Rockford Sun

City Hall, Second Floor Rockford, IL 61104 Committee Meeting

Tuesday, January 3, 2017

I. CALL TO ORDER

Alderman Connell called the meeting to order at 7:42 pm

Attendee Name Organization Title Status Arrived Tim Durkee City of Rockford Alderman Absent Jamie Getchius City of Rockford Alderman Absent Karen Elyea City of Rockford Alderman Present Linda McNeely City of Rockford Alderman Present Pam Connell City of Rockford Alderman Present

Other Aldermen Present: Alderman Tom McNamara Alderman Kevin Frost (Joined the meeting at 7:53 pm) Alderman Venita Hervey Alderman Ann Thompson-Kelly (Left at 8:07 pm) Alderman Teena Newburg (Left at 8:01 pm) Alderman Frank Beach

II. RESOLUTIONS

A. Request by Zion Development Corporation for Forgiveness of Tax Increment

Financing Loan on Property located at 528 7th Street. Vicki Manson reviewed the staff report with the committee and reported that Zion Development Corporation made a request for the forgiveness of a Seventh Street Tax Increment Financing loan for the property located at 528 7th Street. In exchange for the loan forgiveness, Zion Development Corporation will reinvest in the commercial property on the first floor.

A loan for $180,000 was made to 528 Seventh Street LLC, a subsidiary of Zion Development for the rehabilitation of the housing units above the commercial space on February 19, 1997. The funds were provided in the form of a 15 year mortgage at 0% interest. The loan was due and payable in full at the end of the term. The City has been working with Zion Development's current Executive Director, Bob Campbell, to bring Zion/Seventh Street LLC into compliance. They have been able to settle all other loans through a short payoff and this one is left to be resolved.

Zion Development would like to move forward on the rehabilitation of the commercial space on the first floor of the building. However, any effort to redevelop commercial space is financially infeasible with this outstanding loan. Staff has reviewed their request for the forgiveness of the loan and recommends such under certain conditions. Those conditions include, 1) a tenant is identified for the commercial space and a development agreement is executed between the tenant and the Mortgager and shared with the City, 2) a commitment letter be provided from the lender funding the redevelopment of the space, 3) a final proforma for the work to be completed with all work, zoning and permitting found acceptable by the City's Community and Economic Development Department 4) and the work be completed in no more than 12 months from the date the Resolution is approved by City Council.

Staff believes the redevelopment of this long standing vacant commercial space will be a benefit to the Seventh Street neighborhood and the Seventh Street Business District. Vicki Manson stated that Bob Campbell, Zion Development's Executive Director, is present to answer questions.

Group discussed the history of the project and Todd Cagnoni stated that Zion Development is not in a position to repay the loan and potentially they would have to forfeit the property to the City of Rockford. Staff has been working with Zion Development regarding how they can successfully redevelop the building and provide value to the overall corridor and the area. He stated that they have a potential tenant. The Aldermen addressed their concerns. After discussion, Alderman McNeely made a motion to lay this item over and Alderman Connell seconded the motion. MOTION PREVAILED. 3-0. (Aldermen Durkee and Getchius absent)

RESULT: LAID OVER Next: 1/17/2017 5:30 PM

III. COMMITTEE REPORTS

A. Rockford Community Partners - 2017 Budget Request and Work Plan

Todd Cagnoni gave a brief overview of this issue and explained that this committee had previously considered this item. He has provided additional information to the aldermen of the committee and listed some of the agencies' successes.

Alderman Elyea voiced her support of Rockford Community Partners and their budget request. She stated that she is very proud of these agencies and the work they have done. They have come together to assist each other and she believes that each of the agencies brings value to the community.

Group discussed and after discussion, Alderman Connell made a motion to approve the Committee Report and Alderman Elyea seconded the motion. MOTION PREVAILED. 3-0 (Aldermen Durkee and Getchius absent)

RESULT: APPROVED BY COMMITTEE [UNANIMOUS]

Next: 1/9/2017 5:30 PM MOVER: Pam Connell, Alderman SECONDER: Karen Elyea, Alderman AYES: Karen Elyea, Linda McNeely, Pam Connell ABSENT: Tim Durkee, Jamie Getchius

B. Intergovernmental Agreement with Winnebago County Health Department

for lead clearance inspections Vicki Manson reviewed the staff report with the committee and explained that the Community and Economic Development Department wishes to enter into an Intergovernmental Agreement for lead clearance inspections with the Winnebago County Health Department. Lead safe housing is required to be incorporated in all CDBG and HOME federally funded rehabilitation projects. A critical component of the requirement is to complete a clearance inspection, obtain samples from the affected area(s), review test results and insure clearance prior to close-out of the activity.

Community Development has recently had a shift in staff due to a retirement. The person new to this position has taken the Lead Inspector and Lead Assessor training. Once licensed by the State of Illinois, he may begin doing the inspections, taking samples for testing, and insuring that the final test results meet the State and federal Department of Housing and Urban Development’s requirements. In the meanwhile, we have been using a vendor to do this work.

The Winnebago County Health Department has agreed to provide these services and have the expertise on staff. Reimbursing the Winnebago County for staff time allows them the opportunity to use the funds for other lead related work eligible under the grant.

By entering into this agreement, the cost of the work to the City of Rockford will be much less than through an environmental firm. Also, the Winnebago County Health Department can serve as a back-up at times of vacations, sick, and at busy times when the City’s one licensed lead inspector cannot get to the work at hand. The Health Department is offering these services at a very fair rate and would welcome their assistance over the upcoming year.

Group discussed and after discussion, Alderman McNeely made a motion to approve the Committee Report and Alderman Elyea seconded the motion. MOTION PREVAILED. 3-0 (Aldermen Durkee and Getchius absent)

RESULT: APPROVED BY COMMITTEE [UNANIMOUS] Next:

1/9/2017 5:30 PM MOVER: Linda McNeely, Alderman SECONDER: Karen Elyea, Alderman AYES: Karen Elyea, Linda McNeely, Pam Connell ABSENT: Tim Durkee, Jamie Getchius

C. Request by Zion Development Corporation for a 2-Year Mortgage Extension

for Property located at 1055 East State Street (Longwood Gardens) Vicki Manson stated that the Community and Economic Development Department has received a request from Zion Development Corporation for a 2- year extension of a Seventh Street Tax Increment Financing loan for the property located at 1055 East State Street. Zion Development Corporation will use this period of time to look at options for the building, financially and to address necessary improvements and repairs at Longwood Gardens.

The City of Rockford executed a mortgage and promissory note with Longwood Plaza, L.L.C., a subsidiary of Zion Development, on November 17, 1995 in the amount of $480,000 to make repairs and improvement to 1055 East State Street. These funds were due to be forgiven over five years at 20% per year. In 1996, City Council approved the revision of the existing mortgage from a five-year forgivable loan to a 0% interest loan due to be payable on December 31, 2016. Staff has been working with Zion Development to ensure compliance with the agreement and loan documents.

Although City Council did review and approve a request just over a year ago, a large scale funding option did not come to fruition and the project did not move forward. Since that time, Zion Development has been looking at alternative options. We believe this request is the best option for Zion Development at this time to help ensure an end result with long term financial sustainability for the organization and decent and affordable housing maintained for the residents coinciding with long term community stabilization. Bob Campbell, Executive Director of Zion Development, is present tonight and available for questions.

Alderman McNeely made a motion to lay this item over, there was no second and therefore the motion failed. Group discussed and after discussion, Alderman Elyea made a motion to approve the Committee Report and Alderman Connell seconded the motion. MOTION FAILED. (Aldermen Elyea and Connell voted to approve and Alderman McNeely voted No) (Alderman Durkee and Getchius absent).

RESULT: MOTION FAILED

Alderman Elyea made a motion to adjourn, seconded by Alderman Connell. Meeting adjourned at 8:18 p.m. It was taped in its entirety and will be on file in the Legal Department for a period of 18 months.

Respectfully Submitted, Nora Doyle, Planning & Development Secretary Phone: 779-348-7154