Village Outlines Main Street Re-Development Financing

Village Outlines Main Street Re-Development Financing
Posted on 08/17/2011

Development Will Strengthen Local Economy, Create Jobs & Stimulate Local Business

The Village of Orland Park has announced the proposed financing of the re-development of its Main Street area, Downtown Orland Park, which will be considered by the Village Board on Tuesday, September 6, 2011. As the first phase of the Main Street Area, Ninety 7 Fifty on the Park, will set the bar for high quality and act as a catalyst for future development, enhancing the quality of life in Orland Park and protecting property values.

The project, Ninety 7 Fifty on the Park, is anticipated to cost approximately $63 million dollars. The financing sources for Phase I of the development, Ninety 7 Fifty On The Park being developed by Flaherty and Collins of Indianapolis, consists of three parts, a developer loan, developer equity and a village project incentive.

Under the proposed agreement, the village will provide a loan to Flaherty & Collins of approximately $38 million dollars. This will be a standard term loan with Flaherty & Collins being legally obligated to repay it according to the terms of the loan document.

"The village will establish a bank line of credit to fund this project. The line of credit will subsequently be paid off through the issuance of one or more series of general obligation bonds. The general obligation bonds will be repaid with revenues received from the project in accordance with the terms of the redevelopment agreement, as well as incremental property taxes received from the TIF district. The village will not utilize property taxes to repay the borrowings," explained Mayor Dan McLaughlin.

"Public-private partnerships are common across the country as communities want to have more influence over what's being developed in their towns," the mayor added.

The village will provide an incentive to fund a portion of the project to ensure is the cornerstone and anchor of the village's new downtown, a lasting legacy for the Orland Park. The incentive will be approximately $24 million dollars with clear language that provides for claw back of the incentive in each stage of the project.

"Given that obtaining financing in today's market is challenging and restrictive, the village examined ways to get the best cost of money while maximizing the village's influence on the direction of the project," explained Village Manager Paul Grimes.

"We know that Flaherty & Collins shares the village's vision; however we aren't always certain that financing institutions with strict and limited lending capabilities would," he added.

The village examined the entire spectrum of financing scenarios and found that seller financing made the most sense as it provided the best cost of money, the strongest influence over the project for the village and security of the village's investment over having a third party lender involved.

"As community leaders we have to be pro-active in bringing purposeful development to the village," McLaughlin said. "We look for projects that will encourage and attract more of the kinds of initiatives that protect our quality of life and our future, while strengthening our local economy by creating new jobs and stimulating local business. That is exactly what this new downtown development will do," the mayor added.

The details of how the agreement is structured, including the proposed re-development agreement, are available in the village's Citizen Information Center of the village's website at www.orland-park.il.us and on the Downtown Orland Park website at www.downtownop.com.

"This is the same information that has been provided to the Village Board," Grimes said. "And, while much of it is complicated, it also includes questions and answers and a summary memo that explains the agreement in terms that a layperson like me can understand," he said.

Main Street Re-Development Information