HomeMy WebLinkAboutORDINANCES-1984-006-O-84iI 12/29/83
12/30/83
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AN ORDINANCE
j Authorizing the City Manager to Negotiate a Lease
with Option to Purchase Certain Real Estate and
• ;! Authorizing the Publication of a Notice of Intent to
Lease with Option to Purchase Certain Real Estate
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i WHEREAS, the City of Evanston is desirous of leasing
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i with option to purchase the property hereinafter legally
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i described bounded.by University Place on the North, Elgin Road
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on the Northeast, Sherman Avenue on the East, Clark Street on
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the South, and Benson Avenue on the West, commonly ]mown as the
Clark -Benson Triangle; and
I� WHEREAS, said property is presently used as a
municipal parking lot and storage facility and includes a
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storage building and off-street parking; and
;j WHEREAS, in the opinion of the corporate authorities
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of the City of Evanston, ownership of said real estate is no
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necessary, appropriate, required for the use of, or in
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the best interest of said City; and
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WHEREAS, the corporate authorities of the City of
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Evanston determined that the best interest of the City of
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Evanston would be served by the lease with option to purchase
of said property to parties who will develop said property for
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mixed office and commercial use including a parking structure;
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and
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WHEREAS, the corporate authorities of the City of
Evanston have deemed that the lease with option to purchase
said property is to take place as the result of negotiation.
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NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF
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THE CITY OF EVANSTON, COOK COUNTY, ILLI.NOIS:
SECTION 1: That the City Manager be and is hereby
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authorized and directed to negotiate the lease with option to
• i purchase real estate legally described as:
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it Lots 4, 5, 6, 7,.and 8, those portions of Lots 2, 3, 9,
and 10 lying South of a line drawn from a point 44.16
(� feet East of the Northwest corner of Lot 10
Southeasterly to a point 2:05 feet South of -the
Northeast corner of Lot 4, and the vacated 20
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j foot alley lying South of said line, all in Block 8, in
the Village of Evanston Subdivision of Section 13,
I ��'oe�nship 41 North, Range 13 and Sec.tioions 7, 18, and 19,
township 41 North, Range ' f 4 , all East of the Third
Principal Meridian, in -the NW 1/4 of Section 18,
!i Township 41 North, Range 14, East of the Third
Principal Meridian, all in the City of Evanston, County
of Cook, State of Illinois,
jj commonly known as the Clam: -Benson Triangle.
Such negotiations shall include but not be limited to (a)
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IlPhase I, the establishment of financial assurances and
I, guarantees on the ability of the lessee (developer) to
{{lsubstantially complete Phase I of the development project
i``i1 v: ithin eighteen (13) :-lonths of the commencement of construction►
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time lost by Acts of Cod or strikes excluded and (b) in the
event Phase
II is undertaken,
the
establishment
of
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financial assurances
and
guarantees on
the ability
of the lessee (developer) to substantially complete Phase II of
the development project as set forth in Memorandum of Agreement
j;dated -September 30, 1983.
Pursuant to Section 1-17-4-2(B) an affirmative vote of
11two-thirds (2/3) of the elected aldermen is required to accept
!;the reconmrendation of the City Manager on the negotiations
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1ss1authorized herein. mhe City of Evanston reserves the right.to
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i;reject any and all negotiations.
SECTION 2: The City Manager is'hereby author-
ized and directed to give notice of
lintent to lease with option to purchase of the aforementioned
!real estate. Such Notice of Lease with option to purchase must
hbe published at least once in a daily or weekly newspaper in
1fgeneral circulation in the City. The publication must not be
i.less than 15 nor more than 30 days before the date on which
!Council shall consider the adoption of said ordinance.
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SECTION 3: That the Notice of Intent
to lease with option to purchase real
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estate shall be in substantially the following form:
NOTICE OF - PROPOSAL TO_!., ASE
!' WITH OP`"ION TO PURCHASE
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Public notice is hereby given that the City of Evanston
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proposes to lease with option to purchase the following
4' described real estate, to wit:
Lots 4, 5, 6, 7, and 8, those portions of Lots 2, 3, 9.,
and 10 lying South of a line drawn from a point 44.16
!' feet East of the Northwest corner of Lot 10
!! Southeasterly to a point 2.05 feet South of the
Northeast corner of Lot 4, and the vacated 20 foot
�j alley lying South of said line, all in Block 8, in the
i� Village of Evanston Subdivision of.Section 13, Township
41 North; Range 13 and Sections 7, 18, and 19, Township
�[ 41 North, Range 14, all East of the Third Principal
I' meridian, in the NW 1/4 of Section 18, Township 41
North, Range 14, East of the Third Principal Meridian,
all in the City. of Evanston, County of Cook, State of
j Illinois,
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commonly known as the Clark' -Benson Triangle.
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The property proposed to be leased with option to
purchase is presently utilized as a municipal parking
lot and storage facility and includes a storage
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building and off-street parking.
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"'he City of Evanston proposes to lease with option to
purchase said property upon the following terms and
conditions:
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, 1. The site is to be improved by the construction of:
(; (a) A two -phased office and retail complex
J consisting of approximately 311,000 gross square
11 feet of office space and 58,000 gross square feet
of retail space.
ij (b) A first phase development consisting of a
seven -story building of approximately 123,000
gross square feet of office space and 20,000 gross
1 square feet of retail space.
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(c) A second phase of development proposed to
consist of a ten -story building of approximately
188,000 gross square feet of office space, 38,000
i gross square feet of retail space, and 23,000
i� gross square feet of plaza and arcade area.
ii (d) On -site surface parking for approximately 200
it cars to serve the first -phase development, and
partially on site a parking garage of
approximately 560 spaces to eventually serve the
entire completed complex.
(i 2. Upon commencement of construction, Evanston,
as lessor, and the lessee shall execute a lease
for the property with the following terms and
conditions:
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(a) A term of (2.0) years beginning at
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commencement of construction. Construction will
I, commence on or before February 1, 1984. If.
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construction does not commence before said date,
Lessee may extend such date up to September 1,
1984 upon payment to Lessor of Ten Thousand
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Dollars ( $10, 000) • for• each month so extended.
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Lessor shall have four (4) successive options to
extend such term, each for five (5) years.
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( b ) Annual Rent for the first 'Live ( 5 ) years.
shall be One Hundred Sixty -Five -Thousand Dollars
($165,000) (representing a 12o return on
$1,375,000, the current appraised value)
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multiplied by the percentage that the total amount
of gross square footage in said office structure
is to three hundred thousand (300,000) square
feet, but in no event shall such annual rent be
less than Eighty -Two Thousand Five Hundred Dollars
($82,500).
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(c) Com,.nencing with the sixth (6th) lease year,
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annual rent shall be increased to One Hundred
Sixty -Five Thousand Dollars ($165,000).
Notwithstanding the above, every five (5) years,
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commencing with the fifth (5th) lease year,
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Evanston will cause a reappraisal to be made of
the Property, and said rent for the following
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years shall become twelve percent (12%) of such
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reappraised value, provided:
1. Evanston shall pay for said reappraisal;
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2. The value shall not be reduced below One
Million Three Hundred Seventy -Five Thousand
Dollars ($1,375,000);
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3. During the original term of the lease,
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the value shall not increase more than three
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and one-half percent (3-1./2o compounded
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annually (thus, the maximum value applicable'
to the sixth (6th) year would be One Million
Six Hundred Thirty -Three Thousand Dollars
($1,633,000)).
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(d) Lessee shall be entitled to defer all or a
part of the rent (except any prepaid rent) to the
extent that there is insufficient cash flow from
the Clark -Benson project, provided, however, that
any rent that is so deferred shall bear interest
at the rate of twelve percent (12% per annum and
shall be due and payable out of such cash flow as
becomes available in subsequent years and, further
provided, that all such deferred rent plus
interest thereon shall be paid on or before six
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(6) months after'the expiration of the tenth
(loth) lease year.
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(e) Except as to the deferral set forth in
paragraph D above, neither the rent nor Evanston's
interest in the Property shall be subordinated in
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any way by Lessee, its mortgagee, or any other
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claimant. Lessee r:,ay place a permanent.mortgage
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on its leasehold, provided Lessee has a cash
investment in the Project of not less than $1.5
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million and, further provided, that the annual
jpayments
on such mortgage are level for a period
of at least ten (10) years or, if not level and
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Evanston so requests, are computed for deferral
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+. purposes as if level. Lessee may refinance such
permanent mortgage at any time, provided that all
deferrals and interest thereon -are paid and,
further provided,'thht the lease provisions
ti permitting further deferrals are cancelled.
R (f) During the initial term of the lease, but not
• any extensions thereof, Lessee shall have an
" option to purchase the Property for One Million
Three Hundred Seventy-five Thousand Dollars
i ($1,375,000), plus any accrued or deferred base
rent (plus interest thereon), provided, however,
that if a reappraisal has been .completed, as
!! provided in paragraph 2(c), hereof, then such
option to purchase shall be increased to the
amount applicable in determining the annual rent
for the most recent year plus accrued and deferred
rent (plus interest thereon). In the event that
�j Lessee purchases the Property, but does not
I develop or commence the development substantially
beyond that described in paragraphs 1(a) and (b)
above, by January 1, 1988, then Evanston shall
have the right to repurchase the undeveloped
�! portion of the Property at a price equal to the
amount paid by Lessee, excluding any sums
pertaining to rent or interest thereon, plus
interest at three and one-half percent (3-1/20),
�. compounded, per annum, provided that Evanston
shall cause sufficient parking spaces at least to
i; meet zoning requirements to be made available to
Lessee either on the Property or within one (1)
If block thereof, which spaces shall be leased to
Lessee at the same price as to other users.
• I' (g) Upon commencement of construction, Lessee
will deposit Forty -One Thousand Two Hundred Fifty
Dollars ($41,250) less any amount paid for
extension of commencement under paragraph 2(a).
All such funds shall be held by Evanston and shall
fj be applied to rent for the tenth (loth) lease
year. In the event Evanston holds more than
�I $41,250 such excess shall be applied to rent for
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I� 3. Construction of the improvements described in l(a)
�j and (b) above will be completed within 18 Months of
commencement, time lost by Acts of God or strikes
! excluded. Construction shall not commence until there
is delivery to Evanston of a satisfactory Payment and
Performance Bond and Lessee's personal guarantee of
completion. In the event such construction is not so
!� commenced, Evanston may -cancel all agreements with
! Lessee and retain any cash paid as liquidated damages.
If construction is so commenced, but not so completed,
l then Evanston may exercise its _remedies under the
aforesaid Payment and Performance Bond and/or personal
li guarantee of completion by Lessee and may cancel any or
all agreements with Lessee.
4. A covenant running with the land shall be executed
stipulating that the improvements to the property
• I; herein developed shall not be removed from the tax
rolls, the identity or status of subsequent owners
and/or users notwithstanding. Said restrictions may be
waived.by subsequent action of the Evanston City
iCouncil.
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5. The subject property shall renain open and
available for i, unicipal use v7ithout .c,ost to the City as.
a parking lot until construction commences.
SECTION 4: All ordinances or parts of ordinances
jiin conflict herewith are hereby repealed.
SECTION 5: This ordinance shall be in full force
and effect from and after its -passage,
I: approval, and publication in the manner provided by law.
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s Introduced: , . (,��/`. , 1984.
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Adopted: Z ?j 1984.
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ATTES'!' :
j� City Clerk
., App owed as to form:
'' Cor�oration.Counsel
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Approved, �1984.
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