Tensions Heat Up Over Riverside Plaza Property in Algonquin

May 24, 2012

The northwest suburb of Algonquin is the site of an increasingly ugly dispute between the village’s board of trustees and Riverside Plaza developer John Breugelmans.

Riverside Plaza

Photo Courtesy of Algonquin

In March 2011, Breugelmans purchased the uncompleted four-story property located at the corner of routes 31 and 62 with the intention of building 54 luxury condos. However, according to Breugelmans, there is not one lender who will offer him a loan for completing the project.

“There is nobody in this whole world willing to lend money for a condominium project,” Breugelmans said.

In the current Chicagoland real estate climate, it is little surprise that lenders are avoiding handing out loans to builders for anything less than a sure thing. Only four condos have been sold in the River Plaza building since August 2011.

Just how bad is the condo market in the suburbs of Chicago?

During the Committee of the Whole meeting, Breugelmans pleaded with village trustees to alter the original plan by converting the 54 condos into 69 rental units. Banks are much more at ease lending for a rental project, a rising trend throughout the northwest suburbs as many homeowners who have lost their property need to rent as well as the reluctance of many to purchase property during the current housing crisis.

The board of trustees were not thrilled with Breuglemans plan.

“It surprises me that you would come to us after all this time and after all the investment this village has made in [this project] as well as you to ask for a conversion to rental apartments,” Village President John Schmitt said according to a report by Brett Rowland.

Nonetheless, the board was willing to adapt provided the units stay at 54 and high-end appliances are used. The village wants a certain demographic to occupy the building located in downtown Algonquin.

“We originally went for this project as a high-end condo building to attract a certain demographic to our downtown. How are you going to fill (apartments) with the same demographic? That’s the only way you’re going to get my approval for this plan,” Schmitt said according to a report by Stephanie Price.

As much as the village board has a right to be dismayed over the lack of progress on the original plan, the reality is that there may no other option than to convert the condos into rentals. In the current real estate landscape, rentals may be the only viable way to make a profit for the Algonquin property.

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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