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No “Filler” For The Uptown Redevelopment Financial Hole

09.30.11

A headline in yesterday’s Park Ridge Herald-Advocate caught our attention, and not because it was a good one: “No profit for city of Park Ridge as Shops of Uptown goes up for sale” is how it read. 

The accompanying story reported on how the profit-sharing element of the City’s January 2005 “Redevelopment Agreement” with PRC Partners, LLC – a “partnership” of Mid-America Asset Management (the “retail” partner), Edward R. James Homes (the “residential” partner) and Valenti Builders, Inc. (the “construction” partner) – would not be yielding any cash to the City, once touted as the “government” partner of this venture because of all the money and bonded debt it was going to be “investing” – that’s government code for “giving away.”

Who was doing that touting? 

Back then the Uptown bandwagon was pretty crowded with Uptown merchants and many of the people who then ran the City of Park Ridge: Acting Mayor Mike Marous; Alds. Mike Tinaglia and Don Crampton (1st), Rich DiPietro and John Benka (2nd), Sue Bell and Andrea Bateman (3rd), Sue Beaumont and Howard Frimark (4th), Dawn Disher and Mark Anderson (5th), Frank DePaul and Rex Parker (6th) and Frank Bartolone and Larry Friel (7th); City Treasurer Betty Henneman; City Treasurer Carl Brauweiller; and City Manager Tim Schuenke. 

By then, what had begun in 1999 (and continued through the 2003 formation of the TIF district) as a retail-driven project already had defaulted into a predominantly-residential one; and the advertised 70,402 square feet of retail space became the “tail” on the 189 residences “dog.”  Nevertheless, Uptown redevelopment was hailed as ushering in the dawn of a new era in Park Ridge: like Neville Chamberlain returning from Munich with the promise of “peace in our time,” many of those City officials waxed glowingly about “the largest redevelopment effort in generations” that would inject “vibrancy” – “vibrant” and every possible variant thereof being the unofficial watchword of the project – into a moribund Uptown retail district.

Those officials, seduced by predictions (including some of their own) of how certainly and quickly the City would recoup its expenditures, voted to “invest” multi-millions of dollars in cash and bonded debt to acquire a so-called “partnership” and “profit sharing” relationship with PRC.  The City sunk $5.25 million into just the parking garage alone, and we doubt even the City itself has an accurate fix on its entire, to-date cost of Uptown Redevelopment; or what that cost will be when the last of the bonds are retired.

But once again this fiscal year the City will make a $2.9 million payment on that TIF-related bonded debt.  And because the TIF/Uptown project is still in such a deep financial hole, it appears that the City has paid none of the $1 million it owes the Park District in consideration of the millions of dollars the Park District saved the City by permitting the construction of the Uptown reservoir in Hinkley Park rather than at the former City Garage property at Greenwood and Elm.

Upon reading the H-A article, we checked the Council’s 09.26.11 meeting packet on the City’s website and discovered a Sept. 26, 2011, Agenda Cover Memorandum  and an August 12, 2011, letter from the City’s Uptown Redevelopment “consultant” – the former blithely recommending (without any meaningful reason) the Council’s acceptance of the consultant’s profit-sharing analysis; and the latter providing a collection of unsubstantiated conclusions about how the City is entitled to nada from PRC.  We have provided some redlined annotations to the consultant’s letter highlighting some of the inadequacies of that report which, on its face, assumes that the City and its taxpayers should take Mr. Friedman analysis as gospel.

Apparently “trust, but verify” isn’t a favored concept of our City officials, past or present.  And, once again, it looks like the City is taking it in the economic shorts from the Uptown Redevelopment project.

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6 comments so far

Out of curiosity, is there any land that the City of Park Ridge owns that could be transferred to the Park District in lieu of the $1.0 million dollar payment?

EDITOR’S NOTE: Not that we can think of. The only two properties we can think of don’t seem to fit the bill: the Courtland lot south of City Hall isn’t worth anything near $1 million and wouldn’t provide any value to the Park District; and the old City Garage property at Elm & Greenwood is probably worth more than $ million, but probably also needs some environmental clean-up if it was to be redeveloped.

For those of us new to the area, please clarify the business transaction of how it went from retail space to residential space.

How was the City going to originally make money from the retail space, and how was the City going to make money when it became residential space?

EDITOR’S NOTE: We’re not sure we understand the question, but we’ll take a stab at it anyway. There was no “business transaction” converting the Uptown project “from retail space to residential space.” Instead, the original argument for Uptown redevelopment (the “bait,” if you will) was to create retail space that would attract retailers such as Walter E. Smithe, Whole Foods, Williams-Sonoma, Crate & Barrel, the Gap, Barnes & Noble/Borders who needed bigger retail space than what then existed in Park Ridge. But only after the City committed to buying the old Bredemann car dealership properties for $3.8 million and the TIF was enacted did it start hearing from interested developers that residential would have to be a/the key component rather than a by-product (the “switch,” if you will).

As for how the City was going to make money from the retail space v. making money from the residential space, the point to keep in mind is that the principal goal of Uptown redevelopment was to add retail “critical mass” to Uptown, not simply to make money from it. The proponents of that redevelopment, at least based on their public comments, wanted Uptown to provide retail and entertainment that would (a) keep residents shopping and dining in Park Ridge, and (b) attract non-residents to Park Ridge for those purposes. But to the extent money was a consideration, it would come from property taxes (because commercial property is taxed at a higher rate than residential) and from increased sales taxes.

Or so we were told.

I know this is the same old song, but part of the problem with all of uptown is the draconian zoning ordinances. We tried for years to open a business in Park Ridge, only to be flat out told that PR wants restaurants, that’s it, nothing else will be welcomed or worked with. We finally gave up, going instead to Mount Prospect. We generate a lot of sales tax revenue now, not for the town we love and live in, but for a neighbor that welcomed us with open arms and smoothed any difficulty. Maybe the Shops of Uptown would be full now if that was the case here.

EDITOR’S NOTE: Taralynn, can you please identify: (a) who at City Hall “flat out told [you] that PR wants restaurants”; (b) when they did so; (c) what kind of business you wanted to open; and (d) what particular “draconian zoning ordinances” were problematic for you?

We here at PublicWatchdog are pro-business, within some pretty broad limits. But if Park Ridge is going to lose whatever “anti-business” reputation it allegedly has, both the folks at City Hall and the public who pays their salaries need to know exactly what’s wrong, why, and who’s responsible.

Yes, please, Taralynn — it’s important, so please do answer PubDog.

Taralynn must have lost a little enthusiasm for her complaint when asked about the details. Or maybe she just likes Mount Prospect better.

EDITOR’S NOTE: Funny how that happens.

Good thing the Park District got a guarantee on that money. Pretty smart thinking by the Board at that time, whoever that might have been.

EDITOR’S NOTE: It’s probably better than a sharp stick in the eye, Herr Kaiser, but we will reserve judgment for the time being. As we recall that deal, the City’s guarantee might not kick in until the City actually gets into the black on the TIF. And from the way the TIF has been hemorrhaging red ink, that guarantee might not be worth the paper it’s printed on for quite some time, if ever.



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