After 45 minutes of public comments begging them to do so, the Oak Park village board approved a sale and leaseback deal that will send $2.4 million to Elementary School District 97.
“The students need this money. Please invest in them tonight,” said Elizabeth Lippitt, a former president of the Dist. 97 school board. Council Chambers was filled with school leaders, past and present, including the entire Dist. 97 Board of Education.
Using Madison Street Tax Increment Financing District funds, the village will buy the district’s 970 Madison St. headquarters and lease it back for $1 a year until 2011.
The school district will buy back the building in 2011, and the TIF will be extended at least one year to recoup the cost of implementing the deal.
The transfer price totals $2.37 million, paid in two equal installments, the first of $1,185,000 paid between July 1 and Dec. 31 of this year. The second would be paid in the first half of 2008.
The district would continue using its headquarters uninterrupted, and would be responsible for operation and maintenance costs.
Dist. 97 will pay back the purchase price of the property through payments received by the village under a 1995 TIF agreement. At the end of the lease, the property will revert to Dist. 97 once the village is fully reimbursed.
Trustee Galen Gockel pointed out that the leaseback deal might have the collateral benefit of getting district leaders and developers wondering “if that’s the best place” for the headquarters. A recent Madison Street master plan calls for combining municipal uses into one building.
“It wouldn’t be surprising if in the next two, three, four years a developer takes a look at that site” and sees that it’s ripe for development, Gockel said.
Ali ElSaffar, the township assessor, said his original idea to use village TIF funds to help Dist. 97 was improved on through the collaborative process with representatives of all local taxing bodies in the Council of Governments. He credited parks CFO Kent Newton with the leaseback idea.
“The only thing I would say is that we’re not done,” ElSaffar said. “We’re still $1 million short [of what Dist. 97 needs].”
The district has said it needs $5 million over the next two years and is about a year away from being able to sell its Madison Street warehouse building, home to buildings and grounds operations and to school records and other stored documents, some dating back decades.
The Dist. 97 Board of Education discussed the intergovernmental agreement at its April 11 regular meeting but did not take action on it. Instead, members, along with the district’s finance chief and an outside attorney hired to look at the plan, went through the draft document with a fine-tooth comb. Some didn’t like what they read in the fine print.
Some board members took issue with parts of the intergovernmental agreement, while others saw potential conflicts with the 1995 TIF deal.
The agreement originally stated that the title of the property would transfer back to the district once the reimbursement is received. That was changed to include language stating that the lease would terminate “upon the fulfillment of all terms and conditions of the intergovernmental agreement and the 2007 intergovernmental cooperation agreement.”
Robert Kohn, attorney for Dist. 97, said that was a point of contention between the two sides. It was originally understood that the “triggering event” for the transfer of property back to the district would be once the amount of the transfer price is paid to the village, and not any other unspecified condition, said Kohn.
Another concern was when the lease deal could actually end.
Board member Marcia Frank noted that the intergovernmental agreement wasn’t clear to her liking on that point. Language in the intergovernmental agreement, she pointed out, seems to suggest that the lease deal is somehow also tied to the 1995 TIF agreement, which could result in the lease being extended beyond the stated 2011 termination date.
“I did not catch the fact that the intergovernmental agreement was the 1995 version and not the 2007 version,” said Frank.
Kohn echoed her concerns.
“The concern that I have with this language at this time is that you want to make it very clear when the building is transferred, and when you say that you have to fulfill all the obligations under two intergovernmental agreements it doesn’t become clear as to what terms and conditions you’re referring to,” he said.
The Dist. 97 board asked Kohn to take its concerns back to the village.
Both boards have to approve the agreement for it to take effect.