Promising development proposal for property overlooking Lake Zurich ends with termination of sale

What appeared to be a viable answer to the long sought development of a prominent property in downtown Lake Zurich overlooking the namesake lake has evaporated.

In September, the village board was all-in on the concept for The Waterfront Lake Zurich, a two-story commercial building planned for a restaurant and 19 townhouses to be arranged in five, three-story buildings.

The board at the time granted various preliminary approvals for the proposal by Deerfield-based THG Holdings LLC. Officials hoped it would start a new chapter for the site that over more than 20 years attracted consistent interest but no action.

On Monday, the board unanimously agreed to terminate the proposed sale of 173 W. Main St. to THG Holdings. Known as “Block A,” the village-owned property is comprised of 10 consolidated parcels totaling 1.7 acres directly across the street from the promenade fronting Lake Zurich.

The site is considered an important redevelopment area and potential destination for residents and visitors.

A summary of the situation said THG and the village were unable to reach mutually acceptable terms for a final development agreement and mutually determined that ending the sales contract and releasing each from further obligations was in their respective best interest.

What happened?

“Both parties began to realize the buildability of that lot from a commercial perspective is not economically viable,” explained Michael Duebner, assistant village manager.

Village Attorney Scott Uhler said issues arose that affected THG's “willingness to enter into a development agreement on the terms that the (village) board originally contemplated.”

“This returns control of the property to the village,” he added.

In April 2025, THG, which stands for The Huron Group, offered $1.05 million for the property. How the terms may have changed was not referenced.

Of concepts that have surfaced over the years, this one went furthest in terms of engineering and other analysis, according to Duebner.

Soil remediation and extensive measures that would have been needed to deal with drainage and stormwater were among the findings that turned the tide.

“It's not just an economically viable project,” he said. “It’s a lesson in what really goes on with a piece of property,” he added.

The termination agreement says THG’s investment in architectural, engineering and other measures to determine the suitability of the property for development “will have continued value for the understanding and use of the property.”

As such, the village will pay $415,000 for “entitlement costs” including architectural and engineering services, project management and other expenses. The village also will have data involving feasibility studies, plans, documents and other development-related information and expenses not presented during public hearings to use going forward.

“For a commercial product, it’s just not economically viable,” Duebner said of the site. “I think it’s an awareness that has come forward of what is possible and what isn’t possible.”

The village in the agreement said it is not in discussion for the sale or development or is entertaining any other offers for future development of the property.

What will happen on the site is to be determined by the village board, Duebner said.