‘We are at a tipping point’: Shodeen to propose 800 apartments in downtown McHenry. Will council agree?

Development proposals that could bring almost 1,000 apartments, a hotel, commercial spaces and parking to downtown McHenry will go before the McHenry City Council on Monday.

The council will get its first look at what developer Shodeen Group has in mind for two parcels in the heart of McHenry.

Shodeen is sitting down with the council during a 5:30 p.m. discussion Monday, as both sides need to determine whether their relationship should continue and if the City Council is on board with those ideas, Mayor Wayne Jett said.

“They want to know if they are in or out of McHenry. They don’t want to waste any more time or money, and neither do we,” Jett said this week.

The city and Shodeen entered in a “standstill” agreement in April 2023. In the agreement, the city promised to not market to another developer either the 2¼ acres it controls between Route 120 and Green Street or the former wastewater treatment site off Waukegan Road on the Fox River. That agreement sets the properties aside until March 2025 while the two come up with plans for both.

In the meantime, McHenry has agreed to purchase or has purchased other properties adjacent to the two sites, including on Waukegan Road leading to the wastewater site and a restaurant on Green Street.

While working through plans for those sites, Shodeen also floated a plan for 1111 N. Green St. that would have put 88 apartments, 157 shared parking spots and commercial space in a six-story development. The council turned down that plan June 17 in a 4-3 vote, a decision Jett publicly criticized.

It is that vote that brought about the meeting Monday.

“I don’t want to continue to lead them on on doing development in McHenry if the council is not in support of it,” Jett said. “That is the not the right way to do business.”

It is important to see what the concept designs are going to be, City Administrator Suzanne Ostrovsky said.

“We are at a tipping point now. If we want to move forward or not ... we need to know now,” she said.

The concept plans for the Elm/Green Street properties, as outlined by Ostrovsky and available on the city’s website, include 303 apartments, 8,000 square feet of retail space and 422 parking space across three buildings.

That development also would create a new road connecting Route 120 and Green Street, Shodeen President David Patzelt said.

In total, the company is looking at a $100 million development on the site, which also includes use of the property that is home to Green Peapod Thai Restaurant. Shodeen also is looking at $20 million in incentives from a new tax increment financing district on the site, Patzelt said.

Green Peapod owner Siriphote “Poet” Kaewnopparat said that although she does not want to move her restaurant, she also does not want eminent domain used to take the site. She has discussed Shodeen building a “turn-key” operation to move the business, she said.

At the former wastewater plant site, Shodeen is suggesting more than 400 apartment units, 839 parking spaces and a 130-room boutique hotel across five buildings, Ostrovsky said.

Patzelt said the total development there is estimated at $190 million, with a $35 million TIF request.

That proposal also calls for a new entrance road to the site, moving traffic off Waukegan Road. It also envisions the purchase by the city of D’s Marine next door to the site.

Patzelt said the new access road is in direct response to residents of the Riverwalk Townhomes who said during previous discussions that they did not want to see additional traffic on Waukegan Road from additional development.

“You have to look at the bigger area” and how it fits into the existing neighborhood, Patzelt said. “Somebody had to put this together. That is how we differ from other developers.”

At least one of the City Council members who voted against the 1111 N. Green St. project said the wastewater site proposal could be “the crown jewel of the Fox River.”

“I like that there is a new street and they are not going up Waukegan,” 3rd Ward Alderman Frank McClatchey said.

There are a “couple of variations” he said he would like to see, including removing at least one floor from a proposed four-floor building there.

McClatchey said he would like to see the number of stories limited for a Green/Elm Street project, and he could not support the 1111 N. Green St. proposal because of the dining and liquor tax increase included in that plan.

What he is not worried about is whether other developers would come knocking if Shodeen does not continue working with the city.

“We will attract other developers because of the [existing] TIF and the fact McHenry is taking off,” McClatchey said.

If the City Council indicates that it is not interested in the Shodeen proposals or development on the sites, Jett said he may have to reconsider his role as mayor. His term is up next year.

“The fact is that the city of McHenry, prior to me taking office, was stagnant,” Jett said. “If the development is not here, it will go to the next town over, and we are going to sit and dry up. Then revenue goes down and property taxes go up. If it is not going in this direction, there is not reason for me to be in office.”

This story has been updated to correct the number of apartments proposed at the former treatment plant site and the overall number.