D. Committee of the Whole

APPROVED VILLAGE OF LAKE ZURICH SPECIAL COMMITTEE OF THE WHOLE JULY 16, 2007 The meeting was called to order at 7:54 p.m. ROLL CALL: Present –Mayor Tolomei, Trustees Branding, Callahan, Johnson, Poynton and Taylor. Excused – Trustee McAvoy Also present – Administrator Dixon, Village Attorney Burkland, Public Works Director/Engineer Heyden, Fire Chief Mastandrea, Building & Zoning Director Peterson, and Police Chief Urry. DISCUSSION REGARDING GRANDVIEW BUILDING Village President Tolomei summarized the need to hold this special Committee of the Whole Meeting. At a prior meeting held four weeks ago, McCaffery Interests proposed changes to the approved Grandview building in hopes to make the building more affordable and help accelerate sales. The Board requested a comparison of revenue benefits or detriments should the decision be made to accept the proposed changes from McCaffery Interests and construct a four story building instead of the approved five story. Both Steve Friedman and Mark Angelini, from S. B. Friedman & Company, were present to discuss and review McCaffery Interests latest proposal for Phase I, the Grandview, and how these changes affect the TIF fund cash flow. A memo dated July 12, 2007, previously distributed to the Board of Trustees, included two significant charts. The first chart described five different condominium scenarios (number of units, floors, square footage, etc.) and depicted expected public assistance totals needed to construct the Grandview. The second chart provided TIF fund cash flow projections using these five different proposals, two different school district payment scenarios and the outcome should downtown redevelopment continue with two additional projects or stop after the completion of the Grandview. These projections include the Somerset project and show the balance at the end of the TIF in the year 2026. Steve Friedman explained the public works request totals include general public parking, above standard tenant improvements in commercial space, stormwater retention vaults, other site improvements, and additional money needed to make this project economically feasible. The developer gap request combined with the public works request is the amount of assistance McCaffery Interests is seeking from the Village of Lake Zurich. President Tolomei questioned the timeline of amending the TIF budget should the Village decide to move in this direction. Mr. Friedman stated it was always assumed the budget would need to be amended since the budget was formulated prior to developing the master plan. The first step would require the Board to analyze the current master plan and identify TIF expenditures (property acquisitions, infrastructure, etc.) in order to prepare a more accurate budget. Preparing the budget amendment could take Special Committee of the Whole meeting minutes, July 16, 2007 2 approximately 30-60 days. Afterwards, a public hearing would need to be held. The overall approval process could take an additional 60-90 days. Trustee Callahan asked how long the Village had to make a decision on whether to move forward with the five or four story Grandview. Mr. Friedman stated this decision did not require an answer immediately but would need to be dealt with soon in order to prepare the budget amendment for the TIF. Mr. Friedman also advised that in order to break ground in the spring, a final decision on the design would need to be made this fall in order to prepare final drawings, secure construction loans, etc. Trustee Poynton questioned whether Phase III and IV would require any public financing from the TIF funds. Mr. Friedman mentioned public infrastructure would be required but major costs would most likely be from a private developer. Trustee Taylor thought the sale of units at the Grandview was only a unit or two away from being able to begin construction. He questioned why we would consider making changes at this late date especially since dirt on the property will not be moved until spring of 2008 thus allowing more time to sell additional units. Mr. Angelini does not believe the Grandview is only a unit or two away in sales from being developed. The real question is financing. It appears from materials provided by McCaffery Interests they will not fund this project 100% no matter what the redevelopment agreement says about their financial responsibilities and is seeking the Village’s assistance in this matter. Trustee Johnson questioned whether these comments were a breach of contract. Village President Tolomei stated any discussion of litigation should be kept for Executive Session. In summary, several questions were raised. Should the Village amend the TIF budget and, if so, amend to what dollar amount, being sure to leave some flexibility for future projects. The Village also needs to decide whether they should take any position to fund gaps in order to get projects started. Trustee Johnson questioned whether this gap financing should be considered a gift or a loan. Village President Tolomei explained that any money generated from this project pays down the cost structure and any remaining funds would go towards the Village and would be considered a loan. Village Attorney Burkland advised the Board this is a Committee of Whole meeting and are unable to take any formal action at this time. If the Board is so inclined, it was suggested they direct staff to begin the work of amending the TIF budget and preparation of the documents. The consensus of the Board was to move in this direction. This item will be placed on the agenda at a future Board meeting for approval. Special Committee of the Whole meeting minutes, July 16, 2007 3 ADJOURNMENT MOTION was made by Trustee Poyton, seconded by Trustee Callahan, to adjourn the meeting. Meeting adjourned at 8:56 pm. Voice vote, all in favor. MOTION CARRIED Respectfully submitted: Gloria M. Palmblad, Village Clerk Approved by: _______________________ 7/23/07 President John G. Tolomei