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Village Board Approves Lux Apartments Development Plan and Bond Financing

In front of a packed house, Orland Park trustees approve with one dissenting vote, but also agreed to find ways to lessen the financial risk.

Updated, 11:05 p.m. Monday

Catcalls and shouts from unhappy Orland Park residents did not sway the village board Monday night, as both the development plan and for the project were approved.

But the approval did come with a new caveat introduced during the meeting. The Orland Park Village Board also unanimously voted to have village staff pursue ways to reduce the “debt and gap financing participation” of putting up $63 million in bonds to cover loans and incentives for the construction.

Trustee Brad O’Halloran was the lone dissenting vote on the redevelopment agreement and the financing plan for the apartment complex. He said he supports the project itself, but not the financing plan.

While a few residents voiced their concerns and misgivings about the project, it was the trustees who carried most of the meeting as they responded to and .

Trustee Kathy Fenton, who also chairs the development services committee, spoke at length, first firing back at people who criticized the village for not working harder to fill vacant business spaces, citing that less than 5 percent of Orland Park’s business spaces are empty. She also listed several businesses that set up shop in spaces left behind, including in the former Value City space, in Sports Authority’s old home, and Johnny’s Charhouse in the former Canoe Club building.

Fenton then described vacant spots that soon will be built upon, including the northwest corner of 144th Place and LaGrange Road, where will soon build a new plaza space.

 “I am not a person to jump into things,” Fenton said. “If anything, I am a pessimist. But these are very proactive, not reactive, individuals sitting up here.”

Trustee James Dodge tackled the issue most talked about: whether residents will see the costs on their tax bills if the complex fails. He described simulations he asked staff to run 10 years down the line—when developer Flaherty and Collins is scheduled to have repaid the village’s investment.

“If Flaherty and Collins goes to hell in a handbasket, we, because we are the lender, step right in and control the asset, which will be more than the loan,” Dodge said. “We will have more than enough money in the home rule sales tax to make sure this never hits your tax bills.”

O’Halloran said he changed his mind on the financing plan for the project after Standard and Poor’s downgraded the United States’ credit rating because of “too much debt.”

“And here we sit to double out debt,” O’Halloran said about the financing plan. “It’s too much risk at this time.”

McLaughlin complimented staff and board members for the “tremendous amount of time spent over the last several years working on getting to this point.” He said he will work with staff to find ways to reduce the financial risk.

While some attendees clapped after the trustees spoke, others booed and called out while they were speaking, including one man who said, “Don’t treat us like a piggy bank.”


paul cervenka September 21, 2011 at 01:40 AM
Which mayor McLaughlin are you talking about? The one that told voters not to vote for the fire district bond issue or the one that is silent on such issues these days. I'm confused. The only person I trust is written on your money. Village debt is now doubled. Just in time for the next recession! Brilliant.
Kathy Quilty September 21, 2011 at 01:56 AM
And one more thing John Paul -- in your bio on the Patch, it says you were the co-chairman of the successful 2005 referendum in D135. You were NOT! I was the treasurer and filed all the paperwork. Your name wasn't even on the papers I filed with the IL State Board of Elections. Deb Fiengold and Connie Trohke were the co-chairs. You weren't elected board president until April 5, 2005, the same day as the election.
John Paul September 21, 2011 at 02:05 AM
Kathy, I tought we've been through this before. The district had its own committee appointed by the superintendent. The three co-chairs were Me, Dave Manchester and Don Borling. Please don't turn this into a "my committee was better than your committee" thing, we ALL worked very hard to make that referendum possible. Of course we never filed papers with the state because, as I'm sure you know, the district is not allowed to make expenditures for a referendum. Our focus was on crafting a message and coming up with alternantives if the referndum failed, not raising or spending money.
Kathie September 21, 2011 at 02:58 AM
People who drive their cars looking in the rearview mirror, eventually drive off the path! Stop looking back and move forward, you guys!
Kathy Quilty September 21, 2011 at 03:51 AM
John Paul: I did not run with a specific party or group of people except Rick and Pat. We had ALL of the area mayors' support except for one who ran his own slate against us. It was not just Orland Park. We had Tinley Park, Palos Park, Palos Hills, Palos Heights, and Hickory Hills. We came together as a community ... for the students of D230 (which I might add your children attend).
Ashburn Sound September 21, 2011 at 03:59 AM
John Paul: I hope it is worth tanking your reputation for Jim Dodge. You say that you would run as a Republican if you did run. I have gone to at least 20 ROOT meetings and neither you or Jim Dodge have been to one. If memory serves me right, both you and Dodge worked against Liz Gorman when she first ran for office. You both claimed she was a Democrat and now here the two of you are firmly backing a Democrat Mayor and Committeeman Dan McLaughlin, you care to explain? Your right Kathy, his memory isn't so good.......
John Paul September 21, 2011 at 04:16 AM
Ashburn, I never publicly supported anyone when Liz first ran for County Board, but I did vote for her. I pretty much voted against all of the establishment candidates in that primary. I have not been active in partisan politics for a while now because I'm tired of investing time and money in a Republican party that seems rudderless, at least at the state and county level. The exception to that was when I helped Jim Dodge run for Comptroller. I did that out of friendship more than politics. If the GOP ever gets serious in Illinois and Cook County again, I'll get involved again. BTW, I was also active in the Orland GOP when we turned over the organization to Liz and I was a proponent of that. Lastly, Ashburn, stop all of this partisan purity nonsense. At least out here. The lines between Republicans and Democrats is blurry at best. What about Mike Madigan? Whose side is he on?
frank September 21, 2011 at 04:21 AM
Kathie and John Paul, you both are sounding like playground mates trying to get your view across before the recess bell rings. The topic was about the Triangle apartments, not the football field or the school boards. You sound like Gorman bringing up Stroger. We need viable candidates without a party moniker and baggage. Rehashing fhe past only keeps common sense from the future battles that the citizens of OP should win. <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
John Paul September 21, 2011 at 04:25 AM
I see your point, I was questioning why Mrs. Quilty ran with the mayor's endorsement with Schussler, Gira and Ruzich, yet now calls for them to be defeated because of the 9750 project, yet we somehow got sidetracked.
OPmom September 21, 2011 at 12:04 PM
Kathy, you are correct and partisan politics will ruin this town. We live in a great town because there has been no republican vs. democrat and I hope the people who are trying to insert that into our local government fail. Like it or not the mayor and a majority of the trustees voted for this because they feel it is the right thing to do for the village. They very well could be wrong but the name calling and reputation slamming are uncalled for. I for one do not want Orland Park to turn into Washington DC with a bunch of right wing politicians holding tightly to their pledges and the left side wanting to spend everything we don't have and the two of them going after each other constantly. Congress has a 12% approval rating for a reason. Insert that here in Orland Park and we are doomed.
Kathy Quilty September 21, 2011 at 12:25 PM
I was just defending myself & answering the question from John Paul.
Megan James September 21, 2011 at 12:54 PM
I get that! That's why I've decided not to respond to any more of JP's questioning of me. He's failed to provide me proof to back up many of his comments on other posts, so I no longer feel the need to provide proof for my own. Just going to ignore him so I too can get out of the constant defending-back-and-forth with JP too :-)
Tom Spence September 21, 2011 at 12:55 PM
Hey Frank, it was the Stroger point that hit home. Stroger ended up with about 30% of the vote when he ran. While in office he was the poster child for incompitence and so is this group of clowns, she was right even he didnt lend his group of insiders 65,000,000. Also get over the Gerald Maher bandwagon he had ZERO chance of winning. Last but not least use your full name it would give you more credibility.
Andrea Williams September 21, 2011 at 02:01 PM
McLaughlin is the president of the Orland Township Dems and Dodge was the last president of the Orland Township GOP. If these men do not want to align with the ideologies of the national political parties, so be it. If that is their choice however, maybe they should stay out of leadership positions within those organizations. No criticism of McLaughlin here, his actions align very well with his party politics. We have leaders on the village board that have very strong ties to political parties. To say "D and R" politics don't play here is either ignorant or misleading. I'm not saying it should or shouldn't, I'm just saying that it does.
Andrea Williams September 21, 2011 at 02:11 PM
@OPmom - you are probably right about the trustees that voted for this plan believe it is the right thing to do. They have also shown they can hold their own - the Schussler/Gira letter had some pretty good daggers in it. I might not have agreed with alot of what they said, but I'm glad they finally engaged in the public discussion and spoke their mind. I wish we heard more discussion from all the trustees rather than lhaving the mayor stand alone as the public whipping post.
OPmom September 21, 2011 at 03:27 PM
Andrea - John Doria was president of the Orland Township GOP after Dodge. No matter, I do believe that people can be a part of a political party and also be flexible in their governing at the local level. Sorry if that seems ignorant or misleading to you but I'm allowed to have my opinions and express them.
Dave Wagner September 21, 2011 at 04:15 PM
Many here on this site are pointing fingers, arguing points that have NOTHING to do with the topic, and the name calling has started. GROW UP!!!!! PLEASE!!!! It's starting to sound like a mud slinging campaign by those partisan polticians you are slamming. And it doesn't matter who started it. This 9750 project is not built yet. Granted, Mayor McLaughlin made it easier by bypassing the Finance Committee when it comes time to issue the bonds, and I doubt that O'Halloran will still be chairman of that committee when that time comes, but there are still obstacles to overcome. I'm not sure they have secured the bids yet, which must be $52.5 million plus or minus 5%. (This is one of the most idiotic statements I have ever read. It means that a bid 6% lower than the $52.5 mil can't be accepted.) I've admonished the Trustees and the Mayor to read the Kane McKenna report, and the entire development agreement and I suggest you all read them. The bonding is most likely 2 years away, until that time they will use interim financing, probably thru a letter of credit from a major bank, which most likely will have a floating rate. This could be a problem, and is one the Board glossed over. Read and learn, speak from a position of knowledge, and by all means, stop supposing and guessing. I am willing to help.
devcrabgrass September 21, 2011 at 06:07 PM
I do not live in Orland Park. If I did, I would say what questions exist now that it goes forward. The first question I would be asking is what time frame applies - when is ground breaking set for, and how long after that to completion and occupancy? The second question, parallel to the first, when are bonds planned to be issued and sold, terms and conditions, and contracts let to build the thing? I presume that with the village financing it the village would have some say in things such as whether prevailing wages will be paid; and whether union or non-union labor would be preferred. The devil is in details. It is not just new jobs at this point, but who is to get them. Also, how soon will voters be able to judge whether it's worked out well, or badly? The board's majority vote is now history. Where do things go from there is the viewpoint I urge citizens to take at this point. Look to how details can be best scheduled and handled to minimize the chance of failure. Without a timetable made public, and disclosure/transparency on the issuing of the bonds, things are less public than they should be and that can only lead to greater distrust and ambiguity in the minds of voters. The village should at this point want to lay out a plan - if for no other reason than to prove they have one. And the more detail revealed the better to prove that the thinking has been invested before the decision to do it.
Megan James September 21, 2011 at 07:59 PM
@devcrabgrass - I'm not able to help with all your questions, but the Village said that people can find out information about this project at anytime through their website. I don't think it has any of the answers for regarding the timeline yet, but these two links on their website would probably have the information if it's available yet: This is their new downtown op website: http://www.downtownop.com/main-street/ This is the link to the page that should include all the agreements, market research, and hopefully the signed financial paperwork when they're ready: http://www.orland-park.il.us/DocumentCenterii.aspx?FID=322
Megan James September 21, 2011 at 08:10 PM
Ok...a little off subject, but having to do with Orland - They're having a Public Works Auction on Saturday according to the Village's home page: Public Works Department To Host Auction The Village of Orland Park Public Works Department will host the annual public auction of the Southwest Conference of Mayors on Saturday, September 24, 2011, beginning at 11:00 a.m. at the Public Works Facility, 15655 South Ravinia Avenue. The facility is one block west of LaGrange Road and two blocks north of 159th Street. Automobiles, trucks and equipment from member municipalities will be auctioned by American Auction Associates of Bridgeview. A 25% deposit, a $200 minimum, is required to bid. All funds must be in cash or certified checks. Company checks will be accepted with a bank letter guaranteeing payment. All items are sold as-is, where-is without warranty or guarantee. Announcements made the day of auction supersede any and all printed material. All items must be completely paid for and removed the day of auction. A public preview will be held on Friday, September 23 from 9:00 a.m. until 2:00 p.m. and at 9:00 a.m. the morning of the auction. Auction requirements and vehicles and equipment for sale may be viewed on-line at http://www.amer-auction.com/Sept%2024th.htm
OrlandParker September 21, 2011 at 09:12 PM
David, I reviewed the Kane McKenna & Associates report, specifically the financing and am as concerned as you. Clearly this is a risky venture and has many moving parts and risk. The fact the Finance Committee has been bypassed is even more alarming. They identify recommendations on size and scope and more traditional funding being used ...which they say the village explored but were not feasible. The bonds are for 20 years not 10. They are callable at the 10 year mark. The Net Operating Income, which is what will pay back these bonds could be adversely impacted by mutliple market conditions, and the village bond rating subjected to being downgraded. Concerning to say the least. What options, if any, does one have?
Andrea Williams September 21, 2011 at 10:00 PM
@devcrabgrass: There are people out here listening - people that don't have a lot of experience keeping tabs on government schemes like this one, but are determined to do it. Please keep the tips/guidance coming. It is appreciated.
steve dzierwa September 21, 2011 at 10:06 PM
good words Dave. you've always spoken the truth as you see it and done so very eloquently. i've learned a lot from you. i agree, the name-calling and mud-slinging should be refrained from. the who voted for who, and who backed who, and who got help from who, and who really did what really doesn't matter. the fact is that we all have the privledge to vote and that we exercise that. i'm not sure how many of the commenters here actually voted, but they know and it would be interesting to know the truth. remember when i suggested that we swear in people who wanted to speak at public hearings at the plan commiission meetings BEFORE they gave their name and address? that way they had to give their real name because they were under oath. thanks for the info Dave. i appreciate your input and experience.
steve dzierwa September 21, 2011 at 10:13 PM
oh, Dave, next time you decide to run for trustee, count me in on helping with your campaign. your knowledge and experience are good prerequisites for being a well-qualified trustee.
Megan James September 22, 2011 at 01:04 PM
I'm sorry but I need to ask some questions about home rule sales tax..not trying to be negative ...just looking for honest answers from all the legal experts out here for a better understanding: Dodge states “We will have more than enough money in the home rule sales tax to make sure this never hits your tax bills.” Its supposed to take 10 years to pay off the bonds, and the Village is basically saying that in the event there isn't enough revenue generated to pay off the Bonds, then the "home rule sales tax" will be use to cover it, instead of having to increase out taxes. My question is more of a 2-parter. First - For communities that have a "home rule sales tax" fund, what are these funds usually used for? Again, not trying to be a negative, but being that no other community has financed retail or apartment centers, I'm just trying to understand what the purpose of having this fund is meant to be used for in general. Secondly, since this project is supposed to take 10 years to pay off, while they say we have the home rule sales tax to cover the debt now, a lot can happen in 10 years. While I pray no disasters hit our town, is it possible for a sudden urgent need to come up that would force them to allocate some or all of the home rule sales tax towards the urgent need? Again - I'm just asking for a better understanding of it all. Thanks for any geniune, honest answers.
MS September 22, 2011 at 01:45 PM
I'm not sure I have the right answer to your questions, but I read that the Village brings in about $28 million a year in sales tax revenues. Assuming all things are constant, in 10 years that amounts to $280-300 million. I dont know if that means that they save a portion of the sales tax each year to be sure there is something in the end or what... Also, according to this information (http://www.orland-park.il.us/DocumentView.aspx?DID=1226), OP is 5th in the state in sales tax revenue. Sales tax revenue is 26% of the annual budget... I think Sales tax dollars are used for capital projects and business incentives but i am not sure. IF a disaster hits our town, I doubt sales tax will be enough to fix any problems. IEMA and FEMA would probably provide budget boosts.
Dave Wagner September 22, 2011 at 03:22 PM
To OrlandParker - Options are limited at best, but what the future holds is where the opportunity may lie. My initial (as yet uninformed) thought is to stay on the Board to allow the funding proposals to go thru the committe process. It is a BIG deal, and the potential negatives for the board out weigh the positives. Granted they can contend that it is still a public process and thus have a defensible position, but it still looks bad. I fully understand and appreciate they don't want to, and shouldn't with respect to the financing proposals, revisit the should we or shouldn't we do the project. However, without the funding, the project can't proceed. Which makes the interim financing a point of contention for them. Say they have arranged the interim financing, and it comes time for the bonding. They then have an argument that they 'must' approve the bonds as they owe on the interim money. It is more likely that they will both be passed together as they wouldn't want to put themselves in that position down the road. Especially since it could be near the time for the mayor and 3 trustees to get reelected. So keep an eye on the agenda for the meetings and be there when the question comes up. If I had to hazard a guess, I would say that the project will go over budget, and additional funds will have to be approved. I surely hope that the projecy IS a success, at this point failure is too costly. The risk, however, is not going away.
Andrea Williams September 22, 2011 at 04:30 PM
Dave, have you heard anything about who the lender is going to be? There may be an opportunity there...just thinking out loud...to go at this from a different direction and throw some community pressure on the potential lender(s).
Megan James September 22, 2011 at 04:38 PM
Thank you MS. Again, not being negative...just asking questions for further clarity on my end. & I apologize, I didn't mean "disaster" as in something that IEMA or FEMA would handle. I totally understand state & federal funding is provided for those situations when an area is declared a disaster zone by them. But I'm assuming communities who have the Home Rule Tax Fund, use that as a "savings account" for emergencies also. It makes sense that it would be used for business incentives and captial projects. But I would like to know if there are situations or unplanned expenses that could occur during the next 10 years where some of the $62m earmarked for this project may get used first? I do tend to agree with your thinking, that over 10 years, if we pull in about $28m a year constantly, in 10 years that would be about $280m, which is more then the $62m needed for this project. But I'm assuming that we already use this Home Sales Tax fund in to pay for other village projects regularly. So again, not trying to be negative, I'm just wondering if say their was another lawsuit, need for a new school, or say our state or fed gov't were too broke to provide funding, is it possible the full $62m is not 100% guaranteed to be there? Just trying to feel more confident with Home Sales Tax fund being the back up, especially since state & fed govts are not sending as many funds for things like they used to.
Dave Wagner September 22, 2011 at 07:25 PM
The Village, in their budget, plans to use the HR Tax to pay the interest on the existing debt, if I read it correctly. (Note: The budget contains 2009 actual information which was based on 15 months due to, I assume, a fiscal year change). Given that the likelihood of this revenue source decreasing is high, one would have to conclude that using this source on an annual basis going forward would cause possible funding shortfalls to other Village prorgams and/or projects (roads, parks, etc). Sure, the Village pulls in a lot of money from many different sources, but the two biggest changes (2009 actual equalized for 12 months and 2011 Budget) are an increase of $3.5 mil in fees for services and an increase of $2.3 mil in Real Estate tax revenues. State income tax revenue and miscellaneous (other) tax revenues both declined. What my point is - Revenues for fees and services and real estate taxes come from residents and businesses, as do State income taxes. The portion of sales taxes (relatively constant) comes from residents, but more so from others not living in Orland Park. Property Tax revenue and fee revenue went up about $5.8 mil while all the other major sources remined the same or fell slightly. Essentially, the residents are already paying more, and we probably can expect to pay more. But rest assured, as election time approaches, I think we can count on a rebate of our Orland Park portion of real estate taxes. Or maybe sooner, just to make us all happy.

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