LSEassessment

AN ORDINANCE AUTHORIZING THE ISSUANCE OF NOT

TO EXCEED $60,000,000 SPECIAL ASSESSMENT

IMPROVEMENT BONDS, SERIES 2002 (LAKESHORE

EAST PROJECT), OF THE CITY OF CHICAGO, ILLINOIS,

TO FINANCE THE ACQUISITION AND CONSTRUCTION

OF LOCAL IMPROVEMENTS

WHEREAS, the City of Chicago, Illinois (the "City") is

a municipal corporation and home rule unit of the State

of Illinois authorized pursuant to Article 9 of the

Illinois Municipal Code, 65 Illinois Compiled Statutes

5/9, and the Special Assessment Supplemental Bond and

Procedures Act, 50 Illinois Compiled Statutes 460, as

modified and supplemented by Section 075 of Title 2,

Chapter 102 of the Municipal Code of Chicago, to undertake a local improvement by special assessment and to issue special assessment improvement bonds to finance the cost of such local improvement; and

WHEREAS, on June 19, 2002, the Mayor and City Council

of the City (the "Corporate Authorities") adopted an

ordinance of the City entitled: "An Ordinance

Providing For The Installation Of Sanitary Sewers,

Watermains, Storm Sewers, Public Park Improvements and Right-of-Way Improvements in Regard to the Lakeshore East Development [Special Assessment Docket No. 58763/Warrant No. 62456]" (the "Special

Assessment Ordinance") providing for the acquisition

and construction of local improvements to benefit

property described therein and referred to as the

Lakeshore East Project (the "Improvements"); and

WHEREAS, it is anticipated that the Circuit Court

of Cook County, Illinois will enter an order (the

"Confirmation Order") confirming judgment on the

Assessment in the aggregate sum of $67,415,731 and the Series 2002 Bonds (as defined below) will not

be issued unless and until such Confirmation Order

has been entered; and

WHEREAS, the City proposes to issue its Special

Assessment Improvement Bonds, Series 2002 (Lakeshore

East Project) (the "Series 2002 Bonds"), in the

aggregate principal amount not to exceed $60,000,000

pursuant to a Trust Indenture (the "Bond Indenture")

to be entered into between the City and BNY Midwest

Trust Company, as trustee (the "Trustee"), and to

enter into a Servicing Agreement (the "Servicing

Agreement") with BNY Asset Solutions LLC (the

"Servicing Agent") and the Trustee, such Bond

Indenture and Servicing Agreement to be substantially

in the forms presented to this meeting; and

WHEREAS, the City hereby finds and determines that

the Improvements are in the public interest and serve

a public purpose; and

WHEREAS, forms of the Bond Purchase Agreement (the "Purchase Agreement") by and among the City, Lakeshore East Development Group LLC and Lakeshore East L.L.C. (collectively, the "Developer"), William Blair & Company and Podesta & Co. (collectively, the

"Underwriter"), the Preliminary Limited Offering

Memorandum (the "Preliminary Limited Offering

Memorandum") with respect to the Series 2002 Bonds,

the Servicing Agreement and the Bond Indenture, each

in substantially final form, have been prepared and

presented to this meeting as Exhibits to this

Ordinance:

NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF CHICAGO, ILLINOIS, AS FOLLOWS:

Section 1. Incorporation of the Recitals. The

Corporate Authorities hereby find that all of the

recitals contained in the preambles to this Ordinance

are true, correct and complete and are hereby

incorporated by reference thereto and are made a

part hereof.

Section 2. Public Purpose. The financing of the

Improvements, the funding of capitalized interest

on the Series 2002 Bonds, the funding of the Debt

Service Reserve Account and the Making and Levying

Fund under the Bond Indenture and the payment of

necessary expenses incidental to the Improvements

and the issuance of the Series 2002 Bonds are

hereby authorized and determined to be in the

public interest and in furtherance of the public

purposes of the City.

Section 3. Authorization of Bonds. In order to

provide funds to carry out the public purposes set

forth in Section 2 hereof, there are hereby

authorized to be issued the limited obligation

special assessment improvement bonds of the City

in the aggregate principal amount of not to exceed

$60,000,000, which bonds shall be designated

"Special Assessment Improvement Bonds, Series 2002 (Lakeshore East Project)." The Series 2002 Bonds shall be authorized and issued pursuant to Division 2 of

Article 9 of the Illinois Municipal Code, the Special

Assessment Supplemental Bond and Procedures Act and

the Local Government Debt Reform Act, 30 Illinois

Compiled Statutes 350 and an ordinance of the City

entitled "Amendment of Title 2, Chapter 102 of the

Municipal Code of Chicago by Addition of New Section

075 Regarding Home Rule Powers in Special Assessment

Proceedings" passed by the Corporate Authorities of

the City on July 25, 2001 (collectively, the

"Authorizing Acts"). The City elects to apply to

the Series 2002 Bonds the provisions of the Special

Assessment Supplemental Bond and Procedures Act.

Authority is granted to the Mayor or the Chief

Financial Officer to determine to sell the

Series 2002 Bonds on such terms, subject to

Section 5 hereof, as and to the extent such officers

determine that such sale is desirable and in the best

financial interest of the City.

As used in this Ordinance, the term "Chief Financial

Officer" means the Chief Financial Officer of the City

appointed by the Mayor of the City or, if there is no

such officer then holding the office, the City

Comptroller.

The Series 2002 Bonds shall be issuable as fully

registered bonds without coupons; shall be dated,

executed and authenticated in the manner set forth

in the Bond Indenture; shall bear interest from

their date on the unpaid principal thereof at the

rate not to exceed 9% per annum; shall be payable

as to principal and interest at the times and in

the amounts set forth in the Bond Indenture; shall

mature not later than December 1, 2035; and shall

be subject to redemption prior to maturity at the

times, under the circumstances, in the manner and

at the redemption prices set forth in the Bond

Indenture.

The Series 2002 Bonds, together with the interest

payable thereon, shall be limited obligations of

the City, payable from and secured as to the payment

of the principal of or redemption price thereof and

interest thereon, in accordance with their terms and

the provisions of the Bond Indenture solely by the

Trust Estate (as defined in the Bond Indenture)

which includes the Assessment (as defined in the

Bond Indenture) and other funds of the City held

pursuant to, and as provided in, the Bond Indenture;

and, pursuant to Section 13 of the Local Government

Debt Reform Act, the Trust Estate is pledged to the

Trustee for the benefit of the owners of the Series

2002 Bonds, subject only to the provisions of the

Bond Indenture permitting the application thereof

for the purposes and on the terms and conditions

set forth in the Bond Indenture.

Neither the State of Illinois nor any political

subdivision thereof (other than the City) shall

be obligated to pay the principal of or purchase

or redemption price thereof or interest on the

Series 2002 Bonds, and neither the full faith and

credit nor the taxing power of the State or any

political subdivision thereof (including the City)

is pledged to the payment of the principal of or

redemption price or interest on, the Series 2002

Bonds. The Series 2002 Bonds do not constitute

a debt of the City within any constitutional or

statutory limit. No Bondholder or receiver or

trustee in connection with the payment of the

Series 2002 Bonds shall have any right to compel

the State or any political subdivision thereof

(including the City) to exercise its appropriation

or taxing powers.

The Series 2002 Bonds shall be issued in compliance

with and under authority of the provisions of the

Authorizing Acts, this Ordinance and the Bond

Indenture. The Series 2002 Bonds shall be executed

on behalf of the City with the official manual or

facsimile signatures of the Mayor and the City Clerk

and shall have printed thereon a facsimile of its

corporate seal or impressed thereon manually its

corporate seal. In case any officer who shall have

signed (whether manually or in facsimile) any of the

Series 2002 Bonds shall cease to be such officer of

the City before the Series 2002 Bonds have been

authenticated by the Trustee or delivered or sold,

such Series 2002 Bonds with the signatures thereto

affixed may, nevertheless, be authenticated by the

Trustee, and delivered, and may be sold by the City,

as though the person or persons who signed such

Series 2002 Bonds had remained in office. The

appointment of BNY Midwest Trust Company as trustee

under the Bond Indenture is hereby approved.

Section 4. Approval of Documents. The forms, terms

and provisions of the Purchase Agreement attached

hereto as Exhibit A, the Servicing Agreement

attached hereto as Exhibit B and the Bond Indenture

attached hereto as Exhibit C are hereby in all

respects approved, and any of the Mayor, Chief

Financial Officer, Comptroller, Director of Revenue

(in connection with the Servicing Agreement) and

Clerk of the City are hereby authorized, empowered

and directed to execute and deliver the Purchase

Agreement, the Servicing Agreement and the Bond

Indenture in the name and on behalf of the City.

The Purchase Agreement, the Servicing Agreement

and the Bond Indenture, as executed and delivered,

shall be in substantially the forms now before this

meeting and hereby approved, or with such changes

therein as shall be approved by the officers of

the City executing the same, their execution thereof

to constitute conclusive evidence of their approval

of any and all changes or revisions therein from

the forms of the Purchase Agreement, the Servicing

Agreement and the Bond Indenture now before this

meeting. The officers, agents and employees of

the City are hereby authorized, empowered and

directed to do all such acts and things and to

execute all such documents as may be necessary

to carry out the intent and accomplish the purposes

of this Ordinance and to comply with and make

effective the provisions of the Purchase Agreement,

the Servicing Agreement and the Bond Indenture, as

executed. The compensation to be paid to the

Servicing Agent under the Servicing Agreement

shall be subject to the approval of the Director

of Revenue subject to applicable law.

Section 5. Bond Sale. The sale of the Series 2002

Bonds pursuant to the Purchase Agreement to the

Underwriter, at a price of not less than 96% of

the original principal amount thereof to be issued,

exclusive of any original issue discount on the

Series 2002 Bonds, plus accrued interest to the

date of delivery, is hereby authorized and approved.

The use and distribution of the Preliminary Limited

Offering Memorandum by the Underwriter, prepared with

respect to the Series 2002 Bonds is hereby ratified

and approved. Any of the Mayor, Chief Financial

Officer, Comptroller and Clerk of the City are

hereby authorized, empowered and directed to execute

and deliver a final Limited Offering Memorandum,

substantially in the form of the Preliminary Limited

Offering Memorandum attached hereto as Exhibit D

or with such additions, changes or deletions therein

as shall be approved by the officer of the City

executing the same and as are necessary to reflect

the final terms of the Series 2002 Bonds, his or

her execution thereof to constitute conclusive

evidence of his or her approval of any and all

changes or revisions therein from the form of the

Preliminary Limited Offering Memorandum now before

this meeting.

Section 6. Notification of Sale. Subsequent to the

sale of the Series 2002 Bonds, the Chief Financial

Officer shall file in the Office of the City Clerk

a notification of sale directed to the City Council

setting forth (i) the original principal amount of,

maturity schedule and redemption provisions for the

Series 2002 Bonds sold, (ii) the interest rates on

the Series 2002 Bonds sold, (iii) the compensation

paid to the Underwriter in connection with such sale

and (iv) the amount of the proceeds of the Bonds to

be applied as set forth in Section 7 of this Ordinance.

There shall be attached to such notification the

final form of the Bond Indenture, the Purchase

Agreement and the Limited Offering Memorandum.

Section 7. Use of the Proceeds of Series 2002 Bonds.

The proceeds from the sale of any of the Series 2002

Bonds shall be applied to (i) pay for the Improvement,

(ii) pay a portion of the interest accruing on the

Series 2002 Bonds for a period estimated to end on

the later of (a) six months after the estimated date

of completion of construction of the Improvements or

(b) two years after the date the Series 2002 Bonds

are issued, (iii) pay certain expenses incurred in

connection with the issuance of the Series 2002 Bonds,

and (iv) provide any required deposit in the Debt

Service Reserve Account and the Making and Levying

Fund, all as shall be set forth in the Bond Indenture,

and such proceeds are hereby appropriated for such

purposes.

Section 8. Proxies. The Mayor and the Chief

Financial Officer may each designate another to

act as their respective proxy and to affix their

respective signatures to each Bond, whether in

temporary or definitive form, and to any other

instrument, certificate or document required to be

signed by the Mayor or the Chief Financial Officer

pursuant to this Ordinance, the Bond Indenture or

any Supplemental Indenture. In each case, each

shall send to the City Council written notice of

the person so designated by each, such notice

stating the name of the person so selected and

identifying the instruments, certificates and

documents which such person shall be authorized to

sign as proxy for the Mayor and the Chief Financial

Officer, respectively. A written signature of the

Mayor or the Chief Financial Officer, respectively,

executed by the person so designated underneath,

shall be attached to each notice. Each notice, with

signatures attached, shall be recorded in the Journal

of the Proceedings of the City Council and filed

with the City Clerk. When the signature of the Mayor

is placed on an instrument, certificate or document

at the direction of the Mayor in the specified manner,

the same, in all respects, shall be as binding on the

City as if signed by the Mayor in person.

When the signature of the Chief Financial Officer

is so affixed to an instrument, certificate or

document at the direction of the Chief Financial

Officer, the same, in all respects, shall be binding

on the City as if signed by the Chief Financial

Officer in person.

Section 9. Modification of Exhibit L to Special

Assessment Ordinance. Exhibit L to the Special

Assessment Ordinance is hereby amended to read as

set forth in Exhibit E hereto.

Section 10. Enactment. The provisions of this

Ordinance are hereby declared to be separable and

if any section, phrase or provision shall for any

reason be declared by a court of competent

jurisdiction to be invalid or unenforceable,

such declaration shall not affect the validity or

enforceability of the remainder of the sections,

phrases and provisions hereof.

All ordinances, orders and resolutions and parts

thereof in conflict herewith are to the extent of

such conflict hereby repealed, and this Ordinance

shall take effect and be in full force immediately

upon its adoption. No provision of the Municipal

Code or violation of any provision of the Municipal

Code shall be deemed to impair the validity of this

Ordinance or the instruments authorized by this

Ordinance or to impair the security for or payment

of the instruments authorized by this Ordinance;

provided further, however, that the foregoing

shall not be deemed to affect the availability

of any other remedy or penalty for any violation

of any provision of the Municipal Code.

A copy of this Ordinance shall be published in

pamphlet form, filed in the office of the Clerk

of the City and made available for public

inspection.

This Ordinance shall become effective upon

its passage and approval.

Lakeshore East Special Assessment

Author Is Columbus Tower Exempt from Park Assessment? (currently 647 views)

Lee

Posted: February 14th, 2006,

I have heard this building is exempt from paying the special park tax assessment? �Does anyone know if this is true?

Oct. 15, 2005

80-story tower eyed for Chicago River site

Developers plan an 80-story tower for the $4-billion Lake-shore East development on Lake Shore Drive south of the Chicago River. The high-rise, to be on Columbus Drive across from the Fairmont Hotel, is being designed by Chicago architect Jeanne Gang. Plans include about 500 apartments, nearly 300 condos and possibly a hotel with 195 units, says Joel Carlins, CEO of Magellan Development, which is developing Lakeshore East with Near North Properties. The Chicago-based firms are in talks with hotel operators and aim to market the condo units next year, Mr. Carlins says.

Posted: February 14th, 2006, 1:41pm

I have not heard anything on this. The proposed building has been in the works for some time and it will not be the only mixed use building in LSE.

Maybe someone from Magellan will chime in. In the meantime, I will check with the other forums and post when I get a reliable word on the subject.

Lee Posted: February 17th, 2006,

Money approved for Lakeshore E. park on Oct 10, 2002 - Note the money to pay off the 30-year bonds will come from the special assessment, a tax added only to the bills of those who buy property in Lakeshore East. The developers are spending about $11 million up front.

The Chicago Park District Board has approved the sale of $67 million in city bonds backed by a special assessment to build a park at Lakeshore East, a $2.5 billion development on an unused portion of the massive Illinois Center complex.

The bond issue will allow developers to construct the park and infrastructure expected to cost $78 million. The 30-year bonds will be paid off with a special assessment only on the bills of property buyers at Lakeshore East. The developers, Magellan Development Group and Near North Properties, are fronting $11 million on the construction, which already is underway.

Tentatively called Harbor Park, the 5.3-acre park will be the centerpiece of Lakeshore East, surrounded by condos, apartments and "park homes."

Lakeshore East is planned for close to 5,000 units on 28 acres, giving it a projected population larger than that of many municipalities. It is the last piece of undeveloped land that was part of Illinois Center, the massive mixed-use project next door, and it should take 12 to 15 years to complete.

Development plans call for:

� Five rental towers totaling 2,300 apartments.

� Seven to 10 highrises with a total of 2,350 condominiums.

� About 118 "park homes."

� Hotels with up to 2,000 rooms.

� A 60,000-square-foot public elementary school and community center.

� Retail, public parking and storage facilities.

� New roads and infrastructure.

The park will include extensive landscaping, water features, a children's playground and a protected area for dogs. Green space is a prime ingredient in planning Lakeshore East, according to Joel Carlins, president of Magellan Development Group.

"When you go across the river, it's all concrete," Carlins says of Streeterville, the neighborhood immediately north. "One building looks at another building across cement. Here, we've preserved 45 percent of the land as open space. People are attracted to water and greenery. There's only so much you can build and keep it special."

Lee Posted: February 23rd, 2006, 1:55am

Apparently David Carlins of Magellan said at a meeting with owners of the Lancaster that both towers on Columbus are exempt from the special park assessment tax because they were not part of the original Lakeshore East plan. �Sales are targeted to begin this Spring.

This doesn�t seem right at all. �Each Lakeshore East property owner will be paying a special park assessment somewhere in the range of $800-1500 per year for thirty years -- and we are being told that these two 80 story buildings are getting a free ride?

There is something wrong with this picture. This matter should be brought up with Alderman Naturus.

Posted: February 23rd, 2006,

Thanks for this information Lee.

There should definitely be some discussion with the Alderman and the Mayor's office on this. �I moved this info (now removed) to the front page of the website. Here is some contact information:

Alderman Burton Natarus, 42nd Ward

Email: bnatarus@cityofchicago.org

(312) 744-3062

Mayor Daley's Office Contact Form: http://egov.cityofchicago.org/.....;topChannelName=Dept

Lee Posted: March 31st, 2006,

Response from Alderman Naturus...

Dear xxxx,

The fees that you are being charged are not taxes imposed by the government. The assessment is imposed upon you by your contract with Megellan, and only Megellan can remove the assessment. If purchasers do not agree with the assessment, then they should not purchase the apartment. I wish there were something I could do, but this is all a matter of private contract.

Very truly yours,

Burton F. Natarus

Alderman, 42nd Ward

121 N. La Salle, City Hall Room 306

Chicago, IL 60602

312-744-3062

312-744-1728 (fax)

It appears to me that Naturus is mistaken. He seems to be addressing the homeowners assessment, which would be paid to the Association istelf (not Magellan) and not the special park tax assessment, which is paid to the City. The bond was not taken out by Magellan; Magellan received payments from the bond for the development of the infrastructure of Lakeshore East.

'The Chicago Park District Board has approved the sale of $67 million in city bonds backed by a special assessment to build a park at Lakeshore East, a $2.5 billion development on an unused portion of the massive Illinois Center complex.'

The special park tax is collected by the City of Chicago to retire the bond. We need to determine what buildings are included in this assessment and which are excluded and why.

For example, how do rental buildings such as the Shoreham pay this park tax? How is it that a building that is de facto part of Lakeshore East (i.e., the Aqua) is exempt from being required to pay this park tax?

Does it make sense for the 200 unit Lancaster condo and the 340 unit OTP condo shoulder to the burden of retiring a 30 year $67 million bond when these two sister buildings are twice as large as these two condos?

Regards, Lee

Lee Posted: April 2nd, 2006,

Q. When does $60 million = $162 million?

A. When it is a special park tax assessment.

The Park at Lakeshore East is costing residents $162million when you add principal ($60M), interest ($94.5M), and other costs ($7.3M) based on the 10/21/2002 City Council Journal which is public record.

In addition, of the $60 million in principal, bond costs were $17.7 million. Net, some residents of the park are paying $162 million for a park that actually cost $42 million.

Who is paying what:

3000 Condo owners are paying $122 million ($40k/unit)

1500 Apts are paying $22 million ($14k/unit)

118 Parkhomes are paying $9.9 million ($84k/unit)

350 Hotel rooms are paying $7.3 million ($21k/unit)

A total of 4931 units are paying $162 million ($33k/unit).

I do not believe the above totals include the Aqua or the second building next to it. �Given these twin buildings are 80 stories each, why are they exempt from the special park tax assessment?

I need to find out what parcels are designated for which buildings -- I took a guess below....Parcel M is the Lancaster, Parcel N is 340OTP and Parcel G is the Shoreham. �

Lakeshore East Special Park District Tax Allocation

Parcel-Type/Name Units Unit Pct Principal Principal Pct Per Unit Interest Collection Fee Reserve Principle & Interest, Fees,Reserve Total Cost Per Unit

Condominium Development

A Condo 142 2.86% $1,913,377 3.19% $13,474 $3,013,051 $107,493 $128,992 $5,162,913 $36,359

B Condo 174 3.50% $2,344,561 3.91% $13,474 $3,692,049 $131,717 $158,060 $6,326,388 $36,359

C Condo 172 3.46% $2,317,612 3.86% $13,474 $3,649,612 $130,203 $156,244 $6,253,670 $36,359

D Condo 174 3.50% $2,344,561 3.91% $13,474 $3,692,049 $131,717 $158,060 $6,326,388 $36,359

E Regatta 245 4.93% $3,301,249 5.50% $13,474 $5,198,574 $185,463 $222,556 $8,907,843 $36,359

H Chandler 257 5.17% $3,462,943 5.77% $13,474 $5,453,198 $194,547 $233,457 $9,344,146 $36,359

I Fronts on LSD 347 6.98% $8,416,165 14.03% $24,254 $13,253,183 $472,818 $567,382 $22,709,548 $65,445

J Fronts on LSD 264 5.31% $6,403,076 10.67% $24,254 $10,083,113 $359,723 $431,668 $17,277,580 $65,445

K Condo 284 5.71% $3,444,079 5.74% $12,127 $5,423,493 $193,488 $232,185 $9,293,244 $32,723

L Condo 359 7.22% $4,353,607 7.26% $12,127 $6,855,753 $244,585 $293,502 $11,747,447 $32,723

M Lancaster 194 3.90% $2,425,408 4.04% $12,502 $3,819,361 $136,259 $163,511 $6,544,539 $33,735

N 340 OTP 383 7.70% $4,581,326 7.64% $11,962 $7,214,349 $257,378 $308,853 $12,361,906 $32,277

Total 2995 60.25% $45,307,964 75.51% $15,128 $71,347,787 $2,545,392 $3,054,470 $122,255,612 $40,820

Apartment Development

C Apt 400 8.05% $2,802,693 4.67% $7,007 $4,413,483 $157,455 $188,946 $7,562,577 $18,906

F Tides 614 12.35% $3,099,132 5.17% $5,047 $4,880,295 $174,109 $208,930 $8,362,465 $13,620

G Shoreham 494 9.94% $2,425,408 4.04% $4,910 $3,819,361 $136,259 $163,511 $6,544,539 $13,248

Total 1,508 30.34% $8,327,233 13.88% $5,522 $13,113,139 $467,822 $561,387 $22,469,581 $14,900

Hotel Development

A Hotel 350 7.04% $2,711,740 4.52% $7,748 $4,270,257 $152,345 $182,814 $7,317,156 $20,906

Total 350 7.04% $2,711,740 4.52% $7,748 $4,270,257 $152,345 $182,814 $7,317,156 $20,906

Parkhome Development

Parkhomes 118 2.37% $3,653,064 6.09% $30,958 $5,752,588 $205,228 $246,274 $9,857,154 $83,535

Total 118 2.37% $3,653,064 6.09% $30,958 $5,752,588 $205,228 $246,274 $9,857,154 $83,535

LSE Total 4,971 100.00% $60,000,001 00.00% $12,070 $94,483,771 $3,370,787 $4,044,944 $161,899,502 $32,569

Kiki Posted: April 4th, 2006, 12:55pm

Hello Lee,

I wonder if your list corresponds to this plan?:

http://www.neweastsideforum.homestead.com/untitled1.html

( renamed http://neweastside.org/untited1.html )

It's possible that Mr. Ward would know the answer to your

question as he was involved with much of the citizen input

of the original LakeShore East plan.

http://www.neweastsideforum.homestead.com/

(now renamed http://neweastside.org )

Posted: April 4th, 2006,

Administrator Group

This is a very complicated issue. �I would suggest contacting R Ward, as Kiki mentioned above. http://www.neweastsideforum.homestead.com/

The Alderman (contact info in links section) is another good resource, and of course, Magellan.

In the end - it is the first privately funded park in Chicago and the LSE residents, and guests, will be the chief beneficiaries.

The information below was copied from the 340 BLOG and is being checked for accuracy. It has NOT been checked yet. Please review it with this in mind.

This page was last updated: May 3, 2010

Page Visits

WEBSITE COMMENT: Note Parcel A is listed under both Condos and Hotels. Also Parcel C is listed under both Condos and Apartments.

The blog above refers to Aqua (Parcel P) as missing from sharing in the bond repayment. Also the other 900-foot approved building on Columbus (Parcel O) is missing from the repayment obligation.

The website advisors have to do more research to determine why Parcels P and O are not required to participate in the 30-year repayment. Also the "reasoning" for the significant differences in the repayment obligation per living unit from an average of $83,535 per Park Home down to $14,900 per Apartment has to be researched.

It should also be determined why Parcels I and J (directly on Lakeshore Drive) are obligated for twice the financial obligation per unit as the other condos.

All of these questions were answered by Sean Linnane of Magellan at a meeting on April 21, 2010, arranged by Alderman Reilly that included both the Chicago Finance and Planning Departments. Magellan made "business decisions" to exclude the two properties on Columbus based on the buyers demand. The property sale was not completed, however, the 2 properties were never included.

Magellan made good-faith effort to allocate the repayment responsibilities based on the planned size and value differences between commercial units, hotel rooms, apartments, condo units, and townhomes. Once the allocation was approved by the City Council, it could not be changed based on what is actually being built on each parcel.

Each real estate parcel is responsible for the semi-annual bond payments, through the Bank of New York, as trustee. As of 2010, approximately 60% of the payments remain the responsibility of the developer, including the 2 parcels on Lake Shore Drive that pay a disproportionally larger share, based on the original allocation. Within a parcel developed with condominiums, each owner pays a share of the parcel's payments based on the percentage of ownership in the declaration. Individual owners always have the option to payoff their remaining portion of the real estate parcel's responsibility. A low-cost report with the payoff amount and your individual interest rate is available from the trustee at 1-800-___________ or by email at _______________. The cash payoff is by cashiers check based on the requested date, A personal loan could be obtained at possibly a lower interest rate than the average assessment rate of 6.75%. There are three interest rates, depending on the bond issue. As of May, 2010, a refinancing of all the asscessment bonds is not cost-effective. This could be reexamined in the future if interest rates remain low and the risk is lowered by more buildings being completed. It is unlikely to obtain a favorable refinancing rate while 60% of the payoff responsibility remains with the developer.

We will update this information as new information becomes available. Persons on the neighborhood email notification building lists will be advised of significant updates.

Development_Incentives_Bayer.pdf

Click on the icon above to study the 29-page pdf file that offers an in-depth explanation of the Special Assessment method of financing development projects where the infrastructure is all installed at the beginning, and then the project is actually built over 10 to 15 years, such as Lakeshore East.

ECONOMIC DEVELOPMENT INCENTIVES:

USE OF SPECIAL ASSESSMENTS,

SPECIAL SERVICE AREAS, BUSINESS DISTRICTS

AND SALES TAX REBATE AGREEMENTS

- Prepared by -

THOMAS P. BAYER

of the Law Firm of

KLEIN, THORPE AND JENKINS, LTD.

20 North Wacker Drive

Suite 1660

Chicago, Illinois 60606-2903

Phone (312) 984-6400

Fax (312) 984-6444

tpbayer@ktjlaw.com

CHICAGO METROPOLITAN AGENCY FOR PLANNING

SEMINAR

Monday, March 31, 2008

Oak Brook, Illinois

The below document was discovered by Richard Ward among 7 feet of PD #70 warehoused documents that were reviewed on September 2, 2009 during 8 Illinois Freedom of Information Act (FOIA) requests.

EXCERPTS FROM City of Chicago Department of Planning and Development letter dated October 11, 2001 signed by Philip Levin, Assistant Commissioner. Note this was 7 months after the PD 70 was amended by the City Council, and 8 months before the Special Assessment was passed by the City Council. It appears that Lake Shore East set up a Delaware limited liability company called "Smith Properties Holdings Lakeshore East L.L.C." and essentially sold three parcels to themselves, and then exempted themselves from paying for the $60 million local improvement special assessment shown on the left. NEAR is still trying to determine the reasoning behind this series of transactions that were apparently approved administratively by the City of Chicago:

" October 11, 2001

Smith Properties Holdings Lakeshore East L.L.C.

c/o Charles E. Smith Residential Realty, Inc.

2345 Crystal Drive, Suite 1100

Arlington, Virginia 22202

Re: Request for Clarification regarding Parcels G1, G2 and A3 in Residential-Business Planned Development No. 70 (Illinois Center - Lakeshore East)

Dear Sirs:

Please be advised that the Department of Planning and Development has considered your request for clarification and conformation of development rights and obligations under Residential-Business Planned development No. 70 as amended ("RBPD No. 70), and the Master Plan & Design Standards for Lakeshore East (the "Master Plan"). It is our understanding that Smith Properties Holdings Lakeshore East L.L.C., a Delaware limited liability company or its successors and/or assigns ("Purchaser") proposes to acquire and develop Parcel G1, Parcel G2 and a portion of Parcel A3, as such parcels are defined in the Master Plan.

... Further, the Purchaser shall have no obligation to contribute to the payment or to undertake the construction of the Public Park, Public Elementary School or other public improvements to be constructed pursuant to RBPD No. 70 on portions of the property other than Parcel G1, Parcel G2 and the portions of Parcel A3 depicted on the attached Exhibit A.

... This letter shall inure to the benefit of the Purchaser from and after its acquisition of Parcel G1, Parcel G2, and the portions of Parcel A3 depicted on attached Exhibit A, and its successors and assigns.

Very truly yours,

/s/ Philip Levin

Assistant Commissioner "

Note, as of September, 2009, Parcel G1, between Blue Cross and Aqua, is mostly empty (future building "O") with only Lake Street built; Parcel G2 contains the Aqua (building "P"), and Parcel A3 contains Swissotel addition and parking below.

www.NewEastside.org WEBSITE NOTE:

Scroll down to study spreadsheet on the allocation of repayments for the $60,000,000 Lakeshore East Special Assessment, that is now on most current new owners real estate tax bills from Cook County.

The full disclosure responsibility of the developer and/or real estate brokers, contained in the Illinois Condominium Property Act and the Chicago Consumer Protection Ordinance, are important protections for all new buyers.

References:

CHICAGO CONDOMINIUM ORDINANCE Section 13-72-030 Misrepresentation or Omission.

"No person shall with the intent that a prospective purchaser rely on such act or omission, advertise, sell or offer for sale any condominium unit by (a) employing any statement or pictorial representation which is false or (b) omitting any material statement or pictorial representation. (Prior code 100.2-3)"

ILLINOIS CONDOMINIUM PROPERTY ACT Section 22.1 RESALES - DISCLOSURES - FEES

"(a) In the event of any resale of a condominium unit by a unit owner other than the developer such owner shall obtain from the Board of Managers and shall make available for inspection to the prospective purchaser, upon demand, the following:

(8) A statement that any improvements or alternations made to the unit, or the limited common elements assigned thereto, by the prior unit owner are in good faith believed to be in compliance with the condominium instruments."

ADDED TO THIS WEBPAGE September 7, 2009:

FROM...........Magellan Realty Blog

http://magellansells.com/magellan-realty-blog/explanation-special-assessment-disclosure-for-lakeshore-east/

"Explanation Special Assessment Disclosure for Lakeshore East

SPECIAL ASSESSMENT DISCLOSURE

LAKESHORE EAST DEVELOPMENT

You are purchasing property that is within a Special Assessment District established pursuant to a court proceeding adopted by the City of

Chicago.

The Assessment Confirmation authorized the levy, extension, and collection of a Special Assessment upon the Property, in connection with certain “Public Improvements” that will confer a special benefit on the Property (including, without limitation, parks, streets, storm and sanitary sewer, and a potable water system). In connection therewith, the City of

Chicago pursuant to a certain Bond Ordinance, authorized the issuance of municipal bonds to pay for the Public Improvements, including the financing and other costs associated with the funding of the Public Improvements.

These Special Assessment bonds have a 30 year life. Your property will be assessed a fee that is billed and payable semi-annually commencing in the beginning of the year 2005 and ending in the year 2032. This assessment will pay off principal and interest of the Special Assessment Improvement Bonds. Estimated initial assessments are included in the Exhibits to your Property Report. The maximum Assessment on the Property may increase on average by no more than 1.5% each year between the first year of the levy and 2032.

If you sell your property, you will be responsible to the City of

Chicago and/or the subsequent owner for the pro rata portion of the assessment for that part of the year in which you owned the property. The subsequent owner will be responsible for the assessments for the years in which he/she owns the property. The servicing agent will issue the assessment bill prior to the semi-annual due dates of each year, which will be the first business day of March and September. Additional interest and fees associated with the collection of the assessment may be added in the event you are late in making payment. The assessment is considered a lien on your property and may result in a sale of your property if not paid as required in a timely fashion.

You are purchasing the Property subject to the Special Assessment and you will not object to the Special Assessment. You agree that the City validly created the Special Assessment and that the Special Assessment is rationally related to the benefit that the Public Improvements confer on the Property. You will be responsible for the Special Assessment on your Property from and after the Closing Date.

By taking title to the Property, you hereby agree to accept title subject to the Special Assessment and all rights and impositions and obligations thereby imposed, including, without limitation, the Special Assessment, which obligations shall be covenants running with the land. The deed that you, the Purchaser(s), will receive at Closing shall contain a recitation of such covenants, conditions, and restrictions as a permitted exception to title.

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4 Responses to “Explanation Special Assessment Disclosure for Lakeshore East”

1. Michael Says:

June 22nd, 2009 at 10:29 am

Which buildings in LSE are obligated to pay this special assessment tax?

2. admin Says:

June 22nd, 2009 at 5:57 pm

All Buildings in Lakeshore East except Aqua Tower (aqua townhomes are obligated) and Site O which is now undeveloped.

3. Don Whitmore Says:

June 25th, 2009 at 2:11 pm

How were buyers informed about this? What sort of disclosure is there? What is the formula being used and is this shown to buyers before purchase?

4. admin Says:

June 26th, 2009 at 3:04 pm

The information regarding the special assessment tax was disclosed to Purchasers as part of their Property Report, which is given to a Purchaser at the time of contract signing. The amount of the assessment that is attributable to each building has been pre-set pursuant to a determination made by a judge of the predicted parcel value for each building. The amount of the assessment attributable to each unit is then simply calculated by multiplying the percentage of ownership for that unit times the condominium association’s percentage of the assessment (which may be less than 100% if there are other uses in the building) times the actual assessment. The estimated amounts of these assessments, on a unit by unit basis, are also disclosed in the Property Report, right next to the estimates for the condominium monthly assessments.

FROM June 27, 2001 MAYORAL ORDINANCES' WEBSITE

#15 Lakeshore East Special Assessment Bonds

An inducement ordinance concerning Lakeshore East Special Assessment Bonds

ORDINANCE

WHEREAS, the City of Chicago (the "City") is a municipal

corporation and a home rule unit of government, pursuant to

Article VII, Section 6 of the Illinois Constitution of

1970; and

WHEREAS, the City wishes to design, acquire, construct and

install certain municipal improvements within a portion of

the City commonly known as Lakeshore East and the City wishes

to issue its special assessment bonds to finance said

improvements; and

WHEREAS, the City hereby finds and determines that the

financing of the improvements described below by the City

will serve the public purposes of the City; now, therefore,

BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CHICAGO:

SECTION 1. The above recitals are incorporated herein and

made a part hereof.

SECTION 2. The City intends to issue obligations (the

"Bonds") for the purpose of financing the design, acquisition,

construction and installation of improvements consisting of

streets, parks, utilities, stormwater management facilities,

sanitary sewer, engineering and consulting services, and

other eligible costs within Lakeshore East and the acquisition

of land on which such improvements are to be built (the

"Project") and including without limitation, related

expenses for making and levying the special assessments,

costs of issuance, capitalized interest and a debt service

reserve. The total amount which the City intends to borrow

through the issuance of the Bonds for the Project will not

exceed $75,000,000.

SECTION 3. Certain costs will be incurred by the City in

connection with the Project prior to the issuance of the Bonds.

The City reasonably expects to reimburse such costs with

proceeds of the Bonds.

SECTION 4. This Ordinance constitutes a declaration of

official intent under Treasury Regulation Section 1.150-2

and the Internal Revenue Code of 1986, as amended.

SECTION 5. To the extent that any ordinance, resolution,

rule, order or provision of the Municipal Code of Chicago,

or part thereof, is in conflict with the provisions of

this Ordinance, the provisions of this Ordinance shall

control. If any section, paragraph, clause or provision

of this Ordinance shall be held invalid, the invalidity

of such section, paragraph, clause or provision shall not

affect any of the other provisions of this Ordinance.

SECTION 6. This Ordinance shall be effective as of the

date of its passage.

#16 LakeShore East Special Assessment Bonds

An ordinance concerning the exercise of home rule authority in connection with LakeShore East Special Assessment Bonds

ORDINANCE AMENDING CHAPTER 2-102 OF THE MUNICIPAL CODE

IN REGARD TO SPECIAL ASSESSMENTS

BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CHICAGO:

SECTION 1. The foregoing recitals are adopted as the findings of

the City Council.

SECTION 2. That Chapter 2-102 of the Municipal Code is amended

by adding a new Section 2-102-075 thereto which shall read in its

entirety as follows:

2-102-075 Exercise of Home Rule Powers in Relation to

Special Assessment Proceedings

Pursuant to the City's home rule powers, as provided by

Article VII, Section 6 of the 1970 Illinois Constitution,

any proceeding under the provisions of the Local Improvement

Act, 65 ILCS 5/9-2-1 et seq. and the Special Assessment

Supplemental Bond and Procedures Act, 50 ILCS 460/1 et seq.

may be initiated and may proceed in accordance with the

following:

(a) Notwithstanding 65 ILCS 5/9-2-9 as amended, the

following provisions shall apply to the proceeding:

"The proposed local improvement may consist of the acquisition of the

necessary interests in real property and the construction of any public

improvement or any combination of public improvements, including, but not

limited to, sreets, storm sewers, watermains, sanitary sewers,

sidewalks, walkways, bike paths, parks, landscaping, recreation areas,

lighting improvements, signage improvements, vehicular parking improvements,

any additional improvements necessary to provide access to the public

improvements and all necessary appurtenances, in a local area pursuant

to a single special assessment project, provided that in assessing each

lot, block, tract and parcel of property, the commissioner so assessing

shall take into consideration whether each lot, block, tract or parcel is benefitted by all or only some of the improvements combined into the single special assessment project. For purposes hereof, a local area shall

be defined as an area in which all of the lots, blocks, tracts or parcels

located within the boundaries thereof will be benifitted by one or more of

the proposed improvements. The fact that more than one improvement is being

constructed as part of a single special assessment project shall not be

grounds for an objection by an assessee to the special assessment proceeding

in court."

(b) Notwithstanding 65 ILCS 5/9-2-62 as amended, the following provisions

shall apply:

"No special assessment or special tax shall be levied for any local

improvement until the City, or another unit of local government pursuant to

an intergovernmental agreement between the City and said other unit of

local government, has obtained, or has entered into a binding contractual

agreement to obtain, an appropriate permanent interest in the land

necessary therefor, as determined by the City. An apropriate permanent

interest in the land necessary for a local improvement shall include,

but shall not be limited to, fee title, a permanent easement, an easement

which converts to fee title after the passage of a specific period of

time, a dedication, a limited dedication of air rights at a specific

height above ground level, or any combination thereof."

provisions shall apply:

"In the event that the county clerk does not agree to mail such bills, or

in the event that the City declines to request the county clerk to mail

said bills, the City still may bill the annual amount due as of January

2nd in two (2) even installments to become due on or about the due dates

for the real estate tax bills issued by the county clerk during the

year in which such January 2nd date occurs, thus deferring to later dates

in said year the obligation to pay the assessment installment."

(d) In addition, the City Council may on a case by case basis, provide for

further amendments to the application of other provisions of the Local

Improvement Act, 65 ILCS/9-2-1 et seq. and the Special Assessment

Supplemental Bond and Procedures Act, 50 ILCS 460/1 et seq. to City

proceedings that are necessary in order to facilitate a specific special

assessment project. Any such further amendments shall be specifically set

forth in the ordinance authorizing the specific special assessment project.

In the event of a conflict between the language of the Local Improvement Act,

65 ILCS 5/9-2-1 et seq. and/or the Special Assessment Supplemental Bond and

Procedures Act, 50 ILCS 460/1 et seq. with the foregoing, the foregoing

provisions shall prevail.

SECTION 3. That this Ordinance shall be effective upon its passage.

CLICK HERE FOR:

528 page - 23.9MB OFFERING MEMORANDUM EMAIL ATTACHMENT on May 3, 2010

From:

Peter Raphael, Debt Finance

William Blair & Company, L.L.C. | 222 West Adams St.,