Work on Elgin Tower Building expected soon

Prospective tenants are showing interest in the Elgin Tower Building, and its redevelopment is moving forward, city officials said.

Capstone Development Group of St. Louis is set to close in mid-December on purchasing the building at 100 E. Chicago St. from The Stickling Foundation, Elgin Assistant City Manager Rick Kozal told the city council Wednesday night.

The building used to house offices but has been vacant since it was condemned in May 2014. The plan is to turn it into 45 rental apartments under the project by Capstone in partnership with developer Richard Souyoul of Chicago.

As long as “they begin to swing hammers” by late December or early January, the developers believe they will be able to secure state tax credits that expire in December 2016, Kozal said. Selective inside demolition could start before the closing, Kozal said.

“It's heartening to them the amount of interest from people ... looking to establish a residence within that building,” he said.

Capstone had planned to buy the building for $1 million. The developers hoped to obtain about $2 million in state tax credits, part of the River Edge redevelopment zone.

The city is kicking in $4.7 million for the estimated $14 million project through a loan from the general fund that will be repaid over time by funds generated by the Central Area Tax Increment Financing District, in which property taxes going to local governments are frozen at a certain level and taxes generated above that level are allocated for development.

Meanwhile, Marco Muscarello, the owner of the now-closed Gasthaus bar, adjacent to the Tower Building, appealed last month a judge's decision to dismiss his lawsuit aiming to stop the redevelopment.

The matter will now go to a three-judge panel, which may hear oral arguments from both sides or choose to make a ruling on the case based on previous court decisions.