Lakewood Village President Erin Smith had to cast a tie-breaking vote for ordinances giving McHenry County SportsPlex developers an additional six-months to meet their end of the deal struck with Lakewood.
A year ago the vote was unanimous.
In the meantime, village elections turned out an appointed trustee who supported the decision and replaced her with businessman Jeff Iden.
He and another new trustee, Gary Sexton, who ran unopposed, were joined by re-elected Ken Santowski in voting “No.”
After three Smith loyalists, John Burton, Carl Davis (by phone) and Gene Furey voted “Yes,” Smith, who had previously expressed her continuing support for the project, broke the tie.
Smith introduced the agenda item by telling the audience that the only issue was whether an extension should be approved. She said that other questions about the deal approved a year ago (without pre-meeting details of the deal being made public) could not be re-opened unless the SportsPlex developers changed their end of the deal.
Nearby residents outside Lakewood’s village limits had questions to ask and statements to make.
The questions generally were not answered and Smith cautioned that derogatory remarks might be better left unsaid.
“You need to be very careful about your comments,” were Smith’s exact words.
Initially only twenty minutes were allowed for public input, but Smith allowed four speakers after that deadline passed.
More Lakewood residents spoke up than at the original meeting. My guess is that the Sunday front page coverage by the Northwest Herald was the stimulus.
Tom Carroll of Richmond Lane reported that this was his first meeting in thirty years of living in Lakewood. He wondered how the project was “in keeping with our community view,” as the village web site proclaimed.
“Where did you get the idea that anyone wants a sports complex?” he asked.
Smith replied that the proposed development was consistent with “our comprehensive plan.”
“I don’t think the community supports this sports complex. I may be a year late, but I hope you’ll take (my views into consideration).
A resident living on Broadway weighed in with a negative comment.
Kathy Barton of Meridian Street offered her opinion:
“I don’t think you should extend this.”
“When are you going to run for office next?” asked Lake Avenue resident John O’Brien.
Three of those casting the “Yes” votes, including Village President Smith and Trustees John Burton and Gene Fuery are up for election in 2013.
SportsPlex opponents passed out court papers documenting financial problems reported in the First Electric Newspaper the morning of the board meeting.
Unincorporated SportsPlex neighbor Al Stenstrom presented an unredacted copy of a project feasibility study provided by the Upper Illinois River Development Authority after being told to do so by the Public Access Counselor of the Illinois Attorney General.
He suggested that the board had never looked at it–the McHenry County Board (didn’t look at it either).
Fellow unincorporated neighbor Larry Larsen pointed out that the SportsPlex would “pay only $350 per year in taxes for the first five years while Lakewood will be kicking in $5 million.”
“I was dumbfounded at the amateurish (nature of the feasibility study),” former Ameritech Director of Long-Range Planning Joseph Daleiden started his critique.
Among other complaints were inadequate marketing data, incorrect census data, comparisons with other sports complexes with profit and loss data showed all were losing money, the 750,000 estimate of visitors for soccer was way too high, plus errors or simple addition.
He suggested government officials “be very, very suspicious” of developers trying to gain public subsidies.
“Are people behind risking their own money?” Deleiden said was a relevant question. Would they share in the profits and taken management fees?
Finally, “If banks don’t want any part of it…”
Jack Porter, who drew up the conceptual plans took the floor after the public comment period.
“I can’t offer you any guarantees that we can get this done. We’re looking at private equity opportunities. Right now, we can’t really disclose what we are doing. We do need more time.”
Trustee Sexson, newly-elected, asked what proportion of the $12 million in upfront money needed had been gathered–“half three-fourths, ten percent?”
Developer Len Tenore mentioned potential investors in Romania and Taiwan.
“We’ve got $35 million from a bond house,” which he said we “can’t reveal.”
Trustee Ken Santowski remembered he had “sat here a year ago and struggled with this.”
Reiterating the “tax free bonds, then taxable bonds, then private funds, then equity…We as a board have supported you guys blindly for 362 days.”
Santowski referred to the results obtained by the Algonquin Village Board on “Tyvek Towers” when the village “slapped their (the owner’s) head. They were laying bricks the next day.”
Smith asked Tenore for other progress that had been made.
“Number one, there’s not a lot of development going on, period.
“Everyone is reluctant to be first in line.
“The first half has to buy the land and do the engineering.
“We’ve been let down by the EB-5 program.
“After that we decided to look for outside investors.
“We had a lot of people give us verbals. Some more than that,” Tenore said.
“Do you come to us with an empty check book?” Santowski asked.
“There has been investment made of approximately $1/2 million,” Tenore replied.
“I have a hard time thinking a bond firm would (fund this),” Trustee Sexton said.
Tenore revealed that the feasibility study being discussed was one from 2008, which had been superseded by one by CH Johnson.
He also revealed that the original bond firm of Stern Brothers was no long involved. William Blair was identified.
‘I’m for extending this,” Trustee Furey said. “The bond market is going to dictate whether this goes ahead or not. Six months is not a long time. (Then) the Village Board will look hard at it.
“It’s a tough economy,” Trustee Sexton observed. “I don’t know if six months is going to turn the ship around. I don’t know if I want to set you guys up for failure.”
He suggested renegotiating the deal, that the project might have to be done in stages.
“We were very generous.”
Trustee John Burton asked Tenore if there were any changes.
“Trustee Sexton is correct. We have to do it in stages,” he said. “The back portion” would be done later.
Burton described the development as “unique. I think it could draw a very valuable group of people the the village..
“I would fully support bringing sewer and water to that intersection.”
He also noted that extensions were being granted in neighboring communities.
“I support reducing the tax burden to the community with sales tax (revenue from the project),” Burton added.
Via phone, Trustee Davis asked if “different investors” were being approached.
Tenore replied that foreign investors were being followed up.
“I think it is clear to me that the developer has at least some hope of getting financing. in light of the current and possibility of new investors, I think we should allow a six-month delay.
“This is the least worst situation.”
He praised the “wholesome recreation and exercise.”
Prior to the vote, President Smith gave her reasons for supporting the extension.
“I believe this is the best use of the intersection. I don’t want that intersection to look like every other intersection.
“We don’t have another project of this magnitude at that location.
“Other communities–like Crystal Lake–have extended all project six months.
“I am concerned the message we would send about business friendliness, (if we didn’t grant the extension),” she said.