The developer behind the One Winnetka project will pay for the cost of an independent review and economic analysis of the proposed development, according to Winnetka village officials.
On Feb. 2, village trustees approved an agreement with CBRE, a commercial real estate company, for a review of all documents submitted by the developer, all staff and public comments and the financial structure and budget for the project, according to an agenda report.
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The report states that CBRE representatives will evaluate the market viability of the proposal, the cost of the public elements of the project and a request from the developer that the village help to build those public elements, the benefits of the project to Winnetka and will also meet with the developer to negotiate improvements, financial terms and performance obligations.
The cost of the review is expected to come in between $25,000 and $50,000 and will be paid for by the developer, as will all village legal fees associated with the proposed project, according to the report.
“We want to emphasize that the village’s retention of an independent real estate consultant is solely part of the council’s due diligence evaluation of the One Winnetka proposal and does not presage how the council will vote on the development proposal,” reads the report, which was prepared by Winnetka Village Manager Robert Bahan and Village Attorney Peter Friedman.
Bahan said staff members expected the Winnetka Design Review Board to make a recommendation on the proposed project at its Feb. 18 meeting. Board members decided to table the issue at their last meeting on Jan. 21, following a lengthy discussion.
Bahan said the proposed development likely will be up for consideration by trustees at their March 17 meeting. He said village staff reviewed proposals for an economic analysis of the project from two firms and ultimately recommended trustees approve an agreement with CBRE.
Trustees pressed Martin Stern, senior managing director of advisory services at CBRE, whether the company had taken precautions to ensure there were no conflicts of interest with One Winnetka developer David Trandel, CEO of Stonestreet Partners.
Stern said, due to the size of his firm, he could not say whether or not a CBRE broker may have had an unrelated transaction with Trandel in the past, but assured the board that “my full responsibility is to the village to make sure this turns out the way the village wants it to turn out.”
“We really want assurance on that,” said Village Council President Gene Greable. “I’ve been there and I’ve seen (conflicts of interest) happen. It’s terrible.”
Trustee Myers asked if Stern had any idea how long it would take for another developer to submit a project for consideration at the site if this particular proposal were voted down by the council.
“Off the top of my head, and as an experienced developer, I’d be concerned about why it got turned down,” Stern said. He said reaction from the development community would depend upon the reason why the project was rejected.
“If the development community judges this was a good product and it was turned down because of community concerns or indecision or various other reasons it got turned down not related to the project, that would actually scare developers off,” Stern said.
Bahan said, in an interview following the meeting, that even if the council opts to reject the project, the developer behind the One Winnetka proposal would still assume the costs for the independent review by CBRE.
He said the real estate company’s services will be paid for via an escrow account into which the developer routinely deposits funds.
Stern said in an interview following the meeting that he had done similar review work on behalf of several nearby municipalities, including Evanston and Glenview, on other large-scale development projects.
Trandel told the village’s design review board at its last meeting in January that if the village ultimately approves the development, he aims to break ground on the project in June with construction completed by the end of 2017.
Lee V. Gaines is a freelance reporter for Pioneer Press.