At the start of 2011, the after former developer Equity Services Group was unable to come up with financing for the project.
Since that time, the village hired three consultants to work in concert to form a new strategy to breathe life back into the downtown tax increment-financing district.
On Monday night, a first draft review of their findings was presented to the Village Board.
Representatives of Teska Associates Inc., Business Districts Inc., and Kane, McKenna & Associates Inc., pointed out weaknesses in the previous plan, and offered suggestions on how the village can move a future project forward.
“The current market conditions wouldn’t allow the (previously proposed) project to work today,” said Lee Brown, president of Teska Associates. “The development as planned would be unlikely.”
Issues with the plan included the amount of parking set aside for a potential new development.
Brown said the parking requirements in the previous development plan would reduce the amount of usable building space that could be built, which would in turn decrease the amount of tax increment generated in the TIF district.
“Based on the parking standard set, you would need below-grade parking and that would raise the price to the point that people wouldn’t pay for it,” Brown said.
He added that more households would be needed in the village to support the amount of retail space that previously had been proposed for the waterfront.
“The waterfront is most attractive for a residential use, not retail as proposed in the former plan,” Brown said. “The retail should be focused at a main intersection where it can be supported.”
Mary Thompson, senior vice president at Kane, McKenna and Associates, said, "There is a growing market for luxury rentals and such units would bring in the equity needed to support the TIF district."
Thompson said the entire plan should take more of a "project orientation" than a block plan.
The plan proposed by ESG segmented the redevelopment area into a number of different "blocks," wherein each was to be developed according to where they were located within the TIF district.
Thompson suggested the village be realistic about specialty dining and boutique businesses by limiting how many would be permitted within the redevelopment area.
“If you allow too many, other businesses in the village will close,” Thompson said.
Thompson said the village should encourage property owners in the TIF district to reinvest in their homes, which ultimately could be utilized for entrepreneurs in the future as vintage business dwellings.
Consultants also addressed the , which has been a looming discussion.
Bob Rychlicki, executive vice president of Kane, McKenna and Associates, suggested a number of moves to restructure TIF debt to ensure payments could be made without putting an additional property tax burden on residents.
In a worst-case scenario, a homeowner with a home valued at $350,000 could see an increase of $60 per year on his or her tax bill, but proposed steps could avoid that altogether, said Finance Director Al Zochowski.
Among Rychlicki’s suggestions is to negotiate with the school district to decrease student payments by 50 percent for the per capita tuition costs.
“TIFs do allow for school districts to waive or modify payments,” said Rychlicki.
Village Administrator Bob Vitas said negotiations already have begun with school district administration regarding a temporary decrease in payments until the TIF district is on more solid ground.
Other moves that could be made included placing properties with a negative TIF increment equalized assessed valuation into a separate tax code.
Talks have begun between the village and the Lake County Clerk’s Office to see if that can happen, Vitas said.
Extending the life of the TIF district by 12 years — the maximum allowed by state statute —also was discussed.
“It would be an act of the state legislature to extend the TIF; you would have to gain the support of all of the taxing districts and get sponsors in the Illinois House and Senate,” Brown said. “It could take between three and 12 months.”
The affected taxing districts include Lake County, the Lake County Forest Preserve District, College of Lake County, , , and the .
Though a number of positive and potential steps were proposed, the road ahead is still a long one.
“It will take 18 months from when a developer comes in to get through the review process and another year before revenues come into the TIF,” said Bridget Wade of Business Districts Inc. “There is a bleak, short-term outlook because revenue isn’t going to flow until at least 2014.”
“With trustee input, we will consider reshaping regulatory requirements; we already have started meetings to bring about some of the recommendations,” Vitas said.
Vitas added that meetings are planned with a potential developer for a luxury rental project, in addition to a commercial development, all located in the TIF district.
In the meantime, a study session with the consultants to delve further into their recommendations also will be planned.
“We are looking at your current situation and going forward to set the village in the position to take a downtown plan to fruition,” Brown said.
The Joint TIF Review Board is set to meet at 3 p.m. Nov. 9 at Village Hall.