11-29-12 Redevelopment Commission Minutes

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South Bend Redevelopment Commission Regular Meeting—November 29, 2012 6. NEW BUSINESS B. South Bend Central Development Area 4) continued... Mr. Downes said he was very excited about the prospect of this project. There have been conversations about this idea for a long time. He commended Mr. Perri for carrying it forward. Upon a motion by Mr. Downes, seconded by Mr. Varner and unanimously carried, the Commission approved the proposal from Shakespeare Lighting Design for design services for River Lighting Project. C. Airport Economic Development Area 1) Letter of Intent from Curtis Products to Lease Bosch site. Mr. Inks noted that for well over a year he has been showing the Bosch facility, wondering what we might have to do with the site when Bosch leaves to protect and maintain it, all the while hoping that would never come to pass. Today Mr. Inks is very pleased to announce that we have a Letter of Intent that has been executed by Curtis Products to lease the entire Bosch site with an option to purchase it. Curtis Products is a local, family-owned business started in 1959 that operates out of 180,000 square feet in 4 buildings located just southeast of the downtown in the Monroe Park Industrial Park. They have over three hundred employees. A summary of the lease terms are: Curtis Products would have a twelve year lease with the first two years at no rent and subsequent years at market rates or slightly above; Curtis Products would have the option to buy the site for $1,350,000 at any time during the first two years. The Letter of Intent also provides for the Redevelopment Commission to provide $250,000 for improvements to the building to be determined in conjunction with Curtis Products. The Commission is being asked to approve the terms of this Letter of Intent and authorize proceeding with the preparation of the lease for the site. Mr. Inks noted that Bosch will be returning possession of the site to Redevelopment at the end of this year. The target date for Curtis Products to take possession is May 1, 2013. Therefore, there will be an interim period where Redevelopment will be responsible for the site. At the next Commission meeting he expects to have a proposal for property management services. Our annual holding costs for the site have been estimated at $650,000. Almost $200,000 of that would be property taxes. There will be other significant costs related to security, maintenance and utilities. While there is no rent in the first two years of this particular lease, these holding costs will be avoided, except during the interim period in early 2013. The average appraised values for the site were $1,967,000 to purchase and $1.63 per sq. ft. to lease. The option price of$1,300,000 represents a savings for Curtis Products of $617,000 or just under one year of holding costs for the Commission. 9