Title/Name/Summary
Former Andrew Property Redevelopment Agreement - 10500 153rd Street
History
This item proposes a redevelopment agreement (RDA) for the former Andrew Corporation property. The redevelopment contemplates non-age restricted single-family home development on the 75-acre site. The Andrew Corporation operated a manufacturing facility on the site for 60 years. The site has been abandoned for approximately 20 years. The site has been difficult to develop because of the environmental issues resulting from chemical contamination associated with the Andrew manufacturing processes.
The site will consist of public improvements which are built to Village standards with a pond in the current wetland area of the site. When completed, the project will consist of 143 single-family homes.
The RDA calls for the Village to create a TIF District for the purpose of providing funds for remediating the existing contamination. The Village will raise the $10,000,000 cost of remediation through the issuance of a TIF bond in that amount. The bond will be paid off through the TIF revenues that will be produced as the project is built and eventually completed.
During the Village-sponsored remediation process and as security on the Village’s investment, the Village will hold a mortgage on the entire 75-acre site. The property will be appraised by an independent third-party appraiser. If the unencumbered, but remediated property is valued by the appraiser at less than the $10,000,000 Village investment in the remediation, the Developer will make a cash escrow deposit to make up the difference.
The site is currently owned by Michael Musa. Mr. Musa will be conducting the remediation of the site and his work will be monitored by a Village-retained environmental remediation firm. When the remediation process is complete and a Remediation Action Plan has been filed with the appropriate agencies, the site is to be purchased by M/I Homes, a very reputable national home builder.
M/I Homes will purchase the site for $15,500,000. $10,000,000 of that $15,500,000 will be placed in an escrow account to guarantee the building of the project to the point where it will produce enough tax increment for the Village to meet the bond debt service. The Village’s financial advisors have advised that when the project is 50% complete, the increment will enable the Village to meet that debt service. Therefore, for every 8 homes for which the Village has issued Certificates of Occupancy, the Village will reduce the amount of the cash escrow by 10%. At the 80 C/O mark, the escrow will be reduced to 0, but as previously stated, the increment produced by those 80 homes will allow the Village to meet the debt service on the bond.
Financial Impact
The Village will raise the $10,000,000 cost of remediation through the issuance of a TIF bond in that amount. The bond will be paid off through the TIF revenues that will be produced as the project is built and eventually completed.
Recommended Action/Motion
I move to approve the Redevelopment Agreement with Michael Musa, and as fully presented below.
(Full motion - not necessary to be read)
I move to approve the Redevelopment Agreement between the Village of Orland Park and Michael Musa;
AND
Authorize the Village Manager to execute said Redevelopment Agreement subject to Village Attorney review;
AND
Authorize the associated fiscal actions detailed in the Redevelopment Agreement.