Missouri-based Capstone Development Group took another step Wednesday afternoon toward the much-anticipated rehabilitation of the Tower Building in downtown Elgin with signs looking for renters strategically placed inside three, first floor windows.
The stick-on signs read, “Live in a Landmark/Elgin Luxury Lofts/Coming Soon!/Fall 2016/Call 877-690-3999 for more information.” Putting them in place was Brandon Metz from Signs By Tomorrow.
A prior meeting kept Capstone Chief Operating Officer Lisa Kortkamp from being in Elgin Wednesday, with Josie Kotsioris, a senior manager for accounting and advisory firm Baker Tilly present to oversee the application. The firm’s role has been assembling the capital stack for the $13 million project.
The 15-story Art Deco Tower was built at 100 East Chicago Street in 1929 and remains Elgin tallest building.
In a prepared statement, Capstone Development Group President Bill Luchini said the project would not have become possible without the support of the city. According to information provided by Capstone, the group was founded in 1976 and has completed close to 330 projects.
“Our (Tower) renovation plans will utilize energy efficient materials, fixtures and appliances, and exterior work will include the replacement of all windows,” Luchini stated. “Unit designs will capture the historical significance of the Elgin Tower building while creating thoughtfully designed spaces to live, play and further stimulate growth and development of downtown Elgin.”
Plans include converting what was at one time a bank and then an office building to 45 one- and two-bedroom apartments along with creating a fitness center, business center, resident meeting and lounge spaces and storage lockers.
The release from Capstone also noted that “the residential units will be located on the first through 14th floors with amenities on the ground level and in the basement. Residents will have the use of parking spaces around the tower via a long-term lease provided by the city at nearby municipal parking garages. Rents will range from $863 to $1,200 per month.”
The development agreement with the city calls for those rents to remain at market rate for at least 25 years.
The Tower Building is on the National Register of Historic Places. Any rehab of the building has to meet with approval of the U.S. National Park Service as well as state and local historic preservation guidelines.
Capstone’s release noted that the project will be using federal and state historic-related tax credit programs as funding mechanisms to pay for the work. The building stands in one of the state’s designated River’s Edge Redevelopment Zones.
Elgin Assistant City Manager Rick Kozal noted the future of the River Edge program is one that, with the state’s budget still unsettled, also remains in limbo. However, as now set up, the program runs through Dec. 31, 2016, Kozal said.
Recently, Kane County Judge Thomas Mueller dismissed with prejudice an appeal on a lawsuit filed by Gasthaus Zur Linde owner Marco Muscarello city officials said was holding up the Tower project.
Muscarello filed a lawsuit in March against the city of Elgin, Capstone Development Group and the Tower Building’s owner Stickling Foundation over the redevelopment project. The lawsuit claimed the project did not comply with portions of the city’s master plan, violated parts of the municipal code and constituted as illegal spot zoning. It also stated the project violated the state Constitution, specifically a clause that states “public property shall be used only for public purposes.”
Mueller found the hundreds of pages of exhibits filed in the case showed the plaintiff’s complaint was inconsistent.
Having the lawsuit out of the way, Kozal noted, makes it easier for lenders to commit to the project, paves the way for Capstone to seek the tax credits and should allow for crews to complete the work by the end of 2016. Credits are issued when the work is done, Kozal said.
The city also has committed about $4.7 million in Tax Increment Financing District money to the project.
Still to be consummated, Kozal said, is the $1 million sale of the building to current owner, the nonprofit William R. Stickling Foundation, which is overseen by attorney Neal Pitcher. How much of that money will be left in the foundation’s bank account has yet to be determined.
According to Elgin City Councilman John Steffen, the Florence A. & Cornelia A. Palmer Foundation has three notes out to the Stickling Foundation that total about $275,000. The Palmer Foundation is at the top of the list of those to be repaid from the proceeds of the deal, according to Steffen.
Steffen at one time served on the Stickling board. He serves on the Palmer Foundation Board and has recused himself from Tower Building related matters during both tenures.
Some Elgin residents have been claiming on social media that the Stickling Foundation owes the city a good deal of money in fines. However, city officials claim that is not necessarily the case.
In October, 2013, Kane County Judge David Akemann signed an order of default after Pitcher did not respond to a complaint the city had filed alleging life safety and fire code violations at the Tower.
The document concludes, “This Court retains jurisdiction over these proceedings to enforce the terms of this Order, and to order further relief in this cause including but not limited to the imposition of fines against Defendant as provided for in Count of the Complaint, and/or the appointment of receiver for the Subject Property and the granting of further injunctive relief as provided for in Count II of the Complaint.”
Kozal explained that the complaint against the Tower was one of three the city filed in May 2013 related to life safety and fire code matters, the others being against the owners of Buena Vista Towers at 222 Locust St. and of Westwind Towers at 104 State St.
All the complaints had the goal of putting a mechanism in place to bring the buildings up to code, Kozal said.
Fire Chief John Fahy stated at the time, “By going through the courts, this sets up a process where a neutral party — that being a judge — can set a deadline for getting the work done, without anyone claiming the city is being unnecessarily tough.”
As such, with the possibility of fines and other court action the other two buildings’ overseers put together plans and completed projects to come into compliance. Recognizing the high cost of making improvements and that the work was done, no fines were issued related to the other two properties, Kozal noted.
In May 2014, the city condemned the Tower after an arson fire started by a homeless man in an elevator car and an ensuing inspection in the building, which already had a good many maintenance issues this decade, including burst pipes and flooding.
With the Tower Building, the judge’s ruling still leaves the city the option of pursuing fines, which is something Elgin could consider if a contract between Capstone and the foundation doesn’t happen. Redevelopment would bring the building in compliance with current life safety and fire codes.
