Developer Seeks Bigger Elmhurst Subsidy

ELMHURST, IL – A developer who plans a townhome complex on Elmhurst's Lake Street is asking the city to nearly double its subsidy for the project.

In the summer, a City Council committee rejected the proposed 36-unit townhome project at 240 W. Lake St., saying it was too dense.

After that, the developer, John Pembroke, owner of Island Construction, submitted a new plan for 30 units.

Last year, the city agreed to provide up to $950,000 for the project for water and stormwater infrastructure, waiver of permit fees and vacation of an alley behind the property. Officials said the money was contingent on zoning approval.

The money is to come from the neighborhood's tax increment financing district, or TIF, where growth in property tax money is designated for improvements in that area.

An Elmhurst developer wants to build 30 townhomes on vacant land at 240 W. Lake St. in Elmhurst. (David Giuliani/Patch)

As a TIF, the neighborhood is considered "blighted." The property in question is the site of a Ford auto body shop, which has gone unused for more than a dozen years.

Recently, Pembroke asked the city to increase the allocation from the TIF to $1.7 million. The additional money, the developer said, would help establish a market return of 7 percent for the project. This is needed because the complex would have fewer townhomes, he said.

Pembroke said he plans to sell each townhome for $500,000. Once the 30 units are sold, the developer expects the project to generate $280,000 more in property taxes a year.

Construction is projected to last two years.

Pembroke has provided the city with a market analysis for the project. It was done by Mike Muisenga of Berkshire Hathaway HomeServices in Elmhurst.

In his report, Muisenga, who has been hired to market the project, said townhomes such as Pembroke is proposing are in great demand in Elmhurst.

Most recent construction, he said, has been focused on luxury market prices of $750,000 to $1 million, a level that is "unattainable and unsuitable" for prospective Elmhurst residents.

Those looking for comparable $500,000 homes have been largely limited to housing more than two decades old, Muisenga said. When such a $500,000 home happens to come on the market, it sells within two months, he said.

"This project will offer a much-needed new construction product to town for those looking to be near downtown Elmhurst and with quick highway accessibility," Muisenga said in the report.

On Monday, the city's Development, Planning and Zoning Committee plans to review the request for more money.