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REGULAR MEETING May 13, 2019
<br /> Councilmember Jake Teshka asked, While Councilmember Broden is doing that, for the good of
<br /> the order here, could you explain a little bit about what you're asking us to do?
<br /> Mr. Schulte replied, Sure. So,we are asking the Common Council of South Bend to act as a conduit
<br /> of financing for the rehabilitation of this apartment building. In order for us to get the funding
<br /> sources we need, we need the City to provide a financing mechanism in order to access money
<br /> from the State, basically, in order to rehabilitate and purchase our building here in South Bend.
<br /> Total development costs are estimated anywhere between $12 million and $13 million. I'm still
<br /> finalizing our last few items. We are requesting about$7.3 million in tax exempt bonds that should
<br /> meet the fifty percent(50%) test in order to access the four percent(4%) low-income housing tax
<br /> credits we will be utilizing. Like I said, tax credits, that (referencing a slide in the presentation) is
<br /> the LP Capital line right there taking out about $7.7 million, close to about $8 million in debt on
<br /> the project through finance development. Then we will also be deferring some development to be
<br /> on the project in order to fill our gap financing as well as apply for a federal home loan bank grant
<br /> through the affordable housing program. On the uses side, we'll be expending about $4.1 million
<br /> on rehab for the project. Acquisition of the property will get us close to $6 million and the
<br /> remainder is in development fees and self-costs.
<br /> Councilmember Jo M.Broden stated, Sorry,just quickly,please,your construction company,CRG
<br /> Residential,where are they located out of? Do they utilize employees or independent contractors?
<br /> Mr. Schulte replied, CRG Residential is located in Carmel, Indiana. They will be using a
<br /> combination of both their own labor as well as sub-contractors. I don't have the exact amount of
<br /> expected local participation, but it is in the resolution. They will be sub-contracting with local
<br /> contractors.
<br /> Councilmember Jo M. Broden followed up, Then with regard to your set aside for permanent
<br /> supportive housing, I know we discussed this in Committee, but I would just like to affirmatively
<br /> state, we are a very rich local community with regard to the supportive side of permanent
<br /> supportive housing. I understand, and just looking at your portfolio, you have Gary-based,
<br /> Indianapolis-based, and I see this would be your first (1st) project in our community. I think you
<br /> will find, as you work in the negotiations in the City of South Bend, at least from what you
<br /> expressed earlier, you are very comfortable at the five (5) units, and my support on this, I don't
<br /> want that number to be undercut or lowballed just because of your level of comfort. I would like
<br /> to make sure, embedded in this is that intention in these slides that you consider going up to as
<br /> many as eighteen(18)units. We are a very robust community in that regard. We do the supportive
<br /> stuff well and I hope your first (1st) toe in the community, in terms of this project, I hope if you
<br /> need others in the community to help round that out, leadership on the Council or within local
<br /> organizations, they help you feel comfortable in your ability to deliver that. I would love to have
<br /> a conversation with you as, I think, other Council Members would.
<br /> Mr. Schulte replied, We welcome that conversation, truly.
<br /> This being the time heretofore set for the Public Hearing on the above bill, proponents and
<br /> opponents were given an opportunity to be heard.
<br /> Jason Banicki-Critchlow, 3822 West Ford Street, South Bend, IN, stated, I love this project and
<br /> love that this once troublesome property has one (1), turned around its reputation and two (2), as
<br /> we go forward will stay low for the affordable housing. I just wanted to ask a couple questions for
<br /> the public to clarify some things that members of the public might not know. These conduit bonds
<br /> don't cost the City anything, correct? There is a lot of misconception with that online and I know
<br /> from history that is not the case. Also,when we do these conduit bonds,it doesn't inhibit our future
<br /> borrowing capacity because it doesn't add to the debt limit. And then this doesn't prevent us from
<br /> doing any other kind of project in that area at the same time.
<br /> Council Vice President Karen White replied, The answer to both of those questions is you are
<br /> correct. Thank you so much.
<br /> Councilmember Gavin Ferlic then made a motion to adopt Bill No. 19-34. Councilmember Jake
<br /> Teshka seconded this motion which carried by a roll call vote of seven(7) ayes.
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