CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Pass an ordinance approving an amendment to the site development agreement for the resubdivided South Forty Property (Item 1 of 2)
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DEPARTMENT: Transportation, Engineering and Development
SUBMITTED BY: Andrew Hynes, P.E., City Engineer
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
The other related item on the City Council agenda is:
• 25-0816 - Pass an ordinance approving a declaration of use restrictions and right of first refusal with LTF Real Estate Company, Inc. (2 of 2)
The City of Naperville purchased 40 acres of land at the southeast corner of Route 59 and 103rd Street, commonly known as the South 40, during the city’s growth era of the 1980’s.
The property was purchased for potential use by municipal utilities, the Fire Department, and possible operating department satellite branches. A portion of the property was developed with Fire Station #6 and another is used by Water Utilities for an elevated water tank and water reservoir. Since City departments preferred to remain centralized, the satellite facilities that had been envisioned were never constructed.
In 2007 the Wheatland Township Road District was seeking land for the Township Road District garage. The City sold two acres of land to the Township Road District and today the Township Road District and the Township are joint owners of the property located on Tower Court adjacent to the Water Utilities facilities. Approximately 23 of the original 40 acres remained vacant for years and are essentially surplus land to the City. Over the years many offers were extended to purchase the property, but none were accepted.
In 2020 a Housing Needs Assessment/Housing Needs Report prepared for the City by SB Friedman Development Advisors. In 2021, the City Council issued an RFP to propose the sale of part of the City-owned South Forty property to address housing gaps identified in the Housing Needs Report.
Through that process, Gorman & Company, LLC emerged as the recommended developer. In 2023, the City entered into a Purchase and Sale Agreement (PSA) with Tower Drive Naperville, LLC (“TCN”), an entity formed by Gorman for this project, to sell 4.68 acres of the South Forty to TCN to develop a mix of affordable rental housing for Seniors who are 62 and older and for individuals with intellectual disabilities or developmental disabilities who are 18 and older. The TCN property is located immediately west of the Township Property at the southern end of Tower Court.
Also in 2023, the City entered into a Purchase Agreement with Life Time Real Estate, Inc. (“LTF”) to develop a fitness facility on 12.55 acres of the subject property at the hard corner of Route 59 and 103rd Street. Approximately 4.2 acres of the original South Forty property will remain under City ownership. TCN holds a right of first refusal as well as restrictions on certain uses on the remaining 4.22 acres of City property pursuant to the Purchase Agreement.
On April 15, 2025, the City Council passed an ordinance approving a site development agreement for the resubdivided South Forty Property. The site development agreement is needed to implement the consolidated stormwater management system by which each property owner will contribute funds for either LTF or TCN to perform the work necessary to:
1. create OUTLOT A (including mass grading, construction of the shared stormwater pond and related facilities, installation of a lift station and outlet storm sewer which will be located in part on LOT 2); and
2. construct a north-south shared access drive from the entrance of the new access from Illinois Route 59 along the western perimeter of OUTLOT A, to the LOT 1/ LTF property. This shared access drive will be constructed by the City to provide another point of ingress and egress for the resubdivided South Forty properties. IDOT approval for the access point has been obtained by the City. It is anticipated that construction of the Illinois Route 59 access will be completed by July 31, 2026.
DISCUSSION:
In further discussions between the City, LTF, and TCN, it was identified that the shared design and construction costs outlined in Exhibit D of the site development agreement did not cover all expenses necessary to complete the full scope of work. The original costs provided by LTF were missing the following items:
1. Actual contractor bid costs
The original agreement included only the engineer’s estimate, not the actual contractor bids, which differ from those estimates.
2. Contractor soft costs
These include insurance, overhead, general requirements, general conditions, and preconstruction services. These are costs over and above items defined in the engineer’s estimate.
3. Permit fees
Required fees for obtaining the necessary site permits from the City.
4. Electrical service fee for the stormwater pond lift station
Costs for the City’s electric department to install a new electric service feed and transformer to power the lift station.
The City’s cost increase totals $133,729.66, with future reimbursement from TCN in the amount of $83,035.40. These additional costs are reflected in the amended Exhibit D.
Staff recommends approval of the amended Exhibit D, as these expenses are necessary to proceed with the project.
FISCAL IMPACT:
LTF and TCN will each pay their share of the increased costs for the stormwater detention provided on Outlot A of the South Forty property. The City will share in the additional construction costs for the stormwater management system and utilities.