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Municipalities sometimes step in when private property fails

Published: Wednesday, Aug. 21, 2013 5:30 a.m. CDT • Updated: Wednesday, Aug. 21, 2013 3:32 p.m. CDT
Caption
(Sarah Nader – snader@shawmedia.com)
The site of the former Dobyn's House (left) can be seen Friday from the Cunat Bridge on the McHenry Riverwalk. The city of McHenry owns the land and hopes to develop it and eventually sell it.

A partially built golf course that went bankrupt. A historical courthouse falling into disrepair. A lot that has remained vacant since a fire destroyed the restaurant that once stood there.

In each case, the local municipality bought the property with the hope that public ownership could turn the space around – or at least keep it from dragging down neighboring properties.

The municipalities don’t expect to make their money back dollar for dollar, but they point to other economic improvements made possible by the purchase, such as the preservation of open space and quality of life improvements for residents.

These cases aren’t necessarily routine, but they’re not extraordinary either, Woodstock City Manager Roscoe Stelford said.

The village of Lakewood bought the 240-acre RedTail Golf Club in 1990, Village Manager Catherine Peterson said. The neighboring subdivision had not yet been built, and village officials worried that without the golf course, the homes wouldn’t be built and property values would suffer.

The former McHenry County Courthouse was donated to the city of Woodstock in November 2011 in exchange for the city taking over a $105,000 lien on the property. It needed an estimated $4.7 million worth of repairs at the time.

“The Old Courthouse is a historic landmark,” Stelford said. “It’s one of the defining landmarks on the Square.”

Construction of McHenry’s milelong Riverwalk started in September 2007. The project included a pedestrian bridge over Boone Creek connecting the city’s downtown with residential areas.

“The Riverwalk is a downtown development tool,” City Administrator Derik Morefield said. “We have an important natural asset, which is the Fox River and the canal there that feeds the Fox River. We want to take advantage of that and make something residents can enjoy from the land as well as the water.”

When the opportunity came to buy the former Dobyn’s House site for $550,000, city officials decided to go for it.

The riverfront property, located at 1202 N. Riverside Drive at Miller’s Point, had been vacant since 2009, when a fire burned the 1929 landmark and the restaurant it housed.

The purchases haven’t always been popular.

The purchase of RedTail Golf Club was funded through alternative revenue bonds, which officials thought at the time could be covered using revenue from the course.

That didn’t pan out most years, and taxpayers ended up footing $3.6 million of the $6.8 million paid out over the life of the 20-year bond, an example that contributed to a new law that makes that type of borrowing more difficult for governments while making it easier for taxpayers to challenge it.

The club now is profitable, pulling in about $55,000 last year, Lakewood Village President Erin Smith said.

But regardless, Smith – like other elected officials responsible for property that might otherwise be privately owned – would eventually like to see the property return to private hands.

The village is not like a park district, she said. It doesn’t have expertise in running a golf course and unlike a private company, it can’t deal in economies of scale.

McHenry city officials also plan to return the Riverside Drive property to private ownership once improvements have been made and an easement has been carved out for the possible future extension of the Riverwalk, Morefield said.

While officials hope to recoup the cost of the purchase and improvements, the ultimate goal of the Riverwalk isn’t to earn every dollar back, he said.

“In some ways, it’s no different than [the] investment you make in parks,” Morefield said. “It enhances the overall quality of life, not just for the ones who live here, but for the people who come here.”

It comes down to priorities, Stelford said. Repairs made to the Old Courthouse mean other projects have to be delayed.

Woodstock looked into alternative revenue streams, including grants and fundraising, but the goal of ultimately putting the property back into private hands has hindered those efforts.

“It is what it is,” Stelford said. “You have to live within the parameters.”

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