Chicago Suburb McHenry Rejects Downtown Development

Shodeen Group’s plans for high-density housing in downtown McHenry have stalled following opposition from city leaders, and it could be a factor in the April 1 local election.

Opposition over public funding, the impact of density and the absence of ownership housing options led officials to reject the Geneva-based developer’s proposals in a series of nonbinding votes, Shaw Local reported. Shodeen ultimately backed out of its proposed development plans in McHenry, but the handling of cases is sure to be a topic in upcoming races for mayor and city council, the outlet said.

Shodeen’s first proposal, introduced in June 2023, called for a six-story building at 1111 North Green Street featuring 88 rental apartments, retail space and 157 parking spaces. The firm requested $8 million in public funding, including $6 million from a tax increment financing district and $2 million in city grants funded by McHenry’s 1 percent food and beverage tax.

The council voted against it, and Alderwoman Chris Bassi called the funding request a “gross misuse” of public resources.

Shodeen returned in July with revised plans for two city-controlled sites: a $98 million project at Elm and Green streets and a $190 million redevelopment of the former wastewater treatment plant site on the Fox River.

The revised plans called for hundreds of rental apartments, retail space and a 130-key hotel. The projects included TIF funding requests totaling $55 million, which further fueled opposition from city officials.

The lack of support ultimately prompted Shodeen to withdraw from its exclusive rights to propose developments for the two city-owned properties, effectively ending negotiations.

The city also canceled related agreements to purchase adjacent properties.

With redevelopment plans in limbo, downtown McHenry’s future has become a focal point in the city’s municipal election.

Bassi, who is challenging two-term Mayor Wayne Jett, has criticized the city’s focus on downtown projects, arguing that neighborhoods have been neglected. Meanwhile, Jett continues to advocate for downtown revitalization as part of his broader vision for McHenry’s growth.

Despite high interest rates and competing viewpoints, Chicago’s suburban multifamily market remains attractive to investors seeking strong rent growth and demand. Two companies helping drive this investor sentiment are Lakeside Capital Advisors, formerly Covington Realty Partners, and Wisconsin-based Continental Properties.

Lakeside Capital recently listed The Westlyn, a 242-unit apartment complex located at 28262 Diehl Road in Warrenville. Meanwhile, Continental Properties listed Authentix McHenry, a 288-apartment home community located at 3415 Blake Road in McHenry.

Miami-based homebuilder Lennar is also fueling growth in Chicago’s northwest suburb. The company is building a 584-home development spanning 304 acres at Bull Valley and Curran Roads on the town’s far west side.