Why does Oak Park continue to partner with this developer?

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David Barsotti

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It is perplexing why the Oak Park village board unanimously approved a major change in the Lake and Forest redevelopment agreement with Lake Street Investors (Sertus).

Most members on the board had issues with the new design. There were some on the board who also had questions and concerns with Lake Street Investors' experience and financial capabilities in completing the project. After all, Lake Street Investors has no experience in apartment, retail or parking developments.

Sertus did say that they have experience, but the only experience they offered up was their Everleigh project in Des Plaines. Never mind that the Everleigh project in Des Plaines fell into foreclosure and was only saved when a "secret investor" bought the delinquent mortgage from the bank. The "secret investor" saved Sertus from foreclosure, but he did not save Sertus from over 40 liens placed against the Des Plaines project by contractors, vendors, and private individuals, which includes a $3.5 million lien placed by Epstein.

The prevailing excuse offered up by the board as to why the project is being redesigned is because no one could foresee the poor real estate conditions. The board and Sertus repeatedly claimed at the time that the original project was completely feasible and investors were very interested in the project. They ignored the numerous claims from Oak Parkers that said the project was not feasible.

The board and Sertus did not accurately understand the economics of the project and as a consequence, the project failed. Fortunately, Oak Park only has an un-maintained vacant lot, and not another empty or partially completed building, to show for their ineptitude in Planned Unit Developments.

It is even more perplexing why the board wants this project when the property tax revenues would be negligible, as stated by Trustee [Collette] Lueck. There is no logical reason why the board should approve this project when the developer's only experience in these types of developments is a failed project in Des Plaines, and Oak Park is giving the land to the developer to build a skyscraper, which is a subsidy despite the board's claims to the contrary.

The proposed project will also significantly reduce surrounding property values. The surrounding property owners will successfully appeal their property taxes, like Sertus does on their projects, which will ultimately lower property tax revenue even more.

The board has said they must move forward with the Plan Unit Development with Sertus because Sertus is the property owner and Oak Park owns the adjacent garage, which happens to be in better condition than the Holley Court garage.

The board must stop looking at this project narrow-mindedly. One viable option, which should be considered and involves absolutely no additional risk to Oak Park taxpayers, is to let Sertus build without zoning variances or taxpayer subsidies.

There is no legitimate reason why Oak Park should continue to partner with such an inexperienced developer like Sertus.

Reader Comments

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paul from oak park  

Posted: August 26th, 2011 10:17 AM

The parking guy for Sertus used the village's parking study which was created by the village's economic development director. Previously the village board lowered all zoning standards for parking requirements by at least 25% across the board for developments. The economic development director lowered these standards further himself in his study. Then the parking/traffic guy hired by Sertus admits last night that he lowered the standards another 25% cause it's by a train station. Wow!

Smells Funny from Oak Park  

Posted: August 26th, 2011 6:27 AM

This whole deal smells funny and has from the beginning. I'm not sure if it's corruption or just incompetence. Perhaps a subtle combination of both. Regardless, the Village Board is way out over their skiis. They have a record of approving projects that explode in the taxpayers' faces, so let's stop them before they do "stupid and wasteful" again. How about a referendum on our form of village government?

paul hamer from oak park  

Posted: August 26th, 2011 5:56 AM

Best Plan Comm meeting ever! It would appear that at least 5 of the seven comr's present have doubts about how the Sertus Apt. monstrosity has been handed to them. Even chairperson Bolte, who has acted as the boards Plan Com whip in the past, expressed doubts. While two comrs. bravely tried to carry the VMA's water bucket to the table, everyone else was bumping into them and spilling it. Let's see how along it takes for Davey and Ray Ray to corral the dissenters and ram this through.

paul from oak park  

Posted: August 26th, 2011 5:40 AM

There is no official corruption in Oak Park or IL nor national government. The laws have all been rewritten to legally allow officials to do things today that were illegal in the past. What we have locally is called regulatory capture. Where elite groups of connected people get what they want at the expense of the electorate. If they happen to work in the same fields they're regulating or get jobs in those fields after leaving office it's not corruption anymore it's coincidence.

Jim Coughlin  

Posted: August 25th, 2011 10:44 PM

Is Oak Park on the hook for $350K to reimburse Sertus for their expenses regardless of whether or not there is a deal? Do we pay only if the Village pulls the plug? What if Sertus cannot produce a viable financing plan or fails to meet deadlines?

Jim Coughlin  

Posted: August 25th, 2011 10:29 PM

Paul, I cannot go along with the idea that David Pope is mixed up in some scheme to enrich himself by using his influence and power. Disagree with him on the issues and decisions but back off on hinting about official corruption.

Jim Coughlin  

Posted: August 25th, 2011 10:21 PM

I trust the trustees know the identity of the secret investor who saved Sertus and everything checks out okay. Confirmation of this fact should be shared with the stakeholders, including Oak Park residents and taxpayers.

Tooth Fairy from Oak Park  

Posted: August 25th, 2011 6:35 PM

Given that this is Illinois and that the Sertus Investment team's anonymity is tightly guarded, who could be na?ve enough to not believe that a Sertus tooth fairy somehow rewards those who have been very, very good to them in some future lifetime - and we would never know because no one will reveal the names of this needy investment group.

Pope Enterprises  

Posted: August 25th, 2011 2:41 PM

@Paul from Oak Park ... that certain someone you are alluding to, David Pope, appears to already have an exit plan by doling out money bags and favors to his informal collaborative of Seven Generations Ahead / A5 / Mary Jo Schuler.

Sertus neighbor from Oak Park  

Posted: August 25th, 2011 2:14 PM

I have seen the ugly side of Oak Park. The neighborhood presented arguments that challenged the original proposal. In hindsight they proved right about the wisdom of the hotel and those high-priced condos. Anyway, I have sadly observed a certain smugness and condescension after witnessing this process. Sadly some of our trustees have appeared as bad winners as they celebrate their victories before dejected Sertus neighbors and then smugly lecture them ignoring reasoned arguments.

paul from Oak Park  

Posted: August 25th, 2011 2:05 PM

A "Go-along-Gus" is just as guilty as the people he is going along with. It's not enough to ask "tough questions" and still vote yes. The village is broke, the TIF's are a joke, and it all comes down to one man; Pope. I would suspect that there is a strong possibility that when a certain someone leaves office he accidently falls and hits head on a bag of money from a consulting firm that hires him.

Enuf is Enuf from Oak Park  

Posted: August 25th, 2011 10:27 AM

The Sertus project was agreed upon and is being advocated by previous and current board members Pope, Johnson and Lueck. They signed on as partners with Sertus and this is clearly their project. Trustees Hedges, Salzman, Tucker, and Brewer have been raising appropriate questions, and seem to take their role as public fiscal stewards seriously. Barwin and the Plan Comm. have been taking their marching orders from Pope, but are to serve the entire village board and village, respectively.

john murtagh from oak park  

Posted: August 25th, 2011 10:27 AM

There are frayed edges in the VMA agenda. They have all seven board seats and have for several years. What has been accomplished in those years. Not Financial Responsibility which was their tagline during the last election. The boutique follies have not only continued they are expanding - Pleasant Place, brick streets, and elaborate (and poorly executed) developments. Can the VMA separate itself from their Fiscal Responsibility tagline? Maybe but the 21 Century can be cruel to cliches.

john murtagh from oak park  

Posted: August 25th, 2011 9:34 AM

The board is made up of seven voices; not two or three. You can stubbornly stick to pre-conceived notions for just so long. Sertus has a test before PlanCom. If they cannot be convincing on the marketing and financing issues, it will be hard to continue to use sheer power to approve. Remember, several major developments meet their watershed right before then next election. D97 debt announcement sets an interesting platform for the issue. Trust is the issue now.

Jim Coughlin  

Posted: August 25th, 2011 9:23 AM

I agree with you, John. But the board is 100% committed to moving ahead with Sertus to develop Forest and Lake. Mr. Barsotti is not going to change their minds. Creating a public park across the street from Austin Gardens or paving the lot for parking are not on the agenda. It's Sertus or bust. Enuf says to hold the decision makers accountable and we should. But how that can be accomplished is unclear. It's not like voters have any real options to the VMA stranglehold.

Enuf is Enuf from Oak Park  

Posted: August 25th, 2011 8:38 AM

@JimCoughlin ... the board is stuck, not us. Let's hold them accountable. It was the board that required Sertus to demolish the existing building, which removed the option of reuse if the project failed. It was the board that req'd. Sertus to include a hotel w/o a demand for one. It was the board that entered into a contractual redevelopment agreement that included a $4M land write-down. Now the board needs to figure out a way out of their mess. Our job is to hold them accountable.

john murtagh from oak park  

Posted: August 25th, 2011 1:43 AM

Jim - No One builds huge buildings because they feel stuck. No One! If there is no other options, then kill the project and start over. No One goes ahead with a project unless they are certain. If you have no other ideas, build a park -- No One loses when they build a park! No One. No One quits a fight before they enter the ring. No One. I am betting on Barsotti in five rounds.

Jim Coughlin  

Posted: August 25th, 2011 12:58 AM

Sertus checked out of the Village hotel. They are either going to build this apartment building or nothing else could happen at Forest and Lake for long,long time. What's your pleasure? I think we're stuck.

epic lulz  

Posted: August 24th, 2011 11:52 PM

"One viable option... is to let Sertus build without zoning variances or taxpayer subsidies." Amen. The Board needs to explain why this is off the table.

Enuf is Enuf from Oak Park  

Posted: August 24th, 2011 11:37 PM

Except that the vacated businesses and demolished buildings, along with their property taxes and sales taxes, are gone, and downtown Oak Park is left with yet another vacant lot, courtesy of the village board's ineptness, to add to their growing streetscape collection of vacant lots.

Lets Play Wheel And Deal from Oak Park  

Posted: August 24th, 2011 11:30 PM

Nobody needs to get upset about this project. The deal is Sertus gets the land. That gives Sertus something to show investors. Investors give some money. Project never gets built because there is not enough investors. Oak Park gets back the land if they didn't do something stupid, investors loose part of their investment and Sertus comes out with a percentage for putting the deal together. So everyone, don't get your bowels in an uproar.

Jim Belton  

Posted: August 24th, 2011 9:36 PM

The Board has always been perplexing. For them to explain this away by saying that no one could have forseen the poor Real Estate market is an insult to our intelligence. I was present at the meeting where one Real Estate Professional after another stood and told David Pope and the Board that this would be a VERY RISKY project, that it would in-fact be the only Hotel project "green lighted" for the entire year (2010)! Who are these people to make such decisions and where is their integrity?

paul from Oak Park  

Posted: August 24th, 2011 3:08 PM

Great article, well thought out, well reasoned and eminently fair. David Barsotti is one of only a handful of that get it; open, fair and honest government is what we should demand and expect. There are so many things wrong with this project it's hard to know where to start. Can you imagine the effect that 270 new families will have on Holmes School? No other well respected community does stuff this stupid. And that includes Evanston!

reggid from Oak Park  

Posted: August 24th, 2011 3:06 PM

The sad fact is that all of the concerns about Sertus were indeed raised during the Board's rush to approve the monstrous design that is now gone with the wind. The sadder fact is that the concerns about the general feasibility of that project were also raised throughout the process. Indeed, it seems everyone EXCEPT the Board and Sertus knew the project was folly.

john murtagh from oak park  

Posted: August 24th, 2011 12:58 AM

Mr. Barsotti has captured another example of the village board's stubborn refusals to abandon pre-conceived notions. Perhaps we need a plaque with a Thomas Henry Huxley quotation at the door leading to the village chambers. The quote "Sit down before fact as a little child, be prepared to give up every preconceived notion, follow humbly wherever and to whatever abysses nature leads, or you will learn nothing." The risk associated with Sertus Project II, require doubt resolution befor

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