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Just the Facts

The purpose of this feature is to be transparent and direct with the community about topics relating to the City of DeKalb. The feature is an effort by the City of DeKalb to dispel rumors and clear up confusion on a variety of matters. Just the Facts will be updated as rumors, misperceptions, or topics of confusion arise in the community. 

Feb 23

Cornerstone Development

Posted on February 23, 2017 at 8:35 AM by City of DeKalb

The City of DeKalb City Council recently discussed the proposed construction of a roughly $7,500,000 development located at the southeastern corner of Lincoln Highway and First Street, at the site of the former Otto’s.  The proposed development would consist of the demolition of four buildings at that location, and the construction of a new four-story mixed-used facility with extensive first floor commercial (inclusive of a proposed upscale bar/grill and the relocation of the existing Barb City Bagels to a new facility), with 51 one-bedroom, premium apartments located on the upper three floors.  Since the public discussion of the project, there have been some misconceptions regarding the nature of the project, which are outlined below.

Cornerstone Development

Fact One:  The City worked extensively to save Otto’s, but the Owner declined to fix the property, and it is presently beyond repair.

The Otto’s building suffered broken pipes in January of 2014 when the Owner failed to properly heat the building.  Those pipes caused flooding and damage inside the building.  Following that event, the Owner never undertook repairs to the building, and never even applied for a building permit.  Several months after the flooding, the Owner surrendered the liquor license for the premises and chose to not reopen.  The building presently has significant damage that jeopardizes its safety and structural integrity, and requires hundreds of thousands of dollars of environmental remediation.  The pictures below show some of the condition of the building:

Building Condition

Building Condition

The City worked with the Owner extensively to avoid having to pursue demolition of the building.  Finally, 990 days after the initial flooding, the City was forced to file a legal action seeking remediation or demolition of the structure, based upon the public safety threat that the building poses.  Because of the Owner’s failure to maintain the building, it is believed that interior water damage has caused weakening of the common brick wall shared between the Otto’s building and the adjacent building in which the Mediterraneo’s restaurant is located.

Fact Two:  The City has a need for premium, one-bedroom rental units in the downtown.

Some have raised concerns that the construction of new residential rental units will generate further vacancy in other residential rentals.  Recent market experience has shown that there is market demand for units of this nature.  For example, a recent premium apartment development completed in Sycamore by the developer proposing the Cornerstone project has a wait list for apartments that exceeds supply several times over.  The City does not presently have a housing product that serves the market that Cornerstone will serve.

Fact Three:  The City needs greater population density in the central business district.

The City has commissioned several studies and plans for the downtown area that identify the best opportunities to restore a vibrant downtown.  Those plans all indicate that the City needs a greater density of daytime and nighttime population to support local business, create traffic, and generate commercial opportunities.  Other communities that have a vibrant downtown area also feature significant, high-quality residential opportunities.  The availability of premium rental units in the downtown will bring new population to the downtown and spur other commercial opportunities.

Fact Four:  In a healthy community, restaurants benefit from adjacent and nearby restaurant developments.

The suggestion has been made that if a new restaurant opens, it will hurt the business of existing restaurants.  That suggestion is based upon the premise that the City has a fixed market of consumers and cannot draw new interest.  A quality, attractive development that adds to the core of existing dining opportunities in the downtown can draw new interest in the downtown, and bring more consumers into the City to dine and generate revenue.  Again, looking at areas that have successful, busy downtown core commercial areas, they typically feature a wide array of dining options, so that consumers have multiple choices and can select an alternate venue if the wait at one restaurant is too significant.

Fact Five:  Without a City incentive, redevelopment of the site will not occur.

The City has been working for a period of years to attract any commercial interest in the property at issue, to no avail.  Constructing a development on this site requires costly environmental remediation, demolition, site restoration and utility improvements that put the downtown at a competitive disadvantage in comparison to building a new structure in vacant areas or other communities.  The practical experience of those seeking to undertake significant developments in the downtown is that it is difficult if not impossible to obtain commercial lending to support the redevelopment.  Because of the significant cost penalty associated with redevelopment in the downtown, if the City wishes to see redevelopment occur in that area, an incentive is necessary.

Separate from the costs of remediating and demolishing the safety concerns at the Otto’s and Mediterraneo’s buildings, the tenants in the existing building at 122 S. First Street have reported issues with the building roof, envelope and mechanical systems.  The age of the buildings and the failure to maintain the buildings over long periods of time has generated deterioration that makes the properties unviable for development without public support.

Fact Six:  The project will generate a significant return on investment for the City and for other taxing districts.

This project is being evaluated on the basis of a thirty-year repayment, based on the nature of commercial lending and the common approach of utilizing a 30 mortgage.  This project contemplates a $3,000,000 public incentive, repayable over those thirty years.  Within that period, the City will receive between $3,200,000 and $4,000,000 of new tax revenue (excluding amounts paid to other taxing districts under existing intergovernmental agreements).  Community wide, the City and other taxing districts stand to gain between $8,000,000 and $12,000,000 over that same period.  By way of contrast, the properties are presently valued at a lower valuation than they were 30 years ago, and only generate $33,000 of property tax per year.

Fact Seven:  The project will be adequately served by parking.

Numerous reviews of the available parking in the central business district have shown that the City has adequate parking available.  Even during peak events, the City has available parking within a short walking radius of the downtown.  Further, while current zoning codes do not require the developer to provide parking, the developer would both be adding 40-45 new parking spaces, and agreeing to permit the parking area to be used as a part of a future parking deck if the City later had a need for structured parking.

Fact Eight:  The parties will work to minimize impact on existing businesses.

With the deterioration of several of the structures, the unfortunate fact is that some demolition will have to occur, regardless of this project.  With this project, the demolition will lead to new construction and benefit to the community.  Without this project, the demolition will simply generate more vacant lots in the downtown.  The demolition and construction will undoubtedly have an impact on downtown traffic patterns and access to the sidewalks immediately adjacent to the property.  However, the City and developer will work to mitigate that impact, and the project will generate benefit to surrounding properties and businesses.

Fact Nine:  The project has been exhaustively reviewed and makes financial sense.

Some have suggested that this project requires due diligence, and the City agrees—a project with an incentive request of this nature requires careful review.  To that end, the City has completed the most detailed staff review of an incentive request that has ever been completed in the history of the City.  Moreover, the City has shared the results of that analysis publicly, including the detailed calculations underlying each assertion.  Further, the City has retained an independent, third party consultant to review the developer’s pro forma and financial assumptions and to make a recommendation on the viability of the project and legitimacy of the incentive request. That analysis supports the City’s conclusion that the project will generate an incredibly positive return on investment, community wide.  More specifically, the analysis shows that the project requires the public incentive in order to be possible, given the challenges that the site poses.  As proposed, even if the City Council gives preliminary approval, the project will still undergo further review once final plans are prepared.

Fact Ten:  The City is working on an expedited timeline and to allow the potential of this development to be realized.

The City is cognizant of criticism that is sometimes leveled at all units of government, that government bureaucracy moves too slowly and can hinder private development.  In this case, the project involves interlocking timelines on the contracts to purchase five separate parcels of property.  The developer was fortunate enough to be able to get all of the properties under contract with simultaneous review periods, and if this project is to occur, the timeline for initial consideration and conceptual approval has to be expedited.  Notwithstanding that expedited timeline, the project will be reviewed at three separate public meetings before even conceptual approval is granted.

Feb 23

Local Government Elections in the City of DeKalb

Posted on February 23, 2017 at 8:35 AM by City of DeKalb

The City of DeKalb recently completed the process of accepting nominating petitions and related paperwork for those seeking to run for City elected positions that will be up for election in the 2017 municipal elections.  In the course of the filing period, there was some apparent confusion by candidates and/or members of the public regarding the nature of elections in the City, the appropriate forms to utilize, and the role of the City’s Local Election Authority.

Fact One: The City of DeKalb, like most municipalities, utilizes partisan elections.

Illinois has a system of elections for local government where elections are either “partisan” or “nonpartisan.”  In partisan elections, an individual may either run for office as a member of a local party or may run for office as an independent candidate.  In nonpartisan elections, all candidates run without a party.  The Illinois State Board of Elections has developed draft nominating documentation for persons seeking office as a partisan candidate in a partisan election, as an independent candidate in a partisan election, or as a nonpartisan candidate in a nonpartisan election.

While it may seem unusual, the City of DeKalb uses partisan elections under Illinois law.  Under the Illinois Municipal Code, unless a city, village or town goes through a process of converting to nonpartisan elections, the election of local officials (mayor, clerk, aldermen) is through a partisan election process.  While there is a process for utilizing local political parties, the vast majority of candidates in local elections technically run as “independent” candidates in a partisan election.

A review of nominating petitions filed with the City of DeKalb going back to 1989 shows that, with a few rare exceptions of individuals who apparently ran under a party name, the overwhelming majority of persons running for office over the past nearly thirty years ran as independent candidates and were certified as independent candidates.  From 1989 to 2011, every individual who ran for office filed either as an independent candidate or as a partisan candidate (all in partisan elections).  In 2013, one candidate filed a nonpartisan nominating petition, and in 2015, two candidates filed nonpartisan nominating petitions.  It is unknown why those individuals elected to use an alternate form of nominating petition.

Fact Two: Provided that a nominating petition meets all statutory requirements, it is a valid nominating petition.

In the aftermath of filings for the 2017 elections, it was apparent that some individuals used independent candidate nominating petitions and some used nonpartisan candidate nominating petitions.  City representatives received inquiries regarding whether the wrong nominating petitions had been filed, or whether the nominating petitions were invalid.  At the time (for the reasons described in Fact Four below), the City did not respond officially to those inquiries.  The question remains: what is the appropriate form of nominating petition?

Under Illinois law, a candidate for public office may not be required to utilize any specific form.  If their documentation includes all information required by law, the documentation may be valid.  According to the State Board of Elections, the forms that they generate are provided for convenience, but are not required to be used.  The State Board has advised that there are no reported decisions that they are aware of which indicate whether the use of the improper nominating petition (e.g. using a “partisan” nominating petition in a nonpartisan race) is a fatal flaw that would invalidate a nominating petition.  As long as the nominating documentation meets all minimum requirements, the State Board has indicated that it likely would be a valid nominating petition.

Fact Three:  Technically, the correct nominating petitions for the City of DeKalb are partisan nominating petitions.

Because the City uses (and has long used) partisan elections, and because the City has never converted to nonpartisan elections, partisan election forms are technically the appropriate forms for use by candidates for City offices.  As noted above, partisan nominating petitions are available both in a format contemplating a local political party, and in a format contemplating an independent candidate.  There is no real basis for controversy over this point; decades of election records show that the City has taken this position as far back as records are available.  As noted above however, simply because a candidate uses a nonpartisan nominating petition does not necessarily mean that their petition is invalid.

Fact Four:  City personnel cannot provide election advice to candidates for public office about the election process without jeopardizing their independent role in the election process.

Some have asked whether the City’s staff or City Clerk should provide candidates for office with information or resources relating to the conduct of the election or the filing of nominating petitions.  It has been indicated that at times in the past, previous City Clerks have provided advice or recommendations to candidates with regard to their filing obligations when seeking public office.    

Current City practice, as determined by the City Clerk and City staff, is to not provide advice relating to the election process, during the nominating period or the lead up to such period.  The reason for this policy is simple.  Once a nominating petition is filed, any registered voter in the City can file an objection to the nominating petition.  If an objection is filed, under Illinois law, the objection is heard by the Municipal Officers Electoral Hearing Board—a Board comprised of local officials including the City Clerk.  If the City Clerk gave an individual running for public office election-related advice and that advice later formed the basis of an election objection, the Clerk would be placed in the untenable position of having to rule upon the correctness of her earlier advice, or would be obligated to not perform her duty of serving on the Hearing Board.  Additionally, the Clerk has no way of ensuring that each person seeking public office receives the same information.  There have been cases in some municipalities where the municipal clerk provided information to a candidate or performed an election-related service for a candidate, or where a candidate assumed that the clerk was providing information or performing a service, and where the situation resulted in the filing of an election objection and the removal of the candidate from the ballot.

Because of this, the City Clerk and her deputy clerks perform all statutory obligations related to their service as the Local Election Authority under Illinois law, and work to diligently avoid creating situations that are a conflict of interest or which potentially undermine the integrity of the local election process.

Fact Five:  The City Clerk is required to accept the filing of nominating papers that appear to be valid.

Under Illinois law, the City Clerk is required to accept the filing of nominating papers that are filed “in apparent conformity” with the law.  If there is a major, facial flaw evident, the Clerk has a limited ability to refuse to accept a filing.  However, if the papers filed are in apparent conformity, they must be accepted.  The reason for this law is simple: the law favors ballot access, and tries to avoid a situation where one individual public official is the gatekeeper for who can and cannot run for office.  Additionally, the Election Code has the objection process (described above), which gives each registered voter in the City the ability to personally review nominating papers as filed, and the ability to file an objection to any nonconformity or defect.

Fact Six:  The City Clerk and all City personnel performed all election related duties in accordance with the law.

The City Clerk and all City staff take the responsibility of the local election authority’s role in conducting municipal elections seriously.  They diligently researched their obligations and prepared an orderly process for the filing of nominating papers that fully complied with the law, treated all candidates with respect, maintained the independence of the City in the election process, and ensured that the Clerk could fully perform her role in any aspect of the election process, including the conduct of nominating petition-related objection hearings.  

The timeline for the filing of nominating petitions and the timeline for filing of election objections has now passed, and in order to ensure that the public has accurate and full information, this information is being provided.

Feb 23

Just the Facts Introduction

Posted on February 23, 2017 at 8:35 AM by City of DeKalb

 Welcome to the City of DeKalb’s new website feature, “Just the Facts”.  The purpose of this feature is to be transparent and direct with the community about topics relating to the City of DeKalb. The feature is an effort by the City of DeKalb to dispel rumors and clear up confusion on a variety of matters. Just the Facts will be updated as rumors, misperceptions, or topics of confusion arise in the community.