Villa Park extends purchase agreement by 6 months for apartment building developers
Developers hoping to build a mixed-use apartment building in Villa Park have received a six-month extension on their purchase agreement to acquire 100-110 S. Villa Ave.
On Monday, the Villa Park village board unanimously approved the letter of intent extension through February of 2023 for Wisconsin-based developer Catalyst Partners and Naperville-based Marquette Companies. The developers shared their plans late last year to build "The Union," a $50 million, 210-unit housing complex with 10,000 square feet of ground-floor retail or restaurant space on the former site of A.K. Mulch and Firewood.
A spokesperson for the developers said the extension was needed, in large part, because of supply chain issues delaying their plans to begin construction this fall.
"We went through a pretty rigorous process in terms of vetting a number of general contractors that we thought were appropriate for this project," said David Lyon of Catalyst Partners. "Uniformly across them, it was expressed to us because of disruptions in the supply chain, procurement, lead times for critical elements of the project would require a spring start."
Lyon zeroed in on difficulty in acquiring building concrete, electrical meters and switches. He added that more time was needed to put contract bids on those materials so they would be ready when construction begins.
"The risk is mitigated by us now being on the brink of selecting a contractor," Lyon said. "We haven't announced it publicly yet, but we will be able to do so in the very near future."
Trustee Jack Kozar expressed concern that the developers would have six extra months to walk away from the purchase agreement. But Lyon said the developers have already spent between $275,000 and $300,000 in earnest money and architectural engineering studies for the site.
Lyon added that the purchase extension would allow more time for the developers to work on a redevelopment agreement with Villa Park's Director of Economic Development, Patrick Burke. Lyon also noted the timing might align better with the village's intent to create a new tax increment financing district along the entire St. Charles Road corridor, especially if it goes into effect in January of 2023.
In a TIF district, property tax payments to local governments are frozen for up to 23 years. Any extra property tax money collected as a result of rising values within the area goes into a special fund controlled by the village. The money in the fund then can be used to help pay for improvements in the district, such as roads and other infrastructure.
"We are committed to purchasing the site," said Lyon, estimating that construction could begin by March 2023.