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TO: Mayor Thomas J. Weisner
FROM: Bill Wiet, Chief Development Services Officer
DATE: December 2, 2014
SUBJECT:
To request authorization to execute a Redevelopment Agreement with Fox Island Apartments LLC which would allow for Fox Island Apartments LLC ("Developer") to acquire the city owned building at 77 South Stolp Avenue, commonly known as the Elks Club Building. This agreement would also provide the Developer partial reimbursement for the recent acquisitions of 7 South Stolp Avenue, commonly known as the Leland Tower, as well as 33-35 South Stolp Avenue, commonly known at the Graham Building. All three buildings are planned for residential units above the first floor, plus commercial/restaurant uses on the street level. The total investment cost of all three buildings (acquisition and rehab) is estimated at $12.4 Million. The City's total contribution pursuant to this agreement amounts to 9.7% of the total investment.
PURPOSE:
The City of Aurora has owned the Mayan Revival Elks Club Building for 14 years. While it has been used in the past as offices for the Aurora Election Commission and more recently rehearsal space for the Paramount Theatre, it has largely remained vacant. The City has attempted in the past to sell the property, but with the combination of hotel rooms, a banquet/ballroom and a restaurant, it was difficult to find an operator with expertise in all three functions. After recent attempts to redevelop the property failed due to the economic downturn, there has now been renewed interest in the building.
BACKGROUND:
Both the City and Seize the Future Development Foundation (STFDF) have been working to both expand and enhance residential development downtown, as well as market the Elks Building for possible mixed use. STFDF went out and solicited RFP's for the redevelopment of the Elks Building. After receiving several proposals, Karademas Management was recommended by the STFDF Board. Given that the Developer owns the Leland Tower (117 units) and Graham Building (35 units), the acquisition of the Elks Club Building (25-29 units) provides that additional unit count and also has the ability to be incorporated into the current management group. The Developer is estimating renovation costs of the Elks Building at $2.4 Million.
DISCUSSION:
The acquisition of the City owned Elks Club Building will proceed as follows:
A. Purchase Price: $10.00
B. Security Deposit: $500,000.00
The developer shall have 450 days to complete the project. In the event the project is not completed the City (and after applicable cure periods) shall retain the security deposit, and shall have the right of first refusal should the developer decide to not complete the project and market the property.
C. The Developer shall have site plans reviewed by the FoxWalk Overlay District Design Review Committee
D. The Property will be re-subdivided in order to provide an outdoor eating patio off the south side of the building and adjacent to the Swimming Stones (see cover of RFP for concept)
E. No other assistance is being requested for the renovation of the Elks Building.
The 7 South Stolp (Leland) and 33-35 South Stolp (Graham) Acquisition Reimbursement:
A. The Developer shall receive the net tax increment after the base year property taxes are established for tax year 2013, payable in tax year 2014 (increment above the current tax base).
B. The reimbursement shall be from tax years 2014 through 2022 and shall be paid annually starting in calendar 2015 and ending in calendar year 2023.
C. The funding cap under the reimbursement is $1,2 Million, which will be the maximum amount the City shall reimburse the developer for costs associated with the acquisition of the Graham Building and Leland Tower.
D. Funds will be available for this reimbursement from Tax Increment Financing in the Downtown TIF District #1. Only the increment generated above the base amount by these properties will be distributed back to the Developer.
IMPACT STATEMENT:
Approving this redevelopment agreement adheres to the Seize the Future Master Plan for downtown by increasing the availability of market rate housing, and bringing additional population into the downtown. The improvements planned for the Leland Tower and Graham Building will increase the tax base for the downtown, and, more importantly, the sale of the Elks Building brings the building back on the tax rolls. Having up to 181 residential units downtown under one single management control also provides that additional comfort level. The Developer has already made a commitment to bringing quality development, and quality tenancy, to their buildings.
RECOMMENDATIONS:
Staff recommends approval of the Redevelopment Agreement attached as Exhibit "1"
cc: Alderman O'Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Peters, Alternate
CITY OF AURORA, ILLINOIS
ORDINANCE NO. _________
DATE OF PASSAGE ________________
title
An Ordinance Authorizing the Execution of a Redevelopment Agreement with Fox Island Apartments, LLC for the Properties Located at 7 South Stolp, 33-35 South Stolp, and 77 South Stolp Avenue
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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 Corporate Authorities of the City of Aurora, Kane, Kendall, Will and DuPage Counties, Illinois have considered a Redevelopment Agreement for certain properties within the City of Aurora and the TIF #1 Redevelopment Project Area/Tax Increment Financing District, a true and correct copy of the Redevelopment Agreement (the "Redevelopment Agreement") being attached hereto and made a part hereof as EXHIBIT 1; and
WHEREAS, the Corporate Authorities of the City of Aurora, Kane, Kendall, Will and DuPage Counties, Illinois have determined that it is in the best interests of the residents of the City of Aurora that the Redevelopment Agreement be entered into by the City of Aurora, and further, that but for the provision for incentives as provided therein, the properties would not otherwise be developed as provided therein, and
WHEREAS, funding for the project is available in the 2015 City Budget under Account Number 231-1830-465-55-63 (Major Project Development) in Tax Increment Financing District Number 1 (Downtown TIF))
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Aurora, Illinois, as follows:
Section 1: The Preambles hereto are hereby made a part of, and operative provisions of the Ordinance as fully as if completely repeated at length herein.
Section 2: That the Mayor and City Council of the City of Aurora hereby find that it is in the best interests of the City of Aurora and its residents that the aforesaid "Redevelopment Agreement" with Fox Island Apartments 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 3: That the Mayor and City Clerk of the City of Aurora, Kane, Kendall, Will and DuPage Counties, Illinois, are hereby authorized to executive for and on the behalf of the City of Aurora, the aforesaid Redevelopment Agreement.
PASSED AND APPROVED on ______________.
AYES ____ NAYS ____ NOT VOTING ____ ABSENT ____
ATTEST:
____________________________ __________________________
City Clerk Mayor
Attachments: Exhibit 1 Redevelopment Agreement