CITY OF HIGHWOOD REGULAR MEETING OF THE CITY COUNCIL CITY COUNCIL CHAMBERS Tuesday, August 2, 2016 at 7:30 P.M. AGENDA Call to Order 1. Roll Call 2. Pledge of Allegiance 3. Review of Minutes to be Approved 3.1. City Council: July 19, 2016 3.2. Committee of the Whole: July 19, 2016
4. Appointments (Mayor Pecaro) 5. Approval of Warrant List: 5.1. 08/02/2016 AP Warrant List 6. Public Input – Items Not On Agenda 7. Mayor’s Report 8. Committee Reports 9. Treasurer’s Report 10. Clerk’s Report Action Items 11. Unfinished Business 12. New Business 12.1. Consideration of a Resolution Approving and Accepting an ARC Recommendation Regarding a Fence at 432 Sheridan Road. 12.2. Consideration of an Ordinance Approving a Special Use Permit to Allow Operation of a Brewery at 523 Bank Lane. 12.3. Consideration of an Ordinance Granting a Special Use Permit for a Planned Unit Development and Approving a Preliminary Plat for Planned Unit Development at 546 Green Bay Road. 12.4. Consideration of an Ordinance Amending Section 5-7-2: ‘Exceptions’ to the Highwood Noise Ordinance to Allow for Residential Home Generators. 12.5. Consideration of a Motion Authorizing the City Manager to Execute an Agreement with FGM Architects in the Amount of $12,000 to Provide Services to Review Options to Renovate the Existing Library Building into a Combined City Hall, Police Station and Library Facility. 12.6. Consideration of a Resolution Formalizing the Process for Residents to Petition the City of Highwood for a Modification for Parking Restrictions on a Specific Roadway. 13. Any Action Necessary Coming Out of Executive Session 14. Adjournment
08 02 2016 CC Packet Page 1 of 198 CITY OF HIGHWOOD REGULAR MEETING OF THE CITY COUNCIL CITY COUNCIL CHAMBERS Tuesday, July 19, 2016 at 7:30 P.M.
Mayor Pro Tem: Moved by Alderman Slavin, seconded by Alderman Grice to appoint Alderman Falberg Mayor Pro Tem in Mayor Pecaro’s absence. All present voting aye, by voice vote, motion carried. Call to Order by Mayor Pro Tem Falberg at 7:35 P.M. 1. Roll Call Present: Aldermen: Falberg, Grice, Feddermann, Slavin Absent: Mayor Pecaro, Aldermen: Fiore, Peterson Also Present: City Manager Coren, Assistant to City Manager Marquez, Finance Director Gonzalez, City Attorney Jablecki, Deputy City Clerk Baruffi 2. Pledge of Allegiance 3. Review of Minutes to be Approved 3.1. Moved by Alderman Slavin, seconded by Alderman Feddermann to approve the City Council Meeting Minutes: June 21, 2016 as presented. All present voting aye by voice vote, motion carried.
3.2. Moved by Alderman Feddermann, seconded by Alderman Slavin to approve the Committee of the Whole Meeting Minutes: June 21, 2016 as presented. All present voting aye by voice vote, motion carried.
3.3. Moved by Alderman Grice, seconded by Alderman Feddermann to approve the City Council Meeting Minutes: July 5, 2016 with the corrections as noted by Candy Baruffi. All present voting aye by voice vote, motion carried.
3.4. Moved by Alderman Slavin, seconded by Alderman Feddermann to approve the Committee of the Whole Meeting Minutes: July 5, 2016 as presented. All present voting aye, by voice vote, motion carried.
4. Appointments (Mayor Pecaro) 5. Approval of Warrant List: 5.1. Moved by Alderman Slavin, seconded by Alderman Feddermann to approve the 07/19/2016 AP Warrant List as presented. All present voting aye, motion carried. Vote: Yes: Aldermen: Grice, Feddermann, Slavin, Mayor Pro Tem Falberg Absent: Aldermen: Peterson, Fiore
Mayor Pro Tem stated the Warrant List was reviewed and discussed at the Committee of the Whole Meeting. 6. Public Input – Items Not On Agenda
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Teta Menuzo, President of Highwood Historical Society: On August 24, 2016 the Terrific Tomato contest will be held in conjunction with the Garlic Festival. Registration is required to enter a tomato into the contest. All tomatoes entered are judged awarding the winner a $100.00 prize. On Thursday, September 1, 2016, at Oak Terrace School, form 7-9 P.M. a special program is on the North Shore Rail Road is planned. The railroad tracks ran from Milwaukee to Chicago right along Sheridan Road and Waukegan Avenue. Highwood was the sight for the Chicago Northwestern Administrative Building. Lynette Maestri Perkins: voiced her opinion of the proceedings being heard by the Police and Fire Commission. 7. Mayor’s Report 8. Committee Reports 9. Treasurer’s Report 9.1. Moved by Alderman Slavin, seconded by Alderman by Alderman Grice to approve the April 2016 Treasurer’s Report as presented. All present voting aye, motion carried. Alderman Grice questioned what the reserve would equate to, of which the response was an 80 day reserve. The City continues to have a AA rating. Vote: Yes: Aldermen: Grice, Slavin, Feddermann, Falberg Absent: Aldermen: Fiore, Peterson Finance Director Gonzalez stated the auditors’ would be in the City August 1st and 8th, plus anticipated being here for 2 weeks. 10. Clerk’s Report Action Items 11. Unfinished Business 12. New Business 12.1. 16-O-33 Moved by Alderman Grice, seconded by Alderman Falberg to waive the first reading and approve the Annual Appropriations Ordinance of the City of Highwood, Illinois, for the Fiscal Year Beginning May 1, 2016 and Ending April 30, 2017. All present voting aye, motion carried. Vote: Yes: Aldermen: Grice, Falberg, Feddermann, Slavin Absent: Aldermen: Fiore, Peterson
1.1. 16-O-34 Moved by Alderman Slavin, seconded by Alderman Yes: Aldermen: Slavin, Feddermann to waive the first reading and approve an Ordinance Amending the Highwood City Code with Regard to Paving Requirements for Residential Driveways. All present voting aye, motion carried. Vote:
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Yes: Slavin, Feddermann, Grice, Falberg Absent: Aldermen: Peterson, Fiore This Ordinance was discussed in the Committee of the Whole, and the need to pave the driveways will eliminate the dust and gravel issues.
1.2. Consideration of an Ordinance Amending Section 7-5-5 (G): ‘Parking on East Side of Street’ to Allow Parking in the Cul-De-Sac of Euclid Court. This is the first reading only.
1.3. 16-O-35 Moved by Alderman Grice, seconded by Alderman Falberg to waive the first reading and approve an Ordinance Amending the Existing Curbside Café Ordinance in the City of Highwood to Allow Curbside Cafes to Operate through October 31st of Each Year. All present voting aye, motion carried. Vote: Yes: Aldermen: Grice, Falberg, Slavin, Feddermann Absent: Aldermen: Peterson, Fiore
1.4. Moved by Alderman Slavin, seconded by Alderman Grice a approve a Motion Authorizing the City Manager to Sign an Agreement for the Operation and Maintenance of the Fort Sheridan Commuter Parking Facility in the City of Highwood. All present voting aye, motion carried. Vote: Yes: Aldermen: Slavin, Grice, Feddermann, Falberg Absent: Aldermen: Fiore, Peterson
1.5. 16-O-36 Moved by Alderman Feddermann, seconded by Alderman Slavin to waive the first reading and approve an Ordinance Authorizing the Sale or Donation of Miscellaneous Surplus Property and Equipment from the Fire Station. All present voting aye, motion carried. Vote: Yes: Aldermen: Feddermann, Slavin, Grice, Falberg Absent: Aldermen: Fiore, Peterson
13. Adjournment: Moved by Alderman Grice, seconded by Alderman Feddermann to adjourn the meeting. All present voting aye by voice vote, motion carried.
Respectfully Submitted,
Karin J. Baruffi Deputy Clerk Reviewed and Approved by Council on:
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CITY OF HIGHWOOD COMMITTEE OF THE WHOLE MEETING CITY COUNCIL CHAMBERS Tuesday, July 19, 2016 at 6:00 P.M.
Moved by Alderman Slavin, seconded by Alderman Feddermann to appoint Alderman Falberg Mayor Pro Tem. All present voting aye, by voice vote, motion carried.
Call to Order Mayor Pro Tem Falberg called the meeting to order at 6:09 P.M.
1. Roll Call Present: Aldermen: Falberg, Grice, Slavin, Feddermann Absent: Mayor Pecaro, Aldermen: Fiore, Peterson Also Present: City Manager Coren, Assistant to City Manager Marquez, City Attorney Jablecki, Finance Director Gonzalez, Deputy City Clerk Baruffi
2. PUBLIC HEARING: Moved by Alderman Slavin, seconded by Alderman Grice to open the Public Hearing to discuss the Annual Appropriations Ordinance for the City of Highwood, Illinois, for the Fiscal Year Beginning May 1, 2016 and Ending April 30, 2017. All present voting aye, by voice vote, motion carried. Attorney Jablecki stated the Annual Appropriations Ordinance has been available for review through the IMC. City Manager Coren explained the Annual Appropriations Ordinance needs to be approved and filed within 90 days of fiscal/year end. Moved by Alderman Slavin, seconded by Alderman Grice to close the Public Hearing. All present voting aye, by voice vote, motion carried. Mayor Pro Tem Falberg closed the meeting. Commented [CB1]: Ayor P 3. Review of Minutes to be Approved 3.1. City Council: June 21, 2016 3.2. Committee of the Whole: June 21, 2016 3.3. City Council: July 5, 2016 The minutes of the July 5, 2016, City Council Meeting will be approved at the regular City Council Meeting, with the correction of removing the Executive Session title language. 3.4. Committee of the Whole: July 5, 2016 All the above minutes will be approved at the Regular City Council Meeting. 4. Appointments (Mayor Pecaro) 5. Review of Bill Warrant List 5.1. 07/19/2016 AP Warrant List Discussion ensued. The 2007 Impala water plant vehicle required additional repairs. The window board up costs were also discussed. All bills on the warrant list will be paid as presented. 6. Unfinished Business
7. New Business 7.1. Consideration of the Annual Appropriations Ordinance of the City of Highwood, Illinois, for the Fiscal Year Beginning May 1, 2016 and Ending April 30, 2017.
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The Annual Appropriations Ordinance, discussed in the Public Hearing, will be passed at the Regular City Council Meeting. 7.2. A Discussion on the Placement or Auction of the Artistic Benches Completed by 3 Barrels and Funded by the City of Highwood. Kevin Loesch, of 3 Barrels was in attendance for the discussion of the benches. Mayor Pro Tem Falberg suggested the artistic benches be placed around the area at Highwood Days, and would be returned to the train station at the close of Highwood Days. Alderman Feddermann was concerned from a safety standpoint, as the benches would not be secured. Kevin Loesch stated if the benches were placed back to back they would be secure. Alderman Feddermann still voiced a safety concern. Kevin Loesch asked the Council to consider the number of benches the City wanted to place around town, and the remainder will be sold or auctioned. 7.3. Consideration of an Ordinance Amending the Highwood City Code with Regard to Paving Requirements for Residential Driveways. Prior to discussion of the unpaved driveways, City Manager Coren introduced Ed Tomari, the Residential Zoning Official, whom outlined his job in a power point. It was decided he will present a report to the Council once a month. There are only approximately 5 to 10 residential driveways that are not paved within the City limits. Attorney Jablecki stated it would be appropriate, as suggested by Council, to send notices now to ensure those people convert their driveways to pavers, asphalt or concrete. Converting the driveways would alleviate the dust and gravel issues. 7.4. Consideration of an Ordinance Amending Section 7-5-5 (G): ‘Parking on East Side of Street’ to Allow Parking in the Cul-De-Sac of Euclid Court. Alderman Slavin felt a decision should not be made tonight until the rest of the Council is present for their input. Alderman Grice stated the intent of no parking in the Cul-De Sac was from an emergency vehicle standpoint. Alderman Feddermann was in agreement with Alderman Grice. Paul Giannetti: stated there are 5 duplexes on the Cul-De-Sac, 3 of which are owner occupied. He constructed his a garage and parking in the back of his duplex to alleviate the parking issues in the front. City Manager Coren to contact the other resident from the Euclid area prior to a final determination of the parking issues. 7.5. A Discussion on Formalizing a Process for Residents to Request Parking Restrictions on Public Streets. If a speed hump or parking restriction is requested on a public street, it was suggested by staff to have a formal process through the use of a petition signed by 75% of the residents affected by the change. 7.6. Consideration of an Ordinance Amending the Existing Curbside Café Ordinance in the City of Highwood to Allow Curbside Cafes to Operate through October 31st of Each Year.
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There being no issues, the date will be changed for the operation of the Curbside Café Ordinance. City Manager Coren has been approached regarding other establishments being interested in the Curbside Café, but the cost has been a factor. There are also safety concerns regarding the Cursive Cafes. 7.7. Consideration of a Motion Authorizing the City Manager to Sign an Agreement for the Operation and Maintenance of the Fort Sheridan Commuter Parking Facility in the City of Highwood. This is common practice with Metra and research shows there is no current agreement between Metra and the City for the maintenance and collection of parking fees. City Manager Coren explained currently the City collects parking revenue and plows the parking lot, while Metra is responsible for the platform snow removal. It was agreed to have the City Manager to sign the agreement between Metra and the City. 7.8. A Discussion on Requests to Waive Fees for Certain Special Events. City Manager Coren explained the City frequently receives requests of fee waivers for special event fees. The normal charge is $500.00 per event. The Chamber of Commerce is currently sponsoring the Gourmet Market at Everts’ Park on Wednesday evenings. The new bricks around the Gazebo have been hit and damaged. The City has also needed to clean up the park area on Thursday mornings following the Gourmet Market. It was suggested the lowering of rates for non-profit organizations, or a special rate for markets. 7.9. Consideration of an Ordinance Authorizing the Sale or Donation of Miscellaneous Surplus Property and Equipment from the Fire Station. There being no concerns, this Ordinance will be passed at the Regular City Council Meeting. 7.10. A Discussion on the Treasurer’s Report for April 2016.
8. Executive Session (If Necessary)
9. Adjournment Moved by Alderman Grice, seconded by Alderman Feddermann to adjourn the meeting. All present voting aye by voice vote, motion carried. Mayor Pro Tem Pecaro adjourned the meeting at 7:29 P.M.
Respectfully Submitted,
Karin J. Baruffi Deputy City Clerk
Reviewed and Approved
08 02 2016 CC Packet Page 7 of 198 HIGHWOOD - AP WARRANT LIST AUGUST 2, 2016 List #159 Vendor Invoice Description Inv. Date Due Date Amount
ADRIAN MARQUEZ Invoice: Z109LHSM9990 REIMBURSEMENT 07/21/16 07/21/16 $106.24 01-44-652 OPERATING SUPPLIE $106.24 Vendor Total for: ADRIAN MARQUEZ (Fiscal YTD Payments: $393.97) $106.24
ADVANCED DISPOSAL Invoice: 0001869563 JULY 2016 SERVICES 06/30/16 06/30/16 $20,659.04 53-00-578 REFUSE BILLING EX $20,659.04 Vendor Total for: ADVANCED DISPOSAL (Fiscal YTD Payments: $45,396.28) $20,659.04
AFLAC Invoice: 139661 AUGUST 2016 SERVICES 07/12/16 08/01/16 $339.78 01-00-218.06 AFLAC WH PAYABLE $339.78 Vendor Total for: AFLAC (Fiscal YTD Payments: $952.86) $339.78
AGUSTIN GARCIA Invoice: 071316 MILEAGE REIMBURSEMENT 07/13/16 07/13/16 $132.30 51-00-655 AUTOMOTIVE FUEL/O $132.30 Vendor Total for: AGUSTIN GARCIA (Fiscal YTD Payments: $400.68) $132.30
AMALGAMATED BANK OF CHICAGO Invoice: 070116-7009 GO 2002 DEBT PAYMENT 07/01/16 07/01/16 $200.00 37-00-730 FISCAL AGENT FEES $200.00 Vendor Total for: AMALGAMATED BANK OF CHICAGO(Fiscal YTD Payments: $172,323.75) $200.00
APA-IL Invoice: 072616 TRAINING 07/26/16 07/26/16 $285.00 01-44-563 TRAINING $285.00 Vendor Total for: APA-IL (Fiscal YTD Payments: $.00) $285.00
B & B PROJECT MANAGEMENT, INC Invoice: 36252 DUMP FEES 07/12/16 07/12/16 $680.00 01-41-573 MISC SERVICE CONT $680.00 Vendor Total for: B & B PROJECT MANAGEMENT, INC(Fiscal YTD Payments: $478.00) $680.00
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B&F CONSTRUCTION CODE SERVICES Invoice: 44418 JUNE 2016 INSPECTIONS 07/21/16 07/21/16 $1,555.00 01-44-926 REIMBURSABLE EXPE $1,555.00 Vendor Total for: B&F CONSTRUCTION CODE SERVICES(Fiscal YTD Payments: $775.00) $1,555.00
BERRY TIRE & AUTO Invoice: 304892 '14 CHARGER REPAIRS 06/30/16 06/30/16 $542.64 01-21-513 REP & MAINT - VEH $542.64 Vendor Total for: BERRY TIRE & AUTO (Fiscal YTD Payments: $453.72) $542.64
BUFFO'S RESTAURANT Invoice: 071116 WATER MAIN BREAK FOOD FOR CREW 07/11/16 07/11/16 $34.90 01-41-652 OPERATING SUPPLIE $34.90 Vendor Total for: BUFFO'S RESTAURANT (Fiscal YTD Payments: $.00) $34.90
BURRIS EQUIPMENT Invoice: SI40141 CASE REPAIRS 07/15/16 07/15/16 $836.46 01-41-512 REP & MAINT - EQU $836.46 Invoice: SI40142 KUBOTA REPAIRS 07/15/16 07/15/16 $388.61 01-41-512 REP & MAINT - EQU $388.61 Vendor Total for: BURRIS EQUIPMENT (Fiscal YTD Payments: $7,907.36) $1,225.07
CALL ONE Invoice: 071516-6267 JULY-AUGUST 2016 SERVICES 07/15/16 07/15/16 $987.93 01-11-552 TELEPHONE $120.92 01-21-552 TELEPHONE $120.92 01-22-552 TELEPHONE $131.72 01-41-552 TELEPHONE $90.69 01-51-552 TELEPHONE $90.96 16-00-532 TELEPHONE SERVICE $158.43 51-00-552 TELEPHONE $274.29 Vendor Total for: CALL ONE (Fiscal YTD Payments: $1,730.29) $987.93
CANDY BARUFFI Invoice: 071316 TRAINING/TRAVEL REIMBURSEMENT 07/13/16 07/13/16 $36.06 01-11-563 TRAINING $15.00
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08 02 2016 CC Packet Page 9 of 198 HIGHWOOD - AP WARRANT LIST AUGUST 2, 2016 List #159 Vendor Invoice Description Inv. Date Due Date Amount
01-11-562 TRAVEL EXPENSE $21.06 Vendor Total for: CANDY BARUFFI (Fiscal YTD Payments: $15.10) $36.06
CITY OF HIGHLAND PARK Invoice: 063016-4212 JUNE 2016 SERVICE 06/30/16 06/30/16 $1,334.48 51-00-519 WATER USAGE CITY $1,334.48 Vendor Total for: CITY OF HIGHLAND PARK (Fiscal YTD Payments: $163,418.13) $1,334.48
CODAMETRICS Invoice: HW REVIEW 1 HIGHWOOD REVIEW 1 05/10/16 05/10/16 $720.00 78-00-258.73 440 GBR LLC PUD $360.00 78-00-258.74 546 GB RD–FIDES P $360.00 Vendor Total for: CODAMETRICS (Fiscal YTD Payments: $866.52) $720.00
COMCAST CABLE Invoice: 070816-2616 JULY-AUGUST 2016 SERVICES 07/08/16 08/05/16 $84.90 51-00-571 UTILITIES $84.90 Vendor Total for: COMCAST CABLE (Fiscal YTD Payments: $1,135.82) $84.90
COMED Invoice: 071116-2041 JUNE-JULY 2016 SERVICES 07/11/16 07/11/16 $78.04 51-00-571 UTILITIES $78.04 Invoice: 071116-4010 JUNE-JULY 2016 SERVICES 07/11/16 07/11/16 $4.89 01-41-572 STREET LIGHTING $4.89 Invoice: 071116-5003 JUNE-JULY 2016 SERVICES 07/11/16 07/11/16 $2,563.69 51-00-571 UTILITIES $2,563.69 Invoice: 071116-8009 JUNE-JULY 2016 SERVICES 07/11/16 07/11/16 $.13 51-00-571 UTILITIES $.13 Invoice: 071516-4012 MAY-JULY 2016 SERVICES 07/15/16 07/15/16 $3,513.02 01-41-572 STREET LIGHTING $3,513.02 Invoice: 071916-0008 JUNE-JULY 2016 SERVICES 07/19/16 09/06/16 $881.37 01-51-571 UTILITIES $881.37 Vendor Total for: COMED (Fiscal YTD Payments: $19,401.33) $7,041.14
CONSTELLATION ENERGY SVCS (INTEGRYS) Invoice: 1671981-01 JUNE 2016 SERVICES 07/18/16 09/16/16 $256.18 01-11-571 UTILITIES $46.77
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08 02 2016 CC Packet Page 10 of 198 HIGHWOOD - AP WARRANT LIST AUGUST 2, 2016 List #159 Vendor Invoice Description Inv. Date Due Date Amount
01-21-571 UTILITIES $46.77 01-51-571 UTILITIES $162.64 Vendor Total for: CONSTELLATION ENERGY SVCS (INTEGRYS)(Fiscal YTD Payments: $2,500.09) $256.18
DAWN M. SCIARRONE Invoice: 2127 FLOW METER INSTALLATION 06/20/16 06/20/16 $2,950.00 51-00-512 REP & MAINT - DE $2,950.00 Vendor Total for: DAWN M. SCIARRONE (Fiscal YTD Payments: $1,150.00) $2,950.00
DE LAGE LANDEN FINANCIAL SERVICES Invoice: 50982679 JULY-AUGUST 2016 SERVICE 07/23/16 08/15/16 $283.69 01-21-573 MISC. SERVICE CON $283.69 Vendor Total for: DE LAGE LANDEN FINANCIAL SERVICES(Fiscal YTD Payments: $851.07) $283.69
DEMUTH, INC. Invoice: HP3236 STORM SEWER MAIN REPAIRS 05/20/16 05/20/16 $4,400.00 01-41-515 REP & MAINT - ST $4,400.00 Invoice: HP3244 VACCING 05/31/16 05/31/16 $1,500.00 51-00-516 REPAIR & MAINT HY $1,500.00 Invoice: HP3259 VALVE INSTALLATION 06/09/16 06/09/16 $4,000.00 51-00-516 REPAIR & MAINT HY $4,000.00 Invoice: HP3260 SLEEVE TAPPING 06/09/16 06/09/16 $4,000.00 51-00-516 REPAIR & MAINT HY $4,000.00 Invoice: HP3280 JET SANITARY MAIN 06/18/16 06/18/16 $1,500.00 51-00-516 REPAIR & MAINT HY $1,500.00 Vendor Total for: DEMUTH, INC. (Fiscal YTD Payments: $54,892.50) $15,400.00
DIAMBRI & CARAVELLO Invoice: 27343 JUNE-JULY LEGAL SERVICES 07/15/16 07/15/16 $82.50 01-14-533.5 CITY PROSECUTOR - $82.50 Invoice: 27344 JUNE 2016 LEGAL SERVICES 07/15/16 07/15/16 $1,870.00 01-14-533.5 CITY PROSECUTOR - $1,870.00 Invoice: 27346 JUNE 2016 LEGAL SERVICES 07/15/16 07/15/16 $965.00 01-14-533.5 CITY PROSECUTOR - $965.00 Vendor Total for: DIAMBRI & CARAVELLO (Fiscal YTD Payments: $7,317.26) $2,917.50
EJ EQUIPMENT, INC Invoice: W01346 EQUIPMENT REPAIR 06/21/16 06/21/16 $2,509.87
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08 02 2016 CC Packet Page 11 of 198 HIGHWOOD - AP WARRANT LIST AUGUST 2, 2016 List #159 Vendor Invoice Description Inv. Date Due Date Amount
01-41-512 REP & MAINT - EQU $2,509.87 Vendor Total for: EJ EQUIPMENT, INC (Fiscal YTD Payments: $.00) $2,509.87
FWC ARCHITECTS Invoice: 13001 ARCHITECTURAL SERVICES 07/19/16 07/19/16 $2,260.00 01-11-573 MISC. CONTRACT SE $2,260.00 Vendor Total for: FWC ARCHITECTS (Fiscal YTD Payments: $.00) $2,260.00
GUARDIAN Invoice: 072016-7639 AUGUST 2016 SERVICES 07/20/16 08/01/16 $1,107.06 01-00-218.02 DENTAL INS WH PAY $1,107.06 Vendor Total for: GUARDIAN (Fiscal YTD Payments: $3,654.63) $1,107.06
GW & ASSOCIATES, PC Invoice: 1607260 JUNE 2016 SERVICES 07/15/16 07/15/16 $5,750.00 01-11-531.1 ACCOUNTING $3,737.50 51-00-531.1 ACCOUNTING $1,725.00 53-00-531.1 ACCOUNTING SERVIC $287.50 Vendor Total for: GW & ASSOCIATES, PC (Fiscal YTD Payments: $17,250.00) $5,750.00
ILLINOIS PUBLIC RISK FUND Invoice: 37548 AUGUST 2016 07/11/16 09/01/16 $3,824.00 01-51-465 WORKERS COMP INS $17.21 01-11-465 WORKERS COMP INS $9.56 01-21-465 WORKERS COMP INS $569.78 01-22-465 WORKERS COMP INS $2,053.49 51-00-454 WORKER'S COMP INS $290.62 01-41-465 WORKERS COMP INS $883.34 Vendor Total for: ILLINOIS PUBLIC RISK FUND (Fiscal YTD Payments: $7,651.00) $3,824.00
J J SERVICE CENTER Invoice: 16192 '14 CHARGER MAINTENANCE 06/09/16 06/09/16 $34.74 01-21-513 REP & MAINT - VEH $34.74 Invoice: 16308 CASE REPAIRS 07/11/16 07/11/16 $48.50 01-41-512 REP & MAINT - EQU $48.50 Vendor Total for: J J SERVICE CENTER (Fiscal YTD Payments: $1,300.86) $83.24
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J.G. UNIFORMS, INC. Invoice: 2391 NAME PLATE 05/31/16 05/31/16 $7.50 01-21-653 UNIFORMS $7.50 Invoice: 3878 PD UNIFORMS 07/05/16 07/05/16 $110.00 01-21-653 UNIFORMS $110.00 Vendor Total for: J.G. UNIFORMS, INC. (Fiscal YTD Payments: $1,974.64) $117.50
JENNIFER POLIWKA Invoice: 071216 PLANT REIMBURSEMENT 07/12/16 07/12/16 $20.00 01-11-928 MISCELLANEOUS EXP $20.00 Vendor Total for: JENNIFER POLIWKA (Fiscal YTD Payments: $.00) $20.00
JOHN W. KOFFEL Invoice: 070116 DUMPING 07/01/16 07/01/16 $330.00 01-41-574 MISC HAULING/DIRT $330.00 Vendor Total for: JOHN W. KOFFEL (Fiscal YTD Payments: $.00) $330.00
KANE, MC KENNA & ASSOC., INC. Invoice: 14019 JUNE 2016 CONSULTING SERVICES 06/30/16 06/30/16 $262.50 78-00-258.56 DEVITO FAMILY WIN $262.50 Vendor Total for: KANE, MC KENNA & ASSOC., INC.(Fiscal YTD Payments: $1,175.00) $262.50
KATHLEEN W. BONO, CSR Invoice: 7195 7/20/16 SERVICES 07/20/16 07/20/16 $283.00 01-22-573 MISC CONTRACT SVC $283.00 Vendor Total for: KATHLEEN W. BONO, CSR (Fiscal YTD Payments: $.00) $283.00
KLEIN, THORPE, AND JENKINS, LTD. Invoice: 183619 JUNE 2016 LEGAL SERVICES 07/18/16 07/18/16 $3,336.40 01-14-533.1 CITY ATTY - GEN C $3,336.40 Invoice: 183620 JUNE 2016 LEGAL SERVICES 07/18/16 07/18/16 $2,368.16 01-14-533.1 CITY ATTY - GEN C $2,368.16 Invoice: 183621 JUNE 2016 LEGAL SERVICES 07/18/16 07/18/16 $3,307.50 01-14-533.1 CITY ATTY - GEN C $3,307.50 Invoice: 183622 JUNE 2016 LEGAL SERVICES 07/18/16 07/18/16 $236.50 51-00-533 LEGAL $236.50
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08 02 2016 CC Packet Page 13 of 198 HIGHWOOD - AP WARRANT LIST AUGUST 2, 2016 List #159 Vendor Invoice Description Inv. Date Due Date Amount
(KLEIN, THORPE, AND JENKINS, LTD. Cont'd) Invoice: 183623 JUNE 2016 LEGAL SERVICES 07/18/16 07/18/16 $1,740.00 37-00-533 LEGAL FEES $1,740.00 Invoice: 183624 JUNE 2016 LEGAL SERVICES 07/18/16 07/18/16 $840.00 01-14-533.1 CITY ATTY - GEN C $840.00 Invoice: 183625 JUNE 2016 LEGAL SERVICES 07/18/16 07/18/16 $2,131.00 78-00-258.74 546 GB RD–FIDES P $720.00 78-00-258.73 440 GBR LLC PUD $1,411.00 Invoice: 183626 JUNE 2016 LEGAL SERVICES 07/18/16 07/18/16 $131.60 78-00-258.73 440 GBR LLC PUD $131.60 Invoice: 183627 JUNE 2016 LEGAL SERVICES 07/18/16 07/18/16 $3,766.23 01-14-533.1 CITY ATTY - GEN C $3,766.23 Vendor Total for: KLEIN, THORPE, AND JENKINS, LTD.(Fiscal YTD Payments: $29,160.72) $17,857.39
LAKE COUNTY ANIMAL CONTROL Invoice: 061416 MAY 2016 SERVICES 06/14/16 06/14/16 $100.00 01-21-573 MISC. SERVICE CON $100.00 Vendor Total for: LAKE COUNTY ANIMAL CONTROL(Fiscal YTD Payments: $200.00) $100.00
MAROUS & COMPANY Invoice: 062116 APPRAISAL REPORT 06/21/16 06/21/16 $8,250.00 01-11-573 MISC. CONTRACT SE $8,250.00 Vendor Total for: MAROUS & COMPANY (Fiscal YTD Payments: $.00) $8,250.00
MCHENRY ANALYTICAL WATER LABORATORY Invoice: 591037 JUNE 2016-JULY 2017 MONTHLY MGT FEE 07/19/16 07/19/16 $290.00 51-00-518 WATER ANALYSIS $290.00 Invoice: 591204 WATER SAMPLE TESTING 07/20/16 07/20/16 $15.00 51-00-518 WATER ANALYSIS $15.00 Vendor Total for: MCHENRY ANALYTICAL WATER LABORATORY(Fiscal YTD Payments: $985.00) $305.00
MENDINO EXCAVATING, INC. Invoice: 974254 TRUCKING 06/28/16 06/28/16 $353.50 01-41-574 MISC HAULING/DIRT $353.50 Vendor Total for: MENDINO EXCAVATING, INC. (Fiscal YTD Payments: $4,382.25) $353.50
MENONI & MOCOGNI Invoice: 1192224 GRASS SEED 07/08/16 07/08/16 $118.00
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08 02 2016 CC Packet Page 14 of 198 HIGHWOOD - AP WARRANT LIST AUGUST 2, 2016 List #159 Vendor Invoice Description Inv. Date Due Date Amount
01-41-652.1 SUPPLIES - BUILD/ $118.00 Vendor Total for: MENONI & MOCOGNI (Fiscal YTD Payments: $3,249.60) $118.00
MUTUAL SERVICES OF HIGHLAND PARK Invoice: 526894 WD SUPPLIES 06/21/16 06/21/16 $8.99 51-00-611 MAINT SUPP BUILDI $8.99 Invoice: 527309 WD SUPPLIES 06/28/16 06/28/16 $16.80 51-00-611 MAINT SUPP BUILDI $16.80 Invoice: 527382 WD SUPPLIES 06/29/16 06/29/16 $21.58 51-00-611 MAINT SUPP BUILDI $21.58 Invoice: 528159 PW SUPPLIES 07/13/16 07/13/16 $531.75 01-41-652 OPERATING SUPPLIE $531.75 Vendor Total for: MUTUAL SERVICES OF HIGHLAND PARK(Fiscal YTD Payments: $791.13) $579.12
NCC-PETERSON PRODUCTS Invoice: 70469 CLEANING SUPPLIES 07/20/16 08/19/16 $86.91 01-11-652 OPERATING SUPPLIE $86.91 Vendor Total for: NCC-PETERSON PRODUCTS (Fiscal YTD Payments: $208.98) $86.91
NORTHEASTERN IL. PUBLIC SAFETY TRAINING Invoice: 15009 TRAINING 02/29/16 02/29/16 $450.00 01-22-563 TRAINING $450.00 Invoice: 15066 TRAINING 03/24/16 03/24/16 $450.00 01-22-563 TRAINING $450.00 Vendor Total for: NORTHEASTERN IL. PUBLIC SAFETY TRAINING (Fiscal YTD Payments: $450.00) $900.00
NORTHSHORE OMEGA Invoice: 070516-0370 PRE-EMPLOYMENT SCREENING 07/07/16 07/07/16 $96.00 01-11-573 MISC. CONTRACT SE $96.00 Vendor Total for: NORTHSHORE OMEGA (Fiscal YTD Payments: $1,678.00) $96.00
PEPSI BEVERAGES COMPANY Invoice: 97695158 JUNE 2016 VENDING SERVICES 07/26/16 07/26/16 $274.01 01-52-928 MISCELLANEOUS EXP $274.01 Vendor Total for: PEPSI BEVERAGES COMPANY (Fiscal YTD Payments: $368.69) $274.01
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08 02 2016 CC Packet Page 15 of 198 HIGHWOOD - AP WARRANT LIST AUGUST 2, 2016 List #159 Vendor Invoice Description Inv. Date Due Date Amount
PETER BAKER & SON COMPANY Invoice: 12061 SURFACE 07/10/16 07/10/16 $307.02 01-41-515 REP & MAINT - ST $307.02 Vendor Total for: PETER BAKER & SON COMPANY(Fiscal YTD Payments: $2,626.11) $307.02
PINNER ELECTRIC, INCORPORATED Invoice: 26917.2 PAYMENT ADJUSTMENT 05/30/16 05/30/16 $20.00 01-41-516 REP & MAINT - STR $20.00 Invoice: 26975.2 PAYMENT ADJUSTMENT 06/21/16 06/21/16 $10.00 01-41-516 REP & MAINT - STR $10.00 Invoice: 27054 STREET LIGHT REPAIRS 07/13/16 07/13/16 $801.15 01-41-516 REP & MAINT - STR $801.15 Invoice: 27055 INSTALL STREET LIGHT POLE 07/13/16 07/13/16 $1,334.75 01-41-516 REP & MAINT - STR $1,334.75 Invoice: 27056 REPLACEMENT FIXTURE INSTALLATION 07/13/16 07/13/16 $779.82 01-41-516 REP & MAINT - STR $779.82 Vendor Total for: PINNER ELECTRIC, INCORPORATED(Fiscal YTD Payments: $7,142.62) $2,945.72
PLATINUM SYSTEMS Invoice: K-96391 COMPUTER SUPPORT 06/13/16 06/13/16 $105.00 01-21-573 MISC. SERVICE CON $105.00 Invoice: K-97191 COMPUTER SUPPORT 07/11/16 07/11/16 $52.50 01-11-537 COMPUTER SUPPORT $52.50 Invoice: K-97274 COMPUTER SUPPORT 07/15/16 07/15/16 $26.25 01-11-537 COMPUTER SUPPORT $26.25 Invoice: K-97307 COMPUTER SUPPORT 07/18/16 07/18/16 $26.25 01-11-537 COMPUTER SUPPORT $26.25 Invoice: K-97349 COMPUTER SUPPORT 07/20/16 07/20/16 $228.75 01-11-537 COMPUTER SUPPORT $228.75 Vendor Total for: PLATINUM SYSTEMS (Fiscal YTD Payments: $2,528.75) $438.75
PRINTLINK Invoice: 281734 OPERATING SUPPLIES 06/30/16 06/30/16 $118.82 01-11-651 OFFICE SUPPLIES $36.90 01-41-651 OFFICE SUPPLIES $81.92 Vendor Total for: PRINTLINK (Fiscal YTD Payments: $82.26) $118.82
PRO DATA PAYROLL SERVICES Invoice: 367848 CHECK PROCESSING 07/20/16 07/20/16 $128.60
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08 02 2016 CC Packet Page 16 of 198 HIGHWOOD - AP WARRANT LIST AUGUST 2, 2016 List #159 Vendor Invoice Description Inv. Date Due Date Amount
01-11-531.3 PAYROLL SERVICE $128.60 Vendor Total for: PRO DATA PAYROLL SERVICES(Fiscal YTD Payments: $666.10) $128.60
REDS GARDEN CENTER Invoice: 11060 MULCH 06/21/16 06/21/16 $40.50 01-41-652.1 SUPPLIES - BUILD/ $40.50 Invoice: 8598 PETUNIAS 06/08/16 06/08/16 $39.40 01-41-920 COMMUNITY BEAUTIF $39.40 Vendor Total for: REDS GARDEN CENTER (Fiscal YTD Payments: $.00) $79.90
REGIONAL EMERGENCY DISPATCH Invoice: 184-17-08 AUGUST 2016 DISPATCH SERVICES 07/15/16 08/14/16 $6,645.29 01-22-556 DISPATCHING $6,645.29 Vendor Total for: REGIONAL EMERGENCY DISPATCH(Fiscal YTD Payments: $24,118.87) $6,645.29
ROCK-N-RESCUE Invoice: 169840 FD SUPPLIES 03/16/16 03/16/16 $355.09 01-22-515 REP & MAINT - FIR $355.09 Invoice: 169870 FD SUPPLIES 03/18/16 03/18/16 $73.76 01-22-515 REP & MAINT - FIR $73.76 Vendor Total for: ROCK-N-RESCUE (Fiscal YTD Payments: $.00) $428.85
RUSSO POWER EQUIPMENT Invoice: 3300674 VACUUM SHREDDER 07/15/16 07/15/16 $180.00 01-51-515 PARK MAINTENANCE $180.00 Vendor Total for: RUSSO POWER EQUIPMENT (Fiscal YTD Payments: $8,868.60) $180.00
SCHELL SEALCOATING CO. Invoice: 116 HOT PATCHING 07/08/16 07/08/16 $600.00 01-41-515 REP & MAINT - ST $600.00 Invoice: 117 HOT PATCHING 07/08/16 07/08/16 $850.00 01-41-515 REP & MAINT - ST $850.00 Vendor Total for: SCHELL SEALCOATING CO. (Fiscal YTD Payments: $4,960.00) $1,450.00
SCOPELLITI LANDSCAPING, INC. Invoice: 19081 APRIL 2016 SERVICES 07/20/16 07/20/16 $1,089.00
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08 02 2016 CC Packet Page 17 of 198 HIGHWOOD - AP WARRANT LIST AUGUST 2, 2016 List #159 Vendor Invoice Description Inv. Date Due Date Amount
01-41-573 MISC SERVICE CONT $1,089.00 Invoice: 19082 MARCH-APRIL 2016 SERVICES 07/20/16 07/20/16 $1,000.50 01-41-573 MISC SERVICE CONT $1,000.50 Invoice: 19083 MAYT 2016 SERVICES 07/20/16 07/20/16 $580.00 01-41-573 MISC SERVICE CONT $580.00 Invoice: 19084 MAY 2016 SERVICES 07/20/16 07/20/16 $975.06 01-41-573 MISC SERVICE CONT $975.06 Invoice: 19085 MAY 2016 SERVICES 07/20/16 07/20/16 $1,696.50 01-41-573 MISC SERVICE CONT $1,696.50 Vendor Total for: SCOPELLITI LANDSCAPING, INC.(Fiscal YTD Payments: $.00) $5,341.06
SIGNS NOW Invoice: 606044 SIGNAGE 06/09/16 06/09/16 $277.13 01-41-928 MISCELLANEOUS EXP $277.13 Invoice: 606085 WD SIGNAGE 06/22/16 06/22/16 $394.33 51-00-599 MISC CONTRACT SER $394.33 Vendor Total for: SIGNS NOW (Fiscal YTD Payments: $468.00) $671.46
SILVA POWER AND COMMUNICATIONS, LLC Invoice: 1681 COMMUNICATION WIRING 07/14/16 07/14/16 $1,450.00 51-00-512 REP & MAINT - DE $1,450.00 Vendor Total for: SILVA POWER AND COMMUNICATIONS, LLC(Fiscal YTD Payments: $.00) $1,450.00
SPRINT Invoice: 744111511-172 MAY-JUNE 2016 SERVICES 06/18/16 06/18/16 $22.20 01-22-552 TELEPHONE $22.20 Vendor Total for: SPRINT (Fiscal YTD Payments: $512.95) $22.20
STAPLES ADVANTAGE Invoice: 3305759249 INK 06/18/16 07/18/16 $132.18 01-11-651 OFFICE SUPPLIES $32.20 51-00-652 OPERATING SUPPLIE $99.98 Vendor Total for: STAPLES ADVANTAGE (Fiscal YTD Payments: $119.99) $132.18
SYNCB/AMAZON Invoice: 122150101552 ADMIN SUPPLIES 06/22/16 06/22/16 $20.66 01-11-652 OPERATING SUPPLIE $20.66
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08 02 2016 CC Packet Page 18 of 198 HIGHWOOD - AP WARRANT LIST AUGUST 2, 2016 List #159 Vendor Invoice Description Inv. Date Due Date Amount
(SYNCB/AMAZON Cont'd) Invoice: 122151612380 PD SUPPLIES 06/22/16 06/22/16 $112.68 01-21-652 OPERATING SUPPLIE $112.68 Invoice: 122159745271 PD SUPPLIES 06/22/16 06/22/16 $20.66 01-21-652 OPERATING SUPPLIE $20.66 Invoice: 186156306878 ADMIN SUPPLIES 06/14/16 06/14/16 $101.65 01-11-652 OPERATING SUPPLIE $101.65 Invoice: 232023791029 ADMIN SUPPLIES 06/22/16 06/22/16 $135.40 01-21-652 OPERATING SUPPLIE $135.40 Invoice: 261343550220 ADMIN SUPPLIES 07/05/16 07/05/16 $47.63 01-11-651 OFFICE SUPPLIES $47.63 Vendor Total for: SYNCB/AMAZON (Fiscal YTD Payments: $784.43) $438.68
TDS METROCOM Invoice: 072516-1008 JULY-AUGUST 2016 SERVICE 07/25/16 08/15/16 $275.52 01-22-552 TELEPHONE $275.52 Vendor Total for: TDS METROCOM (Fiscal YTD Payments: $874.69) $275.52
UPS Invoice: 0000563018286 JUNE-JULY SERVICES 07/09/16 07/09/16 $23.12 01-11-551 POSTAGE $9.14 51-00-551 POSTAGE $13.98 Vendor Total for: UPS (Fiscal YTD Payments: $69.42) $23.12
VISION SERVICE PLAN OF ILLINOIS Invoice: 071916-0001 AUGUST 2016 SERVICES 07/16/16 07/16/16 $231.71 01-00-218.09 EMPLOYE VISION WH $231.71 Vendor Total for: VISION SERVICE PLAN OF ILLINOIS(Fiscal YTD Payments: $678.82) $231.71
GENERAL FUND $75,277.15 911 EMERGENCY FUND $158.43 TIF PROJECT/EXPENSE FUND $1,940.00 WATER & SEWER $22,980.61 GARBAGE FUND $20,946.54 ESCROW FUND $3,245.10
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08 02 2016 CC Packet Page 19 of 198 HIGHWOOD - AP WARRANT LIST AUGUST 2, 2016 List #159 Amount
Grand Total: $124,547.83
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08 02 2016 CC Packet Page 20 of 198 HIGHWOOD - AP WARRANT LIST AUGUST 2, 2016 List #159 A/P Manual Check Posting List Postings from all Check Registration runs(NR) since last Check Voucher run(NCR) Vendor Invoice Description Check: No Date Reg # Amount
POSTMASTER - HIGHWOOD Invoice: 072216JULY 2016 WATER/REFUSE BILL POSTAGE 049110 07/22/16 160 $557.54 51-00-551 POSTAGE $390.28 53-00-551 POSTAGE $167.26 Vendor Total for: POSTMASTER - HIGHWOOD (Fiscal YTD Payments: $2,180.86) $557.54
SELECTIVE INSURANCE CO OF AMERICA Invoice: 070116-1479JULY 2016 SERVICES 049049 07/15/16 160 $7,001.00 01-11-592 LIABILITY INSURAN $693.80 01-21-592 LIABILITY INSURAN $1,230.08 01-22-592 LIABILITY INSURAN $1,923.87 01-41-592 LIABILITY INSURAN $1,456.91 01-44-592 LIABILITY INSURAN $87.51 01-51-592 LIABILITY INSURAN $151.22 51-00-591 LIABILITY INSURAN $1,457.61 Vendor Total for: SELECTIVE INSURANCE CO OF AMERICA(Fiscal YTD Payments: $20,991.00) $7,001.00
GENERAL FUND $5,543.39 WATER & SEWER $1,847.89 GARBAGE FUND $167.26 Grand Total: $7,558.54
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08 02 2016 CC Packet Page 21 of 198 RESOLUTION NO.
A RESOLUTION APPROVING AND ACCEPTING AN ARC RECOMMENDATION REGARDING A FENCE AT 432 SHERIDAN ROAD
WHEREAS, In accordance with Title 10 Chapter 3 of the Highwood City Code, an application has been submitted to the City of Highwood Appearance Review Committee ("ARC") for a proposed fence at Teddy O’Brian’s, 432 Sheridan Bay Road; and
WHEREAS, The ARC has determined that the proposed fence is appropriate and therefore recommended for approval by the City Council; and
WHEREAS, The City Council of the City of Highwood accepts the ARC recommendation and desires to approve the fence as proposed.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HIGHWOOD, LAKE COUNTY, ILLINOIS, as follows:
SECTION 1: The City Council accepts the recommendation made by the ARC on July 26, 2016 attached hereto as Exhibit A and hereby approves the application for a fence as depicted in the proposal attached hereto and made a part hereof as Exhibit B.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF HIGHWOOD, LAKE
COUNTY, ILLINOIS, this _____ day of ______2016
AYES:
NAYS:
ABSENT:
APPROVED BY THE MAYOR OF THE CITY OF HIGHWOOD, LAKE COUNTY, ILLINOIS,
this _____ day of ______2016
CHARLES PECARO, MAYOR
ATTEST:
08 02 2016 CC Packet Page 22 of 198 EXHIBIT A
Appearance Review Committee July 28, 2016 Action Items
1) The ARC recommends Council approval of the proposed fence replacement for 432 Sheridan Road, per photos and sample submitted. New eight (8') high fence will be installed with metal poles, without gate access, "finished" side facing the outside of the property, and stained to match existing fence. The proposed screening fencing is consistent with Code 10-3-7-7 B. 4. b. The Committee recommendation was unanimous.
2) The ARC tabled discussion of the proposed fencing for 315 Waukegan Avenue due to the applicant not being in attendance. The ARC June 28 meeting minutes clearly state the applicant was to submit a fencing sample for Committee review. (The applicant also failed to attend the the June 28 meeting.) City Staff informed the ARC that the fencing has already been installed.
The Committee questions how this installation was allowed without recommendation or Council approval. A similar situation arose several months ago when an applicant renamed a business with new window and awning signage without ARC recommendation and Council approval. The Committee has serious concerns of precedence and procedure and respectfully requests affirmation from the Mayor, Council and Staff that its work is in fact of import and worth the time, effort and dedication of its members. Please forward advisement on how and if the Committee should proceed. Thank you.
08 02 2016 CC Packet Page 23 of 198 EXHIBIT B
CITY OF HIGHWOOD JUL l 1 2016 17 HIGHWOOD AVE HIGHWOOD, IL 60040 Hifd1.WtK,d City 1~ 847.432. 1924 / .Fax 8~7.432.0735 ..... www.otyofl11ghwood.org Appearance Review Committee Application Please print clearly.
A digital copy of the submittal requirements is required for prellmlnaiy Staff ReVlew. If materials are incomplete, Staff wi ll direct the applicant to submit five (5) hard copies of the submittal with one copy of the application form and checklist to: City Manager, 17 Highwood Ave, Highwood, IL 60040
7 Name of Project/ Building /Business:_.~+l--"'t:.=-==r);.....=D...... )_ _o.;;.__'____,,73,...... e_(_A_~------"'-=c-'-==> ____ _ Address of Project: __4----=-.3_Z_ .. - _S_t-t_~__;l2-_\~_A_,u _ __.__f?_o__.__c------
Owner Information
Name: _ ...... e.....;:;oa.....;(oa:;..; ..;::a;C_...(2.,.~. ....l .....u"'-='-"1\,, ..... ) ...... IA:...... \2-=-.C\-...... f ______Home Address: _:J_l_L_ __._H_____ t (,=--:...~-( 0_o_O_(J.=..._;....14..;...u_1;;_-. ------City: k LO 00~ State: __I_L ____ Z.lp~; __u_O _O~l{~O~- l( 7 / J rl -z_- z_/; ;-r·--? Telephone: __,_--=;....._.;.__.:...... ,L------c-.,;__ ___;;;_ ·_L€_".:::>.;_;;;;_..:;,·------
Applicant Infonnatlonj. Name: 'E {2 1 il 1 Home Address: XC
Telephone Number:
Applications for appearance review approval are subject to the requirements of Title 10 Chapter 3 of the City of Highwood and Development. A copy of Title 10 Chapter 3 may be obtained online at: www.cityofhlqhwood.org ..
It Is the responsibility of the applicant to ensure all necessary documentation and permits are filed with the city.
•. Applicant shall be present at the Committee Meeting for presentation of the request. • Incomplete applications will NOT be placed on the agenda.
Print Nar.;e and Title/ Positicn:
08 02 2016 CC Packet Page 24 of 198 08 02 2016 CC Packet Page 25 of 198 08 02 2016 CC Packet Page 26 of 198 Teddy 0' Brian's
432 Sheridan Rd.
Highwood, IL 60040
Members of the ARC,
We are proposing to replace our old cedar plank fence that runs along the western side of the commercial portion of the property at 432 Sheridan Road with a taller, sturdier, more protective, and more appealing fence. The fence will span the 40 feet from the southwest corner of our building to the current shadowbox fence of ours which borders our neighbors to the south. We are proposing the fence be eight feet tall and ask for your variance on the fence permit limit of six feet for a couple of reasons.
The residence behind us is built on a grade about 2 feet higher than the ground of our patio. It houses a couple of families, including children, and we feel this will benefit them both from a noise reduction factor and a safety issue. Although we ask our patrons to respect our neighbors, occasionally debris can be found outside the fence. Also, on numerous occasions, toys from the children living adjacent to us make their way into our patio area. We feel as though increasing the height of the fence will limit this transfer of goods.
The biggest factor that we would like you to consider when reviewing our request for variance however is the security factor. I mentioned that the grade of the ground surface is higher on the outside of the fence than our patio's ground surface. The fence in its current state has the finished side facing in. This gives the opportunity for individuals to enter our patio by hopping the fence with ease as the two crossbeams running the length of our fence horizontally are similar to ladder rungs and the fence is only four feet high on the outside. This allows the neighbor's kids who may have lost a ball, undesirables, underage kids seeking
08 02 2016 CC Packet Page 27 of 198 entry, or those that don't want to pay a cover charge on our live music nights an easy way to gain access to where they shouldn't be.
Our new fence would be built to code with eight foot tall, three inch diameter steel poles buried 42 inches in the ground with concrete footings. Four treated 2X4 crossbeams would horizontally span the length of the 40 foot fence line to secure the 5 % X % decking wood that runs vertical with V4 spacing between each board. Obviously, the finished side will face the neighbors to alleviate the climbing issue. We feel as though this would be a safe, secure and sturdy way to eliminate some of the problems we are facing and would be a great improvement aesthetically to the current fence.
We ask you to please consider this request as we feel it is in the best interest of our neighbors and us for both safety and security issues. Also, it will look much better than the current fence from both sides. We hope you agree.
Thanks for your consideration,
Brian Carman
Ted Banick
08 02 2016 CC Packet Page 28 of 198 +a B~ck tc Me,5ag~ Teddy OBrians.dot l / l
Pa. Shogren Fence, Inc. PROPOSAL 34305 Fairfield Rd Round Lake, IL 60073 AND (847) 740-9111 * Fax (847) 740-9399 Attn: Brian Carman j Proposal submitted to: Teddy O;Brian's Date: i 7/16/16 J-str;;t: 432si.~ridanR;;; d-·· ---._.. __ -~------Job Phone: 1 · CLf_y,.§tateJU! 0 Item I Description - I Appro~T UnIT Unit -- T -··· =···· -,.------.. "-·---~------..j-2.ui .~!i.!.:tl .._ .. J___ r1:1c _e.• .. ·-. ~ ' Furnish and insta--~llw --=-··6 each 3"o.d. ss40. .weig . . ht galvanized steel l ! ! __ J~~.!§, seaced a maximum 8' on center. All r,osts set 42" deee ! ·· ----i----·+-----···- _·;·. 1 in I 0" diameter concrete foundations, remove dirt sooils from 1 ! I property. l . I t t I Remove and replace 2 each 4" x 4" x 9' long western r~d ,- · - f 1 · ·· ·--- --...... J cedar _p_osts on exjs(in_g£hi.&i s~wbox dog~earf~~~,Lall -i -- ~--t--· ·-~!· ·····--~- ·-·-'""'. ,__J oosts set 36" deep in concrete haul away old posts footings . 1 i ! and dirt spoils from property. l 1 l __·.;, I j f ,, Total price for the above: ! J $t,;1 1 (50% Down, 50% Upon Completion) ! ·; { Note: Customer to remove and haul away existing 6' high t ; j Prices good/or 30 Days Quoted price is based on the current market conditions. We reserve tl,e right to adjust this quote base,! on market condition time material is ordered and delivered to tlte job site. Exclusions: Bonds, permits, licenses, and fees Work performed on a regular time basis per our current certificate of insurance Payment to be made as follows: N/30 OWNER MUST OBTAIN ALL PERMITS. / All material is guaranteed to be as specified. All work to be completed in a workmanlike manner, on a Authorized Signature: regular time basis according to standard practices. Any alternation or deviation from above specifications involving extra costs will be executed only upon wrinen orders. and will become an extra charge over and ------·, ,; lI above the estimate. All agreements contingent upon strikes, accidents or delays beyond our control. Ray Njust Owner to carry fire. tornado and other necessary insurance. Our workers are fully covered by Workmen's Compensation Insurance. Shogren Fence, Jnc. ICusiorner here by assumes full responsibility for the location or the line upon which fence materials are to be installed and locate any and all private cable to include sprinkler systems. electric. septic fields. gas I, lines, grills, lighting, etc. Shogren Fence to Call J.U.L.I.E. Note; We may withdraw this propos I acceeted w ithin 30 days. . I, THE UNDERSICN£0, HEREBY AGREE THAT IN THE EVE"'!' OF DErAVLT IN THE PAVMENT OF ANY AMOUNT DUE, AND IF TIii$ ACCOUNT IS PLACED IN THE HANDS Of Af/ AGENCY AlTORN EV FOR COLLECTION OR LEGAL ACTION, TO PAY AN ADDITIONAL tHA~ E(llk\L TO rnE COST OF COLLECTIONS INCLUDING AGENCY ANO ATTORNEY FEES AND COVR1 INCURRED ANO PERMITTED BY LAWS GOVERNING THESE TRANSACTION§.AU ~ T IU!£ ACCOUNTS WILL BE CHARGED AT THE RATE OF 1.S%0N UNPAID MONTl ACCEPTANCE OF PROPOSAL. The above prices, specifications and conditions are V . .. ·~,\--· .. - ...... J ~ ; .. t.. .-·~·· ~. -:.~;~:. ../ .~1'f;::,,;-,:l,~~i(~.. -=.:-~~ .. ~·t .. ~. ..· >:.. :·K-~·;$ r=t;;f~·:~-~.· ;.·-.,;"Y ) 08 02 2016 CC Packet Page 29 of 198 ...... J 8. SKOKIE. HIGH':IAY SUITE 204 234- 3329 LAKE BLUFF ,ILLINOIS J.Harding Co. Survey 60044 of . THE EASTERLY 75.0 FEl.~T ( AS MEASURED /\ T rnmrr 1\ NG L ES TO Tl! :; 1•;1\.;'l' i'.i{LY LHJ·. ) OF. LOT 2 IN BLOCK 16 IN PL/\ T " D" Of HIG}PlOOD,B ll: ING fi:V! ~H'r:~ Mm P~ l·:.1\ . .;:;;; • .-:;UlJj;lVL:1(11,i I N ~>ECTIONS 14 AND 15, IN TO'~/N:~HIP 11- 3 NORTH, RANG Ii: l ? :•;i\ .;'[ OP Tlh /1.' l[ .1 :,·> r-: (1..0 ,I ,,.. I, i ~ ~ . ' .\ \ ~-~. _,..-. -' .. :·": .... ~· .... I •• , ._. ' 7'" • l ': . ·.1 ·-· ',; STATE OF ILLINOIS) COUNTY OF LAKE )S.S. I,JOSEPH L. HARDING , AN ILLINOIS REGISTERED LAND SURVEYOR DO HEREBY CERTIFY THAT I HAVE SURVEYED THE ABOVE DESCRIBED PROPERTY AND THAT THIS PLAT IS A CORRECT REPRESENTATION THEREOF. DATED AT LAKE BLUFF, ILLINOI S, THIS C. DAY OF ___ ~---'-----,-- NOTE• COMPARE ALL POINTS BEFORE BUILDING BY LINOIS REGISTERED LAiD SURVEYO R 1693. SAME AND REPORT ANY DISCREPANCY TO THIS APPROVED BY: SCALE: / u::; ZO' D RAWN BY 0: l. )../. OFFICE.CONSULT TITLE POLICY FOR EASEMENTS REVISED AND BUILDING SET BACK LINES.DO NOT ASSUME ANYTHING BY SCALING, ILLINOIS,WISCONSIN,MARYLAND,MICHIGAN DRAWING NUMBER I o.,c I 08 02 2016 CC Packet Page 30 of 198 CITY OF HIGHWOOD CITY COUNCIL STAFF REPORT Public Hearing Tuesday, August 2, 2016 Project Addresses: 523 Bank Lane Property Owner: Joe Mendino Applicant / Petitioner: Hopmaniacs LLC 688 Buena Road, Lake Forst, Il. 60045 Zoning: B-2 Nature of Request: The petitioners seek to open a brewery. A brewery does not match any of the uses listed in the matrix under our zoning code in the B-1 or any other district. When a use does not conform to one of the existing categories it must apply for a special use in the B-1 district. Current Use and Conditions The property is currently vacant. The site is located on Bank Lane across the street from the train tracks but with easy access to one of the main stretches of the busy storefront B-1 zoning district. There are a variety of retail type businesses nearby, a few dwelling units and the Public Works Department building, which is more of an industrial use in the vicinity that would complement this type of use. The business would consist of equipment to brew beer and a small tap room for tastings. A brewery use is completely new to Highwood and was not previously contemplated in the zoning code under the matrix in 11-6-2. There was consideration to define it as a bar due to the tap room, but as the primary function of the property is to create product, with the tap room being an ancillary use, the ‘Other’ category is really the only option under the existing code. Staff Recommendation Staff recommends approval of this application, contingent upon the petitioner filling all other requirements of the building permitting process. Staff Report Prepared By: Scott Coren, City Manager 1 08 02 2016 CC Packet Page 31 of 198 INSTRUCTIONS TO THE PETITIONER: You may seek a variation from the Zoning Ordinance of the City of Highwood, as amended. These instructions are provided as a courtesy by the City of Highwood. They are not a substitute for your own legal research or legal counsel. You may wish to seek legal advice in your Petition for Variation as it will aid in the prompt determination of your Petition. Copies of the Zoning Code are available for inspection and/ or purchase at Highwood City Hall. The City may require that any requests for zoning changes be accompanied by an application to the Lake County Soil and Water Conservation District. If that is the case, that District requires at least a thirty (30) day advance notification. Generally, Lake County Soil and Water Conservation District approval will be required only when it appears that the variation proposed has substantial changes to topography and the like. Zoning variations and Special Use Permits are controlled by Section 9.0 of the Highwood Zoning Code. They are heard by the Planning and Zoning Commission. Your petition must disclose the following items: (1) The name of the Petitioner; (2) The fee holder (holder of the title of the property); if the two are not one in the same, you must disclose how the Petitioner is legally authorized to present the variation petition, and the fee holder must consent in writing to the petition; (3) The full legal description of the property, common address and parcel identification number. You should submit a copy of a Deed, Title Policy or Plat-of-Survey containing the legal description. If you are a tenant, you must submit an executed copy of your lease agreement; (4) You must describe in detail the scope of work and the zoning variation or special use sought. If the variation includes an encroachment, state the extent of the encroachment. Specify the provisions of the Zoning Code from which you are seeking a variation and include such site plans, sketches, diagrams, engineering studies or other relevant materials which help to explain the variation and why you qualify for a variation pursuant to Section 9.7 of the Zoning Code; (5) An application fee in the sum of$600.00 (3 or less units) or $900.00 (4 or more units and Commercial) payable to the City of Highwood must be enclosed. (6) Additionally, the City Manager's Office required the application to provide an escrow in the amount of $2,500. The escrow covers the cost of publication, attorney fees, consultant fees, court reporting services and any other fees incurred as a result of your petition; (7) It is your responsibility to explain in detail in your petition (be prepared to present competent evidence to the Planning and Zoning Commission) why you qualify for the zoning variation or special use. The variation can only be granted if the following conditions exist: a. You must establish the hardship you will incur if the variation is not granted. State your hardship. For example, '2vy, kitchen is iocated on the side of the house and I need a larger kitchen for my fami!J. If we try to location the kitchen in another area of the house it will be prohibitive!} expensive;" 08 02 2016 CC Packet Page 32 of 198 b. The construction or use is in harmony \Vlth the surrounding construction or use; c. The construction or use is not objectionable to the surrounding residents; d. Strict application of the provisions of the Zoning Ordinance would deprive you, the petitioner, of any reasonable use of this land. Mere loss and value shall not justify a variation; there must be a deprivation of beneficial use of the land; e. The variation or special use is only a minor deviation of the provisions of the Zoning Ordinance. ALL REQUESTS FORA ZONING VARIATION MUST BE SUBMITTED TO THE BUILDING/ZONING OFFICIAL AT LEAST TEN (10) DAYS PRIOR TO THE NEXT SCHEDULED CITY COUNCIL MEETING. During that ten (10) day period the application will be reviewed by the Mayor, Building Official and Zoning Administrator for completeness. If the application is determined to be complete, generally speaking, that application will be referred to the Planning and Zoning Commission at the next City Council meeting. The Planning and Zoning Commission will hold and schedule a public hearing as required to review your petition. Your attendance at the public hearing is required. You will be required to present your petition. It is your responsibility to be familiar with the Zoning Code and request any relief you deem appropriate and to be forthcoming with any facts or circumstances which may be important for a review of your petition. THEREFORE, IF THERE ARE ANY DATES AT WHICH YOU CANNOT ATTEND THE HEARING, THE SAME SHOULD BE NOTED IN YOUR PETITION. After the hearing the Planning and Zoning Commission will make its recommendations and the Chairman will forward a written recommendation to the City Council. The City Council may then approve or deny the recommendation. Generally speaking, this will occur at the next meeting of the City Council following the Planning and Zoning Commission hearing. If the variation is approved, an ordinance is drafted and voted upon at the next City Council meeting. Assuming the variation is granted, you must make your submission to the Building and Zoning Official for plan review and issuance of the appropriate permits. PLEASE NOTE THAT THE CITY MAY IMPOSE A REQUIREMENT THAT YOU, AS THE PETITIONER AND/OR THE OWNER, PAY ALL COSTS (STAFF, LEGAL, ENGINEERING, PLANNING, ETC.) THAT ARE INCURRED BY THE CITY AS A RESULT OF YOUR PETITION, OR THE DEVELOPMENT PROCESS. Depending on various schedules, the length of the hearings, the zoning variation process may take six (6) to twelve (12) weeks with an additional two (2) to four (4) weeks to obtain a building permit. Please plan accordingly. Copies of the Zoning Ordinance and Rules of Procedure for the Planning and Zoning Commission are available upon request . .Attacheri t0 these in!-:tnu:tiorn:. is a form fnt refei"'ence nnly. Very Truly Yours, Highwood Planning and Zoning Commission 08 02 2016 CC Packet Page 33 of 198 CITY OF HIGHWOOD - PETITION FOR AVARIATION GENERAL INSTRUCTIONS 1. Please type or print legibly; 2. If more room is required for any answer, attach an Exhibit; 3. Include twelve (12) copies of all "required documents." Required documents include: a lease (if you are a tenant), a deed or title policy, a site plan, a current plat-of-survey and plans showing elevation(s) and/ or floor plan; 4. Include a check payable to the City of Highwood in the sum of $600.00 (3 or less units) or $900.00 (4 or more units and Commercial) being the application fee; 5. If applicable, include a copy of the Lake County Soil and Water Conservation District application. Please indicate the date of filing of said application. APPLICATION 1. Name, address, telephone number(s) (home, work, fax, pager, and cellular) and e-mail address of applicant. LC C P-i a_E.">i) A"°' \i-J A , I E: fZ.S 6004-<:, b ~ 2. Name, address, telephone number(s) (home, work, fax, pager, and cellular) and e-mail address of attorney for applicant. (l<.A•~ Pi E/2561U pI f.zR..S C> N iTR f'I c.~f!-..:) f!,'1, O OA><-"-'C>eu Av<-~ ~ re. \ O ~/ LAK:e. Fe, tZ.13 $', IL.. 1 f.o04• ~47 ?-'bit c, o G'\ 3. Name, address, telephone number(s) (home, work, fax, pager, and cellular) and e-mail address of owner of property (fee holder). If the property owner is different than applicant please specify why applicant is legally authorized to present this petition. Include written proof of such authority (e.g. Power of Attorney). Include a copy of the deed or title insurance policy showing title in the property owner. uo<; Ml='..NVINO 677 \0 6£..'D 61...M (2.j I LA KG Pi.... 8' 4 7 2--e-t+ 6 4- "Ill- P1t\.:l / 6 - I l- 2 Off ~ 0 77 08 02 2016 CC Packet Page 34 of 198 4. Indicate when and how the property owner acquired title to the property for which a variance is sought. If you are not the property owner, state your interest in the property and be prepared to provide documentation of your interest at the hearing. Awf lC#.T.fz t.5 &uR."26-NT\...'f t.~11-,1e n---1\lo 5~ Flem,t\ T/ij[ pvoffW-l'f e,w H.!E.t.:. 5. Provide the legal description, common address and parcel identification number of the property. 6. State the Zoning District in which the property is located. E:,. 2 7. State the scope of the work and indicate the specific variation you are requesting. Attach such diagrams, drawings or other information as may be useful to the Planning and Zoning Commission in understanding your variation. You must indicate the specific sections of the Highwood Zoning Code for which the variation is sought. W~ NZ..f. t>.~~i/.J C -r.o ~. A ·e>U1,J1 8. Explain why the proposed variation or use is in harmony with the surrounding construction or use. 1J./(':J Sf%'0lP..L. \JS.£ llXUL.l1 e,JE iN .1-/¢,,Je.~J 6IzCt>,..V$fi. JI !S $11'\itiLA.i:'.. re <.E,J;i.",(JE-12t).L. Bf' THl= ~MIT7 lJ.G.ES t,,l...i..oW!l;O IN THIS 01s,,21cr, $()Cr/ f>-.'5 RJ;ESfAV/ZR,Wf~1 l;i'>,.'/ffi(2f-<:l l>-J..!D /J,N1f<.IJ.1t»HM r;,-tr VS!=5 08 02 2016 CC Packet Page 35 of 198 9. Explain why the variation or use is not objectionable to the surrounding residents. 17+6- ~~ (J£,Jif WIU., /')e}NC -A-J;:;Vi'TIOl\)fi,..L.... f'ATIZor-J'S ro n-tE AR:p~ t,.IHI cN ~\l{l-L ,;,.;ppcrer o7H~e ~, )Vil~ 'i!r,><1S7M1a Yll&-N0€./'Z$ /¥)011JONfe,LJ-'f Tlfl,5 Sf"!iiL/ .t,..L U.SJE.. fYOfOE.~S TO Sl»FJt,f!-f 1-/,l,.z.,o,12QS TO Tl-i)i:.. 10. Explain why strict application of the provisions of the Highwood Zoning Code would deprive you of any reasonable use of the land. Remember, mere loss in value will not justify a variation; there must be a deprivation of beneficial use of the land. 11. Explain why the variation or special use is only a minor deviation of the provisions of the Highwood Zoning Ordinance. NO f'/h,U>-L v;:,e,;..T/tN5 ,,,~ ~U~:li:P, 11+}£. VSJE. (Q ~IV\111.. pie, TO OTJ+/i.(Z. ~t1177/F,O VG;S 11-J TJ-/15 015re1c7 12. Describe in detail the current use(s) of the property (for example, single-family, duplex, multi-family, type(s) of business use). As applicable, describe the number of residential units, layout of the property, layout of each unit, size ( square footage), and occupancy of the units of same and/ or whether the property is used for residential or business purposes. Also, indicate the parking plan, number of parking spaces and vehicles used by occupants of the property. Use an attachment, if necessary. 08 02 2016 CC Packet Page 36 of 198 13. Explain any other relevant factors which should be considered by the Planning and Zoning Commission. (Such as the hardship that will occur if the variation is not granted). If your application is for a Special Use Permit, include an explanation as to your compliance with the requirements for same. 14. Please note any dates on which you cannot attend a Planning and Zoning Commission meeting, as your attendance is required to present the petition. Note: these are traditionally scheduled weekday evenings at the Highwood City Hall, 17 Highwood Avenue, Highwood, Illinois, 60040. 15. State the name, address and telephone number of any witness you intend to use. Further, if your neighbors do not object to the variation, try to obtain and include written statements from them. 08 02 2016 CC Packet Page 37 of 198 I, the undersigned being duly sworn on oath depose and state that I have read the above and foregoing petition by me subscribed, that the same is true in substance and in fact. Further, I am the owner of the property for which a variation is sought, or am otherwise authorized by law to present this petition. s~!!::f::::!b;--= Date CONSENT OF OWNER I, the undersigned being duly sworn on oath depose and state that I have read the above and foregoing petition. Further, I am the owner of the property for which a variation is sought and consent to the hearing of this petition. I acknowledge that the costs of zoning proceedings may be assessed to the petitioner and/ or property owner. Signature of Petitioner Date 08 02 2016 CC Packet Page 38 of 198 08 02 2016 CC Packet Page 39 of 198 PLANNING & ZONING COMMISSION CITY OF HIGHWOOD ) In Re: 523 Bank Lane (special use) ) ) ) Hopmaniacs, LLC ) Petitioner ) REPORT AND RECOMMENDATION Petitioner seeks a special use permit pursuant to Section 11-6(C) of the Highwood Zoning Ordinance to operate a brewery lot on the property located at 523 Bank Lane. Currently, 523 Bank Lane is zoned B-2, which requires a Special Use for the operation of a brewery for a special use (where otherwise not permitted). The PZC held a public hearing on July 20, 2016. All required notices were given and the PZC heard testimony from the Petitioner, City staff, and other interested parties. Members of the public were given the option of commenting on the requested special use permit, and such comments were taken into consideration by the PZC. The PZC reviewed all exhibits which include the application, plans and related documents, engineering reports, staff reports, and public comments, all of which are incorporated herein by reference. Based upon the evidence presented at the public hearing, the PZC finds that the standards for a special use permit under Section 11-6(C) of the City’s Zoning Ordinance have been met. Specifically, with regard to the applicable factors, the PZC finds as follows: A. The establishment, maintenance or operation of the special use will not be detrimental to or endanger the public health, safety, or general welfare. This property has been vacant for many years. The additional brewery in the Downtown area will be a service that is not currently offered in Highwood, would fill a vacant space and be a benefit to residents of Highwood. B. The special use will not be injurious to the use and enjoyment of other property in the immediate vicinity for the purposes already permitted, nor substantially diminish and impair property values within the neighborhood. In general, the filling of vacant buildings has a positive impact on neighboring properties, and the overall project will likely benefit neighboring properties. C. The nature and intensity of the activities involved and the size, placement and design of any structures proposed will be so planned that the special use will be compatible with the existing development and will not impede the normal and orderly development and improvement of surrounding property. 330811_1 1 08 02 2016 CC Packet Page 40 of 198 The site plan proposed for the building does not require additional variations for setbacks or building height. D. The proposed use and development will be served adequately by essential public facilities and services such as streets, public utilities, drainage structures, police and fire protection, refuse disposal, parks, libraries, and schools or the applicant will provide adequately for such services. The proposed development is of a size and scale that is compatible with the surrounding properties. E. The location of the special use within the City will be such that adverse effects on surrounding properties will be minimal, particularly regarding the traffic generated by the special use, nor will it draw significant amounts of traffic through residential streets. The brewery use may generate additional patrons for surrounding business properties. There is no anticipated increase to traffic on residential streets. The parking provided on site meets the City of Highwood’s parking requirements. F. Parking areas will be of adequate size for the particular use and properly located, and the entrance and exit drives will be laid out so as to prevent traffic hazards and nuisances. The parking provided on site meets the City of Highwood’s parking requirements. G. The proposed use and development will not result in the destruction, loss or damage of natural, scenic or historic features of significant importance. N/A H. The size of the lot will be sufficient for the use proposed. The size of the lot is sufficient for the proposed brewery. I. Adequate fencing and/or screening will be provided to ensure the enjoyment of surrounding properties, to provide for the public safety or to screen parking areas and other visually incompatible uses. The use is completely contained within the building. J. The proposed use and development will be in harmony with the general and specific purposes for which this title was enacted and for which the regulations of the district in question were established and with the general purpose and intent of the official comprehensive plan. The proposed use of a brewery in the Downtown area is consistent with the goal and objectives of the comprehensive plan (see Relationship to Comprehensive Plan) and the Downtown Plan. K. If a special use permit is granted, the petitioner, its successors and assigns are currently in compliance with governmental regulations, including City ordinances, and are likely to comply with governmental regulations, including city ordinances, in the future. All known proposed deviations from City ordinances are outlined in this report. 330811_1 2 08 02 2016 CC Packet Page 41 of 198 L. A special use permit shall be denied where the Commission finds that the special use, if granted, would impinge or retard other development within the City or the district. The brewery will not restrict future development in the area. M. A special use permit shall be denied where the Commission finds that the special use, if granted, does not demonstrate that it would exert a positive effect upon other development within the City or the district. The elimination of a vacant space and the addition of a brewery in the Downtown area will have a long term positive effect on surrounding properties. N. A special use permit shall be denied where the Commission finds that the special use, if granted, would not enhance revenue opportunities for the city. The proposed brewery will bring additional patrons to the City of Highwood, which will provide customers for surrounding businesses. O. Where the district regulations authorizing any special use in a particular district impose special standards to be met by such use in such district, a permit for such use in such district shall not be recommended or granted unless the applicant shall establish compliance with such special standards. No special standards, above and beyond the standards highlighted above, are applicable. The Commission of Appeals recommends by a 7-0 vote that the requested Special Use Permit be granted. DOCUMENTS INCORPORATED BY REFERENCE 1. Application for Special Use 2. Site Plans 3. Publication Notice Respectfully Submitted Planning & Zoning Commission CITY OF HIGHWOOD By:______Chairman August ______, 2016 330811_1 3 08 02 2016 CC Packet Page 42 of 198 CITY OF HIGHWOOD ORDINANCE ______ AN ORDINANCE APPROVING A SPECIAL USE PERMIT TO ALLOW OPERATION OF A BREWERY AT 523 BANK LANE ADOPTED BY THE CITY COUNCIL OF THE CITY OF HIGHWOOD, LAKE COUNTY, ILLINOIS ON THE ___ DAY OF______, 2016 Published in pamphlet form by authority of the City Council of the City of Highwood, Lake County, Illinois on this ______day of , 2016 City-wide Aldermen Mayor: Charlie Pecaro Matt Feddermann City Clerk: Vacant Chris Grice City Manager: Scott Coren Mike Fiore Andy Peterson City Attorney: James V. Ferolo M. Brad Slavin Klein, Thorpe, Jenkins, Ltd Eric Falberg 331080_1 08 02 2016 CC Packet Page 43 of 198 ORDINANCE NO. ______ AN ORDINANCE APPROVING A SPECIAL USE PERMIT TO ALLOW OPERATION OF A BREWERY AT 523 BANK LANE WHEREAS, the Planning & Zoning Commission of the City of Highwood has held a public hearing, duly noticed, to consider a request for a Special Use Permit pursuant to Title 11, Zoning Regulations of the City of Highwood City Code, Chapter 6, Permitted and Special Uses, Section 11-6(C), in order to permit the operation of a brewery at 523 Bank Lane, Highwood, Illinois; and WHEREAS, the Planning & Zoning Commission has submitted its Report and Recommendation to the City Council, attached hereto as Exhibit A, with a vote in favor of granting the requested special use permit; and WHEREAS, the City Council of the City of Highwood has determined that the Special Use should be granted, as stated herein. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HIGHWOOD, Lake County, Illinois: SECTION ONE: The Highwood City Council, after considering the Report and Recommendation of the Planning & Zoning Commission, which is incorporated herein by reference, and the matters properly before it, hereby finds with regard to the requested relief: • The establishment, maintenance or operation of the special use will not be detrimental or endanger the public health safety, or general welfare; • The special use will not be injurious to the use and enjoyment of other property in the immediate vicinity, nor will it substantially diminish or impair property values in the neighborhood; • The nature and intensity of the activities involved will be compatible with the existing development and will not impede the normal and orderly development and improvement of surrounding property; • The proposed use will be served adequately by public facilities and services • The location of the special use will have minimal adverse effects on surrounding properties with regard traffic on residential streets, as the use is located in a business district with surrounding commercial use; • The proposed use will not result in the destruction, loss or damage of natural, scenic or historic features of significant importance; • The size of the Subject Property is sufficient for the proposed use; • The proposed use on the Subject Property will be designed to ensure the enjoyment of surrounding and provide for public safety; • The proposed use is in harmony with the purposes of the Zoning Code; • The Petitioner is in current compliance with all applicable regulations; 331080_1 08 02 2016 CC Packet Page 44 of 198 • The proposed use will not impinge or retard other development within the zoning district; • The proposed use will have a positive effect on other developments within the city by providing a service that is currently not offered; • The proposed use will enhance revenue opportunities for the City; • The proposed use is in compliance will all applicable special standards. • The proposed use is in the interest of public convenience and will contribute to the general welfare of the neighborhood or community. • All steps possible have been or will be taken to minimize any adverse effects on the immediate vicinity through building design, site design, landscaping and screening. SECTION TWO: A Special Use Permit is hereby granted to Hopmaniacs LLC to operate a brewery at 523 Bank Lane, Highwood, Illinois. SECTION THREE: Except as provided herein, Petitioner shall comply with all other applicable provisions of the City of Highwood Zoning Code. SECTION FOUR: This Ordinance shall be applied in full force and effect from and after its passage, approval, and publication in the manner provided by law. ADOPTED this ___day of______, 2016, pursuant to a roll call vote as follows: Andy Peterson _____ Chris Grice _____ Eric Falberg _____ Matt Fedderman _____ Mike Fiore _____ M. Brad Slavin _____ AYES:______ NAYS:______ ABSENT:______ APPROVED by the City Council of the City of Highwood this ___ day of______, 2016. ______Mayor Charles Pecaro ATTEST: ______ 331080_1 08 02 2016 CC Packet Page 45 of 198 Deputy City Clerk ACKNOWLEDGMENT I, the undersigned, being the Petitioner for the Special Use Permit on the subject premises, do hereby acknowledge the reasonableness of the terms and conditions set forth in this Ordinance and hereby accept the said terms and conditions and hereby agree to fully comply with each and everyone one of said terms and conditions. Dated this ______day of ______, 2016. By: ______Petitioner Print Name:______ Title:______ 331080_1 08 02 2016 CC Packet Page 46 of 198 STATE OF ILLINOIS ) )SS. COUNTY OF LAKE ) CLERK’S CERTIFICATE I, the undersigned, the duly qualified Clerk of the City of Highwood, Lake County, Illinois, and the keeper of the records thereof, do hereby certify that attached hereto is a true and correct copy of an Ordinance entitled: AN ORDINANCE APPROVING A SPECIAL USE PERMIT TO ALLOW OPERATION OF A BREWERY AT 523 BANK LANE ORDINANCE NO. ______ adopted at a meeting of the said City of Highwood at which a quorum was present held pursuant to the provisions of the Illinois Open Meeting Act on the _____ day of______, 2016. IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of , 2016. ______(seal) Deputy Clerk- City of Highwood 331080_1 08 02 2016 CC Packet Page 47 of 198 AGENDA MEMO City Council August 2, 2016 ISSUE STATEMENT An ordinance granting a special use permit for a planned unit development and approving a preliminary plat for planned unit development at 546 Green Bay Road. BACKGROUND/HISTORY A petitioner submitted an application for a special use permit for the property located at 546 Green Bay Road, which was the old site of Scornavacco’s. The development consists of 28 apartment units within four floors. The attached documents are the final version of the submission, which was approved by the Planning & Zoning Commission by a vote of 6-1. The development would need to utilize the parking spaces along Washington Avenue, which had previously been used by Scornavacco’s. The petitioner has also submitted a TIF application, which has received a preliminary review by the City’s consultant. The petitioner also requires some permit parking changes for the parking spots adjacent to the railroad tracks on Green Bay Road. The permit restrictions would mirror those on Lakeview Avenue and Clay Avenue. This would eliminate any risk of the development necessitating more parking spots than are available on the property. The next step will be to negotiate a redevelopment agreement with the petitioner. The redevelopment agreement will be necessary to outline the responsibilities for the TIF funding and parking requirements. STAFF/COMMITTEE RECOMMENDATION Staff recommends approving the ordinance. ALTERNATE CONSIDERATION Not approving would be an alternate consideration. ATTACHMENTS -Ordinance 08 02 2016 CC Packet Page 48 of 198 CITY OF HIGHWOOD PLANNING & ZONING COMMISSION Public Hearing Wednesday, June 8, 2016 6:30 PM Property in 546 Green Bay Road Question 16-15-207-027 16-15-207-011 Owner: Wintrust Financial Corporation Applicant: Highwood Property Investors LLC/FIDES Capital Partners LLC Zoning District B-1 Retail Business District R-3 Residential Duplex Dwelling Request: Petition for a Planned Unit Development Summary: The Petitioner, Highwood Property Investors LLC/FIDES Capital Partners LLC has submitted a petition for a planned unit development. The development is a four story residential development of 28 total units consisting of 16 two bedroom units and 12 one bedroom units. The site plan demonstrates the development utilizing 24 onsite parking spaces in addition to 13 existing on- street spaces along Washington Avenue adjacent to the development. Staff Review and Comment: In the Downtown Projects Guidebook recently approved by the City of Highwood, these parcels fall within the Green Bay Road District. This district states that “Well established and successful existing businesses should remain, but other uses, such as office and residential buildings, should be considered.” Further in the report, stand-alone apartment buildings are recommended for heights up to four stories, which match the existing properties on Lake View Avenue, with heights of four to seven stories recommended for mixed-use buildings to generate viable development economics. While the Green Bay parcel is currently in the B-1 district, adding additional commercial or office space may not be justified due to existing vacancies. The added density of 62.2 units per acre may serve to create additional support to fill these vacancies and increase the feasibility of other sites closer to the train station and downtown core. The greatest challenge with this particular development is providing sufficient parking for tenants and guests. The Planning & Zoning Commission and City Council recently approved another development on Webster & Clay with parking sufficient for 1.2 spaces per unit. These reduced parking requirements were recommended in the Downtown Projects Guidebook for certain sites and it is common for municipalities to have reduced parking requirements for Transit Oriented Developments with accessibility to public transportation. This calculation would require 34 spaces on the property, of which 24 are onsite and 13 are on Washington Avenue. Staff has been informed the 13 spots on Washington Avenue were previously dedicated to Scornavacco’s, the former business located on site. Additionally, Staff would recommend modifying the parking restrictions on the East side of Green Bay Road adjacent to the railroad tracks. Along Lakeview Avenue and Clay Avenue, near development of a similar scale, the City allows for overnight permitted parking at a rate of $90 per quarter. This project is not anticipated to generate the need for these additional spots but this would offer an additional alternative for tenants of this building or other nearby residents while filling underutilized spaces. 1 08 02 2016 CC Packet Page 49 of 198 Public Comments Received: No written comments have been received regarding this petition. If the Planning & Zoning Commission considers recommending the granting of a variance the following minimum conditions would be recommended: Conditions: 1. Engineering plans must be reviewed and approved by the City’s engineer to appropriately address any stormwater concerns on the property. 2. This project must be reviewed by the Appearance Review Committee to ensure compliance with the Appearance Review Code. 3. That the Petitioner shall comply with such other or appropriate requirements imposed by the City for the proposed improvements including but not limited to recommendations of the Appearance Review Committee, City Engineer, City Planner, City Building Consultant and/or City Staff for the construction and maintenance of the proposed improvements on the premises. 4. That the Petitioner pays all costs incurred by the City of Highwood for the zoning proceedings and any costs incurred by the City of Highwood related to the processing, review and enforcement of this proposal. Submitted by Scott Coren, City Manager 2 08 02 2016 CC Packet Page 50 of 198 Planning Department PETITION FOR PLANNED UNIT DEVELOPMENT 17 Highwood Avenue, Highwood, IL 60040 (Phone) 847.432.1924 (Fax) 847.432.0735 City of Highwood SECTION I: DEVELOPMENT INFORMATION 1. INDEX INFORMATION: (To be completed by City Staff) Application Number: ______Title: ______Date of Submission: ______ 2. BACKGROUND INFORMATION: (All correspondence will be sent to the petitioner) a. Petitioner: _Highwood Property Investors LLC / FIDES Capital Partners LLC_ Address: _225 E. Deerpath Road, Suite 134 City: Lake Forest State: _IL Zip: 60045 Telephone: 847-274-3544 _ Fax Number: ______Email Address: [email protected]______ b. Relationship of Petitioner to Property: Future owner & developer of 542-546 Greenbay Road (parcel under contract) c. Current Owner of Property: FCBT Holdings, LLC, Series 546 Green Bay __ Address: Wintrust Financial Corporation 9700 West Higgins Road, Suite 650 City: _Rosemont State: IL Zip: 60018__ _ Telephone: ___Chris Swieca 847-939-9083______Fax Number: ______ 08 02 2016 CC Packet Page 51 of 198 3. APPROVALS REQUESTED _ Site Plan Approval _ Rezoning (1) Parcel A: ____ acres from ____ to ______(2) Parcel B: __ __acres from ______to______Special Use _____Variation(s) _ X Other: ___PUD______ 4. SUMMARY OF REQUESTED ACTIONS: ______Height variation and inclusion of 13 public street parking spaces as part of the parking space per unit requirement. ______ 5. PROJECT STAFF: Developer: _Gregg Handrich (FIDES) Phone: _847-274-3544_ Engineer: ___Pat Bleck______Phone: ______Architect: ___Bob Bleck___ Phone: _847-247-0303_ Landscape Architect: ______Phone: ______ 6. DESCRITION OF SITE: a. Location (address): 542-546 Greenbay Road, Highwood, IL 60018_ b. Comprehensive Plan Designation: ______c. Existing Zoning: ______B-1____ _ d. Existing Land Use: Vacant Land e. Existing Structures: None ______f. Significant natural amenities (slope, vegetation, water bodies, rock outcropping, etc.) None _ g. Flood plains and other development restrictions: None _ _ 08 02 2016 CC Packet Page 52 of 198 7. CHARACTER OF SURROUNDING AREA: Zoning/Jurisdiction Land Use North R-3 Residential South B-1 Residential East B-2 Commercial West R-3 Residential 8. PUD INFORMATION: Land Use breakdown: Parking/Landscaped Residential Commercial Industrial Institutional Other Total Area No. of .17 .28 .45 acres Percentage 38% 62% 100% of total Residential Density: Number of Type of Unit Net Acres Net Density Gross Acres Gross Density Units Single-family Townhome Condominium Apartments 28 .45 62.2 .45 62.2 Total 28 .45 62.2 .45 62.2 Net acres = land development for that land use type not including right-of-way Net density = number of units/net acres Gross acres = land designated for that land use type including right-of-way Gross density = number of units/gross acres 9. VARIATIONS: List and justify any requested variation(s) from the (a) Zoning Ordinance and (b) Subdivision Control Ordinance (attach additional pages if necessary): ______ 08 02 2016 CC Packet Page 53 of 198 10. LIST OF REQUIRED EXHIBITS FOR CITY DEPARTMENTAL REVIEW A. Plat of Survey ____ B. Location Map ____ C. Existing Conditions Exhibit ____ ! Existing topography ! Significant environmental features (wetlands, floodplain, streams/creeks, lakes/ponds, drainage ways, trees and vegetation) ! Existing structures ! Location of existing public and private utilities (overhead or underground) D. Site Plan, including data table listing the following: ____ ! Site Area ! Building Area ! Open Space ! Parking (# of spaces, including accessible spaces) ! Units of Proposed Uses (e.g., # of residential units; # of sq ft of retail or office) E. Engineering Plans ____ ! Grading Plan ! Erosion and Sediment Control Plan (can be combined with Grading Plan) ! Stormwater Drainage and Detention Plan ! Utilities Plan ! Wetland Protection Plan, if applicable ! Floodplain Development and Protection Plan, if applicable F. Architectural Plans ____ ! Building Elevations ! Floor Plans ! Color 3D Architectural Renderings (street level views) ! Materials list and samples G. Landscape Plan ____ H. Lighting Plan ____ I. Traffic Impact Study ____ J. Market Study ____ K. Fiscal Impact Analysis (impacts on City, schools, taxes, and other taxing districts) ____ L. Schedule (Phasing Plan) ____ M. Covenants, if applicable ____ N. Findings of Fact for PUD and Zoning Variations ____ O. All of the above files shall be provided in 2 full-sized hard copy sets and in PDF format on a CD or flash drive ____ 08 02 2016 CC Packet Page 54 of 198 In consideration of the information contained in this petition as well as all supporting documentation, it is requested that approval be given to this site plan Petitioner: Highwood Property Investors LLC / FIDES Capital Partners LLC ______. _ (Print or type name) _ (Petitioner’s Signature) Date: ______4/21/16______ Current Owner of Property: ______(Print or type name) ______(Property Owner’s Signature) Date: ______ 08 02 2016 CC Packet Page 55 of 198 546 N Green Bay Rd LUXURY APARTMENT HOMES 08 02 2016 CC Packet Page 56 of 198 Street View 08 02 2016 CC Packet Page 57 of 198 Current Site Conditions 08 02 2016 CC Packet Page 58 of 198 Survey 08 02 2016 CC Packet Page 59 of 198 Site Plan 08 02 2016 CC Packet Page 60 of 198 Floor Plan 08 02 2016 CC Packet Page 61 of 198 Green Bay Elevation 08 02 2016 CC Packet Page 62 of 198 Elevations 08 02 2016 CC Packet Page 63 of 198 View from Washington 08 02 2016 CC Packet Page 64 of 198 Entry Detail 08 02 2016 CC Packet Page 65 of 198 Elevated view from Green Bay & Washington 08 02 2016 CC Packet Page 66 of 198 Bird’s Eye View 08 02 2016 CC Packet Page 67 of 198 May 10, 2016 CODAMETRICS Scott Coren City Manager Highwood, Illinois delivery: [email protected] RE: Project Review - 546 Green Bay Road Dear Scott, Attached please find a project review for the above named project, reviewed first based upon the existing code, then reviewed based upon the current draft regulations for the downtown district. In terms of meeting the EXISTING CODE regulations, the two main concerns for the project are as follows: 1. Parking Design. The main concern of the development is the side yard parking lot, which is not permitted per the existing parking regulations. The surface lot occupies about a third of the Washington frontage, adjacent to the single family home to the west, and extends into the front yard adjacent to the sidewalk. There is no location for screening and cars would be visible from all vantage points down Washington, east and west. Further, the development does not include any structured parking, per the existing code. 2. Quality of the Project. While not specifically stated in the code, the PUD standards allude to a higher quality of design. In my opinion, the materials, floor-to-floor heights, the at-grade, first story (while not required in the proposed code), and the lack of recessed windows will result in a building that feels lower in quality. In terms of meeting the PROPOSED CODE, the main items for discussion include the following: 1. Parking Lot on Primary Frontage. Similar to the existing code review, the parking lot in the side yard is the biggest issue. The lot should be located in the rear, screened from the street by the building. 2. Transparency. The other shortcoming is the level of transparency (windows) on the two end facades. The facade on the parking lot is highly visible from the street, being setback from the side lot line 66 feet. 3. Facade Material. Additional information is needed (wood, vinyl, hardieboard?), but siding is not currently included in the major facade materials. If vinyl, the material is prohibited in the draft. 4. Recessed Window. Recessing windows a minimum of 2 inches from the facade is one of the best ways to achieve a higher quality facade. The recess adds a layer of depth www.codametrics.com 08 02 2016 CC Packet Page 68 of 198 and three-dimensions to the facade, even when the facade of a lower quality material. Thank you for the opportunity to review the projects. I look forward to our discussions. Leslie Oberholtzer, AICP, RLA, LEED AP Principal www.codametrics.com 08 02 2016 CC Packet Page 69 of 198 PROJECT REVIEW: 546 GREEN BAY ROAD oad R EXISTING CODE REVIEW is required. R-3 requires a minimum 20' rear yard. The project includes a 17' front setback, 66' side Business (B-1) District & PUD Zoning setback, and 5' rear setback. The site is currently designated for B-1 zoning and the applicant is requesting a Planned Unit The PUD standards also state that buildings over Development designation. 24 feet in height are required to set the building back from any property line equal to the height Uses: The residential uses permitted are of the building. This project does not meet those consistent with the B-1 zoning in the upper floors; requirements. [Note: These requirements are however, B-1 specifically prohibits residential uses inappropriate for a mixed use downtown and on the ground floor on this section of Green Bay more in line with a larger scale development of Road. multiple buildings on several acres.] Lot Area: The minimum lot area for multifamily Consistency with Comprehensive Plan: uses in B-1 is 10,000 sf. For PUD zoning, the eview: 546 Green Bay Currently, the comprehensive plan map designates R minimum required area is double that, 20,000 this parcel as Mixed Use/Downtown Core. Further, sf (11-10-2). The lot is less than 20,000 sf per the the comprehensive plan states that new higher submittal information. density development can "complement the built form, scale, and character of existing commercial, Building Height: The maximum height of a B-1 building is 35 feet and no more than 3 stories. The while respecting the surrounding residnetial Project height of the proposed development is 4 stories, neighborhoods." not consistent with the base district. Though not This development is more consistent with the specifically stated, the PUD may be utilized for comprehensive plan language than the existing increased height, in the form of density. code requirements. The surface parking lot in the side yard and extending into the front yard is not Lot Coverage & Density: The density of the development is approximately 62 units/acre (28 consistent with the language of the comprehensive units on .45 acres). There is no base density for plan, which promotes well-designed, higher the B-1 district, but a limit is placed on multiple- density, pedestrian-oriented development. family uses. The limit requires the development Compatibility with Surrounding Sites: The not to exceed a floor area ratio of 100% of the lot uses of this development are consistent with the area (this project is close to 150%), lot coverage of surrounding sites (residential). 33.3 % (this project is 38% per the submittal), and impervious surface of 60% (this project is 62% per Need: No need has been stated in the application; the submittal). however, the project would provide a significant number of residential units in close proximity Setbacks: The PUD standards say the yards shall to both the train station and the heart of the be at least equal in width or depth to that of downtown. the adjacent zoning district. The zoning districts adjacent to the parcel are B-1 and R-3. B-1 has Purpose & Intent of the Planned Unit no setback requirements; for hotels, motels, and Development: This development provides multiple-family uses (and R-3 districts), however, a development type that fulfills a key a front setback of 30 feet and a side setback of 5' recommendation of the comprehensive plan Project Review City of Highwood 3 08 02 2016 CC Packet Page 70 of 198 for the downtown: higher density development PROPOSED CODE REVIEW utlizing existing infrastructure. This review follows the current draft requirements Parking of the downtown districts, dated April 28, 2016. The off-street parking required for the number At the time of this project review, the working of units and the commercial space would be 70 committee for the code has just begun review of spaces, while the proposal includes a total of 24 the code. Staff has reviewed a preliminary version. on-site spaces plus 13 adjacent head-in, on-street spaces for a total of 37 spaces. The provision of fewer spaces is consistent with transit-oriented REGULATING PLAN development recommendation of 1.2 spaces per District residential unit previously approved by the City. The regulating plan currently denotes the 542-546 However, the code also requires that half of all Green Bay series of lots as RX 1: Residential Mix, multifamily parking spaces must be provided the highest intensity multi-unit residential district. under or within the principal building. And, further, Uses: The district would allow a 4 story building that no parking shall be permitted in any required with only residential uses. front or side yard setback. This proposal conflicts with all of these requirements: the surface lot is Primary Street located in the side yard and extends into the front The regulating plan designates Green Bay Road yard beyond the building face. as a primary street for this lot, though it also contemplates whether Washington should be Appearance Review considered primary. Because the entrance door Parkways and Public Ways: The application into the building appears to be on the Washington does not include information related to installation facade, this review assumes Washington as the of street trees as required in 10-3-7-5. primary frontage. Primary frontage designation Trash Enclosures: Trash dumpsters are located requires certain build-to requirements for the would also likely be located in the side yard building types and limits parking frontage and parking, visible from the street. Fencing and drive access. screening would help, but the opening would likely face the street. Additionally, a trash enclosure in the parking area would be adjacent to the single BUILDING TYPE family home next door. The permitted building types for RX 1 are the General Building, the Row Building, and the Civic Building. The height and use distribution is most similar to the General Building; therefore, this review will use the General building type requirements. Building Siting Following the requirements of the building type regulation tables in the draft document, this building is generally sited with some exceptions. Minimum Primary Frontage Coverage: Estimating the lot length along Washington as 166', deducting the required side yard of 25' (see www.codametrics.com 4 Project Review City of Highwood 08 02 2016 CC Packet Page 71 of 198 below) and the non-primary minimum frontage Building Height of 12 feet, a 102 foot building (estimated) would The building appears to meet the requirements of provide a 77 percent coverage, short of the building height, currently set to be a minimum of oad required 80 percent. 2 stories and a maximum of 5.5 stories (6 stories R is also being considered). Build-to Zone: The build-to zone of the building type is set to be between 12 and 25 feet for the Floor to floor heights for the upper residential primary frontage and 12 and 25' for the non- stories appear to be about 9.5 feet, within the primary frontage. This building would meet the range of the current draft (9' to 14'), though on requirements of the primary street frontage the lower end. (Washington) as it is proposed to be built between 17 and 24 feet, but would not meet the non- Use within the Building primary build-to zone, being proposed between 5 The proposed building appears to meet the and 12 feet from the lot line. Additional sidewalk requirements of this section: residential uses with area would also likely be required along Green Bay no parking within the building. All facades have to accommodate a 10 foot streetscape, increasing occupied spaces located adjacent to them. the build-to area a couple of feet. Facade & Cap Requirements The building appears to generally meet the facade eview: 546 Green Bay Side & Rear Setbacks: Side setbacks for the general building are defined as 10', with a requirements with a few exceptions. R minimum of 25' adjacent to a single family house. Entrance: The current draft requires an entrance Rear is set at 10, with 5' at an alley and a minimum for every 90 feet of primary frontage facade. of 30' abutting a single family house. In this case, Assuming Washington is the primary frontage, the single family house to the west would trigger at least 2 entrances would be required. The a 25' side yard setback and the rear yard setback configuration and elevation would meet the Project would be 10' except 5' adjacent to the alley. Also requirements. note that the parking lot would not be permitted within the 25 foot side yard setback. [working Minimum Transparency: A minimum of 15% group to consider reducing it to 15 feet]. tranparency is required for all street facade stories as well as facades "visible from the street". Site Coverage: The total coverage permitted with The Green Bay Road (east) elevation has less than the current draft code is 85% of the lot, though 5 percent coverage and the west elevation facing 25% of that coverage would be required to be the parking lot (considered visible from the street) semi-pervious. The approximate combination of has only 3 percent transparency. The Washington building and parking lot on this lot appears to be elevation appears to just meet the minimum around 88% coverage, so some portion of the transparency at 16 percent per story. parking lot would need to be semi-pervious or a portion of the roof green. Blank Wall Limitations: Further, the east and west elevations would not likely meet the blank Parking: Parking for this building type is required wall limitations. Blank wall limitations limit blank to be located fully in the rear yard only. Parking for walls without windows to any overlaid rectangle of this building is partially located in a side yard lot. no more than 30% of the story and no 15’ length The dumpster would also likely be located within of the story without windows. In the draft, this is this lot, visible from the street. Trash is required to explained in 11-6-14.D.2. be located in the rear yard. Expression Lines: The facade design would meet the requirements for horizontal expression line at the ground story on Green Bay, but does not Project Review City of Highwood 5 08 02 2016 CC Packet Page 72 of 198 include it on the Washington facade. The recessed be vertically oriented, operable, and clear, though bays would fulfill the vertical division requirement. additional information is required in terms of glass specifications and operability. The depth of the Cap Type: The cap type requirements do not window detail is not apparent, though is suspected appear to be met for this building. The building to be very shallow, especially on the facades where type permits a parapet, pitched or flat roof. The siding is specified. Window depth from facade design illustrated appears to use a parapet, but to glass is required to be 2 inches in the current does not meet the expression line requirements draft. associated with this roof type and does not appear to meet the minimum height for a parapet. Lintels: Lintels are not expressed on any of the windows,. A consistent complaint during image preference survey discussions is that contemporary buildings Balconies: There are no balconies currently are not capped, the facade material just ends. shown. [The working group may consider requiring Survey participants state that the buildings look balconies for some portion of the units.] boxy and unfinished. The cap types defined are intended to finish off the building, providing Principal Entryway: The principal entry is either a pitched roof, a parapet defined with defined by a separate material (tile) and separate expression and shadow lines, and a visibly flat building bay with a taller component. This design roof with a substantial overhanging eave. utilized two of the outlined design options. OTHER DESIGN ELEMENTS MATERIALS & COLOR None of the other design requirements are applicable: rear parking facade treatment, parking Major Materials: The building uses brick and structure, fuel stations, and drive-throughs. two sides of "siding". As currently written, no type of siding is permitted on the general building as a LANDSCAPE REQUIREMENTS major material and vinyl siding is prohibited. More The side yard parking lot, though not permitted, information would be required. would also require a frontage buffer and interior parking lot landscape. Simplicity of Major Materials: The draft code also currently requires one major material to be STREETSCAPE REQUIREMENTS used for 60 percent of the facade. This is meant to reduce the complexity of facade designs seen in The general building would qualify as a non- many contemporary buildings. This building may storefront development, with the minimum 12 not meet this requirement, with the proportions front landscape area planted with planting beds. of brick to siding shown. Additionally, non-storefront developments are required to install a landscape parkway and street Minor Materials. The tile called for on the trees. The on-street parking spaces that currently entrance bay is not currently listed as a major exist should be incorporated into the streetscape or minor material, but could be considered as design, though the code does not outline an "other" material for special use approval as requirements as such. currently written.. OFF-STREET PARKING REQUIREMENTS BUILDING FACADE ELEMENTS With 28 units, the minimum number of spaces required by the draft code would be 34 Windows: The windows on all facades appear to spaces, utilizing the previously approved TOD www.codametrics.com 6 Project Review City of Highwood 08 02 2016 CC Packet Page 73 of 198 recommendation of 1.2 spaces per unit. The total number of spaces could be reduced further due to proximity to the station (15% -- site is just oad barely within 1/4 mile), on-street spaces, and R potential provision of long-term bicycle parking and/or motorcycle/scooter parking. 34 spaces required - 5 spaces for transit credit - 22 potential on-street spaces on Washington and Green Bay (though 2 hour limit on Green Bay spaces) - 3 spaces for potential motorcycle/scooter parking - 4 spaces if a long-term bicycle space is provided for each unit The applicant would likely not choose to utilize all of these credits, but very few spaces would be eview: 546 Green Bay required on site. R Project Project Review City of Highwood 7 08 02 2016 CC Packet Page 74 of 198 08 02 2016 CC Packet Page 75 of 198 PLANNING AND ZONING COMMISSION CITY OF HIGHWOOD In Re: 546 Green Bay Road ) PUD Application ) ) Highwood Property Investors LLC ) FIDES Capital Partners LLC ) Petitioners ) REPORT AND RECOMMENDATION Petitioners seek approval of a preliminary plat, and special use for a planned unit development pursuant to Title 11, Chapter 10 of the Highwood Zoning Ordinance, for the development of the property located at 546 Green Bay Road (the “Property”) into mulit-family residential building containing 28 total residential units (16 two bedroom units and 12 one bedroom units). The site plan demonstrates 24 onsite parking spaces, and utilizes an additional 13 existing on-street spaces along Washington Avenue adjacent to the development for a total of 37 parking spaces. The Planning and Zoning Commission held public hearings on June 8, 2016 and July 20, 2016. All required notices were given and the Planning and Zoning Commission heard testimony from the Petitioner, its architect, City Staff, City consultants, and the public. The Planning and Zoning Commission reviewed all exhibits which include the application, staff reports prepared by the City Manager and the City’s consultant Codametrics, site plans and surveys, and a market feasibility analysis all of which are incorporated herein by reference. The Planning and Zoning Commission considered the following requests from Petitioner, incorporated into their application and preliminary plat for the planned unit development: 1) Approval of Preliminary PUD Site plan and Preliminary Elevations and Plans for a 28 Unit residential apartment building, including on-site parking for 24 vehicles and 13 additional on- street spaces along Washington Avenue adjacent to the development for a total of 37 parking spaces. The Planning and Zoning Commission heard testimony on these matters from the Petitioner and its architect, City staff and its consultants, and considered input from members of the public that testified at the public hearing. Based upon the evidence presented at the public hearing, the Planning and Zoning Commission finds that the standards for a PUD under Sections 11-10-13 and 11-10-14 of the City’s Zoning Ordinance have been met. Specifically, the Planning and Zoning Commission finds as follows: A. The petitioner’s proposed development is consistent with the stated purpose of the PUD regulations, per Section 11‐10‐1 of the Zoning Regulations, particularly as a creating approach to the use of the Property and related physical facilities that results in better development and design and the construction of aesthetic amenities. 368061_1 08 02 2016 CC Packet Page 76 of 198 B. The petitioner’s proposed development meets the requirements and standards of the PUD regulations. Although the proposed plan seeks several variances from the zoning regulations, such variances are minimal in impact and necessary to accommodate the development and improve the property, both of which are beneficial to the public interest. C. The physical design of the petitioner’s proposed development makes adequate provision for public services, provides adequate control over vehicular traffic, provides for and protects designated common open space, and furthers the amenities of light and air, recreation, and visual enjoyment. D. The proposed development is compatible with the adjacent properties and neighborhood and the City’s Downtown Projects Guidebook. In particular, the proposed housing units diversify the housing stock in and around the downtown area. E. The proposed development will enhance the physical composition of the community by providing an creative development on currently vacant property, which will reactivate this property in the Green Bay Road District. In addition, the development will enhance the City’s property tax base. In turn, a stronger tax base will enrich the economic well‐being of the community. F. The development proposed for the Property conforms to the intent and spirit of the Comprehensive Plan and the Downtown Projects Guidebook, particularly diversifying the City’s housing stock, providing for appropriate density in Downtown Highwood, and reinvigorating a vacant site in the Green Bay Road District. The Planning and Zoning Commission recommends by a 6-1 vote that the preliminary planned unit development plat and site plan be approved, and that a special use for a planned unit development be approved for the Property, subject to the following conditions: CONDITIONS 1. That all engineering pans must be reviewed and approved by the City’s engineer to appropriately address any stormwater concerns on the Property. 2. That the project must be reviewed by the Appearance Review Committee to ensure compliance with the Appearance Review Code. 3. That the Petitioner shall comply with such other or appropriate requirements imposed by the City for the proposed improvements including but not limited to recommendations of the Appearance Review Committee, City Engineer, City Planner, City Building Consultant, and/or City Staff for the construction and maintenance of the proposed improvements on the Property. 4. That the Petitioner shall pay all costs incurred by the City of Highwood for the zoning proceedings and any costs incurred by the City of Highwood related to the processing, review and enforcement of Petitioner’s application. 5. That all lighting in the parking lot be directed East rather than West. 368061_1 08 02 2016 CC Packet Page 77 of 198 6. That the Petitioner install a garbage enclosure as approved by the Appearance review Committee. 7. That a safety review be performed by the City Engineer for the two eastern most parking spots on Washington Avenue, with the cost of such review to be borne by the Petitioner. DOCUMENTS INCORPORATED BY REFERENCE 1. PUD Application 2. Staff Report 3. Codametrics Report 4. Site Plans, Plats and Drawings 5. Market Feasibility Analysis Respectfully Submitted PLANNING AND ZONING COMMISSION CITY OF HIGHWOOD By:______ Chairman July______, 2016 368061_1 08 02 2016 CC Packet Page 78 of 198 CITY OF HIGHWOOD ORDINANCE ______ AN ORDINANCE GRANTING A SPECIAL USE PERMIT FOR A PLANNED UNIT DEVELOPMENT AND APPROVING A PRELIMINARY PLAT FOR PLANNED UNIT DEVELOPMENT AT 546 GREEN BAY ROAD ADOPTED BY THE CITY COUNCIL OF THE CITY OF HIGHWOOD, LAKE COUNTY, ILLINOIS ON THE ___ DAY OF______, 2016 Published in pamphlet form by authority of the City Council of the City of Highwood, Lake County, Illinois on this ______day of , 2016 City-wide Aldermen Mayor: Charlie Pecaro Matt Feddermann City Clerk: Vacant Chris Grice City Manager: Scott Coren Mike Fiore Andy Peterson City Attorney: James V. Ferolo M. Brad Slavin Klein, Thorpe, Jenkins, Ltd Eric Falberg 368062_1 08 02 2016 CC Packet Page 79 of 198 ORDINANCE NO. ______ AN ORDINANCE GRANTING A SPECIAL USE PERMIT FOR A PLANNED UNIT DEVELOPMENT AND APPROVING A PRELIMINARY PLAT FOR PLANNED UNIT DEVELOPMENT AT 546 GREEN BAY ROAD WHEREAS, the Planning and Zoning Commission of the City of Highwood has held a public hearing, duly noticed, to consider a request for a Planned Unit Development pursuant to Title 11, Chapter 10 of the Highwood City Code, regarding a proposed multi-use development at 546 Green Bay Road (the “Subject Property”), and WHEREAS, the Planning and Zoning Commission has submitted its Report and Recommendation to the City Council with a 6-1 vote in favor of approving the preliminary planned unit development plat and a special use for planned unit development, with certain conditions; and WHEREAS, the City Council of the City of Highwood has determined that the special use should be granted and the preliminary plat approved, subject to the conditions, as stated herein. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HIGHWOOD, Lake County, Illinois: SECTION ONE: The Highwood City Council, after considering the Report and Recommendation of the Planning and Zoning Commission, which is incorporated herein by reference, and the matters properly before it, hereby finds with regard to the requested approval of the PUD: • The proposed development is consistent with the purpose of the PUD regulations; • The proposed development meets the standards of the PUD regulations; • The proposed development does not significantly vary from the zoning regulations otherwise applicable to the Subject Property; • The proposed development is designed in a manner to make adequate provision for public services and control over vehicular traffic; • The proposed development is compatible with adjacent properties; • The proposed development is desirable to the tax base and economic well being of the community; and • The proposed development conforms to the intent and spirit of the comprehensive plan. SECTION TWO: Based on the aforementioned findings and the favorable recommendation of the Planning and Zoning Commission, the Highwood City Council hereby approves the preliminary planned unit development plat and grants a special use permit for a Planned Unit Development for the Subject Property, subject to the conditions set forth in Section Three. 368062_1 08 02 2016 CC Packet Page 80 of 198 SECTION THREE: That the approval of the preliminary planned unit development plat and special use permit for planned unit development is subject to the following conditions: 1. That all engineering pans must be reviewed and approved by the City’s engineer to appropriately address any stormwater concerns on the Property. 2. That the project must be reviewed by the Appearance Review Committee to ensure compliance with the Appearance Review Code. 3. That the Petitioner shall comply with such other or appropriate requirements imposed by the City for the proposed improvements including but not limited to recommendations of the Appearance Review Committee, City Engineer, City Planner, City Building Consultant, and/or City Staff for the construction and maintenance of the proposed improvements on the Property. 4. That the Petitioner shall pay all costs incurred by the City of Highwood for the zoning proceedings and any costs incurred by the City of Highwood related to the processing, review and enforcement of Petitioner’s application. 5. That all lighting in the parking lot be directed East rather than West. 6. That the Petitioner install a garbage enclosure as approved by the Appearance review Committee. 7. That a safety review be performed by the City Engineer for the two eastern most parking spots on Washington Avenue, with the cost of such review to be borne by the Petitioner. SECTION FOUR: Except as provided for in the approved preliminary planned unit development plat and special use permit, Petitioner shall comply with all other applicable provisions of the City of Highwood Zoning Code. SECTION FIVE: This Ordinance shall be applied in full force and effect from and after its passage, approval, and publication in the manner provided by law. ADOPTED this ___day of______, 2016, pursuant to a roll call vote as follows: Andy Peterson _____ Chris Grice _____ Eric Falberg _____ Matt Fedderman _____ Mike Fiore _____ M. Brad Slavin _____ AYES:______ NAYS:______ ABSENT:______ 368062_1 08 02 2016 CC Packet Page 81 of 198 APPROVED by the City Council of the City of Highwood this ___ day of______, 2016. ______Mayor Charles Pecaro ATTEST: ______Deputy City Clerk ACKNOWLEDGMENT I, the undersigned, being the Petitioner for the Planned Unit Development on the Subject Property, do hereby acknowledge the reasonableness of the terms and conditions set forth in this Ordinance and hereby accept the said terms and conditions and hereby agree to fully comply with each and everyone one of said terms and conditions. Dated this ______day of ______, 2016. By: ______Petitioner Print Name:______ Title:______ 368062_1 08 02 2016 CC Packet Page 82 of 198 STATE OF ILLINOIS ) )SS. COUNTY OF LAKE ) CLERK’S CERTIFICATE I, the undersigned, the duly qualified Clerk of the City of Highwood, Lake County, Illinois, and the keeper of the records thereof, do hereby certify that attached hereto is a true and correct copy of an Ordinance entitled: AN ORDINANCE GRANTING A SPECIAL USE PERMIT FOR A PLANNED UNIT DEVELOPMENT AND APPROVING OF A PRELIMINARY PLAT FOR PLANNED UNIT DEVELOPMENT AT 546 GREEN BAY ROAD ORDINANCE NO. ______ adopted at a meeting of the said City of Highwood at which a quorum was present held pursuant to the provisions of the Illinois Open Meeting Act on the _____ day of______, 2016. IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of , 2016. ______(seal) Deputy Clerk- City of Highwood 368062_1 08 02 2016 CC Packet Page 83 of 198 53 W. Jackson Boulevard Suite 1326 Chicago, Illinois 60604 www.reci.biz MARKET FEASIBILITY ANALYSIS: PROPOSED 28-UNIT APARTMENT DEVELOPMENT on a 0.46 Acre Parcel at the Southwest Quadrant of Washington Avenue and Green Bay Road, Highwood, IL 60040 Prepared for: Mr. Gregg Handrich Principal Fides Capital Partners, LLC 225 E. Deerpath Road Suite 134 Lake Forest, IL 60045 April 29, 2016 08 02 2016 CC Packet Page 84 of 198 53 W. Jackson Boulevard Suite 1326 Chicago, Illinois 60604 www.reci.biz Mr. Gregg Handrich April 29, 2016 Principal Fides Capital Partners, LLC 225 E. Deerpath Road Suite 134 Lake Forest, IL 60045 Re: Market Feasibility Analysis of a Proposed 28-unit Apartment Development on a 0.45 Acre parcel at the Southwest Quadrant of Washington Avenue and Green Bay Road, Highwood, IL 60040 Dear Mr. Handrich: At your request, we prepared a market feasibility analysis regarding the feasibility of a proposed 28 unit apartment development to be constructed adjacent to downtown Highwood, located at the southwest quadrant of Washington Avenue and Green Bay Road, Highwood, Illinois. In summary, first, we observed the subject property site, neighborhood and urban environs. Second, we performed an analysis of the economy of Chicago Metropolitan Statistical Area economy and Lake County/Kenosha County Metropolitan Division, Illinois/Wisconsin economy. Third, we researched national apartment demand/supply trends, particularly recent changes in renter demand in the United States. Fourth, we prepared an analysis of the demand/supply dynamics of the southeast Lake County apartment submarket. Fifth, we performed a detailed survey of Class A and Class B/C apartment communities located in southeast Lake County, Illinois and other nearby submarkets; and a survey of rental condominium units in nearby Highland Park, Illinois and other North Shore communities. Sixth, we reviewed the unit mix and unit sizes of recently developed apartments as well as properties currently under construction. Seventh, we forecast absorption, established rental rates for each of the subject property’s units for the Primary Market Area and quantified demand through a capture rate analysis of rental units in the Primary and Secondary Market Area, as a whole. Our conclusions are based on the presented facts and rationale, and are subject to the limiting conditions and assumptions contained in this report. Our conclusions and recommendations appear in Section VIII of this report. Respectfully submitted, Real Estate Counselors International, Inc. Thomas J. Amato, CRE Mary Claire Sparrow RECI 1 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 85 of 198 TABLE OF CONTENTS Preface Letter of Transmittal Table of Contents Executive Summary Section I THE ASSIGNMENT 1 Scope of Work 1 Objective 2 Client 2 Intended Use 2 Intended Users 2 Property Identification 2 Limiting Conditions and Assumptions 3 Hypothetical Conditions and Extraordinary Assumptions 3 Professional Competency 3 Section II THE GEOGRAPHIC ENVIRONMENT 4 Location 4 The Highwood Community 4 Roadways and Access 6 Highwood Community Amenities 7 Downtown Highwood /Surrounding Land Uses 11 Section III THE PROPERTY 19 Site Redevelopment 19 TIF District And Subject Site Redevelopment 21 Section IV THE MARKET ENVIRONMENT 23 Regional Overview 23 United States Economy 23 Chicago MSA Economy 24 Lake County Economy/Employment Trends 30 Section V DRIVERS OF APARTMENT DEMAND 37 Introduction 37 The Rentership Rate Increase 37 The Nation’s Apartment Market 41 Renters by Age Group 43 Lake County, IL Population and Employment 44 Lake County, IL Migration and Commuting Patterns 45 Major Employment Centers in Lake County, IL 46 Section VI MARKET AREA DEMAND/SUPPLY 52 Overview of Metro Chicago Apartment Market 52 Apartment Market Area Definition 53 Lake County and Market Area Apartment Deliveries 56 Section VII MARKET AREA APARTMENT DEMAND 60 Market Area Demographics 60 Market Area Housing 61 Primary/Secondary Market Area Renter Demand 63 Geodemographic Analysis of Market Area Households 66 Competitive Alignment and Rental Survey 68 Primary Market Area Demand Outlook/Absorption 74 Unit Mix and Rental Rates 77 Section VIII FINDINGS/CONCLUSIONS 82 Findings/Conclusions Summary 82 RECI 2 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 86 of 198 ADDENDA Subject Property/Neighborhood Photos Potential Renter Household Targets Competitive Survey Limiting Conditions and Assumptions Certification Qualifications RECI 3 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 87 of 198 EXECUTIVE SUMMARY Assignment As determined by the consultant, with input from the client, the assignment was to prepare a market feasibility analysis for a 28 unit apartment development located on a site in downtown Highwood, Illinois. Property Location The subject development is planned for a 0.45 acre parcel located at the southwest quadrant of Washington Avenue and Green Bay Road in Highwood, Illinois. The property is presently vacant after a fire in 2009 destroyed the Victoria of Highwood banquet hall in 2009. According to the developer, the recognized address for the property is 544-546 Green Bay Road, Highwood, Illinois 60040 and is located in the Lake County/Kenosha County Metropolitan Division. Summary of Findings Even before the U.S. economy fell into recession a watershed change was emerging with respect to demand for rental housing in the United States. The nation's homeownership rate actually began declining in 2005. The conditions brought about by the Great Recession and post-recession period prompted a renewed appreciation for the benefits of renting. Nationally, households of all but the oldest age groups have joined in the shift toward renting. Chicago MSA employment is projected to continue to exhibit gains throughout the forecast period, though growth is forecast to lag somewhat behind the national average. Meanwhile, Lake County job growth has been fueling the demand for renter housing for some time. Over the last four decades, Lake County was transformed into a major employment center of the region, with most of the development occurring in the southeast portion of the county. Migration and commuting patterns are also contributing to the demand for rental housing in the county. The tightest apartment market conditions in eastern Lake County’s recent history have been exhibited in recent years. The defined Primary Market Area has a total inventory of 2,297 apartment units (and 3,939 total rental units). At the end of the 1st quarter 2016, the vacancy rate in the Primary Market Area was only 3.5%. The average monthly effective rent was $1,724 or $1.90 per square foot in the 1st quarter. For nearly the past 10 years, there were very few apartment units delivered in this market area until recently. The high apartment occupancy rates and recent strong growth in rents in the Primary and Secondary Market Areas indicate apartment demand continues to exceed supply and suggests that rental unit demand is presently not being met. This view is supported by: (1) the capture rate analysis that suggests that the subject property needs to capture only about 7% to 13% of qualified renter demand to be leased–up; and (2) a demand/supply forecast that suggests the delivery of as many as 363 apartment units (total of all apartment projects that are under construction or proposed in the Primary and Secondary Market Areas) will be able to be absorbed after an initial spike in the vacancy rate in the Primary Market Area. RECI 4 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 88 of 198 RECI forecasts that the vacancy rate will rise to between 4% and 6% as a result of the delivery of units under construction or proposed as of March 2016. If additional units are developed in the Primary Market Area through 2018, the vacancy rate could rise above 6%. Over the last four years (1st quarter 2012 to 1st quarter 2016), the average effective rent has increased by nearly 11% in the Primary Market Area, despite the delivery of two large apartment developments built just outside the Primary Market Area boundaries. Unit absorption at two of the largest properties (Woodview Apartments and Amli Deerfield Apartments), have been strong. Three potential sources of demand for apartments in downtown Highwood include: (1) renter households that work in downtown Highwood, downtown Lake Forest, Downtown Highland Park or other downtowns along the Metra line in Cook County; (2) renter households presently residing in older rented condos or apartments in the Highwood, Highland Park and Lake Forest communities that that may be more suited to newly constructed apartments; and (3) renter households residing in northern Cook County who work north of the Northbrook/Deerfield area, who presently commute by commuter train or vehicle. Using the PRIZM geodemographic database, we have identified a rather diverse mix of household types for apartments in downtown Highwood. In fact, the Primary Market Area contains a very diverse mix of household types. We have identified 10 household types or market segments that we believe contain a significant number of households that are either renters or given the opportunity, would become renters at a future stage in their lives. The household types include singles and couples, mostly without children. Potential target households may include 25-35 year olds, singles and couples in their late 30s and 40s, as well as older folks, including empty nesters. These households span a range of affluence that may include some considered to be Lower-Middle income, but mostly Midscale, Upper Middle, Upscale and some households that may be considered Wealthy. In view of the targeted demand segments, we believe that one bedroom and two-bedroom units should represent roughly 40% to 50% and 50% to 60% of total units, respectively. Based on the data that we have available to us, we have concluded a monthly absorption rate range for the subject property to be six to nine units per month. This absorption rate range implies that a 28 unit apartment project would be leased to 95% (i.e., 27 units) between three and four months. We have concluded that the target weighted average per square foot rental rate range for the 28 apartment units developed on the subject property should be in the range of $1,693 to $1,814 in today’s dollars. This equates to an average monthly rental rate of $1.88 to $2.02 per square foot. Observation Date: March 22, 2016, April 6, 2015 and April 12, 2016. Report Date: April 29, 2016 RECI 5 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 89 of 198 SECTION I - THE ASSIGNMENT SCOPE OF WORK In preparing this report, we completed the following scope of work plan: . identified the objective of the assignment; . identified assignment elements, including the client, the subject property, its relevant characteristics, the intended users and the intended use of our opinions and conclusions; . . identified the specific assignment conditions, including any special assumptions, extraordinary assumptions, hypothetical conditions, supplemental standards, jurisdictional exceptions, and any other conditions that affect the scope of work; . identified the property by addresses and described its location and neighborhood; . observed the subject property and surrounding neighborhood on March 22, 2016, April 6, 2015 and April 12, 2016; . analyzed the economy and employment base of the Lake County, IL/Kenosha County, WI Metropolitan Division and the Chicago; . identified centers of employment in Lake County using employment statistics available from the Illinois Department of Employment Security and concentrations of office, industrial and retail space; . evaluated retail, office and residential development trends in eastern Lake County, Illinois; . evaluated metro Chicago apartment market statistics, especially those associated with southeastern Lake County, Illinois, including vacancy, absorption, deliveries and change in market average rent; . delineated an apartment market area (i.e., a Primary and a Secondary Market Area); representing the geographic area that contains the apartment units and broader residential inventory that will most directly compete with the apartment units developed at the subject property; and the employment centers that will generate demand for new apartments developed at the subject property; . reviewed demographic and housing trends for the city of Highwood, Lake County and the Primary and Secondary Market Areas; . evaluated demand/supply dynamics for apartments in the Chicago MSA and the Primary and Secondary Market Areas; . surveyed 17 apartment/rental properties located in and around the Primary and Secondary Market Areas, including five Class B/C properties, eight Class A apartment communities and four Class A condo/townhome rental properties; RECI 6 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 90 of 198 . established the “market” rents for the subject property’s three unit types based on the rents, location and characteristics of the property’s surveyed; . reviewed the unit mix and unit sizes of recently developed apartments as well as properties currently under construction; . evaluated average monthly absorption rates of other urban/infill apartment properties and forecast an absorption rate for the subject property; . forecast absorption and vacancy the Primary Market Area; and . quantified rental housing unit demand through a capture rate analysis of rental units in the Primary and Secondary Market Areas. Market research of national, regional and local economic and market conditions was prepared from our analysis of public and private data sources. These sources include demographic and housing data from the U.S. Census, Neilsen, ERSI, S&P/Case-Shiller Home Price Index; employment data from the United States Bureau of Labor Statistics, Moody’s Analytics and the Illinois Department of Employment Security; apartment market statistics available from CoStar and other sources. Comparable rental information was gathered from both public and private sources and local property managers/operators. OBJECTIVE As determined by the consultant, with input from the client, the assignment was to prepare a market feasibility analysis for a 28 unit apartment development located on a site adjacent to downtown Highwood, Illinois. The subject property is planned for a 0.46 acre parcel located at the southwest quadrant of Washington Avenue and Green Bay Road in Highwood, Illinois. The recognized address for the property is 544-546 Washington Avenue, Highwood, 60040 and is located in the Lake County/Kenosha County Metropolitan Division. CLIENT Fides Capital Partners INTENDED USE This report is for use by the client and other specified users to establish rental apartment absorption and market rent parameters for the subject property as part of an evaluation of rental apartment demand. This report is not intended for any other use. The “readdressing” (transfer) of this report, or the consultant’s opinions and conclusions, to any party, other than the named client and its intended users, is prohibited. The consultant is not responsible for the unauthorized use of this report. INTENDED USERS Fides Capital Partners, LLC, the City of Highwood and prospective lender, as determined by the client. PROPERTY IDENTIFICATION The recognized address for the property is 544-546 Washington Avenue, Highwood, 60040. The Subject Property is designated for tax purposes with the following Property Identification Numbers (PIN): 15-16-207-027 and 15- 16-207-011. RECI 7 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 91 of 198 LIMITING CONDITIONS AND ASSUMPTIONS This report is subject to the general limiting conditions and the specific assumptions stated in this report. Please see the list of limiting conditions and assumptions contained in the Addenda, as they represent an integral part of the research process and conclusion. HYPOTHETICAL CONDITIONS AND EXTRAORDINARY ASSUMPTIONS A hypothetical condition is a condition, which is contrary to what exists, but is supposed for the purpose of analysis, and an extraordinary assumption is an assumption, directly related to the assignment, which, if found to be false, could alter the consultant’s opinions or conclusions. In this instance, we make three extraordinary assumptions. First, we assume that the United States economy and the Lake County, Illinois/Kenosha County, Wisconsin. Metropolitan Division continue their recovery from the Great Recession and overall economic growth mirror’s the economic forecasts as prepared by Moody’s Analytics in March 2016. Second, we assume that the unit absorption rates calculated at other similar urban/infill properties located in the Chicago market are reasonable indicators of the potential lease-up rate associated with the subject property’s 28 apartment units. Third, we assume that the number of units presently forecast for delivery in the Primary and Secondary Markets will not deviate materially for our current estimates. PROFESSIONAL COMPETENCY Our knowledge and previous experience in evaluating this property type qualifies us to competently complete this assignment. Please see the consultant’s professional qualifications in the Addenda for additional information. RECI 8 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 92 of 198 SECTION II-THE GEOGRAPHIC ENVIRONMENT LOCATION The city Highwood is located approximately 28 miles north of downtown Chicago in Lake County, Illinois. Incorporated as a city in 1868, Highwood is part of the Chicago-Naperville-Joliet, IL-IN-WI MSA. The metropolitan area contained approximately 9.6 million persons in 2015 and had an employment base of just over 4.6 million workers in the 4th quarter 2015. As shown in Figure 1, Highwood is positioned roughly in the middle of the Lake County portion of the “North Shore”, the suburban communities which extend northward along Lake Michigan from the city of Chicago. FIGURE 1: LOCATION OF CITY OF HIGHWOOD, IL Source: DeLorme Street Atlas USA THE HIGHWOOD COMMUNITY Highwood sits at a one of the highest elevation points between Chicago and Milwaukee, and was named for this high elevation and towering trees. Highwood is a small city, covering less than one square mile of land. Highwood was incorporated at the same time as the former Fort Sheridan Army Post, which was situated just east of Highwood, along the shores of Lake Michigan. Highwood’s identity as a hub for entertainment and dining pre-dates the establishment of Fort Sheridan, but its proximity to this military installation served to solidify this local function, as the presence of the USO in Highwood during World War II brought thousands of servicemen to the community. The image of the community as a focal point for entertainment and dining continues today, due to its geographical position at the center of the North Shore’s most affluent communities. While Fort Sheridan’s function as Highwood’s closest neighbor changed drastically when the main fort was officially closed in the early 1990’s, a small military presence remains, as approximately 90 acres of the southern portion of the site was retained by the military. Military functions remain through the current Sheridan Reserve Center complex, and new construction is ongoing with attractive office structures replacing antiquated, obsolete remnants of the base. RECI 9 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 93 of 198 Open lands and forest preserves took other portions of the Fort Sheridan land, while historically and architecturally significant barracks and residences were renovated, redeveloped and now serve as condominium, townhome and single-family residences owned or rented by civilians. Since the closing of Fort Sheridan Army Post, annexation agreements between the military and the neighboring cities of Highwood, Highland Park and Lake Forest increased the municipal boundaries of Highwood and Highland Park. Highland Park now almost completely surrounds Highwood, bordering the city on the north, south and west, and most portions of its eastern city limits as well. The affluent suburb of Lake Forest is situated nearby to the north, and other neighboring communities include Bannockburn, Deerfield and Northbrook. Highwood’s municipal boundaries are shown in Figure 2. FIGURE 2: CITY OF HIGHWOOD MUNICIPAL BOUNDARIES Source: Google maps In addition to its identity as an entertainment and dining hub, Highwood grew as a working class suburb, chosen by waves of first Italian and later Hispanic immigrants seeking affordable residential choices within the affluent north shore enclave. In part due to the annexation of portions of Fort Sheridan, wherein residents with higher incomes moved into the new residences created when the area was redeveloped, Highwood now displays what real estate developers and commercial enterprises consider as “strong demographics.” Highwood’s 2015 average household income, at $98,577, while lower than that of its elite suburban neighbors, is over 25% higher than the state average, and 32% higher than the national average household income. Population density is high, at 5,680 persons per square mile. As Figure 3 below shows, Highwood’s population density is well above that of its neighbors or any other north shore community. Aside from the blighted community of North Chicago, Highwood also has the highest percentage of renter-occupied units, at 60.2%. RECI 10 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 94 of 198 In addition to the older one and two- story single-family residences which dominate Highwood’s residential neighborhoods, there are also many areas developed with two-to four-unit multi-family dwellings, mostly dating to the 1960’s through 1980’s, as well as one large garden apartment property, known as Fort Sheridan Place, which is located just northeast of the subject property, along Sheridan Road. FIGURE 3: DEMOGRAPHIC TRENDS AND CRIME STATISTICS FOR NORTH SHORE COMMUNITIES 2015 2015 - 2020 2015 Percentage 2015 2013/2014 Annual Average of Renter- Population Average 2015 Population Household Occupied Per Square Crime Rate Area Population Change Income Units Mile Per 100,000 Highwood 5,680 0.59% $98,577 60.2% 5,680 918 Highland Park 29,880 0.09% $174,019 19.3% 2,490 1,174 Lake Forest 19,505 0.20% $219,068 14.7% 1,135 807 North Chicago 30,503 -0.18% $59,376 64.4% 3,861 2,194 Lake Bluff 5,746 0.04% $202,550 12.6% 1,419 833 Knollwood 1,580 -0.38% $90,796 34.7% 2,376 N/A Green Oaks 3,873 0.09% $173,361 4.9% 963 N/A Libertyville 20,446 0.21% $146,183 22.2% 2,321 1,256 Vernon Hills 25,858 0.04% $127,109 27.9% 3,354 1,999 Deerfield 18,271 0.07% $191,691 12.8% 3,274 698 Northbrook 33,431 0.21% $162,407 14.0% 2,535 1,273 Glencoe 8,746 0.09% $267,952 8.9% 2,351 953 Winnetka 12,270 0.18% $262,449 12.2% 3,220 964 Kenilworth 2,567 0.35% $306,327 7.0% 4,208 1,273 Total North Shore 428,850 0.25% $145,594 24.5% -- N/A State of Illinois 12,917,613 0.21% $78,861 34.9% 223 N/A United States 318,536,439 0.75% $74,699 37.0% 32 N/A Source: ESRI, 2015 Illinois Uniform Crime Report and Real Estate Counselors, International Note: Communities shown are part of the North Shore as defined by the MLS. Not all North Shore communities are included. Anticipated growth in population is slightly higher in Highwood than surrounding communities. Highwood’s population is projected to grow at 0.59% annually between 2015 and 2020. This projected annual growth rate is more typical of the United States as a whole, which is projected to grow 0.75% annually through 2020, than the North Shore, which is projected to grow 0.25% annually over the same time period, approximately one-half Highwood’s projection. ROADWAYS AND ACCESS Highwood is bisected by the Metra’s North Line railroad, as well as by both Sheridan Road and Green Bay Road. The presence of the Metra North Line, which provides direct access to downtown Chicago, is viewed as a significant benefit to residents seeking transit-oriented residential options. Sheridan Road and Green Bay Road are significant north-south thoroughfares throughout the North Shore, but in Highwood, they form the framework of commercial development, and define the downtown area. U.S. Route 41 is located just over a mile west of downtown Highwood, and Interstate 94 is accessible just over four miles west, via Half Day Road, which is known as Prairie Avenue throughout most of Highwood. This arterial is located in the southern portion of the city, and provides convenient access to U.S Route 41. RECI 11 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 95 of 198 Despite Highwood’s identity as an entertainment and restaurant destination, traffic and congestion are fairly limited within the area. Figure 4 below shows traffic volumes in Highwood and the surrounding communities. FIGURE 4: HIGHWOOD ACCESSIBILITY AND TRAFFIC VOLUME COUNTS Source: IDOT and Real Estate Counselors International, Inc. The lack of traffic congestion contributes to Highwood’s appeal for residential uses, and to its continued choice as a location for restaurant and entertainment venues. Parking is generally adequate, although at peak demand periods, can be lacking, and city officials are addressing this deficit as part of their on-going planning efforts. Just as importantly, the lack of congestion and high traffic volumes, but also owing to its compact built environment, allow for and encourage easy pedestrian access. Two Metra stops, one located in the center of the downtown district, enhance the pedestrian access, as well as overall access to the community for both residents and patrons of the dining and entertainment opportunities. HIGHWOOD COMMUNITY AMENITIES Analysis of the community amenities located in and around Highwood confirms the city’s standing as a resource for the North Shore for dining and entertainment options. Figure 5 below lists by category the local offerings of community amenities. RECI 12 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 96 of 198 FIGURE 5: COMMUNITY AMENITIES Map # Category and Name Location Recreation, Dining and Entertainment Miramar Bistro 301 Waukegan Avenue Highwood Froggy's French Café 306 Green Bay Road Highwood 210 Restaurant 210 Green Bay Road Highwood Del Rio Restaurant 228 Green Bay Road Highwood Wooden Nickel 444 Lakeview Avenue Highwood Teddy O'Brian's 432 Sheridan Road Highwood Cellar Gate Wine Market & Bistro 524 Sheridan Road Highwood The Art of Beer 552 Sheridan Road Highwood Curry Hut 410 Sheridan Road Highwood Alex's Washington Gardens 256 Green Bay Road Highwood Longitud315 315 Waukegan Avenue Highwood Isaac & Moishe Restaurant & Grocery 311 Waukegan Avenue Highwood La Casa De Isaac 413 Temple Avenue Highland Park Nieto's 429 Temple Avenue Highland Park Nite N' Gale 346 Sheridan Road Highwood Mean Wiener 532 Sheridan Road Highwood Clucker's Charcoal Chicken 760 Sheridan Road Highwood Tacos El Norte 110 Washington Avenue Highwood Buffo's 431 Sheridan Road Highwood Jay Lovell's 766 Sheridan Road Highwood Barrel Crossing Tap & Grill 260 Green Bay Road Highwood Improv Playhouse 1991 Sheridan Road Highland Park Ravinia Festival 418 Sheridan Road Highland Park Highwood Bocce Courts 440 Bank Lane Highwood School of Rock 9 Prairie Avenue Highwood Highwood Recreation Center 428 Green Bay Road Highwood Highwood Public Library 102 Highwood Avenue Highwood Everts Park 111 North Avenue Highwood Exmoor Country Club 700 Vine Avenue Highland Park Highland Park Country Club 1201 Park Avenue West Highland Park Sanctuary Yoga 502 Sheridan Road Highwood Fort Sheridan Forest Preserve Old Elm & Simmonds Way Fort Sheridan Education Oak Terrace Elementary School 240 Prairie Avenue Highwood Holy Cross School 720 Elder Lane Deerfield Northwood Junior High School 945 North Avenue Highland Park Highland Park High School 433 Vine Avenue Highland Park The Performer's School 432 Green Bay Road Highwood Midwest Young Artists (MYA) 878 Lyster Road Highwood Vitrychenko Academy 523 Bank Lane Highwood Woodland Academy of the Sacred Heart 760 E. Westleigh Road Lake Forest Lake Forest Academy 1500 West Kennedy Road Lake Forest Lake Forest College 555 N. Sheridan Road Lake Forest Health Care Lake Forest Acute Care 1025 W. Everett Road Lake Forest Highland Park Hospital 777 Park Avenue West Highland Park Aperion Care Highwood 50 Pleasant Avenue Highwood Northwestern Lake Forest Hospital 660 N. Westmoreland Road Lake Forest Shopping and Services Poeta's Food Market 520 Green Bay Road Highwood La Union Supermarket 485 Sheridan Road Highwood Walgreens 320 Waukegan Avenue Highwood Heinen's 2503 Waukegan Road Bannockburn Sunset Foods 1812 Green Bay Road Highland Park Jewel‐Osco 4 Deerfield Road Highland Park Costco 25901 Riverwoods Road Lake Forest The Viti Companies 445 Sheridan Road Highwood Anna's Mostly Mahogany 531 Bank Lane Highwood Gallery KL 43 Highwood Avenue Highwood Consignments, Etc 259 Waukegan Avenue Highwood The Find 9 Highwood Avenue Highwood Bent Fork Bankery 433 Waukegan Avenue Highwood Transportation Metra ‐ North Line Highwood Station NEC Green Bay & North Avenue Highwood Metra ‐ North Line Fort Sheridan Station 461 W. Old Elm Road Highwood North Shore Bike Path Sources: Real Estate Counselors International, Inc. Field Survey, April 2016 RECI 13 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 97 of 198 The amenity mix includes a substantial number of restaurants and entertainment options, a testament to the prominence Highwood has continued to serve as a dining and entertainment draw from neighboring suburbs and beyond. Figure 6, below, shows the tight clustering of the recreation and entertainment offerings in Highwood’s downtown district. FIGURE 6: COMMUNITY AMENITIES Source: Real Estate Counselors International, Inc. RECI 14 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 98 of 198 Restaurants and venues continue to open in the city, either re-purposing existing structures, or demolishing them and building new from the ground up. A new music venue has just broken ground at the former Bertucci’s restaurant site, at 246 Green Bay Road, which will feature musical entertainment, as well as secondary events like live band karaoke or sports- viewing events. The former bowling alley at 210 Green Bay Road is being redeveloped as a restaurant and comedy club. These new venues add to the draw already spurred by the School of Rock, on the south side of Prairie Avenue, just west of Green Bay Road, as well as Highwood’s myriad local outdoor festivals. Highwood’s Evening Markets are unique on the North Shore, drawing residents from neighboring communities every Wednesday evening throughout the summer months for dinner, cocktails, and live music. Highwood’s complement of grocery and other neighborhood service offerings is fairly limited. Large format retail shopping areas are situated at positions outside of Highwood, in the neighboring communities of Highland Park and Deerfield, although their distance is not as substantial as to serve as a deterrent to residential development in Highwood. A new grocery amenity is expected to open with the completion of the Hotel Moraine redevelopment. The new project will include 104 independent living units and is expected to be completed in the fall of 2016. DOWNTOWN HIGHWOOD AND SURROUNDING LAND USES Highwood’s core of downtown commercial development is centered between Sheridan Road on the east and Green Bay Road on the west, a one block wide sliver of property which extends approximately six blocks long, from Washington Avenue on the north, to Prairie Avenue on the south. Development is marked by mostly two and three-story brick buildings, some historic, with store-front retail offerings on the first floor, and office and apartments above. Downtown parking is located primarily at the rear of the retail storefronts, with alleyways facilitating access. Figure 7 below shows the outlines of structures in light gray, with parking highlighted in darker gray, and the boundaries of the subject property outlined in yellow. The Metra station is located three blocks south. RECI 15 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 99 of 198 FIGURE 7: DOWNTOWN HIGHWOOD Source: Lake County GIS Maps and Real Estate Counselors International, Inc. The subject property is currently vacant land, situated at the southwest corner of Green Bay Road and Washington Avenue, and as such is situated just outside the core downtown district. The site was previously improved with a restaurant known as Scornavacco’s which was destroyed by fire and subsequently demolished. This area, while located in proximate to downtown Highwood, is more residential in nature than the core downtown district and is largely developed by a mixture of single-family and multi-family homes. These are mostly mid-century construction. Along Green Bay Road, some service uses are situated in a mixture of commercial and residential properties. Further to the east, a variety of commercial and restaurant uses are situated in a small strip center and older two-story structures. The Fort Sheridan Place apartments, a mid-rise apartment complex, is located caty corner to the northeast, from the subject property, but is accessible from Sheridan Road, approximately one block north. A variety of older one and two story buildings line the opposite, eastern side of the Metra rail line, and while this area has been the subject of redevelopment efforts, these efforts were recently thwarted, due to the difficulty of assembling all necessary parcels. RECI 16 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 100 of 198 The subject property, situated as it is along Green Bay Road, one of Highwood’s main thoroughfares, has good local access. Green Bay Road a two-lane road which flows north and south, and has parallel street parking on both sides of the street beginning approximately two blocks south of the subject property. Due to the previous use of the subject property as a restaurant site, approximately 20 angled parking spaces have been demised on a paved area between Green Bay Road and the Metra line. Green Bay Road is curbed, with a sidewalk along the western side of the road. Green Bay Road terminates three blocks north of the subject property, which serves to limit traffic volumes in this area, and contributes to the desirability of the location for residential use. The subject property also borders on Washington Avenue, a two-lane, east- west curbed thoroughfare, which becomes known as Old Trail Road as it extends into Highland Park, approximately three blocks west of the subject property. Old Trail Road terminates another six blocks beyond this to the west, where it would run into the Old Elm Country Club, a male-only private golf club, located in Lake Forest. This further serves to limit traffic volumes, as travel along this east west route does not permit access to Highway 41 or any other major thoroughfares. Visibility of the site is favorable from both Green Bay Road and Washington Avenue, owing in part to a slightly higher elevation at this intersection, than the immediately surrounding area. However, Washington Avenue does provide crossing over the Metra Line, just across the street from the subject property, and this is only one of two crossings in Highwood. Opportunity for Growth in Downtown Highwood According to CoStar, the city of Highwood contains an inventory of approximately 425,000 square feet of retail, office and industrial buildings. The vast majority of this space (estimated at about 80%) is accounted for by retail/eating and drinking establishments. The city has historically been a draw for dining and entertainment on the North Shore and is located along a heavily traveled Metra line, though the housing inventory, especially the inventory of rental units has not kept pace with trends exhibited in many suburban downtowns in the metro Chicago area. Since the 1990s, many suburban municipalities in the metro area have created incentives for developers to build retail/eating and drinking establishments facilities and residential units (i.e., mostly residential condominium units in the 1990s through 2008, and only recently rental apartments.) The objectives of most of these redevelopment initiatives have typically centered around transit oriented development and creation of 24/7 neighborhoods. Over the last 30 years, RECI has consulted on such initiatives with municipal officials in many suburban downtowns, including St. Charles, Oak Park, Wilmette, and Joliet. Our experience has been that the most challenging element of the desired mix of residential and retail/eating and drinking establishments has been the latter. The city of Highwood already has a critical mass of these businesses, which will be enhanced with new residential development. Judging from the experience of many municipalities in the metro area, eventually an increase in the number of residents living in downtown housing supports the expansion of the retail/restaurant base. RECI 17 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 101 of 198 The city of Highwood contained 1,097 occupied rental units in 2015 according to ESRI. Costar Group, Inc. reports on approximately 322 of the total rental units, as indicated in Figure 8. Clearly this table does not represent the lion’s share of rental units in the city. However, the properties listed in the table suggest that the rental units in Highwood are older and smaller in size than institutionally-owned (i.e., owned by REITs, pension funds and insurance companies) in Lake County. Data from the 2010-2014 American Community Survey for the city of Highwood tells us that the majority of rental units fall into the size category of two unit buildings to 19 unit buildings. FIGURE 8: REPRESENTATIVE RENTAL PROPERTIES IN HIGHWOOD CoStar Building Number Of # Building Addres s Year Built Class Rating Units 1 634 Sheridan Rd (Fort Sheridan Place) 1970 B 252 2 131 Pleasant Ave NA B 12 3 54 8-552 Sheridan Rd NA C 12 4 17-21 Webster Ave 1955 C 12 5 74 0 Sheridan Rd NA C 9 6 13-15 Webster Ave 1954 C 9 7 11 W a lk e r A v e 19 4 7 C 7 8 20 Webster Ave 1923 C 5 98 Walker Ave 1910 C 4 To tal 322 So even though the city of Highwood has approximately 60% of its occupied units classified as rental units, this inventory is void of any significant number of modern dwelling units that represent a true complement to both the cluster of commercial activity and the Metra commuter line. In summary, downtown Highwood represents a “frontier” of sorts, a commercial district that is ripe for new rental residential units. RECI 18 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 102 of 198 SECTION III - THE PROPERTY SITE REDEVELOPMENT The subject property is currently vacant land, situated at the southwest corner of Green Bay Road and Washington Avenue, as shown in the map below, and is being considered for redevelopment into multi-family residential apartment use with 28 dwelling units. Figure 9 below shows the location of the redevelopment site. FIGURE 9: LOCATION OF REDEVELOPMENT SITE Source: Lake County and Real Estate Counselors International, Inc. The site is currently zoned B-1, Retail Business, by the city of Highwood, as shown in Figure 10. This zoning classification allows for a wide variety of retail and other business uses. According to the existing zoning code, residential use would not permitted on the first floor of structures located within a business district along Green Bay Road from Burtis Avenue to Washington Avenue, which includes the subject property. However, according to the City Manager, Scott Coren, the subject property, like other sites within the Highwood TIF Area 1, would be considered for a PUD that would allow for development of a multi-family project. In September, 2014, the Highwood City Council adopted The Highwood Downtown Projects Guidebook as an addendum to the 2012 Official Comprehensive Plan of the City of Highwood. The Guidebook included a Land Use Framework plan for central portions of Highwood. Three main districts were delineated in this plan, and are outlined on the map on the next page, in Figure 11. RECI 19 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 103 of 198 FIGURE 10: ZONING CLASSIFICATIONS IN SUBJECT PROPERTY NEIGHBORHOOD Subject Property Sources: City of Highwood Zoning Map and Real Estate Counselors International, Inc. FIGURE 11: LAND USE FRAMEWORK PLAN – DOWNTOWN DISTRICTS Sources: City of Highwood Downtown Projects Guidebook and Real Estate Counselors International, Inc. RECI 20 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 104 of 198 The overarching theme of this plan was to leverage Highwood’s identity as an entertainment and dining destination, and make it a desirable residential choice, especially for younger people, and thereby strengthen Highwood’s image, and improve its neighborhoods. The subject property is situated within the Green Bay Road District. This area, situated on the western edge of Highwood’s downtown area, provides a supporting role to the core commercial function of downtown Highwood. The Land Use Framework Plan called for the addition of office and residential buildings to this district. Mixed use buildings, with apartments above ground floor office or retail, are suggested by the Guidebook, for uses along Sheridan Road and Green Bay Road, with heights to vary from three to four stories. Three stories are suggested for Green Bay Road sites. TIF DISTRICT AND SUBJECT SITE REDEVELOPMENT PLAN The subject property is situated within the boundaries of Highwood’s Tax Increment Finance Area 1, or TIF district. The boundaries of the TIF district are shown in Figure 12 below. FIGURE 12: HIGHWOOD TAX INCREMENT FINANCE AREA 1 Source: Lake County The Highwood TIF district was established in 2002 and is set to expire in 2025, although an extension of this time frame may be allowed through legislation. RECI 21 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 105 of 198 Typically, during the life of the TIF district, property values are frozen for the purposes of distributing tax dollars to schools and other governments. Several properties have been constructed within the Highwood TIF district since its establishment, including the Walgreens and neighboring U.S. Bank building, located at the northwest corner of Highwood Avenue and Sheridan Road, as well as the two-story Viti Insurance Building, located at the northwest corner of Webster Avenue and Sheridan Road. Developers seeking TIF monies must prove that if not for the TIF assistance, the development would not be financially feasible. According the Scott Coren, a 52-unit apartment building was recently approved in Highwood for 440 Green Bay Road, and this site would fall within the TIF District. A major mixed-use development on land situated south of Washington Avenue between the Metra line and Sheridan Road was proposed to include about 200 units. However, according to Scott Coren, the project, which was to be part of the TIF District, has been scrapped, a result of the developer’s inability to assemble all of the necessary parcels. RECI 22 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 106 of 198 SECTION IV - THE MARKET ENVIRONMENT REGIONAL OVERVIEW The subject property is located in the city Highwood, Lake County, Illinois in the Lake County, Illinois/Kenosha County, Wisconsin Metropolitan Division, which is part of the Chicago Metropolitan Statistical Area (MSA). The Chicago-Naperville-Joliet, IL-IN-WI Metropolitan Statistical Area (MSA),contained nearly 9.6 million persons in 2015, and makes it the third largest metropolitan economy in the United States. The Chicago MSA consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties in Illinois; Jasper, Lake, Porter and Newton counties in Indiana; and Kenosha County in Wisconsin. The Lake County, Illinois and Kenosha County, Wisconsin Metropolitan Division, contained over 703,000 persons and 419,000 jobs in 2015 and consists of Lake County, IL and Kenosha, WI. UNITED STATES ECONOMY The Great Recession ended in June 2009 and this past July 2015, was the 6th anniversary of the beginning of the U.S. economic expansion. Moody's Analytics points out that this national expansion is already longer than the average expansion since World War II. They contend that prospects are good that this will be one of the longer expansions in the nation's history. GDP is forecast to increase to have increased at 2.4% in 2015, 2.3% in 2016 and 3.1% in 2017. FIGURE 13: HISTORICAL AND FORECAST QUARTERLY CHANGE IN UNITED STATES GROSS DOMESTIC PRODUCT 8.0% 6.0% 4.0% 2.0% 0.0% ‐2.0% ‐4.0% ‐6.0% GDP Annualized Percentage Change ‐8.0% ‐10.0% Year/Quarter Sources: United States Bureau of Economic Analysis, Moody’s Analytics and Real Estate Counselors International, Inc. RECI 23 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 107 of 198 According to the U.S. Bureau of labor Statistics, the U.S. economy created over 2.7 million jobs in 2015. The private sector has consistently added to payrolls for nearly six years, the longest string of consecutive gains on record. According to Moody's Analytics, if the recent pace of growth is sustained, the economy will be back to full employment by mid-2016. Moody's Analytics believes that even after wage growth revives, it will be some time before this translates into a significant increase in inflation. The remaining slack in the labor market is already quickly being absorbed, as the economy continues to grow. The estimated underemployment gap - the percent of the labor force that is underemployed - has fallen below 1%. Wage gains are finally accelerating, consistent with the fast-tightening job market. Both average hourly earnings and wages as measured by the employment cost index have accelerated noticeably over the past year or more. The wage pickup is especially strong in industries and regions of the country that have already returned to full employment. Full employment and stronger wage growth will induce an increase in household formations. Household formations slowed sharply during the Great Recession. According to Moody's, between mid-2007 and mid-2012, formations were running near 500,000 per year. They forecast that in a typical year given the growth in the population and the population's age and ethnic distribution, formations should be closer to 1.15 million per annum. The stronger U.S. dollar, which, according to Moody's, is up about 15% on real broad trade-weighted basis over the past year, is indeed a drag on growth. Acknowledging that the nation's manufacturing base is taking the brunt of the weaker trade balance, industrial production continues to increase and manufacturing employment continues to remain stable. According to Moody's, record vehicle sales and production and stronger construction-related manufacturing have offset the negative fallout of the stronger dollar on manufacturing and the broader economy. Finally, despite the dollar's strength, it remains close to its average value since the collapse of the Bretton Woods agreement and the broad adoption of flexible exchange rates in the early 1970s. CHICAGO MSA ECONOMY Chicago is fueling the state economy as strong growth in service industries (e.g., Professional & Business Services) compensates for sluggishness in the goods-producing arena. Faster job growth in Chicago’s urban core is encouraging. In addition to many established large employers, Chicago’s cluster of high-tech startups continues to expand. Most venture capital funding in Illinois gets funneled into Chicago, and the value of investments is the highest since the dot-com bust. The total amount of downtown office space occupied by tech companies is growing rapidly. According to Moody’s Analytics, even though growth in Chicago will keep the state economy moving in the right direction, the city’s financial woes threaten to curtail the Chicago metro division’s momentum. Chicago has done more than the state to get its fiscal house in order, but significant challenges remain. Driven by rising pension costs and declining state aid, Chicago’s fiscal problems are among the most severe nationally. RECI 24 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 108 of 198 The City Council approved Mayor Rahm Emanuel's 2016 budget that will hit Chicagoans with more than $755 million in tax and fee increases to plug the budget shortfall. However, without some help from leaders in Springfield, Chicago officials will be unable to make much headway toward a long-term solution, particularly regarding its unfunded pension liabilities. The state of Illinois longer-term outlook is tarnished primarily by its budget woes and weak population trends, not its high costs relative to nearby states. According to Moody’s Analytics, business costs in the state are slightly lower than they are nationally. Costs are lower than those in Wisconsin and Michigan but higher than those in neighboring Missouri and Indiana. Firms in Illinois tend to pay less in taxes and their utility costs are below average, but labor is somewhat expensive. The Chicago MSA contains approximately 4.6 million payroll jobs. The area has a well-educated workforce that garners high per capita incomes. Chicago has dominated North American transportation and distribution since the 1850s. Over the past 20 years, it has become the major crossroads of America's burgeoning global trade. The Chicago metro area is a world-class business center and the primary business center of the Midwest region of the United States. Chicago's office market is the third largest office market in the nation, eclipsed only by the total inventory of office space in the New York/New Jersey metropolitan region and the Washington, D.C. region. Long recognized for being a transportation hub, Chicago has also evolved as one of the nation's primary distribution centers and is the largest industrial space market in the nation. Chicago is located at the center of one of the largest trading areas in the world - the east-west nexus joining the markets of Europe and Asia and the north-south nexus of NAFTA. Metro Chicago has two ports capable of handling ocean-going ships/barges, and is linked to the Atlantic via the St. Lawrence Seaway and to the Gulf of Mexico via the Mississippi River. However, in the short-term, weaker foreign demand, associated with the strengthening of the U.S. dollar, will slow the rate of growth in transportation warehousing. Moody's Analytics reports that cargo traffic through Midway and O'Hare Airports softened at the end of 2014. Chicago remains one of the top cities for both conventions and domestic/foreign tourism, but the strengthening dollar will also put some of the growth in tourism at risk since it will be more expensive for foreigners to visit the city. Primary drivers of the economy within the Chicago metro area include most office-using industries, which are typically comprised of the professional/business services firms. This sector is comprised of firms such as computer systems design, management/scientific consulting and other financial services-related industries. RECI 25 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 109 of 198 Employment in both Financial Services and Professional and Business Services sector is concentrated in the Central Business District (CBD) of the city of Chicago, though much of the metro area's employment is concentrated in the manufacturing, retail and broader services sector dispersed throughout the region. The bulk of new jobs being created in Chicago are business and professional services jobs. There has been a rapid increase in tech-related hiring in Chicago's urban core which has been enticing workers to move downtown. In 2014, over $1.0 billion in venture capital was invested in tech related firms in downtown Chicago, the most since the dot.com bust, according to Moody's Analytics. This capital infusion will result in startups being able to more aggressively hire, and this hiring will support the downtown apartment market. Developers have completed construction on 2,042 apartment units in the CBD and 3,795 units in the city of Chicago in 2015, as a whole, according to data available from CoStar. The other major employment centers are located in the O'Hare Airport area, northwest Cook County, central DuPage County (East/West Corridor) and eastern Lake County, Illinois. As shown in Figure 15, the metro area's largest employers include the U.S. Government, Chicago Public Schools, the City of Chicago, Cook County Government, Advocate Health Care, University of Chicago, J.P. Morgan Chase & Co., State of Illinois, Northwestern Memorial Hospital, and United Continental Holdings, Inc. RECI 26 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 110 of 198 Figure 14: CHICAGO METRO AREA MAJOR EMPLOYERS # Largest Employers Number of Employees 1 U.S. Government 42,887 2 Chicago Public Schools 37,406 3 City of Chicago 30,276 4 Cook County 21,795 5 Advocate Health Care 18,308 6 University of Chicago 16,197 7 Northwestern Memorial Healthcare 15,317 8 State of Illinois 15,136 9 J.P. Morgan Chase & Co. 14,158 10 United Continental Holdings Inc. 14,000 11 Walgreen Co. 13,006 12 Health Care Service Corp. 13,006 13 Presence Health 10,500 14 Abbott Laboratories 10,000 15 Northwestern University 9,708 16 Jewel-Osco 9,660 17 Chicago Transit Authority 9,510 18 University of Illinois at Chicago 9,212 19 American Airlines 8,900 0 20 Rush University Medical Center 8,273 21 AT&T 8,000 22 Wal-Mart Stores Inc. 6,981 23 Employco USA Inc. 7,409 24 AON PLC 7,335 25 Archdiocese of Chicago 2,283 Source: Crains Chicago Business, December 2015 RECI 27 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 111 of 198 Chicago MSA Employment Trends As shown in Figure 15, the metro area exhibited positive job growth in all 12 quarters of 2012, 2013 and 2014, with growth continuing this upward trend throughout most of 2015. Employment is forecast to attain pre-recession levels by the end of the 1st quarter of 2016. MSA employment is projected to continue to exhibit gains throughout the forecast period, though the rate of growth is forecast to lag somewhat behind the national average. The recent poor performance of the metro area's very large Manufacturing and Financial Activities sectors is anticipated to be a drag on overall job growth. As shown in Figure 16, the Chicago metro area's unemployment rate was 5.4% in November 2015, on par with pre-recession rates of the early to mid- 2000s, and significantly below the peak unemployment rates of 10.4%, 9.6% and 9.1% in 2009, 2010 and 2011, respectively, in the midst of, or just after the Great Recession. The unemployment rates for the United States and Illinois were 4.8% and 5.8%, respectively, in November 2015, while Cook, DuPage, Kane, Lake, McHenry, and Will Counties exhibited unemployment rates ranging from 4.3% (DuPage County) to 6.1% (Kane County) for the same time period. Moody's forecast models suggest that job growth in metro Chicago is unlikely to return to its pre-recession trend in the near term. Some sectors of the economy, such as housing and banking, are still struggling with the residual effects of the downturn, and others, such as transportation and distribution, face a more difficult outlook because of slower global expansion. Downstream industries to manufacturing, which have been prominent growth drivers during the recovery, will now face slowing foreign demand and lower shipping volumes. Meanwhile, financial services have suffered a setback as banks struggle to overcome various challenges. Notwithstanding, there are several positive trends that indicate growth in Chicago will accelerate in 2016, according to Moody's Analytics. First, deleveraging seems to have run its course, and delinquency rates are at a six- year low and not far from the national average. Second, households are also enjoying a significant gain in wealth. Although still half the national average, home equity per household has doubled from its low in metro Chicago. Third, weaker inventory building will hurt manufacturing and the auto industry, but slowing will be quicker to subside given that factories export a below average share of what they produce. Fourth, a revival in the downtown real estate market will also aid growth. A better job market and drop in housing affordability will help extend the apartment boom, and the first wave of new office development since the crash should give way to a second as vacancies fall to multi-year lows and rents move higher. Over the long-term, the Chicago MSA will benefit from: (1) major business, distribution, transportation and financial center; (2) a huge talent pool and a strong roster of well-respected educational institutions; and (3) a budding high tech center in the River North area, located north of the Chicago CBD. Moody's is forecasting manufacturing job growth to accelerate through 2016. The Construction and Professional and Business Services sectors are projected to continue to exhibit strong growth through 2016. RECI 28 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 112 of 198 FIGURE 15: QUARTERLY CHANGE IN JOBS FOR THE CHICAGO MSA AND THE UNITED STATES: 1990-2017 6% 5% 4% 3% 2% 1% 0% ‐1% ‐2% ‐3% ‐4% ‐5% Annualized Quarterly % Change ‐6% ‐7% ‐8% 1990Q1 1992Q1 1994Q1 1996Q1 1998Q1 2000Q1 2002Q1 2004Q1 2006Q1 2008Q1 2010Q1 2012Q1 2014Q1 2016Q1 Year/Quarter United States Chicago‐Naperville‐Elgin, IL‐IN‐WI Metropolitan Statistical Area Sources: United States Bureau of Labor Statistics, Moody’s Analytics, and Real Estate Counselors International, Inc. FIGURE 16: HISTORICAL NOVEMBER UNEMPLOYMENT RATES FOR THE UNITED STATES, THE STATE OF ILLINOIS, THE CHICAGO MSA, COOK, DUPAGE, KANE, LAKE, MCHENRY, AND WILL COUNTIES 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% Unemployment Rate 4.0% 3.0% 2.0% 1.0% 0.0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 U.S. State of Illinois Chicago MSA Cook County Dupage County Kane County Lake County McHenry County Will County Sources: Illinois Department of Employment Security and Real Estate Counselors International, Inc. Note: These are non-seasonally unadjusted unemployment rates and are by place of residence. RECI 29 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 113 of 198 Lake County, IL/ Kenosha County, WI Metro Division Economy and Employment Trends The Lake County, Illinois/Kenosha County Metropolitan Division contains approximately 417,000 payroll jobs. Although employment growth in the Lake County, IL/Kenosha County, WI Metropolitan Division has been slow so far this year, stronger rates of employment growth are forecast to return in 2016. The employment recovery since 2010 has been uneven and has not been on par with the United States nor the Chicago MSA, as a whole. Nevetheless, Moody's Analytics is predicting that the metro division will replace all the jobs lost during the Great Recession by early 2016. Relative to the nation, four industries in this metro division - Wholesale Trade, Manufacturing, and Professional & Business Services and Retail Trade - exhibit higher than average shares of total payroll employment. Of these sectors, Moody's is forecasting significant growth in the first three. For some time, weak U.S. export demand associated with the rising value of the U.S. dollar has been forcing manufacturing firms to downsize, which has pushed employment growth well below the state and national average growth rates. In addition, the drop in oil production in the U.S. and Canada has reduced demand for heavy machinery which, in concert with the higher U.S. dollar, has adversely impacted exports to Canada. The uneven recovery of the Lake County, IL/Kenosha County, WI Metropolitan Division is shown in Figure 17. FIGURE 17: RECENT RECESSION AND RECOVERY IMPACT ON JOB GROWTH FOR THE CHICAGO MSA, THE LAKE COUNTY, IL/KENOSHA COUNTY, WI METRO DIVISION AND THE UNITED STATES: 1Q2008- 4Q2016 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% ‐1% ‐2% ‐3% ‐4% ‐5% Annualized Quarterly % Change ‐6% ‐7% ‐8% ‐9% ‐10% ‐11% ‐12% Year/Quarter United States Lake County‐Kenosha County, IL‐WI Metropolitan Division Sources: United States Bureau of Labor Statistics, Moody’s Analytics, and Real Estate Counselors International, Inc. RECI 30 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 114 of 198 LAKE COUNTY, IL/ ECONOMY AND EMPLOYMENT TRENDS Lake County, Illinois was estimated to contain a total of 280,000 private sector jobs in early 2015. Relative to the Chicago metro area, as a whole, four private sector industries in the county – Manufacturing, Wholesale Trade, Retail Trade and Utilities - exhibit higher than average shares of total private sector employment. These sectors each exhibit high “Location Quotients” in the county’s employment base. The most dominant manufacturing industries include textiles, leather & allied products, chemical (pharmaceuticals), plastics & rubber products, fabricated metal products and computer & electronics. With a location Quotient of 1.75, the Lake County manufacturing sector is 75% more concentrated than the manufacturing sector in the broader Chicago metro area. This usually results in county jobs being hit fairly hard during national recessions. The Great Recession was no exception. As shown in Figure 18, between 2008 and 2010, five employment sectors lost the largest number of jobs in Lake County – Construction, Manufacturing, Retail Trade, Finance & Insurance and Business & Professional Services. Nevertheless, since 2010 and as the U.S. and regional economies recovered, some of these Lake County sectors have exhibited strong growth. The sectors that have exhibited the greatest increase in jobs since 2010 (i.e., the bottom of recessionary trends in metro Chicago) include Construction, Manufacturing, Retail Trade, Business & Professional Services and Accommodations & Food Services. FIGURE 18: RECENT JOB GROWTH TRENDS FOR THE LAKE COUNTY ECONOMY EMPLOYMENT SECTORS: 2008 TO 2015 UNCLASSIFIED (99) OTHER SERVICES (except PUBLIC ADMIN.) (81) ACCOMMODATIONS & FOOD SERVICES (72) ARTS, ENTERTAINMENT & RECREATION (71) HEALTH CARE & SOCIAL ASSISTANCE (62) EDUCATIONAL SERVICES (61) ADMIN. & SUP. & WASTE MGMT. & REMED. SVCS. (56) MNGMT. OF COMPANIES & ENTERPRISES (55) PROFESSIONAL, SCIENTIFIC & TECH. SVCS. (54) REAL ESTATE & RENTAL & LEASING (53) FINANCE & INSURANCE (52) INFORMATION (51) TRANSPORTATION & WAREHOUSING (48‐49) RETAIL TRADE (44‐45) WHOLESALE TRADE (42) MANUFACTURING (31‐33) CONSTRUCTION (23) UTILITIES (22) MINING, QUARRYING, & OIL AND GAS EXTRACTION (21) AGRICULTURE, FORESTRY, FISHING, & HUNTING (11) ‐8,000 ‐6,000 ‐4,000 ‐2,000 0 2,000 4,000 6,000 8,000 10,000 12,000 Recovery: Change 2010‐2015 Recession: Change 2008‐2010 Sources: Illinois Department of Employment Security and Real Estate Counselors International, Inc. RECI 31 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 115 of 198 In 2015, Lake County, Illinois jobs remain slightly behind the pre-recession peak (2008) number of total private sector jobs. However, by mid-2016, we expect total jobs to equal or exceed the number of jobs reported in 2008 for the county. As shown in Figure 19, the longer-term trend of job growth in Lake County has been stronger than the rate of growth in the six Illinois counties that make- up the Chicago MSA. By the late 1990s and early 2000s, Lake County was exhibiting job decentralization and growth characteristic of Du Page County in the 1970s and 1980s. Job growth merely flattened out in Lake County during the 2001 recession. However, as shown, because the Great Recession was much deeper and broader than the early 2000s recession, Lake County jobs exhibited a sharp decline between 2008 and 2010. Figure 20 shows that the recovery in Lake County following the Great Recession has been slightly weaker than the recovery in the broader Chicago MSA. This is, in part, a result of the concentration of manufacturing employment in Lake County. FIGURE 19: LONGER-TERM JOB GROWTH TRENDS FOR LAKE COUNTY AND CHICAGO MSA: 1996 TO 2015 130.0 128.0 126.0 124.0 122.0 120.0 118.0 116.0 114.0 112.0 110.0 108.0 106.0 104.0 102.0 100.0 Employment Growth Index (1996 = 100.0) 98.0 96.0 94.0 92.0 90.0 Lake County Illinois Portion of Chicago MSA Sources: Illinois Department of Employment Security and Real Estate Counselors International, Inc. RECI 32 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 116 of 198 FIGURE 20: RECESSION IMPACT AND RECOVERY IMPACT ON LAKE COUNTY AND CHICAGO MSA JOBS: 2008 TO 2015 101.0 100.0 99.0 98.0 97.0 96.0 95.0 94.0 93.0 Employment Growth Index (2008 = 100.0) 92.0 91.0 90.0 2008 2009 2010 2011 2012 2013 2014 2015p Lake County Illinois Portion of Chicago MSA Sources: Illinois Department of Employment Security and Real Estate Counselors International, Inc. Chicago MSA Housing Market Conditions During most economic recoveries since the Great Depression, an improving housing market has led recovery of the broader economy. Not so during the early part of this recovery. In fact, as recent as 2012, the nation's housing market continued to place downward pressure on the recovery from the Great Recession. According to Moody's Analytics, the decline in home prices has impeded recovery by slowing home sales, reducing gross metropolitan product and inhibiting labor mobility. They believe that declines in home equity will affect critical aspects of the economy from education to entrepreneurship and may remain a drag on U.S. growth over the next decade. Throughout the early to mid-2000s, annual home sales increased across the United States at a rapid pace. According to the National Association of Realtors, total U.S. annual volume of sales peaked in 2005 at over 7.0 million transactions of existing homes. Existing home sales fell to 6.5 million in 2006, then to 5.0 million in 2007, continued declining in 2008 to 4.1 million. Though total sales increased slightly in 2009 to approximately 4.3 million, home sales decreased again in 2010 to 4.2 million and 2011 existing sales equaled 2009 sales of approximately 4.3 million. The National Association of Realtors reported 4.7 million existing home sales in 2012, 5.09 million in 2013, 4.94 million in 2014 and 5.25 million in 2015. The home price trends shown below in Figures 10 and 11 are based upon movement in the S&P/Case-Shiller Home Price data series. The S&P/Case- Shiller Home Price Indices are designed to measure the growth in value of residential real estate in various regions across the United States. This index family includes 21 indices - 20 metropolitan regional indices, and one composite index (the 20 metro areas). RECI 33 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 117 of 198 The index, based on initial research undertaken in the 1980s by Karl E. Case and Robert J. Shiller, uses a repeat sales pricing technique, still considered the most accurate way to measure prices of residential real estate. As shown in Figure 21, home prices in many metropolitan areas began escalating at an especially rapid pace during the 2003 to 2006 period and prices across the composite cities peaked in July 2006. Home prices began falling in the various cities as early as November 2005 (in Boston) through October 2007 (in Charlotte) and plummeted in 2009. Recovery began as early as 2009 - in March 2009 in Denver, in May 2009, in Washington, DC and Boston, and in June 2009 in Los Angeles, San Diego and San Francisco. However, price declines continued for many cities through early 2012, with recovery beginning in February 2012 in Charlotte and Las Vegas, in March 2012 in Cleveland, in April 2012 in Atlanta, New York and Cleveland, and in May 2012 in Chicago. In all cities, home prices have risen since 2012 with two cities, Denver and Dallas, exceeding pre-recession peaks as of May 2013. FIGURE 21: SINGLE FAMILY HOME PRICE INDEX FOR THE CHICAGO MSA AND OTHER SELECTED METRO AREAS: DECEMBER 2000 TO DECEMBER 2015 Home Price Index (January 2000 = 100.0) 295.0 280.0 265.0 250.0 235.0 220.0 205.0 190.0 175.0 160.0 145.0 130.0 115.0 100.0 85.0 70.0 55.0 AZ‐Phoenix CA‐Los Angeles CA‐San Diego CA‐San Francisco CO‐Denver DC‐Washington FL‐Miami FL‐Tampa GA‐Atlanta IL‐Chicago MA‐Boston MI‐Detroit MN‐Minneapolis NC‐Charlotte NV‐Las Vegas NY‐New York OH‐Cleveland OR‐Portland TX‐Dallas WA‐Seattle Metro Area Composite Sources: S&P/Case Shiller Home Price Indices and Real Estate Counselors International, Inc RECI 34 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 118 of 198 Figure 22: SINGLE FAMILY HOME PRICE INDEX FOR THE CHICAGO MSA AND OTHER SELECTED METRO AREAS: DECEMBER 2014 TO DECEMBER 2015 10.0% 9.6% 9.0% 8.0% 7.1% 7.1% 7.0% 6.3% 6.1% 5.7% 6.0% 5.5% 5.5% 5.8% 4.7% 5.0% 4.5% 4.0% 3.1% 3.0% 2.3% 2.0% 1.7% Percent Change in Home Price: December 2014 to December 2015 1.0% 0.0% Sources: S&P/Case Shriller Home Price Indices and Real Estate Counselors International, Inc. As shown in Figure 22, from December 2014 to December 2015, home prices in Chicago increased 2.3%, on par with Washington, DC, and New York, but well below the 5.7% rate of gain exhibited across the composite index of 20 metro areas. Though the period from 2009 to 2012 will be considered part of one of the worst housing construction cycles in 40 years, the authors of "The State of The Nation's Housing 2013" point to the fact that minorities and seniors will drive demand fundamentals for housing demand over the next decade. But while the overall pace may be similar to the past, the composition of household growth is changing - and with it, the direction of housing demand. Over the next decade, the number of households aged 65 and over is projected to increase by 9.8 million. Most of these households will opt to age in place and may therefore need to modify their homes to accommodate their changing needs. But a large number will look for different housing opportunities, creating demand for new types of units in communities where they currently live as well as in areas that traditionally attract retirees. Minorities - and particularly younger adults - will also contribute significantly to household growth from 2013 to 2023, accounting for seven out of ten net new households. An important implication of this trend is that minorities will make up an ever-larger share of potential first-time home buyers. But these households have relatively few resources to draw on to make down payments. Proposed limits on low down payment mortgages would thus pose a substantial obstacle for many of tomorrow's potential home buyers. RECI 35 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 119 of 198 Despite the slow economic recovery, the rental apartment market, both nationally and across the Chicago MSA, exhibited a strong recovery each year from 2010 through the 4th quarter 2015. The 4th quarter 2015 apartment vacancy in metro Chicago was 4.1%, despite the delivery of 5,659 units in 2013, 5,920 units in 2014 and 5,853 units in 2015. While economic conditions drive household growth in the short run, the size and age structure of the adult population are more important factors in the long run. Based on the Census Bureau's latest population projections and recent estimates of headship rates, demographic drivers support household growth of approximately 1.2 million a year over the remainder of the decade - similar to the rates in the 1990s as well as in the years preceding the Great Recession. Although the overall pace may be similar to the past, the composition of household growth is changing - and with it, the direction of housing demand. Over the next decade, the number of households for those aged 65 and over is projected to increase by 9.8 million. Most of these households will opt to age in place and may therefore need to modify their homes to accommodate their changing needs. But a large number will look for different housing opportunities, creating demand for new types of units in communities where they currently live as well as in areas that traditionally attract retirees. RECI 36 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 120 of 198 SECTION V – DRIVERS OF APARTMENT DEMAND INTRODUCTION In this section of the report we address seven fundamental factors that we believe are driving apartment demand in Lake County, Illinois: 1. A watershed change in how Americans are making housing decisions, fueled by the shifting view of owner-occupied housing and the perceived economic safety of rental housing. 2. Renter-occupied housing units in Lake County among all age groups, make up a smaller share than these age groups, nationally and therefore there is greater potential that rental units are underrepresented in the county. 3. Since the 1980s Lake County’s growth in office, industrial, retail and other business establishments has been strong, fueling job growth. 4. Lake County and north suburban Cook County contained approximately 466,000 jobs in 2015, representing about 12% of Chicago MSA private sector jobs. 5. The I-94 and Route 41 corridors in eastern Lake County are proximate to major concentrations of corporate office and industrial space and healthcare facilities; commuting patterns imply that major centers of employment in eastern Lake County and northern Cook County generate significant demand for housing, including rental housing. 6. Although though DuPage County job growth produced over 59,500 jobs between 2010 and 2015, Lake County and northern Cook County produced 34,000 jobs during this same period. 7. Lake County employment growth over the last 40 years has exceeded the rate of population growth in the county. THE RENTERSHIP RATE INCREASE Even before the U.S. economy fell into recession, a watershed change was emerging. The nation’s homeownership rate began to decline in 2005. Both the number and share of U.S. households paying more than 30% of income for housing were on the rise, as home values and mortgage debt was on the rise. Certainly the enormous wave of foreclosures that swept the nation after 2008 played a role in this trend, displacing millions of homeowners. More broadly, the Great Recession brought high rates of sustained unemployment that strained household budgets which prevented would-be buyers from purchasing homes. Meanwhile, the experience of 2008 to 2012 highlighted the many risks of homeownership, including the potential loss of wealth from falling home values, the high costs of relocating, and the financial and the personal havoc caused by foreclosure. The conditions brought about by the Great Recession and post-recession period prompted a renewed appreciation for the benefits of renting, including the greater ease of moving, the ability to choose housing that better fits the family budget, the lack of unnecessary exposure to market volatility and the freedom that this brings. According to a report from the Joint Center for Housing Studies of Harvard University sometime after the recovery began: The housing market crash and Great Recession took a toll on rental markets, pushing up vacancy rates and pushing down rents and property values in many areas. RECI 37 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 121 of 198 While many measures indicate that rental markets remain under stress, other evidence points to the beginnings of a turnaround. Vacancy rates have retreated as the troubled homeowner market has spurred strong growth in renter households. And with limited new supply in the pipeline, the ingredients may be in place for rents to rise quickly when the economic recovery strengthens. The dramatic decline in home prices across the nation and in the metro Chicago market between 2006 and 2011, coupled with steep job losses, had underscored the true financial risks of homeownership. Of course, renters face the risk of rent inflation and the loss of their security deposits. However, rental housing does provide a safe haven during times of falling and/or stagnant home prices or job insecurity as detailed below: (1) moving to and from rental housing involves much lower transaction costs than homeownership. (i.e., the last month’s rent plus a security deposit are smaller than the fees associated with buying and selling homes); (2) renting transfers primary responsibility for upkeep and maintenance to a landlord; and (3) renting does not tie up funds in the form of a down payment, nor does it expose households to the risk of loss of that investment. Since the single family housing market recovered in 2012, there have been other factors at work that have fueled the decline in home ownership and the growth of apartment demand. The increase in the nation’s rentership rate between 2005 and 2014 is shown in Figure 23, below. FIGURE 23: RENTERSHIP RATES FOR UNITED STATES: 1995 TO 2014 36.0% 35.5% 35.0% 34.5% 34.0% 33.5% 33.0% 32.5% 32.0% 31.5% 31.0% % of All U.S. Households 30.5% 30.0% 29.5% 29.0% 28.5% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sources: US Census Bureau, Housing Vacancy Survey. Joint Center for Housing Studies of Harvard University and Real Estate Counselors International, Inc. RECI 38 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 122 of 198 While economic conditions drove household growth in the short run, the size and age structure of the adult population are more important factors in the long run. The Joint Center for Housing Studies of Harvard University in their 2015 publication, “State of the Nation’s Housing” explained the decline in homeownership in this way: The downtrend (in homeownership) continued in early 2015 with a first- quarter reading of just 63.7 percent—the lowest quarterly rate since early 1993. The 233,000 drop in homeowner households last year brought the total decline since the 2006 peak to 1.7 million. The weakness in homeownership extends across all regions of the country and nearly all metropolitan areas, including inner cities, suburbs, and non-metro areas. And while recent estimates suggest that homeownership rates may be firming in some areas, there is no evidence so far of a significant rebound. With the exception of Detroit, major metros with the largest declines in homeownership are all within the Sunbelt states, where high foreclosure rates amplified the impacts of the Great Recession. At the top of the list are Las Vegas and New Orleans (both with an 8.5 percentage-point drop in homeownership), and Bakersfield (with an 8.3 percentage-point drop). The worst hit markets generally experienced a much sharper cycle in home prices and incomes than metros that were more sheltered from the housing boom and bust from responsibility for home maintenance. Households of all but the oldest age groups have joined in the shift toward renting. The largest share increase is among households in their 30s, up by at least 900 basis points over an eight-year span. But shares of households across all five-year age groups between 25 and 54 also rose by at least 600 basis points. According to the Joint Center for Housing Studies of Harvard University, with these widespread increases in rentership rates, the 2000s marked the strongest decade of growth in renter households over the past half-century, as shown in Figure 24. FIGURE 24: INCREASE IN APARTMENT RENTING AGE COHORTS Sources: U.S. Census Bureau, Moody’s Analytics and CoStar Portfolio Strategy RECI 39 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 123 of 198 As shown, after a modest rise early in the decade, the number of renter households soared after 2005, boosting average annual growth to more than 500,000 households. Again, according to the Joint Center for Housing Studies of Harvard University, future demand for apartments will be favorably influenced by demographic trends of the next 10 years: Over the next decade, two broad demographic trends—the aging of the population and the increasing importance of minorities for household growth—will drive significant changes in rental demand. Assuming current rentership rates, the aging of the baby-boom generation will lift the number of renters over age 65 by 2.2 million in the ten years to 2023, generating roughly half of overall renter growth. The older profile of renters means much of the increase will be among single persons and married couples without children, each group accounting for about 30 percent of growth. Many of these older households are already renters, but will be aging into the next phase of life. This trend suggests growing demand for smaller rentals, with good access to transportation and located near communities where households in their 50s and 60s are currently living. A future increase in renters is also implied by the uncoupling of 20 to 34 year old householders. The recent historical average household size for this age cohort (i.e., primary renter-age group) has ranged between 2.40 and 2.45. Between 2008 and 2014 (i.e., recession and post-recession period), the average household size increased to between 2.55 and 2.60 persons per household, a result of the doubling-up of households within this age cohort. According to CoStar Portfolio Strategy and as indicated in Figure 25, a return to the recent average household size for this age cohort of 2.40 to 2.45 equates to 1.9 million more households, with the vast majority of these adding to the pool of renter households. FIGURE 25: POTENTIAL RETURN TO RECENT HISTORICAL AVERAGE HOUSEHOLD SIZE FOR APARTMENT RENTING AGE COHORT Sources: U.S. Census Bureau, Moody’s Analytics and CoStar Portfolio Strategy RECI 40 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 124 of 198 As shown in Figure 26, the Joint Center for Housing Studies of Harvard University is forecasting growth in most of the young adult age cohorts (i.e., 30 to 34, 35 to 39 and 40 to 44) between 2010 and 2030 that have a high propensity to rent. This is in contrast to the growth in older, middle-age cohorts that was exhibited between 1990 and 2010. FIGURE 26: FORECAST GROWTH IN HOUSEHOLDS BY AGE COHORT FOR THE UNITED STATES Sources: U.S. Census Bureau and Joint Center for Housing Studies of Harvard University THE NATION’S APARTMENT MARKET According to data available from Costar, demand for apartments remains strong nearly six years after the recovery of the apartment market began, even as construction activity has accelerated, as indicated in Figure 27. Nationally CoStar reports that the apartment vacancy rate ended the year at 3.9%. According to the Costar data, vacancy rates have been fluctuating somewhat over the last two years – declining when deliveries fall and increasing slightly as deliveries accelerate in any particular quarter. Actually, U.S. apartment rents posted one of the weakest 4th quarters since the end of the most recent recession. In the first six months of 2015, U.S. apartment rents grew at an annualized rate of 9.4%, according to CoStar’s same-store analysis of more than 50 million rent observations. The growth rate slowed to just 2.7% in the second half of 2015, and turned negative over the final three months of the year. Taken together, U.S. apartment rents grew by an average of 6% in 2015. Construction of a large number of apartments continued in 2015, with 214,000 new units added across the 54 largest U.S. markets, reflecting an 8% increase in new supply over the previous year, which was also a record. Absorption held steady for the year at around 210,000 units rented, and the average vacancy rate ended the year at a cyclical low of 3.9%, virtually unchanged from the end of 2014. RECI 41 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 125 of 198 FIGURE 27: UNITED STATES APARTMENT DEMAND/SUPPLY: 2000-2015 Source: CoStar Group, Inc. New apartment construction is causing vacancy among Class A apartments (i.e., CoStar’s designation of 4 & 5 Star properties) to increase, as shown in Figure 28. FIGURE 28: UNITED STATES APARTMENT VACANCY BY CLASS 2007-2015 Source: CoStar Group, Inc. Note: For all intents and purposes 4 & 5 Star properties are Class A properties. Nationally, CoStar is forecasting rent growth to slow in 2016 to 3% to 4% range, rather than 6% as was exhibited in 2015. RECI 42 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 126 of 198 RENTERS BY AGE GROUP Who are renters? According to the Joint Center for Housing Studies of Harvard University, nationally, single persons (i.e., those households with more limited incomes and need for less living space) make up nearly two out of every five renters. The balance of the renter population is divided among married couples with and without children, single-parent households, and other related and unrelated groups of people. Though younger age groups are much more likely to rent, more heads of renter households are 35 to 64 years old, than under 35. Elderly households account for the remaining renter households. In fact, the United States’ share of households that are renters varies according to the age of householder. As households are formed in the late teen years through the mid-20s, the vast majority of these households are renters. Renting is a common choice for young adults since they face frequent moves as family, work, school, and living arrangements change; not to mention wealth and income constraints that prevent them from becoming homeowners. As wealth is accumulated by the mid-30s, an increasing share of households choose to purchase homes or condos. Figure 29 shows the percentage of householders that were renters in 2000 for the United States and Lake County, Illinois. As shown, Lake County, Illinois exhibits a considerably lower share of households from each age group that are renters and therefore there is greater potential that rental units are underrepresented in the county, overall. Other factors that can impact these shares within individual counties or overall metro areas include local area commuting patterns, local land use regulations (especially those which favor single family detached residential units versus multifamily), housing market and investment market conditions. FIGURE 29: PERCENT OF RENTERS AMONG HOUSEHOLDER AGE COHORTS IN THE UNITED STATES AND LAKE COUNTY: 2010 90.0% 83.9% 81.7% 80.0% 70.0% 60.0% 58.0% 50.0% 47.6% 40.0% 37.7% 30.0% 28.5% 24.0% % of Age Cohort That Are Renters 22.7% 22.5% 22.1% 19.8% 18.5% 20.0% 16.6% 17.6% 13.6% 13.0% 10.0% 0.0% Householder 15 Householder 25 Householder 35 Householder 45 Householder 55 Householder 65 Householder 75 Householder 85 to 24 years to 34 years to 44 years to 54 years to 64 years to 74 years to 84 years years and over United States Lake County, IL Sources: U.S. Census and Real Estate Counselors International, Inc. RECI 43 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 127 of 198 LAKE COUNTY, IL POPULATION AND EMPLOYMENT Prior to 1970, Lake County was primarily a bedroom community within the metro Chicago region. Since the 1970s, employment growth in Lake County has exceeded population growth in county. In 1970, Lake County, Illinois had a total population of 382,638 persons and total employment of only 89,665. As shown in Figure 30, in 2010, according to the 2010 U.S. Census, the total population had increased to 703,462 persons and total jobs had increased to 324,805 jobs. FIGURE 30: EMPLOYMENT AND POPULATION ESTIMATES FOR LAKE COUNTY, ILLINOIS 380.0 360.0 340.0 320.0 300.0 280.0 260.0 240.0 220.0 200.0 Growth Index (1970 = 100.0) 180.0 160.0 140.0 120.0 100.0 1970 1980 1990 2000 2010 Population Employment Sources: Lake County, U.S. Census County Business Patterns and Real Estate Counselors International, Inc. As shown, Lake County population increased by 15% during the 1970s, though employment increased by about 51%; during the 1980s, population increased by about 17%, though total jobs increased by about 53%; and during the 1990s, population increased by about 25%, though total jobs increased by about 49%. Though employment growth was strong prior to the 2008 recession, between 2000 and 2010, job growth grew only slightly faster than population growth. The growth in the number of jobs in Lake County is directly related to the surge in commercial real estate development during the 1970s, 1980s, 1990s and 2000s. Over these four decades, Lake County was transformed into a major employment center of the region, with most of the development occurring in the southeast portion of the county. From the CoStar office building database, we estimate that approximately 18 million square feet of office, retail and industrial space was built in Lake County during the 1970s; more than 26 million square feet was built in the 1980s; more than 32 million square feet was built in the 1990s and nearly 24 million square feet was built between 2000 and 2009. Only approximately 3.1 million square feet was built since 2010, as construction came to a virtual halt during and immediately after the Great Recession. RECI 44 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 128 of 198 More rapid growth in employment compared to population often suggests that housing construction may lag commercial/industrial development in a particular market. In the next section we consider the implications of commuting patterns on Lake County apartment demand. LAKE COUNTY, IL MIGRATION AND COMMUTING PATTERNS Our analysis of 2009-2013 migration data available from the U.S. Census Bureau indicates there are large numbers of in-migrants to Lake County from nearby counties, including Cook County, Kenosha County, McHenry County, Kane County, DuPage County and Will County. By far the county that produces the greatest number of in-migrants is Cook County, as shown in Figure 31. FIGURE 31: ORIGIN OF MIGRANTS TO LAKE COUNTY, IL: 2009-2013 10,000 9,251 9,000 8,000 7,000 6,000 5,000 Number of Migrants 4,000 3,000 2,000 1,162 1,124 1,000 716 648 409 0 Cook County Kenosha County McHenry County Kane County DuPage County Will County Source: U.S. Census Bureau, 2009-2013 5-year American Community Survey There are other metropolitan regions of the U.S. that produce measurable numbers of migrants to Lake County, IL. These areas include Champaign, IL, Phoenix, AZ, Southern California, Northern California, Hawaii, Detroit, MI and Minneapolis, MN. Another dynamic that we researched was commuting patterns among residents of Lake County and Cook County. Data from the U.S. Census Bureau, 2009-2013 American Community Survey provide a good picture of commuting patterns among residents/workers of Lake County and surrounding counties. The relationship is strongest between Lake County and Cook County residents/workers. The data indicate that 64,036 residents of Lake County work in Cook County and 78,045 residents of Cook County work in Lake County. Since Northern Cook County (Interstate 94/294 corridor) and Northwest Cook County (Interstate 90 corridor) contain both major employment centers in addition to large and fairly dense residential communities, it is no surprise that Lake County commuting patterns are dominated by both commuters to Lake County from Cook County as well as commuters to Cook County from Lake County. RECI 45 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 129 of 198 As shown in Figure 32, the origin of Lake County workers includes those living in Lake County (66%), those that commute from other Illinois counties (27%), workers that commute from the State of Wisconsin (6%) and from other states (1%). As alluded to above and shown in the figure below, Figure 32, the commuting data show that 78,045 workers commute from a residence in Cook County to a job in Lake County. Not only does this trend favor residential demand in Lake County, but the estimated 64,036 workers that commute from Lake County to jobs in Cook County also illustrates that Lake County housing (especially a location in eastern Lake County) is accessible to workers in Cook County. FIGURE 32: ORIGIN OF LAKE COUNTY WORKERS: RESIDENTS OF ILLINOIS COUNTIES AND WISCONSIN COUNTIES FOR 2009-2013 Source: U.S. Census Bureau, 2009-2013 5-year American Community Survey MAJOR EMPLOYMENT CENTERS IN LAKE COUNTY, IL Proximity of apartments to major centers of employment is an important factor associated with the location decisions of most renters. The subject property is located in eastern Lake County, roughly in the middle of the communities considered to be the North Shore. Using data available from the Illinois Department of Employment Security, we estimate that there are approximately 174,000 private sector jobs located within a 15-20 minute drive-time from downtown Highwood. Somewhat less than 50,000 of these jobs are manufacturing, wholesale trade and transportation/warehousing (i.e., industrial) jobs. Approximately 35,000 jobs are traditionally office- using jobs; just over 20,000 jobs are in the retail sector and nearly 14,000 jobs are in the healthcare sector. As shown in Figure 33, office development, in particular, has followed the path of primary high speed access highways (i.e., interstate highways) in Lake County, north Cook County and northwest Cook County. These three areas contain nearly 138.0 million square feet of office space and over 300.0 million square feet of industrial space. RECI 46 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 130 of 198 The city of Highwood is located immediately east of the Interstate 94 corridor and is easily accessible to the Interstate 94/294 corridor in Lake County and northern Cook County. This corridor contains a total of 55.0 million square feet of office space and 90.0 million square feet of industrial space, as shown in Figure 33. FIGURE 33: LAKE COUNTY, NORTH COOK COUNTY AND NORTHWEST COOK COUNTY OFFICE AND INDUSTRIAL BUILDINGS: 2015 Sources: Costar and Real Estate Counselors International, Inc. As shown in Figures 34 and 35, the county’s largest employers include AbbVie/Abbott, Walgreens Boots Alliance Inc., Medline Industries Inc., Aon Corp, Baxter Healthcare Corp, Dayton Electric Manufacturing Co, Six Flags, Discover Financial Services, Hospira Inc., Naval Station Great Lakes and several others. Many of the county’s largest companies are located within 10 miles or a 15 to 20 minute drive-time of downtown Highwood. The Veterans Administration Medical Center-North Chicago (Captain James A. Lovell Federal Health Care Center), Northwestern Lake Forest Hospital, Advocate Good Shepard Hospital, Vista Health System and Vista Medical Center East represent the primary healthcare employers in Lake County. Healthcare employment in Lake County includes the hospital campuses as well as the rapidly growing number of outpatient healthcare facilities being developed across the county. Lake County had approximately 30,000 private sector healthcare jobs in early 2015. This represents a slight increase in healthcare jobs since 2008. RECI 47 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 131 of 198 FIGURE 34: LARGEST EMPLOYERS LOCATED IN LAKE COUNTY Es timated number o f Co mpany Name P artial Addre s s City employees Abbott Laboratories/AbbVie* Abbott P ark Rd North Chicago/Mettawa 12,000 Wa lgre e ns B o o ts Allia nc e Inc Wilm o t R d De e rfie ld 6,100 Medline Industries Inc Medline P l Mundelein 5,000 Abbott Laboratories/AbbVie* Sheridan Rd North Chicago 4,000 Ao n C o rp Ove rlo o k P t Linc o lns hire 4,000 Baxter International Inc Baxter Pkwy Deerfield 4,000 Dayton Electric Mfg Co W Il Route 60 Lake Forest 3,000 Six Flags Great American Pkwy Gurnee 3,000 Captain James A. Lo ve ll F e deral Health Care Center Green Bay Rd North Chicago 3,000 Discover Financial Svc Lake Cook Rd Riverwoods 3,000 Ho s pira Inc N F ie ld Dr Lake Forest 3,000 Naval Station Great Lakes Paul Jones St # 1-A Great Lakes 2,500 Northwestern Lake Forest Hosp N Westmoreland Rd Lake Forest 1,800 Cdvocate DW C o rp Good S epa d N M ilwa uke e Ave Ve rno n Hills 1,800 TakedaHo s pita lPharmaceuticals US A W Il R o ute 22 B a rringto n 1,710 Inc Takeda Pkwy Deerfield 1,700 Trustmark Insurance Co N Field Dr Lake Forest 1,700 Lacosta Inc W Bonner Rd Wauconda 1,600 Lake Forest College N Sheridan Rd Lake Forest 1,400 Rexam Inc Corporate Grove Dr Buffalo Grove 1,400 Siemens Industry Inc Deerfield P kwy Buffalo Grove 1,300 Mondelez International Inc P arkway N # 300 Deerfield 1,200 Blick Art Materials Green Bay Rd Highland Park 1,001 Vista Health System Washington St Waukegan 1,000 American Taxi & Delivery N Il Route 59 Lake Villa 1,000 Vista Medical Ctr East N Sheridan Rd Waukegan 1,000 Klein Tools Inc Bond St Lincolnshire 1,000 Lake County Taxi Grand Ave Fox Lake 1,000 Westmoreland N Westmoreland Rd Lake Forest 1,000 Quill C o rp S c he lte r R d Linc o lns hire 1,000 Banner Day Camp Riverwoods Rd Lake Forest 1,000 P ackaging Co rp o f America W Field Ct Lake Fo res t 1,000 Intren S Il Route 83 Grayslake 937 Lake County Health Dept Grand Ave Waukegan 900 Fresenius Kabi USA LLC Corporate Dr # 300 Lake Zurich 800 Am e ric a n Ho te l R e gis te r C o S M ilwa uke e Ave # 100 Ve rno n Hills 800 Midwestern Medical Ctr Elisha Ave Zion 800 C a nc e r Tre a tm e nt C tr o f Am e r S he rida n R d Zio n 800 Cardinal Health S Waukegan Rd Waukegan 750 Zebra Technologies Corp Overlook P t Lincolnshire 740 Wolters Kluwer Tax & Acctg Lake Cook Rd Riverwoods 700 ECHO Inc Oakwood Rd Lake Zurich 700 East West Distributing Co Wilmot Rd Deerfield 700 Essendant Inc P arkway N # 100 Deerfield 600 Aldridge Ele c tric Inc E R o c kla nd R d Libe rtyville 600 Rosalind Franklin University Green Bay Rd North Chicago 600 Sources: Illinois Department of Employment Security and Real Estate Counselors International, Inc. *Note: Employment at Abbott/AbbVie may not reflect current totals. The spin-off of AbbVie from Abbott and relocation of some employees to Mettawa may result in current totals that deviate from the totals that were reported to us. RECI 48 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 132 of 198 FIGURE 35: LAKE COUNTY MAJOR EMPLOYERS: 2015 Sources: Illinois Department of Employment Security and Real Estate Counselors International, Inc. Downtown Chicago, containing nearly 560,000 jobs, is the single largest employment center of the region and is approximately an hour commute (approximately 25 miles) on the Union Pacific North Metra commuter train from Highwood. Commuter Rail Road Trends and Employment Data from the U.S. Census tells us that approximately 70% of Highwood residents commute less than 30 minutes to their place of work. This is in contrast to Highland Park residents which have longer commute times, in part, due to residents commuting to downtown Chicago. Only about 56% of Highland Park residents have commute times less than 30 minutes. The commute time from the Highwood station to downtown Chicago is a little over one hour. As shown in Figure 36, the average number of passengers boarding inbound (southbound) trains during morning peak hours at the Highwood stations totaled 99 in 2014. A slightly larger number of commuters (165) board inbound morning trains at the Fort Sheridan station, located approximately one and one-half miles to the north. The number of commuters boarding morning inbound trains in Highwood is slightly less than one-fifth of the number of passengers boarding inbound trains in Highland Park and well below the number of passengers boarding southbound trains in Lake Forest (281), Wilmette (806) or Evanston (2,625). Our experience in researching Metra ridership trends in metro Chicago suggests that ridership of passengers commuting to downtown Chicago declines as one moves further out from downtown Chicago. RECI 49 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 133 of 198 For example, Wilmette, in northern Cook County is only a 35 minute commute to downtown Chicago (about one-half of the commute time from Highwood to downtown Chicago) and the number of morning inbound passengers is more than eight times the number of inbound passengers boarding in Highwood. FIGURE 36: PASSENGERS GETTING ON METRA MORNING PEAK INBOUND TRAINS 1,400 1,290 1,300 1,200 1,100 1,041 1,000 969 900 863 806 793 800 700 600 492 500 478 400 322 281 295 300 265 252 237 178 200 165 151 157 123 132 141 86 99 100 63 Number of Morning Peak Inbound ON Passengers 31 0 0 Sources: Metra and Real Estate Counselors International, Inc. The number of morning outbound passengers getting off the trains at the Fort Sheridan and Highwood stations is also relatively small, as shown in Figure 37. FIGURE 37: PASSENGERS GETTING OFF METRA MORNING PEAK OUTBOUND TRAINS 520 500 492 480 460 440 420 400 380 360 342 340 320 300 280 270 260 240 220 194 200 177 180 160 146 133 140 120 96 100 82 79 80 68 61 60 47 43 36 Number of Morning Peak Outbound OFF Passengers 30 26 26 40 18 19 23 15 9 14 20 2 0 0 Sources: Metra and Real Estate Counselors International, Inc. RECI 50 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 134 of 198 Although there is currently not a significant trend of commuters boarding trains in Highwood for a downtown Chicago commute, the potential is there for Highwood to become a more dominant point of origin and destination. Not only is downtown Chicago accessible by commuter train, so are other employment centers along the North Shore, such as downtown Lake Forest, downtown Highland Park, downtown Wilmette and downtown Evanston. RECI 51 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 135 of 198 SECTION VI – MARKET AREA DEMAND/SUPPLY OVERVIEW OF METRO CHICAGO APARTMENT MARKET The Chicago MSA market contains a total inventory of approximately 543,000 apartment units, according to CoStar. At the end of the 1st quarter 2016, the vacancy rate in the metro area was 4.4%. The average monthly effective rent was $1,195 or $1.48 per square foot at that time. In the 3rd quarter 2010, the vacancy rate was much higher – at 8.2%. By the 2nd quarter 2012, the vacancy rate had fallen to about 4%, fluctuating between 4% and 5% over the previous three years. Between the 4th quarter 2010 and the 2nd quarter 2012, there were very few apartment units delivered, as shown in Figure 38. However, beginning in the 3rd quarter 2012, deliveries accelerated as the vacancy rate fell below 5% and rent growth spiked. Between the 3rd quarter 2012 and the end of the 1st quarter of 2016, just over 19,000 units were delivered. Over this same time period total net absorption approximated about 15,000 units. Evidence suggested the same factors which were discussed in the previous section of this report that fueled apartment market demand nationally were fueling demand in the Chicago MSA apartment market. FIGURE 38: CHICAGO MSA APARTMENT MARKET DELIVERIES, ABSORPTION, VACANCY AND RENT CHANGE: Q1 2006 to Q3 2015 5,000 12.00% 4,500 11.00% 4,000 10.00% 9.00% 3,500 8.00% 3,000 7.00% 2,500 6.00% 2,000 5.00% 1,500 4.00% 3.00% 1,000 2.00% 500 1.00% 0 0.00% ‐500 ‐1.00% ‐1,000 ‐2.00% ‐3.00% ‐1,500 ‐4.00% ‐2,000 Units (Absorption and Deliveries) ‐5.00% ‐2,500 ‐6.00% ‐3,000 ‐7.00% ‐3,500 ‐8.00% ‐9.00% ‐4,000 ‐10.00% ‐4,500 ‐11.00% ‐5,000 ‐12.00% Percent (Vacancy Rate and Annualized Average Rent Change) Deliveries Net Absorption Vacancy Percent Effective Rent Growth/Yr Sources: CoStar and Real Estate Counselors International, Inc. RECI 52 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 136 of 198 APARTMENT MARKET AREA DEFINITION The subject property is located in the southeastern portion of Lake County, Illinois. RECI delineated a market area based on several factors. In fact, seven factors were utilized to delineate a market area for upscale apartments developed at the subject site in southeast/central Lake County. These factors included: 1. Location and accessibility of major roads/highways. 2. Historical cross-sectional analyses of apartment residents’ distances to places of work in Chicago and other metropolitan markets. 3. Distances and drive times to major concentrations of employment. 4. Demographic/geodemographic profiles of Lake County neighborhoods. 5. Distance and drive times to competitive apartment developments located in Lake County and the broader Chicago metropolitan market. 6. Physical and perceptional barriers such as dramatic changes in land use, freeways and the like. 7. Regional residential and commercial development patterns. Primary Market Area The Primary Market Area is shown in Figure 39. The approximate boundaries include Lake Michigan on the east, State Route 21 (Milwaukee Avenue) on the west, the city of Deerfield Road on the south and State Route 60 (Town Line Road) on the north. The northern boundary extends approximately 10-15 minutes to the north, the western boundaries of the Primary Market Area extend 15-20 minutes from downtown Highwood. The southern boundary extends only 5-10 minutes to the south due largely to the strong north-south access. The Primary Market Area contains 40.8 square miles and has a total inventory of 4,944 rental units of all types, according to the U.S. Census data. However, the CoStar database reports that there are about 2,300 apartment units (i.e., the larger properties among the total inventory of rental units). FIGURE 39: PRIMARY MARKET AREA Sources: ESRI, CoStar and Real Estate Counselors International, Inc. RECI 53 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 137 of 198 The apartment properties located in the Primary Market Area exhibited a 1st Quarter 2016 occupancy rate of 96.5%, which is just above the metro area average of 95.3%. The Secondary Market Area exhibited a mid-1st quarter vacancy rate of 95.50%. By themselves, strong growth in rents and an average occupancy above 95% would indicate demand already exceeds supply, suggesting that the market has rental unit demand that is presently not being met. Over the last four years (1st quarter 2012 to 1st quarter 2016), the average asking rent has increased by nearly 11% in the Primary Market Area. The submarket average effective rent has increased despite a surge in apartment unit construction located to south of Primary Market Area boundary. (Note: quarter to quarter changes in the average rent do indicate quarterly declines as well as increases.) A total of 488 apartment units were delivered in 2015 at two properties – Amli Deerfield and Woodview. At the end of the 1st quarter 2016, the vacancy rate in the Primary Market Area was 3.5%, as shown in Figure 40. There are two large properties (Woodview Apartments in Deerfield and Amli Deerfield) that delivered units to market. (Both of these properties are actually located just outside the Primary Market Area.) These two properties are seven to nine miles southwest of the subject property. However, if these two properties are included in the Primary Market Area inventory, the Primary Market Area vacancy rate averages 13.4%. Though the vacancy rate is high, absorption is quite strong, causing a rapid decline in the vacancy rate. The Primary Market Area average monthly effective rent was $1,724 or $1.90 per square foot at the end of the 1st quarter. The average monthly effective rent is 45% above the MSA average effective per unit rent. FIGURE 40: PRIMARY MARKET AREA DELIVERIES, ABSORPTION, VACANCY AND RENT CHANGE: Q1 2006 to Q1 2016 150 40.00% 36.00% 125 32.00% 28.00% 100 24.00% 75 20.00% 16.00% 50 12.00% 8.00% 25 4.00% 0 0.00% ‐4.00% Units (Absorption and Deliveries) ‐25 ‐8.00% ‐12.00% ‐50 ‐16.00% ‐75 ‐20.00% Percent (Vacancy Rate and Annualized Average Rent Change) Deliveries Units Net Absorption Units Vacancy Percent Effective Rent Growth/Yr Sources: CoStar and Real Estate Counselors International, Inc. RECI 54 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 138 of 198 In the 2nd quarter 2010 the vacancy rate had spiked to over 8%. However, by the 4th quarter 2011, the vacancy rate had fallen to less than 4%, fluctuating between 2% and 4% over the past three to four years. For nearly the entire period (Q1 2006 to Q2 2015), there were very few apartment units delivered in this market area, as indicated in Figure 40. There were 240 units delivered between 2006 and 2010. Between the 1st quarter 2010 and the 1st quarter 2015, net absorption was relatively flat (slightly positive or slightly negative) as the vacancy rate had declined to below 3%. In a market like this, when the vacancy rate drops below 4%, rents often spike, even though net absorption is low. Rents had begun to spike in the 3rd quarter 2014. Even as new projects were delivered in 2015 the Primary Market Area average effective rent continued to increase at a strong rate. CoStar reports that concession levels have remained low in the Primary market Area. Secondary Market Area The Secondary Market Area is shown in Figure 41. The Secondary Market Area contains 33.96 square miles and a total inventory of 4,123 rental units according to ESRI and 1,162 apartment units. FIGURE 41: SECONDARY MARKET AREA Sources: ESRI, CoStar and Real Estate Counselors International, Inc. At the end of the 1st quarter 2016, the vacancy rate in the Secondary Market Area was 2.5%, as shown in Figure 42. The average monthly effective rent was $1,198 or $1.39 per square foot in the 1st quarter. The average monthly effective rent is about 31% below the Primary Market Area average effective rent. In the 3rd quarter 2010 the vacancy rate had spiked to 7.9%. However, by the 4th quarter 2011, the vacancy rate had fallen to 2.9%, fluctuating between 1% and 5% over the past three to four years. For nearly the entire post-construction boom period (i.e., Q1 2008 to Q1 2016), there were no apartment units delivered in this market area, as shown in Figure 42. During this period, quarterly absorption remained relatively flat (slightly positive or slightly negative) and rent growth remained marginal. Strong rent growth has also been exhibited in the Secondary Market Area. RECI 55 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 139 of 198 CoStar reports that rent concession levels were substantial during the Great Recession, but only marginal since the 1st quarter 2012. FIGURE 42: SECONDARY MARKET AREA DELIVERIES, ABSORPTION, VACANCY AND RENT CHANGE: Q4 2008 to Q1 2016 30 20.00% 18.00% 25 16.00% 20 14.00% 12.00% 15 10.00% 10 8.00% 6.00% 5 4.00% 2.00% 0 0.00% ‐5 ‐2.00% ‐4.00% ‐10 ‐6.00% ‐8.00% Units (Absorption and Deliveries) ‐15 ‐10.00% ‐20 ‐12.00% ‐14.00% ‐25 ‐16.00% Percent (Vacancy Rate and Annualized Average Rent Change) ‐30 ‐18.00% Deliveries Net Absorption Vacancy Percent Effective Rent Growth/Yr Sources: CoStar and Real Estate Counselors International, Inc. LAKE COUNTYMARKET AREA APARTMENT DELIVERIES Lake County Apartment deliveries in Lake County, as shown in Figure 43, were relatively high prior to the Great Recession. Much of the apartment construction came to halt by 2008, though some projects proceeded in late 2009 and 2010. There was a resurgence of deliveries in 2014. FIGURE 43: HISTORICAL APARTMENT DELIVERIES IN LAKE COUNTY: 2005 TO Q 12015 350 328 300 294 280 248 250 240 200 165 148 150 126 Number of Units Delivered 110 106 100 100 100 84 75 66 65 50 9 14 9 0 2005 Q1 2005 Q2 2005 Q3 2005 Q4 2006 Q1 2006 Q2 2006 Q3 2006 Q4 2007 Q1 2007 Q2 2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 Sources: CoStar and Real Estate Counselors International, Inc. RECI 56 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 140 of 198 The largest apartment developments completed since 2005 include the following: . Coventry Glen, Round Lake, IL 280 units . AMLI at Museum Gardens, Vernon Hills, IL 294 units . Zion Senior Cottages, Zion, IL 110 units . 301 Riverwalk Place, Buffalo Grove, IL 90 units . Cardinal Square - Building A, Mundelein, IL 84 units . 1199 E. Port Clinton Road Condos, Vernon Hills, IL 66 units . Thomas Place - Fox Lake, IL 100 units . The Commons at Town Center, Vernon Hills, IL 84 units . Village Park, Waukegan, IL 126 units . Lakefront Residences at Grayslake, Grayslake, IL 70 units . Thomas Place – Gurnee, Gurnee, IL 100 units . Zurich Meadows, Lake Zurich, IL 95 units . The Oaks of Vernon Hills, Vernon Hills, IL 328 units . Woodview Apartments, Deerfield, IL 248 units . Amli Deerfield - 240 units As shown, two recent developments, Amli Deerfield and Woodview - located outside the subject property Primary Market Area - added 240 apartment units in the 4th quarter 2015. According to the CoStar database and other research that we performed, there are nine other apartment developments (other than the subject property units) in Lake County, totaling 429 units that are proposed for delivery in in Lake County in 2016 through 2018. Only 363 units area under construction or proposed for the Primary and Secondary Market Areas. 1. The Oaks Phase II, Vernon Hills, IL 32 units (2016) 2. 833 Laurel, Highland Park 30 units (2016) 3. Manchester Square, Libertyville, IL 34 units (2016/2017) 4. McGovern Flats, Highland Park, IL 73 units (2017) 5. Roger Williams, Highland Park, IL 30 units (2017) 6. 440 Green Bay Road, Highwood, 52 units (2017) 7. Fides/Downtown Lake Bluff 40 units (2017) 8. Focus Dev. Site Lake Forest, IL 110 units (2017) 9. Fides/Downtown Highwood, IL 28 units (2018) Primary and Secondary Market Areas Much of the apartment development of the last 10 years in Lake County took place in the central and western parts of Lake County. We estimate that approximately 52% of the 2,327 units that were delivered in the county over the past 10 years were built in the Primary and Secondary Market Areas, as referenced in Exhibit 44. As part of our research of future rental apartment deliveries, we contacted representatives of several communities in the North Shore including Lake Bluff, Lake Forest, Libertyville, Mettawa, Vernon Hills, Lincolnshire, Riverwoods, Buffalo Grove, Highwood and Highland Park. RECI 57 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 141 of 198 FIGURE 44: HISTORICAL AND FORECAST APARTMENT DELIVERIES IN THE PRIMARY AND SECONDARY MARKETS 2005 TO Q2 2018 350 300 294 280 248 250 240 200 165 148 150 150 126 Number of Units Delivered 110 106 100 100 100 84 75 73 66 65 66 52 50 30 30 28 9 14 9 0 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Sources: CoStar and Real Estate Counselors International, Inc. Note: Proposed developments are also shown in this chart. Delivery dates represent approximations only. The subject property’s 28 units are also represented. As shown in Figure 45, we forecast deliveries, absorption and vacancy for the Primary Market Area. After reflecting the apartment deliveries that have been proposed for the Primary Market Area (delivery dates have been estimated) and forecasting absorption based, in part, on historical trends in this market, we forecast the vacancy rate through 2018. As units are delivered (as the have been in the 2015 and early 2016), we forecast positive absorption which is typical of trends in this market between 2007 and 2011 (i.e., before and after the Great Recession), as shown above in Figure 44. As shown in Figure 45, after new units were delivered in 2015 (Amli- Deerfield and Woodview), submarket absorption spiked. Our experience in urban and suburban submarkets that have been subject to no or minimal apartment construction over decades, especially those markets proximate to major employment centers, has been that newly constructed rental units are absorbed fairly rapidly as existing apartment renters and other households capitalize on the availability of new and/or “higher quality” rental units. Initially, in this case, vacancy may spike somewhat, rent growth may slow, but over time vacancy levels off, especially if there is, as we believe, pent-up demand for rental housing in the Primary Market Area. As shown in Figure 46, for the period 2016 to 2018, we show two vacancy rate forecasts – a Base Case and a Pessimistic Case. RECI forecasts that the vacancy rate will rise to between 4% and 6% as a result of the delivery of units under construction or proposed. If additional units are developed in the Primary Market Area through 2018, the vacancy rate could rise above 6%. RECI 58 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 142 of 198 FIGURE 45: PRIMARY MARKET AREA DEMAND/SUPPLY FORECASTS: DELIVERIES, ABSORPTION AND VACANCY 250 225 45.00% 200 40.00% 175 35.00% 150 30.00% 125 25.00% 100 20.00% 75 15.00% 50 10.00% Units (Absorption and Deliveries) 25 5.00% 0 0.00% ‐25 ‐5.00% ‐50 ‐10.00% Percent (Vacancy Rate and Annualized Average Rent Change) Deliveries Units Net Absorption Units Vacancy Percent ‐ Optimistic Vacancy Percent ‐ Pessimistic Sources: CoStar and Real Estate Counselors International, Inc. Note: Delivery dates represent approximations only. The subject property’s 28 units are also represented. Even though we have not developed a rent forecast, we anticipate continued increases in the Primary Market Area’s average rent along with positive net absorption and a reduction in vacancy. Again, this assumes that all of the units that have been proposed in the Primary Market Area are built in 2016, 2017 and 2018. In the next section of this report, we perform an additional demand analysis which reflects pent-up demand for rental apartments. RECI 59 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 143 of 198 SECTION VII – MARKET AREA DEMAND MARKET AREA DEMOGRAPHICS In order to support the demand/supply forecasts presented at the end of the last section of this report, we perform an additional analysis aimed at quantifying total rental unit demand. Here we are concerned with the subject property’s capture rate within the Total Market Area (Primary Market Area and Secondary Market Area, combined). If the capture rate necessary to absorb the subject property’s 28 units is relatively high, the analysis suggests that proposed new construction may cause a demand/supply imbalance. But first, we review the demographics of these two geographic areas. As shown in Figure 46, the Primary Market Area contains 59,640 persons and 21,852 households in contrast to the Secondary Market Area which contains 40,264 persons and 12,924 households. FIGURE 46: PRIMARY AND SECONDARY MARKET AREA DEMOGRAPHICS Primary Market Secondary Market Demographics Area Area 2010 Summary Population 59,640 40,264 Households 21,852 12,924 F a m ilie s 16,556 8,741 Average Household Size 2.67 2.51 Owner Occupied Housing Units 17,484 9,165 Renter Occupied Housing Units 4,368 3,759 Median Age 43.8 31.9 M e dia n Ho us e ho ld Inc o m e N/A N/A 2015 Summary Population 60,318 39,886 Households 22,359 13,188 F a m ilie s 16,775 8,836 Average Household Size 2.64 2.50 Owner Occupied Housing Units 17,415 9,065 Renter Occupied Housing Units 4,944 4,123 Median Age 45.2 33.0 Median Household Income $123,334 $93,605 Average Household Income $184,762 $146,783 His to rical Trends : 2010-2015 Co mpo unded Annual Average Change Population 0.23% -0.19% Households 0.46% 0.41% F a m ilie s 0.26% 0.22% Owner Households -0.08% -0.22% Renter Households 2.51% 1. 8 7 % Median Age 0.63% 0.68% M e dia n Ho us e ho ld Inc o m e ------2020 Summary Population 60,895 40,255 Households 22,691 13,357 F a m ilie s 16 ,9 17 8 , 8 9 7 Average Household Size 2.63 2.50 Owner Occupied Housing Units 17,575 9,128 Renter Occupied Housing Units 5,116 4,229 Median Age 46.4 34.5 Median Household Income $ 14 1,10 2 $ 10 6 , 4 3 6 Average Household Income $209,077 $168,332 Fo recas t Trends : 2015-2020 Co mpo unded Annual Average Change Population 0.19% 0.18% Households 0.30% 0.25% F a m ilie s 0.17% 0.14% Owner Households 0.18% 0.14% Renter Households 0.69% 0.51% Median Age 0.53% 0.89% M e dia n Ho us e ho ld Inc o m e 2.73% 2.60% Sources: U.S. Census and ESRI RECI 60 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 144 of 198 The median household income in the Primary Market Area ($123,334) is above the median income in the Secondary Market Area ($93,605). This may in part be a result of the slightly older median age in the Primary Market Area (45.2 years) in contrast to that of the Secondary Market Area (33.0 years). It is also noteworthy to point out that between 2010 and 2015, the number of owner occupied households declined as the number of renter households increased in both the Primary and Secondary Market Areas. The population and number of households in the Secondary Market Area increased at a more rapid rate than the population and households in the Primary Market Area. This trend is forecast to continue between 2015 and 2020, also as shown in Figure 46. MARKET AREA HOUSING A profile of the housing stock of both the Primary and Secondary Market Areas is presented in Figure 47. The Primary Market Area is estimated to contain a total of 23,321 housing units and the Secondary Market Area is estimated to contain 32,863 housing units in 2015. Approximately 15% of total units in the Primary Market Area were built since 2000 with a slightly lower percentage, 12.0%, built since 2000 in the Secondary Market Area. Nevertheless, roughly 17% of total housing units in both the Primary Market Area and the Secondary Market Area were built before 1950. The Primary Market Area is estimated to contain a total 3,939 renter- occupied housing units and the Secondary Market Area is estimated to contain 3,571 renter-occupied housing units. Of total housing units, the percentage of units that are owner-occupied is 82% in the Primary Market Area and slightly higher or 72% in the Secondary Market Area. Of total housing units, 71% of the units in the Primary Market Area are single-unit detached in contrast to a slightly lower share, 65%, in the Secondary Market Area. Nearly 36% of renter households moved into their unit since 2010 in the Primary Market Area in contrast to 42% of renter households in the Secondary Market Area. Among owner-occupied households 72% of households moved into their unit between 1990 and 2000 in the Primary Market Area in contrast to 76% in the Secondary Market Area. The percentage of owner-occupied units (homes) without a mortgage in the Primary Market Area is estimated 32% in contrast to the Secondary market Area, which is 30%. RECI 61 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 145 of 198 FIGURE 47: PRIMARY AND SECONDARY MARKET AREA HOUSING Primary Secondary Market Area % Market Area % 2015 TOTALS Total P opulation 58,418 36,133 Total Households 21,538 12,639 Total Housing Units 23,321 13,843 OWNER-OCCUP IED HOUSING UNITS BY MORTGAGE STATUS Total 17 , 6 0 0 100.0% 9,068 100.0% Housing units with a mortgage/contract to purchase/similar debt 12,006 68.2% 6,389 70.5% Second mortgage only 333 1.9% 144 1.6% Home equity loan only 3,554 20.2% 1,874 20.7% Both second mortgage and home equity loan 150 0.9% 50 0.6% No second mortgage and no home equity loan 7,969 45.3% 4,322 47.7% Housing units without a mortgage 5,593 31.8% 2,679 29.5% HOUSING UNITS BY UNITS IN STRUCTURE Total 23,321 100.0% 13,843 100.0% 1, d e t a c h e d 16,541 70.9% 9,043 65.3% 1, attached 1, 9 17 8 . 2 % 1, 5 16 11. 0 % 2 518 2.2% 209 1.5% 3 or 4 627 2.7% 397 2.9% 5 to 9 582 2.5% 379 2.7% 10 t o 19 616 2.6% 572 4.1% 20 to 49 1,281 5.5% 711 5.1% 50 or more 1,213 5.2% 885 6.4% Mobile home 2 7 0 . 1% 13 0 0 . 9 % Boat, RV, van, etc. 0 0.0% 0 0.0% HOUSING UNITS BY YEAR STRUCTURE BUILT Total 23,321 100.0% 13,843 100.0% Built 2010 or later 60 0.3% 14 0.1% Built 2000 to 2009 3,506 15.0% 1,651 11.9% Built 1990 to 1999 2,511 10.8% 2,234 16.1% Built 1980 to 1989 2 , 9 0 4 12 . 5 % 2 , 0 15 14 . 6 % Built 1970 to 1979 2,518 10.8% 2,152 15.5% Built 1960 to 1969 4,430 19.0% 1,884 13.6% Built 1950 to 1959 3,359 14.4% 1,588 11.5% Built 1940 to 1949 870 3.7% 533 3.9% B uilt 1939 o r e a rlie r 3,162 13.6% 1,772 12.8% Median Year Structure Built 1970 1975 OCCUPIED HOUSING UNITS BY YEAR HOUSEHOLDER 69.9% 75.5% MOVED INTO UNIT To tal 21,539 100.0% 12,639 100.0% Owner o ccupied 17,600 9,068 Moved in 2010 or later 1,180 6.7% 420 4.6% Moved in 2000 to 2009 7,178 40.8% 4,021 44.3% Moved in 1990 to 1999 3,951 22.4% 2,409 26.6% Moved in 1980 to 1989 2,716 15.4% 1,087 12.0% Moved in 1970 to 1979 1,358 7.7% 710 7.8% Moved in 1969 or earlier 1,217 6.9% 421 4.6% Renter o ccupied 3,939 3,571 Moved in 2010 or later 1,431 36.3% 1,481 41.5% Moved in 2000 to 2009 2,132 54.1% 1,736 48.6% Moved in 1990 to 1999 255 6.5% 246 6.9% Moved in 1980 to 1989 64 1.6% 72 2.0% Moved in 1970 to 1979 42 1.1% 36 1.0% Moved in 1969 or earlier 15 0 . 4 % 0 0 . 0 % Median Year Householder Moved Into Unit 2001 2000 2002 Source: U.S. Census Bureau, 2009-2013 American Community Survey and ESRI RECI 62 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 146 of 198 PRIMARY AND SECONDARY MARKET AREA RENTER DEMAND In order to support the demand/supply forecasts presented in the previous section of this report, we perform an additional analysis aimed at quantifying rental housing demand and calculating the subject property’s capture rate within the Total Market Area (both the Primary Market Area and the Secondary Market Area, combined). FIGURE 48: SUBJECT PROPERTY MARKET AREA Sources: U.S. Census, ESRI, Neilsen PRIZM, and Real Estate Counselors International, Inc. The capture rate represents the percentage of likely consumers that would need to be attracted to the planned development to reach stabilized occupancy (i.e., 95% occupancy). Typically, the capture rate for any single apartment development should not be considerably higher than 5% - 10% of total rental demand, according to industry standards/benchmarks, though this can vary from market to market based upon market size, density, recent new supply, etc. In order to perform this analysis, we obtained housing data from the 2010 U.S. Census, the 2007-2011 American Community Survey, the 2009-2013 American Community Survey and ESRI. The exact methodology and source data is outlined in detail in Figure 50. Below, we offer a synopsis of the several steps. The first step is to calculate total renter-occupied housing units’ share of total occupied housing units for two recent periods – 2010 and 2014. The second step is to establish the target rental housing share for the Total Market Area (Primary and Secondary Market Areas, combined) which because of both a moderately low share (around 26%) and lack of multifamily rental housing construction over at least the past 15 years, is forecast by RECI to range between 27% to 28%. (Note: For comparison purposes, the average share for the entire North Shore is 24.5%. The average share for a diverse mix of 14 suburban municipalities located in north Cook County and northwest Cook County is 26%). RECI 63 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 147 of 198 Third, we apply the 27% and 28% share against Total Market Area households and then make adjustments for: (a) a 5% vacancy rate; (b) replacement demand; and (c) competitive apartment units under construction or proposed for the Primary and Secondary Market Areas. The resultant total rental unit demand range for the Primary and Secondary Market Areas after these adjustments equals 400 to 773 units. Hence the proposed 28 units represents a capture rate of 3.6% to 7.0% of demand for total rental units. Fourth, based upon our research of the income distribution associated with Primary and Secondary Market Area renter households, we conclude that only a portion of all renters have household incomes sufficiently high to support monthly rents as proposed for the subject property. Based on the data available from the 2007-2011 American Community Survey, we estimate, of total Market Area Renter Households, only 53% have income levels high enough to support the proposed rent structure for the subject property. Applying this share to “qualified” (or high income renters) rental demand, referenced above, indicates qualified new demand of 212 to 410 apartment units. Also, as shown in Figure 49, the proposed 28 units represent a capture rate of 6.8% to 13.2% of total demand for units of the subject type among renter households with income levels above $50,000. Therefore, we conclude that the market should be able to support the addition of 363 other apartment units that are under construction or proposed (and accounted for in for calculations) for the Primary and Secondary Market Areas. RECI 64 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 148 of 198 FIGURE 49: DEMAND/CAPTURE RATE ANALYSIS FOR 28 APARTMENT UNITS IN HIGHWOOD, IL. PRIMARY AND SECONDARY MARKET AREA DEMAND/SUPPLY FORECAST RANGE Row Calculation Note High Low A 2010 Primary and Secondary Market Area Households (1) 37,776 37,776 B 2010 Primary and Secondary Market Area Renter-Occupied Units/Households (2) 8,127 8,127 C 2010 Primary and Secondary Market Area Renter Household Share (3) 21.5% 21.5% D 2015 Primary and Secondary Market Area Households (4) 35,547 35,547 E Estimated 2015 Primary and Secondary Market Area Renter-Occupied Units (5) 9,345 9,345 F Estimated 2015 Primary and Secondary Market Area Renter Share (6) 26.3% 26.3% G Target Rental Housing Share (7) 27% 28% H 2015 Target Primary and Secondary Market Area Rental Units (8) 9,598 9,953 I Difference between Estimated 2015 units and 2015 Target Rental Units (9) 253 608 J Primary and Secondary Market Area Replacement Demand (10) 30 30 K Subject Property Replacement Demand (11) 0 0 LPlus: 5% Vacancy Rate (12) 480 498 M Less: Units Und er Constructio n or Prop osed in the Primary and Secondary Market Areas (13) 363 363 N Total Demand fo r New Primary and Secondary Market Area Rental Units (14) 4 00 773 O Share of Demand for Units with Gross Rent more than $1,3 00 (15)53%53% P Demand for Primary and Secondary Market Area Rental Units with Rents over $1,300 (16) 212 410 Q Subject Prop erty MAXIMUM Number of Planned Units (17) 28 28 R Capture Rate of Primary and Secondary Market Area Renter HHs (18) 0.30% 0.30% S Capture Rate of Total New Rental Demand (19) 7.0% 3.6% P Capture Rate of Demand for Rental Units with Rents over $1,300 (2 0) 13.2% 6.8% NOTES: (1) Obtained from the 2010 U.S. Decennial Census. (2) Obtained from the 2010 U.S. Decennial Census. (3) Renter Units (Row B) divided by Total Units (Ro w A) . (4) Obtained from the estimates available from ESRI. (5) Obtained from the estimates available from ESRI. (6) Renter Units (Row E) divid ed by Total Units (Row D). Forecast capture rate based on renter share from U.S. Census Bureau, 2009-2013 5-Year American Community Survey for Moraine Township, (7) Lake County, IL (23%) and Main To wnship , Cook County, IL. (24%). (8) Target Share (Row G) times Total Units (Ro w D). (9) Difference between 20 10 targ et units (Row I) minus (Ro w E). (10) Annual replacement demand equal to 1% of units built prior to 1970 (30.1% of all rental units in Primary and Seconday Market Areas). ( 11) No rental units will b e d emo lis hed b efo re co ns tructio n will co mmence on 36 unit building. (12) 5% assumed stabilized vacancy rate times Target Renter Units (Row H). (13) The sum of all apartment units that are under construction or proposed in the Primary and Secondary Market Area. Increase in Demand (Row I) plus Rep alcement Demand for all units including subject property (Row J and Row K), plus vacant renter units (Row (14) L) minus renter units under construction/pro posed (Row M). The share of renter househo ld s with incomes o ver $50,000 annual income obtained from U.S. Census Bureau, 2009-2013 5-Year American (15) Community Survey for Primary and Secondary Market Areas. (16) Upper inco me renters share (Row N) times Total Demand (Row O). (17) Number of Units planned for the Lake Bluff site (Supject Property). (18) Number of Subject Property Units (Row Q) divided by Total Renter Units (Row E). (19) Numb er o f Sub ject Pro p ert y Units (Ro w Q) d ivid ed b y To tal Unit Demand (Row N). (20) Number of Subject Property Units (Row Q) divided by Unit Demand for Upper Incomr Renters (Row P). Sources: U.S. Census Bureau, 2007-2011 American Community Survey, 2009-2013 5-Year American Community Survey, ESRI and Real Estate Counselors International, Inc. RECI 65 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 149 of 198 GEODEMOGRAPHIC ANALYSIS OF PRIMARY MARKET AREA HOUSEHOLDS In addition to analyzing the demographics of the Primary Market Area, we also researched the geodemographics (also known as psychographics) of the Primary Market Area by applying a specialized database –Nielsen’s PRIZM database. This database is a market segmentation system which defines all U.S. household in terms of 66 demographically and behaviorally distinct types, or "segments," to help marketers discern those consumers’ likes, dislikes, lifestyles and purchase behaviors. Not only do we use these classifications to supplement our analysis of market area demographics, but this database can be useful in marketing to the targeted households. The corresponding value/number to the left of the segment name refers to the socioeconomic rank of the household type or segment. The segments with the lowest numbers are the most affluent. It is no surprise that the North Shore is characterized by the most affluent household types or “segments” as they are known. The segments that are the brightest red in Figure 50 are the most affluent. As shown on the map, these segments are also denoted by the rankings “1”, “2” and “3” primarily. (the lower the rank; the higher the income level). These three household types or segments are known as “Upper Crust” (1), “Blue Blood Estates” (2) and “Movers and Shakers” (3). Also, noteworthy on the map below are the households located in and around Highwood that are more diverse. FIGURE 50: DOMINANT HOUSEHOLD TYPES (PRIZM PSYCHOGRAPHIC SEGMENTS) FOR SOUTHEAST LAKE COUNTY Sources: ESRI, Nielsen and Real Estate Counselors International, Inc. Note: Although these neighborhoods (actually U.S. Census Block Groups) contain a range of household, the PRIZM data presented in the map identifies the predominant household type. RECI 66 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 150 of 198 Through our extensive research of apartment markets across the country, we have found the traditional segments or household types residing in apartments in large metropolitan areas typically include: “Young Digerati”, “Bohemian Mix”, “Executive Suites”, “Urban Achievers” and “Young Influentials”. These households typically reside proximate to downtown employment centers and/or trendy urban neighborhoods. In the Primary Market Area the numbers of households that fall within the household types referenced above are nonexistent or relatively small. Hence this is not an apartment market that has the breadth and depth of the downtown of a major city. Notwithstanding, the Primary Market Area contains a very diverse mix of household types. In fact, we have identified 10 household types or segments that we believe contain a significant number of households that are either renters or given the opportunity, would become renters at a future stage in their lives. The household types include singles and couples, mostly without children. Potential target households may include 25-35 year olds, singles and couples in their late 30s and 40s, as well as older folks including empty nesters. These households span a range of affluence that may include some considered to be Lower-Middle income, but mostly Midscale, Upper Middle, Upscale and some considered wealthy. These household types are identified on the right side of the pie chart in Figure 51. FIGURE 51: PROFILE OF PRIZM DATABASE GEODEMOGRAPHIC SEGMENTS FOR THE PRIMARY MARKET AREA. Sources: ESRI, Nielsen and Real Estate Counselors International, Inc. RECI 67 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 151 of 198 These ten segments we have identified in the Primary Market Area include, ranked in order of socioeconomic standing: 1. Movers & Shakers (03) 2. Executive Suites (08) 3. Second City Elite (10) 4. Brite Lites, Li'l City (12) 5. New Empty Nests (14) 6. Gray Power (21) 7. Young Influentials (22) 8. Up-and-Comers (24) 9. Middleburg Managers (27) 10. Boomtown Singles (35) Defining characteristics of these household types are presented in Figure 52, below. FIGURE 52: DEFINING CHARACTERISTICS OF THE TEN PRIZM HOUSEHOLD TYPES Socio PRIZM NE Inc o me Eco no mic Segment Social Group Classificati Predominant Predominant HH Predominant Predominant # Rank Nickname Name on Income Ages Composition Education Class Emplo yment Executive, Professional, 1 3 Movers & Shakers Elite Suburbs Wealthy where $100k+ > 90% 35-64 Married Co up les Co lleg e Grad uate + White Collar Seco nd City M arried Co up les /No 2 2 0 Seco nd City Elite Upscale $75k+ > 90% 45+ College Graduate + Professional, White Collar Society Children Singles/Couples/No Executive, Professional, 3 8 Executive Suites The Affluentials Up scale $75k+ > 90% 25-44 College Graduate + Children White Collar Brite Lites , Li'l Seco nd City 412 Upscale $75k+ > 90% 25-54 Married Couples College Graduate + Professional, White Collar City Society M arried Co up les /No 5 14 New Empty Nests The Affluentials Upper Middle where $50k+ > 90% 65+ Co llege Professional, White Collar Children Singles/Couples/No 6 21 Gray Power Middleburbs Midscale $30k-$75k > ~80% 65+ Co llege Professional, White Collar Children M o s t ly Sing les /No 7 22 Young Influentials Middleburbs Midscale $30k-$75k > ~80% <35 Co llege Professional, White Collar Children 8 24 Up-and-Comers City Centers Midscale $30k-$75k > ~80% <35 Singles/Couples College Professional, White Collar Middleburg 927 City Centers Midscale $30k-$75k > ~80% 55+ Singles/Couples College Professional/White Collar Managers Boomtown 10 3 5 City Centers Lower Middle where 90% < $50k <35 Mostly Singles Some College White Collar/Service Singles Sources: ESRI, Nielsen and Real Estate Counselors International, Inc. COMPETITIVE ALIGNMENT AND RENTAL SURVEY According to CoStar, the Primary Market Area contains 2,297 apartment units which were built primarily in the pre-1980 period. The Secondary Market Area contains 1,162 apartment units. CoStar reports that Lake County, as a whole, contains approximately 30,000 apartment units. The complete inventory of apartments in Lake County is shown in Figure 53. RECI 68 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 152 of 198 FIGURE 53: LOCATION OF APARTMENTS IN LAKE COUNTY, IL Sources: CoStar and Real Estate Counselors International, Inc. Seventeen apartment/rental properties in the Primary and Secondary Market Areas were surveyed and include five large Class B/C properties, eight Class A and/or newly constructed apartment communities and four condo/townhome rental properties, as depicted in the in Figure 54. RECI 69 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 153 of 198 FIGURE 54: MAP OF COMPETITIVE PROPERTIES SURVEYED Sources: Real Estate Counselors International, Inc. Field Survey November 2015 The five Class B/C apartment communities (including the nearby Fort Sheridan Place and Braeside Apartments) were built in 1970s, 1980s and 1990s, all but one contain more than 100 units, and are located less than one block up to eight miles from the subject property. We include four of these since they represent some of the larger apartment properties in southeast Lake County. One of the five is small, but appears to be typical of many of the rental units located in east Lake County. However, due to age and neighborhood location we believe that they would not be directly competitive with the subject property, as planned. The eight Class A properties were built since 2000 (actually one – Manchester Square - is still under construction) and each range between 30 units and 328 units. The condo/townhome rentals consist of a mixture of older rented condominium units and three recently developed condominium rentals (15 Clay Avenue Condos, built in 2008, the condo units built at Fort Sheridan in 2002 and The Ravines Condominiums in Highland Park, IL built in 2002.). RECI 70 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 154 of 198 One-bedroom/one-bath units at the five Class B/C apartments generally rent for between $1,000 and $1,800 per month. Two bedroom/two-bath units generally rent for between $1,500 and $2,400 per month. As shown in the oversize exhibit in the Addenda, the Class B/C apartment units that were surveyed include: . Fort Sheridan Place, 634 Sheridan Road, Highwood, IL 60040 (252 units), built in 1970 (renovated in 2011). . Braeside Apartments, 511 County Line Road, Highland Park, IL 60035 (16 units), built in 1975 (and renovated in 2000). . Americana Apartments, 1755 Lake Cook Road, Highland Park, IL 60035 (108 units), built in 1982. . Deer Valley Apartments, 30011 Waukegan Avenue, Lake Bluff, IL 60044 (224 units), built in 1991. . Forest Pointe/Village Green, 29533 N. Waukegan Road, Lake Bluff, IL 60044 (236 units), built in 1989. Unit amenities at three of these properties include most of the typical amenities found in garden-style apartment developments, central air- conditioning, cable ready, ceiling fans, washer and dryer in each unit or in the case of Fort Sheridan Place, on each floor as it is a mid-rise property. At Braeside Apartments only washer/dryer connections are provided. The two garden-style communities also feature vaulted ceilings and fire places in some units. The units at Fort Sheridan Place have been completely renovated since 2009; Deer Valley management has been renovating units upon turnover. These renovated units feature stainless steel, energy-efficient appliances, granite countertops, high-end cabinetry and hardwood-style flooring. Common area amenities at both properties include clubhouses, fitness centers, business centers and swimming pools. Deer Valley and Forest Point/Village Green also feature an outdoor pool and patios/balconies. One-bedroom/one-bath units at the eight Class A/newly constructed apartment developments generally rent for between $1,500 and $2,400 per month. Two bedroom/two-bath units generally rent for between $2,500 and $3,500 per month. The eight Class A apartment properties surveyed include: . The Oaks of Vernon Hills, 103 Oak Leaf Lane, Vernon Hills, IL 60061 (328 units), built in 2014. . Deerfield Village Centre, 625 Deerfield Road, Deerfield, IL 60015 (56 units), built in 2000. . Woodview Apartments, 15 Parkway North, Deerfield, IL 60015 (248 units), built in 2015. : RECI 71 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 155 of 198 . Renaissance Place, 849 Green Bay Road, Highland Park, IL 60035 (30 units), built in 2000. Unit size, monthly and per square foot rental rates: . Focus Development Western/Laurel, 1000-1042 N. Western Avenue, Lake Forest, IL 60045 (110 units), planned for development in 2016/2017. : . Manchester Square, 601-611 N. Milwaukee Avenue, Libertyville, IL 60048 (34 units), built in 2008; renovated/reconfigured in 2015. Unit size, monthly and per square foot rental rates have not yet been reported by the developer. . AMLI at Museum Gardens, 1155 North Museum Blvd., Vernon Hills, IL 60061 (294 units), built in 2005. . AMLI Deerfield, 1525 Lake Cook Road, Deerfield, IL 60015 (240 units), built in 2015. These eight Class A/Upscale properties feature a wide range of common area and unit area amenities. Each of these properties are located on heavily trafficked thoroughfares. The Oaks of Vernon Hills, Woodview Apartments, Amli at Museum Gardens and AMLI Deerfield were all built since 2005 and feature extensive common area amenities found at most garden-style properties. However, of these four properties, only the Oaks of Vernon Hills is a garden-style property. The others are low-rise/mid-rise with four to seven stories. Each of these four properties contains more than 200 apartment units. AMLI Deerfield and Woodview Apartments are the two newest and most upscale properties in terms of unit features and amenities. Amli Deerfield features stainless steel appliances, side-by-side refrigerators, under-counter beverage centers, 42" painted white wood shaker-style or espresso wood flat panel kitchen cabinets, task lighting, marble or glass tile backsplashes, gooseneck kitchen faucets and pull-down sprayers, full size washers and dryers, 9-foot ceilings, crown molding, some private yards and balconies. Woodview’s units include an open kitchen design, quartz countertops, upgraded plank flooring, stainless steel appliances, full-size stackable washers and dryers, private balconies and patios, a peninsula/island counter with overhead lighting, and other modern kitchen amenities, including a pull- down gooseneck kitchen faucet. Amli at Museum Gardens was built in 2005 and has very large (i.e., what appear to be too large for this market) units. Unit features include nine-foot ceilings, gourmet kitchens with 42-inch upper cabinets, black or white Whirlpool appliances, full-size built-in microwaves, refrigerators with automatic ice makers, track lighting in kitchens, kitchen pantries and linen closets, designer floors featuring Berber carpet, home offices with wood floors, full-size washers and dryers, walk-in closets, raised cultured marble vanities, double bowl vanities, storage available, private balconies, sunrooms, Individually controlled heat and air conditioning, high-speed internet available and four phone-line capability. RECI 72 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 156 of 198 Amli - Deerfield and Woodview were constructed in 2014/2015 and as such, feature the most extensive common area amenities and exhibit the most contemporary finishes. Both of these properties have visibility from Interstate 94/294. Amli-Deerfield was designed to qualify for LEED Silver designation and features a fitness center, swimming pool, resident lounge with fireplace and gourmet kitchen, a business center with coffee bar and lounge area, golf simulator room, garage parking, electric charging stations, and secure bicycle storage and repair shop and a dog wash. Deerfield Village Square, Renaissance Place and Manchester Square are smaller properties with 53, 30 and 34 units, respectively. Each of these three properties are located in North Shore community downtowns, along a major thoroughfare and accessible to Metra trains. Deerfield Village was built in 2000 as part of the redevelopment of downtown Deerfield. It is located adjacent to Deerfield Square. In 1998, a significant portion of the Deerfield downtown area was demolished and replaced with a new outdoor shopping district, Deerfield Square, sometimes called "The Square" or "The Commons" by some Deerfield residents. This downtown area is composed of stores, restaurants and facilities, such as Barnes & Noble, Biaggi's Ristorante Italiano, Footloose, Potbelly Sandwich Shop, CorePower Yoga, Whole Foods Market, and Pure Barre. In addition to retail space, Deerfield Square includes some office space and an outdoor plaza which is used during the summer for free outdoor concerts. The property is also a very short walk to the Deerfield Metra station. This property features the highest per square foot rents of all of the properties that we surveyed. Renaissance Place (downtown Highland Park) and Manchester Square (downtown Libertyville) and are similar developments to Deerfield Village. Renaissance Place an urban-style low-rise residential property which is part of a mixed-use development with high-end retail tenants on the first floor. The property was built in 2000 and contains 30 apartment units. In addition to upscale retailers, trendy restaurants the project contains an upscale movie theater. The property includes heated underground garage parking, a fitness center, security, and elevator access. At Manchester Square, multifamily units that were originally built in 2008 are being reconfigured/redeveloped. This property was purchased in 2013 by Chicago-based Cedar Street Companies, which intends to reconfigure the second and third floor apartment units. The first floor retail has been successful but the original developer's attempt to market the upper floors as residential condominium units and office suites space failed. Plans are for a portion of the units to be offered as "affordable", to those with incomes lower than the metro Chicago average. Parking includes a combination of indoor and outdoor spaces. This property is three stories tall, and the exterior is of high quality materials with brick and limestone-type finish. Gated balconies with sliding glass doors are featured. Asking rental rates and amenities have not yet been determined. There is one large apartment development planned in Lake Forest, 4.5 miles north of the subject property. The developer is Focus development and they plan to build 110 units in 2016/2017. RECI 73 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 157 of 198 This property was formerly the site for the municipal services department of Lake Forest, which has been moved to a new facility near I-294 and Hwy 60. The site has been cleared and the developer is awaiting final approvals on various components of development. The apartments are planned to be demised in 3-story brick clad structures with fireplaces in some units. This entire development is also expected to include 12 detached single- family homes ranging in size from 3,900 to 4,400 sf and 42 condominiums ranging in size from 1,408 to 2,600 square feet. One-bedroom/one-bath units at the four Condo/Townhome rentals generally rent for between $950 (Lake Forest North Condominiums) and $1,800 (15 Clay Avenue) per month. Two bedroom/two-bath units generally rent for between $1,200 (Lake Forest North Condominiums) and $3,500 (The Ravines Condominiums) per month. The four Condo/Townhome rentals four surveyed include: . 15 Clay Avenue Condos, 15 Clay Avenue, Highwood, IL (12 units), built in 2008. . The Ravines Condominiums, 3535 Patten Road, Highland Park, IL 60035 (50 units), built in 2002. . Bachelor's Officers Quarters/Barracks Lofts Condominiums, 25 Ronin Road, Highwood, IL 60035 (actually, several nearby addresses), built in 1890, renovated in 2002. . Lake Forest North Condominiums, 1301 N. Western Avenue, Lake Forest, IL 60045 (120 units), built in 1972. Of these four properties, 15 Clay Avenue Condos, The Ravines Condominiums the Bachelor's Officers Quarters/ Barracks Lofts Condominiums are located within one mile of the subject property. The fourth property, Lake Forest North Condominiums, is older and not competitive with the subject property, but was included to illustrate another core segment of the nearby rental unit inventory – vintage rental condominiums. PRIMARY MARKET AREA APARTMENT DEMAND OUTLOOK AND ABSORPTION The apartment properties located in the Primary Market Area exhibited a 1st Quarter 2016 occupancy rate of 96.5%, which is just above the metro area average of 95.3%. The Secondary Market Area exhibited a mid-1st quarter vacancy rate of 95.50%. By themselves, strong growth in rents and an average occupancy above 95% would indicate demand already exceeds supply, suggesting that the market has rental unit demand that is presently not being met. Over the last four years (1st quarter 2012 to 1st quarter 2016), the average asking rent has increased by nearly 11% in the Primary Market Area. RECI 74 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 158 of 198 The submarket average effective rent has increased despite a surge in apartment unit construction located to south of Primary Market Area boundary. (Note: quarter to quarter changes in the average rent do indicate quarterly declines as well as increases.) A total of 488 apartment units were delivered in 2015 at two properties – Amli Deerfield and Woodview. These units are being absorbed at a relatively rapid pace – about 15 units per month. Our experience in urban and suburban submarkets that have been subject to minimal or no new apartment construction in 20 to 30 years, especially in urban submarkets proximate to major employment centers, has been upon the delivery of new rental units, the units are absorbed fairly rapidly as existing apartment renters and other households capitalize on the availability of newer/better quality renter units. Earlier in this section of the report we calculated a capture rate that represents the percentage of likely consumers that would need to be attracted to the planned development to reach stabilized occupancy (i.e., 95% occupancy). We calculated a capture rate of 3.6% to 7.0% of demand for all renter units in the Total Market Area. Refining this analysis to reflect only higher income households (i.e., household income of $50,000+), the capture rate increases to 6.8% to 13.2%. These two measures suggest that there is opportunity for additional rental units. Also, in Section VI, we forecast the potential impact of an additional 363 units in eastern Lake County units on the Primary Market Area vacancy rate. A demand/supply forecast that suggests the delivery of as many as 521 apartment units (total of all apartment projects that are under construction or proposed in the Primary and Secondary Market Area) will be able to be absorbed after an initial spike in the vacancy rate in the Primary Market Areas. The vacancy rate is forecast to ultimately decline to be no higher than 4% to 7%, according to RECI’s forecasts. Three potential sources of demand for apartments in downtown Highwood include: (1) renter households that work in downtown Highwood, downtown Lake Forest, Downtown Highland Park or other downtowns along the Metra line in Cook County; (2) renter households presently residing in older rented condos or apartments in the Highwood, Highland Park and Lake Forest communities that that may be more suited to newly constructed apartments; and (3) renter households residing in northern Cook County who work north of the Northbrook/Deerfield area, who presently commute by commuter train or vehicle. Absorption Forecast In order to develop a forecast of apartment unit absorption, we look to the lease-up rate of recently built apartment developments within or near Lake County, Illinois. Figure 55 below shows average monthly absorption estimates for 15 apartment communities that we have studied since 2009 as part of a broader analysis of Class A apartment developments in Lake County, IL. Our research suggested that each of these properties were properly positioned for their respective submarkets. All but one, for its size (301 Riverwalk Place), achieved a moderate to high rate of lease-up. RECI 75 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 159 of 198 This project was built by developer of office/industrial properties (Hamilton Partners) and also had a significant locational disadvantage – set back well off of Milwaukee Avenue. One of the most rapid rates of lease-up was associated with Deerfield Village apartments. We attribute this to its location at the intersection of two major thoroughfares, location adjacent to Deerfield’s redeveloped downtown and the time period (2000) it was delivered. In summary, our research of the last three to four years suggest that an apartment absorption rate of 10 to 20 units per month is typically achievable for larger apartments projects when: (1) the product is properly positioned to penetrate urban/suburban apartment demand; and (2) the property is properly priced (i.e., subject property rents are not considerably above its primary competitors). We would expect smaller apartment developments like the subject property to exhibit an absorption rate closer to one-half the monthly rate of larger properties, say below 10 units per month. For example, the lease-up rate for two smaller properties in 2013 - Emerson Square and Central Station –were estimated at 5 units per month, as shown below. FIGURE 55: CLASS A AND CLASS A/UPSCALE APARTMENT UNIT ABSORPTION RATES g Number of Units Total Leasing Leased/ % of Total # Property Name City Units Began Month Units 1 Deerfield Village Center Deerfield 56 2000 12 21.4% 2 Amli at Museum Gardens Vernon Hills 298 3Q 2004 17 5.7% 3 Madison at Park Butterfield Mundelein 522 2004 22 4.2% 4 Coventry Glen Round Lake 225 2Q 2005 19 8.4% 5 301 Riverwalk Place Buffalo Grove 90 4Q 2006 5 5.6% 6 Port Clinton Vernon Hills 60 2Q 2009 10 16.7% 7 Commons at Town Center Vernon Hills 85 4Q 2009 7 8.2% 8 Emerson Square* Evanston 32 4Q 2013 5 16.7% 9 AMLI Evanston Evanston 195 1Q 2013 10 5.1% 10 1717 Evanston 175 1Q 2013 11 6.3% 11 Central Station Evanston 80 2Q 2013 5 6.3% 12 Oaks of Vernon Hills I Vernon Hills 304 3Q 2014 16 5.3% 13 Woodview Deerfield 248 1Q 2015 14 5.6% 15 Amli - Deerfield Deerfield 240 3Q 2015 14 5.8% Total/Average 2,848 12 8.4% Sources: Real Estate Counselors International, Inc. Field Surveys, 2000-2016 *Note: Features affordable rental units and is considered a Class B property. RECI 76 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 160 of 198 Nevertheless, based on the data that we have available to us, we have concluded a monthly absorption rate range for the subject property to be six to nine units per month, as shown in Figure 56. This absorption rate range implies that a 28 unit apartment project would be leased to 95% (i.e., 27 units) between four and nine months. FIGURE 56: CLASS A APARTMENT UNIT ABSORPTION FORECAST FOR THE SUBJECT PROPERTY Total Number of Units to be Absorbed to Reach 95%+ Occupancy of 28 Unit Property 27 Units Forecast Range Low Absorption High Absorption Forecast Range of Monthly Absorption, in Units 6 9 Forecast Range of Monthly Absorption, in % 23% 34% Forecast Period to absorb 28 units, in Months 4 3 UNIT MIX AND RENTAL RATES Evaluation Of Unit Mix Several of the newer apartments in the Primary and Secondary Market Areas – Amli at Museum Garden, Woodview, Amli –Deerfield and the Oaks of Vernon Hills – are targeting singles/married couples and offer 60% to 80% one bedroom units and/or studio apartments. Renaissance Place and Deerfield Village, located in east Lake County, are 50% to 60% two bedroom units and 40% to 50% one bedroom units. (They do not offer three bedroom units.) Earlier in this section, we summarized the most competitive apartments in located in the Primary and Secondary Market Areas. In addition, we also surveyed key characteristics of 13 recently completed and under construction apartment projects in northern Cook County and Lake County and summarized the unit mix of each and the unit sizes by unit type. These properties reflect the most recent design plans of apartment developers in the region and are shown in Figure 57. A summary of our findings is as follows: . Studio apartments are primarily found in the in the largest apartment developments, with more than 200 units. Studio apartments are found in seven of the 13 projects. Examples include Woodview, Amli Deerfield, Amli Evanston, E2, Tapestry and The Reserve. Central Station is only 80 units, but featured eight or 10% studios. . Among the properties with studio units, they generally account for only 6% to 15% of total units. E2 in downtown Evanston features the largest percentage – at 24%. . Three bedroom units are featured in in seven of the 13 developments, but in only four of the largest developments (over 200 units). RECI 77 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 161 of 198 . Among the properties with three bedroom units, they generally account for only 3% to 18% of total units. Two of the smaller properties – Emerson Square and The Founders exhibit the highest percentage of three bedroom units, at 31% to 33%. . Unit sizes for studio, one bedroom, two bedroom and three bedroom units are summarized: o Studio units range in size from 505 square feet to 654 square feet, with an average of 595 square feet. o One bedroom units range in size from 695 square feet to 1,318 square feet, with an average of 834 square feet. o Two bedroom units range in size from 950 square feet to 1,517 square feet, with an average of 1,174 square feet. o Three bedroom units range in size from 1,090 square feet to 1,518 square feet, with an average of 1,351 square feet. . For those properties that reported vacancy by unit type (only five of the 13), we did not observe any pattern of high vacancy among any single unit size/type. Regarding the subject property’s amenities kitchens will feature 42” cabinets and granite countertops and an island featuring the sink and dishwasher. All units will have nine foot ceilings. These amenities should be attractive to most residents and a significant upgrade from many of the rental units located in the Primary market Area. RECI 78 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 162 of 198 FIGURE 57: RECENTLY COMPLETED AND UNDER CONSTRUCTION APARTMENTS: UNIT MIX AND UNIT SIZES Unit Type with Unit Mix Number % Unit Mix Unit Size Highest Year Vacancy (April, # Property Name City Built Studio 1 BR 2 BR 3 BR Total Studio 1 BR 2 BR 3 BR Studio 1 BR 2 BR 3 BR 2016) 1 Woodview Deerfield 2015 24 112 104 8 248 10% 45% 42% 3% 596 764 1,182 1,328 IBR/2BR 2 Amli Deerfield Deerfield 2015 23 127 90 0 240 10% 53% 38% 0% 536 830 1,218 --- IBR/2BR 3 Emerson Square Evanston 2013 0 4 18 10 32 0% 13% 56% 31% --- 700 950 1,090 NA 4 Midtown Square Evanston 2014 0 68 70 0 138 0% 49% 51% 0% --- 810 1,162 --- NA 5 Central Station Evanston 2013 8 44 24 4 80 10% 55% 30% 5% 601 837 1,225 1,485 1 BR 6 E2 Evanston 2015 85 111 108 50 354 24% 31% 31% 14% 505 695 1,126 1,443 3BR 7 Amli Evanston Evanston 2013 6 71 98 39 214 3% 33% 46% 18% 654 831 1,260 1,518 NONE 8 The Reserve Glenview 2015 16 96 96 30 238 7% 40% 40% 13% 630 821 1,157 1,396 NA 9 833 Laurel Highland Park 2016 0 2 10 0 12 0% 17% 83% 0% --- 1,318 1,517 --- NA 10 The Founders Northbrook 2015 0 14 14 14 42 0% 33% 33% 33% --- 750 1,000 1,200 NA 11 Tapestry Glenview Northbrook 2014 44 133 113 0 290 15% 46% 39% 0% 645 877 1,133 --- NA 12 Northshore 770 Northbrook 2016 0 NA NA 0 0 ------821 1,135 --- NA 13 Northgate Crossing Wheeling 2016 0 234 54 0 288 0% 81% 19% 0% --- 787 1,197 --- NA LOW 2 10 0 32 0% 13% 19% 0% 505 695 950 1,090 HIGH 234 113 50 354 24% 81% 83% 33% 654 1,318 1,517 1,518 AVERAGE 85 67 12 167 6% 41% 42% 10% 595 834 1,174 1,351 Sources: CoStar and Real Estate Counselors International, Inc. RECI 79 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 163 of 198 In view of the targeted demand segments, we believe that the one bedroom and two-bedroom units should represent roughly 40% to 50% and 50% to 60% of total units, respectively. The client’s unit mix falls within these ranges. Unit Detail Unit To tal % of Total Square Square # Bedroom Type Count Units Feet Feet 1 1 Bedroom, 1 Bath 4 14.3% 680 2,72 0 2 1 Bedroom, 1 Bath, Den 8 28.6% 800 6 ,40 0 3 2 Bedroom, 2 Bath 8 28.6% 985 7,88 0 4 2 Bedroom, 2 Bath 8 28.6% 1,025 8 ,20 0 TOTAL/AVERAGE 28 100.0% 900 25,200 Our analysis of the unit sizes of recently built and projects under construction indicated: (1) the subject’s planned one bedroom units at 680 square feet is only slightly below the bottom end of the range of 695 square feet to 1,318 and (2) the subject’s larger one bedroom unit, at 800 square feet, is just below the average of the range of sizes of one bedrooms; and (3) the planned two bedroom units, at 985 square feet and 1,025 square feet are above the bottom end of the range, at 950 square feet, but below the average size of one bedrooms units, at 1,174. Establishing Rental Rates For Subject Property In order to establish the “market” rents for the subject property, we evaluated the monthly and per square foot rents of both the surveyed Class A/newly constructed apartments and the rental condos/townhomes, with special emphasis on unit features, location and the subject property’s unit sizes. This analysis also reflected our analysis of household types, income levels and affordability. After considering such factors as property location, unit amenities and common area amenities, we believe the target weighted average per square foot rental rate range of $1,693 to $1,814 in today’s dollars. This equates to an average monthly rental rate of $1.88 to $2.02 per square foot. FIGURE 58: FORECAST MARKET RENTS AND TARGET HOUSEHOLDS FOR SUBJECT PROPERTY RECI 80 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 164 of 198 Mo nthly Rent Unit Detail Mo nthly Rent PSF Po tential Targ et Market % o f Unit To tal PRIZM Household To tal Square Square Classification and # Bedroom Type Count Units Feet Feet Low High Low High Socioeconomic Rank Executive Suites (8), Gray Power 1 1 Bedroom, 1 Bath 4 14.3% 680 2,720 $1,350 $1,500 $1.99 $2.21 (21), Up-and-Comers (24), Middleburg Managers (27) and 2 1 Bedroom, 1 Bath, Den 8 28.6% 800 6,400 $1,500 $1,700 $1.88 $2.13 Boomtown Singles (35). 3 2 Bedroom, 2 Bath 8 28.6% 985 7,880 $1,800 $1,900 $1.83 $1.93 Movers & Shakers (3 ), Brite Lites, Li'l City (12), New Empty Nests (14), Second City Elite (20), Young 4 2 Bedroom, 2 Bath 8 28.6% 1,025 8,200 $1,950 $2,000 $1.90 $1.95 Influentials (22) TOTAL/AVERAGE 28 100.0% 900 25,200 $1,693 $1,814 $1.88 $2.02 Sources: Real Estate Counselors International, Inc. Field Survey, March 2016 RECI 81 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 165 of 198 SECTION VIII – FINDINGS/CONCLUSIONS FINDINGS/ CONCLUSIONS SUMMARY We summarize the primary findings/conclusions of our study below: . Even before the U.S. economy fell into recession a watershed change was emerging with respect to demand for rental housing in the United States. The nation's homeownership rate actually began declining in 2005. The conditions brought about by the Great Recession and post- recession period prompted a renewed appreciation for the benefits of renting, including the greater ease of moving, the ability to choose housing that better fits the family budget, the lack of unnecessary exposure to market volatility and the freedom that this brings. While economic conditions drove household growth in the short run, the size and age structure of the adult population are more important factors in the long run. . Households of all but the oldest age groups have joined in the shift toward renting. The largest share increase is among households in their 30s, up by at least 900 basis points over an eight-year span. But shares of households across all five-year age groups between 25 and 54 also rose by at least 600 basis points. Over the next decade, two broad demographic trends - the aging of the Baby Boom population and the increasing importance of minorities for household growth-will drive significant changes in rental demand. Also, a return to the recent average household size for 20-34 year olds of 2.40 to 2.45 equates to 1.9 million more households, with the vast majority of these adding to the pool of renter households. . Chicago MSA employment is projected to continue to exhibit gains throughout the forecast period, though growth is forecast to lag somewhat behind the national average. The recent poor performance of the metro area's very large Manufacturing and Financial Activities sectors is anticipated to be a drag on job overall growth. Lake County job growth, in particular, is forecast by Moody’s Analytics to accelerate in 2016. . Lake County job growth has been fueling the demand for renter housing. Since the 1970s, employment growth in Lake County has exceeded population growth in the county. The growth in the number of jobs in Lake County is directly related to the surge in commercial real estate development (and jobs) during the 1970s, 1980s, 1990s and 2000s. Over these four decades, Lake County was transformed into a major employment center of the region, with most of the commercial development occurring in the southeast portion of the county. Migration and commuting patterns are also contributing to the demand for rental housing in the county. RECI 82 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 166 of 198 . There are approximately 174,000 private sector jobs located within a 15-20 minute drive-time of downtown Highwood. Somewhat less than 50,000 of these jobs are manufacturing, wholesale trade and transportation/warehousing (i.e., industrial) jobs. Approximately 35,000 jobs are traditional office-using jobs; just over 20,000 jobs are in the retail sector and nearly 14,000 jobs are in the healthcare sector. The Interstate 94 corridor contains a total of 55.0 million square feet of office space and 90.0 million square feet of industrial space. . The tightest apartment market conditions in eastern Lake County’s recent history have been exhibited in recent years. The Primary Market Area contains approximately 41 square miles and has a total inventory of 2,297 apartment units (and 3,939 total rental units). At the end of the 1st quarter 2015, the apartment vacancy rate in the Primary Market Area was only 3.5%. The average monthly effective rent was $1,724 or $1.90 per square foot in the 1st quarter. For nearly the past 10 years, there were very few apartment units delivered in this market area until recently. . The high apartment occupancy rates and recent strong growth in rents in the Primary and Secondary Market Areas indicate demand continues to exceed supply and suggests rental unit demand that is presently not being met. This view is supported by: (1) the capture rate analysis that suggests that the subject property needs to capture only about 7% to 13% of “qualified” renter demand to be leased–up; and (2) a demand/supply forecast that suggests the delivery of as many as 363 apartment units (total of all apartment projects that are under construction or proposed in the Primary and Secondary Market Areas) will be able to be absorbed after an initial spike in the vacancy rate in the Primary Market Area. The vacancy rate is forecast to ultimately decline to be no higher than 4% to 7%, according to RECI’s forecasts. . Three potential sources of demand for apartments in downtown Lake Bluff include: (1) renter households that work in downtown Highwood, downtown Lake Forest, Downtown Highland Park or other downtowns along the Metra line in Cook County; (2) renter households presently residing in older rented condos or apartments in the Highwood, Highland Park and Lake Forest communities that that may be more suited to newly constructed apartments; and (3) renter households residing in northern Cook County who work north of the Northbrook/Deerfield area, who presently commute by commuter train or vehicle. . Using the PRIZM geodemographic database, we have identified a rather diverse mix of household types for apartments in downtown Highwood. The Primary Market Area contains a very diverse mix of household types. In fact, we have identified 10 household types or segments that we believe contain a significant number of households that are either renters or given the opportunity, would become renters at a future stage in their lives. These household types include singles and couples, mostly without children. Potential target households may include 25-35 year olds, singles and couples in their late 30s and 40s, as well as older folks, including empty nesters. RECI 83 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 167 of 198 These households span a range of affluence that may include some considered to be Lower-Middle income, but mostly Midscale, Upper Middle, Upscale and some considered Wealthy. . In view of the targeted demand segments, we believe that the one bedroom and two-bedroom units should represent roughly 43% and 57%, respectively, as shown below. We have concluded that the target weighted average per square foot rental rate range for the 28 apartment units developed on the subject property should be in the range of $1,693 to $1,814 in today’s dollars. This equates to an average monthly rental rate of $1.88 to $2.02 per square foot. Mo nthly Rent Unit Detail Monthly Rent PSF % o f Unit To tal To tal Square Square # Bedroom Type Count Units Feet Feet Low High Low High 1 1 Bedroom, 1 Bath 4 14.3% 68 0 2 ,720 $1,350 $1,50 0 $1.99 $2.21 2 1 Bedroom, 1 Bath, Den 8 28 .6 % 80 0 6,400 $1,500 $1,70 0 $1.88 $2.13 3 2 Bedro om, 2 Bath 8 28 .6 % 985 7,880 $1,800 $1,90 0 $1.83 $1.93 4 2 Bedro om, 2 Bath 8 28 .6 % 1,025 8,200 $1,950 $2,00 0 $1.90 $1.95 TOTAL/AVERAGE 28 100.0% 900 25,200 $1,693 $1,814 $1.88 $2 .0 2 Sources: Fides Capital Partners and Real Estate Counselors International, Inc. RECI 84 REAL ESTATE COUNSELORS INTERNATIONAL, INC. 08 02 2016 CC Packet Page 168 of 198 ADDENDA 08 02 2016 CC Packet Page 169 of 198 SUBJECT PROPERTY/NEIGHBORHOOD PHOTOS 08 02 2016 CC Packet Page 170 of 198 TARGET RENTER HOUSEHOLDS 08 02 2016 CC Packet Page 171 of 198 LIMITING CONDITIONS AND ASSUMPTIONS 08 02 2016 CC Packet Page 172 of 198 LIMITING CONDITIONS AND ASSUMPTIONS No responsibility is assumed for matters legal in nature. No investigation has been made of the title to or any liabilities against the properties. It is assumed, unless otherwise noted, that the owner's title claim is valid, all assessments are paid, the property rights are good and marketable, and there are no questions or defects in title, boundaries, encroachments, easements, or liens. No soil analysis or geological studies were made or furnished to the consultant to determine the soil bearing capabilities of the land, nor were any water, oil, gas, coal, or other subsurface mineral and use rights or conditions investigated. To the best of our knowledge, all data set forth in this report are true and accurate. Although gathered from reliable sources, no guarantee is made nor liability assumed for the accuracy of any data, opinions, or estimates identified as being furnished by others. We assume all information provided by the client--including a rent roll and other property data--is accurate. We reserve the right to modify or change our findings and conclusions if these data are later determined to be inaccurate. Substances such as asbestos, urea-formaldehyde foam insulation, atmospheric emissions, PCBs, hazardous chemicals, toxic waste, or other potentially hazardous materials could if present, adversely affect the value of properties. Unless otherwise stated in this report, the existence of hazardous substances, which may or may not be present on or in the properties, was not considered by the consultant in the development of conclusions. No responsibility is assumed for such conditions, and the consultant is not qualified to detect such substances. The consultant is not required to give testimony or appear in court or at any governmental hearing by reason of this analysis or report, unless prior arrangements and compensatory fees have been agreed upon. Exhibits, such as the site plan or parcel maps, are presented to assist in visualizing the properties and its surroundings. No liability is assumed for their legal or cartographic accuracy. Parcel sizes (i.e., square footages) reported by CoStar and zoning were verified when possible through on-line public records databases. However, not all zoning classifications were verified which would have required extensive research, but all sales and listing parcel sizes were confirmed. The subject parcel sizes and the zoning classifications were also verified with Volusia County public records. Land areas and legal descriptions used in this analysis were obtained from public records and have not been verified by a licensed surveyor or attorney. The land description is typically included for identification purposes only and should not be used in a conveyance or other legal document without proper verification by legal counsel. No environmental impact study has been ordered or made. Full compliance with applicable federal, state, and local environmental regulations and laws is assumed unless otherwise stated, defined, and considered in this report. 08 02 2016 CC Packet Page 173 of 198 It is also assumed that all required licenses, consents, or other legislative or administrative authority from any local, state, or national government or private organization either have been or can be obtained or renewed for any use which the report covers. Accordingly, we do not opine on, nor are we responsible for, the structural integrity of the properties including its conformity to specific governmental code requirements, such as fire, building and safety, earthquake, and occupancy, or any physical defects. The date of our forecasts to which the conclusions and opinions expressed apply, is set forth in this report. The sales price ranges are based on the status of the national business economy, the purchasing power of the United States dollar, and financing terms as of that date. One or more signatories of this report is a member or associate of the Counselors of Real Estate. The bylaws and regulations of the Counselors of Real Estate require each member and associate to control the use and distribution of each report signed by them. Possession of this report or any copy thereof does not carry with it the right of publication; nor may this report be used by anyone but the client without the consent of Real Estate Counselors International, Inc. We do not authorize conveyance of all or part of the contents of this report to the public through advertising, public relations, news, sales, or other media without prior written consent. Of particular concern are the forecasts, the identity of the consultants, and any reference to the Counselors of Real Estate or the designation awarded by this organization. 08 02 2016 CC Packet Page 174 of 198 COMPETITIVE RENTAL SURVEY 08 02 2016 CC Packet Page 175 of 198 APRIL 2016: SURVEY OF SELECTED APARTMENT COMMUNITIES IN LAKE COUNTY AND NORTH COOK COUNTY 1 st Quarter 2016 Distance from Occupancy Subject Unit Square Monthly Asking Building Name & Address Class Year built # of Units Rate Property Unit Type # of Units Distribution Feet Rent Additional Fees Unit Amenities Common Area Amenities Comments CLASS B/C MULTIFAMILY PROPERTIES 1 Fort Sheridan Place C 1970/2011 252 97.2% 1 Block 1 Bed, 1 Bath 72 29% 571 - 630 $1,154 - $1,194 Application Fee $50 Central air-conditioning, cable ready, Fitness centers in each building, Fort Sheridan Place was purchased in 2009 with 634 Sheridan Road ($1.89/sf - $2.02/sf) Security Deposit $500 to 2 times Monthly Rent dishwasher, disposal, microwave, walk- washer and dryers on each floor, the intent to convert to condominiums, but this Highwood, IL 60040 2 Bed, 1 Bath 144 57% 881 - 933 $1,384 - $1,484 Administration Fee $150 in closets, window coverings. Units storage locker and bike storage in effort was scrapped in favor of substantial overhaul ($1.57/sf - $1.59/sf) Pet Deposit $250 have been completely renovated since basement. and renovation, including roof, siding and interiors. 3 Bed, 2 Bath 36 14% 1,144 - 1,172 $1,744 - $1,764 Pet Rent $15/pet/mo. 2009. In the process, the rents were substantially ($1.51/sf - $1.52/sf) Storage Complimentary increased, and the residential mixed was altered from larger families to more singles and young professionals. Owing to its position across from the remaining functions of Fort Sheridan, the property is also popular with military personnel. This property is situated at the north end of Highwood, and is approximately a 10-minute walk to the Metra station. 2 Braeside Apartments C 1975/2000 16 95.0% 5 Miles 2 Bed, 1 Bath 16 100% 1,000 $1,500 - $1,600 Security Deposit $1,500 Air-condition, ceiling fans, hardwood Storage available in the basement, but This is an older 4-building, 2-story apartment 511 County Line Road ($1.50/sf - $1.60/sf) Administration Fee $200 flooring, cable-ready, dishwasher. no on-site amenities. complex situated directly across from the Braeside Highland Park, IL 60035 Pet Rent $25/pet/mo. Washer/dryer connections are available Metra stop, on the north side of Lake Cook Road. in the basement but not in the individual It has no amenities, but has been mostly updated units. with hardwood floors and new kitchens. 3 Americana Apartments B 1982 108 95.4% 6 Miles 1 Bed, 1 Bath 18 17% 822 $1,625 Application Fee $60 Air-conditioning, cable-ready, high-end Outdoor swimming pool provided, but This property has large units with luxury 1755 Lake Cook Road ($1.98/sf) Security Deposit $500 (non-refundable) upgrades in kitchen, including no exercise facility. One garage appointments both in the lobby areas, as well as Highland Park, IL 60035 2 Bed, 2 Bath 37 34% 1,473 - 1,699 $2,625 Pet Deposit $500 (non-refundable) marble/quartz countertops and space is provided with each unit, and within the apartments themselves. The exterior ($1.55/sf - $1.78/sf) Additional Garage Space $150 European-style maple cabinets. additional are available to rent. appears dated, and has not been updated. This 2 Bed, 2 Bath + Den 28 26% 1,859 - 2 136 $2,825 Laundry facilities in each unit, as well Shorter term leases, and furnished property was originally developed as a ($1.32/sf - $1.52/sf) as gas fireplaces and balconies. apartments are available, owing to the condominimum-conversion with a total of four 3 Bed, 2 Bath 53 49% 1,851 - 1,886 $2,825 large proportion of snow birds in buildings. However, only one has been converted ($1.50/sf - $1.53/sf) residence. to condominiums and is not included in the unit mix. The population at this property is much older. 4 Deer Valley Apartments B/C 1991 224 96.9% 7 Miles 1 Bed, 1 Bath 120 54% 725 $1,298 - $1,592 Application Fee $50/application Central air-conditioning, cable ready, Clubhouse, fitness center, garages Deer Valley is located directly across the street 30011 Waukegan Road ($1.79/sf - $2.19/sf) Security Deposit $300 ceiling fans in all bedrooms, stainless available, on-site management, pet from AbbVie's executive offices and corporate Lake Bluff, IL 60044 2 Bed, 2 Bath 104 46% 1,050 $1,371 - $1,670 Administration Fee $200 steel, energy-efficient appliances, friendly policies, recycling center, headquarters in Abbott Park. Concessions are ($1.31/sf - $1.59/sf) Parking $125/mo granite countertops, fireplaces in some swimming pool, storage available, wi-fi currently being advertised at $750 for the 2- Pet Deposit $250 2-bedroom homes, granite countertops, available, business center, and bedroom units only. This property has a Lake Bluff Pet Rent $25/pet/mo. high-end cabinetry, hardwood-style picnic/BBQ area available to mailing address, but is located in unincorporated Storage $30 flooring, valuted ceilings in select residents. Lake County, and is associated with the Libertyville homes, private balconies & patios, walk- school system. Lease terms are offered at six to in closets, washer/dryer in each unit, 15 months, with discounts for longer-term leases. view of wetland preserve. 5 Forest Pointe/Village Green B/C 1989 236 97.9% 8 Miles 1 Bed, 1 Bath 126 56% 672 - 768 $1,039 - $1,818 Application Fee $40 or $10 on-line Central air-conditioning, washer/dryer in Club room, business/conference This property was developed by the same 29533 N. Waukegan Road ($1.54/sf - $2.64/sf) Security Deposit $400 (non-refundable) units, cable ready with high speed center, outdoor pool with sundeck, developer as the Deer Valley Apartments but is Lake Bluff, IL 60044 2 Bed, 2 Bath 110 49% 1,013 $1,407 - $2,422 Administration Fee $150 internet access available, above-range activity center, 24-hour emergency under separate ownership. Forest Pointe is also ($1.39/sf - $2.39/sf) Garage Parking $100/mo microwave, garages available, private maintenance and 24-hour fitness known as a Village Green property, and is owned Garage Deposit $50 balcony or patio available, woodburning center. Dog run and dog walking by Blackrock. Like Deer Valley, Forest Pointe is Pet Deposit $275 fireplaces in some units, vaulted stations. Not all buildings are pet- located in unincorporated Lake County, and while Pet Rent $30/pet/mo. ceilings available. friendly. it has a Lake Bluff mailing address, is part of the Storage $30 - $50/mo Libertyville school system. Short-term leases are available, and discounts are available for employees of Abbott, Motorola, Cardinal, Baxter, and Hewitt Associates. No other concessions are being offered. Real Estate Counselors International, Inc. 08 02 2016 CC Packet Page 176 of 198 APRIL 2016: SURVEY OF SELECTED APARTMENT COMMUNITIES IN LAKE COUNTY AND NORTH COOK COUNTY CLASS A/UPSCALE AND NEWLY CONSTRUCTED MULTIFAMILY PROPERTIES 6 Renaissance Place A 2000 30 93.3% 1.7 Miles 1 Bed, 1 Bath 20 67% 960 - 1,273 $2,145 - $2,350 Security Deposit One month's rent Central air conditioning, cable or This is an urban-style residential Current concession of free garage parking is 1849 Green Bay Road ($1.80/sf - $2.32/sf) satellite available, internet access, property which is part of a mixed-use included with a 6 or 12 month lease. Short-term Highland Park, IL 60035 2 Bed, 2 Bath 10 33% 1,330- 1,878 $3,025 - $3,475 extra storage available, patio or balcony development with high-end retail on furnished apartments are sometimes available. ($1.81/sf - $2.33/sf) in most units, washer/dryer in unit, and the first floor. In addition to upscale units come with window covering. Pets retailers, excellent restaurants and a are not allowed. upscale movie theater are part of the development. The property includes heated underground garage parking, a fitness center, security, and elevator access. 7 Deerfield Village Centre A 2000 53 86.8% 5 Miles 1 Bed, 1 Bath 25 47% 760 - 995 $1,820 - $2,240 Application Fee $50/application Furnished, central air conditioning, high On-site management, on-site 625 Deerfield Road ($2.25/sf - $2.35/sf) Security Deposit $500 speed internet available, dishwasher, maintenance, storage space(s), Deerfield, IL 60015 1 Bed+ Den, 2 Bath 1 2% 1,088 $2,650 Parking $50/mo - Single; $75/mo - Tandem washer/dryer, small bedrooms, large concierge, garage parking, house- ($2.44/sf) Pet Deposit $400 - 1 pet; $600 - 2 pets terraces, upgrading to nickel finished sitting service, small free fitness 2 Bed, 2 Bath 27 51% 1,040 - 1,400 $2340 - $3,150 Pet Rent $20/pet/mo. fixtures, storage available at no charge. center, residents lounge, package ($2.25/sf) Storage $0 (1st come/1st serve) Each unit has unique layout. receiving, business center, elevator, trash chutes, recycling center. 8 AMLI Deerfield A 2015 240 47.5% 8 Miles Studio 23 10% 527 - 631 $1,403 - $1,730 Application Fee $65 Stainless steel appliances, side-by-side This property was designed to qualify This is a new property which was completed in the 1525 Lake Cook Road ($2.24/sf - $2.79/sf) Security Deposit $250 (refundable) refrigerators, under-counter beverage for LEED Silver designation. It is a 3rd quarter of 2015. It has high rental rates, but is Deerfield, IL 60015 1 Bed, 1 Bath 121 50% 722 - 858 $1,657 - $1,918 Administration Fee $180 centers, 42" painted white wood shaker- smoke-free community with fitness offering concessions on some units. Concessions ($2.18/sf - $2.30/sf) Parking $125/mo for garage pkg style or espresso wood flat panel center, swimming pool, resident include 3 months free parking or one month's rent 1 Bed, 1 Bath with Office 6 3% 966 $2,137 - $2,167 Pet Deposit $250 (refundable) kitchen cabinets, task lighting, marble lounge with fireplace and gourmet free. It also offers short-term furnished apartments ($2.21/sf - $2.24/sf) Additional Pet Deposit $350 (non-refundable) or glass tile backsplashes, gooseneck kitchen, a business center with coffee from $105/day, with a minimum stay of 90 days. 2 Bed, 2 Bath 76 32% 1,147 - 1,303 $2,451 - $2,717 kitchen faucets and pull-down sprayers, bar and lounge area, golf simulator ($2.09/sf - $2.18/sf) full size washers and dryers, 9-foot room, garage parking, electric 2 Bed, 2 Bath with Office 14 6% 1260 - 1340 $2,853 - $3,117 ceilings, crown molding, some private charging stations, and secure bicycle ($2.25/sf - $2.33/sf) yards and balconies. storage and repair shop. It is pet friendly, with a dog wash. 9 Woodview Apartments A 2015 248 83.1% 7 Miles Convertible, 1 Bath 204 82.3% 586 - 605 $1,500 - $1,575 Application Fee $50 Units include quartz countertops, Outdoor pool with cabanas and hot This is a new property still in lease-up, offering 15 Parkway North ($2.48/sf - $2.65/sf) Administrative Fee $400 upgraded plank flooring, stainless steel tub, fitness center with yoga studio, various concessions, including 1 month free on a Deerfield, IL 60015 1 Bed, 1 Bath 22 8.9% 675 - 859 $1,678 - $2,103 Security Deposit 1 month's rent appliances, private balconies and outdoor kitchens and fire pits, 13-month lease. The $400 administrative fee can ($2.30/sf - $2.49/sf) Parking $75 - $125 patios, a peninsula/island counter with "iLounge" with coffee bar, clubroom, be applied toward the first months' rent if a lease is 2 Bed, 2 Bath 21 8.5% 958- 1,319 $2,208 - $3,052 Pet Deposit $250 (non-refundable) overhead lighting, and other modern business center, multimedia, gaming signed within 24 hours of a tour. ($2.13/sf - $2.39/sf) Pet Rent $20/pet/mo. kitchen amenities, including a pull-down and theatre room, private lounge with 3 Bed, 2 Bath 1 0.4% 1,328 $3,437 Storage $25 - $100/mo gooseneck kitchen faucet. shuffle board and pool table, pet wash ($2.46/sf) with turbo pet dryers. A dog park is under construction. 10 Manchester Square A 2008/2015 34 12 Miles Studio 4 12% 710 The units are being reconfigured. This property is 3 stories high, and the This property was purchased in 2013 by Chicago- 601-611 N. Milwaukee Avenue 1 Bed, 1 Bath 8 24% 880 Parking includes a combination of exterior is of high quality with brick based Cedar Street Companies, who intend to Libertyville, IL 60048 2 Bed, 2 Bath 12 35% 1,430 indoor and outdoor spaces, and and limestone-type finish. Gated reconfigure the second and third floor apartment 3 Bed, 2 Bath 10 29% 1,980 redevelopment plans have been stalled balconies with sliding glass doors are units. The first floor retail has been successful but due to the limited number of units. featured. Amenities have not yet been the original developer's attempt to market the determined. upper floors as condominium units and office space failed. Plans are for a portion of the units to be offered as "affordable", to those with incomes lower than the Chicago average. Real Estate Counselors International, Inc. 08 02 2016 CC Packet Page 177 of 198 APRIL 2016: SURVEY OF SELECTED APARTMENT COMMUNITIES IN LAKE COUNTY AND NORTH COOK COUNTY 11 Focus Western/Laurel A 2007 110 N/A 4.5 Miles 1 Bed, 1 Bath 32 29% 750 $1,900 The apartments are planned to be This development is also expected to This property was formerly the site for municipal 1000-1042 N. Western Avenue $2.53/sf) demised in 3-story brick clad structures include 12 detached single-family services in Lake Forest, which have been moved Lake Forest, IL 60045 2 Bed, 2 Bath 54 49% 1,100 - 1,600 N/A with fireplaces in some units. homes ranging in size from 3,900 to to a new facility near I-294 and Hwy 60. The site 4,400 sf and 42 condominiums has been cleared and the developer is awaiting 3 Bed, 3 Bath 24 22% 1612 - 1811 $3,900 ranging in size from 1,408 to 2,600 sf. final approvals on various components of ($2.15/sf - $2.41/sf) development. 12 The Oaks of Vernon Hills A 2014 302 97.7% 1 Bed, 1 Bath 132 696 - 889 $1,495 - $2,076 Application Fee $50 Private garages open directly into Outdoor swimming pool with sundeck, This is the newest property in the market, and has 103 Oak Leaf Lane ($1.84/sf - $2.77/sf) Security Deposit $250 (refundable) apartment buildings, while rowhomes nature trails, a community room with leased up very quickly. Only the one bedroom Vernon Hills, IL 60061 1 Bed, 1 Bath + Den 44 893 $1,753 - $2,275 Administration Fee $200 have an attached, two-car garage. business center, pool table and units have any significant availability. Concessions ($1.96/sf - $2.55/sf) Parking $150 - $180/mo for garage pkg Units have granite countertops, theater room, fitness center, dog park, of 1 month's rent are currently offered on the one 2 Bed, 2 Bath 94 1,197 - 1,249 $2,096 - $2,754 Pet Deposit $300 (refundable) stainless stell appliances, bicycle storage, individual resident bedroom units.The property is a typical garden ($1.65/sf - $2.20/sf) Additional Pet Deposit $300 (non-refundable) contemporary flooring and advanced storage spaces and secure telephone apartment property, constructed of wood frame 2 Bed, 2.5 Bath + Den 25 1,447 $2,820 - $3,856 Pet Rent $10/mo technology. One- and two-bedroom entry system, as well as on-site and demised in 8 buildings. The property is owned Row Home ($1.95/sf - $2.66/sf) apartments are situated in elevator management and maintenance staff. by REVA Developmentment. Another 32 units will 3 Bed, 2.5 Bath + Den 7 1,800 $3,362 - $4,437 buildings. Units are equipped with be delivered in 2016 in Phase II of this project. Row Home ($1.87/sf - $2.47/sf) washers and dryers, and balconies. Property is LEED certified, Silver. 13 AMLI at Museum Gardens A 2005 294 96.3% 9 Miles 1 Bed, 1 Bath 36 1,001 $1,638 - $1,816 Application Fee $65/applicatant Nine-foot ceilings, gourmet kitchens 7-story buildings with elevators and AMLI at Museum Gardens is located in Gregg’s 1155 North Museum Blvd. ($1.64/sf - $1.81/sf) Security Deposit $250 (refundable) with 42-inch upper cabinets, black or telephone entry system, controlled Landing, a master-planned residential community. Vernon Hills, IL 60061 1 Bed, 1 Bath + Office 126 1,045 $1,516 - $1,678 Administration Fee $180 white Whirlpool appliances, full-size access gates, heated enclosed The community is located adjacent to Westfield ($1.45/sf - $1.61/sf) Parking $150/mo for underground garage built-in microwaves, refrigerators with reserved parking, crystal-chandeliered Shoppingtown Hawthorn Mall. The Tri-State 1 Bed, 1.5 Bath 30 1,064 $1,749 $100/mo for detached garages automatic ice makers, track lighting in great room, 24-hour fitness club, Tollway (I-94) is located 2.25 miles to the east and ($1.64/sf) Pet Deposit $250 (refundable) kitchens, kitchen pantries and linen resort style pool with sundeck, the Libertyville Metra commuter train station 2 Bed, 2 Bath 72 1,203 - 1,216 $1,710 - $2,178 Additional Pet Deposit $350 (non-refundable) closets, designer floors featuring Berber clubhouse, gardens with fountains and (Milwaukee North Line) is located nearly 3.5 miles ($1.42/sf - $1.71/sf) Storage $15 - $30/mo carpet, home offices with wood floors, seating areas, walking/jogging path to the north. The property is located proximate to 3 Bed, 2 Bath 30 1,402 $2,190 full-size washers and dryers, walk-in that connects to Gregg`s Landing the I-94 employment corridor. The property is ($1.56/sf) closets, raised cultured marble vanities, trails, media room with 72-inch rear- situated in a neighborhood that is primarily made double bowl vanities, storage available, projection television and state-of-the- up of commercial land uses. private balconies, sunrooms, art audio and video equipment, library Individually controlled heat and air and conference room with a fireplace, conditioning, high-speed internet business center with computers, RENTAL CONDOS/TOWNHOMES 14 15 Clay Avenue Condos B 2008 12 100.0% .3 Mile 1 Bed, 1.5 Bath 2 1,318 $1,600 - $1,800 Application Fee $50/application Owing to new construction, the units There are no amenities, owing to the This new construction faces the remaining, newly 15 Clay Avenue ($1.22/sf - $1.37/sf) Pet Fee have high-end finishes, hardwood small size of the property. constructed army reserve functions at Fort Highwood, IL 2 Bed, 2 Bath 10 1517 - 1587 $1,950 - $2,000 Security Deposit One Month's rent floors, granite countertops with open Sheridan. The exterior is brick, and the building ($1.26/sf - $1.29/sf) kitchen and stainless appliances. In has an elevator. Units have been listed for unit laundry, private balcony, indoor between $299,000 and $385,000, although none of garage. the units have sold, since the property was developed in 2008. Rental growth for the units since they were constructed has been substantial, generally in the range of $100/month when the units rolled. 15 The Ravines Condominiums A 2002 50 N/A 1 Mile 2 Bed, 2.5 Bath 30 2,006 - 2,400 $2,400 - $3,500 Varies These are luxury condominium units This 9-story condo building has an This building was originally intended to include two 3535 Patten Road ($1.20/sf - $1.46/sf) with high-end finish. Gourmet kitchens outdoor heated pool and exercise condo towers, but only one was constructed. The Highland Park, IL 60035 3 Bed, 3 Bath 20 2,800 $2,800 - $3,200 with stainloess appliances, granite facility. Pets allowed with weight limit. units are generally owned by empty nesters and ($1.00/sf - $1.14/sf) countertops, cherry cabinets, glass tile snowbirds, and very few are available for rent. Real Estate Counselors International, Inc. 08 02 2016 CC Packet Page 178 of 198 APRIL 2016: SURVEY OF SELECTED APARTMENT COMMUNITIES IN LAKE COUNTY AND NORTH COOK COUNTY 15 Bachelor's Officers Quarters A 1890/2002 150 N/A 1 Mile 2 Bed, 2.5 Bath N/A 1,400 - 2,100 $2,500 - $2,700 Varies These luxury condominiums have a While the buildings do not offer garden In addition to the historic buildings renovated and Barracks Lofts Condominiums ($1.29/sf - $1.71/sf) wide range of finishes, but largely apartment style amenities, the position gutted as part of the Fort Sheridan redevelopment 25 Ronin Road, Highwood, IL 3 Bed, 3 Bath N/A 1,750 - 3,000 $3,000 - $3,250 respect the historic architecture of Fort of these buildings on the bluff project, some newer buildings were also built, ($1.00/sf - $1.86/sf) Sheridan, and typically offer lofts, wide overlooking Lake Michigan offers which typically include townhomes. Rents for balconies, and garage spaces. Interior substantial open space and these units can extend from $3,450 to over $4,000 appointments are high end, with outstanding views. per month. European kitchens, hard wood floors, exposed beams and other unique finishes. 16 Lake Forest North Condominiums B 1972 120 N/A 4.5 Miles 1 Bed, 1.5 Bath 60 838 - 1,040 $950 - $1,200 Varies These are condominium units, so each The property is distinguished by its This is a condominium development which has 1301 N. Western Avenue ($1.13/sf - $1.15/sf) unit has different finish. There are no lack of covered or garage parking and many units owned by investors for rent only. The Lake Forest, IL 60045 2 Bed, 2 Bath 60 1,170 - 1,400 $1,200 - $1,400 washer/dryers in any of the units, and its dated design. condominium rules were changed over a decade ($1.00/sf - $1.03/sf) some of the units have very antiquated ago to limit this ability, however, so not all units are furnace/air conditioner units. rental units. Sales prices on these units are remarkably low, sometimes reaching below $120,000. Real Estate Counselors International, Inc. 08 02 2016 CC Packet Page 179 of 198 CERTIFICATION 08 02 2016 CC Packet Page 180 of 198 CERTIFICATION The undersigned certify, except as may be otherwise noted in this report, that: . To the best of our knowledge and belief, the statements of fact contained in this report are true and correct. . The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are the personal, unbiased professional analyses, opinions, and conclusions of the undersigned. . Neither the undersigned, Real Estate Counselors International, Inc., nor any of its officers, have any present or prospective interest in the properties that are the subject of this report, or have any personal interest or bias with respect to the parties involved. . Our compensation is not contingent upon the reporting of a predetermined conclusion that favors the cause of the client, the attainment of a stipulated result, or the occurrence of a subsequent event. . Thomas J. Amato and Mary Claire Sparrow made a personal observation of the subject property site. . To the best of our knowledge and belief, the reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Ethics of the Counselors of Real Estate and the Standards of Professional Practice and Bylaws of The Counselors. . No one provided significant professional assistance to the persons signing this report. . The assignment was not based on a requested minimum pricing range or specified result. Thomas J. Amato, CRE Mary Claire Sparrow 08 02 2016 CC Packet Page 181 of 198 QUALIFICATIONS 08 02 2016 CC Packet Page 182 of 198 PROFESSIONAL QUALIFICATIONS - THOMAS J. AMATO, CRE Professional Experience Mr. Amato is Director of Due Diligence/Market Research at RECI. In this capacity, he has counseled developers, retailers, lenders, institutional investors and TIC Sponsors with regard to acquisition due diligence, disposition strategies and market feasibility of apartments, retail, office, industrial, medical office, student housing, senior housing, self storage facilities and manufactured housing. He has over 30 years of experience in real estate investment and market research and more than six years of experience in commercial real estate appraisal. Mr. Amato has held senior research positions in two of the largest real estate investment firms active in the United States during the 1980s and 1990s - The Balcor Company and Equity Group Investments, LLC. Mr. Amato also has considerable experience as a real estate consultant to equity/debt investors and other entities, providing market feasibility services to some of the largest retailers and retail developers of the 1970s and 1980s, and most recently, to institutional clients in matters of real estate development, acquisition, and disposition as President of Delta Associates - Midwest. In 1990, Mr. Amato joined Equity Group Investments, LLC and created the real estate/corporate market research division serving Samuel Zell's investment subsidiaries. These included Equity Residential Properties Trust, Equity Office Properties, Manufactured Home Communities, Equity Group - Corporate Investments, American Classic Voyages Company, Capital Trust, and other investment subsidiaries. Mr. Amato led a team of consultants in a wide range of research and consulting engagements that included real estate due diligence, corporate M & A due diligence, marketing research, consumer segmentation research, and regional extensive economic research. Education University of Illinois Masters Degree Dominican University Bachelors Degree Professional Designations and Affiliations Counselors of Real Estate Designation: CRE National Association of Realtors Lambda Alpha International Invitations and Acknowledgments University of Illinois Guest Lecturer 08 02 2016 CC Packet Page 183 of 198 PROFESSIONAL QUALIFICATIONS – MARY CLAIRE SPARROW Professional Experience Mary Claire Sparrow has been active in the commercial real estate industry for over 17 years. Her experience has involved the appraisal and consulting of industrial, multi-family, office, hotel and retail properties. Most recently, between 2010 and 2013, Mrs. Sparrow appraised commercial properties in the Midwest for NPV Advisors, a national real estate appraisal concern. The majority of her clients were pension funds and major banks. Between 2005 and 2009, she re-valued the commercial portfolio of property for Shields Township, Illinois. These properties represented the full range of commercial real estate, from very small to large, institutional grade properties. Mrs. Sparrow previously worked in the Cushman & Wakefield Appraisal Division, where she concentrated appraisal and consulting work on retail, office and hotel properties and portfolios, and prior to that provided general real estate consulting services for Landauer Associates, with emphasis on computerized real estate analysis, valuation and feasibility studies. Mrs. Sparrow also worked as an Investment Manager for Rubloff Capital Investments, acquiring retail properties for this Japanese-funded arm of Rubloff. She began her career as a Real Estate Analyst for VMS Realty, where she performed due diligence and deal structuring for this early leader in the syndications industry. Education University of Wisconsin - Madison BBA- Real Estate and Urban Land Economics and Finance, Investment and Banking Professional Designation Appraisal Institute Practicing Affiliate 08 02 2016 CC Packet Page 184 of 198 AGENDA MEMO City Council August 2, 2016 ISSUE STATEMENT An ordinance amending section 5-7-2 ‘Exceptions’ to the Highwood Noise Ordinance to allow for residential home generators. BACKGROUND/HISTORY City Staff recently received an application to install a generators on a residential home that would automatically run in the case of a power outage. These installations are quite common in Illinois, which has both intense summer heat and cold winters. The generators are run on natural gas and typically turn on after detecting thirty seconds of electric outage. They are considered especially desirable in homes for residents with health problems, disabilities, or a sensitivity to dramatic temperature changes. The existing noise ordinance does not allow for any noise to be emitted from mechanics if it is audible at the property line at certain times of the day. Because the generator could start at any time depending on the outage, this section of the code effectively prohibits Staff from permitting their installation. Rather than change the entire noise ordinance, the simplest way to allow for the installation of generators is to provide for them as an exception to the code, which is listed in section 5-7-2. STAFF/COMMITTEE RECOMMENDATION Staff recommends approving the ordinance. ALTERNATE CONSIDERATION Not approving would be an alternate consideration. ATTACHMENTS -Ordinance 08 02 2016 CC Packet Page 185 of 198 CITY OF HIGHWOOD ORDINANCE ______ AN ORDINANCE AMEDING SECTION 5-7-2: ‘EXCEPTIONS’ TO THE HIGHWOOD NOISE ORDINANCE TO ALLOW FOR RESIDENTIAL HOME GENERATORS ADOPTED BY THE CITY COUNCIL OF THE CITY OF HIGHWOOD, LAKE COUNTY, ILLINOIS ON THE ___ DAY OF______, 2016 Published in pamphlet form by authority of the City Council of the City of Highwood, Lake County, Illinois on this _____ day of ______, 2016 City-wide Aldermen Mayor: Charlie Pecaro Eric Falberg City Clerk: Vacant Matt Feddermann City Treasurer: David Gonzalez Mike Fiore Chris Grice Andy Peterson M. Brad Slavin City Attorney: James V. Ferolo Klein, Thorpe, Jenkins, Ltd 08 02 2016 CC Packet Page 186 of 198 ORDINANCE NO. ______ AN ORDINANCE AMEDING SECTION 5-7-2: ‘EXCEPTIONS’ TO THE HIGHWOOD NOISE ORDINANCE TO ALLOW FOR RESIDENTIAL HOME GENERATORS BE IT ORDAINED by the City Council of the City of Highwood, Lake County, Illinois, as follows: SECTION 1: Section 5-7-2 of the Highwood City Code, "Exceptions," is hereby amended as follows: 5-7-2: EXCEPTIONS: The following shall not be cause for a violation or offense under this chapter: A. The operation of sirens or other warning devices by ambulances, firetrucks or other emergency vehicles when responding to or attending to an emergency situation, or by city or other governmental entity for the purpose of alerting or otherwise warning the public of imminent danger; B. Noise emitted by vehicles or other machinery operated by or on behalf of the city or another governmental entity for the purposes of operating emergency generators, snowplowing, mosquito abatement or for emergencies or general maintenance; C. Noise generated as part of a city, school or other public or community event sanctioned by the city, including festivals, music concerts, parades and street or other fairs; D. Noise emitted or generated in the operation of a mass transit system or by aircraft; and E. Noise emitted by church bells, chimes and carillons. F. Noise emitted by residential home generators. SECTION 2: This Ordinance shall be in full force and effect as of passage, and shall subsequently be published in pamphlet form as provided by law. 08 02 2016 CC Packet Page 187 of 198 ADOPTED this _____ day of______, 2016, pursuant to a roll call vote as follows: Eric Falberg _____ M. Brad Slavin _____ Mike Fiore _____ Andy Peterson _____ Matt Feddermann _____ Chris Grice _____ AYES:______ NAYS:______ ABSENT:______ APPROVED by the City Council of the City of Highwood this _____ day of______, 2016. ______ Mayor Charles Pecaro ATTEST: ______ Deputy City Clerk 08 02 2016 CC Packet Page 188 of 198 AGENDA MEMO City Council August 2, 2016 ISSUE STATEMENT A motion authorizing the City Manager to execute an agreement with FGM Architects in the amount of $12,000 to provide services to review options to renovate the existing library building into a combined City Hall, Police Station and Library Facility. BACKGROUND/HISTORY The City and Library conducted a working group meeting to discuss the possibility of sharing space. At the meeting the members recommended moving forward with assistance to provide a detailed design, layout and estimate for this concept. The Library requested the City use FGM Architects, which has significant library building experience. Staff met with and interviewed the firm, which also has extensive City Hall and Police Station construction experience. They have provided a proposal which will help guide discussions and any next steps. STAFF/COMMITTEE RECOMMENDATION Staff recommends approving the motion. ALTERNATE CONSIDERATION Not approving would be an alternate consideration. ATTACHMENTS -Proposal 08 02 2016 CC Packet Page 189 of 198 July 27, 2016 Scott Coren City Manager City of Highwood 17 Highwood Ave Highwood, IL 60040 Re: Pre-Design Services: Space Needs Assessment Study for the City of Highwood Dear Mr. Coren: FGM Architects is pleased to submit this proposal for Pre-Design Services for the City of Highwood City Hall, Police Station and Library needs. We are very excited to be selected for this Project and look forward to beginning a valuable relationship with the City for this important effort. We believe that our team is uniquely qualified to deliver specialized design services for the City. • Team members and consultants have extensive experience in Municipal design and Public Safety Projects. • We enjoyed previously working with the Library on a space needs study several years ago, and look forward to working with them again. • FGM provides a collaborative process with clients and consultants leading to a more integrated project approach and better quality of project documentation and coordination. • FGM brings to the project a reputation for design excellence and quality service throughout Illinois. We have enclosed a copy of our proposal for your review. Should you have any questions regarding the enclosed proposal or require additional information please let us know. We look forward to assisting the City of Highwood with this exciting Study. Sincerely, FGM Architects Inc. Brian Wright, AIA, LEED AP Principal in Charge 475 Regency Drive, Suite #200 O’Fallon, IL 62269 08 02 2016 CC Packet Page 190 of 198 618.624.3364 618.624.3369 Proposal for Pre-Design Services: Space Needs Assessment Study Architectural Services for CITY OF HIGHWOOD Pre-Design Services Highwood, Illinois Submitted to: CITY OF HIGHWOOD 17 Highwood Ave Highwood, IL 60040 By: FGM ARCHITECTS INC. 1211 W. 22nd St., Suite 705 Oak Brook, IL 60523 July 27, 2016 475 Regency Drive, Suite #200 O’Fallon, IL 62269 08 02 2016 CC Packet Page 191 of 198 618.624.3364 618.624.3369 1.0 SCOPE OF PROJECT 1.0.1 The City of Highwood, hereinafter referred to as the Owner, intends to review options to renovate the existing library building into a combined city hall, police station and library facility. 1.0.2 The project will be a renovation and conversion. 1.0.3 A Space Needs Assessment which results in a Preliminary Program will be developed as part of the Pre-Design Services Study. 1.0.4 A Preliminary Adjacency Diagram which become a Preliminary Floor and a Site Plan will be developed as a Part of the Pre-Design Services. One diagram for the combined city hall, police and library will be developed. 1.0.5 An Estimated Total Project Budget, will be developed as a Part of the Pre-Design Services. The Total Project Budget will contain both the “hard” costs of construction as well as the “soft costs” which includes architects and engineers fees, furniture, equipment, geo-technical consultants, surveys, etc. 1.0.6 Preliminary Project schedule will be developed as a Part of the Pre-Design Services. 1.0.7 The zoning requirements for the Project are currently unknown and will need to be determined as a Part of the forthcoming Project, not the Pre-Design work. 1.0.8 Any storm water requirements for this project are not part of this study. 2.0 SCOPE OF ARCHITECT'S SERVICES FGM Architects Inc., hereinafter referred to as FGM or Architect, shall provide the following Professional Pre-Design Architectural Services for the Project: 2.1 PRE-DESIGN SERVICES 2.1.1 Pre-Design Phase Services: 2.1.1.1 Based on the building identified in Paragraph 1.0.1 and 1.0.2 above, and as modified by the Owner, FGM Architects shall prepare Pre-Design Services Documents consisting of preliminary drawings and other documents to fix and describe the size and character of the Scope of Work assigned to FGM. 2.1.1.2 Architect will meet with Project Team and staff to review scope in the form of the following Meetings: .1 Meeting #1: On site interviews and Site Visit. a. FGM shall conduct on site interviews with city, police and library selected staff to ascertain space needs requirements. b. FGM shall review one site to gain an understanding of the site conditions and feasibility for the building. .2 Meeting #2: Program Review with Building Committee a. Meet with Building Committee to review current space and 475 Regency Drive, Suite #200 O’Fallon, IL 62269 08 02 2016 CC Packet Page 192 of 198 618.624.3364 618.624.3369 adjacency deficiencies and develop a preliminary program consistent with the project goals. These documents will be prepared in draft form and distributed for review and comment. They will then be refined based on the participant’s input. b. Prepare preliminary estimate of probable construction cost for the option including hard and soft costs. The Total Project Budget will contain both the “hard” costs of construction as well as the “soft costs” which includes architects and engineers fees, furniture, equipment, geo-technical consultants, surveys, etc. .3 Meeting #3: Final Report Meeting or Additional Meeting a. Summary Report to contain: Building Program, Preliminary Site Plan, Adjacency Floor Plan, Preliminary Schedule and Budget. b. FGM shall meet to discuss the findings of the assessment and recommendations for their consideration. 2.1.1.3 We have included a total of three (3) meetings in this proposal. 2.1.1.4 Additional Meetings shall be billed out at $500 per meeting. 2.1.1.5 Additional preparation time shall be billed at the hourly rate listed below. 2.2 CONSULTANTS FGM has included structural; mechanical, electrical, plumbing (MEP) consultants in this proposal for the limited scope identified in paragraph 2.1 above. The purpose is to gather preliminary design information to identify scope of work and assist in initial planning and establishing a preliminary budget. Interior Design and Landscape Architecture are provided in-house by FGM, but are generally not included in Pre-Design work. Civil Engineering, IT infrastructure, Survey, geotechnical (soil borings), material testing and hazardous waste engineering services are not included in this Pre-Design proposal, but would be part of the forthcoming Project. 3.0 ARCHITECT'S COMPENSATION The City of Highwood shall compensate FGM Architects for professional Pre-Design Architectural services rendered in connection with the Project under this Proposal as follows: 3.1 For all professional services in connection with the Pre-Design Services as described in Paragraphs 2.1 and 2.2 above we propose the compensation, which is based on the following distribution: Basic Pre-Design Architectural Services: $12,000.00 3.2 For any Additional Services authorized by the Owner beyond the scope of this Proposal including: major revisions to previously approved design documents, detailed environmental impact studies, traffic studies, financial or demographic 475 Regency Drive, Suite #200 O’Fallon, IL 62269 08 02 2016 CC Packet Page 193 of 198 618.624.3364 618.624.3369 studies, preparation of permit applications to local building and utility authorities, or services not customarily furnished in accordance with generally accepted architectural practice, FGM shall be compensated on the basis of the hourly rates described in the attached Hourly Rate Schedule for the professional and technical employees engaged on the Project. Consultants Hourly Billing Rate Schedule for the Project shall be forwarded to Owner upon Owner’s request. 3.3 FGM has included limited printing costs in the base services. This includes Ten (10) Final Report Packets. Additional requests for material will done with City Manager approval prior to printing be invoiced at the direct cost (1.00) times the actual cost. Any items requiring postage or delivery will also be invoiced at cost. 3.4 Payments 3.4.1 Payments shall be made by the City of Highwood to FGM upon receipt of FGM's invoice in accordance with the Local Government Prompt Payment Act. 3.5 Non-payment of invoices shall constitute grounds for discontinuing service. 4.0 FORM OF AGREEMENT 4.1 Should our proposal be acceptable, a signed copy of the Proposal is sufficient to commence our work. It is our intention to enter into a formal agreement using an AIA Standard Form of Agreement with modifications as mutually agreeable, once the forthcoming Project commences. We appreciate this opportunity to be of service to the City of Highwood for this exciting Project. FGM ARCHITECTS INC. ______Project Representative-Scott Coren Brian Wright-Principal in Charge, FGM ______John Dzarnowski-Vice President, FGM 475 Regency Drive, Suite #200 O’Fallon, IL 62269 08 02 2016 CC Packet Page 194 of 198 618.624.3364 618.624.3369 HOURLY RATE SCHEDULE Effective November I, 2015* Where the fee arrangements are to be on an hourly basis, the rates shall be those that prevail at the time services are rendered. Current rates are as follows: Effective November 1, 2015* Principal $230.00 Arch IV $185.00 Arch III 145.00 Arch II 115.00 Arch I 90.00 Intern 60.00 Project Administrator III 110.00 Project Administrator II 80.00 Project Administrator I 70.00 *Rates are subject to adjustment each November 1st. 475 Regency Drive, Suite #200 O’Fallon, IL 62269 08 02 2016 CC Packet Page 195 of 198 618.624.3364 618.624.3369 AGENDA MEMO City Council August 2, 2016 ISSUE STATEMENT A resolution formalizing the process for residents to petition the City of Highwood for a modification to parking restrictions on a specific roadway. BACKGROUND/HISTORY The City recently passed a parking restriction ordinance for Euclid Court after receiving resident feedback, which was later reviewed again after other resident complaints. In an attempt to enhance resident involvement and communication early in the process, Staff recommends formalizing the process to require a resident to gather signatures on a petition before bringing the concept to the City Council. The resolution for Council consideration includes criteria based on those agreed upon by the Council for the installation of a speed up. An initial petition circulated to property owners on the street is required, with a guideline that 75% of property owners must agree. Staff will then evaluate and provide recommendations to the City Council. Because the Council may determine this process does not work in all instances, the resolution makes it clear the process is non-binding. STAFF/COMMITTEE RECOMMENDATION Staff recommends approval. ALTERNATE CONSIDERATION The Council may add additional criteria, change the 75% threshold, or not pass the resolution. ATTACHMENTS -Resolution 08 02 2016 CC Packet Page 196 of 198 RESOLUTION NO. A RESOLUTION FORMALIZING THE PROCESS FOR RESIDENTS TO PETITION THE CITY OF HIGHWOOD FOR A MODIFICATION TO PARKING RESTRICTIONS ON A SPECIFIC ROADWAY WHEREAS, the City of Highwood (“the City” or “Highwood”) is a home-rule municipality located in Lake County, Illinois; WHEREAS, the City of Highwood from time to time receives requests from individual residents to change the parking restrictions ordinance on specific streets; and WHEREAS, in order to insure any parking restrictions under consideration by the City Council are fully communicated to impacted neighbors; and WHEREAS, in order to insure the City Council is fully informed of all viewpoints and impacts that a new parking restriction may have on the surrounding properties, guidelines on a formal process are desired; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Highwood, as follows: Section 1: Prior to formal consideration of a resident parking request, the resident requestor shall be asked to circulate a petition to all property owners on the street in question, providing both ‘yes’ and ‘no’ responses to the Council for consideration. A petition with fewer than 75% support for changing the restriction will be considered insufficient. Section 2: Following the submission of the petition, Staff including the police and fire departments shall review the requested change to insure compliance with public safety and other considerations. Section 3: The City Council must approve the change formally by a majority vote. Section 4: This resolution is non-binding and does not prohibit the Council from modifying the process from time to time or following an alternative process if provided with exigent circumstances. 08 02 2016 CC Packet Page 197 of 198 RESOLUTION NO. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF HIGHWOOD, LAKE COUNTY, ILLINOIS, this _____ day of ______2016 AYES: NAYS: ABSENT: APPROVED BY THE MAYOR OF THE CITY OF HIGHWOOD, LAKE COUNTY, ILLINOIS, this _____ day of ______2016 CHARLES PECARO, MAYOR ATTEST: 08 02 2016 CC Packet Page 198 of 198