The west side of Market Street has been cleared of volunteer brush in some spots, and revealed long-covered sidewalks from the 1940s. (Photo by Gregory Harutunian/for Chronicle Media)

An Aug. 9 hearing before the Waukegan Building Commission ended with a change in the zoning classification for an 11-acre site on the east side of the historic Market Street area, formerly the Diamond Scrap Yards, from a mixed marine-commercial-residential use to a pure (L-1) residential designation. The action set the initial stage for a potential revitalization of the entire south lakefront corridor, as envisioned in the city’s 2003 master plan.

The Chicago-based firms of NSREG, LLC and K Development LLC filed the petition for the map amendment and had been negotiating for the property, comprised of more than 20 separate parcels, from the locally owned NorStates Bank. Upon completion of the purchase, they approached the city of Waukegan with a proposal to develop the Market Street area for residential housing, from approximately South Avenue to the Pershing Avenue bridge access ramp.

The petition passed unanimously 7-0, with one absentee, and is now slated for an airing at the Sept. 4 Waukegan city Council meeting. In July, Steven Sabourin, a senior planner with the city’s Department of Planning and Zoning, forwarded the recommendation, citing that, “This map amendment request marks the first of many properties along the south lakefront to be rezoned to L-1 since 2009.

“The Petitioner intends to assemble this property with many other properties so that a new livable and walkable neighborhood can be created that will bring residential, commercial and open space uses to an area that has been underutilized for decades. This map amendment request represents the first step of a process that will require additional reviews.”

Waukegan’s Director of Planning and Economic Development Noelle Kischer-Lepper said, “Once they had acquired the property, they wanted to work with the city on these plans. There have been other proposals in the past, but this was new. The opportunity for this area that has been underused for decades to become a vibrant neighborhood with housing is exciting for the city. We are looking forward to the progress of this endeavor.”

The map amendment has been characterized as a “first step with a ways to go” in concurring with the downtown district overlay plan and requiring a special use permit, along with some city infrastructure work. The area is also included in an established tax-increment financing district. There have been no formal design or engineering plans submitted for consideration, but the concept and survey plats are on the table.

The Waukegan master plan, completed in 2003, basically seeks to reinvigorate the lakefront area with an eye toward changing the city’s face and becoming a place to invest.

“The city’s master plan is important because this is urban land and an aspiration to recapture the lakefront as a viable area that has been in receivership for 35 years,” said Richard Shields, a principal with K Development LLC. “We were able to get a ‘no remediation’ letter from the Illinois Environmental Protection Agency, for the top fill work we did, and that it is suited for residential use.

“This is the time … just over the border, FoxConn is coming and the employees will be looking for housing, so this land should not remain vacant,” he said. “Bringing back to the vibrancy of the downtown area is critical to Waukegan. They have suffered through tough economic times, and the value of the place always trumps the stigma of economic challenge in a new commitment with new features, a new tax base lowering property taxes.”

K Development LLC is a privately held company and listed as a management services business. The group was instrumental in the Fort Sheridan housing plans, and several other high-profile projects.

Market Street was an Italian neighborhood in the early 1900s, when many immigrant ethnic groups created their own community districts that lined the Waukegan-North Chicago boundary line, with the chief source of income being employment at the lakefront wire mill. The street was so named from the freight train cars bringing produce, meats, fruits, and ice there, on the spur line.

Lakefront employment was intrinsic to the life of these districts, which began to dissipate with the closure of the Washburn-Moen plant, and its latter incarnation purchased by US Steel that shuttered its doors by the mid-1970s. By the early 1960s, Market Street had dwindled to scattered residences and several grocery-notion stores operated by members of the Puerto Rican community. Most of the buildings were leveled with the construction of the Amstutz Highway, and only a few residences now remain.

“The city had the foresight to create a TIF-district … we will build the infrastructure initially,” said Shields. “We have to create the right pieces, the right concept to make it all happen. We’ve partnered with the city and it’s the beginning of a long journey … the first steps. We’ve got the financing and put it in equity, and have been at this for years.

“We took on the environmental risks and the Diamond Scrap Yards site has been received the remedial work,” he said. “Ultimately, we aspire to achieve what the city’s master plan aspires to achieve … a vibrant residential and commercial lakefront and their most vital asset.”

— Historic Waukegan lakefront area rebirth in works —-