Economic Development Committee

APPROVED MINUTES OF THE NORTHBROOK JOINT REVIEW BOARD MEETING January 30, 2014 Call to Order The meeting was called to order at 7:30 a.m. in the Terrace Room of Village Hall by Chairman Scolaro. Upon roll call, the following Joint Review Board members were present: Paul Zima/Northbrook Park District, Hillarie Siena/School District 225, Sally Larmore/School District 28, Michael Scolaro/Village of Northbrook, and James Kahan/Public Member. Others present were: Richard Nahrstadt/Village Manager, Jeff Rowitz/Deputy Village Manager, David Schoon/Village Assistant DPS Director & Economic Development Coordinator, Steve Elrod/Village Attorney, and Bob Rychlicki/Kane McKenna and Associates, Inc. Introduction of Representatives The above members introduced themselves. Review of Joint Review Board (JRB) Procedures & Duties Village Attorney Elrod stated that prior to the Village Board consideration of amendments to the Redevelopment Plan and TIF District, the Joint Review Board is provided the opportunity to review and make a non-binding recommendation regarding the proposed amendments. The JRB has 30 days (March 3) to make such a recommendation. Should the JRB recommend against the amendments, the Village Board then has 30 days to work with the JRB on the issues. If the JRB still recommends against the amendments, a super majority (3/5ths) vote by the Village Board is required to adopt the amendments. A history is noted in the documents as to the TIF and Village Board petition. TIF Plan & Amendments – Review Village Assistant DPS Director Schoon reviewed the packet and the history of the TIF district and its boundaries . Originally when the TIF District was established in 2006, the Redevelopment Plan called for the TIF area to be a mixed-use development with a limited amount of residential (no more than 75 dwelling units.). As a TIF lasts 23 years, the TIF District will end in 2029, with a final payment in 2030. A budget of $5 million (which may be adjusted via TIF Act) was set in 2006; the equivalence of $5.7 in 2014 dollars. Fifty percent (50%) of the TIF increment is declared surplus and distributed to all taxing entities with the remaining going into the TIF Fund for TIF eligible expenses. . Applicant is requesting $4.9 million (at a taxable market interest rate) toward TIF-eligible expenses in a pay-as-you-go note and that only the property tax increment form the commercial component of the development be used to pay the TIF note. The Administration & Finance Commission has recommended that the Village provide $4.9 million in TIF assistance as requested by the Applicant and that the residential area of the development be removed from the TIF District. The Village Board is also considering the use of TIF Funds for dual left-turn lanes on Dundee Road. Other funding sources may also be used for this improvement. Assistant Director Schoon then reviewed a comparison of incremental property tax revenues and tuition cost reimbursement payments that would be available to each taxing district under the current TIF mechanism and under the proposed TIF mechanism, which includes removing the residential portion of the development from the TIF District and making available 100% of the incremental property taxes from the remaining TIF District area for payment of TIF eligible expenses. Northbrook Joint Review Board Meeting January 30, 2014 Page 2 of 4 As currently structured, the TIF Fund would be obligated to pay the school tuition cost reimbursement as provided for by the TIF Act including net new students to the districts residing in the development. there is residential development within the TIF District. Two different tables on Incremental Property Taxes & Tuition Reimbursement, one based on the Developer’s assumptions and one based on Kane McKenna assumptions, were explained by Village Assistant DPS Director Schoon. Schoon noted that under the proposed TIF mechanism structure, all taxing districts (minus school districts) would receive more money. Discussion ensued as to the information. In response to a question, Mr. Rychlicki stated that a growth factor of 2.5% was used by the developer and 1.5% by Kane McKenna.. Village Assistant Director Schoon shared the TIF plan amendment process. Next steps by JRB are meeting and recommending in January & February with a deadline date of March 3, 2014 for preparing a recommendation. Assistant Director Schoon distributed copies of the Incremental Property Taxes and Tuition Reimbursement summary produced by Kane McKenna. Village Attorney Elrod noted that the JRB makes a recommendation and that the Village Board has the final say. Questions/Comments from the Joint Review Board Chairman Scolaro asked if there were any questions:  Member Kahan inquired about Zengeler relocation costs; Assistant Director Schoon summarized the costs and discussion ensued.  Member Zima asked: o if relocation expenses include any environmental remediation costs. Village Assistant Director Schoon advised these costs are included. o if there is a more detailed list of the requested TIF eligible expenses, and if Village Staff is comfortable with this. Village Assistant Director Schoon & Mr. Rychlicki stated the Village Staff has reviewed a more detailed account of the expenses and will continue to review them as the project moves forward. Village Attorney Elrod stated that is why it’s a pay-as-you-go note. o what the impact fees are and how would a reduction in impact fees impact the TIF request. Village Manager Nahrstadt stated that a reduction in impact fees may not necessarily lead to a reduction in the TIF request. Member Siena requested that the JRB add amendments/language that the Village Board (1) prohibit property tax appeals and (2) agree not to request that the State legislature allow an extension of the TIF term. Village Attorney Elrod stated that the first item should not be a problem as it is a common provision in TIF agreements. However, the second item may not be possible to include in an agreement as the law prevents a current Board from binding a future Village Board’s ability to request a TIF term extension. He could, however, draft the TIF agreement with a notation as to the strong preference of both parties not to seek an extension. Member Kahan reminded that unless an increment is created, there is no public money to be paid to the developer. Mr. Rychlicki & Village Attorney Elrod concurred. Village Attorney Elrod stated there is no obligation to dip into other Village monies. Northbrook Joint Review Board Meeting January 30, 2014 Page 3 of 4 Public Comments Audience member, Adele Sturgis, 1807 Maple Avenue, Northbrook, IL, stated:  she has sat through all of the meetings and wonders why the Village is considering providing more TIF funds for the current project ($4.9 million) than the Village agreed to provide the last project on the site ($2 million), while the assessed value of the proposed project has decreased by over 78% compared to the last development proposed for the site.  is the Village going to be covering its costs? Retail sales tax was noted.  are we investing more to get back less?  how many jobs will be lost at Zengeler’s?  is there $2.8 million in costs in Zengeler relocation expenses? Village Assistant Director Schoon advised that the developer is requesting $750,000 for the Zengeler relocation costs, which does not include land acquisition. Village Attorney Elrod advised that the developer submitted an expense detail; the Village Board restricted what is acceptable in the terms of TIF eligible expenses. Mr. Rychlicki advised that commercial is assessed at a higher rate than residential. Chairman Scolaro advised the project is less impactful and more in line with the Village. Ms. Sturgis reiterated the Village would be providing $4.9 million rather than $2.1 million as agreed to provide with the previous proposed project. Chairman Scolaro responded that this is a far better development proposal than the last one. The developer’s land cost is less than the previous development cost, and should this affect the TIF request? Ms. Sturgis noted the estimated Police Department deployment necessary for the proposed WalMart and wonder what would be the demand for police services with this project. Member Kahan advised the best case is that this project is a huge success. Chairman Scolaro reminded that the developer is investing a great deal of money, stating the returns are at the low end of the market. Do we want Zengeler to be part of the redevelopment project or not? Chairman Scolaro stated he does. Ms. Sturgis advised she does support the use of TIF monies for public road improvements. Review of Draft TIF Ordinances Village Attorney Elrod distributed to members a draft of the proposed TIF ordinances and stated if there are any questions, he will be happy to address them. Village Assistant Director Schoon advised there are three ordinances :  one amends the language of the Redevelopment Plan;  one amends the boundaries of the TIF District; and  one amends the TIF financing mechanism. Consideration of Joint Review Board Recommendation to Village Board Regarding the First Amendment to the Dundee Road/Skokie Boulevard TIF District Plan & Boundaries Village Attorney Elrod advised the JRB can make the recommendations today or the entities can go back to discuss and then JRB can reconvene. Review of Timetable & Next Steps Member Larmore clarified the timeframe. It was decided that the taxing district representatives go back and have discussions with their boards, and the JRB would reconvene. Member Kahan stated since we have a month, we should take the time to digest this material. Chairman Scolaro suggested the JRB meet in a couple of weeks. Village Attorney Elrod noted March 3, 2014, is the legal date/deadline for the JRB to act on a recommendation. Chairman Scolaro asked if everyone could meet on February 27, 2014 at 7:30 a.m. Village Assistant Director Schoon will not be in attendance. Village Attorney Elrod advised there will be limited time Northbrook Joint Review Board Meeting January 30, 2014 Page 4 of 4 following the next meeting until the March 3 deadline. Chairman Scolaro confirmed that the next JRB meeting will be on February 27 at 7:30 a.m. Adjournment A motion was made and seconded to adjourn the meeting. On a voice vote, the motion was approved. The meeting was adjourned at 8:34 a.m. Respectfully submitted, Gale Cerabona Recorder