2001-58 PROVIDING FOR THE ISSUANCE OF A TAXABLE SUBORDINANTE LIEN PROMISSORY NOTE

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�� +'�'�Y► LEGAL DEPARTMENT MEMORANDUM #2001-15 July 31, 2001 To: The Honorable Mayor and City Council From: Steve G ity Manager C John W. Co � , Corporation Counsel � Subject: Southeast Plaza TIF SUMMARY RECOMMENDATION. Pursuant to the terms of an agreement with the developer of the Southeast Plaza, a TIF project, staff recommends that Council adopt an ordinance authorizing a note to be given to the developer in payrnent for eligible incurred costs and which note is to be paid solely from TIF proceeds. BACKGROUND: In 1997, by Ordinance No. 97-19, the Council approved an agreement with Airport Plaza Joint Venture ("Airport Plaza"), under which Airport Plaza agreed to develop the property which is now Southeast Plaza (the Strand Theatre, Bennigan's, etc.) in return for the City designating the property a tax increment financing (TIF) area. The agreement further provided that the City would issue a note,payable solely from TIF funds and not a general obligation of the City, and tender the note to Airport Plaza in payment for eligible development costs incurred during the project. Under the agreement, the Chicago law firm of Chapman & Cutler would act as bond counsel in approving the form of the note, and Chapman's fees would be paid by Airport Plaza. City staff, Airport Plaza and Chapman & Cutler have now agreed on the note, and an ordinance authorizing the issuance of same is presented herewith to Council. The note will be paid only from TIF funds, as they come in (from the property and sales taxes), and will not be paid from any other funds of the City. The agreement requires the City to authorize such a note, if requested by Airport Plaza, and such a request has been made. Staff recommends that Council authorize the issuance of the note. POTENTIAL OBJECTION: None of which staff is aware. INPUT FROM OTHER SOURCES: None. STAFF REFERENCE: John Couter BUDGET/TIME IMPLICATIONS: None.