CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Adopt the resolution for major business terms related to the sale of City-owned land at IL Route 59 and 103rd for affordable senior and IDD housing
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DEPARTMENT: Transportation, Engineering and Development
SUBMITTED BY: Amy Emery, AICP, TED Operations Manager
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
In September of 2021, the City Council approved RFP 21-315 to leverage City-owned property to address affordable housing needs in Naperville. This action is consistent with recommendations contained in the Housing Needs Assessment/Housing Needs Report approved by the Human Rights and Fair Housing Advisory Commission (HRFHC) and endorsed by the City Council in 2020.
Naperville received four responses to RFP 21-315 that were reviewed by a selection committee made up of representatives from the City Council, HRFHC, Naperville Development Partnership, Senior Task Force, and Accessible Community Task Force.
The two highest scoring consultant submissions, Mercy Housing - Lakefront and Gorman & Company, LLC, were invited to a community meeting on March 7, 2022 hosted by the HRFHC to present their initial concepts and receive public feedback. Both consultants also participated in follow-up meetings hosted by the Accessible Community Task Force and the Senior Task Force to solicit additional community input and learn more about Naperville’s needs.
In accordance with RFP 21-315, both consultant groups independently negotiated with the City to create a single Major Business Terms (MBTs) document for City Council review and approval.
On June 13, 2022, staff was notified by Mercy Housing-Lakefront that, although they remain strong supporters of the proposed project, they no longer wish to be considered for selection in response to RFP 21-315.
DISCUSSION:
The attached MBT document outlines major financial terms and conditions for an affordable senior and IDD housing development project. Gorman & Company, LLC is in agreement with the terms and will execute accordingly if selected as the project developer.
The purpose of the proposed MBTs is to define the scope of the project and to establish mutual understanding related to:
• Minimum number of units (60)
• Tenant age and income restrictions (e.g., seniors age 62 and over; individuals with Intellectual Disabilities and/or Development Disabilities age 18 and over)
• Expectations for site amenities and service availability
• Timeframes for project financing, construction, and leasing
• Financial, legal, and reporting obligations
Key provisions in the negotiated in the draft MBTs include:
• Milestones (NOTE: property closing is expected on or before June 30, 2024, construction will take up to 18 months thereafter)
• Subject to approval by the Illinois Housing Development Authority and the U.S. Department of Housing and Urban Development (as required), a provision that lease priority shall be granted to City of Naperville residents, and their immediate family members
• Sustainability objectives related to design and operation
• Accessible design requirements
• Infrastructure improvements required of the Developer (e.g., stormwater, utility service extensions and recaptures, sidewalk extension along Tower Drive)
• Indoor and outdoor amenities including gardens, pet areas, picnic/grilling and outdoor gathering spaces, pickleball, classrooms, exercise facilities, community kitchen, and wi-fi
• Tenant access to transportation and other services
The draft MBTs also stipulate that an Owner’s Acknowledgement and Development Agreement (OAA) will be required. The OAA shall include (among other items):
• Required development plans (architectural, engineering, landscaping, etc.)
• School and park donation requirements
• Minimum affordability period and final unit count (including stipulation that 25% of said units be dedicated to IDD Residents)
• Easement and surety requirements
• The purchase price for the City property
• The City of Naperville completing off-site roadway improvements to address the requirement for two points of emergency access to the property. Specifically, the City of Naperville will seek Illinois Department of Transportation approval to construct an IL Route 59 access point (likely including a left turn lane and right deceleration lane). In addition, the City will design and construct a two-way vehicular drive to connect the project site to the new IL Route 59 access. The estimated cost for this work is two million dollars and will appear as a CIP project in 2023 to support the anticipated project construction timetable.
Next Steps:
Subject to City Council approval of the form and substance of the draft MBTs on June 21, 2022, Gorman & Company, LLC will submit the following:
• a bid proposal to purchase the City property;
• a proposed minimum affordability period (the time period for which the Developer will guarantee all units will remain affordable based on area median income limits); and
• If applicable, an updated design concept plan based on the stipulations outlined in the MTBs.
This information, along with the written proposal scores and comments received, will be provided to the City Council on July 19, 2022. At that time, the City Council may or may not select the developer to proceed with the project subject to compliance with the fully executed MBTs (including purchase price and minimum affordability period) as will be finalized in an OAA.
FISCAL IMPACT:
Total fiscal impact of this project is yet to be established as development plans that will determine the project value and taxable benefit have not been finalized. Fiscal impact will also be based, in part, on direct City expenditures (e.g., estimated $2 million investment for the IL Route 59 access improvement) and any direct payment received for purchase of the property.