The previous edition of "What's Happening With....?" covered the time period of 2000 to around 2010, when the Great Recession stalled Lake Zurich's ambitions to redevelop the Main Street area into a master planned downtown with commercial storefronts, high density residential development and complementary amenities. 

With the collapse of Equity Services Group (ESG)'s financing in 2011 for their development concept, the Village was left with $30 million in debt from its property acquisition efforts. The TIF revenue that was expected to repay the debt was underperforming, requiring general fund support that threatened funding for municipal operations. Declining property values, restrictive bank lending, reduced traffic and visibility from the Route 22 bypass all inhibited the community's downtown development goals.

 

The Great Recession cast a pall over the community's downtown plans until 2013, when the Village first took steps to restructure the debt from the property acquisition phase. The debt's balloon payment schedule was starting to hit the Village's budget, increasing to $2.5 million in 2014 to $3.4 million annually through 2025. The Village stabilized the debt payments by refinancing $13 million with a lower interest rate and a longer term, reducing the annual payments to $1.3 million annually through 2034.

 

This new repayment schedule coincided with revisions to the Village's TIF district, which was underperforming in the absence of the anticipated development that didn't materialize. The restructured TIF districts established a new baseline revenue stream that would support the stabilized debt repayment schedule, reducing their future impacts on the Village's other funds should the downtown redevelopment be further delayed.

 

By 2013, the Village started increasing market awareness of both the publicly- and privately-owned downtown redevelopment opportunities with "Building a New Lake Zurich" for sale signs, listings on Loopnet.com, and online property profiles on the Village's website. To further stimulate interest, the Village invited 11 potential developers to submit proposals for the Block A property, the former JJ Twiggs site located on Main Street across from the Promenade. 

Block A Proposal by Streetscape USA LLC

Five developers responded with residential proposals; only one concept included a commercial element to accompany its high density residential concept. None of the proposals were selected, as they did not come close to the community's expectations for the site's development. Two more residential-only proposals also emerged; these concepts did not advance further as the developers couldn't assure the projects' viability or completion.

 

Focus on Old Rand and Main Street

I n 2015, the Village attracted the interest of Foxford Communities, who presented a proposal to complete the 26-unit Somerset townhouse development on Lakeview. Their project scope expanded to construct 48 apartments on Village-owned property along Main Street. After extensive public participation and revision, the Village Board approved the "Somerset By The Lake" project in 2016, the first major private investment in the downtown area in nearly 13 years.

 

In addition to paying $270,000 and completing park and streetscape improvements at the corner of Old Rand Road and Main Street, the newly privately-owned property is projected to generate $175,000 annually in property taxes that will go toward the Village's debt repayment. Foxford also contributed $157,000 in park impact fees that provided funding for the Sunset Pavilion at Breezewald Park, which opened in 2018 to add an attractive lakeside amenity and generate greater activity within the Main Street area.

 

To further pursue new investment in the community, the Village promotes all of the community's available sites online through LoopNet, at the annual International Conference of Shopping Centers (ICSC) show at Navy Pier, and through the Select Chicago initiative.  Village Board members and staff, Plan Commission members, and commercial brokers have been actively fielding inquiries from interested developers and businesses. 

 

The Benchmark's "What's Happening With...?" series reviews the history, ownership, current conditions, and development activity of various properties within the Village which are often asked about.

 

To learn more about redevelopment opportunities in Lake Zurich, please visit lakezurich.org or contact Assistant Village Manager Roy Witherow ( [email protected] or 847-540-1578).