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Article updated: 12/12/2012 1:06 PM

St. Charles rejects Lexington Club project, developer outraged

By James Fuller

St. Charles aldermen pulled the funding out from under the proposed Lexington Club project this week, a move that not only killed the project but resulted in a tongue lashing for the city council.

City officials had negotiated with the developers of the project for many months. The crux of the city's concern rested in the cleanup of the former Applied Composites site at 333 N. Sixth St. on which the Lexington Club project would be built. The land is known to be contaminated with industrial pollutants and has been both an eyesore and a safety hazard for years. But those conditions also added substantial costs to making the property into a suitable neighborhood for up to 102 townhouses and 28 single-family homes.

To ensure a profit, the developers wanted aldermen to create a tax increment finance district. More typically scene with commercial projects, the TIF district would have refunded up to $6 million of the development costs to the builder as the land appreciated in value through the improvements created. City officials liked the setup of the TIF because, unlike a regular financing model where the city would've plunked down the $6 million to the developer up front, this TIF would have been "pay as you go." In other words, if the developer never built anything it would not get a dime from city.

"Worst case, the developers get stuck with a $6 million bill, and they go away," explained Chris Aiston, the city's economic development director. "There is some risk, but it's to them."

That wasn't enough to sell aldermen. Similar to other recent would-be residential development projects, local residents decried the project. Many residents believed the city shouldn't give the developer any money to clean up the polluted land. The thinking went that the developer bought the land knowing it was dirty and the responsibility to clean it was solely the owner's obligation.

Aiston told aldermen that's not necessarily true.

"I'm not aware of a city code violation," Aiston said of the property. "One could approach the (Illinois Environmental Protection Agency) and ask if there are any state laws being violated. Otherwise, I don't know what compels the property owners to clean this up beyond this project."

But after hearing the arguments, aldermen didn't feel compelled to give the developer $6 million. Alderman William Turner said he didn't believe the residential project would be successful. Alderman Dan Stellato said $6 million is double the financial assistance he believes the project deserves. And with that, months of negotiations went for naught as aldermen voted the funding down.

The developers went down swinging. The vote fueled a heated speech by Hank Stillwell, the attorney for the developer. Stillwell said yanking the city's financial assistance away from the project now went against everything he believed aldermen said to him in support of the project for months.

"You people agreed," Stillwell shouted at the city council. "I met face to face with you people. Where is the credibility? What is he message you are sending? ... That this is the most unfriendly development community in the western suburbs? You say one thing one time and change your attitude another time."

Stillwell then alluded to the upcoming local elections as the real reason aldermen voted down the funding.

"This is one of the most dissatisfying examples of what I believe to be political, rather than a true business, decision," Stillwell said. "We're finished."

Aldermen will still take at least one more vote on the project when they next meet as a full city council.

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