Tale of two riverside developments
Residential, retail plans in Algonquin, McHenry back on track after setbacks
In 2006, government officials in McHenry and Algonquin approved plans for luxury condo and retail developments in their respective historic downtowns.
Work began in April 2007 on Algonquin’s 54-condo Riverside Square at the corner of Routes 31 and 62.
Construction of the 27-condo RiverWalk Center on Green Street in McHenry started four months after that.
Five years later, neither has turned out as planned.
Initial developers for both fell victim to the economic collapse in 2008, both properties have at some point fallen into bank hands, and today neither is filled with retail shops and condominium owners.
Despite the bumpy journey – in Algonquin there was a bank auction and a lawsuit, in McHenry hundreds of thousands of dollars have been paid out in incentives to developers – officials in both Algonquin and McHenry say they are happy with the way things are turning out.
Riverside Square and RiverWalk Center survived the housing bust. As of spring 2011, both are in the hands of new owners who are finishing, fixing and filling the developments.
In March, John Breugelmans of Riverside Plaza Developers LLC bought the half-finished Riverside Square, and since then the developer has been mostly on track to turn the property into the condo and retail space originally approved.
In October 2008, Aspen Homebuilders halted construction with only about half of the building completed. By the end of that year, Harris Bank held the Riverside property in foreclosure.
Things got worse before they got better. In July 2009, construction professionals working for the village reported water staining and mold throughout the vacant, half-finished Riverside building, which had become known as Tyvek Tower due to its Tyvek building material-covered frame. Exposure to elements compromised plywood and brick and mortar in the building, too.
In December 2009, the village took the bank to court over health, safety and building code violations. The next March the village switched focus and instead sought to tear down Riverside, calling the property a blight and a public safety hazard. Algonquin spent $71,677.30 between March 2010 and 2011 on litigation.
The bank finally put Riverside up for auction with a $1.25 million minimum bid, but when no minimum bids came in, it sold the property to Breugelmans in a private sale.
The village approved but required Breugelmans to sign a contract that included a series of deadlines to keep construction on track. He has met all of them so far, except a financing commitment that was due by the end of May along with a $500,000 letter of credit.
The village since has extended Breugelmans’ deadline to December. This month, Breugelmans released news that he plans to have the development filled by 2012.
The journey to completion for RiverWalk Center has been less tumultuous.
Although there was initial strife about an unexpected $400,000 cost related to the construction of an enclosed parking garage, most of River Place was built by the initial developer, John Curtis of Curtis Commercial, before the company went bankrupt.
In February 2011, First Midwest Bank took the property from Curtis.
Despite the struggles, however, the development did at that point house two tenants – although they were renters – and four businesses: a spa, a pizzeria, an apparel retailer, and a financial planner.
In April, Roy Blavvise of Chicago and a partner bought the RiverWalk Center and changed its name to River Place.
Seeking to get the development filled quickly, Blavvise petitioned the city to allow him to fill the units with renters until the economic climate for condos improved.
In a 4-3 vote, the city allowed the new developer to finish the interiors of the 27 condos and allow them to be rented. If River Place does not convert to condos by 2019, however, the city will charge the bank $55,000 a year until 2024, unless the conversion happens before then.
As of this month, 21 of the units in River Place are rented, Blavvise said. Despite the change in the type of housing he is offering, he said he still believes River Place can be a boon for downtown McHenry.
“We want to be an active member of the community,” he said. “Yes, we are not the first developer that was there, and we are not the bank that took it over. We are something else, but we are trying to be part of McHenry.”
That is why, Blavvise said, when he took over the property, a public parking area was the first thing he completed.
“We wanted to demonstrate that we were in this for the community,” he said. “We are not big fat developers; we are real people, and we are making [River Place], and therefore the downtown, better.”