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Zion Council approves indemnification for Trumpet Park deal despite possible $900K–$1.1M recapture exposure
Summary
The Zion City Council on June 3 approved an indemnification/recapture agreement with Orion Asset Management LLC tied to the Trumpet Park project; staff said recapture claims from dissolved predecessor entities could expose the city to roughly $900,000–$1.1 million, but those costs would be allocated to benefiting property and could be paid from TIF funds.
The Zion City Council voted June 3 to authorize an indemnification and recapture agreement with Orion Asset Management LLC that clears title for the city’s planned Trumpet Park commercial transaction while leaving a possible financial exposure if recapture claims arise.
City Attorney Jimmy Driscilla told the council the negotiated indemnification is intended to resolve “recapture obligations that are outstanding as recorded against the Trumpet Park property” and to allow the transaction to close. He described the counterpart entities as older, dissolved companies that cannot be located, which prompted negotiated protections in the sale documents.
City staff and legal counsel acknowledged a residual risk. City Administrator Nate said the potential exposure, based on frontage of the 21-acre site, is “somewhere between 900,000 and 1,100,000,” and that the cost estimate covers infrastructure such as streets and water mains installed for the development. Administrator Nate added that, if triggered, the recapture amount would be allocated to property that benefits from the work and could be paid through the city’s TIF (tax increment financing) district.
Supporters told the council the arrangement was necessary to deliver the negotiated benefits of the project, including a commercial closing and related private investment. Driscilla and staff described trade-offs: granting indemnity to secure clean title and completion of the deal, while accepting a limited, quantified risk that official records and the city’s legal review deem unlikely but possible.
Council members discussed the magnitude of potential liability and the expected protections. The council approved the ordinance on a roll-call vote; staff noted the transaction’s other anticipated local benefits and said the city would monitor any recapture claim process.
Next steps: staff will proceed with the closing steps described by counsel, and the city will record and administer any recapture obligations in accordance with the ordinance and applicable TIF procedures.
