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Home My WebLink About09-210 Resolution No. 09-210 RESOLUTION AUTHORIZING EXECUTION OF A TERMINATION AGREEMENT WITH WATER STREET PLACE, LLC REGARDING THE DEVELOPMENT OF 200 N. GROVE AVENUE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that Ed Schock, Mayor, and Diane Robertson, City Clerk, be and are hereby authorized and directed to execute a Termination Agreement with Water Street Place on behalf of the City of Elgin of the development agreement regarding the development of 200 N. Grove Avenue, a copy of which is attached hereto and made a part hereof by reference. s/Ed Schock Ed Schock, Mayor Presented: September 23, 2009 Adopted: September 23, 2009 Vote: Yeas: 7 Nays: 0 Attest: s/Diane Robertson Diane Robertson, City Clerk TERMINATION AGREEMENT IT THIS TERMINATION AGREEMENT ("Termination") is made and entered into as of the 3/ day of August,2009,by and between the City of Elgin,Illinois, a municipal corporation, (hereinafter referred to as the "City") and Water Street Place, LLC, an Illinois limited liability company, (hereinafter referred to as the "Developer"). WHEREAS, the City and the Developer have previously entered into a Development Agreement dated December 6,2006,relating to the City-owned property at the southwest corner of Kimball Street and Grove Avenue, Elgin, Illinois; and WHEREAS, the City and the Developer entered into an Amendment to such Development Agreement as of May 9,2007,a Second Amendment to the Development Agreement as of June 27, 2007, a Third Amendment to the Development Agreement as of August 8, 2007, a Fourth Amendment to the Development Agreement as of August 22, 2007, and a Fifth Amendment to the Development Agreement as of July 28, 2009 (such Development Agreement, as amended, is hereinafter referred to as the "Subject Development Agreement"); and WHEREAS, Section 2(b)of the Subject Development Agreement,as amended, provides in part for the Developer to provide to the City on or before July 1,2009, further documentation in the form of a market study to demonstrate and validate to the City's reasonable satisfaction the Developer's projected sales prices, lease rates and absorption schedule for the proposed Mixed Use Residential and Commercial Development on the Subject Property such that the City can independently determine that it is likely to receive the estimated tax increment revenue and sales tax for the proposed Mixed Use Residential and Commercial Development on the Subject Property;and WHEREAS, Section 2(b)(i)provides that in the event the Developer fails to provide the City with such market analysis on or before the market study due date of July 1, 2009, then the City or Developer may, by written notice to the other party within ninety(90) days following such market study date elect to terminate the agreement; and WHEREAS,the City and Developer have conferred and have mutually determined that the development currently provided for in the Subject Development Agreement is not feasible under current market conditions; and WHEREAS, the City and Developer have mutually agreed to enter into this termination agreement terminating the Subject Development Agreement. NOW,THEREFORE, for and in consideration of the mutual undertakings as set forth herein, and in consideration of the mutual undertakings set forth in the Subject Development Agreement, and in consideration of other good and valuable consideration,the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 1. The City and the Developer hereby mutually agree that the Subject Development Agreement be and is hereby terminated without any further obligations of the parties with respect thereto. 2. The City and the Developer further agree that the termination of the Subject Development Agreement,as amended, as provided herein is the sole and exclusive remedy the City and the Developer have with respect to one another with respect to the Subject Development Agreement and that the City and the Developer hereby mutually agree and do hereby waive and release one another and their respective officials, officers,members, managers, employees, agents and all other related persons and entities from any and all claims or damages of whatever nature with respect to the Subject Development Agreement. IN WITNESS WHEREOF, the parties hereto have entered into and executed this Termination Agreement on the date and year first written above. CITY OF ELGIN WATER STREET PLACE, LLC, an Illinois limited liability company By Ryan ompanies, US, Inc., a Manager Ed Schock, Mayor By Its Vice President Attest: City Clerk F:\Legal Dept\Agreement\Development Agr-Water St PI-Termination Agr.doc 2 ,Y�OF k-4 o-JO • ` ° _._ Memorandum _ City of Elgin z ; �o r II 'PA,o'9 rE D FE'0 VIA EMAIL Date: September 16, 2009 To: Mayor and Members of the City Council Sean R. Stegall, City Manager From: William A. Cogley, Corporation Counsel Subject: Termination of Development Agreement between the City of Elgin and Water Street Place, LLC The city and the developer Water Street Place, LLC previously entered into a development agreement dated December 6, 2006, relating to the development of the city owned property at the southwest corner of Kimball Street and North Grove Avenue. Such property includes the site of the old Gail Borden library. Pursuant to the development agreement the property was to be redeveloped with a mixed use residential and commercial development including residential condominiums, an indoor parking garage, retail space and restaurants. Due to the downturn in the housing market the parties entered into several amendments to the development agreement extending the dates for a market study to demonstrate and validate the viability of the project. Section 2(b) of the development agreement as amended by the fourth amendment thereto required the developer to provide the city a market study on or before July 1, 2009. Subsection (i) thereof provided that in the event the developer fails to provide the city with such market analysis on or before July 1, 2009, the city may, by written notice to the developer within 30 days following such market study date, elect to terminate the agreement. The city and the developer subsequently entered into a fifth amendment to the development agreement extending the city and developer's rights to terminate the agreement through September 30, 2009. The developer requested a meeting to discuss the status of the development agreement and such meeting was held on August 5, 2009. City staff and the developer agreed the project as currently proposed is not viable given the current market conditions and that the project would unlikely be viable for a number of years. Given these circumstances it was agreed that termination of the development agreement was in the best interests of both the city and the developer. Attached is a termination agreement. The termination agreement provides that the subject development agreement is terminated without any further obligations of the parties with respect thereto. The result of the termination agreement is that the city retains ownership of its property and can pursue any and all development opportunities as market conditions allow. I recommend approval of the termination agreement. Mayor and Members of the City Council - 2 - September 16, 2009 Sean R. Stegall I have placed the termination agreement on the other business portion of the city council agenda for the next city council meeting on September 23, 2009. Please contact me if you have any questions or require any additional information. Vv s/WAC mg Attachment cc: Richard G. Kozal (via email w/attachments) Jerry Deering (via email w/attachments) `,‘.(OF Eto City of Elgin Memorandum rn(-)k-1 i-F t t0 Date: September 29, 2009 To: Diane Robertson, City Clerk From: William A. Cogley, Corporation Counsel Subject: Termination of Development Agreement Between the City of Elgin and Water Street Place, LLC Attached for the city clerk's files is an original fully executed copy of the termination agreement dated August 31, 2009, between the City of Elgin and Water Street Place, LLC providing fot the termination of the development agreement between the City of Elgin and Water Street Place, LLC. LI 114°i/ WAC bf Attachment