Elmhurst Developer Accepts Lower Return: Lawyer - Patch

ELMHURST, IL – A developer seeking more public money from Elmhurst is accepting a lower-than-usual return for a proposed townhome project, his lawyer said Monday.

John Pembroke, owner of Island Construction, is asking the city to nearly double its money for the project to $1.7 million, from $950,000.
For most local housing projects, Pembroke and other local developers get 10 percent or more in their return on investment, Pembroke’s attorney, Mike Roth, told the City Council’s zoning committee.
Under Pembroke’s current request, he would get a 7 percent return, Roth said.
“He’s not going any lower because it’s a killer. It’s just not going to work for him,” Roth said. “Right now, we’re at the bare minimum for this project, given what the costs are and the projected revenues.”
John Pembroke, owner of Island Construction, said Monday that the property where he is proposing a townhome development is too small for commercial projects. (David Giuliani/Patch)

Over the summer, the council’s zoning committee rejected Pembroke’s proposal for a 36-unit development at 240 W. Lake St., saying it was too dense. It suggested 30 units, with Pembroke later submitting a plan to that effect.
At Monday’s meeting, Pembroke said the lower number would make the project better. But he said a smaller development means less income, which he said prompted the request for more money.
The money would come from the neighborhood’s tax increment financing district, or TIF. In such a district, growth in property tax money is designated for improvements in that area.
Pembroke said if the committee rejected his request, some other developer would later approach the city with a similar project, asking for money from the district.
“Commercial will not work there,” Pembroke said. “The property is too small.”
As a TIF, the neighborhood is considered “blighted.” The property in question is the site of an old Ford auto body shop, which has gone unused for more than a dozen years.
The committee’s chairwoman, Alderwoman Dannee Polomsky, praised Pembroke’s work.
“What has been proposed looks great. We have a reputable builder,” she said. “He has been working in town. He has a lot of happy homeowners that could vouch for him.”
But she said aldermen needed to determine at what level the city should aid the developer.
Alderman Mark Mulliner said he agreed that townhomes would end up on the property in question, one way or another.
“I think this could open the door for some of the developments down west on that frontage road,” he said. “I think there are a couple of buildings west of there that could definitely be improved because of what we could do with the infrastructure.”
If the city gives the money, it would be repaid by projected increases in property taxes as a result of the development.
Roth said his client planned to build the project in phases, which he said would reduce the city’s risk.
“If John isn’t moving forward with anything, the city doesn’t pay anything more,” Roth said.
The zoning committee made no recommendations to the full council Monday. It said it needed more information first.