Politics & Government

UPDATED: City Lets Morningside Out of Its Contract to Develop Hahn Street

Ordinances approved with no discussion by aldermen Monday.

Two ordinances related to the Hahn Street development passed as part of the City Council's consent agenda Monday with no discussion by aldermen.

The City of Elmhurst ended its long-term relationship with Morningside Hahn LLC, the group that had been planning to develop the downtown parcel bordered by North Avenue, York Road, Addison and Third streets.

The planning for Hahn Street began back in 2006, and the city entered a purchase agreement in 2008 with Morningside, which originally proposed 82 condominiums, seven townhomes and retail businesses on the ground floor. Last October, Morningside representatives presented a that included less retail and apartment rentals. They said the economy could no longer support a condominium development.

Aldermen also heard a to move the Hahn Street development into a new tax increment finance district on north York Road to give the project more time to become successful. TIF 1, where Hahn Street currently lives, is set to expire in nine years and has already been extended.

But on Feb. 27, the developer submitted a written request to "irrevocably withdraw its pending zoning petition" for Hahn Street and terminate all rights and obligations under its contract.

The ordinance states: "It is hereby determined that the public interest will be served by approving, entering into and accepting the Mutual Release, Waiver and Termination Agreement" with Morningside. The ordinance states that the dissolution of the contract is a result of "market conditions and financial considerations."

As part of the termination agreement, aldermen also approved an ordinance assigning to the city of Elmhurst Morningside's contract to purchase the gas station at 260 N. York, which is part of the Hahn Street development. Morningside had agreed to purchase Pauli's Marathon for $2 million back in 2007 and paid the owners $50,000 in earnest money toward the purchase. The ordinance directs the city to reimburse Morningside the $50,000 and assume the contract.

"Acceptance of the attached Assignment will result in the City becoming the Purchaser and provide the City the right to investigate, negotiate and, if elected, close on the purchase of the Pauli property," according to the summary provided in tonight's board documents.


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