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Downtown Redevelopment

December, 2003 Update

At the October 6th Special Village Board meeting, the Mayor and Board of Trustees voted unanimously to terminate the Downtown Redevelopment Agreement with the Teng/Forrest development partnership (“the Developer”). This agreement has had a number of contract extensions since it was approved in February, 2001. After much deliberation, the Mayor and Board came to the unfortunate realization that the proposed project would subject the village and its residents to an unreasonable financial risk. This risk was dramatically increased over the course of the project by the following factors: 1) the failure to deliver a Jewel grocery store to the Village, which, had the project moved forward without Jewel, would have resulted in the necessity for the Village to contribute $2 Million from our General Fund to offset the loss in revenues anticipated with the grocery store, 2) the extended payback time necessary for the Village to pay the TIF (Tax Increment Financing) Bonds, that would have been necessary for the project (the payback had been extended from 2 years beyond the end of the TIF in 2013 to 17+ years beyond the end of the TIF), 3) an increase in the developers budget of over $400,000 from the original budget approved as part of the Redevelopment Agreement, 4) the continuing state of the nation’s weak economy which would have undermined the revenue and interest projections that were made at the end of 2000, and 5) the time delay in moving forward from approval of the Redevelopment Agreement, which has reduced the potential revenues into the TIF as the 2013 termination fast approaches.

As per the terms of the Redevelopment Agreement, the developer was provided an opportunity to assume these additional financial risks, thereby eliminating any increased financial exposure to the Village. Village representatives met with the developer prior to the October 6th meeting, at their behest, to discuss this matter, however, no new proposal to assume that risk was provided.

Once the Village had completed the termination procedure, the developer subsequently filed a $20 Million lawsuit against the Village. This lawsuit contained a number of legal accusations and sought to have the Village continue forward with the project, as proposed. The Village has been cooperatively working with and meeting with the developer in the hopes that we can come to a resolution to this lawsuit without the necessity to proceed to court. Settlement discussions are on-going.

The Village Board is evaluating the next steps related to redeveloping the Downtown area and will soon be determining a direction in which to move forward and provide a redevelopment project that will offer the valuable amenities, both manmade and natural, our residents, Mayor and Village Board have been working towards.