Slow sales stall First Street project

The development of downtown St. Charles' cornerstone has failed to get the financing necessary to continue at the pace the city and its developer had envisioned.

Phase 3 of the city's First Street project was set to begin on March 1, but instead has been delayed because not enough tenants have signed on.

As of this week, only about 65 percent of the available retail space is set to have tenants.

The phase will include an 82,000-square-foot office, residential and retail building; a 211-space parking deck; a second building of 47,000 square feet for office, residential and retail use; and a 55,000-square-foot building just for residential and office use.

Developers have asked the city to extend the March deadline to Dec. 1 in hopes it would give the market time to rebound.

The city's planning and development commission decided to sit on the request for 60 days and revisit the matter on June 8.

Even with what's already been built, developers expect a significant increase in the appraised value of the downtown site, which is good for the city's property tax base when the tax increment finance district on the land expires.

If Phase 3 isn't built, the city eventually would gain ownership of the land. Phases 4 and 5 are set to follow in 2010 and 2011. There's no word yet on how any delay to Phase 3 may impact those portions of the project.