Progress has come to a halt in a redevelopment project on Ridge Road in downtown Homewood, but village officials and the developer said it is still possible the project might be saved.
Third Coast Development of Grand Rapids, Mich., recently withdrew its offer to purchase the property at 2033 Ridge Road.
The company has been working with the village for more than a year to obtain properties in the 2000 block of Ridge Road in order to replace them with a new structure that would conform with the village’s transit-oriented economic development plan, a mix of residential and retail spaces.
Last year, the company bought the building at 2049-2051 Ridge Road, currently home to Loulou Belle boutique and Artistix salon. The village served as an intermediary to help that deal work.
Third Coast also entered into a contract with Josephine Triumph last year to purchase the building at Ridge Road and Martin Avenue. That contract expired in January while Third Coast worked on elements of what it describes as a challenging financing environment.
“We have a development market that is tough due to concerns about excess development in Cook County,” Third Coast representative David Levitt said in a statement to the Chronicle. “Lenders have been expressing concern about the market and about the current situation in the Illinois state government. Equity sources are concerned about residential saturation as well as absorption of retail space due to the national market collapse in retail.”
Among the factors in the financing situation was the creation of a new tax increment financing (TIF) district in downtown Homewood, which could provide some support for this and other development projects eventually. The new TIF district was approved by the village board of trustees late in April.
Levitt said the company believed it had an understanding with Triumph that the original contract would be extended through August.
Two weeks ago, village officials received a copy of an email from Third Coast to the Triumph family stating that the deal appears to be dead. Company officials cited the family’s lack of response to its efforts to sign a contract extension.
A Triumph family representative, Diana Campbell, said the family did not wish to comment on the situation at this time.
Levitt indicated the project’s future is not currently in Third Coast’s hands.
“In this case, they want us to pay a high price and they don’t want to give us the time we need to insure that we can make money,” Levitt said. “We cannot overpay for the land unless we know the rest of the deal is set up for success. Therefore, we notified the sellers that we are withdrawing our offer.”
Levitt said the building is obsolete. There are currently no businesses operating in its storefronts. The last two businesses left last year.
Homewood Fire Chief and Building Department Director Bob Grabowski confirmed that for any new businesses to in, significant renovations would be required, in part because recent building code changes require fire alarms in portions of the building that weren’t required to have them in the past, and a fire suppression system would need to be added for any occupancy of more than 5,000 square feet.
The village is not a party in the contract, but officials have worked with the developer to help the plan proceed, and Village Manager Jim Marino said the apparent stalemate is not necessarily the end of the project.
“That email doesn’t mean the project’s dead,” Marino said.
It was an effort by Third Coast to get the Triumph family to move the process forward, he said. And he noted that this is the first mixed-use development project of its kind in downtown Homewood.
Marino said he has heard from residents and business owners who were eager to see the project move forward. People have been wondering about its status, he said.
“It’s not unusual for it to take this long,” he said. “The hardest part is getting that first project done. Part of the difficulty for developers is it’s an untested market. Other communities have experienced the same thing. Once you get the first mixed-use project done, it makes it a lot easier.”
Village Trustee Anne Colton said village officials were very disappointed that the original deal was in trouble, but they have not given up on the project. She said trustees were developing a plan for the downtown area prior to the Third Coast proposal and would renew those efforts.
“We’re going to keep working and find a solution that’s beneficial for everyone,” she said.
Although its offer on the Triumph building has been withdrawn, Third Coast still has a stake in Homewood, Levitt said.
“On the plus side we are already invested in the community, and we have a very accommodating village government,” he said. “We cannot say enough good things about the people at the village. They have been very supportive.”
The company now plans to upgrade the apartments at 2049-2051 Ridge Road and lease them, a step it had been reluctant to take while the deal for 2033 Ridge Road was still on the table.
The company also had discussed with village officials two other potential redevelopment sites in the downtown area. Those plans were very preliminary, though, and Marino said it is not certain whether the company will pursue them.