Village Administrator Outlines Strategy to Move Downtown Redevelopment Forward

Just over a month ago, the plan to breathe new life into downtown Lake Zurich came to a screeching halt when David L. Smith's request to extend his contract until the end of January was denied. 

But since, and even prior to Smith's company Equity Services Group (ESG) missing its Jan. 1 final funding deadline, village administration has quietly formed a strategy to forge ahead with downtown revitalization if the worst case scenario came true. 

And it did.  

“Going back to September (when ESG asked for the extension), we did not know what to expect; (we asked ourselves) what do we do when the truck doesn’t show up and there is no money for the project to go forward?” said Bob Vitas, village administrator.

At the Monday night board meeting, Vitas outlined what he believes is needed to get a downtown project in motion.

“I am looking at recommending bringing aboard a downtown redevelopment consultant to perform financial and gap analysis at a flat fee that would be negotiated by the village and the board,” said Vitas.

As part of Phase 1, we need to know from the outside what the financial analysis and gap analysis are; and what we can expect to work in downtown Lake Zurich, said Vitas.

The financial analysis would consist of gaining a solid understanding of the bond structure and debt repayments in the TIF district. 

“We need to know what it is costing us every day, every month,” said Vitas.

“In 2009, we knew we needed to have $40,000 in growth, but times have changed.  We want to know what the gap is to meet the debt obligations to move forward,” said Vitas.

A gap analysis would assist in looking at the current market in relation to what types of  projects would make the most sense for the village to move forward.

“We don’t want to reinvent the wheel; we don’t want to start from scratch,” said Vitas.

Due to the now three failed attempts by previous developers to renew downtown, the village is able to make some lemonade out of the lemons.

The design charettes and Form Based Regulations (FBR) created by Torte Gallas from 2008 and drawings from 2004 prepared by Lucien LaGrange Architects are owned by the village.

The design charettes and FBR were alone valued together at $226,000 at the time they were created.

If a consultant were hired, they would be charged with reviewing those and other plans to determine how they would fit into a project in today's economy.

“We need to learn what is going in the state and the region (because) that could affect where we are going to go, and our expectations based on the economy and market conditions,” Vitas said.

“We want to be able to pinpoint what is going on in the marketplace,” Vitas added.

(A consultant) can tell us what is feasible based on the market today, said Vitas.

Vitas said the time frame for Phase 1 could be as little as two to three months.

Other tasks of a potential consultant in Phase 2 of the prospective plan would be to assist in identifying and attracting developers with a proven track record. 

“For the second phase, we would pay per performance; that would be negotiated as well to bring developers to the table,” said Vitas.

“Based on the outcome of a successful project, they (consultants) would be compensated (in Phase 3),” Vitas added.

The final phase would involve “Preparing project specific development agreements, and part of this is determining what incentives would be, what would we offer to entice them to develop in Lake Zurich,” said Vitas.

“What incentives would the board offer? Tom Poynton, trustee asked. “How much do we want to spend and give away?”

“One incentive would be a sales tax rebate. We also have the land that we used with David L. Smith and McCafferey to provide incentive,” said Vitas.

Vitas said the village could also extend utilities and improve property to attract developers.

Another function of the consultant would be to determine what incentives are needed to compete in the current market place, Vitas said.  

“This is the public’s expectations being reset,” Poynton said.

“I would love to see this process move forward, if there’s anyone (developers) looking at us now, I want to make sure that this plan won’t impede progress with those who may be interested right now,” Poynton said.

“There is not much activity lately,” said Vitas.

“I agree that we should look at a consultant; I would recommend that we do a Request for Qualifications (RFQ), so that we are getting the best for our money,” Jeff Halen, trustee suggested.

Vitas said the village can obtain a list of qualified consultants from the Illinois Increment Tax Association.

“We can create a short list from those names; I don’t want to get caught up in a laborious task of finding a consultant; we could do it in 45 days,” said Vitas.

“I think we need to make sure the process isn’t so tedious that we lose time; we need to do this in the shortest possible time to get this process moving,” said Rich Sustich, trustee.

“Do we have the infrastructure to support development?” Jim Johnson, trustee asked.

“When a developer comes in, then we determine what needs to be done,” Vitas answered.  

Vitas said he will be putting together a RFQ that will clearly state what the village wants and expects and the timeline they want it within. He added that he will have the list for the board to review at the Feb. 21 meeting.

“Right now, it’s like a pyramid spinning around like a top, we need to turn it around and get it facing north,” Vitas said.

“(These strategies) would put the north on the pyramid to tell us where we are going, said Vitas.