Johnson said.
Glazier said that Sertus is now working to turn in an amended plan, which they hope to submit to the village in the next few weeks. Along with the deleted incentives, there are a couple of other changes. With the hotel out, Sertus no longer plans to build a lounge on the top floor. Village documents said last week that the developer might build 330 parking spaces, but Glazier said they're still figuring exactly how many spaces their 264-unit apartment building and retail space will need.
The design of the development is expected to stay relatively the same, though Glazier said they're switching architects, from Epstein, to Gensler, which designed the Block 37 development in downtown Chicago. He declined to say why they're changing architects.
Sertus originally proposed to build apartments on the site, before the village enticed them to go hotel. Glazier called it a "fruitless endeavor" to speculate where things might have been if they originally stuck with apartments.
"Realistically, nobody knows. It's impossible to determine," Glazier said.
Oak Parker David Barsotti, another opponent of the project, thinks Sertus was too optimistic the first time around with its projections, and worries that it will be more of the same when they switch to apartments. He thinks the village should scrap the whole thing and go "back to square one."
"It's all pie-in-the-sky numbers. It's always best-case scenarios," he said. "What happens if those apartments sit empty? What happens if he only gets 50 percent occupancy? What happens if the retail never takes off? What happens if parking proves to be insufficient?"
Glazier said he is currently asking a consultant, Tracy Cross & Associates, to assess the apartment market in the Oak Park area. But he thinks there is demand for rental housing.
"Housing is going through a big change in the United States. There will still always be ownership, but I think people are starting to look at renting from a different light," Glazier said.