The Homewood Board of Trustees voted unanimously at its Jan. 9 meeting to approve an agreement that would allow HCF Homewood, the developer of The Hartford, to make a change in financing for the project.
The move was routine, according to village officials, but Trustee Anne Colton noted that the process was unusual in that the agreement was signed by Mayor Richard Hofeld before being approved by the board.
She asked staff to provide an explanation.
HCF was seeking a new long-term loan for developing the newest building in downtown Homewood, a four-story mixed-use structure that officially opened in December.
Village Attorney Chris Cummings said as part of the refinancing process, HCF Homewood was required by its new lender to assign it HCF’s TIF incentives in case of default.
“The agreement before you tonight is almost word-for-word the same agreement that was approved unanimously by the village board in February 2022” for the project’s original loan, Cummings said. The main change was to replace the old lender with the new lender.
He said the developer made the request on Dec. 18, the day before the last village board meeting of the year, leaving not enough time to get it on the agenda.
“We were informed the closing had to take place by the end of the month. If the closing did not take place by the end of the month, the developer would have incurred several thousand dollars of additional costs in financing,” Cummings said. “Ultimately, that could have cost the village increased incentive payments.”
Colton thanked Cummings for the explanation and said she wished it had been included in the board packet documents in the interest of transparency, since it was an unusual situation.
She offered full support for the agreement itself, but asked that in the future established procedures be followed.
“I have no problem saying yes to this. This is a slam dunk, no brainer of a yes,” she said. “My only issue was the process. We need to do things the right way. The reason we have a process in place is to make sure that we do everything ethically, with transparency.”
Trustee Jay Heiferman said the process isn’t always perfect but thought it made sense to make an exception in this case.
Trustee Lauren Roman offered a clarification, noting that by agreeing that the lender could be assigned rights to the TIF incentives in case of a default does not mean the lender would get paid automatically.
“The assigning of the TIF funds is only if the bank follows through with the original TIF agreement,” she said.