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A Resolution Authorizing the First Amendment to the Right of Reconveyance for Keystone Apartments
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Introduction
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The purpose of this agenda item is to allow for the financing deadline extension contained in the Right of Reconveyance for the Keystone Apartments project.
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Recommended Action
Approve the resolution.
Prior Board Action
The Board has taken the following prior action(s):
• ORD 26-109: On February 10, 2026, the Village Board approved an Ordinance Authorizing the Execution of a Development Agreement between the Village of Oak Park and Interfaith Housing Development Corporation
• RES 26-124: On February 10, 2026, the Village Board approved a resolution to Authorize the Execution of a Purchase and Sales Agreement with the Fellowship Christian Church to Acquire the Property at 1106 Madison Street
• ORD 25-171: On October 14, 2025, the Village Board approved an Ordinance Granting an Extension of a Special Use Permit for a Major Planned Development at the Property Located at 1106 Madison Street
• RES 25-111: On January 28, 2025, the Village Board approved a Resolution to Concur with the Housing Programs Advisory Committee's Recommendations and Adopt a Resolution Authorizing the Provision of Conditional Commitment Letters
• ORD 24-142: On July 30, 2024, the Village Board approved a Resolution to Concur with the Plan Commission and Adopt an Ordinance Granting a Special Use Permit for a Major Planned Development Containing a Five-Story Residential Building Consisting of 36 Dwelling Units at the Property Located at 1106 Madison Street
Background
Interfaith Housing Development Corporation has been working with the Village to develop Keystone Apartments at 1106 Madison Street over the last two years. This includes needed land use approvals and the Village’s financial support in purchasing the site.
In February 2026, the Board approved a Development Agreement with Interfaith. This included provisions to transfer the site to Interfaith. To protect the Village’s ability to recapture the site if the project did not proceed, the development agreement included a Right of Reconveyance. This Right of Reconveyance included a requirement that Interfaith obtain financing for construction of the project on or before July 31, 2026 in an amount equal to or greater than $16,250,000. If that was not met, the Village could recapture the site.
At that time, the key decision point was whether Interfaith would be able to obtain the needed Low-Income Housing Tax Credits and Illinois Affordable Housing Tax Credits from the Illinois Housing Development Authority (IHDA). In June, IHDA awarded the project the needed credits. This leaves the project with a gap of appx. $1.8 million. Interfaith will be seeking Federal Home Loan Bank funding in the coming months to fill this gap. IHDA’s funding award allows time for Interfaith to fill this gap, requiring that Interfaith close on the project by July 31, 2027. Staff is recommending that the Village amend its Right of Reconveyance to extend its deadline also to July 31, 2027.
Timing Considerations
The Right of Reconveyance had a financing deadline of July 31, 2026. Interfaith exercised its rights under the Right of Reconveyance and sought a 30-day extension of the requirement. The extension will end as of August 30, 2026. Without extension, Interfaith would be in violation of the terms of the Right of Reconveyance and the Village could claw back the property.
Financial Impact
There is no budget impact associated with this item.
Operations Impact
There is no operating impact associated with this item.
DEI Impact
The Keystone project would increase the supply of rental housing affordable to households earning below 60% of AMI, thereby supporting economic inclusion.
Community Input
There has been no community input given in relation to this item.
Staff Recommendation
Approve the resolution.
Advantages:
• This action aligns the Village’s right of reconveyance with the closing deadline set by IHDA.
• This action allows the project to proceed with additional fundraising and closing.
Disadvantages:
• There are no disadvantages to this action.
Alternatives
The Board can reject the resolution.
Advantages:
• There are no advantages to this action.
Disadvantages:
• This action can stymie the development of additional affordable housing in Oak Park.
Anticipated Future Actions
Staff will continue to monitor the project through closing.
Prepared By: Jonathan Burch, Assistant Village Manager/ Neighborhood Services Director
Reviewed By: Jack Malec, Assistant to the Village Manager
Approved By: Kevin J. Jackson, Village Manager
Attachment(s):
1. Resolution
2. Amendment