Title/Name/Summary
University of Chicago Medical Center (UCMC) - Ground Lease Maintenance Costs Agreement
History
On August 17, 2015, the University of Chicago Medical Center (UCMC) and the Village of Orland Park (VOP) entered into a Ground Lease for the development of a multi-story, multi-tenant Ambulatory Care Center. The project included the construction of the UCMC Medical Office, construction of the parking garage, and construction of Jefferson Avenue and other associated infrastructure. The terms of the agreement call for shared use and maintenance of the public garage and surface parking lot.
Originally, it was contemplated the Village would undertake the regular maintenance, including cleaning, snow removal, power washing, street sweeping, landscape maintenance and litter control. After further discussions with UCMC, it was proposed that maintenance would be done by UCMC, as they have a higher internal standard set by their employees and patients (referred to as Premium Health Care Service Level I). The following outlines the maintenance cost methodology utilized to determine the Village’s annual share of costs.
Maintenance Costs Methodology
The UCMC has a higher standard for their snow removal requirements called Premium Health Care Service Level. Because of this standard there is an additional cost above and beyond what VOP would typically pay for Retail Service Level of snow removal. UCMC is covering these additional costs in their entirety. The remaining Retail Service Level costs for the snow removal on the parking deck and surface lot have then been divided based on parking space designation and hours of use for those designations. Page 2 of the maintenance costs attachment shows these costs and details the hours of use for parking spaces.
The street sweeping costs for the parking deck and the surface lot are divided using the same parking space designation and hours of use for that designation method. Also the costs for power washing the parking deck are divided using this method. Page 3 of the maintenance costs attachment outlines the total costs.
The landscaping and litter maintenance costs are divided according to area. Page 4 of the maintenance costs attachment provides a summary of the costs.
The maintenance cost attachment page 1 summarizes the financial impact to the VOP and page 5 summarizes those costs as dollars per parking space. The UCMC is estimated to pay $105,686 of the total $192,525 annual costs for snow removal, street sweeping, power washing deck, landscaping maintenance and litter control. A portion of the village’s costs ($86,839) could potentially be offset in the future as additional phases of the development occur within the area. This amount is significantly less than originally anticipated ($165,000).
On October 16, 2017, this item was reviewed by the Development Services Planning and Engineering Committee, recommended for approval and sent to the Village Board of Trustees for consideration.
Financial Impact
A budget adjustment for FY 2017 in the amount of $21,709.75 (three months) is necessary to the TIF fund. The full amount ($86,839) will be budgeted in the FY 2018 TIF fund.
Recommended Action/Motion
I move to approve a budget adjustment for FY 2017 in the amount of $21,709.75;
And
I move to approve a cost sharing maintenance agreement as outlined, estimated to be $86,839 annually;
And
I move to approve authorizing the Village Manager to execute the necessary documents.