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HomeMy WebLinkAbout14-153 Resolution No. 14-153 RESOLUTION AUTHORIZING EXECUTION OF A REDEVELOPMENT AGREEMENT WITH CAPSTONE DEVELOPMENT GROUP, L.L.C. FOR HISTORIC RENOVATION AND ADAPTIVE REUSE OF THE ELGIN TOWER BUILDING WITH MARKET-RATE RENTAL HOUSING BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that David J. Kaptain, Mayor, and Kimberly A. Dewis, City Clerk, be and are hereby authorized and directed to execute a Redevelopment Agreement on behalf of the City of Elgin with Capstone Development Group, L.L.C. for historic renovation and adaptive reuse of the Elgin Tower Building with market-rate rental housing, a copy of which is attached hereto and made a part hereof by reference. s/ David J. Kaptain David J. Kaptain, Mayor Presented: October 8, 2014 Adopted: October 8, 2014 Vote: Yeas: 8 Nays: 0 Abstain: 1 Attest: s/Kimberly Dewis Kimberly Dewis, City Clerk A REDEVELOPMENT AGREEMENT THIS AGREEMENT made and entered into this 8th day of October, 2014 by and between the CITY OF ELGIN, an Illinois municipal corporation (hereinafter referred to as the "City"); and CAPSTONE DEVELOPMENT GROUP, L.L.C., a Missouri limited liability company (hereinafter referred to as"Developer"). WHEREAS, the City Council of the City of Elgin has adopted Ordinance Nos. S6-99, S1-02, S2-02, S3-02 and S4-02 proposing, approving and creating the Elgin Central Area Tax Increment Financing Redevelopment Plan and Project(the "ECA TIF District") pursuant to the Tax Increment Allocation Redevelopment Act at 65 ILCS 5/11-74.4-1, et seq.;and WHEREAS, the ECA TIF District was established on April 10, 2002 and will continue for twenty-three(23)years thereafter; and WHEREAS, the Developer is the contract purchaser of that certain property commonly known as 100 East Chicago Street, Elgin, Illinois, such property being commonly referred to as the "Elgin Tower Building" and legally described in Exhibit A attached hereto, (hereinafter referred to as the"Subject Property"); and WHEREAS,the Subject Property is located within the ECA TIF District; and WHEREAS, the Subject Property is currently improved with a 15-story high-rise office building which is vacant, functionally obsolete, deteriorated, and in a condition below certain minimum code standards for occupancy; and WHEREAS, the Subject Property is not only on the federal National Registry of Historic Places, but also is an iconic Elgin landmark whose preservation and reuse are deemed of high importance to the overall vitality of the City's central business district; and WHEREAS, the Developer desires to acquire the Subject Property and has submitted to the City a proposal for the redevelopment of the Subject Property providing for its conversion into an approximate 45-unit 100% market rate apartment building comprised of one (1) and two (2)bedroom apartments situated on and with the floors that include the main(ground level) floor through the 14th floor, and with floor plans and certain common amenities, all as will be submitted to and subject to the approval of the City of Elgin as part of the Subject Plan Development Ordinance for the Subject Property(as defined in Section 2 below), and with those exterior improvements to the Elgin Tower Building as similarly described and approved as part of the Subject Plan Development Ordinance for the Subject Property. The aforesaid plans (and any other City-required plans and details) as hereafter submitted to and approved by the City as part of the Subject Plan Development Ordinance for the Subject Property are hereafter collectively referred to as the "Approved Project Plans". For the purpose of clarification and without limiting the foregoing, the redevelopment of the Subject Property will also include the complete restoration and renovation of both the exterior and interior of the building on the Subject Property. The adaptive restoration of the building will be completed according to the National Park Service (NPS) standards for rehabilitation of historic properties. The exterior limestone on the building will be cleaned, tuck-pointed and repaired as needed. Building amenities will include a fitness center, media center, resident meeting/lounge space and storage lockers. Renovation plans will utilize universal design concepts in incorporate energy efficient materials, fixtures and appliances;and WHEREAS, the City Council of the City has determined, and hereby finds, that Developer's proposed redevelopment of the Subject Property as herein described will further the goals and objectives of the Elgin Central Area Tax Increment Financing Redevelopment Plan -2- and Project and assist the City in its objective to create a more economically viable and sustainable downtown business district through strategic development that supports 24/7 activity and connects commercial corridors with residential properties, all of which are hereby declared by the City to be a valid"public purpose"of the City ; and WHEREAS, Developer's proposal for the redevelopment of the Subject Property will result in an increase in the City's tax revenues, and will result in the complete renovation and restoration and adaptive re-use of an important downtown historic building;and WHEREAS, the proposed redevelopment of the Subject Property would not occur in the absence of limited development assistance from the City as herein provided; and WHEREAS, in order to incent and facilitate the proposed redevelopment of the Subject Property as herein described which will further the goals and objectives of the Elgin Central Area Tax Increment Financing Redevelopment Plan and Project, the City has agreed to provide certain development assistance as hereinafter described;and WHEREAS, the City of Elgin is a home rule unit authorized to exercise any power and perform any function pertaining to its government and affairs;and WHEREAS, this Redevelopment Agreement, resulting in furthering and achieving the goals and objectives of the Elgin Central Area Tax Increment Financing Redevelopment Plan and Project, and resulting in the benefits to the City as hereinabove stated,are matters within the government and affairs of the City; and WHEREAS, the redevelopment of the Subject Property will create job opportunities within the City; and WHEREAS, the redevelopment of the Subject Property will serve to further the development of adjacent areas;and -3 - WHEREAS, the redevelopment of the Subject Property will strengthen the commercial sector of the downtown and the City; and WHEREAS, the redevelopment of the Subject Property will enhance the tax base of the City; and WHEREAS, the Developer meets high standards of credit worthiness and financial strengths; and WHEREAS,this Agreement is made in the best interest of the City. NOW, THEREFORE, for and in consideration of the mutual undertakings as set forth herein, and other good and valuable consideration,the receipt and sufficiency of which is hereby acknowledged,the parties hereto agree as follows: 1. Recitals. The foregoing recitals are incorporated into this Agreement in their entirety. 2. Development Application: Petition for Rezoning. Within Forty-Five (45) days following the entry into this Agreement, the Developer agrees to and shall file with the City a formal development application and petition for the rezoning of the Subject Property (such development application and petition for rezoning of the Subject Property being hereinafter referred to as the "Development Application"). All costs and expenses relating to the Development Application shall be the responsibility of and shall be paid for by the Developer. Such Development Application shall request the rezoning of the Subject Property to a Planned Center City 1 ("PCC-1") zoning district and shall provide for the redevelopment of the Subject Property in general conformance with the Approved Project Plans, modified and amended only (i) as the Developer and the City during the development review and the zoning process and (ii) as may be required to comply with -4- ordinances, building codes or other requirements of law (collectively the "Project Modifications"). The Developer's proposal as set forth in the Approved Project Plans, as possibly modified by any Project Modifications, is hereinafter referred to as "Subject Redevelopment Plan" and the redevelopment of the Subject Property in conformance with Subject Redevelopment Plan is hereinafter referred to as the "Subject Redevelopment". For the purpose of clarification, and except as the Approved Project Plans may be amended by Project Modifications as provided for in this paragraph, the Subject Redevelopment on the Subject Property by the Developer shall conform to those Approved Project Plans as approved by the corporate authorities of the City in connection with the Subject Plan Development Ordinance for the Subject Property. The Development Application to be submitted by the Developer to the City shall include all materials and documents customarily required by the City for such development applications and zoning petitions and shall also include a description of the Subject Redevelopment Project including (i) the nature of the various renovations to be made to the building on the Subject Property, (ii) architectural drawings or other information as required by the City to accurately reflect the Exterior Improvements, and showing and describing the architectural styling and materials of such Exterior Improvements, (iii) the floor plans for each of the residential units and floors of the building, (iv) a description of finishes and amenities for each of the residential units, (v) a description of finishes for common areas, (vi) a description of amenities for the building, (vii) preliminary or proposed final engineering plans (to the extent required), (viii) estimated development schedules for the completion of the Subject Redevelopment, (ix) a comprehensive project budget showing all anticipated hard and soft costs for the acquisition of the Subject Property, the interior demolition work, professional fees, - 5 - financing costs, and construction costs, and (x) such other and further materials and documentation as may be reasonably required by the City. The City agrees to give prompt consideration to the Development Application. The PCC-1, Planned Center City 1 Zoning District Ordinance for the Subject Redevelopment of the Subject Property as to be requested in the Development Application is hereinafter referred to as the "Subject Planned Development Ordinance for the Subject Property". This Agreement and all of the parties' obligations hereunder are expressly subject to and contingent upon the City Council of the City adopting the Subject Planned Development Ordinance for the Subject Property which authorizes the improvement of the Subject Property with the Subject Redevelopment. In the event the City Council does not, in its sole and exclusive discretion, adopt the Subject Planned Development Ordinance for the Subject Property to authorize the Subject Redevelopment on the Subject Property on or before the ninetieth (90th) day following the City's receipt from the Developer of a complete Development Application, then either party shall have the right, by written notice to the other,to terminate this Agreement, whereupon this Agreement shall be cancelled and null and void with no further liability of either party hereunder. In the event of any conflict between the terms and provisions of this Agreement and the terms and provisions of the Subject Planned Development Ordinance for the Subject Property, the terms and provisions of the Subject Planned Development Ordinance for the Subject Property shall control. 3. Construction of Subject Redevelopment. (a) It is agreed and understood that the redevelopment assistance being provided by the City to the Developer pursuant to this Agreement is being provided for the sole purpose of assisting the Developer with the Subject Redevelopment of the Subject Property as described in -6- this Agreement. The redevelopment of the Subject Property shall conform in all respects with the Subject Planned Development Ordinance for the Subject Property and as directed by the City to the extent necessary to comply with other applicable ordinances, building codes or other requirements of law. The Developer shall also cause all work performed in connection with the Subject Redevelopment of the Subject Property to be performed in a workmanlike manner. Except as otherwise provided in this Agreement, all costs and expenses relating to the Subject Redevelopment of the Subject Property including, without limitation, the construction of the Subject Redevelopment on the Subject Property, shall be the responsibility of and shall be paid for by the Developer. (b) Developer shall, within sixty (60) days of the date the City adopts the Subject Planned Development Ordinance, submit to the City and to all other governmental bodies or agencies thereof having jurisdiction over the Subject Redevelopment (if any) applications for all permits required to perform the Subject Redevelopment in accordance with the Subject Redevelopment Plans approved by the City(collectively the"Required Permits"). (c) Developer shall commence construction of the Subject Redevelopment on the Subject Property within sixty(60)days following the last to occur or arrive of(i)the Developer's acquisition of the Subject Property or (ii) the issuance to the Developer by the City and by any other governmental body or agency having jurisdiction over the Subject Redevelopment, of all Required Permits (whichever of such dates shall apply being hereinafter called the "Construction Commencement Deadline"), subject, however, to reasonable extension by reason of Force Majeure (as hereafter defined). Developer shall be deemed to have commenced construction of the Subject Redevelopment on the Subject Property upon Developer obtaining a building permit from the City for the Subject Redevelopment and the commencement of initial -7- construction activities associated with the Subject Redevelopment. In the event the Developer does not acquire fee simple title to the Subject Property and does not commence construction by the first to arrive of(i) the Construction Commencement Deadline (as same may be extended as provided herein) or (ii) the first business day that is two hundred seventy (270) days after the City adopts the Subject Planned Development Ordinance for the Subject Property, then Developer shall provide the City notice of non-commencement, whereupon, absent any written agreement between the parties to extend the Title Acquisition Deadline and the Construction Commencement Deadline, either party shall have the right, by written notice to the other, to terminate this Agreement, whereupon this Agreement shall be cancelled and null and void with no further liability of either party hereunder. (d) Upon Developer commencing construction of the Subject Redevelopment on the Subject Property, the Developer shall continue with the construction of the Subject Redevelopment in as expeditious a manner as is reasonably practicable. The Developer shall substantially complete the Subject Redevelopment on the Subject Property on or before the four hundred twentieth (420th) day following the commencement of construction of the Subject Redevelopment (hereinafter referred to as the "Completion Date"); provided, however, that such Completion Date shall be extended by one day for each day for which construction is delayed or stopped due to accident, strikes, shortage of materials, extreme weather, acts of God, undue delay by the City in issuing any required permits for which application has been properly made by the Developer, or lawsuits or other administrative actions brought by any third party that has the effect of hindering or delaying Developer's performance hereunder (such occurrences being individually or collectively hereinafter referred to as "Force Majeure"). In -8 - the event Developer requires any further extension of any of the Completion Dates for the Subject Redevelopment of the Subject Property other than by reason of Force Majeure,any such requests shall be submitted to the City in writing specifying the reasons for such an extension and the amount of additional time being requested. Any agreement by the City to further extend the Completion Date for the Subject Redevelopment of the Subject Property shall be at the sole discretion of the City Council of the City. (e) The Subject Redevelopment of the Subject Property shall be deemed "substantially completed"when the Developer has completed all of the improvements proposed to be constructed and installed in connection with the Subject Redevelopment, subject to only customary "punchlist" work to be completed, and has obtained a temporary or final occupancy permit for the building on the Subject Property and temporary or final occupancy permits for all of the apartments created within the Tower Building. Notwithstanding the foregoing, to the extent requested by the Developer and consistent with the City's ordinances the City will issue temporary certificates of occupancy for apartments on specific floors within the Tower Building even though all redevelopment work on other floors has not been completed, it being the intention of the parties to allow for the possible incremental occupancy of the apartments as they are completed on a per-floor basis so long as life and safety codes and ordinances are adhered to. 4. Development Assistance from City. (a) In consideration of the Developer completing the Subject Redevelopment of the Subject Property set forth in this Agreement, the City agrees to provide the development assistance to the Developer set forth in this Section 4. In the event of Developer's completion of the Subject Redevelopment of the Subject Property the City agrees to provide the Developer monetary development assistance of Four Million Seven Hundred Thousand Dollars -9- ($4,700,000.00) (hereinafter referred to as the "Subject Monetary Development Assistance"). The Subject Monetary Development Assistance shall be paid by the City to the Developer to reimburse the Developer for Redevelopment Project Costs (as hereinafter defined) incurred by the Developer in connection with the Subject Redevelopment of Subject Property. Redevelopment Project Costs shall be defined as provided in 65 ILCS 5/11-74.4-3(q), which are incurred by Developer in connection with the Subject Redevelopment of the Subject Property and which are eligible under law for reimbursement from the City's ECA TIF District (such costs as defined in 65 ILCS 5/11-74.4-3(q), which are incurred by the Developer in connection with Subject Redevelopment of the Subject Property and which are eligible under law for reimbursement from the City's ECA TIF District are hereinafter referred to as "Redevelopment Project Costs"). (b) It is expressly agreed and understood that, regardless of the actual amount of the Redevelopment Project Costs incurred by the Developer, the City's Subject Monetary Development Assistance to Developer shall nonetheless be limited to an amount not to exceed Four Million Seven Hundred Thousand Dollars ($4,700,000.00), and in no event shall the City pay or reimburse the Developer any amount over Four Million Seven Hundred Thousand Dollars ($4,700,000.00). As a condition of the right to receive payment from the City of the Subject Monetary Development Assistance Developer shall be required to document to the City's reasonable satisfaction that it has incurred Redevelopment Project Costs in connection with the Subject Redevelopment of the Subject Property in the amount of the reimbursements being requested. The Subject Monetary Development Assistance shall be utilized by the Developer solely and only for the payment of Redevelopment Project Costs for the Subject Redevelopment of the Subject Property. - 10- (c) The City shall pay the Subject Monetary Development Assistance to the Developer in increments at each Payment Eligibility Date (as defined in the following table) as follows: Payment Description of Payment Eligibility Amount of Subject Monetary No. Dates Development Assistance to be paid to Developer 1 When (i) the apartments on 7 or more Fifty percent (50%) of the Subject of the lower 14 floors of the Elgin Monetary Development Tower Building have been issued Assistance, to be deposited into temporary or final certificates of the Developer's construction occupancy by the City and (ii) the escrow at the title insurance Developer has provided to the City company being used by Developer evidence that the Developer has readily for making construction payouts available to it (whether in the form of for the work being performed on its own funds or in the form of the Subject Redevelopment of the construction loan commitments) Subject Property sufficient funds to pay for the completion of the Subject Redevelopment. 2 When the work required to complete The unpaid balance of the Subject the Subject Redevelopment is Monetary Development substantially completed, as defined in Assistance; provided that the City Section 3(e) hereof, as certified to the may hold back an amount City by the Developer's project estimated to be the reasonable cost architect and by such third-party to complete all punchlist items, if architect as the City may, in its any discretion, elect to retain to oversee the completion of the work. As a condition to the right to receive payment number 1 described in the above table, the Developer shall provide to the City a completion guaranty in form attached hereto as Exhibit B (the "Completion Guaranty"). Said Completion Guaranty shall be delivered to the City simultaneously with and as a condition of the City's delivery of payment number 1. (d) In addition to the Subject Monetary Development Assistance to be provided to the Developer as defined in the preceding subsections of this Section 4, the City also hereby - 11 - agrees that, throughout the Redevelopment Term (as hereafter defined) the City shall make available to residents of the Elgin Tower Building ("Tower Building Residents"),fifty-five (55) reserved parking spaces (or such lesser number as may be requested of the City from time to time) in one or more of the Qualifying City Parking Lots (hereafter defined), for use by such residents for the parking of their personal automobiles, subject to the following: (i) Such parking rights shall be evidenced by permits ("Reserved Parking Permits") issued by the City to Tower Building Residents, specifying the particular parking space within a Qualifying City Parking Lots the use of which has been reserved for such Tower Building Resident; (ii) Each Tower Building Residents shall be required to pay to the City for the continued use of such Reserved Parking Permits the sum of Thirty Dollars ($30.00)per month,payable in advance in 6-month increments; (iii) The City shall post on each such designated parking space a sign designating that parking space as being reserved for use by the holder of the Reserved Parking Permit corresponding to such space, and shall reasonably cooperate in enforcing the exclusive parking rights of the holder of each such Reserved Parking Permit; (iv) The City shall have the right,in the exercise of its reasonable discretion,to move the location of any designated parking space from one Qualifying City Parking Lot to another Qualifying City Parking Lot upon not less than Sixty (60) days prior written notice to the Developer (or its successors)and to the holder(s)of the Reserved Parking Permit(s)affected by such relocation; - 12 - (v) The City shall not issue any Reserved Parking Permit to any Tower Building Resident without the prior express written authorization of the manager of the apartment project, and will promptly revoke the Reserved Parking Permit previously issued to a Tower Building Resident upon notification from the apartment project manager that such Tower Building Resident's tenancy within the Elgin Tower Building has been terminated; and (vi) The term "Qualifying City Parking Lots" shall mean any City operated public parking lot situated within one thousand (1000) feet of the Subject Property measured from property line to property line. (vii) The thirty dollar($30.00)per month charge for a Reserved Parking Permit may be increased by the City on such dates selected by the City (each an "Adjustment Date") that are not more frequent than every five (5) years following the date of issuance of the first occupancy permit for an apartment in the Subject Property (the "First CO Date"), with such increases to be not greater than the percentage increases in the Consumer Price Index for All Urban Customers-All Items, Seasonally Adjusted (1982-84=100) ("CPI-U") published by the Bureau of Labor Statistics of the United States Department of Labor, as measured between the period (A) commencing with the First CO Date or the last Adjustment Date (whichever is the most recent) and (B) ending on the date as of which the CPI-U was published most immediately prior to the current Adjustment Date. - 13 - (e) In addition to the Subject Monetary Development Assistance to be provided to the Developer as defined in the proceeding subsections of this section 4, the City also hereby agrees to reasonably cooperate and support, at no cost to the City, applications by the Developer seeking federal and state historic tax credits. (f) The parties understand and agree that the Subject Monetary Development Assistance and the other assistance being provided by the City to the Developer as set forth in this section 4, including, but not limited to, the Reserved Parking Permits, are expressly subject to and contingent upon the Developer completing and maintaining the Subject Redevelopment of the Subject Property as set forth in this Agreement. In the event the Developer fails to complete the Subject Redevelopment of the Subject Property as required in this Agreement, or fails to maintain and operate the Subject Redevelopment on the Subject Property as described and required in this Agreement, the parties understand and agree that the City will not be providing the Subject Monetary Development Assistance and other assistance to the Developer pursuant to this Agreement or otherwise. Upon the occurrence of an Event of Default on the part of the Developer (as defined in Section 10) then, in addition to other remedies available to the City at law, equity or otherwise, the City shall recover any Subject Monetary Development Assistance previously paid to the Developer and may terminate any further and other assistance being provided to the Developer including,but not limited to,the Reserved Parking Permits. 5. Acquisition of the Subject Property by Developer. (a) This Agreement and all of the parties' obligations hereunder are expressly subject to and contingent upon the Developer (or a single purpose entity owned or controlled by the Developer or the Developer's principals and/or investors) acquiring fee simple title to the Subject Property on or before thirty (30) days after the City (and any - 14 - other governmental body having jurisdiction over the Subject Redevelopment) issues all of the Required Permits referenced in Section 3(b) above (the "Title Acquisition Deadline"). The Title Acquisition Deadline shall be subject to reasonable extension by reason of Force Majeure. In the event the Developer does not acquire title to the Subject Property on or before the Title Acquisition Deadline, then Developer shall provide the City notice of same, whereupon, absent any written agreement between the parties to extend the Title Acquisition Deadline, either party shall have the right, by written notice to the other, to terminate this Agreement, whereupon this Agreement shall be cancelled and null and void with no further liability of either party hereunder. (b) The Developer's Real Property Option Agreement for the Subject Property currently provides for a preliminary purchase price of One Million Dollars ($1,000,000.00). In the event the purchase price for the Subject Property paid by the Developer is less than One Million Dollars ($1,000,000.00), the amount of the Subject Monetary Development Assistance provided for in this section 4 shall be reduced accordingly. For the purposes of clarification and example, in the event the actual purchase price paid by the Developer for the Subject Property is Eight Hundred Thousand Dollars ($800,000.00), the amount of the Subject Monetary Development Assistance shall be reduced by Two Hundred Thousand Dollars ($200,000.00). Usual and customary prorations and other closing credits allowed to the Developer at the acquisition of the Subject Property shall not be deemed to be a reduction of the purchase price. (c) Prior to the execution of this Agreement, certain violations of municipal codes and ordinances did or may have occurred on the Subject Property ("Prior Code Violations") and the City has filed litigation and taken other enforcement actions with - 15 - respect to and by reason of such Prior Code Violations (collectively "City Enforcement Actions"). Contingent upon and simultaneously with Developer's acquisition of title to the Subject Property as contemplated by this Agreement, the City agrees to notify the seller of the Subject Property and the Developer that the City is agreeing to dismiss such pending City Enforcement Actions and will not be seeking fines in such pending City Enforcement Actions. 6. Market Rate Apartment Building. The Subject Redevelopment of the Subject Property shall be a 100% Market Rate Apartment Building. For the purposes of this Agreement, the term 100 % Market Rate Apartment Building shall mean that there shall be no restrictions with respect to income or rent for the rental of apartments whether by restriction to deed, title to the property or otherwise, and no project based governmental or quasi-governmental subsidy which results in restrictions with respect to income or rent for the rental of apartments within the Subject Property shall be in place with respect to the Subject Redevelopment of the Subject Property during the Redevelopment Term. Developer agrees that the Subject Redevelopment on the Subject Property shall be maintained and remain as a 100% Market Rate Apartment Building for a period of not less than the Redevelopment Term. 7. Redevelopment to Remain on Subject Property. The Developer agrees that except as otherwise agreed to by the City, the Subject Redevelopment on the Subject Property shall be maintained and remain on the Subject Property for a period of not less than twenty-five (25)years following the date of this Agreement(the"Redevelopment Term"). 8. Assessment of Subject Property. The City and the Developer agree that the Subject Redevelopment of the Subject Property should be assessed for general real estate taxes in - 16- the manner provided by Illinois Compiled Statutes as they may be amended from time to time. This provision shall not be deemed to prevent the Developer or its successors or permitted assigns from appealing or challenging assessments against the Subject Redevelopment on the Subject Property which Developer or its successors or permitted assigns consider to be contrary to law. Notwithstanding any other provisions of this Agreement to the contrary, the Developer agrees that during the Redevelopment Term neither the Developer nor any person affiliated with the Developer, or any successor or permitted assign of the Developer, shall do any of the following: (a) Request a full or partial exemption for general real estate taxes for any portion of the Subject Property or the improvements thereon; (b) Request a full or partial abatement of general real estate taxes for any portion of the Subject Property or the improvements thereon;or (c) Request an assessment at a value not otherwise permitted by law. 9. Compliance with Laws. (a) Notwithstanding any other provisions of this Agreement it is expressly agreed and understood by Developer and the City that in connection with the performance of this Agreement and the redevelopment of the Subject Property with the Subject Redevelopment, including without limitation, Developer's construction of residential units on the Subject Property, the Developer shall comply with all applicable federal, state, city and other requirements of law. Developer shall also at its expense secure all permits and licenses, pay all charges and fees and give all notices necessary and incident to the due and lawful prosecution of the work necessary to provide for the Subject Redevelopment of the Subject Property as described in this Agreement. To the extent the City has jurisdiction over the issuance of any such permits, the City agrees to act reasonably and on an expedited basis in the - 17- • consideration and review of, and action upon all such permit applications that are properly and completely submitted to the City by the Developer or its successors. (b) The City represents that the Subject Property is in an area designated as a "River Edge Redevelopment Zone" (as created by the River Edge Redevelopment Zone Act 60 ILCS 115/10-1 et. seq.). The City agrees to give its reasonable cooperation and support to any application by the Developer to seek lawful benefits eligible to properties, such as the Subject Property, situated within such zone. 10. Default. The City and Developer agree that an "Event of Default" shall be deemed to have occurred with respect to either party if (i) such party materially breaches it obligations hereunder and (i) such breach remains uncured for more than thirty (30) days following written notice thereof to such breaching party by the other party; provided, however, that if the nature of the breach is such that it cannot reasonably be completely cured within thirty (30) days of the date of such notice, then so long as the notified party commences such cure within said 30 days and thereafter diligently pursues the completion of such cure in good faith, then such the party shall not be deemed to have breached this Agreement and the other party shall not seek to enforce any remedies against said notified party. 11. Remedies. Upon the occurrence of an Event of Default with respect to either party (such party being hereafter referred to as the "Party in Default"), the other party (in such context the"Aggrieved Party") shall, except as otherwise provided in this section, be entitled to pursue any and all available remedies as specified herein or otherwise available at law, equity or otherwise. Notwithstanding the foregoing or anything else to the contrary in this Agreement, with the sole exception of an action to recover the Subject Development Monetary Assistance the City has agreed to pay pursuant to the preceding Section 4 hereof, no action shall be commenced - 18 - by the Developer against the City for monetary damages. The parties hereto further agree that any action by the Developer arising out of this Agreement must be filed within two (2) years of the date the alleged cause of action arose or the same shall be time barred. Venue for the resolution of any disputes or the enforcement of any rights pursuant to this Agreement shall be in the Circuit Court of Kane County, Illinois. The provisions of this section shall survive any termination,completion and/or expiration of this Agreement. 12. Time. Time is of the essence of this Agreement. 13. Notices. All notices herein required shall be in writing and shall be served on the parties at the following addresses: If to City: City of Elgin Attn: Sean R. Stegall, City Manager 150 Dexter Court Elgin,IL 60120 Fax: 847-931-5610 With copy to: William A.Cogley,Corporation Counsel City of Elgin 150 Dexter Court Elgin,IL 60120 Fax: 847-931-5665 If to Developer: Capstone Development Group,L.L.C. Attn: Lisa Kortkamp 215 Thomas O'Fallon. IL 62269 Fax: 314-925-5897 with a copy to: Peter C. Bazos, Esq. Bazos,Freeman,Kramer,Schuster &Braithwaite,LLC 1250 Larkin Avenue, Suite 100 Elgin,Illinois 60123 Fax 847-742-9777 Any such notices may be sent by (a) certified mail, return receipt requested, in which case notice - 19 - shall be deemed delivered on the date of deposit, postage prepaid in the U.S. mail or (b) a nationally recognized overnight courier, in which case notice shall be deemed delivered on the date of deposit with such courier or(c) by facsimile transmission to the parties at the facsimile numbers set forth above followed the same day with the mailing of a copy of such notice,by regular mail,to the parties at the foregoing addresses, in which case notice shall be deemed delivered upon electronic verification that transmission to the recipient was completed or(d) by personal delivery. The above addresses and facsimile numbers may be changed by notice to the other party;provided that no notice of a change of address or facsimile number shall be effective until actual receipt of such notice. Notice on behalf of any party may be given by such party or its counsel to the other party and/or its counsel. 14. Interpretation. This Agreement shall be construed, and the rights and obligations of the City and the Developer hereunder shall be determined in accordance with the laws of the State of Illinois without reference to its conflict of laws rules. 15. Relationship of the Parties. This Agreement shall not be deemed or construed to create an employment,joint venture,partnership or other agency relationship between the parties hereto. 16. Failure to Enforce Provisions. The failure by a party to enforce any provision of this Agreement against the other party shall not be deemed a waiver of the right to do so thereafter. 17. Amendments. This Agreement may be modified or amended only in writing signed by both parties hereto,or their permitted successors or assigns as the case may be. -20- 18. Entire Agreement. This Agreement contains the entire agreement and understandings of the parties hereto with respect to the subject matter as set forth herein,all prior agreements and understandings having been merged herein and extinguished hereby. 19. Joint and Collective Work Product. This Agreement is and shall be deemed and construed to be a joint and collective work product of the City and the Developer, and, as such, this Agreement shall not be construed against the other party, as the otherwise purported drafter of same, by any court of competent jurisdiction in order to resolve any inconsistency, ambiguity,vagueness or conflict, if any,in the terms and provisions contained herein. 20. Assignment. (a) This Agreement shall be binding on the parties hereto and their respective successors, successors in title, grantees and assigns and shall run with the land. A memorandum of this Agreement shall be recorded by the City against the title of the Subject Property. This Agreement and the obligations herein may not be assigned without the express written consent of each of the parties hereto, which consent may be withheld at the sole discretion of either of the parties hereto. Notwithstanding the foregoing, upon completion of the Subject Redevelopment, the Developer may assign its rights hereunder to any successor owner of the Subject Property, which assignee shall have and enjoy all of the rights of the Developer hereunder. In the event Developer assigns this Agreement advance written notice of such assignment shall be provided to the City. Any such assignment shall expressly provide that the assignee shall comply with all terms and requirements of this Agreement. (b) An "assignment" shall not be deemed to have occurred on the part of the Developer if the Developer elects to have title to the Subject Property taken and held by a single -21 - purpose entity owned and / or controlled by the Developer or by the Developer's affiliates, principals and/or investors. 21. No Conflicting Interests. In compliance with 50 ILCS 105/3.1, Developer shall provide the City with a written statement subscribed by an owner, authorized trustee, corporate official, or managing agent of the Developer, under oath, disclosing the identity of every person having an interest, real or personal, in the Developer and every equity owner entitled to receive more than seven and one/half(7V2%)percent of the total distributable income of the Developer. 22. Indemnification. To the fullest extent permitted by law, Developer agrees to and shall indemnify, defend and hold harmless, the City, its officials, officers, employees, attorneys, agents, boards and commissions from and against any and all claims, suits, judgments, costs, attorney's fees, damages or other relief, including but not limited to workers' compensation claims, in any way resulting from or arising out of or alleged to be resulting from or arising out of the negligent actions or omissions of the Developer in connection herewith, including negligent acts or omissions of Developer's employees, agents, contractors or subcontractors in the performance of the redevelopment work contemplated by this Agreement, or in any way resulting from or arising out of or alleged to be resulting from or arising out of any violation and/or breach of law by the Developer or its employees or agents. In the event of any action against the City, its officials, officers, employees, agents, attorneys, boards or commissions covered by the foregoing duty to indemnify, defend and hold harmless, such action shall be defended by legal counsel of the City's choosing. The provisions of this Section shall survive any termination,completion and/or expiration of this Agreement. 23. No Liability. No past, present or future elected or appointed official, officer, employee, attorney, agent or independent contractor of the City shall be charged personally or -22 - held contractually liable under any term or provision of this Agreement including,but not limited to,because of their negotiation,approval,execution or attempted execution of this Agreement. 24. Reports. Developer agrees to and shall provide to the City written reports on the status of the Subject Redevelopment of the Subject Property. Such written reports shall be provided to the City on a quarterly basis following the entry into this Agreement and shall continue for five (5)years after the Completion Date. 25. Easement to City. As of the date of this Agreement there exists on the roof of the Elgin Tower Building, through prior agreement between the City and the current or prior owner of said Elgin Tower Building, two (2) Elgin Police Department surveillance cameras and associated electronic equipment. The City desires to install (i) two (2) additional Elgin Police Department surveillance cameras and associated electronic equipment and (ii) up to three (3) dish-type communication antennae on the roof (the two existing and two proposed additional cameras and associated electronic equipment, and the three dish-type communication antennae being collectively the "Elgin PD Surveillance Equipment"). In consideration of the Subject Monetary Development Assistance, but subject to the Tax Qualification set forth below, the Developer, for itself and its successors in interest to the ownership of the Subject Property, hereby grants to the City(i) an easement ("Surveillance Easement") for the term commencing with the date of Developer's (or its affiliate's) acquisition of title to the Subject Property and continuing for the entire remainder of the Redevelopment Term, to operate, maintain, repair and replace the Elgin PD Surveillance Equipment in its current location, and in such additional locations the two additional cameras and associated equipment are located on the roof, and (ii) reasonable access through the common areas of the Elgin Tower Building to gain access to the Elgin PD Surveillance Equipment in exercise of its Surveillance Easement rights. The -23 - Developer further agrees to provide and allow the City continued use of the common electricity account for the building, as same may be altered during the Subject Redevelopment, for the purpose of providing power to the Elgin PD Surveillance Equipment. The City agrees to indemnify and hold the Developer and its successor owners of the Elgin Tower Building (collectively the "Owners") harmless from and against any liability, loss, cost, damages or expenses asserted against or incurred by the Owners and arising out of or in connection with the exercise by the City of its Surveillance Easement Rights. The City may not assign or transfer to any third party all or any part of the City's Surveillance Easement rights. Notwithstanding the foregoing, the installation of the Elgin PD Surveillance Equipment shall be provided for or limited such that neither the Developer or its affiliate will be prejudiced in connection with qualifying for federal or State of Illinois historic preservation or rehabilitation tax credits or other incentives as administered by the United States National Park Service in cooperation with the State of Illinois, nor would the amount of such credits and incentives be reduced as a result of the existence of such Elgin PD Surveillance Easement. [SIGNATURE PAGE FOLLOWS] -24- IN WITNESS WHEREOF, the parties hereto have entered into and executed this Agreement on the date and year first written above. CITY OF ELGIN, a municipal Corporatio ll By _��44PIffii_ " Ma Att: • ity Clerk CAPSTONE DEVELOPMENT GROUP, L.L.C. A Missouri limited liability company /6a • ✓ewe • By: Name: William L. Luchini Title: Member EXHIBIT A LEGAL DESCRIPTION OF SUBJECT PROPERTY PARCEL ONE: That part of Lots 3 and 4 In Block 19 of the Original Town of Elgin on the East side of Fox River, described as follows: Beginning at the Southeast corner of said Lot 4; thence North along the East line of said lot, 60 feet; thence West at right angles to said East line, 66 feet to the West line of said lot; thence Southwesterly at right angles to the Easterly line of River Street to the Westerly line of said Lot 3; thence Southerly Along said Westerly line and along the Westerly line of Lot 4 aforesaid to the South line of said Lot 4;thence East along the South line of said lot, 49.5 feet to the point of beginning, in the City of Elgin,Kane County,Illinois. PARCEL TWO: That part of Lot 3 in Block 19 of the Original Town of Elgin on the East aide of Fox River, described as follows; Beginning at a point on the westerly line of Lot 3 aforesaid, 44 feet Southerly from the Northwest corner thereof; thence Southerly along the Westerly line of said lot, 53 feet and 8 inches to the Northerly line of the lot conveyed to the Home National Bank of Elgin by deed dated June 3, 1890, and recorded June 17, 1890 as document 30468, in.book 266, page 115; thence Easterly at right angles to the Easterly line of River Street, 19 foot 9 inches to the East line of said Lot 3; thence North along said East line to a point therein from which a line drawn at right angles to the Easterly line of River Street would intersect the place of beginning; thence Westerly at right angles to River Street and along said line 60 feet and 2 inches to the point of beginning, in the City of Elgin,Kane County,Illinois PARCEL THREE: The North 21 feet of the South 81 feet of Lot 4,(measured on the East line of said lot)in Block 19 of the Original Town of Elgin on the East side of Fox River,in Section 14,Township 41 North,Range 8 East of the Third Principal Meridian,in the City of Elgin,Kane County,Illinois. Common Address: 100 East Chicago Street,Elgin,IL PIN: 06-14-283-018 -26 - EXHIBIT B COMPLETION GUARANTY GUARANTY OF COMPLETION THIS GUARANTY OF COMPLETION (this "Guaranty") is dated as of , 2015 by [NAME OF TITLE HOLDING ENTITY] ("Owner") and Capstone and CAPSTONE DEVELOPMENT GROUP, L.L.C., a Missouri limited liability company (hereinafter referred to as "Developer") (with Owner and Developer being collectively called the "Guarantor"),jointly and severally for the benefit of CITY OF ELGIN,ILLINOIS, an Illinois municipal corporation, its successors and assigns("City"). RECITALS: A. City has agreed to provide to Owner and / or Developer the principal amount of Four Million Seven Hundred Thousand and No/100 Dollars ($4,700,000.00) of monetary development assistance (the "Subject Monetary Development Assistance") for the redevelopment of the Elgin Tower Building, all as more particularly described in that certain Redevelopment Agreement dated October , 2014 between the City and the Developer (as amended from time to time, "RDA") between Guarantor and City, the terms and provisions of which are incorporated herein by reference. All capitalized terms used but not otherwise defined herein shall have the meanings set forth in the RDA. B. As a condition precedent to City's extension of the Subject Monetary Development Assistance to Guarantor and in consideration therefor, City has required the execution and delivery of this Guaranty by Guarantor. C. Each party comprising the "Guarantor" will be directly benefited by the Subject Monetary Development Assistance and, by reason thereof,has agreed to execute and deliver this Guaranty to City. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged,each Guarantor hereby agrees as follows: 1. Performance Guaranty. (a) Guarantor absolutely, unconditionally and irrevocably undertakes and guarantees, for the benefit of City, that all construction obligations of the Developer for completion of the Subject Redevelopment in accordance with the Subject Redevelopment Plans, and with all Required Permits, shall be substantially completed prior to the applicable Completion Date specified in the RDA (subject to such extension by reason of Force Majeure as provided for therein) and in accordance with the other terms and conditions contained in the RDA (collectively referred to herein as the Developer's"Construction Obligations"). (b) Upon the occurrence of an Event of Default by the Developer its Construction Obligations,. Guarantor shall indemnify, defend and hold City harmless from and against any and all loss, damage, cost, expense, injury or liability City may suffer or incur in connection with the actions the City may reasonably take to cause the Subject Redevelopment to be completed. Without limiting the generality of the foregoing, it is acknowledged and agreed that if Guarantor fails to commence and pursue diligently the performance of the Construction Obligations within fifteen (15) days after its receipt of a notice from City (a "Demand Notice") to do so, then, either before or after pursuing any other remedy of City against Guarantor, and regardless of whether City shall ever pursue any such other remedy, City shall have the right to complete the Construction Obligations, or call upon any other reputable parties to complete the Construction Obligations, in accordance with the Subject Redevelopment Plans, and shall have the right to expend such sums as City in its discretion deems proper in order so to complete the Construction Obligations. During the course of any construction undertaken by City or by any other party on behalf of City, Guarantor shall pay on demand any amounts due to the Contractor, Subcontractors and other material suppliers and for permits and licenses necessary to complete the Construction Obligations, without regard to any limitation on liability set forth herein. City at any time may require the Guarantor to perform or supervise the performance of such work in lieu of City or any party engaged by City. (c) For purposes of this Section 1, the Construction Obligations shall be deemed to be substantially completed as set forth in the RDA; provided, however, that following the occurrence of an Event of Default by Guarantor and the enforcement by the City of its rights under this Guaranty, substantial completion shall require certification as such from a qualified architect selected by the City. 2. Continuing Guaranty. Each Guarantor agrees that performance of his covenants of guaranty to the City as set forth herein shall be a primary obligation, shall not be subject to any set-off, abatement, deferment or defense based upon any claim that Guarantor may have against any third party, and shall remain in full force and effect without regard to, and shall not be released, discharged or affected in any way by, any circumstance or condition(whether or not Guarantor shall have any knowledge thereof),including without limitation: (a) any voluntary or involuntary bankruptcy, insolvency, reorganization, arrangement, readjustment, assignment for the benefit of creditors, composition, receivership, liquidation, marshalling of assets and liabilities or similar events or proceedings with respect to either the Owner or the Developer,as applicable,or any of their respective property or creditors,or any action taken by any trustee or receiver or by any court in any such proceeding; (b) any merger or consolidation of either the Owner or the Developer,as applicable, into or with any entity, or any sale, lease or transfer of any of the assets of either the Owner or the Developer,as applicable,to any other person or entity; (c) any change in the ownership of either the Owner or the Developer, as applicable, or any change in the relationship between either the Owner or the Developer, as applicable„ or any termination of any such relationship; (d) any release or discharge by operation of law of either the Owner or the Developer, as applicable,from any obligation or agreement contained in the RDA; or (e) any other occurrence, circumstance, happening or event, whether similar or dissimilar to the foregoing and whether foreseen or unforeseen, which otherwise might constitute a legal or equitable defense or discharge of the liabilities of a guarantor or surety or which otherwise might limit recourse against either the Owner or the Developer to the fullest extent permitted by law. Notwithstanding the foregoing, a default by the City of its covenants and obligations under the RDA shall be a defense available to the Guarantor of any enforcement action brought by the City to enforce this Guaranty. 3. Enforcement Costs. In any action or proceeding between the Guarantor (or either of them) and the City arising under or in connection with this Guaranty or the breach or enforcement hereof, the prevailing party in such action shall be entitled to recover its/their fees, costs and expenses thereby incurred, including, without limitation, reasonable attorney's fees, court costs and filing fees (all of which are referred to herein as "Enforcement Costs"), in addition to all other amounts due hereunder. 4. Successors and Assigns; Joint and Several Liability. This Guaranty shall inure to the benefit of City and its successors and assigns. This Guaranty shall be binding on Guarantor and the heirs, legatees, successors and assigns of Guarantor. If this Guaranty is executed by more than one person, it shall be the joint and several undertaking of each of the undersigned. Regardless of whether this Guaranty is executed by more than one person, it is agreed that the undersigned's liability hereunder is several and independent of any other guarantees or other obligations at any time in effect with respect to Guarantor's Obligations or any part thereof and that Guarantor's liability hereunder may be enforced regardless of the existence, validity, enforcement or non-enforcement of any such other guarantees or other obligations. 5. No Waiver of Rights. No delay or failure on the part of City to exercise any right,power or privilege under this Guaranty or any of the other RDA shall operate as a waiver thereof, and no single or partial exercise of any right,power or privilege shall preclude any other or further exercise thereof or the exercise of any other power or right, or be deemed to establish a custom or course of dealing or performance between the parties hereto. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law. 6. Modification. The terms of this Guaranty may be waived, discharged, or terminated only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. No amendment, modification, waiver or other change of any of the terms of this Guaranty shall be effective without the prior written consent of City. 7. Severability. If any provision of this Guaranty is deemed to be invalid by reason of the operation of law, or by reason of the interpretation placed thereon by any administrative agency or any court,Guarantor and City shall negotiate an equitable adjustment in the provisions of the same in order to effect, to the maximum extent permitted by law, the purpose of this Guaranty and the validity and enforceability of the remaining provisions, or portions or applications thereof, shall not be affected thereby and shall remain in full force and effect. 8. Applicable Law. This Guaranty is governed as to validity, interpretation, effect and in all other respects by laws and decisions of the State of Illinois. [ • 9. Notice. All notices, communications and waivers under this Guaranty shall be in writing and shall be sent as follows: To City: City of Elgin, Illinois Attn: Richard Kozal,Assistant City Manager 150 Dexter Court Elgin, Illinois 60120 Fax: 847-931-5610 With a copy to: City of Elgin, Illinois Attn: William A. Cogley, Corporation Counsel 150 Dexter Court Elgin,Illinois 60120 Fax: 847-931-5665 to Guarantor: Capstone Development Group,LLC and [Name of Title Holding Entity] Attn: William L.Luchini 326 Coyote Crest Lane Augusta, MO 63332 Fax: 314-925-5897 with a copy to: Bazos, Freeman, Kramer, Schuster & Braithwaite, LLC Attn: Peter C. Bazos,Esq. 1250 Larkin Avenue, Suite 100 Elgin,Illinois 60123 Fax: 847-742-9777 Any such notices may be sent by(a)certified mail, return receipt requested, in which case notice shall be deemed delivered on the date of deposit, postage prepaid in the U.S. mail or (b) a nationally recognized overnight courier, in which case notice shall be deemed delivered on the date of deposit with such courier or (c) by facsimile transmission to the parties at the facsimile numbers set forth above followed the same day with the mailing of a copy of such notice, by regular mail, to the parties at the foregoing addresses, in which case notice shall be deemed delivered upon electronic verification that transmission to the recipient was completed or (d) by personal delivery. The above addresses and facsimile numbers may be changed by notice to the other party;provided that no notice of a change of address or facsimile number shall be effective until actual receipt of such notice. Notice on behalf of any party may be given by such party or its counsel to the other party and/or its counsel. 10. CONSENT TO JURISDICTION. TO INDUCE CITY TO ACCEPT THIS GUARANTY, EACH GUARANTOR IRREVOCABLY AGREES THAT, SUBJECT TO CITY'S SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY ARISING OUT OF OR RELATED TO THIS GUARANTY WILL BE LITIGATED IN COURTS HAVING SITUS IN KANE COUNTY, ILLINOIS, OR, IF FEDERAL JURISDICTION IS APPLICABLE, IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, SITUATED IN CHICAGO, ILLINOIS. EACH GUARANTOR HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF THE AFORESAID COURTS. 11. WAIVER OF JURY TRIAL. GUARANTOR AND CITY (BY ACCEPTANCE HEREOF), HAVING BEEN REPRESENTED BY COUNSEL, EACH KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS GUARANTY OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH AND AGREES THAT ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. GUARANTOR AGREES THAT IT WILL NOT ASSERT ANY CLAIM AGAINST CITY ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES. IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date first above written. CAPSTONE DEVELOPMENT GROUP,L.L.C. A Missouri limited liability company By: Name: William L. Luchini Title: Member AND BY: [NAME OF TITLE HOLDING ENTITY] A limited liability company By: Name: Title: • ILLINOIS This space reserved for Recorder's use only