The Lake and Forest development appears as an item on Monday’s Oak Park Village Board meeting, but unlike the recent meetings about the project, the matter isn’t up for discussion.
Instead, staff has recommended a motion to table discussion, and an ordinance related to the public/private development that is slated for Lake and Forest. According to the village board agenda released Friday, the topic is only going to be presented for “informational purposes” and to establish a date to discuss the matter for consideration.
According to the agenda, the Redevelopment Agreement calls for the closing and transfer of the village-owned property to the developer, which was supposed to occur by July 19. An extension to that may be granted by “mutual written consent of the village and developer,” the agenda states.
While the village has received a formal request — via a letter on behalf of Lake Street Investors — there has been no mutual agreement for the closing date. That request, however, comes with amendments to the redevelopment agreement, according to the agenda.
“The village has received from Lake Street Investors a formal request for consideration of various amendments to the RDA, including an extension of the closing date,” the agenda reads. The development group is requesting a six-month extension so it can “finalize a financing plan for the construction of the building,” according to a letter sent to the village Aug. 28.
It’s unclear, based on the agenda materials posted late Friday, what other amendments may be on the table concerning the redevelopment agreement. Village Manager Cara Pavlicek could not be reached immediately Friday afternoon about what that may entail. But according to the agenda, the motion is being made so staff can review and make its recommendation on the developer’s request for an extension as it relates to supporting documents that were received after Sept. 9.
The board does have the ability to not table the issue; however, staff suggests it is needed to “allow for a full review of the developer’s request.” Denying the developer’s request remains a possibility at Monday’s meeting. The village board can also approve tabling the issue and still deny the extension request at the Oct. 7 meeting, which is the date staff recommends bringing the item back for discussion.
Speaking to Wednesday Journal Monday, Pavlicek stressed the need to have the Lake and Forest discussion soon, because of the potential impact any future development would have on capturing TIF dollars.
“There is some further public discussion that has to be had with Lake and Forest,” she said. “[The discussion] is going to happen.”
Before the project can move forward — either by current developers, Lake Street Investors, or possibly a new group, Golub & Company — Pavlicek said a financial review will be needed. That review, she adds, will explore what capacity any developer has to bring the project to fruition. Golub reportedly has interest is stepping into the project, according to James Prescott, a spokesperson for Sertus Capital Partners (the former name for Lake Street Investors).
The biggest issue at hand, from the village’s perspective, is that the developers haven’t closed on the land, nor have they revealed the financial ability to do so. The transfer of public property hasn’t happened because of this. This also relates back to capturing what’s left in the Downtown TIF before it expires.
According to Pavlicek, the ability to seize TIF dollars was the reason for the redevelopment agreement in the first place. This also ties into the agreement by the developers to construct a new garage on the property, which will be partially owned by the village — the village owns the land under the parking garage while the developers own the other plot of land.
The question remaining, Pavlicek said, is “does delaying construction also mean a delay in the taxable valuation? That’s a financial piece the village will care about.”
While it appears any discussion about the future of Lake and Forest won’t be happening next Monday, if staff’s recommendation is upheld, the matter will be discussed on Oct. 7.
Lake & Forest has new developer interest
More questions than answers remain for the future of the long-delayed and sometimes controversial Lake and Forest development slated for downtown Oak Park, possibly more now than ever in the project’s seven years of talks.
With a $4.9 million foreclosure suit now being brought by the project’s original lender, with Oak Park’s village government pressing over missed deadlines, and with Michael Glazier, the original face of the 20-story retail and apartment project having left the development firm which bought the parcel in 2006 and persevered through a bad economy and lengthy planned unit development process, there is great uncertainty surrounding the future, if any, of this major development.
But on Tuesday morning, James Prescott, a spokesman for Sertus Capital Partners, the original developer, sketched an odd picture of unexpected developments at Sertus throughout 2013 but held out hope that a new and major investor – and the new employer of Glazier – might step up and, with some added patience from village hall, be able to build the exact project already approved.
That developer is Golub & Company, a Chicago-based international real estate development group where Glazier began work Aug. 1 as one of five senior vice presidents. Glazier had previously worked at Golub for a decade leading up to 2002.
“Golub’s interest is significant,” said Prescott. The spokesman said discussions began within the past month between Golub and Sertus and also between Golub and PNC Bank to buy the past due note.
At some point those discussions will need to include the Oak Park village board which seems increasingly concerned over any further extensions on a project where the village is both regulating the developer and is itself a partner with the developer in replacing a decrepit public parking facility.
The topic is expected to surface at a regular village board meeting within the next month, according to Village Manager Cara Pavlicek.
Prescott detailed the unexpected January death of a Sertus principal, and one of its strongest financial investors, as setting off a series of delays and side discussions that eventually led to the current discussions with Golub. One of those lengthy discussions was reported by the Journal online last week and involved a potential partnership on this project between Sertus and Tampa-based DeBartolo Development. Such an investment was referenced as recently as last month in a letter from a Sertus attorney to the village government. Prescott said however that a potential pact with DeBartolo now seems unlikely after the Florida firm was unable to negotiate an agreement with PNC to buy the note.
On July 8 a lawsuit was filed in the U.S. District Court for the Northern District of Illinois by PNC Bank against Lake Street Investors, LLC. The lawsuit alleges that no payments have been made since the balloon mortgage was due in March 31, 2012. Missing that date left Lake Street Investors in default of their loan agreement.
The bank is now demanding $4.9 million in principal and interest for the amount loaned for the mortgage.
Unrelated to the lawsuit, Pavlicek wrote a letter on behalf of the village to the investment group’s attorney Rolando Acosta on Aug. 19 to inform the group of the deadline lapse in relation to the village agreements. The letter references the redevelopment agreement (which has been amended and restated) , reminding the group that the closing on the property was to occur no later than 16 months after the amended planned development was granted (March 19, 2012).
Closing for the property was supposed to be done by July 19 according to terms of the redevelopment agreement, and construction was to be started by Sept. 1, according to the planned development ordinance with the Village of Oak Park.
“The village is notifying you that Lake Street Investors may need the consent of the village board to effectively transfer any interests granted by the redevelopment agreement.” Pavlicek wrote. “As such, I would like to have a specific understanding of the details of the joint venture agreement with DeBartolo or any other entity as soon as possible in order to facilitate a review by the village board in a timely fashion.”
This element and the fact that the group missed two deadlines recently, will force Lake Street Investors to go before the village board again to ask for another extension. It’s up to village staff between now and that board meeting to determine the best recommendation to move forward.
Prescott said Tuesday that if an agreement is reached that the plan would be to construct the building exactly as approved. “I don’t think anyone wants to start a new (development review) process. There is no cost to the village to give us more time. The timelines were made in good faith. But things change.”
Pavlicek’s letter also states that “the village does not intend to dissuade [the investors] efforts at moving this project forward,” instead, she said, the letter is to simply remind the group where it is out of compliance and what steps are needed at the village board level before the project can move ahead.
A letter written from Acosta dated Aug. 28 requests a 180 day extension.
“As you are aware the process of building permit drawings in nearly finished. [Lake Street Investors] is currently working to finalize a financing plan for the construction of the building.
We believe that a 180-day extension would allow sufficient time for these matters to be finalized and construction to commence,” Acosta wrote in the letter on behalf of the investors.
Pavlicek said this matter has not been scheduled for a village board meeting yet, but depending on how long staff needs to review whatever documents Lake Street Investors submit, the issue should be on the docket for the Sept. 16 or Oct. 7 regular board meeting.
Publisher Dan Haley contributed reporting to this story.