Nearly four months after Des Plaines approved preliminary plans for a massive parking garage and a 180-room hotel on a long-vacant property near O'Hare International Airport, the developer has nixed the project citing high Cook County property taxes, officials said Monday.
The deal struck with Chicago-based developer, The Parking Spot, included a seven-story, 2,350-stall parking deck, a roughly 4,000-square-foot fast-food restaurant, and a nine-story hotel on a nearly 5-acre, city-owned property at the northeast corner of Mannheim and Higgins roads, south of the Jane Addams Tollway. The entire redevelopment project was estimated to generate roughly $50 million in construction work.
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"It's very disappointing," Des Plaines City Manager Mike Bartholomew said. "When you look at the project they presented with the parking structure, the hotel and restaurant, it was going to transform that area."
The redevelopment site falls within the city's tax increment financing district No. 6, created in 2001 to spur redevelopment in the area east of Mannheim Road and north of Higgins Road on both sides of the tollway.
The Parking Spot owns and operates off-site airport parking in 40 locations at 25 airports throughout the country. The Des Plaines garage would have primarily served commuters to O'Hare International Airport and visitors to the Rivers Casino and the Allstate Arena in Rosemont.
"It turns out everything was working well until they met with Cook County to find out what the tax structure would be," Bartholomew said. "The Cook County tax structure was far greater than any of the other tax structures where they operate these parking facilities throughout the country."
The Parking Spot has been acquired by Green Courte Partners LLC, a Chicago-based private equity real estate investment firm. A Green Courte spokesman could not be reached for comment Monday.
As part of the redevelopment agreement, the developer had until Aug. 31 to back out without incurring any costs and will be refunded the $100,000 given to Des Plaines as a deposit toward the project. If the project had moved forward, the city would have collected an additional $100,000 after closing the sale of the property, which would have been nonrefundable, officials said.
The city had agreed to sell the site to The Parking Spot for $1.1 million provided the developer built a restaurant within 18 months and the hotel within six years.
"The city will not be receiving one penny from this whole transaction," said Des Plaines 6th Ward Alderman Mark Walsten, whose ward includes the project site. "Now we're going to be trying to get somebody else on that property."
Walsten had voted against the redevelopment project because he wanted to see a more ambitious plan than a parking garage, which he believed didn't utilize the full potential of the property. Yet, he was disappointed that the project died so abruptly.
"It's one of the prime real estate pieces in the country," he said. "I thought, and I still think, we can do better."
Walsten said several local business people have reached out to him with ideas to lease the property.
Bartholomew said the city will put out a revised request for proposals and advertise to reach a wider audience in coming months. He couldn't say what the property's selling price would be today.
The city is trying to recoup money it spent buying and clearing land for earlier redevelopment projects that stalled due to a weak economy and hotel glut. Without development, the TIF is expected to be $19.7 million in deficit over its lifetime. Des Plaines must pay roughly $1 million in principal and interest payment toward that debt next year.
"We will find the right user for that piece of property," Bartholomew said. "We don't simply want to sell the land because there's no guarantee that somebody won't buy it and sit on it. We have a great location, and you can't beat location. You just have to be patient."