Lake Zurich rethinks its plans for downtown redevelopment

Lake Zurich had a vision for its downtown.

It wanted to create a vibrant business district with quaint shops that capture the ambiance of a quintessential Main Street and draw residents and visitors.

However, despite five years of work, it hasn't materialized, and now the village is poised for a change.

Those discussions begin this week, and officials say everything is on the table, from building heights and street configurations to the mix of residential condominiums versus commercial and retail development.

There is no shortage of challenges. This master plan overhaul begins amid a struggling housing market and an uncertain economy, and questions about an exclusive deal with one developer and the threat of a lawsuit from another.

"It's not going to be easy," Mayor John Tolomei said. "There are a lot of challenges ahead with trying to still make this work, but I believe it's well worth making it work. It's seldom that you can achieve anything good without a lot of effort and challenge."

A series of public and invitation-only meetings is set for this week with the village's new architects, Torti Gallas & Partners, to generate ideas for reviving the stalled project. The first public presentation will be at 7 p.m. today at village hall before the village board's regular committee of the whole meeting.

A draft of the revised master redevelopment plan is expected to be completed by September, when it will be reviewed by the village board.

Until then, Lake Zurich won't vet any new proposals for development downtown.

"There's not much point in us trying to entertain plans right now when we're looking into what those plans should be," Tolomei said.

Resident Rich Sustich, a vocal critic of how the village has managed downtown redevelopment, believes revising the master plan is the right thing to do. But, he questions whether the village is rushing into things.

"Why did it take five years of missteps to get here?" Sustich asks. "This thing is moving faster than you can imagine and it's the speed with which they are attempting to do it that, in itself, precludes thoughtful review. Let's all hope it works."

The original master plan, created roughly eight years ago, calls for razing and rebuilding nearly all existing structures along both sides of Main Street from Old Rand Road west to Lake Street. They were to be replaced with two- to five-story buildings with ground-level retail and condominiums/offices above.

The plan extends to other parts of downtown in later phases of redevelopment. Officials will now also consider the impact of any future development that may occur outside that area.

To date, the village has roughly $30 million invested in redevelopment, mostly borrowed from taxpayers.

Officials began rethinking the master plan after money ran out and two redevelopment projects with its former master developer -- McCaffery Interests Inc. of Chicago -- ground to a halt last year.

McCaffery's Lakeview Place townhouse project is half complete, and the developer dropped the plan to erect a five-story condo building on a village-owned site along Main Street across from the lakefront promenade. Financing issues and a housing market slump were blamed.

The village has since fired McCaffery and hired Barrington-based developer David Smith's Equity Services Group to pay for the master plan revision work.

Village Administrator Bob Vitas said the old plan perhaps did not take into account enough office uses in downtown and was heavily weighted toward residential development.

"When we talk about the residential side of the equation, a lot has changed economically in the country and locally," Vitas said.

With a national housing market slowdown, condos aren't selling as they once did, leading officials to wonder whether the model of residential-above-retail is still viable.

In drawing up the new master plan, officials will consider current market conditions to create realistic estimates of what can be built and sold, and at what price, Vitas said.

It doesn't mean the village is entirely back to the drawing board.

"All the work that we did before is not thrown away," Tolomei said. "It probably will be adapted and changed. Also, there's work being done that wasn't done the first time, in terms of architectural standards and design guidelines."

Those guidelines would give the village greater control over the types of development to allow in downtown.

Tolomei said the village now won't offer any upfront incentives to developers as it has in the past.

Developers must find ways to finance projects themselves. They may be subsidized later from a special taxing district for money invested in infrastructure, if the projects are successful.

Smith is absorbing all upfront costs, $276,000, to revise the master plan. The village will later repay that money with interest by establishing a development impact fee attached to every future redevelopment project.

Several developers pitched proposals earlier this year for the site across from the lakefront promenade and for other downtown locations.

None will move forward until the master plan revision is completed.

If the revised master plan is adopted, Smith gets exclusive rights to negotiate with the village on any downtown parcel he chooses to redevelop for 18 months. That includes the village-owned site across from the lakefront promenade and other key downtown parcels.

The aim is to start the first redevelopment project before Jan. 1, 2009.

Yet, some residents fear the cozy relationship with Smith, who is also eyeing their homes near downtown for redevelopment. And, the village could be sued by McCaffery, who claims to have exclusive rights to develop all of downtown. That could halt any plan from moving forward.

Have your say

Residents can offer input on revising Lake Zurich's downtown master redevelopment plan at public meetings this week. Village staff, area business owners, other government entities and groups also can offer feedback at multiple public and private sessions.

If you go

• The first public presentation on the master plan by Torti Gallas & Partners will be at 7 p.m. today before the village board's regular committee of the whole meeting, at village hall, 70 E. Main St.

• The public can drop in on master plan work sessions at 5 and 7 p.m. Wednesday and Thursday at village hall, 70 E. Main St. Space is limited.

• Public presentations on master plan revisions are 7 to 9 p.m. Wednesday and 3 to 5 p.m. Friday at the Lake Zurich Police Station, 200 Mohawk Trail.

Village of Lake Zurich