Lake Zurich seeks downtown alternatives

Lake Zurich officials say they're seeking alternate proposals for downtown redevelopment to ward off possible challenges if candidates from the CARE party are elected in April.

Village President John Tolomei said the board is prepared to vote on a draft agreement with Equity Services Group of Barrington, chosen after a public search for developers was conducted last spring. But officials will wait to consider alternate proposals, he said.

"We have opened up this bidding period as added insurance against CARE interfering with ESG's contract should their candidates take office in the spring," Tolomei said.

Village Administrator Bob Vitas said the earliest the board could vote on the draft agreement with ESG is Feb. 23.

Officials have been planning to redevelop the downtown area for several years, hoping to attract businesses and make it more pedestrian-friendly.

The process has hit several roadblocks.

The village decided to end its agreement with McCaffery Interests of Chicago in 2007, saying the developer breached its contract. Tolomei said a settlement proposal Lake Zurich recently received from the developer is a good start toward getting the redevelopment back on track.

In addition, the TIF district, established to capture property tax revenue for downtown redevelopment, slumped with the housing market. The village is now seeking to extend the life of the special tax district to be sure it can pay for the redevelopment.

The draft agreement with ESG specifies four opportunity periods during which the developer has the exclusive right to buy village-owned property within four separate project areas. The project areas are on Main Street along the lakefront, stretching northeast to Old Rand Road.

ESG would have to submit plans for a project during the first opportunity period, which expires Sept. 30, 2010, or the developer would lose the exclusive right to buy village-owned property.

Some parcels would sell for as little as $10, as an incentive for the developer. Vitas said this comes with the stipulation that ESG would have to acquire privately owned property around the parcel which would carry a heftier price tag.

Vitas added that the value of those parcels would be recuperated by putting them back on the tax rolls.

Richard Sustich, candidate for trustee with the CARE party, spoke critically of the draft agreement. He said it is plagued by the same problem as the agreement with McCaffery: The projects have to be completed sequentially.

ESG would work on one project area at a time, so if the first project is stalled, they are all stalled. To alleviate this problem, Sustich said the village should take each area out for bid.

Trustee Craig Taylor said that while a combination of developers working on different project areas would be a good thing, he does not want to see the agreement with ESG stalled.

"At this point, I think it's far enough advanced that it's an excellent agreement that I think we should carry on with," said Taylor, who is running with Tolomei on the Village Pride slate.

Interested parties have until noon on Feb. 23 to submit a statement of interest and the terms of their alternate proposal to the village administrator. Tolomei said the village has received some inquiries but no alternate proposals yet.