Johnsburg planning to borrow $1.1M to buy Chapel Hill golf course

JOHNSBURG – The village of Johnsburg plans to take out a $1.1 million loan to buy the Chapel Hill golf course only months after a developer proposed a residential housing complex on the site.

Village officials announced a contract with the owner to buy the property Sept. 8. Village Board members voted to buy the 100-acre property at their Sept. 5 meeting.

The village never held a public hearing about buying the property. Government bodies are allowed by law to discuss the acquisition of property in closed session. Johnsburg held multiple closed session meetings in the past several months, but the matter never made it to a public hearing, according to village records.

The village plans to lease out the course to recoup acquisition expenses, and officials said the purchase won’t result in higher taxes for residents, according to a news release from Johnsburg.

“The village has been focusing on the details of a management contract for the operations of the course,” Johnsburg officials wrote. “Revenues derived from the course’s operations will be used to pay back the note secured to acquire the property. The purchase of the course will not result in a tax increase to village residents.”

The village also plans to offer reduced fees for residents and make special fee arrangements with the Johnsburg High School golf team, the release said.

Village President Edwin Hettermann said that if the course isn’t self-sustaining, the city’s general fund will pick up the slack.

“A tax increase would not occur,” Hettermann said. “Johnsburg is limited in its ability to raise taxes, as we are restricted by the Property Tax Extension Limitation Act, meaning we cannot just arbitrarily increase taxes to cover a shortfall if it should occur.”

Johnsburg has not yet closed on the deal, and it is in its 60-day due diligence period, as stipulated in its Sept. 5 contract.

The village didn’t have a formal appraisal of the property done. Instead, officials looked at its property assessment, talked to board members who had banking expertise and considered different factors such as its value to the community, Village Administrator Claudett Peters said.

Rachel Leven, policy manager at the Better Government Association, called that decision risky.

“This seems like an unnecessary risk for a government to be taking with taxpayer money,” Leven said. “Which makes the fact that they didn’t hold a public hearing that much more concerning.”

The property consists of 26 individual parcels totaling $866,377 in assessed value, which represents about a third of the actual value of the properties, Peters said.

The village will have some maintenance work to do on the golf course after buying it. That likely will include removing dead trees, brush and overgrowth. The old clubhouse likely will need to be demolished, according to a news release from the village.

“We have looked into the cost of performing the maintenance items identified in the news update, and most of those tasks will be performed by our public works employees. Much of the work will be performed during the winter, when the demands on their time are not as great,” Hettermann said.

The McHenry Township Fire Protection District will use the old clubhouse for training, and once the district is done with it, it will burn it down, Hettermann said.

“This will be a mutually beneficial opportunity for both the village and the fire protection district,” he said.

Johnsburg officials said preserving green space in the community was a key factor in the Village Board’s decision to buy the golf course. Village officials had talked about acquiring the property since it went on the market four or five years ago.

“Recently, we decided to move forward, but it’s been talked about for a long time,” Hettermann said. “We like that it’s an entrance to the village, and we would like it to remain open space and remain a golf course. … We are still in the due diligence period, and we are confident we can make it work.”

The property could have been developed into a residential home and vocational center for people with developmental disabilities, if a proposed plan by Lake Forest-based Swanson Development had come to fruition.

The development group pitched its proposal to the McHenry City Council in July and was met with support. About 55 percent of the property would have remained open space if the plans moved forward, Swanson Development officials have said.

Rick Swanson, president of the development group, called the village’s decision to move forward on a contract “underhanded” in a news release Sept. 12, several days after Johnsburg’s announcement.

“Your press release flagrantly misrepresents the development concept we proposed and suspiciously fixated on one aspect of our overall vision … to justify your actions,” Swanson wrote to Johnsburg. “More importantly, it insults millions of families in this country trying to find meaningful alternatives for adult children with developmental disabilities.”

Swanson said the plan was a result of a decade of research. The developers had worked for months on the plan during its due diligence phase, and said the village of Johnsburg should have talked to them about the matter.

Swanson said the company reached out to the village but never heard back.

Hettermann said the village had gotten back to the developer at some point before the proposal went before McHenry City Council, but he wasn’t sure of the date or whether it had been an email or phone call.

Peters said she had not been contacted by Swanson.

“We ordinarily take the loss of a project to a competitor with grace and move on,” Swanson wrote. “It is an unfortunate aspect of our profession, and we accept that risk. In this case, our unknown competitor is an entity we should be able to trust to act fairly and with full transparency. … The village chose to take a less honorable approach.”

Johnsburg plans to annex the McHenry Township property to the village, which would bring a 1998 boundary agreement battle full circle.

The Chapel Hill golf course was at the center of a rift between McHenry and Johnsburg in 1998, when the two municipalities were redrawing boundary agreements. The city of McHenry essentially agreed to allow Johnsburg to provide sewer service to land along Route 31 in McHenry’s service area if Johnsburg conceded to allow the Chapel Hill property to fall into McHenry’s boundary lines, according 1998 Northwest Herald reports.

Johnsburg residents feel strong ties to the property because Frederick Schmitt – who has genealogical ties to many current Johnsburg residents – built the first church in Johnsburg on the site. The chapel on the hill is where the golf course gets its name, according to the 1998 reports.

Longtime Johnsburg resident John Huemann, who also was a trustee during the 1998 debates, said that it comes back to heritage.

“It really starts with the Chapel Hill chapel,” he said in a recent interview. “It was built ... in the mid-1800s. It’s evolved since then, obviously, but there is a long, long, long family tree that ties back to Schmitt.”

Huemann said that he agrees with the village’s decision to buy the property.

“I know there are going to be people concerned with the viability of the golf course,” he said. “But I believe the Village Board has their feet firmly planted on this.”

Peters said the village have not solidified details of the loan and is working with several banks and the operators of the golf course. The village expects to close in November, she said.

McHenry Mayor Wayne Jett said it is a shame to lose out on the development.

“It’s unfortunate for McHenry and Johnsburg,” he said. “I think the housing would have been a good opportunity, and it kept green space, as well.”