Parking garage, restaurant part of Des Plaines TIF 6 redevelopment deal

A 1,900-car parking garage, national franchised restaurant and possibly a hotel are part of the new redevelopment deal for property near Mannheim and Higgins roads in Tax Increment Financing District 6, city officials said.

Des Plaines will sell the 4.9 acre site for $1.1 million to TPS Des Plaines, LLC, and stands to make $40 million through various parking, restaurant and hotel taxes by 2025. The city bought the property for about $10 million in 2005, said Finance Director Dorothy Wisniewski.

City officials said the purchase will pay the debt for the ailing TIF district, which is expected to hit a $5.9 million deficit by the end of the year. That amount could escalate to $19.7 million by 2025, when the TIF district expires.

Director of Community and Economic Development Mike Bartholomew said the land is currently valued at $5 million. He said the city is looking at the long-term picture and not the immediate financial loss. The development will push the TIF district out of the red, while also providing different sources of revenue for the city, he said.

“It’s a big benefit to the city,” Bartholomew said of the deal. “That’s sort of deceiving if you don’t take the long view of it.”

The five to six story garage will be mainly used as off-site parking for O’Hare International Airport. Des Plaines makes $1 per day per car parked in the O’Hare Corridor Privilege Tax Area, which covers TIF District 6.

Though a specific restaurant has not been chosen, the eatery will be a national franchise with a successful business plan, Bartholomew said. The plans call for one restaurant though there is a possibility two could be built, he added. The agreement lists over 50 permitted restaurants, including Cooper’s Hawk, Chipotle, Portillo’s and Five Guys Burgers.

The developers will likely wait a few years to see if the hotel industry has bounced back, but if a hotel is built, the city would generate hotel taxes, Bartholomew added. Under the deal, the city also retains the land underneath the billboard on the property, he said.

Hotels were slated to be built at the northeast corner of Mannheim and Higgins roads, just south of Interstate 90, but the deal fell through when the economy soured. Last April, the city received five proposals from developers looking to purchase the land and in July, the council gave the green light to negotiate with TPS Des Plaines.

At the Feb. 6 City Council meeting, Ald. Jim Brookman voted against the project, saying the request for proposal bid process doesn’t work and is not truly competitive. The only competition is the selection process, and then once a developer is chosen, the negotiations occur in private, he said.

He added he doesn’t want the city to use the request for proposal bid process in the future, because he wants the city to get the best financial deal.

The council voted 6-2 to approve the redevelopment deal. Ald. Mark Walsten also voted against it.

“It’s like going to a car dealer and saying, ‘I’m going to buy an Impala from you and no one else and let’s go and talk about terms,’” Brookman said. He claimed the council was never given updates during the negotiation process, though other aldermen refuted that.

In order to support the debt on the TIF, residents would see a 5 percent property tax increase for 2012, Wisniewski added. Bartholomew told the council it would take at least a year for the city to re-start the process and find a new developer.

During the discussion, resident Brian Burkross said he wished the city asked for more from the community and asked officials to wait on the deal. He pointed to the previous plan for the area and said developers spoke about their ideas without discussing prices.

“Remember, you are spending our own money,” he told the council. “I think we should have a right to have input to that process…I don’t see where that right was afforded in this particular case and that upsets me a bit.”

Ace Rent-A-Car currently sits on the site. Officials said the company was notified it must vacate the premises. Bartholomew said he hopes the developer breaks ground this spring.


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