Good morning everyone.
I wanna appreciate, uh, your patience
as we get started a little late this morning.
The Committee on Finance is called to Order.
Uh, good morning ladies and gentlemen.
Today we will have a combined TEFRA public hearing
for two separate projects, the Avenue Southwest Project
and the Sacred Apartments Project.
For each project, the city will issue separate
multifamily housing debt.
The projects have different owners
and are not connected to each other in any way.
The hearing will come to order.
We'll have a roll call to establish quorum this morning.
Vice Chair Conway.
Alderman Lata, alderman Hopkins. Alderman Hall.
Alderman Mitchell. Alderman Harris. Alderman Beal.
Alderman Lee, alderman Ramirez. Alderman Quinn.
Here. Alderman Lopez. I see there.
Mr. Lopez. Alderman Moore.
Alderman Curtis Alderman, OSHA
Alderman Taylor will be virtual.
Alderman Mosley. Alderman Rodriguez will be Virtual.
Alderman Scott Alderman. Ccho Lopez.
Alderman Burnett. Alderman Irvin
was Alman.
Talia Farrell. Alderman Cardona.
Alderman Waba. Alderman Rodriguez Sanchez,
virtual Alderman Ramirez.
Ro Rosa, virtual Alderman Viegas.
Alderman Mitch Virtual. Alderman Spaza.
Alderman Vasquez, alderman Riley, alderman Knutson.
Alderman Martin, alderman Silverstein, virtual chair.
Doel is here. Alderman Harris is here.
We have a quorum.
We have 17 present, uh, alderman Silverstein,
Taylor Rodriguez, Rodriguez Sanchez, Ramirez, Rosa
and MITs have requested participation by remote means
for a reason stated under Rule 59.
Can I have a motion for these alderman to attend?
So moved by Alderman Viegas.
All those in favor signify by saying Aye.
And opinion of the chair. The ayes have it.
And can we confirm that Alderman Silverstein,
Taylor Rodriguez, Rodriguez Sanchez, Ramirez, Rosa
and Mitts are with us this morning.
Ramirez. Rosas here. Thank you.
Rodriguez Sanchez here. Thank you.
Silverstein Taylor is here.
Alderman Taylor. Uh, welcome back. Alderman Taylor.
I hope you are feeling better.
Thank you, chairwoman. You're welcome.
Alderman, uh, Ramirez has joined us
and we'll be counted
towards, she's in our member.
Uh, yes. Alderman Ramirez will be counted towards Quorum.
Let the record reflect that this is a public hearing
that is being held pursuant to the requirements
of Section 1 47 f of the Internal Revenue Code
of 1986 as amended.
A notice of the public hearing for the Avenue
SW project was published on October sep
on September 24th, 2024, on the website of the Office
of the City, clerk of the City of Chicago.
A separate notice of the public hearing
for the Sacred Departments Project
was also published on September 24th, on the website
of the Office of the City Clerk of the City of Chicago.
Let the reporter mark the screenshot of each of,
of each such notice as committee's, exhibits number one
and two respectively for identification.
I want to make sure that, uh, these are
noted in the public record.
This is a hearing regarding two separate plans of finance.
The first plan of finance is for the city
to issue its Multi-Family Housing Revenue Bond Series 2024,
the Avenue Southwest Project,
and a principal amount not to exceed $25 million.
We will refer to this as the Avenue Bonds.
The proceeds of the Avenue bonds will be loaned
to the Avenue Southwest, LLC
and Illinois Limited Liability Company.
We'll refer to them as the avenue borrower
to finance a portion of the cost for the development
of an affordable housing projects,
which we are calling the Avenue Project.
The Avenue Project consists of the following.
One, the acquisition from Neighborhood Housing Services
of Chicago, incorporated,
an Illinois not-for-Profit Corporation of one parcel
of land, generally located at 36 0 1 West Chicago Avenue
in Chicago, Illinois.
We'll refer to this as the NHS parcel
to the acquisition from the city of one parcel of land,
generally located at 36 13
through 36 25 West Chicago Avenue in Chicago, Illinois.
We will refer to this as the Avenue City Parcel
and the existing city alley located in
between the NHS parcel
and the Avenue city parcel, which we will refer to
as the Avenue City Alley.
And together with the Avenue City Parcel
and the NHS parcel, we'll refer to this
as the avenue property.
And three, the construction equipping
and leasing of a mixed use residential building
with 52 residential units
and up to 28 parking spaces for residents, all
of which we be rented to Households earning up to 60%
of the area median income together
with related common areas, community space,
and onsite LA laundry facilities.
The Avenue Borrower will be the initial owner operator
of the Avenue Project Bank of America, na,
a National Banking Association.
We will refer to this as the Avenue Investor member
is the investor member of the Avenue Borrower,
the Avenue Borrower and poa.
Tiff, LLC
and Illinois Limited Liability Company, together
with its affiliates will be designated
as the Avenue developer for the Avenue Project.
The city will issue the avenue bonds pursuant to its powers
as a home rule unit of government under the 1970
Constitution of the state of Illinois,
and an ordinance adopted by the city council of the city.
The Avenue Bonds will not be a general obligation
of the city, the state of Illinois,
or any political subdivision thereof,
but will be a limited special obligation of the city.
The principle of premium, if any,
and interest on the Avenue bonds, will be payable solely out
of the revenue of the Avenue Project and other funds pledged
and assigned for their payment
by the Avenue borrower in accordance with a loan agreement
between the city and the Avenue borrower.
The Avenue Bonds will not constitute an indebtedness of
or an obligation of the city, the state of Illinois,
or any political subdivision of the state
of Illinois within the purview of any
constitutional limitation or legal provision.
No holder of the Avenue Bonds will have the right
to compel any exercise of the taxing power of the city,
the state of Illinois, the United States of America,
or any political subdivision of any of them
to pay the principle of premium.
If any or interest on the Avenue Bonds written comments
for the plan to issue the Avenue Bonds must have been
submitted by email to the Committee on Finance,
not later than 1:00 PM Monday, September 30th, 2024.
Now we will turn to the separate
and unrelated Sacred Apartments Project.
The second plan of finance is for the city
to issue its multifamily Tax Exempt Bond Series 2024
A and its multifamily Housing Revenue Bonds series
2024 B.
We will collectively refer to these as the Sacred Bonds.
The maximum principle amount of the sacred bonds
to be issued is
$23,500,000.
The proceeds of the sacred bonds will be loaned
to sacred apartment owner, LLC,
an Illinois Limited Liability Company will refer to them
as the sacred borrower in order to finance a portion
of the cost for the development
of an affordable housing project,
which we are calling the Sacred Project.
The Sacred Project consists of the following, one,
the acquisition from the Cook County Land Bank Authority
and Agency of Cook County, and a Body politic
and corporate, um, uh, and a body politic
and corporate of five adjacent vacant parcels of land.
Generally located at
32 15 32 17 32 19
and 32 29 East 92nd Street,
and 92 34 South Burley Avenue in Chicago, Illinois.
We, we will refer to these as the bank parcels.
Two, the acquisition from the city of Chicago
of seven parcels of vacant land,
generally located at
92, 16 92, 20 92, 24,
and 92, 38 South Burley Avenue
and 32 11 32 23
and 32 27 East 92nd Street in Chicago, Illinois.
We will refer to these as the sacred city parcels
and together with the bank parcels, the sacred property,
and three, the construction equipping
and leasing of a mixed use residential building
with 81 residential units
and up to 44 parking spaces for residents
of which will be rented to households earning up to 60%
of the area median income, together
with related common areas, community room,
and social service offices.
The sacred borrower will be the initial operator
of the Sacred Project.
USA institutional sacred LLCA Delaware Limited
Liability Company.
We will refer to this as the Sacred Limited Partner
is the limited partner of the Sacred Borrower.
The Sacred Borrower,
and the Interfaith Housing Development Corporation
of Chicago and Illinois, not-for-Profit Corporation,
together with their affiliates will be designated
as the sacred developer for the Sacred Project.
The city will issue the sacred bonds pursuant to its powers
as a home rule unit of government under the 1970
Constitution of the state of Illinois,
and an ordinance adopted by the city council of the city.
The Sacred Bonds will not constitute
general obligations of the city,
but will be a special limited obligation of the city,
which will be payable solely out of the revenue
of the Sacred Project and other funds pledged
and assigned for their payment by the Sacred borrower.
In accordance with the financing agreement between the city
and the Sacred borrower.
The sacred Bonds will not constitute an indebtedness of the,
or a loan of of credit of the city, the state of Illinois,
or any other political subdivision thereof within the
meaning of any constitutional or statutory provisions.
And no owner of any sacred bond shall have the right
to compel or any exercise of the taxing power of the city,
the state of Illinois,
or any other political subdivision thereof,
to pay the principle of premium.
If any or interest on the Sacred bonds
written comments relating to this plan
to issue the sacred bonds must have been submitted by email
to the Committee on Finance, not later than 1:00 PM Monday,
September 30th, 2024.
Let the record reflect the following sub.
Let the record reflect
that no written comments were submitted on either project.
Ladies and gentlemen, if any resident taxpayer
or any interested person attending this hearing desires an
opportunity to express their views for
or against the proposed issuance of the Avenue Bonds
or the sacred bonds,
or both of them, please do the following.
For those attending the hearing in person, please come
to the microphone in the aisle when your name is called,
and for those who have called in on toll free number,
please enter star nine on the phone to enter
to notify the host of the call in number.
And once you're called upon to provide your comments,
each speaker will be limited
to three minutes please indicating your comments,
which project or projects you are speaking about.
Is there any member of the public taxpayer interested person
who wishes to make a statement with respect
to these projects and the related city debt?
We do have some individuals that have signed up to speak
to this, and we will hear them now.
Uh, the first person is, uh,
before we call his name, wanna acknowledge that, uh,
alderman Spto has joined us
and will be counted towards Quorum.
Taiwan Sims.
Good morning committee. Um,
so on my way here, I was thinking about just financing, um,
and how much did it take to finance a nation out of a city?
They slated it for as the New Arrival initiative.
And the first was the state, 600 million
city 150 million.
It was just so much poured into this.
Now we coming to the Road of recovery,
but how, how much does it take to drive a group, a nation,
a race of people out of a city?
And I imagine, but we have our representative,
we have a black coalition or whatever it is,
but there's a group of our representatives
that have taken a direction towards black Americans here in
the city that is more than insidious.
It's murderous in education, in finance,
housing, everything.
C Joe Lopez calling him out, calling him out.
This is housing Andre Vasquez.
They made him head of immigration
or whatever it is, this new initiative thing.
All these people that have colored themselves as good people
or our elects or representatives of us who have driven us
for whatever reason, for whatever reason,
this attack on my people
or black Americans here in the city is, I guess
because it was the low hanging, I guess, what did David say
that if you're not in the room, then you're the snack.
And how many black Americans in this room right now?
But there's black Americans in this city.
We've been in this city. I'm 44 years here.
But there's no protection. There's no thought.
Even when Barbara Vian says that black
Americans against immigrants and paints this narrative,
but not only Bob Veian.
Now the new syndicates have put up
that black Americans against I immigrants gangs coming up
against the Venezuelans.
There ain't no gangs in this city no more.
The old man locked up
and everybody else that was substantial is dead.
There's no gangs in this city.
So it ain't no gds, bds, Blackstones, nothing.
Them Venezuelans coming up against more poor people.
Them kids that's driving on them. Elves.
They use the elves for sanctuary, Madam.
That's who they coming up against.
This same Black American group of people.
These people that y'all driving in into the streets
that y'all driving into detriment.
Bob ve he says that, um,
that if you can put a people into this type of, um, formula,
then you get nothing but chaos out of it,
then you can use those people.
This is sickness. But we got a whole group.
We got a group of people that's
representing us into nothingness.
Look, Burnett, you madam, because you finance.
So you, you aware of what's going on?
You just can't be in the dark because y'all sit up high,
but the low hanging on us.
Thank you Mr. Sims.
Our next speaker is Wallace Skater Bradley,
Madam Chairman Finance Committee.
I've been paying attention,
but now I'm paying more attention
because you put out the notice.
Everybody been screaming about affordable housing.
I'm glad that the affordable housing
and the bonds are putting, that y'all are putting together
is addressing affordable housing
that's being needed on the south and the west side.
One of the things that I feel
that's very important in educational is
that this body allow the pro and con
and give everybody a righteous reason to speak.
I just wanna say I commend you, Madam Chairman,
I commend this body
because those that follow me
for generationally understand.
Now, if you don't come within these rooms to learn,
then you won't know.
And I've been coming here a long time
and I'm seeing the change.
Sometime it takes a while to grow with a new administration,
but the more that you put the notice out, you make it
where we can let individuals know, come
and learn what's happening.
And those on the west side know
how long it's been since they was allowed
to get affordable housing.
I'm seeing so much development that's happening now,
and I ain't seen that type
of development since they burnt everything down.
So I'm just saying, I commend you.
I'm in full support of you.
Keep doing what you're doing
and allowing the people to speak whether they pro
and con for what it's about.
I wanna say to God, be the glory. That's Gator's story.
Thank you, Mr. Bradley. Um, Zoe Lay,
They need to abolish Tiff money.
They need to abolish this whole affordable housing,
which is a money lauder and racket.
That's number one. Okay?
This is not affordable housing is not
what it's supposed to be.
That is a mass, that's just something they use.
Affordable housing is detrimental to our communities.
It's leaving. It's, it is stopping all our traditions.
People don't even know their neighbors anymore.
The the trying to, trying to, to, to all you guys are y'all.
And that's what y'all really are doing.
Y'all are laundering money
through affordable housing when people do really,
and really are trying to make a, a,
a change in their communities.
You guys don't never know how to give people
who come into y'all wards the money to do TIF money
to rehab their actual home.
So what you'll do is you'll just knock it down
for building violations instead of using that TIF money that
that's what it's supposed to be for,
to help them rehab their homes.
So you'll knock it down in the name of building violations
for affordable housing, give it
to all these white developers that's
that's in here right now.
And then they go get this IDA money too.
So at the end of the day, they really don't spend no money
and a lot of us don't know about it and you guys.
And so when we do come into your wards
and ask, Hey, we're interested in, you know, uh,
rehabbing or getting some money, getting some tiff money.
Y'all don't know how to fill out the packet all of a sudden.
But here comes, let's say we'll do Walter Burnett's Ward,
here comes Holston, Peter Holston and them, right?
All of a sudden, he knows how to fill out the, the form.
He knows how to give them all the
bonds and all of that stuff.
But when it comes to our comm, when it comes
to our black contractors
and our people that work in our communities,
we can't get anything.
So again, this is, I oppose anything that when it comes
to tiff, when it comes to bond,
because it's not really for the communities.
Y'all are literally taking stuff out of our communities.
We barely have nothing now.
So to sit here and say that you commend this body, this one
of the slowest bodies I think on earth,
because y'all don't care about the community,
y'all never cared about the community.
That's why our communities look the way they look.
They should never look like that.
Everybody else community got everything but our community.
But you commend this comm you commend this body.
Yeah, you crazy because you getting paid. My boy.
Thank you, Ms. Lay our thank you Ms. Lay.
Our next speaker is George Blakemore.
I I would ask for order
and if we can't have order, I'm gonna ask you
to leave plain and simple.
Mr. Blakemore.
No, I was at this meeting before
and you was, uh, in this voodoo economics,
you was reading the same thing and I,
and you didn't let the people speak.
We signed up to speak and you wouldn't let us speak.
And then you told me where to go.
Right here, go to hell George.
And I said, back to you and your mama too,
and your baby white baby daddy.
But anyway, you, you are part of the problem.
The land bank and what George, I don't have to like George,
but what she said was correct,
but thatt money, this is voodoo economics.
You giving the rich developer money
and land bank is nothing
but a grab a, a black people's land.
So you all play games here and,
and you can't play these games with me
because I know exactly what's going on.
I said when you was reading that, I say,
go up Sergeant lvo and get a copy.
What, what Pat do is reading the bonds.
Why would you give money, uh, for, uh,
and then this LLC, who owns this LLC?
Who are these people? Where did they come from?
You know what you're doing?
You making the rich richer at the expense of the poor.
This is voodoo economics here. Voodoo economics.
And you've been doing it and you will continue to do it
because the citizens do not participate.
They're not informed that the tip is, is a ripoff.
And when you come here with this little barn nest here,
that's a ripoff too.
So, uh, we, we, you deserve the government, you get
and you get the government you deserve.
When they have this development.
How many black men going be architects?
How many of 'em going to be working on these projects?
How many? But if you go out, how many?
So, so, uh, you know why?
Because we have black faces in high places,
selling people out sour.
So, uh, I'm, I'm speaking to black people.
You deserve the government you get
and you get the government you deserve.
And you know, some, all these people right here are
Democrats, all the same party, 60, 90,
all the same party, no different,
no multi party system of a monopoly.
A monopoly can be good and a monopoly can be harmed
or can do a lot of harm.
And it's happening here. So I want Trump to come here.
All what Trump's a racist. Racist. What do you think?
What's going on? Right here,
Local, At home, local government.
Don't tell me about dc Let's talk about Right.
Thank you Mr. Blakemore.
I would like to also acknowledge that we've been joined
by Alderman Beal and Alderman Riley,
and they'll be counted towards quorum.
Our last speaker on this tougher hearing is Louis Calderon.
My name is Louis Calderon. Good morning everybody.
Thanks for being here.
Today's a good day to make history.
It's a time to come for
prosperous and new future.
Future. Think for a moment, think twice.
Your boat is worse. More than gold.
You said wisely. Wisdom
that future generations will get the benefit from the tiff.
Let's work together because working together
will be stronger with a,
we'll get more funds
or social programs, program star
and better ways to improve Pilsen areas, housing,
clean energy, green energy, commerce, economy,
growth, et cetera, et cetera.
Let's make history, let's make a
legacy for everyone.
The two fans will be invested
where the most is needed in the same
community, what is provided.
It will be regulated by the Chief
Supervision Revision Committee
or Pilsen,
TSRC and the neighborhood
community or pea.
Everything has to be regulated
and it has to be done the right way.
It is not regulated, it not gonna work.
So everybody's supposed to be on the same page
and we supposed to work like a team
and we have to look towards a future
and make a better future for better generations.
If we don't get together
and we get divided, nothing is gonna work.
Nobody's proposing anything positive. Positive.
So let's propose something.
It's gonna work for everybody
and everybody's gonna get the benefit.
Teeth is a real good program for everybody
because if it is regulated, it won't be no corruption.
If it's not regulated,
it's gonna be a problem for everybody.
Thank you, Mr. Calderone. Um,
I would also wanna acknowledge
that Alderman Hall is requesting to be, uh, remote
to remotely participate this morning under Rule 59.
Can I have a motion to allow
Alderman Hall to attend this meeting?
So moved by Vice Chair Conway.
All those in favor signify by saying aye.
All those opposed and the opinion of the chair.
The ayes have it. Alderman Hall.
Um, you are in the meeting, ladies
and gentlemen, this concludes the combined public hearing
of the two proposed plans.
First for the City of Chicago
to issue its multi-Family Housing Revenue Bond series 2024,
the Avenue Southwest Project in a principal amount not
to exceed 25 million for the Avenue Project
and the second for the use for the city
to issue its multifamily tax exempt Bond Series 2024 A
and its multifamily housing Revenue Bond series 2024 B
In an aggregate aggregate principle amount not to succeed.
23.5 million for the Sacred Project.
Let the record reflect that the public hearing
on these projects were concluded at 10:45 AM
October 2nd, 2024.
This concludes the combined TEFRA hearing
for the Avenue Project and the Sacred Departments Project.
And now we will go into our regular
finance committee meeting.
I'd like to have a roll call to establish quorum
Vice Chair Conway Alderman Lata Alderman Hopkins.
Alderman Hall is, uh, remote. Alderman Mitchell.
Alderman Harris. Alderman Beal. Alderman Lee.
Alderman Ramirez. Alderman Quinn.
Alderman Lopez. Alderman Moore. Alderman Curtis.
Alderman O'Shea. Here. Alderman Mosley.
Alderman Scott Alderman Ccho Lopez.
Alderman Burnett. Alderman Irvin.
Alderman Talia Farrell. Alderman Cardona.
Alderman Wapac. Alderman Viegas.
Alderman Spto. Bdo. Alderman Vasquez.
Alderman Riley, alderman Knutson,
alderman Martin, uh, alderman Mitchell.
Good morning, chairman Dowells.
Here we have 18, we have a quorum
and we still have Alderman Silverstein, Taylor,
Paul Rodriguez, Ramirez,
Rosa Rodriguez Sanchez,
and Mitch requesting participation remotely, uh,
under the provision of Rule 59.
So moved by Alderman O'Shea.
Al those in favor signify by saying I opposed in the opinion
of the chairs, the ayes have it,
and these aldermen are president.
Have joined us today.
At this time, we'll begin the public comment
for the finance committee.
The public comment period will be limited to 30 minutes.
Out of respect for everyone's time.
Each speaker is limited to three minutes.
Our first speaker is, um, George Blakemore.
Moving on Mr. Blakemore, you have three minutes.
I had to get some fresh air there. Talk
the finance committee.
It's one of the most powerful committees of all city
committees, and it was House of Chairman
for over 50 years was Bert Aman.
Bur, and I'm gonna give you a little history.
He used to call the people up and we will be seated. Right?
Right here, they have the right there.
And when anybody start talking, when when he called
for the public, he
dealing with finance, the finance.
But you know, one gets out
and another one come in, they get one out
and another one come in.
And that's why I'm advocating for you all,
all you wonderful Democrats.
Did you know that when you do the same thing over
and over again, that's insanity.
You keep voting them back again
and you are the problem, not them,
you, you, you, you, you all of us.
Without the problem, we have to get rid of them.
And if we can't
Fix, But we got some good one, one of my friends,
they have just smiled.
Uhhuh, we got some good one.
But you, we got to teach them how to treat us.
We have to teach 'em how to treat us.
They don't know how to treat us.
So again, I advocate that everybody,
if you would just think twice
and vote for Trump, go red.
What? Trump, go red. What trump's a racist?
Whatcha you Blake?
Thank you Mr. Blakemore.
Our next speaker is Charles Dom.
Last call for Charles Dom.
Next. Next, next speaker. Alma Duran.
Oh, Charles Dom is here. Let's get to the mic. Mr.
Dom?
Yes. My name is Charles Dom.
Father Dom. I did not, it's, that's not here on here.
So I acknowledge you as, as the, as a priest.
Okay.
Not know.
Okay, Speak father.
So my name's Charles Dom.
Uh, I'm a Dominican priest
and also a resident of the Pilsen neighborhood for 38 years.
I'm the, uh, founder
and current board president of the Resurrection Project.
Um, and I served as pastor of St.
Pius, the fifth parish,
which is the largest parish in the Pilsen neighborhood,
largest church.
And I served there for 29 years as pastor.
So I'm very happy to be living in Pilsen.
I love the community and I'm happy
and proud to be accompanying all the residents in that,
that community.
The Pilsen community needs the extension
of the current tiff at its expansion.
Um, we have desperate needs.
Now opponents to the TIF have raised the number
of problems
and falsehoods really, like for example,
the TIF is going to increase taxes.
That's not documented that it's going to, um, that,
that non-for-profits that want the TIF don't pay taxes.
That's not correct. That money is available elsewhere.
We don't need the tiff. That's not correct.
So they're basing this on falsehoods.
Also, they really don't want any
development in the neighborhood.
So if we are gonna beautify the parks, improved sidewalks
or street lighting,
they say we're gentrifying the neighborhood.
Even if we reduce crime and gang activity
and create, uh, affordable housing,
they say we're gentrifying the neighborhood.
That's not true. We're improving the neighborhood not only
for current residents, but residents to come.
Now the Pilsen neighborhood needs this, uh,
expansion of the tiff.
We need the money for many different reasons.
One of the principle reasons is infrastructure.
We need the streets and the sidewalks improved,
but we also need the library and the schools to be updated.
Technology security cameras,
even air conditioning, air conditioning.
Some of the schools don't have that. So we need that.
And the residents will also get part of this tiff
to help improve their own homes, rehab them,
and bring them up to date.
So, uh, affordable housing is one of the major things
that will occur with the tiff.
Last year, the Resurrection Project opened
a 53 unit, uh, affordable housing
in the Pilsen neighborhood.
We had 1500 applicants
for 53 units.
So there's a tremendous demand.
Thank you fathers. Julie Sowicki.
Good morning. My name is Julie Sowicki
and I am the President of the Society of St.
Attles. Even though I know
that the Pilsen tip expansion is not on today's agenda
for a vote, I would like to share a few thoughts.
Um, first, Byron Ccho Lopez,
you have been pursuing a hidden agenda
regarding Senate Alberts virtually from the start,
and it all surfaced in the zoning committee last week when
it finally came out
that you in fact have been lying to us for five years.
I will not let you destroy Santa Dilbert's.
It has been an institution for 150 years,
and we don't need an upstart from Willowbrook coming here
and destroying our church.
You are no friend to the Polish community whose
ancestors built this.
You are no friend to the Mexican American community who came
to cherish St.
Bert's as their own.
All we ever asked you for is to landmark and down zone St.
Berts. And in five years you fail to do that.
Here again, you played games with the down zoning
and you got spanked by two of your colleagues.
This is on you and your this said Byron, nobody else.
Second in Alderman Byron Ccho Lopez stopped playing games
with the community, the deceitful way in which you went
around getting support for this TIFF extension.
And then the expansion is absolutely shameful
and insulting to your constituents.
We are watching you closely
and we will be watching you for the next three years.
Instead, please learn to work from a place of respect
for your constituents and true community stakeholders.
This is what effective leaders do.
We have real problems here that require elected leaders
to work in good faith to find solutions.
The self-determination of the community is
what you should be guiding by, guided by,
and not by your personal agenda.
Lastly, Byron, you will be held accountable for your
and your wife's sear campaign against me on social
media for the record.
Byron, did you know that over 65%
of real estate brokers are women?
Do you know why that is?
It's because women, we women are primarily the
caretakers in our families.
We take care of our children, we take care
of our aging parents.
I left a career in human resources to take care
of my disabled mother.
And now you're, you are going to smear me
because I am a real estate broker
that still needs to earn a living.
I didn't get into it to become a real estate tycoon.
I came into it because I needed flexibility for my family
to take care of my family.
So stop. We are onto you.
Thank you to all the aldermen
who have opened their doors to me.
I've spoken with many of you personally
regarding this TIFF expansion.
I am not in your ward and you extended a a courtesy to me
and I am grateful to you.
You are the true leaders
and the type of leaders that we need in this community.
We are all in this together.
The TIFF expansion sets a dangerous precedent.
We have a massive budget deficit to address.
This is not the solution
and we certainly do not trust Alderman Byron Ccho Lopez
with a billion dollar cookie jar.
Thank you Ms. Sowicki.
The next speaker, the the next speaker is Pastor
to the Mess.
The next speaker is Pastor Tanya Lozano,
Peace and power, everyone.
My name is Reverend Tanya Lozano Washington.
I serve as a chairwoman at Healthy Hood Chicago.
And I'm the pastor at Holy Ground Methodist
Church in Pilsen.
And today I come before you, not just
as a leader in our community,
but as a passionate advocate for an amendment
that I believe holds immense potential
for benefiting our neighborhood
and beyond initiated under Mayor Harold Washington.
Tiff was envisioned as a democratic
and effective tool to encourage development
and neglected neighborhoods,
unfortunately later became a symbol
of inequity under Mayor Daley.
Its deployment often favored his big property developers
and contributed to the siphoning of wealth from lower
and middle class communities to the upper class.
We understand that there is historical mistrust surrounding
TIFF funds and the impact of high taxes in Pilsen.
While concerns about rising taxes are valid, it's important
to recognize that our property taxes have been high
for years and many residents have yet
to see tangible benefits from the past manage
management of TIF funds.
The truth is, the existing tax burden has accelerated
gentrification and displacement in our neighborhood.
We support the alderman's amendment to not only expand tif,
but also to implement a structure of accountability
that includes community involvement in
the allocation of these funds.
And this, this process has already started.
The alderman has sent packets to all of the residents
to be a part of this process.
We want these, these funds to be right redirected,
to support community spaces like ours, like our church,
improve our schools, assist homeowners with repairs,
create affordable housing, and bolster local businesses.
For context. This year alone,
property taxes in Chicago's 25th Ward have risen
significantly this proportionately right?
And as a family deeply rooted in the Pilsen community
for four generations.
Now I can tell you
that our neighborhood's essence lies in its people.
We are hanging on by a threat as property taxes
and the cost of living rise while wages remain stagnant.
In addition, we need more affordable housing,
home repair assistance for seniors, youth training programs,
and support for local businesses.
This amendment is a part of our preservation plan
that over 20 community organizations are a part
of creating and implementing.
And I wanna address a critical issue
that keeps coming up here in this place
and that hampers progress.
The scarcity mindset.
This pervasive belief
that aiding one community must come at the expense
of another has been strategically used
to pit suffering communities against each other.
This tactic not only divides us,
but distracts us from the essential task
of ensuring resources are allocated
where they are truly needed.
This false dichotomy fosters a climate
of competition rather than collaboration.
It creates an illusion of limited resources suggesting
that the success of one community
inherently threatens another.
In reality, this mindset merely serves
to maintain the status quo,
diverting attention from the fundamental issues
of resource mismanagement and inequitable allocation.
Our community is tired of being used
as a pawn in this divisive game.
We need to unite, not be pitted against each other.
Our focus should be on expanding the use of tiff in ways
that truly benefit our communities,
rather than engaging in a zero sum game
where only a few gain while many continue to suffer.
Thank you Ms. Reverend Lozano.
Our next speaker is Selma Martinez.
I wanna acknowledge while she's coming to the microphone,
uh, alderman Martin and Alderman Mosley have joined us
and will be counted towards quorum.
Ms. Martinez, you have three minutes.
Good morning. My name is Selma Martinez.
Uh, I came to this country when I was five years old
and most of my life I've lived in Pilsen.
I studied at Pilsen Academy or Rosco and Benito High School.
Um, I've seen the progress
in my community in some areas while I have also seen
how other areas, um, have been weakening due
to lack of resources.
I understand the concern
of homeowners about the constant increase in property taxes
because those of us who rent also are affected
by these increases every day.
It is harder for us to find housing, um,
for the working class people that can afford
because it's too expensive.
It's also why we need more affordable housing.
I am now a mother of two little girls, one of 'em,
which is at Cooper Elementary And at her school
they do not have AC in the gym, which is detrimental
for them not having the air conditioner diminishes their
ability to, ability to develop
and they don't have security cameras in the school as well.
The lack of security cameras put students
and teachers at risk admits the violence in the neighborhood
and the city today.
The TIFF expansion would give our school the opportunity
taxes, resources that would help us meet these needs that
and other needs that the communities needs
that we don't have right now.
I ask to please support this amendment
and allows those resources that already exists
exist in other areas to be, to put
to good use in our community.
Thank you. Thank you very much Ms. Martinez.
The next speaker is Maria Miranda.
Good morning everyone.
My name is Maria Miranda
and I'm a longtime resident of Pilsen.
Can you hear me there? Good morning everyone.
My name is Maria Miranda
and I'm a longtime resident of Pilsen
and also business owner of TM Locker Room
and Nail Salon that we opened my mother
and I since 2017 in goldeneye sushi restaurant that I opened
with my lifetime partner three years ago.
Um, as a business owner
and a resident of Pilsen neighborhood for about 13 years,
I have seen and experienced the challenges that come
with under funding.
This thi is crucial
for supporting Pilsen small businesses like mine
and addressing issues such as gen,
gentrification, and displacement.
It's about en hazing,
a stability while preserving pilsen's cultural heritage.
And I'm here to say yes to chief expansion
because our community deserves not only affordable housing,
also schools with playgrounds
and classrooms with with working acs.
Also, we also need resources for small businesses, resources
that will help us grow, create jobs better our community,
better train our employees, continue paying taxes,
and yes, continue to go back and give back to our community.
As small businesses are the backbone of our economy,
but not just in Pilsen, it's throughout the city of Chicago.
It's only fair that we get to see our taxes stay in Pilsen
to help our neighborhood thrive.
Personally, I would like to open a trade school,
a nail school, to provide training
and job opportunities for the kids graduating from Juarez
High School and surrounding neighborhoods.
For those who might not see college as the right path
or can't afford it, I want to offer them a chance
to learn skills and lead their professional careers
to real opportunities.
By giving them this opportunity,
we can keep them off the streets and out of trouble.
I truly believe that if we give them the right skills,
they'll gain a sense of responsibility and pride
and best of all, they stay on a positive path.
So if you're considering voting no, you're saying no
to small businesses, especially to Latina owned businesses,
which make up a majority in Pilson neighborhood.
You're saying no to creating jobs in our community.
You're saying no to affordable housing, no
to Latino families being able to afford
to stay in their homes or even make basic repairs
and no to basic needs
to our children in their schools like having playgrounds
or air conditioning in their classrooms.
And I could go on and on,
but I hope this gives you a sense of just how much our this,
how much of, um, this community needs extension.
Thank you. Thank you Ms. Miranda.
The next speaker is Demarion Span.
Good morning committee members al the woman Ms. Scott.
I'm madam. I'm madam President. My name is Demarion Span.
I have distinct honor
and pleasure is serving as student body president at the
Collins Academy Steam High School.
Um, and representation. A representation of Collins.
I'm here to, um, represent Collins about the city TIFF Grant
for the $10 million for the development
and um, support
of the Collins Academy, charmers and Johnson.
The city TIFF Grant will give us access options
and careers not only in our communities,
but in schools such as Charmers Johnson
and d Collins Academy that can be developed
to accommodate those things.
We wanna first talk about insurance student growth,
inclusion, and accessibility.
And by this, this grant can allow students to be able
to have us home and a safe, sustainable school community
where they have rooms that accommodate steam
and science, technology, engineering, arts and math.
Um, we wanna also emphasize
that all students at the Collins Academy look forward
and is very grateful for the opportunity
and support that are set to come forward.
How this is how part
of this finding will allow our parent parents
to have a parent center in the Collins Academy to be able
to be a part of and thrive in the school community.
We also want to emphasize that the city, we hope
that the city and Alder
and Ms. Scott is working hands in hands with developers
to maintain the land of the people who are already there.
We wanna reiterate that we are not against the mixed, mixed
and com community, but we also want the school
to be accessible for students who are already there.
The mission of Collins is to produce lifelong warriors
who come back and serve their community.
And that's exactly what we want of, um, ensuring that
students and parents have affordable housing
and places to come serve their community.
We at Collins, we believe in building a safe, um, haven
for students to come at any time of the day
and students to be able to thrive academically, socially,
emotionally, and physically.
Thank you all very much.
Thank you Mr. Span. Our next speaker is Mary Calderon.
Good morning. Um, since, since 2021,
many of the Pilsen property owners have been hit
with high property taxes in the thousands
and have been struggling to pay those taxes every year, even
to the point of selling their long held properties.
The 25th Ward Alderman proposes to give property tax relief
with an expended extent expanded Pilsen Tiff,
that is not guaranteed TIF money cannot be used
to help pay property taxes.
Legislation in Springfield has to be changed to allow
for that use of money.
Yes, hook County assessor ha e
and the community group EPM
will be lobbying early next spring in 2025
to hopefully change that rule.
Alderman Fiche Lopez is putting the cart before the horse.
What's the rush? I asked the finance committee
hold off from taking a vote to expand the Pilsen TIFF until
after next spring 2025 to see whether Tiff money
can be used to help property owners, um,
with property tax relief.
It is only fair that Pilsen property owners benefit
it is their tax money.
If TIF money does not benefit property owners,
then what's the sense when Pilsen property owners
can't keep their rentals affordable to no
to no great relief, they need thousands
of dollars in relief every year to stay in Pilsen.
I oppose the finance committee in moving forward
with the expansion of the Pilsen tiff.
I was opposed to the TIFF back in 1997.
Thank Thank you Ms. Calderone. Our last two speakers, Dr.
Rome Rome, Roman Crockett,
Romeo Crockett,
and our last speaker will be Jada Duncan.
Tell, uh, you should get ready.
All right. Good morning. Uh, thank you all for the time.
Uh, my name is Roan Roan Crocker. So Dr.
Roan Crockett, everybody always kind of gets it wrong,
but I'm the principal at, uh,
Chalmers Steam Elementary School in North Lawndale
and I'm here advocating, uh,
for the 10 million additional tip funds to, uh, help us
actually build a facilities within three schools.
Uh, Chalmers Johnson and d Collins Academy.
Um, I'm supposed to be at a meeting right now,
but when I leave my students I always
tell 'em where I'm going, right?
And so I told 'em I'm coming down here today to advocate
for something that I shouldn't have to advocate for.
Uh, our kids deserve the proper facilities.
Right now we are in the second year of steam
and we just steam in theory
because we don't have the actual facilities.
So our kids are actually being shortchanged, um,
by the current fiscal policies
and what we're being allocated, uh, in terms
of resources for our schools.
And North Lawndale, uh, is uh, very dear to me
because I'm born and raised on the west side of Chicago.
Um, multiple of my family members actually graduated from
Chalmers as well as Collins.
Uh, but when I became the principal nine years ago
and growing up in Henry Hornet in Austin,
it's like North Lawndale seems to always get left behind.
Um, and the kids are starving for all of the resources
that they need in order to be able
to successfully navigate the world in which they will enter
into because they live in the real world.
But we have to teach them how
to navigate the spaces in which they live in.
So I would just ask this at the end of the day,
if you all are debating whether
or not to give the funds to the three schools,
what if your child attended the school?
Right? So that's the question
that you all should grapple with.
Thank you all for your time and I appreciate you all.
Thank you. Principal Crockett, Jada Duncan, tell
you are our last speaker today.
Hello, my name is Jada Duncan, tell,
and I am a senior Ed the Collins Academy
Steam Magnet High School.
I will not lie, I am extremely nervous,
but I am standing here
'cause this is not only about me, this is about other kids
that are about to come into the school.
I hope that this TIF program will help give access
and more opportunities for students specifically in steam.
Now, when we go to college courses,
in different college classes
and when we go
and see different colleges, it's,
it's not really a college experience.
We only have one person
that's actually helping us do these different things.
He's, he is our counselor
and we do have other people that's going here
and these partners, but it's not steam related.
You get the basic dorms
and this is what we do and this, that, and the third.
But it's not steam related.
We don't see the engineers,
we don't see these different things.
We don't get to understand what we're actually going into.
We are asking young adults to pick
what they wanna do in their life.
And you're not giving them any
actual say in what they're doing.
'cause they don't know what they're choosing to do.
We here, I want us to focus on things like photography
and steam and the real things
that people are saying they want to do.
I am a senior. Last year we had a film program.
This year we do not
'cause we do not have the funding
to keep the people to do that.
I want to go in for film
and now I feel under prepared
for the different things that are there.
I am scared I'm going to be behind when I go into film
'cause I was not able
to learn about it early in what I needed to do.
All I want to do is get an actual chance, a real life chance
to say, this is Steam.
This is what we're doing. How are we going
to partner three different schools if none
of them is actually showing the steam that we need
to get done, if none of them is actually doing the things
that it says it's going to do.
If you give something the name, it has to be worthy of it.
We have that name, we prove that we deserve it.
So all we are asking is a chance to actually do the good
that we say we want to do.
Thank you.
I just, I just want to, uh,
acknowledge the two young people, Jada and Demarion.
Thank you very much for taking
and Principal Crockett for taking time out of your schedule
to come down and just give us a sense of the,
what young people are experiencing and
and feeling, uh, this morning.
And I appreciate you coming down.
I just wanted to acknowledge that. All right.
Uh, this ends the, uh, public comment period.
I want to, uh, also acknowledge
that Alderman Lata has joined us
and will be counted towards Quorum.
The committee received written public comments from
Landmarks, Illinois BOMA, Chicago Preservation Chicago
and Chicago Loop Alliance in favor of 79 West Monroe.
We've also received letters from the Illinois Housing
Council, the Alden Foundation,
and related Midwest in favor of the volume cap ordinance.
And from Uptown United
and Uptown Chamber of Commerce in support
of timeline theater.
These letters of support were sent
to everyone electronically.
And we'll begin with the approval of the September 24th,
September, 2024 monthly Rule 45 report,
which was sent electronically to everyone.
If there are no questions, can I get a motion for approval
of the monthly Rule 45 report?
So moved by Alderman ada.
All those in favor signify by saying Aye.
Opposed in the opinion of the chair. The ayes have it.
We have a number of items before the committee today.
Uh, take a guess on the number.
The number is 18, uh, on the corrected agenda this morning.
Um, item number one, uh, we will start with the Department
of Law Settlement Cases.
And while they're making their way up here, as was the case
with the previous committee meeting,
this month's regular Committee on Finance meeting,
we'll begin with the settlement orders
from the Department of Law.
We have three proposed orders
authorizing the corporation counsel to enter into
and execute settlement orders in the following case.
The first case is Bass versus Deur at all in the amount
of $332,500.
We adjoin by Carolyn Franzi from the Department of Law
who will give us the briefing.
Morning everyone. Um,
on JU June 23rd, 2019,
plaintiff Jeanette Bass was at her home in an apartment at
two 60 East Chestnut.
When she called police in order to correct a police report
that she had previously filed,
then Sergeant Andrew Deur was sent to her home.
Plaintiff was asking Deur to create a new police report
as she had accused her landlords of unlawfully trespassing
inside her apartment, and the report was incorrect.
In her view, deur attempted to explain
that he could not issue a new police report
and a verbal altercation between plaintiff and Deur ensued.
Ultimately, deur made the decision
to have Bass involuntarily committed due to her behavior,
and she was held in a hospital
for a mental health evaluation for two days.
Plaintiff filed the following claims against
Deur and the city.
False arrest, excessive force, intentional infliction
of emotional distress, and a monell claim against the
city and indemnification.
In order to limit the city's exposure,
the law department recommends settling this case
for 332,500 inclusive of attorney's fees and costs.
As I mentioned, bass lives in a streeterville
high rise apartment building.
According to bass building,
staff enter her apartment unannounced,
including when bass is not dressed.
After one such incident, bass called the police
to make a report, but the police classify
the incident as non-criminal.
While Bass believed it should have been recorded
as a criminal trespass bass called the police
again this time.
Then Sergeant Deur responded for several minutes, both Bass
and Deur were reasonably calm.
Bass began count recounting
what the building staff had allegedly done, stating
that it constituted criminal trespass.
Deur disagreed
and stated that at the reports were incomplete,
that the detectives could amend it.
Bass told him that another sergeant told her she had
to call 9 1 1 and have the police come out again
and Deur disagreed.
At this point, the situation started to become more heated.
Bass was playing audio
of a conversation she had with the Sergeant.
Deur called the sergeant, but Bass kept talking.
He raised his voice and he eventually hung up on the
sergeant saying, she doesn't want me to talk to you
and a raised voice.
He said, ma'am, you have a report. And then began to leave.
Bass protested that she needed the report.
Amended Deur refused, stating, no ma'am,
and that's not gonna happen when Bass
responded by parroting back.
No ma'am. And that's not gonna happen.
Deur asked her, are you in crisis
to deur his question about being in crisis.
Bass responded sarcastically because of you.
Yeah, because of you lying. She then sat down.
She was still relatively calm.
Deur refused to amend the report.
She then called Deur a liar.
Sar sarcastically remarked that it was really nice of him
to hang up the call with the other sergeant
and told him to now leave her unit.
Deur refused to leave.
He radioed for an ambulance
and a wagon for a mental health transport.
Bass repeatedly yelled at Deur to get out
and Deur refused, telling her she needed help
and she was having a mental health crisis
and asking what hospital she wanted to go
to for several minutes.
Deur was, or Bass was asking Deur to get out
of her house at one point, saying she was scared
and trying to retreat into her bedroom.
Deur refused and at one point tells her she
has a harm to herself.
After a few minutes of trying to get Deur to leave.
Bass then left her own unit trying to get away from Deur.
She walked down the hallway and her bare feet and went up
and down several flights of stairs.
Deur followed close behind telling her to stop
and saying, this is not how rational people act.
When she did stop Deur grabbed and handcuffed her
and she ended up on the ground.
Bass was then transferred to Method, uh, to Northwestern
where she was held
and then transferred to Methodist Hospital
where she spends approximately two days
for a mental health evaluation.
The law department recommends settlement.
In this case, bass does not meet the legal threshold
of an individual who is in need of mental health treatment,
such that she needs to be involuntarily committed.
An officer may take an individual into custody
for mental health exam if the officer reasonably believes
that the person in, in need of I immediate hospitalization
to protect that indu individual
or others from physical harm.
While Bass became agitated and erratic,
and as she got more worked up during her interaction
with Deur, she appears to, um, to be,
um, irrational.
However, there is no evidence
that would suggest she would harm herself or others.
She is not violent. She does not threaten
to harm Deur or herself.
Um, her sarcastic answer to Deur is question
that she was in crisis because of him, is not enough.
Bass told to Curtis to leave
and he could have just left the apartment
as she was no longer requiring police services
and she had not committed a crime.
Um, bass claims to have experienced pain
and humiliation during the incident, which are corroborated
by her statements of, you're hurting me on body-worn camera.
She also claims to have night terrors every night
as a result of this incident
and claims to be, quote, unquote, scared to death
of police officers and to have PTSD.
Further, if plaintiff is successful at her case at trial,
she would be entitled to her attorney's fees,
which could easily exceed $500,000.
The reasons explained above we,
the reasons we just explained,
we recommend settle in this case for 332,500
to settle this case of inclu
inclusive attorney's fees and costs.
Thank you, Carolyn, any questions
from members of the committee? Alderman Spto.
Thank you, Madam Chair.
Um, so, and I,
I I must have missed this in the briefing, so I didn't know.
She spent two days in the hospital,
so she went there saying she didn't need to go,
but then the hospital kept her for two days.
She was taken into Northwestern
and then they transferred her to a different hospital
where she was evaluated and then released.
Okay. But it would've, but it was two days,
four eight hours basically.
Yes. Okay. Thank you.
I I'm a no on this one. Madam Chair. Okay.
Um, any other questions from members of the committee?
Seeing none, is there a motion to recommend approval?
So move by Vice Chair Conway recommending Due Pass.
All those in favor signify by saying Aye.
Oppose Alderman Spto, we will record your opposition.
The Due Pass recommendation will be reported out
with the exception of Alderman Spto voting no at the
October 9th, uh, city Council meeting.
Um, our next case, one B is Tila Wade,
tah Wade individually and as mother
and next friend of Jada Dior Hamilton,
a minor versus Charles Doherty
and the City of Chicago in the amount of $445,000.
This will be reported out
by Deputy Corporation Counsel, Margaret Mendenhall. Casey,
Thank you Chair, and good morning all.
Chicago Police Department Sergeant Charles Doherty.
Entered an intersection on a red light.
He was not involved in a pursuit
and hit a car with plaintiff Delilah Wade
and her 11 month old daughter in the car.
Plaintiff Wade suffered a broken shoulder and spine.
The Department of Law recommends settlement in the amount
of $445,000.
On June 12th, 2021,
Sergeant Dougherty unsuccessfully attempted to break
as he approached the red light at Michigan in Pershing.
Plaintiff Wade had the right of way
and was driving at 25 to 30 miles per hour.
Sergeant Doherty was traveling at approximately
55 miles per hour.
Prior to the accident, the front of Sergeant Doherty's car
hit plaintiff Wade's car.
Plaintiff Wade was diagnosed with shoulder
and spinal f factories
and underwent surgery where hardware was implanted.
Plaintiff wait is a cashier at Aldi
and could not work for nine weeks.
Currently, plaintiff Wade can do her job
but has difficulty lifting her arm
and still experiences pain.
Plaintiff Wade has a eight inch scar on her arm,
11 month old plaintiff, Jada Dior.
Hamilton was transported to the hospital
after the accident examined
and released between medical bills and lost wages.
There's a total of 235,000 in economic
damages in the record.
The Department of Law therefore recommends settlements in
the amount of $445,000.
That is $430,000 for the mother, plaintiff,
Wade, and $15,000
for the minor plaintiff Hamilton.
Thank you Ms. Casey.
Uh, any questions for members of the committee?
Seeing that there are no questions, can I get a motion
to recommend approval of item number one B?
So moved by Alderman LaSpada Recommending Do pass.
All those in favor signify by saying Aye.
Opposed in the opinion of the chairs, the ayes have it
and the do pass recommendation will report it out at the
next city Council meeting.
Um, item number one C is Eddie Banks versus the City
of Chicago versus John Tinker in the amount
of 1.75 million.
Uh, that will also be reported out by Margaret Menal Casey.
This case involves a police pursuit in which a innocent
civilian's car was struck by a fleeing offender
fleeing from officer to Chuck Eddie Banks.
The plaintiff suffered a broken pelvis and ribs
and hematomas that required two abdominal surgeries
as a result of the accident.
Mr. Banks claims that officer to Chuck's willful
and wanton pursuit led to his injuries.
The Department of Law recommends settlement in the amount
of 1.75 million.
On July 5th, 2018, officer
to Chuck conducted a traffic stop on a Dodge Charger
that failed to stop for a red light.
John Tinker, who was driving the car, pulled over initially
and then proceeded to flee from the traffic stop.
About one mile
and less than two minutes passed
between offender tinker fleeing the traffic
stop and the accident.
Finally, at the intersection of 83rd
and Stony, the charger struck a car occupied Bay Eddie Banks
and innocent civilian Mr. Banks alleges
that the officers willfully
and wantonly pursued the charger in violation
of the general orders offender Tinker was charged
and convicted of a felony stemming from this incident
and is a named defendant.
In this lawsuit, Eddie Banks was diagnosed with
fractured ribs and a fractured pelvis.
His abdominal cavity was surgically open
to treat active bleeding and kept open for four days.
Then he had a second surgery to close his abdomen.
He received inpatient care for one month.
Mr. Banks claims ongoing pain
and has multiple surgical scars,
including a large wide scar from his pectorals to
below his belly button.
Mr. Banks claims a total of $1.1 million in medical bills.
The plaintiffs will argue
that the officers violated the Chicago Police Department
general orders by failing to terminate a pursuit.
After offender tinker violated two stop signs, failing
to notify OEMC, failing to obtain supervisor approval to,
uh, pursue failing to activate their lights and sirens
and failing to preserve in-car camera.
If the city is found liable for the pursuit,
the jury will likely apportion fault between the city
and offender tinker.
However, under Illinois law, a party found responsible
for any percentage of fault is responsible for all
of plaintiff's medical bills.
The medical bills in this matter are valued at approximately
$1.1 million.
Therefore, the Department
of Law recommends settlement in the amount
of $1.75 million in this matter.
Thank you. Uh, Ms. Casey, uh,
c we have a question from Alderman Lopez.
Thank you, Madam Chairman and good morning.
Members of the committee, um, when we speak
to apportionment, that means if the City of Chicago and Mr.
Tinker are found guilty, correct?
Yes. In order for there to be, um, an apportionment
of fault, um, the jury would have to find both the City
of Chicago and fleeing offender tinker liable for, um,
the injuries caused to Mr. Banks.
And what is the description of Mr.
Tinker's, um, culpability in this matter in, in terms
of the damages that they're seeking?
Sure. So in terms of the analysis and
and recommendation that's being made here, that analysis
and recommendation is being made based on, um,
what's called joint
and several liability law in the state of Illinois.
And under our joint
and several liability law, it holds
that if a party is found even 1% responsible
for, um, an accident
or an injury, um, then
that party would be on the hook for all of economic damages.
And economic damages include medical bills and lost wages.
In this case, we don't have any lost wages,
however, we do have, um, one evidence
of $1.1 million in medical bills.
So with the parties being presumably potentially found
guilty, uh, with more than 1%,
how do they define who's at what percentage?
And is the settlement reflective of that?
Yes, so it would really be, um, within the hands
of the jury to apportion fault.
Um, some things that would be considered in terms
of apportioning fault is what role, um, each actor,
and of course, like you said,
hypothetically, if the city and Mr.
Tinker were found guilty,
but what role each actor played in the injuries that were,
um, caused to Mr. Banks in terms
of the settlements in this case, the $1.75 million, um,
is that request is to be paid by the city of Chicago.
The reason why that request is being made is
because if we were to go to trial, um, we were found guilty,
um, or liable, we would be on the hook for, um, at least
that 1.1.
Um, and there was an asset check
that was performed on fleeing offender.
John Tinker. Um, the asset check, unsurprisingly,
considering the fact that, um,
he is a three time convicted felon, was
that he had no assets.
Um, so the recommendation is to settle based on, um,
the risk of going to trial
and the knowledge that if we were to proceed to trial
and the jury were to apportion fault,
and the city did attempt to collect from, um, Mr.
Tinker that there are no assets
At this time.
Um, yeah, at this time the check revealed
that he does not have any assets.
So what do we,
what is the department's policy then when we are clearly
settling and covering a hundred percent liability, uh,
liability at this point even for the second defendant to,
in the future, try to get any, uh,
funding back from this individual?
Do we place liens on against them?
What is our policy in that regard?
Sure. So the policy
regarding making settlements when there are another,
a actors that are, um, involved in litigation, um,
other actors that may have been involved in, um, injuries
caused to the plaintiff is to conduct an asset check,
see if there are any assets that, um, can be garnished
or any assets that the Department of Law can attempt to, um,
recover from the fleeing offender.
In this case, that check was done in terms
of any potential future assets that the city of Chicago
could attempt to, um, recover from Mr.
Tinker. I will answer that question
through the chair Alderman.
Okay. I will say Madam Chairman, that
I believed in this situation, um, that
as was described, the police did not follow and u
and under follow pro protocols and an
and un, excuse me, in any other situation,
I would've gladly voted yes to this.
But I think that when we have,
and as we've seen in the past
where other people are also implicated
and we make no effort to recoup our costs,
when we are simply settling, we're sending a message,
a very bad message to criminals
that even if they are caught, we will cover.
Um, so I would like to be recorded
as voting no on this item. Thank you.
And, Uh, thank you.
Uh, you wouldn't finish up your answer to him.
And Vice Chair Conway has a question.
And if I may just state for the record.
Um, in terms of efforts that have been made to attempt
to recover from, um, Mr.
Tinker, there was an asset check that was conducted of Mr.
Tinker. It revealed that Mr.
Tinker did not have any, um, assets to, to recover.
Um, and the recommendation in this case is made, um, as
me, um, a fiduciary of the city of Chicago, um, a steward
of our taxpayer dollars that this settlement is made to,
uh, mitigate any risks to the city
of Chicago. Thank you, chair.
Thank you. Vice Chair Conway.
Yeah, I mean, a a a common refrain you often hear is
that the police can't chase anyone.
And what, what this case shows as many have is that
the law for us is just terrible when it comes to, comes
to police chases and, and li
and the liability we face on that.
And I mention that
because we had hearings in multiple committees,
committees this week about perhaps
how technology can help in these efforts.
So I think this case among others, illustrates
how it's imperative that we look to that technology
and how it can help us with regard to, to police chases.
So we don't face, uh, cases like this, but as Ms.
Mendenhall Casey said, the law for us is, uh, is what it is.
And so I, I support this, this, uh, settlement.
And if there's no other questions, uh, move to pass.
Okay. Thank you. Um, al, the motion made by Alderman
Vice Chair Conway recommending Do pass.
All those in favor signify by saying Aye. Opposed?
And the opinion of chair, the ayes have it,
and the DO pass recommendation will report it out at the
October 9th City council meeting.
Thank you, Carolyn, and thank you Margaret. Thank you Chair.
I wanna acknowledge for the finance meeting, alderman Ccho,
Lopez, Burnett, and Lee, um, have joined us
and will be counted towards quorum.
Uh, Brian, if you can remove this stuff up here
and we'll move to item two and three.
The Department of Finance, uh, will pre,
will present items two and three together,
however, the committee will vote on each item separately.
Item two is an ordinance concerning the issuance
of the city's second lien wastewater Transmission Revenue
Bonds Project and refunding series 2024 B
and three is an ordinance concerning the refunding
of the general obligation sales tax securitization corporate
bond series 2024.
There is a substitute, uh, go, uh,
STSC bond ordinance, which was prepared
and sent electronically to everyone.
And can I get a motion to accept the, uh,
substitute ordinance motion made by Alderman Mosley?
All those in favor signify by saying Aye.
Opposed in the opinion of the chair.
The ayes have it, and the substitute ordinance is now
before the committee and will be explained
by the department.
Brendan White is representing the, uh, finance department
and he will be represented today.
Good morning.
Good morning committee. Thank you, chair.
Um, so before I introduce these two ordinances
and plans of finance, I just wanted
to give a brief overview on, uh, refinancing the city debt
and, um, how we make the decision to, uh,
actually put together one of these refundings on
what we're thinking about when we do so.
So a lot of the debt that city issues carries an option, uh,
that we hold to refinance it, uh,
after 10 years sort of, oh, sorry.
Soft voice. Sorry about that. Thank you.
Okay. Um, so most of the debt
that the city's city issues has a option to refinance
after 10 years, sort of similar to how you might
refinance from mortgage, uh, after a certain period of time.
So most of the refundings
that we are looking at here have, um,
call options on January 1st, 2025,
that we're looking to take advantage of.
Um, the city does have a debt policy, uh, that stipulates
that, uh, refinancings, uh,
are a good deal if the present value savings
of the given refinancing are greater than 3%
of the principle that is being refinanced.
So both transactions we're presenting here have savings
above 10% and will generate new cash flow savings in every
year for the sewer fund and the general fund respectively.
Um, in addition to this sort of normal refinancing
of callable debt, the general obligation or geo
and the sales tax securitization corporation,
STSC bond refinancing also contemplates the use of a tender.
Um, a tender is when the city makes an offer on the open
market to purchase and then cancel its own debt.
Um, this purchase is funded by the sale of new bonds
and acts similarly to normal refinancing except
with more unknowns ahead of time about
how many people will agree to sell their bonds to the city.
When we are attempting to refinance bonds
that have an optional call, we already know ahead of time,
uh, uh, how many bonds are available to be called,
and there isn't really any variables there.
But when we look to do a tender, we don't know ahead of time
how many people are going to agree to, um,
uh, participate in the tender.
So that's why there's a little bit
of room here in the authorization
that we'll discuss later when I get
to the G-O-S-T-S-C uh, refunding.
So for background for the sewer transaction,
there is approximately 152 million
of outstanding wastewater transmission revenue bonds
that can be refinanced on January 1st, 2025.
Um, under the current market conditions
that we're looking at right now,
the refinancing will generate approximately 17 point a half
million of net present value savings, which is equal
to about 11.5% of the refinanced principle.
Um, this will amount to just over 1.6 million in annual cash
flow savings for the sewer fund in budget years 2026
through 2039.
Uh, to lead this team, we, uh, would like
to appoint Cabrera Capital markets to, uh,
as senior manager, um, that will bring the Hispanic
participation in the underwriting syndicate to 50%
with another 26.3% given to African American firms,
8.8% to women-owned firms,
and then 15% to non-minority firms
for the advisory and legal team.
Um, the 52.9% of the advisory
and legal team will be, uh, conducted
by African-American firms with a quarter of the
business being done by women-owned firms with, uh,
non-minority firms accounting for 21.8% of the total fees.
Um, the financing timetable for this is we would look
to price this transaction sometime in mid November
after the sort of market has digested the election results,
and we had looked to close
before the end of the year to take advantage
of the January 1st, 2025, um,
call date on these outstanding bonds.
Uh, so that is all I have
to say right now about the sewer transaction.
Um, moving on to the sales tax securitization
and general obligation refunding, I thought I'd begin
with a little bit of background about the sales tax
securitization corporation.
Excuse me. Um, before you do that Yeah.
Can you explain the substitute ordinance first? Yes.
And then Go into the, uh, securitization.
Yes. So the, the ordinance authorizing the refinancing
that we're planning for the GEO
and STSC originally was written with broad language to allow
for the defining the purpose of the bonds to include, um,
uh, uh, working capital of the city.
Um, the whereas clause that defines the purposes
of bonds was then amended in the substitute ordinance
to limit the purpose of the bonds solely to the refunding
and tender that we're contemplating for savings.
So there is nothing in the way that this bond, uh,
ordinance is written that would allow us to use the proceeds
of these bonds for anything other than
refinancing refunding for savings.
Um, the, uh, to take a step back
and just sort of explain the background
of the sales tax Securitization corporation a little bit,
the STSC was a, is a special purpose instrumentality
of the city that was established in 2017
as a refinancing vehicle, um,
because, uh, it's a legal setup
where sales tax revenues are received by a trustee
and set aside for debt service
before being passed along to the city.
Um, because of this legal structure,
the STSC has higher ratings than the city's general
obligation credit
and is able to, uh,
receive more favorable borrowing rates in the,
uh, municipal market.
So since 2017, we've been using the STAC
as a vehicle to refund, uh,
expensive general obligation debt
with less expensive STSE debt
and realize savings for the corporate fund.
So for this refinancing, there is approximately $850 million
of outstanding general obligation bonds
that can be called on January 1st, 2025.
Um, and this transaction would refinance approximately
980 million of general obligation bonds with a mix of STSC
and general obligation bonds.
Um, the city also intends to use a tender process
to repurchase to purchase up to an additional 500 million
of GEO and STSC bonds to refinance those bonds.
For savings, we are requesting authorization up
to 1.5 billion for this refinancing to allow the city
to refund the callable bonds and execute the tender.
Um, and that room between the sort of like base case of
what we know we want to refund, that's currently callable.
And the 1.5 billion in authorization
that we're requesting is due to uncertainties
with the ultimate size of the tender.
Um, under current market conditions,
this refinancing could generate approximately 110 million
of net present value savings, which is equal to about 11%
of the refinanced, uh, refinanced par.
Um, approximately 90 million
of this refinancing savings would be in a fiscal year 2024,
and another 35 million of refinancing savings would land in,
uh, budget year 2025.
Um, this transaction, uh, originally
was included in the 2024 budget a year ago.
We estimated that we'd be able to, um, do this transaction
and realize approximately $70 million worth of savings.
Um, so these expected 2024 budget year savings are
exceeding what we planned for last year when we
included $70 million
of refunding savings in the 2024 budget.
Um, so Department of Finances introducing this ordinance
with the intent of pricing the bonds
before the November election, um, for,
to leave this transaction, we selected RBC capital markets.
Um, the underwriting syndicate, uh, has
participation from 20%, uh, Hispanic owned firms
and 17% African American owned firms
with women owned firms making up 4.3%
of the total underwriting syndicate.
And the, uh, advisory
and legal team, uh, has representation from 7%
Hispanic firms, 19.4% women owned firms,
and 17.4% African American firms.
Um, as I mentioned earlier, we would like
to kick off this transaction soon
and post the preliminary official statement soon
after council approval with the goal of pricing
before the November election.
So we would target the week of October 21st with the intent
of closing, um,
and locking in the savings the week of November 11th.
Uh, thank you Brendan.
We've also been joined
by Chief Financial Officer Jill Jaworski.
Um, and I wanna acknowledge, uh, alderman Ramirez
and Alderman Curtis have joined us for quorum.
Uh, we have questions for members of the committee,
and we'll start with Alderman Wapac.
Thanks, chairman Mandell.
Uh, Brendan, thanks for the presentation
and thanks for giving the quick briefing the other day.
Um, starting out with the wastewater, um, according
to the document you passed around, uh, you know, we,
we got this, uh, first I wanna say we got this document at
about 10 15 this morning,
and I know there was some significant changes to it.
Um, unfortunately, you know, it came, uh,
I think at a time when we should have had this in hand, uh,
several days ago,
but we'll make due with the time
that we have here this morning.
Um, so according to this document, we can expect savings
above 10%, um, on page one
point that out there.
Um, so if the, uh,
if the yields for our wastewater bonds have been 3.25,
depending on majority dates,
where are the details on these savings
and where do you, uh, get the expectations expectation
that there's going to be savings above 10% in detail?
Yeah, so
Because we don't have that detail, so I'm just curious as
to why it's not been provided
and also what the, what the outcome is there.
Yeah, so the bonds that we're targeting were originally
issued in 2008, um,
and then they were issued in 2008 as variable rate bonds.
And then they were converted to fixed rate bonds in 2015.
And at the PO time that they were, um, converted
to fixed rate bonds, they were, um, outfitted
with the 10 year par call.
So were able to call those bonds at par on January 1st.
The, uh, interest rate that those bonds are carrying, um,
that we're paying right now is 5%.
And the current, uh, all in true interest cost
of these bonds is about 3.43%.
Um, and part of that is, um,
when we originally issued these bonds in 2015, the,
uh, bonds maturing in 2039
were 25 year bonds, and now they're 15 year bonds.
So we're sort of sliding down the yield curve
and able to get savings from, um,
both the city's credit is stronger than it was in 2015.
And, um, the, just sliding down the yield curve, we're able
to realize, uh, annual savings there.
So this is keeping within this refunding is keeping within
the footprint and we're refunding 5% bonds with, uh,
true interest cost, uh, 3.43%.
And so, um,
I'm sorry, what'd you say? That
4.3% you said
3.43%, three point 0.43 current, uh, market conditions so
that that could change, move around a little bit
by the time we actually come to price.
But we've done some sensitivity analysis
and we're pretty confident that we would be able to, uh,
realize positive cash flow savings well in excess of the 3%,
um, debt policy that threshold.
Sure. Let me just add a little bit more for clarity.
I know you mentioned that, you know,
the bonds are outstanding.
The current yields are around three and a quarter percent.
When we do a refunding, one thing to keep in mind is
what we are paying at the city is the coupon on the bonds,
the 5% coupon,
those bonds can be trading in the market at three and a quarter.
That's what investors are trading them the yield.
So when those bonds trade, they're trading at a price
that's higher than par, which drives the yield down.
We would like to be paying three and a quarter.
Also, that's why we're issuing the refunding bonds.
So we're gonna sell new bonds, take out those existing ones
that we are paying 5% on,
and we'll probably actually sell new ones with a 5% coupon,
but we'll sell them at a much higher price.
We won't need to sell as many bonds
because they trade at that lower coupon.
And that's how we're gonna generate the savings.
So we're not paying what they're trading on, we're paying
what we issue them at,
and now we're taking advantage of the call option to get rid
of these and be able to actually have bonds
that we sell at those current market yields.
Um, could you provide that information through the chair
to the, uh, committee if you could?
Thank you. And then, um, again, on the,
on the sewer wastewater here.
So RBC is the senior manager
and we're paying about, um, $5 on a bond for,
um, I think, lemme see if I can find the page.
I think it was page eight.
Page eight, page eight.
So we're paying about, um, an estimate, well,
on the expected par for each one, um,
on the 950 million,
we're paying them about $5 on a bond.
And when you look at other cities
and what they have done, we're talking more like $2 state
of Illinois, three and a quarter.
So why are we paying almost double
or more than what other cities and states are doing?
The range of what we pay depends
on the maturity of the bond.
So the longer maturities, we're paying a higher amount.
Um, there's a large, the large part
of the reason why we pay the levels we do is
because we're looking for the underwriting firms
to price the bonds aggressively
and actually underwrite the bonds.
When you pay $2 a bond at that level,
no underwriting firm is gonna take any risk when they price
your bonds, meaning they're gonna sell them at a level
where they are a hundred sure percent sure they're gonna
clear the market, so they're gonna sell 'em cheaper.
They don't have enough room in that to take risk
or potential to lose money.
Um, when you pay a higher take down, they,
you can push the underwriters a lot harder, uh,
and they're much more willing to take risk at those levels.
So, you know, we look at it sort of as, you know,
are we gonna pay take down?
Are we gonna pay yield? And you know,
we've certainly believe that paying that type of take down
has been beneficial to us
and we're getting better yields in
the marketplace by doing it.
Well, the only thing I have a problem with that is
that you're asking for pricing on November 19th,
which is just around the corner.
So essentially that's only a few weeks window that
whether they were getting $2 or a dollar 99
or three 30 that the state did,
or $5 that we're getting,
what difference does it make if it's that short of a window?
I mean, they're gonna have to price aggressively either way.
Yeah. So why are we paying double
The time between now
and then is not, uh,
is not reflective of how we pay them?
Um, when they start marketing the bonds?
We'll be we, when we issue the preliminary statement.
So, uh, right now they're working with us on
structuring the bonds, running numbers, doing a lot
of support, but they're not actually marketing the bonds yet
and they can't because we don't have the
disclosure document out yet.
Sure, sure. But that window is still pretty tight.
That's, that's my point that I don't see the difference
between being aggressive with, again, $2 versus $5,
but that's a, I guess a different point.
Uh, chairwoman, I, I had other questions on the go.
Do you want me to wait for those and let others pop
In? No, ask, ask them together.
I would like to say that the,
uh, wastewater, all
of this information was sent out on Monday,
and you know, there's been some changes in based on feedback
that we heard from members of the committee
on the Geo's STSC bond,
which required a substitute ordinance.
Yeah. Which we had to get out.
I think we got it out at nine 15 this morning.
The changes were made yesterday.
Okay. So I must have missed all the
maturity dates on the other
You did, but that's Okay.
That was all in the document. Yes.
So I was supposed to do all the math on that. That's fine.
Uh, let me jump over to the geo bonds.
Um, so we know you've already given an explanation on
the 1.5 billion.
Um, if we're refining up to 1 billion
or the, actually the 980 million, um,
we're borrowing 1.5 billion,
what is the extra 520 million in borrowing for
Sure. So in addition
to the refunding, um, we're gonna, uh,
do what's called the tender transaction as well,
which is we're gonna offer to buy, um,
some outstanding bonds that are in the market.
So we're looking at, we've targeted at this point
approximately $1.2 billion in outstanding bonds
that constitute the 2017 Go Bonds, the 2018,
uh, A-S-T-S-C bonds and, excuse me, the 2017 A-S-T-S-C
and the 2018 A-S-T-S-C bonds are our primarily the series
that we are focused on.
We might offer to buy some of the,
some bonds from our other series,
but those are the primary ones that we're focused on.
Um, in a tender offer, um, what we're doing is offering
to buy the bonds because we have not
yet reached the call date.
And so, for instance, when you think about like a 2017 bond,
it's gonna be probably callable in 2007.
You know, an investor today looks at that bond
and says in 2017, I'm gonna get that,
that bond's gonna get called
and they're gonna pay me par,
which is 100 for the value of the bond.
We can offer a little bit more than that today,
and some investors will be happy
to like tender their bonds and let us buy them.
We, in the meanwhile, benefit from buying that bond.
We do a refunding bond to fund the purchase,
and now we've got bonds
that are sold in today's market at lower yields,
then waiting until we get to the call date for those bonds
and paying the higher coupon until then.
So it's a alternative way to do a refunding.
The the reason, um, we added that extra 500 million, is
that the sort of maximum amount we think we could use?
Um, it's probably more likely just based on history of
what we've seen with people participating in the tenders
that it'll be lower than that.
Um, you know, we ran numbers assuming about a a 200
and about 20% participation outta there, about 240 million
in bonds being tendered.
And that would generate about 40 million
more in additional savings.
So that 500 million theirs was to allow us to capture
that additional opportunity.
Okay. Um,
I see you thinking Alderman Wabe,
you want me to come back to you?
Sure. All right. Thanks Alderman. Uh, vice Chair Conway
Per, uh, first off, Madam Chairwoman and,
and I want to commend you and, and the,
and, uh, Madam, CFO for, for working through some
of the concerns we had in the language on the use
of operational expenses.
I know that was something that a lot of us had, uh,
concerns about as previously discussed
and just wanted to commend you all for, for making that,
that change in there and for your leadership on that.
Um, couple questions I have actually on, I'll start
with one on page seven.
I see there
that it says under the fifth bullet current market
conditions, the refi could generate approximately
110 million of NPV savings.
But the bullet right below those numbers add up
to 125 million.
What's, what am I missing there?
Uh, Or is that a typo?
Those bolded numbers are sort of actual cashflow savings
and then the PV calculation includes
a discount rate for Got it.
For future years. So that, that's the only difference there.
Understood. But, but
For the purposes of the debt policy, the sort
of operative, um, metric
that we look at is net PV savings. And
And is the one 10 is that,
is the discount rate you're using?
Just the yield on the bonds, yeah. Okay.
Do on the STSC bonds,
I recognize the savings comes from
essentially collateralizing the go bonds that,
that you recall.
Obviously the Go bonds are not collateralized
and the STSC bonds would be collateralized by the,
by the sales tax revenue.
Um, so I get the savings there,
but where does the savings come from on the
STSC bonds that were previously issued for the tender?
Is it interest rate savings
or is there something else going on there?
It's just interest rate savings.
Um, you know, again, it's looking at bonds
that primarily have 5% coupons that if we sold them today,
we'd have a lower yield.
Okay. So it's, it's the market
That that makes that, and,
and the tender will be for STSC bonds, it's not
for additional geo bonds.
We're going to tender for some geo bonds and, uh,
but mostly STSC, but we'll put geo bonds in the mix as well.
Okay, great. Yeah, we get much more savings when we
issue STSC to refund go.
Yeah. But there's still savings available to issue STSC to,
you know, do a, do the tender transaction,
which is essentially refunding of
No, that, that, that makes, that makes total sense.
Um, other question is, um,
perhaps could ask about, about your choice of RBC
as the lead book runner here.
Um, we have, you know,
JP Morgan Chase is the largest private employer in the city
with like 14, 14 ish thousand employees.
Um, if we wanted somebody with Canadian Flair Bank
of Montreal, Harris has about 6,000 employees
here in here in Chicago.
And then, um, the choice seemed especially odd based on the
marketing page that was sent out that indicates that
RBC has 123 employees in Chicago
and they show their list of tombstones the, um,
balance sheet commitments.
You know, they sort of, uh, advertised
that the biggest one they did here was 225 million.
The sum total of those is less than,
looks like less than 500 million.
And yet here they are on a lead book runner
on a debt authorization of 1.5 billion,
a se a potentially a $750 million, um,
$750 million underwriting.
So I'd be curious on how you, how you defend the choice
of RBC versus versus other banks.
Sure, absolutely. And I, you know,
I appreciate the question because, you know, we use a lot
of firms and we, we pick 'em for a lot of different reasons,
but we have a lot of confidence in all the firms
that we put on our transactions.
Um, let me just address, uh,
first off your comment about JP Morgan.
Um, a hundred percent agree that, you know,
JP Morgan is a really excellent investment bank.
They've been a great partner to the city, uh, to CPS,
to many of the agencies, um, many of our sister agencies,
and they are running the upcoming, uh, airport refunding.
Uh, we were, uh, on the phone with them this morning, uh,
with the rating agencies getting prepared to do that deal.
We're expecting at this point, we will probably price
that deal on October 17th,
and that should be about $1.6 billion.
So we are working with them on a,
on a large refunding transaction.
Um, and, uh, looking forward
to really good execution on that.
Um, so RBC is one of the largest firms, uh, in the business.
Um, they are here today and,
and they could answer their question on their ranking,
but they are one of the top ranked firms, um,
in the investment banking business.
Um, they've done some very significant business
with the city in the past and including working on, um, one
of, uh, the last, uh, go STSC refunding that we did,
which was, I don't remember the paramount,
but it was quite large.
Um, there's two things that we really, um,
felt like they brought to the table on that last transaction
that led us to choosing them again on another G-O-S-T-S-C.
Um, one is the quality
of their banking work is really outstanding.
When we are taking, uh,
when these bonds are our really our most complex types
of refundings because we're moving bonds from one credit
to another, uh,
the STSC is very different from the general obligation
and that we have to worry about an additional bonds test.
And so we can't just necessarily take a refunding bond
and put it in the exact same spot, uh, the, as
where the refunded bonds was,
because you end up with all kind of lumpy debt service.
And what we need is it to be relatively steady.
So we have capacity between what our debt services
and what our STSC revenues are
and what our coverage requirement is allowing us to continue
as issuing debt in the future.
And so there's an optimization of which geo bonds do I use
to refund go, which STSC to refund go?
Where exactly do I place those bonds?
Um, to try to do that manually is extremely difficult.
Um, they built an optimization model, um, that they used,
uh, and it was really excellent
and helped tremendously in our ability
to model many different scenarios
and really come out with what was the best one.
So the technical expertise that they're bringing,
the modeling is absolutely top-notch.
One of the, um, uh, they're one
of the top firms we work with in that area.
Um, the other thing was that, uh, their underwriter,
their lead underwriter on the transaction price, the bonds
very aggressively.
She got us excellent pricing in the market.
We were extremely pleased with it.
Um, and so overall we felt from the,
the running the numbers, assisting with developing the deal
and then actually selling the bonds,
they just did an incredible job.
And for that reason, we've chosen to use them again.
That, that's great. And as a, as a former,
as a recovering banker, uh, certainly, uh, who,
who did a lot of bond issuance, uh, hearing about the, um,
uh, tight pricing on this, uh,
warms my heart as a recovering banker.
So thank you. Thank you, uh, madam again,
thank you madam chairwoman for your leadership on,
on the redline document this morning.
And thank you both for the explanation.
Thank you, alderman. You know what,
let me add one more thing that I just also,
you mentioned BMO, and we did used to work with BMO,
but they actually don't do union
underwriting anymore. There you go.
That's a perfectly great explanation. Thank you.
All right. Uh, thank you Vice Chair Conway.
Uh, alderman Irvin will be added to the finance committee,
uh, quorum.
Can I get a motion to allow Alderman Martin
to participate remotely under provisions of Rule 59?
So moved by Alderman Irvin.
All those in favor signify by saying Aye.
Opposed in the opinion of the chair. The ayes have it.
Alderman Martin, you're in the meeting. Uh, alderman Viegas.
Thank you. Uh, thank you Madam Chair.
The, I think the $500 million question was answered,
but you answered like,
so it was 9 82 plus you wanted about 240 million,
which would be about 1.25. So then
That's what we're expecting.
We're likely to get, we'd actually like to get,
we'd like to get more than that.
Um, and that's why we put the additional 500 million
of authorization as we are hoping
to have a better participation in the tender.
We wanna be able to buy as many bonds as possible.
But with a tender, you're, you're paying a little premium
to get those bonds back early.
The more we pay, the more bonds we'd get,
but we wanna keep it balanced.
So the estimation at this point is with
what we're gonna offer, we'll probably get
around 240 million.
Um, that's about 20% of the bonds outstanding.
Uh, but we are hoping that we get more than that.
Um, What
Specific debt issuances will be be retired?
Could you speak into
The mic again? Sorry. Do you, I'm
sorry, what specific debt
issuances will be retired.
Yeah. Can you walk through on the 20, uh,
on the refunding bonds?
Yeah. So the, the bonds that we're looking to refund are,
uh, they're nine of them, uh,
two geo, that's
Why I'm making him do the list. Yeah.
Geo 2002 BG 2003 BG 2005
DG 2007 EG 2007 FG
2007 GG 2014 A, G 2015 A
and G 2015 B.
Um, and then the tender bonds that we're targeting is, uh,
GEO 2017 A-S-T-S-C 2017 A
and STSC 2018 A
Gotcha. And,
um, what's their effective yield
interest expense on that?
Um, I have that here. One sec.
Just so I'm clear, we're doing the, we're we're doing this
because the 10 year authorization to allow us
to, to refinance, right?
Yes. Mm-Hmm. So, um, while you're looking for
that information, um, is it possible through the chair
to provide, you know, a list of all bonds
and debt that is outstanding that
are getting near that 10 year period?
I'm curious to see what that looks like. Um,
Yeah, so the, the average coupon on the bonds
that we are looking to refund is
4.998%, so pretty close to 5%,
but there are some lower coupon bonds in there
that are bringing down the average.
And then the true interest cost on our, uh, bonds
that we'd look to issue to take out those bonds is three,
uh, 3.64%.
We can get that information for you through the chair.
Um, the listing of all the outstanding bonds,
it's on page 32 and 33 of the budget forecast.
But you want to know also the what's callable
within 10 years, correct?
Yeah, yeah, no
Problem. Yes, we can provide
that
and, um, I think we even have it in a, a,
uh, a graphic too. Okay,
Cool. Luck for both.
Thank you. Thank you, Madam Chair.
Thank you. Alderman. Viegas, alderman, osha.
Thank you Chairman. Thank you to the finance team
for presenting much of this information.
Some of my questions have been answered.
Um, my biggest concern is our, uh, our credit rating
is on very unstable ground
as if we're in an earthquake zone.
Now we have this issue with our cargo public schools,
and then we're talking about asking us
to approve this 1.5 billion.
Are we concerned at all about what the,
this could do to our rating?
This type of transaction is not gonna be negative
to our rating because we are selling bonds
to take out all bonds.
So this is not adding to our debt.
We are gonna, we are gonna have actually less debt
after the transaction than we have now.
But aren't we taking on more risk?
No. We're selling fixed rate bonds, which will, uh,
which is the same character of the bonds we're taking out.
So we're not selling variable rate bonds
or anything like that, that has more risk than the bonds
that we're taking out.
It's just that
because the, the,
the interest rates are lower in the market today, instead
of paying 5% on the old bonds,
remember we don't pay the yield and that's trading.
We pay what's actually the coupon when we sell new bonds.
We can sell those at the lower yield,
and that's how we generate savings.
So we've got 5% coupon bonds,
and we're gonna be selling them depending on
what maturity there are, um, you know, for three, three
and a half, four, you know, foreign and change.
And so that lower that difference between
that interest rates where we're gonna save money
And we have to act on this quickly,
Well, we do need to act on it before the end of the year.
Um, you know, one of the, one of the, um, you know,
we assumed last year, uh, at this time, uh,
teeny bit later, uh, when the budget was being approved,
that we were gonna complete this transaction in, uh,
calendar year 24, uh,
to generate about 70 million in savings.
Um, that's sort of part of our expected budget.
So if we don't do the transaction at all, um,
we'll have 70 million, um, uh, added
to our budget deficit in essence.
Now we're expecting to get more than that 70 million,
which would be helpful because that will reduce, um,
the budget deficit for this year.
But we would, uh, we'd add
to the deficit if we didn't execute the transaction.
I feel like I still have more questions.
I I don't know where some of my colleagues are.
Um, is this something we need
to act on or
Say that again?
I feel like I still have some more questions
and still some uncertainty here.
Uh, is, is there any way
that we could move this on to the next meeting?
Do we have to act on this next Wednesday?
I think that we should,
because we need to make sure that they,
we give them enough time to get out into the market
to, to do this deal.
We have to do it before January.
Nothing further. Thank you.
Excuse me. Uh, is this a, a point
of information Vice mayor? No,
That's okay. Okay. You
want me to add you to the
No, just was gonna say time is money, that's all.
Yes, I know. Time is money.
Um, alderman Lopez,
Thank you chairman and good afternoon.
Members of the committee. Um, one, thank you
for incorporating the concerns as, uh,
my colleague Alderman Conway said about, uh,
operating expenses and cashflow being eliminated.
Uh, but I have a question. Um, two things.
One, in addition, uh, to what Alderman Viegas asked for
through the chair, does page 32 in the budget forecast
include the entire schedule of all outstanding
and issued bonds up to this point?
And if not, if we can have that provided through the chair?
If it's there, it's there. If not,
if we could have it, we'll,
We'll double check.
It should be, but we'll confirm.
Okay, thank you. Um, so I'm understanding this correctly.
Um, if we approve this ordinance
and move forward this year,
we're looking at 90 million in immediate savings
for the general obligation, the STSE bonds
and 1.6 million for the sewer bonds.
Is that correct?
Yeah, tho those are the annual cash flow savings.
So the sewer will have, right now we're structuring
as level cashflow savings, so $1.6 million in each year.
Um, and this geo, STSE refinancing would lower, um,
budget year debt service for 24 and 25,
and then hold all the future years, uh, steady.
So we're not be increasing debt service in future years.
So the, where would the 90 million go then?
That would essentially that's the, uh,
would lower the amount of money that we're having
to pay for a debt service.
So it's gonna go to the corporate fund.
So I'm, so we're clear
90 million less for our debt service.
What is our annual debt service right now?
Oh, I'd have to look up the total. I don't
Have the top of mind. Roughly, roughly,
I think the, the, the corporate fund contribution,
so aside from the levy was about
$287 million, I think.
Um, but that number I think also includes the 70 million in
savings that we, uh, assumed
that this transaction would get.
So without that,
it would be roughly $70 million more is
what is pledged already?
That's correct. So when we discussed the budget's
$280 million shortfall for this year, budget year 2024,
that incorporated a savings that had not yet
materialized, is that correct?
Yes. Incorporated the savings from this plan transaction.
So in essence, the 2024 deficit as
of right now, excluding the execution
of this ordinance is closer to $350 million?
Well, the deficit is calculated based on projections.
So if you were to try to take a point in time, it would be,
it wouldn't be, um, what is forecast,
because we also have lots of other taxes and, and fees
and other revenues coming in through the end of the year,
as well as other expenses going out.
So it's projected to include where we'll be at the end
of the year, and it is projected
to include this transaction.
So then minus the projection that we're going to do this,
the budget deficit is technically $70 million more than
what was proposed. I wanna, I'm I,
If you do not approve this transaction, yes.
The deficit will be 70 million higher,
70.
That's correct. Okay. I, I just wanna make sure that,
that we're discussing real numbers
because that means that there are projections
and assumptions being made about what we're doing that are,
are not really telling the entire
truth of where our deficit is.
Are there other projections based on debt scenarios such,
uh, as what we're presenting
that were included in that deficit?
Uh, no, there's nothing else based on debt. Okay.
Thank you. Um,
And, uh, uh, CFO,
those projections could change based on, uh, also
increase revenues we might capture between now
and the end of the year, is that,
Oh, yes. I mean
it, uh, differences in
revenues, differences, expenses.
So for instance, the deficit could grow if we have more
police over time than we are already projecting to have.
Um, so there's a lot of factors in there that, you know,
create that forecast,
Not notwithstanding
Any farther, the more accurate it is
Not notwithstanding any of those situations,
which I appreciate the chairman and,
and you both stating what we know
that those are projections based on
where we've seen the last three quarters,
where we're gonna end in the fourth quarter,
but to make a $70 million assumptions are pretty big
based on a legislative action that has not happened yet.
It is interesting to say the
Least. Well, it's based on the bucket,
So I will ask the next question if you don't mind. Excuse
Me.
Alderman Lopez, we're gonna let the CFO answer.
She did answer your Response.
She did answer and no, she did not.
She was getting ready, she was getting
ready to say something else.
So let her finish and then you can keep going.
Okay. The forecast is based on the budget
and the refunding savings are included in the budget
that was approved last year for this fiscal year.
This was already approved.
The savings was included in the budget.
That's not what I asked the savings. So the
Ordinance has not been Approved.
The savings, which are, wait, the savings which are
projected in the ordinance in my hand,
which has not been approved, was used to determine the size
of the projected deficit for this year?
Yes. All
The items in the budget were used
to project the deficit, including
This. Was, this used, was this unapproved
as
We've discussed? It
Was right, that, that would be my point.
That the unapproved ordinance by this body
was used to create a false
deficit projection
because this is not a reality yet, correct?
I don't believe that's correct,
because it was included in the budget
and the forecast is based on the budget.
The forecast is not based on a different set of assumptions.
It is based on what was passed in the budget.
Now, circumstances can change throughout the year
that will make that budget not be realized.
So this body could choose not to pass this ordinance
and we could not do the deal
and the savings would not be there,
and we would then have to, you know, have different results,
but we're following what was in the budget
and this was included in the budget.
So we're not making different assumptions about things
that were, that were not in the budget,
Just things that aren't legal as of yet.
Okay. Um, I wanna ask, with regards to
the cost per bonds that one
of my other colleagues brought up, um, is it legal
and within our authority to put a cap on,
uh, the fees per bonds in these deals?
Are you asking about council's authority? Yes.
I'm not a, I'm not an expert on
that. I don't, I do not know.
But you are an expert on issuing bonds, correct?
I am. So, because I'm trying to find
where in this ordinance that $5 figure comes from.
Can you point that out to me?
The $5 figure is, uh, one that we've been using
for a while, we think it's an appropriate level
of compensation that drives performance
and also reflects the credit quality of the city.
So I think some of my colleagues would disagree that
that's adequate,
especially when other cities get for half that price.
So where in the ordinance does it say that
that's where we're going to be paying that?
Um, I don't believe it says that in the ordinance.
Can you explain to me
how it's enumerated in the ordinance?
I don't, I don't believe it says that in the ordinance.
So then how do we come up with that figure
The CFO's office does,
And how do they come up with that figure?
The general factors I just described,
But there's nothing legislatively speaking in this sale,
which outlines everything under the sun.
That figure, because I, I've tried to look
through both the actual ordinance as well as the form
of the bond, uh, issuance,
and nothing states how we come up with that figure.
Is there something that I'm miss missing or not seeing?
Because I see the interest rate that we'll be paying,
the maturity date, things of that nature.
Um, but I don't see where we come up with,
It doesn't say the interest rate.
It's a maximum rate that we would not issue
if it was above that.
It's not the interest rate we'll be paying.
In fact, we won't issue the bonds if
it's anywhere near the interest rates.
It's listed in there because we were only issuing these
bonds to generate savings for the city.
When I said the interest rate, I mean the categories
of which, 'cause everything is blank as,
as I would expect it to be until we make the sale.
But the question is where is that the fee structure in this
for whom is handling these sales force?
Because somewhere in here the
Answer is not different from what I said.
It's an administrative Jim answer.
It's administrative operations.
Uh, is is the law department.
You want to, uh, opine on this, Mr. McDonald?
Yes. Thank you, chairman.
Uh, for the record, I am, uh, Jim McDonald.
I'm managing Deputy corporation counsel
in the law department.
So, sorry, Alder,
I wasn't sure which ordinance you're referring to.
That's there are restrictions in each one.
I, I, I am referring to the substitute,
the substitute ordinance
of this securitization bond ordinance
General obligation.
Yep. So if you look at
page 19, section two point
18 D as in David,
Hold on one second. Page
19. Yes.
Is that the bottom of that page?
Just to, I think we respond to the question you're asking.
The ordinance does not expressly limit the amount
of underwriter compensation per se.
What it does do is set a minimum purchase price
at which the city would be buying the bond
or that the city would be selling the bonds
to the underwriters.
And if you look at section two 18 D as in David,
page 19, at the bottom,
the ordinance authorizes the chief financial officer
to enter into a contract of purchase with the underwriters.
The underwriters will be purchasing the bonds from the city.
It says here, most of the way down on that page,
bonds sold pursuant to a contract of purchase shall be sold
at a price of not less than 85% of the principle amount
of the bonds being sold.
It's often what I've seen in practices.
It's often the case
that the underwriter discount is realized.
The underwriter compensation is realized through a discount.
And so the city is selling bonds at a hundred percent
and the underwriters pay us percentage less than that.
And that is where they achieve,
they can achieve their discount that way.
I defer to the chief financial officer on a transaction
by transaction basis, whether the bonds are sold
that way in a particular transaction
or there's a separate underwriter compensation fee
that's authorized as part of the cost of issuance.
The, for just to be clear as well, on the
wastewater revenue bonds, you will see
the same 85% minimum purchase price
on page seven of that ordinance.
So is there anything pre precluding the city of Council,
which is the one authorizing this sale,
to increase that percentage,
The city council can take this ordinance
and amend these parameters.
That would certainly be within the City Council's Authority.
Thank you.
So then, Madam Chairman?
Yes. Alderman Lopez.
I would move to amend on its face.
Section two, lay it on the table, dash 18 sub, uh, sub, uh,
section D 85%, replacing it
with 90% of the principal amount.
Alderman's spotter awo.
Motion to table that ordinance, that motion.
We have a motion to table
Then I roll. Call that please.
What that does. I'm not saying my,
my colleague was wrong. I just don't, excuse
Me.
She can't hear you. I can't hear you. Alderman Moore.
Oh, I'm sorry, chair. I apologize.
I'm saying I'm not, I don't, I don't know if this is up
for discussion based on the call for the motion now.
Um, it's just that I, not saying my colleague is wrong,
but I would like to hear from the C FFO on it to know,
understand the impact.
I just don't financially understand the impact.
He could be, right. She could have a point.
And I just know, gotta know which one to weigh.
I just haven't looked into it.
Uh, And I can't vote yay
or nay based on what I don't know.
Gonna depend on the size of the transaction, but,
and the cost related to it.
Whether that's gonna work
or not, I suspect under this transaction that
that wouldn't have a full impact.
But we'd have to go back and run the numbers. Sure.
All right. We have a motion to lay, uh, this on the table.
We're gonna take a roll call. Vice Chair Conway.
You don't wanna lay this on the table. Okay.
Alderman La Spotter.
Alderman Hopkins. Alderman Hall.
Alderman Hall. Alderman Mitchell.
No, it's a roll call. Alderman Harris.
Alderman Beal. Alderman Lee.
Alderman Ramirez. Alderman Quinn.
Alderman Lopez. Nope. Alderman Moore.
Alderman Curtis. Alderman O'Shea.
Alderman Mosley. Alderman Rodriguez.
Alderman Scott. Alderman. Seche Lopez.
Alderman Burnett. Alderman Irvin.
Alderman. Talia Farrell. Alderman Cardona.
Alderman Waba. Alderman Rodriguez Sanchez.
Aye. Alderman Ramirez. Rosa.
Yes. Alderman Viegas. Alderman Mitts.
Alderman Spto. Alderman Vasquez.
Alderman Riley. Alderman Knutson.
Alderman Martin Alderman Silverstein.
Vice Chair Conway. You voted Chairman Dowell votes. Yes.
Yes. Alderman Taylor is a yes. Ho. Hold on a second.
Hold on a second. Vice chair.
I mean, chairman Dowell is a yes. Uh, alderman Moore.
Alderman Burnett changed my vote to Yes. I was confused.
Okay. Alderman Ramirez is a yes.
Alderman Knutson, are you a Yes.
Okay.
Matt, Madam Chairman, we are in the middle of a vote.
So, so, so let me, uh, we're gonna take this vote over.
All right. Madam Chairman, we have a vote.
No we don't. 'cause I haven't called the vote. Um, you
Can't have a sec. You can't void off first.
I haven't finish the roll call. So I'm going stop it.
And we are going to explain the tabling
That is out of order, Maam. And
Then Madam Chairman, that is out of order.
Thank you for your, your
Comments. You are out of order. Madam
Chairman. I'm
Not out of order. Yes you are.
You already, you acknowledged a motion.
I have been acknowledged the vote.
I have not finished the vote. Excuse me. Um,
Disregard the mo the votes that have already happened.
We're gonna vote over
if you want to say there's no voting.
If you wanna Say you're in the middle of a vote.
If no, we're not in the middle of the vote.
'cause I have to stop it because this all of that happen.
Were we hallucinating? There was a vote.
Um, Mr. McDonald,
could you explain how
To vote The tabling, what it means?
Yes, Madam Chairman, the
This meeting is now officially in violation of the law
because you are stopping a vote midway.
That is illegal.
So first of all, I want to explain
that the vote is at my discretion
because we had not finished the roll call.
Um, I think there is confusion about
what you are laying on the table.
So I'm gonna ask you Alderman Lopez
to explain your lay on the table again
and we are gonna vote again.
Madam, Madam Chairman, I didn't lay anything on the table.
That would be my other colleague.
Okay. Alderman Lata, would you explain
what you're laying on the table?
Yes. This is a motion on my part to lay on the table.
Alderman Lopez's motion to amend the bond
or the bond refinancing ordinance that is in front of us.
I would like to be able to vote on
the full bond ordinance rather than amended, which is why
I am motioning to lay on the table the amendment
that we are being that's been put forward by Alderman Lopez
And Alderman Mitchell, you have a
point of information? Yes.
Yes. Okay.
Alderman Lopez,
and I'm not, I'm in the middle right now.
I think that Alderman Lopez is,
although how he does things, it's, it has,
it's worth the discussion.
And I don't think we should be put in a position without a
further discussion to vote on his or his.
So that's, that's why I think the confusion is
Okay. The motion
is not debatable. Okay. Okay. So
Thank you for doing That. Now
we're following the rules. So
What I want you to explain is what your
motion was so that people are clear on
what it is you're asking that we're laying on the table with
Respect. Madam Chairman,
that request is on
Order. You don't wanna do it, just say no,
I wanna follow the rules.
And I made a motion, which
I'm asking a colleague late on the table. Teacher
I'm asking, we're not to repeat your motion so
that people are clear on what you're asking for.
My motion is not on the table.
We will just go through the vote
Again. My motion is
not on the table.
Madam Chairman, I'm following the rules.
I am redoing the vote.
Point of clarification.
Um, Can you let me know
what the results for the last vote
Was? We didn't finish
the last vote.
There was no result because I didn't finish the roll call.
Um, vice Chair Conway,
Like to 14. To that I
would like to vote yes so we can go forward today.
I thought the motion was to lay the whole offering
on the table, not the amendment.
So I would like to go forward today
with this offering and vote yes. Thank you.
Alderman Lata, alderman
Hopkins, alderman Hall.
Alderman Mitchell. Alderman Harris.
Alderman Beal. Alderman Lee.
Alderman Ramirez. Alderman Quinn.
Alderman Lopez. Alderman Moore.
Alderman Curtis. Alderman O'Shea.
Alderman Taylor. Alderman Mosley.
Alderman Rodriguez. Alderman
Scott Alderman.
Ccho Lopez. Alderman Burnett.
Alderman Irvin. Alderman. Talia Farrell.
Alderman Cardona. Alderman Waba.
Alderman Rodriguez Sanchez Aye. Alderman Ramirez. Rosa.
Yes. Alderman Viegas. Alderman Mitt.
Alderman Spaza. Alderman Vazquez.
Alderman Riley. Alderman Knutson. Yes.
Alderman Martin
Al Alderman. Martin Votes? Yes.
Alderman Silverstein? No.
Alden Mitchell is a no. Chairman. Dowell is a yes.
13 yeses and 12 nos. The motion to lay on the table passes.
Any other going on to other questions?
Um, assuming you have no more Alderman
Lopez, alderman LaSpada
My questions at this time.
Thank you. Thank you Alderman Moore.
Thank, thank you.
This question I think was answered in the committee,
but just for the record, we are not doing any extension,
time extension and we're not doing any other re um, um,
taking any money, additional money out.
It's just strictly ref refinancing, correct?
Yes. This is, this is just a refinancing transaction.
And then thank you so much CFO, uh,
for your clarity on all of this.
But also it's something that I think, um, Alder
and OSHA had asking you,
and you said, at least by the end of the year,
are we going away?
Because I think the Feds are gonna cut at least one more
time by the end of the year.
Would that be our to our benefit? Or does that not matter?
Well, it's kind of complicated
because, uh, I suspect there will be another rate cut.
Um, but the market bakes that in.
So, um, usually, you know, when you look at like the,
the futures market, it's showing
what investors are expecting as far as rate cuts.
And if rate investors are expecting there to be a rate cut,
the rates will be lower already.
And then if there's not a cut, if you get to the, the Fed
meeting and they don't cut,
then rates bounce, you know, back up.
Uh, so it isn't that investors sit around waiting
to see the cut and then react afterwards.
They act in anticipation of it ahead of time.
And so, uh, we could wait longer
and we could see lower weights, but we could wait
and see them go up
because maybe the Fed didn't act as expected.
And I'm not saying to, to hold this.
We can approve this and still not issue until
a certain time that I guess you are comfortable with
as the CFO to say, okay, I know that it fed's gonna cut
by another half percent by the end of the year.
Am I gonna give them to November, whatever?
Am I gonna give 'em till December? What?
That we can still be in a good position to do the refi.
Yes, we do have that flexibility.
Um, and in fact, uh, the last two transactions
that we've done, we've used the flexibility on the timing
of pricing to make changes.
So when we did the Go Bond issuance
that we sold about 500 million for our, uh, CIP program,
we waited about a week for that because we were ready to go
and it was not a good week in the market.
And, uh, we saw the rates, uh, spiking up
and lots of volatility
and we just stayed out, waited for about a week and got in
and had a much better sale.
And the recent water refunding,
we actually did the opposite.
We were, we only moved it by a day,
but we were planning a price, um, on a, uh, Wednesday.
And the market was so good on Tuesday that we decided
to accelerate and we sold the bonds Tuesday afternoon
and, uh, did very well.
So we do use, you know, the tools, uh,
and that allow us to be flexible
and we definitely will be with this also.
All right. Thank you. Thank you Chairman
Alderman Hopkins.
Uh, thank you Madam Chair. I wanna pick up on the, uh,
line of questioning from Alderman O'Shea with regard to, uh,
the ratings agencies.
Uh, assuming this transaction is approved
and goes forward, what would be the next
anticipated opportunity
where we might get some status change from either Fitch
Moody's or Standard Reports?
I think, uh, the most likely time that
or could be a rating change would
be the outcome of the budget.
Um, and so, um, you know,
we have a significant deficit
and the ways in which we deal with that deficit,
whether structural
or not, will have an impact on the rating.
Uh, I think, uh, you know, a, a deficit
that is solved primarily through structural means,
it won't necessarily get us an upgrade,
but it will be keep our ratings stable.
If we used a lot of methods that, um,
were mostly one time in nature,
we would be at risk for a downgrade.
I understand. So stability would be the more attainable
goal throughout this budget process.
Um, assuming, uh, you know, best case scenario,
a perfect world, which I know we don't live in,
what would be some of the things we might consider
during the budget de deliberations, um,
that could potentially get us an upgrade in
the next six months? Sure.
The primary, uh, thing
that is really weighing down our rating is our
pension obligations.
Um, and so one of the, the, the action
that the city took to do the advanced funding,
the supplemental contribution got us rating upgrades from,
um, I think all three of the major rating agencies.
Uh, didn't get it from all four.
We have a fourth rating agency, KBRA,
who already had us rated higher than the others.
Um, but, uh, that type of, uh, action
of continue to find ways
to put additional funding into the pension system
to reduce our liabilities.
That's probably the single thing
that could be the most helpful in improving our ratings.
Um, improving the amount of reserve we have might help,
but we have, we're, we're good on reserves right now.
I think we're very solid.
I'm not sure that if we, you know, we might,
we'd probably have to put a lot more in reserve
for it to move the needle.
If we put a little more in, it's probably, you know, well
that's good for financial policy and I would love it.
It probably won't actually change the rating.
Um, it's really our pension obligations
that are the biggest issue that we have.
Well, I appreciate your comments
and, uh, I hope we all keep that in mind, uh,
in the upcoming weeks as we grapple with what is certain
to be a very challenging budget.
Thank you. Alderman Hopkins, alderman Hall.
Thank you, Madam Chair. That was, um,
it was already answered,
but thank you for acknowledging me. Thank you.
Okay, thank you. Uh, seeing that, uh,
we don't have any more questions.
Uh, can I get a motion?
Alderman wa back you remembered your question.
You want round
Two? Uh, just, uh,
about 10 of them,
but, um, so I just wanted to go back a little bit.
When originally we got this, there was, uh, allowance
for operating expenses, um, when, and I know it was removed,
but was this allowable with the S-T-A-S-T-S-C that we u
utilized these, um, proceeds for operating expenses?
That was standard language that we put in the ordinances.
Um, the, uh, the SCSC has been only used
for refunding except for the, uh,
Chicago Recovery Plan bonds, um,
which were used specifically to fund a number
of different, um, programs.
Um, and so, uh, that, so those, those programs,
since they were not all capital, um, those could have been,
those would've been considered operating some of them.
Okay. Um, I think those were, uh,
those were based on the government funding
that the ARP funding that we got, correct.
Or they were backstop by it? It,
The, uh, well, the bonds themselves were, uh,
the credit was the same as the other STSC,
so they were backstop by the sales tax,
but they were used with the ARPA dollars for, so the, the,
the bond funding that went into it was just a component
of the entire Chicago recovery plan.
And it was really, uh, gave us, uh, funding
to do some additional programs,
but also to fund some programs
that we didn't have certain capacity under ARPA to do.
Um, when we're looking at the master in denture for the,
um, STSC, uh,
I thought the maximum amount allowed was
5.6 billion, roughly.
And, um, I'm just curious if, if we're beyond that, um,
regardless of whether we get advantageous financing
as you're saying, um, what happens to, um,
the S-T-S-A-S-T-S-C, if we're going well beyond the,
in the original indenture, what impact is there on the city?
Um, I'm not sure I fully understand the question.
Well, I thought we originally had like a $5.6 billion max
that was allowed in terms of the indenture,
and now we're like, well over 6 billion,
maybe close to seven.
So I'm just curious, like what happens if you're borrowing
or taking out of that beyond what the original intent was?
Check to see if we've, if that's part of what we've added
with the supplemental indentures.
Uh, 'cause we have done supplemental indentures, uh,
particularly when we, um, added the, uh, the junior se,
the junior lien, uh, to it.
But we cannot issue anything.
We're not authorized to issue, so we would not be able
to get an opinion of bond counsel to move forward
if the issuance was in violation
of any caps in the indenture. Okay. But,
Um, and then looking at the,
and you can provide that through the chair,
unless Jim has an answer on that.
Jim's always got the, Jim, have anything to add today?
Uh, we'll provide it through the chair.
I don't have the numbers offhand for the
Mastermind. Um, and we've
talked a little bit about the estimated
increase for debt service, I think from, uh, the ones
that we're seeing mature, but what's the,
what do you estimate the impact is on individual property
taxes throughout the townships and the city?
Um, should we pass this?
And, um,
I know you've talked a little bit about the projected impact
on the city's bond ratings that it would be negligible,
but, um, what, what impact does this have on, um,
whether it's a year out or two years out, uh, borrowing this
and, and essentially kind
of kicking the can down the road here a little?
Well, it's not going to affect the property taxes.
Um, and the reason why is, uh, twofold.
One, when we think about the general obligation bonds we're
taking out, we provide a significant amount of funding
to pay the debt service
for general obligation bonds from the, the corporate fund.
So the bonds, uh, when they are issued, they are levied
with a property tax levy,
but we abate a portion of that levy every year
and use corporate tax dollars, uh, to pay the debt, um,
to keep from having the property taxes go up
for all the amount in the levy.
Uh, so the refunded go bonds are gonna reduce the amount
of corporate fund subsidy that we have to make.
They're not gonna reduce the property tax levy.
Um, for STSC, for instance, if we, um, ex execute the tender
and do STSC bonds to, to refund STSC, um,
the impact of that would be we would have more sales tax
residual coming back to the city,
which would go into the corporate fund.
So neither is directly going to impact the property tax.
Okay. Um, well, Madam Chair, I'll,
I'll wait till we get some of the other information
through the chair on some of that outstanding debt
and the date of maturity.
I don't recall that being in the documents.
Um, obviously we'll have to go back and look at the,
The date of maturity is not in the document,
but the list of the, uh, uh,
series bonds is in the document.
Yeah, I, I just didn't see
what Alderman Lopez was referring to was not in there.
And that was a calculation that, um, I had come up
with based on trying to make, um, make due with what we had.
But, um, that's all the questions I have,
Madam Chair. Thank you.
All right, thank you. All right.
Is there a motion to recommend approval
of item number two on the agenda?
So move by Alderman LaSpada recommending Due Pass.
All those in favor signify by saying Aye. Opposed?
Uh, alderman Lopez, you'll be recorded as a no Alderman,
WABA, Cardona,
and Beal in the opinion of the chair.
The ayes habit and the motion carries the do pass
recommendation of the ordinance will reported out
with the nose, uh, reported out as well.
At the next city council meeting, is there a motion
to recommend approval of item number three on the agenda?
So moved by Alderman Hopkins.
All those in favor signify by saying Aye.
Opposed Alderman Lopez, you'll be counted as a no
Alderman, WABA,
and Cardona as well in the opinion of the chair.
The ayes have it, and the motion carries
and the DO pass recommendation will be reported out at the
next, uh, city council meeting with the nos, uh, identified.
We will now move to items four, five,
and six, uh, the Department of Thank you very much.
Uh, thank you. Thank you,
chief Financial Officer and Brendan White.
We will now move to items four, five,
and six on the Department of Planning.
They will present those items together,
however, the committee will be voting on these
items separately,
So this is not, mine
Could escape, I guess.
Brian, please just get up here and do it.
He's gonna handle it unless you have it.
Okay. Item number four from the Department of Planning
and Development is an ordinance concerning the authority
to enter into and execute an intergovernmental agreement
with the Chicago Board of Education for the provision
of tax increment financing funds
for improvements at James Weldon Johnson.
Steam Elementary School,
located at 1420 South Albany Avenue in the
24th ward.
Item number five is an ordinance concerning the authority
to enter into and execute an intergovernmental agreement
with the Chicago Board of Education,
but the provision of TIF funds
for improvements at Collins Academy.
Steam High School, located at 12, excuse me, 13.
13 South Sacramento in the 24th Ward.
And item number six is an ordinance concerning the authority
to enter into and execute an IGA with the Chicago Board
of Education for the provision of TIF funds
for improvements at Thomas Chalmers Steam Elementary School,
located at 27 45 West Roosevelt Road in the
28th Ward.
Um, we're joined today by Jamal Chambers from CPS,
Sean Newark and Fannie Alvarez, also from CPS.
Thank you, Jamal.
Good morning Chairman Dowell
and members of the community on finance.
For the record, my name is Jamel Chambers City Council
liaison for the Chicago Public Schools.
I'm also joined by Sean Newark, who is our Director
of Facilities Operations at CPS, as well as Tim Jeffries,
managing Deputy Commissioner of the
Department of Planning and Development.
We have a new face here with us today.
Um, someone who's not new to community engagement or CPS,
but new in this capacity.
Um, Fannie Diego Abras, who was our newly appointed Chief
of Family Community Engagement.
I'm here today to request your approval
of an intergovernmental agreement
that will provide the Chicago Public Schools with up
to $10 million in TIFF assistance to provide STEAM
and other building improvements at Charmers Elementary,
the Collins Academy High School
and Johnson Elementary School.
The Chicago Public Schools in collaboration
with many community partners have, um,
it's creating a science technology, engineering, arts
and math program at Charmers Elementary.
Uh, Johnson School of Excellence
and the Collins Academy High School program promises
to provide students with a well balanced education
that deepens their knowledge
and steam subjects starting in the elementary school
and continuing through high school,
building more graduates prepared
for in demand steam careers.
Good afternoon. My name is Pan Diego Alvarez
and I am the new Chief of the Family
and Community Engagement, um,
office at Chicago Public Schools.
Today, I wanna highlight some
of the ways in which this project has been led
by North Lawndale residents and stakeholders.
And some of you all got to listen to, um, some
of those stakeholders earlier today, like Dr.
Crockett j uh, the students, Jada
and Demarion, the North Lawndale Community Action Council,
also known as CAC, was established in 2013
after the school closures that impacted that neighborhood.
For 11 years, the CAC has been envisioning planning
and executing neighborhood driven
and focused education initiatives and partnerships.
In the last seven years, that has meant advocating for
ESTEEM Program
and STEAM stands for Science, mathematics Engineering,
art at Art, uh, sorry, science, technology
Engineering, arts and Mathematics.
Um, so they've been advocating for
that program in North Lawndale.
And in July of 2022,
the planning started to become more real.
What has emerged now is a focus on the STEAM program at
three existing neighborhood schools,
two elementary and one high school.
And as you can see in this slide, community engagement has,
has been a very important part
of the process from the beginning.
And there was certainly an important part in the steam
selection process that included over 75 meetings.
The design team includes CAC leadership members like
Dr. Green, Dr. Moore, Aurelia Davis, Rodney Brown, Yolanda,
king Elle Vivid, Rashelle Jackson, Lauren Lewis, Marietta,
McDuffy, and CPS offices, including the Family
and Community Engagement Office, networks five
and 15 portfolio IGA, STEM facilities,
academic enhancement, early childhood Education,
communications, marketing, college and career, and teaching
and learning, and also wonderful external partners,
including the Deans Foundation, Aurora University,
university of Illinois, shed Aquarium, museum of Science
and Industry, north Lawndale Community Coordinating Council,
LISC Chicago, the Chicago Metro Agency for Planning,
Exelon Foundation and Fermi Lab.
As a result of this extensive engagement,
we now have the three schools selected
to become STEAM schools, and they require STEAM related
and all other building improvements.
And that is why we are presenting today.
First school is Traumas Elementary School.
Here's a map showing the general location
of the school within the city.
The school is located at 27 45 West West Roosevelt Road,
in the North Lawndale community area, and in the 28th Ward.
What is located within the Midwest?
Tiff District School is bound by 12th place to the South
Fairfield Avenue, to the East Roosevelt Road to the North
and California Avenue to the west.
Here's a view of the school's main interest located on
Roosevelt Road and pictures of the existence
existing MEP system in the roof.
Traumas is a neighborhood elementary school serving 224
students in pre-K through eighth grade.
The project scope includes addressing critical facility
needs, including MEP upgrades
and a roof replacement,
renovating four primary steam classrooms along
with the living museum and modernizing common
and academic areas if approved.
The intergovernmental agreement with authorized up
to $3.7 million,
which will finance a portion of the project.
Completion of this project is scheduled for a winter
of 2026.
The next schools is Collins High School.
Here's a map showing the general location
of the school within the city.
The school is located at 13, excuse
Me, Mr. Mr.
Uh, chambers. Mr.
Uh, Blakemore, if you can, you please keep your voice down.
I thank you very much.
Go ahead.
The school is located at 1313 South Sacramento Drive in
the North Lawndale community area.
And in 24th Ward,
it's located within a Midwest TIFF district.
The school is within a Douglas Park.
It's within Douglas Park in the northwest portion
of the park, fronting Sacramento Drive to the west.
Here's a view of the school's main interest located
on Sacramento Drive.
In pictures of the existing MEP system,
Collins is the neighborhood high school serving 213 students
in the ninth through 12th grade.
The project includes addressing critical facility needs,
including MEP upgrades,
renovating four primary steam classrooms, along
with the parent university center and specialty career room.
If approved, the intergovernmental agreement will authorize
up to $2.5 million, which will,
which will finance a portion of the project.
Completion of the project is scheduled for winter of 2026.
The third and final school is Johnson Elementary School.
Here's the map showing the general location
of the school within the city.
The school is located at 1420 South Albany Avenue in the
North Lawndale community area,
and 24th Ward is also located
within the Midwest TIFF District.
The school is bounded by 15th Street to the South
Edy Avenue, to the East Douglas Boulevard to the North
and Kie Avenue to the west.
Here's a view of the school's main interest
located at Albany Avenue.
In pictures of the existing m
and p system, Johnson is a neighborhood elementary school
serving 210 students in pre-K through eighth grade.
The project scope also includes addressing, um,
critical facility needs, including MEP upgrades
and roof replacement, renovating four primary steam
classrooms along with the living museum
and modernizing calming and academic areas.
If approved, the Intergovernmental G would authorize up
to $3.7 million,
which will finance a portion of the project.
Completion of the project is scheduled for winter 2026.
Here are some examples of STEAM programs, um,
improvements at um, other CPS schools.
And also lastly, I do want to recognize, um,
former alderman of the 24th Ward.
Uh, my good Morehouse brother, Michael Scott Jr.
Who, um, was a huge advocate
for this project in the beginning stages.
Um, also wanna acknowledge Alderman Jason Irvin, who
provided a letter of support and support for these projects.
And most certainly, um, Alderwoman Scott,
the current alderman, um, of the 24th Ward,
who since her tenure as Alderman, has been a huge advocate,
um, for not just this project,
but all of the schools within the North
lockdown community in her ward.
Um, so with that, I ly ask you guys to, um,
consider this project for approval.
Thank you. Uh, Mr. Chambers, uh,
alderman Moore has requested remote participation, uh,
due to Rule 59.
Can I get a motion to allow him to participate remotely?
So moved by Alderman Curtis, uh, motion made
by Alderman Curtis.
All those in favor signify by saying Aye.
Opposed an opinion of the chairs. The ayes have it.
And Alderman Moore, you are now in the meeting.
Thank you, Tam. You're welcome.
Uh, we'll start with questions.
First question, alderman Lopez, followed by Alderman Lata,
and I know you wanna close Alderman Scott,
Thank you again, chairman and members of the committee.
And this question goes for all three.
Um, the total of all of these tip requests are
approximately $9 million, is that correct?
10 Alderman. 10. And is there anyone from
CP S'S finance team here?
No, sir, there isn't. So the question I have is that
as we're on the discussion of deficits in our budget,
CPS owes us $175 million for
non-teacher related pension payments
that we've made on your behalf.
When are we gonna get paid?
That's not up for discussion in this finance committee
Meeting. Fine. Let
let me ask it another way.
If you can, you can ask, we can,
if you like cutting me off, I'll ask it another way.
Why should we give money to CPS when we are owed
10 times the amount that you're asking for,
or 17 times the amount to be more specific.
Give you the question, please.
Why should this body give CPS money
17 times the amount, uh, uh, that is, that is owed?
We are owed 17 times the amount
that we're, you're asking for.
Why should we give you money today?
Yeah. So very similar
to the first question that you asked.
Um, and again, I'm not a content expert
on finance nor budget.
I major in political science
to stay away from AF and science.
Um, but what I can say is that, um, we are aware
and acknowledge the conversations
that have been ongoing across the city
and state regarding the broad, um, CPS funding picture.
However, this dollar amount that we're asking for right now
to secure these, the funds for this project
is immensely less than the amount that you're referring to.
Um, and it's also an inaccurate, um, um, description of
what you're painting, um, be it further.
Um, I don't think those ongoing discussions, um,
preludes us from being able to us at, when I say us,
I mean CPS when being able to work with city council members
as well as our school communities
to make community-based investments in
historically underserved communities.
And that's exactly what this project does.
It is an investment esteem investment in the community area
that has been historically underfunded.
And on the resource you heard from the, the principals,
you heard from the cac,
you heard from the students about the benefits, um,
that this project would bring to their communities as well
as, as well as how long they have been, um,
waiting for this investment.
I'll take you back to the year 1965 when, um,
Dr. King stood on the steps of the Alabama State Capitol,
and he proclaimed five times how long, not long, how long?
Not long. And he said those words
to encourage the minority community that liberation
and freedom was in a not too distant future.
So I asked that same question. How long is too long?
This community has been waiting for years
for this investment to come into the neighborhood.
And here we are today, 60, almost 60 years, following
that speech that Dr. King gave.
And we were having a conversation about making an investment
into an historically, um, underserved community.
So I humbly do ask that the committee consider this, um,
project and understand the benefit that it brings
to the community and as well
as acknowledge our moral obligation to provide resources
to our, um, students.
Well, you might put a smile on my chairman's face,
but I think you're absolutely right.
How long, and the question is,
how long has CPS avoided investing in this community while
having a $9 billion property tax levy?
Yeah, my question is exactly that.
Are you done? Sorry. No, I'm not.
Well, because I think that it is an opportune moment for us
to look at the fact that we have hundreds of millions
of dollars in deferred maintenance,
let alone improvements in our communities like this one.
And to sit here and quote Martin Luther King
and whomever else you wish to quote, to try
to bully people when 60%
of our property taxes go towards educating our youth,
and we're not investing, you are not investing.
And to constantly come to this body for money so
that you don't have to do that is outrageous.
Thank you. And I would like
to be recorded on No, on all three of these items.
Thank you.
You don't have to respond to that. Um, alderman Lata,
Thank you very much, chair.
Really honestly glad for the projects today.
I have a, a good friend, Becca Corak,
who has been a longtime leader in STEAM and CPS
and also locally at the First Ward at Chase.
So I know the impact that this is going to
make for our students.
And I'm, I'm glad that I've had an opportunity to walk
through a lot of the STEAM classes in the first ward.
It is a real conversation that we're having around pensions
and BAF it, it is a conversation that has to be made.
I, I cannot imagine though, in, in light of
that conversation, a world
where we punish these children
for those political complications.
I, I cannot imagine depriving them
of these resources based off
of an ongoing political discussion that we will have.
And I believe that we'll resolve to everyone's satisfaction.
So I'm really glad for these ordinances.
My only question in all of this was the Living Museum.
The Living Museum is the one concept in Steam that I,
I haven't had an opportunity to witness.
I was wondering if either of you could speak more into that.
I'm gonna pass to our director of operations, um,
Sean say, saved my life.
Sean, new director of operations for capital.
So yeah, living a museum is anything
that the community wants to bring.
For example, one of the schools, there's like a, um,
almost like a, a bench like in front
where they bring in artifacts or it's photography.
It's something that continually evolves over time
and can share
what the community's doing, what the students are doing.
So it's, it's literally a living,
breathing thing that changes.
And just a lot of times you go to our schools
and you'll see like something a,
a kid did in 1974 that's never been changed.
And so this is the idea is
that this will continually evolve over time.
That's really cool. I did not even know
that those a concept in CPS capital,
something we can explore further.
Thank you so much. Thank you, chair. Thank you. Thank
You. Alderman La Spotter.
Alderman Scott.
Thank you Chair. Thank you.
CPS CAC and my community that was here.
And the question was asked, why, why should we vote or give?
Because this is my community
that has been disinvested in since 19 April 4th, 1968.
And I probably will repeat that whenever I speak.
Uh, and our kids deserve it.
No community should walk into a school
and it looks like it has been a abandoned
or the fact that, um, we don't have the same amenities
as Glenview has to learn.
And so how do you invite people into your community
with great education, great schools, so great housing
and economic development.
You can't dec decouple one.
Uh, all of them fit hand in hand with one another.
And so I think this is amazing.
It will revitalize our community.
Uh, it's a pathway for steam, uh,
and also having center space just to block down
and the work that we're doing with Center Space to bring
that into our schools.
I think that this project and what we're gonna do
for these three schools will be amazing.
You have it right in a, uh, in a pathway, in a park, uh,
and to, to partner with a huge,
uh, film studio at Center Space
and bring that into the schools will, it's gonna be amazing.
And so I'm excited for this
and I hope that my colleagues, uh, vote this tiff
because we need it, uh, versus a new school.
Why not update our preexisting schools that we have?
So we asked for a new school
and we said that the best bet is to work
with our preexisting schools.
They're not that, not that bad,
but I mean, they could be better.
You want kids to come in vibrancy, cleanly, cleanliness,
and just new.
I mean, everything doesn't have to be prehistoric.
Like we have our parks and our schools
and sometimes city has to help.
And so this is the way that I'm asking my colleagues to help
and I appreciate your support on this. Thank you.
Thank you Alderman Scott.
Um, I just wanted to say to CPS that, you know,
sometimes we see projects
that are a hundred percent dependent upon,
uh, tiff expenditures.
And to have, uh, CPS step up to the plate
and put some capital money into these communities,
TIFF is supposed to help in these areas.
And so I want to, uh, just acknowledge that, uh, with
that said, uh, motion made by Alderman la spotted
to move due pass on item number four.
Uh, all those in favor signify by saying Aye. Opposed?
And the opinion of the excuse with who is that?
Oh, forgot about you. Alderman Lopez.
The DO Pass recommendation will be, uh, reported out, uh,
as do pass, with the exception of Alderman Lopez voting no.
Um, is there a motion to recommend approval
of item number five on the agenda?
So moved by Alderman Lee.
All those in favor of the motion signify by saying Aye.
Opposed? I got you.
Alderman Lopez and the opinion of the chair.
The ayes have it, and the motion carries.
And the due pass recommendation, with the exception
of Alderman Lopez will be reported out at the next
City Council meeting.
And is there a motion to recommend approval
of item number six on the agenda motion made by,
uh, alderman Knutson?
All those in favor signify by saying Aye.
Uh, with the exception of Alderman Lopez, who wants
to be recorded as they know,
and the due pass recommendation will be reported out at the
next city Council meeting.
Thank you very much. Thank you, chair.
Uh, item number seven from the Department of Planning
and Development is an ordinance concerning the execution
of a redevelopment agreement with Bandwidth Music,
LTD as the Chicago Recovery Plan,
community development grantee
for a capital project at 1 34 South
California Avenue in the amount not to
exceed 5 million in Tiff.
Um, alderman Burnett is not here,
but as he was leaving, he, uh, had given us a letter,
but he also expressed his support for this project.
We're joined by, uh, Tim Jeffries from the Department
of Planning and Development.
Good morning, Tim. Good afternoon. Now,
Uh, it's good afternoon. Chair
Dowell, members of the Committee on Finance.
Uh, for the record, my name is Tim Jeffries,
managing Deputy Commissioner in the
Department of Planning and Development.
Uh, this item requests your approval
of a redevelopment agreement between the city
and Bandwidth Chicago, uh, for the purpose
of authorizing $5 million in TIF funding to be used
for the rehabilitation of a former industrial property
as bandwidth's new permanent facility.
Uh, the subject property is located at 1 34
South California Avenue.
It's within the East Garfield Park community area,
the 27th Ward
and the Midwest TIFF District, uh,
shown here is a closer look at the subject
property within its neighborhood context.
Uh, it's highlighted in red.
Uh, the property encompasses the entire city block
of California, uh, between, uh, Wilcox and Adams.
Uh, uh, here is the exterior, uh,
of the property in its current condition.
Uh, the building was formerly the longtime site
of the Loyal Casket Company, a coffin manufacturer, uh,
that vacated earlier this year.
Uh, the developer of the project is Bandwidth Chicago, uh,
a music education and performance nonprofit
that annually serves more than 200 children
from ages three to 18.
Uh, their core programming includes music instruction,
ensemble play, and performance opportunities
through in-school, after school
and summer arts programs, uh, most
of bandwidth participants in their programs do
so at at no cost to them.
Uh, uh, in addition to bandwidth,
the space within the building will be occupied
by B Love Cafe, uh, operated
by the North Lawndale Employment Network, uh, as well
as offices for the Horizons for Youth
and Educational Support organizations that provides services
that are complimentary with Bandwidth's mission.
Uh, the scope of work for the projects involves a
rehabilitation of, uh, the 21,000 square foot building
as bandwidth's permanent facility.
The project involves work to all aspects of the building,
including a new roof, uh, repair
and replacement of the building openings, exterior masonry,
and interior improvements throughout.
Uh, the total project cost for this scope
of work is an estimated $15.5 million, uh,
up to $5 million.
5 million of this, or 36% of the budget is slated
to come from funds from the Midwest TIF District.
Other major sources of funds include a $5.6 million, uh,
new market tax credits allocation, a $2.9 million loan
and $1.8 million in philanthropic, uh, contributions from,
uh, bandwidth Capital Campaign.
Uh, if approved, the redevelopment agreement will reimburse
the developer for up to $5 million in TIFF
eligible construction costs.
The reimbursement will be provided
as three progress payments during construction
with a final payment made.
Uh, upon the issuance of the certificate of completion.
Uh, the city's investment will be protected
by provisions in the RDA that require the project
to operate on this property for no less than five years.
If this condition's not met, the city has a right
to recapture any previously dispersed TIF funds.
Uh, additionally, the developer must achieve typical
construction, um, compliance requirements
for prevailing wage M-B-E-W-B-E and City Residency.
Uh, once it's complete, this is
what the new facility is expected to look like.
As you can see, it's, uh, significantly improved
with significantly fewer coffins.
Uh, uh, and this rendering, uh, it's, it will, uh,
create a significant amount
of more engagement with the general public.
Then it then is former industrial uses with its retail, uh,
users, the, uh, the development of open space in front
and the installation of public art.
Uh, and here is the interior space completed.
Uh, as you can see, it is the complete, uh, redevelopment
and modernization of the building,
although it is, uh, maintaining some of its former elements,
including the trusses
and the distinctive sawtooth roof roof that is a typical
of older industrial buildings.
Uh, overall, DPD is highly supportive
of this proposed project and believes
that will create a significant number of, uh, benefits
to the community, including supporting a local art space
organization that provides educational opportunities to,
to children with demonstrable needs.
Uh, it will also allow this organization that was founded
and, uh, established in East Garfield Park
to remain in that community.
And finally, it will rep repurpose a former industrial
property that would've generally not been suitable
to either conversion for, to either retail
or residential uses.
Uh, and for all those reasons, DPD is, uh,
recommending the use of tiffs to support the project.
Uh, I thank you the committee
for your favorable consideration of this item.
Uh, I'm also joined today
by Annie Palino from Bandwidth Chicago,
and that we are happy to answer any questions
that the, that you might have.
Thank you, Tim. Uh, any questions
for members of the committee?
Seeing none, uh, alderman Curtis makes a motion
recommending do pass all those in favor
of the motion signify by saying aye.
Those opposed in the opinion of the chair.
The ayes have it, and the do pass motion will be
reported out at the next city council meeting.
Thank you, Tim. Okay.
Gotcha. Uh, item number eight, from the Department
of Planning and Development, an ordinance
concerning the authority to enter into
and execute a replacement redevelopment agreement
with an issuance of tax increment financing funds
to German American National Congress, chapter, Chicago
North and Dan House, doing business as Dan House
German American Cultural Center
for the Redevelopment Project at 47 40 Northwestern Avenue
in the 40th ward.
Um, we do have a letter of support from Alderman Vazquez,
and today we're joined by Jeffrey Cohen, deputy Commissioner
and Planning and Development.
Uh, good afternoon, Cheryl Dowell
and members of the Finance Committee For the record,
my name is Jeffrey Cohen,
deputy Commissioner in the Department
of Planning and Development.
I'm here today to request your authority
to modify the funding structure
of an unexecuted redevelopment agreement
with Don House German American Culture Center
for the Rehabilitation and Modernization
of Don House's operational headquarters.
This RDA was previously approved in March, 2023,
but the pending expiration
of the TIFF District requires a technical change
to the financial structure.
Uh, Don House is located at 47 40 Northwestern Avenue.
It sits within the 40th ward represented
by Alderman Vasquez, the Lincoln Square Community area,
and the Western Avenue North Tiff District
highlighted in red is the property.
It is situated on the west side of Western Avenue
between Lawrence and Leland Avenues.
A short distance north
of the Western Avenue Brown Line Station
shown here is the subject property.
The building was originally constructed in 1927
for the Three Links Association
and was designed by Paul Gerhardt, the architect
of other notable properties within Chicago,
the former Cook County Hospital, and Lane Tech High School.
The property was purchased by Don House in 1967,
as remained the organization's primary operational location
and continuously operating in the space since that time.
While the building is structurally in a good state
of repair, many of the building systems
and accessibility features are significantly outdated
and are in need of rehabilitation and modernization.
The developer of this project is the Don House German
American Cultural Center, a nonprofit organization
originally formed in 1959 to promote the awareness
of German cultural heritage as well
as providing educational opportunities
and community events for area residents.
The scope of the work for this project is focused on
repairing and modernizing several outdated building systems,
including improving to both plumbing and electrical systems.
Additionally, the project will improve the restroom
facilities and make a DA improve a DA improvements
throughout the entire building, including the front entrance
construction on the project has already commenced
and is approximately 60% complete.
The remaining work will be completed by the end
of this year in advance of the expiration of the TIFF
district As
currently drafted, the RDA provides up to 1.56 million
to Don House as two, sorry.
The project budget here shown here, uh,
as modified, the total scope
of work is an estimated 2.4 million funded by 489,000
of owner equity, a 200,000 State of Illinois grant
and $235,000 line of credit provided by Fifth Third Bank.
The remaining 1.56 million in TIF funding will continue
to be provided as the previously approved.
If approved, the city will reimburse the developer for up
to 1.56 million in TIF eligible costs,
which funds from area wide increment in the Western Avenue
North TIFF District.
As previously stated, the developer will receive up
to 756,000 at RDA closing as a low interest
repayable term loan.
The remaining 806,000 will be funded as a conditional loan
that can be drawn down during construction.
All TIF eligible expenses must be incurred
and requisition for reimbursement
and submitted prior to the TIF district expiration.
The loan will be forgiven upon issuance
of the certificate of completion.
Additionally, Don House must occupy
and operate the facility for 10 years
with a recapture provision protected protecting the city's
in financial interest.
They will also be subject
to standard construction compliance requirements
for MWBE prevailing Wage and City Residency.
Here are interior photos of the project.
Yeah, sorry.
The Scope of this project
and recommendation rationale is high.
DPD is highly supportive of the modification
and believes the use of the forgivable loan structure is
critical to ensuring the project moves
forward toward completion.
When the subject, when the subject property is complete,
it will result in a number of significant benefits.
The project will provide upgraded amenities
for the local community, the clubs
and youth groups who use the facility as well
as support Don House's mission.
The project will enhance the center's accessibility
for all community members with the proposed upgrades
to restrooms and entry points
that meet current a DA standards.
The project will also extend the life
of a notable building while allowing patrons
with mobility issues
to more fully access the cultural center
and attend events here.
I'd like to thank the committee for its consideration
and request the approval of this technical modification
presented before you today.
Uh, from Don House, I'm also joined by Heidi Christensen,
executive director Melanie Hodges, project manager.
Um, and we're happy to answer any questions.
Thank you, Jeffrey. Um,
although this is in the 40th ward, we do have a letter
of support from Alderman Martin, uh,
who shares a larger percentage of this TIFF area.
Um, and so wanted to acknowledge that.
And Alderman Vazquez, do you want speak to your project?
Yes. Uh, thank you, uh,
Madam Chair and members of the committee.
Um, uh, as you stated, uh, alderman Martin
and I share the tiff that this funds it is exp um,
expiring at the end of the year.
Uh, so some of the work that's been done here, um,
we think is in support of the common good understanding
of the German community that's had history in the area.
And although we know in Chicago, um, all
that history changes, we have a lot more populations coming
in, um, from every, uh, the diaspora from other countries.
Um, being able to have this as a cultural center
to provide the kind of support
that's kind of history that they do.
They do, um, classes for children, they do language classes,
they do cooking classes and things that, um,
have really shown themselves to be a great community
partner, uh, not only for the 40th ward but for the city.
So we would be, uh, in support
and ask for the committee to support as well.
Thank you, Madam Chair.
Uh, thank you. Alderman. Yes. Alderman Beal
Chair. Um,
just a question for the, um, alderman of the ward.
He, he said that this is in the best interest of his ward.
Is that correct?
And, and the city. Thank you.
Okay. I just wanted to make note of that for the record.
Thank you. Thank
You. Can I get
a, uh, motion for approval of item number eight?
Uh, alderman Spto moves Do pass.
All those in favor of the motion signify by saying Aye.
Opposed in the opinion of the chair.
The ayes have and will report this out.
Uh, the do pass motion at the next city council meeting.
Uh, you've got the next one, Jeffrey, too, which is, uh,
item number nine, an ordinance concerning the authority
to enter into and execute a redevelopment agreement
with an issuance of TIFF funds to
Timeline Theater Company for the redevelopment
of an existing warehouse
and construction of a new theater auditorium at 50 33
through 50 35 North Broadway in the 48th Ward.
Um, we do have a letter of support from
Alderman Mana Howorth
and Alderman Clay who shared this, uh, TIFF.
And we're joined today by, uh, Mr. Cohen,
Jeffrey Cohen from DPD.
Uh, good afternoon, uh, members of the finance Committee
and Chairman Dowell again for the record,
my name is Jeffrey Cohen,
deputy Commissioner in the
Department of Planning and Development.
I'm here today to request the approval
of redevelopment agreement between the city
and Timeline Theater Company for the purposes
of redeveloping a vacant
and underutilized property for the permanent home
of Timeline theater.
The subject property is located at 50 33 North Broadway in
the 48th Ward Uptown Community area
and in the Lawrence Broadway TIFF District.
This is an a of the community showing the theater just north
of the Argyle CTA station.
And on the east side of Broadway.
The property is immediately north
of the Uptown Square District
and a significant number
of cultural venues in its burgeoning entertainment corridor.
Here's a picture of the property in its current condition.
The building was originally constructed in 1911
as a warehouse for the WC, Rebe and Brother Company,
and was generally used as a storage facility
until the property was vacated in 2008.
Although the building appears to be in generally good
condition, a number of significant structural issues have
been identified that required immediate improvements.
The applicant for the proposed project
is a timeline theater company.
A Chicago based theater was originally established in 1997
over the previous 24 seasons.
Timeline has presented 82 productions
and received MacArthur Award
for Creative Effective Institutions
and named Company of the Year by the Wall Street Journal
since it was originally founded.
Timeline has operated out
of Baird Hall at six 15 West Wellington Avenue,
but they purchased this property in order
to establish their new permanent home.
The proposed project involves the complete rehabilitation
of the property in order to redevelop the space
as a state-of-The-Art 250 seat Theater
work will include the reconstruction
of a structurally unsound front portion of the building
and the renovation of the rear section
in addition to the new main theater.
The redevelopment will also include a new rehearsal room,
gallery and exhibit space, concession area and educational
and Community Spaces.
Construction is anticipated to start in short order
as timeline is already in possession
of the necessary building permits.
Construction of the project is expected to wrap in Q1
of 2026.
The estimated total cost
of the project is $41.7 million.
If approved, the city would provide up
to 14 million in TIF funds or 33.5% of the total budget.
The majority of non-city funds are contributions from
timelines, capital campaign, as well as loan proceeds
and smaller grant from the state of Illinois.
This is a rendering of the project once upon completion.
The RDA provides the city's funding
as two different structures.
The first is a 4 million interest bearing loan
that will be issued following the execution of the RDA.
The second is a 10 million conditional loan that will be
provided as construction draws.
The obligation will be forgiven following the issuance
of the certificate of completion.
If the developer does not finish these project, the project
or does not secure the certificate,
the loan will remain an additional
interest bearing loan throughout the term.
This structure is nearly identical
to the one previously presented for the Don House project,
and it is similarly, similarly necessary
and structured to accommodate the TIFF district expiration.
Additionally, the current lending environments
for non-profit and cultural
institutions is extremely difficult.
And securing a loan in the amount necessary
to complete the project would not be financially feasible
given the debt service of current market rates offered
by traditional lending sources.
Given those factors, DVD believes
that the proposed structure accommodates both the need
for timely and accelerated payments
and fills a large void in the current capital markets.
The city funds will be protected by a 10 year occupancy
and operations covenant subordinate recapture agreement
and subordinate recapture agreement.
The project must also meet the city's typical construction
compliance requirements for city residency prevailing wage.
And
W-M-B-E-D-B-D
is supportive of the proposed development
and believes that the timeline theater redevelopment will
significantly benefit the community in a number of ways
versus support Chicago's arts community
by establishing a long-term home
for a local cultural institution that has history
of community outreach and service.
It'll also expand on the ongoing growth
of the Uptown Entertainment District,
and the project will also repurpose a long-term vacant
warehouse that would have presented
for redevelopment challenges for other users.
This concludes my testimony.
I'd like to thank the committee for its consideration
and request the approval of this redevelopment agreement.
I'm also joined by Mika Cole
and Elizabeth Alman from Timeline Theater Company,
their owner's representative Ann Maroney of JRG Research
and Brendan Keen, project director from Bullon Andrews,
the general contract for the project.
We're all happy to answer any of your questions.
Are there any questions for members
of the committee on this project?
Seeing none, uh, is there a motion to recommend approval
of item number nine?
So moved by Alderman Mitchell. Recommending Do pass.
All those in favor signify by saying Aye.
Opposed in the opinion of the chair.
The ayes have it
and the do pass motion will be reported out at the
next city Council meeting.
Thank you, Mr. Cohen.
Item number 10, from the Department of Planning
and Development, an ordinance concerning the authority
to enter into and execute a redevelopment agreement
with an issuance of tax increment financing funds
to double door development LLC
and double door liquors 2.5 LLC
for the re, for the redevelopment into commercial space,
including live music venue,
and a space for tuition free afterschool programs at 10 50
through 10 52 West Wilson
Avenue in the 46th Ward.
Um, we do have a letter of support from Alderman Clay,
and this is for an amount not to exceed 5 million.
Tim,
Uh, no coffins in this one.
Uh, but for the record, Tim Jeffries, uh,
managing Deputy Commissioner in the Department of Finance.
Uh, as the chair said, I'm requesting your approval
of a redevelopment agreement between the city
and Double Door Liquorice 2.5 LLC, that would provide up
to $5 million in TIFF funds
to redevelop the historic Wilson Theater Building
as the new home of the Double Door Theater.
Uh, the subject property is located at 10 50 West Wilson
Avenue, which is in the 46th Ward, represented
by Alder Angela Clay,
and is also within the uptown community area,
the North Planning region,
and the Wilson Yard Tiff District.
Uh, you can see the subject property
highlighted in red in this map.
It is, uh, uh, on the north side of Wilson Avenue, uh,
immediately east of Broadway.
And the Wilson, uh, redline CTA station, uh,
shown here as the Wilson Theater, as it currently stands.
Uh, the building was originally constructed in 1909
as the 900, uh, seat standard Vaudeville Theater,
which was later renamed the Wilson Theater.
Uh, and it is the oldest remaining ex extent theater
building in the uptown neighborhood.
Uh, in 1919, the building was converted to a bank
and continual oper continually operated as such
for nearly a century until the most recent user TCF uh,
vacated the property in 2012.
Uh, the building was designated a City
of Chicago landmark in 2016
as a contributing structure in the Uptown
Square Historic District.
Uh, shown here are the interior conditions of the property,
which has been unoccupied for nearly 15 years.
Uh, while the building has remained an overall stable
condition, uh, both the historic nature
and the long-term vacancy
of the property means extensive renovations, uh,
would be required of any user to occupy the space.
Uh, this specific project is being developed by, uh,
the operators of the Double Door Theater,
a prominent live mu live performance venue, uh,
that originally opened in 1999 in the Wicker Park
neighborhood, uh, for nearly 25 years.
It was a, a significant venue in the Chicago music scene
hosting, uh, not only up and coming local and regional acts,
but also national and international ones as well, uh,
after a lengthy
and public court fight with their former landlord.
The double door closed at this location in 2018, uh,
but has been working towards reopening in this
new location since that time.
Uh, the project involves the full rehabilitation
of the building to accommodate a multi-stage music venue
that will seat more than 600 people.
Uh, the scope of work includes repairs
to the historically significant exterior as well
as interior renovations
and the replacement of the bu the existing building systems
to meet modern standards.
Uh, additionally, uh,
the Double Door will also operate the Double Door Rocks
Program, a tuition free afterschool music program in
partnership with a nearby, uh, uplift High School, uh,
the People's Music School and the Black Ensemble Theater.
Uh, the program will include music education,
but also opportunities to learn the technical aspects
of the industry, including sound engineering,
stage lighting, uh, electronic music,
and remixing stage management and production.
Uh, the project is expected
to begin the construction in earnest extremely soon,
and has already secured its building permits.
Uh, the developer's goal is to complete the project
and be open and operations and open
and operational by this time next year.
Uh, the total cost of construction
for this project is an estimated 10.35 million with up
to 5 million of that budget,
or, uh, 48% proposed to come from tiff.
Now, the remaining funds will be, uh,
provided by a combination of developer equity at SBA loan
and a small adopt a Landmark grant.
Uh, the city through DPD intends to provide the developer,
uh, with this TIFF assistant in an amount not
to exceed $5 million.
With funds provided from area wide increment in the
Wilson Yards TIF district.
Uh, the city will, uh, will reimburse the developer
for eligible costs through a construction escrow
with funds dispersed at three defined completion milestones.
The final payment will be held in trust until the issuance
of the CFC, uh, or the certificate of completion.
Uh, the RDA also requires the developer
to continually operate the theater
and the afterschool program in this location for a term
of no less than five years,
and to also satisfy the city's typical construction
compliance requirements, including prevailing wage
M-B-E-W-B-E and City Residency.
Uh, shown here is the interior of the pro
of the the project, uh, post completion.
Uh, this is the main stage,
and I'll note that you can see that the project is expected
to retain some of the historic elements,
including the columns in the, in the rear.
Uh, and likewise, uh, the historic elements
of the front will also be, uh, be maintained, uh, pursuant
to its status as the City of Chicago Landmark.
Uh, I will note
however, that the, that, that the development will intends
to re refurbish
and reinstall the original double door sign
that was in place for more than 90 years in the
original Wicker Park location.
Uh, overall, DPD is supportive of this proposed projects,
as it will reactivate the historic Wilson Theater, a City
of Chicago Landmark, uh, that has been vacant
for nearly 15 years, as well
as continue the ongoing redevelopment
of the Uptown Entertainment District.
Additionally, it'll create an estimated 60 permanent jobs,
uh, and as well as create this Double Door Rocks program,
a tuition free after school music program in partnership
with, uh, local community organizations.
Uh, I'd like to thank the committee
for your favorable consideration of this request.
Uh, I'm also joined today by Sean Mulroney from the, uh,
double Door Theater Team,
and I'm happy to answer any questions you might have.
Thank you, Tim. Uh, alderman Vasquez.
Thank you very much, Madam Chair.
Um, I just want to commend all the work
that's being done on this.
I'm glad to see it in the 46th Ward.
Uh, it's actually near and dear to my heart.
So when I first started rhyming,
this is the first stage I ever got on.
We used to sneak in with the dj,
and so I just know that me at 17 years old, if I didn't have
that opportunity to go somewhere,
I probably would've gotten in a lot more
trouble, uh, as a youth.
So glad to see that they got the double door rocks
and all the other things Absolutely.
In support. Um,
and glad to see the double door continuing. Thank you.
You're still a problem, cha. That
Be fair? And that's definitely
Fair. And
Alder Vasquez, the, the owner is here.
If you wanna square the ledger with him
after all those free, uh, free tickets.
All right. Thank you. Alder Invest.
Thank you. Alderman Vasquez, alderman la spotted.
Did you wanna say something or No?
You know, the, there's a lot that I could say
and a, a fraction of it is appropriate,
and the fraction that is appropriate is
that the preservation of this sign
is such a signifier of the history
and the heritage of this theater in Chicago.
And regardless of the ward
or the intersection that it occupies, having this theater
and its legacy and its sign preserved, I know means a lot
to First Ward residents.
So I'm really grateful for this project. Thank you.
Thank you. Alderman LaSpada motion made
by Alderman Vasquez recommending Do pass all those in favor
of the motion signify by saying Aye.
Opposed in the opinion of the chair, the ayes have it,
and the Due Pass recommendation will report it out at the
next City Council meeting.
We're gonna stand at recess for about five minutes
to allow our court reporter to stretch your hands,
and, uh, so thank you.
We'll be back in five minutes.
Committee on Finance is, uh, reconvening from our recess,
and we will move on to item number 11,
which is the substitute ordinance
concerning the Second Amendment
to the redevelopment agreement.
And a second amendment to the authorizing ordinance
with our revival, Chicago, LLC
and South Side Revival, NFP
for the restoration of the Rova Theater.
Located at 35 18 South Halstead.
In the 11th ward, there is a substitute ordinance,
which has been prepared and electronically sent to everyone.
Is there a motion to accept the substitute?
So moved by Alderman Lee.
All those in favor signify by saying Aye.
Opposed in the opinion of the chair.
The ayes have it, and the substitute ordinance is before us
and will be explained by, uh,
Jeff Cohen from the Department
of Planning and Development. Jeff,
Thank you. Your Chairwoman
Dowell.
Again, good afternoon Committee members
of the Finance Committee for the record,
my name is Jeffrey Cohen,
deputy Commissioner in the Department
of Planning and Development.
I'm here today to request a Second Amendment
to a previously approved RDA between the city
and our revival Chicago, LLC for the purpose
of redeveloping the removal theater.
Mova Theater is located at 35 18 South Halstead in the 11th
Ward Bridgeport Community Area.
And in the 35th Halstead Tiff District,
shown here is a subject property outlined in red in relation
to the immediate neighborhood.
The Mova Theater is located on the west side of Halstead,
just south of 35th Street.
The other area highlighted in red is the theater's dedicated
parking lot situated
to the south on the east side of Halstead.
The city acquired the property in 2001
and prior to redevelopment, the removal theater sat vacant
for more than 40 years.
And as you can see in these photos,
it had fallen into disrepair.
The property, however, was the focus
of a total redevelopment undertaken by our revival, Chicago,
LLC, led by Bridgeport resident Tyler Nevis, with the goal
to restore a neighborhood icon to its former pro prominence.
As you can see, this work is now largely complete
and the Mova Theater has reopened its doors
to the public earlier this year.
The interior is also fully improved in order
to operate the building as a music venue.
Shown here is a current image
of the rehabilitated main theater and seating area.
In total, the project involved a complete redevelopment
of the nearly nine 39,000 square foot theater.
The mixed use venue now includes an 1800 person capacity
auditorium, 4,000 square feet of restaurant space,
and 5,000 square foot brewery.
The project is subject of a previously approved RDA that
provided approximately 9.1 million in assistance
to rehabilitate and stabilize the property
that said, sub the prop.
That said, the project has experienced a significant number
of challenges that continue to cause financial stress
that could impact the longevity of the project,
project and the city's investment.
Given that DPD is requesting an amendment
to the existing RDA to increase the total amount
of TIFF assistance for the project
to approximately $15.6 million in
real estate development, timing is everything.
The redevelopment of the Mova Theater,
however, couldn't have faced worse timing.
The project has suffered from a trifecta of unfavorable un
and uncontrollable macro
and economic events, including the COVID-19 pandemic
shutdown, the resulting once in a generation inflationary
environment, and an unprecedented velocity
of interest rate increases
by the Federal Reserve in response to inflation.
These events have significantly impacted the project in many
ways, however, it is most apparent when comparing the
initial budget to the one to the current.
Of note in this comparison, the project saw an increase
of 190% to the structural
and finishes cost trades, which require qualified laborers,
non-traditional materials and technical expertise.
In addition, the expected interest carry cost rose 437%
as the floating rate in,
as the floating rate jumped from an average of 5.5% to 11%.
This was exacerbated by the extended construction timeline.
In all the total project costs increased
by more than $12 million or 43.5% of the original budget.
One of these elements on its own, could have been enough
to derail a project to the development team's credit.
They continue to persevere through these conditions,
working in good faith to complete the
and fully fund the project.
However, given the cascade
of issues surrounding the development
and despite all efforts made by the development team,
all sources of funds have been exhausted.
This calamity of events has created a tenuous financial
situation that cannot be immediately resolved
through private funding
and threatens the continue operational viability
of the Remo Theater and threatens the city's investment.
Therefore, in order
to ensure the immediate long-term viability of the project
and the city's investment in the building,
DPD is requesting the use of an additional six
and a half million in TIFF assistance.
This assistance will be
provided in the form of a 2 million interest-bearing
conditional loan, and a four
and a half million dollars grant.
These funds would rebalance the project, allow the developer
to satisfy outstanding contracts
and convert their current high interest loans
to a sustainable cost of capital.
Specifically, this proposed ordinance would amend the RDA
to provide up to $15,590,000 in TIF assistance.
The outstanding 11 million in funds still
to be dispersed would be
provided in three payments, one following the
execution of the amendment.
The city would disperse 4,548,000 in grant funds
provided under the existing RDA also at the execution
of the amendment, the city would provide a $2 million
interest-bearing loan to the developer.
Following the issuance of the final certificate
of completion, the city would provide the final four
and a half million in funding.
As a grant, all grant funds are structured
as a forgivable loan with the portions
of the prince and well being forgiven.
If the project remains in compliance with the terms
of the RDA, should the project go into default,
any Unforgiven principle must be repaid to the city.
A structure that is secured
by subordinate mortgage on the property.
The $2 million loan must be repaid
to the city within 20 years of issuance
and will bear interest at a sustainable low interest rate.
With a 30 year amortization schedule.
The loan will also be secured
with a subordinate recapture mortgage on the property
to protect the city's interests.
Although this amendment is not typical for DPD,
the project has had a significant impact on, on the property
and the community itself.
These include rehabilitating an iconic property on a major
thoroughfare in Bridgeport neighborhood that's at vacant
for 40 years successfully opening the theater,
the restaurant, and the brewery for business,
creating 80 full-time employment
opportunities in the building.
Also securing designation of the removal theater as a city
of Chicago Landmark at the September
of 2024 City Council meeting
and is catalyzing further further development in the
area and along the corridor.
The redevelop the redevelopment has achieved all these
milestones in spite
of unprecedented macro macroeconomic events
throughout the development period.
Despite good faith efforts by the developer
to avoid additional assistance,
the project's capital structure is financially untenable
in the near and long term.
For these reasons, DPD is in support of this amendment
and believes the proposed structure
and additional assistance will not only ensure the
stabilization of Ram ova,
but will do so in a financially reasonable manner,
ensuring the long-term viability of the project,
while providing the appropriate
protections to the city's investment.
I'd like to thank the committee for its consideration
and request the approval of this amendment presented
before you to answer any questions
associated with this project.
I am joined by Tyler and am Emily Neviss
of our revival Chicago, John Reynolds of Bomb Realty
and the Devel, and Andrew Scott of dykema,
the developer's legal counsel.
Thank you for your consideration
And thank you, Jeff. I
just want make sure the,
the ordinances 15,596,000.
You said? 15,000,590. So 96.
It is 96. Okay.
And the property's been vacant 30 years or 40 years.
40.
It isn't anymore, though. It's thriving.
Um, can I get, uh, approval
to allow Alderman Ramirez to,
to participate remotely under Rule 59?
So moved by Vice Chair Conway.
All those in favor of the motion signify by saying Aye.
Opposed? And the opinion
of the chair, the eyes have it.
And Alderman Ramirez, you're in the meeting
and, uh, we'll go to Alderman Lee.
I know you want to comment on this project
and how proud you are of do.
Thank you. Um, thank you Chair.
Uh, yes, I'm, I'm so very proud of the
Ram Renova Theater Project.
Um, I, I was able to, when I came in,
get it across the finish line, I, by, by no means, um,
was here at the ground level.
So I'll, I'll credit to those.
Um, including my predecessor who, um,
originally started the, the project along with the, uh, NEIS
that are here, Tyler
and Emily, um, who happened to also be constituents of mine.
Um, I said it
before, uh, in the last a amendment, um,
that I feel very strongly that this is the, the model
of the future of how partnership should go
for redevelopment in a community.
Um, Tyler and Emily moved into the,
moved into the neighborhood right in the middle of Covid.
Their whole family moved here.
Their children go to the school, um, locally here.
And I probably talk
to them more than any other business owner.
Um, they are just down the street
and are in constant communication.
Um, they're great neighbors.
And the, since the theater has opened, we've seen, um,
economic development up and down Halstead, um, coupled
with some map amendment changes that we've made.
We've seen, uh, at least five new businesses
open in and around the corridor.
Um, and we continue to see more and more activity.
Um, and this is just the beginning and quite literally,
and thank you to DPD for all that they've done on this.
I know that this is not typical.
Um, it was not a small thing to come back, um,
and seek more support out of this tiff.
It was something that we discussed and,
and something that was not done, um, in a way
that was taken lightly at all.
Uh, in fact, the, the investors, the, um, Tyler
and Emily went back to the investors multiple times.
They, they never come hat in hand before.
They've tried to exhaust everything on their own.
Um, and I am very pleased with the way that this most recent
or this last, uh, amendment came together, um, allowing
for some things to, um, help correct some things
that were completely out of their control.
And the one thing we didn't mention was the bus
that ran into the building that, that tried
to put a stop to this as well.
Um, a bus literally ran into the
theater not all that long ago.
Um, but we're okay.
Um, and I, I, I have, uh, every expectation
that the future's gonna continue to be bright
for our community because we have the remote theater
and all of the work that's been put into this, um,
and, uh, that it's, uh, in good hands with Tyler and Emily.
So with that, I do ask for, uh,
the committee's favorable support on
this amendment. Thank you.
Thank you. Alderman Lee, I've been to that restaurant.
Very good. And there's a little African shop next door.
There is, um, vice Chair Conway.
Uh, I, during the presentation,
I heard something about an 11% interest rate.
What was, what was that?
That it supposed to be five and half, it became 11. And
Yeah, for the floating rate,
interest rate environment prior
to covid average interest rates for the project, we were
around five and a half percent.
And given the floating rate nature of 'em,
when the Federal Reserve increases their interest rates,
the underlying index rate also increases.
Yeah. So the spread didn't change,
but the Federal Reserve Fed funds rate, you know,
increased almost infinite if you would like,
if you think it's a 0% interest rate
environment prior to Covid.
So that added a call at 500 basis points
to the spread on their existing loan. So
It's, oh, do you know what the underlying was,
like the 10 year treasury or prime, or what was it?
Plus 500 or five 50?
Uh, I don't know what the underlying,
underlying index rate is,
but I would imagine it's either a treasury
or SOR Fed Foot for fund rate. Oh,
Good. So for sure. Yeah.
Alderman Lee, did you wanna add to that? Yeah,
I'll, I'll just add to this too.
Um, the, the project received a commitment of funding from,
um, the state to the tune of $1.25 million.
Um, and the million dollar State grant came in about a year
and a half after it was supposed to, which then forced them
to draw on their SBA loan a a full year ahead
of when they had anticipated $250,000 is still outstanding
from the state at this point.
So all of these things have exacerbated
and really caught, literally, Murphy threw up all over this,
and yet it stands, um, and,
and really a, a project like this,
someone could have just threw in,
threw the towel in at any point, um,
and we would've lost as a city
and certainly my neighborhood would have.
Um, but here we are, um,
and, you know, ready to, to move forward if we're able
to secure, um, this amendment.
So thank you.
Great. Okay. Okay.
So, uh, motion made by Vice Chair Conway. Sure.
Recommending do pass all those in favor
of the motion signify by saying Aye.
Those opposed in the opinion of chair, the ayes have it,
and we'll report the due pass motion out at the, uh,
city council meeting.
Congratulations, alderman Lee. Um, item number 12.
Thank you, Mr. Cohen.
Item number 12 from the Department
of Housing is a substitute ordinance concerning an amendment
of municipal code two dash 44
by adding a new section two dash 44 dash one 50,
authorizing the seating
of tax exempt private activity volume cap
to the Illinois Housing Development Authority
and the Chicago Housing Authority.
There is a substitute ordinance, which has been prepared
and electronically sent to everyone.
Is there a motion to accept the substitute?
So moved by Alderman Beal to accept the substitute.
Um, all those in favor signify by saying aye.
All those opposed, and the opinion of the chair,
the ayes have, and the substitute is before us.
Um, we're joined today by Tamara Collins,
who is the Managing Deputy Commissioner
from the Department of Housing.
Thank you, Blake. Good afternoon. Alright,
Uh, good afternoon, Madam Chair
and members of the Committee for the record.
My name is Tamara Collins
and I am here today on behalf of the Department of Housing,
the ordinance, before you request approval
to see avail available volume cap as determined by the city
to the Illinois development hous,
the Illinois Housing Development Authority, known as ida,
and to the CH Chicago Housing Authority, known
as CHA at the approval of the Commissioner of the Department
of Housing in concurrence
with the city's Chief Financial Financial Officer
and the chair of the finance committee.
Volume cap is a federal resource regulated by the IRS
and is issued by the city for various expenditures
As an allocating authority.
The amount of annual cap received is the maximum amount
of tax exempt private activity bonds that may be issued
during any calendar year.
The Department of Housing share
of volume cap is approximately $270 million
in volume cap per year, and that cap expires in three years.
The authority to seed volume cap allows the city
to allocate all or a portion of its excess
and unallocated volume cap to our partner agencies
for the development of both new construction
and the preservation of affordable housing.
The city has, from time to time, seeded a portion
of its volume cap to both IDA
and CHA in most cases, to preserve affordable housing
for existing properties within the city of Chicago.
The cap was seated
because it would likely expire, if not avail, if not able
to be au to be utilized by the Department
of Housing to fund projects.
And since 2018, IDA has
provided more than $1.5 billion in volume cap
to multifamily projects, uh, created or preserved and have,
and has created and preserved more than 7,000 units
of affordable rental housing in the city without any
additional assistance or subsidy from the city.
While IDA has more resources for affordable housing,
their mission is to create affordable housing across
the entire state.
As many housing deals are becoming more, more expensive
and more complex to finance,
ida's volume cap is becoming more constrained as it
as it meets its statewide obligations.
The ordinance will help IDA to continue
to create a preserve affordable housing,
specifically within the city.
In addition to the project's finance with the,
with in the city without city assistance, IDA also works
with the city and with CHA on multiple deals
that include millions of dollars in volume cap 9%
and 4% tax credits and other soft funds.
This includes projects known as twin deals that require
a combination of 9% tax credits and volume cap
and 4% credits.
The desire for the use of volume cap at both the city
and IDA is increasing,
but at a much more rapid pace at ida,
since they fund deals across the entire state prior to 2019,
up to $200 million
of DO H'S volume cap received would expire annually.
And to date, DOH still does not utilize all
of its volume cap before it expires.
This is why it's critical that the city continues
to seed unallocated volume cap when available to ensure IDA
and CHA can continue to create and preserve units
and keep buildings in the, in the city.
When volume cap is used for affordable housing, it is issued
as a conduit bond.
The bonds help to finance multifamily, affordable, uh,
projects preservation and new construction projects.
The bonds are purchased
and the proceeds of that sale of the, of the sale
of the bonds are used to construct the project.
The volume cap is a debt instrument in the project,
and the responsibility for the repayment of
that debt on is on the project owner.
Additionally, when the bonds are sold
and the proceeds are used for the project costs,
it also becomes eligible
for 4% non-competitive low-income housing tax credits.
Those credits are then sold to an investor,
and the equity generated for those credits are also used
for the benefit of the project.
However, the equity
for those credits generally only covers about
30% of the project costs.
Therefore, the remaining 70% must be covered
by other resources.
In 2020 DOH seated cap to IDA
of $170 million,
the city's volume cap was used in collaboration
with ida's volume cap between 2020 and 2023.
During that time, IDA created
and preserved approximately 5,700 units
of affordable housing in the city in 2022 DOH seeded cap
to CHA for of approximately $98 million for which CHA used
to preserve 500 units of senior housing
averaging at about $196,000 per unit
based on the cap provided.
Currently, DOH has authority to issue up to $150 million
of the city's volume cap to IDA until December of 2025.
In 2019, DOH saw some uptick in the use of tax exempt bonds
with some of the changes in its city's
qualified allocation plan.
These changes allowed for DOH to underwrite projects as
what we previously described as twin deals.
Twin deals allow DOH to utilize 9% credits
and tax exempt bonds, and 4% credits on the same project.
This structure generates additional, additional equity
and limiting the amount
of additional soft funds provided by the city.
But essentially, the city is swapping
one resource for another.
As previously stated, it's been do H'S experience
that in most cases bonds must be repaid
with other cash resources, including TIFF home,
and now the new bond funds to finance multifamily projects
and to make bond deals work in order
to make bond deals work financially in 2021,
with the institution
of the preservation tract in the city's QAP
and as projects drastically increased
and with higher construction costs related to labor,
material, supply chain issues,
and other costs outside
of the city's control deals became more complex
and structure, and the city was able to issue more bonds
to finance these deals.
However, even with this increase in cost
and the use of more bonds, there is still significant,
a significant amount of volume cap left
to expire each year as a result.
Rather than allowing the volume cap to expire
and miss out on the opportunity to continue to build
and preserve affordable housing in the city of Chicago,
DOH is requesting approval
to see this excess unallocated volume cap to IDA
or CHA as needed.
And when available by the authority of the DOH Commissioner
and in concurrence with the CFO
and finance chair seating volume cap
administratively can save significant
resources and staff time.
As an example, the recent CHA projects
where the city seated seat cap to CHA,
it utilized roughly 13 months of valuable staff time
and several months of city the city's law department, time
for multiple meetings to work through the ordinance
for the project to get the project to council.
And roughly 60 days to close after council approval.
During that 13 month, those 13 months due
to the increase in project costs, the project also had
to return to council
to request an additional $10 million in volume cap,
allowing an increase in the amount of bonds
to go from the original $90 million request
to a hundred million dollars request,
adding an additional two months to the closing timeline.
At that time, the PM was carrying roughly eight projects,
including these two deals.
Having administrative authority would've saved the staff
time, that staff time of 13 months because CHA
and IDA would've managed the projects themselves.
And that would've allowed the city staff
to focus on two additional projects
that were awarded in 2021, much of which would've been
for new construction projects,
and utilizing the city's additional resources,
which are required to be approved by city council.
By way of this ordinance, allowing cap
to be seated administratively,
this process could have allowed CHA
and IDA to make their request to the commissioner,
identify their projects, gotten their board approvals,
and the cap would be seated
through an intergovernmental agency.
The projects could close as soon as they're ready
and C-H-I-C-H-A
and IDA would then be required
to report annually on the projects
and proposed units created or res or preserved.
This report would be included as part
of the DOH report to city council.
Overall, this shift
to the administrative process will help create units more
quickly, preserve units more quickly,
and keep them from falling further into disrepair.
Included here are bond projects completed
by IDA within the city
and without the city's participation
in particular Ogden Commons.
A one is a CHA project that is fully funded by IDA
and C-H-A-C-H-A.
Uh, currently DOHS com is completing phase two.
This deal is being funded in partnership with the city IDA
and CHA
and the city is providing TIFF assistance, which, uh,
which has come before the council for approval.
What DOH has seen over the last several years is
that bond deals have been averaging somewhere between 14.8
and $18.3 million in additional resources
to create a preserved units in the city.
Once the volume cap is seated, sorry,
once the volume cap is seated,
the city maintains its oversight authority
and approval through the commissioner initially
through the identification of the specific projects.
Then instituting annual reporting requirements
to be included in the agreement between the city IDA
and CHA respectively with the, with the CFO
and the chair of the finance committee will sign off on
prior to the seating of any volume cap.
The city's goal is always to preserve
and create affordable housing
and the city as quickly as possible.
While the city IDA NCHA understands the need
for more affordable housing to be made avail available
for residents throughout the state of Illinois
and in the city of Chicago, we believe some
of this can be mitigated through this ordinance by allowing
for administrative authority to see cap as needed
and available and not leave valuable
federal resources on the table.
If approved, IDA
and CHA would be accountable for annual report reports
to the city when the projects are complete
and units are online at this time.
DOH respectfully request your approval of this ordinance.
And this concludes my presentation.
I would also like to res, um,
acknowledge our partners from Ida Lawrence Grisham,
Christine Moran, and our partners from CHA
and Mackenzie, who are in the audience.
Where's Lawrence? All the way in the back there.
They're,
Hey Lawrence. Long
time. No, see,
we all remember you Lawrence Grisha.
Yes. Behind the pole. Didn't see him.
Um, Tamara, when you seed either to
Ida or CHA, do you know ahead of time what projects
they're gonna be focusing on?
Yes. So for, um, for this particular ordinance,
we are requesting that they provide us with the projects
that they will be seed, that will be seeding volume cap for.
And then once the projects come online, we would,
they would then be required to do annual reports to us
so we can report to the city council which projects were,
what those bond funds were utilized
For.
And are you required to, uh, notify the, the
alderman of the ward?
We can absolutely, um, make that connection between the,
uh, developer and, and the alderman.
And we can also notify the alderman directly.
Alderman Irvin, I'D Alderman Irvin.
Oh, thank you. Thinking Madam Chair.
Uh, so the, the volume cap goes with the 4% deals, correct?
Yes. Okay. And, um, we are
seeding volume cap to both IDA
and CHA, um, of what we have that's left over.
Why is it that the timing that you said you gave the,
the, uh, the C project beans project,
why would the timing take so long to ma manifest this?
I mean, this is, this doesn't seem like
rocket science to me.
Sure. So you have
to keep in mind when these deals are done,
it's not just the city that's in the deal.
There are multiple agencies, multiple lenders in the deal.
If the, if we had this AAU author,
this authority at the time, we would not have had
to be in the deal at all.
We would've seated the volume cap as required
by the intergovernmental agency that we would have.
And then IDA and CHA could then go onto their boards
respectively and meet the requirements there.
And then they could just report back
to us once the work was done.
In the case of these two deals, we had
to treat it like it was a regular multi-family deal
where the project manager had to be assigned
and they had to take it through all
of our internal review processes, um,
because they were the ones that were gonna have
to present the projects to the city council
for the seating of the volume cap.
So then does that change the nature of, for example,
uh, CHA does not have MBE requirements?
We do. Um, they have D-B-B-D-B-E requirements
'cause they are, they use Section three
and other things in the state too,
doesn't have an MBE program.
So how would those, how would that impact, um,
us giving authority
to them if these are technically our projects
that are happening in the city of Chicago,
but are, we don't have involvement.
That's,
I'm actually gonna let Anne McKenzie
and speak to that on the CHA aspect.
Yeah, that,
Um, thank you so much.
I'm, um, for the record, Anne McKenzie,
chief Development Officer, and actually we do have, um, MBE
and WBE requirements.
Um, they very closely match the city.
Um, the only difference that I really see is that we take
certification from more than just the city.
Um, but also a reminder, most of our, in fact, all
of our transactions that you've seen are plan developments.
So, so as the owner of that property, we are covered
and we have made a commitment to you, the city to honor
that 36 um, percent m
and 6%, um, WBE requirement.
But you're saying that you accept certifications that are
outside of Chicago certification.
Uh, is that correct? What other
certifications do you accept?
State of Illinois, the county, um,
we have our own certifying, um, we take the airport
and we can get you the complete list.
Would one, um, we've got fairly
strong requirements.
Um, and, and, uh, maybe this is a question that, um,
I don't know if you can answer or not.
Um, our requirements are fairly robust.
Are the requirements on the MBS and other, um, programs
or other certifying agencies as robust as the city
of Chicago's MBE program?
Um, I think you're right that I would have
to ask my compliance department to explain that compared
to your compliance department.
But we do have a full com, a full department
that looks at absolutely our red draw, um,
and certifies.
We are also starting to share information.
So on, um, on transactions where you do have a loan
and we have a loan, actually we are sharing, um, all
of those compliance requirements between our departments
And to, uh, deputy Collins, those deals still come
through here or, or those are deals that will just stay
with IDA and or CHA.
So once we see the volume cap, they would be monitored
by CHA and ida.
Um, but we would, for, for CHA in particular, we would be,
uh, administering the, the tax credits on those.
So we would be managing the long-term monitoring process
for, um, for the CHA deals.
And for some of those deals, alderman, we, they go
through the, uh, plan commission, uh, for review.
Uh, most of the CHA projects go through the plan commission
where we get a look at it,
and when we get another look at it, some
of these projects also go through zoning.
Okay. But the financing aspect
of it wouldn't come back to this committee then?
Right? So the purpose of seeding the volume cap is we
don't, we don't have the funds to do the deal ourselves.
So otherwise, otherwise, if we had the money,
we would just do the volume cap deal ourself.
We wouldn't see the volume cap. Oh,
I, I get that point. I'm
just, I'm just concerned.
Uh, I'm just, I'm just concerned about us as a, as,
as the city of Chicago, uh, for lack of a better term,
losing control over what happens
after we, we give up this, uh,
give up the volume cap to another agency
and it also meeting the goals locally of what, uh,
respective members of council would want to see in their,
uh, wanna see in their communities.
Now, if these deals still require TIF for other assistance,
but they would've been included in the volume cap
that we would've used anyway. Right.
Not when we're seeding cap, we're not providing any
Right. We're not doing anything.
Yeah. We're not providing any additional
financial resources to the project.
Once we seed the cap, it's up to IDA
and CHA to utilize it for the respective projects.
We don't put any more money in the,
we don't put any cash in the deal.
Okay. And then that also be done in consulted in
consultation with the chair?
Yes, we would work and they would let us know in advance
which projects that they would be, um,
providing see volume cap two.
Okay. And I would make the commitment, um,
as the current chair that any, since we know
what projects are associated with the seating
of the volume cap to make sure that the alderman know
and are contacted about those projects.
Okay. Alright. Thank you. Thank you Madam Chair.
Thank you Deputy. Thank
You.
Any other questions on this? Alderman Conway?
I'm sorry. Vice Chair Conway?
Yeah, I mean, uh, uh, uh, chairman Irvin
answered a lot of what I had.
I totally understand why we need to seed volume cap
and why IDA is better equipped than, uh, than, than we,
than do OH is at least to do this.
Um, but I share all the vin's concern
that doesn't seem like it's adding much time to come to come
to city council on something like this.
This is an, this is an enormously valuable thing
that we are, that are seeding away.
And while I think Chairwoman Dowell is perhaps the most,
is the most honest public servant in the city, you know,
the guy who was head of the finance committee for the bulk
of my life is in federal prison.
So that is something that, that makes me nervous
that city council is, is seeding that, seeding that power.
So maybe you can talk a little bit about the
administrative burden.
Just go over that again about the administrative burden it
is to come to city council.
Sure. The two, uh, times
that we seeded volume captain CHAI talked about the time
that it took for staff to basically underwrite those deals
so that they could present those projects
to the city council.
If this ordinance was in place, we would not even have
to assign a staff person for that purpose.
The staff person would,
would basically accept the application
and we would request authority for the commissioner
of the Department of Housing to, to approve, uh,
the seating of the volume cap.
Once it's seated, the agreement is then, um, completed
between IDA or CHA, whoever the volume cap is being seated
to, and then they would report back to the city
when those projects, when those units are brought online.
So in that particular case, it was about 13 months
of staff time, plus the project had to go back
to city council when they requested an
additional $10 million.
So that added an additional two months.
So if you just think about city council in general,
that's two months normally,
but then if you have to come back to city council,
if I had the authority to just see the extra $10 million,
I wouldn't have had to return.
But that added another two months.
But then it also required that staff person
to focus their time on these two projects for 13 months
as it went through ch a's processes as it went
through other lenders processes.
And that time could have been utilized in, in my opinion,
doing deals where we actually have,
where we actually have cash in the deal,
mostly new construction deals
that we could have had in the ground
and had them moving forward.
Lot to unpack there. Perhaps the scariest part is
that it's, it takes a staff member 13 months
to talk about seating volume cap to, to another entity,
which means we have a whole different set of issues at play.
Um, and feel free you can add to
that if you'd like, I guess.
Well, I think what, when you think about it from
that perspective, you have
to think about all the other processes that we have
to wait on in order to seed the cap.
So it's not necessarily our internal processes,
although we had to have some,
so there's internal loan committee
and other committees that we have to do present to,
but we could have done that fairly, you know, right away
and seeded the volume cap and then allowed IDA
or CHA to move on with their processes
and then we would just get the reports back.
So there's there's a duplicative nature. I, I get it.
Well, I, I, I have expressed my concerns,
but I also recognize the enormous housing shortage we have
in the city, so I'm certainly, uh, so on that move to pass.
Okay, thank you. We'll hold the motion, think
that the alderman la spotter had a question.
Thank you very much chair.
I, I appreciate the dialogue today.
I, I think about the fact
that we've spent the last two months
and we'll spend the next three months
talking all efficiencies in city processes.
They cut the tape initiative.
This feels like something,
and maybe you can elaborate as you already have,
that creates significant efficiencies for DOH staff.
Would you, would you agree?
I do. Absolutely.
Um, and just as I just spoke about,
but that is, it's this, that's this time I came back twice
to city council myself, um, for, for IDAs volume cap.
So it, it,
and obviously as the managing deputy,
I'm extremely, extremely busy.
So I I, but having to come back and,
and do this work, I, I think it's important
to come back here and, and, and do this.
We have, as the alderman has already alluded to, we have a,
a serious shortage of affordable housing in any way
that we can get affordable housing online.
I think we should be moving in
that direction without interfer.
I'm not interference from that perspective without,
you know, being held up.
No, I appreciate it. I I just wanna like, highlight in all
of this that by ordinance, the cap that we're seating needs
to be spent on projects in the city of Chicago.
That feels great. In the briefing that you all did with us,
it was shared that the volume cap
that is used on projects in Chicago
far exceeds the cap that we are seeding to these bodies.
Also feels good. It's written in that there has
to be an annual report to the committee on finance of
where our volume cap went.
That's also accurate. Yes.
Feels great. And it must be used in Chicago. Yeah. Yes.
That's, that's, that's what the ordinance specifies
Valuable points. And as
we talked about in 2022
when we were seeding cap, we, we seed cap
because there's not sufficient.
I may editorialize here for a second
and you can tell me if I'm editorializing
Yeah. Sufficient DOH
resources to use it.
Bingo. Bingo.
So like, if, if the goal here at some point is to
seed less cap to IDA
and CHA, there is a route for that,
which is called putting more city resources
into affordable housing.
That's a conversation that we can continue.
And until that point, I, I really value the work
that we're doing today, the efficiencies
and the housing that it creates. Thank you chair.
Thank you. Alderman Lata, uh, motion made by
all vice chair Conway.
Recommending do pass. All those in favor
signify by saying Aye.
Opposed in the opinion of the chair.
The ayes have it and we will report this out at
the next city council meeting.
Thank you, Tamara. Thank you so much.
Ooh, item number 13, from the Department
of Housing, a substitute ordinance concerning the execution
of a redevelopment agreement
and issuance of multifamily housing, revenue bonds,
and other financial assistance with the avenue southwest LLC
for acquisition construction
and equipping of a four story building
located at 36 0 1 through 36 25
West Chicago Avenue in the 27th Ward.
Um, there is a substitute ordinance which was prepared
and sent electronically to everyone.
If I can get a motion to accept a substitute.
So moved by Alderman Beal.
All those in favor signify by saying Aye. Opposed?
And the opinion of the chair.
The ayes have it and the substitute is before us.
Now we're joined by, uh, Venetta Jones, who is the
financial planning analyst from the Department of Housing
to present this project.
Thank you Chairwoman Dow
and members of the committee For the record,
my name is Venetta Jones from the Department of Housing
before you today is the ordinance for the benefit
of the a f transaction located at 36 0 1
through 36 25 Chicago Avenue
and the 27th Ward Humble Park Community area under Alderman
Walter Burnett Jr.
This project was selected by the Department of Planning
and Development via RFP in 2021.
Today we are requesting the authorization
for tax exempt bonds for up to 25 million
and authorization to issue up to 20 million in tif along
with the authorization to negotiate the sale
of one city on Land one city on lot at 36 11
through 36 25 West Chicago Avenue.
The development team is led by joint venture
between the preservation of Affordable Housing Incorporated,
known as POA
and KMW Properties Incorporated,
which together will form the Ave.
Southwest LLC POA is a national nonprofit organization.
Since 2001,
POA has had more than 13,000 affordable rental apartments
through the transactions that guarantee
that rents will remain affordable for the long term
of 30 plus years.
KMW communities.
LLC is a Bipoc Illinois limited limited liability certified
MBE company founded by experienced real estate professionals
with over 20 years of combined real estate development,
finance design, and construction management experience.
The split between the two developers will be 62.5
to 37.5%.
Gensler will be the architect
and they have chosen their general contractors
as Leo Pardo Construction
and Usma Construction, which is also Bipoc led.
Sorry, Their lender is Bank of America
with a 93 cent buy-in rate.
Bank of America will use their own credit,
so there will not be a syndicator needed for this project.
Poor communities will be the property manager
with Applegate Thorn Thompson
as their council and Bond council.
The proposed project will be located in the 27th Ward in the
Chicago Central Park Tiff District located in the
Humel Park community area.
The a will consist of a single new construction building.
This building will be a four story with elevator
and will house 52 mixed income units.
They will have 32 onsite parking spaces for residents
and there will be an be an enclosed garage
with a loading area.
Currently, NHS owns the existing building on
the property owned lot.
They are donating the existing property to the project.
They will move temporarily during construction
and demolition and upon completion will permanently occupy
one of the commercial spaces.
The development also offers a 1600 square foot commercial
space, but currently has no letter
of interest for this space.
At this time,
The proposed units range from one to three bedrooms.
The development will consist
of three units at 30% a MI five units at 50% a MI
and 44 units at 60% a MI.
The three one bedroom units listed are set
to be permanent supportive housing units as indicated
by the asterisk pos.
Community impacts coordinator will provide connections
to the supportive services.
I have taken the liberty to list the square footages
and rents as well as noted.
The, a average a MI for the Humboldt Park community area
is at 41,800,000, $41,800
With link on the site.
In addition to the city owned lot,
the development will be financed with equity
of approximately $19.4 million from the tax exempt bonds.
With a 93 cent buy-in rate up
to $20 million in tif.
Also, the Department of Planning
and Development has approved $4.2 million in
Chicago recovery funds.
This project has also received other grants such
as the bond reinvestment, earnings investor,
legal reimbursement,
and a boa uh, bank of America ITC Solar Grant.
Users of funds include $32.8 million in construction cost
and contingencies.
The development will accrue approximately
$11.7 million in soft funds for a total development cost
of $44.6 million.
This will result in approximately 857,000 per unit
costs are attributed to high construction interest.
Also, the City of Chicago is moving towards being
an all electric city.
This project will be an all electric building
with energy star appliances.
They will also have water conserving,
plumbing fixtures and all units.
This building will also contain a solar ready roof.
All of these islands will be attributed to the,
the cost per unit
To the left is a city owned lot at 36 11 through 36 25.
This slide shows you the current views of the site.
To the right is the privately loan owned lot at 36 0 1
through 36 0 9
and the existing building for NHS that will be demolished.
It shows where there is, was a vacated building on
that lot on the city owned lot,
but has since been demolished.
And now a vacant lot shown
is the rendering for the proposed development along the
Chicago Avenue Corridor.
Next rendering still along the Chicago Avenue corridor.
Just a different angle
to the left is the existing layout
with the blue being the city owned lot appraised at
approximately $240,000.
In order to complete the proposed project to the right,
they're going to cut off the current alley
and make a new alleyway.
As such, this alley vacation dedication has already been
approved through council, along with DWM and cdot.
The public benefits will consist of two 50, I'm sorry,
52 units with 11 accessible units ranging from 30 to 60%.
A MI three of the units will be
permanent supportive housing units.
This development will provide common area amenities
that will include free wifi
and common areas bike storage, a package room,
and laundry facilities on each residential floor.
Onsite parking for residents will be in,
in an enclosed garage with a loading area building.
Security will be provided through the controlled buzzer
entry system and cameras at the entrances.
There will be 32 parking spaces for cars
with Ike storage as well.
The developer is a joint venture project
with BIPOC LED KMW communities,
who has over 20 years experience.
There will be a community space housed for NHS
who will offer home ownership programs and education.
They will create approximately 280 temporary construction
jobs, along with five to 10 permanent jobs.
The project is being designed to enterprise green standards,
which will satisfy the City
of Chicago sustainability requirements with the building.
This building will also be all electric
and solar ready, roof energy store appliances
and water concern conserving public plumbing fixtures.
Today we are requesting approval to issue up
to $25 million in tax exempt bonds approval to issue up
to 20 million and TF
the development team seeks the negotiated sale
of one city on lot, located at 36 11
through 36 25 West Chicago Avenue for the purchase of $1,
and to designate the a southwest LLC as the developer.
If we have passage this month, we're looking to close
in December of 2024
To thank you Venetta.
Um, want to acknowledge that Alder Burnett, who is not here,
um, supports this project.
He's given us a written letter of support.
Um, any questions from the council?
Start with Alderman Irvin, followed
by Alderman La Spotter. Uh, I was gonna move
Passage. I didn't
Know anybody answer. Oh,
alderman la Spotter.
Thank you so much, chair.
It's a, a beautiful project, really great building.
Love the mix of incomes, unit sizes, construction.
I wondered if you could go back to the slide
that lists the area median income and the rents.
Of course. This one? Yes.
Okay. Yes. So I know that we're listing community area,
area median income
because council members have asked for that.
Correct. But we are still, just for clarity for the public,
we're still basing rents off of the metropolitan area area.
Median income. Correct.
We're basing it off the market area study that are within
that community area.
So are we, I think I need somebody to clarify this for me.
Are we doing small area fair market rents
for area median income?
Have we moved to community area based area median incomes,
because this would, this would be a bit of a, a break from
previous rental pricing.
So I have today, uh, Julie Degra and with POA
and Bill Williams from KMW to answer any questions.
Good afternoon. I'm Julie DeGraff.
Um, the question on the rents is a good one.
Uh, we actually do look at
what the prevailing market can support.
So we use a market study done by a third party
to evaluate what the rents could be.
So even though the maximum is up to 60%
of a MI based on the city of Chicago,
we are not at those maximums.
We are actually below those.
Um, and they are appropriate based on that market
and analysis for this neighborhood.
No, I, I, I, I'm, I'm very grateful for that
because there's no point doing
a hundred percent a MI rents when the community is making
50% a MI.
But just for clarity in the conversation, when we say
60% a MI, that, that is still based off
of the Chicago metric.
Yeah. Yep. And that's, that's the maximum.
And that's basically pursuant to IRS guidelines.
I, I figured I appreciate the clarity. Yep.
Thank you so much. Sure. Uh, I'll only other say like,
despite some of the, these, I'll be cheeky for a moment.
Despite some of the mailers that went out over the weekend,
the idea of an all electric city sounds really great to me
and this feels like a great project
for moving us in that direction. Thank you.
Well, thank you. Thank you. Yeah, thank you.
Alderman LaSpada. We did include the a MI
for the community area
'cause that had been requested by, uh,
several members of the committee.
So we're trying to include that going forward.
Um, alderman Irvin moves to pass of this item.
All those in favor please signify by saying Aye.
Opposed in the opinion of the chair.
The ayes have that, have this,
and we will report Do pass motion out at the next city
council meeting.
Thank you, Venetta. Thank you all.
Uh, the, the item number 14 from the Department
of Housing is a substitute ordinance
concerning the execution of a redevelopment agreement
and issuance of multifamily bonds
and other financial assistance with sacred apartments.
Owner LLC for acquisition construction
and equipment of a low income residential facility
at 92 12 South Burley in the 10th ward, uh,
there is a substitute ordinance, which was prepared
and electronically sent to everyone.
Alderman Quinn, uh, made a motion to,
uh, accept the substitute.
All those in favor signify by saying Aye pose in the opinion
of the chair, the ayes habit
and the substitute is before us.
Um, we're joined today by Ms.
Shin from the Financial Financial Planning Analyst
with the Department of Housing.
Ms. Hin,
Good afternoon, chair da are the members of the Committee
for the record, my name is hin Financial Planning Analyst
from Department of Housing.
I'm presenting Sacred Apartments today for the authority
of the ordinance
regarding the financial assistance from the city.
This project will be located at 92 12 South Birdie
Avenue in South Chicago.
The project is supported by the Alderman Peter Chico.
The overall request to the City of Chicago,
including the issuance of up to 5 million grant in T funds,
a grant and a loan from Department of Housing.
Multi-family Program funds up
to 23.5 million in tax exempt bonds
and the Convey seven city owned parcels to the developer
for the development of the project.
The site will be located at the southwest corner
of East 92nd Street
and South Birdie Avenue, south Chicago Community Area,
and the T District
Sacred Apartments.
Owner LLC will be the owner entity.
The developer is a joint venture between the Interface,
housing Development Corporation of Chicago,
and Collaboration Associates, both nonprofit organizations.
Interface is a professional organization in affordable
housing area with over 30 years of experience.
Collaboration Associates as the community partner
remain dedicated in its mission of responding to the needs
of South Chicago
and is surrounding communities
by providing affordable housing
and the vital services that benefit the safety
and the wellbeing of residents and the families.
The proposed project will be a newly constructed five
story elevator building.
The first floor will contain a front desk, a community room,
property management, and social service offices
retail space on the 92nd Street frontage
and a 44 space parking lot is designed for the South end.
Sacred apartments will contain 15 studios, 11,
one bedroom, 21 2 bedroom, 25, 3 bedroom.
And the nine four bedroom units was completed.
Oh, 81 units will be tax credit eligible with 47 units
targeted to households at or below 50% a MI.
And the 43 units below 60% EMI
17 units will be set aside as permanent supportive housing
for serving homeless and disabled households.
The total land area is around 60,000 square feet,
mostly vacant with two unused buildings to be demolished.
The subject side covers 12 parcels,
including five parcels from Cook County Land Bank.
Seven city owned parcels will be conveyed to the project
for $1 each parcel.
The total development cost will be around 47 million,
which 73% attributed to hard cost, 18%
for soft cost, and a small portion for land acquisition.
In addition to typical sources including first mortgage, gp,
equity and comment grant,
the project is also getting a 4 million loan from ida,
2.6 million from proceeds from invested bonds,
and 1 million deferred developer fee in the budget.
The overall ask to the city of Chicago
for financial assistance, including 1.3 million grand
and two seven, I'm sorry,
7.2 million loan in DH multifamily program funds,
5 million T grants and issuance of 23.5 million.
Tax exempt fund will generate at least 20 million in equity.
The project clearly meet the DOH goals
and the guidelines by supporting the creation
of affordable housing for low and very low income residents
and families, DOH re recommending the project
and request your favorable approval
of the assistance to the project.
So again, the overall request to the City of Chicago,
including a grant in t funds, a grant
and a loan from DOH multifamily program funds
insurance of tax exempt bonds,
and convey seven city owned parcels.
To the developers, they create apartments developer
for the development of the project.
That covers my introduction. Thank you for consideration.
From the developer side, we have Angela HeLOCK,
the Chief Executive Officer from Cion Associate
and Perty, the president from IHDC.
We are happy to answer any questions you may have today.
Uh, thank you Ms. Shin and uh, uh, to, uh, Angela Hurlock.
I just recognized you. I'm sitting there. Nice to see you.
Thank you for coming. Uh, any questions for members
of the committee on this item?
Seeing that we have no questions, uh, motion made
by Alderman Ramirez, uh, to on due pass on this.
All those in favor signify by saying Aye.
Opposed in the opinion of the chair.
The ayes have it and will report this item out at the next
city council meeting. Thank
You.
Thank you, Ms. Shin.
Item number 15, an ordinance concerning the issuance
of financial assistance
and execution of a TIFF redevelopment agreement
to Brown Derby LLC
and R two development LLC for the redevelopment
of the building located at 79 West Monroe Street
and the 34th Ward.
Uh, there is a substitute ordinance, which has been prepared
and is sent electronically to everyone.
Can I Alderman Con Vice Chair Conway, uh, moves
to accept a substitute.
All those in favor signify by saying Aye.
Oppose and the opinion of the chair.
The ayes have it, and the substitute ordinances
before us for consideration.
Uh, Diane Beltran from the Department of Housing
and Cindy Rubik from the Department of Planning
and Development are here to give the presentation.
Yeah. Good afternoon, chair Dowel
and members of the committee for the record.
My name is Diane Beltran, city planner
with the Department of Housing.
I am here to bring you 79 West Monroe, also known
as the Weather Bell Building.
This project is one of the office
to residential conversion projects in the LaSalle Central
Redevelopment Project area.
It is located at 79 West Monroe Street in Alderman
Conway's 34th Ward.
Today's request is a TIF request
provided by the LaSalle Central TIF District.
Both Al Alderman Conway
and Alderman Riley of the 42nd Ward have
provided letters of support.
Today's requested action is to request finance committee
to approve and refer the 79 Westman Monroe transaction
to city council for the approval of the following.
Authorize the execution
of a tax increment financing TIF R development agreement
with Brown Derby LLC
and R two development LLC for the use of 28 million
and Tiff, and to designate R two development LLC
as developer for the project known as 79 West Monroe
to be located at 79 West Monroe Street in the
Loop Community area.
Before I jump into my presentation,
I do wanna allow Cindy Rubik with the Department of Planning
and Development to present a very brief presentation on the
overall Loop Revitalation initiative.
Oh, yes. Um, the, so LaSalle Street today.
Yeah, thank you. We were gonna skip
through some of these for the record.
My name is Cindy Rubik, deputy Commissioner with DPD.
Um, so in terms of the overall timeline for this initiative,
as we all know, the Covid pandemics, uh,
significantly exacerbated already high office
and retail vacancies.
These are challenged by aging older structures, the rise
of e-commerce, and of course work from home.
So in the fall of 2020,
the city convened over 150 stakeholders
and we identified 90 action items in the Central
City Recovery roadmap.
These recommendations included repositioning the loop
and its historic financial core to be a more vibrant,
equitable and mixed use environment.
DPD then sponsored additional studies which recommended
that the city should provide financial assistance
for mixed income housing, adaptive reuse projects.
The city then announced an invitation
for proposals in the fall of 2022 for proposed conversions
of underutilized office space into residential uses.
For consideration of city assistance, a minimum of 30%
of the units had to be
for affordable households averaging 60% a MI.
Earlier this spring, the city announced support to proceed
with four adaptive reuse proposals.
And today's agenda is the first one coming
to city council's, uh, finance committee.
In addition to the adaptive reuse component
of this initiative, the city's also providing small business
improvement fund grants for the first time in the loop
to address the unprecedented high levels
of retail vacancies.
The first round was released last fall,
and the second round round was released last month.
Over the past spring and summer, the Department
of Planning Development and CDOT also engage the public on
LaSalle Street visioning to gather feedback on how
to improve the public realm along this historically
significant corridor.
Turn it back to Deanna.
Thank you, Cindy. So, jumping back in, I'd like
to share a few details if I could find my slide
about the existing structure that you see here.
So, 79 West Monroe is a 14 story building that was designed
by architect Architect Jarvis Hunt in 1906 with an addition
to the South by Holly Bird and Roche in 1924.
This historic building is the former headquarters
for the Bell Federal Insurance Company.
And in 2013,
the building was included in the West Loop LaSalle Historic
District listing on of the National Historic,
on the National Historic of National
Register of Historic Places.
My apologies. So the development team,
the developer is our two development LLC.
Our two companies was founded in 2006
and is a fully integrated private equity real estate firm
with offices here in the city of Chicago,
Milwaukee, and Minneapolis.
They have deep knowledge
and experience redeveloping historic buildings in Chicago,
including the Salt She and Romania Club.
The owner for this project is Brown Derby, LLC, uh,
with Lavin SCA to control a hundred percent interest.
Lavin, SEA is a Luxembourg race company organized under the
form of limited partnership by shares.
Its main corporate purpose is to, is the holding, uh,
of a controlling stake in the David Campari Milano Envy,
which is part of the Campari Group.
They hold a glo, a global diversified portfolio
of real estate assets
and has picked Chicago as one
of the two key markets in the United States.
Over the past two years.
They have deployed over a hundred million of equity
with several acquisitions here in the city of Chicago,
including 79 West Monroe, two 17 North Jefferson,
nine 16 West Fulton, and 101 50 North Michigan.
The architect is warm welcome.
They were established in 1972, and they are a contemporary
and expanding full service design firm.
They have substantial Chicago, a substantial Chicago office,
and is experienced with, uh, adaptive reuse projects.
The general contractor will be a joint venture
between Lopardo and GMA construction group.
Lopardo was founded in 1977
and is headquartered here in the city of Chicago,
and they are one of the largest, uh, one
of the city's largest general contractors.
GMA was founded in 2009
and is a MPE certified company headquartered here in Chicago
and is one of the fastest growing general contractors.
There has not been a property
manager selected for this project.
The attorney firm is TAF Law
and there are also two consulting, uh,
firms supporting the development team.
That is Johnson Research Group
and Ramsey Historic Consultant Incorporated.
As mentioned, brown Derby, LLC is controlled, uh,
by Lavin, SEA.
You could see here the ownership ownership structure.
Lavin SEA is controlled by limited partnerships
and general partnerships.
79 West Monroe is an adaptive reuse project
that will result in the conversion
of approximately a hundred thousand square feet,
containing 117 residential units on floor seven through 13,
a tenant lounge, fitness center,
and an outdoor area on floor 14.
It will also include a small retail space,
bike room, and dog run.
On the lower level floor of the seven
of the 117 residential units, 41 units
or 35% will be affordable to households earning an average
of 60% of the area median income.
The remaining units will rent
to unrestrict unrestricted households.
Unit sizes will range from studios up to two bedrooms
with square footage ranging between 414
and 487 square feet for studios
545 to 774 square footage
for one bedroom units.
And lastly, the two bedroom units will be roughly
1049 square feet.
The building does have two existing tenants
that is Walgreens
and intrinsic schools that will not be impacted
nor included as part of this proposed project.
The project will provide 41 units that will consist
of a total of seven units at 40% of the area median income
or a MI seven at 50% of the a MI
13 at 60% of the a MI and seven at 70% a MI.
And lastly, seven at 80% of the a MI.
The table you're seeing here on the slide outlines
additional unit detail, including estimated initial rent
for the affordable units.
The rent for the affordable studios will range from 785
to 1,571 bedrooms will range from
841 to roughly 1682
and two bedrooms ranging from 1000 to roughly $2,000.
I do wanna provide some clarity on the income limits
as well as the a MI.
The affordable rent paid
by the tenant is based on the tenant's income,
not on market comparables.
These limits are based on the median income
of a specific geographic area.
That being the Chicago MSA, the maximum rent
for each defined affordable income that you see here
is published annually by the US Department of Housing
and Urban Development, also known as HUD
and listed according, uh, to the building construction type.
For example, smaller apartments, town homes,
or single family homes, number
of bedrooms and household size.
So here I am highlighting the income limits, uh, from 40
to 80% of the a MI.
The rent
for the affordable units will be significantly lower than
the unstructured market rate units.
Rental rates for Class A buildings in the loop are roughly
2200, nearly 2300 for studios,
about 2,800 for one bedroom units
and about more than 4,004 two bedroom units.
The structure in city requirements are as follows
for TIF disbursement Schedule 50 will 50% will be upon the
expenditure of 50%
of the total project costs 25 at 75%
of the total project costs.
And lastly, 25
after the certificate of completion,
there will also be other city requirements including
prevailing wages, 26 MBE,
and 6% MBE wbe.
And lastly, a 50% city residency.
The mixed income rental housing development has a total
development cost of roughly 64.2 million.
44% of the project,
or 28.3 million will be funded by the owner's equity.
The applicant is also leveraging historic tax credits
that will generate roughly 7.8 million in equity,
approximately 12% of the total development costs.
And lastly, the applicant is seeking 28 million in tiff.
All in all, the per unit costs sit roughly at
549,000 per unit,
and you could see the breakdown for the additional, uh,
unit types, taking a closer look at their uses,
roughly 9.9 million in acquisition, 47 million in hard costs
and 5.6 million in soft costs.
The remaining 1.7 is for the developer fee.
I do wanna point out additional factors that drive up costs
for these types of adaptive reuse projects.
There are conversion costs, costs for conversions, uh,
of this type, um, are nearly
impossible to to do.
Um, this project. This building is a historic building.
So there are extensive details to the mechanical,
electrical, plumbing work, hvac,
and other quote required modifications.
Uh, these types of buildings also have larger
and deeper floor plates that are more inefficient in terms
of rentable versus non rentable space,
which reduces feasibility.
And again, uh, reiterating the building size.
Office buildings are often too big
to fully convert into residential,
so resulting in costly building modifications.
There are also, as we know, financing costs,
interest rates are still fairly high,
making financing more expensive
and reducing the feasibility of a project.
There are other challenges such as structural challenges,
uh, windows column placements, access elevators,
sprinklers means of egress.
There become a challenge that could drive up costs.
And again, um, this building is a historic building.
So to preserve historic buildings, um,
there is a higher standard of care
and specialized expertise needed
highlighting the project location.
The building occupies the full site at the southeast corner
of West Monroe Street and South Clark Street.
And then these next few slides are renderings
of the proposed common areas and units.
So the upper, uh, rooftop deck
in amenity space, additional amenity space,
and, um, interior unit view of the units.
There are several public benefits to this project
for the Luke community area,
but for the entire city, um,
we are converting underutilized space,
increasing the property tax revenue higher, uh,
housing production in the loop community area
that will result in 41 affordable units, uh,
for households earning anywhere from 40 to 80% of the a MI.
These units will also be type A accessible.
There is historic preservation.
Um, they're also requesting landmark status
and leveraging historic tax credits.
Several environmental sustainability, uh,
benefits including, uh,
energy efficiency upgrades following the Chicago
sustainability development policy.
And there will also be roughly a hundred construction jobs,
including that being 26% MBE
and 6% WBE through that joint venture with, uh,
GMA construction bike park bike parking,
there will be roughly 124 spaces for bikes.
And again, highlighting that this is a joint venture
with an MBE firm established here in the city of Chicago.
There is an estimated five full-time jobs, including a fa,
a full-time property manager, two leasing agents
and two building engineers that will
result from this project.
And, um, lastly, highlighting
that there will be several community spaces for tenants,
including a lounge with private workspaces, fitness center,
outdoor areas, dog run,
and other amenities project timeline.
Um, if approved, uh, we expect to close by quarter four
of this year with construction beginning quarter one
of 25 in completion in quarter one of 26.
Again, today's request is to request finance committee
to approve and refer the 79 West Monroe transaction
to city Council for the approval of the following,
authorize execution
of a tax increment financing redevelopment agreement
with Bron Derby LLC
and R two development LLC for the use of 28 million
and Tiff, and to designate R two development LLC
as developer for the project known as 79 West Monroe
to be located at 79 West Monroe Street in
the Loop community area.
Thank you for your consideration
and I am happy to answer questions.
We are also accompanied by several members
of the development team, including the developer,
Gary Stoltz and Liz Butler with TAF Law.
Thank you Ms. Beltran. Very thorough, uh, presentation.
Um, although this is located in the 34th ward,
and I know Vice Chair Conway will speak to this, it's also,
uh, it's in a tip shared by, uh, the 42nd Ward alderman,
and we have a letter of support from the 42nd Ward.
Are there any questions from members of the committee?
Alderman Lasa.
Thank you very much, chair.
It's, this is feels like a long time coming.
I'm, I'm excited for what we're bringing to LaSalle Street
and as we've discussed in a few different places, this is,
this is the pilot, this is the test for
what office conversions can look
and feel like on LaSalle Street To that extent, like you,
you can't expect everything to meet the highest
of expectations the first time around.
Although this is a beautiful building. The units look great.
The lounge looks like something I wish I could
put on my rooftop.
Uh, I did have a few questions, all of like,
I'm a sure thing on the vote, so don't worry about
that going in.
Um, can you talk a little bit more about how they're meeting
the Chicago Sustainable Development Policy?
I feel like it's a certain threshold for rehabs,
it's a higher threshold for new construction.
Can somebody elaborate on that?
Sure. Yeah. For new construction, they have
to meet a hundred points
and for a substantial, uh, rehabilitation
of existing buildings, it's 50 points.
So we'll get into, uh, how they're exactly meeting that
as we get closer to submitting for permit and that process.
But it's for, you know,
they can exceed energy code as an example.
Um, you know, being, um, uh, providing energy efficient, um,
appliances, electric appliances, that sort of thing.
There are different, it's a whole menu
of options that they can select. Oh,
I know. I yes,
aware. Um, I appreciate that.
I, I hope when you get closer to permits,
if you can circle back through the chair,
that's something I'd be very much interested
in, better understanding.
Um, I was curious if you could talk about in the
RDA, the RDA itself only calls for a 10 year term
of affordability.
My understanding from talking to DOH is
that there's inclusionary housing agreement that follows
after that extends that term of affordability.
I'm wondering if someone can elaborate that
or confirm whether I have the facts right.
Hi, I am Dean Wayne. I'm a financial planning analyst
with the Department of Housing.
Yeah. So there, there, um, the RDA actually will, will, um,
require 30 years of affordability.
Yeah. And there'll be a covenant running with the land.
And so the term of the agreement
of the RDA is gonna be 30 years.
There's a 10 year recording, uh, reporting requirement
by the department of, for the Department of Planning.
And information will be submitted to them for that.
But our compliance division,
the housing compliance division, will continue
to get records for affordability.
Um, I mean, and it does tie in very nicely with the IHA,
but they're, they're co-Terminus.
What's the story with the covenant?
Is this something that we generally do?
Say that again? What's the story that covenant,
The story? I have not heard
of affordability being tied to a
Covenant. Well, a lot of times, yeah. So a lot of times
when we have,
um, TIFF free development agreements,
we also have litech regulatory agreements
or home regulatory agreements
or other things that would keep the housing
affordable for 30 years.
Um, in this case, um, we have the Illinois, we,
in this case, we're spelling out the 30 year requirement in
the TIF RDA, I believe, as well as in the IHA.
Okay. This is really helpful to understand
and I appreciate you clarifying on those points.
The other thing that I, I raised up,
I think when we previously talked about this in committee,
and I'll probably talk about it
with the other LaSalle projects, is there is a dearth of
two and three bedroom units in this project.
And we've, we talked a little bit about why that is,
and I think it bears the need
for maybe a more fulsome conversation in the future.
It was one thing when I thought people shared, well,
there's not a market for families living in the loop.
Why is there not? Or what kind
of a neighborhood do we wanna create if we're creating more
of a mixed use, multi-use kind
of neighborhood in the loop than it has been.
It was one thing when I thought, well,
there's nothing bringing families or kids down here.
But then I'd looked at the map
and we're building on top of a school
and it was a little hard for me to believe
that there weren't more than three families
attending this school that wouldn't mind living above.
It sounds great on a snowy day.
Um, but could, could you
or maybe somebody from the development team Elaborate on
how we're thinking about multi bedroom units at this time?
Welcome Gary. To answer that question,
I'm Gary s Soltz with our two development.
Uh, thank you for having me.
Could you repeat your name again? I don't Sure.
This for the Record, I'm
Gary Stoltz with our two development.
Thank you for having me.
Um, so we did, we hired a third party to, uh,
to study the market and determine what we, um,
should be providing at, at this moment.
And one of the benefits of being a pilot project,
and one of the cons when it comes to an issue like this is
that we have to design for it today and we are ready to go.
So we are in for demo permit,
and as soon as we have the approval, uh,
we will start construction.
So, so
because of that, we feel like we have to provide for
what we know the market can bear now.
Um, and that is something that
I wish we could be providing larger units for families.
But there are other factors at play too.
Um, one of them is, so all of our units are designed
to either be a DA accessible
or converted to 88 in the future.
So that, that kind of expands some of the typical
sizes in a market rate unit to afford that.
And that was something that was important to us
for the developers to be able to have.
And and the difference between those two units, as you,
as you may know, uh, those two units types is that, um,
you have to build all
of the expensive hard stuff on the front end for the units
that will be converted in the future.
And the conversion component is
relatively minor down the road.
So that has expanded the size of the units a bit.
Um, also given the bones of this building
and being a historic building, it doesn't lend itself easily
to larger size units.
Um, the footprint
and the units are very, um, actually kind of narrow.
And so as the units get larger, you get full away,
farther away from daylight and whatnot.
So we were trying to create units
that we feel are marketable for where we're at today.
So, and, and, uh, a couple other points,
you're comment about the school.
Uh, we have a fantastic working relationship with Intrinsic.
We've already been in touch with their staff about, uh,
renting units to team members there.
Yeah. So, so we feel like that's exactly the type
of vibrancy that you wanna bring to a downtown.
So we feel good about kind of, uh, working with them
to help out, uh, staff members.
Um, also in terms of public benefits, it is all electric.
So, uh, feel good about, yeah, feel good about that.
Um, yeah, that was, I hope that answers you
Should get a hundred points on sustainable development
policy for that, for that alone. Well,
Um, Hey, I'll say it.
I'm allowed to say it. Um, Hey,
I appreciate that very much, sir.
I, I understand where I think it'll be.
As we talked about an excellent test opportunity to see
what demand looks like at different market sizes.
There's the market. I'm a,
I'm sometimes a firm believer in the field of dreams model
of housing, where if you build it, they will come.
But I think this is a phenomenal project
to start this LaSalle Street vision with.
So I really appreciate you being here. Thank you, sir.
Thank you Chair. Thank you.
Alderman LaSpada, vice Chair Conway.
Right. Uh, I've been writing remarks here
for the last five and a half
hours, so bear what I'm kidding.
I, I, most people go to the cutting room floor,
but I, I think we all know that every city in the world has
to rethink itself, at least in terms
of its central business district from a place where, um,
you know, people merely work to places where they can live
and shop and eat and go to entertainment places.
And we here in Chicago need to catalyze that,
that transformation.
Uh, and as, as mentioned, this is the first project of the
Loop revitalization initiative.
And I'm especially excited about it
because as, as Alderman Lata alluded to,
it is an adaptive reuse project, uh,
reusing a historical building.
It can come online, uh, very quickly as, as Mr.
Stoltz mentioned, uh, which is great
because it's right near the Google Thompson Center.
So the fact that it comes online quickly will, will, uh,
make those things converge as well.
And the fact it does have 35%, uh, affordable units.
Um, so I mean that, that which is above, above what the, uh,
the RFI called for, which is great.
And, and it didn't, um, as Miss Beltran mentioned it,
this is bringing European capital here
to Chicago in the sense that it's the com Campari group and,
and family members of the Campari group
that will be its owners.
And certainly we need that level of investment in Chicago.
And to have it from a high profile
European provider is, is fantastic.
So I wanna thank, uh, I wanna thank the mayor's office.
I want to thank, um, uh, deputy Commissioner Rubik. Ms.
Beltran, if you have a title, I apologize if I missed it.
Uh, I wanna thank all of DPD.
I know you had to, to work into like the wee hours this
morning to get this done, which I appreciate that.
And so I, I ask you all to support this, this project
as the, the beginning of the catalyzation
as we transform downtown Chicago.
Thank you Madam Chairwoman.
Uh, thank you Vice Chair Conway.
And uh, I will, I see
that Alderman LaSpada has made a motion of due pass.
And all those in favor signify by saying Aye.
Opposed in the opinion of the chair.
The ayes have it and the motion carries
and will report this project out at the next
city Council meeting.
Item number six. Thank you ladies.
Item number 16, uh, is a proposed order
authorizing the payment of various small claims
against the city of Chicago.
This was a direct introduction
and that list of payments was sent
to everyone electronically.
If there are no objections,
these will be placed on the omnibus.
Item number 17 is a proposed order denying the payment
of various small claims against the city of Chicago.
Also, a direct introduction, uh,
which was sent electronically to everyone.
And if there are no objections,
these two will be placed in the omnibus.
Item number 18, a proposed order
authorizing charitable solicitation on the public way.
Uh, tag day permits a direct introduction
for the Nature Conservancy, uh,
citywide January 1st, 2025
through December 31st, 2025.
If there are no objections, these,
this will be placed on the omnibus
and there being no further business before the committee.
Can I get a motion to adjourn today?
So move by Alderman Ccho Lopez to adjourn.
All those in favor signify by saying Aye.
All those opposed, and then P chair, the a have it,
the meeting is adjourned.
Thank you all. Have a great afternoon.