Title
New Downtown Orland Park -University of Chicago Medical Center (“UCMC”) Ground Lease for a medical facility all together on Parcels E and F and the E&R Realty Amended & Restated Redevelopment Agreement
History
Executive Summary
This new plan strengthens Downtown Orland Park by pairing the UCMC on Parcel E with an Amended & Restated RDA with E&R Development LLC, aka Edwards Realty. The UCMC ground lease delivers predictable, recurring revenues-about $10.16 million in rent over 25 years plus $322,500 per year from UCMC leasing 215 garage stalls at $125/month. The Village will assign these lease revenues to offset Heroes Park construction, debt service, and Operations and Maintenance (“O&M”) This plan also includes a Special Service Area (SSA) which provides for the maintenance of the public improvements, including Heroes Park, thereby reducing General Fund pressure. Together, this plan keeps the Village Funding Obligation at its base cap, adds performance safeguards, and preserves evening/weekend public parking even if UCMC later exercises its garage purchase option.
The new plan advances the Village’s commitment to the public and the arts by reviewing the feasibility of a Performing Arts Center on Parcel C (with a reversion to Edwards for other development if construction on the Performing Arts Center does not commence within 36 months of execution of the RDA). The plan also creates the DOP East RPA/TIF for development of the parcels north of 143rd Street from LaGrange to John Humphrey Drive.
Background
The Downtown Orland Park TIF and Business Districts were previously established to catalyze the original Triangle’s redevelopment per Ordinance No. 5927 and the Original RDA (March 14, 2025). UCMC now brings their proposal to greatly enlarge their presence in our community by virtue of the proposed medical facility. The new plan amends that original RDA and assigns certain development rights on Parcels E and F to UCMC via a new UCMC ground lease with the Village.
The attached UCMC Letter of Intent (“LOI”) sets forth the core business terms for Parcel E and related parking/expansion rights. While non-binding in many respects, it will be used to finalize the new UCMC Ground Lease. Certain exclusivity, and due diligence provisions will be binding until the new UCMC Ground Lease is executed.
-Medical Anchor & Building Program
UCMC to develop a 3-4 story medical facility (80k-120k sf) on Parcel E, adhering to Village zoning/appearance review.
Retail activation: LOI requires 3,000-9,000 sf of complementary ground-floor retail.
Parking & Public Access
Existing Parking Garage (~547 stalls): Weekdays 4:00 a.m.-5:00 p.m. exclusive to UCMC; off-hours/weekends open to the public. New UCMC provides for the lease of 215 of these 547 stalls from the Village at $125/month each (rent starts after occupancy). UCMC retains an option to purchase the garage at fair market value less (i) all garage rent paid plus (ii) the present value of the $11.5M UCMC originally invested in the garage. Village retains off-hour public parking with proportional O&M cost share after any purchase.
Surface Lot (207 stalls): 100 stalls exclusive to UCMC 24/7; remaining 107 exclusive to UCMC on weekdays 4:00 a.m.-5:00 p.m., open to public off-hours/weekends.
Future Healthcare Expansion (Parking Lot North of current UCMC facility)
In the future, UCMC may build an additional 80k-120k sf healthcare building on the current Parking Lot with required structured parking; Village receives non-exclusive off-hours parking rights and shares maintenance/repair O&M proportionally.
Exclusivity / Land Use Protections
Village will, to the extent lawful, restrict competing medical systems in the Triangle while allowing small non-UCMC system practices ≤5,000 sf; specific service-line exclusivities (e.g., orthopedics, cardiology, oncology) apply if provided in UCMC’s building.
Stormwater & Site Delivery
UCMC is responsible for stormwater detention/retention design/construction (potentially under Heroes Park/Jefferson Ave); Village provides O&M for detention/retention facilities with SSA pass-throughs and a separate agreement with UCMC for their share of the O&M. Delivery conditions include commercial-standard environmental compliance, with a remediation process and Soil Management Plan.
Lease Term & Rent Commencement
25-year Ground Lease; rent commences upon issuance of Permanent CO. Interim: starting January 1, 2027, UCMC pays to the Village half of the full Ground Rent until Full Rent commencement; if State Certificate of Need (CON) not obtained, the 1/2 Ground Rent is refunded.
-Key Changes Versus the Original RDA
Edwards’ Rights with Respect to Parcels E & F
Edwards waives rights to acquire/develop Parcels E and F; UCMC becomes the developer via the New Ground Lease. The new UCMC project preserves certain public parking access in the existing garage (Parcel F) and grants Edwards a Retail Right of ≥9,000 sf . If the Retail Right is not obtained within 9 months of the new RDA’s Effective Date, Village pays Edwards $1,400,000 (2026 dollars).
Performance Trigger (UCMC Construction)
If structural steel for the New UCMC is not installed within 24 months of the new RDA’s Effective Date, UCMC forfeits and Edwards regains rights to present plans for Parcels E/F (with TIF reimbursement eligibility per the Original RDA).
Village Funding Obligation (VFO) & Bonds
VFO is capped at $27,785,012 (base) when Parcels E/F are developed by UCMC and the Performing Arts Center construction is commenced on Parcel C. If the Performing Arts Center is not built and UCMC does not develop Parcels E and F, Edwards reacquires the rights to develop those parcels and the VFO to Edwards is increased as follows: Parcel C $2,298,873; Parcel E $1,868,518; Parcel F $408,891. VFO will be funded via Special Revenue Bonds with GO backstop, repaid from 100% TIF increment and 100% Business District sales/hotel taxes.
Heroes Park
Village pays 100% of Heroes Park and utility relocation costs and provides a $2,760,000 deposit (~20%) before construction. Heroes Park is defined as public, programmed/maintained by Village, with an ice rink requirement and perpetual Park Covenant. Because of Edwards’ familiarity with the project, Edwards will be the general contractor for the utility relocation and the construction of Heroes Park.
UCMC Rent Offsets Heroes Park Costs. To strengthen the Village’s long-term operating plan for Heroes Park, the UCMC ground rent and garage stall rent will be earmarked to offset Heroes Park costs - including debt service and ongoing maintenance/programming-alongside Special Service Area (SSA) revenues. The new UCMC plan will establish recurring rent streams (Parcel E ground rent with a defined schedule and $125/month per leased garage stall). The New RDA provides for the Village’s responsibility for Heroes Park and broader public-realm O&M with SSA reimbursement. The new UCMC rent directly reduces the net burden on the General Fund.
Construction of Heroes Park commences late Summer 2026 with work completed in Summer 2027.
Edwards Repayment Obligation & Open-Book TIF
The New RDA provides open-book accounting for TIF-eligible reimbursement and an Edwards Repayment Obligation structured around Phased VFO Notes and subsequent credit/cancellation reporting (IRS 1099-C) timing.
Parcel C Plan: Performing Arts Center First; Reversion if Not Accomplished
Parcel C is removed from the Edwards’s acquisition/development sequence under the New RDA so the Village can pursue a Performing Arts Center (Arts Center) as a public anchor. The New RDA sets an “Arts Center Period” during which the Village may deliver an Arts Center Commitment (design, permits, funding ordinance). If delivered, Edwards may elect to serve as general contractor. If the Village does not deliver the Arts Center Commitment by the end of the Arts Center Period or does not commence construction within 36 months thereafter, Parcel C reverts to the Edwards, who may then proceed under the commercial/residential development paths specified in the New RDA.
Downtown Orland Park East TIF District (DOP East): Activation Strategy
To immediately activate the parcels north of 143rd Street between LaGrange Road and John Humphrey Drive, the Village will establish the Downtown Orland Park East Redevelopment Project Area (DOP East RPA/TIF District) within 12 months of the New RDA’s Effective Date, adopt the DOP East Special Use for a Planned Development, and enter into a DOP East RDA to reimburse TIF-eligible costs from tax increment generated in that corridor.
If the Village does not establish the DOP East RPA and TIF District, nor enter into the DOP East RDA in a form reasonably acceptable to to both the Village and Edwards within the required timeframe, the Village must pay the Edwards $1,000,000 within 14 months of the Effective Date of the New RDA.
The DOP East Property, the area immediately north of 143rd Street from LaGrange to John Humphrey Drive is consistent with our 143rd Street redevelopment vision and adjacent private investment momentum.
Other Fiscal Adjustments
Village reimburses Edwards for Initial Development Costs of $3,046,118.67 and pays a $1,000,000 for Edwards Waiver of Rights in the original RDA.; Parcel pricing totals $3,825,000 across A/B/C/E/F/H should Edwards purchase all those Parcels.
-Total Financials Summary (Village Perspective)
SEE ATTACHMENT “A”
-How This Plan Improves on the Original Plan
Stronger, longer-Term Anchor: A premier UCMC medical facility replaces earlier plans on Parcel F and uncertain timing for a fitness business on Parcel E. The New UCMC brings high-frequency, daytime foot traffic, complementary retail, and the draw of a national medical brand.
Guaranteed Public Parking Access Times: Clear off-hours public access to the garage and surface lot. Even if UCMC later exercises its right to purchase the garage, public parking rights are preserved for event and evening activity for Heroes Park and restaurants.
Defined Fiscal Streams: Ground rent (~$10.16M total) plus stall rent ($322.5k/yr) create recurring revenues absent in the prior restaurant concept; exclusivity limits protect UCMC investment and stabilize tenancy.
Enforceable Performance & Reversion: If UCMC doesn’t commence construction within 24 months, development rights revert to Edwards, avoiding indefinite site stasis and enables alternative build-out.
Retail Activation Along Heroes Park: Work Letter standards (frontage/depth, utilities, service corridor, clear heights) reduce build-out friction and enable robust restaurant/retail lining the park.
Transparent Funding & Fiscal Safeguards: Open-book TIF, phased notes, and repayment-credit mechanics provide better control and auditability than the 2025 framework.
Park & Public Realm Guarantees: Heroes Park is funded and protected (ice rink seasonality; Park Covenant), with SSA to backstop maintenance, improving community amenities and ensuring programming continuity.
Right-Sized Risk: The garage purchase option credits prior UCMC investment, limiting speculative price risk while preserving Village off-hours access and cost-share proportionality.
It must be remembered that Edwards has already established the Weber Grill restaurant and retains development rights to Parcels A and B. These developments will continue to produce tax increment to supplement the UCMC Ground Lease and rent revenue streams.
Financial Impact
This new plan improves the Village’s financial position by replacing uncertain revenues with predictable, recurring streams-about $10.16 million in Parcel E ground rent over 25 years plus $322,500 per year from leasing 215 garage stalls at $125/month-that the Village can apply to offset Heroes Park Construction and Operation and Maintenance within the RDA’s SSA framework. This reduces the net burden on general funds; while the Village Funding Obligation remains at the base cap (with no Parcel E/F adders when UCMC develops) and lowering future outlays. The plan embeds risk controls (24-month state approval and structural-steel commencement trigger) to avoid idle capital, and purchase-option credits on the garage) that further protect cash flow and downside exposure compared with the original approach.
Recommended Action/Motion
I move to recommend to the Village Board the approval of the Amended & Restated RDA and related exhibits; 2) Authorize negotiation and execution of the UCMC Ground Lease consistent with the attached LOI terms; and 3) Approve associated fiscal actions detailed herein.