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Developer scales back plans for massive downtown Arlington Heights project

Developers of the massive proposed Arlington 425 development in downtown Arlington Heights - which has stalled to this point - are scaling down their plans to make the project more economically feasible, officials said.

The latest version of the three-building residential and commercial campus on a long-vacant block calls for fewer housing units and less retail space, among other changes.

Attorney Mike Firsel, who represents Norwood Builders, pointed to the high costs of construction, lack of available financing, potential of no return on investment, and no governmental assistance or incentives.

"Petitioner has a strong desire to move forward with a project for this site, but modifications will have to be made to make it economically viable," Firsel wrote in a letter to village officials.

The revisions come after months of consulting with contractors, architects, financing sources and marketing professionals, Firsel wrote, "and taking into account the potential long-term economic and life-style consequences of the current pandemic environment."

The $150 million project - which would be the largest development in some two decades in Arlington Heights - earned a stamp of approval from the village board in May 2019, after an extensive review process involving the plan, design and housing commissions.

The board last August already agreed, at Norwood Builders' request, to extend zoning approvals on the site until June 2021, as the developer worked to secure financing.

The amended plan is now subject to another formal review by those panels and the village staff, before the village board has final say. The first step in that process occurred last week, when the developer presented preliminary plans to the conceptual plan review committee, which is a subset of the plan commission.

Among the notable changes, a 13-story, 125-unit apartment building on Highland Avenue that included six stories of parking is being replaced with a five-story parking garage.

A nine-story, 182-unit apartment building with commercial space on the bottom two floors on Campbell Street is proposed to grow a story taller with 26 more residences, while retail/offices on the second floor would be replaced with 26 other residences. Firsel also proposed that ground-level retail on the west side be optional, saying retail opportunities that would generate sales taxes beyond the building's east side "are extremely limited, or may be nonexistent altogether."

A four-story, 54-unit residential building facing Chestnut Avenue would add one level and 34 units.

In total throughout the nearly 3-acre site, the number of residences would be reduced from 361 to 322, while commercial space would be cut from 43,800 square feet to 7,500 square feet.

Village staff members who reviewed the preliminary revisions said they generally support the plan so far. They're also requiring a virtual neighborhood meeting with residents and business owners, as well as a traffic and parking study.

Charles Witherington-Perkins, the village's director of planning and community development, said he anticipates the review process to take place over the winter months and be complete before the current approvals are scheduled to lapse in the summer.

"It's a very important site downtown," he said.

"The village is very supportive on seeing this site developed in a good way that helps downtown to continue to grow."

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