R-47-00 05/22/00RESOLUTION -LSO
RESOLUTION AUTHORIZING AN AMENDED AND REINSTATED
TAX INCREMENT FINANCE REDEVELOPMENT AGREEMENT
WITH THE STOUGH GROUP FOR DEVELOPMENT OF A
SENIOR HOUSING PROJECT
WHEREAS, on January 24, 2000, the Village of Lemont approved Resolution R -5 -00,
authorizing a Tax Increment Finance Redevelopment Agreement between the Village and Lemont
Senior Housing L.P.I.; and
WHEREAS, the agreement reimburses specified Developer expenses through incremental real
estate taxes generated by redevelopment of the 5.7 acre site; and
WHEREAS, the project will place 43 senior citizen apartments, community center, and coach
house on a parcel east of downtown Lemont; and
WHEREAS, Lemont Senior Housing bond counsel Katherine Bensen is requesting to amend
the Redevelopment Agreement and the Bond Ordinance to issue Senior Lien Bonds in the original
amount of $250,000 and replace the Junior Lien Note with a "Lemont Senior Housing Subordinate
Obligation "; and
WHEREAS, the Junior Lien Note is not to exceed the original amount of $1,169,669; and
WHEREAS, the projections of incremental tax revenue do not adequately cover the Junior
Lien Note and therefore the amendment is necessary; and
WHEREAS, the change is technical in nature and does not change the essential terms of
agreement or financial obligations of the Village.
NOW, THEREFORE, BE IT RESOLVED the Amendment to the Redevelopment Agreement
attached hereto as Exhibit A is hereby approved.
PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
THE VILLJGE OF LEMONT, COUNTIES OF COOK, WILL, AND DU PAGE, ILLINOIS, on
this day of 0'1 , 2000.
John Benik
Debby Blatzer
Keith Latz
Connie Markiewicz
Rick Rimbo
Mary Studebaker
Approved by me this ZZ"d day of
Attest:
,//d1
AYES NAYS PASSED ABSENT
v
tif
ENE SMOLLEN, Village Clerk
2000.
ARLENE SMOLLEN, Village Clerk
Approve as to For
JOHN ANTONOPOUL
1tel/4--)
age Attorney
A. KWASNESKI, Village President
Recording Requested by and
When Recorded Return to
Katharine L. Bensen
Schiff Hardin & Waite
6600 Sears Tower
Chicago, IL 60606
Box 408
Common Address:
721 -932 Talcott Avenue
Lemont, Illinois 60439
Tax Identification Nos.
See Exhibit B
AMENDED AND RESTATED REDEVELOPMENT AGREEMENT
BETWEEN
VILLAGE OF LEMONT, ILLINOIS
and
LEMONT SENIOR HOUSING L.P.I.
Dated: as of May 22, 2000
300515.3
TABLE OF CONTENTS
Page
ARTICLE I — RECITALS PART OF AGREEMENT 3
ARTICLE II — MUTUAL ASSISTANCE 4
ARTICLE III — DEVELOPMENT OF THE PROJECT 4
Section 3.01 Development Plan. 4
Section 3.02 Modifications 7
Section 3.03 Utilities and Fees 7
Section 3.04 Access Parcel Acquisition and Dedication; Road Construction 7
Section 3.05 Street Vacations 7
Section 3.06 Costs of Developer Infrastructure Improvements 7
Section 3.07 Indemnity 8
Section 3.08 No Liens 8
Section 3.09 Insurance 8
ARTICLE IV — OBLIGATIONS AND DISBURSEMENTS 8
Section 4.01 Allocation of Financing Responsibility 8
Section 4.02 Financing of Developer Infrastructure Improvements 9
Section 4.03 Senior Lien Bonds 9
Section 4.04 Lemont Senior Housing Subordinate Obligation 9
Section 4.05 Disbursements 10
Section 4.06 Procedures for Payment 10
Section 4.07 Rights of Developer's Lender 11
Section 4.08 Right to Inspect 11
ARTICLE V — COMPLETION 11
Certificate of Completion 11
Form of Certificate 12
Agreement to Pay Taxes 12
Section 5.01
Section 5.02
Section 5.03
ARTICLE VI — AUTHORITY 12
Section 6.01 Actions 12
Section 6.02 Powers 12
Section 6.03 Authorized Parties 12
ARTICLE VII —
Section
Section
Section
Section
Section
Section
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GENERAL PROVISIONS 13
7.01 Time of Essence 13
7.02 Breach 13
7.03 Amendment 13
7.04 Entire Agreement 13
7.05 Assigns 13
7.06 Severability 14
Section 7.07 Illinois Law 14
Section 7.08 Notice 14
Section 7.09 Counterparts 15
Section 7.10 Recordation of Memorandum of Agreement 15
Section 7.11 Consent or Approval 15
Section 7.12 Recourse 15
Section 7.13 Conflict of Interest: Village's Representative Not Individually Liable 15
EXHIBIT A — Site Plan A -1
EXHIBIT B — Legal Description of Site and PIN Numbers B -1
EXHIBIT C — Developer Infrastructure Improvements and Related Fees and Expenses C -1
EXHIBIT D — Plat of Subdivision D -1
EXHIBIT E — Projected Incremental Site Taxes E -1
300515.3
REDEVELOPMENT AGREEMENT
THIS REDEVELOPMENT AGREEMENT (this "Agreement "), is made and entered into
as of the 22nd day of May, 2000, by and between the VILLAGE OF LEMONT, ILLINOIS, an Illinois
municipal corporation located in Cook County, Illinois (the "Village "), and LEMONT SENIOR
HOUSING L.P.I., an Illinois limited partnership (the "Developer ").
RECITALS
A. The Village is a duly constituted and existing municipality, created under the
laws of the State of Illinois.
B. The Village has the authority to promote the health, safety and welfare of the
Village and its inhabitants, to encourage private development in order to enhance the local tax base,
create employment and ameliorate blight, and to enter into contractual agreements with third persons
to achieve these purposes.
C. Pursuant to the Tax Increment Allocation Redevelopment Act of the State of
Illinois, 65 ILCS 5/11- 74.4 -1, et. seq., as from time to time amended (the "Act "), the President and
Board of Trustees of the Village are empowered to undertake the redevelopment of a designated area
within its municipal limits in which existing conditions permit such area to be classified as a
"conservation area" as defined in Section 11.74.4 -3(b) of the Act.
D. The Village authorized the preparation of a Redevelopment Project and Plan
by Trkla, Pettigrew, Allen & Payne, dated March, 1991 (the "Redevelopment Project and Plan "),
concerning the Downtown Lemont Redevelopment Project Area (the "Redevelopment Project Area "),
all within the corporate limits.
E. In accordance with the requirements of the Act, the Village held and conducted
a public hearing with respect to the Redevelopment Project and Plan, the Redevelopment Project Area
and the redevelopment project described in such Redevelopment Project and Plan at a meeting of the
President and the Board of Trustees held on May 13, 1991.
F. In accordance with the requirements of the Act, the President and Board of
Trustees of the Village, pursuant to Ordinance No. 690, adopted by the President and Board of
Trustees of the Village on May 28, 1991, approved the Redevelopment Project and Plan for the
Redevelopment Project Area.
G. In accordance with the requirements of the Act, the President and Board of
Trustees of the Village, pursuant to Ordinance Nos. 689 and 691, respectively, adopted by the
President and Board of Trustees of the Village on May 28, 1991, designated the Redevelopment Project
Area as a redevelopment project area (as that term is defined by the Act) and adopted tax increment
allocation financing for the Redevelopment Project Area pursuant to the Act for the purposes of
implementing the Redevelopment Project and Plan for the Redevelopment Project Area.
H. The President and Board of Trustees of the Village have determined that the
blighting factors described in the Redevelopment Project and Plan are detrimental to the public and
300515.3
impair development and growth in the Redevelopment Project Area, with the result that it is necessary
to incur extraordinary costs in order to develop the Redevelopment Project Area. The blighting factors
in the Redevelopment Project Area will continue to impair growth and development but for the use
cf tax increment financing to pay Redevelopment Project Costs as defined in the Act) which
necessarily must be incurred to implement the aforesaid program of redevelopment.
In furtherance of its commitment to develop the Redevelopment Project Area,
the Village has from time to time invited and solicited proposals from qualified developers for
redevelopment of certain and within the Redevelopment Project Area in an effort to encourage its
revitalization as outlined in the Redevelopment Project and Plan.
J. The Developer has proposed to build senior citizen housing development units
consisting of nine one -story buildings containing in the aggregate 43 one bedroom units, together with
a resident manager's unit, a 3,000 square foot community center, a coach house containing living
quarters for a maintenance person and 63 parking spaces (the "Housing Development "). The Parties
to this Agreement agree the Housing Development will provide much needed housing facilities in the
Village for senior citizens. The Housing Development will be built in substantial conformity with the
site plan attached to this Agreement as Exhibit A (the "Site Plan ") on the portion of the Redevelopment
Project Area legally described in Exhibit B to this Agreement (the "Site ").
K. The Developer also proposes to construct certain improvements, including the
Road described in paragraph L below and certain off-site improvements with respect to the Housing
Development, all identified on Exhibit C attached to this Agreement. The improvements described in
Exhibit C are referred to collectively in this Agreement as the "Developer Infrastructure
Improvements."
L. The Site is bordered to the North by the Illinois and Michigan Canal (the
"Canal "), on the East by land owned by a person other than the Developer, on the South by the Illinois
Central Railroad and on the West by land owned by Alan Senffner ( "Senffner "), and therefore contains
no ingress or egress to public streets. Senffner has sold to the Village the portion of the real estate
adjoining the Site to the West and depicted in the Site Plan (the "Access Parcel ") in order to enable
the Developer to construct a road, consisting of an extension of Talcott Street both within the Access
Parcel (running from the Western perimeter of the Site to the eastern edge of Holmes Street) and within
the Subdivision itself (collectively, the "Road ").
M. To induce the Developer to construct the Housing Development and to
construct the Developer Infrastructure Improvements (collectively, the "Project "), the President and
Board of Trustees of the Village have determined that it is in the best interest of the Village and the
health, safety, morals and welfare of its residents for the Village to (i) acquire the Access Parcel, (ii)
acquire from the Developer the Road and pay for the acquisition from the Developer on June 30, 1999,
of an approximately fifty (50) foot wide strip of land within the Site and adjacent to the Canal (the
"Canal Reserve Strip "), in each case as depicted on Exhibit A, for a purchase price of $250,000,
(iii) vacate that portion of Grant Street located within and adjacent to the western boundary of the Site,
(iv) issue its senior lien tax increment financing revenue bonds pursuant to the Act, with the proceeds
from the sale of such bonds being used by the Village to acquire that portion of the Road not contained
within the Access Parcel and to reimburse itself for the purchase price of the Canal Reserve Strip and
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(v) reimburse the Developer for the cost of the Developer Infrastructure Improvements and the related
fees and expenses described in Exhibit C, in each case pursuant to the Act.
N. This Agreement has been submitted to the President and Board of Trustees of
the Village for consideration and review, and, after publication of a ten day notice for comment prior
to the initial execution and delivery of this Agreement, questions and alternate proposals, the President
and Board of Trustees of the Village have taken all actions required to be taken prior to the execution
of this Agreement in order to make the same binding upon it according to its terms.
O. The President and Board of Trustees of the Village, after due and careful
consideration, have concluded that the development of the Site for the Project as provided for in this
Agreement and in the Redevelopment Project and Plan and the provision to the Developer of the
benefits described in paragraph M above will further the growth of the Village, facilitate the
redevelopment of the entire Redevelopment Project Area, improve the environment of the Village,
increase the assessed valuation of the real estate situated within the Village, foster increased economic
activity within the Village, increase employment opportunities within the Village, further the goals of
the Redevelopment Project and Plan, enable the Village to further direct the development of the
Redevelopment Project Area, and otherwise be in the best interests of the Village by furthering the
health, safety, morals and welfare of its residents and taxpayers.
P. The Village is desirous of having the Site developed for the Project in order to
serve the needs of the Village community and in order to produce increased tax revenues for the
various taxing districts authorized to levy taxes within the Redevelopment Project Area; and the
Village, in order to stimulate and induce the development of the Redevelopment Project Area, has
agreed to finance the Developer Infrastructure Improvements through tax increment revenues, and
through the issuance of senior lien tax increment financing revenue bonds, and the establishment of
a subordinate lien obligation, all in accordance with and subject to the terms and provisions of the Act
and this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and
agreements contained in this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the Village and the Developer agree as follows:
ARTICLE 1
RECITALS PART OF AGREEMENT
The representations and recitations set forth in the foregoing recitals are material to this
Agreement and are incorporated into and made a part of this Agreement as though they were fully set
forth in this Article I.
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3
ARTICLE II
MUTUAL ASSISTANCE
The Village and the Developer agree to take such actions, including the execution and
delivery of such documents, instruments, petitions and certifications (and, in the Village's case, the
adoption of such ordinances and resolutions), as may be necessary or appropriate to carry out the
terms, provisions and intent of this Agreement and to aid and assist each other in carrying out said
terms, provisions and intent of this Agreement.
300515.3
ARTICLE III
DEVELOPMENT OF THE PROJECT
Section 3.01 Development Plan.
(a) Although the scope and detail of the construction of the various
components of the Project (sometimes referred to in this Agreement as the "Work ") shall be
set forth in the Final Plans (as defined in Section 3.01(g) below), the summary of certain aspects
of the Work provided in this Section 3.01 shall serve as a general guide to the development
of the Final Plans and the Parties' intent with respect to the scope of the Work. The Developer
shall coordinate all Work, if any, to be performed by public utility companies installing on -site
electric power lines, telephone lines and gas mains, including main feeder lines, conduits,
piping, wiring, valves, manholes and other appurtenant devices within the Site to provide
service to the Project, as may be necessary or appropriate to implement the Final Plans and to
satisfy all Legal Requirements (as defined in Section 3.01(d) below).
(b) The Housing Development shall include, without limitation, nine one -
story buildings containing in the aggregate 43 one bedroom units, together with a resident
manager's unit, a 3,000 square foot community center, a coach house containing living
quarters for a maintenance person and 63 parking spaces.
(c) The Developer Infrastructure Improvements shall be constructed on the
Site and shall include, without limitation, installation of the following:
(i) site preparation, including grading of land;
(ii) infrastructure improvements, including roadways, curbs, gutters,
sidewalks, lighting standards (including concrete bases, conduits, fittings and fixtures),
a drainage system, water mains and sanitary sewers;
(iii) landscaped areas, including landscape buffers along the
perimeter of the parcels within the Site (including tree drains) required in the
maintenance of the Site; and
(iv) parking lot striping and painting.
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all generally in accordance with the Site Plan and specifically as may be necessary or appropriate to
implement the Final Plans and to satisfy all Legal Requirements.
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(d) The design documents shall comply with all applicable federal, state,
county, municipal or administrative laws, ordinances, rules, regulations, codes and orders
(collectively, the "Legal Requirements ") relating in any manner to the Work.
(e) Subject to the terms, conditions and provisions provided below, the
Developer has the following general responsibilities (which are not all inclusive) for the
planning, design, development, construction and installation of the Work (with the technical
assistance of such qualified outside consultants as the Developer, in its discretion, may retain):
(i) providing all plans and specifications for the Project (collectively
referred below to as the "Preliminary Plans" until such time as they shall be separately
approved as the Final Plans) which may be necessary for the Work (except for the
portions of such Work for which plans and specifications shall be provided by utility
compan ies);
(ii) providing qualified full -time field personnel for inspecting and
reviewing the Work progress and construction of the Work, including final inspection
and certification by Developer that, to the best of its knowledge, all Work, as
constructed, conforms with the approved Final Plans;
(iii) preparing and updating a master activity schedule (the
"Construction Schedule ") with respect to the design and construction of all Work,
which Construction Schedule is to be submitted to the Village for approval as to format
and content and which is to include a program to update said schedule;
(iv) holding periodic project coordination and progress meetings
among the Developer, the Village and maintaining and distributing memorandum
notes concerning all such meetings, including confirmations of decisions, reports and
correspondence, together with the performance of appropriate administrative duties
to accomplish appropriate follow -up;
(v) providing, either alone or in conjunction with the Developer's
advisers and consultants, the appropriate coordination of all planning and construction
of the Work, including the directing and scheduling of construction, all field
inspections, tests, surveys and other activities related to the construction of the Work;
and
(vi) furnishing line and grade surveying services as well as an "as-
built" survey, which shall be furnished as soon as reasonably possible after completion
of the Work and which as -built survey shall show the boundaries of the Site, the
parking facilities and the location of utilities on the Site.
(f) The Developer shall engage the services of architects, soil engineers,
structural engineers, lighting, heating, ventilating and air conditioning, life safety and other
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300515.3
design consultants, as Developer shall deem necessary and appropriate, to prepare design
documents.
G. The Village shall expeditiously review all Preliminary Plans and the
Village shall promptly notify the Developer of its specific objections to the Preliminary Plans
and of any requested modifications, alterations or additions. Any proposed modifications,
alterations or additions to the Preliminary Plan, or deletions therefrom, if possible, shall be
prominently noted on the plan or drawing so affected or shall otherwise be clearly stated. The
Parties shall meet as often as reasonably necessary to resolve and adjust any such objections
or proposals with a view toward developing the Preliminary Plans in their final form. The
Village shall approve separately the final plans for the Project (the "Final Plans "), one copy of
which shall be maintained by the Village at the Village Hall. The Parties may agree to approve
a portion of the Final Plans before the remainder of the plans are approved as Final Plans.
Material changes may be made in the Final Plans only upon the prior written agreement of the
Village.
H. The Developer shall secure all authorizations, permits and licenses,
including those of a temporary nature, as may be necessary for the construction and intended
use of the Work from all governmental authorities, and the Village shall reasonably assist the
Developer in securing such regulatory approvals from the Village and from other governmental
authorities. The Village agrees to use its best efforts to o-complete their review as promptly as
practical of all plans, drawings, specifications, license and permit applications and requests for
approvals submitted by the Developer in connection with the Work, provided that the
Developer's submittals are complete and accurate and contain all of the information required
by the applicable ordinances or other Legal Requirements.
Upon approval of the Final Plans, the Developer shall enter into one
or more written contracts for the Work (collectively, the "Construction Contracts ").
J. Promptly (weather permitting) after approval of the Final Plans, the
Developer shall cause the respective Work on such parcel to be constructed in a good and
workmanlike manner and in substantial conformity with the Final Plans. All Work shall be
prosecuted in compliance with any and all permits and approvals received in connection with
the Work. The Construction Contracts shall provide for the completion of the Work in
accordance with the Construction Schedule. The Developer agrees with the Village to use its
best efforts to cause all of the Work to be timely completed in accordance with the
Construction Schedule.
K. Time is of the essence of this Agreement; however, a Party shall not be
deemed in material breach of this Agreement with respect to any obligations of this Agreement
on such Party's part to be performed if such Party fails to timely perform the same and such
failure is due in whole or in part to war, insurrection, riots, floods, earthquakes, fires,
casualties, acts of God, epidemics, quarantine restrictions, freight embargoes, inability to
procure materials, acts caused directly or indirectly by the other Party (or such other Party's
agents, employees or invitees) or similar causes beyond the reasonable control of such Party
( "Force Majeure "). If one of the foregoing events shall occur or either Party shall claim that
such an event shall have occurred, the Party to whom such claim is made shall investigate
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same and consult with the Party making such claim regarding the same and the Party to whom
such claim is made shall grant an extension for the performance of the unsatisfied obligation
equal to the period of the delay, which period shall commence to run from the time of the
commencement of the Force Majeure, provided that the failure of performance was reasonably
caused by such Force Majeure.
L. Promptly after completion of the Project in accordance with this
Agreement, the Village shall furnish the Developer with appropriate instruments so certifying.
The certification by the Village shall be conclusive determination of satisfaction and
termination of the Developer's covenants with respect to the construction and completion of
the Work required by the Final Plans. The certification shall be in such form as will enable it
to be recorded.
Section 3.02 Modifications. The construction of the Project may be modified or
revised by the Developer, with the Village's and Developer's approval, or to provide for other
improvements comprising less than the square footage provided for in this Agreement, provided that
the projected incremental taxes from such constructed development, in the aggregate, are not less than
the projected incremental taxes, and further provided that the incremental taxes as a result of such
modification are not less in the aggregate in any year than those projected in the feasibility report used
as a basis for issuance of the Senior Lien Bonds. No modifications shall be made to the Project which,
in the opinion of Schiff Hardin & Waite, would affect the tax - exempt status of the Senior Lien Bonds.
Section 3.03 Utilities and Fees. The Village hereby agrees that the Developer shall
have the right to connect any and all on -site water lines, sanitary and storm sewer lines constructed on
the Site to Village utility lines existing at or near the perimeter of the Site. The Village agrees that the
Developer shall be obligated to pay, in connection with the development of the Site, only those water,
sanitary sewer, building permit, engineering, inspection, and other fees imposed by entities other than
the Village and the Village shall waive fees of the foregoing type that would otherwise be imposed by
the Village.
Section 3.04 Access Parcel Acquisition and Dedication; Road Construction. The
Village represents that it has acquired and dedicated the Access Parcel as a public right of way. The
Developer agrees to construct the Road as part of the Developer Infrastructure Improvements and
agrees that the Road shall be part of the municipal public street system of the Village, serving as a
through street and serving the residents of the Village and the Housing Development.
Section 3.05 Street Vacations. The Village has vacated (i) the portion of Grant Street
located within and adjacent to the western boundary of the Site, (ii) the portion of Catherine Street
located north of Main Street and within the Site, (iii) the portion of Julia Street located north of Main
Street and within the Site and (iv) the portion of Grove Street located east of Grant Street and within
the Site, all as depicted in more detail on the Plat of Subdivision attached to this Agreement as Exhibit
D.
Section 3.06 Costs of Developer Infrastructure Improvements. The Village and the
Developer agree that the Developer shall cause the construction of the Developer Infrastructure
Improvements for a stipulated lump sum in the amount indicated on Exhibit C, which amount also
includes fees and expenses related incurred by the Developer to such construction and implementation
300515.3
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of the Redevelopment Project and Plan as set forth in more detail in Exhibit C. The Developer reserves
the right to reallocate dollars between and among line items as may be desirable or necessary to
implement the Redevelopment Project, provided that such re- allocation is consistent with the terms
of the Redevelopment Project and Plan and the Act. The Village shall reimburse the Developer for the
cost of the Developer Infrastructure Improvements in accordance with Article IV of this Agreement.
The Developer Infrastructure Improvements shall be owned by the Village.
Section 3.07 Indemnity. The Developer covenants and agrees, at its expense, to pay,
and to indemnify and save the Village, and its officers, agents, employees and attorneys (the
"Indemnitee ") harmless of, from and against, any and all claims, damages, demands, expenses, and
liabilities resulting directly from the Developer's development activities with respect to the Project,
unless such claims, damages, demands, expenses, or liabilities, arise by reason of the negligent actor
omission of the Village or other Indemnitee.
Section 3.08 No Liens. No mechanics' or other liens shall be established or remain
against the Developer Infrastructure Improvements, or the funds in connection with any of the
Developer Infrastructure Improvements, for labor or materials furnished in connection with any
acquisition, construction, additions, modifications, improvements, repairs, renewals or replacements
so made. However, the Developer shall not be in default if mechanics' or other liens are filed or
established and the Developer, as agent for the Village, contests in good faith said mechanics' liens and
in such event may permit the items so contested to remain undischarged and unsatisfied during the
period of such contest and any appeal therefrom. The Developer hereby agrees and covenants to-
indemnify and hold harmless the Village in the event any liens are filed against the Housing
Development or the Developer Infrastructure Improvements as a result of acts of the Developer, its
agents, or independent contractors.
Section 3.09 Insurance. The Developer agrees to secure or cause to be secured
liability, workmen's compensation, and employer's liability insurance coverage in commercially
reasonable amounts with respect to construction of the Developer Infrastructure Improvements. The
Developer shall deliver to the Village certificates evidencing liability insurance policies, naming the
Village as an additional insured, with provisions for notification to the Village in the event of
cancellation.
ARTICLE IV
OBLIGATIONS AND DISBURSEMENTS
Section 4.01 Allocation of Financing Responsibility. The Developer hereby
acknowledges that the Village shall have no financing obligations in connection with the Housing
Development or the Developer Infrastructure Improvements except as expressly provided for in this
Agreement. The Village and the Developer agree that the Developer shall be solely responsible for
the costs of constructing the Housing Development, provided that the Developer shall have no
obligation to construct the Housing Development until the proceeds of the Senior Lien Bonds shall
have been made available. The Village and the Developer further agree, subject to Section 4.04 of this
Agreement, that the sole source of funding for the acquisition of the portion of the Road not contained
in the Access Parcel and the Canal Reserve Strip shall be tax increment allocation financing,
300515.3
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implemented in accordance with the terms and provisions of the Act and the sole source of funding
for the construction of the Developer Infrastructure Improvements shall be an advance of funds by the
Developer, such advance to be reimbursed from tax increment as provided in Section 4.04 below.
Section 4.02 Financing of Developer Infrastructure Improvements. Subject to
Section 4.05 of this Agreement, the Village shall adopt a bond ordinance (the "Bond Ordinance ")
providing for the pledge of funds on deposit in the special tax allocation fund of the Village in respect
to the Redevelopment Project Area (the "Fund ") in an amount equal to One Hundred Percent (100 %)
of the incremental real estate taxes generated in respect of the Site as determined in accordance with
65 ILCS 5/11- 74.4 -8 of the Act. Such amounts are referred to in this Agreement as the "Pledged Taxes."
Since the Site constitutes less than the entire Redevelopment Project Area, Pledged Taxes shall be
ascertained using the real estate tax bills paid by the Developer in respect of the Site and the Developer
shall deliver to the Village copies of all such bills promptly following their payment. The projected
Pledged Taxes, which have been determined at the request of the Village by Speer Financial, Inc. (with
an assumed closing date of June 6, 2000), are attached to this Agreement as Exhibit E. Subject to
Section 4.03(b) of this Agreement, the Bond Ordinance shall provide for the deposit of the Pledged
Taxes into a separate account of the Fund which shall be pledged to retire the Senior Lien Bonds and
the Lemont Senior Housing Subordinate Obligation, provided that the Village shall have no obligation
to make such deposit available until it shall have been provided with copies of paid real estate tax bills
for the Site. The Village may use incremental real estate taxes generated by the Redevelopment Project
Area other than the Pledged Taxes for any purposes permitted by the Act, including, but not limited
to the payment of obligations secured by such incremental real estate taxes. Pledged Taxes shall cease
to be so pledged to following payment in full of the Senior Lien Bonds and Lemont Senior Housing
Subordinate Obligation, and may thereafter be used by the Village for any purposes permitted by the
Act, including, but not limited to the payment of obligations secured by incremental real estate taxes
generated in respect of the Site.
Section 4.03 Senior Lien Bonds. (a) The Village hereby shall issue to Michael Pizzuto
and Paul Berglund or such other purchaser(s) as shall be designated by Michael Pizzuto its Village of
Lemont Senior Lien Tax Increment Revenue Bonds, Series 2000 (the "Senior Lien Bonds ") pursuant
to the Act in the initial aggregate principal amount of $249,967.71. The Senior Lien Bonds shall be
capital appreciation bonds, all of the interest on which shall be payable as appreciation in the principal
amount of the Senior Lien Bonds. The proceeds of the Senior Lien Bonds shall be used by the Village
to fund the cost of acquiring from the Developer the Road and to reimburse itself for the previous
acquisition from the Developer, on June 30, 1999, of the Canal Reserve Strip. The Senior Lien Bonds
are not general obligations of the Village and are secured solely by the Pledged Taxes. Neither this
Agreement nor the Senior Lien Bonds shall constitute a full faith and credit obligation of the Village.
Section 4.04 Lemont Senior Housing Subordinate Obligation. The Developer shall
advance the cost of the Developer Infrastructure Improvements, the legal, engineering, consulting and
other costs incurred by the Village and the Developer in connection with this Agreement, the Project
and the issuance of the Senior Lien Bonds, and (iii) the cost of issuing the Senior Lien Bonds, including
all necessary capitalized interest and reserve funds (if any), and other eligible costs, all as set forth in
more detail in Exhibit C. The Village shall reimburse the Developer for such eligible costs, in an
amount not to exceed $1,169,669, in accordance with Section 4.06 below, but only from Pledged
Taxes. The Village's obligation to so reimburse the Developer is referred to in this Agreement as the
"Lemont Senior Housing Subordinate Obligation." The Lemont Senior Housing Subordinate
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Obligation shall be secured only by the Pledged Taxes and shall be subordinate to the Senior Lien
Bonds in all respects. The Developer hereby acknowledges that the Pledged Taxes may be insufficient
to both cover the payment of principal of and interest on the Senior Lien Bonds and to pay principal
of and interest on and retire the Lemont Senior Housing Subordinate Obligation prior to the
termination of the Redevelopment Project Area. The Village covenants that it will not terminate the
Redevelopment Project Area prior to May 28, 2014, which date is twenty three (23) years following
the date the Village designated the Redevelopment Project Area, unless the Senior Lien Bonds and
Lemont Senior Housing Subordinate Obligation shall have been paid in full. In the event that the
cumulative Pledged Taxes generated in respect of the Site (regardless of when actually collected) for
the period to and including the date on which the Redevelopment Project Area terminates (subject to
the Village's covenant in this paragraph), insufficient to pay the Lemont Senior Housing Subordinate
Obligation, the Developer shall have no recourse against the Village. The Village acknowledges that
Pledged Taxes for the year in which the Redevelopment Project Area terminates will be collected
following such termination and covenants to apply such Pledged Taxes, whenever received, first, to
any amount unpaid on the Senior Lien Bonds and second, to any amount unpaid on the Lemont Senior
Housing Subordinate Lien Obligation. The Developer will be solely responsible for the funds to
complete those Developer Infrastructure Improvements costing in excess of $1,169,669 ( "Excess
Costs ") and shall have no right to reimbursement for such Excess Costs.
The Lemont Senior Housing Subordinate Obligation is not a general obligation of the
Village and is secured solely to the extent that there are Pledged Taxes available to make required
payments of principal and interest thereon. Should Pledged Taxes be insufficient there shall be no
default declared in the payment of the Lemont Senior Housing Subordinate Obligation. The Lemont
Senior Housing Subordinate Obligation does not constitute a full faith and credit obligation of the
Village.
(c) The Village's obligation described in paragraph (a) of this Section 4.03 to issue
the Senior Lien Bonds is expressly contingent upon a bond opinion from Schiff Hardin & Waite opining
that the Senior Lien Bonds are being issued in accordance with Act and are further subject to all of the
provisions and conditions contained in this Agreement.
Section 4.05 Disbursements. The Village and the Developer agree that the proceeds
realized upon sale of the Senior Lien Bonds shall be remitted to the Village to enable it to acquire on
the date of sale of the Senior Lien Bonds, the portion of the Road not contained within the Access
Parcel and to reimburse itself for the acquisition of the Canal Reserve Strip.
Section 4.06 Procedures for Payment. In order to receive reimbursement of the costs
of the Developer Infrastructure Improvements and related fees and expenses as set forth in more detail
in Exhibit Cthe Developer shall submit to the Village a written request therefor setting forth the amount
for which payment or reimbursement is sought and identification of the Developer Infrastructure
Improvements, related fees and expenses with respect to which payment or reimbursement is sought.
Each request for reimbursement shall be accompanied by such bills, contracts, invoices, lagging lien
waivers or other evidence as the Village shall require to evidence appropriate payment under, and the
due performance of, this Agreement. The Village reserves the right to have its engineer or other agents
or employees inspect all work in respect of which a requisition is submitted, to examine the
Developer's and other's records relating to all costs to be paid, and to obtain from such Village and
the Developer as the Village determines to be appropriate such other information as is necessary for
300515.3
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the Village to evaluate compliance with the terms of this Agreement. The Village shall have twenty
(20) business days after receipt of any request for payment or reimbursement to approve or disapprove
any such request. The only basis for rejection of a request for reimbursement shall be that the costs
are not eligible redevelopment costs or that additional reasonably requested evidence of payment for
such costs by the Developer needs to be supplied. In the event the Village finds an error in the request
or the work performed in respect thereto, the Village shall specify such error in reasonable detail within
twenty (20) days from the date of the request for payment, and the request or the work shall be
corrected prior to approval of the portion of the request affected. Upon approval of the request the
Village shall, when and if Pledged Taxes are deposited to the General Account established by
Ordinance No. , adopted by the President and Board of Trustees of the Village on May 22, 2000,
be obligated to promptly send a requisition as above described to the paying agent authorizing
payment to the appropriate party entitled to payment for the full amount of the request. Amounts for
which reimbursement has been approved shall bear interest at an annual rate of 13.5% (calculated on
the basis of a 360 -day year consisting of twelve 30 -day months), from the earlier of the date on which
the Village approves the request for reimbursement or is required to approve such request pursuant
to this Agreement to but not including the date on which such payment is made.
Section 4.07 Rights of Developer's Lender. The Village agrees that in the event that
the Developer defaults under the terms of this Agreement or under the terms of any private financing
which the Developer secured for the construction of this project, that Developer's lender will be
entitled to complete construction of Developer Infrastructure Improvements and obtain disbursement
for payment or reimbursement as provided in this Article IV.
Section 4.08 Right to Inspect. The Developer agrees that, up to one year after
completion of the Redevelopment Project Improvements, the Village, with reasonable advance notice
and during normal business hours, shall have the right and authority to review, audit, and copy, from
time to time, the Developer's books and records relating to the Developer Infrastructure Improvements
funded by the Village under this Agreement (including all loan statements, general contractor's sworn
statements, general contracts, subcontractor's sworn statements, general contracts, subcontracts,
material purchase orders, waivers of lien, paid receipts and invoices) in order to confirm that the
proceeds realized upon issuance and sale of the Senior Lien Bonds are or have been expended for
purposes of undertaking the Developer Infrastructure Improvements or other purposes permitted under
the Act.
ARTICLE V
COMPLETION
Section 5.01 Certificate of Completion. Promptly upon the completion of the
Housing Development, the Village shall furnish the Developer a Certificate of Completion so certifying.
"Completion" as used in reference to the Housing Development, means that the Developer has
substantially completed the Housing Development in accordance with the plans and specifications
approved by the Village prior to issuing its building permits. Except as provided in Section 5.02 of this
Agreement, the Village's issuance of the Certificate shall release the Developer from any further
obligation or liability under this Agreement with respect to the construction and completion of the
300515.3
Housing Development portion of the Project. The Certificate shall not have any effect or bearing on
the issuance of a certificate of occupancy by the Village.
Section 5.02 Form of Certificate. The Certificate of Completion shall be in a
recordable form, and shall be a conclusive determination of satisfaction and termination of the
covenants in the Agreement with respect to the obligations of the Developer and its successors and
assigns in regards to the construction and completion of the Housing Development. Upon written
request by the Developer for a request for a Certificate of Completion, the Village shall have ten
business days after receipt of same to provide the Developer with a Certificate of Completion or a
written statement indicating in detail how the Developer has failed to complete the construction in
conformity with the Redevelopment Project and Plan and this Agreement, or is otherwise in default,
and what measures or acts will be necessary, in the opinion of the Village, for the Developer to take
or perform in order to obtain the Certificate of Completion.
Section 5.03 Agreement to Pay Taxes. The Developer further agrees to pay, to any
extent it is obligated any portion of the real estate tax bills for the Site, and it shall pay such taxes
promptly on or before the due date of such tax bills.
ARTICLE VI
AUTHORITY
Section 6.01 Actions. The Village represents, warrants and covenants that upon
application of the Developer it has taken, or will take, such action(s) as may be required and necessary
to process the amendments, variations, and special use approvals relating to its zoning ordinances and
its other ordinances, codes and regulations, as may be necessary or proper in order to insure the
development of the Site in accordance with the Redevelopment Project and Plan and to enable the
Village to execute this Agreement and to carry out fully and perform the terms, covenants, agreements,
duties and obligations on its part to be kept and performed as provided by the terms and provisions
of this Agreement.
Section 6.02 Powers. The Village represents and warrants that the Village has full
constitutional and lawful right, power and authority, under currently applicable law, to execute and
deliver and perform the terms and obligations of this Agreement, including but not limited to the right,
power and authority to issue and sell the Senior Lien Bonds and to incur the Lemont Senior Housing
Subordinate Obligation, and all of the foregoing have been or will be duly and validly authorized and
approved by all necessary Village proceedings, findings and actions. Accordingly, this Agreement
constitutes the legal, valid and binding obligation of the Village, enforceable in accordance with its
terms and provisions and does not require the consent of any other governmental authority.
Section 6.03 Authorized Parties. Whenever under the provisions of this Agreement
and other related documents and instruments or any supplemental agreement, request, demand,
approval, notice or consent of the Village or the Developer is required, or the Village or the Developer
is required to agree or to take some action at the request of the other, such approval or such consent
or such request shall be given for the Village, unless otherwise provided in this Agreement, by the
Village President or his designee and for the Developer by any officer of the Developer so authorized
300515.3
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(in any event, the officers executing this Agreement are so authorized); and any person shall be
authorized to act on any such agreement, request, demand, approval, notice or consent or other action
and neither party to this Agreement shall have any complaint against the other as a result of any such
action taken.
ARTICLE VII
GENERAL PROVISIONS
Section 7.01 Time of Essence. Time is of the essence of this Agreement. The Village
and the Developer will make every reasonable effort to expedite the subject matters of this Agreement
and acknowledge that the successful performance of this Agreement requires their continued
cooperation.
Section 7.02 Breach. Before any failure of any party of this Agreement to perform
its obligations under this Agreement shall be deemed to be a breach of this Agreement, the party
claiming such failure shall notify, in writing, the party alleged to have failed to perform of the alleged
failure and shall demand performance. No breach of this Agreement may be found to have occurred
if performance has commenced to the reasonable satisfaction of the complaining party within thirty
(30) days of the receipt of such notice.
Section 7.03 Amendment. This Agreement, and any exhibits attached to this
Agreement, may be amended only by the mutual consent of the Village and the Developer, by the
adoption of an ordinance or resolution of the Village approving said amendment, as provided by law,
and by the execution of said amendment by the Village and the Developer or their successors in
interest.
Section 7.04 Entire Agreement. This Agreement, and the Exhibits attached to it
contain the entire agreement between the Parties in connection with these transactions, and there are
no oral or parol agreements, representations or inducements existing between the parties relating to
these transactions which are not expressly set forth in this Agreement and covered by this Agreement.
Section 7.05 Assigns. This Agreement shall be binding upon the Village and the
Developer and their respective successors and assigns. Nothing in this Agreement shall in any way
prevent the alienation or sale of the Project, or any portion of the Project, by the Developer, nor shall
anything in this Agreement be construed as limiting any rights of any lender or equity partner or
investor, and to the extent that any provision of this Section 7.05 conflicts with any loan, partnership
or investor agreement, the loan, partnership or investor agreement will control. Excepting the
foregoing, prior to any assignment of this Agreement to any successor owner of the entire
Redevelopment Project, the Village's written consent must first be had, which consent shall not be
unreasonably withheld. The Developer shall request permission to assign this Agreement by
submitting a written request to the Village. The Village shall either approve said request within seven
days of receipt, or shall deny said request in writing with specificity. Failure of the Village to respond
in seven days shall constitute approval of said request for assignment. Any assignee shall expressly
assume in writing the obligations of the Developer under this Agreement, in which case the Developer
shall be relieved of its obligations with respect to such sold Parcel(s) or portion thereof. Anything
300515.3
- 13 -
contained in this Section 7.05 to the contrary notwithstanding, the Village's consent shall not be
required for any pledge of the Project and this Agreement as collateral security or for any foreclosure
sale or deed in lieu thereof pursuant or subsequent transfers after such sale or deed in lieu.
Section 7.06 Severability. If any provision, covenant, agreement or portion of this
Agreement, or its application to any person, entity or property, is held invalid, such invalidity shall not
affect the application or validity of any other provisions, covenants or portions of this Agreement and,
to that end, any provisions, covenants, agreements or portions of this Agreement are declared to be
severable.
Section 7.07 Illinois Law. This Agreement shall be construed in accordance with the
laws of the State of Illinois. To the extent there is a conflict between this Agreement and the Bond
Ordinance, the Bond Ordinance is controlling.
Section 7.08 Notice. All notices and requests required pursuant to this Agreement
shall be sent as follows.
300515.3
To the Developer:
Lemont Senior Housing L.P.I.
% Michael Pizzuto
The Stough Group
534 West Chestnut
Suite B1
Hinsdale, Illinois 60521
With copies to:
Katharine L. Bensen
Schiff Hardin & Waite
6600 Sears Tower
Chicago, Illinois 60606 -6473
Tom Thorne - Thomsen
Applegate and Thorne - Thomsen
322 South Green Street
Chicago, Illinois 60607
To the Village:
Village of Lemont
418 Main Street
Lemont, Illinois 60439 -3788
Attention: Village Clerk
- 14 -
With a copy to:
John P. Antonopolous
Antonopolous & Virtel, P.C.
15419 127th Street
Suite 100
Lemont, Illinois 60439
or at such other addresses as the Village and the Developer may indicate in writing to the other either
by personal delivery, courier, or by registered mail, return receipt requested, with proof of delivery
thereof. Mailed notices shall be deemed effective on the third day after mailing; all other notices shall
be effective when delivered.
Section 7.09 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the same agreement.
Section 7.10 Recordation of Memorandum of Agreement. The Village and the
Developer agree to execute and deliver a memorandum of this Agreement in proper form for recording
and /or indexing in the appropriate land or governmental records.
Section 7.11 Consent or Approval. Except as otherwise provided in this Agreement,
whenever consent or approval of either party is required, such consent or approval shall not be
unreasonably withheld.
Section 7.12 Recourse. Except as provided in this Agreement, no monetary recourse
under or upon any obligation, covenant or agreement contained in this Agreement or for any claim
based thereon or otherwise in respect thereof shall be had against the officers, agents and employees
of either Party for any reason. Except as provided in this Agreement, no liability, right or claim at law
or equity shall attach to and be incurred by the officers, agents and employees of either Party by and
through any of the terms contained in this Agreement. The shareholders of the general partner of the
Developer shall be personally and jointly and severally liable to the Village for the following: any
damages, expenses or costs suffered or incurred by the Village (i) as a result of any intentional or willful
misrepresentation made by or on behalf of the Developer under this Agreement, or (ii) as a result of
fraud committed by or on behalf of the Developer under this Agreement.
Section 7.13 Conflict of Interest: Village's Representative Not Individually Liable.
No member, official or employee of the Village shall have any personal interest, direct or indirect, in
this Agreement; nor shall any such member, official or employee participate in any decision relating
to this Agreement which affects such person's interests or the interests of any corporation, partnership,
or association in which such person is directly or indirectly interested. No member or employee of
the Village has acquired any interest direct, or indirect, in the Site. No member, official, or employee
of the Village shall be personally liable to the Developer or any successor in interest in the event of
any default or breach by the Village or for any amount which may become due to the Developer or
successor or on any obligation under the terms of this Agreement, except as such shall be found to be
caused by a violation of Section 4(n) of the Act.
300515.3
- 15 -
IN WITNESS WHEREOF, the Village and the Developer have duly executed this
Agreement pursuant to all requisite authorizations as of the date first above written.
ATTEST:
(116
Village Clerk
ATTEST:
O
Secretary
300515.3
VILLAGE OF LEMONT,
an Illinr unicipal corporation
By:
illage President
LEMONT SENIOR HOUSING L.P.I.,
an Illinois Limited Partnership
By: Lemont Senior Development Corp.
Its: General Partner
- 16 -
By:
SITE PLAN
(See Attached)
300515.3
EXHIBIT A
LEGAL DESCRIPTION OF SITE AND PIN NUMBERS
Legal Description:
PARCEL 1:
EXHIBIT B
Lots 1, 2, 3, 4 and 5in Block 12; Lots 1, 2, 3, 4 and 5in Block 13 ; Lots 1,2,3,4,5,6,7,8,9 and 10
in Block 15; Lots 1 to 10, both inclusive, in Block 16; all in Town of Athens, being a subdivision in the
North part of the East 1/2 of the Southeast 1/4 of Section 20, Township 37 North, Range 11, East of the
Third Principal Meridian; Except the railroad rights of way in and across said Lots 6, 7, 8, 9 and 10 in
Block 15 and Lots 6, 7, 8, 9 and 10 in Block 16; in Cook County, Illinois.
PARCEL 2:
That part of Catherine Street, Julia Street and Grove Street adjoining Blocks 12, 13, 15 and 16, Town
of Athens aforesaid, and that part of Grant Street adjoining Blocks 13, 14 and 15, Town of Athens
aforesaid, and that part of Canal Avenue adjoining Blocks 12 and 13, Town of Athens aforesaid, and
bounded Westerly by the West line of said East 1/2 of the Southeast 1/4 of Section 20; except the
railroad rights of way in and across said Streets; in the East 1/2 of the Southeast 1/4 of Section 20,
Township 37 North, Range 11, East of the Third Principal Meridian, in Cook County, Illinois.
NOTE: The above Parcel 2 legal description is for convenience purposes only and is not an insured
description, based on the description furnished us, and is subject to such amendments and
modifications as deemed necessary upon our receipt and examination of proper vacation ordinance(s)
of the Village of Lemont vacating said above - described streets or parts thereof.
PARCEL 4:
Lot 5 in Block 11 in Town of Athens, being a subdivision in the North part of the East 1/2 of the
Southeast 1/4 of Section 20, Township 37 North, Range 11, East of the Third Principal Meridian, in
Cook County, Illinois.
PARCEL 5:
Lots 5 and 6 in Block 17 in Town of Athens, being a subdivision in the North part of the East 1/2 of the
Southeast 1/4 of Section 20, Township 37 North, Range 11, East of the Third Principal Meridian,
Except the railroad rights of way in and across said Lot 6, in Cook County, Illinois.
300515.3
PIN Numbers:
22 -20- 408 -001
22- 20-408 -002
22- 20-408 -003
22- 20- 408 -004
22- 20- 408 -005
22- 20-409 -001
22- 20-409 -002
22- 20-409 -003
22- 20-409 -004
22- 20-409 -005
22- 20-413 -001
22- 20-413 -002
22- 20- 413 -003
22- 20-413 -004
22- 20-413 -005
22- 20-413 -006
22- 20-413 -007
22- 20-413 -008
22- 20-413 -009
22- 20-413 -010
22- 20-414 -001
22- 20-414 -002
22- 20- 414 -003
22- 20-414 -004
22- 20-414 -005
22- 20-414 -006
22- 20- 414 -007
22- 20-414 -008
22- 20-414 -009
22- 20- 414 -010
22- 20- 410 -001
22- 20-415 -001
22- 20- 415 -005
300515.3
EXHIBIT C
DEVELOPER INFRASTRUCTURE IMPROVEMENTS AND RELATED FEES AND EXPENSES
Improvement Cost
Concrete Service Walks $45,000
Storm Drains 99,631
Road Work 207,465
Site Lighting 64,500
Earthwork 238,494
Watermain 66,134
Sanitary Sewers 65,580
Utilities 8,600
Landscaping 105,350
Irrigation 26,660
Legal Fees 67,000
Appraisal Fees 4,000
Marketing Fees 8,500
Environmental Studies 25,000
TIF Consultant's Fees 10,000
Bonds and Permits 39,946
Site and Marketing Study 5,709
Title and Recording 15,000
Survey 67,100
TOTAL $1,169,669
300515.3
EXHIBIT D
PLAT OF SUBDIVISION
(See Attached)
EXHIBIT E
PROJECTED INCREMENTAL SITE TAXES
(See Attached)
THE VILLAGE OF LEMONT, ILLINOIS
2000 TAX INCREMENT PROJECT PROJECTIONS
Speer Financial, Inc. has been requested to review projected tax increment revenues for the project
of The Stough Group. The report shows the projected real estate taxes to be collected and used to pay
the debt service on a senior lien bond issue. Tax increment debt by its nature is subject to uncertain
cash flows. The bonds are highly speculative as to timing of repayment and completeness of payment.
It is understood that the debt, consisting of senior lien bonds and a junior lien obligation, will be
retained by the developer and related parties.
The assumptions we used are as follows:
1. Assessed valuation is calculated using the income approach in which the market value of the
property is based on an 11.5% capitalization rate using stated rents with a 10.0% vacancy rate.
Please refer to EXHIBIT B for details. Application of other capitalization rates, rent changes and
changes in expense levels would have a direct impact on valuation under this method of
assessment.
2. The assessed valuation is estimated to grow at a rate of 6.50% annually. This factor is used to
account for growth in valuation of the building due to inflation, rental increases and other
unknowns such as a change in valuation techniques. Any variation in growth will directly
affect the cash flows available for debt service.
3. The county multiplier and tax rate are representative of the area in which the property is
located in levy year 1998. These have been fairly stable over the past several years.
4. The taxes extended for levy year 2000 consist of one half year due to an estimated mid -2000
occupancy. Timing of project completion will affect the timing of initial taxes.
5. EXHIBIT A is for illustration purposes only. It should be noted that little coverage is available
for the senior lien bonds.
Future bond value of $718,000 for the senior lien bonds reflects the value at maturity. As a capital
appreciation bond issue reflecting an interest rate of 13.5 %, the current value is less. The senior lien
bonds are valued at approximately $250,000, assuming an issue date of June 6, 2000. It is understood
that the junior lien obligations will be issued with a stated maximum value of approximately
$1,169,669 and will be held by the developer. This value reflects the developer's expenditures and
is not based on the expected cash flow.
The total income, expenses without real estate taxes and capitalization rate have been provided by the
developer. Speer Financial, Inc. has not verified this information or performed an independent
investigation of the laws or assumptions, facts and circumstances upon which such information is
based.
There is no guaranty that the methodology and capitalization rate used in determining the assessed
valuation will continue to be valid or utilized in the future. In addition, there is no guaranty that the
300515.3
real estate taxes will be levied and collected at the stated rates in the future. Substantial damage to or
destruction of the improvements that have been or will be constructed could cause a material decline
in or loss of the projected real estate taxes, and could impair the ability of the development to generate
the projected real estate taxes. While it is expected that the improvements will be insured, there can
be no assurance that such insurance will be available throughout the term of the bonds. Such
insurance is not pledged to pay the bonds. Any of the foregoing circumstances could result in the
value of the property remaining depressed for some time. Any such decline could eliminate or reduce
the amount of real estate taxes available to pay debt service.
Enclosures
KWM: wjk
5/10/00
300515.3
Assessed Valuation is calculated using the income approach as follows:
INCOME:
Number of Units
Rent per unit per year
Total Income
$ 43.00
4,266.00
$ 183,438.00
EXPENSES:
Expenses without Real Estate Taxes $ 75,180.00
Estimated Real Estate Taxes for First Year 39,283.24
Total Expenses $ 114,463.24
Net Income $ 68,974.76
Capitalization Rate 11.50%
Market Value Based on Capitalization Rate $ 599,780.52
Assessed Valuation $ 197,927.57
County Multiplier 2.1799
Equalized Assessed Valuation $ 431,462.31
Tax Rate 8.7490%
Estimated Real Estate Taxes $ 37,748.64
300515.3
Equalized Cumulative
Levy Collection Principal Assessed County Assessed Tax Taxes Senior Surplus/ Surplus/
Year Year Due January 1 Valuation Multiplier Valuation Rate Extended Lien (Deficit) .(Deficit)
2000 2001 2002 $197,928 2.1799 $431,463 8.7490% $18,874 $17,000 $1,874 $1,874
2001 2002 2003 210,793 2.1799 459,508 8.7490% 40,202 39,000 1,202 3,077
2002 2003 2004 224,495 2.1799 489,376 8.7490% 42,816 40,000 1,816 5,892
2003 2004 2005 239,087 2.1799 521,186 8.7490% 45,599 44,000 1,599 7,491
2004 2005 2006 254,628 2.1799 555,063 8.7490% 48,562 46,000 2,562 10,053
2005 2006 2007 271,179 2.1799 591,142 8.7490% 51,719 50,000 1,719 11,772
2006 2007 2008 288,805 2.1799 629,566 8.7490% 55,081 52,000 3,081 14,853
2007 2008 2009 307,577 2.1799 670,488 8.7490% 58,661 54,000 4,661 19,514
2008 2009 2010 327,570 2.1799 714,070 8.7490% 62,474 56,000 5,474 25,988
2009 2010 2011 348,862 2.1799 760,484 8.7490% 66,535 60,000 6,535 32,523
2010 2011 2012 371,538 2.1799 809,916 8.7490% 70,860 62,000 6,860 41,382
2011 2012 2013 395,688 2.1799 862,560 8.7490% 75,465 64,000 9,465 52,848
2012 2013 2014 421,408 2.1799 918,627 8.7490% 80,371 66,000 12,371 67,218
2013 2014 2015 448,799 2.1799 978,338 8.7490% 85,595 68,000 15,595 84,813
2014 2015 2016 477,971 2.1799 1,041,929 8.7490% 91,158 91,158 175,972
Total
$718,000
INCOME:
Number of Units
Rent per unit per year
Total Income
43.00
$ 4,266.00
$ 183,438.00
EXPENSES:
Expenses without Real Estate Taxes $ 75,180.00
Real Estate Taxes 39,283.24
Total Expenses $ 114,463.24
Net Income $ 68,974.76
Capitalization Rate 11.50%
Market Value Based on Capitalization Rate $ 599,780.52
Assessed Valuation (33% of Market Value) $ 197,927.57
County Multiplier 2.1799
Equalized Assessed Valuation $ 431,462.31
Tax Rate 8.7490%
Estimated Real Estate Taxes $ 37,748.64