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Home My WebLink About8.2 A RESOLUTION RECOMMENDING THE FUTURE RENEWAL OF A CLASS 6B CLASSIFICATION FOR THE MOUNT PROSPECT TECHNOLOGY CAMPUSIL Mr�GauC'd'+rt;�iect\V Subject• RECOMMENDING THE FUTURE RENEWAL OF A CLASS 6113 CLASSIFICATION FOR THE MOUNT PROSPECT TECHN# • Meeting November 15, 2022 - REGULAR MEETING OF THE MOUNT PROSPECT VILLAGE BOARD - Fiscal Impact false Dollar Amount Budget Source Category NEW BUSINESS Type Action Item The Petitioner obtained approval to redevelop the former United Airlines campus (1200 E. Algonquin Road) with three (3), 84 megawatt (MW) data centers totaling 566,767 square feet of gross floor area per building in June of 2022. The data centers will be located on the former United Airlines property and powered by a ComEd substation that will be constructed on the 6 -acre parcel at 1200 Dempster Street. In total, the Petitioner is proposing to invest $2.5 billion (not adjusted for inflation or increase in labor or materials) into the Village to redevelop this property. To incentivize this project to move forward, the Village approved an inducement resolution supporting the petitioner's application for a Cook County Class 6b tax incentive. The Class 6b incentive reduces the assessment level on the property from 25% to 10% for ten years, to 15% in year 11 and 20% in year 12 before returning to the full 25% assessment level in year 13. The incentive can be renewed for an additional 12 -year term if requested after the 10th year of the initial incentive. The petitioner has requested that the Village commit to renewing the Class 6b incentive in the future to provide greater cost certainties to prospective tenants within the data centers. While the Village does have a history of granting these renewal requests throughout the community, it can't take official action on a renewal request until at least 10 years from the time it approved the 1 initial incentive. Therefore the petitioner is requesting that the current Village Board approve a non-binding resolution recommending that a future Village Board approve the petitioner's renewal request when made. It should be noted that neither the petitioner nor any other party is entitled to rely on this Resolution as a binding commitment by the Village, or a future Village Board, to approve a renewal of the Class 6b Classification and the Village reserves the right in its sole and absolute discretion to not approve a renewal of the Class 6b Classification and in such event the Village shall not be subject to any liability or damages of any nature. While the request is unique, so is the project's economic impact to the Village. In addition to the $2.5 billion that the petitioner will spend to construct the data centers, it is estimated that the project will employ around 1,000 construction personnel on-site, totaling approximately 2,116,109 labor hours and over $630,214,065 in total salaries paid throughout the entirety of the project. In addition, each building will use up to 84 megawatts (MW) of energy, which in turn creates utility taxes for the Village. The Village estimates that the project will generate between $1-$2 million annually in utility taxes when the centers are fully operational, which in turn allows the Village to upgrade infrastructure and provide other public improvements throughout Mount Prospect. In consideration of the above, staff is supportive of the petitioner's request to approve a non-binding resolution recommending the future renewal of a class 6b classification for the Mount Prospect Technology Campus. Alternatives 1. Approve the resolution recommending the future renewal of a class 6b classification for the Mount Prospect Technology Campus. 2. Discretion of the Village Board. Staff Recommendation Staff recommends that the Village Board approve the resolution recommending the future renewal of a class 6b classification for the Mount Prospect Technology Campus. ATTACHMENTS: Cloud_HQ_Future_6b_Renewal_Resolution. pdf 2 RESOLUTION NO. A RESOLUTION RECOMMENDING THE FUTURE RENEWAL OF A CLASS 613 CLASSIFICATION FOR THE MOUNT PROSPECT TECHNOLOGY CAMPUS WHEREAS, on September 3, 2021, CloudHQ, LLC, later succeeded by Tur Ventures LLC (collectively, "Developer"), submitted a proposal for the redevelopment of property located at 1200 E Algonquin Rd and 1200 E. Dempster Avenue, Mount Prospect, consisting of approximately fifty (50) acres ("Property"), with a data center campus and related improvements ("Project"); and WHEREAS, contemporaneously with its proposal, the Developer requested that the Village of Mount Prospect ("Village") consider assisting the Project with economic incentives under the Tax Increment Allocation Redevelopment Act, 65 ILCS 5/11-74.4-1, et seq. ("TIF Act"), through support of a Cook County Class 6b property tax assessment classification incentive (the "Class 6b Classification"), and/or other applicable and available incentives (collectively "Incentives"); and WHEREAS, on December 14, 2021, the Village President and Board of Trustees ("Village Board") of the Village approved "a Resolution Declaring the Village of Mount Prospect's Official Intent to Reimburse Expenditures (Proposed South Mount Prospect Tax Increment Financing District)" (Resolution No. 46-21) (the "TIF Reimbursement Intent Resolution"); and WHEREAS, the TIF Reimbursement Intent Resolution states that the Village reasonably expects to reimburse itself, and/or the Developer under the terms of a redevelopment agreement containing such terms as are necessary for the completion of the Project by the Developer, including, potentially, use of some of the Incentives to 1 3 reimburse Developer for Project costs ("Redevelopment Agreement"), from tax increment finance revenue; and WHEREAS, the TIF Reimbursement Intent Ordinance further acknowledged that (i) the Developer had stated that without and but for the Incentives, it cannot complete the Project and (ii) the Developer reasonably expected that it would pay or incur Project Costs prior to formal approval and execution of a Redevelopment Agreement; and WHEREAS, the intent of the TIF Reimbursement Intent Resolution was to induce the Developer to pay or incur certain Project costs in connection with the Project prior to creation of the South Mount Prospect TIF District and prior to formal approval and execution of a Redevelopment Agreement, thereby advancing the purposes of the Economic Development Statute and the TIF Act; and WHEREAS, after approval of the TIF Reimbursement Intent Resolution, on May 3, 2022, pursuant to authority under the Constitution of the State of Illinois, Section 8-1- 2.5 of the Illinois Municipal Code, 65 ILCS 5/8-1-2.5 ("Economic Development Statute"), and the provisions of the TIF Act, and to promote and incentivize economic development and redevelopment projects, and, under the TIF Act, to finance certain redevelopment project costs, as defined in Section 3(q) of the TIF Act, 65 ILCS 5/11-74.4-3(q) ("TIF Project Costs"), the Village Board approved [the TIF Ordinances] establishing the South Mount Prospect TIF District, which is a redevelopment project area under the TIF Act; and WHEREAS, on December 14, 2021, the Village Board also approved "a Resolution in Support of CloudHQ LLC, and/or its Affiliate Tur Venture LLC's, Application for a Cook County Class 6b Tax Assessment Classification for the Property Located at 1200 E. 2 4 Algonquin Road and 1200 Dempster Street, Mount Prospect, Illinois" ("6b Resolution"); and WHEREAS, on June 21, 2022, the Village Board approved "An Ordinance Granting a Conditional Use for a Final Planned Unit Development and a Final Plat of Subdivision for the Properties Located at 1200 E. Algonquin Road and 1200 Dempster Street, Mount Prospect, Illinois" ("Final PUD Ordinance"); and WHEREAS, the Final PUD Ordinance authorizes Developer to proceed with the Project, subject to the Final PUD Ordinance and the Project must also comply with other applicable laws; and WHEREAS, the general maximum term of an Incentive under the TIF Act is 23 years, while the maximum term of an Incentive under a Class 6b Classification (a "Class 6b Incentive") is only 12 years; and WHEREAS, Developer has stated to the Village that, to attract, incentivize, and retain quality, long-term tenants for the Project, Developer desires to provide reasonable real property tax certainty to such tenants for up to (or more than) 20 years and, in furtherance thereof, desires to alleviate (i) the time difference between a potential 23 -year TIF Act Incentive and a 12 -year Class 6b Incentive and (ii) the uncertainty whether Developer's Class 6b Incentive will be renewed at the end of its 12 -year term; WHEREAS, to address this concern, the Developer had previously requested that, consistent with the TIF Act and the TIF Reimbursement Intent Resolution, the Village approve TIF Act Incentives that would become effective if the Class 6b Incentive is not renewed and therefore would provide the reasonable real property tax certainty sought by Developer and its tenants; and 3 5 WHEREAS, in response to Developer's stated concern, the current Village Board desires to approve this Resolution; and WHEREAS, Developer has stated that, following the approval of this resolution, it intends to (i) withdraw its current request for TIF Act Incentives and (ii) proceed with the development of the Project; and WHEREAS, Developer has further stated that, if the current Class 6b Classification for the Project is not renewed, notwithstanding the current Village Board's recommendation and desire, Developer reserves its rights to seek TIF Incentives or other Incentives to address its concerns stated herein; NOW, THEREFORE, BE IT RESOLVED by the President and Board of Trustees of the Village of Mount Prospect, Illinois, as follows: SECTION 1: That the recitals set forth above are hereby incorporated herein by reference and made a part hereof. SECTION 2: That the current Village Board (i) states that it, and its predecessor Village Boards, have previously approved all requests for renewals of Class 6b Classifications that comply with applicable laws and (ii) recommends that a future Village Board, between year 10 and year 12 of the current Class 6b Incentive (as it applies to each data center building on the Property), approves a renewal of the Class 6b Classification for the Project for an additional 12 years for each such building. SECTION 3: That the intent of this Resolution is to induce the Developer to commence and complete the Project in accordance with the Final PUD Ordinance and other applicable laws and to incur certain Project costs, even though the Village Board M 6 has not yet approved or formally considered a renewal of the Class 6b Resolution, thereby advancing the redevelopment of the South Mount Prospect TIF District. SECTION 4: That the Village acknowledges that Developer intends to proceed with the Project in reliance on the provisions of this Resolution, including the Village Board's statements concerning its prior approvals of renewals of other Class 6b Classifications and the current Village Board's recommendation that a future Village Board approve such a renewal for Developer's Class 6b Classification. However, neither the Developer nor any other party is entitled to rely on this Resolution as a binding commitment by the Village, or a future Village Board, to approve a renewal of the Class 6b Classification and the Village reserves the right in its sole and absolute discretion to not approve a renewal of the Class 6b Classification and in such event the Village shall not be subject to any liability or damages of any nature. SECTION 5: That this Resolution shall be in full force and effect from and after its adoption and approval as provided by law. SECTION 6: That if any section, paragraph, clause or provision of this Resolution shall be held invalid, the invalidity thereof shall not affect any of the other provisions of this Resolution. SECTION 7: That all resolutions or parts of resolutions in conflict herewith are, to the extent of such conflict, hereby repealed. AYES: NAYS: ABSENT: 5 7 PASSED and APPROVED this 15th day of November 2022. Paul Wm. Hoefert, Mayor ATTEST: Karen M. Agoranos, Village Clerk