No Lowe's, Meijer for Rand Road property

Neither Lowe's Home Improvement Warehouse nor Meijer will be built on the northeast corner of Cuba Road and Route 12.

Oak Brook-based developer, Midwest Real Estate Equities, Inc., has backed out of the project it pursued for 18 months, saying Kildeer and Lake Zurich are taking too long to hash out issues with a boundary agreement restricting development there.

"We've terminated all contracts on that property," said Jeffrey Rattner, director of Midwest Real Estate. "There is a lot of retail interest here, but without these two towns coming together nothing will get built."

The roughly 45-acre site has been a thorn on the side of both towns for years as developers have come and gone.

With this latest proposal, the property would have been anchored by a 103,000-square-foot Lowe's, a 150,000-square-foot Meijer grocer, roughly 257,000 square feet of retail space, and possibly a restaurant.

For several months, both villages have been negotiating on buffers, setbacks, lighting standards, access points and traffic flows for the project. But the main stumbling block has been how to share the sales and property tax revenues it would generate.

Kildeer offered Lake Zurich a 50/50 split of the revenues, estimated at about $1 million annually for five years from when the first store opened. Lake Zurich wanted the revenue sharing period extended, though not forever, Village Administrator Bob Vitas said.

"That five years was totally inappropriate and inadequate," Vitas said. "It is a shame. It's a great disappointment not only for Kildeer, but also for us. The unfortunate thing is that everybody had a lot of time and energy invested in this."

Lake Zurich also is not keen on deannexing certain properties, under requests by the developer and Kildeer, as it would reduce the village's equalized assessed valuation and the amount of property taxes collected, Vitas said.

Kildeer Village President Alan Stefaniak blames Lake Zurich for killing the deal with Midwest.

"I don't think a developer can ever wait forever for two villages to try to make an agreement," Stefaniak said. "(Lake Zurich) just keep coming back and saying we want 50/50 in perpetuity. This was the straw that broke the camel's back. We're back to square one. The real sticking point has been and will always continue to be the revenue sharing ... 2013 is when the boundary agreement expires and then everybody will be free to do what they want."

Residents of both towns who fought hard against the project couldn't be happier with the outcome. The site backs up to Lake Zurich residents on the north and Kildeer homes on the east.

"I just feel that we just don't need another shopping area," said Carole Smith, who lives in Farmington subdivision in Kildeer off East Cuba Road. "We have enough congestion at that intersection with high traffic. It's over for now, but I'm sure that it will be revisited."

Vito Mitalo, president and managing partner of Churchill & Associates, Inc., which has owned the property since 1985, lamented the loss.

"We're disappointed," he said. "Every single development on Rand Road - Kohl's, Target, Deer Park (Town Center), Costco and Home Depot - all came to us first. Right now, the property can't be developed until the intergovernmental agreement has been resolved."