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Residents question process used for parking lot redevelopment deal

Editor’s note: A number of residents attended the Homewood board meeting Tuesday to learn more about and question the project, and 10 of them made comments. This is the second in a series of stories about the issues raised at the meeting.

Residents at the Homewood Board of Trustees meeting Tuesday, July 25, asked several questions about the process in place when the village works with developers.

The citizen interest was spurred by the letter of intent (LOI) trustees approved with developer HCF Homewood II. The firm has expressed interest in purchasing property that currently serves as the village hall parking lot at 2024 Chestnut Road.

Selling for $1
The first question was about the terms laid out in the LOI that has a 90-day time window. After the agreement expires, HCF Homewood II and the village will have the option of entering into a sale agreement. The price of the property according to the LOI will be $1.

Residents at the meeting and on social media questioned why the village would sell property at such a low price. Some argue the village is giving away too much to developers.

Mayor Rich Hofeld noted at the meeting that the nominal sale price is a common practice. The village has made similar arrangements with other developers over the years.

He addressed the issue again on Saturday, July 29, during his office hours at village hall, noting that $1 sale price is necessary to attract projects that will, over the long term, provide stable tax revenue to the village.

“If it’s village-owned property, the taxes are zero. Nothing’s coming in,” he said. “When it is sold, it goes on the tax rolls again. Whatever’s put on that property, those taxes accrue to the other taxing bodies. We’re putting nonproductive properties back on the tax roll.”

He noted that the village does not usually buy the properties but instead acquires the deeds to tax delinquent properties through the county’s No Cash Bid program, which eliminates tax liabilities that can be an impediment for developers to purchase open market property.

“If the village didn’t get it, it would sit there forever,” he said. “If the taxes are still accruing on it, no one will buy it.”

The village hall parking lot is not tax delinquent, but it doesn’t generate tax revenue. If the property is sold and redeveloped, it will produce tax revenue.

The letter
Village Attorney Chris Cummings also noted that the letter of intent is not for the sale of the parking lot. It is a preliminary step that is nonbinding on either party, he said. The village agrees to hold the property for the 90-day period, and it grants the developer access necessary to do its due diligence.

“If there was a sale, that would come back before the board at a later date,” he said. “If this comes back before the board, there would be negotiations between the developer and the village as far as a redevelopment agreement.”

The letter spells out the terms that apply to the 90-day period for preliminary study and planning to determine if the project will be viable.

Several residents wondered, though, whether entering into the agreement signaled that, in reality, the village and developer already are committed to the project. They asked if subsequent public input would be a formality without much real influence over the project.

Rachael Shores asked whether the approval of the letter means the process “is already at that point that ‘This is what we’re doing we just need to vote on it. Take a look at what we decided’ or is it ‘We really want to hear your input?'”

Hofeld said that while it was premature at that meeting to get into details that haven’t been worked out yet, the process would remain open.

“All of our meetings are public meetings, and input is welcome,” he said. “I love it when there’s people in the audience. Too many times we have one or two people in the audience. This is wonderful.”

Whose idea was this?
Mike Dickover asked how redevelopment projects are initiated, whether the village seeks developers or developers approach the village.

Hofeld said either can happen, and in this case it was a bit of both.

“I think it was us talking to different developers to see if they were interested,” he said. “If you remember, condos had been proposed over here, and (that developer) spent quite a bit of money. As the condo market fell apart, so did that project. We knew that other developers might be interested. The developer of the Hartford Building (HCF Homewood II) expressed an interest in doing something on this particular site and we said ‘Fine, give us a proposal, we’ll proceed with it.'”

The village has been trying to attract a developer to the site for some time.

The project Hofeld referred to was a plan to build 24 townhomes on the village hall parking lot late in 2018. The lot had been featured in a village marketing campaign earlier that year. Packets of faux baseball cards had been sent to prospective developers, and one of the cards featured 2024 Chestnut Road.

Trustee Jay Heiferman noted in his comments before voting on the LOI that the village’s efforts to promote development of the parking lot went back to 2006.

The Mesirow/Morningside Group proposed developing a four-story, 45-unit, mixed-use condominium building called Chestnut Station on the parking lot site. The proposal came before the board in March 2006, but the structure was not built.

Tim Flanagan, one of the partners in HCF Homewood II, cited an even earlier source of his interest in building in downtown Homewood, the Downtown Master Plan produced in March 2005 by the Lakota Group and Metro Transportation Group.

“I was a participant and observer to the Lakota Group’s survey of how you should develop downtown Homewood,” he said. “I followed that proposal for years. It eventually seemed like the right thing to do.”

The 2005 master plan recommends, on page 61, redeveloping the downtown area “as an active, moderate density town center with a mix of retail, office, residential and public uses. The goal of the master plan is to increase commercial activity and residential densities in downtown, while maintaining the ‘small town’ character that makes Homewood a desirable place to live. The plan builds upon Homewood’s small town image and character through enhanced streetscape, signage, open spaces, architecture and site design.”

The previous attempts to develop on the parking lot involved condominiums and townhomes. Flanagan’s firm is proposing apartments, like the Hartford Building that he and his partners are building at the southwest corner of Ridge Road and Martin Avenue, just a block south of 2024 Chestnut.

“Apartment residential units have become very popular,” he said.

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