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TO: Mayor Richard C. Irvin
FROM: David Dibo, Economic Development Director
DATE: March 9, 2020
SUBJECT:
A Resolution Authorizing the Specific Implementation as Outlined in the Attached Redevelopment Agreement (RDA) as to How Disbursements Will Be Made for the Previously Approved $600,000 Loan (Resolution #19-421) And Other Details Regarding the Payback and Loan Mechanics. (Craft Urban / Bernie Laskowski - 20-0193 / AU22/3-20.052-AG/I - AM - WARD 6)
PURPOSE:
The purpose is to memorialize a document that details how the aforementioned City Council approval is to administered and implemented.
BACKGROUND:
Since resolution R19-421 was approved last December 17, 2019 Bernie Laskowski has completed his purchase of 41 South Stolp and COA completed its purchase of its adjacent lot. With a number of moving parts and the year-end approaching Council approved the loan that gave Mr. Laskowski the comfort to close on his transaction and enabled COA to come to terms with the adjacent lot owner assuring that a combined project could move ahead. Staff indicated that it would bring forth an RDA after it had been vetted between COA and Mr. Laskowski; funds have not yet been dispersed on the loan. Aside from purchasing 41 S. Stolp, Bernie and his investors are responsible for funding tenant improvements estimated at an additional $300,000.
DISCUSSION:
The highlights of the RDA are:
Aside from provisions that would be expected in a loan agreement (boilerplate plus affirming obligations such as the guarantee, loan terms, insurance, etc.,) here are some provisions worth noting:
1. The inclusion of a specific timeline highlighting key dates for completion
2. The inclusion of a budget (that will be refined once final plans are completed)
3. The allowance of the release of $50,000 "upfront" to complete drawings and apply for permits
4. Subsequent payments will be made on a "draw" basis, upon receipt of invoices/waivers of lien for work performed on the project
5. The specification of the date the first loan payment is due to COA (one year after the receipt of occupancy permit-providing "running room" to get going)
6. The agreement that the COA mortgage will include both the 41 S. Stolp property (Bernie's property) and the COA vacant lot
7. As such, rather than holding title to the lot until the COA loan is fully amortized, COA will
release the lot to Bernie once construction commences but immediately will include the lot (and 41 South Stolp) into one mortgage providing COA with the security it needs.
This will enable the combination of two separate pins into one combined property facilitating permitting and recording.
IMPACT STATEMENT:
Approval of the RDA will keep the Craft Urban deal moving forward and provide comfort to COA as to our position as lender with affirmative obligations and deadlines.
RECOMMENDATIONS:
That the resolution be approved
ATTACHMENTS:
Craft Urban Redevelopment Agreement
Cover Memo resolution R19-421
R19-421
Craft Urban Business Plan Aurora
Chef Laskowski Bio
cc: Finance Committee
Alderman Robert O’Connor, Chairperson
Alderman Edward J. Bugg, Vice Chairperson
Alderman Carl Franco
Alderwoman Scheketa Hart-Burns
Alderman Emmanuel Llamas
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Authorizing the Specific Implementation as Outlined in the Attached Redevelopment Agreement (RDA) as to How Disbursements Will Be Made for the Previously Approved $600,000 Loan (Resolution #19-421) And Other Details Regarding the Payback and Loan Mechanics.
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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 desires to increase the number of quality restaurant establishments in its downtown area; and
WHEREAS, Bernie Laskowski is a successful chef and restaurant owner and founder of the Craft Urban restaurant located in Geneva, Illinois and is planning a sister restaurant in the City of Aurora; and
WHEREAS, the City of Aurora desires to lend Bernie Laskowski, or a designated entity managed and operated by Bernie Laskowski, up to Six Hundred Thousand and No/100 U.S. Dollars ($600,000.00) from existing lines of credit for the purpose of redeveloping 41 S. Stolp Avenue and the adjacent lot as a Craft Urban restaurant with second story apartments and/or reimburse certain expenses related to the closing of the contemplated transaction as indicated in the redevelopment agreement; and
WHEREAS, the CIty Council, pursuant to Resolution #19-421, previously approved a loan of up to $600,000.00 to Bernie Laskowski to assist in the building of the project; and
WHEREAS, the attached Redevelopment Agreement sets forth the disbursement and repayment terms of the said loan, the terms of the conveyance of a vacant lot (1 W. Downer Pl.) to Bernie Laskowski, and such other terms relevant to the project;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Aurora, Illinois, that the City Council of the City of Aurora, Illinois, that the City Council hereby authorizes (i) the disbursement up to Six Hundred Thousand and No/100 U.S. Dollars ($600,000.00) from existing lines of credit to Bernie Laskowski, or a designated entity managed and operated by Bernie Laskowski, for the purpose of redeveloping 41 S. Stolp Avenue and the adjacent lot (1 W. Downer) as a Craft Urban restaurant with second story apartments and/or reimburse certain expenses related to the closing of the contemplated transaction and (ii) the execution of the attached Redevelopment Agreement which sets forth the disbursement and repayment terms of the said loan, the terms of the conveyance of the vacant lot (1 W. Downer Pl.) to Bernie Laskowski, or a designated entity managed and operated by Bernie Laskowski, and such other terms relevant to the project.