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Ordinance 2007-008 200700013884 Filed for Record in KENDALL COUNTYP ILLINOIS STATE OF ILLINOIS ) PAUL ANDERSON )ss ORDINANCE? At 11'$0 00� COUNTY OF KENDALL ) RHSP Surcharge 10.00 ORDINANCE NO. 2007- 08 AN ORDINANCE AUTHORIZING THE EXECUTION OF A DEVELOPMENT /ECONOMIC INITIATIVE AGREEMENT WITH PETER KAPPOS (Property at Southwest Corner of Rt 47 and Corneils Road) WHEREAS, it is deemed prudent and in the best interest of the UNITED CITY OF YORKVILLE, Kendall County, Illinois, that a certain Development/Economic Initiative Agreement pertaining to the development of real estate described within the Agreement which is attached hereto as and made a part hereof as Exhibit "A" be entered into by the UNITED CITY OF YORKVILLE; and WHEREAS, said Agreement has been drafted and has been considered by the City Council; and WHEREAS, the legal owners of record of the property subject to the Agreement are ready, willing and able to enter into said Agreement and to perform the obligations as required hereunder; and WHEREAS, the reasons for entering into this Agreement and benefits to the City are described within the Agreement and thereby made a part of this Ordinance, and Page 1 of 3 WHEREAS, the statutory procedures including specific findings as required by 65 ILCS 8- 11 -20, as amended, for economic incentive agreements have been complied with, and said findings are contained in the Agreement (Exhibit "A "), NOW THEREFORE, BE IT ORDAINED BY THE MAYOR AND THE CITY COUNCIL OF THE UNITED CITY OF YORKVILE, KENDALL COUNTY, ILLINOIS, AS FOLLOWS; Section 1: The preambles, above, are incorporated by this reference as if written in full at this place. Section 2: The Mayor and the City Clerk are herewith authorized and directed to execute, on behalf of the City, the Development/Economic Initiative Agreement concerning certain real estate described therein, a copy of which attached hereto and made a part hereof as Exhibit "A ". Section 2: This ordinance shall be in full force and effect from and after its passage and approval as provided by law. JAMES BOCK V JOSEPH BESCO V VALERIE B y PAUL JAMES V DEAN WOLFER \/ MARTY MUNNS ROSE SPEARS \/ JASON LESLIE i y Page 2 of 3 Approved by me, as Mayor of the United City of Yorkville, Kendall County, Illinois, this 6-5 Day of J A1A UAP-V , A.D. 2007. MAYOR Passed by the City Council of the United City of Yorkville, Kendall County, Illinois this rd day of 1411 U AP— Y , A.D. 2007. ATTEST: Lj r Zpjt TY CITY C� Prepared by: John Justin Wyeth City Attorney United City of Yorkville 800 Game Farm Road Yorkville, IL 60560 Page 3 of 3 STATE OF ILLINOIS ) :.. )ss. COUNTY OF KENDALL ) UNITED CITY OF YORKVILLE FIRST UNITED BANK, AS TRUSTEE UNDER TRUST AGREEMENT DATED NOVEMBER 15, 2004 AND KNOWN AS TRUST #2189 DEVELOPMENT/ECONOMIC INITIATIVE AGREEMENT THIS DEVELOPMENT AGREEMENT (this "Agreement ") is made and entered into as of the ' 3 day of ).A1,Jg4RV , 2007 by and between THE UNITED CITY OF YORKVILLE, an Illinois corporation located in Kendall County (the "CITY ") and FIRST UNITED BANK, AS TRUSTEE UNDER TRUST AGREEMENT DATED NOVEMBER 15, 2004 AND KNOWN AS TRUST #2189 (the "OWNER "). RECITALS The CITY is an Illinois municipality and hereby enters into this Agreement pursuant to 65 ILCS 5/8 -11 -20 (2002) ( "Enabling Statute "); and pursuant to Section 6(a) of Article VII of the Constitution of the State of Illinois of 1970, the CITY has determined that it has the authority to enter into this Agreement. The OWNER owns and intends to develop the real property located at the Southwest corner of the intersection of Route 47 and Corneils Road and legally described in Exhibit "A" (the "Property ") for commercial uses ( "Development Project ") subject to the zoning ordinance enacted by the CITY. OWNER has demonstrated to the CITY's satisfaction that the OWNER has the experience and capacity to complete the Development Project. The OWNER and the CITY have determined that without the financial assistance provided under this Agreement the Development Project would not be feasible and that the OWNER would not undertake the Development Project. The OWNER has expressly conditioned the undertaking of the Development Project on the CITY's agreement to pledge the Sales Tax Revenues (defined later) it receives from the Development Project to repay OWNER its Reimbursable Improvements (defined later), all as provided in this Agreement. The CITY deems it to be of significant importance to encourage development within the CITY so as to maintain a viable real estate tax and sales tax base and employment opportunities. -1- Accordingly, the CITY has made the following findings necessary pursuant to the Enabling Statute: That the Property has remained vacant in excess of twenty (20) years; That the Development Project is expected to create job opportunities within the municipality; That the Development Project will serve to further the development of adjacent areas; The CITY has requested that OWNER financially participate in the cost of design and improvement of Illinois Route 47 adjacent to the subject real property, and the cost of signalization at the intersection of Illinois State Route 47 and Corneils Road in the United City of Yorkville. The CITY has requested OWNER to dedicate real property to the CITY on Corneils Road and Illinois State Route 47 for the widening of Right -of -Ways. That without this Agreement, the Development Project would not be reasonably possible given the off -site costs imposed by the Illinois Department of Transportation and the United City of Yorkville; That the OWNER meets high standards of creditworthiness and financial strength; That the Development Project will strengthen the commercial sector of the municipality; That the Development Project will enhance the tax base of the CITY and all related governmental bodies; and That this Agreement is made in the best interest of the CITY; and Pursuant to the Illinois Municipal Code, as amended ( "Code "), the CITY has authority to enter into an economic incentive agreement relating to the development of land within corporate limits, including an agreement to share or rebate a portion of the retailer's occupation taxes received by the CITY that are generated by the development. Subject to the terms and conditions of this Agreement, the CITY agrees to reimburse the OWNER for its Reimbursable Improvements. In reliance upon the CITY's representations and covenants contained in and subject to the terms and conditions of this Agreement, the OWNER intends to cause the Reimbursable Improvements (as hereinafter defined) to be constructed and to enter into construction contracts and other agreements as necessary. This Agreement has been submitted to the corporate authorities of the CITY for consideration and review, and the corporate authorities have given all notices and taken all actions required to be taken prior, to the execution of this Agreement to make this Agreement effective. -2- NOW, THEREFORE, to maintain and revitalize business within the CITY by assuring opportunities for development and attracting sound and stable commercial growth; to promote the public interest and to enhance the tax base of the CITY; to induce the OWNER to undertake the Development Project; in consideration of the OWNER's agreement to undertake the Development Project and the CITY's agreement to reimburse the OWNER for the costs of causing the construction of certain of the Reimbursable Improvements; and in consideration of the mutual promises, covenants, stipulations and agreements herein contained in this Agreement, the OWNER and the CITY hereby agree as follows: Incorporation of Recitals. The recitals set forth above are incorporated hereby by this reference as if fully set forth herein. Creation of Economic Incentive Agreements. The CITY acknowledges that an economic incentive agreement for the subject commercial property within the Property will provide incentives for development within the Property, which will provide sales tax benefits to the CITY. The CITY shall, upon application by OWNER or its assigns, pursuant to 65 ILCS 5/8 -11 -20 (2002) or any other statutory means, enact all ordinances and execute all agreements to share or rebate a fifty percent (50 %) portion of the CITY's allocated portion of sales tax revenue as set forth herein to OWNER or as assigned in writing by OWNER, pursuant to the terms provided in this paragraph of the Agreement (hereinafter referred to as "Incentives "). For purposes of this Agreement a "commercial retail user" shall be any user that collects sales tax as part of its operation. The commercial retailer user shall be referred to as the "Generator ". The CITY acknowledges that its agreement to execute this Development/Economic Initiative Agreement is a material inducement to OWNER to enter into this Agreement. Development Incentive Reimbursement. Incentives. The OWNER pursuant to the terms of this Agreement shall be repaid 100% of its Reimbursable Improvement costs (defined below) out of a minimum of 50% of sales tax generated by any "Generator" on the Property or any additional property purchased by OWNER, as evidenced by paid lien waivers and sworn contractor affidavit submitted to the CITY. The CITY shall include interest at the rate of three percent (3 %) per annum in excess of prime commercial interest rate as set by Old Second Bank — Yorkville on the Reimbursable Improvement calculation for the balance of Reimbursable Improvements incurred by OWNER. Interest shall be calculated annually and shall commence with the Certificate of Occupancy being issued to the first store (or other business operator) on the Property. OWNER shall be entitled to recover up to the total amount of the Reimbursable Improvement calculation plus interest for a period of twenty (20) years commencing from the date of the execution of this Agreement. -3- In the event OWNER recovers its full Reimbursable Improvement plus interest calculation prior to that expiration time, the right to recovery shall terminate earlier than the previous stated expiration date. In the event OWNER has not received all of its Reimbursable Improvements calculation and interest upon said expiration date, the Agreement shall be treated as expired. Interest shall not be compounded. These Reimbursable Improvements include, but are not limited to, the following: 1) Construction of any off -site Illinois State Route 47 and Corneils Road improvements intersection, signalization, or other improvements on Corneils Road or Route 47 as is necessitated by IDOT or the CITY for the development of the subject property and handling ambient traffic benefiting from said roadway improvements. 2) The Fair Market Value of any real property, determined by Appraisal Figure agreed to by OWNER and CITY at the time of any dedication or taking of real property for right -of -way purposes at the time of said real property is dedicated or taken for said purposes by either the United City of Yorkville or the Illinois Department of Transportation. The CITY shall distribute the sales tax revenue generated by any Generator as follows: A) 50% to the OWNER, or as directed by the OWNER; and B) 50% to the CITY; if the OWNER has One Hundred Fifty Thousand (150,000 sq.ft.) or less of commercial space on the subject property; or Sales Tax and Sales Tax Revenue Defined. The term Sales Tax used herein refers to revenues generated by the sale of merchandise from and collected under the Retailer's Occupation Tax, or any other "sales tax" or similar tax that may be enacted by the State of Illinois or any governmental agency or body created under the laws of the State of Illinois, based upon gross sales, and located within the State of Illinois, that is collected by the Generators as .a result of business transactions occurring on the Property. In the event that the CITY's share of said sales tax or substitute tax is reduced or increased by the State, then the affected Generator's share thereof shall be reduced or increased in the same proportion. Payment Obligation. The CITY hereby agrees to pay OWNER or its assignee the quarterly installment payments made to the CITY by the Illinois Department of Revenue within thirty (30) days of receipt by the CITY of the quarterly installments, and continuing until the Reimbursable Improvements and applicable interest are paid to the OWNER as set out in this Agreement. The "quarterly installment payment" shall mean an amount equal to one -half ( of the sales tax revenue received by the CITY from the State generated by each Generator on the Property, or any additions to the Property. All amounts paid to the OWNER will be due and payable solely from one -half (Y2)-or as adjusted under paragraph 8(a) of this Agreement of the -4- quarter. However, if the CITY no longer receives sales tax revenues from the Generator due to a change in Illinois statutes, then the CITY shall make payments to the OWNER from any alternate sources of revenue provided to the CITY by the State, if any are made, specifically as a replacement or substitute for sales tax revenue presently received by the CITY. Verification of Costs. Following construction of the Reimbursable Improvements, OWNER shall provide the CITY with final lien waivers and sworn contractor affidavit establishing the cost of such improvements. I Commencement Date. The terms of this Agreement shall be for Twenty (20) years commencing upon the execution and approval of this Agreement by the CITY. Sources of Funds to Pav Reimbursable Development Proiect Costs. Funds necessary to pay for the Incentives are to be solely derived from the additional sales tax generated by the Generators. This pledge of additional sales tax revenues hereby is approved by the CITY. In order to comply with the terms of this Agreement, OWNER shall require in writing all tenants in the Property and to any subsequent purchasers of any portion of the Property to direct the Illinois Department of Revenue to provide the CITY with a breakdown of sales tax being remitted to the CITY for each commercial retailer on -site. In the event OWNER or a commercial retailer fails to provide the CITY with written authority for release of said information from the Illinois Department of Revenue the CITY shall have no duty to remit sales tax proceeds from that commercial retailer to the OWNER. Assignability. 1) It is expressly agreed and understood by the parties to this Agreement that the benefits contemplated in the Development/Economic Initiative Agreement and pursuant to 65 ILCS 5/8 -11 -20 (2002) are assignable at the option of the OWNER. Upon such written assignment by the OWNER, Generator shall have all rights currently vested in the OWNER under the Development Agreements, this Ordinance and applicable law, and shall be entitled to enforce same by any legal or equitable remedy. If any Lot is sold by the OWNER, OWNER shall be entitled to continue to receive payments for Reimbursable Improvements pursuant to the Development /Economic Initiative Agreement unless specifically assigned by the OWNER. 2) OWNER may assign a portion or all of its rights under the terms of this Agreement to any future developers, owners, or institutions or individuals providing financing for the improvements outlined above in this Agreement. -5- Reimbursement Procedures. Sales Tax Reports. OWNER agrees to cause all Generators to execute and deliver to the CITY a written direction, in form and content acceptable to the CITY and the Illinois Department of Revenue ( "DOR "), authorizing the DOR to release to the CITY the sales tax figures for the Generator, on a quarterly basis and during the term of this Agreement. The CITY agrees to take the necessary action to initiate the transaction. Should the DOR cease to release the sales tax information to the CITY on a quarterly basis, OWNER and all Generators shall be responsible for any further action to obtain the sales tax information from the DOR or shall be responsible for submittal of the sales tax information from the DOR or shall be responsible for submittal of the sales tax information as provided for in the next paragraph of this Agreement. In the event the DOR fails to submit to the CITY the quarterly sales tax information for any Generator as provided for in Section A above, OWNER shall cause Generators to, contemporaneous with the filing of sales tax reports with the Illinois Department of Revenue or successor agency, furnish to the CITY copies of any and all sales tax returns, sales tax reports, amendments, or any other paper filed with the State of Illinois, said Department of Revenue or other appropriate governmental entity, pertaining to the Generators, and certified as being true and correct, which documents are being provided to the CITY for purposes of identifying sales tax revenues collected pursuant to this Agreement. Confidentialitv. The CITY acknowledges and agrees that information to be provided by Generators hereunder are proprietary and valuable information and that any disclosure or unauthorized use thereof will cause irreparable harm to OWNER and /or OWNER's affiliates and /or Generator and /or Generator's affiliates, and to the extent permitted by state of federal law, including but not limited to Section 7(1)(g) of the Illinois Freedom of Information Act, the CITY agrees to hold in confidence all sales figures and other information provided by OWNER or Generators or obtained from OWNER'S or Generator's records in connection with this Agreement, and in connection therewith, the CITY shall not copy any such information except as necessary for dissemination to the CITY's agents or employees as permitted hereinafter. The CITY shall be permitted to disclose such information (i) to its agents or employees who are reasonably deemed by the CITY to have a need to know such information for purposes of this Agreement; provided, that such agents and employees shall hold in confidence such information to the extent required of the CITY hereunder or (ii) to the extent required by order of court or by state of federal law. The confidentiality requirements of this Agreement shall survive any expiration, termination or cancellation of this Agreement and shall continue to bind the CITY, its successors, assigns and legal representatives for a period of five (5) years from the termination, expiration or cancellation of this Agreement. All Generators shall be treated as third party beneficiaries to this Confidentiality provision. Audit Each payment by the CITY to OWNER shall be accompanied by a statement executed by the City Treasurer or the Treasurer's designee, setting forth the calculations of such payment and identifying the sales tax return period to which the payment relates. The City Treasurer or the Treasurer's designee shall further issue a statement setting forth all payments made to date to -6- OWNER. OWNER shall have one (1) year following the receipt of said payment to contest any of the calculations or information contained in said statements. OWNER shall have the right to review all sales tax reports provided to the CITY by the state relating to any Generator upon two days written request by OWNER. Default/Right to Cure. No party shall be deemed in default hereunder until such Party has failed to cure the alleged default with ten (10) days in the case of a monetary default, or within thirty (30) days in the case of a non - monetary default, from notice of such default from the other Party; provided, however, if the nature of such non - monetary default is such that it cannot reasonably be cured within such thirty (30) days period, then such Party shall not be deemed in default if such Party commences to cure such default within such thirty (30) day period and thereafter diligently prosecutes such cure to completion. In the event of a default and except as may be otherwise provided herein to the contrary, the non - defaulting party may: (i) terminate this Agreement upon written notice to the defaulting party, recover from the defaulting party all damages incurred by the non - defaulting party; (ii) j except as may be otherwise expressly provided to the contrary herein, seek specific performance of this Agreement, and, in addition, recover all damages incurred by the non - defaulting party; (the parties declare it to be their intent that this Agreement may be specifically enforced); (iii) pursue all other remedies available at law, it being the intent of the parties that remedies be cumulative and liberally enforced so as to adequately and completely compensate the non - defaulting party. No Obligation to Develop, Open or Operate. Nothing contained in this Agreement shall be deemed to obligate OWNER, Generator or any of Generator's affiliates to construct any improvements on the Property or to open or operate any form of business in the Property for any period of time or at all. Additional Covenants. Time Time is of the essence unless otherwise stated in this Agreement and all time limits set forth are mandatory and cannot be waived except by a lawfully authorized and executed written waiver by the party excusing such timely performance. Binding Effect. This Agreement shall be construed and enforced in accordance with the laws of the State of Illinois. Severability. If any provision of this Agreement is held invalid by a court of competent jurisdiction or in the event such a court shall determine that the CITY does not have the power to perform any such provision, such provision shall be deemed to be excised herefrom and the invalidity thereof shall not affect any of the other provisions contained herein. Notices. All notices and requests required pursuant to this Agreement shall be sent by -7- i i i certified mail as follows: To Owner: Peter C. Kappos 6502 W. Joliet Rd. Ste. 4 Countryside, IL 60525 To Owner's Attorney: Law Offices of Daniel J. Kramer 1107A S. Bridge Street Yorkville, IL 60560 With copies to: Attorney John Wyeth United City of Yorkville Offices 800 Game Farm Rd. Yorkville, IL 60560 I Authority to Execute. The signatories of the parties hereto warrant that they have been l lawfully authorized by the City Council of the CITY and the Board of Directors of ! DEVELOPER, to execute this Agreement on their behalf. i Attorneys' Fees. If a party commences a legal proceeding to enforce any of the terms of this Agreement, the prevailing party in such action shall have the right to recover reasonable attorneys' fees and costs from the other Party to be fixed by the court in the same action. Relationship of the Parties. Nothing herein shall be deemed or construed by the Parties or by any third party as creating the relationship of principal and agent or of partnership of or joint venture between the Parties, it being understood and agreed that no provision herein, nor any acts of the parties, shall be deemed to create any relationship between the parties. Remedies Not Exclusive. Except as may be otherwise expressly provided herein, the various rights and remedies herein contained and reserved to each of the parties, except as herein otherwise expressly provided, are not exclusive of any other right or remedy of such party, but are cumulative and in addition to every other remedy now or hereafter existing at law, in equity or by statute. No delay or omission of the right to exercise any power or remedy by either party shall impair any such right, power or remedy or be construed as a waiver of any default or non- performance or as acquiescence therein. -8- r IN WITNESS WHEREOF, this Agreement is entered into at United City of Yorkville, Illinois, as of the date and year shown above. UNITED CITY OF YORKVILLE, FIRST UNITED BANK, AS TRUSTEE UNDER an Illinois Municipal Corporation TRUST AGREEMENT DATED NOVEMBER 15, 2004 AND KNOWN AS TRUST #2189, AND NOT PERSONALLY By: B' MAYO o onald J. Beran, and Asst. Trust Officer Attest: Dated: //a3/ 0 7 i SEE ATTACHED PAGE 10 "EXONERATION CLAUSE - MISCELLANEOUS INSTRUMENTS" -9- EXONERATION CLAUSE — MISCELLANEOUS INSTRUMENTS It is expressly understood and agreed by and between the parties hereto, anything herein to the contrary notwithstanding, that each and all of the representations, covenants, undertakings and agreements herein made on the part of the trustee while in form purporting to be the representations, covenants, undertakings and agreements of said Trustee are nevertheless each and every one of them, made and intended not as personal representations, covenants, undertakings and agreements by the Trustee or for the purpose or with the intention of binding said Trustee personally but are made and intended for the purpose of binding only that portion of the trust property specifically described herein, and the instrument is executed and delivered by said Trustee not in its own right, but solely in the exercise of the powers conferred upon it as such Trustee; and that no personal liability or personal responsibility is assumed by nor shall at any time be asserted or enforceable against the FIRST UNITED BANK or any of the beneficiaries under said Trust Agreement, on account of this instrument or on account of any representations, covenants, undertakings or agreements the said Trustee, whether or not in this instrument contained, either expressed or implied, all such personal liability, if any, being expressly waived and released. Date: I FIRST UNITED BANK, not individually, but solely as Trustee under Trust Number Dated: N BY:cn� Trust Officer `4 S,` N i o"2 V'/E& Law Offices of Daniel J. Kramer 1107A S. Bridge Street Yorkville, Illinois 60560 630.553.9500 -10- LEGAL DESCRIPTION That part of the Northeast' /4 of Section 17, Township 37 North, Range 7 East of the Third Principal Meridian, Described as Follows: Commencing at the Northeast Corner of said Northeast V4; Thence Westerly along the North Line of said Northeast 1 /4, 28.74 Feet to the Westerly Right of Way Line of Illinois State Route No. 47; Thence Westerly along said North Line, 213.30 Feet; Thence Southerly Parallel with the East Line of said Northeast 1 /4721.70 Feet for a Point of Beginning; Thence Northerly along the last described course, 182.03 Feet; Thence Westerly Parallel with said North Line, 347.87 Feet; Thence Southerly along a line which forms an angle of 91 Degrees, 03 Minutes, 36 Seconds with the last described course, measured clockwise therefrom, 181.72 Feet to a line drawn Westerly from the Point of Beginning, Parallel with the South Line of the Northeast' /4 of said Northeast 1 /4; Thence Easterly along said Parallel Line, 345.80 Feet to the Point of Beginning, in Bristol Township, Kendall County, Illinois. And That Part of the Northwest Quarter of Section 16 and part of the Northeast Quarter of Section 17, all in Township 37 North, Range 7 East of the Third Principal Meridian, described as follows: Commencing at the Northeast Corner of the Northeast Quarter of said Section 17; Thence South 88 Degrees, 44 Minutes West along the North Line of said Quarter Section 28.30 Feet to the Westerly Line of State Route No. 47 for the Point of Beginning; Thence South 88 Degrees, 44 Minutes West along the North Line of said Quarter Section 213.30 Feet; Thence South 0 Degrees, 07 Minutes West Parallel with the East Line of said Quarter Section 721.70 Feet; Thence North 89 Degrees, 49 Minutes East Parallel with the South Line and South Line extended of the Northeast Quarter of the Northeast Quarter of said Section 17, 273.56 Feet to the Westerly Line of said State Route No. 47; Thence Northerly along said Westerly Line 727.95 Feet to the Point of Beginning, in the Township of Bristol, Kendall County, Illinois.