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07/30/2001MINUTES COMMITTEE OF THE WHOLE JULY 30, 2001 The Village Board met as a Committee of the Whole on Tuesday at 7:30 p.m. on Monday, July 30, 2001. In attendance were: Mayor Harris Diane Mikula, Assistant to the Village Manager Trustee Kayne Bob Fialkowski, Director of Finance Trustee Ragona Barbara Little, Director of Public Works & Engineering Trustee Rosenthal Peter Coblentz, Village Attorney Trustee Seiden Trustee Swanson Various representatives from the Petitioner including: Trustee Wylie Mike McCall, Lend Lease Dick Spinell, Mid America Corp. Bill McKenna, Financial Consultant for TGI Chet Woolan, Scott Dever, Susan Russell, & Bill Horvath, Sears Larry Moss, representing ownership of Deerbrook Mall Tim Doran, Traffic Consultant David Marks, Architect Patrick Kennedy, Civil Engineer Dick Spinell provided and overview of the marketing strategy behind the redevelopment of the mall. The Great Indoors (TGI) provides the type of anchor that is needed for this mall. They are faced with the problems of dealing with the existing leases and the issues involved in relocating the existing tenants. He clarified a previous comment where there was a concern relating to TGI and Sears Home Life. Mr. Spinell commented that there was no correlation with Homelife to the TGI concept. He also commented that what has made this project challenging is that many of the existing tenants have lease restrictions. They are working to whatever extent possible. Also, they believe they have found a place in the mall to relocate Kuhns Delicatessen. Chet Woolan from Sears discussed the timing issues that they face. They need a ten-month construction period, with no problems, to build out TGI. Their target date for opening is Spring 2003. If they do not move forward soon they will lose a full year. It is a costly winter construction in Chicago. Their pre -opening costs and the time needed to do the interior build out will allow them to attract better tenants. The underground parking will be a great benefit to the success of TGI. Scott Dever from Sears indicated that TGI would not open after October because of the loss of sales tax revenues and escalated construction costs. If they cannot start 10 months before October then they would loose a year and financially this project may not work out. Financial Consultant Bill McKenna presented the financial issues involved with this petition. De- malling is a more expensive development than regular mall construction. He discussed the economic incentive agreement. A base year would be established. As development occurs, the developers would receive 60% of the sales tax revenues above the base figure. There would be a fifteen -year agreement and a dollar cap of $5.8 in sales tax from the Village. Lake Bluff, Skokie and Mundelein have used developer incentives to attract desirable developments. This is not within a Tax Increment Financing District and no up -front outlay of funds is being requested of the Village. The request is limited to sharing increased sales tax revenues. The base sales tax year will be predicted on 2000 sales. They believe the amount is warranted due to the extraordinary costs to redevelop the site. Trustee Rosenthal commented that she believes the Board has indicated they are agreeable to the Sales Tax Sharing Agreement in concept, but that the land use issues need to be resolved. Trustee Seiden indicated he cannot approve of an agreement at this point because he needs to see financial information on the principals involved. Trustee Seiden asked who is paying for what? The petitioners responded that Sears will have a twenty year ground lease and will own their building. Lend Lease pays to clear the site and will have the right of first refusal if Sears decides to cease operation. The agreement rights are assignable by both parties. The agreement continues as long as there is a quality use in the space. Trustee Seiden asked to see the financial statements of Gateway Financial. Mike McCall stated that he could view the statements of Gateway and the agreement made between Lend Lease and Sears. Trustee Ragona asked if it is a two party agreement. He commented that Sears is not a signatory to the agreement yet they seem to have certain rights in the agreement such as auditing the Village records. Village Attorney, Peter Coblentz questioned Sears being involved in auditing the Village's books. Sears is put in a position of having rights and not being a signatory to the agreement. Mr. Coblentz requested a two party agreement. Susan Russell responded that Sears does not need to have that right in the agreement. Mr. Seiden asked what would happen if TGI concept didn't work and the Village was left with a very large empty Box. Larry Moss responded that they do not expect to fail and will do everything they can to protect their 24 million dollars. In the legal documents, they have the right to sublease space or Lend Lease can take over. Sears guarantees the lease and it has the right to select a replacement. Trustee Ragona commented that the use cannot violate the zoning and the zoning will control to some extent as to how that site can be used. Susan Russell stated that they need an economic incentive from Deerfield and not Lombard and Schaumburg due to higher taxes, higher lease costs, and the cost of the underground -parking garage. Bob Fialkowski asked how quickly Sears anticipates reaching $5.8 million. She believe they will hit it withinl5 years. Without this economic incentive, Sears could not move forward Bill Horvath, finance manager, commented that this is one of the greatest ideas to come around. The petitioners commented that The Expo is TGI's only competition. TGI is not affiliated with Homelife, which is a furniture store. The stores in Lombard and Schaumburg didn't need assistance. There are projected higher sales volume for those stores in part because they have a larger market area. Trustee Kayne commented that the base sales tax number should be taken from when the center was more vital about 10 years ago. Trustee Wylie asked what if this development is wildly successful? Won't the development be choked by success? The petitioner responded that the real risk is to the owner's. Even if they go out the Village will have an attractive redesigned shopping center. Trustee Swanson commented about traffic. He indicated that currently it is a mess getting in and out of the mall. He further stated that adding additional congestion with the projected cars will be making the traffic flow worse and he is not satisfied that they have provided solutions. Tim Doran, KLO Associates, discussed the sources of traffic on Lake Cook Road. He commented that over the past few years the Village has approved office uses which have greatly added to the traffic congestion along with Nortbrook Court traffic and traffic heading to the tollway and route 41. He indicated that another traffic light could not be put on Waukegan because IDOT requires a quarter mile space between signals. The existing signals are too close especially with the two existing driveways. He commented that the traffic problem already exists. It's a regional problem that they feel they do not have to solve. Trustee Swanson commented that they are adding to the problem without offering better traffic solutions. Ms. Little discussed potential right -of- way improvements at Lake Cook Road and Waukegan. The right-of-way needed would greatly impact the properties on all four corners of the intersection. At lease 15' of right-of-way is needed along Lake Cook Road and possibly 30' would be needed approaching the intersection of Lake Cook and Waukegan. The right-of-way needed depends on the magnitude of the road improvements. Department of Transportation road improvements would not start until 2004 in part because right-of-way acquisition is usually a very slow process. Trustee Rosenthal discussed the impact of closing the west driveway on Lake Cook Road and keeping the east driveway open. She also indicated that if the Village received an agreement from Deerbrook for 15' of R.O.W it would help move the intersection improvement process more quickly. She would like a commitment from Deerbrook that they would be willing to dedicate 15' of right-of-way along the length of their property on Lake Cook Road. Trustee Ragona indicated it would be beneficial if there was a full intersection at the Spur. There may not be enough land available without taking businesses. The Board discussed the letter from Kurt Sauser regarding the possibility of creating a connection between Designer Kitchen & Bath shopping center and Deerbrook Mall. Lend Lease indicated they are open to the interconnections. An access road could be created approximately 300' west of Waukegan Road on the west side of Bally Fitness. The Board also asked about an interconnection with Lake Cook Plaza. Mr. McCall indicated that they are agreeable to a cross connection but that the Owner of Lake Cook Plaza does not support the connection. Lend Lease will make the effort to put in a connection at the time an agreement is reached with Lake Cook Plaza. Trustee Ragona commented that Lake Cook Plaza would be before the Board with their three -restaurant concept in the former bank building. At that time the Board may be able to bring up the cross connection issue. Mayor Harris commented that all of the items that have been mentioned will be issues that will be the same no matter what uses go into the center. The discussion should focus on the issues unique to this petitioner. Engineer Patrick Kennedy discussed density and landscaping. They are only adding 26,000 square feet of space and they are adding over 300 parking spaces. The new plan will help lessen the traffic flow confusion. Trustee Wylie commented that the petitioners are asking for a parking variance of 25% without the right-of-way taking. Mr. Kennedy responded that a parking variance currently exists. Cross functionality lessens the need for maximum space at all times. Also, the rear entrance will be emphasized which should help spread the parking demand. A question was asked whether Lend Lease needs the two outlots. Mr. McCall indicated that the finances for the center require those additional outlots. They have improved the parking, internal traffic flow and landscaping. They have to have the outlots in order to make the project work. Outlots are high visibility and attract businesses. Trustee Wylie stated that the petitioner is asking for a 25% parking variance from the zoning ordinance. The petitioner responded that the parking ratio is better than the current arrangement. Trustee Swanson asked about storm water detention. The petitioners responded preliminary plans have been given to the Village. The project will be less impervious than what currently exists as a result of the landscaping they have added. There is a 2% increase in favor of better drainage. Scubbers would be a part of the parking lot design to aid in water quality. Trustee Wylie discussed the perimeter landscape screening. He feels more landscaping should be added, especially along Waukegan Road. The petitioners commented that additional landscaping would require a reduction in the number of parking spaces. Mr. Wylie indicated that depending on the area of parking reduction, he would be in favor of additional landscaping. Trustee Rosenthal commented that there currently is an improvement in landscaping only because so little landscape exists. She would like the petitioners to do more. Mr. Wylie commented that he would like to see granite material used as part of mulch in the landscaping beds and would like it to be more green than rock. Trustee Ragona commented that he feels structural soil should be added. Trustee Wylie stated that as part of the landscaping he supports more green strips to break up the parking lot area. The ARC asked for a number of changes in the landscaping which are reflected in the plan before the trustees. Trustee Wylie commented that the location of the entrance into the parking garage might be better located so as not to compete with pedestrian traffic. The petitioners responded that this is similar to the Lombard setup. They direct people to the garage through signage and an educational program. They want to help people feel comfortable in using the garage. In response to Trustee Kayne's question about lighting affecting a neighboring subdivision, the petitioners responded that the lighting would not adversely impact the neighbors. In response to handicapped parking spaces and accessibility questions David Marks indicated that they are obligated to meet ADA requirements and will do so. Mayor Harris asked the petitioners to consider questions raised from tonight's discussion and that they will continue to discuss the petition at the August Oh Village Board meeting. ^notes prepared b Diane H. Mikula, Assistant to the Village Manager