By Jason Crane
At the Aurora city government Committee of the Whole meeting Tuesday, through the Zoom video conference platform, the City Council gave consent to approximately 15 agenda items to be voted on at the full City Council meeting next Tuesday.
Consent was given to a resolution authorizing the city government of Aurora to amend a previously approved redevelopment agreement (RDA) with Fox Valley Developers (FVD) to facilitate the redevelopment of the former Copley Hospital at 502 S. Lincoln Avenue.
The RDA was the second part of a two-step process that started with the remediation and securing of the complex (resolution No. R18-220) approved in late August 2018).
City of Aurora documents state the purpose of the amendment is to modify the RDA approved November 2019 in a manner that assists the execution of FVD’s development plan while maintaining the spirit and key provisions in the approved RDA. The modifications are centered on resetting certain threshold dates and providing a short-term advance of $1.5M by the City to FVD that will be matched by an additional $1.5M advanced by School District 131.
Despite a detailed term sheet executed by Sterling Bank for the entire Project funding, the Bank unexpectedly pulled this financing, even though it had committed and have provided interim financing of $7.1 Million toward the construction of the School District 131 building. The unexpected turn had a negative cascading effect on the willingness of the tax credit investor to fund and complete the Project’s capital stack. Believing that project financing was secured, FVD made a number of commitments related to the completion of the School District and to vendors working on the next phase (the seniors housing, adults with disabilities, and commercial components). The city government expressed its concern over this course of action, noting that proceeding this way was not consistent with the RDA, which incorporated a March 31, 2020 full financing deadline, and which included in Exhibit D a requirement for a $35 Million construction loan, not an interim loan for the School District building.
The City, FVD and the School District sought a means to complete the School District building, now about 70% complete. The funds Sterling Bank agreed to advance are insufficient to complete the building. The shortfall is about $4.5 Million and will be split evenly among FVD, the city government and the School District. It assures that the District could move in by their scheduled Fall due date and allow FVD the time to secure financing for the remainder of the Project. Obtaining this financing is related to FVD’s qualifying for the previously-approved city government incentives, which had deadlines fast-approaching and likely would have had to be reset based on a provision in the RDA, typical of most contracts that accounts for such unforeseen circumstances.