St. Charles City Council to vote on tax incentive for proposed development on Pheasant Run site
An agreement that would reimburse a developer up to $3.5 million for costs associated with a project on the old Pheasant Run Resort site in St. Charles appears to be moving forward.
On Monday, St. Charles’s Committee of the Whole recommended for approval a tax increment financing, or TIF, redevelopment agreement for the proposed project, which received preliminary approval earlier this month. The agreement would now need to secure final approval with the St. Charles City Council.
Located at East Main Street and Kautz Road on the city’s eastern edge, the development project in question — called The Shops at Pheasant Run — would sit on 33.7 acres of what had been the site of the Pheasant Run Resort, a facility that shuttered in 2020.
In 2022, a fire engulfed large sections of the resort in flames, causing significant damage. Portions of the hotel there were destroyed by the fire, but crews were able to save the 16-story tower on the property.
The remaining resort buildings were eventually demolished, but discussions about redeveloping the property have been going on for years. Parts of the former resort property have been sold off over the years, for car dealerships and an industrial park. This would be the last portion of the property to be redeveloped.
Last year, a concept plan for the site was submitted to the city by SC Landman LLC, the property owner entity of Chicago-based developer Vequity.
In question over the course of the discussions about the development have been the number of drive-throughs permitted as part of the development, the possibility of businesses like car washes or gas stations being built on the site and the project’s overall concept.
One version of the developer’s plans was shot down by St. Charles aldermen in August, but revised preliminary plans were ultimately approved by the council earlier this month.
The project is slated to include businesses like Chase Bank, Valvoline Instant Oil Change and Dutch Bros Coffee, with the development of some of the other lots set to require future city approval. The overall project calls for a total of 18 to 25 businesses, with a construction cost of $70 to $100 million.
Also included in the preliminary plans approved earlier in October was a caveat that, if the city and developer don’t come to an agreement on and enter into a redevelopment agreement within 45 days of the plans’ approval, then the plans could be vacated, according to past reporting. That redevelopment agreement is what came to the Committee of the Whole for consideration on Monday.
The redevelopment agreement would establish a tax increment financing, or TIF, reimbursement structure that is capped at $3.5 million, according to documents included in Monday’s meeting agenda.
A TIF district is a type of economic development incentive, in which the value of a property is essentially frozen, and the extra or “increment” taxes created by developing the property go into a special fund used to pay for costs related to improving the area. The property is within the Pheasant Run TIF District.
Per the city, the project is expected to generate over $12 million in TIF revenue over the remaining life of the TIF district.
Under a TIF, the property owner would pay property taxes as usual, and a portion of the revenue generated by the development would go into a TIF fund, according to the documents included in Monday’s meeting agenda. A portion of those funds would then be reimbursed to the developer for eligible costs.
The reimbursement would be via a pay-as-you-go structure, meaning reimbursements would be made only as TIF revenues are generated, and the city would not front project costs or issue debt to help fund the project, per the city.
Capped at $3.5 million, the maximum reimbursement amount would represent between 3.5% and 5% of the estimated total project cost.
In an earlier version of the plans, the developer was potentially seeking upward of $4 million, depending on what restrictions the city imposed on what could go on the site.
The purpose of the reimbursement is to pay for costs related to the existing site conditions, such as earthwork and site preparation, clearing and environmental work, a presentation from the city at Monday’s meeting said. The project is set to be fully built in 2031.
The $3.5 million in TIF funds is expected to be generated within seven to nine years, the city presentation said, of a total of about $12.3 million generated by the project over the life of the TIF. The city would retain the additional TIF revenue generated by the project that isn’t given back to the developer.
The project is also expected to generate sales tax revenue, the city has indicated, due from businesses setting up shop on the site.
The resolution considered Monday — which authorizes the mayor and city clerk to execute a TIF redevelopment agreement for the project — was ultimately recommended for approval by the council in a 5-3 vote.
Voting in favor of the recommendation were Alds. Vicki Spellman, Dave Petschke, David Pietryla, Bryan Wirball and Steve Weber. Voting against were Alds. Ronald Silkaitis, Mark Foulkes and Jayme Muenz.
The agreement is expected to come to the City Council for final approval at their Nov. 2 meeting, according to City Administrator Heather McGuire.
mmorrow@chicagotribune.com