1998-07N N
RESOLUTION 98- 7
A RESOLUTION CONCERNING THE TOWN CENTER TAX INCREMENT FINANCING AREA
RESTRUCTURING TERM SHEET
WHEREAS, on October 3, 1994, the Village of Buffalo Grove approved a Term
Sheet that set forth certain terms and conditions for the refinancing of the
Village of Buffalo Grove Tax Increment Allocation Bonds - Series A and B of 1987,
and;
WHEREAS, the Village authorized its Series 1995 Tax Increment Allocation
Revenue - Series A, Series B and Series C Bonds on February 21, 1995, with issuance
shortly thereafter, and;
WHEREAS,the Village and Simon De Bartolo Group are desirous to further the
goals and objectives of the Redevelopment Plan and Project for the Town Center
originally adopted October, 1986 and amended on November 1, 1993, and;
WHEREAS, the most effective way to further those goals and objectives will
be with the refinancing of the Series 1995 Village of Buffalo Grove Tax Increment
Revenue Bonds, Series A, Series B and Series C bonds from a non - taxable to
taxable basis.
NOW, THEREFORE BE IT RESOLVED by the President and Board of Trustees of the
Village of Buffalo Grove, Cook and Lake Counties, Illinois that:
1. The Village of Buffalo Grove endorses the Buffalo Grove Town Center
Tax Increment Financing Refunding (1998) Term Sheet with a final
draft date of February 12, 1998.
2. The Village Board directs its staff to proceed with the preparation
of final refinancing documents to resubmit to the Village Board for
consideration at the earliest possible date upon completion of the
terms and conditions as outlined in the Term Sheet.
3. Final approval of the Term Sheet by the Village of Buffalo Grove
shall be contingent upon its approval, in principal, by Simon De
Bartolo Group.
AYES: 7 - Marienthal, Rubin, Braiman, Hendricks, Glover
NAYES: 0 - None
ABSENT: 1 - Reid
PASSED: February 18 ,1998.APPROVED: February IS ,1998.
Vil ge Clerk
Village President
BUFFALO GROVE TOWN CENTER
TAX INCREMENT FINANCING REFUNDING (1998) TERM SHEET
1. Bond Refunding. The Village will issue $8,660,000 of TIF refunding bonds
in three series, all taxable to Simon De Bartolo Group: $4,510,000 of
Series A bonds; $750,000 of Series B bonds; and $3,400,000 of subordinated
Series C bonds. All Series of bonds will have maturity dates and call
features that coincide with the Refunded (Series 1995) bonds with a final
maturity no later than December 30, 2005. The maximum interest rate on
the Series A and Series B bonds shall be 8.5 %. Series C Bond interest
will not exceed 7% (2% paid and 5% accrued).
Initiation of this Bond Refunding will be contingent upon the closing on
the sale of the development site for the anchor retail commercial space
proposed for Eagle Stores, Inc. At closing, Simon De Bartolo shall notify
the Village of this event and the Village shall authorize its bond counsel
to proceed ahead with the document preparation for the Bond Refunding.
The actual date for the ordinance adoption and closing on the refunding
will be a soon as can reasonably be scheduled by bond counsel.
2. As part of the events to occur at the time of the closing on the bond
refunding, two executed documents will be placed in escrow. The first
shall be an amended Payment Agreement that will be developed around the
terms and conditions of this Term Sheet. The second will be an agreement
that terminates the Municipal Services Reimbursement Agreement dated
February 21, 1995.
These documents will remain in escrow only to be released upon the
issuance by the Village of a Certificate of Occupancy for the anchor
retail commercial space built on the Eagle Stores site. If a certificate
of occupancy is never issued for this anchor retail commercial space, the
Payment Agreement and Municipal Services Reimbursement Agreement, both
dated February 21, 1995 will remain in effect until either final maturity
or amendment.
3. At closing of the Bond Refunding, Simon De Bartolo Group will tender the
outstanding TIF Bonds it holds (1995 Series A, Series B and Series C)
totaling $8,660,000 in exchange for:
A. $4,510,000 Series A taxable Bonds;
B. $3,400,000 of subordinated Series C taxable Bonds, repayment of
which will be subordinated to payment of the Series A bonds and the
Series B bonds.
C. $750,000 Series B taxable Bonds payment of which will be
subordinated to payment of the Series A bonds.
4. The Village will not issue $1,100,000 in Series B bonds authorized but not
issued as part of the Series 1995 restructuring even if Simon De Bartolo
Group constructs anchor retail commercial space, as defined in the Junior
Lien Bond Escrow Agreement dated February 21, 1995. Simon De Bartolo
Group waives any future demands upon the Village to authenticate and
release the authorized Series B bonds upon construction of anchor retail
commercial space.
5. Simon Property Group will make certain payments from its own funds to
certain of the affected taxing authorities pursuant to an amended Payment
Agreement, the original of which is dated February 21, 1995. Payments
shall be made after recognizing credit for any and all required debt
service due as of the date of any remittance as noted below. Payments
shall be determined as follows:
School District #102: Through December 30, 2005 (tax years 1997 - 2004),
Simon De Bartolo Group shall direct the bond trustee /paying agent to remit
prior to its own receipt debt service proceeds, certain payments from such
funds to School District #102. The amount of each such payment shall be
calculated for each tax year by the Finance Director of the Village of
Buffalo Grove, or such other officer of competent authority, by obtaining
for each tax year from the office of the Vernon Township Assessor, or from
other competent authority in Lake County, Illinois, the total incremental
equalized assessed value for the Town Center Tax Increment Redevelopment
Project District of the Village of Buffalo Grove which shall be divided by
100 with such result multiplied by the property tax rate for School
District #102 for the given tax year. The annual incremental property
taxes due School District #102 for each tax year shall be remitted twice
annually to coincide with the scheduled debt service payments due Simon De
Bartolo Group. At the election of the School District, Simon De Bartolo
Group will remit annual tax monies beginning in 1998 through December 31,
2002 (tax years 1997 through 2001) but to compensate for this accelerated
payment schedule, Simon De Bartolo would not provide payments for the
years 2003 -2005 (tax years 2002 - 2004). Further if Simon De Bartolo Group
does sell the bonds purchased, School District #102 must be fully
reimbursed at closing for the then remaining present value tax loss
through December 30, 2005.
Buffalo Grove Park District: Through December 30, 2005 (tax years 1997-
2004), Simon De Bartolo Group shall direct the bond trustee /paying agent
to remit prior to its own receipt of debt service proceeds, certain
payments from such funds to the Buffalo Grove Park District. The amount
of each such payment shall be calculated for each tax year by the Finance
Director of the Village of Buffalo Grove, or such other officer of
competent authority, by obtaining for each tax year from the office of the
Vernon Township Assessor, or from other competent authority in Lake
County, Illinois, the total incremental equalized assessed value for the
Town Center Tax Increment Redevelopment Project District of the Village of
Buffalo Grove which shall be divided by 100 with such result multiplied by
the property tax rate for the Buffalo Grove Park District for the given
tax year. The annual incremental property taxes due the Buffalo Grove
Park District for each tax year shall be remitted twice annually to
coincide with the scheduled debt service payments due Simon De Bartolo
Group. At the election of the Park District, Simon De Bartolo Group will
remit annual tax monies beginning in 1998 through December 31, 2002 (tax
years 1997 through 2001) but to compensate for this accelerated payment
schedule, Simon De Bartolo Group would not provide payments for the years
2003 -2005 (tax years 2002 - 2004). Further if Simon De Bartolo Group does
sell the bonds purchased, the Buffalo Grove Park District must be fully
reimbursed at closing for the then remaining present value tax loss
through December 30, 2005.
Village of Buffalo Grove: Through December 30, 2005 (tax years 1997 - 2004),
Simon De Bartolo Group shall direct the bond trustee /paying agent to remit
prior to its own receipt of debt service proceeds, certain payments from
such funds to the Village of Buffalo Grove. The amount of each such
payment shall be calculated for each tax year by the Finance Director of
the Village of Buffalo Grove, or such other officer of competent
authority, by obtaining for each tax year from the office of the Vernon
Township Assessor, or from other competent authority in Lake County,
Illinois, the total incremental equalized assessed value for the Town
Center Tax Increment Redevelopment Project District of the Village of
Buffalo Grove which shall be divided by 100 with such result multiplied by
the property tax rate for the Village of Buffalo Grove for the given tax
year. The annual incremental property taxes due the Village of Buffalo
Grove for each tax year shall be remitted twice annually to coincide with
the scheduled debt service payments due Simon De Bartolo Group. At the
election of the Village, Simon De Bartolo Group will remit annual tax
monies beginning in 1998 through December 31, 2002 (tax years 1997 through
2001) but to compensate for this accelerated payment schedule, Simon De
Bartolo Group would not provide payments for the years 2003 -2005 (tax
years 2002 - 2004). Further if Simon De Bartolo Group does sell the bonds
purchased, the Village of Buffalo Grove must be fully reimbursed at
closing for the then remaining present value tax loss through December 30,
2005.
However, in no case, will the annual payment to the Village of Buffalo
Grove be less than $125,000, should the amount calculated in the preceding
paragraph be less than that amount. If the amount calculated in the
preceding paragraph is less than $125,000, the Village's Director of
Finance shall direct the bond trustee to increase the semi - annual payments
contemplated under the amended Payment Agreement to $62,500.
Up until the time that the amended Payment Agreement is released from
escrow, the Municipal Services Reimbursement Agreement dated February 21,
1995 will remain in effect. However, once the amended Payment Agreement
is released from escrow, and if a payment shall have been made to the
Village as contemplated under the terms and conditions of the Municipal
Services Reimbursement Agreement, a subsequent payment(s) will be made to
the Village by Simon De Bartolo so that the amount received by the Village
for any calendar year up until the date of release from escrow of the
amended Payment Agreement will equal, when combined with the Village
payment calculation above, no less than $125,000 annually.
The payment methodology for School District #102, Buffalo Grove Park
District and Village of Buffalo Grove will remain in effect as long as
refunding bonds are held be Simon De Bartolo Group. Should any bonds be
resold within the public finance markets, both Village and Simon De
Bartolo Group shall determine a payout formula to School District #102,
Buffalo Grove Park District and Village of Buffalo Grove that considers
the present value of all future payments to be made as of the date of sale
less any payments that have been periodically made under the terms noted
above and such Districts shall receive such amount as a condition of such
resale.
6. The refunding contemplated under this Term Sheet will not require an
amendment to the current TIF Redevelopment Plan and Project.
7. Simon De Bartolo Group will pay at fifty percent (50 %) from its own funds
the Village's third -party costs incurred in connection with the TIF
refunding costs as eligible under the TIF Act. Payment of such costs
shall come from funds on hand in the Municipal Service Reimbursement
Agreement account maintained by the Village.
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8. At closing} the Municipal Service Reimbursement Agreement will become void
and upon a final accounting, all remaining funds will be returned to Simon
De Bartolo Group after payment of any third -party costs incurred per
Paragraph 6.
9. The issuance date for the Series A and Series C restructuring bonds will
be determined in conjunction with bond counsel.
10. This term sheet represents draft dated February 12, 1998 and supersedes
the Term Sheet originally dated February 2 and 9, 1998.
This Term Sheet offered by the Village of Buffalo Grove this 12th day of
February, 1998.
William R. iling
Village M a er
This Te She t accepted, i principal, this 13---day of February, 1998.
Attest for Simon De Bartolo Group.
i
SIMON
DEBARTOLO
GROUP
February 16,
Mr. William R. Balling, Village Manager
Village of Buffalo Grove
50 Raupp Boulevard
Buffalo Grove; IL 60089
RE: Buffalo Grove Town Center
Dear Mr. Balling:
As a representative of the Simon DeBartolo Group, I you This l tter erect lies
in the successful development of the Buffalo Grove Town Center.
representation that Simon DeBartolo will use its reasonable best efforts in assisting the
Village of ` Buffalo Grove in perfecting outstanding conditions established through
Ordinance 96 -48 concerning a parcel adjacent to properties owned by Simon DeBartolo.
(Subject to review and approval of all related documentation and conditioned that Simon
DeBartolo Group bears no cost associated with the ordinance or matters related to this
letter, etc.)
Based solely on our conversations, it is my understanding that this ordinance provides for
an adjacent property owner to secure necessary access easements for fire lane circulation
to, the westernmost service drive of the Buffalo Grove Town Center and to reconfigure
the southwesterly retention basin to accommodate a shared drainage facility. It would be
our intent to use our reasonable best efforts, (but at no cost to Simon DeBartolo Group
and having no long -term financial or operating impact on the project and subject to the
review and approval of the final documentation) in accommodating and accepting both
easements allowing the planning established by Ordinance 96 -48 to occur. We are also
willing to work with representatives of those owners in an attempt to finalize the
necessary easements within the next 30 -day period to perfect that zoning. (Actual time
frame subject to preparation of plans /documents and our review of those inaterials.)
Among the issues to be resolved are the following:
1. Simon DeBartolo, using its reasonable best efforts, will allow a sharing of the western
detention basin to be properly reconfigured to accept the adjacent drainage. This is
based on the pre- requisite that no drainage volume will be lost from the west basin
which otherwise benefits the Simon DeBartolo Group, that it will be at no cost and
will have no impact on our ability to add to the center or effect our operations of the
property.
NATIONAL CITY CENTER 0 POST OFFICE BOX 7033 a INDIANAPOLIS, INDIANA a 46207 a 317-636 -1600
Mr. William R. Balling
February 16, 1998
Page Two
2. All construction modifications and restoration will occur at no cost to the Simon
DeBartolo Group (including legal, design, engineering work, etc. which we will be
fully reimbursed for as provided in a final agreement).
3. The design is subject to the approval of the Village of Buffalo Grove and final review
and design approval by the Simon DeBartolo Group.
It is our intention to be fair and equitable in resolving all matters related to drainage so
that the adjacent property owner will bear the full cost, but not beyond the full cost, for
the modifications to the southwest basin (including reimbursement of our time,
engineering, design or legal review).
Regarding the access easement for fire lane circulation, it is understood that we will
evaluate and consider approving an easement crossing between our property and the
adjacent property for a fire lane circulation road to be located approximately at the
southwest corner of the service access drive (adjacent to the now closed K. C.
Masterpiece Restaurant). Should parking spaces on the Simon DeBartolo property be lost
as a result of this modification, a cross easement will be provided by the adjacent owner
granting the Simon DeBartolo Group shared access to offsite parking spaces equal to
those lost through the construction of this road. It is further understood that Simon
DeBartolo will bear no costs associated with the construction of this fire lane circulation
drive and our obligation is subject to the review and approval of all related documentation
(including but not limited to the reimbursement of all legal, engineering and /or design
fees).
I further understand that the Village of Buffalo Grove will agree to passage of its final
ordinance allowing for a zoning text amendment to permit drive - through facilities for
restaurants once these easements have been resolved. I will make every reasonable effort
to (at no cost to Simon DeBartolo Group) secure and resolve all issues related to the
easements and grant approval for those easements within the next 30 -day period.
I hope this letter clarifies my intentions and those of the Simon DeBartolo Group for
resolving this outstanding issue and allowing the Village to perfect its planning outlined
in Ordinance 96 -48. I must state that this letter does not constitute a binding agreement
but merely outlines our willingness to cooperate and move ahead with a formal easement
Mr. William R. Balling
February 16, 1998
Page Three
agreement. Each party must realize that the final agreement must be' reduced to writing
and be executed by duly authorized officers of both Simon DeBartolo Group and others.
Until such writing and execution has been accomplished, neither party shall make any
claims against the other.
Very truly yours,
SIMON EKBARTOLO GROUP
Kevin OAS i m
Director of Development
Community Center Division
KAS /gig
cc: Michael E. McCarty
Myles Minton