Sawmill Station TIF District, Redevelopment Plan Approved

MORTON GROVE, IL — Village trustees granted final approval this week to a redevelopment plan to transform the site of the former Prairie View Plaza into the Sawmill Station Shopping Center, a new mixed-use shopping, dining and entertainment area.

The village board enacted a series of ordinances Monday ending a unsuccessful tax increment financing district, creating a new TIF district with modified boundaries, adopting a redevelopment plan, authorizing economic incentives for the developer and allowing for the issuance of $26 million in bonds.

"This is a very big night in Morton Grove," Mayor Dan DiMaria said after the vote. "This is our legacy decision."

The 26-acre site at the southeast corner of Dempster Street and Waukegan Road was purchased last September by the Oak Brook-based firm, Kensington Development Partners, and IM Properties, a commercial real estate investment firm based in the U.K.

Their $150 million plan involves demolishing everything on the site, except for the Bank of America, before erecting several new buildings with 200,000 square feet of retail space and a 250-unit luxury apartment building.

"But only if the village provides substantial financial assistance to the developers," said Village Administrator Ralph Czerwinski.

Sawmill Station is set to include a 35,000-square-foot grocery store, an LA Fitness Signature health club, a Kohl's department store, a Flix Brewhouse micro-brewery and nine-screen movie theater, a Cooper's Hawk winery and restaurant, a Raisin' Cane restaurant, a Ross store and a Dollar Tree, among other tenants, according to the developers and village staff.

The name is an homage to Miller's Mill, a water-powered saw mill built in 1841 and one of the first businesses in a community that incorporated as Morton Grove more than five decades later.

Czerwinski said the previous TIF district was created in 2012 around Dempster Street and Waukegan Road at the request of the then-owner of the Prairie View shopping center. He contrasted the new development team with the previous landlord.

"We have a great team working on something that's fabulous for our community," Czerwinski said, praising the public-private partnership between the trustees, village staff and the developer, "who's really moving this forward — versus a previous owner who had the property, who didn't move anything forward."

Since 1978, the property had been owned by a trust connected to Federal Construction, a Canadian property management firm. The former owner provided a plan for redevelopment, but it went nowhere.

"The shopping center continued to deteriorate and the EAV, equalized assessed value, of the TIF district continued to decline," Czerwinski said.

The assessed value of property in the redevelopment area was about $17.3 million in tax year 2017, according to the plan. Over the 23-year life of the new TIF district, the area is anticipated to grow to an assessed value of between $85 million and $90 million.

In a TIF district, tax revenue generated from any growth in property values within the district after it is established is diverted from local taxing bodies and set aside into a TIF fund. That fund can be only used for infrastructure improvements and other costs associated with redevelopment. Because the value of the shopping center has not increased in the past seven years, the previous Dempster/Waukegan TIF fund never got any money.

As part of the redevelopment agreement approved at the July 8 meeting, the village agreed to reimburse the developer for about $25 million in expenses authorized to be covered by TIF funding. Those reimbursements will come from growth in property tax revenue and 50 percent of all new sales taxes provided by Sawmill Station. The developers will only receive the reimbursement if the site generates more tax revenue than current levels.

"This is all performance driven. It's investment for the village," DiMaria said, thanking the developers for doing business in Morton Grove and taking a risk on the project.

"We promised people that we would invest in Morton Grove. We've done that," the mayor said.

Trustee Rita Minx thanked residents, the developers and village staff for the redevelopment gaining approval less than a year after the property changed hands.

"We probably have been able to get this done in the short/long amount of time we've had due to the phenomenal communications we've had with everyone." Minx said. "We're really looking forward to this project coming to fruition."

"Your staff was just tremendous throughout this whole process," said Chad Jones, a principal at Kensington Development Partners, told trustees after they voted to approve the plan. "We're very excited to bring this to Morton Grove."

In a release following plan commission approval in April, Kensington said it hopes to see openings of retailers in the site in 2020. The planned apartment building will be built after completion of the retail development.

Czerwinski said final approval of the redevelopment agreement was the culmination of a lot of long hours from village staffers, who he said are extremely excited about the project.

"This community has been looking at that site and trying to get something there for at least three decades," he said. "I think the partnership here is very, very positive."

Earlier:

• Developer Buys Prairie View Plaza Shopping Center In Morton Grove
• Dominick's Demolition Begins Prairie View Plaza Redevelopment