Developer to Proceed in Sale of Downtown Property, Apartment Complex Construction

A developer will proceed in its deal to purchase 218 E. Wesley St. in downtown Wheaton after completing a due diligence period that ends Monday, Mary Ellen Martin, senior development manager for Morningside Equities Inc., said.

Morningside Equities, a Chicago-based firm which plans build a 300-unit apartment complex on the vacant, bank-owned lot, will close on the property by the end of the year or in early 2012, Martin said. Construction would begin in 2012.

To proceed with the deal, Morningside needed assurance it would receive support from the city for costs related to public improvements and negotiating impact fees.  for the property to City Council in a Nov. 8 meeting as part of its due diligence to gauge city support for the project.

Morningside attorney Scott Day told council that the developer would need $2.3 million through Tax Increment Financing (TIF) from the city, support in negotiating reduced or waived impact fees and a commitment to reimburse the $2.3 million to Morningside if the city realizes projected tax increments by the end of the TIF in 2021.

Morningside projects annual revenues to the city of around $1.5 million to more than $2 million between 2014 and 2021, Martin told council. Morningside would break ground on the property in 2012 and the complex would reach a stable occupancy in 2014, she said. Revenues for 2012-2014 would be low in comparison to the growth projected for 2014-2021.

The City of Wheaton hired its own consultant, Ehlers, to do its own the tax-increment projection through 2021. Ehlers predicted an increment of less than $600,000 in 2014, which rises each year to almost $800,000 in 2021, according to Martin. Morningside projected an annual property tax increment of around $600,000 in 2014, which rises each year to more than $900,000 in 2021.

The six-story development would include heated, enclosed parking for approximately 400 cars in an interior, two-level concrete parking structure,a courtyard with barbeque and social recreation areas; a theater; a fitness center; bike storage; residential storage; a community room with catering kitchen and a business center. 

Council members supported Morningside's plan and said they would be willing work with the developer to satisfy their requests. They lauded the developer for a vision that would benefit Wheaton.

Despite the public funding for the project, Wheaton Mayor Mike Gresk said, “In this day and age to have a project of this scope and quality come to our community is a definite long-term benefit.”

The 2.6-acre property is bordered by Cross, Front, Scott and Wesley streets in downtown Wheaton and is a part of the city's TIF District 2. It is listed for $5.5 million, according to the city's website.