If Waukegan officials have their way, a new multi-use midrise building with commercial space on the ground floor, and approximately 100 apartments in the upper stories, will be built in the near future on the southeast corner of County and Clayton streets downtown.
Mayor Sam Cummingham said the proposed project could have a similar impact on the city’s downtown, and community in general, as the Genesee Theatre, which was renovated and reopened in 2004 after sitting vacant for 15 years.
“Waukegan is due for this,” he said. “This is the spirit of progress synonymous with our Genesee Theatre. It is part of rebuilding Waukegan. It is what we envisioned when we updated our comprehensive plan in 2020.”
Cunningham introduced the plan for the new mixed-use construction in the city’s downtown during a City Council meeting Monday at City Hall before a presentation of a market study demonstrating the need for rental housing in the area.
“There is a severe housing shortage in Lake County,” he said. “Waukegan is ready to fill that need. New housing will welcome new, young residents and will expand our tax base. The city has cut red tape and made it easy to build what the Waukegan community wants to see.”
Currently a city-owned parking lot across the street from the Waukegan Public Library, and just north of the Lake County Courthouse & Administration Center, Sam Greene, a city planner, said the city is inviting potential developers to officially share their ideas for the project with the city.
Greene said a request for qualifications (RFQ) went live on the city’s website, giving developers until 9 a.m. on Sept. 8 to submit their proposal detailing the best way to develop the current parking lot into a mixed-use building.
Once the RFGs are submitted, Greene said the city will narrow the proposal to a group of finalists and make a decision by this spring.
Erik Doersching, the president and CEO of Tracy Cross & Associates, Inc., an economic research firm specializing in analyzing housing markets, was commissioned to do a detailed study of the housing market in Waukegan and northern Lake County in April. He said a strong need exists.
With few vacant apartments available in the area, Doersching said the vacancy rate for market-rate units in northern Lake County is 0.7%, and in Waukegan, it is 0.3% for buildings built within the last 25 years. A balanced vacancy rate is between 5% and 6%.
“When you start to see this type of vacancy of under 1%, you know there is a supply issue,” Doersching said. “Northern Lake County, which includes Waukegan, is probably behind the eight ball 10 to 15 years compared to other suburban areas. The supply side constraints in this market are the worst in the entire region.”
In the last five years, Doersching said only 650 units were built in northern Lake County, with most west of Interstate 94. He said the one east of the Tollway is leasing 20 units a month. Doing half as well in downtown Waukegan would lead to a strong success.
“This project will absorb 10 units a month and be completely full in less than a year. There’s an opportunity,” Doersching said, “I know you’ve got to start somewhere, but there’s the opportunity to do two to three of these simultaneously.”
Suggesting a five- or six-story building, with commercial space on the ground floor, Doersching said rents could range between $1,200 and $2,700 a month, targeting people earning between $50,000 and $124,000 annually.
Lowell Jaffe, the lead developer with Waukegan Community Development Partners, said the group plans to submit an RFQ. The group is already renovating two older buildings in downtown Waukegan.
“Absolutely,” Jaffe said. “I think we were the impetus for the city taking this step.”
Cutting the ribbon on a renovated building at 38 North Genesee Street in May, the partnership is leasing six apartments on the top two floors, with a restaurant soon to occupy the ground level.
Also renovating for former YMCA kitty-corner from the proposed new project on County Street, Jaffe said the building will have 19 apartments on the top three stories and 6,700 square feet of commercial space on the ground level.
Cunningham has said on several occasions that adding 500 to 700 housing units to the downtown area is an essential part of his goal of rebuilding Waukegan. Jaffe has used a similar number for what he said the area needs.
Seeing the development of rental units in nearby communities like Vernon Hills, Libertyville and Highwood, Cunningham said Monday Waukegan is ready to take the step by finding a developer to create a project at the corner of County and Clayton.
“This is happening in other parts of the county, and now it’s Waukegan’s turn,” Cunningham said.
