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updated: 10/8/2013 5:16 AM

Lake Zurich says no to downtown developer's $10 offer

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  • John Breugelmans

    John Breugelmans

  • Lake Zurich rejected a developer's plan for a downtown renaissance, saying his plans were too risky.

    Lake Zurich rejected a developer's plan for a downtown renaissance, saying his plans were too risky.
    Daily Herald file photo


Lake Zurich's elected officials Monday endorsed the village planner's recommendation to reject a developer's offer to pay $10 for public property downtown that cost taxpayers $3.6 million to purchase.

Operating as LZ Promenade LLC, developer John Breugelmans wanted to erect a four-story building on roughly 2 acres overlooking the village's namesake lake.

His plan called for a mixed-use structure with 66 rental apartments that eventually would be converted to condominiums, along with a restaurant, bar, coffee shop and hair salon.

Breugelmans appeared before the Lake Zurich village board to make a final pitch on why he should lead a downtown renaissance. After his proposal was rejected by a 4-2 village board vote, Breugelmans called Lake Zurich's staff "a disaster."

He then used foul language on the village board after a man who accompanied him yelled an obscenity from the rear of the meeting room. Police Chief Patrick Finlon approached the man as he departed village hall.

"He's speaking the right language," Breugelmans told the village board.

Village planner Sam Hubbard said "several areas of significant concern" were found with Breugelmans' proposal. He said if the village were to accept Breugelmans' $10 for the 2 acres, that would mean a loss of $3.6 million in land acquisition costs for Lake Zurich.

In addition, Hubbard said, the developer was seeking a waiver of all permit fees that would total $1.1 million. Lake Zurich also was asked to provide real estate tax abatements for up to 10 years to Breugelmans so he could receive an 8 percent return on investment.

Hubbard said Breugelmans provided "very optimistic" financial projections on sales tax revenue from the eatery, hair salon, coffee shop and other uses based on 100 percent retail occupancy for seven years. The village staff members concluded there would be little benefit granting the breaks sought by Breugelmans.

"Based on staff research, it is reasonable to expect that in a best-case scenario the total sales tax revenue to the village generated by the retail spaces, once they are fully occupied, will be $51,250 annually," Hubbard said. "This is less than half of the estimate prepared by Mr. Breugelmans."

Breugelmans had received an exclusive period to show he could build a project to rejuvenate a section of the village's downtown. As part of an agreement, he used certified funds to make a $10,000 deposit for the public property that he later offered to buy for $10.

Trustees Jeff Halen, Dana Rzeznik, Jim Beaudoin and Daniel Stanovich voted against the proposal, while Mark Loewes and Jonathan Sprawka were in favor.

Halen said he had a problem selling the 2 acres for $10 in a high-risk venture.

"For me, this comes down to how much risk is the village willing to take on," Halen said.

Village Administrator Jason Slowinski said requests for proposals and developer qualifications may be distributed regarding the 2-acre site Breugelmans had wanted.

Twitter: @DHBobSusnjara

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