Elgin Tower Building plan moves forward, Gasthaus owner objects

A plan to redevelop the iconic Elgin Tower Building is moving forward despite objections from a nearby business owner.

Attorney Charles Muscarello, who represents his father Marco Muscarello, said the city council's approval of the project - building apartments inside the office building that now sits vacant at 100 E. Chicago Street - violates the city's own municipal code.

Marco Muscarello owns two buildings in downtown Elgin, including the Gasthaus Zur Linde half a block from the Tower Building.

Chicago-based developer Richard Souyoul partnered with St. Louis-based Capstone Development Group for the project, now estimated at $14 million.

Charles Muscarello declined to comment on the notion that redeveloping the building might be beneficial to the Gasthaus by bringing in more potential customers.

"I think people are making an assumption that we don't want the Tower Building," he said. "The reason we were objecting, which seems to be a common theme, is that the city of Elgin doesn't follow its own rules."

The developer's plan for apartments on the first floor violates the city's own rules, Charles Muscarello argued last week before the city council. Elgin Corporation Counsel Bill Cogley rejected the notion.

Getting rid of apartments on the first floor would amount to a 10 percent drop in income, which would adversely affect the project's financing, Capstone owner Bill Luchini said.

The city is contributing of $4.7 million in tax-increment financing funds to the project. "Why are they getting all the TIF money, when the Gasthaus has been there since the 1960s and we haven't been offered any?" Muscarello said.

Developer Souyoul said Muscarello's objections are "not logical," .

"You have a landmark building there that's a real gem but it's a tarnished gem that's the nose on the face of the city of Elgin," he said. "It's a fantastic building. There needs to be more people living downtown - and this is a good place to start."

Souyoul said there is a contract in place to buy the building from the Stickling Foundation, but declined to name the sale price. He expects to garner about $4.6 million in federal and state historic tax credit and hopes break ground by the second quarter of 2015, he said.