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HomeMy WebLinkAbout98-16 Resolution No. 98-16 RESOLUTION AUTHORIZING EXECUTION OF AN ASSIGNMENT AND ASSUMPTION AGREEMENT BETWEEN ASHWOOD CORPORATION AND SHOE FACTORY HOMES, L.L.C. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Joyce A. Parker, City Manager, be and is hereby authorized and directed to execute an Assignment and Assumption Agreement on behalf of the City of Elgin for the assignment of the Development Agreement from the Ashwood Corporation to Shoe Factory Homes, L.L.C. , a copy of which is attached hereto and made a part hereof by reference. s/Kevin Kelly Kevin Kelly, Mayor Presented: January 28, 1998 Adopted: January 28, 1998 Omnibus Vote: Yeas 7 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement ("Assignment") is entered into as of December 5, 1997 by and between ASHWOOD CORPORATION ("Assignor") and SHOE FACTORY HOMES, L.L.C. ("Assignee"). RECITALS A. Assignor has entered into that certain Development Agreement dated November 21, 1996 by and between Assignor and the City of Elgin, Illinois (the "Development Agreement"), which Development Agreement relates to the property commonly known as 630 Congdon Avenue in Elgin, Illinois and legally described on Exhibit A hereto (the "Property"). B. Assignee is the sole beneficiary of Chicago Trust Company Trust No. 1104001 (the "Land Trust"), and the Land Trust acquired title to the Property on or about November 21, 1997. C. Assignor desires to assign and delegate, and Assignee desires to assume, all of the rights and obligations of Assignor under the Development Agreement. AGREEMENTS NOW, THEREFORE, in consideration of the foregoing Recitals other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged: 1. Assignor hereby assigns, delegates, transfers and conveys to Assignee all of Assignor's right, title, interest and obligations in, to and under the Development Agreement. 2. Assignee hereby accepts the foregoing assignment and assumes and agrees to perform all of the obligations of Assignor under the Development Agreement. IN WITNESS WHEREOF, the parties have executed this Assignment as of the date set forth above. ASSIGNOR: ASHWOOD CORPORATION By: / �Aeq k_ ///47( R. iuce •rd, Presiden ASSIGNEE: SHOE FACTORY HOMES, L.L.C. By: Ashwood Corporation, its Managing Member By: rti L t_ R. Bruce Lord, Presid nt CONSENT AND ACKNOWLEDGMENT The undersigned City of Elgin, an Illinois municipal corporation, hereby acknowledges and consents to the foregoing Assignment. The undersigned hereby also acknowledges that Developer has (through a land trust) acquired title to the Property and that, notwithstanding the provisions of Section 2 of the Development Agreement as amended (which required that the Developer acquire title to the Property on or before February 28, 1997), the Development Agreement is in full force and effect and Developer shall not be deemed in default thereunder due to the fact that the Property was acquired after February 28, 1997. CITY OF ELGIN, an Illinois municipal corporation By: iii.4 a_ • -2- 1313037.1 OF Et. ` City of Elgin Agenda Item No. �R1TED FES. January 6, 1998 TO: Mayor and Members of the City Council FROM: Joyce A. Parker, City Manager SUBJECT: Proposed Assignment and Assumption Agreement for Development Agreement Between the City and Ashwood Corporation PURPOSE To present to the Mayor and members of the City Council information regarding a proposed Assignment and Assumption Agreement for the Development Agreement with the Ashwood Corporation as developer of the Shoe Factory Homes at 630 Congdon Avenue . BACKGROUND t The Ashwood Corporation of Chicago is the developer of the former Shoe Factory Building at 630 Congdon Avenue . Redevel- opment plans provide for the construction of 27 townhomes/condominiums in a loft style project . On July 10, 1996, the City Council approved Ordinance No. G39-96, which reclassified the subject property to a Planned Multi-family Residence District and which authorized the development of the property in conformance with the Shoe Factory Development Plan. On November 21, 1996, the City and Ashwood Corporation entered into a Development Agreement for the project. A copy of the Development Agreement is attached. On February 20, 1997, the City and Ashwood Corporation entered into an amendment to the Development Agreement to allow the developer additional time to acquire the subject property. A copy of such amendment is also attached. Paragraph 13 of the Development Agreement contemplates an assignment of the Development Agreement from Ashwood Corpora- tion to an affiliate of developer known as Shoe Factory Homes LLC, an Illinois limited liability. Shoe Factory Homes LLC is a corporation created by the principals of the Ashwood Corpo- ration specifically for the purpose of developing the subject property. The president of the Ashwood Corporation and of Shoe Factory Homes LLC is Bruce Lord. Attached is the pro- posed Assignment and Assumption Agreement . Proposed Assignment and Assumption Agreement January 6, 1998 Page 2 COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None . FINANCIAL IMPACT There is no financial impact associated with the Assignment and Assumption Agreement. However the Development Agreement requires a $175, 000 economic development grant by the City. The first installment of $100, 000 is to be paid after Develop- er ' s acquisition of the property, completion of a right of way donation to the City and completion of the demolition of the former gas station at the southwest corner of the property. The Developer completed its acquisition of the property on November 26, 1997, and has also completed the demolition of the former gas station building. The Developer has now also tendered to the City a deed for the right of way donation and that .transaction is expected to be completed within the next several weeks. Upon completion of the right of way donation the City would be required to pay the first installment of $100, 000 of the economic development grant. The remaining $75, 000 would be paid upon completion of the project as evidenced by a final certificate of occupancy. The grant was originally funded from the 1996 Riverboat Lease Fund, account row number 276-0000-791 . 80-27, Economic Development Initiatives, and has been rebudgeted for 1998 from this fund. LEGAL IMPACT „t�The Development Agreement specifically acknowledges that the ��JJ Ashwood Corporation is contemplating the assignment of such agreement to Shoe Factory Homes LLC with the City' s approval of such assignment limited to approval of the form of the written assumption agreement. ALTERNATIVES As the Development Agreement contemplates the proposed assign- ment, approval of the Assignment and Assumption Agreement would appear to be the only appropriate alternative . . Proposed Assignment and Assumption Agreement January 6, 1998 Page 3 eill RECOMMENDATION Approval of the Assignment and Assumption Agreement to provide for the assignment of the Development Agreement from the Ashwood Corporation to Shoe Factory Homes LLC. Res ectfully submitted ,, Erwin W. Jentsch Corporation Counsel oyce A. Parker City Manager EWJ/WAC/mg Attachment r ASHWOOD CORPORATION 228 SOUTH WABASH,SUITE 410 • CHICAGO,ILLINOIS 60604 (312)663-1700 February 20, 1997 • Mr. Robert O. Maim • Interim City Manager City of Elgin 150 Dexter Court Elgin, Illinois 60120 Re: The Shoe Factory Homes Elgin, Illinois Dear Bob: Once again we appreciate your excellent cooperation. As requested, I am returning one fully executed original Development Agreement between the City of Elgin and Ashwood Corporation for your file. We will keep you informed as to our progress. Thanks again. Best regards, 4 4111W c Marian Ginsberg + fir.. . - • rs. • . ESC F— f ._ 0.4j. :;/1, . /" Agenda Item No. (0 City of Elgin February 6, 1997 TO: Mayor and Members of the City Council FROM: Robert 0. Malm, Interim City Manager SUBJECT: Shoe Factory Homes Development Agreement Amendment PURPOSE The purpose of this memorandum is to provide the Mayor and members of City Council with information to consider amending the Development Agreement with the Ashwood Corporation for the Shoe Factory Homes redevelopment. BACKGROUND Last November the City and the Ashwood Corporation entered into a Development Agreement for the rehabilitation of the property at 630 Congdon Avenue into twenty-seven new residen- tial homes. The Agreement required the developer to complete the acquisition of the property within 45 days of the execu- tion of the Agreement. The developer in a letter dated January 13, 1997 has requested the acquisition date for the property be extended until March 31, 1997 . The extension has been requested for tax implica- tions as well as the need for additional environmental test- ing. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None. FINANCIAL IMPACT None. LEGAL IMPACT The Legal Department has prepared the attached Amendment to the Development Agreement and the Resolution authorizing its execution. ALTERNATIVES rft. 1. Not to approve the extension. Shoe Factory Homes January 29, 1997 Page 2 RECOMMENDATION It is recommended the City Council approve the above time extension and authorize the execution of the Amendment. -= • =ctfully submitted, Robe O. Malm Int- im City Manager ROM/skg Attachment ASHWOOD CORPORATION 228 SOUTH WABASH,SUITE 410 • CHICAGO,ILLINOIS 60604 January 13, 1997 (312)663-1700 Mr. Robert O. Maim Interim City Manager City of Elgin 150 Dexter Court Elgin, Illinois 60120 Re: The Shoe Factory Homes Elgin, Illinois Dear Bob: As we discussed, tax council has pointed out new tax alternatives to Marian Ginsberg as to best way to transfer title to the property. Over the last 30 days, Marian has had to have her accountant and lawyer review the various tax implications of the sale in order to determine the most acceptable tax treatment. This has now been resolved. In addition, the lender has requested an additional report as to the environmental conditions on the property. There is a Phase I Report which does not indicate any problems, but takes a very conservative point of view and suggests that some additional testing be done to make sure that there are no problems. Even though we believe that there is no environmental problem on the land, this has necessitated Marian having to have another analysis done. Hopefully, the testing, analysis and report will be completed and approved by the bank within 60 days. Because of the above, the acquisition loan for the Shoe Factory has not closed as yet and therefore the Shoe Factory Homes, L.L.C. has not taken title to the property. We are requesting that the Redevelopment Agreement timetable for the acquisition of the property be extended until March 31, 1997. We feel that we will have the acquisition �h done by then and we can proceed with the construction of the model unit and the start the sales program. Best regards, 604. Bruce Lord BL/dz c: Marian Ginsberg Resolution No. 97- RESOLUTION AUTHORIZING EXECUTION OF AN AMENDMENT TO DEVELOPMENT AGREEMENT WITH ASHWOOD CORPORATION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Kevin Kelly, Mayor, and Dolonna Mecum, City Clerk, be and are hereby authorized and directed to execute an Amendment to Development Agreement on behalf of the City of Elgin with Ashwood Corporation for the development of Shoe Factory Homes at 630 Congdon Avenue, a copy of which is attached hereto and made a part hereof by reference. Kevin Kelly, Mayor Presented: Adopted: Omnibus Vote: Yeas Nays Attest: Dolonna Mecum, City Clerk 47)