Developer pauses plans for 110 rental units in Johnsburg, which also puts brakes on new water tower

Johnsburg leaders had hoped the proposed Redwood Homes project – which was to bring 110 attached rental homes to the village – would also help fund an expansion of its water and sewer system.

That expansion, including an additional water tower for the village, is now on hold. Redwood Homes is pausing its Johnsburg project, said Claudett Sofiakis, village administrator.

“At the current time, they are not proceeding because of materials an other related costs. The housing market in general is experiencing the same thing,” Sofiakis said. She added that “they are really excited abut the project” and do plan to continue it in the future “provided the property is available,” Sofiakis said.

“The village is a great place to be. I would love to put a shovel in the ground tomorrow.”

—  Kellie McIvor, Redwood Homes LLC

Redwood has been working on the housing proposal with Johnsburg for a few years, but there were “a couple of off-site improvements we need to get our arms around,” said Kellie McIvor of the Ohio-based company.

“Johnsburg itself is a great village. It is golf cart-friendly and development-friendly,” McIvor said. “We brought them a good project and they collaborated with us, making our neighborhood a good fit for Johnsburg.”

But higher interest rates, higher construction costs and those “off-site costs” including the water tower, is behind the pause, she added, saying it allows Redwood to “get our hands around ... the current state of the market.”

Plans were for 110 one-story rental units with attached garages. While Redwood developments do not have set age restrictions, their renters’ average age is 51 and do tend to be empty nesters, McIvor said.

She couldn’t say if or when the project would resume, but “it would be a correction for the market – the cost of debt, the cost of construction materials” that would have to change, she added. “It has nothing to do with the village. The village is a great place to be. I would love to put a shovel in the ground tomorrow,” McIvor said.

Other Redwood housing projects, including in Crystal Lake, Fox River Grove, Volo, Oswego, Aurora and Lockport, have no changes planned. “We are continuing to build in Chicagoland,” she added.

The village had been working toward a bond sale to fund water tower construction. Those bonds would be paid off via developer donations, tap-on fees and user fees from those ultimately connected to the village’s water system, village officials said previously.

A water tower for the Redwood development would also have provided water to downtown, in addition to other Johnsburg neighborhoods.

“We have to take a look and evaluate the cost. Redwood was contributing significantly toward it,” Sofiakis said. “We have to look at it and if it would be appropriate” to continue.

Village President Ed Hettermann said that while the village has had a third water tower planned for 25 or 30 years “the water tower won’t be built now” unless Redwood chooses to restart the project, or another developer comes in.