By Carol Kania Morency
Elmhurst City Council positioned itself Monday to make a final decision on one of two developers—Lincoln Property or Morningside Group—to win the Hahn Street development project. The development will encompass a 10-acre area between York and Addison Avenue, just north of Hahn Street.
On Monday, a city consultant offered a view of the preliminary costs and benefits of each project, comparing apples to apples, and when necessary, apples to oranges.
Both ideas would create rental housing over first-level retail space facing York Road. The Lincoln Property concept is a five-story building, and Morningside has put forth both four- and six-story options.
The parcels are part of the North York Road tax increment financing district, which stretches up to Grand Avenue. Projections related to the use of TIF funds estimate that each proposal would bring in between $18 million and $19.6 million. On the expenditures side, the Morningside plan would cost more, at $11 million, compared to $9 million for Lincoln Property.
Robert Rychlicki, from Kane McKenna, a consultant the city uses to evaluate its TIF districts, told aldermen that both projects were similar in terms of number of residential units, parking spaces and retail space planned. The differences began with each projects' timelines and benchmarks, the developers’ ability to secure financing, and the potential return on costs for both projects, he said.
Rychlicki said the council also might consider how each project might generate revenue in the City Centre, or how the new parking would fit into what's now available.
"TIF revenue generation does not have to be the whole story," he said.
Fifth Ward Alderman Scott Levin asked if Kane McKenna had an assessment of each groups' financial information. Rychlicki said their proposed rents were in market ranges, but he wondered about some of the preliminary construction costs that had been offered. He added that he hoped these costs would come down in order to improve the picture for potential lenders.
Because the city is offering TIF money, Mayor Steve Morley said the expectation would be that any significant cost reduction—a steep drop in the price of concrete, for example—would be shared between the city and the developer.
Rychlicki also cautioned that Morningside’s four-story building was not as viable as the six-story concept.
"There's a little less room because there's less revenue,” he said.
Levin asked if the city even needed to keep the four-story plan on the table. First Ward Alderman Diane Gutenkauf said that it should continue to be considered, as the city wanted to see as many ideas as possible from developers. The Council voted on the issue and decided to keep the four-story idea alive for now.
In preparing the requests for proposals for this project, aldermen had created elaborate evaluation system to help them make a final choice. However, Morley recommended that system be scrapped since the city was dealing with only two proposals, and aldermen would simply be deciding which plan they liked better.
The council will meet again Jan. 27 to make a final choice.