Village Board of Trustees Workshop November 28, 2018

Transcription

1 Village Board of Trustees Workshop November 28,

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3 Private Sector Project (get property on the tax rolls) Best Deal Provisions for Village Economically Viable Projects No direct limitation as to what entities could or could not submit a proposal 3

4 Village Board direction (November, 2017) Start new RFP process seeking qualified development entities New RFP prepared, released February 1 Open House/Q&A meeting: February 28 RFP Proposals Due: April 16 (4 proposals received) Spring/Summer, 2018: Proposal review for compliance to the RFP requirements Selection process narrowed field from 4 proposals to 2 (Luxica & Holladay Properties) 4

5 Development Community Activities Entities informed that the RFP is available: 314 Entities who have received the RFP: 29 Entities who attended the Open House: 12 Entities that submitted proposals: 4 5

6 Public Outreach Regarding Process Press Releases & Social Media throughout process (from release to final review) Frequently Asked Questions (FAQ) On-Line Document Posting and Access Direct Media Engagement Letters to Property Abutters Meetings, Direct Discussions with Other Stakeholders Three ECDC meetings to vet proposals 6

7 Help the Board determine the best deal and best project. The Village is not approving an economic incentive or a purchase agreement at this time. The ECDC did not review land use and zoning matters. Those items are under the purview of the Plan Commission and will be discussed at a later date. 7

8 Development group qualifications, including experience with projects of related scope, nature and complexity specifically including prior experience in working with municipalities particularly within downtown and historically significant locales. Demonstration by prospective developers that commitments are either in place or can be readily established to deliver tenants that meet the stated goals of the Village Board as it pertains to retail commercial uses. 8

9 Financial capability of the group or individual partners is a key concern and will be thoroughly reviewed before developer selections are made. Project economics, consistent with a quality reuse of the redevelopment site, and which benefit the Downtown and overall community. Design proposal including site utilization. The Village will be looking for creative, yet proven strategies to maximize the potential of the site. 9

10 Review of any proposed store operator(s) including their past track record and experience in similar retail commercial sales endeavors Review of proposed residential unit mix including type of units and amenities/services. Extent of public sector investment required to successfully implement the project. 10

11 Staff and Village s economic consultant (Kane McKenna & Associates (KMA)) reviewed the proposals for compliance to the RFP requirements, and engaged with entities to refine proposals. Reports and refinements were forwarded to the ECDC for consideration at their August, October and November meetings. 11

12 The ECDC unanimously voted (7-0) to recommend that the Village Board enter into negotiations with Holladay Properties on a purchase and sale agreement. 12

13 Recommendation from ECDC is not legally binding on the Village Board Before the Village Board formally votes, the Board sought to have a public meeting, with the proposals and recommendation from the ECDC could be discussed. Village Board will ultimately select a preferred developer to enter into negotiations this will be done at a future Village Board meeting 13

14 Once a decision is made by the Village Board: Selected entity would negotiate agreement with Village (start discussions in January, 2019 and proceed through first half of 2019) Final development plans would be created (will be tied to negotiations and Plan Commission submittal) 14

15 Luxica proposal: 24,500 sq. ft. of retail in total 12,000 sq. ft. of retail will be Prairie Food Co-op 1,500 sq. ft. food hall Other envisioned commercial tenant spaces micro-brewery Mexican Restaurant Restaurant (Kitchen & Tap) indoor gardening store other commercial space 7 residential units and civic building space in original plan concepts have been eliminated 15

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20 Holladay proposal: 120 apartment units 12,000 sq. ft. of retail which will be Prairie Food Co-op 3,000 square feet will be built as a restaurant (black iron being added to building to assist in it becoming a restaurant) 2,000 sq. ft. outdoor food/gathering/seating areas Site plans were modified to reorient the principal building (based upon public input), an additional 3,000 sq. ft. restaurant space was added, and gathering spaces were added to plan concepts 20

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25 Net Difference within proposals: Luxica has 9,500 sq. ft. more commercial space Holladay has 120 residential units Both proposals contain Prairie Food Co-op as a tenant 25

26 Luxica request Holladay request Combination of funds from the existing Downtown TIF District; sharing of sales and Places For Eating (PFE) taxes Fully covered by the increase in equalized assessed valuation (EAV) increment reimbursement exclusively from the property redevelopment $500,000 in TIF funding plus $900,000 sales and places for eating tax sharing for 15 years (whichever comes first) $150,000 annually with a cap of $525,

27 Luxica request Offering $1 for the property Performance based sales tax sharing arrangement limited to Prairie Food Co-op ($500,000) and TIF assistance ($70,000) Holladay request Offering $1,500,000 for the property* Performance based sales tax sharing arrangement limited to Prairie Food Co-op ($500,000) * More closely aligns with March 28, 2017 appraisal prepared by Polach Appraisal Group, and confirmed in

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32 Notes: (1) Preliminary review by Village counsel has determined costs requested to be reimbursed from TIF are not eligible costs - a determination would need to be made if other sources areavailable (2) In order to allow for a comparison relating to amounts that are received "upfront" with amounts that are expected to be received over a period of time, amounts that are projected to be received over time are valued by determining the present value of such amounts based on a rate of interest of 4% (3) Subject to final negotiations with the Village Board. 32

33 Holladay - Project Financing Sources $440,000 $7,750,000 Owner Equity (24%) Loans & Other Equity (75%) $23,250,000 Village Assistance (1%) These percentages are based on construction costs only. The passthru incentives for Prairie Food Co-op are not included. That incentive will occur after the building is constructed and only if Prairie Food Co-op occupies the space. 33

34 Luxica - Project Financing Sources $100,000 $1,077,016 $922,984 Owner Equity (15%) Loans & Other Equity (66%) Village Assistance (Upfront) (2%) $4,132,000 Village Assistance (Over Time) (20%) These percentages are based on construction costs only. The passthru incentives for Prairie Food Co-op are not included. That incentive will occur after the building is constructed and only if Prairie Food Co-op occupies the space. 34

35 Prairie Foods - Capital Sources $374,415 $1,960,110 $1,850,000 Owners Loans and Equity (42%) Landlord Contribution (6%) Loans & Bank Debt (44%) Village Assistance (8%) $262,500 35

36 Performance Based Incentives (reduces/eliminates risk to Village) No utilization of existing sales tax proceeds Village gets paid first Extraordinary expenses (vs. ordinary expenses) Ten Years of Less on Incentives Non-guaranteed provisions Address cannibalization 36

37 Project Approval date Term Incentive Value of Incentive Mariano's/Bradford Real Estate Thornton's Gas Station/ Bluestone Single Tenant Properties LLC Yorktown Commons 9/29/2016 NA Utility agreement to waive water and sanitary sewer connection fees for a new lift station and force main Lombard Plaza LLC (401 E. North) 19WLLC/O'Reilly Auto Parts Oakview Estates Condos/ Neri Development 7/5/ y Sales Tax Rebate and Places for Eating Tax Not to exceed $3,000,000 3/24/16 10y Sales Tax Rebate Not to exceed $58, y Sales tax rebate to offset parking lot cross-access improvements y Sales tax rebate of $68,411 for a water main and extension after being annexed into the Village 2004 NA Paid through TIF increment generated by the project, to offset costs of utility relocation and infrastructure Not to exceed $1,644,128 Not to exceed $36,600 Rec'd $23,470 Not to exceed $400,000; however paid out $195,525 as only one condo building was built Lombard Toyota y Sales Tax Rebate Not to exceed $300,000 Von Maur y Sales tax rebate Not to exceed $4,000,000 37

38 ECDC recommendation (summation of comments): Overall incentive requests Impact on other existing downtown funds Sale price consideration Future property tax generation by project Fiscal concerns and risk to Village 38

39 ECDC recommendation (summation of comments): Past development track record Cannibalization concerns Value of adding residences to strengthen existing commercial base No guarantee that retail spaces will generate sales and PFE taxes over 20 years Existing commercial vacancies in downtown area 39

40 Source of Funds Performance Based Incentive Ten Years or Less on Incentive Non-Guaranteed Provisions Gets Paid First Provision Cannibalization Factors Luxica Initial use of existing TIF funds for initial eligible site improvement costs and future EAV proceeds; also use of sales and places for eating tax proceeds Partially identified food & beverage and sales taxes. Also seeking $100,000 in up-front development and construction costs (to be paid upon completion of project) May seek time extension on sales tax incentive period to address guarantee provision Seeking initial payment of $100,000 plus EAV project reimbursement $1 sale price; proposed future sales/ PFE tax sharing Not accounted for relative to Co-op pass through; no discussion offered relative to other proposed uses Holladay Incentive to be based upon future EAV proceeds No up-front revenues. Assistance to be based upon future EAV increment Would meet as they are seeking performance based TIF (ends in 2024) EAV project reimbursement $1,500,000 sales price, full revenues from proposed restaurant entity to be kept by Village Not accounted for relative to Co-op pass through 40

41 Village Board reviews materials, ECDC recommendation Opportunity to ask further questions regarding the proposals Take no immediate action, but set date for consideration of the RFP development entity by the Village Board 41

42 Village Board makes preferred developer selection Plan refinement, submittal to Plan Commission early Spring, 2019 Public hearing before Plan Commission Spring,

43 Developer works with staff on an economic incentive agreement and a purchase and sale agreement (Winter/Spring, 2019) ECDC review of economic incentive agreement - Spring,

44 Village Board consideration of: Plan Commission recommendation Economic incentive agreement Purchase and sale agreement (late Spring, 2019) Closing on property Summer,

45 Developer proceeds with final engineering construction drawings - Summer, 2019 Construction start possibly Fall, 2019 Construction completion TBD (late 2020 or 2021) 45

46 Notes: (1) Preliminary review by Village counsel has determined costs requested to be reimbursed from TIF are not eligible costs - a determination would need to be made if other sources areavailable (2) In order to allow for a comparison relating to amounts that are received "upfront" with amounts that are expected to be received over a period of time, amounts that are projected to be received over time are valued by determining the present value of such amounts based on a rate of interest of 4% (3) Subject to final negotiations with the Village Board. 46