Economic Development Packet 09-15-05 ,st,D C/py
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800 Game Farm Road
EST. �' -- 1836 Yorkville, Illinois 60560
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AGENDA
ECONOMIC DEVELOPMENT COMMITTEE MEETING
Thursday, September 15, 2005
7:00 p.m.
City Hall Conference Room
1. Approval/Correction of Minutes: None
2. Discussion of Future Incentive Programs to Attract Commercial/Industrial
Business to Yorkville
3. Protect Kendall Now
4. PC 2005-43 Daniel Laniosz - Annexation and Zoning
5. PC 2005-18 Del Webb - PUD Plan
6. PC 2005-45 Payne Onishi - Annexation and Zoning
(McHugh Professional Building)
7. PC 2005-26 Eldamain Center for Business - Preliminary Plan
8. PC 2005-37 Corneils Crossing - Preliminary Plan
9. PC 2005-47 Swanson Lane Estates - Final Plat
10. Draft Policy for Collection of Transportation Development Fees for Kendall
County Highways
11. Additional Business
'c``0 Ciro United City of Yorkville Memo
800 Game Farm Road
EST. 1836 Yorkville, Illinois 60560
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Date: August 18, 2005
To: EDC
From: Bart Olson,Administrative Intern; Traci Pleckham, Finance Director
CC: Tony Graff, City Administrator
Subject: Economic incentive packages for discussion
As discussed at a previous EDC meeting, staff has looked into common types of
economic incentive packages that can be used to lure developers/businesses into the City. All
examples given are meant to be theoretical in nature, and the numbers that have been chosen are
mostly arbitrary but based on general industry standards of sales and tax rates. These examples
should be used to identify which types of packages are most favorable and which packages may
be more common or favorable in different situations.
In studying the options of economic incentive packages a municipality can give to a
business, a few policy questions are likely to arise. Traditionally, sales tax rebates are the
preferred method of economic incentive packages. In fact, Yorkville already has a few of these
packages in place with existing businesses/developers. However, in order to lure more
commercial development, more creative options may be necessary. These creative options can
involve adding utility tax rebates, multiple layered rebates, capping rebates, and rent kickers.
Illustrated with Attachments: Option 1
Sales tax rebates involve rebating a percentage of sales tax to the business. This can be
completed as part of a project that involves infrastructure improvements, or as a general
incentive to lure a business to the area before the population threshold for the business is present.
This is the most common and simple form of economic incentive package, and involves a flat
percentage of sales taxes. For example, in trying to lure a big box retail store to the area,
Yorkville decides to give up 50% of its sales tax from the development for 7 years. In a 175,000
square foot store, $350,000 of sales taxes is expected to be generated(based on$200 sales per
square foot), and$175,000 of that would be rebated to the business developer. Over the term of
the agreement, $875,000 would be rebated to the developer.
Illustrated with Attachments: Option 2
Utility tax rebates involve rebating a percentage of the utility tax to the business.
Generally this is completed as part of a project that specifically involves utilities, such as burying
power lines. Policy questions with utility tax rebates involve whether or not the developer is
undertaking a special project, or a project that has been encouraged by the City. Most
commercial developers require that power lines be buried on their property, but may still be
aesthetically hindered by power lines near or adjacent to their property. In this case, it may be
beneficial for both the developer and City to enter into an agreement to have these"off-site"
•
power lines buried. In order to do this, the City may offer a percentage of its utility tax for a set
number of years. For example, burying power lines may cost a big box retailer$2,000,000. A
175,000 square foot big box retailer is expected to bring in$262,500 in utility taxes (at$1.50/sf)
each year. A"50%utility tax rebate for 7 years"package would yield$918,750 for the
developer. Not enough to completely pay off the burying of the cables, but possibly enough to
give the developer incentive enough to undertake the project.
Illustrated with Attachments: Option 3
Multiple layered rebates involve more than one percentage or type of tax rebate. This
would be offered in cases where a developer/business is responsible for multiple projects on the
property, or needs an incentive to build in the town before the business' population threshold has
been reached. For example, a big box retail store has identified Yorkville as a town it would like
to build in within the next 5 years. Unfortunately, the population threshold isn't likely to be
reached for four years (projected), but the cost of land is expected to grow substantially. Also,
the developer has some soil issues that will require some extra mass grading. In response to this,
the City offers a substantial incentive package that will rebate 50%of sales taxes for 3 years for
land acquisition and general incentives, and an extra 25% of sales taxes for 5 years to subsidy the
soil issues. Using the same big box as in the utility tax example, the City can expect
$35,000,000 in sales and $350,000 in sales tax ($200/sf in sales). This package would pay-out
$787,500 the first 3 years, and$175,000 for the final two years of the package. Assuming
$100,000 an acre on a 40 acre property is the current price, with an increase in price per year
expected at 5%brings the price in 2010 (when the company would normally build in Yorkville)
to $127,628 an acre. Purchasing the land now would save the developer/business$1.1 million
dollars in land costs, in addition to the$962,500 it will receive in incentives for land acquisition.
Illustrated with Attachment 4
Another option for tax incentive packages includes caps. Caps located at the end of a
package are generally included in a project where the end goal is for the incentive to pay off a
specific percentage of specific project. For example, the City is currently in an incentive
package with Menard's to rebate a portion of infrastructure costs until the total cost is repaid
(a.k.a. —no term on the length of the incentive package). Caps located each year in a package
may be tied to the performance of the business. In an example from an NIU budgeting class, a
mall had an empty anchor store and the City was looking to give incentives to an anchor for
taking the anchor space (due to the heavy correlation between anchor store sales and the sales of
interior stores). Because the estimated revenue the anchor was going to bring in was largely
unknown(due to the shaky nature of the economy and the mall's recent history with not being
able to retain anchor stores),the City decided to put a yearly cap on the amount of sales tax
rebates the developer would receive (attached). As is illustrated on the chart,the City
implemented a sliding scale rebate; falling from 95% of sales taxes within the first year to 55%
of sales taxes in the tenth year. However, the yearly cap was set at $700,000 for the first four
years, $600,000 for the following three years, and $500,000 for the following three years. Given
the projected performance of the mall ("Total New Sales Tax"), it is shown that the cap amount
was less than the amount of sales tax projected; meaning the mall owner received the cap
amount, and the City pocketed the rest. As we can see, using a yearly cap can be beneficial in
instances when the sales tax amount is generated tough to predict. Should the anchor store have
underperformed(as had been witnessed in the past),both the business and the City would have
seen their share of sales tax decrease,but if the anchor overperformed, then the business would
hit the cap, and the City would gain the extra revenue.
The last option studied for economic incentive packages for is rent kickers. This is a
form of a rebate to the City which was used in the previous anchor store example. Should the
mall have done successfully enough to remain in the shopping center, and subsequently driven
up the property values of the mall (thus increasing rents for stores), the City would receive a
portion of the rent increase. In the example provided, this number was set at 7%of the total
increase in rent above the base rent at the time of the initiation of the agreement for the first 5
years of the agreement and 3% for the last 5 years. Given a mall that had $8.5 million in rent per
year and increased to $12.9 by the end of the agreement, the City re-pocketed $485,800 through
rent kickers.
OPTION 1
SAMPLE SALES TAX INCENTIVE ANALYSIS
***ESTIMATED***
Annual
Property
Annual Sales Annual Utility Tax to the Total Annual
Year Sales 1%Sales Tax 50% Rebate Tax to the City Tax to the City City Revenue
1 35,000,000 350,000 175,000.00 175,000.00 262,500.00 17,500.00 455,000.00
2 35,000,000 350,000 175,000.00 175,000.00 262,500.00 17,500.00 455,000.00
3 35,000,000 350,000 175,000.00 175,000.00 262,500.00 17,500.00 455,000.00
4 35,000,000 350,000 175,000.00 175,000.00 262,500.00 17,500.00 455,000.00
5 35,000,000 350,000 175,000.00 175,000.00 262,500.00 17,500.00 455,000.00
6 35,000,000 350,000 175,000.00 175,000.00 262,500.00 17,500.00 455,000.00
7 35,000,000 350,000 175,000.00 175,000.00 262,500.00 17,500.00 455,000.00
2,450,000 1,225,000.00 1,225,000.00 1,837,500.00 122,500.00 3,185,000.00
OPTION 1A
SAMPLE SALES TAX INCENTIVE ANALYSIS
***ESTIMATED***
Annual
Property
Annual Sales Annual Utility Tax to the Total Annual
Year Sales 1% Sales Tax 75% Rebate Tax to the City Tax to the City City Revenue
1 35,000,000 350,000 262,500.00 87,500.00 262,500.00 17,500.00 367,500.00
2 35,000,000 350,000 262,500.00 87,500.00 262,500.00 17,500.00 367,500.00
3 35,000,000 350,000 262,500.00 87,500.00 262,500.00 17,500.00 367,500.00
4 35,000,000 350,000 262,500.00 87,500.00 262,500.00 17,500.00 367,500.00
5 35,000,000 350,000 262,500.00 87,500.00 262,500.00 17,500.00 367,500.00
6 35,000,000 350,000 262,500.00 87,500.00 262,500.00 17,500.00 367,500.00
7 35,000,000 350,000 262,500.00 87,500.00 262,500.00 17,500.00 367,500.00
2,450,000 1,837,500.00 612,500.00 1,837,500.00 122,500.00 2,572,500.00
OPTION 1B
SAMPLE SALES TAX INCENTIVE ANALYSIS
***ESTIMATED***
Annual
Property
Annual Sales Annual Utility Tax to the Total Annual
Year Sales 1% Sales Tax 100% Rebate Tax to the City Tax to the City City Revenue
1 35,000,000 350,000 350,000.00 0.00 262,500.00 17,500.00 280,000.00
2 35,000,000 350,000 350,000.00 0.00 262,500.00 17,500.00 280,000.00
3 35,000,000 350,000 350,000.00 0.00 262,500.00 17,500.00 280,000.00
4 35,000,000 350,000 350,000.00 0.00 262,500.00 17,500.00 280,000.00
5 35,000,000 350,000 350,000.00 0.00 262,500.00 17,500.00 280,000.00
6 35,000,000 350,000 350,000.00 0.00 262,500.00 17,500.00 280,000.00
7 35,000,000 350,000 350,000.00 0.00 262,500.00 17,500.00 280,000.00
2,450,000 2,450,000.00 0.00 1,837,500.00 122,500.00 1,960,000.00
Prepared by Traci Pleckham 8/18/2005
OPTION 2
SAMPLE UTILITY TAX INCENTIVE ANALYSIS
***ESTIMATED***
Annual Annual
Annual Utility Tax to Property Tax Total Annual
Year Utility Tax 50% Rebate the City Sales 1% Sales Tax to the City Revenue
1 262,500.00 131,250.00 131,250.00 35,000,000 350,000 17,500.00 498,750.00
2 262,500.00 131,250.00 131,250.00 35,000,000 350,000 17,500.00 498,750.00
3 262,500.00 131,250.00 131,250.00 35,000,000 350,000 17,500.00 498,750.00
4 262,500.00 131,250.00 131,250.00 35,000,000 350,000 17,500.00 498,750.00
5 262,500.00 131,250.00 131,250.00 35,000,000 350,000 17,500.00 498,750.00
6 262,500.00 131,250.00 131,250.00 35,000,000 350,000 17,500.00 498,750.00
7 262,500.00 131,250.00 131,250.00 35,000,000 350,000 17,500.00 498,750.00
1,837,500.00 918,750.00 918,750.00 2,450,000 122,500.00 3,491,250.00
OPTION 2A
SAMPLE UTILITY TAX INCENTIVE ANALYSIS
***ESTIMATED***
Annual Annual
Annual Utility Tax to Property Tax Total Annual
Year Utility Tax 75% Rebate the City Sales 1%Sales Tax to the City Revenue
1 262,500.00 196,875.00 65,625.00 35,000,000 350,000 17,500.00 433,125.00
2 262,500.00 196,875.00 65,625.00 35,000,000 350,000 17,500.00 433,125.00
3 262,500.00 196,875.00 65,625.00 35,000,000 350,000 17,500.00 433,125.00
4 262,500.00 196,875.00 65,625.00 35,000,000 350,000 17,500.00 433,125.00
5 262,500.00 196,875.00 65,625.00 35,000,000 350,000 17,500.00 433,125.00
6 262,500.00 196,875.00 65,625.00 35,000,000 350,000 17,500.00 433,125.00
7 262,500.00 196,875.00 65,625.00 35,000,000 350,000 17,500.00 433,125.00
1,837,500.00 1,378,125.00 459,375.00 2,450,000 122,500.00 3,031,875.00
OPTION 2C
SAMPLE UTILITY TAX INCENTIVE ANALYSIS
***ESTIMATED***
Annual Annual
Annual Utility Tax to Property Tax Total Annual
Year Utility Tax 100% Rebate the City Sales 1%Sales Tax to the City Revenue
1 262,500.00 262,500.00 0.00 35,000,000 350,000 17,500.00 367,500.00
2 262,500.00 262,500.00 0.00 35,000,000 350,000 17,500.00 367,500.00
3 262,500.00 262,500.00 0.00 35,000,000 350,000 17,500.00 367,500.00
4 262,500.00 262,500.00 0.00 35,000,000 350,000 17,500.00 367,500.00
5 262,500.00 262,500.00 0.00 35,000,000 350,000 17,500.00 367,500.00
6 262,500.00 262,500.00 0.00 35,000,000 350,000 17,500.00 367,500.00
7 262,500.00 262,500.00 0.00 35,000,000 350,000 17,500.00 367,500.00
1,837,500.00 1,837,500.00 0.00 2,450,000 122,500.00 2,572,500.00
Prepared by Traci Pleckham 8/18/2005
OPTION 3
SAMPLE SALES TAX INCENTIVE ANALYSIS
***ESTIMATED***
Annual
75% Rebate Years 1-3 Sales Tax to
#Years Sales 1%Sales Tax 25%Years 4-5 the City
1 35,000,000 350,000 262,500.00 87,500.00
2 35,000,000 350,000 262,500.00 87,500.00
3 35,000,000 350,000 262,500.00 87,500.00
4 35,000,000 350,000 87,500.00 262,500.00
5 35,000,000 350,000 87,500.00 262,500.00
1,750,000 962,500.00 787,500.00
Prepared by Traci Pleckham 8/18/2005
& of
DEKAL
BUSINESS INCENTIVE PROGRAM
GOALS OF PROGRAM:
The City of DeKalb has established its Business Incentive Program to achieve the
following Economic Development goals of its adopted Comprehensive Plan:
> Encourage the strengthening of existing commercial areas and the
development of new business areas at appropriate locations
➢ Promote, preserve, and enhance industrial areas within the existing City
limits and unincorporated areas adjacent to the City.
➢ Enhance the local economic, social and cultural climate to ensure that
DeKalb is a community that is a desirable place to live, work and conduct
business.
> Develop and implement plans, activities, and improvements necessary to
facilitate and service quality growth as well as protect the public's health,
safety, and welfare
> Retain and attract a diverse mix of quality industrial enterprises to protect,
expand and diversify DeKalb economic and employment bases.
➢ Retain, attract, educate and train a diverse quality labor force to meet the
employment needs of existing, expanding and new businesses, enhance
the availability of quality jobs and provide a full range of employment
and advancement opportunities to DeKalb residents.
> Retain, expand and enhance retail and commercial opportunities within
DeKalb so as to maximize local retail activity and provide for a full range
of shopping and service opportunities within the DeKalb market area.
All requests for assistance shall be evaluated upon how many and how fully the
project meets these stated goals.
GENERAL RETAIL DEVELOPMENTS
Sales tax revenues are the primary source of funding for the general municipal
operations of the City of DeKalb. As such, developments that have the greatest
potential in producing these types of revenues shall be given priority when
evaluating multiple funding requests.
1
Eligible Uses of Funds:
1. Land Acquisition
2. Demolition
3. Street (Re) Construction & Related Improvements (e.g., signalization,
turning lanes,etc.)
4. Building Rehabilitation
5. Environmental Remediation Activities
6. Storm Sewer, Sanitary Service &Water System Improvements
7. Architectural/Engineering Services
8. Relocation Expenses of Expanding Businesses
Incentive Parameters:
1. Assistance shall not exceed 20%of total project hard costs
2. Payback must be within 7 years
3. Public improvements completed on grant basis
4. Private improvements completed on a sales tax rebate and/or loan
guaranty basis.
All monies extended by the City shall be subject to reimbursement by the
developer to the City should the business fail to meet its agreed upon goals. The
terms and conditions of such repayment shall be negotiated on a case-by-case
basis and incorporated into the final development agreement.
Project Evaluation Criteria:
The City shall consider all aspects of a proposed project, including its financial
feasibility, the type of project being proposed, its location within the community,
and the amount of estimated tax revenues. For retail/commercial projects, the
following shall be considered as priorities of the City and as such, projects
meeting one or more of the following criteria shall be given priority when
considering multiple funding requests:
Priority Businesses:
➢ Home Electronics
> "Higher End" Merchandise
➢ Furniture
> New Car &Truck Dealerships
Priority Locations:
➢ West Lincoln Highway
a. 1st Street to Annie Glidden Road
b. Annie Glidden Road to City Limits
➢ East Lincoln Highway (7th Street to City Limits)
2
➢ Greek Row Neighborhood(Hillcrest &Annie Glidden Roads)
➢ South 4th Street (Taylor Street south to City limits)
Ineligible Businesses:
The following business uses shall not be eligible for funding assistance through
this program unless otherwise directed by t he City Council:
1. Restaurants (including banquet facilities)
2. Auto Repair
3. Beauty Salons/Barbershops
4. Gas Stations
5. Business/Personal Service Uses (e.g., tax accounting, financial planners,
attorneys,printers, funeral homes etc.)
6. Medical &Dental Facilities
7. Financial Institutions
8. Religious and Fraternal Organizations
9. Taverns
10.Movie Theatres
11. Performing Arts Theatres
12. General Purpose Grocery Stores
CENTRAL BUSINESS DISTRICT DEVELOPMENTS
DeKalb's central business district ("downtown") shall be generally described as
that area between the River and 7th Street; Grove to Locust. Two sub areas
within this region are further defined as that area between the River and 4th
Street, and that area between 4th and 7th Streets. Each maintains a distinct
character while serving and enhancing the other, creating a synergy that is
unique within the community.
Applications for assistance within the Central Business District shall be subject to
the same terms and conditions as retail projects located elsewhere in the
community, with the exception that certain businesses, otherwise deemed
ineligible for assistance, may receive consideration if locating within the
downtown area. These are:
1. Restaurants (including banquet facilities)
2. Auto Repair
3. Beauty Salons/Barbershops
4. Business/Personal Service Uses Medical &Dental Facilities
5. Performing Arts Theatres
3
COMMERCIAL/SERVICE/INDUSTRIAL DEVELOPMENTS
To protect, strengthen and expand the City's local economic base, the City relies
upon the creation and/or retention of high quality, permanent fulltime jobs for
its residents. As such, developments that have the greatest potential in
producing these types of jobs shall be given priority when evaluating multiple
funding requests.
It is noted that the City's adopted Zoning Ordinance shall determine if a business
is considered to be a commercial,service or industrial type use.
Project Evaluation Criteria:
The City shall consider all aspects of a proposed project, including its financial
feasibility, the type of project being proposed, its location within the community,
the amount of estimated tax revenues, and the number and type of jobs being
created or retained. For commercial/service/industrial projects, the following
shall be considered as priorities of the City and as such, projects meeting one or
more of the following criteria shall be given priority when considering multiple
funding requests:
lob Creation and Retention: a minimum of five (5) fulltime equivalent jobs
must be created and/or retained within 24 months of project completion to be
considered eligible for funding. Further, these jobs must be permanent and
fulltime in nature (e.g., at least 1950 hours annually), and fall into one of the
following categories:
Job Type Minimum Hrly Wage Maximum Credit Per Job
Unskilled $10.00 $2,500
Semi-Skilled $15.00 $3,000
Skilled $20.00 $4,000
Professional Over$20.00 $5,000
Priority Locations:
> Park 88
> South side Industrial Park
> Airport North
Incentive Parameters:
1. Assistance shall not exceed 20% of total project hard costs
2. Payback must be within 7 years
3. Public improvements completed on a grant basis
4. Private improvements completed on a utility and city property tax rebate
and/or loan guaranty basis
4
All monies extended by the City shall be subject to reimbursement by the
developer to the City should the business fail to meet its agreed upon goals. . The
terms and conditions of such repayment shall be negotiated on a case-by-case
basis and incorporated into the final development agreement.
Eligible Activities:
1. Land Acquisition
2. Demolition
3. Street (Re) Construction & Related Improvements (e.g., signalization,
turning lanes, etc.)
4. Building Rehabilitation
5. Environmental Remediation Activities
6. Storm Sewer, Sanitary Service &Water System Improvements
7. Architectural/Engineering Services
8. Relocation Expenses
HOTEL/CONVENTION FACILITIES
It shall be a goal of the City of DeKalb to attract one or more full service hotels to
the community within the next five years. Given the specialized nature of this
type of development, any incentives extended shall be done so on a case-by-case
basis.
ARCHITECTURAL IMPROVEMENT PROGRAM
The City of DeKalb Main Street District Architectural Improvement Program is
designed to promote the continued use and maintenance of commercial
buildings in the Downtown area by making funds available for appropriate
quality exterior and limited interior rehabilitation of eligible structures. This
program, provided through matching funds, has been approved by the City
Council in recognition of the positive impact that individual architectural
improvement can have on the overall appearance, quality and vitality of the
Downtown. For the period of July 1, 2004 to June 30, 2007, the City of DeKalb has
earmarked$300,000 in funding for this program.
Three separate categories of projects may be funded under Phase II of the AIP
program.
A) Standard Projects
The vast majority of projects will be Standard AIP Projects. Standard projects will
5
be provided with up to $25,000 in matching funding on a dollar-for-dollar (1:1)
basis, under provisions virtually identical to those used during the initial three-
year period of the AIP program (Phase I). Funding for standard projects is
provided as reimbursement after all project costs have been prepaid, and as a
forgivable loan subject to a standard legal agreement with the City of DeKalb.
B) Special Program for Highly Significant Projects
For projects of exceptional significance, involving buildings of major
architectural importance that are potentially eligible for listing on the National
Register of Historic Places, funding of up to $50,000 in matching costs may be
provided. Eligibility and review provisions of this program are more strict than
for the standard AIP program. The mere existence of total projects costs greater
than those normally matched for a standard AIP project is not, in and of itself, a
sufficient criterion for funding under this program.
C) Small-Project Grants
A limited number of direct grants, not to exceed total project costs of $1,000 will
be available for funding small-scale "spruce-up" projects. Applicants/building
owners are limited to one (1) funded grant over the three-year period of AIP
funding. Receipt of a small-project grant will not affect eligibility for standard
AIP forgivable loan projects.
6
Page 1of1
Bart Olson
From: Susan K. McLaughlin jsmclaughlin@vil.north-aurora.il.us]
Sent: Friday, December 17, 2004 10:46 AM
To: bolson@yorkville.iLus
Subject: RE: [lamma] Business Sales Tax Incentive Packages
Bart,
We just finished one with Woodman's Supermarket and are in the process of approving one with Rubloff
Development for a Target& Kohl's also. What do you need in regards to basic specs?
Woodman's is receiving $3 million over 10 years as .5% of our 1.5% sales tax rate. We get$150K then they get
$150K, we get$200K, then they get$200K and so on until the $3 million is paid back. If we don't get any sales
tax revenue, then they don't get paid either. With Rubloff Development, we're looking at a similar situation. A half
percentage of sales tax revenue from our 1.5%total sales tax rate. I'm sorry I can't give you specifics on that one
yet because it hasn't been approved yet. Algonquin recently had an incentive agreement with Rubloff as well.
You could try to contact them.
Sue McLaughlin
Village Administrator
Village of North Aurora
25 E. State St.
North Aurora, IL 60542
(630) 897-8228 ext. 226
From: iamma-bounces@mailman.depaul.edu [mailto:iamma-bounces@mailman.depaul.edu] On Behalf Of Bart
Olson
Sent: Friday, December 17, 2004 10:15 AM
To: LISTSERV
Subject: [Iamma] Business Sales Tax Incentive Packages
Hello everyone—
Has anyone recently approved a sales tax incentive package or policy to attract commercial or industrial
development? I would need basic specs of any agreement you may have entered into, or know of. I know
Mokena just entered into an incentive package with a lifestyle center, and St. Charles has been involved with one.
Bart Olson
Administrative Intern
United City of Yorkville
800 Game Farm Rd.
Yorkville, IL 60560
630-553-8537
Page 1of1
Bart Olson
From: Michael Flynn [mfiynn@mundelein.org]
Sent: Friday, December 17, 2004 5:14 PM
To: bolson@yorkville.il.us
Subject: RE: [lemma] Business Sales Tax Incentive Packages
We have completed 2 sales tax incentive agreements in recent years. One with Cub Foods and one with a
shopping center developer. In both cases the incentives were provided to compensate the developers for
extraordinary costs of development In the Cub Foods case extraordinary costs included demolition of an existing
big box, and various site improvements. In the other case the Village required a lot of improvements to the State
and county roads around the site including a traffic light, intersection improvements, widening etc. In each case a
maximum amount and time period was set; the reimbursements were based on performance (i.e. the more sales
tax they generated the faster they got paid, but never more than the cap). For Cub the deal was$800,000 over
12 years. For Mundelein Crossing it was up to$6M over 15 years with certified costs of the road work to be
provided.
That's it in a nutshell. It is case-by-case, balancing the extraordinary costs with the net sales tax increase for the
Village.
Mike Flynn
Assistant Village Administrator
Original Message
From: iamma-bounces@mailman.depaul.edu [mailto:iamma-bounces@mailman.depaul,edu]On Behalf Of Bart
Olson
Sent: Friday, December 17, 2004 10:15 AM
To: LISTSERV
Subject: [Iamma] Business Sales Tax Incentive Packages
Hello everyone—
Has anyone recently approved a sales tax incentive package or policy to attract commercial or industrial
development? I would need basic specs of any agreement you may have entered into, or know of. I know
Mokena just entered into an incentive package with a lifestyle center, and St. Charles has been involved
with one.
Bart Olson
Administrative Intern
United City of Yorkville
800 Game Farm Rd.
Yorkville, IL 60560
630-553-8537
12/08/2004
ECONOMIC INCENTIVE AGREEMENT
BY AND BETWEEN
THE VILLAGE OF BUFFALO GROVE AND THE ARLINGTON AUTOMOTIVE GROUP, INC.
This Agreement is made and entered into as of the xx day of January, 2005, by
and between the Village of Buffalo Grove , an Illinois home rule municipal corporation
(hereinafter defined as the "Village") and The Arlington Automotive Group, Inc., an Illinois
corporation (hereinafter defined as "Toyota").
In consideration of the recitals and mutual covenants and agreements set forth
herein, the receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
SECTION 1. RECITALS.
A. Toyota conducts its Business at the Premises commonly known as 935
West Dundee Road, Buffalo Grove, Illinois.
B. Toyota has adopted the assumed names of "Arlington Toyota" and
"Arlington Collision Center".
C. Toyota desires to expand its Business in the Village of Buffalo Grove,
including but not limited to, expanding its vehicle inventory, sales, service and repair operations.
The single order acceptance point for all of Toyota's Business would continue to be conducted
from the Premises.
D. In order to assist Toyota with its expansion plans in the Village, and to
undertake and ensure the success of the Development, the Village agrees, pursuant to the
terms of this Agreement, to share sales tax received by the Village using a formula which
corresponds to new sales tax revenue generated by the Development over a finite period of
time.
E. As of the date of this Agreement, the total sales tax rate applicable on the
sale of certain tangible personal property, including but not by way of limitation, items that must
be titled or registered by an agency of the State of Illinois (e.g. automobiles) within the Cook
County portion of the Village is seven and three-quarter percent (7.75%), the Village portion of
which is one percent (1%) (which is comprised of the one percent (1%) Illinois retailers'
occupation tax).
F. As of the date of this Agreement, the total sales tax rate applicable on the
sale of taxable tangible personal property (e.g. general merchandise but not including
automobiles) is eight and three-quarter percent (8.75%), the Village portion of which is two
percent (2%) (which is comprised of the one percent (1%) Illinois retailers' occupation tax, and
the one percent (1%)Village's Home-Rule Sales Tax).
G. The Village has the power and authority to enter into this Agreement
pursuant to, but without limitation, the home rule powers of the Village under Section 6, Article
VII of the 1970 Constitution of the State of Illinois.
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SECTION 2. RULES OF CONSTRUCTION AND DEFINITIONS.
A. The language in this Agreement shall be interpreted in accordance with
the following rules of construction: (a) The word "may" is permissive and the word "shall" is
mandatory; and (b) except where the context reveals the contrary: The singular includes the
plural and the plural includes the singular, and the masculine gender includes the feminine and
neutral.
B. Whenever used in the upper case in this Agreement, the following words
shall have the following meanings:
1. Agreement. This Economic Incentive Agreement.
2. Audit. Undertaken at the sole cost and expense of the Village, a
review of the books and records of the Business by the Financial Consultant for
the purpose of making a determination of the amount of Municipal Sales Tax the
Village should have received under the terms of this Agreement and for the
purpose of verifying Toyota's compliance with the terms of this Agreement.
3. Base Year. The twelve months immediately preceding the
Commencement Date.
4. Business. All of the sales operations of Toyota that occur on the
Premises, including but not limited to, the sales, service and repair of
automobiles and all associated operations.
5. Commencement Date. The first day of the first calender month
following the date upon which Toyota is issued a Village Certificate of
Occupancy for the Development, but no later than December 31, 2006.
6. Development. The expansion and renovation of the existing facilities
and infrastructure on the Premises in order to increase vehicle inventory, and
expand service and repair operations. (WGR Note: This language will need to
be adjusted once the actual plans are determined.)
7. Financial Consultant. The person, firm or corporation and agents
thereof authorized by the Village to conduct an Audit, at the sole cost and
expense of the Village, of the Business regarding all transactions occurring
during any given Sales Tax Year following the date of this Agreement.
8. Gross Receipts. The term "Gross Receipts" shall have the same
meaning as that which is ascribed to it in the Retailers' Occupation Tax Act.
9. Home Rule Sales Tax. The one percent (1%) sales tax imposed in
the Village pursuant to Village's Home Rule Sales Tax Ordinance No.
2004-16enacted in accordance with the Home Rule Municipal Retailers'
Occupation Tax Act (65 ILCS 5/8-11-1) and the Home Rule Municipal Service
Occupation Tax Act (65 ILCS 5/8-11-5). Pursuant to the Home Rule Municipal
Retailers' Occupation Tax Act, said tax shall not be imposed upon an item of
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tangible personal property titled or registered with an agency of the State of
Illinois.
10. Incremental Municipal Sales Tax. The additional Municipal Sales
Tax generated by Toyota from the Development in excess of the Municipal Sales
Tax generated from the existing operation. For purposes of this Agreement, the
Municipal Sales Tax generated from the existing operation shall be determined
based on the Municipal Sales Tax paid by Toyota for the Base Year, but not less
than $430,000.00.
11. Municipal Sales Tax. That portion or component of the Sales Tax
generated by the Development that the Village actually receives from the State
of Illinois pursuant to the Village's Home Rule Sales Tax, the Retailers'
Occupation Tax Act, the Service Occupation Tax Act, the Service Use Tax Act,
and the Use Tax Act.
12. Municipal Sales Tax Payment. The payment to Toyota of a portion
of the Municipal Sales Tax that the Village is required to make pursuant to
Section 3 of this Agreement.
13. Payment Date. Within ninety (90) days after the end of each Sales
Tax Year.
14. Premises. The real estate and structures located at the commonly
known address of 935 West Dundee Road, Cook County, Buffalo Grove, Illinois.
15. Retailer's Occupation Tax Act The Illinois Retailers' Occupation
Tax Act, 35 ILCS 120/1 et seq., as the same has been, and may, from time to
time hereafter be, amended.
16. Sales Tax(es). Any and all taxes imposed and collected by the State
of Illinois pursuant to the Home Rule Sales Tax, the Retailer's Occupation Tax
Act, the Service Occupation Tax Act, the Service Use Tax Act, or the Use Tax
Act.
17. Sales Tax Year. The period of time commencing on the
Commencement Date and ending on the date that is one year after the
Commencement Date, and each of the seven (7) succeeding one year periods
thereafter.
18. Service Occupation Tax Act. The Illinois Service Occupation Tax
Act, 35 ILCS 115/1 et seq., as the same has been, and may, from time to time
hereafter be, amended.
19. Service Use Tax Act. The Illinois Service Use Tax Act, 35 ILCS
110/1 et seq., as the same has been, and may, from time to time hereafter be,
amended.
20. Use Tax Act. The Illinois Use Tax Act, 35 ILCS 105/1 et seq., as the
same has been, and may, from time to time hereafter be amended.
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21. Village or Village of Buffalo Grove. The Village of Buffalo Grove,
an Illinois municipal corporation and home rule unit as described in the Illinois
Constitution.
SECTION 3. MUNICIPAL SALES TAX PAYMENT.
A. The Village shall pay Toyota the Municipal Sales Tax Payment on or
before the Payment Date an amount equal to the following formulas:
1. For the first Sales Tax Year, eighty percent (80%) of that year's
Incremental Municipal Sales Tax.
2. For the second Sales Tax Year, seventy percent (70%) of that year's
Incremental Municipal Sales Tax.
3. For the third Sales Tax Year, sixty percent (60%) of that year's
Incremental Municipal Sales Tax.
4. For the fourth Sales Tax Year, fifty percent (50%) of that year's
Incremental Municipal Sales Tax.
5. For the fifth Sales Tax Year, forty percent (40%) of that year's
Incremental Municipal Sales Tax.
6. For the sixth Sales Tax Year, thirty percent (30%) of that year's
Incremental Municipal Sales Tax.
7. For the seventh Sales Tax Year, twenty percent (20%) of that year's
Incremental Municipal Sales Tax.
8. For the eight Sales Tax Year, ten percent (10%) of that year's
Incremental Municipal Sales Tax.
B. Prior to any Municipal Sales Tax Payment, Toyota shall provide the Village
with copies of its Sales Tax returns for the Base Year for the existing operation, which returns
shall be used for establishing the existing operation sales.
C. The amount due pursuant to this Agreement shall not be a general
obligation of the Village. The Village shall not have an obligation to pay any amounts to Toyota
except an amount equal to the Village's local sales tax share actually received from Illinois
Department of Revenue on account of the Development and not exceeding the sales tax rates
as set forth in this Agreement.
D. The Village shall continue the Municipal Sales Tax Payments until the
earlier of (i) the eight (8) year term of this Agreement, or (ii) a maximum of $1,300,000.00 has
been paid by the Village to Toyota.
E. In the event that any sales tax returns that have been submitted to the
Village are amended, Toyota shall promptly forward a photocopy of such amended sales tax
returns to the Village, clearly identifying them as an amendment of a sales tax return previously
submitted to the Village.
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F. Should Toyota transfer or sell its operation or cease its Business on the
Premises within four years of the Commencement Date of this Agreement, then Toyota shall
reimburse to the Village 100% of the Municipal Sales Tax Payments received pursuant to this
Agreement.
SECTION 4. LITIGATION AND DEFENSE OF AGREEMENT.
A. Litigation. If, during the term of this Agreement, any lawsuits or
proceedings are filed or initiated against either party before any court, commission, board,
bureau, agency, unit of government or sub-unit thereof, arbitrator, or other instrumentality, that
may materially affect or inhibit the ability of either party to perform its obligations under, or
otherwise to comply with, this Agreement ("Litigation"), the party against which the Litigation is
filed or initiated shall promptly deliver a copy of the complaint or charge related thereto to the
other party and shall thereafter keep the other party fully informed concerning all aspects of the
Litigation.
B. Defense. The Village and Toyota each agree to use their respective best
efforts to defend the validity of this Agreement, and all ordinances and resolutions adopted and
agreements executed pursuant to this Agreement, including every portion thereof and every
approval given, and every action taken, pursuant thereto.
SECTION 5. REMEDIES.
A. Remedies. In the event of a breach or an alleged breach of this
Agreement by either party, either party may, by suit, action, mandamus, or any other
proceeding, in law or in equity, including specific performance, enforce or compel the
performance of this Agreement.
B. Notice and Cure. Neither party may exercise the right to bring any suit,
action, mandamus or any other proceeding pursuant to Subsection A of this Section without
first giving written notice to the other party of the breach or alleged breach and allowing 15 days
to cure the breach or alleged breach; provided, however, that if the party accused of the breach
or alleged breach cannot cure the condition within 15 days after the notice, notwithstanding the
party's diligent and continuous effort, promptly commenced and diligently continued upon
receipt of the notice, then the period to cure the violation or failure shall be extended for the
time necessary to cure the violation with diligence and continuity, but in no event longer than
180 days unless extended in writing by the Village.
SECTION 6. TERM.
This Agreement shall be in full force and effect from and after the date of its
execution until the date that is the earlier to occur of (a) the date that is eight (8) years after the
Commencement Date or (b) the date on which the Village has made all payments required
pursuant to this Agreement.
SECTION 8. RELEASE OF INFORMATION.
Prior to any payments by the Village of any sums as provided for in this
Agreement, Toyota shall cause to be delivered to the Village, on a quarterly basis, the Illinois
Retailers' Occupation Tax, Use Tax and Service Occupation Tax returns and/or other
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documentation submitted by Toyota to the Illinois Department of Revenue, which detail the
amount of Sales Tax that Toyota paid to Illinois Department of Revenue with respect to
Toyota's operations. If necessary, Toyota shall provide the Village with a limited power of
attorney, addressed to and in a form satisfactory to the Illinois Department of Revenue,
authorizing the Illinois Department of Revenue to release to the Village all gross revenue and
Sales Tax information submitted by Toyota to the Illinois Department of Revenue. Additionally,
in the event that the Illinois Department of Revenue does not make available to the Village said
documentation, Toyota shall provide alternative documentation that details the amount of Sales
Taxes that Toyota paid to the Illinois Department of Revenue.
SECTION 9. GENERAL PROVISIONS.
A. Complete Agreement; Supersedence. This Agreement constitutes the
complete agreement of the parties regarding the payment of Municipal Sales Tax to Toyota and
shall supersede and nullify all prior drafts and agreements concerning the payment of Municipal
Sales Tax to Toyota.
B. Amendments. No amendment to, or modification of, this Agreement
shall be effective unless and until it is in writing and is approved by the authorized
representative of Toyota and by the Village of Buffalo Grove corporate authorities by Ordinance
duly adopted, and executed and delivered by the authorized representatives of each party.
C. Notices. Any notice or other communication required or permitted to be
given under this Agreement shall be in writing, and shall be deemed delivered to and received
by the addressee thereof when delivered in person at the address set forth below, or three
business days after deposit thereof in any main or branch United States Post Office, certified or
registered mail, return receipt requested, postage prepaid, properly addressed to the parties,
respectively, as follows:
For notices and communications to the Village:
Village of Buffalo Grove
50 Raupp Blvd.
Buffalo Grove, Illinois 60089
Attention: Director of Finance
with a copy to:
William G. Raysa, Esq.
Raysa &Zimmerman, LTD
22 South Washington
Park Ridge, Illinois 60068
For notices and communications to Toyota:
Mr. Gary Vicari
President
Arlington Toyota
935 West Dundee Road
Buffalo Grove, Illinois 60089
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By notice complying with the foregoing requirements of this paragraph, each party shall have
the right to change the address or addressee or both for all future notices and communications
to such party, but no notice of change of address shall be effective until actually received.
D. Indemnity. Toyota shall and hereby agrees to defend, hold harmless
and indemnify the Village, its President, Trustees, employees, agents and attorneys from and
against any and all claims, demands, suits, damages, liabilities, losses, expenses, and
judgments which may arise out of this Agreement. The obligation of Toyota in this regard shall
include but shall not be limited to all costs and expenses, including reasonable attorneys' fees,
incurred by the Village in responding to, defending against, or settling any such claims,
demands, suits, damages, liabilities, losses, expenses or judgements. Toyota covenants that it
will reimburse the Village, or pay over to the Village, all sums of money the Village pays, or
becomes liable to pay, by reason of any of the foregoing, and will make payment to the Village
as soon as the Village becomes liable therefore. In any suit or proceeding brought hereunder,
the Village shall have the right to appoint counsel of its own choosing to represent it.
E. Governing Law. This Agreement and the rights of the parties hereunder
shall be governed by, and construed, interpreted, and enforced in accordance with, the internal
laws, and not the conflict of law rules of the State of Illinois.
F. Interpretation. This Agreement has been negotiated by all parties and
shall not be interpreted or construed against the party drafting the Agreement.
G. Change in Laws. Unless otherwise explicitly provided in this Agreement,
any reference to laws, ordinances, rules, or regulations of any kind shall include such laws,
ordinances, rules, or regulations of any kind as they may be amended or modified from time to
time hereafter.
H. Headings. The headings of the sections, paragraphs, and other parts of
this Agreement are for convenience and reference only and in no way define, extend, limit, or
describe the meaning, scope, or intent of this Agreement, or the meaning, scope, or intent of
any provision hereof.
I. Time of Essence. Time is of the essence in the performance of all terms
and provisions of this Agreement.
J. Severability. It is the express intent of the parties hereto that should any
provision, covenant, agreement, or portion of this Agreement or its application to any person,
entity, or property be held void, invalid, or unenforceable by a court of competent jurisdiction,
such action shall not effect the remainder of this Agreement, which shall continue in full force
and effect.
K. No Third Party Beneficiaries. Nothing in this Agreement shall create, or
be construed to create, any third party beneficiary rights in any person or entity not a signatory
to this Agreement.
. L. Counterparts. This Agreement may be executed in any number of
multiple identical counterparts and all of said counterparts shall, individually and taken together
constitute the Agreement.
M. Assignment. Toyota may not assign this Agreement or the amounts, in
whole or part, to be paid hereunder without the Village's prior written consent. The Village
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acknowledges that this Agreement is an obligation which runs to Toyota and is not a covenant
running with the land.
O. Audit. Upon prior written notice to Toyota, and at a place and time that is
mutually beneficial to both parties, the Village shall have the right conduct an Audit of Toyota to
inspect and review those books and records which are directly related to establishing Gross
Receipts for any Sales Tax Year, Base Year, or any portion thereof.
P. No Village Obligation. The parties acknowledge and agree that none of
the terms, conditions or provisions of this Agreement shall be construed, deemed, or
interpreted as (i) a restriction or prohibition on the Village from eliminating or amending it Home
Rule Sales Tax, or (ii) a requirement to impose a sales or other tax for the purpose of providing
a source of funds for the Municipal Sales Tax Payment.
Q. Loss of Authority. In the event that the Village's authority to enter into
this Agreement or to pay the Municipal Sales Tax Payment to Toyota pursuant to this
Agreement are repealed, become unexercisable, null and void or otherwise become invalid then
the Village's obligations hereunder shall cease and no further obligations shall be required of
the Village.
R. Certifications. Each party hereto certifies hereby that it is not barred
from entering into this Agreement as a result of violations of either Sections 33E-3 or 33E-4 of
the Illinois Criminal Code (720 ILCS 5/33 —E-3, 5/33-E-4), that it has a written policy against
sexual harassment in place in full compliance with 775 ILCS 512-105(A)(4), and it is in
compliance with the Illinois Drug Free Workplace Act (30 ILCS 580/2).
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first above written.
VILLAGE OF BUFFALO GROVE
By:
Village President
ATTEST:
Village Clerk
THE ARLINGTON AUTOMOTIVE GROUP,
INC.
By:
Its:
ATTEST:
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Its:
ACKNOWLEDGEMENT
STATE OF ILLINOIS )
SS
COUNTY OF COOK )
This instrument.was acknowledged before me on , 2005 by
Elliott Hartstein, the Village President of the VILLAGE OF BUFFALO GROVE, an Illinois home
rule municipal corporation, and by Janet Sirabian, the Village Clerk of said municipal
corporation.
Signature of Notary
SEAL:
My Commission expires:
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ACKNOWLEDGEMENT
STATE OF ILLINOIS )
SS
COUNTY OF COOK )
This instrument was acknowledged before me on , 2002 by
, the President of THE ARLINGTON AUTOMOTIVE GROUP, INC., an Illinois
corporation, and by , the of said company.
Signature of Notary
SEAL:
My Commission expires:
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The Conservation Foundation
Memo
To: Economic Development Committee
From: Stephanie Houk Sheetz,Land Use/Open Space Planning Manger
Date: 9/12/2005
Re: Protect Kendall Now! Funding
Protect Kendall Now! is an initiative focused on increasing the pace of land preservation in
Kendall County. My presentation to the Yorkville City Council on September 6th outlined the
three tasks we will accomplish in the first two years of this project. They are as follows:
• Create a unified,county-wide,open space and natural areas plan.
• Increase public awareness through a multi-faceted public awareness campaign.
• Engage interested landowners in exploring permanent land protection options.
The Conservation Foundation obtained 2/3 of the funding from three sources: The Grand
Victoria Foundation,The Gaylord&Dorothy Donnelly Foundation,and The Illinois Clean
Energy Community Foundation. The remaining funding must come through local matching
dollars that The Conservation Foundation is seeking to raise through municipal,county,and
private monies. We are seeking$5,000 this year and next from the United City of Yorkville
in order to raise the required matching funds of$50,000 each of the next two years. Many of
the Kendall County municipalities have initially agreed to the same amount,therefore we are
now working to formalize those tentative agreements. Attached is a draft agreement that we
thought would help formalize the expectations and outline the funds to be provided. It is not
intended to be legalistic,rather it is in a resolution format that will demonstrate official
support. This is a document we will show to our funders to prove the local match has been
raised.
The Conservation Foundation is requesting Yorkville favorably consider this request for
$5,000/year in 2005&2006. I will be at the meeting to answer questions the committee may
have in considering this request.
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1
Draft 9/12/05
RESOLUTION NO.
PROTECT KENDALL NOW! INITIATIVE AGREEMENT BETWEEN
THE CONSERVATION FOUNDATION (TCF)
AND
THE UNITED CITY OF YORKVILLE
WHEREAS,The Conservation Foundation(TCF) wishes to promote the protection of
open space and natural areas in Kendall County, and to restore/maintain its watersheds for its
citizens and those of Illinois; and
WHEREAS, Kendall County is currently the fastest growing county in Illinois, and the
second fastest growing county in the nation; and
WHEREAS, Kendall County residents support open space preservation as demonstrated
in the 2002 referendum and in numerous surveys;
WHEREAS,TCF has received funding to pursue this objective in the form of its
"Protect Kendall Now!" initiative; and
WHEREAS,United City of Yorkville regulates development and can increase the
success of this objective;
WHEREAS, it would be advantageous for TCF to work with the United City of
Yorkville to implement this initiative; and
THEREFORE, BE IT RESOLVED,that TCF and the United City of Yorkville agree to
work cooperatively on the implementation of this initiative.
The principal goal is to increase the pace of land preservation in Kendall County. Three tasks
will be completed with the initiative: 1) create a unified Open Space and Natural Areas Plan for
Kendall County; 2) run a public awareness campaign on the importance of open space, urgency
to protect, options, etc.; and, 3) contact landowners with property designated as open space. TCF
will work with United City of Yorkville to help implement greenway and open space objectives
of their development plans (incorporated into the Open Space and Natural Areas Plan).
Services.Provided by TCF
TCF will provide the following services through Protect Kendall Now!:
Ongoing coordination of the initiative;
Technical training to United City of Yorkville staff and elected officials on open space
protection options and sustainable development;
Assistance in open space land acquisition(negotiations, landowner contact, etc.);
Public education on the urgency of protecting open space in the United City of Yorkville;
Regular updates of TCF activities, accomplishments, and general project status through
regular meetings and/or correspondence with TCF's PKN! project manager;
Accept qualified conservation easements.
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Draft 9/12/05
Services provided by
The United City of Yorkville will work to:
Provide funding to the initiative to help cover the local match;
Make available all land use and open space plans within the United City of Yorkville's
jurisdiction;
Provide input to the development of the Kendall County Open Space and Natural Areas
Master Plan;
Provide ongoing input into the coordination and strategy of the initiative;
Designate a staff person or elected/appointed official to serve on the Steering Committee;
Facilitate discussions with developers and landowners on properties identified on the
Master Plan;
Consider donations and acquisitions on said properties;
Work to connect protected open space;
Provide technical assistance as requested to the initiative;
Implement sustainable development and conservation design principles on lands
identified in the Master Plan that United City of Yorkville has jurisdiction over, and that
are not designated as Open Space;
Work cooperatively with other government agencies in implementing the goals of this
initiative.
Payment Schedule
United City of Yorkville recognizes that TCF obtained two-thirds of the project funding through
private grants and seeks local matching funds from the project partners. The United City of
Yorkville is a project partner and therefore agrees to pay out $ during the first year(July
1, 2005 through June 30, 2006)and$ during the second year(July 1, 2006 through June
30, 2007) for a total of$ to provide monies toward the local match required for the
"Protect Kendall Now!"initiative. Upon the signing of this agreement,the United City of
Yorkville will provide in full the first payment.
Term
The duration of this agreement is from the date signed below until terminated in writing by either
party or by mutual consent. At the time of the signing of this agreement, it is contemplated that
it will last 24 months.
Termination
TCF reserves the right to terminate this agreement if its Board of Trustees determines that the
mission of TCF is not furthered by continuing this affiliation
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Draft 9/12/05
Passed by the United City of Yorkville on , 2005.
Mayor Arthur F. Prochaska, Jr. Clerk Jackie Milschewski
United City of Yorkville
Vote:
YES
NO
ABSTENTIONS
3
E tD
A POLICY FOR THE COLLECTION OF TRANSPORTATION DEVELOPMENT FEES
FOR KENDALL COUNTY HIGHWAYS
- VILLAGE OF OSWEGO -
DRAFT
Background
The suburban Chicago region has been experiencing tremendous growth over the past few
decades. Kendall County and the municipalities within Kendall have recently become a part of
this growth trend, as evidenced by the recent revelation that Kendall County is the 2°d fastest
growing county in the nation. Additionally, the Chicago Area Transportation Study (CATS) has
now included all of Kendall County in-its metropolitan planning area.
with this tremendous growth comes a myriad of issues, not the least of which is transportation
needs. More population means more traffic on the entire transportation network, including state,
county, municipal and township roadways.
An evaluation of the historical growth trends reveals that the vast majority of new residential
units are located within corporate limits. Kendall is no exception. In fact, in 2004, new
residential building starts in the unincorporated region of Kendall County represented less than
10% of the total new building starts county-wide.1
The Village of Oswego recognizes this impact on the municipal transportation network, and has
taken steps to address the municipal needs through implementation of the Roadway Capital
Improvements Cost Allocation &Recovery Program (2004). This program identifies capital
costs over a 5-year period and assigns some of this cost to new development,based on an
estimated number of new residential starts. Fees collected generally fund improvements on just
the municipal transportation system.
The Village of Oswego also recognizes that Kendall County, like most counties in Illinois, has
limited ability to collect fees from new municipal developments, even though those
developments contribute directly to the need for capacity-type improvements on the County
Highway System.
To remedy this inequity, the Village desires to adopt a policy that will address some of the
funding deficiencies on the County Highway System, by collecting fees from new residential
developments that will fund capital improvements on County Highways.
Fee Guidelines
As a rule, all residential developments would be subject to the collection of fees on behalf of the
County, even if they don't have frontage on a County Highway. This is because the average trip
from nearly every development in Oswego would involve travel on a County Highway. And
each new residential subdivision will have an incremental impact on the need for a capacity
improvement.
In general terms, it is more desirous to have larger developments, with significant frontage on a
County Highway, actually install the capacity improvements on the adjacent county highway,
rather than pay a fee that is collected by the Village. This tends to be a more efficient means of
realizing the capacity improvement. The cost of such a capacity improvement would be credited
to the developer, and if the cost is equal to or greater than the fees that would have been collected
through cash payments, then there would be no further obligation to pay transportation
development fees to the Village. Site specific improvements such as turning lanes, signals, etc.
that are directly attributable to the development are exempt from receiving any credit on the
transportation development fee. Smaller developments with limited frontage will be more likely
to simply pay the transportation development fee. Again, site specific improvements would not
yield any credit on the collection of fees. Upon collection of sufficient fees,the County will then
have the ability to let a contract for the capacity-type improvement.
The Village is supportive of the collection of a transportation fee en behalf of Kendall County,
but desires to guarantee that said fees will be spent only on improvements that will directly
benefit the residents of the Village. Therefore, the Village will collect and hold transportation
fees, and will only release fees to Kendall County upon mutual agreement on the scope and
extent of work to be completed on the County Highway.
Fee Calculation
The Kendall County 2005-2030 Transportation Improvement Plan identifies slightly more than
$21 million in needed capital improvements in the Oswego area(see Exhibit 1) . These costs do
not include routine maintenance,but are all generally capacity-type improvements.
The Village of Oswego's Roadway Capital Improvements Cost Allocation&Recovery
document estimates 2470 new residential units in the 2004-2008 time period. In reviewing that
document today,the number of units appears under-estimated, since 890 new residential building
permits were issued in 2004.3
Another source of information that provides insight on anticipated development is the Village of
Oswego Comprehensive Plan, which is currently being updated by the Lannert Group. Although
the plan will probably only be relevant for the next 5-years due to the rate of development, it
does identify the ultimate expected build-out for Oswego, considering current municipal
boundary agreements and assumed residential densities. That build-out would yield a total
Village population of approximately 70,000 people.4 The 2005 population is estimated at nearly
20,000, so approximately 50,000 additional people could move to Oswego in the coming years.
In an attempt to marry the County Transportation Plan to the Village Comprehensive Plan, this
policy assumes that the Village will, for all practical purposes, reach"build-out" by 2030.
Therefore, all the transportation projects identified in the County Plan will need to be
constructed, at a cost of$21,050,000 in 2005 dollars.
50,000 people _ 2.79 people/unit5 = ± 17,921 units
$21,050,000 _ 17,921 units = $1175/unit
Conclusion
An efficient transportation network will undoubtedly be one of the key issues facing Oswego for
the foreseeable future. And both Village of Oswego and Kendall County will need to partner
their efforts to insure the necessary steps are taken to provide a safe and efficient transportation
network that will continue to stimulate the local economy.
For these reasons, the Village of Oswego hereby agrees to negotiate in good faith with new
residential developments in an attempt to collect transportation development fees consistent with
the context herein. Specifically, the Village will attempt to negotiate the collection of not less
than $1175 per residential unit for all new developments negotiated in the years 2005 or earlier,
or will negotiate the actual construction of the capacity-type improvement by the developer. An
inflator of 3% per year, effective January 1, 2006 and each subsequent January 1st shall be added
to the $1175 (see table below).
This policy will be reevaluated as agreed by both the Village of Oswego and Kendall County.
Year Negotiated Fee
2005 or earlier $1,175
2006 $1,210
207 $1,246
2008 $1,283
2009 $1,321
2010 $1,361
2011 $1,402
2012 $1,444
2013 $1,487
2014 $1,532
2015 $1,578
Source: Kendall County Record
2 Source: Kendall County 2005-2030 Transportation Improvement Plan
3 Source: Oswego Building Department
4 Source: Oswego Community Development Department
5 Source: 2000 Census