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TO: The Honorable Mayor and City Council
FROM: Law Department
DATE: November 26, 2018
SUBJECT:
A resolution authorizing the execution of additional documents related and subordinate to the redevelopment agreement between the City of Aurora and Pizzuti Aurora Industrial, LLC dated August 28, 2018.
PURPOSE:
To assist the developer, Pizzuti Aurora Industrial, LLC. (Pizzuti) secure funding for the project contemplated by the August 28, 2018 redevelopment agreement.
BACKGROUND:
In August, the City Council approved a redevelopment agreement pursuant to Resolution R18-0218 with Pizzuti to redevelop property on the City's northwest side and to provide for the extension of Corporate Boulevard to Mitchell Road, a long-desired public improvement. Pizzuti is a nationally-known and highly-regarded developer with an excellent reputation.
The redevelopment agreement provides that the City must offer reasonable assistance to Pizzuti in its pursuit of financing, but as was the City's intention, does not insert the City into Pizzuti's "debt chain." The transaction contemplates a pay-as-you-go TIF, meaning the City would reimburse Pizzuti's TIF-eligible costs from the tax increment generated by the improvements.
Pizzuti hopes to secure funding for this project through the Wisconsin Public Finance Authority, which like Illinois' Capital Development Board, is a governmental entity that provides bonding for public improvements. The prospective purchaser of the bonds, a Wisconsin-based investor, has insisted that the City and Pizzuti execute an additional "cooperation agreement" which further defines each's responsibility to the other under the redevelopment agreement. The investor will not purchase the Pizzuti bonds without the agreement in place. Separately, the Public Finance Authority conditions its bonding on the City's written authorization, though the City does not become part of the debt process when it authorizes the bond issue.
The City's Law and Finance Dep...
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