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HomeMy WebLinkAboutG28-19 Ordinance No. G28-19 AN ORDINANCE APPROVING AN AMENDMENT TO THE REDEVELOPMENT AND FINANCING AGREEMENT FOR THE CITY OF ELGIN BLUFF CITY QUARRY TIF DISTRICT WHEREAS, the City of Elgin has previously created the Bluff City Quarry TIF District pursuant to Ordinance Numbers S4-11, S5-11 and S6-11 adopted on May 11, 2011; and WHEREAS,on June 13,2012,the City Council of the City of Elgin approved Ordinance No. G35-12,providing for the approval of a Redevelopment and Financing Agreement between the City of Elgin and Gifford 300, LLC, an Illinois limited liability company as Owner, and Bluff City Materials,Inc.,an Illinois corporation as Developer,which relates to the redevelopment of a portion of the Bluff City Quarry TIF District (hereinafter referred to as the "Subject Redevelopment and Financing Agreement"); and WHEREAS, the parties to the Subject Redevelopment and Financing Agreement have determined that it is in their mutual and respective best interests to amend the agreement by removing the various references and provisions for developer notes and to provide for the payment and reimbursement of Gifford 300 TIF eligible expenses through more straightforward contract provisions in the subject agreement. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS, in the exercise of its home rule powers. as follows: Section 1. That the amendment to the Redevelopment and Financing Agreement between the City of Elgin,Gifford 300,LLC and Bluff City Materials,Inc.,be and is hereby approved,a copy of such amendment being attached hereto. Section 2. That Mayor, David J. Kaptain, and City Clerk, Kimberly Dewis, be and are hereby authorized and directed to execute such amendment to the Redevelopment and Financing Agreement. Section 3. That all ordinances or parts of ordinance in conflict with the provisions of this ordinance be and are hereby repealed to the extent of any such conflict. Section 4. That this ordinance shall be in full force and effect upon its passage and publication in the manner provided by law. 41 / . David J. Kaptain, Ma or Presented: July 10, 2019 Passed: July 10, 2019 Omnibus Vote: Yeas: 9 Nays: 0 Recorded: July 10, 2019 Published: July 12, 2019 Attest: T, y.`t)FC , L../ Aeoeb8 Kimberly Dewis, ' y Clerk =, r,,,,,,ti �IjE .,.. „...„....____ . ,,,,,_,2 1 AMENDMENT TO REDEVELOPMENT AND FINANCING AGREEMENT This Amendment to Redevelopment and Financing Agreement (the "Amendment Agreement")is dated as of this 10th day of July,2019,by and between the City of Elgin,an Illinois municipal corporation (the "City"), Gifford 300, LLC, an Illinois limited liability company (the "Owner"), and Bluff City Materials, Inc., an Illinois corporation(the "Developer"). WITNESSETH: WHEREAS, the City, the Owner and the Developer previously entered into a Redevelopment and Financing Agreement dated June 13, 2012 (the "Subject Agreement"); and WHEREAS, the Subject Agreement provides for the City to pay or reimburse to the Developer for specified amounts of Gifford 300 TIF-Eligible Costs as defined therein relating to the redevelopment of the Owner and Developer Subject Property defined therein; and WHEREAS, the Subject Agreement concurrently provides that the TIF reimbursements paid by the City to the Developer shall be paid through the Developer Notes as defined therein; and WHEREAS, the City, the Owner and the Developer have agreed that it is in their mutual and respective best interests to amend the Subject Agreement by removing the various references and provisions for Developer Notes and to provide for the payment and reimbursement of Gifford 300 TIF-Eligible Costs through more straightforward contract provisions in the Subject Agreement. NOW, THEREFORE, the City, the Owner and the Developer, in consideration of the mutual undertakings as set forth herein, and the mutual undertakings as set forth in the Subject Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby agree as follows: 1. That the foregoing recitals are incorporated into this Amendment Agreement. 2. That the Subject Agreement be and is hereby amended as follows: A. Section 1 entitled "Recitals, Definitions and Interpretive Clarifications" is hereby amended by deleting therefrom the following defined terms: "Approved Note Indebtedness"; "Bond Counsel"; "Bonds" or "Developer Bonds"; "Net Bond Proceeds"; "Tax-Exempt Note Interest Rate"; and "Taxable Note Interest Rate". B. Section 1 of the Subject Agreement entitled "Recitals, Definitions and Interpretive Clarifications" is hereby further amended by adding or amending (as the case may be) the following definitions so as to read as follows: "Approved Indebtedness"means the aggregate of all such Certificates of Expenditure from time to time approved by the City. "Note(s)" or"Developer Note(s)" shall have the meaning as set forth in Section 5 below. "Note Ordinance" shall have the meaning as set forth in Section 5 below. "TIF Obligations" means the principal amount and any interest the City has agreed to pay or reimburse the Developer for Gifford 300 TIF-Eligible Costs as provided in Sections 4, 5 and 7 of this Agreement." C. Section 4 of the Subject Agreement entitled "Reimbursement of Redevelopment Project Costs" is hereby amended by amending subparagraphs, B, D and E thereof to read as follows: "B. Notwithstanding the actual amount expended by the Developer for Gifford 300 TIF-Eligible Costs, the maximum amount of such costs which are subject to payment or reimbursement by the City from the TIF Revenue Stream from the Subject Property shall not exceed the aggregate of (i) Thirteen Million Five Hundred Thousand Dollars ($13,500,000), plus (ii) a maximum of Eight Million One Hundred Thousand Dollars ($8,100,000)or such smaller amount as may be determined in accordance with Section 5C below, plus (iii) interest as herein provided." "D. Interest on the Certificates of Expenditure approved by the City will accrue at a rate of six percent (6%) per annum (computed on the basis of a 360 day year of twelve thirty day months). All such interest will accrue and be calculated as simple interest and will begin to accrue as of the date a Certificate of Expenditure is approved by the City.." The City shall make annual payments to Developer on approved Certificates of Expenditure on January 1 of each year until paid,subject to sufficient TIF Revenue Stream from the Subject Property to be deposited in the Sub-Staff Gifford 300 account as provided in Section 7 and 12 of this Agreement. Deferred accrued interest shall itself not bear interest. Payments by the City to the Developer for approved Certificates of Expenditure shall be applied first to any outstanding principal amount of an approved Certificate of Expenditure and then to any accrued interest. "E. It is the obligation of the City pursuant to this Agreement to pay or reimburse the Developer for Gifford 300 TIF-Eligible Costs up to Developer Reimbursement Amount plus interest, with such reimbursement to be made from the portion of the TIF Revenue Stream from the Subject Property to be deposited into the Sub-STAF Gifford 300 Account subject to the limitations and provisions of this Agreement. The City's obligations shall include, without limitation, (i) the reimbursement to the Developer of Gifford 300 TIF- Eligible Costs from a portion of the TIF Revenue Stream from the Subject Property, as provided in Section 7, and/or from other revenue sources, if any, as provided in Section 12B." D. Section 5 of the Subject Agreement entitled "Calculation of Developer Reimbursement Amount: 2012A and Subordinate Notes" is hereby amended in its entirety to read as follows: 2 "SECTION 5 CALCULATION OF DEVELOPER REIMBURSEMENT AMOUNT A. The City agrees to reimburse the Developer Gifford 300 TIF-Eligible Costs of up to Thirteen Million Five Hundred Thousand Dollars($13,500,000),plus additional Gifford 300 TIF-Eligible Costs as provided in subparagraph B of this section. B. The City further agrees to reimburse Developer additional Gifford 300 TIF-Eligible Costs in an amount not to exceed Eight Million One Hundred Thousand Dollars ($8,100,000), or such smaller amount as may be determined in accordance with the following: If the projected unleveraged internal rate of return ("IRR") ("unleveraged" is defined to include a return calculation based upon the entire amount of Project costs without respect to equity and debt components) of the Project at the time of the first Request for Issuance which requests approval of additional Gifford 300 TIF-Eligible Costs exceeding the total amount of Thirteen Million Five Hundred Thousand Dollars ($13,500,000) is greater than ten percent (10%), then the amount of the additional Certificate of Expenditures to be approved by the City will be reduced dollar-for-dollar below Eight Million One Hundred Thousand Dollars ($8,100,000) until a ten percent (10%) unleveraged IRR is reached. The methodology used to calculate the unleveraged IRR for this calculation will be in the same methodology as calculated in the"gap"analysis as shown in Exhibit G attached hereto. As of the date of the issuance, actual costs and revenues will be used to the extent known and a mutually agreed upon assumptions will be used from that point forward. For example, if the unleveraged IRR is projected to be eleven percent (11%), the amount of the additional Certificates of Expenditures to be approved by the City in excess of Thirteen Million Five Hundred Thousand Dollars ($13,500,000) would be reduced to the extent necessary to cause the projected IRR to be reduced to 10%, and so on. To the extent that capitalization rates are used to calculate IRR,these rates will be derived from forecasted Chicago regional terminal cap rate data as reported in the most recent available edition of Real Estate Research Corporation's quarterly "Real Estate Report." If this publication is not available at the time of calculation, a similar publication may be substituted. The Developer shall be responsible for the payment of any City audit or professional service costs related to the calculation and substantiation of the IRR calculation described above. C. Notwithstanding anything to the contrary in this Agreement, it is agreed and understood that the City's approval of Certificates of Expenditure and the City's agreement to pay or reimburse the Developer Gifford 300 TIF-Eligible Costs or prior Gifford 300 TIF-Eligible Costs,and any interest thereon as provided herein,and any Note(s)hereinafter issued by the City pursuant to Section 5D hereof(TIF Obligations) shall not be general obligations of the City and shall be non-recourse as to the City, and instead, shall be a special limited obligation of the City payable solely and only from the portion of the TIF Revenue Stream from the Subject Property to be deposited into the Sub-STAF Gifford 300 Account, and that the all payments to be made by the City shall come exclusively from, 3 and be dependent upon and wholly subject to receipt by the City of (i) sufficient TIF Revenue Stream from the Subject Property to be deposited into the Sub-STAF Gifford 300 Account pursuant to this Agreement and (ii) subject to the provisions of Section 22 and other applicable requirements of law, other revenues as described in Section 12 hereof, if any. It is further agreed and understood that the TIF Obligations shall not constitute an indebtedness of the City or a loan of credit thereof within the meaning of any statutory or constitutional provision." D. At the request of the Developer,the City agrees that it shall deliver to the Developer a promissory note (each a "Note" or "Developer Note") payable by the City to the Developer in the amount of any then outstanding and unpaid Approved Indebtedness,with the form of such Note to be as reasonably determined by the City shall in a City ordinance ("Note Ordinance") as then adopted by the City. The interest, and the payment terms, conditions and limitations of any such Note(s) shall be consistent with those same provisions as contained in this Agreement. Notwithstanding the foregoing, the Developer shall not request the issuance of a Note more than twice in any consecutive twelve-month period, and no such Note shall be in a principal amount of less than one hundred thousand dollars ($100,000.00). Each Note issued by the City(if any) shall replace and cancel the Certificate of Expenditure(s) to the extent that the Approved Indebtedness thereby represented has been incorporated in to any such Note(s). The Note(s)may be(i)assigned or pledged by the Developer as collateral to a senior lender, to an Accredited Investor or the Owner. The Developer may also transfer the Note(s) at any time to (i) any entity controlling, controlled or under common control with Developer or(ii) any entity in which the majority equity interest is owned by the parties that have a majority equity interest in Developer (in either case an "Affiliate"). Developer agrees and shall pay when due all costs and fees to the City's bond counsel or other outside counsel retained by the City and any other costs or fees incurred by the City in connection with the Note(s), including, but not limited to, for the review, drafting or issuance of such Note(s). Such costs and fees paid by the Developer shall be considered Gifford 300 TIF eligible expenses. E. Section 6 of the Subject Agreement entitled "Certificates of Expenditure: Required Supporting Documentation" is hereby amended by amending the introductory paragraph thereof to read as follows: "Each Request for Issuance submitted by the Developer to the City requesting a Certificate of Expenditure shall be for a minimum amount of Two Hundred Fifty Thousand Dollars ($250,000)of Gifford 300 TIF-Eligible Costs,and(other than with respect to a Request for Issuance submitted with respect to the Prior Gifford 300 TIF-Eligible Costs as described in Section 6B below, which may be submitted by the Developer at any time), shall be submitted to the City no more frequently than quarterly. (Such quarterly limitation shall also not apply to any resubmission of a Request for Issuance submitted to correct a Defective Request for Issuance as described in Section 6G below.) The aggregate of(i)all such Certificates of Expenditure from time to time approved by the City plus(ii) all Notes issued by the City shall sometimes herein be referred to as the "TIF Obligations"." 4 F. Section 6 of the Subject Agreement entitled "Certificates of Expenditure: Required Supporting Documentation" is hereby further amended by amending subparagraph H thereof by deleting therefrom the phrase "to ultimately become incorporated as part of the Approved Note Indebtedness". G. Section 7 of the Subject Agreement entitled "Allocation of TIF Revenue Steam From the Subject Property: Application of Amounts on Deposit" is hereby amended by amending subparagraph G thereof by deleting therefrom the phrase "or in the Note Ordinance;". H. Section 8 of the Subject Agreement entitled "Issuance of Bonds" is hereby deleted in its entirety from the Agreement. I. Section 9 of the Subject Agreement entitled "Special Assessments: Impact Fees" is hereby amended to read as follows: "The City agrees that it will not, without Developer's prior written consent, make or create any special assessment against the Subject Property or charge any impact fees not currently contained within the City Code against the Subject Property during the term of this Agreement. The foregoing sentence shall not apply and City or County impact fees that are generally applicable to all properties within such political jurisdiction that are similarly situated." J. Section 18 of the Subject Agreement entitled "Events of Default and Remedies" is hereby amended by amending subparagraph B(iii) thereof by deleting the references therein to "Bond holders" or "Bonds". K. Section 22 of the Subject Agreement entitled "No Private Payments" is hereby deleted in its entirety from the Agreement. L. Exhibit C to the Subject Agreement providing for the Note Ordinance is hereby deleted in its entirety from the Agreement. 3. That upon entry into this Amendment Agreement it is agreed that the City will repeal Ordinance No. S8-13, such ordinance relating to the 2012A Note and the Subordinate Note. 4. In the event of any conflict between the terms and provisions of this Amendment Agreement and the terms and provisions of the Subject Agreement, the terms of this Amendment Agreement shall supersede and control. 5. That except as amended in this Amendment Agreement, the Subject Agreement shall remain in full force and effect. [signature page follows] 5 IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be executed on the day and year first written above. The City of Elgin An Illinois municipal corporation B 7 i y�, David J. tai , Mayor Atte b- dr, 4 Kimberly Dewis, - Clerk Gifford 300,LLC An Illinois limited liability company By: Na Namet Je he, , Title: ma 016-1 tr Bluff City Materials,Inc. An Illinois corporation -- Nar�l�e - e o. A'. l''r•1 Title: V P F:\Legal Dept\Agreement\Bluf City TIF-Amend Agr-Gifford 300-BluffCityMat-RedevelopFinancAgr-clean 7-2-I8.docx 6