Vernon Hills officials are prepared to proceed with what could amount to a $20 million incentive to attract a mix of retail and residential uses to one of the few large undeveloped tracts left in town.
Many details need to be settled and thresholds crossed before any funds would be dedicated. But the pending pact with Regency Centers for the northeast corner of routes 21 and 60 would be more than the combined total of seven previous sales tax incentives the village has offered to attract businesses such as Mariano's.
In return for the hefty investment, Vernon Hills would be getting a mix of about 268,000 square feet of pedestrian-oriented retail space estimated to generate $800,000 in sales taxes each year as well and 250 units of rental housing.
The center, with a working name of Mellody Farm, is promised as being different from other shopping areas in the village, which perennially is among the sales tax leaders in Lake County because of its variety of commercial offerings.
"We're adding a dynamic source of new tenants. They've had an opportunity to get in Vernon Hills before and they've passed," said Matthew Hendy, vice president of investments for Regency, which owns operates and develops grocer-anchored retail centers, including many in the suburbs. Potential merchants have not been disclosed.
The proposed project and other details were discussed Monday by the village board during a special meeting. The plan represents a combined investment among Regency, retailers and the Focus Development Group, which would build the residential portion, of $200 million.
Regency approached the village in August with a general vision for a mix of retail and residential uses in what was described as the first serious proposal in years for the long vacant property owned by the Cuneo Foundation.
The company wants the village to designate the 55-acre parcel as a special financing district and borrow $20 million to be raised by selling bonds to investors. The money would be deposited in an escrow account upfront and be used to reimburse the developer for eligible expenses. With interest and other costs, the total to the village would be $24 million.
Regency also wants the village to authorize a nonbinding agreement called a memorandum of understanding that would outline specific conditions and other details but wanted to gauge the interest of village officials in the incentive amount before proceeding. The board at its regular meeting Tuesday is scheduled to vote on the agreement.
"The final terms still need to be agreed to, but it gives them a comfort level going forward, said Village Attorney Bob Kenny. The agreement will include many conditions, such as signed leases with an organic grocery store and two anchors and guarantees that certain work will be done in a specified time.
"The village has no obligation to give us any money whatsoever before we've met certain conditions," Hendy said.
Only 33 of the 55 acres are usable and the property has remained undeveloped because of the price, estimated at $30.5 million.
"Based on what I know tonight, my vote would be to accept this and move forward," said veteran Trustee and former Mayor Barb Williams.
"That's the most important corner I can imagine that's left in Lake County. I expect something spectacular to go there."
It is the last piece of the Cuneo holdings, which stretched for thousands of acres and most notably were developed as the Westfield Hawthorn shopping center and Gregg's Landing upscale residential community.