Skokie borrows $ 160 million for pensions and $ 27 million for garages

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SKOKIE, IL – Village trustees voted to borrow up to $ 187 million to support Skokie’s police and fire retirement funds and fund a downtown hotel development.

The municipal board voted 6-0 on Monday with one abstention for a regulation that allows the issuance of bonds for both projects.

“First, no more than $ 160 million is required to fund 90 percent of the unfunded portion of the fire and police pension obligations as determined by the village’s external actuaries,” said Corporation Counsel Michael Lorge on Monday the final vote on the shackles.

“Second, no more than $ 27 million is required to fund TIF-related improvements in connection with the previously approved hotel development at 4930 Oakton St.,” said Lorge.

In December 2020, the village council reached an agreement with E&M Skokie LLC of Evanston developer Mark Meyer to build a 142-room hotel on the corner of Oakton Street and Niles Avenue.

“Both Series A and Series B from 2022 will be sold in early January under the same bond in order to meet the funding deadlines for the TIF project and to leverage the underwriting expertise and market reach,” added the village attorney.

Village officials have already agreed to provide $ 13.5 million – the estimated costs for the hotel parking garage – as tax increase financing to the property developer.

“As foreseen in the development agreement between the village and the developer, the Series B 2022 bonds are required to meet the village’s commitment to the project,” said Finance Director Julian Prendi in a memo to Lorge last month.

As Patch previously reported, the development agreement provides for a tax increase of $ 13.5 million from the village’s Oakton-Niles-TIF district. Since the district was only founded in 2019, the village has to borrow the money to finance the parking lot.

As for the larger portion of the bonds approved on Monday, Prendi said the $ 160 million pension obligation includes enough cash to cover 90 percent of the unsecured debt of the village’s public security pension funds, as well as a pension stabilization fund and the cost of the bonds themselves to spend.

“The regulation also sets a maximum annual coupon (interest rates of 5.5% and a maximum total interest rate of 3.5%,” said Prendi. “Staff assume that the actual interest rates are much lower than those in the regulation fixed maximum rates. ”

The principal and interest on the annuity bonds will come from existing sources of income, including property taxes, while the funds for the public-private parking garage project will come from future tax revenues and fees related to the operation of the garage. According to employees, the property will include 100 village-owned rooms and 200 of the planned Homewood Suites by Hilton Hotels.

The only abstentions on the project, Trustee James Johnson, said he supported the borrowing to meet the village’s unsecured pension liabilities – but not the other $ 27 million.

“It’s the second series that I don’t endorse, specifically helping to build a very large parking garage on what is now the green space in downtown Skokie,” said Johnson. “But I support the larger series wholeheartedly.”


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