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TO: Mayor Richard C. Irvin and City Council
FROM: Alex Alexandrou, Chief Management Officer
Christopher Minick, City Treasurer/Chief Financial Officer
David Dibo, Executive Director, Division of Economic Development
Alessandro Minnella, Senior Planner, Mayor's Office of Economic Development
DATE: June 24, 2024
SUBJECT:
The acquisition of seven (7) properties on Bilter Road in the unincorporated area of Kane County, located north of the Chicago Premium Outlet.
PURPOSE:
To authorize the City to accept the assignment of all contractual rights and responsibilities of Invest Aurora, with whom staff have been working, to acquire seven (7) parcels for a total purchase price of $5,891,000.
To authorize and direct various City Officers to take all actions necessary to complete the acquisition of said properties as outlined in each purchase and sale contracts made part of this approval.
BACKGROUND:
Although within Aurora's municipal boundaries, the subject parcels are currently unincorporated in Kane County which has more flexible land use regulations and therefore may not bring the best land use for the City; this in turn could have a negative impact on existing land uses.
The City has received requests to build a large industrial complex in this area and very recently an industrial business that is seeking to expand on certain of these parcels, in close proximity to high quality homes to the north and east of the subject area.
Speculative buildings, light industrial uses in general, are often associated with trucks and semitrucks traffic which is not in line with the residential developments immediately to the north and east or with the intended high-quality mixed-use sports and residential development envisioned on the fifty (50) acres the City already owns.
In 2019, the City strategically acquired and assembled nine (9) open parcels comprised of 50.22 acres for $4.50/SF that today they are worth $10/SF.
On December 13, 2024, a Request for Qualifications (RFQ) was published on the City's website, and distributed to hundreds of qualified developers for a sports oriented and complimenting residential development. Staff have interviewed several qualified applicants and will soon make a recommendation.
In recognition of the strong market for residential developments and the negative consequence of an industrial use, the City has the opportunity to control the destiny of these parcels and has done so.
The land proposed for acquisition will provide for additional quality residential development that will help increase the City's attractiveness and its tax base while meeting the outstanding housing demand.
Currently, each property generates on average $6,000/year in property taxes for a total of approximately $42,000/year. Staff envisions that the site could be home of approximately 150 units which, at the current market, could and will generate approximately $12,000/unit or approximately $1,800,000/year in property taxes.
Upon total control of the properties, staff will facilitate a Request for Qualifications (RFQ) with the intent to facilitate new development as earliest as late spring or early summer in 2025. The RFQ is planned to be published between September 15, 2024 and September 30, 2024 with a determination of selected developer(s) by October 15, 2024.
The properties are under contract for a period ending August 9, 2024. Assuming all conditions for closing are met, closing is anticipated to take place no later than September 15, 2024 on all parcels. Attached is an anticipated closing schedule.
As part of the due diligence process, staff have commissioned environmental assessments and reviewed wetland delineations and have determined that the acquisitions can be pursued.
The City has a unique, but very time-sensitive opportunity to acquire, and therefore influence the future development of the site.
DISCUSSION:
The Farnsworth Avenue corridor, which includes the Outlet Mall as well as the former Motel 6 and Fox Valley Inn, represents a significant economic development opportunity for the City. By acquiring the properties on Bilter Rd. the City will be well positioned to maximize this opportunity and ensure quality development.
The property represents a long-sought market assemblage of seven (7) parcels each with different ownerships, expectations and circumstances. The overall pricing at less than eight ($8) dollars per square foot reflects this delicate and rigorously pursued aggregation providing ownership with a positive arbitrage in a market with few remaining "greenfield sites" especially in close proximity to the Tollway (I-88). Land in the area has been sold recently or is under contract for at least thirty percent (30%) higher than the Bilter contract pricing. The intention would be to annex this unincorporated parcel into the City. The individual pricing for each parcel is attached. This acquisition also presents an opportunity to ensure the right of way dedication for the two-lane road portion of Bilter Rd. and provides for a higher use outcome consistent with the transformations that have been occurring in the immediate area.
In light of the most recent agreement between the City and Cyrus 1, LLC, the City plans to use these funds to finalize these closings and then reimburse itself upon sale to a third party developer/builder.
IMPACT STATEMENT:
Acquisition and development of these long-underdeveloped properties will have a positive impact on the Equalized Assessed Value of the City while assuring quality development. Not approving this acquisition will result in the City losing the opportunity to achieve the most desirable use for these properties.
RECOMMENDATIONS:
That this resolution be approved.
ATTACHMENTS:
Ownership Location Map - Bilter Road Properties
EXHIBIT A - Sale and Purchase Contracts
Tentative Schedule Closings-RFQ
cc: Finance Committee:
Alderman Carl Franco, Chairperson
Alderman Edward J. Bugg, Vice Chairperson
Alderman-At-Large Ron Woerman
Alderwoman Shweta Baid
Alderman Brandon Tolliver
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Accepting the Assignment of the Contractual Rights and Responsibilities of the Seize the Future Economic Development Foundation, Inc. (Invest Aurora), for the Purchase of Certain Real Property Located on Bilter Rd. and Authorizing the City's Officers and Employees to Complete the Transactions Contemplated by Said Contracts.
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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 Seize the Future Economic Development Foundation, Inc, d/b/a Invest Aurora, is a not-for-profit corporation, that promotes economic development in the City of Aurora; and
WHEREAS, Invest Aurora is the contract purchaser of seven (7) parcels of real property constituting approximately 18 acres located north of Bilter Rd. in the unincorporated area of Kane County; and
WHEREAS, Invest Aurora desires to assign its contractual obligations with respect to all seven (7) parcels to the City of Aurora and the City of Aurora desires to accept said assignment; and
WHEREAS, the descriptions of the aforesaid seven (7) parcels are attached to this resolution as Exhibit A and incorporated as if fully set forth herein;
WHEREAS, said contractual obligations include a duty to close on the purchase of the seven (7) parcels by September 15, 2024; and
WHEREAS, the total purchase price for all seven (7) parcels, including all costs, fees, assessments, liens, and reimbursements is approximately Five Million Eight Hundred Ninety -One Thousand Six Hundred and Ten ($5,891,610) dollars representing an average price per square foot of 7 dollars ($7);
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Aurora, Illinois, That the recitals shall be and hereby are adopted and made part of this resolution; and further
BE IT RESOLVED, that the Mayor shall be and hereby is authorized to sign on behalf of the City such document or documents necessary to accept the assignment of all of Invest Aurora's rights and obligations with respect to the real properties described in Exhibit A; and further
BE IT RESOLVED, upon the assignment of Invest Aurora's rights to the City, that the Mayor, the Clerk, the Treasurer, and the Corporation Counsel shall be and hereby are authorized and directed to take any and all actions necessary to complete the acquisition of the real properties described in Exhibit A not later than September 15, 2024.