Financing, soil problems delay Hickory-Kensington apartments in Arlington Heights
The developers of a proposed five-story, 76-unit apartment building east of downtown Arlington Heights are having trouble getting a shovel in the ground, amid financing and soil contamination problems.
Project attorney Mark Lenz told village officials his client is still committed to building the residential and commercial facility on the northwest corner of Hickory Avenue and Kensington Road, but they need a little more time.
The village board went along with the request, agreeing to a 12-month extension of its approval just before it was due to lapse last Thursday. The board first approved the planned unit development in August 2018.
Village officials have been counting on the project to kick-start redevelopment of the light industrial area into a long-envisioned mixed-use, pedestrian-friendly neighborhood that could complement the nearby downtown.
As a way to spur redevelopment, the board agreed in 2018 to give developers Guido Neri and Ben Pecoraro up to $120,000 a year for up to eight years from tax increment financing funds.
After the TIF district was set up in 2014, property taxes above the existing level began going into a fund controlled by the village for economic development purposes.
Also under the redevelopment agreement between the village and developers, the village is paying $800,000 to help the developers extend Campbell Street west from Hickory and make streetscape improvements along Hickory and Kensington, and paying the developers $700,000 for a parcel of land to the north targeted for future development.
But all of that is on hold for now, as the developers struggle to obtain financing amid the COVID-19 pandemic.
Lenz wrote in a letter to village officials that the developers are continuing efforts to seek conventional and alternative sources of funding, and have already invested a significant amount of time and money.
Even before the pandemic, acquisition of the vacant property was delayed nearly a year over concerns about environmental contamination, Lenz said.
It will be remediated during construction, he added.
The project calls for a mix of studios and one- and two-bedroom units, and 3,450 square feet of first-floor commercial space for retailers and offices.
The board's initial approval lasts for 24 months, and the recent vote extends that another 12 months. Any request for a further extension would go before the plan commission and village board.