Whiteco sale delayed after Oak Park trustees question deal's specifics

Village board raises concern about eliminating lease agreement terms

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By Anna Lothson

Staff Reporter

The Whiteco building in downtown Oak Park is slated to change ownership soon, but a number of questions and concerns from trustees on the details of the sale agreement put a halt to the process, Sept. 18.

Trustees questioned the financial stability of the potential buyer, among other concerns. The board meeting, however, was dominated with a conversation about the Trader Joe's space.

As part of the redevelopment agreement between Whiteco and Oak Park, the village retains the right to approve any retail tenant that might replace Trader Joe's if it were to leave, though that approval expires in 2016. Through Whiteco, the potential new owners have asked that the agreement be amended to remove that restriction because they worry that if Trader Joe's did leave, the property would be hard to fill under the current agreement, according to Tim Connelly, president of Whiteco.

Connelly said he thinks the request is reasonable and that current downtown zoning, as a transit-related retail overlay district, protects the village's interests just as well. Because Trader Joe's has been successful since opening, and a valuable asset to the village in his opinion, Connelly said there's nothing suggesting Trader Joe's would shut down its Oak Park location.

But trustees weren't on board with giving up that restriction.

"I'm not actually comfortable saying that retail overlay protects us," said Trustee Ray Johnson. "A new use may not bring in the same income. How do we analyze that exactly?"

Johnson expressed concerns that were echoed across the board. It was mentioned that Trader Joe's provides excellent revenue for the village in terms of sales and liquor tax, something another retailer may not match.

Interim Village Attorney Simone Boutet said the new owner would keep its lease deal with Trader Joe's but wanted flexibility in the event that Trader Joe's leaves since it would be difficult to get a similar business in the spot when it was designed specifically for Trader Joe's.

Still, the trustees had reservations.

"Part of my struggle is the fact that we haven't done a financial analysis on the village's investment in regards to the economic return this property has generated," Johnson explained.

Although he said the project has been a fantastic addition for Oak Park in terms of enhancing pedestrian features, increasing foot traffic and attracting high-end restaurants, it's difficult to know the value without digging into the financials.

"I think it's important to look back to see if we've hit our targets or not … but it's one thing to say it and it's another thing to analyze numbers. So I'll leave it at that and hope we get it in the long term."

Trustee Bob Tucker, Glenn Brewer and President David Pope didn't back down on their claims that the village shouldn't drop the restriction without something in return.

"Why would we be giving up that right just because it's being sold?" Tucker asked.

When Tucker didn't get the answer he was looking for, he pressed Connelly again.

"You would not be willing to consider any additional consideration back to the village for giving up this right?" he asked.

Connelly emphasized that Whiteco has been a good partner with the village and said that should be considered when moving forward with this deal. He mentioned items like its contribution to affordable housing in Oak Park and elements such as providing an easement for public art, one element of the initial agreement.

Regardless of these points, trustees agreed that relying only on the retail overlay restriction may not be in the best interests of the village.

The proposed purchaser of the property has only been publicly revealed as OPP Apartments LLC, a group that is owned by a public employee statewide consolidated retirement system. The group is financially stable, according to the village report, and will be utilizing Lincoln Property Company, based out of Chicago, as the on-site management and leasing firm. As part of the original redevelopment agreement, the 14-story building was to remain rental for 10 years after the building's opening.

The six-story parking garage attached to the building that's owned by the village has also remained a controversial part of the project after cracks were discovered in 2010. A structural engineer was hired to inspect, and Whiteco and the village have a formal agreement that it will cover the expenses associated with the review and repair of the structure.

As condition of the sale, Whiteco has agreed to post $200,000 cash in an escrow account for the second phase of repairs that will be completed this fall, according to a village report. Whiteco is also reimbursing the village for a $161,000 tab the village picked up for inspection and review of the work. The village has paid $140,000 out of pocket and another $20,000 in expenses is anticipated, all of which will be paid by Whiteco.

After much discussion at last week's meeting, Tucker suggested the board not take a motion, instead referring the issues back to staff so the questions and concerns could be vetted with Whiteco and the prospective new owners. The board agreed, and the matter will be taken back up at the next regular meeting on Oct. 1.

Contact:
Email: anna@oakpark.com Twitter: @AnnaLothson

Reader Comments

25 Comments - Add Your Comment

Comment Policy

Progressive from Oak Park IL  

Posted: September 25th, 2012 9:59 AM

It seems the trustees have some valid questions which deserve specific answers. Meanwhile the entire VMA should be at Trader Joe's stocking shelves, bagging groceries, sweeping the floor or doing whatever else would help this successful store continue to thrive in Oak Park. Our town needs successful businesses and the VMA needs to stop going out of its way to drive them out of town.

No More Empty Bldgs on Madision from Madison/Grove  

Posted: September 25th, 2012 8:49 AM

Mr. Johnson, maybe Madison/Grove is so much more "affordable" because the Village has done ZERO to foster business on West Madison. Putting your SRO on Madison/Grove does nothing to attract business either. Is the next step to turn the D97 admin. building on Madison into an "affordable housing project" for ex-cons like Trustee Brewer previously mentioned for Madison/Grove?

Susan Swatek from Oak Park  

Posted: September 24th, 2012 12:09 PM

Do you really believe that the Board of Oak Park Village does not have the numbers on each and every property they own/manage/control, etc.? Day one the numbers would/should be on a roster of properties with money in and money out. Come on people this is the 21 century and all needs to be right as rain.

Astonished from Oak Park  

Posted: September 22nd, 2012 6:34 PM

Did an Oak Park Trustee actually ask a developer a hard question? I have to give Trustee Tucker credit. If Oak Park is giving up something, then it should get something in return.

Same ol Same ol from the SAME ol   

Posted: September 22nd, 2012 9:06 AM

Glass is always half full for these people. It doesnt matter the project, or development. Look around and take in all the great things that OP has ENDURED. I suppose we shouldnt have built 100 Forest?

Done from Oak Park  

Posted: September 21st, 2012 2:05 PM

OP Resident: Very, very well said. I think it is time to realize that the village board is ill-equipped to lead a town of this size. With the next board election, it is time to clean house and let someone else lead the village back to reality. Hopefully, we aren't so deep that we can't get out.

OP Resident  

Posted: September 21st, 2012 1:27 PM

"Connelly emphasized that Whiteco has been a good partner with the village" Is he kidding! When Whiteco was before the Village Board it asked for huge tax and building code concessions and got them despite the "no" vote of its Plan Commission. And as a "compensating benefit" all we got was a pathetic piece of "public art." The Village Board engaged in the same song-and-dance with the Colt building and now with Sertus. A sad example of repeating the same mistakes and expecting different results.

Enuf is Enuf from Oak Park  

Posted: September 21st, 2012 12:06 PM

@RayJohnson: the sale of privately-owned buildings/land ('Vlahos parcel') at Lake/Forest in 2006 to Sertus was contingent upon an ensured redevelopment agreement with the village for the public land occupied by the parking garage. Otherwise, why would Sertus purchase this undersized parcel for their high-rise project? Proof can be found in the Nov. 1, 2005 letter by Sertus to David Pope that proposed the deal to the village, pre-dating their purchase of the Vlahos parcel.

paul from oak park  

Posted: September 21st, 2012 11:05 AM

Hey, for once I agree with Ray! Let's add up all the money we have spent on Whiteco and let's see how many millions we still owe for the project and let's see exactly how much is coming in from the building and let's see how many times they have protested their taxes lower, and let's see when Trader Joe's lease ends and once and for all put everything on the table for everyone to see. Open and honest government. I'd be happy to serve on the committee at no charge to the public.

Double Speak RAYJAy  

Posted: September 20th, 2012 7:14 PM

More double speak form RAY JAY. there will not be "onsite supportive services" on madison 24 hrs per day. And there are plenty of apartments for under $750.00 per month in OP...and those are larger than the sro rooms on madison. Go Away, Ray, we don't need or want you anymore.

Ray Johnson from Oak Park  

Posted: September 20th, 2012 1:45 PM

@Kurious: Affordable Housing on Madison includes on-site support services, with a target market of low wage Oak Park workers, people with disabilities, and veterans. The rental price point on Madison is truly affordable and could not be matched at Oak Park Apartments. @ Q: No, the land at Lake/Forest is not for sale. We have a public garage on the property. @ My City: The owners of the previous building at Lake/Forest accepted an offer to sell. The Village had no say or hand in that.

My City Was Gone from Oak Park  

Posted: September 20th, 2012 12:00 PM

"No direct cost to taxpayers", perhaps. But an entire block of viable, quality-of-life-enhancing, community businesses were evicted and torn down in the name of development and all we have to show for it is a patch of grass in the middle of our supposed business district. Not to mention the tax revenue that evaporated by loosing the likes of Certifiedland and the pancake house.

Q from Oak Park  

Posted: September 20th, 2012 11:54 AM

Ray Johnson is the land available for sale? Or did you enter into an agreement that gives Sertus an unlimited time to find investors? If not then offer the deal into the open market around the World. Germany is in a good financial position.

kurious  

Posted: September 20th, 2012 11:26 AM

If we have enough affordable units, why did the board approve the SRO on Madison?

Ray Johnson from Oak Park  

Posted: September 20th, 2012 10:53 AM

@ Mr. Lauber: Actually, the Village Board decided not to include a requirement for affordable units in this project (as we have a high quantity of affordable units already available). Whiteco is covering all the expenses related to garage repairs, and the architecture changes which led to the current design were approved by the 2005 Village Board.

Dan Lauber  

Posted: September 20th, 2012 10:43 AM

Whiteco has manipulated the Oak Park Village Board from Day One by refusing to included units affordable to households with modest incomes, building a faulty garage, and the ugly as sin architecture. It's time for the village to put it's foot down and refuse to drop the approval clause. Enough is enough.

Ray Johnson from Oak Park  

Posted: September 20th, 2012 9:53 AM

@ Q: There has been no transfer of property at Lake/Forest nor will there be unless the developer achieves financing and submits final plans for the public parking facility. The use of Village owned land for the benefit of the development, does not change the fact that the Village retains ownership over the 300 publicly financed parking spaces on that land. All of this is moot if the developer is not able to proceed, but during this time there are no direct costs to taxpayers.

Who  

Posted: September 20th, 2012 9:06 AM

If they are back, does that mean you never left? Scary. This is your retirement. Enjoy it.....on the OP.com comment section.

John Butch Murtagh from Oak Park, Illinois  

Posted: September 20th, 2012 2:19 AM

Oh great, Silly and her buddy 4 Freedom and back!

JBMNN  

Posted: September 19th, 2012 11:19 PM

Thank God for Murtagh. Where would OP be with out him. Bwaaa Ha ha ha aha haaaaa

More Information from Oak Park  

Posted: September 19th, 2012 9:49 PM

Saw the meeting last night, and the same apartment requirement would remain with the new owner.

John Butch Murtagh from Oak Park, Illinois  

Posted: September 19th, 2012 9:11 PM

Hi Galen - thanks for the info. In reading the article it became obvious to me that the details could only be resolved by lawyers. In my mind, the issue should not be before the board until the lawyers have dotted the "I's" and crossed the "T's." Best Regards. John

Galen Gockel from oak park  

Posted: September 19th, 2012 7:45 PM

The Redevelopment Agreement between the Village Board and Whiteco also contained a provision (unless it was deleted at the last minute) that Whiteco would keep the building as rental---not do a condo conversion---for ten years. (I voted against the agreement, but not for that reason.) Will the new owner be bound by that provision? Will the new owner automatically "inherit" that and other provisions of the original agreement between VOP and Whiteco? Probably not.

John Butch Murtagh from Oak Park, Illinois  

Posted: September 19th, 2012 7:33 PM

It is OP election season. Time for the board to show everyone that they are actively involved in protecting the interests of the community. It's a busy week for the board - VCA forum on Sunday, Play with minutia on Tuesday - and a Barrie Park Fest on Saturday. As police officers say, "OK Folks, there nothing here to see, move on."

Q from Oak Park  

Posted: September 19th, 2012 6:07 PM

What is wrong with the board people. They give away land for the building at Forest and Lake street that isn't going to be built and then they won't let a building be sold without a bunch of restrictions and negotiations. As for Trader Joe's, the board acts like it is the best trading post that has ever been in Oak Park. Trader Joe is not a fair trader. He doesn't accept anything in trade except for cash. That is not a trading post.

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