Joliet council to vote on $105 million in bonded debt for Rock Run Crossings project

The Joliet City Council will vote Tuesday whether to create up to $105 million in city debt to invest in the future Rock Run Crossings project.

The vote may be a formality since the council in June committed to issuing the bonds when it approved an agreement with Cullinan Properties, which wants to create the 309-acre development designed to include retail, restaurants, entertainment venues, hotels, office space, housing and warehouses at the crossing of Interstates 55 and 80.

The plan is for the bonds to be used to fund infrastructure improvements needed for the project and to be paid off by tax revenue generated by the development. But city taxpayers would be on the hook if the project does not develop as planned.

Council member Larry Hug raised questions at a Monday workshop meeting of the council about a provision in the agreement that obligates the city to use a specific company to underwrite and market the bonds – Stifel, Nicolaus and Company.

Hug questioned city Finance Director James Ghedotte, who said the city had not done business with the firm previously and that he did not have a part in selecting Stifel as the underwriter.

“How did we choose them?” Hug asked Ghedotte.

“I don’t have an answer to that,” Ghedotte said. “It was in the development agreement.”

Ghedotte said he did not see the development agreement until it was presented to the council.

Cullinan attorney Rick Joseph said after the meeting that the developer wanted Stifel as the major underwriter for the bonds because of past experience with the company.

“They’ve had a lot of experience selling municipal bonds for development,” Joseph said.

He said Stifel was the bond underwriter for Cullinan’s Streets of St. Charles project in St. Charles, Missouri.

“They did a very good job for the city of St. Charles,” Joseph said.

The Joliet development agreement was approved by the council June 21 with little public discussion on the details and the city’s bond obligation, which is set at $103 million in the agreement. The agreement did not go through a council committee but was presented to council members individually by Cullinan representatives and city staff.

Hug when questioning Ghedotte noted that the city used several underwriters for the $10.5 million in bonds, issued in 2020, to fund library renovations and the purchase of new city vehicles.

Ghedotte said more bond underwriters are likely to be used for the $105 million Rock Run Crossings project, but Stifel would be the managing underwriter.

Before the council meeting, Ghedotte said the city’s financial adviser on the bond issue, Speer Financial, has advised that at least one additional underwriter be used because of the amount of bonds that need to be sold. He said Speer characterized Stifel as “a good company.”