Affordable housing fee could stymie upscale housing project in St. Charles

A desire to bring more affordable housing to St. Charles may also block construction of the largest upscale apartment complex in the city in the last 15 years.

Big Rock, Illinois-based Executive Capital presented a plan to bring 250 apartments to the city's west side Monday night. The company owns the XSport Fitness Club in St. Charles and 39 others just like it across the country. Now the company wants to bring to the city a multifamily residential plan that it's had success with in Rochester, New York.

Apartments in the Prairie Winds of St. Charles development would average 1,250 square feet. They'd have 9-foot ceilings, stainless steel appliances, wood floors, a fireplace and a direct-access garage for every apartment. The 25 buildings, with 10 apartments per structure, would be built along Bricher Road on a site nestled between the Kane County Judicial Center complex and the Lowe's and Meijer stores that would serve as a buffer to Randall Road.

Aldermen loved the high-end feel of the proposal, calling it "creative" and "something unseen in this area."

Alderman Steve Gaugel gave his stamp of approval simply by saying, "I think you would be a welcome addition to the city."

But there's another semi-recent addition to the city that may prove to be the biggest obstacle to construction. The city reactivated a dormant inclusionary housing ordinance about a year ago. The ordinance requires new residential developments to include a certain number of units at affordable prices or pay a fee instead of creating those units. In this case, that fee would be about $1.8 million.

"I don't have to pay that across the street in Geneva," said Jeff Ratzer, a vice president for the development team.

"Well, we are not Geneva," replied Alderman Ron Silkaitis.

Ratzer said he accepts that fact and wants to build in St. Charles. He pointed to the future property taxes the development will pay as a long-term payback if the city and other local taxing bodies can work with him to lower their fees. Ratzer estimated the property would generate up to $700,000 in taxes for St. Charles schools alone. The $1.8 million affordable housing fee is only part of the development bill Ratzer faces. The total bill for fees to the city, county, schools, park district and others totals about $5.3 million.

Aldermen agreed the affordable housing fee was a "shocking" number when they saw it. That may be because they've never seen the fee calculated for an actual project before. Though aldermen crafted the fee years ago, no developer has ever paid it. Ratzer may not become the first.

After hearing a suggestion by members of the city's housing commission to urge Ratzer to include some affordable units to help shrink the fee, aldermen indicated that they'd prefer consideration of a tiered affordable housing fee. The tiered system would treat developers of apartments different by charging a presumably lower fee than the developer of a single-family home project.

Alderman William Turner said having the affordable units built right into Ratzer's project would just tag those units with a scarlet letter.

"In the end, people are tribal," Turner said. "They go with their own kind. I think we should start a problem in his development. They'll look at the people in an affordable unit house and say, 'They are different than we are.' I'm sorry it's the way it is, but that's the way it is."

The interiors of the proposed one or three-bedroom apartments would all include modern finishings and a dedicated garage for each apartment. Courtesy of Executive Capital
The proposed apartments would be a neighbor to several high-traffic areas in St. Charles. courtesY of City of St. Charles
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