McHenry Green Street developer seeks $8M in city funds; sales tax for parking garage also floated

McHenry officials ensured residents this week that a proposal for a property along Green Street has nothing to do with Landmark School or its future.

The proposal from developer Shodeen Group LLC, set for discussion at Monday’s city council meeting, seeks apartments, retail space and parking for the public and residents at the former city hall site at 1111 N. Green St. – which happens to abut Landmark School.

“It is not at all about Landmark School,” City Manager Suzanne Ostrovsky said. “There has been zero conversation” about the adjacent school or any development there.

Mayor Wayne Jett reiterated the sentiment, saying the Shodeen proposal “has nothing to do with Landmark” and that it’s the McHenry School District 15 board “that has to make that call” about the future of the school building and its year-round program.

The District 15 school board hosted three public meetings in recent weeks seeking resident input on potentially closing Landmark School following a yearlong look at its school and administrative facilities.

District 15 Superintendent Josh Reitz said at the public hearings that no group has approached the district looking to purchase the building or property. The district has not said when a vote is set to consider the school’s future.

Neither should the city be involved with development of the Landmark property if the district decides to sell the property, said Alderman Frank McClatchey, 3rd Ward.

“I will chain myself to that building” rather than see it developed into apartments or razed, McClatchey said. “There would be riots in the street.”

This development has nothing to do with Landmark.”

—  Wayne Jett, McHenry mayor

What Shodeen is seeking Monday is city council feedback on a six-story, mixed-use building for downtown McHenry that would include 88 apartments, commercial space and 157 under-roof parking spaces. The developer is also asking McHenry for $8 million in public funding – $6 million via a Tax Increment Finance district and $2 million in city grants.

Ostrovsky’s report to the council suggests the city’s direct, $2 million grant would pay for the new parking by adding a 1% food and beverage tax across McHenry.

That tax would be applied to all “food and liquor over-counter service,” Jett said, including dining out, from sit-down restaurants to fast food orders. It would not apply to groceries.

By adding the dining-out sales tax, the city gets funding it needs for additional parking, Jett said.

There are currently 46 parking spaces at the 1111 N. Green St. site, serving neighboring businesses and as overflow parking for Landmark school and “any development of 1111 Green would need, at a minimum, to replace these public parking spaces,” according to Ostrovsky’s report to council.

After subtracting overnight resident parking, the garage would allow “51 open public parking spaces, replacing the 46 currently on the site and adding five to the downtown total,” according to the council report.

Shodeen President David Patzelt said at his February presentation that the parking structure would be deeded to the city after construction.

There will not be a vote Monday, Ostrovsky said, but city staff is asking for a consensus on whether or not it should move forward to a development agreement.

Jett has also asked business owners and the public to weigh in, making an appeal through his public-facing Facebook page for support for the parking plan and a change.org petition to support the development plan.

Dan Hart, owner of the D.C. Cobb restaurant across the street from the proposed development and the soon-to-open Whiskey Diablo on Riverside Drive, said he supports the proposed sales tax on restaurants.

“Nobody wants taxes raised, but development is good for everybody,” Hart said.

The more development that comes to downtown McHenry, the more parking that is needed, Hart said, adding that other towns with a D.C. Cobb location have added a similar sales tax with no affect on restaurant sales.