Loading...
HomeMy WebLinkAbout00-90 Resolution No. 00-90 RESOLUTION AUTHORIZING EXECUTION OF A DEVELOPMENT AGREEMENT WITH ELGIN DEVELOPMENT COMPANY, L.L. 0 (164 and 166 East Chicago Street) . BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Ed Schock, Mayor, and Dolonna Mecum, City Clerk, be and are hereby authorized and directed to execute a Development Agreement on behalf of the City of Elgin with Elgin Development Company, L.L. C. for the development of the Leath Building at 164 and 166 East Chicago Street, a copy of which is attached hereto and made a part hereof by reference . s/ Ed Schock Ed Schock, Mayor Presented: April 12 , 2000 Adopted: April 12 , 2000 Omnibus Vote : Yeas 6 Nays 0 Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk DEVELOPMENT AGREEMENT This agreement made and entered into this 12th day of April , 2000, by and between the CITY OF ELGIN, an Illinois municipal corporation, (hereinafter referred to as the "City" ) , ELGIN DEVELOPMENT COMPANY, L.L.C. , an Illinois limited liability company, (hereinafter referred to as "Developer" ) WITNESSETH WHEREAS, Developer is the developer of the property consisting of the buildings located at 164 East Chicago Street and 166 East Chicago Street, Elgin, Illinois, such property being legally described in Exhibit A attached hereto (hereinafter referred to as the "Subject Property" ) ; and WHEREAS, Developer, after consultations and negotiations with the City concerning certain development assistance, has determined to proceed with the redevelopment of the Subject Property; and WHEREAS, Developer' s proposed redevelopment of the Subject Property is currently estimated to represent a 2 . 3 million dollar investment resulting in the creation of approximately 16, 000 square feet of office and/or retail space; and WHEREAS, it is unlikely that such redevelopment of the Subject Property will occur in the absence of limited economic assistance; and WHEREAS, in order to provide for the continued redevelopment of the City including the redevelopment of the Subject Property and the ongoing redevelopment of the center city area the City has agreed to provide certain development assistance; and WHEREAS, the redevelopment of the Subject Property will result in an increase in the City' s tax revenues and an increase in the tax revenues to other local taxing districts; and WHEREAS, the Subject Property is one of the predominate sites in the center city area and the redevelopment of the Subject Property will likely result in the stimulation of further redevelopment and improvements in the center city area; and WHEREAS, the redevelopment of the Subject Property will result in approximately 50 to 100 new employment opportunities in the center city area; and WHEREAS, the City of Elgin is a home rule unit authorized to exercise any power and perform any function relating to its government and affairs; and WHEREAS, the development assistance resulting in significant increases in the City' s tax base, spurring additional redevelopment and creating additional employment opportunities in the center city area are matters within the government and affairs of the City of Elgin. NOW, THEREFORE, for and in consideration of the mutual promises and undertakings contained herein, and other -2- good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows : 1 . That the foregoing recitals are incorporated in this agreement in their entirety. 2 . That the Developer agrees to commence construction and redevelopment of the Subject Property within ninety (90) days hereof which in general shall consist of the complete renovation and redevelopment of the existing commercial buildings on the Subject Property resulting in the creation of approximately 16, 000 square feet of new office and/or retail space and to complete such renovation and redevelopment of the Subject Property with the renovations and improvements and according to the renderings in the document entitled "Revitalization of the Leath Building 164-166 East Chicago Proposal for Development Assistance March 2000" attached hereto as Exhibit B and pursuant to the plans and specifications previously submitted to the City of Elgin Department of Code Administration and Development Services prepared by Christus Design Group dated March 15, 2000 (such proposal attached hereto as Exhibit B and the plans and specifications prepared by Christus Design Group are hereinafter collectively referred to as the "Plans" ) , no later than September 30, 2001 (hereinafter referred to as the "Completion Date" ) , provided, however, that such Completion Date for the redevelopment of the Subject Property shall be extended by one day for each day of which construction is -3- delayed or stopped due to accident, strikes, shortages of material , extreme weather, acts of God, or other causes not within Developer ' s reasonable control . The Plans for the redevelopment of the Subject Property shall be amended as directed by the City if necessary to comply with ordinances, building codes or other requirements of law. 3 . That in consideration for the Developer' s undertaking of the redevelopment of the Subject Property and substantial investment in the center city area the City agrees to provide a Three Hundred Fifty-Eight Thousand Six Hundred Fifty Dollars ($358, 650) economic development grant to the Developer to be used by the Developer for improvements on the Subject Property. These funds shall be distributed to the Developer in four installments as follows : A. The first installment of One Hundred Sixty-One Thousand Three Hundred Ninety Dollars ($161, 390) shall be paid to the Developer when 4, 000 square feet of the new office or retail space of the Subject Property have been leased by tenants not currently occupying the Subject Property. B. The second installment of Sixty-Five Thousand Seven Hundred Fifty Dollars ($65, 750) shall be paid to the Developer when, including the space referenced in Paragraph A above, 8, 000 square feet of the new office or retail space of the Subject Property have been leased and occupied by tenants not currently occupying the Subject Property. -4- C. The third installment of Sixty-Five Thousand Seven Hundred Fifty Dollars ($65, 750) shall be paid to the Developer when, including the space referenced in Paragraphs A and B above, 12 , 000 square feet of the new office or retail space of the Subject Property have been leased and occupied by tenants not currently occupying the Subject Property. D. The fourth installment of Sixty-Five Thousand Seven Hundred Sixty Dollars ($65, 760) shall be paid to the Developer when the entire Subject Property (consisting of approximately 16, 000 square feet of the new office or retail space) has been leased and occupied by tenants not currently occupying the Subject Property. 4 . That notwithstanding anything to the contrary provided in this agreement, exterior facade improvements to the Subject Property shall be consistent with the City of E1 in s Center CityFacade Program Guidelines requi rements . g 5 . That in consideration of the development assistance being provided by the City, Developer does hereby covenant and agree to forever waive any right to claim or apply for any so-called "Enterprise Zone" abatement of any portion of the real estate taxes levied against the Subject Property. Developer does hereby further covenant and agree that for a period of five (5) years following the final payout pursuant to this Development Agreement not to contest, protest, object to or otherwise challenge any real estate taxes levied against the Subject Property including but not -5- . limited to the rate thereof or the assessed valuation of the Subject Property. 6 . That in consideration of the development assistance being provided by the City Developer does hereby covenant and agree that, with the sole exception of the co-op advertising funds available in the City' s e-elgin Incentive Program, the Developer shall not apply for and that the Subject Property shall not be eligible to obtain any further or additional grants or incentives from the City for the redevelopment or maintenance of the Subject Property, including but not limited to, any grants or incentives pursuant to the City' s Center City Facade Improvement Program or the City' s e-elgin Incentive Program. It is further agreed and understood that tenants of the Subject Property shall not be eligible to obtain grants or incentives for any improvements referenced in the Plans, including but not limited to any such grants or incentives pursuant to the City' s e-elgin Incentive Program. 7 . That in the event of any conflict between the terms of this agreement and the proposal for development assistance of March 2000 attached hereto as Exhibit B, the terms of this agreement shall control . 8 . That the Developer shall be permitted at its option to remove at its cost the City-owned utility pole presented located at the northeast corner of the Subject Property and to replace the light fixture currently mounted on such pole with a new fixture mounted on the building. All -6- costs associated with such work shall be the responsibility of P Y the Developer. The plans, specifications and other details associated with the removal of such utility pole, the placement of the new light fixture and other work related thereto shall be subject to the advance approval of the City. 9 . That Developer shall be permitted at its option to fill the sidewalk vault located on City property in front of the Subject Property on the south. Developer shall replace or repair any sidewalk removed or damaged in filling such sidewalk vault . All costs associated with the filling of the sidewalk vault, including but not limited to any replacement or repair of any sidewalks, shall be the sole responsibility of the Developer. The plans, specifications and other details associated with the filling of the sidewalk vault, any or replacement repair of any sidewalk and other work related P thereto shall be subject to the advance approval of the City. 10 . That the parties understand and agree that the economic development assistance being provided by the City to Developer as set forth herein is expressly contingent upon Developer' s redevelopment of the Subject Property as set forth herein. In the event the Developer fails to complete such redevelopment of the Subject Property on or before the Completion Date, as such date may be extended pursuant to the preceding Paragraph 2 , the parties understand and agree that Developer shall reimburse the City in full any funds distributed to the City under the economic development grant as provided for in the preceding Paragraph 3 . -7- 11 . That this agreement shall not be deemed or construed to create an employment, joint venture, partnership, or other agency relationship between the parties hereto. 12 . That all notices or other communications hereunder shall be made in writing and shall be deemed given if personally delivered or mailed by registered or certified mail , return receipt requested, to the parties at the following addresses, or at such other addresses for a party as shall be specified by like notice, and shall be deemed received on the date which said notice is hand delivered or the second business day following the date on which so mailed: TO THE CITY: City of Elgin 150 Dexter Court Elgin, Illinois 60120-5555 Attn: City Manager TO THE DEVELOPER: Elgin Development Company, L.L.C. 100 E. Chicago Street, Suite 305 Elgin, Illinois 60120 Attn: Neal Pitcher 13 . That 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. 14 . That 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 . 15 . That this agreement contains the entire agreement and understanding 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. -8- 16 . That 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 or provisions contained herein. 17 . That this agreement is subject to and shall be governed by the laws of the State of Illinois . 18 . That this agreement shall be binding on the parties hereto and their respective successors and permitted assigns . This agreement and the obligations herein may not be assigned without the express written consent of each of the parties hereto . IN WITNESS WHEREOF, the parties have entered into and executed this agreement on the date and year first written above . CITY OF ELGIN, a municipal ELGIN DEVELOPMENT COMPANY, corporation L.L.C. , an Illinois limited liability company By ;- ;e By Ed Schoc , Mayor Neal Pitcher, Manager Attest : 9414 Dolonna Mecum, Cit Clerk ELGINDEV. CO/RAGREE -9- EXHIBIT A Legal Description of Subject Property PARCEL ONE: THAT PART OF LOT 8 IN BLOCK 16 OF THE ORIGINAL TOWN OF ELGIN, ON THE EAST SIDE OF THE FOX RIVER, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE SOUTH LINE OF LOT 8 AFORESAID, 29 FEET EAST OF THE SOUTHWEST CORNER THEREOF; THENCE EAST ALONG SAID SOUTH LINE TO THE SOUTHEAST CORNER THEREOF; THENCE NORTH ALONG THE EAST LINE OF SAID LOT TO THE SOUTHWESTERLY LINE OF THE RIGHT OF WAY OF THE CHICAGO AND NORTHWEST RAILWAY COMPANY; THENCE NORTHWESTERLY ALONG SAID RIGHT OF WAY LINE TO THE SOUTH LINE OF AN ALLEY AS ESTABLISHED BY DEED TO THE CITY OF ELGIN, DATED MARCH 14, 1867 AND RECORDED APRIL 2, 1883, IN BOOK 178, PAGE 116, AS DOCUMENT 23342; THENCE WEST ALONG THE SOUTH LINE OF SAID ALLEY TO A POINT 29 FEET EAST OF THE WEST LINE OF SAID LOT 8; THENCE SOUTH TO THE POINT OF BEGINNING, IN THE CITY OF ELGIN, KANE COUNTY, ILLINOIS. PARCEL TWO: THE WEST 20 FEET OF LOT 9 IN BLOCK 16 OF THE ORIGINAL TOWN OF ELGIN, ON THE EAST SIDE OF FOX RIVER, IN THE CITY OF ELGIN, KANE COUNTY, ILLINOIS, EXCEPTING THAT PART CONVEYED TO THE GALENA AND CHICAGO UNION RAILROAD COMPANY (NOW CHICAGO AND NORTHWEST RAILWAY COMPANY) BY DEED DATED JULY 24, 1849 AND RECORDED AUGUST 10, 1849 IN BOOK 14, PAGE 431. • REVITALIZATION OF THE LEATH BUILDING I 164-166 EAST CHICAGO I I _ �� �•w'... y �````7^1� x t4 ` '- 6 '� +- ..,-_ x� ►��� .* rya •'Y.n"s• i ce'` LL .�.\ '.--:-%`- fir• Q. a.e. 'I`'- -:. {• .i.40.• .'y' ..'=j 3.i`r u' r. .. ~� �'. 1Y�Y.a �r r x•3F•`�� d+f� i I •.r,, qr�r _y ,� �1j 4z`5,a.:ir� 4,..;i... a. • ' 7, s {L'? -. lr r - r.ti •-. • -.•'-": ;-,/,-•''.47 i"-..-tit ' t .4_,... ...., :k4P 'Arm" N't t.:7•?:17i,:4•.2):t.:'Kf,7;;.11:;',7...;::::.•-:-.;,',:ittifi::!..-5,.. .':----...;':,1 . . •i _ liftman, � �,� �w�`��� } .4 -.` ' ,, 1 R� } { 'A► .mot .. t�:. . : y- "•�. T .. y '-Vr +�:.. nth _a(_y_� , .�� '.'.".- • .1t -.. I'I..`41. , Ir •'c a r•,.. a.f • `r..L� .., 9 f .•►• i � .�. .i:'} • 3.t, ... r { ~f:41:41,6",- - '� , ,4 {S r 7 II e++---+ ••• 1 - .• r'1 "?— ai i r ,.-i,:= ;A :t: ter- -a .w -yy 1,t r 1 .. I,..,,r_ Y_ ' .T .„ f r I r r r't. ti.'" AY ifigi i•.•ts: L 1 ... -..,-s., l.{ Ii,.. i 1 1 ',.,:-..,.-."'-,.„...,,.t..-....,7z„-:._7,_-„..,.,, •-:,._,rI1.i,-.fF$-'"'';.•; r4;._,•.1-;._.,?_4.' c--0'-'a„,..5i.,•.7,1'..'_'.".:'_.--:-. y.,A.1 iIii:i'..'...'_.,.._ - y+,�/4 1 i I . , I .. '.!:I =...J• I i : ';:" -' .r .;=^'III+ iI1 .:..i •tr is :.y' NI • _}} 1-. • ,'_ e - r ea •8i fng: ---- t i :j -rtaa- Elgin, Illinois PROPOSAL FOR DEVELOPMENT ASSISTANCE MARCH 2000 Exhibit B HISTORY - MORE THAN 125 YEARS OF FURNITURE SALES • 1-------•P'sriA Based upon my research to date, it appears that the current structure was constructed in 1867. As of 1875, it housed the furniture and undertaking _ -- furnishings business of Cornell&Hunter. r : i William Wait(who went on to establish the Wait- titti '1 - Ross-Allanson Funeral Home) succeeded to hlr. Comell's interest in the partnershipwith Mr. IMF-=-== '' = �� t Hunter and the name of the enterprise was = 3 ` i f changed to Hunter&Wait. The first and second _. floors of the building were used for showrooms and the third floor was used for furniture and The Leath Building in 1999, before renovations began coffin production. The furniture sales portion of the business was taken over by H.H.Dennison who continued to operate it in the building during the early 1900's. continued through the century,peaking at 42 stores in 1996. During this period of explosive growth,Leath In the meantime,Arthur Leath came to E1g'n with moved his Elgin store to a larger building at 156 • $12.50 in his pocket and opened a small upholstery DuPage Street and then into the former H. H. shop on DuPage Street in 1903. In 1914 Leath Dennison furniture store in this building. The third in Rockford and thereafter his floor and basement were converted to additional opened a second store business rapidly grew into a chain of 31 prominent showroom space. stores in the principal cities of Illinois,Wisconsin, Iowa, Indiana and Michigan by 1935. This growth In the mid-1940's, Leath & Company acquired the smaller two-story building adjoining on the east (formerly housing Kane Cut-Rate Drugs) and the two structures were unified with the enameled-steel facade and modern glass storefront existing today. TABLE OF CONTENTS History 2 Future of the Building 3 Project Objectives 4 Timetable 5 Benefits to the City of Elgin 6 Assistance Requested from 7 the City of Elgin Cost Analysis 8-16 About the Developer 17 A Post Script on Center City Parking 18 Proposal for Development Assistance -March 2000 ` FUTURE OF THE BUILDLNG As a result of the redevelopment efforts of the City of assistance of the City of Elgin, I intend to offer Elgin over the past years, I see the trend in office tenants back-up power generation systems and state of space in Elgin's Center City area moving from the low the art electrical wiring featuring isolated service to cost"Class C" space, characterized by the typical desk outlets (to protect sensitive electronic equipment office space available eight or ten years ago, to "Class from interference from motor and lighting loads), with A" space exemplified by the redevelopment of the dedicated grounding as required for optimal operation Peter Burritt Building. It is my intention to position of UPS equipment. Offering the warmth and charm of the Leath Building as the next step in this progression a 19th century building, with the capabilities required in quality. From the granite facade and lobby flooring in the 21st century, the Leath Building should be well to the brass appointments on the new elevator and positioned to attract the type of business tenants coffered ceilings, this building will offer all of the targeted by Elgin's Technology Action Team. While class that Elgin's new tenant prospects have been office use appears to be the most likely at this time, accustomed to in downtown Chicago or Schaumburg. the first floor of both the Leath Building and the Kane In addition, I plan to offer tenants a building Cut Building could accommodate retail, restaurant or infrastructure designed specifically to accommodate coffee bar tenants and such uses will not be in any the needs of the most technologically advanced way discouraged. businesses today. With the requested development Neal Pitcher kG.� +Its — _ _ -:�� ' i 7.4 SIB .,1.1 i'J.. • .. ` —ram_ ----_ Proposedfront ofthe Leath Building �c-- p �� f0so ii i, U /� .7- le ,. ,r1, ? A imi..4 rellisi?, OK ^" imf:. la tv:p I Proposed back of the Leath Building II Proposal for L - clopment Assistance -March 2000 3 I I PROJECT OBJECTIVES I • To completely renovate and restore the Leath Building to a condition appropriate for its highly Ivisible location in Center City. • To attract new, technology-intense business to I Center City by offering Class A office and retail space which compares favorably to that of competitive buildings in other communities. 1 • To recreate a facade on the Leath Building that blends I with the numerous other restored buildings on Chicago Street using 2•,se�311e.aaulaaa,a�g1aaa,�2!..a., landmark quality materials i n 1 I that will endure another 125 A --- years without significantill •1 1 1 I , deterioration. —f , Ii i )1 2 3 I2 13 2 E 3 1111 i s •• 1 I =--.-. i- . 1. , ; 1 7 ,' ,, .@1_i _1 C " onl' ' i tip. : % , ' --• ;h' _ _ IAn architectural rendering of the proposed front of the Leath Building I I Proposal for Development Assistance -March 2000 4 TLMETABLE • Facade reconstruction and infrastructure improvements to begin in April 2000 • Exterior facade (all four sides of the building) completed by July 2000 • First tenant space available by August 2000 i • Lease-up expected to be completed within 18 months III .'':, . — .r17#4\.... . 0 ......,.. WPM/ • rr=� g , moo • isib\, r . ,1 i o 5�.f j 'S. % Cn�7it / • ,; .7, '''''''', tl o r-- / �.. / ' iczi CI , M0d i Q0 .I' L 9 i r_ i 1♦ ♦ may, % G� , 3E1 i 1 i irk. . o o 0 © a % ° "NIP / O 4i 1 j i �D • ,a O h t-�=� - 0 �.,. 77 ■ 44 _J / j �, �.. I. !/ El /4.4 / a .. -P=3- LI11 ill� I•• / , ......,,.... :,111111 :2 Sa il* ice/��J� / / UU n RASFIIENT PLAN v,vi- -' F`P ' C1 CCR P1 AV -r.�•• ...r / Floor Plan -Basement Floor Plan -First Floor Proposal for Development Assistance -March 2000 5 I I BENEFITS TO THE CITY OF ELGIN I • Revitalization and adaptive reuse of a 125-year- old historic structure in the heart of Center City I • The attraction of up to six new high tech businesses to Center City I • The addition of an additional 100+ employees to P �/q • .4/ ., Center City who will support other downtown I businesses and restaurantsII 'A .., • Significant investment of private dollars in the ICI';; ICenter City area / ,• • Another significant step in the process of m I� l© /•,'" I upgrading the quality and appearance of properties I �—�^-^-NM in Center City _ • '!'`f / © O • The attraction of high paying, high technology businesses to Center City o J ®_ ® 9 ; O aCI U /! II o 4 • ®, ID'%; i. ii I J/n m _A a , (j -7i j c� d i 0 ;; ' liairj. ® 03 INN I 74;II -114fiCli) d, • 8 : ° _ i 1 E. % cp 9 . _ CD i. �^ r R PLAN 11 n _cCCtvC _OC � v*�I. Floor Plan -Second Floor Proposal for Development Assistance -March 2000 6 I. I [ ASSISTANCE REQUESTED FROM THE CITY OF ELGIN [ • A contribution of$328,968, constituting fifteen percent of the projected cost of the renovation project. I • A contribution of$98,945, constituting fifty percent of the additional project costs for -W �, technology infrastructure improvements, including ,� installing backup power generation equipment. i 1 . h ;j • Grant permission for Elgin Development 1"' ` ,a� IICompany, LLC to remove the unsightly City- 0 , owned utility pole presently located at the ;A� " northeast corner of the building (see photograph o 9, 1 below) and replace the light fixture currently 0 o la mounted on the pole with a new fixture mounted i • D_ on on the building. io Io 'o l ' .. Rik,: auc Lip m OD d _ � r .1 •-• gar !--'•• _A0 1 C T3 • una ry„ .cam.,_{.? � ...,a- '„! la I _ ''.1".. .. / :II: "l' lira r ( rtt LEA 'TM . ''iI " s _ t I I0 Back of Leath Building t----t l — II . • G• rant permission for Elgin Development to o Company, LLC to fill the sidewalk vault located % I i �r on City property in front of the building and l! n7 replace or repair any sidewalk removed in I accomplishing this task. ' �� ' • Grant Elgin Development Company, LLC a �'-- ___,0_,A____________ - R ±.--P permanent easement for existing building =R, cc1.1_11 7��: 111 encroachments unto City right-of-ways (Chicago Floor Plan Third Floor Street & alley) IIIProposal for Development Assistance -March 2000 r r LEATH BUILDING IIncome&Expense Projections As of 2/28/2000 Projected Cost of Renovation Project: $ 2,193,123.00 100% 1 Projected Contribution by the City of Elgin: 328,968.45 15% [ Balance to be Covered by Debt&Owner's Equity: 1,864,154.55 85% Anticipated Mortgage Financing of Project 1,200,000.00 55% Owner's Equity Investment in Project: $ 664,154.55 30% I Rental I Net Rate Annual Rentable Per Sq. Rental Monthly Rental Income Sq. Ft. Ft. Income Rental Income 1 164 East Chicago Street First Floor Base Rent 3,687 $ 13.00 $ 47,931.00 $ 3,994.25 Estimated Tax Passthrough $ 2.98 $ 10,984.97 $ 915.41 I Estimated CAM $ 1.49 5,507.61 458.97 Second Floor Base Rent 4,087 12.00 49,044.00 4,087.00 Estimated Tax Passthrough $ 2.98 $ 12,176.72 $ 1,014.73 t Estimated CAM $ 1.49 $ 6,105.12 $ 508.76 Third Floor Base Rent 4,087 12.00 49,044.00 4,087.00 Estimated Tax Passthrough $ 2.98 $ 12,176.72 $ 1,014.73 I Estimated CAM $ 1.49 $ 6,105.12 $ 508.76 Lower Level Base Rent 2,407 7.00 16,849.00 1,404.08 Estimated Tax Passthrough $ 2.98 $ 7,171.36 $ 597.61 IEstimated CAM $ 1.49 $ 3,595.55 $ 299.63 166 East Chicago Street First Floor Base Rent 1,598 13.00 20,774.00 1,731.17 I Estimated Tax Passthrough $ 2.98 $ 4,761.05 $ 396.75 Estimated CAM $ 1.49 $ 2,387.08 $ 198.92 Second Floor Base Rent 1,688 12.00 20,256.00 1,688.00 I Estimated Tax Passthrough $ 2.98 $ 5,029.19 $ 419.10 Estimated CAM $ 1.49 $ 2,521.52 $ 210.13 I Total Estimated Rental Income 17,554 $ 15.66 $ 274,869.29 $ 22,905.77 Estimated Occupancy Rate: 90% NTotal Estimated Rental Income: $ 247,382.36 I I . . iiProposal for Development Assistance-March 2000 8 1 Annual Estimated Estimated Cost per Annual Monthly Expenses Sq. Ft. Cost Cost Operating Expenses Taxes-General Real Estate $ 2.98 $ 52,300.00 $ 4,358.33 Insurance General Liability 0.02 429.00 35.75 Casualty Insurance 0.10 1,843.00 153.58 Maintenance Janitorial 0.40 7,020.00 585.00 Repairs 0.20 3,500.00 291.67 Snow Removal (Sidewalks) 0.04 750.00 62.50 1 Window Cleaning 0.02 300.00 25.00 r Elevator Service 0.21 3,600.00 300.00 Garbage Collection Service 0.27 4,680.00 390.00 Utilities Serving Common Areas t Gas(Heating&Hot Water) 0.03 500.00 41.67 Electricity(Lighting&A/C) 0.14 2,400.00 200.00 Water&Sewer 0.03 600.00 50.00 1 Landscaping (Window Boxes) 0.03 600.00 50.00 Total Operating Expenses $ 4.47 $ 78,522.00 $ 6,543.50 11. Financial Expenses Mortgage Interest(8.75%) P= $1,200,000 $ 5.98 $ 105,000.00 $ 8,750.00 ITotal Estimated Expenses $ 10.45 $ 183,522.00 $ 15,293.50 I ItSummary Annual Monthly II Total Income $ 14.09 $ 247,382.36 $ 20,615.20 Total Expenses $ (10.45) $ (183,522.00) $ (15,293.50) IliOwner's Projected Net Income Before Taxes $ 3.64 $ 63,860.36 $ 5,321.70 Projected Before Tax Return on Investment: 9.6% 11 III i Proposal for Development Assistance- March 2000 9 I I Leath Building I 164-166 East Chicago Street, Elgin, Illinois Owner/Developer. Elgin Development Company, L.L.C. (Neal Pitcher) Total Building Area (square feet)=20,812 20,812 IESTIMATED ACQUISITION AND RENOVATION COSTS As of 2/28/2000 Cost I Estimated Per Item Cost Sq. Ft. IShell Building Purchase $ 220,000.00 $ 10.57 Acquisition &Financing Costs I Appraisal 2,200.00 0.11 Title Insurance 849.00 0.04 Pre-closing Exterior Repairs Made at Purchaser's Expense in Response to City of Elgin Code I Violation Notice 4,270.00 0.21 Closing Costs $300.00 0.01 Construction Loan Fees $1,800.00 0.09 Construction Loan Closing Costs $16,000.00 0.77 I Construction Loan Interest $75,000.00 3.60 End Loan Fees $6,500.00 0.31 Attorney Fees $10,000.00 0.48 111 Environmental Assessment $3,400.00 0.16 Architectural &Engineering Concept Drawings $5,000.00 0.24 I Architectural Drawings&Engineering $140,240.00 6.74 Site ALTA Survey&Topological Plat $1,950.00 0.09 IIConstruction Management $130,000.00 6.25 Permits and Fees I City of Elgin Building Permits $31,300.00 1.50 City of Elgin Water Tap-on Fee(4"sprinkler line) $6,500.00 0.31 FRWRD Fees $15,600.00 0.75 I General Conditions Asbestos Abatement $36,000.00 1.73 Demolition of Boilers&Oil Tanks $12,450.00 0.60 III Fill Sidewalk Vault& Replace Sidewalk $6,375.00 0.31 Interior Foundation Wall Repairs $6,500.00 0.31 Remove Utility Pole at Northeast Corner of Building & Replace City Owned Streetlight with New 11 Fixture Mounted on Building $3,160.00 0.15 Restore 1930's Neon Sign on Front of Building $$3,000.00 1.06 Exterior Brick Repair,Tuckpointing ,r &Masonry Cleaning $37,250.00 1.79 10 Proposal for Development Assistance - March 2000 Page 1 of 7 I I Cost Estimated Per Item Cost Sq. Ft. IChicago Street Facade RJR 2nd&3rd Floor Windows(13 Units) $24,050.00 1.16 I Replace/Install Limestone Window Sills(13) $2,400.00 0.12 Window Installation $4,550.00 0.22 Granite&Masonry $49,000.00 2.35 Re-create 1870's Ornamental Cornice $14,600.00 0.70 I Window Wall $34,000.00 1.63 Exterior Doors(1 Double Set& 1 Single) $10,500.00 0.50 Exterior Light Fixtures $8,120.00 0.39 I Bronze Building Name Plaques $1,400.00 0.07 Demolition-Window Openings $11,050.00 0.53 Recreate Corbeled Brick Arches Above Second-Story Windows $8,270.00 0.40 IDemolition-Sheet Metal Facade&Storefront $6,140.00 0.30 East Facade RJR I Windows(17 Units) $31,450.00 1.51 Replace/Install Limestone Sills(18) $3,600.00 0.17 Window Installation(17 Units) $5,950.00 0.29 Shutters(16 Pair) $2,400.00 0.12 I Planter Boxes&Ivy $4,750.00 0.23 Exterior Doors(5 Units) $7,500.00 0.36 Painting of Stairs&Fire Escape $3,220.00 0.15 IDemolition-Window&Door Openings $7,650.00 0.37 North Façade RJR Windows(5 Units) $9,250.00 0.44 11 Replace/Install Limestone Sills(5) $1,000.00 0.05 Window Installation (5 Units) $1,750.00 0.08 Exterior Door(1 Unit) $1,500.00 0.07 I Shutters(5 Pair) $750.00 0.04 Planter Boxes& Ivy $4,750.00 0.23 Demolition-Window Openings $2,475.00 0.12 I West Facade RJR Windows(18 Units) $33,300.00 1.60 Replace/Install Limestone Sills(18) $3,600.00 0.17 ill Window Installation(18 Units) $6,300.00 0.30 Shutters(18 Pair) $2,700.00 0.13 Demolition-Window Openings $20,375.00 0.98 IIII iii Proposal for Development Assistance - March 2000 11 Page 2 of 7 I • I Cost Estimated Per Item Cost Sq. Ft. ... Plumbing -Basement Lift Pits & Pumps Install Floor Drain/Sump Pit in Mechanical Room $8,500.00 0.41 Install Floor Drain/Sump Pit in Elevator Pit $8,500.00 0.41 I Install Floor Drain/Sump Pit in North Basement $8,500.00 0.41 Install Sewage Lift Pit in Basement $8,750.00 0.42 E Roof Replacement Replace Roof $60,000.00 2.88 Replace Gutters and Downspouts $4,150.00 0.20 IConstruct Penthouse at Stair for Roof Access $3,475.00 0.17 Sprinkler System Installation 565,000.00 3.12 I Stairwell&Stair Installation Main 4-Story(Plus Roof Access)Stair and Enclosure $78,400.00 3.77 Rear Stair Between Basement and First Floor $19,500.00 0.94 S Rear Exit Stair From Basement of 166 E. Chicago $15,400.00 0.74 Elevator Shaft&Equipment Excavate and Construct Concrete Pit $6,000.00 0.29 i Elevator Equipment&Installation $88,700.00 4.26 Hoistway Construction $22,000.00 1.06 Interior Wood Paneling &Trim in Elevator $4,300.00 0.21 I Replace Freight Elevator Penthouse Door $1,500.00 0.07 Install Access Controls to Freight Elevator $7,885.00 0.38 Install Truck Bumpers at Elevator Loading Dock $800.00 0.04 Electrical Service(3 Phase)To Passenger Elevator $4,700.00 0.23 I Electrical I Fire Alarm/Security Replace Main Switch&Service(6 Tenant& ii 1 House Panels) $54,700.00 2.63 Light Fixtures-Exterior&Common Areas $6,500.00 0.31 III Fire Alarm System & Installation $14,300.00 0.69 Security System (including video camera and recorder for lobby area) $12,900.00 0.62 t im HVAC Basement HVAC Unit Replacements(2 Units) $9,550.00 0.46 Lobby HVAC System $8,000.00 0.38 illi 164-First Floor HVAC System& Ductwork $12,600.00 2.95 166-First Floor HVAC System& Ductwork $9,750.00 0.47 164-Second Floor HVAC System&Ductwork $12,600.00 7.00 166-Second Floor HVAC System&Ductwork $10,250.00 0.49 166-Third Floor HVAC System&Ductwork $12,600.00 0.61 iiah Division of Gas Service by Nicor&Gas Piping $4,500.00 0.22 NIL ill I it Proposal for Development Assistance - March 2000 12 i i Page 3 of 7 Cost Estimated Per Item Cost Sq. Ft. Lobby Improvements Flooring (Granite) $8,280.00 0.40 Granite Sidewalk in Front of Entrance $3,400.00 0.16 Fountain $2,500.00 0.12 Millwork&Installation/Finishing $6,900.00 0.33 Lighting $3,200.00 0.15 Painting, Staining &Varnishing $3,800.00 0.18 i Window Wall Enclosure with Double Doors $8,750.00 0.42 Tenant Call Box $2,450.00 0.12 I Interior Improvements-164 First Floor&Basement Framing & Drywall $3,800.00 0.18 Restrooms&Kitchenette Plumbing $27,000.00 1.30 Trim-Out New Window Openings(6 Units) $1,440.00 0.07 I Install Tray Ceiling $19,800.00 0.95 Interior Millwork $29,850.00 1.43 Wiring Ducts $4,300.00 0.21 I Electrical Wiring $6,500.00 0.31 Lighting $19,955.00 0.96 Finish Flooring & Floor Coverings $10,518.00 0.51 Painting, Staining &Varnishing $7,000.00 0.34 IInterior Improvements -164 Second Floor Framing &Drywall $3,800.00 0.18 t Restrooms &Kitchenette Plumbing $19,000.00 0.91 Trim Out New Window Openings(10 Units) $2,400.00 0.12 Install Tray Ceiling $19,800.00 0.95 Interior Millwork $29,850.00 1.43 I Wiring Ducts $4,300.00 0.21 Electrical Wiring $6,500.00 0.31 Lighting • $17,455.00 0.84 I_ Finish Flooring $6,836.00 0.33 Painting, Staining &Vamishing $7,000.00 0.34 t Interior Improvements -164 Third Floor Demolition of Plaster Walls and Ceiling Tile $16,000.00 0.77 Framing & Drywall $3,800.00 0.18 is Restrooms&Kitchenette Plumbing $19,000.00 0.91 Trim-Out New Window Openings(22 Units) $5,280.00 0.25 Strip, Refinish and Reinstall Bead-Board Ceiling $17,000.00 0.82 Interior Millwork $29,850.00 1.43 Wiring Ducts $4,300.00 0.21 Electrical Wiring $6,500.00 0.31 it Lighting $17,455.00 0.84 Flooring Repairs and Finishing $8,100.00 0.39 Painting, Staining &Vamishing $7,000.00 0.34 litt Proposal for Development Assistance - March 2000 it 13 Page 4 cf 7 I I Cost Estimated Per Item Cost Sq. Ft. I Interior Improvements -166 First Floor Framing &Drywall S3,800.00 0.18 Restrooms&Kitchenette Plumbing $7,080.00 0.34 I Trim-Out New Window& Door Openings(5 Units) $1,200.00 0.06 Interior Millwork $2,300.00 0.11 Electrical Wiring $4,700.00 0.23 Lighting S5,000.00 0.24 I Finish Flooring $2,685.00 0.13 Painting $4,500.00 0.22 I Interior Improvements-166 Second Floor Framing &Drywall $3,800.00 0.18 Restrooms&Kitchenette Plumbing $7,080.00 0.34 Trim-Out New Window Openings(3 Units) $720.00 0.03 I Interior Millwork $2,300.00 0.11 Wiring Ducts $3,100.00 0.15 Electrical Wiring $4,700.00 0.23 I Lighting $5,000.00 0.24 Finish Flooring $2,685.00 0.13 Painting $4,500.00 0.22 I I Summary - Before Technology Infrastructure Improvements ICurrent Cost Estimated Per IItem Amount Sq. Ft. Total Acquisition& Renovation Cost $2,193,123.00 $ 105.38 I Requested Development Assistance from City of Elgin ($328,968.45) (15.81) Percent of Total Cost 15% 1 Total Investment by Owner $1,864,154.55 89.57 Percent of Total Cost 85% I Proposal for Development Assistance - March 2000 14 Page 5 of 7 i I Cost Estimated Per Item Cost Sq. Ft. Technology Infrastructure Improvements Isolate electrical service to all desk outlets from Imotor and lighting loads to reduce interference S12,600.00 0.06 Install back up power generation system to serve all tenant areas (100-150 kW)and related Iwiring and switch gear S175,000.00 0.80 Install High Pressure Gas Line to Generator S1,800.00 0.01 I Install oversized conduits from telecom room to each tenant area to accommodate present and future data/communications lines $1,350.00 0.01 I Install dedicated ground lines to all electrical outlets $1,200.00 0.01 Install data/communications/electrical cabling troughs to allow for data cabling and Irecabling flexibility $5,940.00 0.37 Technology Infrastructure Sub-Total: $197,890.00 9.51 I Summary -With TechnologyInfrastructure Improvements P 111 Current Cost Estimated Per IItem Amount Sq. Ft. Total Acquisition &Renovation Cost from Above $2,193,123.00 $ 105.38 S Technology Infrastructure Improvements $197,890.00 $ 9.51 Total Projected Project Cost: $2,391,013.00 $ 114.89 IRequested Development Assistance from City of Elgin for Basic Project ($328,968.45) Percent of Total Cost 15% IRequested Development Assistance from City of Elgin for Technology Infrastructure I (50%of cost) ($98,945.00) 50% Total Requested Development Assistance from 11 City of Elgin ($427,913.45) (2.53) Percent of Total Cost 18% Total Investment by Owner $1,963,099.55 94.33 Percent of Total Cost 82% Proposal for Development Assistance - March 2000 15 Page 6 of 7 1 Additional Development Related Assistance Requested from the City of Elgin Grant permission to allow owner to remove City- owned utility pole from alley at northeast corner of building and replace and mount City street light on building (roughly the same location). Grant owner permission to fill vault in front of 166 E. Chicago Street(after Commonwealth Edison re-routes electrical service to 168 E. Chicago Street). Grant permanent easement for planned building encroachments(approximating current building facade encroachments)on to City right-of-ways (Chicago Street and alley) Requested Pay-out Schedule for Development Assistance for Basic Project Paid when leases are executed for 4000 square feet of space in building: ($164,484.23) Paid when leases are executed for 8700 square feet of space in building: ($164,484.23) Requested Pay-Out Schedule for Development Assistance for Technology Infrastructure Improvements Payment for listed improvements based upon 50%of actual expenditures upon leasing each of the six tenant areas, not to exceed$98,945 in aggregate. Proposal for Development Assistance - March 2000 16 Page 7 of 7 I z I ABOUT THE DEVELOPER INEAL R. PITCHER Personal Background I Neal is a graduate of Northern Illinois University In 1997, Neal served as construction manager for the I College of Law. He holds M.B.A. (emphasis in investments) and B.S. (in business $500,000 restoration of the Elgin Tower Building finance) degrees facade. He currently supervises all mechanical and from Illinois State University and is a Certified Public structural maintenance and restoration of both the I Accountant. He is licensed to practice law in both Elgin Tower Building and the Elgin Professional Illinois and Wisconsin and is a licensed heating, air Building, as well as administrating all of the radio conditioning and electrical contractor. Neal is a transmission license agreements at these two I member of the American, Illinois State,Wisconsin and buildings. Kane County Bar Associations, the American Institute of Certified Public Accountants and the Illinois CPA A significant portion of Neal's time in his law practice I Society. Neal is a past chairman of the Kane County Bar Association Business Law Committee and is a is spent negotiating commercial leases, commercial property sales agreements, construction disputes and frequent speaker at bar association Continuing Legal commercial landlord-tenant disputes. Neal represents I Education programs. He was a member of the first numerous civic organizations on either a reduced rate graduating class of the Elgin Leadership Academy. or pro bono basis, including: the Downtown Neighborhood Association of Elgin, the Hispanic I Neal owned and operated a mechanical contracting Heritage Coalition, the Larkin Center, Common business (heating, air conditioning and electrical) with Grounds -The McKinley Schoolyard Project, the offices in Bloomington and Peoria, Illinois, from 1974 Elgin Symphony Orchestra Association, the Heart of I until 1987, when he moved to Northern Illinois to Oswego redevelopment organization, the Hispanic attend law school. During and immediately following Fine Arts Council and the South Elgin Economic law school, Neal was employed at the Elgin law firm Development Council. He was a founding director of II of Ritt & Dalton, P.C. In 1994 Neal became a partner the Elgin Symphony Orchestra Foundation, serves as in the Elgin law firm of Meyers, Schuster & Pitcher, one of the two directors of the Stickling Foundation, P.C. In 1998 Neal left the firm to continue practicing which operates the Elgin Tower Building and the 111 law as a sole practitioner, with his practice Elgin Professional Building, and is the treasurer and a concentrated in business organizational law, director of Downtown Neighborhood Association of commercial transactions (especially commercial Elgin. Neal served as Chairman of the Elgin Police leasing), business planning, estate planning and and Fire Department Awards Committee in 1997 and 111 taxation. The law firm of Neal R. Pitcher, P.C. again in 1998. currently represents approximately 85 small and I medium-sized businesses located in the Chicagoland and Rockford-Beloit areas. Neal's former employer, Norbert Ritt, now serves of counsel to Neal's firm. I I I WI Proposal for Development Assistance - March 2000 17 I I A Post Script on Center City Parking You will notice that there is no request for any dedicated parking spaces in this proposal. As a downtown business owner,I feel very strongly that the dedication of public parking space is detrimental to the interests of the City and other business operators. 111 The absence of such a request should not be taken as an indication that additional parking space is not required for the success of this project. To the contrary, the first question I hear from every tenant prospect is: "Where do we park?" From my daily, first hand experience, it is clear that the Spring Street deck, the NBD lot, and the municipal lot are currently experiencing capacity use, at least during weekday mornings. On the days that it takes me 20 minutes to go from lot to lot looking for a placed to park, I question whether there is any hope of continuing to attract new businesses to the Center City when we cannot accommodate the customers of current businesses. It doesn't take more than one or two frustrating experiences trying to find a place to park to create a negative image of Center City in the mind of a customer or visitor. The entire experience of patronizing Center City businesses, including finding parking space, must be pleasant for Center City to prosper. Please keep this in mind when you are setting priorities for the area. I I p p p 18 Proposal for Development Assistance -March 2000 l .0OFEt City of Elgin Agenda Item No. IF .ATED' ' March 10, 2000 TO: Mayor and Members of the City Council FROM: Joyce A. Parker, City Manager SUBJECT: Development Proposal for 164-166 East Chicago Street PURPOSE The purpose of this memorandum is to present to the Mayor and members of the City Council a request for financial assistance from the City of Elgin in order to facilitate the exterior and interior rehabilitation of office space located at 164-166 East Chicago Street . BACKGROUND Mr. Neal Pitcher, on behalf of Elgin Development Company L.L.C. (EDC) , has submitted a redevelopment proposal to the City for a downtown site, the Leath Building, located at 164-166 East Chicago Street . The structure was constructed in 1867 . As of 1875, it housed the furniture and undertaking furnishings business of Cornell & Hunter. William Wait (who went on to establish the Wait-Ross-Allanson Funeral Home) succeeded to Mr. Cornell ' s interest in the partnership with Mr. Hunter and the name of the enterprise was changed to Hunter & Wait . The first and second floors of the building were used for showrooms and the third floor was used for furniture and coffin production. The furniture sales portion of the business was taken over by H. H. Dennison, who continued to operate it in the building during the early 1900 ' s . Arthur Leath came to Elgin and opened a small upholstery shop on DuPage Street in 1903 . In 1914, Leath opened a second store in Rockford and thereafter his business rapidly grew into a chain of 31 stores in the principal cities of Illinois, Wisconsin, Iowa, Indiana and Michigan. Growth continued through the century, peaking at 42 stores in 1996 . During this period of explosive growth, Leath moved his Elgin store to a larger building at 156 DuPage Street and then into the former H. H. Dennison furniture store in this building. The third floor and basement were converted to additional showroom space . 164-166 East Chicago Street March 10, 2000 Page 2 In the mid-1940 ' s, Leath & Company acquired the smaller two-story building adjoining on the east (formerly housing Kane Cut-Rate Drugs) and the two structures were unified with the enameled-steel facade and modern glass storefront existing today. It is EDC ' s intention to position the Leath Building as high quality office space . From the granite facade and lobby flooring to the brass appointments on the new elevator and coffered ceilings, this building will offer all of the class that Elgin' s new tenant prospects have been accustomed to in downtown Chicago or Schaumburg. In addition, they plan to offer tenants a building infrastructure designed specifically to accommodate the needs of the most technologically advanced businesses today. With the requested development assistance of the City of Elgin, EDC intends to offer tenants back-up power generation systems and state-of-the- art electrical wiring featuring isolated service to desk outlets (to protect sensitive electronic equipment from interference from motor and lighting loads) , with dedicated grounding as required for optimal operation of UPS (uninterrupted power supply) equipment . Offering the warmth and charm of a 19 century building with the capabilities required in the 21st century, the Leath Building should be well positioned to attract the type of business tenants targeted by Elgin ' s Technology Action Team. While office use appears to be the most likely at this time, the first floor of both the Leath Building and the Kane Cut Building could accommodate retail, restaurant or coffee bar tenants and such uses will not be in any way discouraged. Project Objectives • To completely renovate and restore the Leath Building to a condition appropriate for its highly visible location in Center City. • To attract new, technology-intense business to Center City by offering Class A office and retail space which compares favorably to that of competitive buildings in other communities . • To recreate a facade on the Leath Building that blends with the numerous other restored buildings on Chicago Street using landmark quality materials that will endure another 125 years without significant deterioration. Benefits to the City of Elgin • Revitalization and adaptive reuse of a 125-year-old historic structure in the heart of Center City. 164-166 East Chicago Street March 10, 2000 Page 3 • The attraction of up to six new high tech businesses to Center City. • The addition of an additional 100+ employees to Center City who will support other downtown businesses and restaurants . • Significant investment of private dollars in the Center City area. • Another significant step in the process of upgrading the quality and appearance of properties in Center City. • The attraction of high paying, high technology businesses to Center City. Assistance Requested from the City of Elgin • A contribution of $328, 968, constituting 15% of the projected costs of the renovation project . • A contribution of $98, 945, constituting 50% of the additional project costs for technology infrastructure improvements, including installing backup power generation equipment . • Grant permission for EDC to remove the unsightly City-owned utility pole presently located at the northeast corner of the building (see photograph attached) and replace the light fixture currently mounted on the pole with a new fixture mounted on the building. • Grant permission for EDC to fill the sidewalk vault located on City property in front of the building and replace or repair any sidewalk removed in accomplishing this task. • Grant EDC a permanent easement for existing building encroachments onto City rights-of-way (Chicago Street and alley) . Timetable • Facade reconstruction and infrastructure improvements to begin in April 2000 . • Exterior facade (all four sides of the building) completed by July 2000 . • First tenant space available by August 2000 . • Lease-up expected to be completed within 18 months . 164-166 East Chicago Street March 10 , 2000 Page 4 The staff assessment of the request from the developer included a review of other incentive programs that have been packaged for other developers . The following common elements were present within most of the incentive programs . 1 . Performance-based. 2 . Payouts were spread out over several years . 3 . In many instances, public improvements were funded. 4 . Additional well-paying jobs were added to the local economy. 5 . The level of amount of property taxes attributed to the site increased. The level of City participation in the total project cost varied relative to the location of the development . City participation in downtown projects ranged from 13o to 150 of the developer ' s financial commitment . City participation in outlying projects, Randall Road area, ranged from 3%- to 100 of the developer' s financial contribution. EDC estimates that the development of the office space will cost approximately $2 . 39 million. Fifteen percent of $2 . 39 million is approximately $358, 650 . A $358 , 650 incentive package for the development of 164-166 East Chicago Street could be structured in the following way: 1 . Provide a $358, 650 redevelopment grant to the developer based upon the following payout schedule : A. $119, 550 when 5, 850 gross square feet of the building space is leased. B . $119 , 550 when an additional 4, 850 gross square feet of the building space is leased and occupied. C. $119 , 550 when the final 5, 854 gross square feet of building space is leased and occupied. D. The calculations of leased space shall only apply to new tenants . E. No permit fees or sales taxes shall be waived or property taxes abated nor contested through the Assessor' s office or Board of Review. 164-166 East Chicago Street March 10 , 2000 Page 5 2 . 3 . F. Exterior facade improvements shall be consistent with the Center City Facade Program Guideline requirements . G. The first payment shall not occur prior to September 1, 2000 . The second payment shall not occur prior to January 1, 2001. The final payment shall not occur prior to March 1, 2001 . H. EDC agrees not to contest the assessed valuation of the property for a period of five years following the final payout of the development agreement . The improvements funded through the development agreement shall conform with those outlined in the attached proposal dated March 2000 . Authorize the EDC, at developer' s cost, to remove a City-owned utility pole located at the northeast corner of the building. 4 . If technically feasible, grant permission, at developer ' s cost, to fill the sidewalk vault located on City property in front of the building and to replace and repair any sidewalk removed as a result of the vault removal . 5 . If feasible, grant an easement to the developer for the building encroachment onto City-owned right-of-way. Draft guidelines for the e-elgin incentive program calls for a maximum incentive payment to prospective companies of $22 , 500 if the guidelines are applied to a project . If the $198 , 000 Technology Infrastructures costs estimate for this project was added into the estimated total project cost, EDC would be eligible for technology assistance totaling approximately $29 , 700 . The $29 , 700 technology assistance subsidy has been included in the $358, 650 subsidy recommended for this project . The terms of any assistance provided to EDC should be detailed in a formal development agreement . The agreement should specify that failure on the part of the developer to perform shall result in a reimbursement of monies provided by the City. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED The Downtown Neighborhood Association, New Century Partnership for Elgin, and City Vision Associates have been advised of the details of this request . 164-166 East Chicago Street March 10 , 2000 Page 6 FINANCIAL IMPACT ilk The incentive to Elgin Development Company L.L. C. would total $358, 650 and would be paid over two fiscal years ($119, 550 in 2000 and $239, 100 in 2001) . Funds would be required to be budgeted in the appropriate years for this project . Included in the Five-Year Financial Plan are incentives of $403 , 500 in 2001 . LEGAL IMPACT A development agreement will need to be negotiated with the principals of Elgin Development Company L.L.C. ALTERNATIVES 1 . Determine the level of participation that the City Council is willing to support and direct staff to develop an Agreement with Elgin Development Company L.L.C. that reflects such participation. 2 . Advise Elgin Development Company L.L.C. that the Mayor and members of the City Council do not wish to participate in the proposed project . RECOMMENDATION Staff recommends that the $358, 650 development assistance package, as identified above, should be considered as incentives for the redevelopment project proposed for 164-166 East Chicago Street . Re ectfully submitted, i J ce A. PailiQL--- City Manager amp Attachments