River Forest’s village board finally put a number on the massive Lake and Lathrop redevelopment project Monday night: $1.9 million.
That’s how much cash the village is setting aside for developer Tim Hague’s Keystone Ventures to make his proposed five-story retail-condo project at Lake and Lathrop work.
It’s one of the village’s last efforts to make use of the $5 million left in its economic development TIF fund before it expires after 22 years, and they’re committing nearly 40 percent of their cash to the project.
It comes at the tail end of a nearly 18-month debate on how to develop the southwest corner of Lake and Lathrop, which currently holds Annie’s Beef and River Forest Cleaners, among other businesses. The property is also contaminated with dry cleaning chemicals that need to be cleaned up.
The board approved the project’s subsidy close to midnight Monday after a lengthy meeting where they approved a host of other last-minute TIF projects, under consistent objection from Trustee Steve Hoke and often, Trustee Steve Dudek.
The village’s deal will allow them to hold on to the $1.9 million for three more years while the details of the Lake and Lathrop project get worked out.
The money is designated to help Hague do three things:
- Take care of the dry cleaning contamination on the property (estimated at $1 million),
- Bridge the gap between the value of the undeveloped land and the value of the land with buildings on it
- Help build out spaces in the final project to make it more appealing to businesses, like restaurants, which pull in an extra 1 percent in sales taxes
The board didn’t specifically subdivide the $1.9 million for any of the three purposes, but Village President John Rigas said the village wasn’t planning to pay for the entire cost of the environmental cleanup.
Publicly questioning Hague for the first time since he was chosen to develop the block this spring, the board asked him if he thought the project would be viable. Based off Hague’s preliminary numbers, the building’s 48 condos would sell in the mid-$500,000 range, on average. Some condos could be as expensive as $875,000.
“Do you really think that you can sell a condo at $875,000 at 100 cents on the dollar in the next three years?” Hoke asked Hague.
That price, Hague said, was based on an assumption that the market would rebound. While that price isn’t viable in today’s real estate market, they’re assuming it could be by the time the building goes up.
“In the current market conditions, it would be prohibitive,” Hague said. “That’s why it’s not happening today.”
Hague said the current timeline calls to start marketing Lake and Lathrop properties in about a year and a half. Forest Park National Bank is already slated to be the development’s anchor tenant, but Hague’s June proposal shows about 18,000 square feet of street-facing commercial space available for other businesses.
Dudek pushed Hague and the other trustees to get concrete dates written into the contract for the development process to be accomplished, benchmarks that needed to be followed for money to be paid out.
“Can we get the framework of the deal worked out in six months, or not?” Dudek asked.
“We can, but I think it narrows the scope of the project when you do that,” Hague replied. “I think we need an improvement to the market to add validity to the plan.”
Hague originally asked the village for $2.4 million, but they decided in closed session to reduce the number by $500,000.
With the village’s contractual allocation of the cash, it’s set aside in an escrow fund until December 2013 while the project goes through the full development process. Hague still needs to buy the land from its current owners, and then submit a detailed plan to the village’s development review board.
Hague doesn’t just get access to the cash whenever he wants it — any request to actually collect it has to go through the village board, which still has discretion on doling it out.
The sidebar has been corrected from a previous version that appeared online and in print to reflect that the board declined to spend $27,000 to add power outlets to street lights.