DeKalb Times

City of Dekalb City Council met Dec. 2.

Here are the minutes provided by the council:

The City Council of DeKalb, Illinois held a Special meeting in the Yusunas Meeting Room of the DeKalb Public Library, 309 Oak Street, DeKalb, Illinois.

A. CALL TO ORDER AND ROLL CALL

Mayor Barnes called the meeting to order at 5:00 p.m.

Executive Assistant Ruth Scott called the roll and the following members of City Council were present: Alderman Carolyn Morris, Alderman Barb Larson, Alderman Tracy Smith, Alderman Greg Perkins, Alderman Scott McAdams, Alderman Mike Verbic, Alderman Tony Faivre, and Mayor Cohen Barnes.

Others in attendance included City Manager Bill Nicklas.

B. PLEDGE OF ALLEGIANCE

Mayor Barnes asked Alderman Perkins to lead the Pledge of Allegiance.

C. APPROVAL OF THE AGENDA

MOTION: Alderman Perkins moved to approve the agenda; seconded by Alderman Faivre.

VOTE: Motion carried by an 8-0 roll call vote. Aye: Morris, Larson, Smith, Perkins, McAdams, Verbic, Faivre, Barnes. Nay: None. Mayor Barnes declared the motion passed.

D. PUBLIC PARTICIPATION

Ryan (last name withheld by request) spoke briefly regarding the proposed resolution, stating residents living in the properties should have more input. He then reiterated his allegation of intimidation and discrimination by the City of DeKalb, DeKalb County, and other local entities, as well as various staff, as it pertains to an incident he claims occurred at Northwestern Medicine Kishwaukee Hospital involving his mother.

Mark Charvat provided his opinion and concern regarding the proposed resolution, first by asking what the removal of $1,000,000 from the City’s reserves will do to its bond rating. He then stated there was barely any public notice regarding this item and wondered why it couldn’t have waited until the next Regular City Council meeting. He also stated he feels this move is fiscally irresponsible. Continuing, Mr. Charvat stated the money should instead be used for fire and police services, as well as the repair of potholes in various subdivisions, including his own.

Mr. Charvat then spoke about Special Service Area (SSA) #3, stating that only half the money collected from the SSA, of which he lives in, is being expended for the area, while the other half is being spent on City expenditures.

Robert Carlson stated he was a real estate appraiser for 42 years until his retirement two years ago. He now owns 302 apartment units and an office building with 13 units. He then provided a brief history of Greek Row, stating dramatic changes have taken place in the area over the years. Based on his years of experience, something prudent needs to be done. He then stated that in his opinion, bringing in this investor and accepting this proposal would be a prudent decision by City Council.

E. RESOLUTIONS

1. Resolution 2021-103 Approving a Development Agreement Between the City of DeKalb and Clear Investment Group, LLC.

Mayor Barnes read the resolution by title only.

MOTION: Alderman Faivre moved to approve the resolution; seconded by Alderman McAdams.

City Manager Nicklas began by introducing Amy Rubenstein, owner of Clear Investment Group, and principal in Windy City RE, LLC, who joined the meeting virtually via Zoom.

City Manager Nicklas then provided an overview of this item based on the information provided in the agenda packet, stating this meeting was called because there’s an incentive being proposed to assist Clear Investment Group, a Chicago based real estate firm specializing in the acquisition, renovation, and maintenance of larger, affordable apartment buildings, to purchase a number of Hunter properties, including Hunter Ridgebrook, with 184 units, Hunter Tri-Frat, with 40 units, and Lincoln Tower, with 66 units, as well as several smaller Hunter properties within the city, for a total of 403 units. The total investment that Clear Investment intends to make in Hunter Ridgebrook would be a little over $13,000,000, of which $3,000,00 will be dedicated toward renovation and upgrades. If approved, the development agreement would extend $1,000,000 from the City’s general revenues to assist in the acquisition and renovation of Hunter Ridgebrook.

City Manager Nicklas added that Hunter Ridgebrook is three different stand-alone buildings, located at 808 Ridge Drive, 832 Ridge Drive, and 835 Edgebrook Drive, which account for a disproportionately high percentage of police and fire calls every month since their purchase.

In exchange for this financial incentive, Clear Investment Group will provide a number of security measures that have not been present on these properties in many years. Further, a no trespass agreement would also be executed, which serves and supports the security measured being proposed.

The incentive would come from the general fund reserve, which is within Council’s purview to do. The City’s reserve policy for the general fund, which requires a reserve of 25% of the value of the proposed expenditures for any given fiscal year. At the end of the 2021 fiscal year, it is projected that the City will have $16,611,650, or 44.79% of its proposed expenditures. Spending $1,000,000 would leave $15,611,650, or 42% of the City’s estimated FY2021 expenditures.

Continuing, City Manager Nicklas referenced Special Service Area (SSA) #30, which was established in 2020. This SSA can be used by the proposed developer for external repairs such as parking lot and grounds maintenance, the installation and maintenance of exterior cameras, etc. He added that the City has never been in a position to expect collaboration from the current owner of Hunter Properties as to the best use of that in helping with its external upgrades.

City Manager Nicklas then referenced documents provided to Council for review, which included some background information on Ms. Rubeinstein, as well as information on the history of Hunter Properties that includes when each of the three buildings were purchased (2016 and 2019), Hunter’s investment in these properties, the most recent EAV, and then the purchase price for each building Hunter was asking for towards the end of 2019. Other documents included information regarding crime statistics at each of the properties in question and shows the increased spike in crime since the Hunter Properties purchase, and another provided a breakdown of the number of times the police department has been dispatched to Lincoln Towers, Hunter Ridgebrook and Hunter Tri-Frat from January 1, 2019, through today’s date, which totaled 9,929. The next document referenced provided information regarding citations issued to Hunter Properties during the months of July, August, and September of 2021 – at a total of 196. City Manager Nicklas noted these citations were issued even after the agreed upon settlement provided the City the option to purchase the Hunter Hillcrest property. The City exercised that option and purchased Hunter Hillcrest in October of this year in the amount of $1,185,000.

City Manager Nicklas continued, stating there have been numerous fire calls due to arson at these properties. He further stated that the Fire Department also responds if an injury is reported. He also noted that there have been six murders in and around these three properties since January 1, 2019, and another murder that was tied back to the area by investigation. City Manager Nicklas then provided a cost estimate for police and fire response time at the properties in question, as well as the time it takes for investigations, etc. Hunter Ridgebrook is located in one of three zones the Police Department divides the town into. In just the last two years, a zone 1 west and a zone 1 east has had to be created because of Hunter Properties

In conclusion, City Manager Nicklas stated that as Chief Operating Officer, he cannot recommend walking away from this proposal. This is an opportunity to solve some of our local problems and he believes that Ms. Rubenstein intends to make things better for those residents who want to live a normal life in a home that’s safe, clean, and well managed.

Ms. Rubenstein then spoke, stating her company wouldn’t be able to do what needs to get done at these properties without the City’s assistance. She stated they are trying to create a safe and clean home for people to live in and there’s a lot to be done. There will need to be cooperation from the tenants that live there, as well as the community. She further stated they’re not looking to displace anyone who lives there at this time, but there will be rules that need to be followed, such as the payment of rent and maintaining a clean and safe space. Those who would be displaced are those who don’t want to follow the rules.

At this point in the meeting, Mayor Barnes opened discussion for City Council.

Noting her excitement, Alderman Morris stated she had questions and concerns initially, some concerning SSA #30. She further stated that she had some other ideas of what could be added to proposal, however because this is primarily a private purchase, with the City being a very small portion, she didn’t think it was reasonable to ask for additional things. She concluded her comments stating she looks forward to supporting this item.

Ms. Rubenstein replied that she wants what’s best for the community and she would be open further ideas and suggestions later on.

Alderman Verbic thanked Ms. Rubenstein for helping to support the community. Noting that Lincoln Tower was originally constructed for student housing with minimal parking, he asked what would be done about the insufficient parking, adding that nearby businesses face challenges due to residents and visitors of Lincoln Tower parking in their lots. Ms. Rubenstein replied that during one of her visits to Lincoln Tower she didn’t see an issue with parking other than it was full of garbage. She added that tenants of the building will be assigned a certain number of parking spaces.

Alderman Verbic then asked if business owners would be referred to Ms. Rubenstein to remediate issues rather than having to confront someone who’s parking where they shouldn’t be. Ms. Rubenstein replied there’s little they can do if someone they don’t know is parking in a business parking lot. However, they would make sure they’re properly screening how many people are living in a unit, noting she thinks it’s about setting the right expectations up front.

Alderman McAdams stated that, like so many others in the community, he’s tired of being against things and wants to look forward to being for something. The negativity around the Hunter Ridgebrook issue has been emotionally draining and addicting and all its done is hinder our ability to improve our situation. The return on the investment in economic development will be exponential in terms of quality of life, the ability to attract additional outside investments, and sustaining a new reputation as a powerful piece of the region. He’s inspired when he sees that previous investments have brought forth more diverse investments to help keep housing affordable in DeKalb. He hopes to one day be able to point at this day as the day DeKalb changed and say the era of Annie Glidden North is over. He’s glad to vote yes for a bright future so that things work out for the heightened good of everyone.

Referencing City Manager Nicklas’ comments regarding the crime history, Alderman Smith stated that years ago the police department provided security at Hunter Ridgebrook when there was a crime spike and the crime diminished drastically. If the Police Department is involved as proposed, the need for service will be reduced. For example, the average number of man hours of a single homicide is over 500. Removing those hours spent in these situations will amount to money saved for the City. If anyone thinks these numbers will decline in 2022 without action, they are mistaken

because the numbers are going to increase without action. Alderman Smith added that the Fire Department has spent numerous hours on the properties fighting arson fires. If we were to ask our public service agencies to come up with a dollar figure, it would exceed $1,000,000 in a heartbeat.

Continuing, Alderman Smith stated he’s received phone calls from residents who live on the property, and they are concerned. They want a better place to live, and that’s what they deserve. He believes it’s time to put this problem behind us and let Ms. Rubenstein and her company take hold and move forward.

From a standpoint of the referenced graph regarding crime, Alderman Verbic asked if we’re sure we won’t be moving the same challenges to another location. In other words, it’s a combination of factors that lead to this, including the condition of the properties. These residents need a place to call home. To Alderman Smith’s point of improving crime statistics, we absolutely want to do that but he’s not sure this purchase will help solve those issues alone. We’ve got a lot more that goes into that beyond just this consideration.

City Manager Nicklas replied to Alderman Verbic, stating that he and Mayor Barnes met with some of the owners and managers of rental property in DeKalb just this morning and that very concern was brought up with questions on how it would be addressed. He stated this has never been just a City issue, it’s been a community issue and the people they met with this morning have been relied on for many years to be a bulwark against the kind of things we’ve seen in this current ownership of the properties in question because they are operating with the same ethic and quid pro quo. The answer remains the same, it’s about the professionalism of the management firm and DeKalb has those and this proposal would bring in another. We’ve seen what’s happened when a transformation has occurred with good management, Gideon Court Apartments being a prime example. There were a lot of police calls and activity there 10 to 15 years ago, but then the building was renovated, cleaned up, security and technology added with live feeds to the Police Department. University Village is another example. It sat in disrepair five years ago but is now transformed.

Alderman Verbic stated that in fairness this crime data doesn’t necessarily reflect on the resident’s behavior because there’s a lot of non-resident bad behavior as well.

Police Chief Byrd stated the numbers don’t show what the actual owners of those apartments are doing but it does breed a transient crime problem because of the lack of security, lighting, and surveillance. He noted there are some great residents who reside in these apartments and areas but then there are criminal elements coming from outside of DeKalb that feed on this type of venue because they know they can hide in the shadows, which isn’t safe for our police officers. A change in management is one of the most important things that can happen to this property because it will bring in controlled structure and accountability and it’s important to have a management company that will work with the Police Department. Just recently the U.S. Marshalls were here looking for a subject wanted for murder at one of these addresses. There is a clear and present danger to the city of DeKalb because of those who think they can hide in the shadows here. We have to start addressing the issue and he thinks this is a great step.

Alderman Perkins asked what protections will be in place for the rents of the residents to ensure market base rent is still charged and continues to be charged for a period of time. Ms. Rubenstein replied there are no plans to increase the rents of existing tenants. Their philosophy is to come in and improve the quality of a building. She noted there are currently a number of empty units that will be rented at market value, however, that’s perhaps only a $100 more than what current tenants are paying. She hopes that all current tenants will want to stay, pay their rent, and cooperate with the plan. Ms. Rubenstein added that the way some of the buildings are being run at this time is bringing in a criminal element that doesn’t pay rent. Once we established those who want to stay and live in the same community with their vision won’t find it cost prohibitive to stay.

Discussion ensued between Alderman Perkins and Ms. Rubenstein regarding the market-based rent index. Ms. Rubenstein stated that most tenants aren’t paying rent now for a variety of reasons, including no security, no access to laundry rooms, not enough lighting, the lack of trash pickup. The properties are begging for crime right now and that needs to be turned around. They plan to sit with each tenant to explain the plan. She thinks often times when status quo is accepted, it breeds negativity off of itself. When people see that no one is taking pride in the community then they won’t either.

Alderman Perkins asked if rental voucher holders, also known as Section 8, would be accomodated. Before responding to that question, Ms. Rubenstein responded to a question posed earlier in the meeting about why this proposal is moving so fast, stating it has everything to do with negotiations between the seller and the buyer, with no time to spare between regular meetings of Council. The City is an independent party and not trying to pull a fast one or sweep anything under the rug. Ms. Rubenstein then stated that they always accept Section 8 in their buildings, with those individuals being treated the same as any other tenants.

Alderman Perkins stated that all sounds like sound business, but there are some landlords in town that don’t accept Section 8. In this case when the City is handing over $1,000,000, he’d like some assurance that that’s still going to be a practice and it’s going to resonate. Ms. Rubenstein stated they are happy to have Section 8 tenants and will cooperate with them.

Brief discussion ensued regarding Section 8, with Alderman Morris asking if they are legally obligated to take Section 8 if you have a certain number of properties. It was determined there isn’t an obligation by statute to have a certain percentage.

Glen Roby spoke to a couple of things that were brought up that he’d like to clarify. With respect to Alderman Verbic’s concern about displacement, it’s his understanding that the properties in question aren’t fully occupied, of which Ms. Rubenstein confirmed. Mr. Roby added that there are tenants who will be asked to leave because they’re not meeting certain basic requirements.

Mr. Roby continued, stating that this item is moving forward because of the deadline the seller has put on the buyer and in his opinion, anything that can be done to improve the quality of life in DeKalb makes sense and we can afford to do it. He then addressed the topic of Section 8, stating there’s only a certain number of vouchers that the county of DeKalb receives.

Alderman Larson expressed her support of this item and applauded everyone involved for working on a creative way to use civic dollars to make DeKalb better.

Alderman Perkins asked for further clarification about where the money will be spent and if the focus will be on the Hunter Ridgebrook area. He also asked if there’s a possibility that further financial assistance would be made available for the other properties. City Manager Nicklas replied that we chose the focus for the legitimate reasons discussed during this meeting and Ms. Rubenstein agreed that it is a worthy target for the City’s assistance. As to further assistance, City Manager Nicklas stated that this is the package offered and no other monies are involved.

Alderman Perkins asked about the linkage between Hunter Ridgebrook and Lincoln Towers, with Mayor Barnes clarifying that Alderman Perkin’s worry is that only Hunter Ridgbrook would be purchased and not the other properties as discussed. Ms. Rubenstein replied they are under contract right now for all 403 units, adding she wouldn’t make the purchase if it was less because she wouldn’t be able to operate it properly. Further, they’re bringing in relatively proportional and equal funds to Lincoln Towner, Hunter Tri-Frat, etc. to ensure the creation of a safe environment.

Alderman Faivre stated the City has been working to make improvements to the Annie Glidden North area over the last several years, which is evident by the demolition of the former cinema and 912 Edgebrook, as well as the purchase of the Hunter Hillcrest property. All of that has come at a cost and it takes a lot of time for the City to enact these changes. This investment will allow a new owner to come in and make changes in less time than if the City had to do it on its own. In closing, Alderman Faivre thanked everyone involved for all the work and negotiations it took to bring DeKalb this opportunity.

Mayor Barnes stated he agrees with everything Council has commented on. He further stated that that in 2020 he went on a police ride along and went into some of the Hunter Ridgebrook buildings, noting he saw people being forced to live in appalling conditions that no one should be living in; it was a solidifying moment for him. This decision will not only impact the residents living in these properties, but also surrounding areas. Mayor Barnes added he’s excited for this opportunity and thanked Ms. Rubenstein for their time her team has given us regarding this issue.

VOTE: Motion carried by an 8-0 roll call vote. Aye: Morris, Larson, Smith, Perkins, McAdams, Verbic, Faivre, Barnes. Nay: None. Mayor Barnes declared the motion passed.

Mayor Barnes told Ms. Rubenstein stated he looks forward to working with her and her team, and he especially looks forward to the transformation with a high level of confidence.

F. ADJOURNMENT

MOTION: Alderman Verbic moved to adjourn the meeting; seconded by Alderman Smith.

VOTE: Motion carried by a unanimous voice vote of the Council members present. Aye: Morris, Larson, Smith, Perkins, McAdams, Verbic, Faivre, Barnes. Nay: None. Mayor Barnes declared the motion passed and adjourned the meeting at 6:15 p.m.

https://www.cityofdekalb.com/AgendaCenter/ViewFile/Minutes/_12022021-2099