Lockport committee approves permit for school

By Lhalie Castillo

Mar 9, 2017

The city of Lockport Committee of the Whole met Jan. 18 to approve a special use permit for a school.

Here are the meeting's minutes, as provided by the committee:

COTW – January 18, 2017

The Committee of the Whole Meeting was held on Wednesday, January 18, 2017 in the Board Room, 3rd Floor, of the Central Square Building.

Mayor Steven Streit called the Meeting to order at 7:00 p.m. and led the Pledge of Allegiance.

COUNCIL MEMBERS PRESENT: PETRAKOS, CAPADONA, GILLOGLY, SMITH,

DESKIN, VANDERMEER, PERRETTA, BARTELSEN

COUNCIL MEMBERS ABSENT:

ALSO PRESENT: S. STREIT, MAYOR

A. MATTEUCCI, CITY CLERK B. BENSON, CITY ADMINISTRATOR T. THANAS, INTERIM CITY ATTORNEY R. HUFF, DEPUTY CHIEF OF POLICE L. HEGLUND, FINANCE DIRECTOR P. HIRTH, DIRECTOR OF COMMUNITY &

ECONOMIC DEVELOPMENT

PRESS PRESENT

Sarwat Ahmad, Reporter for Herald News, Meredith Dobes, Reporter for Lockport Legend, Frank Vaisvilas, Reporter for Southtown Star, and Cathy Wilker, Volunteer for LCTV were present to cover the Meeting.

Lockport Police Chaplin, Steve opened the meeting with a prayer.

RECOGNITION

Mayor Streit recognized Taft Grade School 7th Grade Girls Basketball Team for winning Sectionals and making it to State.

LIAISONS REPORT

Alderman Deskin spoke about the new “Safe Passage Program” to help people with drug addictions. Deputy Chief Ron Huff explained what the goal is for this new program.

Mayor Streit formed a Lockport Intergovernmental Committee. It will be made up of all governing bodies such as the School District’s, the Township Government’s, the Library’s, the Park District’s, the Fire District’s, Forest Preserve’s. Alderman Petrakos will be the Chairman.

PZC CASE #2016-014: SPECIAL USE PERMIT FOR A PUBLIC SCHOOL AND FINAL DEVELOPMENT PLANS FOR TWO (2) BUILDING ADDITIONS TO BE LOCATED ON THE WEST AND SOUTH SIDES OF THE EXISTING BUILDING (LOCKPORT TOWNSHIP HIGH SCHOOL/1323 E. 7TH STREET/ORDINANCE NO. 17-002

Director of Community and Economic Development Pam Hirth presented her Memo dated January 11, 2017.

These items were initially presented to the Committee of the Whole Meeting on January 4th. It was subsequently tabled to this evening’s Meeting so that the School District could have someone present at the Meeting to respond to concerns on a separate matter related to a sidewalk project.

The Applicant, Peter Pontarelli of DLA Architects, on behalf of Lockport Township High School is seeking approval of Special Use Permit for a Public School expansion and Final Development Plans for the construction of two (2) separate additions to the Lockport Township High School, East Campus to include a 7,500 square foot multi- purpose room addition (with 4,500 square feet of lower level storage space) and a 19,700 square foot 11 classroom addition.

The subject property, Lockport Township High School East Campus, is zoned R-1 Single Family Residential. A Public School is a Special Use within all Residential Zoning Districts in accordance with the Zoning Ordinance. In the past, Public Schools were not subject to Municipal Zoning regulations. A School Zoning Law was signed by the Governor in August 2016 that gives local governments the authority to apply and enforce their zoning regulations on schools.

Administrator Benson explained that customarily in the past the City has waived fees for governmental entities such as Park District, Township, Fire District has come to us in the last six months and we have done the same process where we only charge them fees that we incur as a pass through. We will be doing the same thing customarily for the High School.

ACTION: MOTION TO APPROVE AT TONIGHT’S CITY COUNCIL MEETING ORDINANCE NO. 17-002/ AN ORDINANCE APROVING A SPECIAL USE PERMIT FOR A PUBLIC SCHOOL AND FINAL DEVELOPMENT PLANS FOR TWO (2) BUILDING ADDITIONS (LOCKPORT TOWNSHIP HIGH SCHOOL/1323 E. 7TH STREET).

CITY HALL RENOVATIONS

In 2014, the City worked with Buchar, Mitchell, Bajt Architects Inc. for architectural and engineering services to complete the scope of work for the Council Chambers improvement plan.

R. Berti Building Solutions of Lockport was utilized for Construction Management Services and completed some minor renovations and AV improvements were installed in Council Chambers, including new cameras, presentation TV’s and removing the dividing wall.

The 2017 budget allocation included additional funding to complete the rest of the renovation plans, including additional flooring selections for the 2nd and 3rd floor including the stairways.

R. Berti Building Solutions as the Construction Manager sent out multiple proposals for cost estimates to complete the designed flooring renovation plans from Buchar, Mitchell, Bajt Architects with the lowest responsible prevailing wage bidders. Whenever possible local businesses were encouraged to respond for quotes and it should be noted that Marchio Tile of Lockport furnished the carpet and installation from the Council Chambers project back in 2014. Total construction cost estimates are $83,089.00.Administration is seeking authorization approval to not exceed $90,000, in case of any unknown contingencies are found to mitigate any existing flooring conditions.

CONSENT AGENDA: MOTION TO ENTER INTO A CONTRACT WITH R. BERTI BUILDING SOLUTIONS FOR RENOVATIONS TO FLOORING AT CITY HALL, WITH A COST NOT-TO-EXCEED $90,000.

RESOLUTION APPROVING AN ECONOMIC INCENTIVE AGREEMENT BETWEEN THE CITY OF LOCKPORT AND LOCKPORT SQUARE LLC – HOTEL COMPLEX/RESOLUTION NO. 17-004

City Administrator, Ben Benson presented his and Interim City Attorney, Tom Thanas Memo dated January 9, 2017. On October 26, 2007, the City of Lockport and a Commercial Property Developer named “Lockport Partners II, LLC” entered into a Development Agreement for an 80-acre commercial complex at the southeast corner of I- 355 infrastructure and 159th improvements Street that became were constructed known as “Lockport by the Developer, Square.” While the recession some of halted the all development, and no new Retailers were attracted to the site.

A few years later, a new Developer, Lockport Square LLC, acquired the property and restarted the development process. The Janko Group is the controlling ownership group behind the Limited Liability Company that bought the property, and James Purinton is a Partner in the ownership group who serves as its spokesman. On November 6, 2013, the City approved the First Amendment to the Development Agreement that revised the sales tax incentive component of the original Development Agreement as an inducement to the new Developer to take on the project.

The First Amendment also anticipated the new Developer’s acquisition of a 17-acre portion of the original 80-acre development site that was conveyed to a National Retailer that decided not to build its store during the recession; that acquisition was closed in 2016.

The main change made in 2013 was to change the 50-50 split in the 1% sales tax that the City revenue receives as part of the State Sales Tax imposed on retail sales to the Developer receiving 60% of the Sales Tax Revenue from all retail sales in the shopping center and the City receiving 40%. The First Amendment also capped the Developer’s share of sales tax rebate at $12 million, but the First Amendment also allowed for that number to increase to $13.5 million if Developer opened a major tenant having at least 50,000 square feet by December 31, 2017.

In 2016, the Developer and the City began negotiations for the construction of a $14 million hotel project that would occupy a prominent lot near I-355. The proposed hotel would be part of a nation hotel chain. Part of those negotiations included a request from the Developer for the City to rebate the City portion of the hotel tax that will be imposed on hotel room rentals.

The City has long needed a national hotel. With the opening of I-355 and the new life being breathed into the Lockport Square Shopping Center, a national hotelier is willing to make a major investment in Lockport to construct a hotel. The City commissioned a market study for a new national hotel to be done in 2015 and was updated in 2016. The market study showed that a demand exists for the construction of at least one new hotel. Frequently, other hotel companies follow the opening of the first hotel, especially at interstate interchange locations. This project along with other prospects will bring new jobs to Lockport Residents and will expand the real estate tax base from which Schools and other governmental agencies will benefit.

In 2013, the City enacted its first Hotel Tax Ordinance that imposes a 5% tax on the rental of a hotel room. The State of Illinois imposes a 6% hotel tax that is payable in addition to the City tax. It is the 5% City hotel tax that would be subject to the Hotel Tax Rebate Agreement if the Developer’s request is approved.

The Hotel Tax Rebate table sets forth the details of how the 5% hotel tax would be allocated. Generally, the Hotel Developer will receive all of the proceeds of the 5% hotel tax for the first 10 years. In years 11 through 15, the City will receive 1% of the hotel tax with the Developer receiving 4% of the tax. In years 16 through 20, the City would receive 2% of the tax, the Hotel Developer would receive 3% of the tax. The tax would be capped at a maximum of $3,000,000 during the duration of the Rebate Agreement.

If the Hotel Developer has not been received the full amount of the rebate by the end of the 20th year, the Rebate Agreement will terminate with no further obligation of the City to pay the shortfall.

If the City were to increase the hotel tax in the future, the amount of the increase would be retained by the City and would not be subject to the Hotel Tax Rebate Agreement.

The Hotel Developer has also requested assistance with a portion of the initial costs of developing the hotel complex. The City will be extending a credit of $300,000 in fees payable for building permits and other fees that the Developer would be assessed during the construction process. The estimated total fees would be about $350,000. Any amount above $300,000 would be payable by the Developer during the construction process. The Developer will be required to reimburse the City for any professional consulting fees and any equipment purchase costs incurred by the City in reviewing the project.

Jim Purinton, Partner in the ownership of Lockport Square gave a background update on the project. He mentioned they are working with Junior Anchor stores to come in at this site.

Greg Spanos, Managering Director of Jenko Group, Developer of the Holiday Express gave a background on the Jenko Group as a Developer. He went over the design of the building and the time table of the Development. They would open in the Fall of 2018.

Mr. Purinton talked about the Movie Theatre Complex proposal.

ACTION: MOTION TO APPROVE RESOLUTION NO. 17-004/ A RESOLUTION APPROVING AN ECONOMIC INCENTIVE AGREEMENT FOR THE DEVELOPMENT OF A HOTEL.

RESOLUTION APPROVING THE SECOND AMENDMENT TO THE DEVELOPMENT AGREEMENT BETWEEN THE CITY OF LOCKPORT AND LOCKPORT SQUARE LLC – MOVIE THEATER COMPLEX/RESOLUTION NO. 17-005

City Administrator Benson presented his and Interim City Attorney, Tom Thanas Memo dated January 9, 2017.

On October 26, 2007, the City of Lockport and a Commercial Property Developer named “Lockport Partners II, LLC” entered into a Development Agreement for an 80-acre Commercial known as “Lockport complex Square.” at the southeast While some corner of the of I-355 infrastructure and 159th improvements Street that became were constructed by the Developer, the recession halted all development, and no new Retailers were attracted to the site.

On November 6, 2013, the City approved the First Amendment to the Development Agreement that revised the Sales Tax Incentive component of the original Development Agreement as an inducement to the new Developer to take on the project.

It should be emphasized that the Sales Tax Rebate applies only to the 1% sales tax the City receives through the State Sales Tax imposed on retail sales.

The 1% non-home rule sales tax that was enacted by the City will be received by the City and will not be part of the sales tax rebate plan. As a point of clarification, the State Sales Tax and the 1% Non-Home Rule Sales Tax do not apply to ticket sales for the movies that will be shown at the new theater because the showing of a movie is not considered a retail sale of a product.

But, all food and beverage sales and the sale of tangible goods at the Movie Theater will be subject to the State Sales Tax and the 1% Non- Home Rule sales tax. It is the sales that will generate State Sales Tax revenue that will be subject to the Sales Tax Rebate program established by the original Development Agreement as amended by the First and Second Amendments. If the Illinois General Assembly expands the scope of the tax to include the sale of services and the purchase of a movie ticket becomes a taxable sale, the City will entitled to retain all of the tax proceeds from the sale of movie theater tickets and will not be required to share that new revenue with the Shopping Center Developer or the Movie Theater Developer.

In 2016, the Developer and the City began negotiations with a major operator of movie theater complexes for the development of a full service, multi-screen theater complex. Part of those negotiations included a revision in the Sales Tax Rebate allocation to have the Theater Developer receive a share of the sales tax rebate. The sales tax rebate table that is presented sets forth the details of how the 1% sales tax generated by retail sales at the Movie Theater Complex would be allocated. Generally, the Theater Developer will receive all of the proceeds of the 1% sales tax for the first five years. In years 6 through 20, the City will receive 25% of the 1% sales tax (in addition to the 1% non-home rule sales tax that the City receives for its capital improvement program).

The remaining 75% of the 1% tax would be split in years 6 through 10 with the Theater Developer receiving 50% of the tax revenue and the Shopping Center Developer receiving 50% of the tax revenue. In years 11 through 20, the Shopping Center Developer would receive 50% of the tax revenue, and the Theater Developer will receive 25% of the tax revenue.

There are two more points that are part of the recent round of negotiations regarding the Sales Tax Rebate incentive. The Movie Theater Complex will be deemed a major anchor tenant that will trigger increase in the total sales tax rebate amount to $13.5 million for the Shopping Center Developer, and the deadline for opening the theater to make the Developer eligible for the enhanced rebate is moved from December 31, 2017, to December 1, 2019.

The Theater Developer has also requested assistance with a portion of the initial costs of developing the theater complex. The City will be extending a credit of $100,000 in fees payable for building permits and other fees that the Developer would be assessed during the construction process. The estimated total fees would be about $125,000. Any amount above $100,000 would be payable by the Developer during the construction process. The Developer will be required to reimburse the City for any professional consulting fees and any equipment purchase costs incurred by the City in reviewing the project.

In a competitive retail market that is trying to recover from the depths of the recession, municipal incentives have become commonplace. A Movie Theater Complex will generate a substantial amount of traffic for the new shopping center and will help the City and the Shopping Center Developer land other quality retail tenants and restaurants.

The City’s participation in the Sales Tax Rebate Program will provide the needed incentive to have the Movie Theater Developer commit to the project and invest in Lockport. With the Movie Theater Complex will come other desired retailers and restaurants assuming the economy continues on its path to recovery. This project along with other prospects will bring new jobs to Lockport Residents and will expand the Real Estate Tax Base from which schools and other governmental agencies will benefit.

The Second Amendment to the Development Agreement revising the Sales Tax Rebate Program that was first approved in 2007 will be before the City Council for consideration at the January 18th Committee of the Whole Meeting, and the City Administration is recommending that the City Council move forward with the approval process.

Alderman Petrakos feels if there is an incentive they need to start designing now, start building now. He has concerns. He would like to see completion at the end of 2018. He has concerns with waiting three more years.

Alderwoman Bartelsen feels the same way. She feels they need to move a lot quicker than 2019. Whatever we have to do to do that, she feels we’ve waited long enough. There should be no reason to stall anymore, given all the incentives.

Alderman Capadona is for giving more incentives and getting a kick start and get it rolling. He would like to see the date pushed up.

Alderman Perretta said to give a little give and take. Give a little bit extra on the tax incentive and look down the mid July, August, 2018. Incentive agreement maybe five years going to six years 100% toward the development. Kind of like a give and take.

Alderman Gillogly asked if the dates could be changed to ground breaking dates instead of completion dates?

City Administrator Benson said he would like to put the Hotel Complex on as an action for the February 1 Meeting, but don’t put anything on the next Meeting in regards to the Theater until Jim can go back and work with his Client a little bit and find out what can they move it up to, what can they live with? Can we move it up 6 months, 9 months? When they can sign a Contract and they come back to finalize the incentive then we can try to narrow it down a little better.

A discussion ensued. For complete details the video of the meeting is available on the City’s website.

More information regarding the Movie Theater Complex will be brought back to a future Council Meeting for further review and consideration.

LOCKPORT SQUARE EAST OF ADELMANN/MAINTENANCE BOND RELEASE REQUEST

Director of Engineering, Amy Wagner presented her Memo dated January 19, 2017. A Letter of Credit (#4110000006108) in the amount of $2,000,000 was posted at the start of the above-referenced project. In January 2015, the Council approved a reduction) in the amount of $905,000, resulting in a remaining Letter of Credit amount of $1,095,000.00.

In January 2016, the City Council approved a second reduction for the remaining Phase 1 work (100% complete) and the reduction for receiving the Certificate of Occupancy for Lot 7. The reduction for both of these items amounts to $945,000, leaving an outstanding balance of $150,000, the agreed 1-year maintenance amount.

The one year maintenance period has expired and we are currently conducting inspections to make sure that there are no outstanding issues.

ACTION: MOTION TO APPROVE THE ADELMANN MAINTENANCE BOND RELEASE PROVIDED UPON COMPLETION OF THE WALK THROUGH THERE AREN’T ANY OUTSTANDING ISSUES.

ELECTRIC AUCTION UPDATE FOR CITY PROPERTIES

Finance Director, Lisa Heglund updated the Council on the Electric Auction for City properties.

In 2008 the City of Lockport started to participate in an auction with NIMEC (Northern Illinois Municipal Electric Collaborative) to achieve the best price possible for electricity. This auction is not for Residents this is only for our City owned buildings. The City Administrator was given authority in the 2008 Resolution by City Council to accept a one or a three year bid based on price. Although we have used other Providers for the auction service, this year we are going to use NIMEC. NIMEC provides this service to over 140 Municipalities in Illinois to help drive down the pricing for Municipal electricity.

We do not pay NIMEC for their work. They receive payment directly from the electric companies. Our current Contract with World Energy expires in May and NIMEC is going to start the bidding process in February and will continue doing this bidding if prices do not come in favorable. Once the auction occurs the City Administrator has 24 hours to accept this bid. We don’t have time to come back to Council to talk about it. Last year we spent $568,000.00 with Energy Me, that’s our Provider. Ms. Heglund wanted to keep everyone apprised so we are still falling under the Resolution that we had before. We are going to watch the price and see how it comes in from the auctions and then we will go ahead and have Ben Benson sign those Contracts for either a one year or three year depending on how the price comes in.

2017 F250 XL/RESOLUTION NO. 17-001

Director of Finance, Amy Wagner presented Director of Public Works, Joe Findlay & Water Superintendent, Scott Green’s Memo dated January 5, 2017.

The Water Department is requesting approval to purchase a 2017 F-250 XL from Currie Motors for a total not to exceed the budgeted amount of $35,000. The price is based on the South Suburban Joint Purchasing Program. This truck will replace truck #703, the 2006 Ford Explorer that has reached its useful life. This item has been budgeted for in the Capital – Public Works line in the 2017 budget. At this time we are also requesting the authorization to declare truck #703 as surplus so that it can be auctioned or disposed of.

CONSENT AGENDA: MOTION TO APPROVE RESOLUTION NO. 17-001/ A RESOLUTION AUTHORIZING THE ADMINISTRATOR AND STAFF TO PURCHASE A 2017 F-250 XL FROM CURRIE MOTORS FOR AN AMOUNT NOT- TO-EXCEED $35,000 AS WELL AS DECLARE #703 AS SURPLUS.

DISPOSAL OF VEHICLES: STREET DEPT. #108 AND WATER DEPT. #700/RESOLUTION NO. 17-002

Director of Engineering, Amy Wagner presented Director of Public Works, Joe Findlay’s Memo dated January 5, 2017.

Street Dept. Truck #108 has over 141,000 miles and has cost $8,500.52 in repairs since November of 2008. This truck is in rough condition and has reached its useful life.

Water Dept. Truck #700 has 68,864 miles and has cost $8,630.05 in repairs since November of 2008. This truck has a number of issues that would cost several thousand dollars to repair as noted on the Fleet Maintenance Crew Leaders Memo.

CONSENT AGENDA: MOTION TO APPROVE RESOLUTION NO. 17-002/ A RESOLUTION AUTHORIZING THE DISPOSAL OF TWO (2) SURPLUS VEHICLES: TRUCK #108 STREET DEPT. & TRUCK #700 WATER DEPT.

ADJOURNMENT

MOTION BY PETRAKOS, SECOND BY BARTELSEN TO ADJOURN THE COMMITTEE OF THE WHOLE MEETING AT 8:37 P.M.

ALL VOTED AYE – MOTION CARRIED

Respectfully submitted by,

Donna Tadey, Administrative/Deputy Clerk

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