cover
TO: Mayor Richard C. Irvin
FROM: David Dibo, Director Mayor's Office of Economic Development
DATE: March 11, 2021
SUBJECT:
A Resolution Authorizing the Execution of a Revised Second Amendment to the Y'All LLC (F/K/A Windy City Distribution, Inc.) Redevelopment Agreement.
PURPOSE:
To modify the recently approved amendment to enable Y’All to sell their building located at 1103 Butterfield Rd. (within the Liberty Business Park, pin 15-02-202-005) approximately 7 months earlier than is permitted in the RDA. The modifications are described below.
BACKGROUND:
Subsequent to the approval of the second amendment on January 26, 2021 with resolution R21-013; the City was advised that the purchaser had changed.
The original buyer was identified as Prologis, a world leader in industrial real estate for over 30 years. A different company, Yashrut Realty (Butterfield Logistics Center IL) Limited Partnership, a Delaware limited partnership, replaced Prologis as the buyer. Yashrut is a wholley owned subsidiary of Dalfen Industrial, one of the largest buyers of industrial real estate who both manages and own their own properties and have been in the real estate business for over 50 years.
The second modification now being requested relates to the RDA and was not included in the January approval. In this amendment, a request has been made that the RDA is formally terminated as of the sale of the property.
DISCUSSION:
The city reviewed and discussed in detail the ramifications of terminating the RDA. There are two different agreements in play here. The first is the previously approved early release of the City’s mortgage (set to expire in August of this year anyway). The second is the RDA itself that does not expire until August 0f 2022. City staff reviewed internally and discussed in detail the ramifications of terminating the RDA with representatives of the prospective buyer.
The only relevant material provision relates to a prohibition in the RDA to appeal real estate taxes until August of 2022. The buyer has agreed that in consideration for the City agreeing to terminate the RDA that Dalfen will not appeal any assessment for real estate taxes on the property that is below the current 2020 assessment for the period until August of 2022
The City has been advised that Dalfen is purchasing the property for an amount that is well in excess of the full market value that is the basis for the assessment and therefore would render any tax appeal unlikely in any event. (The City always has the right, for all properties to object to property assessment calculations coming out of the assessor’s office).
City staff believes this is a fair tradeoff that will enable the sale to go through but protect the City from the any short-term reduction in real estate taxes.
IMPACT STATEMENT:
Approving this resolution will assure the building continue to stay occupied and be a base for employment. Y’All’s obligation was to continue to pay real estate taxes and they have done so. As a valued business partner in Aurora, facilitating this sale, will continue to maintain this strong and valued relationship.
RECOMMENDATIONS:
Staff recommends approval of this resolution
ATTACHMENTS:
Attachment - Second Amendment to Y'ALL LLC Redevelopment Agreement (R2021-013)
Exhibit A - Revised Second Amendment to Y'ALL LLC Redevelopment Agreement
cc: Finance Committee
Alderman Robert O’Connor, Chairperson
Alderman Edward J. Bugg, Vice Chairperson
Alderman Carl Franco
Alderman Scheketa Hart-Burns
Alderman Emmanuel Llamas
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Authorizing the Execution of a Revised Second Amendment to the Y'All LLC (F/K/A Windy City Distribution, Inc.) Redevelopment Agreement.
body
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 Y’All, LLC, an Illinois limited liability company, (the “Developer”) have entered into a certain Redevelopment Agreement (approved by Resolution No. R11-159) dated June 14, 2011 (the “Original Agreement”) as amended by that certain First Amendment (approved by Resolution No. R11-234) dated on or about August 23, 2011 (the “First Amendment”, and together with the Original Agreement, the “Agreement”), pursuant to which the Developer agreed to redevelop the property consisting of approximately 10 acres located at 1103 Butterfield Road, Aurora, Illinois (the “Property”) for the purposes of operating a beer distribution business for the storage and distribution to the Chicagoland area of specialty and craft beer; and
WHEREAS, the Agreement provides that the City will release the Mortgage and Note (as such terms are defined in the Agreement) it holds on the Property on August 25, 2021; and
WHEREAS, the Developer is under contract to sell the Property and is scheduled to close on the sale of the Property prior to August 25, 2021; and
WHEREAS, the City Council previously found that it is in the best interest of the City to allow the Developer to sell the Property prior to August 25, 2021 and to release the Mortgage and Note and the Agreement upon Developer’s sale of the Property; and
WHEREAS, pursuant to Resolution No. R21-013, the City previously approved a certain second amendment to the Agreement (the “Second Amendment”) in order to allow the Developer to sell the Property prior to August 25, 2021 and to release the Mortgage and Note upon Developer’s sale of the Property; and
WHEREAS, following the approval of the Second Amendment, the Developer approached the City and indicated that the entity under contract to purchase the Property has changed and that the entity under contract also requests the Agreement to be released upon Developer’s sale of the Property; and
WHEREAS, the City Council finds that it is in the best interest of the City to allow the Agreement to be released upon Developer’s sale of the Property in order to ensure the continued profitable use of the Property; and
WHEREAS, in light of the foregoing, the City Council desires to amend the Agreement pursuant to the terms of that certain revised second amendment (the “Revised Second Amendment”) a copy of which is attached hereto and incorporated herein as Exhibit A, which shall supersede and replace the Second Amendment approved by Resolution No. R21-013.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Aurora, Illinois, as follows: that the Revised Second Amendment attached to this resolution as Exhibit A shall be and hereby is approved; and further
BE IT RESOLVED, that the Mayor is authorized to execute an amendment to the Agreement that substantially and materially conforms to the provisions of the Revised Second Amendment set forth in Exhibit A on behalf of the City; and further
BE IT RESOLVED, that the Mayor, Finance Director, Director of Economic Development, and each of their respective designees shall be and hereby are authorized to perform the City’s duties set forth therein described.
BE IT RESOLVED, that the Revised Second Amendment set forth in Exhibit A shall replace and supersede the Second Amendment approved by Resolution No. R21-013, which shall no longer be a legally enforceable agreement.