cover
TO: Mayor Richard C. Irvin
FROM: David Dibo, Executive Director
DATE: February 27, 2025
SUBJECT:
A resolution authorizing approval of a Loan Agreement between the City of Aurora and Jamie Gilmore, and a third amendment agreement between the City of Aurora and Urban Equity Properties (UEP) for the purpose of facilitating the redevelopment of the vacant commercial space located at the ground level at 2 N. Broadway in downtown Aurora
PURPOSE:
The Agreements will facilitate Jamie Gilmore to open "Lizzy J Café" a sophisticated diner with affordable prices. The agreement codifies the commitments from Jamie Gilmore that triggers City incentives that will be repaid to the City as described below.
BACKGROUND:
Proliferation of new and long-standing downtown restaurants, especially those unique to Aurora is a long-sought goal of the City. Restaurants, bars and hospitality businesses in general support a population living, working, or visiting a city that in turn adds to an environment that encourages more of the same. Based on informal surveys from the Paramount Theater, attendees often comment that they would like to have more dining opportunities in walking proximity to the theater for a “one stop” entertainment and dining experience. With a rising tide of a robust dining alternatives, bars and lounges, all hospitality businesses prosper. Jamie owns and operates a popular breakfast and brunch cafe in Chicago, one of them in the prominent Fulton Market.
The Lizzy J Diner will be located at the same location as the former popular Broadway Diner the "Terminal" building, also known as Lofts on Broadway.
Similar to the Hobbs Development at Galena and River Street, the costs associated with the renovation of the residential portion of the project far exceeded the original estimates due to the unprecedented inflation that took place after COVID. As detailed in the Amendment to the Hobbs/JH Redevelopment Agreement, the City agreed to provide Food and Beverage/Sales tax sharing as a means to fund the buildout of the first-floor restaurant space. In the case of the Hobbs amendment the City provided $1.2 million in loans to be paid back directly by JH from their own resources and $1.5 million in loans to be paid back from Sales/Food and Beverage Taxes for three restaurant spaces in total, two of which are open and exceeding sales projections, which in turn accelerates the payback to the City of the second set of loans.
DISCUSSION:
Jamie's background is well rounded in business with 25 years of project manager experience. She successfully began her journey in the restaurant business, and she is now ready to open her own establishment in her hometown Aurora.
In 2019, to promote the continued revitalization of the downtown, the Economic Development Division recommended the approval of the RDA between the City of Aurora and Urban Equity Properties (UEP). UEP planned and delivered to redevelop the property with loft type market rate apartments, fully rented, and a restaurant space on the ground floor.
Extensive renovation took place to restore to long vacant and neglected ground floor commercial space. Between then and today, Covid, and skyrocketing interest rates have slowed the process of finding a user to customize the finishes around.
UEP, COA, and Jamie Gilmore are partnering to bring this one-of-a-kind diner to the Downtown.
The capital stack is:
Jamie Gilmore's contribution: up to $50,000
Lizzy J/Finish Line Grant: $50,000
UEP's equity: $350,000
COA's Loan to UEP: up to $200,000 (at 5.5% interest)
City Loan to Lizzy J Cafe: $250,000 (at 5.5% interest)
The project cost: $900,000
Fundamental to all incentives going forward is that the City will be paid back.
The loan to Lizzy J Café will be amortized over nine (9) years and paid back through sales/food and beverage taxes levied by the City. The sources of funds will be from the newly created Transformation Fund. The loan is 100% guaranteed by the owner of Lizzy J Cafe, Jamie Gilmore. The loan to UEP will be paid back over ten (10) years and is guaranteed by UEP, Justin Fern (owner). If for some reason the total amount is not repaid from sales tax revenues, Jamie Gilmore has guaranteed the difference. The City’s funding will be pari passu (dollar for dollar) with cash from UEP and Jamie Gilmore. The Finish Line Grant is subject to the approval from the board of directors of Aurora Regional Economic Alliance (formerly Invest Aurora)
In summary, the incentives being offered as a part of this Agreement are:
- A Loan of $250,000 to Lizzy J Café (Paid through sales/food and beverage taxes and personally guaranteed)
-A Loan of $200,000 to Urban Equity Properties (UEP) to be repaid according to the repayment schedule in the Loan Agreement.
-A Finish Line Grant to Lizzy J Café for $50,000
Design and working drawings will begin immediately after approval and is anticipated to be completed in 2025, with opening immediately thereafter.
All funding will be made through the title company.
The restaurant hours will be a minimum of 6 days a week.
IMPACT STATEMENT:
Lizzy J Cafe will expand dining and entertaining choices in the downtown and help service existing and new residents and visitors. There will be a positive spillover for the emerging development on Galena and Broadway corridors. The Paramount, the Venue and other locales will be able to cross market with new choices and the locally owned restaurants will add to the City’s growing reputation for “boutique” bars, restaurants and lounges.
RECOMMENDATIONS:
Staff recommends approval of the resolution authorizing approval of the Loan Agreements between the City of Aurora and Jamie Gilmore and between the City of Aurora and Urban Equity Properties for the purpose of facilitating the redevelopment of the vacant commercial space located at the ground level at 2 N. Broadway in downtown Aurora.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution authorizing approval of a Loan Agreement between the city of Aurora and Jamie Gilmore and a third amendment to the redevelopment agreement with Urban Equity Properties (UEP) for the purpose of facilitating the redevelopment of the vacant commercial space located at the ground level at 2 N. Broadway in downtown Aurora
body
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, Lizzy J Café is a majority owned affiliate of Jamie Gilmore has approached the City with a proposal for the development of the vacant first floor and basement for the Lizzy J Café for a full service (diner) restaurant in the recently rehabilitated "Terminal" building at 2 N. Broadway in downtown Aurora; and
WHEREAS, this commercial space at 2 N. Broadway is currently vacant and has not generated any Sales/Food and Beverage tax income for the City or housed a tax-generating business for a significant period of time; and
WHEREAS, the City finds that this property at 2 N. Broadway will not develop without some assistance and incentive from the City with respect to the costs of buildout; and
WHEREAS, the project cost is $900,000; and
WHEREAS the developer has agreed to contribute to develop the Property as a restaurant in accordance with the terms and provisions hereof (the "Project"); and
WHEREAS, the City recognized the need to financially assist the project by providing Urban Equity Properties a construction loan in the amount of Two Hundred Thousand dollars ($200,000) to be amortized over ten (10) years; and
WHEREAS, the City recognized the need to financially assist the project by providing Lizzy J Café a Loan in the amount of Two Hundred and Fifty Thousand dollars $250,000 amortizable in nine (9) year; and
WHEREAS, the City finds that as a direct result of the Project, the City will benefit
through the retention or creation of jobs; the strengthening of the commercial environment within the City and the enhancement of its tax base, and that the Project will serve as a catalyst for the commercial development of adjacent areas; and
WHEREAS, the Project would not be economically viable but for the assistance and participation of the City.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: pursuant to its statutory and home rule powers, as follows: that the Agreement attached to this Resolution as Exhibit "A" shall be and hereby is approved; and further
BE IT RESOLVED, that the Mayor is authorized to execute an Agreement that substantially and materially conforms to the provisions of the Agreement set forth in Exhibit "A" on behalf of the City for the redevelopment of the Property as a restaurant/diner and the provision of economic incentives to the Developer to make the Project economically viable, as set forth in the Agreement; and further
BE IT RESOLVED, that the several City Officers and employees designated in the Agreement are authorized to perform the function and duties set forth in the Agreement; and further
BE IT RESOLVED, that the Mayor is authorized to execute such documents or agreements between the City and the Developer which are related to and subordinate to the Agreement so long as (1) such additional documents or agreements are consistent with and do not conflict with the provisions of the Agreement authorized by this Resolution (2) are necessary to carry into effect the purposes of the Agreement, and (3) do not create any additional liabilities upon the City.