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HomeMy WebLinkAbout04/09/07 Community and Economic Development Committee MinutesCommunity and Economic Development Committee 2007 South Bend Common Council The April 9, 2007 meeting of the Community and Economic Development Committee of the South Bend Common Council was called to order by its Chairperson, Council Member Derek D. Dieter at 3:50 p.m. in the Council's Informal Meeting Room. Persons in attendance included Council Members Pfeifer, Kelly, Varner, Kirsits, White, Dieter and Puzzello; Citizen Members Phil Panzica and Martin Wolfson; Mayor Stephen J. Luecke, Paul J. Meyer, Public Works Director Gary Gilo#, Don Inks, Martha Lewis, Rita Kopola, Martin Wolfson, City Clerk John Voorde, Pam Meyer, Bob Mathia, Marco Mariani, Debbie Hogul, Violent Blosser, Todd Junkies, unidentified members of the public, Nancy Sulok and Jamie Loo of the South Bend Tribune and Kathleen Cekanski- 1=arrand, Council Attorney. Council Member Dieter noted that the Committee members include Council Members Kelly, Puzzello, White, and himself; and that Professor Martin Wolfson Phil Panzica are the citizen members. Bill Nos. 07-25 and 07-26 Economic Revitalization Areas for ~d ssian Technolo located at 5'11 East Colfax Avenue and 210 North Niles Avenue: Council Member Dieter called for an update from the Community and Economic Development Department on Bill Nos. 07-25 and 07-26 addressing a six (6) year real property tax abatement and a five (5) year personal property tax abatement far Odyssian Technology. Bob Mathia of the Community and Economic Development Department reviewed the April 1, 2007 report (copy attached). He noted that new confirmatory resolutions are needed in light of the changes highlighted in the memorandum. Odyssian Technology qualifies for the tax abatements being sought under the City's regulations. Debbie Hogul a representative of Odyssian Technology stated that she is available for any questions which the Committee may have. The Council Attorney noted that she has worked with Mr. Mathia and the City Clerk's Office on this, and that it is consistent with past practice where there where changes from the original Declaratory Resole#ion. There was no one from the public to speak in favor or in opposition to the Bills. Council Member Puzzello made a motion, seconded by Council Member White that Bill Nos, 07-25 and 07-26 be recommended favorably to Council The motion passed with Citizen Member Wolfson abstaining noting that in light of the Circuit Breaker he could not cast a vote. April S, 2007 Cammuni#y and Economic development Committee Meeting Minutes Page 2 Bill Nos. fl7-63 Five 5 Year Residential Real Pro ert Tax Abatement Re nest of Dan Golfer for 1329 South 32" Street: The Council Attorney noted that she was in contact with the wife of the Petitioner today. She noted that Mr. Golfer had surgery and is unable to attend today's meetings. They are requesting that Bill No. 07-53 be continued until the April 23, 2007 meeting. Council Member White made a motion, seconded by Council Member Puzzello that Bill No. 07-53 be continued until April 23, 2007 at the request of the Petitioner. The motion passed. Substitute Bill No, D7-54 Five (5] Year Residential Real Property Tax Abatemen# Re oast of Habitat for Humani ; Council Member Dieter called for a report from the Department of Community and Economic Development on Substitute Bill No. 07-54. Bob Mathia of the Community and Economic Development Department reviewed the April 9, 2007 report detailing the need for the Substitute Bill and also reviewed the March 19, 2007 report {copies attached}. The report concluded that the Petitioner meets the qualifications for a five {5} year residential tax abatement under Section 2- 77.1 Single Family Residential Construction under the Saufh Bend Municipal Code. Violet Blosser and Todd Junkies of Habitat for Humanity with offices at 402 East South Street in downtown South Bend made the formal presentation. They Hated that new single-family homes of 1,440 square feet will be constructed on the subject properties; each valued at $65,000. The homes will be offered to qualified, low-income families using a na-interest loan and mortgage. Taxes to be abated are estimated at $2,895 per year for each home for a total of $11,580 per home during the 5-year abatement period. Ms. Glasser noted that in the past twenty {20) years approximately 100 homes have been constructed by Habitat for Humanity. Council Member Pfeifer noted that the new Names will be constructed in the 2"d District. She commended the Habitat for Humanity representatives and welcomed the new construction in her Councilmanic District. No one from the public spoke in favor or in opposition to the substitute Bill. Following discussion, Citizen Member Wolfson made a motion, seconded by Council Member Kelly that Substitute Bill No. 07-54 be recommended favorably to Council. The motion passed. Bill No. D7-55 Five 5 Year Residential Real Pro art Tax Abatement Re oast of Habitat for Humanity for 1D22 West Jefferson, 1216 West Jefferson, 1342 Bissell and 1338 Bissell: April 9, 2DQ7 Community and Economic ©evelopment Committee Meeting Minutes Page 3 Council Member Dieter called for a report from the Department of Community and Economic Development on Bill No. 0755. Bob Mathia noted that the petitioner qualifies for the requested five (5} year residential real property tax abatement with the details being set forth in the report which he has combined with the information on Bill No. 07-54. Violet Blosser of Habitat for Humanity noted they are very excited to move forward with both housing projects which should be completed by November. Na one from the public spoke in favor ar in opposition to the Bill. Council Member Puzzello made a motion, seconded by Council Member White that Bill No. D7-55 be recommended favorably to Council. The motion passed. U date Downtown South Bend DTSB - Paut Me er Chair arson DTSB Board of Diirectors: Council Member Dieter noted that the 6th item on the Committee's agenda was to receive an update on Downtown South Bend {DTSB} by Paul Meyer, Board Chairperson. He noted that the Council has asked several questions of Mr. Meyer through a recent letter and have also requested several documents of him. Today's meeting is to receive updates from Mr. Meyer and to have the Committee asked additional questions. There will be no public input on this topic today, with additional meeting (s} being scheduled as needed. He Hated that two {2} Executive Sessions have been held by the Council with information from those meetings being confidential. Mr. Paul Meyer, DTSB, Inc. Chairperson, thanked the Committee for the opportunity to come and address the Committee, noting that he had originally requested to come before the Committee of the Whole. He then asked Marco Mariam to pass out amulti-page handout (copy attached) which addressed six {6) items: DTSB Strategic Plan Overview; 1=financial Control Actions taken in response to embezzlement; Recent letter to Downtown Business and Property owners and attached Accountability Report; DTSB Parade Grant program-3 year history; DTSB Ribbon Cuttings for new downtown establishments; and International Downtown Association consulting report. Mr. Meyer stated that he does not believe that he would be here today but for the embezzlement.. DTSB has been in operation for the past four (4} years and he believes that the downtown is better today as a result. He noted that the amount of the alleged embezzlement is $2D4,54D. The person charged has admitted to the embezzlement and the forgery and that they are attempting to recover as much as possible. He noted that this incident has damaged the credibility of DTSB. He stated that the Board's oversight was inadequate and that a new accounting firm has been hired and new April 9, 2007 Community and Economic Development Committee Meeting Minutes Page 4 procedures are in place. Mr. Meyer stated that he is confident that the under the new systems which are in place that "there is a zero chance of another embezzlement". He noted that he believes that it is "time to move on"; noting that there are differences a# opinions. DTSB sees the downtown as the core of the city and its economic engine. It should be known far its hospitality, safety, and the many services provided by the ambassadors. Mr. Meyer stated that it is appropriate to respond to the Council Members concerns and is open to questions. He added that many members of the Board are present who broadly represent the community. Each are "committed emo#ionally and economically". Counci[ Member Dieter noted that a letter was sent to Mr. Meyer dated Apri[ 4t" requesting specific information and would like an update. Mr. Meyer stated that he would like to hear feedback from the Council. Upon further questioning by Council Member Dieter, Mr. Meyer stated that he would have the information requested in that letter in a week. Dr. Varner stated that he would like to see a detailed budget for 2007 rather than just the proposed fiscal plan. He noted that an "enormous amount of money is handed off with precious little oversight". In acknowledging the presence of many of the Board of Director members and the interim Directors, he questioned the policy of utilizing property to pay off debts and requesting copies of the Board's authorization to do so. Dr. Varner stated that he preferred that the monies be in the hands of the City subject to specific appropriations, and that this was not a reflection on the people standing here today. With regard to the civil actions, Dr. Varner suggested that a 1099 Miscellaneous Income form be given to the former DTSB employee so that the IRS could review the situation. He also questioned the various amounts charged for accounting fees of $29,000 and $30,000, Someone in the audience noted that a 1099 has already been sent. Mr. Meyer stated that a budget is predicated on the sources of income. He stated that he could not address the 2004 accounting fees today; however the 2006 accounting fees included the evaluation process related to the embezzlement. Council Member Kelly hoped that there would be as much money recovered as possible. Mr. Meyer stated that $50,000 has been received from their insurance company and they hope to garnish any future wages which the former employee may have, noting that this may be a challenge. Council Member Kelly noted that this has become a $150,000 lesson. April 9, 2007 Community and economic ©evelopment Committee Meeting Minutes Page 5 Council Member White thanked Council Member Dieter and the Committee for "pulling the meeting together". She stated that she believes that Board oversight is critical and that there must be a proper check in balance in place. She hopes that the questions presented to DTSB will be addressed so that the Council may have further discussion; and thanked Mr. Meyer far coming to the committee meeting. Council Member Kirsits questioned the process in giving out contracts such as that for the ambassador program to an out-of-state company. He noted that he believes that many of those services have been done in the past by city personnel and believes that many of them could be done today. Mr. Meyer stated that they sent out for bids and that three (3) were received. He noted that the scope of services is substantially different, and that the Board made the final decision. Council Member Pfeifer stated that she agrees with much of what has been said by the Council Members, and that perhaps there needs to be another executive session of the Council. The Council needs more information to that adjustments can be made and so the Council can determine "what part we should play". She noted that she has seen many very positive changes in the downtown and is very appreciative of them. She noted that the community also enjoys such things as Art Beat and many are wondering if it will continue. The West Washington Neighborhood is in the downtown and she does not "want the baby thrown out with the bath water". Mr. Meyers stated that they are "getting hard pressed with vendors" Hating that TIF, voluntary BID money and capital budget monies have funded them in the past, Council Member Dieter stated that he does not want any misconception that the Common Council is against DTSB; rather the Council is in need of more information in light of the many questions which have been raised. The Council Attorney noted that the Council is unable to initiate an appropriation ordinance of this type. Council Member Kelly stated that he appreciates hearing what has happened, noting that it is vital that things happen downtown. Council Member White inquired about the time frame which DTSB has under their current funding and what contacts they have made with businesses. Mr, Meyer stated that Memorial Hospital has agreed to give $75,000 as their voluntary bid for this year, and that they are the biggest contributor. They should be able to operate until mid to late Summer. He noted that fetters have gone out to over 300 persons and that many individual meetings began last week. Common themes include: April 9, 2007 Community and Economic Development Committee Meeting Minutes Page 6 • Concern over how the embezzlement happened Suggestions for programs • DTSB role in business recruitment • How the downtown has improved • Concerns over the BID and revisiting the structure of it • Some did not believe that there was a need for such an organization while others gave support Dr. Varner stated that print to 2004 requests for the Form 990's were treated like they were for just a "closed society" but that they have always been public documents. He again requested a detailed budget. Mr. Meyer stated that he believes that the "city should provide some degree of oversight" and is happy to provide their business plan as well as the other requested documents. Council Member Kirsits asked for an organizational chart; job assignments and job descriptions so that it could be determined if city employees could provide some of these services. Mr. Meyer stated that Marco Mariani, Jitin Kain and two (2) other employees are their only employees, along with the contract for the ambassador program. Council Member Dieter thanked everyone for coming and welcomed receiving the requested information. There being no further business to come before the Committee, Council Member Dieter adjourned the meeting at 4:43 p.m. ~.. Respectfu y submid,~ `~ Counci Member Derek D. Dieter, Chairperson Community and Economic Development Committee Attachment