ACTION REQUESTED:
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Communication from the City Manager with a Request to Approve the SECOND AMENDMENT to the REDEVELOPMENT AGREEMENT with RIVER TRAIL DRIVE L.P. (1st District)
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BACKGROUND: On April 14, 2015 the City Council approved a Redevelopment Agreement with River Trail Drive L.P. to create the River Trail apartment project. The Agreement was fully executed by both parties on April 29, 2015. Section 1.3(c) of the Agreement created a six month “Due Diligence” window in which both the City and developer had to produce certain documents and complete certain activities prior to conveyance of the property and commencement of the project. Those documents and activities are outlined more fully in Sections 1.3 and 1.5 of the Agreement. Among the more critical deliverables are having the property subdivided and rezoned; an approved bond resolution; securing of private financing; and obtaining approval from the Illinois Department of Natural Resources (IDNR) and National Park Service (NPS) for the conversion of the property.
The “Due Diligence Expiration Date” was originally set to expire on October 29, 2015. On October 27, 2015, the City Council approved the First Amendment to the Redevelopment Agreement which extended the “Due Diligence Expiration Date” until April 29, 2016. After that date, either party has the right to terminate the Agreement during an additional 10-day period. If neither parties terminates, the project could proceed.
The largest remaining issue is receiving approval from IDNR and NPS that will allow project to proceed. Since the extension granted by the First Amendment, the City has submitted its request to IDNR to approve the conversion. This was a complex process that included a series of public meetings and hearings, significant public comment, and submission of appraisals for both the property to be converted and the replacement properties. Subsequent to the submission, the State requested that a Phase 1 Archaeological Survey be conducted to investigate the potential of endangered cultural resources. The City hired Prairie Archaeology and Research to conduct the study. Their findings showed no threatened resources and recommended that the project proceed. The study has been submitted to IDNR and is part of their final approval.
The appraised values were certified by IDNR in March. The difference in value between the conversion and replacement parcels, combined with “banked” value from the Rocky Glen conversion, yielded a difference of $9,300 in the City’s favor. This allowed the City to request that 6,000 square feet of the Detweiller Playground property be withheld from the official conversion. This allowance preserves an option to lease the clubhouse and its immediately surrounding grounds to the Peoria Boat Club should the project proceed.
While anticipated, the City has not yet received approval of the conversion from IDNR and NPS. IDNR approval is likely to occur before the April 29, 2016 deadline, but NPS approval is not. While the developer has arranged financing, nothing can be finalized until the developer is certain that IDNR and NPS approve of the conversion. Similarly, the City will not prepare a bond resolution in the absence of such approval.
Given the hard work and progress on this project, neither the developer nor City staff wish to terminate the Redevelopment Agreement. Without some relief, the City would be forced to terminate since it cannot sell the property without IDNR approval. The attached Second Amendment extends the due diligence window for an additional 3 months through July 29, 2016. It is important to note that this date is an outside parameter. Should all of the deliverables in the Agreement be satisfied prior to that date, the project can proceed. An unsigned copy of the final Redevelopment Agreement is also attached for reference.
FINANCIAL IMPACT: Extending the due diligence window does not have any financial impact.
NEIGHBORHOOD CONCERNS: The River Trail project has been the subject of a great deal of public comment. While there has been support for the project, there has also been considerable opposition.
IMPACT IF APPROVED: The Due Diligence window will be extended through July 29, 2016.
IMPACT IF DENIED: The Due Diligence window will end April 29, 2016 and the City would need to terminate the Agreement under the provisions of 1.3(e).
ALTERNATIVES: Council could lengthen or shorten the proposed Due Diligence extension.
EEO CERTIFICATION NUMBER: Not applicable.
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL’S 2014 - 2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Vibrant Downtown: Riverfront/ Central Business District/ Warehouse District
2. Financially Sound City Government, Effective City Organization
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Reinvest in neighborhoods.
2. Have an efficient government.
DEPARTMENT: City Manager's Office