News

Prairie Park developers get $11 million -- and a firm deadline

Posted September 19, 2010 11:00 pm

By Sheila Ahern

Mark and Vivian Smith aren't going to like this article.

As developers of Prairie Park, a residential complex in Wheeling, the couple have been under one headline or another since they broke ground in 2003 because of the $11 million they've received over the years.

It's the most money Wheeling has ever given a residential developer.

"A friend of mine said we are in the paper more often then the Brown Chicken murders," said Vivian Smith. "It's not fair. We are from Wheeling. We've lived in the same house for 21 years.

"If we wanted to flip this and leave, we could have."

Despite not being your average developer, they are dealing with a very common developer problem these days - keeping their project out of foreclosure. Attached to that $11 million is a deal that says they have exactly 18 months to make it work or they will walk away from the project without a legal fight, according to a new agreement they signed with the village.

"Pressure, nah," said Mark Smith without smiling. "With five kids, no pressure."

"Listen, the market is picking up," said Vivian, cutting off her husband. "People are looking. We are waiting for empty-nesters to sell their homes. We are seeing a lot of interest."

The Smiths point out the $11 million is not coming directly from Wheeling taxpayers. True, Prairie Park is in a tax increment financing district, which means the $11 million is money generated by the development. Only instead of going to schools, parks and village government, those taxes are all going directly back to their development.

It's a deal few residential developers get. And all of their neighbors know about it.

Local connectionsThe Smiths have five kids, ranging from 9 to 23, who have all gone to Wheeling schools. Mark has coached the boys in wrestling, and Vivian is president of the Wheeling High School Booster Club.When she isn't in the sales trailer, Vivian said, she's pruning the bushes around her condo development.And unlike most developers, when people criticize their project, Mark and Vivian Smith take it personally.And sometimes their friends try to help. At an August 2009 meeting, police had to break up a crowd that was shouting at trustees who voted against giving Smith the money.But lately things are calmer. When the Wheeling village board approved giving the Smiths their final $6 million in July, only Trustees Pat Horcher and Ray Lang voted "no." And no one from the public criticized the vote.Horcher said he feels like the "crazy uncle at Thanksgiving who sits at the end of the table and who no one listens to" when he criticizes Prairie Park funding."Our job is to look out for the entire village, not one individual taxpayer," said Horcher, who pointed out he was in favor of the project at first. "We are spending millions to rescue one little guy. It's an insult to all the other businesses in town."Lang agrees."We're all hurting right now," he said. "I can't see how you can give money to one person." Trustees like Dean Argiris, however, say Wheeling can't let Prairie Park fail. It would ruin the lives of people who already bought Prairie Park condos and all the neighborhoods surrounding it. "The Smiths have a wonderful vision to put upscale housing there," Argiris said. "Before Prairie Park and the Westin (Hotel), there was nothing there. There wasn't even a water supply. They built everything." Village President Judy Abruscato won't comment on Prairie Park because she's employed by MB Financial, the bank in charge of the project's financing. She's abstained from every vote this year. Looked good in 2003In 2003 when the real estate market was booming, the Smiths got an $80 million loan and broke ground on 2.5 acres of their hometown to build Prairie Park. The land at Wolf Road and Milwaukee Avenue had been home to a fence company and was littered with pallets, Vivian Smith said. They certainly weren't new to the development game. They built Park Point in Wheeling and another development on Ohio Street in Chicago but weren't in charge of selling the units. Prairie Park was the first time they were in charge of the whole project.At the time, they were promised $10.6 million by some village officials, but when the vote came, they got $3 million. They say they don't want to dwell on the $10.6 million promise, but seven years later, they still bring it up."We have the ordinance all printed out; it's just not signed," Vivian Smith said. Trustee Dean Argiris confirms that the Smiths were promised the $10.6 million but isn't sure what "was promised or said by the village manager at the time.""We ended up doing the best that we could at the time," Argiris said. And according to the Smiths, all Wheeling has to do is wait.Now the condos pay the village about $1.5 million a year in property taxes, and that figure could climb to $3 million per year once all the units are sold. They just have to get through this rough economy."People understand and are very supportive," Vivian said. "They say, 'Hang in there, Vivian,' all the time at the high school."Today, they still owe the bank $22 million on the project. The Westin Hotel across the street has filed for bankruptcy, which doesn't help sell condos.Most recently, the Wheeling village board approved giving the Smiths $6 million of tax increment financing money to keep the project out of foreclosure. Part of the agreement says they must sell 10 units in the next 18 months, or they will hand over the project's deed to the bank without question.Prairie Park consists of mostly two-bedroom condos, ranging in price from $295,000 to $460,000. The Smiths sold a unit two weeks ago, but they've sold only seven condos since October 2009.A few weeks ago, the board approved a deadline extension because it's taking longer than expected to put together a list of expenses and plans for a new clubhouse and ring road for the development.Mark Smith said the extension wasn't his fault but was needed because "attorneys on both sides have been on vacation."The Smiths say they won't ask the board for more money, and despite the struggle to finish Prairie Park, they haven't closed the door to building more homes in Wheeling. "There's a lot of open land around here," said Mark Smith, pointing to Wolf and Milwaukee Avenue. "We're just going to have half of the units sold before we break ground."We just have to survive this and we will. We're survivors."False20001274Vivian Smith, president of the Prairie Park development in Wheeling, walks the grounds.Mark Welsh | Staff PhotographerFalse Prairie Park timeline2003: Prairie Park gets $3 million from the village in tax increment funds to build 306 high-end condo units in five buildings on North Wolf Road at Milwaukee Avenue. Mark and Vivian Smith say they were promised $10.6 million, but the board approves only the $3 million. 2006: Mark Smith asks for and receives $1.5 million more to cover the rising cost of materials.2009: In August and again in October the Smiths ask for an additional $3 million. They are denied both times.2009: The Wheeling Park District board agrees to pay the Smiths $1.5 million for about 30 acres on the south side of Lake-Cook Road between Northgate Parkway and Milwaukee Avenue. The area has a 13-acre lake, 17 acres of natural landscaping and 3 acres of buildable space. Park officials say the final concept probably will include bike paths, nature trails and wildlife habitats.2010: The Wheeling village board promises the Smiths an additional $6 million, of which about $2.5 million would finish site improvements. The remaining $3.5 million is performance-based, meaning they get the money only as new units are sold. This brings the village's total commitment to Prairie Park to $11 million.Conditions: The Smiths sold seven units in the past year; part of the new agreement says they must sell 10 units in the next 18 months or relinquish the deed to Prairie Park to the bank without a fight. The Smiths also promise the clubhouse will be built by the spring. There are no plans to construct the fifth residential building, they said.

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