By Jason Crane
The Aurora City Council approved, 9-1, a redevelopment agreement providing a forgivable and a non-forgivable loan totaling $1.1 Million to Lazaro Rs Corp, Inc., operating under the assumed business name of La Quinta De Los Reyes at the City Council meeting, Tuesday, July 25.
Recently-elected alderman-at-large John Laesch was the one dissenting vote.
Mayor of Aurora, Richard Irvin, expressed the importance of supporting businesses in Aurora. His thoughts can be viewed on the city government of Aurora’s YouTube page after the 18 minute mark by clicking here.
City government of Aurora documents show the purpose is to enable the construction of a year-round 125-seat patio addition and related building and infrastructure upgrades to LaQuinta De Los Reyes restaurant by providing funding to complement the owner’s investment.
La Quinta De Los Reyes, on the corner of East New York Street and Broadway Avenue has been in business for more than 20 years. The authentic Mexican, Latin, and Spanish, restaurant and special occasion/event venue is known for its fine cuisine, catering, bar service, and uniquely-crafted specialty platters. The landmark food and beverage locale has played an important role in Aurora’s history and continues to be a cultural and community icon.
The business withstood the 2008 great recession and the 2020 global pandemic; its resilience attributable to its family-friendly atmosphere and values that honor loyal cliental, employees, and strong relationships with neighboring businesses and community.
The restaurant is known for its elaborate celebrations, including Los Reyes Magos, a Latin and Christian Heritage holiday where for 17 years more than 50,000 toys have been distributed to thousands of Aurora families, Dia Del Los Ninos, or Universal Children’s Day, another family-friendly celebration community event that honors contributions of first responders. Despite its own challenges, La Quinta De Los Reyes donated free family meals during the pandemic and regularly sponsors countless charities and scholarships based in Aurora.
In the past year, Claudia Urrutia purchased the building to operate La Quinta De Los Reyes in a partnership with Jesus Sanchez and embarked on a new vision of the building. Because of its history, size, and complexity, redevelopment will be undertaken in stages with the initial focus on enclosing the popular patio on the north end of the restaurant and completing related building and infrastructure upgrades.
This agreement will have a two-pronged impact on revenues. It will enable the patio to seat and serve more than 125 diners all-year-round and in all weather conditions and it will free up the existing second floor dining area to advance book for banquets, rather than holding for restaurant patrons that may need its seating during inclement Summer weather when the open-air patio cannot be used or during busy periods in the restaurant.
The planned all-season climate-controlled patio will include the existing, underutilized, courtyard. A louvered rain protection roof coupled with infrared heaters will both protect patrons from rain events as well as control the temperature of the patio in the Winter. The all-season patio will now accommodate accessibility needs for patrons with a new accessible lift. Maximization of seating in this space led to a need to relocate the existing wood stairs to the north side of the restaurant. The stairs will be replaced with a steel staircase allowing for the least obstruction of the views from the restaurant with the smallest structural section sizes and the longest spans possible for the stringers without additional obstructions from columns. Note that the Downtown Review Committee has additionally approved the steel staircase solution because it was the least obtrusive solution.
An exterior grease trap is being added to building as required by Fox Metro Water Reclamation District. The installation of the required grease interceptor does require extensive rerouting of existing pluming in the kitchens and from mop basins. Additionally, as part of the project the city has requested that a grease line from the interceptor be run to the unused Broadway facing spaces of the building to facilitate the use of these spaces as restaurant uses in the future.
Additionally, as additional plumbing fixtures are being added to the facility it has been determined that the existing water service is not large enough (per the Illinois Department of Public Health – Plumbing Code) to add additional fixtures to the water supply system. The existing water service is being replaced with a water service that will accommodate the expanded restaurant and the ultimate full utilization of the building.
The capital stack (sources) and project costs (uses) are:
Owner equity towards: interior plumbing and exterior grease trap: $223,525.
Architectural fees and permits: $130,000.
FFE payments: $50,000.
Additional construction contribution: $276,475.
Subtotal: $680,000.
City Participation: 2022 Finish Line Grant (grease trap) City non-forgivable loan: $25,000 $550,000.
City loan payable from incremental taxes subtotal $550,000 $1,100,000.
Total project cost: $1,805,000.
As has been the City government’s goal in similar type transactions, the intent is for all funds advanced to be refunded back to the City. The request is that this be in the form of a traditional loan structure (the first $550,000) and a forgivable loan (the other $550,000)
The first loan will be paid back monthly as with any bank loan subject to the terms below. The second loan will be amortized by the City paying itself back from incremental sales and food and beverage taxes.
More specifically, aside from the $680,000 the owner has or will be contributing in equity, the owner will be responsible to make monthly payments to the City of Aurora to fully amortize a loan of $550,000 over a twelve-year term. Monthly payments will be approximately $5,350 and will start three months after the date of completion but no later than six months after funding.
In addition, the City will advance a second $550,000 at a rate of 2.50% with the loan expected to amortize by the collection of incremental sales and food and beverage taxes also in about 12 years. If LaQuinta adds about $1.325 million in incremental annual sales revenues and the loan amortizes during this time, the owners will have no further obligation to the city as relates to this tranche of financing. If however these monies are not recouped by the City by the end of the 12th year of payments, a calculation will then be made as to the opportunity cost of interest during this time by deducting the actual taxes received on a yearly basis during these twelve years from the amount that the City would have received had annual interest of 5.5% been calculated on a straight line basis for twelve years. LaQuinta will be responsible to pay the difference back to the City evenly over the following five years.
In summary, the proposal seeks assist this long-standing business in a market and circumstance where traditional lending is unavailable, at least until the addition is up and running. This is because most banks do not favor restaurant loans, much lending has paused or require terms that are too onerous for smaller businesses and the current high cost of interest and construction makes loans unavailable or too expensive. That said, the City has been working with Invest Aurora who has access to certain nontraditional lending sources such as the Dunham Fund and Federal lending alternatives. These programs were not available at this time either because a lack of funds or based on certain parameters such as interest rates tied to prime that would have made these loan structures untenable and the requirement of having a first mortgage security interest, also not possible here given Claudia’s recent purchase of the building. The City government will continue to work with Invest Aurora in an effort to to mitigate the City’s participation in this transaction, and all transactions.
The timing however is critical as all bids are in place to avoid further cost increases and the goal to be open for the holiday season to be in a position to be open for the nearby Chriskindlmarket.
Approval will assure that this longstanding business is able to meet the growing demand for its services and diversify its product line. The owners are investing close to $700,000 of their own funds to make this a reality but cannot proceed without this additional financing. This will increase revenues to the city, honor the heritage personified by the restaurant, support a majority owned woman’s business and increase employment in Aurora. It will also help safeguard a historic building in the downtown.
Two individuals used their voices for up to three minutes each: Comments can be viewed on the city government of Aurora’s YouTube page after the 8 minute mark by clicking here.
The City Council approved the following agenda items:
- Approved was a Resolution authorizing the City of Aurora government to accept a grant of more than $192,000 to be host to a Luminosity festival in 2024.
City government of Aurora documents show the Resolution authorizing the City government to accept a grant award of $192,779 from the State of Illinois Department of Commerce and Economic Opportunity (DCEO) requires the City to contribute $192,779 in matching funds to be host to “Luminosity,” a month-long celebration of light set to be September 6, 2024, through October 5, 2024.
The Luminosity festival is an effort to attract tourists and other visitors to Aurora’s downtown for a festival celebrating Aurora as the City of Lights. This festival is modeled after similar festivals in other cities, such as “Canal Convergence” in Scottsdale, Ariz., “Blink” in Cincinnati, Ohio, and “Light City” in Baltimore, Md..
Matching costs will come from projects already included in the Aurora government’s Public Art budget that will be showcased or unveiled during the Luminosity festival and routine event expenses included in the Public Art and/or Special Events budgets. Grant funds will cover the costs associated with temporary displays of medium and large-scale artistic lighting installations and projection mapping. In addition, grant funds will cover costs associated with an augmented reality path and associated digital markers to lead visitors through downtown and track attendance. Finally, grant funds will cover the cost of roving performers to entertain crowds during the festival’s two-day finale.
Matching costs will be tracked in 2023 using funds already allocated in the FY23 budget. Both reimbursable costs and matching costs will be included in the FY24 budget.
Due to the DCEO’s requirement to process the grant award before the close of the State’s FY23 on 6/30/23, the grant agreement was signed prior to this resolution request.
- Approved was a Resolution authorizing execution of a first amended agreement for provision of services at the city of Aurora’s Financial Empowerment Center with The Neighbor Project (TNP) through December 2023 with an optional one-year extension.
City government of Aurora documents show since 2019, The city of Aurora Financial Empowerment Center, has committed to providing free, one-on-one financial counseling to low- and moderate-income residents, delivered by professionally trained counselors. The Neighbor Project (TNP) has successfully served as a program partner by elevating FEC program services, developing trusted relationships with their clientele and local community organizations. TNP has also been instrumental to the vision and evolution of future programming. To sustain the City government’s commitment to resident’s economic mobility, a revised contractual agreement has been developed to maintain continuity of FEC services, revising and simplifying the structural payment from itemization details to an hourly billing rate, and clarifying the procedure for applying for grants and depositing grant funds.
The City Council approved a resolution December 17, 2019, to accept a two-year matching grant from the Cities for Financial Empowerment (CFE) to create a Financial Empowerment Center (FEC) in the city of Aurora (ref. R19-412). Under the agreement with CFE, The Neighbor Project (TNP) was identified as the community-based organization to lead CFE counseling standards. In December 2021, council approved an amendment to the original agreement between CFE and FEC to extend grant related services ending the cohort on April 30, 2022 (ref. R21-376). Council also approved an extension of the original contractual agreement with TNP to continue services to the FEC in December 2021 (ref. R21-377) and in April 2022 (ref. R22-118).
To date, the Aurora FEC counselors have provided over 2,300 clients with over 4,000 professional counseling sessions. Highlights from the FECs community impact include almost 2,000 outcomes produced by FEC counselors, over $900,000 in increased savings and almost $2,500,000 in debt reduction. The success and importance of FEC services to the community has been featured on Univision and Aurora area media.
Through its contractual relationship, TNP has provided residents free financial counseling and financial literacy services.
The proposed amendment has been developed to maintain continuity of FEC services while simplifying and streamlining the process. The revised structural payment has been changed from itemization details, which included labor, payroll, overhead, costs associated with Contractor healthcare and retirement plans, marketing/ outreach, credit report pulls, software/tech support and subscriptions, phones and trainings, including training on the model, database, and any continuing education sessions, profit and expenses, such as out-of-pocket, general, administrative, travel and contractor’s per diem expenses, which took many staff member hours to review and process, to an hourly billing rate. The TNP hourly billing rate is inclusive of the previous itemization details. This enhances overall efficiency and saves time for TNP and the city of Aurora’s Financial Empowerment Center staff members.
Another component of the proposed amendment addresses grants and fundraising. Since passage of the last agreement with TNP, the City has entered into an agreement with a fiscal agent, the Community Foundation of the Fox River Valley, to hold funds allotted for the FEC. As such, after identifying a grant opportunity source, TNP and City shall collaborate, and if grant funds are secured, the funds are deposited with the City’s fiscal agent.
It is anticipated there will not be a financial or budgetary impact with the proposed amendment. Furthermore, expenses with TNP are trending lower through June, 2023. If approved by council, the term of this Amended Agreement will continue through December 31, 2023 (the “original term”), unless terminated sooner as provided in Section 3 herein. This Agreement shall automatically renew for a one-year term, upon the same terms and conditions as set forth in this Amended Agreement, unless either Party provides the other Party written notice of an intention not to renew, which shall be provided to the other Party not less than 120 days prior to expiration. Provided, however, an automatic renewal is subject to City Budget appropriation and necessary approval as may be required internally by the City.
Expenses are budgeted for these services in account 101-1304-419.32-20 in the amount of $200,000 for 2023. In addition, $55,000 in Community Development Block Grant funds has been allocated in 2023 and the fiscal agent is holding approximately $100,000 to cover the remaining 2023 TNP expenses.
A continuing partnership with TNP as the City government’s service provider will allow FEC counselors to link those seeking financial security to educational, employment and business opportunities and capital. Together, services will expand from cradle to retirement, decrease the wealth gap and generate equitable economic mobility within the Aurora region for years to come. Continuing this arrangement with TNP through a streamlined and transparent agreement will also aid in the ability to attract and retain the highest qualified financial counselors.
- Approved was a Resolution authorizing the renewal of the line of credit (LOC) in the amount of $10 million with Old Second National Bank for a one-year term expiring on June 30, 2024.
City government of Aurora documents show the City government initially approved LOCs with Old Second Bank and Fifth Third Bank in 2019 for $10.0 million. The City government has used the LOC’s to provide short-term financing for the City contributions to various land acquisition and economic development projects when bond financing is not practical. Staff members anticipate there will be additional need for short term financing of economic development projects in the future and the LOC’s provide a practical and cost effective vehicle for those needs. The City makes periodic payments on the LOC’s as appropriate when long term bonds are issued.
Each LOC is renewed separately, and the Fifth Third renewal will be presented at a future Finance Committee meeting. The LOC may not be used for any project not specifically approved by the City Council.
There were no draws on the LOC since the last renewal and $1,195,408.24 was paid in February reducing the balance to $6,688,000. The LOC will continue to be reduced by payments from future bond issuances and repayments from developers from various economic redevelopment costs initially financed by the City.
The rate for the renewed LOC will continue to be based on the 30-day Secured Overnight Financing Rate (SOFR) + 200 basis points (2%). SOFR is a published rate and is a common replacement for LIBOR in loans moving forward in the past few years. SOFR represents the overnight rate that financial institutions charge each other for overnight loans. The rate generated for the renewed LOC (if calculated today) is 7.066% due to the recent increases in interest rates. Staff members will evaluate if a less costly financing mechanism is available given current market conditions.
Approval of this resolution will renew this ongoing line of credit, which is necessary for the City’s continued economic development project financing when bond financing is not immediately practical.
- Approved was a Resolution to approve the purchase of 12 United Shield Brand Ballistic Shields and accessories from MES/Lawmen Supply of Deer Creek, Ill. in the amount of $73,606.15.
City government of Aurora documents show the purpose is to purchase replacement ballistic shields for the Aurora Police Department. These ballistic shields are essential for the protection of first responding police officers and are being purchased to replace outdated and end-of-life shields.
The 2023 budget included a decision package from the Aurora Police Department to replace ballistic shields over a multi-year phased replacement program. The ballistic shields used now are either reaching or are at the end of their useful recommended life, and a replacement is warranted.
During the budget cycle, it was noted that ballistic shields used in the patrol division and Special Response Team were approaching or have reached the end of their warrantied life. Police administrators have developed a multi-year plan to replace aging supply on a rotation. This request for purchase is part of that multi-year replacement program cycle.
City government officials found MES/Lawmen Supply Company, who participates in the Sourcewell Cooperative agreement, and is a vendor who has provided reliable service to the Aurora Police Department in the past. MES/Lawmen Supply Company demonstrated that they are able to meet the public safety needs of the police department and will provide these needed gas masks and filters through this turnover period.
Funding is available in the 2023 budget in account 255-3536-421.61-40.
Local preference does not apply when using a cooperative purchase program.
This purchase is vital to the protection of police first responders during times where the threat of deadly force against responding officers is present. Ten of these shields are intended to outfit first responding patrol officers, and two of these shields are specially manufactured to meet the needs of the Special Response Team.
- Approved was a Resolution to award the Root Street Water Main Replacement project in Ward 1 to Stokes Excavating Inc. in the bid amount of $455,560.00.
City government of Aurora documents show the purpose is to replace the existing 4” water main that has a history of breaks and low pressure. The water main will also be extended to connect to the dead end on High Street creating a water main loop to improve water quality in the area.
The approximate location of this water main to be replaced is High, Root, and Reising Streets. Closures of entrances to the business will be kept to a minimum during construction.
Six bids were received, opened, and read aloud on June 28, 2023. The lowest responsible bid in the amount of $455,560.00 was submitted by Stokes Excavating Inc. The water main improvements will be funded with account 510-4058-511-73-02 (IC076 & IC080) which has a 2023 budget amount of $11,950,000.00.
This project was subject to the Local Preference Ordinance, however no local contractors submitted.
There will be lane closures on each of these local roads during the duration of the project. Water shutdowns during the project will be planned and residences will be notified to minimize impact. Impacts to traffic and residents will be kept to a minimum.
- Approved was a Resolution to award the Mountain Street, McClure Road, and Austin Avenue Water Main Replacement project in Ward 1 to Gerardi Sewer & Water Co. in the bid amount of nine hundred seventy-eight thousand one hundred seventy three Dollars and zero Cents ($978,173.00).
City government of Aurora documents show the purpose is to replace the existing 6” (Austin) and 12” (Mountain and McClure) water mains that have a history of breaks.
The approximate location of this water main to be replaced is Austin Avenue, north of Forest Avenue. Closures of entrances to the business will be kept to a minimum during construction.
Ten bids were received, opened, and read aloud June 28, 2023. The lowest responsible bid in the amount of $978,173.00 was submitted by Gerardi Sewer & Water Co. The water main improvements will be funded with account 510-4058-511-73-02 (IC076 & IC080) which has a 2023 budget amount of $11,950,000.00.
This project was subject to the Local Preference Ordinance, however no local contractors submitted.
There will be lane closures on each of these local roads during the duration of the project. Water shutdowns during the project will be planned and residences will be notified to minimize impact. Impacts to traffic and residents will be kept to a minimum.
- Approved was a Resolution to award the Lake Street Crossing Water Main Replacement project in Ward 4 to Stokes Excavating Inc. in the bid amount of one hundred eleven thousand five hundred ninety one Dollars and zero Cents ($111,591.00).
City government of Aurora documents show the purpose is to replace the existing 6” water main that has a history of breaks.
The approximate location of this water main to be replaced is Lake Street, between Grace Avenue and Allaire Avenue. Closures of entrances to the business will be kept to a minimum during construction.
Six bids were received, opened, and read aloud on June 28, 2023. The lowest responsible bid in the amount of $111,591 was submitted by Stokes Excavating Inc. The water main improvements will be funded with account 510-4058-511-73-02 (IC076 & IC080) which has a 2023 budget amount of $11,950,000.00.
This project was subject to the Local Preference Ordinance, however no local contractors submitted.
There will be lane closures on Lake Street during the duration of the project. Water shutdowns during the project will be planned and residences will be notified to minimize impact. Impacts to traffic and residents will be kept to a minimum.
- Approved was a Resolution requesting ratification for emergency replacement of a video management server from Scientel Solutions LLC., 2021 N Eola Rd, Aurora, Ill., in the amount of $75,304.82.
City government of Aurora documents show this resolution is requesting emergency replacement of aging video management server (VMS) at the City’s Water Production Facility.
The video management server (VMS) at the City’s Water Production facility is aging and has become unreliable in capturing video. The most recent outage occurred on July 3 and 4, 2023. These outages result in the inability to capture and retain video while VMS is offline.
The VMS that is in service at the Water Production facility is a stand-alone server that is running a solution from Milestone Systems. This Milestone solution was planned to be replaced in 2023 with a Genetec solution and placed under the City’s preventive maintenance and support of City-wide security/CCTV cameras that was approved by Resolution R21-135.
Due to frequent outages with this server in 2023, Water Production and IT staff members decided to replace this critical server immediately.
Funds were available in account 510-4058-511-6412 and were utilized for this purchase.
This replacement was needed to ensure the Water Production Facility is properly monitored and protected in case of issue.
- Approved was an Ordinance ratifying all actions taken by the Committee of the Whole and the City Council during their meetings of July 11, 2023.
City government of Aurora documents show the purpose is to foreclose any possibility of challenges to actions taken by the COW or the Council due to the apparent inability of certain members of the public to attend the meetings in person and to afford further opportunities for public comment on matters considered during those meetings.
The Committee of the Whole and the City Council each conducted duly called meetings July 11, 2023, in which members of the public were present and offered public comment. A representative of the media was also physically present during both meetings. The Committee of the Whole convened at 5:00 PM. The City Council convened at 6:47 PM, approximately ten minutes after the COW meeting adjourned. The City Council adjourned at approximately 7:10 PM.
Following the adjournment of the City Council meeting, members of the City Council encountered members of the public who were waiting outside of City Hall and who reported that the doors to City Hall were locked.
The Department of Facilities Management subsequently investigated the situation and determined that the City Hall doors locked automatically at 6:30 PM. It is likely that the rescheduling of the July 4, 2023, COW meeting created some confusion as whether there was a need to reprogram the timing of the door lock given the normal COW adjournment time. The temporary relocation of public meetings to the Fifth Floor probably also contributed to the delayed discovery of the problem.
Section 2.01 of the Open Meetings Act requires that all meetings of public bodies meetings required to be public shall be held at specified times and places which are convenient and open to the public. Courts and the Attorney General’s Public Access Counselor (PAC) have interpreted this provision to require public bodies to ensure that any person who wishes to observe a public meeting have the opportunity to do so. The common problem addressed by courts and the PAC in these situations is when a public body convenes a meeting in a space too small to accommodate all of the public and makes no attempt to secure a larger space, accommodate “overflow” accommodations or provide alternate opportunities for the public to observe the transaction of public business. There are no reported opinions that have addressed the situation that occurred on Tuesday. It is important to note that despite the inadvertent inability of at least some of the public to observe the meeting, and perhaps offer public comment in person, some members of the public were present during both meeting, and the meetings were live-streamed.
Nevertheless, the customary practice of the PAC in more egregious situations is to request that the public body ratify its actions during a subsequent meeting held in full accord with the Open Meetings Act.
Consideration of this Ordinance accomplishes three important goals: First, it provides the public with two additional opportunities to offer comment on any of the items previously discussed at the July 11, 2023 meetings. Second, if the consideration leads to the Ordinance’s approval, it will resolve any doubt as to the validity of the actions taken by the City Council or its COW and provide the requisite certainty to the public and to those who rely on the actions taken by the City Council as to their legal effect. Finally, if approved, the Ordinance proactively applies would most likely be the most serious remedy that the PAC or the courts would order to address what occurred.
- Approved was a Resolution Granting the Advice and Consent of the City Council to the mayor’s designation of chairperson of the Public Health, Safety and Transportation Committee.
City government of Aurora documents show the purpose is to approve the mayor’s designation of a chairperson to the Public Health, Safety and Transportation (PHST) committee.
On May 14, 2019, the City Council revised Chapter 2, Article II, Division 5 of the Code of the City of Aurora (City Code) to establish five standing committees of the Council, each consisting of five aldermen. Section 2-123(a) provides that to the extent practicable, each alderman shall serve on two standing committees. Section 2-123, further provides that the mayor shall, with the advice and consent of the City Council appoint aldermen to the standing committees and designate members of each committee to serve as the committee’s chairperson and vice chairperson.
The mayor’s proposed appointment is to appoint a new Chair for the PHST Committee consistent with the requirements of Section 2-123 of the City Code described herein.
The advice and consent of the City Council is required for confirmation of the Mayor’s appointment.
Appointment of the Standing Committees of the City Council are as follows:
To the Rules, Administration, and Procedures Committee
Ron Woerman, chairperson
Emmanuel Llamas, vice chairperson
Edward J. Bugg
Carl Franco
Patricia Smith
To the Building, Zoning, and Economic Development Committee
Patricia Smith, chairperson
Shweta Baid, vice chairperson
Carl Franco
Michael B. Saville
William Donnell
To the Finance Committee
Carl Franco, chairperson
Edward J. Bugg, vice chairperson
Shweta Baid
Vacant
Ron Woerman
To the Public Health, Safety, and Transportation Committee
Michael B. Saville, chairperson
William Donnell, vice chairperson
John Laesch
Theodoros Mesiacos
Juany Garza
To the Infrastructure and Technology Committee
Juany Garza, chairperson
Theodoros Mesiacos, vice chairperson
John Laesch
Vacant
Emmanuel Llamas