The already-delayed project to redevelop parts of downtown Lake Zurich may face another setback as the end of the year approaches.
The village granted David Smith, owner of the development company Equity Services Group (ESG) an extended deadline for funding until Jan. 1, but according to Al Zochowski, the village's finance director, he still doesn't have it.
Smith will be at the village board meeting Monday night to discuss the status of his funding.
If Smith misses his deadline again, the village contract with him will become null and void and the redevelopment program will be back to where it was five years ago, Zochowski said.
Terminating the contract with ESG means the village would have to find a new developer within the special taxing district to start working on the project. Zochowski said the village has had several developers express interest in downtown projects, but have not been able to pursue any while they are still under contract with ESG.
Assuming there is a new developer to be found
“We were relying on this project getting started several months or a year ago and hoping we would see some development happening by now,” he added.
If Smith secures funding, final design plans would be due to the board for approval by April 1 to move forward with construction.
Zochowski said the village needs development to take place because the revenue source for the tax increment financing district is incremental property taxes, or taxes that go up because of development in the TIF which hasn't been happening. He said the village has $28 million in outstanding bonds that need to be paid off over the next 13 or 14 years, and the village has planned to pay those off through additional property taxes.
If Smith can convince the board Monday night that he will be able to meet his Jan. 1 deadline for $12.5 million, he will have until Jan. 30 to come up with another $8 million.
“Our agreement said you had to have certain things done by a certain time,” Zochowski said. “I'd love to see Mr. Smith come in with his funding and start the project. The concept he had would be very good for Lake Zurich.”