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08-31 r ,1 Resolution No. 08-31 RESOLUTION AUTHORIZING EXECUTION OF A DEVELOPME T AGREEMENT WITH HILLTOP REALTY, INC. FOR DEVEL N PMENT OF 1000 N. PRESTON AVENU BE IT RESOLVED BY THE CITY COUNCIL OF TH CITY OF ELGIN,ILLINOIS,that Ed Schock,Mayor, and Diane Robertson, City Clerk,be and al.- hereby authorized and directed to execute a Development Agreement on behalf of the City of :lgin with Hilltop Realty, Inc., for development of 1000 N.Preston Avenue,a copy of which is att.ched hereto and made a part hereof by reference. s/Ed .chock Ed Sc 0 ock, Mayor Presented: February 13, 2008 Adopted: February 13, 2008 Omnibus Vote: Yeas: 7 Nays: 0 Attest: s/Diane Robertson Diane Robertson, City Clerk DEVELOPMENT AGREEME T rucu.rc,a00 This agreement made and entered into this / ' day ofAIMIMIEMINIL by and between the CITY OF ELGIN, an Illinois municipal corporation (hereinafter referred to as the "City"), and Hilltop Realty, an Illinois corporat on, (hereinafter referred to as "Developer"). WITNESSETH WHEREAS, Developer is the developer of the property consisting of the vacant building located at 1000 North Preston Avenue, Elgin, Illinois, such property being legally described in Exhibit A attached hereto (hereinaf er referred to as the "Subject Property"); and WHEREAS, Developer's proposed redevelopment of the Subject Project is currently estimated to represent a 1.13 million dollar inv:stment by Developer resulting in the creation of four(4), two (2) bedroom loft-style condominium units; and WHEREAS, it is unlikely that such redevelopme t of the Subject Property will occur in the absence of limited economic assistance; and WHEREAS, in order to provide for the contin ed 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 •evelopment 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 l evenues to other local taxing districts; and WHEREAS, the Subject Property was abandoned a d the target of vandalism and deterioration and the redevelopment of the Subject Propert will likely result in the stimulation of further redevelopment and improvements in he neighborhood area; and WHEREAS, the City of Elgin is a home rule unit a thorized to exercise and perform any function relating to its government and affairs; and WHEREAS, the development assistance resulting i significant increases in the city's tax base, spurring additional redevelopment and nei: borhood improvements are matters within the government and affairs of the City of El:in. NOW, THEREFORE, for and in consideration of the mutual promises and undertakings contained herein, and other good and valuabl- consideration, the receipt and sufficiency of which are hereby acknowledged, the parties ereto agree as follows: 1. That the foregoing recitals are incorporated in this agreement in their entirety. 2. Developer at its cost shall redevelop the '.ubject Property with four (4) residential condominium units in substantial confo ance with the plans and specifications prepared by Christus Design Group date. March 14, 2007, last revised May 29, 2007, attached hereto as Exhibit B, (hereinafier referred to as the "Subject Redevelopment Plans") and in conformance with Plannes Development Ordinance No. G53-07 for the Subject Property (hereinafter referres to as the "Subject Planned Development Ordinance"). In the event of any conflict b:tween the terms and provisions of the Subject Redevelopment Plans and the terms and provisions of the Subject Planned Development Ordinance, the terms and provisions of the Subject Planned Development Ordinance shall control (such redevelopment of the S eject Property in conformance 2 with the Subject Redevelopment Plans and in conforma ce with the Subject Planned Development Ordinance is hereinafter referred to as the "I' edevelopment of the Subject Property". The Redevelopment of the Subject Property shall conform in all respects with the Subject Redevelopment Plans, the Subject Planned Development Ordinance, final engineering plans as approved by the City Engineer, t e terms of this development agreement, or as otherwise directed by the city as is I ecessary to comply with the ordinance, building codes or other requirements of law. ID eveloper shall also cause all work performed in connection with the Redevelopment of the Subject Property to be performed in a workmanlike manner. Except as otherwis:provided in this agreement, all costs and expenses relating to the Redevelopment of the Subject Property, shall be the responsibility of and shall be paid for by the Developer. 3. The Developer shall commence with the I'edevelopment of the Subject Property within sixty (60) days hereof and shall compl:te such Redevelopment of the Subject Property pursuant to the Redevelopment Pl.ns and the Subject Planned Development Ordinance no later than June 30, 2008 hereinafter referred to as the "Completion Date"), provided, however, such Completio Date for the Redevelopment of the Subject Property shall be extended by one (1) day for each day of which construction is delayed or stopped due to accident, strikes, shortage of aterials, extreme weather, acts of God or other causes not within the Developer's re.sonable control. In the event Developer requires any extension of the Completion Dat- for the Redevelopment of the Subject Property any such request shall be submitted to t e City in writing specifying the reasons for such an extension and the amount of additio al time being requested. Any agreement by the City to extend the Completion Date for the Redevelopment of the 3 Subject Property shall be at the sole discretion of the •ity council of the City. The Redevelopment of the Subject Property shall be deemed •ompleted when the Developer has completed its construction of all buildings and site improvements for the subject Redevelopment of the Subject Property and has obtained imal occupancy permits for all four (4) residential condominium units to be constructed on the Subject Property. The City shall not withhold a final occupancy permit for any unit within the subject Redevelopment on the Subject Property that otherwise co plies with this Agreement and all city codes, ordinances and other requirements o law as to such residential condominiums. 4. That in consideration for the Developer's ndertaking of and completion of the Redevelopment of the Subject Property and subst.ntial investment in the Preston Avenue area as described in this Agreement, the City .grees to provide an economic development grant to the Developer in the total amount .f One Hundred Fifty Thousand Dollars ($150,000) to be used by the Developer solely ano only for the improvements on the Subject Property in connection with the Redevelo.ment of the Subject Property. Such economic development grant shall be distributed to d e Developer as follows: A. Twenty-six Thousand Three undred Eighty-eight Dollars ($26,388) of development assistance shall be pro ided to the Developer through waivers by the City of portions of permit and i pact fees in the amount of Six Thousand Five Hundred Ninety-Seven Dollars (16,597) for each of the four (4) residential condominium units to be constructed .s part of the Redevelopment of the Subject Property. 4 B. One Hundred Twenty-three Tho sand Six Hundred Twelve Dollars ($123,612) of economic development assis ance shall be paid by the City to the Developer in four(4) installments. The first nstallment of Thirty Thousand Nine Hundred Three Dollars ($30,903) shall be p„id to the Developer when the first of the new two-bedroom residential condomi ium units is sold and occupied by a new owner. The second installment of Thirt Thousand Nine Hundred and Three Dollars ($30,903) shall be paid to the Developer when the second of the new two-bedroom residential condominium units n the Subject Property is sold and occupied by the new owner. The third install ent of Thirty Thousand Nine Hundred and Three Dollars ($30,903) shall be p,id to the Developer when the third of the new two-bedroom residential condominium units in the Subject Property is sold and occupied by the new owner. he fourth installment of Thirty Thousand Nine Hundred and Three Dollars C.30,903) shall be paid to the Developer when the fourth of the new two-bed oom residential condominium units is sold and occupied by a new owner. 5. That the parties understand and agree t at the economic development assistance being provided by the City to Developer a., set forth herein is expressly contingent upon Developer's Redevelopment of the Subj-ct Property as set forth herein. In the event the Developer fails to complete the Redevelopment of the Subject Property on or before the Completion Date, as such date ma be extended pursuant to the preceding paragraph 3, the parties understand and aee that the City will not be providing the Developer any economic development assistance pursuant to this Agreement or otherwise, and Developer shall reimburs- to the City in full any funds 5 which may have previously been waived by the City pur.uant to the fee waivers in the preceding Paragraph 4A hereof or paid by the City for the monetary economic development grant as provided in the preceding paragraph 4B hereof, and the City's obligation to provide the Developer by waiver, payme t or otherwise any economic development grant assistance shall be null and void. 6. That this agreement shall not be deem-d or construed to create an employment, joint venture, partnership, or other agency elationship between the parties hereto. 7. That all notices or other communication, hereunder shall be made in writing and shall be deemed given if personally delive ed or mailed by registered or certified mail, return receipt requested, to the parties at the following addresses, or at such other addressed for a party as shall be specified by 11e notice, and shall be deemed received on the date on which said hand delivered or the second business day following the date on which so mailed: TO THE CITY: TO TI E DEVELOPER: City of Elgin Hillt.p Realty 150 Dexter Court 1045 North Spring Street Elgin, IL 60120-5555 Elgin, IL 60120-5555 Attention: Raymond H. Moller Atte tion: Keith Farnham With a copy of any such notice to: City of Elgin 150 Dexter Court Elgin, IL 60120-5555 Attention: William A. Cogley Corporation Counsel 8. That the failure by a party to enforce a y provision of this agreement against the other party shall not be deemed a waiver of th, right to do so thereafter. 6 9. That this agreement may be modified or a ended only in writing signed by both parties hereto, or their permitted successors or assi s, as the case may be. 10. That this Development Agreement contain s the entire agreement and understanding of the parties hereto with respect to the su.'ect matter as set forth herein, all prior agreements and understandings having been m:rged herein and extinguished hereby. 11. That this agreement is and shall be deemed and construed to be a joint and collective work product of the City and the Developer anis, as such, this agreement shall not be construed against the other party, as the otherwis: 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 co stained herein. 12. That this agreement is subject to and shall .e governed by the laws of the State of Illinois. 13. That this agreement shall be binding o the parties hereto and their respective successors and permitted assigns. This agree ent and the obligations herein may not be assigned without the express written consen of each of the parties hereto, which consent may be withheld at the sole discretion of ei her the parties hereto. 14. The City and Developer agree that, in the event of a default by the other party, the other party shall, prior to taking any such ac dons as may be available to it, provide written notice to the defaulting party stating tha they are giving the defaulting party thirty (30) days within which to cure such default. If the default shall not be cured within the thirty (30) days period aforesaid, then the p.rty giving such notice shall be permitted to avail itself of remedies to which it may be e itled under this agreement. 7 15. If either party fails or refuses to carry out a y of the material covenants or obligations hereunder, the other party shall be entitled t• pursue any and all available remedies as specified herein or otherwise available It law, equity or otherwise. Notwithstanding the foregoing or anything else to the cont l ary in this agreement, with the sole exception of an action to recover the monies the Cit has agreed to pay pursuant to the preceding Paragraph 4 hereof, no action shall be commenced by the Developer against the City for monetary damages. Venue for the re.olution of any disputes or the enforcement of any rights pursuant to this agreement shall •e in the Circuit Court of Kane County, Illinois. In the event any action is brought by the City against the Developer or its permitted assigns with respect to this agreement and th- City is the prevailing party in such action, the City shall also be entitled to recover iom the Developer reasonable interest and reasonable attorney's fees. 16. Time is of the essence of this agreement. 17. This agreement shall be construed, and t e rights and obligations of the City and the Developer hereunder shall be determined in :ccordance with the laws of the State of Illinois without reference to its conflict of laws rug es. 18. Notwithstanding any other provisions of his Agreement, it is expressly agreed and understood by the Developer and the Cit, that in connection with the performance of this Agreement and the Redevelopment o I the Subject Property including, without limitation, Developer's construction of th- four (4) new residential condominiums on the Subject Property, that Developer -hall comply with all applicable federal, state, city and other requirements of law. Dev-loper shall also at its expense secure all permits and licenses, pay all charges and fees and give notices necessary and 8 incident to the due and lawful prosecution of the work necessary to provide for the Redevelopment of the Subject Property as described in thi. Agreement. Without limiting the foregoing, and notwithstanding anything to the contrar in this Agreement, Developer and its contractors and subcontractors shall comply with he Prevailing Wage Act in all respects of the Redevelopment of the Subject Property. 19. To the fullest extent permitted by law, II eveloper agrees to and shall indemnify, defend and hold harmless, the City, its officials, officers, employees, attorneys, agents, boards and commissions from and ag.inst any and all claims, suits, judgments, costs, attorney's fees, damages or other reli:f, including but not limited to workers' compensation claims, in any way resulting fro or arising out of or alleged to be resulting from or arising out of negligent actions or omissions of the Developer in connection herewith, including negligence or omissions of employees, agents or subcontractors of the Developer arising out of the perfo ance of this agreement, or in any way resulting from or arising out of or alleged to be i esulting from or arising out of any violation and/or breach of the terms or provisions of this agreement by the Developer, including any violation and/or breach by emp oyees, agents or subcontractors of the Developer. In the event of any action against he City, its officials, officers, employees, agents, attorneys, boards or commissions co ered by the foregoing duty to indemnify, defend and hold harmless such action shall .e defended by legal counsel of the City's choosing the costs of which shall be paid by t e Developer. The provisions of this paragraph shall survive any termination and/or expira ion of this agreement. 20. To the fullest extent permitted by law, Developer agrees to and shall indemnify, defend and hold harmless the City, its officials, officers, employees, 9 attorneys, agents, boards and commissions, from and ago inst any and all third party claims, suits, judgments, costs, attorneys' fees, expert witness fees and expenses, damages or other relief, in any resulting from or arising o t of or alleged to be resulting from or arising out of the existence of this agreement, the provisions of this agreement, the performance of this agreement, the rezoning of the Sub ect Property, the development approvals provided for in this agreement and/or any othii actions to the parties hereto provided for or arising from this agreement. In the event •f any action against the City, its officials, officers, employees, agents, attorneys, board. or commissions, covered by the foregoing duty to indemnify, and defend and hold iarmless, such action shall be defended by legal counsel of the City's choosing and the osts of which will be paid for by the Developer. Additionally, in the event of such thirty party action the Developer to the extent permitted by law shall upon the request of the City attempt to intervene in such proceedings and join the City in the defense thereof. 21. Developer agrees to and shall provide to he City written reports on the status of the Redevelopment of the Subject Property. Such written reports shall be provided to the City quarterly or upon request of the C ty. Such written reports shall contain a status report on construction activities, marketin: efforts and sales activities and such other information as may be requested by the City. 22. Developer on behalf of itself and its resp ective successors, assigns and grantees of the Subject Property hereby acknowledge. the propriety, necessity and legality of all of the terms and provisions of this agreeme t, including, but not limited to, the Subject Planned Development Ordinance and any lees and/or contributions which may be charged by the City in connection with the I'edevelopment of the Subject 10 Property, and does hereby further agree and does waive a y and all rights to any and all legal or other challenges or defenses to any of the terms . d provisions of this agreement and hereby agrees and covenants on behalf of itself a d its successors, assigns and grantees of the Subject Property, not to sue the City or mai ntain any legal action or other defenses against the City with respect to any challenges .f the terms and provisions of this agreement. IN WITNESS WHEREOF, the parties hereto hay- entered into and executed this agreement on the date and year first written above. CITY OF ELGIN, a municipal HILL I OP REALTY Corporation Illinoi corporation By By 0 Edward Schock, Mayor Ke'th Farnha Its /�." ttest: Diane Robertson, y Clerk F:\Legal Dept\Agreement\Development Agr-Hilltop Realty-1000 N.Preston.doc 11 • EXHIBIT A LEGAL DESCRIPTION Lots 21 and 22 in Block 10 of the Ludlow Addition to Elgin, in the City of Elgin, Kane County, Illinois. 12 R immammeimmi IS Piiiil 81 amessisa i in rn 'Ui f+ y`�`-SLR June 8, 2007 TO: Mayor and Members of the City Council FROM: Olufemi Folarin, City Manager Raymond H. Moller, Director of Economic D-velopment and Business Services SUBJECT: Residential Redevelopment Assistance - 1001 N. Preston Avenue PURPOSE The purpose of this memorandum is to provide the Mayor a d members of the City Council with information to consider a request from Keith Farnham •f Hilltop Realty for development assistance related to the conversion of the former Elgin Ho es Dairy building-1000 N. Preston Avenue- into four, two-bedroom condominium units. RECOMMENDATION It is recommended that the City Council approve a re.evelopment agreement with Keith Farnham of Hilltop Realty for development assistance rela ed to the Elgin Homes Dairy Lofts property in the amount of$150,000. BACKGROUND Mr. Farnham purchased the property in November, 2005. I recent years the property has been abandoned and a target of vandalism. The structure as it c rrently exists is not an asset to the surrounding residential neighborhood. Mr. Farnham estimates that with an overall investment •f $1,130,300 this property can be redeveloped into four two-bedroom market rate condominiu s units ($225,000/avg) Mr. Farnham is requesting financial participation from the ity of Elgin in an amount totaling $150,000. If the project were to move forward as proposed by Mr. Farnham, the permit fees to be generated for the City would total $13,638. Impact fees would total approximately $12,750. The current real estate tax generated by the parcel is $2,68 . The projected property tax for the renovated property is $23,944.15. If permit fees and impar t fees were waived, the net cost of assistance from the City of Elgin would be $123,612 or $30,'03 per unit. If the City Council chooses to participate in the project, the ncentive could be paid out on a per unit basis at the time of issuance of a certificate of occupanc for each unit. , Residential Development Assistance 1000 N. Preston Aven e June 8, 2007 Page 2 COMMUNITY GROUPS/INTERESTED PERSONS C I NTACTED None FINANCIAL IMPACT The total incentive for this project is $150,000. There are su icient funds budgeted and available in the Riverboat Lease Fund, account number 276-0000- 91.80-27, Economic Development Incentives, and Project Number 17711A to enter into thi agreement with Keith Farnham of Hilltop Realty. To date $456,434 has been expended or enc mbered from this account. In 2007 $1,357,260 was budgeted for this account. Following an ap.roval of this expenditure, $777,213 remains available. LEGAL IMPACT A development agreement will be required. ALTERNATIVES 1. The City Council may choose to approve the request by Keith Farnham of Hilltop Realty for financial assistance for building redevelopment i the amount of$150,000 at 1000 N. Preston Avenue. 2. The City Council may choose to deny the application for redevelopment assistance to Keith Farnham. Respectfully submitted for Council consideration. RHM/jr Attachment