Committee discusses Colt site negotiation process

Role of trustees in developer negotiations debated

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By Anna Lothson

Staff Reporter

Negotiating a development proposal can be a lot like a round of poker. You can't show all your cards at once.

At least that's the analogy that the village manager and trustees used when talking about how to move forward with negotiations for the development of the Colt/Westgate site in downtown Oak Park.

Interim Village Attorney Simone Boutet was on hand at the Economic Development Committee of the village board Monday evening to explain the legal factors to consider when deciding who should be involved in negotiations and how much of the conversation needs to be discussed in public sessions versus closed meetings.

For example, Boutet said a majority of development conversations need to be held in open session, but the price of land can be left to executive session. A conversation about the sale of village-owned real estate is another item that can be discussed in closed session.

Village Manager Cara Pavlicek said the village explained that publicly discussing too many financial details related to development negotiation could undercut how much the developer is willing to give the village.

Trustee Collette Lueck said she prefers to "put the cards on the table," but understands that's not how these deals work.

"If we put all the cards on the table they will give us what they think exactly what we want and nothing more," Lueck said. She reminded the group the goal of any deal is to work for the taxpayers, not the developer.

Pavlicek said the proposal to redevelop the Colt/Westgate site involves the Redevelopment Agreement (RDA) that typically contains a transfer in ownership, possibly paying for street improvements — plus a new village street in this case — along with parking and water and sewer projects. In any RDA, the village has the potential to negotiate who pays for what.

"Everyone has a bottom line," Pavlicek said. "We don't want them to know what the village will take."

Lueck said setting the cost for land, a specific that can be determined in executive session, will make or break the deal.

"The only cost you have to negotiate is with the land and you don't know what that is until you've discussed everything else," Lueck said.

Trustee Peter Barber asked if it is possible to not discuss specifics, instead asking the developer what's the best deal they can offer. That way, it "puts the pressure on them" to respond in a reasonable manner instead of undercutting the village.

Pavlicek's recommendation to the committee was to allow staff to enter into negotiations with a certain parameter of expectations from the board but to not have board representation in negotiations. She recognized that there are challenges in this approach and said the committee could also elect to have two board members participate with staff.

Pavlicek said on the staff side she would lead a team that includes CFO Craig Lesner, Village Planner Craig Failor, Business Services Manager Loretta Daly and an outside TIF consultant.

Lueck suggested there isn't anyone on the board with enough expertise to negotiate a real estate deal of this magnitude and suggested the board stay back from the process.

"It's a complicated spreadsheet," Lueck said. "I don't think it's appropriate for the board to be involved. I also don't think it's particularly helpful."

Trustee Ray Johnson also said having two board members involved can complicate the matter because the developers assume they are speaking for the whole board. He thought having staff do the negotiations was a cleaner approach. Johnson also said having board members involved in past negotiations was a method that wasn't beneficial for Oak Park.

Trustee Peter Barber asked for an explanation about past processes and Pavlicek said the negotiating process is about controlling benefits and costs.

"If there is a voting game in the negotiations, the poker game goes away very quickly," she said. Elected officials can be targeted in these cases, Pavlicek said, and having staff involved without the board allows staff to step out of negotiations and ask for time to get a board opinion without getting stuck.

Barber and Johnson agreed the group should stick to the board goal of getting out of the way and letting staff do its job. Otherwise, they worried about getting "stuck in the weeds."

Village President Anan Abu-Taleb had a different perspective and suggested that having two board members involved would add value and transparency to the process. He also thinks staff levels are thin and staffers could use help.

"Why not take advantage of that," he posed to the group. "It's essential to represent the interests of the board. …We would be shooting ourselves in the foot if we left it to staff alone."

Johnson disagreed, restating that process didn't work well in the past. Because of Abu-Taleb's suggestion, the matter will come before the board at its Aug. 19 meeting. Now, however, this will likely set back the initial timeline which had aimed for an agreement in September, according to Business Services Director Loretta Daly.

Although the details of the negotiating process will come back to the full board for more discussion, the committee agreed to let staff continue negotiations as necessary before the Aug. 19 meeting.

Email: Twitter: @AnnaLothson

Reader Comments

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paul from oak park  

Posted: July 31st, 2013 6:06 PM

Kudos to Anna for putting in the conversational detail lacking in so much reporting today. Well done and keep up the good work that helps to inform us. It's important.

paul from oak park  

Posted: July 31st, 2013 5:35 PM

This is another well reported story from the WJ. This article shows the banality and the futility of pitting our nice neighbor/trustees against the developing vulture hordes. These negotiations never accrue to our benefit and they should never have to be negotiated in the first place. Most other communities don't do this because the community never wins. Our community will win one day and it will happen when our Village returns to solely following a strong Zoning Code that protects all fairly.

OP Resident  

Posted: July 31st, 2013 10:22 AM

When is the Village gonna stop trying to finesse commercial development. They are out of their league and are outmaneuvered by developers and their high-priced legal teams. We make huge zoning and TIF concessions and end up with empty lots and developers who play us by pleading they need more time to arrange financing. As for the Colt/Westgate site, leave it a parking lot. It's heavily used. We don't need more retail space. We can't find tenants for all the vacant retail space we have.

dystOPia from OP  

Posted: July 31st, 2013 9:03 AM

Successfully negotiating a public/private redevelopment agreement requires a municipality to have specific expertise & experience in this area. While a developer does this for a living, who on the village staff has proven expertise? The board already gave away any leverage by; a) selecting a preferred developer prior to issuing the RFP, and b) then proclaiming they will do anything for the developer to make this project happen as soon as possible. The village is out of their depths on this one.

Here we go  

Posted: July 30th, 2013 6:19 PM

Let the fun begin......

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