Village of Orland Park's Ninety 7 Fifty Investment Bought Out Four Years Early

Village of Orland Park's Ninety 7 Fifty Investment Bought Out Four Years Early
Posted on 07/10/2017

ORLAND PARK, IL (July 10, 2017) -- The Village of Orland Park Board of Trustees voted unanimously to accept a take out offer from Flaherty and Collins, developers of Ninety 7 Fifty on the Park, the luxury apartment complex at 143rd Street and LaGrange Road. This take out offer, in the amount of $50.5 million, allows the village to recoup its investment in the development.

The village will realize approximately a $6.8 million dollar gain over its total investment in this development, including the tax increment generated.

"This is a significant return for the Village of Orland Park," said Trustee Kathy Fenton, chair of the village's Development Services Committee. "Last fall, we began take out discussions with Flaherty and Collins based on the knowledge that this offer, which came forward four years earlier than anticipated, would allow the village to recoup its entire investment."

In 2011, the Orland Park Board of Trustees authorized the financing of Ninety 7 Fifty on the Park and created a public-private partnership resulting in 295 luxury residential lease units, 4000 square feet of first floor commercial space, 8666 square feet of residential amenity space, and 365 onsite parking spaces, situated on 3.4 acres of village-owned land.

"From the beginning, Ninety 7 Fifty has exceeded occupancy expectations, with a current occupancy rate of approximately 97%," said Village Trustee Carole Griffin Ruzich, chair of the village's Finance Committee. "Average residential lease rates have increased significantly since opening with current lease rates ranging from $1,440 to $2,440.

Former Orland Park Mayor Dan McLaughlin addressed the take out in a May 11, 2017 memo to the village board. McLaughlin wrote, "I believe strongly that the recent offer from Flaherty and Collins of $50.5 million should be seriously considered. This will allow the village to reduce our debt load and enhance our cash flow, while also knowing that we participated in an extremely successful project."

Pilewski and Associates, an outside financial consultant, evaluated the take out and wrote, "…the take out offer allows the village to pay off the line of credit/term loan and provides additional cash flow to support village initiatives. Ninety 7 Fifty on the Park has been a catalyst for additional development, including a University of Chicago Medical Center, a 520 space multi-level public parking facility with 12,000 square feet of commercial space and a proposed 80,000 square foot entertainment and mixed use building."

This development was highlighted by the Urban Land Institute as a case study of successful public-private financing initiatives.

"The take out offer is the best alternative for village taxpayers going forward," said Mayor Keith Pekau. "It reduces our debt, improves our liquidity and removes the significant risk the village has as owners/investors in the property."

The financing structure defined in the redevelopment agreement included a $38.2 million developer loan, a $25 million village project incentive and $2 million in equity provided by the developer, for a total project cost not to exceed $65.2 million.

Explaining the take out event, Orland Park Finance Director Annmarie Mampe said, "With the $50.5 million take out offer, as well as project related revenues collected to date and into the near future, the village will fully recoup its investment and realize a net gain of approximately $6.8 million, including the tax increment generated."

Ruzich added, "The village board has always recognized the responsibility it has in serving the taxpayers of Orland Park. The success of this development is a huge accomplishment for the village."

Fenton said, "Not only will the village recoup its original investment and capture nearly $7 million on top of that, Ninety 7 Fifty has been a great catalyst for Downtown Orland Park. It helped attract the University of Chicago, Mariano's, the new theater complex and others. We are all very proud of this achievement."