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The St. Charles City Council in the coming weeks is set to vote on whether to create a tax increment financing district to spur the redevelopment of the shuttered Pheasant Run Resort in St. Charles.
There were no public comments about the plan at a public hearing during the Jan. 3 St. Charles City Council meeting. Alderpersons have to make a decision within the next 90 days.
In December, a joint review board unanimously recommended that the city approve the proposed Pheasant Run Redevelopment Plan and Redevelopment Project. The panel also found the former resort property meets the criteria to become a tax increment financing district.
The joint review board has representatives of local taxing districts affected by a proposed TIF. Representatives from Wayne Township, St. Charles School District 303, the St. Charles Park District and St. Charles Public Library District attended last month’s meeting.
TIF consultant Kane, McKenna and Associates created the plan. KMA President Phil McKenna told alderpersons Jan. 3 that the TIF plan conforms to the city’s comprehensive plan.
Once a municipality creates a TIF district, its property assessment is frozen and new or increased taxes generated by improvements are used to pay for improvements or other development incentives. The property has seen a decline in equalized assessed valuation in the past two tax years, McKenna said.
A fire in May that destroyed large parts of the Pheasant Run Resort has increased the need to use tax increment financing to spur its redevelopment, according to the plan.
“There’s been a decline of 33% of equalized assessed valuation and that’s prior to the fire,” McKenna said.
Two male juveniles – one from Carol Stream and one from Wheaton – have been charged with causing the fire, while two other male juveniles – one from Carol Stream and one from Winfield – each have been charged with trespassing at the resort.
The plan designates the property for light industrial, retail and commercial use. Pheasant Run Resort closed in March 2020 after a failed attempt to auction the resort. McGrath Honda redeveloped the former Pheasant Run Mega Center adjacent to the property and industrial buildings will be built on the former Pheasant Run Resort golf course.
The plan estimates it will cost $42.6 million to redevelop Pheasant Run Resort. The investment is projected to significantly increase the property’s EAV.
“The projected EAV upon completion of redevelopment activities is somewhere between $50 and $75 million,” McKinley said.
That investment includes an estimated $16.5 million in demolition, site preparation and environmental cleanup along with $9 million in land acquisition and assembly.
Other costs include $3 million in infrastructure/public facilities improvements, $1.5 million in rehabilitation costs, $5.5 million in interest costs and $6 million in statutory school district payments.
McKinley said the budget is spread out over time.
“It’s a 23-year budget,” McKinley said. “That’s a long period of time. Development, as you know, doesn’t happen all at one time.”
St. Charles Economic Development Director Derek Conley said determining redevelopment costs is difficult.
“The $42 million captures all possible costs in the event that they are needed,” Conley said. “However, for any potential project, it is not realistic that the full $42 million would be utilized.”
Conley said just because it’s an estimated redevelopment cost doesn’t mean it’s going to be paid for by the TIF.
“The city is only looking to fill in a financial gap for a potential development,” he said. “A majority of the redevelopment costs will be born by the prospective developer.”
Conley also said the estimated redevelopment costs are for the entire former Pheasant Run property, including the former golf course.
The plan addresses the fire and its impact on redeveloping the property.
“These conditions negatively impact the possibility for coordinated and substantial private sector reinvestment in the overall redevelopment project area,” according to the plan. “Without the use of city planning and economic development resources to address certain issues, potential redevelopment activities are not likely to be economically feasible. These factors potentially weaken the likelihood for redevelopment opportunities, limiting employment and contributing to a lack of future investment in the area. To address these conditions, the city seeks to adopt the Pheasant Run TIF in order to enhance future opportunities for viable redevelopment.”
The plan states the permanent closure of the Pheasant Run Resort and golf course, along with the resort’s physical demise and partial destruction by the fire“ and the resulting impacts in this strategically critical area of the city, especially in light of the decline of the Charlestowne Mall across the street, requires the city to be proactive in encouraging its redevelopment.”