Mundelein officials recently moved closer to finalizing a sale of the former village hall, as a local business looks to break ground this summer on a proposed two-story mixed office and retail center at the site.
During a meeting in late April, village trustees approved a term sheet that describes base requirements of a potential sale, tentatively agreeing to a $1 sales price and other tax rebates for the development project.
Frank Dziadus, president of Mundelein-based Midwest Masonry Inc., earlier this year proposed demolishing the former village hall, 440 E. Hawley St., and building a new two-story building that would include 22,950 square feet and two floors of combined office and retail space, as well as 7,500 square feet of rooftop dining or entertainment space, according to village documents.
While village officials typically serve a regulatory role in these instances and review proposed projects against zoning standards, Dziadus’ proposal involves land that Mundelein owns, requiring village officials to be more involved during negotiations of a sales contract, said Village Administrator John Lobaito.
“Before anybody starts spending a lot of money, we sit down and see if we can come to a general agreement about the business terms of the transaction,” Lobaito said. “Now, what he’s got is a fair amount of confidence that the board is generally OK with those terms and he can start spending money (on detailed designs).”
The recently approved term sheet is a non-binding document that serves as an early outline for the eventual redevelopment agreement, which is more detailed, Lobaito said. If the project ultimately is approved, construction on the proposed two-story mixed office and retail center could start late summer, officials said.
Preliminary terms include a $1 sales price and waiver of several fees in exchange for Dziadus covering the demolition cost, paying for new roadside parking spots on Hawley Street, installing light poles and agreeing to a land covenant restricting future development to a “mixed-use” project that would be similar to his earlier presentation.
The 0.77-acre site was appraised at $380,000 in 2017 and recent estimates at building demolition are valued at $300,000, according to the term sheet.
Out of $161,575 worth of developer fees, Dziadus would only be required to pay a $2,525 stormwater impact fee, according to the tentative agreement. Building permits, water and sewer connection fees, and other impact fees would be waived.
Because the proposed building will have more utility use than the former village hall, water and sewer lines will need to be widened, officials have said. Dziadus would be required to pay for the work, which is estimated to total $35,000.
If the deal goes through, Mundelein also would rebate 75% of all sales tax generated in the new building during a 10-year period, according to the term sheet.
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Similarly, because the property is in a tax-increment-financing district, Mundelein tentatively agreed to rebate 75% of newly generated property taxes over the 10 years to reimburse certain demolition and construction expenses.
Trustee Kerston Russell, who is on the village negotiating team and said he knows Dziadus, praised Midwest Masonry for its willingness to invest in its community.
“Unlike other developers, Frank (Dziadus) is committed to breaking ground by August this year,” Russell said. “We’re going to see a building coming out of the ground yet this year. That is exciting stuff.”
The term sheet is set to expire in 90 days and calls for architectural designs to be submitted for review within that time in order to extend the terms for another 90 days.
If the project moves forward, both sides also would work together to determine if any materials from the existing building could be salvaged and reused in the new building as a historical marker or relocated elsewhere for preservation, according to the term sheet.