Rentals help draw added residents into downtown Elgin developments

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A pathway extends amid townhome units at River Park Place on South Grove Avenue in Elgin. | Michael Smart~Sun-Times Media

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Updated: October 29, 2011 12:39AM

ELGIN — Thanks to a change in marketing strategy, two high-profile downtown housing developments now are close to being fully occupied.

At Fountain Square on the River, along South Grove Avenue not far from Chicago Street, property manager Katie Lange said the occupancy rate is 90.3 percent for the 93-unit building.

And about two blocks away on South Grove, the occupancy rate is 99 percent for the 116 townhomes at River Park Place, according to Kurt Kresmery, vice president of management for Plote Property Management. Near the Grand Victoria Casino and Festival Park, the development stands between Prairie and Lake streets.

The Joseph Spiess department store once stood where Fountain Square on the River is now. The store was torn down in 2005 to make way for what was to be the initial phase of the housing development, which opened its first unit in 2007.

Before the economy tanked, according to published reports, Oak Park-based real estate development firm RSC & Associates’ plans for the project included 204 condos and 15,000 square feet of retail space.

In the aftermath of the recession, Lange said, First American Bank wound up owning 58 of the condos. The other units are owned by individuals, with 15 of those owner-occupied and 20 rented out by their owners.

Lange said 53 of the 58 units owned by FAB have been rented. Of the remaining five, one is the model and another is being used as an office.

Lange noted that in the last year or so, the development moved from a sales model to a leasing one to fill spaces, in part because lending remains tight, as do rules for such.

As an example, complexes such as Fountain Square face tough requirements before potential buyers can qualify for Federal Housing Authority loans. According to the eHow website, “At least 50 percent of the project must be sold before the first FHA loan can be issued. And 50 percent must be owner-occupied or sold to buyers who intend to occupy.”

Lange also said the move was “based on helping the downtown revitalize and to get people living downtown for its businesses.”

Drawing tenants

A factor helping draw tenants is what is included with rents, which range from $1,020 to $2,120 per month, Lange said. Those amounts include natural gas for heating and cooking, a basic satellite TV package, Internet connection, washers and dryers in each unit, heated indoor parking and additional storage. Space details are available online at www.fountainsq.com.

Lange also said she is selling downtown Elgin as much as the condos, pointing out that residents can walk to attractions including restaurants, the train, The Centre of Elgin recreation facility, the casino and city hall.

Lange said the development’s residents typically are “those not ready for picket fences or those done with picket fences.” The mix includes a variety of professionals, “snowbirds” and some young families with newborns, but not a lot of children.

Lange said she rented five of the units sight unseen, in part because people nowadays seem to be making moves “dictated by jobs. People are moving because of their jobs and wanting to be closer to where they work. It’s not like before the recession, when people were moving just to move.”

Pushing to fill

South from Fountain Square, at River Park Place, “In the past year, we made a switch to fill the units and complete the project,” Kresmery said.

Kresmery noted that “there have been foreclosures (at River Park Place) just as everywhere. Assessed value went down while tax rate went up, so bills are the same.”

Kresmery said he doesn’t know the total number of homes at River Park Place being rented. He noted that he rents the units that the developer owns, and added, “If an owner asks for assistance, we always will provide.”

Currently, homes are being rented for $1,250 to $2,250 per month, depending on finishes and options within the home, Kresmery said. Further information on residencies is available at www.riverparkplacehomes.com/home.html.

As for who is renting the dwellings, Kresmery said the demographic is “the same as the buyers were: newlyweds or divorced men or women; very few children, maybe an infant; very few seniors, as there are too many stairs.”

“People always need a place to live, and River Park Place is a very attractive community,” Kresmery said.

Without going into detail, Kresmery said a matter between Plote and PNC Bank involving another phase of the development has been resolved.

In January, PNC filed a complaint in U.S. District Court in Chicago against those involved with the venture, claiming they had failed to pay off a loan on the project.

Crocker site status

In addition to the almost-filled 116 townhomes already built, a condominium building designed to hold 60 units where the Crocker Theater once stood — on the corner of South Grove and Fulton Street — had been in the works.

According to Courier-News reports from January 2007, River Park Place at one time claimed it had buyers for all 60 of those condos, but more than half backed out, and that number dwindled to eight sold units. Under its financing arrangement, Plote affiliate Par Development could not build until it had contracts on at least half the building’s units, and construction has remained at a standstill.

In 2001, Elgin voted to give River Park Place’s developers the vacant land on which their project would rise, as well as to pay them about $1 million to haul away contaminated soil from the site. The area once had been home to numerous car dealers, many of which long since had relocated to Route 19 on the city’s east side. New homes there first went up in 2005.

The city spent $600,000 to buy the Crocker — which stood empty for 30 years — and around $330,000 to tear it down. It then used its power of eminent domain to force the owner of an adjacent coin shop to sell his building, spending $420,000 to obtain the property and stirring controversy in the process. The shop now houses the development’s sales center.

The idea at the time of giving the land to Par was that building higher-priced homes downtown was a risky move that no one would make without city help and that, over the years, the city would receive far more in property taxes from the new building than it spent.

While there had been talk of the city reclaiming the Crocker land, “Our records show that the property is still owned by River Park Place LLC,” Elgin City Planner Sarosh Saher said.