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TO: Mayor Richard C. Irvin
FROM: Martin S. Lyons, Chief Financial Officer/City Treasurer
DATE: March 14, 2019
SUBJECT:
A Resolution With Respect to the Potential Reimbursement of Eligible Costs in a Possible Tax Increment Finance District (TIF) and to Induce Development Interest within Such Area (Terminal Building at Galena and Broadway and surrounding property)
PURPOSE:
Adoption of a Reimbursement Resolution is the first step following the approval of the Redevelopment Agreement (RDA) with Urban Equities for the redevelopment of the Terminal building at Broadway and Galena. This resolution will allow initial expenses to be reimbursed by the TIF once formed later in 2019.
BACKGROUND:
The Terminal Building at Broadway and Galena has remained vacant on the upper floors decades. The City Council recently approved a RDA with Urban Equities (UEP Aurora, LLC) to redevelopment the entire building into a mixed use of 1st floor restaurant and upper floor residential space at an estimated cost of $6.5 million.
Urban Equities plans to use a variety of sources to fund this redevelopment including grants, loans, tax credits and TIF revenues paid solely from the development. The City negotiated a "pay as you go" sharing of TIF revenues on an 80/20 split with Urban Equities.
DISCUSSION:
The redevelopment of the Terminal Building is a part of the first wave of redevelopment in the downtown using Micro-TIF that will only involved a small area of the downtown. The City Council will be asked to approve the removal of property from TIF 1 to allow for this property to become a new TIF as the City Council did for TIF 9..
The creation of the new TIF is critical to the redevelopment agreement and without it, the RDA is void. As such the City will be moving transparently, yet expeditiously to form the new TIF through the same process used in creating TIF #9, the Stolp Island TIF.
IMPACT STATEMENT:
Adopting this resolution will allow for initial costs incurred during the set up of the new TIF to be reimbursed by TIF revenues at a later date..
RECOMMENDATIONS:
Staff recommends the City adopt this resolution.
cc: Finance Committee
Chair - Alderman Robert J. O'Connor
Alderman Edward J. Bugg
Alderman Theodoros C. Mesiacos
Alderman Richard B. Mervine
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution With Respect to the Potential Reimbursement of Eligible Costs in a Possible Tax Increment Finance District and to Induce Development Interest within such area (Terminal Building at Broadway and Galena and Surrounding Properties).
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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 hereby finds and determines that the financing intended herein will serve the public purposes of the City; and
WHEREAS, the City has been requested by the contract purchaser Urban Equities (UEP Aurora LLC),(the “Developer”) of certain real property (the “Property”), which is generally described as set forth in Exhibit A, attached hereto and incorporated herein, to consider adopting Tax Increment Financing on the Property; and
WHEREAS, the City and the Developer have entered into a Redevelopment Agreement that requires the Adoption of a TIF District for final execution of the Agreement; and
WHEREAS, the Mayor of the City (the “Mayor”) and the Aldermen of the City Council (the “City Council,” and with the Mayor, the “Corporate Authorities”) acknowledge that the Developer will not be able to complete the Project without economic assistance from the City; and
WHEREAS, the City desires to have the Property improved and redeveloped, and believes that it is not economically feasible to do so without public intervention, given the impediments to development which characterize the Property; and
WHEREAS, in reliance upon the City’s commitment to explore the issue of creating a Tax Increment Finance District, the Developer is expending money with respect to the following expenses, including, but not limited to, engineering, legal, design, remediation, property acquisition and other expenses which could be reimbursed if a Tax Increment Finance District is created and as permitted by the Act (the “Developer’s Potential Eligible Costs”); and
WHEREAS, the City will also expend funds in the investigation of a potential Tax Increment Financing District, including, but not limited to, legal, engineering, planning and other consultants which would be eligible to be paid as eligible redevelopment project costs in the event the Tax Increment Finance District is created and as permitted by the Act (the “City’s Potential Eligible Costs”); and
WHEREAS, this Resolution does not obligate the City to create a Tax Increment Finance District on the Property, or any portion thereof, but rather, it is intended to induce the Developer to pursue plans for redevelopment and to provide for the potential reimbursement of the City’s Potential Eligible Costs and the Developer’s Potential Eligible Costs in the event such a Tax Increment Finance District is created, the costs are legally permitted to be reimbursed, in accordance with the Redevelopment Agreement; and
WHEREAS, after the adoption of this Resolution, the City agrees to consider providing municipal and/or other governmental economic assistance including, but not limited to, tax increment financing, through the establishment and/or expansion of a redevelopment project area, to the extent that such assistance may lawfully and practically be available and in the best interests of the City)
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows:
Section One: Incorporation of Recitals
The recitals set forth above are incorporated into this Section as if fully set forth herein.
Section Two: Property Review
That City staff have examined the Property and its condition and circumstances and, at this time, the Corporate Authorities conclude that it is reasonable to believe that a tax increment financing plan can be adopted for said Property and expenditures of development costs in furtherance of the plan and potential development should be allowable “redevelopment project costs” under the plan, provided however, that this resolution is not a guarantee that any such plan will be adopted, but rather, is an expression of the intent of the City at this time.
Section Three: Inducement
That this Resolution is adopted for purposes of inducing the City and the Developer to proceed with the potential redevelopment of the Property and to incur costs pending the possible approval of the TIF and the Redevelopment Agreement.
Section Four: Reimbursement
In the event a Tax Increment Finance District is created over some or all of the Property, the City may make reimbursement for the Developer’s Potential Eligible Costs, according to the Redevelopment Agreement and the City’s Potential Eligible Costs to the extent approved by the City and authorized by law. In the event that no Tax Increment Finance District is created over some or all of the Property, the City shall in no way be obligated to reimburse the Developer for any of its costs or expenses.
Section Five: Authorization
That the Corporate Authorities hereby approve of and authorize the reimbursement to the Developer for the Developer’s Potential Eligible Costs according to the Redevelopment Agreement, subject to the limitations provided in this Resolution. That the Corporate Authorities hereby authorize and direct the Mayor or his designee to draft and execute all necessary documents and perform all necessary tasks to effectuate the intent of this Resolution. That the Mayor or his designee, and the Corporation Counsel, or his designee, as may be required, are hereby authorized and directed to draft, execute, and complete any and all documents deemed necessary, to effectuate the intent of this Resolution, whether or not such other documents are attached hereto. That the City Clerk is hereby authorized and directed to attest to, countersign, and affix the seal of the City to all such documents as are deemed necessary.
Section Six: Other Actions Authorized
The officers and employees of the City shall take all actions reasonably required or necessary to carry out and give effect to the intent of this Resolution and otherwise take all actions necessary in conformity therewith including, without limitation, the execution and delivery of all documents required to be delivered in connection with the actions contemplated herein.
Section Seven: Acts Of City Officials
That all past, present, and future acts and doings of the officials of the City that are in conformity with the purpose and intent of this Resolution are hereby, in all respects, ratified, approved, authorized, and confirmed.
Section Eight: Severability
This Resolution and every provision thereof shall be considered severable, and the invalidity of any section, clause, paragraph, sentence or provision of this Resolution shall not affect the validity of any other portion of this Resolution.
Section Nine: Repealer
All resolutions, ordinances or parts of resolutions conflicting with any provision of this resolution, are hereby repealed.
Section Ten: Effective Date
This Resolution shall be in full force and effect after its passage, approval and publication in accordance with applicable law.