City Council

AGENDA Committee of the Whole Meeting October 26, 2015 5:00 p.m. A. Roll Call B. Items Also on the Regular Agenda C. Considerations 1. Glidden Crossing – Annexation Agreement Third Amendment. D. Public Participation E. Recess for Executive Session of the City Council 1. Approval to Hold an Executive Session to Discuss Personnel as Provided for in 5 ILCS 120/2(c)(1). F. Adjournment  C-1 October 26, 2015 DATE: October 21, 2015 TO: Honorable Mayor John Rey City Council FROM: Anne Marie Gaura, City Manager Ellen Divita, Community Development Director Dean Frieders, City Attorney Derek Hiland, Principal Planner SUBJECT: Glidden Crossing – Annexation Agreement Third Amendment. I. Summary This item was first reviewed by Council in November and December of 2013. At the November 25, 2013 Council meeting, a public hearing was held to consider amending the Glidden Crossing annexation agreement to remove the prohibition of “bars and taverns” from the prohibited use list. This amendment would allow for Video Gaming Terminals (VGT) in an establishment that serves food and alcohol in the vacant space of the shopping center building. The public hearing was extended to the December 9, 2013 meeting for further input. Minutes from both meetings have been attached for review. At both public hearings, several neighbors shared concerns over the operations of the facility and potential criminal activity that could occur at such a facility. Based on the feedback received from the public, the facility’s operator, Blackhawk Restaurant Group, chose to put their pursuit of an amendment on hold until they had the opportunity to get their Sycamore location up and running (Penny’s next to Hy-Vee). With almost two years of crime-free operation at their Sycamore location, Blackhawk Restaurant Group is asking that a third amendment to the Glidden Crossing annexation agreement be reconsidered. Attached to this backup are photographs and a slideshow presentation on the history of the company, the overall business plan and model improvements, and projected revenue percentages of the business’ operation. Staff is seeking direction from Council on how to proceed. 1  C-1 October 26, 2015 II. Background The property located at 975 S. Annie Glidden Road is developed as a commercial retail shopping center and the Glidden Crossing development owner has a proposed tenant who would like to locate in the shopping center. The tenant's business operations/model includes service of food and alcohol, presence of VGTs (as defined under the Illinois Video Gaming Act) and prohibits patrons under the age of 21 (unless accompanied by their parent or legal guardian). The business model and description proposed by the tenant would fit under the City’s existing “Bar” liquor license, which permits the operation of VGTs, and the sale of alcoholic beverages, with or without food. As explained by the proposed tenant, they would offer video gaming in an upscale atmosphere and participants could enjoy a glass of wine or other similar drink while playing. The tenant would also offer a limited menu of food options. When approved in 2006, the first amendment to the annexation agreement for the commercial site, now known as Glidden Crossing, included a list of 17 exceptions to the retail uses. These uses would typically be allowed by right or by special use in the General Commercial “GC” District and if the agreement did not prohibit them, no action would be needed by Council for them to locate in one of the retail spaces. That being said, the annexation agreement, as currently drafted, prohibits bars from operating on the property. The purpose of this request is to determine if Council would consider amending the annexation agreement to allow for “bars” to operate on the property, to enable the proposed tenant to locate in the facility in an existing, vacant space. If minimizing the effect on nearby residential uses is of a concern, Council could consider additional regulations to coincide with an amendment to remove the prohibition on bars and taverns or to impose restrictions on the number of such facilities that may locate at the property. There are no concerns regarding setbacks to nearby schools or churches; all setback requirements are satisfied by the tenant’s proposed location. III. Community Group/Interested Parties Contacted The developer, the tenant’s representatives, and staff met recently to discuss reconsideration of the amendment. Blackhawk Restaurant Group desires to move this project forward. IV. Legal Impact The changes are outlined above, and would be incorporated into an annexation agreement amendment if acceptable to Council. V. Financial Impact Blackhawk Restaurant Group is estimating investing $125,000 to $200,000 in building improvements at the DeKalb location. It is expected that the City will receive additional Restaurant and Bar tax. The gaming terminals are anticipated to generate approximately $2,000 per month revenue to the City. Page |2 2  C-1 October 26, 2015 VI. Options Council may affirm, modify the request by adding additional regulations or deny the above changes entirely. VII. Recommendation It is recommended that Council direct staff whether to schedule a public hearing regarding the amendment to the Annexation Agreement for Glidden Crossing Subdivision at a future City Council meeting. Page |3 3  C-1 October 26, 2015 Regular City Council Meeting Minutes November 25, 2013 Page 3 of 8 Human Relations Commission Minutes: September 3, 2013 October 2013 Investment and Bank Balance Summary Quarterly Investment Report October 2013 Check Register Received and filed in the Consent Agenda by Omnibus Vote. 6. RESOLUTION 13-87 ADOPTING THE TRANSPORTATION IMPROVEMENT PROGRAM FOR DEKALB TAYLOR MUNICIPAL AIRPORT FOR FISCAL YEARS 2014-2019. Approved in the Consent Agenda by Omnibus Vote. F. PURCHASE AND BID AWARDS: 1. APPROVAL OF A STAFF REQUEST TO WAIVE COMPETITIVE BIDDING AND AWARD A CONTRACT TO DIXON OTTAWA FOR PURCHASE OF BI- DIRECTIONAL ANTENNA SYSTEM FOR THE POLICE STATION IN AN AMOUNT NOT TO EXCEED $25,000. MOTION Ald. Finucane moved to approve staff’s request to waive competitive bidding and award a contract to Dixon Ottawa for the purchase of a bi-directional antenna system for the Police Station in an amount not to exceed $25,000; seconded by Ald. Naylor. Ald. Naylor asked for clarification that the purchase is for internal radio communications; Chief Lowery confirmed. Motion carried 8-0 on roll call vote. Aye: Jacobson, Finucane, Lash, Snow, Naylor, Baker, O’Leary, Rey. Mayor Rey declared the motion passed. G. PUBLIC HEARINGS: 1. PUBLIC HEARING ON GLIDDEN CROSSING – ANNEXATION AGREEMENT THIRD AMENDMENT Mayor Rey opened the Public Hearing at 6:32 p.m. Mr. Frieders stated that tonight is the public hearing; staff is not asking for any action on the annexation agreement. He stated the user would need a liquor license but the use is not a typical “bar.” He noted that staff could draft language in the agreement that is specific to the tenant and the location. Mr. Tom Specht, DeKalb, Illinois stated he previously was a member of the Planning Commission. He noted there was no provision for a tavern or a liquor store when originally annexed and added it is not in the best interests of the City to put a liquor store at the entrance to the City. He urged Council to move the item to January until other neighbors can address the issue and to take action on it. Mr. Aaron Szeto, Rockford, Illinois, attorney representing the owner of the property, stated the 4  C-1 Regular City Council Meeting Minutes November 25, 2013 October 26, 2015 Page 4 of 8 property has unoccupied spaces, some as long as six years. He explained the request in detail to Council which would allow a bar at the location. He stated this is an opportunity to bring in revenue and fill in the space rather than maintaining a long-term vacancy. Ald. Naylor asked when the details would be available. Mr. Espiritu stated an amendment would be forthcoming at the next meeting. Ald. Lash cautioned Council on creating specific allowances for individual businesses. Mr. Frieders stated a formal presentation would be made at the December 9th meeting with notices mailed. Mr. Espiritu stated he is not certain notices will be able to make the December 9th meeting. Mr. Fred Reynolds, of Phillips Edison & Company, owner of the property, stated it has been difficult filling the tenant spaces due to the economic times. Mr. Mike Thiessen asked if there are specific questions and stated he could provide a power point presentation on the business which would answer many questions. He added he could attend the December 9th meeting and provide detailed information. At 7:15 p.m., Mayor Rey continued the Public Hearing to December 9, 2013. 2. PUBLIC HEARING ON PROPERTY TAX LEVY Mayor Rey opened the Public Hearing at 7:15 p.m. There being no public comments, Mayor Rey closed the Public Hearing at 7:15 p.m. H. OLD BUSINESS: NONE. I. ORDINANCES – SECOND READING: 1. ORDINANCE 13-67 APPROVING THE 2013 AMENDMENT TO THE CITY OF DEKALB TIF REDEVELOPMENT PROJECT AREA NO. 1 (CENTRAL AREA TIF). Mayor Rey read Ordinance 13-67 by title only. Mr. Espiritu stated the ordinance would remove the former Small’s property from the Central Area TIF. If Council does not approve the Sycamore Road TIF, Council will not want to remove this property from the Central Area TIF, he said, and the monies obligated in the development agreement would then need to come out of the General Fund. The Sycamore Road TIF includes the former Small’s property and the NIU warehouse. The Nelson property is not included because it is not yet annexed, Mr. Espiritu said; it may be included at a later date with an amendment. Mayor Rey stated Council could decide to postpone action on this item until Ordinances 13-68, 13-69 and 13-70 are acted on. MOTION Ald. Lash moved to postpone action on Ordinance 13-67 until December 9th; seconded by Ald. O’Leary. Motion carried 8-0 on roll call vote. Aye: Jacobson, Finucane, Lash, Snow, Naylor, Baker, O’Leary, Rey. Mayor Rey declared the motion passed. 5  C-1 October 26, 2015 Regular City Council Meeting Minutes December 9, 2013 Page 4 of 8 G. PUBLIC HEARINGS 1. CONTINUED PUBLIC HEARING ON GLIDDEN CROSSING – ANNEXATION AGREEMENT THIRD AMENDMENT. Mayor Rey opened the Public Hearing at 6:44 p.m. Aaron Szeto, attorney for the owner of the property, spoke regarding the annexation agreement which is requesting that the prohibition on bars and taverns be lifted at the development site. Mike Thiessen, Blackhawk Restaurant Group, stated his group maintains restaurants in five states. He said the proposed restaurant, “Penny’s” would be casual and upscale with a bistro-style menu. Their group focuses on grocery-anchored centers, he said; it is not a traditional bar. He noted that food will always be available during hours of operation; there is a three-drink maximum and everyone entering the establishment is carded. Liquor represents between 14% and 17% of sales, he said. He stated that they either have or will have restaurants in Bartlett, Elk Gove Village, Hoffman Estates, Joliet, Morton Grove, Oak Lawn, Oakbrook Terrace, Prospect Heights and Sycamore. Typical hours of operation, he said, are 10:00 am-10:00 pm. Fred Reynolds, Salt Lake City, Utah, stated the only permission needed is from Schnucks and they designated the spot in the shopping center where they preferred Penny’s to locate. Ald. Lash asked how the smoking issue would be addressed in the strip mall. Mr. Thiessen stated Penny’s is not a drinking establishment, they do not encourage people to spend long periods of time there, and therefore, the environment would not be conducive to smokers. Mayor Rey stated that after seeing the Sycamore location he envisioned this as a bistro-type restaurant rather than a bar. Thomas Specht, DeKalb, Illinois stated the annexation agreement prohibited bars previously in 2006. Now Council is being asked to approve a saloon and gambling casino, he said. Also, he asked if this will be viewed as a positive move by NIU. Ms. Kay Mills, DeKalb, Illinois stated there is adequate police now in the neighborhood but stated there is a deterioration of the neighborhood where gambling casinos are allowed. She said that it is not a good move for the young people. Greg Prater, DeKalb, Illinois stated he was involved in the 2006 debate on the original annexation agreement. One of the key factors was to ban bars, he said. Allowing bars will lower the standards, he added and voiced his opposition to this amendment. He said he has a petition signed by over sixty (60) residents who do not want a bar, tavern or gambling establishment located in the area. He gave the petition to the Mayor. Joseph Pasteris, DeKalb, Illinois asked Ald. Baker if the current agreement is not considered to be a sound agreement between two parties. Ald. Baker stated the discussion previously related to another college bar. He added that video gaming was never discussed. Mr. Pasteris asked what the value of the annexation agreement is if it can be put aside. Ald. Lash asked if there is a provision that a certain amount of income must come from liquor in 6  C-1 Regular City Council Meeting Minutes December 9, 2013 October 26, 2015 Page 5 of 8 order to be called a bar. Mr. Frieders stated that provisions address the serving of food and also prohibiting minors. He added the City abandoned the percentage of liquor sales. Ald. Lash stated she is concerned this is setting a precedent for restaurants wanting a video gambling license. Mr. Frieders explained the restriction on minors. Ald. Lash expressed concern regarding the video gambling. Ald. Naylor stated his concern about a contract changing. He viewed the venue as similar to off-track betting parlor. Mr. Rick Mota, DeKalb, Illinois asked if Illinois did not allow video gaming, would they still come to DeKalb. Mr. Thiessen replied he liked the area and would probably come. Mr. Reynolds stated the original annexation agreement was amended to allow Goodwill to come into the Schnucks shopping center. Mr. Aaron Szeto stated it is a misnomer calling Penny’s a bar or tavern. He stated that their lease states that 70% of their sales must come from food, and liquor is not their primary operation; one-third of the revenues come from gambling. In 2006 the intent of the agreement was not to have another Molly’s or Fatty’s, he said. Mr. Frieders stated Council could close the public hearing or continue. A draft annexation agreement was drawn to permit a bar. More restrictions could be added, he said. The ordinance is not on this agenda for first reading, he said. If it is unlikely there is no support for it, it would not make sense to move forward, he added. Ald. O’Leary stated that Mr. Thiessen said if the residents do not want the establishment, he would withdraw his request. She stated they have spoken and asked him if he will withdraw his request. Mr. Thiessen stated he would have to consider this. Mr. Joe Pasteris and Ms. Kay Mills again voiced opposition to the request. Mr. Fred Williams, DeKalb, Illinois stated he would like to take a petition to his neighborhood and find their interests. Ald. Baker stated Schnucks did not serve liquor when they opened. He added that the City doesn’t want to chase Penny’s out of town. He asked residents if they would consider beer and wine with no gambling. Mayor Rey asked Council if they wanted to provide direction to staff. Ald. Baker suggested placing a restriction on hours. Mr. Reynolds stated the lease is 9:00 a.m. to 10:00 p.m. Mr. Thiessen stated he is open to suggestions and asked if the residents would be open to liquor and food only. Mr. Specht stated there is an agreement and you are renegotiating it. The Public Hearing closed at 8:03 p.m. Mr. Frieders suggested staff work with the applicant and determine which restrictions they would be willing or not willing to accept. Staff could then bring back a menu of options or statement if the developer is not interested. It is not on the agenda for action tonight, he said. Council consensus was to move forward with Mr. Frieder’s suggestion. H. OLD BUSINESS NONE. I. ORDINANCES – SECOND READING 1. ORDINANCE 13-73 AMENDING THE MUNICIPAL CODE OF THE CITY OF DEKALB CHAPTER 24, “BUILDING CODE,” SECTION 24.04 “BUILDING PERMIT FEES” BY CHANGING OR ADDING VARIOUS FEES OF SCHEDULES A, B, C, AND D. 7  C-1 October 26, 2015 Blackhawk Restaurant Group A Brief Overview: Proven Quality Successful Operators Impeccable Record 8  C-1 October 26, 2015 Blackhawk Restaurant Group  Principals have 80+ years experience in operating restaurants in 5 states Illinois California Idaho Oregon Texas Washington  57 units operating/approved in Illinois ◦ Single largest tax generator in this space ◦ Landlord friendly  Customer profile is favorable to most retailers ◦ Financially secure9  C-1 October 26, 2015 Locations and Landlords  Near all of the major supermarkets ◦ Schnucks ◦ Hy-Vee ◦ Jewel ◦ Marino’s ◦ Caputo’s ◦ Tony’s Fine Foods  REIT’s, Corporate and Individual Investors ◦ Inland Real Estate ◦ Regency 10  C-1 October 26, 2015 Proposed DeKalb Location  Near Schnucks-Annie Glidden Road ◦ Schnucks approved and encouraged change in location  Both units share similar customer profile  Fills vacancy  Change to Annexation Agreement provides additional flexibility and tax generation potential for landlord.  Proven concept with successful locations statewide 11  C-1 October 26, 2015 Narrative Concept  Causal upscale eatery ◦ Modern, warm, welcoming design ◦ Traditional and soft seating options  Bistro style menu  Entertainment option  Locations ◦ Focus on grocery anchored centers ◦ Convenience to our customers ◦ Strategic sites based on local markets 12  C-1 October 26, 2015 Customized Design  $125,000-$200,000 build out per store  Gaming and common area are separated  Gaming area is discrete and private  Custom carpet  Chicago history motif-art work  Combination of seating options ◦ Leather chairs and sofas ◦ Hi-top and regular table seating  State of the art video surveillance ◦ 8+ surveillance cameras per unit 13  C-1 October 26, 2015 Design Photos of our Morton Grove location 14  C-1 October 26, 2015 Design-Discrete and Tasteful 15  C-1 October 26, 2015 Existing Locations and Projected Annual Tax Revenue*  Sycamore $37,614.35 ◦ Sept. 2015 $3,482.81  Antioch $41,566.72 ◦ Sept. 2015 $3,848.77  Woodstock $30,443.69 ◦ Sept. 2015 $2,818.86  South Elgin $26,499.10 ◦ Sept. 2015 $2,453.62 *Variability exists due to market conditions 16  C-1 October 26, 2015 Corporate Policies  Food ALWAYS available during hours of operations  “Serve Safe” certified  Illinois Department of Public Health, food service sanitation manager certification on premise  All employees are BASSET Certified  Three (3) drink maximum ◦ Safety of our guests and employees 17  C-1 October 26, 2015 Food and Beverage  Gourmet coffee drinks, soft drinks, juices and tea  Menu is light eclectic fare ◦ Italian Supreme Panini ◦ Chicken Pesto Sandwich ◦ Turkey Artichoke Wrap ◦ Tomato Caprese Sandwich, vegetarian ◦ Salted Caramel Brownie with Pretzel Crust  Beer and Wine 18  C-1 October 26, 2015 Menu Items Italian Supreme Panini Cream Cheese Frosted Cinnamon Roll Warm Cherry Turnover 19  C-1 October 26, 2015 Why Blackhawk Restaurant Group?  Financially strong  Excellent Customer Service ◦ Liquor service training  Passed numerous “Stings” on both local and State of Illinois Liquor Commission levels ◦ Safety and security ◦ Positive tax generator  Blackhawk is the highest VGT tax generator in the State of Illinois  Allows land lords to re-invest and pay appropriate tax associated with property ownership 20  C-1 October 26, 2015 Thank You Questions? Mike Thiessen 630-656-5757 miket@blackhawkrestaurantgroup.com 21 Return to Agenda