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TO: Mayor Richard C. Irvin
FROM: David Dibo
Executive Director, Mayor’s Office of Economic Development
Alex Minnella
Senior Planner, Mayor's Office of Economic Development
DATE: January 1, 2025
SUBJECT:
A Resolution authorizing (1) the Assignment of the Redevelopment Agreement, Contractual Rights and Responsibilities of Frontier Development LLC to 7 South LLC for the redevelopment of property located at 7 S Broadway approved with resolution R24-185; (2) a modification of the project timeline set forth therein, and (3) an Assignment of Collateral from the Developer to its Lender for Construction Financing Purposes.
PURPOSE:
To authorize the assignment of all contractual rights and responsibilities of Frontier Development LLC to 7 South LLC, under the Redevelopment Agreement, to revise the timeline for the completion thereof, and to permit the assignment of collateral for financing purposes.
BACKGROUND:
Approximately 6 years ago, the City purchased the 3,200 square foot one-story building at 7 S. Broadway from Gary Brown who continued to maintain his art studio on site. Following the art studio's departure, the City entered into a redevelopment agreement with Frontier Development, LLC to repurpose the building into a restaurant with access to the area known as "Skinny Park" immediately to the south.
Under the agreement:
- Frontier Development, LLC ("Developer") will required to contribute with equity and/or third-party financing in the amount of $827,455. Frontier's obligations are guaranteed by Conrad Hurst and Curt Hurst.
- The City will provide a forgivable in the amount of $413,547.00.
- The City will provide a grant of $413,547.00.
- The City will sell the real property at 7 South Broadway to the Developer for $100,000.
The Developer has established a new legal entity, 7 South, LLC for the special purposes of performing the work required to redevelop the property in accordance with the agreement. The Developer is now asking the City to allow it to assign its rights and responsibilities under the agreement to 7 South LLC. The redevelopment agreement specifically contemplates the possibility of an assignment of the agreement, conditioned upon the consent of the City. The Hursts will continue to act as Guarantors of the obligations assigned to 7 South LLC.
DISCUSSION:
There is no impact to the City in permitting the assignment and staff recommends that the City consent to the Developer's request.
The Developer is also requesting a modification of the original timeline for project completion set forth in the RDA.
The original timeline as approved per R24-185 provides the following schedule:
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Real Estate Closing targeted by end of June 2024 |
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- Schematic Designs submittal by end of June 2024 |
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- Building Permits submittal targeted by the end of July 2024 |
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- Building Permits Approval targeted by the end of September 2024 |
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- Skinny Park redesign targeted between September 2024 and February 2025 |
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- Construction Commencement no later than the end of November 2024 |
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- Project End of Construction targeted by the end of February 2025 |
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- Grand opening by the end of March 2025 |
The proposed revised timeline is as follows:
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Schematic Designs submittal by end of June 2024 (complete) |
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Building Permits submittal targeted by the end of November 2024 (complete) |
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Downtown Review Committee for approval of Historic Certificate of Appropriateness by the end of December 2024 (complete) |
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Real Estate Closing targeted by end of January 2025 |
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Building Permits Approval targeted by the end of March 2025 |
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Skinny Park redesign targeted between September 2024 and April 2025 (per City) Construction Commencement no later than the end of January 2025 |
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Project End of Construction targeted by the end of May 2025 |
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Grand opening by the end of June 2025 |
The timeline extension of approximately 2.5 months in total is necessary to accommodate the City's review of the proposed redevelopment. The FoxWalk Design Committee approved the project’s elevations on December 18, 2024, and the approval of a license agreement for the use of City property in "Skinny Park" was obtained on December 17, 2024.
IMPACT STATEMENT:
The redevelopment of the subject property is an integral part of the Downtown renaissance. Adjacent properties have been subject to a Request for Proposals that has attracted qualified development proposals currently under staff consideration.
By authorizing the Assignment of the Redevelopment Agreement, Contractual Rights and Responsibilities of the Redevelopment Agreement previously entered into between the City of Aurora and Frontier Development, LLC to 7 South LLC, the developer will be enabled to start construction and the City to fund the project as deemed necessary per contractual obligations contained in the RDA. Also, consenting to the collateral assignment, as required by the RDA, will enable the Developer to obtain construction financing for the Project.
RECOMMENDATIONS:
Staff recommends the approval of the resolution authorizing (1) the Assignment of the Redevelopment Agreement, Contractual Rights and Responsibilities of Frontier Development LLC to 7 South LLC for the redevelopment of property located at 7 S Broadway approved with resolution R24-185; (2) a modification of the project timeline set forth therein, and (3) an Assignment of Collateral from the Developer to its Lender for Construction Financing Purposes.
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution authorizing (1) the Assignment of the Redevelopment Agreement, Contractual Rights and Responsibilities of Frontier Development LLC to 7 South LLC for the redevelopment of property located at 7 S Broadway approved with resolution R24-185; (2) a modification of the project timeline set forth therein, and (3) an Assignment of Collateral from the Developer to its Lender for Construction Financing Purposes.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City and Frontier Development LLC, an Illinois limited liability company, (the “Developer”) have entered into a certain Redevelopment Agreement (the “Agreement”), approved by Resolution No. R24-185), pursuant to which the Developer agreed to redevelop the property located at 7 S Broadway, Aurora, Illinois, and the City agreed to provide the Developer with certain incentives to redevelop said properties; and
WHEREAS, as part of the Agreement, the City agreed, to sell and transfer title of the City Property (as defined in the Agreement) to the Developer; and
WHEREAS, the terms of the Agreement required the Project to be completed by February, 2025 in order for the Developer to retain title of the City Property; and
WHEREAS, due to various factors, completion of the Project by February, 2025 is no longer feasible; and
WHEREAS, to facilitate completion of the Project, the Developer has requested the City authorize it to assign its obligations under the Agreement 7 South LLC; and
WHEREAS, in order for the Developer to obtain financing for construction of the Project, the City agreed, pursuant to the Agreement, to consent to a collateral assignment of the Agreement from the Developer to its lender, and the City desires to agree to the form of the collateral assignment and authorize the Mayor to execute the collateral assignment; and
WHEREAS, in light of the foregoing, the City Council desires to authorize and approve the aforesaid assignment and collateral assignment, copies of which are attached hereto and incorporated herein as Exhibit A and Exhibit B, respectively; and
WHEREAS, the City authorizes the amendment of the Agreement to incorporate a revised schedule for project completion as more fully set forth in Exhibit C.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that the assignment agreement attached to this Resolution as Exhibit A and the collateral assigned attached to the Resolution as Exhibit B, shall be and hereby are approved as substantially set forth in said exhibits; and further
BE IT RESOLVED, that the revised schedule for project completion set forth in Exhibit C shall be and hereby is approved and with the consent of all parties to the Agreement shall constitute an amendment to the Agreement.
BE IT RESOLVED, that the Mayor is authorized to execute the assignment agreement as substantially set forth in Exhibit A and the consent to collateral assignment substantially set forth in Exhibit B, on behalf of the City, which substantially and materially conform to the provisions of the redevelopment agreement previously approved by resolution R24-185; and further
BE IT RESOLVED, that the Mayor, Chief Financial Officer, the Chief Development Services Officer Director of Economic Development, the Clerk, and each of their respective designees shall be and hereby are authorized to execute such documents or agreements between the City and the Developer which are related to and subordinate to the Agreement so long as (1) such additional documents or agreements are consistent with and do not conflict with the Agreement; (2) are necessary to carry into effect the purposes of this Agreement; and (3) do not create any additional liabilities upon the City.