Aurora City Council approves Shodeen agreement

[jenrik2714]

Council approves Shodeen agreement

February 28, 2007

BY ANDRE SALLES Staff Writer

AURORA -- In January 2006, city aldermen approved a development agreement with Geneva developer Kent Shodeen in roughly one week.

No one could accuse them of such blazing speed when it came to the recent revision of that agreement, which received final approval Tuesday.

For months, committee members and city staff have met, discussed, argued, bargained, written memos and counter-memos, questioned, probed and analyzed the new agreement in detail. In turn, the developer's representatives have answered queries and made themselves available to concerned citizens.

The agreement asks the city to up its stake in the project from $6 million to $11 million, and increases the amount Shodeen can reclaim from the TIF district to $26.5 million. In return, the agreement binds Shodeen to building a minimum of 900 condominium units on a 33-acre site on Broadway, and the developer has stated plans to add up to 225,000 square feet of commercial space.

The process culminated Tuesday with a three-hour-plus City Council meeting, the majority of which was devoted to the Shodeen project. Aldermen heard from more than a dozen speakers.

Among the supporters were representatives from Seize the Future, the Aurora Economic Development Commission and the Chamber of Commerce, all of whom praised the attempt to revitalize a long-dormant part of the city. In her comments, Sue Vos, head of the city's Convention and Visitors Bureau, called the project "as close to a slam-dunk as the city of Aurora could possibly have."

But others were not so complimentary. Bruce Schubert, an environmental engineer who is also running for 1st Ward alderman, encouraged caution, considering the unknown cost of remediating the contaminated land. And Mark Daniel, attorney for a pair of local businessmen, was more direct, charging that the city's relationship with Shodeen is too close and advising aldermen that his clients were preparing lawsuits.

Daniel represents Iqtidar Rana, owner of the Hilltop Citgo, one of the parcels Shodeen still needs to acquire for his site. He also continues to represent businessman Chip Valor, who also spoke at Tuesday's meeting, reiterating his disappointment with a process that he believes excluded him.

The development agreement was approved 8-2, with Aldermen Stephanie Kifowit, 3rd Ward, and Rick Lawrence, 4th Ward, voting no. (Alderman Chris Beykirch, 8th Ward, abstained, and Alderman Juany Garza, 2nd Ward, was absent.)

Kifowit and Lawrence both gave impassioned speeches against the agreement. Lawrence called the agreement irresponsible and charged that the city was putting taxpayer dollars at risk unnecessarily on an agreement with no concrete plans, no financial estimates and no construction time line.

Kifowit spoke out against the financial plan from the city side, which, according to Finance Director Brian Caputo, would see the city either investing money from the casino funds or borrowing from another TIF to jump-start the project.

In his closing comments, Mayor Tom Weisner noted the risk inherent in the project, but also said that the land in question has sat vacant for decades with no development interest, and revitalizing the downtown would be worth the risk.

He also took aim at Lawrence and Kifowit, stopping short of naming them directly.

"These are people with a track record of being against anything significant that happens in this city," he said. "It's as if they are waiting for something to go wrong so they can say, 'I told you so.' I don't call that leadership. It's pure politics."

[wvhsparent]

Did I miss something?.....What/where is this? and what's the problem with it?

[jenrik2714]

WVHSparent,
I believe it is in Downtown Aurora near the river

AURORA -- After four meetings, numerous written memos, and statements from the City Council, school district representatives and attorneys, aldermen moved developer Kent Shodeen's revised agreement with the city its first big step toward approval Thursday.

The new agreement promises a minimum of 900 residential units and 225,000 square feet of commercial in the East Side development, an increase from the original agreement approved in January 2005. But the new contract also asks for more investment from the city -- $11 million in up-front costs, up from $6 million initially, and an increase in tax-increment-financing reimbursements, from $13.6 million to $26.7 million.

Throughout the process, aldermen have written memos outlining their concerns, beginning with Planning and Development Committee Chairman Mike Saville's three-page document, and continuing with multi-page letters from Aldermen Stephanie Kifowit, 3rd Ward, and Rick Lawrence, 4th Ward. Staff and Sho-Deen Inc. President David Patzelt have endeavored to answer those questions.

Aldermen also heard from Jerome Roberts, superintendent of the East Aurora School District, who detailed the district's support for the project and ideas for limiting the impact of new students to an already overburdened school system. Roberts suggested age-restricted condo complexes, putting in restrictions to increase owner occupancy, and requiring a minimum amount of commercial development, which will funnel tax dollars to the district.

Council members also heard from businessman Chip Valor, who said he is still mounting a legal challenge to the deal. His former attorney, Mark Daniel of Wheaton-based Rathje and Woodward, addressed the committees on behalf of both Valor and his new clients, including the owners of Hilltop Citgo, one of the properties Shodeen must acquire for his concept plan.

However, when discussions turned to legal challenges, Finance Committee Chairman Bob O'Connor called a halt to Daniel's comments and would not allow remarks from Steven Ruffalo, attorney for the VanStrand Group, builders of River Street Plaza on the west side of the river. Ruffalo, in a letter to aldermen, took issue with some of the environmental concerns on Shodeen's property, but O'Connor pulled the meeting away from legal concerns.

Aldermen unanimously approved the agreement, with two conditions: the developer must consider owner-occupancy language and present a progress report on the environmental remediation of the site.

The contract now moves to the Committee of the Whole.

[warriorpride]

wvhsparent said:

Did I miss something?.....What/where is this? and what's the problem with it?

This has been covered extensively in the Beacon over the past month or two (or three). Maybe if you search around their web-site you could get the details? In a nutshell:

The land is on the east side of the river, a little south of downtown. It's in the vicinity of the old, shuttered, train station. The land is contaminated, and needs some cleanup. The full-blown plan looks pretty impressive - some drawings were in the paper - and includes getting a Metra train station added back into the mix out there. It seems like if it came to fruition, it would be a very good thing for the downtown area, but you can see some of the arguments against it, in the articles that have been posted. I think Weisner is doing a very good job, and he knows that some risks need to be taken, and some $ invested, in order to make some major positive impacts to Aurora.

[wvhsparent]

www.chicagotribune.com/news/local/west/chi-0703050089mar05,1,5118585.story?coll=chi-newslocalwest-hed
Aurora backs downtown deal
City's contribution rises to $11 million
By Rhianna Wisniewski
Special to the Tribune

March 5, 2007

For the last 20 years, the fenced-off property along Broadway Avenue in downtown Aurora was abandoned, a blight on an otherwise budding area. Then the city made a multimillion-dollar development agreement with a Geneva-based developer, and, presto, the riverfront property finally looks profitable.

But while city officials praise Sho-Deen Inc.'s plan as a long-awaited boost to the downtown area, the project has been controversial, with concerns about how fast it is getting city approval and its potential cost to taxpayers.

The Aurora City Council voted 8-2 last week to increase the city's contribution to the project from $6 million to $11 million.

If completed, the $198 million project could be a saving grace for the downtown area of the state's second-largest city. In 10 years, Aurora's downtown population has barely budged--from about 500 people to 600--a pittance for a city of more than 168,000 people.

The new development could bring in a minimum of 900 residences and as many as 2,000.

Mayor Tom Weisner said the development could double the number of residences in three years and double it again three to four years after that.

"The downtown has languished for decades," he said. "But now we are focused to deal with it."

Included in the developer's concept plan for the 33-acre area are buildings of up to 16 stories, a train station, a park, a riverwalk and a minimum of 900 condominiums. The investment could go to $450 million if the developer creates the maximum 2,000 condo units. There is also the potential to create 225,000 square feet of commercial, office or retail space.

Under the new agreement, the city's added financial obligations could include $3.5 million for infrastructure and a $1.5 million cap for rehabilitation of a dilapidated train station. Sho-Deen can also reclaim a total of $26.5 million from a tax increment financing (TIF) district.

The site contains contamination thought to be from former occupants--a foundry, a gas station and a city storage area. Among contaminants of concern are metals such as selenium, lead and arsenic. The city has already paid for the first $3.5 million in remediation costs, and any remaining costs would be split in half with the developer.

Ald. Rick Lawrence, one of two aldermen to vote against the city's increased contribution, fears further cleanup of the site could cost taxpayers even more millions. City officials estimate that the remaining portion would be an additional $1 million from the city and $1 million from Sho-Deen.

But officials also point out the potential for future revenue. The city estimates that the development's residential portion could generate between $2 million and $4 million annually. Because the site is in a TIF district, money from future property-tax growth would reimburse the developer and the city evenly.

"I believe there is a strong need, desire and interest--that downtown Aurora will happen and that people will need somewhere to go," said Sho-Deen president David Patzelt.

Aurora spokeswoman Carie Anne Ergo said: "The whole point of taking a risk doing a project like this are the benefits, which are real. The costs are spread out; they are not all upfront."

Ergo said the new agreement has to go through the zoning process.

Patzelt said Sho-Deen hopes to have a preliminary budget on the environmental remediation within three weeks.

Although a few speakers at last week's meeting opposed the project, most were in favor, including Fran Caffee, volunteer coordinator for the Valley of Fox branch of the Sierra Club.

"We think that this is as good as we're going to get in this area," Caffee said.

Yet the site's environmental state has prompted concern from the Vanstrand Group, developers of River Street Plaza on the Fox River's west side. A Feb. 15 letter from the group's lawyer, Steve Ruffalo, calls pursuing the agreement "bordering on reckless."

Also potentially involved in the legal fray is Iqtidar Ranha, owner of the Hilltop Citgo gas station, which is on the site. Ranha charges that Sho-Deen is trying to buy his property for less than it is worth.

His attorney, Mark Daniel, said Ranha has received letters from the city accusing him of contaminating the property and encouraging him to sell at a lower price. But Aurora's outside legal counsel, Dennis Walsh, said letters were sent only because city officials have serious concerns that his business contributed to the contamination.

Daniel also represents local businessman Chip Valor, who is upset that the city never put out requests for proposals. Valor, who said he had pursued development on the property for more than a decade, alleges that city staff members told him that they weren't accepting proposals yet, just before signing the agreement with Sho-Deen.

City officials said that if Valor had wanted to pursue a deal, he should have bought the land.

Alayne Weingartz, corporation counsel for Aurora, said the city was not under any legal obligation to put out requests for proposals.

She said Aurora published a notice that three parcels of city property may be involved in the development and encouraged anyone with proposals for the property to come forward. Weingartz said no one responded by the Feb. 20 deadline.

Meanwhile, Ald. Stephanie Kifowit, who also voted against the larger contribution, said Sho-Deen isn't following the same standards as other developers, which are held to 42 units per acre and have agreed to 100 percent owner occupancy rates.

Sho-Deen's development has a limit of 62 units per acre, and the owner occupancy is set at a minimum of 80 percent.

Kifowit and officials from East Aurora School District 131 are also concerned about the number of pupils the development could add to the already stretched district.

Ergo said the city plans to help offset the district's cost by giving it 20 percent of revenue from the TIF.

Kifowit and Lawrence said they don't like the way approval of the project has been hurried.

"I took a five-day vacation and I missed all debate and all vote," Kifowit said.

"It borders on reckless behavior on the City Council's part to approve this development agreement, to commit the taxpayer dollars without any plan and without any due diligence," Lawrence said.

Weisner countered that it's time to move.

"It is impossible to tell you how much environmental cleanup will cost until it is done," he said. "There will be more costs, we understand that, but we have the choice of having the site sit and become nothing more than the eyesore it has been for 20 years, or to create something that will create jobs, increase the tax base and create excitement."
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