Randall Road corridor drives towns’ sales tax revenue

A view of northbound traffic on Randall Road in Lake in the Hills.
A view of northbound traffic on Randall Road in Lake in the Hills.

ALGONQUIN – The recession has dramatically slowed development on Randall Road, but the commercial corridor remains crucial to both Algonquin and Lake in the Hills.

Retail sales along the corridor provide shopping, entertainment, restaurants and, perhaps most important for local municipalities, sales tax revenue. That revenue eases the tax burden on property owners.

The development of the corridor underscores the benefits and pitfalls of rapid growth.

Before the Algonquin Commons, the Galleria, the Esplande and the dozens of other shopping centers, the section of Randall Road in Algonquin and Lake in the Hills was largely undeveloped.

“In 1992, Randall was a two-lane road with a gas station,” said Algonquin Village President John Schmitt, who helped come up with the vision for the corridor. “Between Algonquin Road and [Interstate 90], there was one stop sign and one traffic light.”

Building really began in Lake in the Hills in the late 1990s and expanded south to Algonquin.

Lake in the Hills has more than 580,000 square feet of commercial space along Randall Road.

Lake in the Hills’ section of Randall Road is largely filled with commercial properties, although there still is some room for development, said Dan Olson, community development director for Lake in the Hills.

Algonquin has much more land for commercial growth, although village officials are rethinking development plans for the corridor.

Since 1998, in Algonquin alone, the amount of retail space on Randall increased by an estimated 3 million square feet to about 3.5 million square feet, Algonquin Senior Planner Katie Parkhurst said.

That growth was deliberately planned, Schmitt said.

Algonquin officials first created border agreements with nearby towns to prevent developers from playing one town against another for tax incentives. Then they laid out a plan for residential development with a mix of housing and high-end condominiums.

The village board didn’t allow residential development without corresponding commercial development.

Commercial development followed, largely without the assistance of tax rebates or other incentives, Schmitt said.

Retailers were attracted by the number of homes in the area, which at one point was among the fastest-growing in the country. Retailers also were drawn by the proximity of the interstate, said Tim Billimack, who helped develop properties along Randall Road and is the principal owner of Blue Tip Commercial Real Estate and Development.

“Crystal Lake was the retail hub of the county, but Algonquin and Lake in the Hills changed that,” he said.

Algonquin officials got developers to foot the bill for widening sections of Randall Road, Village Manager Bill Ganek said. They also required developers to bury power lines and meet architectural and landscaping requirements.

“All of that was done by design, not accident,” Ganek said.

Retail development turned Randall Road into a shopping destination and economic engine for both villages, but it also brought traffic problems.

“In hindsight, some road projects should have been built into development plans,” Ganek said.

Improvements to Rakow Road and plans to widen Randall should reduce congestion, officials said.

What lies ahead for the corridor is less certain. Tighter lending practices, high unemployment, the continued housing slump, and the surplus of available retail space mean growth is a ways off.

“Larger retailers won’t focus on tertiary markets in the collar counties until the housing market improves and new housing development begins,” Billimack said.

Commercial development could remain stalled for an additional two to five years, he said.

Because of that, Algonquin leaders are “in the process of re-evaluating where we are heading,” Ganek said.

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