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A Resolution to Give Staff the Authority to Issue a Waiver of the Requirements of Chapter 12, Article 3, Subsection 4e Of The Oak Park Village Code For The Oak Park Commons Cohousing Project
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Introduction
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Oak Park Commons Cohousing is seeking waiver of a requirement to hold 2% of the sales price of each unit in escrow for 15 months to support unexpected building repairs.
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Recommended Action
Adopt the resolution.
Prior Board Action
The Board has taken the following prior action(s):
• ORD 24-133: An Ordinance Granting an Extension of the Waiver and Suspension of the Right of Way Obstruction Permit Fee and Parking Obstruction Fee for the Planned Development Located at 839 Madison Street
• ORD 23-78: An Ordinance Waiving and Suspending the Right of Way Obstruction Permit Fee and Parking Obstruction Fee for the Planned Development Located at 839 Madison Street
• ORD 22-75: Concur with the Plan Commission's Recommendation and Adopt an Ordinance Granting a Special Use Permit for a Major Planned Development Containing a Five-Story Mixed Use Building Consisting of Residential Dwelling Units, Commercial Space and Parking at the Property Located at 839 Madison Street
Background
Chapter 12, Article 3 of the Village Code outlines standards related to condominiums and condominium conversions. Under subsection 4E, the developer of any condominium must place in escrow at the time of closing a sum equal to two percent (2%) of the total of each unit sale price. These funds are required to ensure that the individuals who live in the condominiums are protected against defects with the roof, foundation, external and supporting walls, and central heating system. Per the code, this amount must remain in escrow for at least 15 months.
The project contains 24 total units. Of that 24, 18 have been sold, and 6 remain for sale. With those sales, the association has collected $169,323 in escrow funds. Based on listing prices, the association anticipates collecting approximately $73,800 in additional escrow funds per the standards of 12-3-4E, for a total collection of $243,100. 10 of the 24 units in the association are owned by partners in Oak Park Commons Cohousing LLC, the developer.
Oak Park Commons Cohousing is a new condominium development that is currently selling units. The Oak Park Commons Intergenerational Cohousing Association has asked that the Village waive the requirements outlined above so that the developer may instead use these funds to help pay the construction loan, which would otherwise be paid from sales of the remaining 6 units. They argue that this section of the code was enacted to protect buyers in condominium developments or conversions where the developer is not the same as the owners of units in the building. 12-3-4E does not exempt developers who will then live in the new buildings once constructed. Oak Park Commons Cohousing is unique in that the developers are living in the building after construction. They also argue that the building is in good shape since it is new, Village staff permitted the building, and Village staff inspected it during construction.
Oak Park Commons Intergenerational Cohousing Association submitted a letter showing that owners of all 18 sold units approve the request for the waiver and the diversion of the escrowed funds to Oak Park Commons Cohousing LLC. The association also included an insurance policy documenting other means to potentially cover any other repairs needed in critical building systems.
Currently, the building is operating under a temporary certificate of occupancy due to outstanding issues, most notably with the attachment of the paneling on the northeast corner façade, the installation of the Emergency Responder Radio transmitter, completion of the fifth-floor deck and pergola, and addressing issues on the east side of the garage. Staff has worked with Oak Park Commons Intergenerational Cohousing Association on an alternative to a full waiver of the requirement in its current condition. Instead, the Board would provide staff with the authority to issue a waiver for this project. In turn, staff would grant partial waivers for portions of the escrow as key outstanding issues are addressed.
- Release 50% of the escrow upon Village signoff on the northeast corner metal façade, fifth-floor deck and pergola, and water damage/ scuppers/ and 2nd floor exteriors for the east side of the garage.
- Release 40% of the escrow upon installation and Village signoff on the Emergency Responder Radio transmitter, commonly called a BDA.
- Release 10% of the escrow upon the receipt of certificates of occupancy for the whole building and all units.
This tiered approach meets the Association's request while ensuring that key outstanding high-dollar value items are reviewed and approved by the Village prior to release of the funds.
Timing Considerations
There are no specific timing considerations associated with this item.
Financial Impact
There is no budget impact associated with this item.
Operations Impact
There is no operating impact associated with this item.
DEI Impact
Oak Park Commons Cohousing was built with the goals of furthering intergenerational connection, diversity, and inclusiveness. The waiver request helps ensure the financial feasibility of the development.
Community Input
There has been no community input given in relation to this item.
Staff Recommendation
Approve the resolution.
Advantages:
• Provides needed financial support to the Oak Park Commons Cohousing project as it seeks to sell the remaining units in the development.
• Allow staff to issue partial waivers of the escrow requirement as key remaining building systems receive sign-off from our Permits Division.
Disadvantages:
• Future purchasers of the building have not agreed to this waiver request.
• If something goes wrong with a major system in the next 15 months, the association will not have the escrow to draw upon when addressing the issue.
Alternatives
Alternative 1
The Board can reject the resolution.
Advantages:
• Affords additional time for consideration of alternatives by the Board.
• Affords Oak Park Commons Cohousing time to receive all certificates of occupancy prior to considering the waiver request.
Disadvantages:
• Creates a financial impact on the Oak Park Commons Cohousing project.
Anticipated Future Actions
There are no anticipated future actions in relation to this item.
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. Request
3. Operating Agreement Amendment