CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Receive the staff report on Life Time Fitness and Tower Court Residences (Item 1 of 9)
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DEPARTMENT: Transportation, Engineering and Development
SUBMITTED BY: William J Novack, P.E., Director of Transportation, Engineering and Development/City Engineer
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
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 1980s. The property was purchased for potential use by municipal utilities, the Fire Department, and potentially for satellite branches for operating departments. Part of the property was developed with Fire Station #6 and another part 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 on the property.
In 2007 the Wheatland Township Road District was seeking land for the Township Road District garage. The City sold two (2) 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 City water utility 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 that were of interest to the City.
In response to a 2020 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 40 to TCN to develop a mix of affordable rental housing for Seniors who are sixty-two (62) and older and for individuals with intellectual disabilities or developmental disabilities who are eighteen (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 40 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.
DISCUSSION:
Consolidated Stormwater Management System. As discussions progressed between the City, LTF, and TCN, a unique opportunity emerged to create a single site on a portion of the South Forty property that could be designed to meet the stormwater management needs for each of the properties in a manner that would decrease the amount of land needed for stormwater management and allow stormwater management to be provided off-site.
As a result, City Council approval is being sought for a resubdivision of a portion of the South Forty property as follows: (i) LOT 1, approximately 10.55 acres to be purchased by LTF; (ii) LOT 2, approximately 4.22 acres that will be retained by the City; (iii) LOT 3, approximately 4.014 acres to be purchased by TCN; and (iv) OUTLOT A, approximately 3.46 acres which will be the site of the shared stormwater management facility that will serve LOT 1, LOT 2, LOT 3, OUTLOT A, and the two parcels of land owned by the City located immediately east of Tower Court which are the sites of City Fire Station #6 and DPU-W Utility’s elevated water tank and water reservoir. While the acreages of each of LOTS 1, 2, and 3 were reduced in order to create OUTLOT A, the purchase prices to be paid to the City for LOT 1 and LOT 3 were unaffected since both LTF and TCN will contribute to the cost of the property needed to create off-site stormwater detention on OUTLOT A.
Two agreements will be needed to implement the consolidated stormwater management system:
(1) A Site Development and Escrow Agreement by which each property owner will contribute funds for either LTF or TCN to perform the work necessary to create OUTLOT A (including mass grading, construction of the shared stormwater pond and related facilities, installation of a pump station and outlet storm sewer (which will be located in part on LOT 2), and construction of a north-south shared access drive from the entrance of the new access from Illinois Route 59 (discussed below), along the western perimeter of OUTLOT A, to the LOT 1/ LTF property; and
(2) A Declaration of Covenants, Conditions, and Restrictions by which an Association will be formed by the owners of LOT 1, LOT 2, LOT 3 to govern the operation, maintenance and repair of the stormwater management facility. After the stormwater management system is constructed, the Declaration is fully executed, and the Association is formed (to be known as the “South Forty Lots Association”), the City will convey OUTLOT A to said South Forty Lots Association.
Amended Purchase and Sale Agreements. Due to changes in the approach being taken for the South Forty resubdivision, it will be necessary to amend the TCN and LTF Purchase and Sale Agreements, mainly to reflect current acreages being acquired and contributions being made to OUTLOT A. In addition, the Major Business Terms which are an exhibit to the TCN Purchase Agreement have been amended to update timelines, to revise tenant selection requirements (required in order for TCN to retain federal funding), and an updated site plan.
Illinois Route 59 Access. To provide another point of ingress and egress for the resubdivided South Forty properties, the City will construct a full access point to Illinois Route 59 from LOT 2. 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.
Wheatland Township Tower Court Access Agreement. In order to create access to Tower Court, especially from LOT 3 (the TCN property), an Intergovernmental Agreement between the City and Wheatland Township/the Wheatland Township Road District is needed to provide that access and for an access roadway to be constructed. It is anticipated that TCN will acquire LOT 3 and undertake construction of that access roadway.
Wheatland Township Stormwater Management Agreement. The Township’s stormwater management needs are served by a detention pond that is located on a portion of what will become LOT 3 (or the TCN property). An Intergovernmental Agreement between the City and Wheatland Township/the Wheatland Township Road District is needed to provide for easements to accommodate the stormwater detention pond and to provide for ongoing repair, replacement, and maintenance.
Plat of Vacation. In 2007, when the South Forty property was originally subdivided, certain setback lines and easements were provided for on the plat. With the Resubdivision of four of the original lots formed by the 2007 subdivision (Lots 4,5,6 and 7) and the development of the resubdivided property as currently proposed, certain of the platted setbacks and utility easements need to be vacated. New setbacks will be applicable to the resubdivided property and new utility easements are being granted on the final resubdivision plat now being submitted to City Council.
Final Plat of Resubdivision for South Forty Lots 4, 5, 6 and 7 and TCN and LTF OAAs.
The proposed Final Plat of Napervile-South Forty Lots 4,5, 6 and 7 Resubdivision (the “Final Plat of Resubdivision”) is the foundation for all other agreements described in this memo. As noted above, it resubdivides a portion of the original South Forty property into LOT 1, LOT 2, LOT 3, and OUTLOT A. Utility and cross-access easements are included on the Final Plat of Resubdivision and the Southeastern Stormwater Management Easement Agreement that pertains to LOT 3 and the adjacent Wheatland Township property is depicted and notes that a separate agreement is to be recorded. The proposed Final Plat of Resubdivision is in technical compliance with City Code and substantially conforms to the Preliminary Plat of Subdivision approved by Ordinance 24-047.
The ordinance approving the Final Plat of Resubdivision also approves Owner’s Acknowledgement and Acceptance Agreements for LTF and TCN. The LTF OAA includes standard provisions governing development of Lot 1 including payment of fees and surety requirements, and also establishes the order of precedence between the OAA and the amended Purchase and Sale Agreement. The LTF OAA also references Outlot A, the Site Development and Escrow Agreement and Declaration.
The TCN OAA also includes standard OAA provisions, provides for order of precedence between the OAA and the First Amendment to the Purchase and Sale Agreement and Major Business Terms (MBTs) which are incorporated and made part of the OAA, and references Outlot A, the Site Development and Escrow Agreement and the Declaration. The OAA includes a provision for the City to pay a recapture fee to TCN for extension of watermain that will be performed by TCN that will benefit City Lot 2. It also references the two agreements which will be needed with Wheatland Township and the Wheatland Township Road District: (i) a Tower Court Access Agreement to allow ingress and egress to and from Tower Court; and (ii) a Stormwater Management Easement Agreement to address the Southeastern Stormwater Management Facility located on Lot 3 which is being acquired by TCN.
RELATED FILES
The following agenda items are related to this file:
1. An ordinance approving a first amendment to the purchase agreement with LTF Real Estate Company, Inc. for City property located south of the southeast corner of Route 59 and 103rd Street in the City of Naperville
2. An ordinance approving a first amendment to the TCN purchase and sale agreement for City property located south of the southeast corner of Route 59 and 103rd Street
3. An ordinance approving a plat of vacation of certain easements and setback lines on the preliminary/final plat of subdivision Naperville-South Forty Subdivision
4. An ordinance approving the final plat of Naperville - South Forty Lots 4, 5, 6, and 7 Resubdivision and Owners’ Acknowledgement and Acceptance Agreements for Life Time and Tower Court Residences
5. An ordinance approving a site development agreement for the resubdivided South Forty Property
6. An ordinance approving a declaration of covenants, conditions, and restrictions for the South Forty Lots Association
7. An ordinance approving an intergovernmental agreement between the City of Naperville, Wheatland Township, and the Wheatland Township Road District for a stormwater Management easement agreement
8. An ordinance approving an intergovernmental agreement between the City of Naperville, Wheatland Township, and the Wheatland Township Road District for the Tower Court Access Agreement
FISCAL IMPACT:
LTF and TCN will pay the City the originally agreed-upon purchase price for Lot 1 and Lot 3 of the City resubdivided South Forty property, including their share of the stormwater detention to be provided on Outlot A of the South Forty property. The City will also pay a share of the costs of construction of the stormwater management system and for utilities, and will pay for the construction of the Illinois Route 59 access on Lot 2.