With approval from the city of Waukegan to assist with the renovation of two downtown buildings, developers are already looking ahead to the next part of the first phase of a $315 million project with 700 residences, 70,000 square feet of commercial space and a park.
Following the recent approval of two projects — the one-time YMCA at the northwest corner of County and Clayton streets, and a former restaurant at 38 North Genesee St. — by the city, developers are now pushing forward with three more downtown projects.
Lowell Jaffe, the lead developer with the Waukegan Community Development Partnership, said creating a motivation for people to live in the downtown area is the key to revitalizing the city’s central business district. Mixed-use buildings with residences and commercial space are the key.
“We need to repopulate downtown,” Jaffe said. “We need more people to make downtown viable. We are focusing on the core of downtown which is the city and county (building) compound.”
Lawyers for the city and the partnership are working on a development agreement for the initial portion of the first phase of the project after the City Council approved the terms of the deal on Feb. 3 at City Hall creating a public-private partnership.
Sam Yingling, another member of the development partnership, said once the development agreement is signed and permits issued, he anticipates the renovation of the former YMCA and 38 North Genesee will be complete in six to nine months.
Currently in conversations with city officials about three additional projects of the more than $119 million first phase, Yingling said he hopes construction on those can start within six months of final approval. One will be a new building.
As soon as the first two buildings are complete and permits are issued for the next three, Jaffe said the partnership will renovate the long-abandoned 10-story Waukegan Building at the southwest corner of Genesee and Washington streets.
Courthouse Square will constitute the other two buildings that will complete the first phase. Jaffe said it would include a new building kitty-corner to the former YMCA, with 200 apartments on the upper stories and stores on the ground floor. It will sit on a current city-owned parking lot.
Jaffe said along with the new construction, a former bank building on Madison Street adjacent to the parking lot will be a mixed-use building with 75 apartments.
When the former YMCA is complete, it will have 19 apartments on the top three floors, and 6,700 square feet of commercial space on the ground level. The building at 38 North Genesee will have six residences on the top two floors, and 3,000 square feet of retail or office space.
As part of the package to remodel the former YMCA for just over $3.7 million, and the building on Genesee for more than $1.6 million, the council voted 6-2 to initially fund $900,000 from an existing Tax Increment Financing District (TIF) and another $825,000 from the TIF later.
Ald. Victor Felix, 4th Ward, sponsored the legislation. He said the investment will help add 25 luxury apartments to the downtown area, and help establish a market so other developers will begin to invest in the area.
“You give incentives to someone willing to put themselves out there to start the first development,” Felix said at the meeting. “It is a big risk. It benefits us to spark development. We don’t have an established market. That’s what we’re trying to do.”
Mikki Schuk is another partner with the development team. He already owns and is renovating the Genesee Street property. He bought it in September when the former owner grew impatient waiting for city approval. He currently owns and operates seven downtown luxury units.
Ald. Lynn Florian, 8th Ward, said she has some concerns over the use of TIF funds. She also believes the effort of Schuk and others has established a market for high-end apartments in the downtown area.
“There’s only so much money in the TIF and if we drain the TIF, there’s lots of things that are not going to happen as a result of that,” Florian said. “My opinion is it will not set a precedent. I think we’re being hoodwinked in some ways.”
Both Florian and Ald. Edith Newsome, 5th Ward, said using money — approximately $13 million — derived from gaming and cannabis sales is a better way to contribute to the partnership. Newsome said she would support it if funds did not come from the TIF.
“I’m not in favor of taking it out of the TIF because it has already been designated for projects we have,” Newsome said. “I’m all for development. I’m not in favor of using tax dollars upfront for the development. I will go along if it’s coming out of something other than this TIF.”
Mayor Ann Taylor said the council should not be quick to allocate money derived from gaming and cannabis. Members have discussed potential uses over the past few months, but have not allocated any.
“Thirteen million (dollars) may seem like a lot to you, but it’s nothing when we’re talking about some of these projects,” Taylor said.
Ald. Keith Turner, 6th Ward, also said he is not generally in favor of using taxpayer dollars to help fund private projects, but this is an exception. Spending public funds to help renovate the Genesee Theatre is such an exception.
“Think where we would be if the city had not carried the whole nut for the renovation of the Genesee Theatre, the demolition of the Academy Theater, the resurfacing of the sidewalks,” he said. “If we’re going to redevelop the downtown, we’re going to have to invest.”
Voting for the project with Felix and Turner was Ald. Sylvia Sims Bolton, 1st Ward, Ald. Jose A. Guzman, 2nd Ward, Ald. Juan Martinez, 4th Ward, and Ald. Michael Donnenwirth, 7th Ward. Florian and Newsome were the sole no-votes. Ald. Thomas Hayes, 9th Ward, was not present.
The remaining parts of the overall $315 million plan are in the initial planning stage.
