Developer Presses Western Springs On Subsidy

WESTERN SPRINGS, IL – A developer has already begun construction on a Western Springs project that is set to include 10 condos and commercial space.

Meanwhile, KLM Development, owned by Felix Lampariello, is pressing the village for up to $1.5 million in assistance. Otherwise, he said, the project may not be profitable.

The developer broke ground in October at a vacant lot at 514 Hillgrove Ave.

The village money would come from a tax increment financing district, or TIF, where growth in property tax money is designated for improvements in that area.

Through a public records request, Patch obtained correspondence between the village and the developer.

"I have invested a tremendous amount of time and money, as you are aware, in bringing this project to life with the Village's cooperation," Lampariello said in a Nov. 29 email to Village Manager Ellen Baer. "I have been continually assured that the TIF would be forthcoming."

He shared the contents of a letter from his lender underscoring the importance of getting the village money. The lender's name was not included.

The lender said the project had "minimal room" for cost overruns. It was imperative, the lender said, to get fully approved for the village money to make the project "viable and profitable."

"I believe the best data you can present to the Village of Western Springs is the appraisal, which illustrates the disconnect between the cost of the project and the value," the lender said.

A Dec. 1 email from Chicago-based Lakeside Bank made a similar point.

"If you are only able to sell the residential units, but do not receive the TIF and do not sell the commercial units, the project is just about break even," Nick Wycklendt, the bank's senior vice president of commercial lending, said to the developer. "That's only if everything goes smoothly with the residential units in the face of high interest rates and economic headwinds."

In August, Lampariello emailed Martin Scott, the village's community development director at the time, about the subsidy.

Lampariello cited the circumstances of the pandemic and the rise in construction costs. He said his company was moving in good faith on the project because of the guidance of the village and Scott, who left his job a month later.

"(W)e are currently between a rock and a hard spot with whether to proceed without the TIF incentive guarantee in place," Lampariello said. "Without the TIF funding, the development will be a financial burden, so it is absolutely imperative to have our request approved."

In a Nov. 29 email, Village Manager Baer said the assistance could come before the Village Board in December or January. This week, the board held its last meeting of the year.

Earlier this month, Trustee James John spoke briefly about KLM's request at a meeting. He said the village attorney was reviewing the request to determine which expenses are eligible for village assistance. John gave few details.

The idea behind a tax increment financing district is that the money spurs development, which will bring more taxes to local government bodies in the long run.

According to the developer, the condos in the four-story building will range in price from $650,000 to $1.4 million. It will be called The Hill.

The development is described as "luxurious" and "maintenance-free." The units will range from two to four bedrooms and two to 2½ bathrooms, the developer said in a news release in the fall.

The project is two blocks east of Village Hall and between an office building and a doctor's office.