Special Meeting Board of Trustees

Village of Lombard Village Hall 255 East Wilson Ave. Lombard, IL 60148 villageoflombard.org Minutes Thursday, June 30, 2016 7:00 PM Amended and Corrected Lombard Village Hall Board Room Special Meeting Board of Trustees Village President Keith Giagnorio, Village Clerk Sharon Kuderna, Trustee Dan Whittington, Trustee Mike Fugiel, Trustee Reid Foltyniewicz, Trustee Bill Johnston, Trustee Robyn Pike and Trustee Bill Ware Special Meeting Board of Trustees Minutes June 30, 2016 I Call to Order The Special Meeting of the President and Board of Trustees of the Village of Lombard held on Thursday, June 30, 2016 in the Board Room of the Lombard Village Hall was called to order at 7:02 p.m. by Village President Keith Giagnorio. II Pledge of Allegiance III Roll Call Present 8 - Keith Giagnorio, Sharon Kuderna, Dan Whittington, Mike Fugiel, Reid Foltyniewicz, Bill Johnston, Robyn Pike, and Bill Ware Staff Present: Village Manager Scott Niehaus Director of Finance Tim Sexton Director of Community Development Bill Heniff Assistant Village Manager Nicole Aranas Executive Coordinator Carol Bauer IV Public Participation Village Clerk Sharon Kuderna read the following announcement: On behalf of the Village Board and staff, we hope you all have a wonderful Fourth of July weekend, filled with family and friends. While it is a fun summer holiday, it also the day that we remember the birth of our great country. This Fourth of July, our thoughts and prayers are with all of our Veterans who have helped to preserve our Freedom, and to troops who are still doing so. We are able to celebrate this weekend because of your service. We thank you all. To help celebrate the Fourth of July, the Village of Lombard is once again hosting its annual Fourth of July fireworks display at Madison Meadow Park. Free shuttle buses will be available from Glenbard East High School, Madison Elementary School, and Pleasant Lane School, from 7 - 11:30 p.m. Just a reminder - Wilson Avenue between Stewart and Edgewood Avenues will be closed for construction to all traffic, and attendees are strongly encouraged to utilize the shuttle buses. For more information including event and parking maps, visit www.villageoflombard.org/fourthofjuly <http://www.villageoflombard.org/fourthofjuly>. The Lombard Police Department will be out in full force this weekend Village of Lombard Page 1 Special Meeting Board of Trustees Minutes June 30, 2016 to help keep our roads safe. Remember - there is NO excuse for drunk driving. Help keep Lombard safe - Drive Sober or Get Pulled Over. V Agenda 160192 Bradford Lombard 1 LLC (Mariano’s) Economic Incentive Agreement Recommendation from the Economic and Community Development Committee to approve an economic incentive agreement for Bradford Lombard 1 LLC relative to the construction of a new 74,000 square foot Mariano’s grocery store on the property located at 345 W. Roosevelt Road, with an estimated project development cost of $25,500,000. The economic incentive that is being provided pursuant to the agreement is $3,000,000, with interest accruing thereon at the rate of six percent (6%) per annum until the entire economic incentive (both principal and interest) is paid in full, or the agreement terminates by its terms, whichever occurs first. The economic incentive will be paid solely from a portion of the real estate taxes, sales taxes and places of eating taxes generated from the subject property. The agreement also provides for the Village to facilitate and construct certain roadway improvements within the right-of-ways of Finley Road and Roosevelt Road abutting the subject property, at the Village's cost. (DISTRICT #2) Trustee Bill Johnston, Chairperson of the Economic & Community Development Committee, noted that having a proposal for a Mariano's to be built on the Finley and Roosevelt site is a great opportunity for such a key development site. He thanked Bill Heniff and Scott Niehaus for all of their hard work in making this proposal come to fruition. Village Manager Scott Niehaus recognized a Boy Scout in the audience attending the Board meeting to earn a citizenship badge. Village Manager Niehaus thanked Director of Community Development Bill Heniff, Director of Finance Tim Sexton and Attorney Greg Smith for their work with the Mariano's proposed development. Village Manager Scott Niehaus gave a Power Point presentation and noted the following: Background - The Finley and Roosevelt site is the former K-Mart site and has been vacant since January, 2013. Bradford Lombard 1 LLC has the property under contract with the Geller Family Trust (the owner) and Sears Holdings (the long-term lessee). Bradford intends to close on the property, raze the existing building and provide a new 74,000 square foot Mariano's grocery store on the premises. The Village granted zoning approvals on June 16. Economic Benefits - The project is intended to create both Village of Lombard Page 2 Special Meeting Board of Trustees Minutes June 30, 2016 construction and permanent job opportunities; strengthen the commercial sector; serve as a catalyst for future economic development activity; finance roadway expansion and intersection improvements at Roosevelt and Finley Roads and strengthen the tax base of local governmental entities. Economic Incentive Request - Bradford is seeking approval of an Economic Incentive Agreement to facilitate the project. The Village negotiated the agreement. The Village utilized a third-party consultant to ensure that the incentive was necessary. The concept was recommended for approval by the Village's Economic and Community Development Committee (ECDC). Economic Incentive Request - The estimated project cost is $25.5 million. The incentive request is $3 million (net present value) plus selected roadway improvements. There is a 6% interest provision. The Incentive Agreement is for a 19-year agreement, but the School District property tax sharing is only for the first 10 years of the Agreement. Economic Benefits - Approximately $40 million in retail sales is projected in the first year. Assuming conservative growth projections, the project will add an estimated $870.8 million in sales to the Lombard economy over the 29 year life of the Agreement. Taxing districts will benefit by expanding their respective tax bases. New revenue to the Village as a result of the new property and sales taxes of $9.1 million over the life of the Agreement ($481,000 per year). For all taxing districts involved (School Districts #44 and #87 and the Village), the site is projected to generate approximately $12.5 million in new combined property and sales tax over the 19 year life of the Agreement. Property Taxes - All existing tax revenues generated by the site would continue to go to all taxing bodies. Any future property tax generated from the new project construction would be equally shared (50/50) between Bradford and the taxing bodies that are party to the Agreement. Sharing of revenues would occur for the first 10 years of the Agreement for the School Districts and will be shared by the Village through the life of the Agreement. "Early sale" provisions within the Agreement provide for reduction of interest payments. Sales Tax - Reimbursement from future sale tax rebates, received from goods sold at the new store once it opens. The Village retains the first 20% of sales tax generated from the site for potential loss of sales tax. After the first 20%, the Village will equally share (50/50) retail sales tax generated from the project for the life of the Agreement. An anticipated $37.5 million baseline sales figure was estimated based upon performance by other like establishments. Almost $6.2 million in sales tax could be generated and evenly divided between the Village and Bradford exclusive of the Village's non home rule sale tax. Places for Eating Tax - The store is anticipated to also provide funds Village of Lombard Page 3 Special Meeting Board of Trustees Minutes June 30, 2016 derived from the Village's Places for Eating Tax (PFE) Tax. The Village retains the first 20% of sales tax generated from the site for potential loss of PFE Tax. After the first 20%, the Village will equally share (50/50) retail sales tax generated from the project for the life of the Agreement. Finley/Roosevelt Road Improvements - There is a proposed new traffic signal at the east entrance to the site. There are also additional lane improvements along Roosevelt Road (IDOT roadway). Finley Road left turn lane improvements consisting of double left-turn lanes (addressing existing deficiencies that would be required to be made by using Village funds). Improvements to be undertaken/paid by the Village are to be identified in the Village's Capital Improvement Program and will be funded by the Village's non home rule sales tax generated from the site. Project Status: Other agreement parties have reviewed and consented to the Agreement. Zoning entitlements have been approved. Engineering plan review is underway. IDOT has consented to the new signal concept, and provided preliminary comments of roadway improvements. Lombard Public Works is in the process of selecting an engineering firm to undertake an engineering feasibility study. The closing date on the property is July 5. Construction is slated to start in 2016. Action Requested - We are requesting concurrence with the recommendation of the Economic and Community Development Committee on an incentive concept and ask the Village Board to approve the Incentive Agreement tonight. While consistent with the Village's Economic Incentive Policy general parameters, the time length of the Agreement of 19 years is beyond the general provisions of the Policy. As such, the Policy recommends that a super-majority of the Village Board concurs with the Agreements. Trustee Foltyniewicz inquired about the Incentive Agreement. Village Manager Niehaus indicated these funds are not coming from other sales tax. It was moved by Trustee Whittington, seconded by Trustee Fugiel that the Lombard Village Board concur with the recommendation of the Economic and Community Development Committee and approve the Intergovernmental Economic Incentive Agreement (Bradford Lombard 1 LLC) relative to the construction of a new 74,000 square foot Mariano's grocery store on the property located at 345 W. Roosevelt Road, with an estimated project development cost of $25,500,000. The economic incentive that is being provided pursuant to the agreement is $3,000,000 with interest accruing thereon at the rate of six percent (6%) per annum until the entire economic incentive (both principal and interest) is paid in full, or the agreement terminates by its terms whichever occurs first. The economic incentive will be paid solely from a portion of the real estate taxes, sale taxes and places for eating taxes generated from the subject property. The agreement also provides for the Village to facilitate and construct certain roadway improvements within the the right-of-ways of Finley Road and Roosevelt Road abutting the subject property, at the Village's cost. Village of Lombard Page 4 Special Meeting Board of Trustees Minutes June 30, 2016 Aye: 7- Keith Giagnorio, Dan Whittington, Mike Fugiel, Reid Foltyniewicz, Bill Johnston, Robyn Pike, and Bill Ware VI Adjournment A motion was made by Trustee Reid Foltyniewicz, seconded by Trustee Bill Ware, that the Special Meeting of the President and Board of Trustees of the Village of Lombard held on Thursday, June 30, 2016 in the Board Room of the Lombard Village Hall be adjourned at 7:19 p.m. The motion carried by the following vote: Aye: 6- Dan Whittington, Mike Fugiel, Reid Foltyniewicz, Bill Johnston, Robyn Pike, and Bill Ware Village of Lombard Page 5