1981-09-14 - Village Board Committee of the Whole - Minutes SUMMARY OF COMMITTEE OF THE WHOLE OF THE PRESIDENT AND BOARD OF TRUSTEES
OF THE VILLAGE OF BUFFALO GROVE, ILLINOIS, HELD MONDAY, SEPTEMBER 14, 1981 ,
AT THE MUNICIPAL BUILDING, 50 RAUPP BOULEVARD, BUFFALO GROVE, ILLINOIS.
President Clayton called the meeting to order at 10:00 P.M. Those present
were: President Clayton; Trustees Marienthal , Stone, O'Reilly, Hartstein,
Gerschefske, and Schwartz. Also present were: William Balling, Village
Manager; James Doyle, Assistant Village Manager; William Brimm, Finance
Director; Richard Kuenkler, Village Engineer; Raymond Rigsby, Superintendent
of Public Works; Paul Kochendorfer, Village Treasurer; and William Raysa,
Village Attorney.
TOWN CENTER
President Clayton stated that this meeting is to review and discuss some of
the financing alternatives necessary to proceed. Mr. Harold Eisenberg of
Ken Tucker & Associates explained the financial problems which have beset
the Town Center project. Discussion then took place regarding the financial
alternatives outlined in Mr. Balling 's memo to the President and Board of
Trustees of September 10, 1981 .
Mr. Balling discussed the opportunity to place special service district or
tax exempt bond financing on a negotiated basis through the principal finance
service center. At the request of the Board, staff did examine financing
alternatives; both the industrial revenue bonds and the special service
district were investigated as a vehicle for financing. The preliminary
investigation of the special service district showed that it was a reasonable
concept; however, local banks showed no interest in securing a municipal rate.
The Village's fiscal consultant showed that a public placement of bonds would
not be recommended at this time. It was suggested that there may be feasibility
into the Village creating the special service district, or possibly a tax-
exempt industrial revenue bond that would be placed privately by the develop-
ment group and could attain a municipal rate. If that were to occur, it would
break the obstacle in dealing with the tax exempt financing issue. If the
Village used either the industrial revenue bond vehicle or the special service
district bonds, either sale could be structured in such a way to encumber only
the property in question for the obligation. This concept would demand that
the developer would be responsible for negotiating the sale and a competitive
municipal rate with a financial institution.
Mr. Eisenberg stated that industrial revenue bonds are not saleable today.
Mr. Brimm stated that he had talked with a number of financial institutions,
and there is basically no interest at all in tax exempt paper. Mr. Brimm also
stated that there is absolutely no risk on the part of the Village with industrial
revenue bonds. Discussion took place on the revenue which will be brought into
the Village from the Town Center, as well as the possibility of the Village
backstopping any type of loan or bond. Mr. Eisenberg stated that he did not
think they would be able to secure any type of bonds without a backstop by
the Village.
There was discussion on the engineering fees, followed by further discussion
on the financing possibilities. Mr. Eisenberg stated that the options on the
property run through the end of September. Mr. Brimm stated that there is no
risk to the Village with a special service district unless there is a backstop
added; if there were a backstop added and there was a default, the debt service
would have to be levied against all property in the Village.
COMMITTEE OF THE WHOLE
SEPTEMBER 14, 1981
PAGE TWO
Trustee Schwartz asked for a polling of the Board as to whether they would
consider the alternate financing that has been discussed this evening, and if
Ken Tucker & Associates is able to get some positive response, to call a special
meeting to discuss that in detail , and use that as an alternative to move
forward with the Town Center; this would include an industrial revenue bond or
a special service district, with or without backstop by the Village.
President Clayton stated that she would poll the Board separately on each of
the possible alternatives . The first polling pertains to the Industrial Revenue
Bonds : "Yes" indicates favor of same; "No" indicates opposition:
YES: Marienthal , Hartstein, Schwartz
NO: Stone, O'Reilly
ABSTAIN: Gerschefske
President Clayton stated that, in light of the fact that the final vote on an
annexation requires a vote of 5, the affirmative vote of 3 Board members would
not be enough to even look into the Industrial Revenue Bond possibility.
The second polling pertains to a special service district with a backstop:
"Yes" indicates favor; "No" indicates opposition:
YES : Hartstein, Schwartz
NO: Marienthal , Stone, O'Reilly
ABSTAIN: Gerschefske
The third polling pertains to a special service district with no backstop:
"Yes" indicates favor; "No" indicates opposition:
YES: Marienthal , Hartstein, Schwartz
NO: Stone, O'Reilly
ABSTAIN: Gerschefske
Trustee Hartstein stated that he is very much in favor of the Town Center, and
urged other Board members to reconsider their views on the special service
district, or to go along with one of the alternatives presented by the Village
Manager in his September 10, 1981 memo.
Trustee Schwartz stated that, although he does not agree with all of Trustee
Hartstein's concepts of the Town Center, he would also urge other Trustees to
consider alternative financing of this project.
President Clayton stated that she agreed with the above statements. Mrs.
Clayton also stated that she did commit to Ken Tucker that he would receive
some direction frow the Board, one way or the other, at tonight 's meeting.
Trustee Stone stated that the Board has already been told that two of the
methods of alternate financing will not be saleable; the only possible method
of financing is the special service district with a backstop, which Mr. Stone
would not favor.
Trustee O'Reilly stated that her main reason for not reconsidering is because
\./ of the financing, but also because she is not in favor of the way the negotiations
thus far have been conducted.
\./
COMMITTEE OF THE WHOLE
SEPTEMBER 14, 1981
PAGE THREE
President Clayton polled the Board: "Yes" indicates favor of Alternative III
as outlined in Mr. Balling 's memo of September 10, 1981 , and also requiring a
dollar contribution of the proportionate share from this particular developer;
"No" indicates opposition:
YES: Hartstein
NO: Marienthal , Stone, O'Reilly, Schwartz
ABSTAIN: Gerschefske
President Clayton polled the Board: "Yes" indicates favor of Alternative II
as outlined in Mr. Balling's memo of September 10, 1981 ; "No" indicates opposition:
YES: Hartstein, Schwartz
NO: Marienthal , Stone, O'Reilly
ABSTAIN: Gerschefske
President Clayton stated that she regretted having to inform the developer
that it appears there is no way that the Village is going to be able to
accommodate them with financing. Mrs. CLayton stated that the Board is in
favor of the Plan. Mr. Eisenberg stated that, on behalf of the Jewel Store,
he felt that he should ask the Board how they felt about Jewel 's locating at
another spot.
President Clayton polled the Board: "Yes" indicates favor of consideration
of the Jewel/Osco plus additional retail on the Henderson property; "No"
indicates opposition :
YES: Stone, O'Reilly
NO: Marienthal (would like to have the Lake-Cook/Arlington Heights Road
location be pursued) ; Hartstein (because of traffic consideration) ;
Gerschefske
ABSTAIN: Schwartz (does not feel he has enough information regarding that site)
Mr. Eisenberg thanked the Board for their consideration on this project.
ADJOURNMENT
Moved by Stone, seconded by Marienthal , to adjourn the meeting. Upon voice vote,
the motion was unanimously declared carried. The meeting was adjourned at
11 : 17 P.M.
'�`' fir' l �7u
Janet kit Sirabian, Village Clerk