By Anna Lothson
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.