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updated: 4/8/2014 12:18 AM

St. Charles back to square one on First Street project?

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St. Charles officials pushed the reset button Monday night on the city's First Street redevelopment project.

Aldermen decided the two development teams involved with the project -- one for the third phase of the First Street project, the other to build on the old Manor Restaurant site -- don't deserve any more time to begin construction, so the city will now seek new developers.

The council's refusal to grant extensions for both development projects did not come as a major surprise. Several members of the city council and Mayor Ray Rogina during the 2013 election cycle criticized the First Street LLC group's lack of progress on the third phase of what was supposed to be the crown jewel of downtown redevelopment.

But the development team, led by Bob Rasmussen, still received several extensions from the city council to begin construction. On Monday night, Rasmussen still pointed to a stagnant economy as the main force undercutting progress.

But it was perhaps Rasmussen's ongoing push to change what were supposed to be retail spaces into offices that was the final straw. Rasmussen said the switch is necessary to put at least some tenants in consistently vacant storefronts.

Alderman Jim Martin disagreed.

"I will not support any change to office on the first floor," Martin said. "It is designed for retail. I insist that it be retail."

After those comments, aldermen refused to take any action that will prevent the expiration of agreements the city has with Rasmussen's team. Those deals expire Tuesday.

Rasmussen had little to say in an interview after the decision.

"It's just disappointing," he said.

City officials also have deals with SMN Development LLC to bring new commercial space to the site of the old Manor Restaurant and an adjacent strip of land.

Joe Klein of the development team brought forward a series of last-minute ideas to at least get some temporary form of enhanced public use going on the property. The ideas were not discussed in detail but involved commercial kiosks, a performance stage and landscaping.

Aldermen expressed interest in the ideas but not enough to keep the current agreements from expiring Tuesday. Aldermen encouraged Klein to bring his new ideas to the council via a whole new approval process that would be considered with any other proposals the city will now be open to hearing.

The decisions made Monday night mark the first time in the 12-year history of the First Street project that aldermen don't have any official plans before them.

The city's taxpayers are on the hook for tens of millions of dollars unless a project or projects can be fast-tracked to pay off the bonds the city took out. Indeed, when aldermen committed to the First Street LLC vision in 2006, the full project was envisioned to have a $105 million price tag.

Of that, the developers were on the hook for only about $67 million because the city created a new TIF district -- funneling property taxes that would have gone to local governments -- to finance many of the infrastructure improvements in the initial phases of the redevelopment project.

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