ECONOMIC DEVELOPMENT COMMITTEE MEETING
Thursday, May 12, 2011 – 5:30 p.m.
Chamber Room – Countryside City Hall
1. Call to order.
2. Roll Call: Ald. Sean McDermott, Chairman, Ald. James Jasinski, replacing Ald. Smetana, Ald. Karen Michalczyk, Treasurer Steven Jasinski, Adm. Gail Paul
3. Approval of Minutes – May 10, 2011 (if available).
4. Presentation by Bradford Real Estate for the development of property at Joliet and La Grange Road.
5. Other Business
COUNTRYSIDE ECONOMIC DEVELOPMENT COMMITTEE
TUESDAY, MAY 12, 2011 – 5:30 P. M.
COUNCIL CHAMBERS – CITY HALL
Ald. Sean McDermott, Chairman, called the meeting to order at 5:30 p.m. He called the Roll of those physically present:
PRESENT: Ald. Sean McDermott, Chairman, City Admin. Gail Paul,Ald. Karen Michalczyk, Ald. Jim Jasinski.
ABSENT: Treas. Steve Jasinski
ALSO PRESENT: Mayor Krzeminski, Clerk Sweeney, Ald. Pondelicek, Ald. Von Drasek, Ald. Straza,
Approval of Minutes
The first order of business was approval of the Minutes of May 10, 2011. Ald. Michalczyk moved to approve the minutes as presented, seconded by Ms. Paul and carried by unanimous voice vote.
Presentation by Bradford Real Estate for the Development of Property At Joliet Road and LaGrange Road
Mr. Jay Eck of Bradford discussed the current site plan and highlighted changes from the previous plan. He stated that the timing is excellent because in ten days they will be headed to Las Vegas for the annual ICSC convention where they will again meet with retailers; they hope to get direction from the City tonight.
The current site plan accommodates Harley-Davidson re: excess parking for the Rider’s Edge course, which they will use exclusively for six months out of the year. This has definitely impacted the site plan. Bradford previously had six outlots (buildings) they now have five. They also lost excess parking along the LaGrange Road side – there is no overflow parking for full-serve restaurants. They have provided a nice water feature to the rear of Time Out and the access road to LaGrange Road; although the park area is gone they may be able to provide some green space.
The retailers remain basically the same – Hooters at the north end; a multi-tenant building next – Chipotle, Caribou Coffee and Five Guys – fast food restaurants. The next building is a Sonic and Chick Fil A – these are smaller restaurants in keeping with the smaller parking area due to insufficient parking on LaGrange Road. Texas Roadhouse has agreed to move to the Joliet Road outlot, this enables Bradford to develop the entire project all at once. There will be signage at both entrance points.
Mr. Steven Pagnotta of Bradford stated that amenities will blend in with the Streetscape; he highlighted the grassy knoll – next to the water feature – a green belt area with trees and landscaping throughout, incorporating the ornamental light fixtures of the Streetscape. They are seeking MWRD approval for above ground detention.
The economics are as listed in the Proposed Project Budget – they are providing the dollars to complete all the necessary redevelopment improvements. The parking lot will remain but the surface will be ground down, resurfaced and restriped, landscaped islands provided, and everything completely reconstructed throughout.
Mr. Eck stated that the Harley site is 4 acres; Bradford has six acres as buildable lots; the City may retain the two remaining acres of common land, including the driveway, the grassy knoll and the pond. IDOT may reduce the present number of access points. LaGrange Road will have a right in and right out pork chop and the existing curb cut to Bally’s plus full access at the Joliet Road traffic signal. Bradford proposes to pay $2 million for the six acres and will do all the site improvements for the entire property plus the Harley Davidson site. Their estimated total private investment is $15,600,000; that includes $6.2 million of TIF qualified expenses and $3.7 as the City incentive. Bradford will demolish all the buildings, remove the existing parking lot and utilities, clean up environmental contamination on the site, regrade the entire development, put in all new utilities to serve these buildings, construct the parking lot, install lighting, landscaping, match the Streetscape standards, do all IDOT improvements and common area improvements including the access drive on LaGrange Road and Joliet Road, the Harley parking lot and the pond to provide an integrated development. The site work portion estimate is $4,029,000.
Ms. Paul discussed the revenue projections generated from the site . Page 1 is the project budget showing all costs included. The projections on Page 2 were done by Robert Rychlicki who was unable to attend tonight. He used national averages for the restaurants to show how that will increase the EAV and the tax increment received over the life of the TIF. Page 3 is the Tax Summary – showing that once construction is completed – beginning in 2014 (EAV’s are always one year behind), the total TIF increment is $2,380,000 over the life of the TIF. The annual sales tax is estimated at $173,513 – cumulative sales tax would be $4,8885,000. Annual food/Beverage tax about $100,000, cumulative tax would be $2,908,000. Over the life of the TIF the cumulative taxes would be $10,175,422 generated from this development. The Illinois Harley Davidson is not included in this projection.
Ald. Pondelicek noted that Bradford’s total investment would be $15 million. The TIF will extend through 2035. Committee had no other questions for Bradford. Bradford has been working on this project for about a year. Given the configuration of the property and the market, the area lends itself to restaurants; they hope this will spark additional development to the north. They owe the retailers a definite decision. Chairman McDermott stated that the committee will discuss the matter further and Bradford will have their decision tomorrow morning. The Bradford group left the meeting at 6:00 p.m.
Ms. Paul stated that the City purchased the Dodge, Ethan Allen and Toyota properties collectively for $13 million. The City gave Harley 20% of Toyota and 8% of the Dodge property — the allocated purchase price is still over $12 million. If Bradford only pays the City $2 million for the property and the City gets $10 million over the life of the TIF, the City will barely break even. The buildings are not usable; the City is selling them the land only – still worth $6 million. Land values on LaGrange Road are about $1 million per acre. Demolition costs in Illinois are about $11-12/s.f. per Ald. Straza. Ms. Paul stated Bradford is seeking $3.7 million as a TIF incentive. The City’s total TIF revenues are $2.4 million – the balance of $1.3 must come from some other source, which would be sales tax. The City previously agreed that sales tax should remain in the general fund and should be used to pay down the bonds.
The bottom line is Bradford needs to pay more for the land. This development will be a catalyst for everything else in the TIF; it takes the life of the TIF for the City to recover its money. Mayor Krzeminski stated that the value of the money, going back 23 years, will be less – Ms. Paul stated that the $10 million in today’s dollars will probably be equal to $6 million in 23 years. Hooters has been in contact with Ms. Paul for the past year. They are anxious to proceed with or without the developer. Another option is for the City to go out to bid for the site work. Harley already has site estimates from their developer – who accidentally did the estimate for the entire site, then broke out just the Harley portion. The City could bid the site work to another developer and strike a deal with Hooters individually. The City’s agreement with Bradford has expired and was never extended. Mayor Krzeminski stated that the City should not be responsible for maintaining the pond and the access road.
After further discussion of the proposed development and the fact that Harley is definitely going ahead will bring added impetus to the rest of the development. Council members are not happy with the number of fast food restaurants proposed, plus the deterioration of the money over 23 years. They directed Ms. Paul to advise Bradford that the City chooses not to accept the proposal as presented, the numbers don’t work, the payback and the package are not acceptable. The City will move forward with getting the land pad ready. Ms. Paul will contact Hooters to proceed independently; they wish to purchase the land. Ald. Jasinski suggested getting the baseline figures from the Harley Davidson developer. Ms. Paul will meet with Mr. Fitzgerald to review the entire property and come up with a plan. She will contact Bradford tomorrow.
There being no further business to discuss, Ald. Michalczyk moved to adjourn the meeting, seconded by Admin. Paul and carried unanimously.
Chairman McDermott declared the meeting adjourned at 6:15 p.m.