Kane County Reporter

City of Geneva Committee of the Whole met July 1

Here are the minutes provided by the committee:

Elected Officials Present: Mayor Burns, Ald. Bowring, Ald. Bruno, Ald. Kilburg, Ald. Kosirog, Ald. Maladra, Ald. Marks, Ald. Mayer, Ald. Paschke, Ald. Swanson, Clerk Kellick.

Elected Officials Attending by Teleconference: Ald. Hruby.

Elected Officials Absent: None.

Others Present: City Admin. Dawkins, Asst. City Admin. McCready, City Attny.

Sandack, Supt. Landers, Dir. Babica, Dir. DeGroot, Dir. Tymoszenko.

Others attending by video or teleconference: None.

Call to Order

Council member Craig Maladra, serving as chair, called the meeting to order at 7:26 PM noting all council members were present, save for Ald. Hruby who attended via teleconference.

Approve Committee of the Whole Minutes from June 17, 2024.

Moved by Ald. Bruno, seconded by Ald. Paschke.

MOTION CARRIED by voice vote 10-0.

Items of Business

Consider Draft Resolution Authorizing the Purchase of Vehicles Up to the Budgeted FY25 Amount of $600,000.00 Through a Joint Purchasing Agreement.

Moved by Ald. Bowring, seconded by Ald. Marks.

MOTION CARRIED by voice vote 10-0.

Presentation and Consideration of a Draft Resolution for a Public-Private

Partnership Opportunity with Emerald RE Holdings, LLC at 122-130 E. State Street.

Moved by Ald. Marks, seconded by Ald. Bowring.

Dir. Tymoszenko provided a presentation on a public-private partnership with Emerald RE Holdings, LLC, for the development of The Roosevelt at 122 and 130 E. State St. If built, this will be the first newly constructed property in TIF 2 and TIF 3 since Aldi was constructed in 2008. She noted that the proposed development meets five of six redevelopment plan objectives.

The Roosevelt will be a three-story mixed-use building. The first floor will comprise approximately 5,000 sq. ft. for a Great Western Flooring design center, approximately 2,000 sq. ft. for comparable commercial use, and approximately 260 sq. ft. to be used as a potential amenity space for tenants. The two floors above will be used for 14 residential units including 2 studio units. Dir. Tymoszenko noted that the developers realized that there would be extraordinary costs involved with the site assembly and preparation, utility upgrades and extensions, and stormwater management on the property. It was determined that the project would need $1.4M in TIF assistance. Development of the property would likely cover the incentive request and it was expected that sales tax would not be utilized for funding. The total development costs are estimated at just under $8.7M.

S.B. Friedman was the third-party consultant that conducted a financial but-for analysis of the project and found that projected financial returns leveraged an initial rate of return of 6.3% without assistance and a 14% rate of return with assistance. Dir. Tymoszenko advised that funds to support the project are not currently available in TIF 3. Some sources of assistance to close the gap include AARPA funds of $350,000, providing $350,000 into TIF 3 through an inter-fund loan, a Pay-as-you-go Note of $1,050,000, and a local sales tax rebate of $250,000.

Emerald Holdings has also agreed to create a backup SSA to support the TIF funding assistance should the increment be less than expected. The anticipated costs to be reimbursed total $2,205,000 and Dir. Tymoszenko explained that the City would review the developer’s requests for reimbursement and certify that incurred costs are eligible for reimbursement.

Dir. Tymoszenko noted that several City goals would be achieved through this project. These include strengthening the Fox River area as a neighborhood-level commercial and residential district, improving the connection to the Fox River, redeveloping a vacant underutilized site, enhancing the streetscape and landscape, replacing public infrastructure, and providing opportunities for a locally owned business. Additionally, Dir. Tymoszenko noted that this is a unique opportunity with a willing seller and buyer. The project results in new construction in TIF 2 where there is market hesitation. The proposed project is at a scale, height, and bulk that is supported by the public and is compatible with surrounding uses. The project also provides quality housing. She noted that because the TIF is already eight years old, the opportunity for projects of this scale is small. Finally, this is a project with a successful retail tenant. The public-private shares total 25% public and 75% private investment.

On a question by Ald. Mayer, Dir. Babica confirmed that there will be a dual turn lane at Chrissy Ave.

On a question by Ald. Kosirog, Dir. Tymoszenko noted that there are pending projects in the TIF that were excluded. Only base revenues were utilized. If another redevelopment project were presented, the City would be able to consider its incremental gain to assist that development. The City wants this development to spur further development. On another question, Dir. Tymoszenko explained that the backup SSA would allow for a special tax to be levied in the short amount should projections not be met. Ald. Kosirog stated that he believed that this project is consistent with the State St. redevelopment plan and supports it.

On a separate question by Ald. Kosirog, Admin. Dawkins advised that the City has budgeted $500,000 in AARPA funds for grants and downtown reinvestment. It is obligated to spend $138,800 on the Tapville Social project, leaving $362,000 in funds. By allocating $350,000 for this project, nearly all the funds will be allocated which she noted is good because there is a finite period in which to spend the funds.

On a question by Ald. Swanson, Dir. Tymoszenko explained that S. B. Friedman was satisfied with a 14% rate of return. She noted that the developer tried to get a lower assistance amount but that this is the lowest that they could go. On another question, Dir. Tymoszenko noted that there is a term sheet available with proprietary information. That term sheet becomes what she presented in the meeting. She explained that most of the work was done collaboratively in meetings with the developer and that there are not reports available for review. She noted that a report on the rate of return can be provided for review as that report does not contain proprietary information.

On another question by Ald. Swanson, Josh Voit with Emerald RE Holdings explained that the increase in cost from $1.4M 1½ years prior to $2M now is because of the site grade and engineering involved. He noted that the total cost of the entire project increased over what was originally thought. Dir. Tymoszenko explained that the building and footprint changed in response to feedback from the City Council. On another question by Ald. Swanson, Mr. Voit noted that there will only be a six-month difference between the completion of the ground floor retail space and the residential spaces above.

On a question from Ald. Kilburg, Admin. Dawkins stated that the unaudited balance in TIF 2 is $1.29M. On another question, Dir. Tymoszenko stated that a PAYGO note had not been issued during her tenure with the City because TIF 2 has a significant balance. As a result, Country Village Meats utilized those funds.

She explained that The Roosevelt project is different because of the lack of extensive development in the district so far. On another question, Dir. Tymoszenko noted that there was a 90% of the 1% sales tax rebate at Dodson Place with no cap.

The proposed project is capped. She noted that the City always tries for 50% of the 1%, and that this is just the municipal tax portion of the sales tax, and does not include the Home Rule sales tax.

Ald. Mayer commented that the proposed studio apartments are simply small but not affordable. Dir. Tymoszenko noted that Emerald spent much time considering opportunities to provide affordable units. She explained that the resolution was to provide some attainable units.

Roll call:

AYES: 8 (Bowring, Bruno, Kilburg, Kosirog, Maladra, Marks, Mayer, Paschke)

ABSENT: 0

NAYS: 2 (Hruby, Swanson)

Public Comment

None.

New Business

None.

Adjournment

On a motion by Ald. Marks, the meeting was adjourned by unanimous voice vote at 8:20 PM.

https://www.geneva.il.us/AgendaCenter/ViewFile/Agenda/_07152024-2382