analyzing, stabilizing and repositioning distressed assets
ANALYZING, STABILIZING AND REPOSITIONING DISTRESSED ASSETS Jessica Schramm Thompson Coburn, LLP
Dan Shapiro Robbins, Salomon & Patt, Ltd.
I.
Defining the Terms A.Distressed Assets
Deal Crashed Financially Developer or Mastermind Crashed Death by Market
B.Stabilization and Repositioning 1) 2) 3)
Clean up the Unfinished Aspects of the Project Negotiate New Entitlements Made Ready for “Market” or Development
II.
Analyzing a Busted Deal: From the High Profile
Chicago’s: Waterview Tower/ Shangri-La Hotel or The Spire
Located at 111 West Wacker, a proposed 90-story tower for a 220 room luxury hotel with a 26-story parking structure. Stalled in 2008.
Located at 330 North Lake Shore Drive, a proposed 115-story residential tower providing 1,193 units. Stalled in 2008.
II. Analyzing a Busted Deal: To the More Common A Townhome Deal: On the Surface it’s a Beauty
II.
Analyzing a Busted Deal [Continued]
A Townhome Deal: Underneath it’s a Beast
II. Analyzing a Busted Deal [Continued]
A.
Assess the Current Property Conditions
A.
Assess the Current Property Conditions [Continued]
A.
Assess the Current Property Conditions [Continued]
A.
Assess the Current Property Conditions [Continued]
B. Assess the Existing Development Rights
B. Assess the Existing Development Rights [Continued] 2. Identify Municipal Entitlements i. Types of Documents, other than those recorded, may include Entitlement Ordinances and Resolutions and Permits and Licenses ii. What is valid and what has expired? Most should include sunset provisions. iii. What rights and obligations are contained therein? iv. Will such rights transfer? Special Uses rarely transfer without formal approval.
B. Assess the Existing Development Rights [Continued] 3. Identify all Current Building Permits and Licenses i. What permits or licenses are valid and what has expired? ii. In the case of permits, who has authorization to use the prior plans? iii. In the case of licensing, what licenses will transfer? Most licenses, including those which are use permits, will likely not transfer.
C. Identify the Highest and Best Use for the Parcel 1. Engage a Planner to Study the Area and Assess the and Best Use 2. Consider the Comprehensive Plan 3. Consider Current Market Conditions and Trends 4. Consider Key Targets for Infill Development
Highest
D. Reposition through New Entitlements 1. Consider any Necessary or Desirable Amendments to the Original Entitlements 2. Create Incentives through Attractive Zoning 3. Utilize Financial Incentives, including the creation of tax credits, funds and grants 4. Utilize Public-Private Partnership Agreements 5. Create Value through Stabilization and Repositioning
V.
Question and Answer
For Additional Information Contact: Dan Shapiro 312/ 456-0383 [email protected] Jessica Schramm 312/ 580-2249 [email protected]
APA Presentation Daniel C. Shapiro & Jessica M. Schramm August 30, 2011
Negotiating Land Use Issues and Agreements with Municipalities PRESENTED BY Dan Shapiro Thompson Coburn
Zoning and Development of Property y Initial determination of validity and applicability of y y y y
y y
Development Agreement Term Conditions Timing of development benchmarks and obligations Confirm continuation of P.U.D. plan plat of subdivision, and zoning, i.e. construction initiation and completion dates 65 ILCS 5/11 – 12-8: Plat approval period Determine if any parts of the property to be re-zoned per development agreement, or local zoning ordinance
Cost and Ordinances; Fees; Negotiations y Freezing of codes, ordinances and regulations for
years, as well as freezing of fees and charges for years y List of all fees, charges and permits that will be required { {
{
Impact fees: Reasonableness. Long Grove case Recapture fees: Specifically and uniquely attributable. Amoco Oil case connection fees
Cost and Ordinances; Fees; Negotiations (continued) yList of all fees, charges and permits that will be required {
{ {
Payments at different stages of development. i.e., building permit, CO plat or annexation approvals Land in lieu of payment i.e., schools, parks For stalled projects, renegotiate fees; amount of timing of payments
Sanitary Sewer Service and Potable Water Service y Recapture agreement for any other properties
benefiting from the sanitary sewer y on fees; waiver thereof y Reservation of capacity issues
Land Uses Flexibility and Text Amendment y Permitted and Special Uses in zoning district. If not
allowed, then text amendment y Bulk Regulations; flexibility in P.U.D. { { { { { {
Maximum FAR Minimum lot area Minimum lot width Minimum lot depth Building height Building and landscape setback requirements
Land Uses Flexibility and Text Amendment (continued) yDensity bonus yFloating zoning districts
Changes to the P.U.D. y Major changes: To units, density, # of lots,
boundaries y Minor changes y Technical or “minor” Changes. These include any changes to engineering, plans and specs and any changes to building plans which are: { { {
In substantial compliance with the preliminary plan In compliance with the ordinances Relocation to any road, sidewalk or easement
Changes to the P.U.D. (Continued) yTechnical or “minor” Changes. These include any changes to engineering, plans and specs and any changes to building plans which are: { {
Alteration to any detention facility Any changes to lot lines from the preliminary plat of subdivision or final plat of subdivision or preliminary final or P.U.D. Plan
yDensity bonuses. Enhanced landscaping,
architecture, green spec. T.O.D.
Subdivide Property y re-zone property into smaller pieces y market and sell with existing or different zoning
Economic Incentives y y y y y
TIF Districts Business District Sales Tax Agreements Tax Credits Commercial Development Incentives Pursuant to 65 ILCS 5/8-11-20 {
The presentation will also include a discussion regarding financing options for Illinois municipalities, including publicly-sold bond and note transactions and private purchases of governmental debt by commercial banks. We will discuss the pros and cons of public debt sales and private bank purchases and include case studies of government finance transactions from both the public sale perspective and the bank purchase perspective.
For additional information contact:
Dan Shapiro 312/ 456-0383 [email protected]
OR
Jessica Schramm 312./ 580.2249 [email protected]
Questions?
Dan Shapiro Robbins, Salomon & Patt, Ltd.
I.
Defining the Terms A.Distressed Assets
Deal Crashed Financially Developer or Mastermind Crashed Death by Market
B.Stabilization and Repositioning 1) 2) 3)
Clean up the Unfinished Aspects of the Project Negotiate New Entitlements Made Ready for “Market” or Development
II.
Analyzing a Busted Deal: From the High Profile
Chicago’s: Waterview Tower/ Shangri-La Hotel or The Spire
Located at 111 West Wacker, a proposed 90-story tower for a 220 room luxury hotel with a 26-story parking structure. Stalled in 2008.
Located at 330 North Lake Shore Drive, a proposed 115-story residential tower providing 1,193 units. Stalled in 2008.
II. Analyzing a Busted Deal: To the More Common A Townhome Deal: On the Surface it’s a Beauty
II.
Analyzing a Busted Deal [Continued]
A Townhome Deal: Underneath it’s a Beast
II. Analyzing a Busted Deal [Continued]
A.
Assess the Current Property Conditions
A.
Assess the Current Property Conditions [Continued]
A.
Assess the Current Property Conditions [Continued]
A.
Assess the Current Property Conditions [Continued]
B. Assess the Existing Development Rights
B. Assess the Existing Development Rights [Continued] 2. Identify Municipal Entitlements i. Types of Documents, other than those recorded, may include Entitlement Ordinances and Resolutions and Permits and Licenses ii. What is valid and what has expired? Most should include sunset provisions. iii. What rights and obligations are contained therein? iv. Will such rights transfer? Special Uses rarely transfer without formal approval.
B. Assess the Existing Development Rights [Continued] 3. Identify all Current Building Permits and Licenses i. What permits or licenses are valid and what has expired? ii. In the case of permits, who has authorization to use the prior plans? iii. In the case of licensing, what licenses will transfer? Most licenses, including those which are use permits, will likely not transfer.
C. Identify the Highest and Best Use for the Parcel 1. Engage a Planner to Study the Area and Assess the and Best Use 2. Consider the Comprehensive Plan 3. Consider Current Market Conditions and Trends 4. Consider Key Targets for Infill Development
Highest
D. Reposition through New Entitlements 1. Consider any Necessary or Desirable Amendments to the Original Entitlements 2. Create Incentives through Attractive Zoning 3. Utilize Financial Incentives, including the creation of tax credits, funds and grants 4. Utilize Public-Private Partnership Agreements 5. Create Value through Stabilization and Repositioning
V.
Question and Answer
For Additional Information Contact: Dan Shapiro 312/ 456-0383 [email protected] Jessica Schramm 312/ 580-2249 [email protected]
APA Presentation Daniel C. Shapiro & Jessica M. Schramm August 30, 2011
Negotiating Land Use Issues and Agreements with Municipalities PRESENTED BY Dan Shapiro Thompson Coburn
Zoning and Development of Property y Initial determination of validity and applicability of y y y y
y y
Development Agreement Term Conditions Timing of development benchmarks and obligations Confirm continuation of P.U.D. plan plat of subdivision, and zoning, i.e. construction initiation and completion dates 65 ILCS 5/11 – 12-8: Plat approval period Determine if any parts of the property to be re-zoned per development agreement, or local zoning ordinance
Cost and Ordinances; Fees; Negotiations y Freezing of codes, ordinances and regulations for
years, as well as freezing of fees and charges for years y List of all fees, charges and permits that will be required { {
{
Impact fees: Reasonableness. Long Grove case Recapture fees: Specifically and uniquely attributable. Amoco Oil case connection fees
Cost and Ordinances; Fees; Negotiations (continued) yList of all fees, charges and permits that will be required {
{ {
Payments at different stages of development. i.e., building permit, CO plat or annexation approvals Land in lieu of payment i.e., schools, parks For stalled projects, renegotiate fees; amount of timing of payments
Sanitary Sewer Service and Potable Water Service y Recapture agreement for any other properties
benefiting from the sanitary sewer y on fees; waiver thereof y Reservation of capacity issues
Land Uses Flexibility and Text Amendment y Permitted and Special Uses in zoning district. If not
allowed, then text amendment y Bulk Regulations; flexibility in P.U.D. { { { { { {
Maximum FAR Minimum lot area Minimum lot width Minimum lot depth Building height Building and landscape setback requirements
Land Uses Flexibility and Text Amendment (continued) yDensity bonus yFloating zoning districts
Changes to the P.U.D. y Major changes: To units, density, # of lots,
boundaries y Minor changes y Technical or “minor” Changes. These include any changes to engineering, plans and specs and any changes to building plans which are: { { {
In substantial compliance with the preliminary plan In compliance with the ordinances Relocation to any road, sidewalk or easement
Changes to the P.U.D. (Continued) yTechnical or “minor” Changes. These include any changes to engineering, plans and specs and any changes to building plans which are: { {
Alteration to any detention facility Any changes to lot lines from the preliminary plat of subdivision or final plat of subdivision or preliminary final or P.U.D. Plan
yDensity bonuses. Enhanced landscaping,
architecture, green spec. T.O.D.
Subdivide Property y re-zone property into smaller pieces y market and sell with existing or different zoning
Economic Incentives y y y y y
TIF Districts Business District Sales Tax Agreements Tax Credits Commercial Development Incentives Pursuant to 65 ILCS 5/8-11-20 {
The presentation will also include a discussion regarding financing options for Illinois municipalities, including publicly-sold bond and note transactions and private purchases of governmental debt by commercial banks. We will discuss the pros and cons of public debt sales and private bank purchases and include case studies of government finance transactions from both the public sale perspective and the bank purchase perspective.
For additional information contact:
Dan Shapiro 312/ 456-0383 [email protected]
OR
Jessica Schramm 312./ 580.2249 [email protected]
Questions?
