Unknowingly, T.S. Eliot summed up the saga of CRM
Properties’ dream to create a downtown for Buffalo Grove when he wrote ““This is
the way the world ends; Not with a bang but a whimper.”
The announcement
today that the Deerfield-based developer is withdrawing is plan to develop the
Buffalo Grove Golf Course into a downtown that encompassed retail, residential,
dining and entertainment venues combined with a municipal campus should not
come as a total surprise.
The grandiose plan
with all its seashells and balloons lacked one major thing for residents and
apparently, village officials. Answers.
In the release, the
village said “In discussions with staff, CRM Properties Group President Charles
Malk cited higher costs than initially projected for the proposed plan, and an
inability to resolve related financial hurdles. The most recent cost estimates
forecasted a significant funding gap; Mr. Malk indicated that without a Village
commitment for public financing, the project would not be financially feasible.
The nature and magnitude of the newly requested financial contributions were
neither expected nor contemplated by the Village.”
So what’s it all
mean? Apparently Malk wanted the village
to bankroll a major portion of the project and the village said, “no thanks.”
If nothing else,
this should dispel some of the accusations that the Board was full-steam ahead,
storm the Bastille and let’s build one for the Gipper.
It wasn’t.
Nor is it a “victory”
for any neighborhood or group.
In a carefully
worded statement, Village President Jeff Braiman pointed out that “The Village
has reviewed the latest financial parameters, and while we appreciate Mr.
Malk’s interest in Buffalo Grove and the time he and his team took to explore
such a large investment in our community, the current concept does not make
financial sense for Buffalo Grove. As I have said from the beginning, this
would be a long and important process with a number of decision points along
the way. I want to thank all of those who participated.”
It’s the obligatory “thanks,
but surely you can’t be serious” statement.
It’s like every new Cubs manager saying they’re here to win.
While numbers have
not been released, it apparently was a concern for Village Manager Dane Bragg,
with whom I met Monday to discuss economic development in the village. When discussing the now faded downtown, Bragg
said “the preliminary financial gap would be difficult to overcome” and that he
was not sure the project Malk perceived it was “feasible." Again, no exact figures were discussed.
However, in a
follow-up exchange with Bragg, he indicated the cost front loaded by the
village would be prohibitive. Bragg
noted that “His (Malk’s) conception of the project, for example, the office
product is a major issue – Malk anticipates(d) that this element alone could create a gap of
some $40 million in the project pro forma – mainly because the market rents
don’t appear to support the equity raise required for new office building
construction.”
Bragg noted that
there were some amenities that may be “nice to have” versus “need to have,” or
may not be required upfront., but by adding in the office gap, plus basic site
prep for pad ready property and the replacement of Village facilities, he said
the financing could have exceeded $75 million, with a great deal of that amount
front-loaded by the Village.”
In an email to me,
Bragg noted that “while the Village is willing to consider options, that sort
of front-loaded debt creates risk and opportunity cost that the Village is not
likely to accept.”
And that is not what
Malk wanted to hear, so the project is a thing of the past.
What is not a thing
of the past, however, is the need for continued economic growth in the village. This will entail more presentations by more
developers, and it’s possible that they won’t please all of the people in all
of the neighborhoods.
But nothing is a done
deal -- and if nothing else, like it or not, the system works.
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