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TO: Mayor Richard C. Irvin
FROM: David Dibo, Executive Director
DATE: March 22, 2019
SUBJECT:
A resolution authorizing certain revisions of a Real Estate Purchase and Development Agreement with Mora Asian Fusion Bolingbrook, LLC to facilitate the redevelopment of certain real property located at 43 E Galena Ave. in the City of Aurora, commonly known as the "Vargas Building."
PURPOSE:
These revisions will facilitate the opening of the restaurant by allaying concerns expressed by potential investors in the restaurant.
BACKGROUND:
In February, Council approved the initial agreement with Mora to acquire, renovate and open one or more restaurants in the Vargas/Culture Stock building.
DISCUSSION:
After Council approval, Mora learned that its investors were troubled by language in the agreement that gave the City broad discretion to reacquire the property at fair market value if it chooses to. The likelihood that the City will want to or will opt to buy back the property is low and detailing these circumstances bogged down the simplicity of the intent of the initial agreement, which is to get the restaurant opened. Because a municipality always has a right of eminent domain, attorneys for both sides agreed that maintaining this endless right was a "belt and suspenders" that was not needed. Mora has proposed narrowing the City's shorter term option so that the City may require in two situations: First would be if the restaurant was not to open at all in the first 12 months and the second would be if the restaurant were to close by year six. Each instance, would create an option (but not an obligation) on the part of the City to reacquire the building. In the first instance, the price would be 100% of the structural improvement costs, in the second 100% of the structural improvement costs plus the appraised value of the property.
IMPACT STATEMENT:
Because the City always has the option to reacquire the property through eminent domain, the City's attorney and staff agreed that the request was reasonable.
RECOMMENDATIONS:
Staff recommends City Council approval of the Revised Real Estate Purchase and Development Agreement with Mora Asian Fusion.
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution authorizing the execution of a Revised Real Estate Purchase and Development Agreement with Mora Asian Fusion Bolingbrook, LLC to facilitate the redevelopment of certain real property located at 43 E Galena Ave. in the City of Aurora, commonly known as the "Vargas Building."
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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, Mora Asian Fusion Bolingbrook, LLC (the "Developer") has approached the City with a proposal to redevelop vacant property owned by the City at 43 E Galena Ave. (the "Vargas Building") and operate it as a restaurant; and
WHEREAS, the Vargas Building is currently vacant and has not generated any rental income for the City or housed a tax-generating business for a significant period of time; and
WHEREAS, the City finds that the Vargas Building will not develop without some assistance and incentive from the City with respect to the purchase price; and
WHEREAS, Purchaser has agreed to acquire and develop the Property as a restaurant in accordance with the terms and provisions hereof (the "Project"); 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;
WHEREAS, the Project would not be economically viable but for the assistance and participation of the City, including the sale of the Vargas Building to the Developer for nominal consideration; and
WHEREAS, the City and the Developer previously negotiated a Real Estate Purchase and Development Agreement ("Original Agreement") to facilitate the Project and accomplish the foresaid objectives; and
WHEREAS, the City Council authorized the execution of the Original Agreement pursuant to Resolution R19-056; and
WHEREAS, prior to the execution of the Original Agreement by both parties, the Developer requested certain changes to the Original Agreement in order to secure funding for the Project; and
WHEREAS, representatives of the City have reviewed the changes requested by Developer and have negotiated a revised Real Estate Purchase and Development Agreement ("Revised Agreement") which is attached to this resolution as Exhibit A and incorporated into this resolution as if fully set forth herein; and
WHEREAS, approval of the Revised Agreement is in the best interest of the City)
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that the Revised 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 a Real Estate Purchase and Development Agreement ("Agreement") that substantially and materially conforms to the provisions of the Redevelopment Agreement set forth in Exhibit A or the agreement authorized by R19-056 on behalf of the City; 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 shall is authorized to execute such additional 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; and further
BE IT RESOLVED, that the City Engineer and the Chief Development Services Officers or any of their respective designees are authorized to take all actions on behalf of the City necessary to cause a subdivision of that portion of the Vargas Building to be occupied by the Developer and that portion of the building occupied by other tenants in compliance with the Plat Act and notwithstanding the provisions of the Subdivision Control Ordinance.