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TO: Mayor Robert J. O’Connor
FROM: Rick Guzman, Assistant Chief of Staff
DATE: November 29, 2016
SUBJECT:
To approve a Development Agreement between the City of Aurora and The Aurora Revitalization Owner LLC (formed by The Development Partner, The Community Builders) for the Redevelopment of residential units 2 - 20 S. Stolp Avenue and 32 S. Broadway.
PURPOSE:
Attached is a Development Agreement that covers the development of the residential portions of the buildings at 2 - 20 S. Stolp and 32 S. Broadway. This agreement is strictly between the City of Aurora and “The Aurora Revitalization Owner” formed through the City’s development partner, The Community Builders (TCB), a nationally renowned, non-profit developer that has expertise in utilizing Historic Tax Credits and other tax credit financing to redevelop vacant buildings into vibrant, mixed-use centers for artist residences, retail and community center-type spaces.
BACKGROUND:
There are two separate, but “companion” development agreements because there will need to be separate ownership partnerships established for (a) the residential portions of the buildings at 32 S. Broadway and 2 - 20 S. Stolp; and (b) the commercial portions of the buildings located at 5 E. Galena Blvd. and 2 - 20 S. Stolp. This is necessary because separate tax credit investors will need to be part of the ultimately separate partnerships created to hold the properties and ensure compliance with the different Tax Credit requirements.
DISCUSSION:
The residential portion of redeveloping these two buildings is almost entirely funded by affordable housing Tax Credits (LIHTC) and Federal Historic Tax Credits so the City only has to invest $600,000 of federal pass-through dollars to leverage more the more than $20 million of the total $35 million budget that will be applied to the renovation and/or creation of housing units.
Together with the Companion Development agreement, these agreements authorize a total City contribution that includes $4.3 million of federal pass-through and/or federally guaranteed loan proceeds and $500,000 of TIF proceeds. Moreover, $3 million of the $4.3 million of federal resources would be paid back by sources created by the development itself.
IMPACT STATEMENT:
This action will have a positive impact on the City, its residents and the downtown. The funding sources proposed are typical sources for projects such as this. Repurposing these historically significant buildings in the downtown; creating jobs and driving additional foot-traffic will have a spin off effect on other development nearby..
RECOMMENDATIONS:
It is recommended that the attached Development Agreement be approved
cc: Alderman O’Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Mesiacos, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution authorizing the execution of development agreement with Aurora revitalization owner LLC for the property located at 5 East Galena Boulevard and 2-20 South Stolp Avenue - Aurora Arts Centre Residential Project.
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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 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 and 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 development agreement (the “Development Agreement”), a true and accurate copy of which is attached hereto and made a part hereof as Exhibit 1, between the City of Aurora and Aurora Revitalization Owner LLC (“Developer”), relative to the residential portions of the Aurora Arts Centre Project, which concerns property located at 5 East Galena Boulevard and 2-20 South Stolp Avenue, Aurora, Illinois (together, the “Property”); and
WHEREAS, the Development Agreement contemplates a loan by the City to the Developer of up to Six Hundred Thousand and No/100 Dollars ($600,000.00) in federally provided HOME funds, to be used in furtherance of the rehabilitation and development of the residential portions of the Aurora Arts Centre project, all subject to the repayment and other terms and conditions as set forth in the Development Agreement; 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 Development Agreement be entered into by the City of Aurora, and further, that but for the provision for incentives as provided therein, the property would not otherwise be developed as provided therein
NOW, THEREFORE, BE IT RESOLVED 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, this Resolution as fully as if completely repeated at length
herein.
Section 2: 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
Development Agreement with Aurora Revitalization Owner LLC be
entered into by the City of Aurora, with said Development Agreement to
be substantially in the form attached hereto and made a part hereof as
EXHIBIT 1. Any additional edits, revisions or amendments to the
Development Agreement subsequent to this approval are subject to the
approval of the City Attorney and the Mayor, so long as the contemplated
uses of the federally provided HOME funds loaned to Developer in
furtherance of the residential portions of the Aurora Arts Centre Project
remains the same, and the amount of HOME funds provided does not
exceed Six Hundred Thousand and No/100 Dollars ($600,000.00).
Section 3: 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 said City of Aurora, the aforesaid Development Agreement and
all other documents contemplated thereunder necessary to facilitate the
Development Agreement and loan of HOME Funds to Developer of up to
Six Hundred Thousand and No/100 ($600,000) for the uses specified.
Section 4: This Resolution shall take effect from and after its adoption and approval
as required by law.