Beleaguered Lake Zurich subdivision closer to completion?
Preliminary plans to finish a downtown townhouse development were pitched to the Lake Zurich village board Monday night.
Icon Building Group wants to complete the final 19 units for the Somerset townhouse subdivision near the village's namesake lake. Somerset was supposed to have 39 townhouses.
Village board trustees Monday gave Icon a thumbs-up to move forward in the official approval process, starting with the advisory plan commission.
Responding to a question from Mayor Thomas Poynton, Icon Vice President Jeremy Blackstock said he hopes the work would start in May on the last 19 homes of the long-unfinished project.
"We could build a townhome building in less than four months," Blackstock said during the village board's informal courtesy review of Icon's proposal.
Somerset's 20 lakefront townhouses are in a special taxing zone that village officials enacted in 2002 in an attempt at downtown redevelopment. The village is still trying to lure developers to revitalize the area.
McCaffery Interests Inc. of Chicago was selected to reshape downtown, but it never finished the final 19 homes at Somerset and failed to do other work before being fired by Lake Zurich in December 2007.
In 2008, the village paid almost $1.2 million to McCaffery and Bank of America as part of a foreclosure settlement. Lake Zurich provided nearly $1 million to help McCaffery with the half-done Somerset project, officials said.
Last year, M/I Homes Inc. of Columbus, Ohio, received village board approval to complete Somerset. However, M/I never proceeded to construction, and the property meant for the 19 homes remains vacant.
Blackstock said three buildings with the townhouse units would be constructed by Algonquin-based Icon to round out Somerset. He said water and sewer lines already are at the property.
Lake Zurich has what's called a tax increment financing district meant to rejuvenate downtown. The special taxing zone is supposed to expire in 2025, but the village wants to extend it by another 12 years so it does not have to contend with balloon payments on debt and possibly dipping into the general fund to cover the tab.
In a TIF district, property tax revenue is frozen at a certain amount and any additional revenue goes into public improvements rather than to local governments, such as Lake Zurich Unit District 95.
Lake Zurich has about $28 million in outstanding debt associated with the long-stalled downtown effort. Poynton has said about $16 million of the debt is attributed to property purchases within the special taxing area, but the current worth is unknown.