Orland Trustees bash officials in response to taxpayer concerns on Ninety7Fifty project

Trustee Brad O'Halloran issued a public statement last week expressing his concern with the controversy-plagued Ninety7Fifty luxury apartment complex. O'Halloran, who initially supported the concept, said he was uncomfortable with the proposed financing which involved Orland Park taxpayers putting up almost all of the money to help the private developers make the project work.

Here is a link to O'Halloran's original letter.

A lot of Orland Park taxpayers agree with O'Halloran.

But today (Sunday Sept. 18), Trustees Patricia Gira and Ed Schussler issued their own letter. (You can read it below.) Although they defend the project, they spend a lot of time bashing O'Halloran and Cook County Commissioner Liz Gorman.

When officials spend time bashing their opponents, it usually means they are weak on the issues. But it also is a good sign of who they think really has influence in Orland Park. Liz Gorman? Or Mayor Dan McLaughlin, their ally?

Their main complaints seem to be about the people rather than policy. The letter below attacks O'Halloran and Gorman. It makes an absurd claim that O'Halloran is doing Gorman's bidding in opposing the project, noting that she was instrumental in getting him appointed to the Metra Board. And, they lash out at Gorman, claiming she should be more concerned about the county taxation than the taxation in the village.

Wow. Clearly, Gira and Schussler are saying Liz Gorman is the most important political leader in Cook County and this region. Their letter also basically says that poor Mayor Dan is really nothing in all this. By attacking Gorman, Gira and Schussler are saying that Gorman better represents the taxpayers than McLaughlin. It's the only way to read the letter. Is this more about politics than economics to them? Apparently so.

Taxpayers showed at the August public hearing that they agree with the concerns that both Gorman and O'Halloran have expressed in challenging the village-mortgaged project. That was obvious from the public response made at the public hearing the village reluctantly held. (The Regional, Southtown and the Tribune Local had great coverage of that meeting.)

The most startling aspect of the Gira/Schussler letter is the admission that Orland Park taxpayers will be giving the developers the mortgage loan to build their project, and they will pay it back the way homeowners repay their mortgages. I don't know if they have noticed by nearly a quarter of the country's mortgage holders are having problems paying back their mortgages.

If there is any problem with this project, or if it fails, the taxpayers of Orland Park will be stuck holding the bill thanks to Gira, Schussler and McLaughlin.

Gira and Schussler did not point out that their ally on the board, Trustee Jim Dodge, was also appointed to the Metra board and was on it how many years? Eight? No complaints when he was on the Metra Board and the Metra service went to hell in a handbasket. Why didn't they say something then?

I think it was a poor move on Gira's and Schussler's part. That's what happens when you hire too many PR firms and have too many PR people on the village payroll.

I reached out to Gorman and O'Halloran for a response.

Here is the Gira/Schussler Letter issued today (Sunday Sept. 18):

We have decided to explain our position in light of Orland Park Trustee Brad O’Halloran’s recent decision to send an open letter to the media regarding his position on the Ninety 7 Fifty project. Trustee O’Halloran is certainly free to vote as he chooses, however, it is inappropriate to address an open letter to the Mayor and then send it only to the media. He could have shared those concerns with the rest of the board and perhaps swayed others to his beliefs.  Why would someone go to the media before sharing his thoughts with the board with whom he professes to work?

The two questions that we have repeatedly heard about this project are “Why apartments?” and “Why is the Village of Orland Park loaning money to the developer?”  Luxury apartments are being considered because that is where the market is at this time.  We have two market studies that indicate luxury apartments are in short supply and the demand is growing.  As you know, these market studies are available on the village web site for review and analysis.  In addition to those expert opinions, in a recent letter, Mr. John Jaeger, senior vice president of the CB Richard Ellis, Inc. real estate firm, made the following statements regarding this project, “The project itself is well designed and thought out….The suburban MSA needs additional apartments to meet growing demand due to the shift from home ownership to rental living.”

There are two reasons the Village of Orland Park is considering loaning $38 million for this development: it puts the village in a first lien position if problems are encountered and it allows the village to recover all or a major portion of the $23 million incentive that is necessary to get this project under way.  If a third party lender were involved, the village would not be in a secured position if a default occurred and the village would not be able to recover the $23 million incentive.

The Village of Orland Park will not own an apartment building; it will be owned by Flaherty and Collins, the developer.  Just as we own our homes, a lender, in this case the village will carry the loan for the project.  We will be repaid as Flaherty and Collins repays the loan, a process we are all familiar with as we pay the mortgage on our homes.  Bonds will be sold to obtain funds to lend to the developer.  The bonds will be repaid from the net operating income of the building not from real estate taxes. The Main Street Triangle is a Tax Increment Financing District, a TIF.  TIF incremental revenues or sales tax can be used to carry the project if it isn’t rented as quickly as projected.  There are also other parcels to be sold and developed that will contribute financially to the triangle redevelopment.  This project should have no adverse financial effects on residents.  There has been no referendum because residents are not being asked to pay more in property taxes.  In fact, when the project is completed and leased, it is estimated that it will produce over $700,000 in real estate taxes annually and have the potential to reduce the village’s portion of our residents’ tax bill.  

People who live in the development will shop our local business community and 400 to 500 construction jobs will be created over a three-year period.  Standard and Poor’s and Moody’s have reaffirmed our excellent bond rating, fully aware of the plans for the Ninety 7 Fifty development.

Because of conservative budgeting and prudent decisions that were made by successive village boards over the last forty years, Orland Park is a very desirable place to live and work. Residents and businesses receive a plethora of services at a very low relative cost.  Twice in the last five years, we have made the list of the most desirable places to live in the entire country.  New businesses continue to open in Orland Park.

Orland Park is one of a very small number of municipalities in Illinois that has the financial ability to handle a project like Ninety 7 Fifty.  At the end of our most recent fiscal year (2010), we had more than $37 million in fund balance reserves.  The village’s debt, as a percentage of equalized assessed value, is low.  In 1992, we had just under $22 million of outstanding debt which was 2.93% of equalized assessed value.  In 2010, the outstanding debt was over $79 million but the percentage of equalized assessed value was almost the same, 2.89%.  The board only borrows for capital projects and never to cover operating expenses.  That is one of the reasons why approximately $4.4 million was cut from the operating budget during the last three years.

The highest Standard & Poor bond rating is AAA and ten municipalities have it.  We, along with 24 other Illinois municipalities, have the next highest rating of AA+.  Our per capita debt and liabilities are $1,811.  The average per capita debt and liabilities for southwest Cook County is $5,244. Conservative fiscal policies have kept the village real estate taxes low.  In the last ten years a single family home with a value of $300,000 has paid an average of $533 per year in real estate tax to the village. If you factor in the property tax rebates that were given to residents in the last ten years, the average amount of taxes paid to the Village of Orland Park drops to $184 per year. This amount includes a levy for parks and recreation.  Orland Park residents do not pay a separate tax to a Park District.  That certainly is not the “high taxation” that Cook County Commissioner Elizabeth Gorman mentioned at our last meeting.  Perhaps she was referring to the Cook County taxes that burden us and our businesses each year.

Commissioner Gorman also stated “We also have a lot of vacant retail space.” Not true.  Orland Park had a retail vacancy rate of 5.32% in 2010 while the national average during the same period was 12.7%.  In spite of the recession, our business sector is growing.

Trustee O’Halloran has tried to justify his recent decision to vote against the Ninety 7 Fifty proposal.  Redevelopment of the triangle started eleven years ago when Trustee O’Halloran was on the board.  Many votes have been taken the last eleven years regarding the triangle and Trustee O’Halloran has voted in the affirmative on all of them.  Now, when we are finally ready to get redevelopment under way, he suddenly flips and says he will vote no.  He is certainly entitled to his opinion and to change his mind, however, we wonder if his recent appointment to the Metra Board of Directors, allegedly orchestrated by Cook County Commissioner Gorman, had anything to do with his sudden change of heart.

Orland Park residents should not fear bold action.  Forty years ago, a nervous mayor and board approved the construction of a big shopping center on a former pig farm.  It was a controversial decision that many said would change the town.  It certainly did that.  Today Orland Square is a huge success.

The only other TIF in the village was Orland Park Place which was met with some opposition at the time.  That TIF was retired early and is clearly a tremendous success and has made a positive contribution to our community.

The current economy calls for creativity and innovation if Orland Park is to remain a dynamic village.  We need to invest in the future.  Orland Park has hired the best consultants and advisors who have indicated that the Ninety 7 Fifty project maximizes returns to the village and minimizes the risks.  It will act as a catalyst for millions of dollars of future private investment in the Main Street area of our Downtown Orland Park.  On September 19^th, we intend to vote yes on this project and for the future of the Village of Orland Park, one of the most dynamic communities in the State of Illinois and the country.

Trustee Patricia A. Gira

Trustee Edward G. Schussler III

Village of Orland Park

Sunday Sept. 18, 2011