The complicated details of an agreement outlining terms and conditions for a major development at the busy northeast corner of routes 60 and 21 in Vernon Hills appear to be nearing a conclusion.
Village officials at 6 p.m. Tuesday will host a special work session to continue discussion of a pact with Regency Centers regarding what has been described as a $200 million Mellody Farm retail and housing plan that would require a substantial village incentive. The meeting will precede the regular board meeting at 7 p.m. at village hall, 290 Evergreen Drive.
Regency, which owns or operates more than 300 shopping centers, about 15 months ago introduced the idea to build a 274,575-square-foot retail center and an accompanying 260 luxury rental apartments on one of the few remaining undeveloped areas in town. One unwavering aspect has been the developer asking the village to contribute $20 million toward the project, because of the high land cost and other factors.
How and when that will be paid are among dozens of issues that have emerged as the final make-or-break push is underway. The village wants guarantees, including a $25 million liquidated damage clause if the project isn't built, to protect its investment as it considers the final terms and conditions. Regency representatives have emphasized there will be no risk to the village.
In September, the village's advisory planning and zoning commission unanimously recommended approval subject to 34 conditions, including state approval of major road improvements at the intersection.
The village board Tuesday may review those recommendations. A special session also is set for 6 p.m. Thursday to continue the discussion.
Two weeks ago, Regency officials gave detailed presentations about the plan's housing and retail components, as well as market information, background on the property purchase and other observations to show why the hefty incentive would make sense for the village and how the project would be unique in Lake County.
Village officials sought alternative ways to assist Regency and have been uncomfortable with any reimbursement of the property purchase price. Regency was able to get the price reduced from $40 million to $26.2 million. However, the structure of the transaction, which involves Regency stock, precludes other potential incentive avenues, village officials were told.
The village is being asked to borrow money by issuing bonds. Those proceeds would be used to pay Regency for various expenses only as they are completed. The idea is that eventually, the village will recoup its investment by designating the area as a special taxing district.
Village officials are wary of doubling the village's bond debt or having to possibly dip into general funds to pay the annual debt. Informally, they appear willing to proceed if the agreement addresses a variety of factors.
Regency, for example, would be required to have signed leases representing half the space. Whole Foods is the only announced tenant, but more are expected in coming weeks.