Unfinished Lake Zurich townhouse project draws interest
Developer interest is being shown in downtown Lake Zurich's long-unfinished Somerset townhouse subdivision.
Village board members, at a meeting Monday night, are to conduct an informal courtesy review of the 19-home proposal from Icon Building Group of Algonquin.
Icon's plan to finish what was supposed to be a 39-home project would move into the village's formal approval process if a majority of trustees indicate support.
Lake Zurich Mayor Thomas Poynton said he looks forward to hearing from Icon representatives at Monday night's session.
“I am cautiously optimistic,” Poynton said of the tentative proposal. “I'm glad that we've got some interest in (the property).”
Somerset's 20 lakefront townhouses are in a special taxing zone that village officials enacted in 2002 in an attempt at downtown redevelopment. The village is still trying to lure developers to revitalize the area.
McCaffery Interests Inc. of Chicago was selected to reshape downtown, but it never finished the final 19 homes at Somerset and failed to do other work before being fired by Lake Zurich in December 2007.
In 2008, the village paid almost $1.2 million to McCaffery and Bank of America as part of a foreclosure settlement. Lake Zurich provided nearly $1 million to help McCaffery with the half-done Somerset project, officials said.
Last year, M/I Homes Inc. of Columbus, Ohio, received village board approval to complete Somerset. However, M/I never proceeded to construction, and the property meant for the 19 homes remains vacant.
“It's sort of a testament to the McCaffery debacle,” Poynton said Friday.
Lake Zurich has what's called a tax increment financing district meant to rejuvenate downtown. The special taxing zone is supposed to expire in 2025, but the village wants to extend it by another 12 years so it does not have to contend with balloon payments on debt and possibly dipping into the general fund to cover the tab.
In a TIF district, property tax revenue is frozen at a certain amount and any additional revenue goes into public improvements rather than to local governments, such as Lake Zurich Unit District 95.
Lake Zurich has about $28 million in outstanding debt associated with the long-stalled downtown effort. Poynton has said about $16 million of the debt is attributed to property purchases within the special taxing area, but the current worth is unknown.