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TO: Mayor Richard C. Irvin
FROM: John Curley, Chief Development Officer
David Dibo, Executive Director Mayor's Office of Economic Development
DATE: August 9, 2018
SUBJECT:
To obtain City Council approval of a Redevelopment Agreement between the City of Aurora and Pizzuti/TMD LLC (The Developer).
PURPOSE:
The approval of this agreement will allow for the development of a 274,000 sq. ft. industrial building at the intersection of Mitchell Road and I-88 and the extension of Corporate Drive by 1,165 linear feet.
BACKGROUND:
Pizzuti/TMD LLC (Developer) is an industrial developer who is the contract purchaser of approximately 16.56 acres of land at the northeast corner of I-88 and Mitchell Road. Pizzuti is a highly respected and successful developer of build to suit properties, industrial, office, multi-family, healthcare, hospitality and land throughout the United States (pizzuti.com). Their focus is on combining good design and at competitive cost, prioritizing detail and execution,
The Developer seeks to construct a 274,000 sf industrial building. As part of constructing the building for an approximate total project cost of $18 million dollars the developer is responsible to extend Corporate Drive 1,165 linear feet from its present terminus to Mitchell Road at a projected cost of $2,881.447 as follows:
Corporate Blvd Extension $1,002,241
Land for road $ 261,360
Pond including land $ 829,420
USACOE Mitigation $ 100,000
Closing costs $ 177,500
Capitalized Interest $ 252,000
Debt Service Reserve Deposit $ 175,000
3% Contingency).plus 6% interest. $ 83,926
TOTAL $2,881,447
Both the road to be constructed and the industrial building to be built are located within Tax Increment Financing District 7 which expires in 2034. The Developer has agreed that it will construct both the road and industrial building as described, provided that they receive certain incentives from the City of Aurora.
DISCUSSION:
The Developer is to construct the extension of Corporate Drive to the requirements of the City of Aurora. The Developer shall within three (3) months after the closing date apply for all necessary permits for the road. The Developer shall within one (1) month of the receipt of all required approvals and permits begin construction of the road. The Developer shall complete the road on or before June 1, 2019. The City shall reimburse the Developer from the incremental property taxes created by the Developer’s industrial building. No other funds shall be used to reimburse the developer. Attachment A is a sample Tax Increment and Developer payment schedule for this agreement. Actual amounts will vary based on assessed value, however the interest rate is fixed at 6%. If the development is assessed at a higher value than anticipated, the construction costs can be paid off sooner, reducing total interest costs. Once the principal of $2, 881. 447 is paid back to the Developer, the agreement ceases. If the Tax Increment is not sufficient to pay off both principal and interest before the end of 2034, the agreement ceases and the City is not obligated to pay any outstanding principle from any other source. The incremental property tax shall only commence to be paid when the improvements to Corporate Blvd. are complete and other road improvements are completed to the reasonable satisfaction of the City. The Developer shall pay prevailing wages. The City will have access to all documents set forth for reimbursement. The RDA is included as an attachment to this presentation.
IMPACT STATEMENT:
This agreement will increase the City’s industrial base and eventually add to the property tax base at the close of the TIF. In addition, the relationship with a highly respected national developer is a valuable resource.
RECOMMENDATIONS:
It is recommended that the City of Aurora City Council approve the attached resolution authorizing the Mayor to sign the REDEVELOPMENT AGREEMENT FOR THE PIZZUTI DEVELOPMENT, COMPRISING A PART OF THE WEST FARNSWORTH TIF DISTRICT NO. 7 OF THE CITY OF AURORA, ILLINOIS.
cc: Alderman Robert J. O'Connor, Chairman
Alderman Edward J. Bugg, Member
Alderman Theodoros "Ted" Mesiacos, Member
Alderman Richard "Rick" B. Mervine, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Authorizing the Execution of a Redevelopment Agreement between the City of Aurora and Pizzuti/TMD LLC (The Developer), for the development of the Property Located at the intersection of Mitchell Road and I-88, Aurora Illinois
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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 of Aurora desires to enter into a Redevelopment Agreement with Pizzuti/TMD LLC to facilitate the construction and establishment of a 274,000 sq. ft. industrial building at the above address; and
WHEREAS, given that the total investment of the project exceeds $18,000,000, the project would not be viable without economic assistance from the City of Aurora through a Redevelopment Agreement; and
WHEREAS, the City of Aurora agrees to fund a portion of this project not to exceed $2,881,447 for the construction of Corporate Blvd and various site improvements to include stormwater retention as outlined in the Attached Redevelopment Agreement)
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows:
Section 1: That the Mayor and City Council of the City of Aurora hereby find that it is in the bests interests of the City of Aurora and its residents that the aforesaid Redevelopment Agreement with Pizzuti/TMD LLC be entered into by the City of Aurora, with said Agreement to be substantially in the form attached hereto and made a part hereof as EXHIBIT 1.
Section 2: That the Mayor and City Clerk of the City of Aurora, Kane, Kendall, Will and DuPage Counties, Illinois, are hereby authorized to execute for and on behalf of the City of Aurora, the aforesaid Redevelopment Agreement.