Redevelopment Goals: From the attached document, you ll note the following redevelopment goals for the RFP process:

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1 CITY OF BATAVIA DATE: May 13, 2013 TO: City Council FROM: Jason Bajor, Assistant City Administrator SUBJECT: Request for Proposals (RFP) 2 East Wilson Street (Thomle Building) Issue: During the period of November 2012, through February, 2013, at Council direction, staff issued a Request for Proposals (RFP) for the development of the City-owned property located at 2 East Wilson Street. A total of three responses were received, of which two were considered as satisfactorily meeting the proposal content requirements: one from Vignette Home Décor and the other from 246 East Wilson, LLC. Staff now desires the City Council to hear presentations from representatives of the two remaining proposals as the next step in the selection process. Analysis: Since 1997, the City has owned the property at 2 East Wilson (commonly referred to as the Thomle Building). During this city-ownership period, the building has been used as a business incubator the last being Simonetti Studios which in 2012 relocated to a building on South Shumway Avenue. Over the last several months, the City has been approached by various individuals interested in acquiring and developing this property. In consideration of this interest, and in the larger desire for the City to place the property back into private ownership and revenue generation, staff developed the attached RFP. Redevelopment Goals: From the attached document, you ll note the following redevelopment goals for the RFP process: a. Reactivate the parcel with a viable commercial or mixed-use development. The City will consider a wide range of commercial and residential uses that are in conformance with the goals of the City s Comprehensive Plan and Downtown Mixed-Use Zoning District. Neighborhood-serving commercial uses, such as a restaurant or other retail, and mixed-use are preferred. Proposals that include this site within an expanded, multi-parcel project would be considered more desirous. b. Contribute to the commercial activity within the City s downtown. Redevelopment of the site should enhance commerce in the downtown by increasing business activity and density, increasing the availability of goods and services, and/or offering employment opportunities for area residents. Development should enhance the downtown s strength as a center of civic life while increasing its presence as a residential neighborhood. c. Preservation of the historic architecture and urban design of the Site. Development should aspire to meet traditional urban design by maintaining the building location adjacent to the sidewalk (not set back from the roadway), providing storefront windows that allow views into and out of the building, assimilating inviting outdoor space that addresses the riverfront, ensuring that any building improvement includes windows facing the Fox River,

2 orienting parking to the rear of building, and providing building access from the public sidewalks and rear parking lot. As a significant historic building in the downtown, it is the desire of the City to have the building remain in place, however, proposals that include an addition to the building would be considered more desirous. Any addition would have to preserve the North (Wilson Street) and West (river side) facades of the building substantially as is, and visually as a separate entity. The redevelopment goals highlight what staff believes to be the critical objectives for the property: 1) a mixed-use development (i.e. commercial and residential); 2) inclusion within a multi-parcel development; and 3) maintaining the architectural character of the building while making additions to it to leverage its waterfront location. Evaluation Criteria: In terms of evaluation criteria, the RFP provides the following: a. Fulfillment of the redevelopment goals for the RFP stated above b. Adherence to the City of Batavia Comprehensive Plan, Zoning Code, and other relevant policy documents and City ordinances c. Track record and financial and organizational capacity of the development team to complete the type of redevelopment project that they propose d. Financial feasibility of the project and the ability of the project to secure necessary financing e. Proposed project timeframe and feasibility of beginning construction in 2013 f. Public benefits from the project g. Offered purchase price for the Site h. Minimization of City subsidy, if any i. Degree of green building techniques and features incorporated j. Overall quality of the submission, adherence to the proposal content requirements, and responsiveness during the review process Conclusion: Staff desires that the City Council have the opportunity to hear brief presentations from each proposal s representatives so that they may better understand their details and also have the opportunity to ask any questions that may arise. After hearing the presentations, staff would come before the City Council during a subsequent meeting with its analysis of the proposals and recommendation for a selection. Should consensus on a selection be achieved, staff would then engage the representatives of the selected proposal in a negotiation over a suitable redevelopment agreement that would clarify the obligations and responsibilities of all concerned parties, to include financial commitments. This draft redevelopment agreement would then come before the City Council for final approval. w/attachments: RFP - 2 East Wilson Street (Thomle Building) Proposal Vignette Home Décor, Inc Proposal 246 East Wilson, LLC

3 cc: Bill McGrath, City Administrator Scott Buening, Community Development Director Peggy Colby, Finance Director Gary Holm, Public Works Director Noel Basquin, Engineering Director

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5 2012 Request for Proposals for City Owned Property: 2 East Wilson St Jason Bajor, Assistant City Administrator City of Batavia 11/5/2012

6 I. Introduction/Overview The building and site at 2 East Wilson Street is located in the center of downtown Batavia, along the bank of the Fox River. The property has 24 feet of frontage along Wilson Street and of frontage overlooking the Fox River Bike Trail and the Fox River. The 4,485 square foot (.10 acre) site was acquired by the City in The City is now calling for Requests for Proposals (RFP) for acquisition and redevelopment of this significant downtown property. The successful bidder will develop an acquisition and redevelopment plan that will enhance and promote this property and the downtown Batavia area. II. Site Facts/Background The building and property was acquired pursuant to plans for redevelopment and improvement of the downtown area. The building is commonly known as the Thomle Building and it was originally constructed in The building is comprised of four floors. The lowest level is a dirt floor sub basement that is accessed from the rear. There is another basement that is accessed from the west side of the building and can have additional access from the Wilson Street staircase. There are two retail levels with front access from Wilson Street. Gross building area amounts to 2,970 square feet, which includes all three floors plus the basement. Net useable area, which includes the first, second and third floors, amounts to 2,222 square feet. Finished space above street level (Wilson Street) is considered to be floors two and three and amounts to 1,474 square feet. The building is primarily clad with local limestone. At one time it was a northern terminal of the Aurora, Elgin and Chicago railway. It is situated on a prominent site on the Fox River at the foot of the Donovan (Wilson Street) bridge. The building was rehabilitated by the City in It was used as a business incubator for upcoming small businesses for a number of years. It has been vacant since July 2012, when the latest incubator business moved to another location in the downtown. The site includes an open space at the south end of 2 East Wilson Site Proposal Page 2 of 9

7 the property which could be utilized for outdoor dining purposes. Due to the floodplain on this parcel, construction of a building addition could be challenging. However, a deck or addition elevated above the floodplain is possible. Parking is available at the rear of the site with two spaces located on site and additional public parking to the south. Parking is also available along the Wilson Street frontage. Interior Wilson St. level View from bike path III. Redevelopment Goals Interior second floor The redevelopment goals for the RFP include: a. Reactivate the parcel with a viable commercial or mixed use development. The City will consider a wide range of commercial and residential uses that are in conformance with the goals of the City s Comprehensive Plan and Downtown Mixed Use Zoning District. Neighborhood serving commercial uses, such as a restaurant or other retail, and mixeduse are preferred. Proposals that include this site within an expanded, multi parcel project would be considered more desirous. b. Contribute to the commercial activity within the City s downtown. Redevelopment of the site should enhance commerce in the downtown by increasing business activity and density, increasing the availability of goods and services, and/or offering employment opportunities for area residents. Development should enhance the downtown s strength as a center of civic life while increasing its presence as a residential neighborhood. c. Preservation of the historic architecture and urban design of the Site. Development should aspire to meet traditional urban design by maintaining the building location adjacent to the sidewalk (not set back from the roadway), providing storefront windows that allow views into and out of the building, assimilating inviting outdoor space that addresses the riverfront, ensuring that any building improvement includes windows facing the Fox River, orienting parking to the rear of building, and providing building access from the public sidewalks and rear parking lot. As a significant historic building in the downtown, it is the desire of the City to have the building remain in place, however, proposals that include an addition to the building would be considered more desirous. Any addition would have to preserve the North (Wilson Street) and West (river side) facades of the building substantially as is, and visually as a separate entity. 2 East Wilson Site Proposal Page 3 of 9

8 IV. Redevelopment Considerations It is the City s desire to enhance this existing, historically significant building and property, and foster a successful adaptive reuse. Being in the Downtown Historic District, the City s Historic Preservation Commission (HPC) must approve a Certificate of Appropriateness (COA) for any building or site changes. In addition to the City s adopted building codes, Zoning Code, and Standard Design Review Criteria for Commercial and Institutional Projects, the HPC applies its Historic Preservation Design Guidelines when acting on a COA. Through all entitlement review processes, retaining and enhancing the historic character of the building and having the project fit into downtown Batavia is of paramount importance. V. Proposal Contents Proposals must include the items listed below to be deemed complete and responsive, and must be in the order as listed with corresponding section numbering (all proposals must include page numbers). The information being requested through this RFP is necessary for the City to responsibly evaluate all proposals. Failure to supply the requested information may result in rejection of a proposal. Select items below must be presented in the format as noted. The City is not responsible for the costs incurred by proposers or their subcontractors in connection with this RFP process, including, but not limited to those associated with preparation or presentation of, or negotiations related to this RFP. Proposals deemed incomplete and/or non responsive will not be considered. a. A cover page that includes: i. Developer s name and mailing address ii. Developer s current legal status: corporation, partnership, etc. iii. Federal tax ID number or Social Security number iv. State ID number v. Contact person s name, title, phone number, and e mail address vi. Signature of authorized corporate officer for each entity proposing as a partnership or team vii. A narrative project description that includes, but is not limited to, the following information: 1. Uses on the Site and proposed users/tenants of the Site 2. Improvements made to the Site including square footage of specific components, anticipated materials, and design styled. 3. Plan for transportation access, including parking needs 4. Green building features, techniques, and/or certifications 5. Include exhibits of preliminary site plans and building elevations b. A description of the entities involved in the development team that includes: i. Description of the roles the development team members will play (e.g., developer, architect, building owner, property manager, tenant, professional consultant) ii. Summary of the development team s track record, including, but not limited to: 2 East Wilson Site Proposal Page 4 of 9

9 1. Experience working together and in developing projects of similar type or scale. 2. Information on past projects addressing each one s location, type, development costs, development funding sources, current status, and any continued financial or operating interest in them. 3. Previous relevant development experience working with public entities, including reference contact information. 4. Summarize any lawsuits that members of the development team or any principals of the development team have been a party to. 5. Identify the principal person who will speak for the development team and any other key participants who will be involved in negotiating the project terms. 6. Specify whether the development team is or intends to form a corporation, a general or limited partnership, a joint venture or other type of business association to carry out the proposed development. 7. The developer must also provide three years of financial statements. If there is a concern about confidentiality, they may be submitted confidentially to the City s point of contact under separate cover. 8. Please note the City may ask for supporting documentation substantiating claims of previous experience and that design consultants on the team must be licensed in the State of Illinois. c. A development budget showing the detailed sources and uses of funds for the project. For uses of funds, itemize the projected costs of the project including Site acquisition, hard and soft construction costs, any tenant improvements, and any other project costs. For sources of funds, indicate the type of financing planned e.g. debt, equity, other and describe the status of securing those funds. If available, include of a letter of interest to provide financing from a lender if debt financing is proposed. Clearly indicate any public financial assistance to be requested, particularly any from the City. Writedowns of the acquisition price below fair market value will be considered City financial assistance. Please provide one electronic and editable copy of the development budget including all underlying assumptions and formulas in Excel format. d. An operating pro forma of at least 5 years for operations, including the assumptions underlying the income and expense projections. The pro forma should break out line items for all revenue streams and expense categories. Clearly indicated assumptions, if applicable, for rental rates, vacancy rates, operating expenses, growth rates, taxes, debt service, and capital reserves. Also show the available cash flow, cash on cash return, and internal rate of return, if applicable. Detailed pro formas in a format acceptable to the City will be required during the negotiation of a redevelopment agreement. Please provide one editable copy (MS Word or compatible MS Office format) of the pro forma including all underlying assumptions and formulas in Excel format. e. Evidence of demand for the proposed use that could include a market study, letters of intent from tenants, an assessment of area demographics or economics, and/or other 2 East Wilson Site Proposal Page 5 of 9

10 VI. VII. information documenting market demand for the proposed development. The City s website provides economic and demographic information for downtown Batavia. f. A description of the public benefits that will result from the redevelopment, e.g. the creation or retention of jobs (including the estimated number, type and wage levels), the provision of retail goods and services, and connections or relationships with the community and/or neighborhood based organizations. Include an estimate of the taxable value upon completion and annual real estate taxes of the Site. g. A timeframe for redevelopment. The schedule should include the time needed to finalize financing, complete design, secure permits and approvals, prepare the site, start and complete construction, and start and complete occupation and/or lease up. Identify any conditions that must be met before the proposal can become a reality. h. Any other information that would help City staff understand and evaluate the concept. The contents of the proposal and any clarification to the contents submitted by the successful proposer may become part of the contractual obligation and be incorporated by reference into the redevelopment contract between the selected developer and the City. Evaluation Criteria In reviewing proposals, the following criteria are among those that will be considered in no particular order: a. Fulfillment of the redevelopment goals for the RFP stated above b. Adherence to the City of Batavia Comprehensive Plan, Zoning Code, and other relevant policy documents and City ordinances c. Track record and financial and organizational capacity of the development team to complete the type of redevelopment project that they propose d. Financial feasibility of the project and the ability of the project to secure necessary financing e. Proposed project timeframe and feasibility of beginning construction in 2013 f. Public benefits from the project g. Offered purchase price for the Site h. Minimization of City subsidy, if any i. Degree of green building techniques and features incorporated j. Overall quality of the submission, adherence to the proposal content requirements, and responsiveness during the review process Proposal Submission Proposers must submit copies of their proposals as follows: One unbound copy Seven bound copies One electronic version in Microsoft compatible or PDF format on CD or USB Drive, including Excel files for project financial information as described above. 2 East Wilson Site Proposal Page 6 of 9

11 Proposals must be on standard 8 ½ by 11 paper. Foldouts containing charts, spreadsheets and oversized exhibits are permissible as long as they are packaged with the proposal. Proposals and supporting documentation must be submitted in a sealed envelope labeled 2 East Wilson Site Proposal and sent to: City of Batavia Attention: Jason Bajor, Assistant City Administrator 100 North Island Avenue Batavia, IL Faxed proposals will not be accepted. Proposers may choose to provide additional copies if and when invited to do so for presentation purposes. Submissions will not be returned. Proposals shall be delivered to the City on or before 5:00 pm Wednesday February 20 th, Proposals received after the deadline may not be accepted. It is neither the City s responsibility nor practice to acknowledge receipt of any proposal. It is the proposer s responsibility to assure that a proposal is received in a timely manner. VIII. Proposal Review and Selection Process City staff will review proposals that are received by the due date. Late submittals will not be considered. City staff will also seek neighborhood and other stakeholder input. Some or all of the proposers may be requested to present their proposals to City staff and stakeholders. City staff expects this review process to occur in March, City staff will then make a recommendation to the City Council regarding the proposer/developer that best meets the evaluation criteria in April, We expect a single City Council action regarding developer selection and land sale approval. However, if the proposers/developers request public financial assistance, staff may need to complete further analysis, underwriting, and/or other processes to consider the request. This further analysis may require two separate City Council actions to select a developer and authorize a land sale. The City reserves the right to reject any or all proposals or parts of proposals, to negotiate modifications of proposals submitted, and to negotiate specific work elements with a proposer into a project of lesser or greater magnitude than described in this RFP or the proposer s reply. IX. RFP Inquiries & Site Visit Prospective proposers may only direct questions by to the City contact person: Jason Bajor, Assistant City Administrator jbajor@cityofbatavia.net City of Batavia 100 North Island Avenue Batavia, IL East Wilson Site Proposal Page 7 of 9

12 All questions are due no later than 5:00 pm on Wednesday, February 6 th, Questions will be answered in writing and posted on the RFP website: Potential respondents are encouraged to periodically check the website for new information on this RFP and for answers posed by other respondents during the proposal preparation process. The department contact person is the only individual who can be contacted about the RFP before the proposal deadline. The department contact cannot vary the terms of the RFP. A site visit will be conducted on Wednesday, January 23 rd, X. City Contracting Requirements The selected developer will be required to enter into a redevelopment contract with the City and comply with any applicable City requirements. These requirements vary depending upon the type of development and the source and amount of public investment, if any, and may include, without limitation, the payment of prevailing wages for construction, the preparation of affirmative action plans, competitive bidding, and reporting requirements for those programs. Some of the standard requirements are further discussed below, but the following list is not exhaustive. Proposers unfamiliar with these standard requirements are urged to seek further information. Prevailing Wage Policy. If the developer/proposer receives funding from the City, in accordance with the City s Prevailing Wage Policy, the selected developer covenants and agrees that it will cause its general contractor to comply with the wage and hour standards issued by the United States Secretary of Labor pursuant to the Davis Bacon Act, 40 U.S.C. Sections 276a to 276a 5, as amended, and the Contract Work Hours and Safety Standards Act 40 U.S.C. Sections The developer shall maintain appropriate payroll documentation for a 3 year period after completion of the project. Uniform Federal Accessibility Standards. The development must be in conformance with the Uniform Federal Accessibility Standards as published on April 1, Developers must describe the accessibility design for people with disabilities of each of the code required handicapped units, any proposed housing development (e.g. roll in showers), the mix of accessible units in the project and where they are located, and any appropriate safety features for vision and hearing impaired people. Soil Conditions. The Site will be sold as is and it will be the developer s responsibility to correct and pay for all costs associated with environmental or geotechnical soil problems. Any environmental reports in the City s possession regarding the property may be reviewed during normal business hours at the City offices by making arrangements with the department contact person. Any potential proposer may also reasonably conduct its own environmental testing of the property by contacting the department contact person, entering into a right of entry agreement with the City and providing the requisite insurance coverage. 2 East Wilson Site Proposal Page 8 of 9

13 Rezoning Responsibility. It is the selected developer s responsibility to undertake and finance any rezoning, variance, use permit(s), and design review necessary for approval of the proposed development. Utilities. It is the selected developer s responsibility to identify the locations of and provide for the installation of electricity, gas, water, sewer service and other utilities servicing the site from the public mains to the individual units. Construction Standards. Development must meet all Batavia City codes, and projects will be reviewed for energy efficiency. Hold Harmless. The selected developer shall agree to defend, indemnify and hold the City harmless from any and all claims or lawsuits that may arise from the developer s activities under the provisions of the redevelopment contract, that are attributable to the acts or omissions, including breach of specific contractual duties of the developer or the developer s independent contractors, agents, employees or officers. 2 East Wilson Site Proposal Page 9 of 9

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15 a. A cover page that includes: i. Developer s name and mailing address: Vignette Home Decor, Inc W Fabyan Parkway, Batavia, IL Phone: / mgrudecki@vignettehomedecor.com ii. Developer s current legal status: corporation, partnership, etc: Corporation iii. Federal tax ID number or Social Security number iv. State ID number v. Contact person s name, title, phone number, and e mail address Michael Grudecki, President Vignette Home Decor, Inc W Fabyan Parkway, Batavia, IL Phone: / mgrudecki@vignettehomedecor.com vi. Signature of authorized corporate officer for each entity proposing as a partnership or team Michael Grudecki, President, Vignette Home Decor Date Michael Grudecki, Primary Contact Date 1 P age

16 vii. A narrative project description that includes, but is not limited to, the following information: 1. Uses on the Site and proposed users/tenants of the Site The Tini Lounge will be a successful presence in the beverage service industry. Tini Lounge will be a small, upscale bar that will specialize in martinis. Tini Lounge will also serve a range of other alcoholic beverages such as mixed drinks, wine by the glass, and bottled beer. Non-alcoholic drinks will also be available. The atmosphere will be typical of a trendy lounge that can be found in higher end neighborhoods in large cities such as Chicago. Grudecki is currently a design professional who owns a retail furniture and design business, so the interior design of Tini Lounge will be top notch and unique. Tini Lounge will not have a full service kitchen so food will generally not be served with the exception of gourmet prepared appetizers such as meat and cheese trays, olives, and chocolates. Additional items added to the menu to be determined within the first year of operation based on the needs and wishes of the clientele. A benefit of sales primarily being sourced by alcoholic beverages is that inventory is largely non-perishable, and thus losses due to expired food or drink supplies will be minimal. Management has recognized a gap in the downtown Batavia, IL market for an upscale, intimate lounge for gathering of local area residents and visitors. Tini Lounge is targeted at a clientele that is above average in income level with an age range of Tini Lounge will attract business as both a destination gathering spot as well as a location to stop for a couple of drinks before or after local restaurant or other local entertainment venues are visited. The proposed location in Batavia is projected to gross in excess of $450,000 in sales by its third year of operation (due to the challenging state of the economy, Tini Lounge is projected to reach its full baseline sales potential in year three of operation, while still allowing for future growth potential beyond year three). Year one sales are expected to be at 60% of baseline potential, and year two sales are expected to reach 80% of baseline potential. Year one net profit is targeted at $20,000, year two net profit target is $50,000 and year three at full potential sales goals will generate $80,000 in net profit. 2 P age

17 This will be generated from an investment of $75,000 in initial capital. Payback of total invested capital will be realized in year four of operation. Cash flow becomes positive from operations immediately. 2. Improvements made to the Site including square footage of specific components, anticipated materials, and design styled. Phase One will include the reconfiguration of the main level and second level of the building and relocating the HVAC system to the lower level allowing a rear egress in the structure to meet building code requirements. Additionally, a second bathroom will be added to the space on the second floor, energy efficient lighting will be installed within the space, and green floor coverings like bamboo will replace existing carpeting on first and second floors. Phase Two of the Tini Lounge will include the build out 2 East Wilson St buildings lower level including the addition of a Bathroom, energy efficient windows and lighting, green bamboo flooring and low VOC paint. This space will be finished with the intentions of renting at a reduced rate to other small home based businesses or local artists as an incubator space. Phase Three of the Tini Lounge will include the reconfiguration of the rear portion of the building, allowing for an expansion to include a multi-level structure which will offer outdoor entertaining spaces. With a variety of seating options including high-top tables, outdoor sofas, and cabanas, the rear structure will double the square footage of the existing entertaining space during the spring, summer, and fall, offering addition enjoyment of the views. Phase Four of the Tini Lounge will include the enclosure of the rear portion of the building, allowing for an expansion to include dining areas that capture the beauty of the Fox River and Downtown Batavia riverfront. This space will use reclaimed wood on both the interior and exterior of the building, energy efficient windows and lighting and low VOC paints. Additionally, the enclosure will take into consideration the structures surroundings including the bike path, Clark Island, the newly created streetscape, bridge, and the Fox River. 3 P age

18 3. Plan for transportation access, including parking needs Because of the location of the 2 East Wilson St building, transportation access is viewed as plentiful. Access includes and is not limited to Wilson St, the bike path, and walking access. Parking can be obtained behind the 2 East Wilson St building, along Wilson St, and the local parking structures. Additionally, for those individuals that take advantage of the bike path, parking in the rear of the structure will be made available for bicycles. 4. Green building features, techniques, and/or certification Green features included in the build out of this project will include and not be limited to: Bamboo Flooring Reclaimed Wood Energy Efficient Lighting Energy Efficient Windows Low / No VOC Paints Energy Efficient Plumbing Fixtures Recycled Materials whenever possible 5. Include exhibits of preliminary site plans and building elevations Please review exhibits of preliminary site plans and building elevations on the following 8 pages and note additional graphics and renderings are available upon request. Please forward all requests via to mgrudecki@vignettehomedecor.com 4 P age

19 2 East Wilson St Main Floor Proposed Layout Including 2 nd egress for emergency exit 5 P age

20 2 East Wilson St Main Floor Proposed Furniture Layout Option #1 6 P age

21 2 East Wilson St Main Floor Proposed Furniture Layout Option #2 7 P age

22 2 East Wilson St 2 nd Floor Proposed Layout Including 2 nd Bathroom 8 P age

23 2 East Wilson St 2 nd Floor Proposed Furniture Layout Option #1 9 P age

24 2 East Wilson St Proposed Exterior Layout (Pending Approval) Option #1 10 P age

25 2 East Wilson St Proposed Exterior Layout (Pending Approval) Option #1 11 P age

26 b. A description of the entities involved in the development team that includes: i. Description of the roles the development team members will play (e.g., developer, architect, building owner, property manager, tenant, professional consultant) Developer and Property Manager The Developer and Property Manager will be Batavia based Vignette Home Decor, located at 1952 W. Fabyan Parkway. Vignette Home Decor was founded in 2007 and is a privately held General Contracting and Interior Design firm. Working with a team of subcontractors and consultants, Vignette offers over 50 years of combined construction experience spanning from residential to commercial projects. Architect The Architect selected for this project will be a local Batavia Architect in an effort to give business to another business within the Batavia community. While currently two Architects are being considered, a final selection will not be made until the project warrants the final selection. Building Owner The Building Owner will be Michael Grudecki, a successful local Batavia business owner and founder of Vignette Home Decor. Mr. Grudecki is also the creator of The Tini Lounge concept, a hopeful future tenant of 2 East Wilson St, Batavia, IL. Tenant 1 Phase 1 The Tini Lounge will be owned and operated by Michael Grudecki. Mr. Grudecki currently owns Vignette Home Decor, Inc. in Batavia, which was established in 2007 and has been a profitable entity every year in business and has experienced double digit growth year over year since it was established. Mr. Grudecki s career prior to opening Vignette was as a Sr. Level Sales and Marketing executive for various technology-oriented and manufacturing firms over the course of 15 years. He has a proven track record of business success and growth, with an emphasis on marketing and advertising. Mr. Grudecki s years of experience in sales and marketing will be a key to the success of Tini Lounge. Mr. Grudecki also teaches Entrepreneurial Finance, Principal of Advertising, and Business Management at Waubonsee Community College further solidifying his understanding the importance of marketing. Additionally, Mr. Grudecki spent almost 5 years in the 12 P age

27 food and beverage industry helping family members run their bar and grill restaurant early on in his career. Tini Lounge has conservatively budgeted $1000 per month for the first three years to employ 2 to3 part time bartenders to assist with operating the business. These employees are also expected to be compensated by tips, thus enabling the lounge to attract well qualified employees. As the need increases, additional wait staff and management staff will be added to the employment mix of the Tini Lounge. Tenant 2 Phase 2 Tenant 2 of 2 East Wilson St will rent out the lower level of the building, with the space targeted to be available for rent within 9-12 months from the date of the properties acquisition. With the hopes of a joint partnership with the Batavia Mainstreet, this space will be rented out to Batavia home based businesses looking to take their company to the next logical step, a brick and mortar facility. Possible tenants include and are not limited to massage therapists, CPAs, Financial Planners, Psychologists and Counselors, Marketing Companies, and any other business that can benefit from the use of the space. 13 P age

28 ii. Summary of the development team s track record, including, but not limited to: 1. Experience working together and in developing projects of similar type or scale. Vignette Home Decor has worked on both Residential and Commercial projects, consulting and managing the layout of spaces, material and finish selections including lighting and electrical, plumbing, painting and fixtures, flooring, cabinetry, site build out, general contracting, etc. Client s spaces have ranged from 100 sq. ft. to 9,500 sq. ft. 2. Information on past projects addressing each one s location, type, development costs, development funding sources, current status, and any continued financial or operating interest in them. Location: Geneva, IL NOTE: Client Reference upon request Type: Commercial, Law firm build out Size: 4,500 Sq. Ft. Vignette Home Decor worked with Tenant and Property Owner to layout floor plan including locations of offices, conference rooms, kitchen, waiting area, and reception desk Vignette Home Decor worked with Tenant and Property Owner to develop project timeline to meet clients March 15, 2013 deadline Vignette Home Decor worked with Tenant to choose flooring, paint colors, cabinetry, lighting, window treatments Vignette Home Decor worked with Tenant to choose furniture, accessories, signage Development Funding: Client funded Current Status: In Progress Financial/Operating Interest: Design Consultant on the project Location: Geneva, IL NOTE: Client Reference upon request Type: Residential, Basement build out Size: 800 Sq. Ft. Vignette Home Decor worked with Homeowner to layout floor plan including locations of home office, bathroom, family room, game area, and storage area Vignette Home Decor worked with Homeowner to develop project timeline to meet clients February 18, 2013 deadline Vignette Home Decor worked with Homeowner to choose flooring, paint colors, cabinetry, lighting, window treatments Vignette Home Decor worked with Tenant to choose furniture, Development Funding: Vignette Home Decor Credit Line and Client funded Current Status: Completed Financial/Operating Interest: Design Consultant and General Contractor on the project 14 P age

29 Location: Hanover Park, IL NOTE: Client Reference upon request Type: Commercial, Lighting Distributor Size: 9,500 Sq. Ft. Vignette Home Decor worked with Tenant and Property Owner to layout floor plan including locations of offices, conference rooms, waiting area, and company President Suite Bar, Sitting, Meeting area Vignette Home Decor worked with Tenant and Property Owner to develop project timeline to meet clients April 27, 2010 deadline Vignette Home Decor worked with Tenant to choose flooring, paint colors and finishes, cabinetry, window locations, window treatments Vignette Home Decor worked with Tenant to choose furniture, accessories, signage Development Funding: Client funded Current Status: Completed Financial/Operating Interest: Design Consultant on the project Location: Naperville, IL NOTE: Client Reference upon request Type: Commercial, Laser Company Size: 8,000 Sq. Ft. Vignette Home Decor worked with Tenant / Property Owner to layout floor plan including locations of offices, conference rooms, and company President Suite Bar, Sitting, Meeting area Vignette Home Decor worked with Tenant and Property Owner to develop project timeline to meet clients November, 2010 deadline Vignette Home Decor worked with Tenant to choose flooring, paint colors and finishes, cabinetry, window locations, window treatments Vignette Home Decor worked with Tenant to choose furniture, accessories, signage Development Funding: Client funded Current Status: Completed Financial/Operating Interest: Design Consultant on the project 15 P age

30 3. Previous relevant development experience working with public entities, including reference contact information Rhonda J. Klecz, Code Compliance Officer City of Batavia Regarding: Confirmation that Vignette is in compliance with all codes Tom Springer, Fire Marshal City of Batavia Regarding: Confirmation Vignette is meeting all fire requirements 2010 Joel Strassman City of Batavia Regarding: Exception for storefront signage Jeffrey Albertson, Building Commissioner City of Batavia Regarding: Exception for storefront signage Drew Rackow City of Batavia Regarding: Exception for storefront signage sign-off of permit 2012 Bill McGrath, City Administrator City of Batavia Regarding: The purchase and/or acquisition of 2 East Wilson St, Batavia, IL Jason Bajor, Assistant City Administrator City of Batavia Regarding: The purchase and/or acquisition of 2 East Wilson St, Batavia, IL Meredith A. Hannah, Economic Development Analyst City of Batavia Regarding: The purchase and/or acquisition of 2 East Wilson St, Batavia, IL 4. Summarize any lawsuits that members of the development team or any principals of the development team have been a party to. Both Michael Grudecki and Vignette Home Decor are not currently and have not been party to any lawsuits. Grudecki and Vignette maintain a clean work record do to the attention to detail that is put into every project. 16 P age

31 5. Identify the principal person who will speak for the development team and any other key participants who will be involved in negotiating the project terms. The principal person who will speak for the development team and is solely responsible in negotiating the project terms is Michael Grudecki. Michael Grudecki, President Vignette Home Decor, Inc W Fabyan Parkway, Batavia, IL Phone: / mgrudecki@vignettehomedecor.com 6. Specify whether the development team is or intends to form a corporation, a general or limited partnership, a joint venture or other type of business association to carry out the proposed development. Upon approval of transfer of ownership of 2 East Wilson Street, Batavia, IL, the future tenant The Tini Lounge will form a corporation allowing it to conduct business within the State of Illinois. 7. The developer must also provide three years of financial statements. If there is a concern about confidentiality, they may be submitted confidentially to the City s point of contact under separate cover. Information provided in separate confidential packet 8. Please note the City may ask for supporting documentation substantiating claims of previous experience and that design consultants on the team must be licensed in the State of Illinois. 17 P age

32 c. A development budget showing the detailed sources and uses of funds for the project. For uses of funds, itemize the projected costs of the project including Site acquisition, hard and soft construction costs, any tenant improvements, and any other project costs. For sources of funds, indicate the type of financing planned e.g. debt, equity, other and describe the status of securing those funds. If available, include of a letter of interest to provide financing from a lender if debt financing is proposed. Clearly indicate any public financial assistance to be requested, particularly any from the City. Writedowns of the acquisition price below fair market value will be considered City financial assistance. Please provide one electronic and editable copy of the development budget including all underlying assumptions and formulas in Excel format. As ed to Meredith Hannah, Economic Development Analyst, City of Batavia on August 28, 2012: The requested acquisition of 2 East Wilson St, Batavia, IL property and proposed options for transfer of ownership are listed below and include: 1. The City of Batavia holds a forgivable loan on the property at 2 E. Wilson St. a. 20% of the loan will be forgiven with each year the building is owned b. The loan will be amortized at 30 years with a fixed interest rate comparable to current market rates c. An undetermined down payment would be required on the space 2. Create a 5 year lease on the property at 2 E. Wilson with 90% of payments being applied towards the down payment of the building a. The purchase price of the building would need to negotiated in advance and prior to any leases being signed b. All improvements done to the space would be recorded and applied to down payment at prorated amount 3. The city holds a low interest rate loan for the sale of the property at 2 E. Wilson a. The City will sell the property at 50% of current market value / offsetting the remaining 50% with TIF dollars or any other type of grants and funding available b. The loan will be amortized at 30 years with a fixed interest rate below current market rates c. An undetermined down payment would be required on the space 18 P age

33 d. An operating pro forma of at least 5 years for operations, including the assumptions underlying the income and expense projections. The pro forma should break out line items for all revenue streams and expense categories. Clearly indicated assumptions, if applicable, for rental rates, vacancy rates, operating expenses, growth rates, taxes, debt service, and capital reserves. Also show the available cash flow, cash on cash return, and internal rate of return, if applicable. Detailed pro formas in a format acceptable to the City will be required during the negotiation of a redevelopment agreement. Please provide one editable copy (MS Word or compatible MS Office format) of the pro forma including all underlying assumptions and formulas in Excel format. Revenue Breakdown Tini Lounge Financials.xls, Revenue Breakdown Tab Saturday # visitors # drinks cost of liquor: # of drinks sold per 4 to week to cost per drink $ to total cost per week $2, to total cost per year $128, to total cost per month $10, to to to to drink ratios weight price martini 60% 10 6 other drinks 20% wine 15% beer 5% total 100% weighted avg drink price 9.05 # drinks target wtd avg price total revenue tue 70 $9.05 $ wed 75 $9.05 $ thur 150 $9.05 $1, fri 350 $9.05 $3, sat 380 $9.05 $3, total weekly revenue $9, annual revenue $463, average monthly revenue $38, weeks/year (2 weeks/year closed) 19 P age

34 P&L 1 st Year Tini Lounge Financials.xls, P&L Tab P&L 1st year - 60% of sales Income monthly yearly Gross Sales $23,191 $278,288 less discounts, comps $2,319 $27,829 less sales tax payable $1,565 $18,784 Net Sales $19,306 $231,674 Cost of Goods Sold liquor $6,406 $76,875 mixers $1,281 $15,375 garnishes $641 $7,688 total COGS $8,328 $99,938 Gross Profit $10,978 $131, % Expenses Salaries $1,000 $12,000 Utilities $500 $6,000 Prop Taxes & Bldg Ins $750 $9,000 Supplies $696 $8,349 Insurance $1,000 $12,000 Advertising $1,000 $12,000 Telephone $100 $1,200 Interest paid $300 $3,600 Repairs & Maintenance $1,000 $12,000 Licences & Legal $500 $6,000 CC processing fees $386 $4,633 Total Expenses $7,232 $86,782 Net Income $3,746 $44,955 less capital reserves $1,000 $12,000 less loan payback $1,000 $12,000 owners profit $1,746 $20, % Salaries $1,000 $12,000 Tips $3,479 $41,743 Total Earning Revenue $4,479 $53, P age

35 P&L 2 nd Year Tini Lounge Financials.xls, P&L Tab P&L 2nd year - 80% of sales Income monthly Yearly Gross Sales $30,921 $371,050 less discounts, comps $3,092 $37,105 less sales tax payable $2,087 $25,046 Net Sales $25,742 $308,899 Cost of Goods Sold liquor $8,542 $102,500 mixers $1,708 $20,500 garnishes $854 $10,250 total COGS $11,104 $133,250 Gross Profit $14,637 $175, % Expenses Salaries $1,030 $12,360 Utilities $515 $6,180 Prop Taxes & Bldg Ins $773 $9,270 Supplies $928 $11,132 Insurance $1,030 $12,360 Advertising $750 $9,000 Telephone $103 $1,236 Interest paid $309 $3,708 Repairs & Maintenance $1,030 $12,360 Licences & Legal $515 $6,180 CC processing fees $515 $6,178 Total Expenses $7,497 $89,963 Net Income $7,140 $85,686 less capital reserves $1,500 $18,000 less loan payback $1,500 $18,000 owners profit $4,140 $49, % Salaries $1,030 $12,360 Tips $4,638 $55,658 Total Earning Revenue $5,668 $68, P age

36 P&L 3 rd Year Tini Lounge Financials.xls, P&L Tab P&L 3rd year - full sales Income monthly yearly Gross Sales $38,651 $463,813 less discounts, comps $3,865 $46,381 less sales tax payable $2,609 $31,307 Net Sales $32,177 $386,124 Cost of Goods Sold liquor $10,677 $128,125 mixers $2,135 $25,625 garnishes $1,068 $12,813 total COGS $13,880 $166,563 Gross Profit $18,297 $219, % Expenses Salaries $1,061 $12,731 Utilities $530 $6,365 Prop Taxes & Bldg Ins $796 $9,548 Supplies $1,160 $13,914 Insurance $1,061 $12,731 Advertising $773 $9,270 Telephone $106 $1,273 Interest paid $318 $3,819 Repairs & Maintenance $1,061 $12,731 Licences & Legal $530 $6,365 CC processing fees $644 $7,722 Total Expenses $8,039 $96,470 Net Income $10,258 $123,091 less capital reserves $2,000 $24,000 less loan payback $2,000 $24,000 owners profit $6,258 $75, % Salaries $1,061 $12,731 Tips $5,798 $69,572 Total Earning Revenue $6,859 $82, P age

37 P&L 4 th Year Tini Lounge Financials.xls, P&L Tab P&L 4th year - 10% projected growth Income monthly yearly Gross Sales $42,516 $510,194 less discounts, comps $4,252 $51,019 less sales tax payable $2,870 $34,438 Net Sales $35,395 $424,736 Cost of Goods Sold liquor $11,745 $140,938 mixers $2,349 $28,188 garnishes $1,174 $14,094 total COGS $15,268 $183,219 Gross Profit $20,126 $241, % Expenses Salaries $1,093 $13,113 Utilities $546 $6,556 Prop Taxes & Bldg Ins $820 $9,835 Supplies $1,275 $15,306 Insurance $1,093 $13,113 Advertising $796 $9,548 Telephone $109 $1,311 Interest paid $328 $3,934 Repairs & Maintenance $1,093 $13,113 Licences & Legal $546 $6,556 CC processing fees $708 $8,495 Total Expenses $8,407 $100,879 Net Income $11,720 $140,638 less capital reserves $2,000 $24,000 less loan payback $2,000 $24,000 owners profit $7,720 $92, % Salaries $1,093 $13,113 Tips $6,377 $76,529 Total Earning Revenue $7,470 $89, P age

38 P&L 5 th Year Tini Lounge Financials.xls, P&L Tab P&L 5th year - 10% projected growth Income monthly yearly Gross Sales $46,768 $561,213 less discounts, comps $4,677 $56,121 less sales tax payable $3,157 $37,882 Net Sales $38,934 $467,210 Cost of Goods Sold liquor $12,919 $155,031 mixers $2,584 $31,006 garnishes $1,292 $15,503 total COGS $16,795 $201,541 Gross Profit $22,139 $265, % Expenses Salaries $1,126 $13,506 Utilities $563 $6,753 Prop Taxes & Bldg Ins $844 $10,130 Supplies $1,403 $16,836 Insurance $1,126 $13,506 Advertising $820 $9,835 Telephone $113 $1,351 Interest paid $338 $4,052 Repairs & Maintenance $1,126 $13,506 Licences & Legal $563 $6,753 CC processing fees $779 $9,344 Total Expenses $8,798 $105,572 Net Income $13,341 $160,098 less capital reserves $2,000 $24,000 less loan payback $2,000 $24,000 owners profit $9,341 $112, % Salaries $1,126 $13,506 Tips $7,015 $84,182 Total Earning Revenue $8,141 $97, P age

39 Total Forcasted Investment Phase 1: $136, Phase 2: $54, Phase 3: $178, Phase 4: $401, Grand Total: $771, Phase 1 start up costs building Tini Grant building breakout build-out $21,00 0 $50,000 Bathroom $11,50 0 2nd Floor Bath - New Addition sign $5,500 Painting $5,000 Main & Upper Floor misc purchase exp. $10,00 0 Flooring $10,00 0 Main & Upper Floor HVAC Relocation $10,00 0 Main to Lower Level furniture 2nd Exit $15,00 0 Exterior bar stools $7,500 Electrical $7,500 Main, Upper, & Exterior tables/chairs $5,000 Bar w Sink $5,000 Main Floor lounge seating $7,500 10% overage $7,000 misc furniture/décor $5,000 $71,00 0 equipment fridge $2,000 ice machine $1,000 drink making supplies $500 glassware $2,500 dishwasher $2,000 soft drink setup $2,000 utilities - connection $1,000 initial inventory $8,328 initial supplies $696 legal & incorporation $5,000 total $86,52 4 $50,000 $136,52 Total 4 25 P age

40 Phase 2 Lower Level Buildout - 1 Level below Ground Level building breakout Bathroom $12,000 Carpentry $9,500 Main & Upper Floor Windows $4,000 Electrical $7,500 Main & Upper Floor Plumbing $0 Main to Lower Level Drywall $6,000 Exterior Flooring $3,000 Main, Upper, & Exterior Painting $2,500 Main Floor Furniture $5,000 10% overage $5,000 $54,500 Phase 3 Exterior Steel Structure - Outdoor Patio Steel Mezzanine Decking Steel Materials: $75,000 Railings $15,000 Stairways $15,000 Concrete $10,000 Labor: $35,000 Electric: $12,500 10% overage $16,200 $178,700 Phase 4 Enclosure of Exterior Steel Structure 2 Bathrooms: $25,000 Carpentry: $75,000 Drywall: $20,000 Electric: $15,000 Flooring: $25,000 HVAC addition: $20,000 Painting: $15,000 Exterior Stairway: $15,000 Exterior Materials (Stucco, Stone, Brick, Wood): $75,000 Windows: $40,000 Trimwork/Doors: $15,000 Landscaping $25,000 10% overage $36,500 $401, P age

41 e. Evidence of demand for the proposed use that could include a market study, letters of intent from tenants, an assessment of area demographics or economics, and/or other information documenting market demand for the proposed development. The City s website provides economic and demographic information for downtown Batavia. Market Study Competition There are currently no upscale martini lounges in the tri-cities area, thus Tini Lounge will fill a gap in Batavia entertainment options. Local competition consists of local bars and restaurants that include a full service bar such as Wilson Street Tavern and full service bar with food such as Rendez Vu and O Brien s Pub and Grill. Management does not expect direct competition from either of these businesses as they each will attract customers in search of more of a casual, sports bar type of environment. Tini Lounge expects to attract clients seeking a slightly more sophisticated atmosphere. Competition may also consist of other upscale bars such as the new Rhino Room and in neighboring communities such as Geneva. Tini Lounge will differentiate itself from these establishments by specializing in martinis which is a drink that has enjoyed a sustained popularity for years and has an image of sophistication, as well as by offering more of a city feel to attract patrons who may be more accustomed to entertainment venues in large cities such as Chicago. Concepts like the Tini Lounge have proven to be successful in other parts of Kane County including Elgin s Martini Room and throughout the Chicagoland area. Tini Lounge will also be the first and only upscale lounge in the fox valley offering a multi-level structure which will offer outdoor entertaining spaces. With a variety of seating options including high-top tables, outdoor sofas, and cabanas, the rear structure will double the square footage of the existing entertaining space during the spring, summer, and fall, offering addition enjoyment of the picturesque Batavia views including and not limited to: Clark Island The Fox River The Bike Path Historic Downtown Batavia 27 P age

42 Marketing The importance and benefit in a successful marketing plan is something the Tini Lounge does not take lightly. With a BA degree from Columbia, Owner and Founder Grudecki has a strong understanding of market trends and the identification of key market differentiators. Grudecki also teaches Entrepreneurial Finance, Principal of Advertising, and Business Management at Waubonsee Community College further solidifying his understanding the importance of marketing. Tini Lounge will be owned by a current successful Batavia retail business owner who founded the company at the beginning of the recession and has maintained profitable double digit growth since its inception. Its owner recognizes the importance of marketing and advertising, and current financial targets allow for a significant monthly marketing budget in the first year of operations to generate as much local knowledge and interest in the business as possible. Second and third year advertising budgets will be reduced as the business name recognition grows, but will still allow for regular, continued advertising and promotion. Advertising will consist of a multi-phase media schedule including both paid and non-paid avenues. Paid advertising Local Papers Radio Groupon, Resturant.com Pay Per Click Direct Mail Non-paid advertising Social Media: Twitter, Facebook, Tumblr, Pintrest Internet Radio You Tube Press Releases Client Referrals 28 P age

43 Additionally, management of Tini Lounge believes in high end customer service, making every visitor feel welcome and well cared for, and has budgeted 10% of sales for reduced priced drink promotions or complimentary drinks for regular visitors to keep them coming back. f. A description of the public benefits that will result from the redevelopment, e.g. the creation or retention of jobs (including the estimated number, type and wage levels), the provision of retail goods and services, and connections or relationships with the community and/or neighborhood based organizations. Include an estimate of the taxable value upon completion and annual real estate taxes of the Site. Public Benefits With the addition of the Tini Lounge to downtown Batavia, the riverfront will receive a new business that capitalizes many of the beautiful things Batavia has to offer including views and of the Fox River, Clark Island, Bike Patch, and other historic buildings. Other benefits of the Tini Lounge include increased generation of tax revenue, beautification of the downtown main Batavia street, and one more business assisting in the draw to the community. The Tini Lounge will work closely with community groups and organizations like the Chamber of Commerce and Batavia Mainstreet to host events in downtown Batavia at the Tini Lounge and surrounding businesses including other small businesses, organizations, and clubs like book and mothers. Working with these groups will not only increase the sales at the Tini Lounge, but also create additional foot traffic in the downtown Batavia area. With increased foot traffic and visibility, the multiple options in downtown Batavia transform it to a Destination area similar to 3 rd Street in Geneva or downtown Naperville. Additionally, being actively part of the Chamber of Commerce, Batavia MainStreet, and community as a whole will allow the Tini Lounge to help show what a great community Batavia is and specifically why people and new businesses should come to downtown Batavia. 29 P age

44 As forecasted in the financial portion of Tini Lounge s business plan, the following revenue will be dispersed back into the Batavia Community: Employment Wages & Tips (Estimated) Year 1: $57,743 o 3 Part-time employees Year 2: $68,018 o 4-5 Part-time employees Year 3: $82,303 o 4 Part-time employees o 1 Full-time Manager Year 4: $89, 642 o 5 Part-time employees o 1 Full-time Manager Year 5: $97,688 o 6 Part-time employees o 1 Full-time Manager Sale Tax Revenue (Estimated) Year 1: $18,784 Year 2: $25,046 Year 3: $31,307 Year 4: $34,438 Year 5: $37,882 Property taxes (Estimated) Year 1: $9,000 Year 2: $9,270 Year 3: $9,548 Year 4: $9,835 Year 5: $10, P age

45 g. A timeframe for redevelopment. The schedule should include the time needed to finalize financing, complete design, secure permits and approvals, prepare the site, start and complete construction, and start and complete occupation and/or lease up. Identify any conditions that must be met before the proposal can become a reality. PHASE 1 Financing Upon approval of conditions and grants, any additional financing required to obtain the space will be applied for the Illinois Small Business Administration Loan Program. This process can take between two and six weeks. Complete design The rough designs of the space have been completed and are included within this document. Upon approval of conditions, grants, and financing, the Architect will be contacted to finalize drawings that will be submitted to City of Batavia for approval. The process to finalize such drawings will be approximately four weeks. Secure permits and approvals Based on past experiences with the securing of permits and approvals from cities and local historical society, we are allowing four to eight weeks for this process to be completed. Prepare the site Preparation of the site will take approximately two weeks before construction can begin Start and complete construction The start of completion of the construction process for phase one will be eight to ten weeks. Start and complete occupation and/or lease up Upon completion of occupancy permit, Tini Lounge will be set to open two weeks from completion of construction and issuance of occupancy permit. Phase 2 Construction of phase two is targeted to begin within 6 months of completing phase one Phase 3 Construction of phase Three will be scheduled once the financial ability to generate revenues to cover the costs of renovation and expansion have been realized Phase 4 Construction of phase Three will be scheduled once the financial ability to generate revenues to cover the costs of renovation and expansion have been realized 31 P age

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