Negotiation OK’d for redevelopment of former mental health center
With an eye toward acquiring the former Tinley Park Mental Health Center, village officials will negotiate with a development group that has proposed building hundreds of homes and is seeking tax increment financing help and other incentives of nearly $69 million.
The exclusive negotiating rights agreement with Melody Square LLC will be in effect for six months, with issues such as potential uses of the 280-acre site and incentives being discussed.
At a Village Board meeting Jan. 3, residents accused officials of “rushing” the agreement through, although the village said that entering into negotiations doesn’t bind it to ultimately approve Melody Square’s plans or incentive amount.
Melody Square’s proposal includes 435 single-family homes described as active-adult agerestricted housing targeting buyers 55 and older, as well as a 200-unit luxury senior apartment building. Separately, an additional 60 single-family detached homes are proposed as well as 100 town homes.
According to the village, Melody Square’s principals include national homebuilders K. Hovanian Homes and M/I Homes, along with commercial property owner Rick Heidner. Another partner in the group is David Dorgan, who served as Tinley Park’s village manager from 1991 until 2003.
In 2015, Tinley Park planned to pay the state what was then an asking price of $4.16 million for the property, north in a bid to gain greater control over what might be built there, then backed away from that idea.
Village officials said they have been waiting on an updated appraisal of the property from the state.
Having a development partner will “send a message to the state” that Tinley Park is interested in moving ahead with redevelopment, village manager Dave Niemeyer said at the meeting.
Melody Square’s was one of three proposals reviewed by the village and a consultant, SB Friedman.
Melody Square wants tax increment financing assistance from the village to demolish buildings on the 280-acre property, northwest of Harlem Avenue and 183rd Street, and environmental remediation of the site, according to its proposal.
Testing completed in 2014 revealed environmental issues such as asbestos, an abandoned sewage treatment plant, leaking underground storage tanks holding gasoline and other petroleum products, drums containing chemicals, and soil contaminated with mercury and lead. An estimate for the village put the cost of cleaning the site and demolishing the many buildings on the property to get it ready for development at $12.4 million.
Unlike a shovel-ready site, costs for developing the property could be anywhere from 40 percent to 70 percent higher than for a typical residential development, largely because of the demolition and environmental remediation costs, according to SB Friedman.
Some residents questioned why the village would want a development with a large number of homes, noting statistics that show Illinois continues to experience an exodus of residents to other states.
Officials have said that although the property is in a tax increment financing district, the site’s location in Cook County makes large-scale commercial development unlikely due to higher property taxes.
UrbanStreet Group, had proposed 785 single-family homes, 306 town homes, 500 apartments and 200 units of senior housing, including active-adult and assisted-living units.
Trustee John Curran said that large number of homes could have overwhelmed local school districts with an influx of students, noting that most of the housing in Melody Square’s proposal is restricted to buyers 55 and older.
“It’s a need,” he said of housing for older residents.
During a public comment period prior to the Village Board vote, many residents said it was frustrating because they were asking questions without having more specifics about the proposal.
Mayor Jacob Vandenberg said there would “be multiple other opportunities for public comment,” and officials noted that any development would undergo extensive review by the village’s Plan Commission as well as the Village Board.
After six months, if progress is being made, the negotiating agreement with Melody Square could be extended, or the village could “go back to the drawing board” and start fresh with a different developer if talks stall, village attorney Patrick Connelly said.
Two trustees — Michael Glotz and Michael Pannitto — voted against proceeding with negotiations with Melody Square.
In a breakdown of its incentive request, Melody Square is proposing $6 million for demolition of buildings on the property, $12.8 million for infrastructure work such as utilities and streets, and $6.5 million for environmental remediation.
Incremental increases in property tax revenue in the TIF district the land is located in would be used to pay those expenses, according to the village.
Melody Square also has asked that any existing TIF revenue be turned over to help in getting redevelopment started.
Melody Square’s proposal earmarks about 140 acres of the site for housing development and more than 80 acres for parks and open space.
Six to 10 acres of the total site would be earmarked for commercial uses, with potential interest in a hotel and movie theater, according to Melody Square.