Arlington Heights Apartment Plan Gets Lifeline Amid Cost Crunch

A long-stalled Arlington Heights apartment development just bought itself another year.

Village trustees approved a 12-month extension this week for zoning approvals tied to Mylo Arlington Heights, a six-story, 135-unit project that has been unable to break ground since securing entitlements in 2022. The Daily Herald reported that the reprieve keeps the plan alive at 116-120 West Eastman Street, where two obsolete office buildings — including one with a basement that once housed the 1960s teen club called The Cellar — have sat vacant on the edge of the village’s downtown.

Developer Joe Taylor III of Compasspoint Development said the hurdles holding up the $66 million transit-oriented project are the same ones dogging multifamily proposals across the Chicago suburbs. Interest rates have pushed banks and debt funds to retreat from construction lending. Equity investors are hesitant too, Taylor said, because they can pick up existing northwest suburban apartment buildings at or below replacement cost. And construction pricing continues to rise, strained by higher materials costs, a tight labor pool and uncertainty around tariffs and inflation.

Even so, Taylor told trustees he expects 2026 to be the year that it finally becomes realistic to see shovels dig in the dirt on West Eastman. The new zoning deadline requires Compasspoint to secure permits and begin construction by December 18, 2026.

The plan calls for a midrise building with a ground-floor restaurant and a renter base ranging from young professionals to local downsizers — a demographic mix Arlington Heights has been courting as redevelopment clusters near its Metra train station.

Taylor said the extension provides enough runway to finalize design, engineering and construction pricing by the second quarter of 2026, with delivery and lease-up targeted for 2028.

Trustee Tom Schwingbeck pressed him on whether that’s achievable. Taylor insisted it is.

“I don’t envision us coming back for a second time for a second extension,” Taylor said at the meeting. “I think we’re going to get everything done.”

Much of his confidence stems from new capital partners. Taylor said he has teamed up with Richard Wolper, founder of Utah-based luxury homebuilder Mark 25 Homes, who in turn has long-standing financing relationships with D.A. Davidson and SDP Real Estate Investment Trust.

Those alliances, Taylor said, open doors to construction and long-term debt that smaller suburban developers often struggle to access, saying his new partners are well-capitalized and committed to financing the project.— Eric Weilbacher