Artspace $12.5M Karcher overhaul to start July 1

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Artspace Inc. will kick-start its $12.5 million overhaul of the Karcher Hotel on Washington Street in Waukegan July 1. | Ryan Pagelow~Sun-Times Media

Updated: February 24, 2011 2:15AM

WAUKEGAN — July 1 has been pegged as the day Artspace Inc. will kick-start its $12.5 million overhaul of the Karcher Hotel, even as project organizers continue their bid to secure the final funds needed for the renovation.

“We are hoping to be under construction no later than July of this year,” Artspace Director of Property Development Heidi Kurtze told the City Council Monday at the tail end of an evening of public presentations that included a meet-and-greet for potential tenants at Green Town Tavern.

Kurtze added that the final input of private funds stands between $450,000 and $200,000, and “we’re very confident we have the resources to close that gap.” 

The biggest piece of the financial pie for Artspace was nailed down last year in the form of $9.23 million in low-income tax credits from the Illinois Housing Development Authority. Waukegan has pledged $550,000 from downtown redevelopment sales tax revenue, along with $1.7 million in tax-increment financing over 20 years.

Artspace plans to build 36 live/work units for artists and their families on floors two through nine of the Karcher, which has been vacant since a 1984 fire. The ground floor featuring 2,400 square feet of commercial space for “complementary non-profits” and small businesses.

If all goes as planned, Kurtze said the building could start leasing space as soon as the summer of 2012. She added that “I cannot thank this community enough for your commitment and patience.”

Mayor Robert Sabonjian told Kurtze that he’s also confident that the final funds will be collected, though he noted the challenges involved.

“Obviously, these days, money doesn’t just come pouring in. But it’s coming in,” said Sabonjian, adding that he’s pledged $500 out of his own pocket. “It’s the first step in the rejuvenation of the city of Waukegan’s downtown, (and) we’ll keep working with you any way we can.”

Waukegan Main Street board president Mary Clare Jakes said Kurtze and other Minnesota-based Artspace officials had a full itinerary planned this week in both Waukegan and Elgin, where the group is lining up a $14.5 million rehab of a 1908 Sears and Roebuck building in the city’s downtown.