Restaurants, retail and apartments part of pitch for Fox River Grove property obtained through eminent domain

The village of Fox River Grove has a tentative plan for the section of downtown along Route 14 that it acquired via eminent domain.

The Village Board approved a memorandum of understanding with West Bend, Wisconsin-based American Construction Services for a mixed-use, three-story block that would include restaurants, retail space and, at the moment, 80 apartment units on Route 14 between Lincoln Avenue and Illinois Street.

Both Village President Marc McLaughlin and Village Administrator Derek Soderholm stressed at a meeting last week that the proposal was very preliminary. The plans would still have to go through the village’s planning and zoning process, with plenty of opportunity for public comment, in the coming months.

“This is the first in many steps to get an approved project on Block B,” McLaughlin said. “This is not a final approval of anything. It basically says, ‘We would like to go forward with this developer,’ so they know we’re not selling the property to somebody else while they spend money on producing planning documents.”

Soderholm said he expects initial documents and a public meeting to review them will happen at some time in early fall. The demolition of the existing structures could follow in the winter of 2023.

Several residents at the meeting last week expressed relief that another proposal for four restaurants on the site was rejected by the board, although some said parking and traffic issues remain a concern with the approved plan.

“This plan is more fitting for the location,” said John Raviolo, a Fox River Grove residents of 25 years who owns Peacetime Traders on Lincoln Avenue, across from the Block B site.

The preliminary proposal calls for 156 new parking spaces overall, with 83 interior parking spaces that would be restricted to residents, Soderholm said.

The rejected proposal was the only one the village received during a request for proposals period last fall.

Soderholm said he wasn’t sure why the village didn’t receive more proposals, but thought a mix of factors, including the pandemic and a poor market for commercial proposals, might have played a role.

Fox River Grove resident John Lee, who works in the hotel supply industry, said he was asked by a village board member to try and find alternatives through his developer contacts.

“This was a Hail Mary pass to see who could build a downtown like we all want,” Lee said.

Lee said he reached out to Kraig Sadownikow, president of American Construction Services, and along with McLaughlin and other local officials, toured the village with Sadownikow and explained what they were looking for. Lee cited the downtown area of Arlington Heights as a broad model for their plans.

“We were introduced to Fox River Grove by a passionate resident, Mr. Lee, who is proud of the village and excited about downtown investment,” Sadownikow said. “We appreciate the confidence officials at Fox River Grove have in our development team and are hopeful our ideas will come to fruition.”

In order to facilitate the development, the village spent $3.5 million to acquire nine parcels from five owners over the course of three years.

“It is just an ugly block,” Lee said of the site. “We want to do something with it because it just looks terrible.”

While much of the block was unoccupied and Raviolo said the apartments were in poor condition, at least one business on the site, the New China Restaurant, held out for several years before being bought out by the village last October.

Local business owner Wilkin Gee, the brother of William Gee, who owned New China, said while months later the family has moved on, it still was an upsetting situation.

“What they did was just wrong,” Gee said. “Eminent domain is for infrastructure or something that benefits everyone, like a community center. You don’t tear a restaurant down just for new business.”

Wilkin, who has run WG Salon in Cary for 18 years, said he and other salon staff had helped out at his brother’s restaurant and this May would have been the restaurant’s 48th anniversary.

Raviolo said it’s his impression that village residents remained fairly mixed overall in their attitudes towards the eminent domain process and what might end up there.

“I’ve heard everything from ‘How dare they eminent domain New China, a viable business? It was my favorite,’ to ‘Good riddance, that block was run down. I didn’t go there anyways,’” Raviolo said.

Quantifying how the proposal would eventually justify the eminent domain process and acquisition costs is difficult at this stage, Soderholm said, though he noted an economic impact analysis would be part of the planning and zoning process for Block B.

“This was the only way to obtain redevelopment,” Soderholm said. “If Block B was just an empty parcel filled with grass, it would be easier to facilitate development. But when there are multi-story structures on a site for development, somebody in the process has to absorb the cost of removing those structures.”

That was also why the village created a tax increment financing district to help pay for redevelopment, Soderholm said.

“The endgame is the long-term financial benefit for the village and taxpayers,” Soderholm said. “This will create economic value for decades.”