McHenry County Blog

Pete Gonigam’s First Electric Newspaper reported it first, but he didn’t have the map you see below.

What you see in orange is the new area within McHenry County designated by the Illinois Department of Commerce and Economic Development as “Targeted Employment Area under the Alien Entrepreneur Visa Program.”

Part of McHenry County eligible for EB-5 "Buy a Visa" investment program.

The yellow sections on the map are already so designated.

So, what does it mean?

Under the irreverently coined “buy a visa” program, foreigners with $1 million to invest in an approved job creation enterprise may obtain entry to the United States of America.

However, if the economic development occurs within a “Targeted Employment Area,” the required investment decreases to $500,000.

As you can see two townships—Riley and Chemung—previously were eligible for the smaller “entry fee.”

With the expansion of the Woodstock Greenwood Township section, whose northern edge is Ware Road (the street between the McHenry County Jail and the Administrative Building), to include the rural part of Dorr Township, Lakewood gains a potential source of investment for its part of the intersection of Routes 47 and 176. So does Woodstock as it expands southward toward Route 176.

The rural Dorr Township area was eligible because the census tract had an unemployment rate of 14.2% is 153% of the national average of 9.3%. (An area must be at least at the 150% level.)

Note that the connection is at a point. Only the edges of the census tracts touch. (See black mark on map.)

A January 6th letter from Lakewood Village President to Warren Ribley, Executive Director of the DCCA, states that “the proposed project” will employee “800 temporary and 400 permanent individuals.”

It references a January 7th letter to Village Manager Catherine Peterson from New York City attorney Stephen Yale-Loehr.

He delivers an affirmative answer as to whether the census tract can be designated a “Targeted Employment Area for EB-5 (the name of the “buy a visa” program) purposes.”

He points out his co-authorship of “Immigration Law and Procedure, the leading 20-volume immigration law treatise,” plus his teaching immigration law at Cornell Law School.

He has been a member or in a leadership position in the American Immigration Lawyers Association EB-5 Investors Committee since 1996.

And he says why this particular census tract, which contains the area proposed for the SportsPlex is eligible for a Targeted Employment Area designation.

DCCA apparently agreed with Yale-Loehr’s logic. That’s what DCCA Research Manager Edwin R. Taft’s February 16th letter indicates.

Alice in Wonderland

Read this article on The First Electric Newspaper about the unsavory background of one of the McHenry County SportsPlex’ consultants.

The publication reports SportsPlex supporters introduced “Terry Gaouette, Vice President of Administration and Business Consulting Services for H&K Sports Fields, Egg Harbor, WI, as a consultant.”

Further, that he was “Chief Financial Officer of the Milwaukee Public Museum and indicted on four felony counts in 2007 for draining money from the museum’s endowment funds to cover its declining operations and hiding it.”

The museum had to be bailed out by county government to keep it from going under.

Marc Munaretto

Also of interest was McHenry County Board Finance and Audit Committee Chairman Marc Munaretto:

“I understood him to represent himself as the consultant for (McHenry County Sportsplex’s) business plan. I thought he was a paid consultant that helped develop the application.”

Munaretto told reporter Pete Gonigam it wasn’t his committee’s job to “drill down that far.”

The committee has also not “drilled down” far enough to even reveal to fellow county board members and the public who owns how much of the project.

Read the whole story.

It’s getting curiouser and curiouser.

I was reading the blog of Merle Widmer, the Vice Chairman of the Peoria County Board.

In writing about how local unions want construction started on a museum for which money is not in the bank, retired businessman Widmer writes,

“My dealings over the years with bankers who ask you how much you have in the ‘bank’ means CASH, not promises.”

That made me think of the “commitments” that two potential funding sources for the McHenry County SportsPlex that is proposed to be in Lakewood at the intersection of Routes 47 and 176.

Read them carefully and I think you will agree that neither gets past the promise stage.

Commitment letter for $27 million for McHenry County SportsPlex.

EB-5 letter of commitment for $27 million for the McHenry County SportsPlex.

Maybe, “maybe ‘promise’” stage would be a more accurate description of the commitments.

Yesterday, McHenry County Blog showed you the letter from the Chicagoland Foreign Investment Group saying that it would raise $27 million “for construction and operation of the (McHenry County SportsPlex” sports facility complex to be constructed in McHenry County.”

That was dated December 1st, but just given to county officials on January 28th.

Today, take a look at a February 5th letter from Stern Brothers & Company.

Click to enlarge.

It says the firm will find “sophisticated investors…in tandem with a sophistical investment letter…”

Then, there are two “if’s.”

• The operating LLC raises $8 million in equity, and
• The project is located in a Targeted Employment Area and CFIG (Chicagoland Foreign Investment Group) commits $27 million in long-term take out financing.

Miyun Cho, Managing Director, signs the letter.

The December 1, 2009, letter you see below was given to McHenry County officials on January 29, 2010, according to the date stamped on it.

Click to enlarge.

The Chicagoland Foreign Investment Group, known for short as the EB-5 company, pledges to provide funding up to $27 million to McHenry County SportsPlex ”for construction and operation of the sports facility complex to be constructed in McHenry County.”

“The funding is contingent,” the letter from Taher Karneli says, “ upon the $8 million in equity to be raised by the equity group as well as several factors relating the the EB-5 Program and the requirements of various Federal laws that govern the program.”

The letter goes on to point out that the money supplied is intended to repay the financing provided by bonds issued through McHenry County.

One of the factors alluded to might be a necessity to broaden the investment mission of the EB-5 entity. This was discovered by Pete Gonigam of the First Electric Newspaper.

Artist's conception of the view from Routes 47/176.

Yesterday, Pete Gonigam’s First Electric Newspaper reported on what could be called a “snag” in bringing a $40 million sporting complex to the intersection of Routes 47 and 176.

It “comes on the side of that group’s majority partner, McHenry Sportsplex EB-5 Fund LLC. The short version is investments in a Sportsplex may not be on the official approved list,” as the article says.

If you want to know more about what an EB-5 fund is and what restrictions on investment that the Chicago one does not seem to meet, click on over to the publication that covers the southeast part of McHenry County.

McHenry County Board Chairman Ken Koehler (R-Crystal Lake) talking to McHenry County Young Republicans at 1776.

When I saw the envelope with Lakewood Village President Erin Smith’s name and office on it and no return address, I was surprised.

Still, I live in Lakewood, I figured she might be writing the community about the SportsPlex about which I have severe qualms. So far, no written explanation of what is planned has been mailed to residents, although the winter newsletter was in the mail when I went to the early December board meeting to inquire how the village could afford to subsidize the developer to the tune of a million dollars.

Lakewood residents have good reason to be leery when a village board gets big ideas that cost money.

After all, I and other Lakewood residents ended up paying hundreds of dollars per year to pay off the Red Tail Golf Course bonds that the village board had promised me, former village Trustee Roger Reid and attorney Jim Bishop the golf course would never “cost me a dime.” (Lakewood residents will still be paying for those bonds this year because the golf course does not make enough money to pay for operating expenses and its “mortgage.”)

When I opened the envelope, it was information about the proposed Route 47 and 176 sports complex development.

But not how it would affect Lakewood residents.

Rather, it was about the village president’s support of McHenry County Board Chairman Ken Koehler’s re-election.

Lakewood Village President is seen talking to constituents in a crowded Meridian Street home.

Village President Smith bases her endorsement on her interaction with Koehler on SportsPlex matters:

“He has provided his support as we meet with the Illinois Department of Transportation, along with state and federal legislators regarding this strategic development.

“We have a long way to go before we’re ready to approve development at this intersection, and I am confident that Ken Koehler will support our efforts every step of the way.”

Crystal Lake City Councilwoman and District 2 county board candidate Ellen Brady Mueller speaking to Patriots United candidates' forum.

Smith goes on to point out that Koehler knows

“the importance of intergovernmental
agreements and cooperation,”

but last Wednesday night at the Young Republican’s 1776 candidates’ forum, Koehler opponent Ellen Brady Mueller took the county board to task for not requiring development on Crystal Lake’s watershed to meet the standards of Crystal Lake’s Watershed Ordinance.

In the proposed 2030 Plan, which Smith praises in the endorsement letter, the county does not propose to let Crystal Lake’s well-researched lake watershed protection rules to take precedent.

So, when Smith praises Koehler for his protection of “open space, groundwater and historic areas,” I must admit the groundwater protection part so far seems to have missed the Crystal Lake watershed, the protection of which is so important to the 420 homes in my Country Club Additions subdivision (located between the lake and the Crystal Lake Country Club).

I figure if one is going to promise to protect groundwater, one should start where one lives and that’s Crystal Lake in Koehler’s case.

The Crystal Lake area has half the 24 county board members representing parts of it.  Districts 2, 3 and 5 ought to be watching out for the interests of Crystal Lake.

So, when you see one of those 12 county board members, ask them why the 2030 Plan ignores the protection of Crystal Lake.

And, as I read the map, it appears that Smith lives in District 5, rather than Koehler’s District 2.

The letter from Smith does not say who paid for it.  When I called her, she verified that  she wrote the letter, but, when asked if she paid for it, said

“I did not.”

The problem for whoever mailed it, if that “whoever” is a political action committee, is that  state election disclosure law says it has “to be identified by the payor.”

When driving along Rute 47, you may see this in the future.

Here’s the first of a series of article that Pete Gonigam has written for his First Electric Newspaper.

It’s entitled,

FEN Finds Possible Problems for Proposed SportsPlex

You can read about and see the Prairie Grove maraschino cherry processing plant that Lake in the Hills resident and SportsPlex CEO Lou Tenore owns.

The article reports that “at the moment the EB-5 fund owns 65 percent of the company, the Management Group 35 percent. Later on the Management group will end up with a 51 percent interest.”

The intriguing description of tomorrow’s article is

“How Do You Say ‘Sportsplex’ in Farsi?”

The McHenry County Board is poised to vote on whether to allocate $18 million of its $27 million in Federal stimulus money to the Lakewood development.

Details from the application for a Federal Stimulus Fund-subsidized $18 million loan the award of which is controlled by the McHenry County Board was discussed yesterday.

There will be a 125,000 square foot indoor facility, plus “multiple baseball, softball, soccer, basketball, volleyball and other competition fields (e.g., lacorsse) to complement the complete array of sporting needs in and around the market area of McHenry County.”

“An ‘extreme’ sports area” will include “a BMX course, Skateboard Park, Obstacle course,” etc.

“Underserved athletes in the community including handicapped, autistic and blind participants” will be served.

The business plan notes that 25% of all McHenry County’s youth athletes use facilities outside of the county.

Besides President Lou Tenore, the investors are identified only as

The management team is identified as overseeing “the  largest baseball tournament in the in the United States, (plus) the largest indoor basketball league and training program in Illinois.”

Further hints as to management’s identity are contained in this description:

“The management team is composed of local McHenry County residents who have either been employed in youth and adult athletic competition field or have done it voluntarily in nonprofit organizations in this industry.”

Today, let’s take a look at some concept drawings of what the 180-acre area on Routes 47 and 176 might look like if the project reaches fruition.

Here is what you might see as you drive past:

Below is what it might look like from the air:

Retail space in contemplated, which might look like what you see below:

There will be a sports bar. Below you see two views of what is contemplated:

A view from the North of the Sportsplex is below:

The meeting of the County Finance and Audit Committee is scheduled to begin at 9:30 Tuesday morning in the county board conference room Woodstock’s Administrative Center.

Committee members will consider the proposal, whose financing may be assisted by an admissions tax “to repay public support for the project.”

$400,000 in real estate taxes are contemplated annually.  There would be about $1.6 million a year in sales tax.

Headed by Lake in the Hills’ Louis Tenore, Jr., a group of investors is seeking permission to obtain $18 million in Federally-subsidized stimulus money, according to a document posted on the McHenry County Board’s web site.

The proposed McHenry County Sportsplex will be mainly on the west side of Route 47 where it joins with Route 176. That area is within the planning jurisdiction of the Village of Lakewood. Background on the project can be found here.

While discussions have been going on for a considerable length of time, the application says that the Village of Lakewood will not act on annexation and approval of the project until next March.

Issuance of the $18 million in bonds, if approved by the county board, is scheduled for April 15^th. Construction would begin January 1, 2010, with completion six months later.

If approved, unless more Federal stimulus money is found, the current $27.5 million allocation of Federal Stimulus Bonds would not seem to have enough remaining to also provide the $15 million in financing that the Woodstock minor league baseball stadium promoters are seeking.

Concept Plan for the McHenry County Sportplex on Routes 47 and 176.

SportsThe time table listed seems a bit optimistic, given the stated March approval by the Lakewood Village Board.

The name of the limited liability corporation which will own 30% of the project is MCSMG LLC. It was formed on May 12, 2009.

The Illinois Secretary of State’s Office lists it as “McHenry County Sportsplex, LLC.”

McHenry Sportsplex E-5 Fund LLC, established August 21^st of this year and located at 111 E. Wacker Drive in Chicago, will own the other 70%. According to the Illinois Secretary of State’s Office, it is related to McHenry Real Estate and Property Investments, LLC. The fund proposes to invest $27 million in the project.

The application says that $13 million in equity will be put up by the investors.

This is how the document says the $40 million will be spent:

• $6 million – land acquisition
• $6 million – site development
• $24,100,000 – new construction
• $500,000 – furniture and fixtures
• $2.9 million – professional fees

Getting the project off the ground will produce 524 temporary jobs, the application says. 420 permanent jobs will be created. Annual payroll after the first year is estimated to be $14.1 million or almost $36,000 per person per year.

The investment banking firm is identified as Stern Brothers. The bonds will be privately placed.

Kitak, Rock, LLC, will be the bond counsel.

Legal counsel is Mike Moody of O’Rouke and Moody at 55 W. Wacker Drive, Chicago.

The application is dated December 16^th.

An attachment showing local labor, supplies and materials to be used is not posted on the county’s web site. Another attachment explaining the project is also not attached.