McHenry Times

City of Woodstock Old Courthouse and Sheriff's House Advisory Commission met March 18.

Here is the minutes provided by the commission:

A Regular Meeting of the City of Woodstock Old Courthouse and Sheriff’s House Advisory Commission was called to order at 7:00PM by Vice-Chairman David Stumpf on Monday, March 18, 2019 in the Council Chambers at City Hall.

A roll call was taken.

COMMISSION MEMBERS PRESENT: Donovan Day, Jessica Campbell, Tom Ellinghausen, Jacqueline Lechner, Wendy Piersall, David Stumpf, and Joseph White

COMMISSION MEMBERS ABSENT: Jim Campion and Chairman Dennis Sandquist (arrived at 7:07PM)

STAFF PRESENT: City Planner/Staff Liaison Darrell Moore, Finance Director/Assistant City Manager Paul Christensen, Economic Development Director Garrett Anderson, and Library Director Nick Weber

OTHERS PRESENT: Gary Anderson and Ashley Sarver of Gary Anderson Architects, Friends of the Old Courthouse member Susan Stelford, and City Clerk Cindy Smiley

AMENDED AGENDA

Motion by T. Ellinghausen, second by W. Piersall, to amend the agenda to move Item 5b to follow Item 6 – Reports and Project Updates.

Ayes: J. Campbell, D. Day, T. Ellinghausen, J. Lechner, W. Piersall, J. White, and Vice-Chairman D. Stumpf. Nays: none. Abstentions: none. Absentees: J. Campion and Chairman D. Sandquist.

APPROVAL OF MINUTES

Commissioner Lechner requested that the 3rd sentence in the final paragraph of Page 2 be corrected to read:

“She noted costs include Construction Costs and Development Costs, noting the Development Costs are lower than indicated last month due to City ownership.”

Motion by W. Piersall, second by T. Ellinghausen, to approve the minutes of the January 21, 2019 Regular Meeting as corrected.

Ayes: J. Campbell, D. Day, T. Ellinghausen, J. Lechner, W. Piersall, J. White, and Vice-Chairman D. Stumpf. Nays: none. Abstention: none. Absentees: J. Campion and Chairman D. Sandquist. Motion carried.

Chairman Sandquist entered the Council Chambers and joined the proceedings at 7:07PM.

3. PUBLIC COMMENT

Talia Pavia, tenant in the Old Courthouse, spoke about her experience as the operator of Talia Pavia String Academy located in the Old Courthouse, noting she has students of all ages who take lessons in the building. Noting this is a substantial way she makes her living, Ms. Pavia stated it has been a wonderful experience to be a part of that special building and the arts community in Woodstock.

In response to a question from Commissioner Ellinghausen, Ms. Pavia stated because the lessons are time-sensitive having a dedicated space works best for her rather than having to move to a different space each time. She expressed agreement that flexible space would be great for the community but stated for her it would be more difficult than having a dedicated space, noting that would be her preference.

In response to a question from Commissioner Campbell, Ms. Pavia stated she might be able to share a dedicated space and storage area. Noting she has been a tenant in the building for 11 years, Ms. Pavia stated it is important for her to know she has dedicated time so she can schedule a block of time.

In response to questions from Commissioner Lechner, Ms. Pavia stated she does pay rent and may be able to pay utilities if the building were no longer owned by the City.

Susan Stelford, 21 North Street and member of the Friends of the Old Courthouse, thanked the Commission members for their hard work. She stated she would like to talk about the proposal that she supports for the Old Courthouse, providing an outline of it to the Commission members. She noted when the Commission recommended that the City retain ownership, Mayor Sager stated it was appropriate for the City to own and manage the building. She further noted the public surveys support an arts use and City Council stated the approved use should be a revenue generator. Ms. Stelford opined the first priorities should be saving the building and generating revenue.

Noting she has served as a tour guide for the building, giving tours to from 50 to 500 people, Ms. Stelford noted the most talked about and well-liked feature of the building are the jail cells.

Ms. Stelford then talked about the proposed use of the Old Courthouse suggested by Beth Raseman of the Barrington White House. She noted Ms. Raseman and individuals from the Groton Center both indicated they needed more banquet and community space at their facilities and noted more revenue can be generated from two floors of banquet space. She provided diagrams proposed for the 1st and 2nd floors and highlighted the following recommendations made by Ms. Raseman:

 Bar areas in separate rooms that can be locked when not in use and during non-alcohol events.

 Consider partition walls to section off the 1st floor banquet room for smaller events.  Consider restoring the original matching staircase on the 1st floor.

 Additional kitchen needed for large amount of banquet space.

Ms. Stelford stated she supports Mr. Raseman’s revenue-generating proposal of two floors of banquet space. She opined this would be public space as anyone can rent it and would not preclude an arts center. Briefly discussing the restoration of a matching staircase, Ms. Stelford noted this would be very expensive.

Turning the discussion to the Sheriff’s House, Ms. Stelford stated she does not support a Boutique Hotel and Café use that building due to the expense to renovate this into suites and bathroom facilities and other major renovation expenses which are not financially viable. She stated the biggest reason for opposing this use, however, is that it would take away the jail cells which are the most historic interior element of the buildings. She also questioned the financial viability of placing a café in the basement in light of its proximity to the Public House and the new Ethereal Chocolates Café.

Ms. Stelford presented proposed floor plans for the Sheriff’s House noting her support of:

 The Public House taking over the 1st floor jail cells for dining and utilizing the entire patio space

 The Art Space recommendation for a museum but only one room on the 2nd floor which would contain the row of original jail cells and display of the Judge’s Bench, Chalkboard Election Results, hand-painted vault doors, and another other interior historic elements

 An Arts Center use as suggested by the public survey

Concerning the museum usage, Ms. Stelford opined a museum would not generate enough income to warrant a larger space but expressed support of a one-room museum as she indicated.

Ms. Stelford opined these are viable proposals that tick all of the boxes of what the public has said they want.

In response to a question from Commissioner Lechner, Ms. Stelford stated the pro formas being presented by Gary Anderson Architects indicate a banquet center would be a revenue generator. She noted Ms. Raseman has talked about how partitioning the first-floor banquet room would generate revenue from smaller events while the larger banquet center on the 2nd floor could host larger events.

4. OLD BUSINESS – Presentation and Discussion of Master Planning Study for the Old Courthouse and Sheriff’s House by Gary Anderson Architects, including funding and potential building management structure (continued)

Gary Anderson and Ashley Sarver presented financial information and opportunities for the buildings. They showed photos of similar spaces and reviewed some of the information previously provided.

Ms. Sarver provided information on the expenses that would be shared by the buildings which primarily involved the elevator and required connections. She noted there are various scenarios by which these expenses could be shared noting for the purposes of this discussion they have been split 50/50.

Mr. Anderson and Ms. Sarver provided information on the cost of a geothermal system. They stated operating costs for a geothermal system for the Old Courthouse would be $17,928 vs. $50,933 for a conventional HVAC system and $5,940 for a geothermal system vs. $16,875 for a conventional system for the Sheriff’s House. They noted capital expenses of $335,000 for a geothermal system and provided information on funding sources for a geothermal system including historic tax credits and a ComEd grant totaling $183,950. They stated using these costs, it would take 3.4 years to pay off the additional expenses. In response to a question from Commissioner Piersall, Mr. Anderson confirmed these costs reflect prevailing wage.

Mr. Anderson provided a site plan for a geothermal system vs. a conventional system including where the geothermal wells would be drilled and where the condensers could be placed. He noted the visual effect of the condensers. In response to a question from Commissioner Stumpf, Mr. Anderson stated the outside equipment needed for a geothermal system is minimal and the pumps are barely heard. He stated the wells can be paved over if put in the street. He stated the location of the wells in his plan is a concept noting it is possible they could be located elsewhere. He stated it would be necessary to drill a test well to see the conductivity of the soil noting there are a lot of variables.

A brief discussion ensued of the operating expenses vs. the current utility costs. Mr. Christensen stated the current electric costs fall under an agreement with ComEd with little in heating expenses.

Ms. Sarver then provided information on Scenario E for the Old Courthouse including floor plans noting this includes a lower level restaurant, 1st floor community space, and 2nd floor banquet space.

She first provided information on Scenario E with a conventional HVAC system noting development and construction costs of $4,864,618. Noting a proposed annual income of $160,834 that would come from rent and costs from a 10% commercial space vacancy, operating expenses, and mortgage expenses, she estimated the net income for the first year to be ($76,872) and ($115,131) the second year upon the commencement of developer fees. Ms. Sarver noted funding sources to include bonds, historic tax credits, TIF funds, and deferred developer fees in the amount of $4,864,618. She noted this scenario provides for no private equity injection but stated there could be a fundraising effort.

Ms. Sarver then provided information on Scenario E with a geothermal system noting construction and development costs of $5,384,433. Noting this Scenario calls for a proposed annual income of $160,834 with an annual net income of ($67,320) after vacancy and operating and mortgage expenses. She noted funding sources totaling $5,485,533 from bonds, historic tax credits, TIF funds, deferred developer fees, and a ComEd geothermal grant.

Ms. Sarver then provided information on Scenarios for the Sheriff’s House, showing floor plans for these. Mr. Anderson stated the jail cells would be retained under these scenarios.

Beginning with Scenario E with a geothermal system, Ms. Sarver stated this scenario includes pay- as-you-go TIF funding amounting to $326,000 over 23 years. She stated this scenario reflects private ownership and provides for a café on the lower level and a private boutique hotel on the 1st and 2nd floor noting construction and development costs of $3,107,272. She noted an estimated annual income of $467,339 which would be derived from rent from the café and rental of the hotel rooms on the 1st and 2nd floors. She noted a net year-one income of $23,879 after considering vacancy, operating expenses, mortgage expenses, and an add-in for the TIF. Ms. Sarver stated funding sources of equity, loan, historic tax credits, and deferred developer fees totaling $3,107,272 resulting in a return on investment of 4% year one and 1% year two. Ms. Sarver noted this scenario appeared to be more profitable when previously presented as at that time the loan was at 4.5% and now has been adjusted to 5%.

In response to a question from Commissioner Stump, Ms. Sarver confirmed the 20-year spread sheet provided shows a loss over that period so there would be no profit after the debt service. She stated without additional information about the business model, she assumed a certain rental income. She noted if higher rent could be charged, this could change, as it may if the building remains City-owned. Commissioner White suggested the implementation of a food and beverage tax to increase revenue.

Noting Chairman Sandquist’s observation that the interest makes or breaks this scenario, Ms. Sarver agreed.5% makes a big impact on the business because this is such a small space. In response to Commissioner Stumpf’s comment that a longer term would lower the payments, Ms. Sarver stated a 20-year terms seems to be the standard for developers. Commissioner Piersall opined a capital fundraising campaign could be a game-changer. Chairman Sandquist questioned the success of a capital fundraising campaign for a private venture. A brief discussion ensued of the possibility of charging more for the rooms with Ms. Sarver noting hoteliers do not charge per square foot and stating the room rate used in this scenario was derived through a review and comparison of area rates. She noted this option assume sale of this building to a private developer so any profit would be for the developer. Commissioner Lechner opined the rent used of $13.50 per square foot is high and not standard for Woodstock at this time.

Ms. Sarver then provided information on Scenario E for the Sheriff’s House with a conventional HVAC system which also includes a lower level café and 1st and 2nd floor hotel. She noted construction and development costs of $2,886,591 and a net income of $19,242 which result in a 3% return on investment in year one and 0% in year two.

Ms. Sarver then reviewed Scenario F for the Sheriff’s House which includes a lower level café and 1st and 2nd floor community space.

Scenario F with a geothermal system would include construction and development costs of $2,830,211 and proposed annual rental income of $71,351. After expenses from vacancy, operating expenses, and mortgage there would be a net income of ($96,271) year one and ($115,577) year two. She stated funding sources would include loan, historic tax credits, and deferred developer fees.

Scenario F with a conventional HVAC system would include construction and development costs of $2,628,206 with proposed annual rental income of $71,351. After expenses from vacancy, operating costs, and mortgage there would be a net income of ($99,049) year one and ($117,331) year two. She noted funding sources of loan, historic tax credits, and deferred developer fees.

Ms. Sarver noted the TIF analysis that had been done and the information provided to the Commissioner. Discussion ensued of this. Chairman Sandquist suggested further discussion of this and the scenarios presented continue at the next meeting.

5. NEW BUSINESS

a. Input and Discussion by Woodstock Public House

Noting Mr. Loprino had been called out of town, Katherine Loprino, owner of the Woodstock Public House, stated they were still gathering bids from contractors so they had no proposal to present this evening. She offered to answer questions from the Commission.

Ms. Loprino stated they have expressed interest in obtaining the jail cells which is one of their goals. She stated they have many ideas moving forward noting one of their biggest concerns is the cost as it is a lot of money which is why they are still working with different contractors to get more bids.

In response to questions from Commissioner Lechner, Ms. Loprino stated they do not have any use for the upstairs and like the idea of shared space. She opined the front part could be more of a lounge which they could service out of their current kitchen and could be booked out privately in advance.

In response to a question from Commissioner Piersall, Ms. Loprino stated their current kitchen could handle both a banquet upstairs and a busy Saturday night in the restaurant. Ms. Loprino stated she likes Ms. Stelford’s idea of this being a public space with people being able to bring in whatever caterer they choose. In response to questions from the Commission, she talked about what equipment and facilities a private caterer would need to cater in the space by the banquet room.

In response to a question from Commissioner Campbell, Ms. Loprino stated they would be interested in the jail cells if they were moved elsewhere also. She expressed agreement with Ms. Stelford that they are a wonderful asset and should be kept and be true to the building. Discussion of this followed including considering reconfiguration for the elevator.

In response to questioning from the Commission, Ms. Loprino stated they would make the capital improvements with a fair rent similar to that now in place.

In response to a question from Chairman Sandquist, Ms. Loprino stated they are not interested in the basement space without the jail cells noting the allure is the cells and opining people will pay a premium for those. Chairman Sandquist opined the historic preservation community may not support moving the jail cells.

Brief discussion ensued of placement of the elevator and new lobby in Scenario E and how people will enter the Public House and various levels.

6. REPORTS AND PROJECT UPDATES

a. Memo and discussion by Commissioner Campbell proposing an arts-focused community center based in the Old Courthouse

Commissioner Campbell noted there has been a consensus that there be community space. She stated she would like to recommend to the City Council a use for this space and be proactive in outlining programming for a community space. She stated she is proposing that the City run an arts-focused community center in the Old Courthouse as part of the Library, noting the presence this evening of Library Director Nick Weber to participate in the discussion. She opined this could expand on Mr. Weber’s ideas to connect the wider community to the arts.

As outlined in her memo, Commissioner Campbell stated the center would contribute to the success of other components of the Old Courthouse complex and would generate enthusiasm for fundraising for the complex. She opined some operating costs could be funded by fees and memberships.

Commissioner Campbell recommended that City create a new staff position that is part of the Library to run the community center and also create a City Arts Commission. She stated once the human resources are in place, they can work to make Woodstock an arts destination and make sure there are ways anyone in the community can get involved in the arts. She opined this would also get more people moving through the Old Courthouse.

In response to questions from the Commission, Commissioner Campbell stated one of the keys to this proposal is there would not need to be a whole new infrastructure, but rather could use some of the space that does not need to be renovated as there would not need to be much done for art classes, for example. She opined there would not need to be much time, money, or effort expended to make the space useable. She noted she has not created a budget but hopes there would be fees for classes and perhaps a membership option. She stated salaries would have to come from the City’s budget.

Chairman Sandquist noted the art study called for the arts community to come together as a group asking if the City would organize the artists. Commissioner Campbell opined the City needs a commission regardless which would think about ways to bring the arts community together. Commissioner Piersall opined perhaps an independent group or commission would be better noting the success of the mural project. Chairman Sandquist stated perhaps the City could provide a Staff person to help them organize and move forward. Discussion followed of the support provided by the City to the Opera House and whether it would be desirable and appropriate to supply the same to the Old Courthouse.

Library Director Weber talked about how the Library pays for its programs opining Commissioner Campbell’s proposal could be structured differently. He opined the Library could provide staff, but the arts center would not be run on the same model. He noted the center could have a membership option but opined this probably would not cover all costs. He stated the center would not have to have all of its space developed immediately and its program could be developed over time. Mr. Weber stated the Library has a lot of experience with this and provided information on how they are accomplishing this including with grant funding. He noted the Library already does a lot of arts-related things providing information on some of these including the success of an art gallery there. He agreed the Library would be an ideal partner to help make this into an arts and cultural space.

In response to a question from the Commission concerning the City staffing a position for this, Mr. Christensen stated perhaps this could be accomplished with a Library person. Mr. Weber stated he is always looking to get the Library out in the community opining the Library may be willing to work on staffing issues. Mr. Christensen opined capital outlay would be the biggest issue rather than staffing. He talked about how the mural was done with a City liaison and the Friends of the Opera House.

Chairman Sandquist stated he is looking at this as a way to organize the arts community expressing his hope this is a step that would be the key.

Commissioner Day stated he likes the idea of starting small expressing his concerning about creation of a City commission. He provided information about his experience in Fox Lake in developing an Arts Commission. He stated this would bring people to the Old Courthouse.

In response Commissioner Campbell noted some of Ms. Pavia’s students come from out of Woodstock, making Woodstock a destination which will be the ultimate goal of the arts center. She noted with Ms. Pavia’s school and the art gallery, the project would not be starting from scratch but rather would be amplified with City support. She stated for every $1 the City invests in the arts it gets $6 back.

Commissioner Piersall opined this will be a hard sell to the community. Commissioner Campbell countered in this way the City will have put money into the building and people will be able to use the building. Discussion of this followed.

Chairman Sandquist opined there are many life-safety issues to be addressed before this could happen. He also opined the project, including Staffing and a commission, should be scaled, supporting Commissioner Day’s idea of using Staff support and phasing the project in. Discussion followed including what constitutes community use and/or community space. Chairman Sandquist opined the banquet space, which is useable by the public, is a community space with Commissioner Campbell disagreeing opining the Library is an ultimate community space. Mr. Weber noted it is possible to have both opining this is an additional way to use some of the space already outlined for community space. He opined Woodstock is an arts community but there is no central arts space, noting this makes the community space the central hub for many things including the arts community. He opined the Library could help make this happen. Chairman Sandquist opined the uses need not be competing.

In response to a question from Commissioner Lechner, Mr. Weber opined this could be done fairly soon but would require some planning. He stated the space would need to look passable.

Noting money must be made to save the building, Ms. Stelford opined there is no reason the rental space cannot be community space also. She opined it would take a couple of weeks to make the Sheriff’s House useable for an arts center talking about how this could be done and stating this could be a temporary location with an eventual move to the Old Courthouse. Mr. Christensen opined there may be more life safety issues that need to be addressed.

6b. Report on meeting with Robin Doeden, Community Foundation of McHenry County

Chairman Sandquist stated he met with Ms. Doeden concerning fundraising noting it was her opinion civic uses would be better for fundraising. She suggested conducting a feasibility study to see if a capital campaign would be successful. She opined the study would cost approximately $20,000 which would include development of the campaign. Ms. Doeden also suggested having a 501c3 or the Foundation conduct the campaign. Mr. Moore noted Ms. Doeden mentioned the need for non-profit office space in the County.

Discussion followed. It was noted it would be less appealing to donors if the campaign was for a private use with a community use being more appealing. Commissioner Piersall opined this seems expensive and suggested speaking with Beth Raseman. She opined a professional fundraiser who would actual raise the funds could be hired for this amount of money. In response to a question from Ms. Stelford, Chairman Sandquist stated Ms. Doeden indicated the Foundation would probably not provide a grant for this study.

6c. Report on conversation with Rockford Local Development Corporation

Mr. Moore and Mr. Christensen provided information on their discussions with the President of the Rockford Local Development Corporation which is financing the Turner School Project with the City of Rockford. They noted the RLDC has an interest in the City’s project if there is an opportunity to invest and feels they have a unique qualification. They noted the organization’s concern is that the $4 million needed for the project may be too small.

Mr. Christensen noted this issue is incredibly complex. He provided information he discovered during discussions with attorney Don Longwell concerning state and federal tax credits, opining the City may not be able to count on the state credits. Discussion followed of the City being the developer with Mr. Christensen noting there may be a problem with historic tax credits if the City runs the banquet facility. Mr. Moore stated the goal of the state program is to produce revenue for a business. Chairman Sandquist opined this would be the same if the City runs the arts center as opposed to turning it over to another entity. He noted the Artspace Study stated not to worry about tax credits because this is too small a project. Mr. Anderson stated this must be a for-profit to get the tax credits. Mr. Christensen stated a proposal has been requested to clarify this which will build on the scenarios. Mr. Anderson discussed the allotment of tax credits this year and next and how the City can move up the list. He opined the City could be at the top of the list, stating Mr. Christensen’s idea of obtaining a proposal is a good one.

It was the consensus of the Commission that Mr. Christensen pursue the proposal.

6d. Report on Courthouse users meeting

Mr. Moore noted he received some good ideas and information from those attending the meeting of the Courthouse users. He stated it is planned to hold regular meetings and for this group to serve as a conduit for the Commission to dispense and gather information.

6e. Sheriff’s House Hotel Interest

Mr. Moore stated the Commission’s discussions about a boutique hotel has generated interest from two groups interested in the building for this use. He stated there has been no formal proposal, but he has given a tour to one of these groups. Mr. Moore confirmed the groups have seen the pro formas developed by Mr. Anderson and the interest expressed is for eight rooms.

5b. Discussion on drafting a recommendation to City Council

Chairman Sandquist opined this is the next stage but not necessarily the final one. Mr. Moore stated this is for Phase I calling the Commission’s attention to the final paragraph of the proposed resolution. He noted something such as this is needed if the Commission wishes to apply for tax credits next month.

Commissioner Stumpf stated he wished to ensure the Geothermal system be included in the recommendation to the City Council.

In response to a question concerning the text mentioning Scenario E, Mr. Moore noted there are multiple Scenarios E which would be sorted out to just one for attachment to the Resolution. Discussion followed.

It was the consensus of the Commission to add a geothermal option as requested by Commissioner Stumpf.

Commissioner Stumpf stated he would also like the resolution to advise the City Council of the various financial options. Discussion followed of putting in additional information on financing consistent with Scenario E.

Following additional discussion, it was agreed Mr. Moore will work on making the clause concerning ownership more specific.

Following discussion of what would be needed for a July application for tax credits, it was the consensus of the Commission that this probably would not be possible.

Following discussion, Mr. Christensen suggested he and Mr. Moore work on the pro formas using Mr. Anderson’s figures and the City’s figures to provide an analysis. Commissioner Stumpf requested that the analysis look at 30- and 40-year amortization of bonds with Mr. Christensen stating the City does not typically go beyond 20 years.

Commissioner Campbell opined the Resolution should address community space. Discussion followed of whether revenue generators could fund the cost of improvements needed for the community center such as the need for an elevator.

Chairman Sandquist expressed his hope Staff can bring back a more refined scenario which would reflect what the community and the City would support. Commissioner Piersall expressed her wish to develop Ms. Stelford’s proposal into a scenario also. Mr. Christensen stated it is his hope to bring back three or four scenarios for a pro forma for each one.

7. FUTURE AGENDA ITEMS

Chairman Sandquist summarized the future items as previously discussed.

8. ADJOURNMENT

Motion by D. Stumpf, second by J. Lechner, to adjourn this regular meeting of the Old Courthouse and Sheriff’s House Advisory Commission to the next regularly-scheduled meeting on Monday, April 15, 2019 at 7:00PM in the Council Chambers at City Hall. Ayes: J. Campbell, D. Day, T. Ellinghausen, J. Lechner, W. Piersall, D. Stumpf, J. White, and Chairman D. Sandquist. Nays: none. Abstentions: none. Absentees: J. Campion. Motion carried.

Meeting adjourned at 9:34PM.

https://www.woodstockil.gov/sites/default/files/fileattachments/old_courthouse_and_sheriffs_house_advisory_commission/meeting/26921/f-_och_advisory_commission_-_part_1_of_1_-_minutes_03-18-19.pdf