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October 18, 2007

Forest City in the News

Daily Herald, Sugar Grove may lose Forest City

For the second time in 19 months, a major development in Sugar Grove is on the brink of being shelved because of infrastructure costs.

An official with Forest City Commercial Group said the company did not renew its option to buy land for a proposed 211-acre development with 1 million square feet in retail and might nix the project.

"We're still trying to figure out how much we'll need to make modifications of Route 47 and Galena Boulevard," Jerry Ferstman, vice president of the development group, said last week.

"At this point, it doesn't seem like IDOT (the Illinois Department of Transportation) has much funding. We don't have a clue as to what road improvements will cost. How to pay for it is the real conundrum."
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The possible scrapping of the project is especially surprising considering the Cleveland-based real estate company paid a public relations firm to push a referendum on a proposed tax hike it had requested.

Voters approved a 1 percentage point sales-tax increase in November that was enacted by the village board in March. The state began collecting the tax for Sugar Grove on July 1.

NoLandGrab: We posted another article about Sugar Grove yesterday, which explained that FCE was threatening to pull out because of land acquisition costs. If you add the need to cover infrastructure costs from today's article, one might assume that the development company is bucking for a Brooklyn-stlye sweetheart deal, in which the City is kicking in $205 million, to start, to pay for extraordinary infrastructure costs and contribute to land acquisition, and the State is piling on another $100 million.

The success of the FCE model is based upon getting the public to assume most of the up-front risk. Subsequently, if the project doesn't deliver the promised benefits, the municipal or state government is compelled to continue to find ways to support the project — this pattern has been observed in Cleveland and Brooklyn.

The Herald News, Higher sales tax for mall?

Village officials hinted this week they're considering an extra 1 percent sales tax to help fund bonds that are being contemplated to fund road improvements around Cedar Crossings, the 1-million-square-foot retail center proposed by Zaremba Group LLC of Cleveland.
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The bonds are necessary, village officials said, because in order to allow Cedar Crossings to align its entrance with the I-355 ramp on U.S. 6, the Illinois Department of Transportation is requiring that both U.S. 6 and Cedar Road be built out to handle the estimated traffic in 2030.

While the Cedar Crossings project will directly abut the roadways, the roads will also be traveled by cars that need access to a 1.5-million-square-foot lifestyle center being proposed by Forest City Enterprises and any number of other future retail projects along the U.S. 6 corridor, including a proposed hospital by Silver Cross.

NoLandGrab: Reporter Patrick Ferrell tells us that, unlike the Sugar Grove project mentioned above, the Forest City Enterprises New Lennox project is not in a proposed tax-increase zone and, unlike the nearby Cedar Crossing project, does not front the interstate.

Arizona Daily Star, Giffords at bat for Marana on flood issue
Ten square miles of Marana, AZ might be designated by FEMA as a Zone A flood plain, requiring current property owners to purchase costly flood insurance.

Already feeling the effects of a slowdown in the housing market, Marana could become a development wasteland, officials said, if flood insurance were to become necessary to live or build there.

"There is nobody that wants to buy property in a flood zone," said Dean Wingert, senior vice president of Forest City Land Group, which is developing the Gladden Farms master-planned community in Marana.

Wingert said that within a week of FEMA releasing its draft maps, a $6 million development deal fell through with Richmond American for that home builder to construct its fourth neighborhood in Gladden Farms.

Posted by lumi at October 18, 2007 7:07 AM