Lake Zurich came off a phenomenal Rock the Block event that attracted 5,000 people to the downtown over the weekend, fueling hopes that it would bring new development to the area.
Monday, the Board of Trustees faced some tough decisions when it considered what to do about LZ Promenade’s proposal for a residential/retail development in the downtown.
LZ Promenade’s request to have the village sell the land for a symbolic $10, waive fees and abate property taxes for 10 years did not impress the village board, which ultimately voted to table the issue for two weeks.
LZ Promenade’s proposal had staunch support and opposition on the village board.
“This is a lose-lose for our residents,” Village Trustee Jim Beaudoin said. “The way this is set up I don’t see how I can support it.”
“At what cost do we want to redevelop downtown? Do we bankrupt the village?” said Beaudoin, who described himself as pro-development.
But Trustee Jonathan Sprawka said if the board rejects the proposal it is, once again, establishing a track record of being a “schizophrenic board.”
People are hungry to see something happen downtown, he said.
“We have a developer willing to start something in the downtown,” Sprawka said. “Once that project has begun, it gets the village back in the driver’s seat. We have critical mass, you need the one thing to kick it off.”
LZ Promenade proposal
Developer John Breuglemans, of LZ Promenade and Lake Zurich reached an exclusive agreement earlier this year to come up with a comprehensive development plan for an area known as Block A in the downtown.
The plans were submitted, but village staff found “deficiencies” in the plan including the estimated cost of construction, the company’s financial capability and a significant cost to the village.
Staff wrote in a memo that LZ Promenade’s estimate, on the high end, is $16.3 million while the village’s consultants, Teska Associates, estimated the cost at $24.8 million. If LZ’s costs do come to the higher, the project’s funding could be in jeopardy, the memo stated.
Additionally, LZ Promenade is asking the village to sell the land it purchased for $3.5 million, for a symbolic $10 as well as waive all permit fees and abate real estate taxes for 10 years, the memo stated.
Lake Zurich would lose its $3.5 million investment as well as fees and would not realize any property tax revenues it its TIF district until 2024, a year before the Tax Increment Financing (TIF) district expires, staff said.
Breuglemans refuted each point staff brought up, calling the information “slanderous.” Teska Associate’s cost estimates were based on union labor whereas LZ’s estimates used nonunion labor, he said.
A TIF district is designed to assist developers and businesses, Breuglemans said. If Lake Zurich can’t give LZ Promenade the land, what can it offer, he said.
LZ Promenade would not need the 10 years of tax abatements, he said, stating the information village staff provided about the tax abatement was incorrect and that the developer expects it won’t need the abatement after four years.
“I have spoken my opinion in defense of a document that is full of errors and I would like the village to reconsider,” Breuglemans said. “I will be very happy to sit down with Jason (Slowinski) and his staff to go over the numbers so everyone is comfortable that this project is a real one.”
The board can reject the plan or vote to move it forward to the planning commission and begin drafting a development agreement, officials said.
Village trustees were split on whether to allow the plan to move forward or reject it.
Trustee Dana Rzeznik found the proposal lacking in content and very disorganized, she said. She was not in favor of the exclusive agreement and felt the village has lost months of time.
“I would like to move forward and get something down and put this to rest,” Rzeznik said.
While Sprawka agreed the project isn’t viable at this time, he said he’s willing to work with Breuglemans. LZ Promonade has the financing and a plan and Sprawka did not see how the board could deny the plan in its entirety, he said.
Denying the plan will send a conflicting message about its desire to bring redevelopment to the downtown.
“We are full of hogwash if we don’t allow it to move forward,” Sprawka said.
“I am not saying no to downtown development. I am pro-development. I will not vote on something that will put the future of Lake Zurich at risk,” Beaudoin said.
Village President Tom Poynton said he was “very reluctant to just throw the baby out with the bath water on this.” Poynton does not have a vote but suggested tabling tabling the item for a few weeks so staff and trustees can meet with Breuglemans to iron out the numbers and get an accurate sense of where the project is going.
Rzeznik was the only trustee who voted no to table the motion.
Breuglemans and staff will meet at 9 a.m. today.