ACTION REQUESTED:
Title
Communication from the City Manager with a Request to Approve the FIRST AMENDMENT to the REDEVELOPMENT AGREEMENT with RIVER TRAIL DRIVE L.P. (1st District)
Body
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” is October 29, 2015. After that date, either party has the right to terminate the Agreement during an additional 10-day period (until November 7, 2015). If neither parties terminates, the project could proceed. While a major milestone of subdividing and rezoning the property has been accomplished, the City has not yet submitted its request to IDNR to approve the conversion. The application will not be made prior to October 29, 2015 and consequently no approval will be granted prior to the end of the due diligence window. 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 First Amendment extends the due diligence window for an additional 6 months through April 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 considerable public comment. The immediate neighborhood, the Detweiller Marina Neighborhood Association, has supported the project. There has been considerable public opposition to the project.
IMPACT IF APPROVED: The Due Diligence window will be extended through April 29, 2016.
IMPACT IF DENIED: The Due Diligence window will end October 29, 2015 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