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GlobeSt.com UPDATE: Uptown Surviving Delay, Cost Increases

PARK RIDGE, IL-Redevelopment of a 383,788-sf mixed-use project at Touhy Avenue and Northwest Highway is taking longer to build, largely because of a recently settled lawsuit. The project is becoming costlier, yet remains a profitable venture.

By Mark Ruda | Updated on February 07, 2006

PARK RIDGE, IL-Construction delays caused by a recently settled lawsuit have increased the cost of the 383,788-sf mixed-use Uptown redevelopment in this suburb’s Downtown past $120 million. However, the project still appears to be a financial winner, according to a report by the city’s tax increment financing consultants.

Original plans projected a $64.5-million payoff in increased property taxes and the city’s share of sales taxes from the project during the next 23 years. In addition to construction delays, the project has changed since then, most recently by eliminating about 15,000 sf of retail space that would have been taken by a multi-story book store anchoring the project at Touhy Avenue and Northwest Highway. Even with that space shifting into the residential column, the project is now expected to generate $65.9 million through 2027, according to a report by S.B. Friedman & Co.

Meanwhile, latest projections show the project generating an 11.35% internal rate of return during the next 15 years, an improvement of 65 basis points from earlier estimates that puts the city in a bonus situation. PRC Partners, a group that includes Mid-America Asset Management, Edward R. James Partners and Valenti Builders, has agreed to a 60-40 split of excess profits above the 11% internal rate of return with the city. While the city is selling the 5.8-acre site for $9.5 million, it is spending $18.4 million in infrastructure improvements.

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