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HomeMy WebLinkAbout04-19-18 Community Investment x 1865 OFFICE OF THE CITY CLERK KAREEMAH N. FOWLER, CITY CLERK COMMUNITY INVESTMENT APRIL 19, 2018 5:00 P.M. Committee Members Present: Gavin Ferlic, Regina Williams-Preston, Oliver Davis Committee Members Absent: Sharon L. McBride Other Council Present: Tim Scott, Jo M. Broden, John Voorde, Karen White Other Council Absent: Dr. David Varner Others Present: Graham Sparks Presenters: Eric Horvath, Earl Wacker, Gary Foyle, Chris Brewer, Mayor Pete Buttigieg Agenda: Presentation of the AECOM South Shore Study results- AECOM Committee Chair Gavin Ferlic called to order the Community Investment Committee meeting at 5:00 p.m. He introduced members of the Committee and proceeded to give the floor to the presenters. Presentation of the AECOM South Shore Study results-AECOM Eric Horvath,Director of Public Works with offices on the 13th floor of the County-City Building, stated, Good evening Council. Thank you for this opportunity to speak to you toni t about the South Bend Station Alternatives Study that we put together. I will make a couple introductory comments and then hand it over to AECOM who will make some comments on the result of the study we put together. Finally, the Mayor will have a couple comments and we will have time for questions at the end of that. I also want to note, on the web, after the meeting,we will have the full report. So if you were worried about something you saw and you didn't quite get it, don't worry, we will have the full report including the technical memos on the web after the meeting. Mr. Horvath continued, So I think you all are familiar with the goal of South Shore and that is to provide high speed transit from South Bend to Chicago. Looking at this, they are looking at opportunities to do a couple of things but primarily they look to shorten that travel time from South Bend to Chicago. In addition to that, they had three (3) main goals. One (1) was to expand the opportunities for meeting the growing ridership need. Second was to reduce travel time and third was to improve the safety. In the existing station on the east side of the airport, it has a number of at-grade crossings and it takes quite a bit of time to get through town. So they looked at moving the station to the West Side of the airport. That would meet a lot of the needs in terms of reducing INTEGRITY) SERVICES ACCESSIBILITY JENNUER M.COFFMAN BLANCA L.TMADO JOSEm R MOI.NAR CHIEF DEPUTYJDIREamR OF OPERATIONS DEPITFY/Dnm=R OF POLIOY ORDINANCE VIOLATION CLERK EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1 227 W.Jefferson Blvd.I South Bend,Indiana 466011 p 574.235.92211 f 574.235.9173 1 www.southbendin.gov ®CITY OF SOUTH BEND I OFFICE OF THE CLERK that time to get to Chicago, decreasing the at-grade crossings and increasing the level of safety. It met a lot of the requirements they were looking for in their perks and needs statement.At the same time, we were getting a lot of feedback from the Council and stakeholders. We were recognizing that this was such a major decision with such significant impacts to the City. These were long term impacts. We thought it was important to ask NICTD to pause the study they were during and expand that to take a more holistic approach to this to look at other things. That included, number one (1), other potential sites. We looked at the feasibility of four (4) additional station locations and those were the Chocolate Cafe site,Honeywell,Amtrak and Downtown. We took a much more comprehensive look at each one (1) of those sites. Not only did we look at the cost but we also, and very importantly, looked at the benefits that each of those provided. In addition to looking at travel time, which was really important to us, we looked at ridership, safety, and we added some other things like economic development opportunities and socioeconomic impacts. This gives us a more comprehensive look at what each one (1) of these proposed areas will do for the City long term. Mr. Horvath went on, As we were looking to do this, AECOM came to mind as a partner because they are a recognized world leader in rail, both in planning and construction. They have done a lot of work for the South Shore line. There are three (3) members of the AECOM Report Team here tonight to speak to the findings. We are very fortunate to have them here. The first one (1) is Earl Wacker. Earl is the lead in AECOM's Railroad Practice for the Americas. He has over forty-five (45) years of experience in the railroad industry. Along with him is Gary Foyle. Gary has over forty-three (43) years of experience in railroads as a Project Manager for AECOM and a Planning Director at Chicago Metro as well. Finally is Chris Brewer. Chris is one (1) of the leaders in AECOM's Economics Division. So I think this study was really unique as it required specialized expertise. We are very pleased with the results we got. They brought a level of experience, expertise and diligence to the study and I would like them to give the report of the study. Committeemember Oliver Davis interrupted, For the report they are about to give, do we have a copy you can send to us or email us so we can look at that as they go? Mr.Horvath replied,Yes,absolutely.I can email you a full copy as well as all the technical memos. In addition, again,that will be on our website following this meeting. Committeemember Davis interjected, Can we get it now? Mr. Horvath replied, We will email that to you. Committeemember Davis stated,I would appreciate that because that way we can follow back and forth without asking all the questions. That is what I was hoping that we would have gotten before but that is ok. Earl Wacker, Vice President of US Railroads for AECOM with offices located at 100 South Wacker Drive, Chicago,IL, stated, One(1)thing I would like to point out is that all three (3) of us are local to the Midwest. We are all out of the Chicago office. We are very familiar working with Metro, South Shore and all the communities in and around Chicago. This is kind of a close to home project to all of us.About four(4)years ago, South Shore started taking a very aggressive approach to reducing travel times to Chicago. Not just for South Bend but for their entire service area. One (1) of the biggest things they did was the double track project. That is currently finishing up the EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1 227 W.Jefferson Bvld I South Bend,Indiana 466011 p 574.235.9221 If 574.235.9173 1 TfD 574.235.5567 I www.southbendin.gov 2 ®CITY OF SOUTH BEND I OFFICE OF THE CLERK the best tool to develop these forecasts through the year 2040 for each of the sites. One (1) of the other inputs beside the actual running time was the socioeconomic forecast that we received from the MPO. We also got transit information which was also one (1) of the inputs as well as traffic volumes. Again, comparable to what I just said about the travel times, there was not a significant difference in ridership. The Chocolate Factory, as we've been calling it, had the lowest but really given the estimation tool, these are all within a fairly close range of ridership. That is not a distinguishing factor in recommending a site. Mr. Foyle went on, Onto the cost, we also fell back on another tool the FTA encourages to use. It is just a way to organize and format capital costs.This is actually a summary. Within each of those nine (9) categories is a detailed subset of identified elements that would be required for each of the four(4) sites. Actually,there were five (5) sites because we also did the exercise for the South Shore proposed station at the airport. The one (1)thing I would point to is that the challenge with an exercise like this of estimated capital costs, before you've done any engineering design work, it is somewhat difficult. We are basically at the planning level and it is very conceptual. We hope to identify what the requirements would be. Some of the sites, as Earl mentioned the Honeywell site, are straightforward. Unallocated contingency is basically to address the unknown factors. Committee Chair Ferlic left the meeting at 5:14 p.m. Council President Tim Scott presided over the remainder of the meeting. Mr. Foyle continued, In the case of the Downtown, that is probably the most challenging and is the most unknown. We carried a much higher contingency factor for that alternative compared to the others. The bottom row portrayed in the graph are the respective contingency values. Downtown was the most expensive as the infrastructure would be more involved and there would be many more unknowns in how you would deal with it. We definitely did come away with the conclusion,however,that it was feasible,but it would be the most costly. The Honeywell site was identified as being the least costly. Again, the track is already in place. We did assume that the track connecting the Airport line to the Honeywell site would be replaced. But we also did an estimate coming up with a range so there was one (1) option to not upgrade the track. We also looked at other ways of developing a low range of capital costs and that included smaller parking. We developed the ridership forecasts through 2040 and we developed an interim forecast year of 2030 and what the parking requirements would be at that point. That would allow you to start with a smaller footprint of parking capacity. Mr. Foyle went on, We also factored in the smallest station building. We assumed the cost of the station depot itself to be approximately $4 million and it was built into the original estimates. In terms of coming up with the range, we assumed half of that at $2 million. So in the case of the airport, there would not be a station building itself and there would not be parking added. That is why there is not a low-end range to that.The parking and the indoor waiting area is already created. I'll finish up with the O&M costs. This is associated with the operation and maintenance of the building itself as well as parking, snow removal, janitorial services and security. What we concluded is that the cost for the three(3)standalone station sites,those being Honeywell,Amtrak and Downtown,wouldn't vary much between each other. But in the case of the Chocolate Factory and the airport station where the commuter rail operation would be embedded into the other facility,there would be some savings and that is primarily in the security area. EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227 W.Jefferson Bvld I South Bend,Indiana 466011 p 574.235.9221 f 574.235.9173I1TD574.235.55671www.southbendin.gov 4 CITY OF SOUTH BEND I OFFICE OF THE CLERK environmental impact phase and will be going into the design and engineering phase fairly soon. With that, that gives South Bend the opportunity to have a much more aggressive travel time to Downtown Chicago. That is what got us to the point of looking at different options for a station location in South Bend. We were tasked with looking at these four(4) sites. Chocolate Factory, is just our term for it, the Honeywell site, the Amtrack site and a Downtown site near where the old Union Station was located are those four(4) sites. Mr. Wacker continued, The first task was to see if these were even feasible. It was important to make sure, before we started studying any site, that we can really do it. We had to ask if we could build something to get to these locations. The first location was the Chocolate Factory site. It was one (1) of the more challenging ones because there is no railroad going up toward the Chocolate Factory but it is a great field site. It is fairly hilly and there are some challenges there but we could certainly physically get there. The Honeywell site is on the route of the current line that goes to the airport. That quickly became the simplest of the four (4) sites as it is certainly feasible to just relocate the station closer.The Amtrak site is a little more complex. South Shore used to run toward that location and they still own some property there but there is a freight operation there. There I would be a little bit of work to get the freight moved out of the way so that passenger trains would be able to get there. And then of course, the last and most challenging would to be to get Downtown. It is feasible but it is not easy. It would require quite a bit of work and infrastructure. When Gary gets to talking about costs, you will see some of the reason for the higher costs is because there are more unknown variables to the Downtown location, but we can build and get there. Committeemember Davis interjected, Have they been emailed to us yet? Council President Tim Scott confirmed, Yes, I got it. Gary Foyle, Project Manager for AECOM with offices located at 100 South Wacker Drive, Chicago, IL stated Thank you, Earl. Good afternoon. We are going to be covering four 4 items g > Y g g g ( ) and they will be the travel time estimation,the ridership forecasting,the capital costs and then the operation and maintenance each of the four (4) sites. The starting points for the estimates of the travel times were the schedules that NICTD has created for their double track project. The whole focus of that initiative was to reduce the running time from points east on the railroad. The basic outcome was that there was not a substantial difference in running time from each of the sites. Each of the sites have different distances but given the curvature of the track and the speeds,in the end,the travel times were about the same. This (referencing the presentation available in the City Clerk's Office as well as the City of South Bend website)represents the fastest time and that range was from eighty-two (82) to eighty-four (84) minutes. They are all very comparable and that is compared to the current situation today. The fastest train on the South Shore from the South Bend Airport Station is one hundred and fifteen(115) minutes. Mr. Foyle continued,As part of this exercise,we developed the full schedules for each of the sites. That was important input into the modeling process. This is the result of the modeling process. We used a Federal Transit Administration (FTA) tool that they created called STOPS. I forgot what the acronym stands for but it is very much a standard tool that FTA encourages sponsors of federally funded projects to use. It is not clear this project would be federally funded but it seemed like an appropriate tool. It has been used for the work we have done for NICTD so it seemed like EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227W Jefferson Bvld I South Bend,Indiana 466011 p 574.235.9221 If574.235.91731TM574.235.5567Iwww.southbendin.gov 3 � ,,CITY OF SOUTH BEND I OFFICE OF THE CLERK Chris Brewer,Vice President of Economics for AECOM with offices located at 100 South Wacker Drive, Chicago, IL, stated, Thank you, Gary. For the sake of disclosure, I've only been doing this for about twenty-five (25) years. I am an economist and I usually find I have to apologize for that so, again, full disclosure. My job in this effort is to place the different stations into a real estate framework. That is obviously not for the faint of heart. Trying to understand and predict what could happen in the future is always tricky. Just thinking about the last six (6) months we've had significant changes in our expectations for future inflation. I saw an article that said we might have four percent (4%) interest rates in two (2) years which would be a significant change from even nine(9)months ago. We have a federal budget for the first time in a while and we have new federal policies that have significantly altered how we generate taxes. So again,there are a lot of things to think about in terms of how we understand real estate. I'm responsible for figuring out what could happen, where it can and can't happen, and trying to put all of that into context related to how the different station locations could trigger ancillary real estate potential over the next five (5) to ten (10) years. Mr. Brewer continued, Our approach, ultimately, was as straightforward as possible. Part of it is simply documenting the land, the land use, the zoning of it and how much vacant land there is. The focus of the study was on the potential for new construction. We acknowledge that at many of these station locations we could also see adaptive reuse and renovation. For the sake of this study we focused explicitly on the potential for new construction. We tried to keep it more limited in focus in terms of opportunities. Obviously for these different station locations,there could be a renovation component which would be in addition to what we are talking about in the study. What we are trying to do ultimately though is, to a certain extent, predict the future. We are trying to understand a sustainable level of future development and then understand each station location's ability to capture a share of that market over time. We will explain that process in detail but it ties in ultimately to step number one (1) which is figuring out the inventory of vacant land we have around each site. The full report has an immense amount of detail about the exact land use conditions and real estate conditions around each station location. Mr. Brewer went on, We need to come up with a ten (10) year estimate of what could play out around each of these stations. Obviously we are going to have four(4) different station locations. Each one (1) of them is on a different real estate trajectory at this point so we are trying to put that into context. We are trying to understand, ultimately, based on how that development unfolds, what sort of tax proceeds we might expect. We try to figure out the economic impact of all that new construction, what that fiscal benefit might be and how that correlates with the cost of the station. And then again, the goal is to put this all in perspective. We need to understand the tradeoffs, the costs and benefits of each of the station locations to give that information to you. I would like to stress that today our goal is not to set policy, but to inform and continue the conversation about how we would anticipate the impact of these stations in the altering markets that influence the future trajectory for growth in the region. Mr. Brewer continued, So again,being the economist,I always have to try and put everything into perspective. I think part of this is understanding the basic function of growth. We need to understand how fast we are adding people and jobs. This post-recession environment has seen significant changes in where jobs are happening and not happening. Strong growth in jobs tend to have a very specific correlation in demand, for say, apartments. So what we know in the Midwest EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1 227 W.Jefferson Bvld South Bend,Indiana 466011 p 574.235.9221 if 574.235.9173 I TD 574.235.5567 l www.southbendin.gov 5 ®CITY OF SOUTH BEND I OFFICE OF THE CLERK the trend is that we are not building houses anywhere near the rate that we were pre-recession. In fact, we have a gap opening up where we need to start building more housing. But fundamentally for South Bend there is this reality of a slower pace of aggregate population growth since the recession. This has an influence on how conservative or aggressive we are going to be. That is something we have to keep in mind as well as where we are seeing the activity. We always have to think about the impact of Notre Dame. We always have to think about college students and game day impacts. We know a significant number of people ride the train to take part in the game day experience. We need to know how that comes into play. We need to bring all these pieces into play. Mr. Foyle went on, One (1) of the things I always like to do is put things into context. So for me, I always like to understand,from retail,office and industrial markets,how quickly we are building and occupying space as well as adding jobs. All things being equal, I would love a world where I am adding jobs and occupying space faster than I am adding new construction. That would point to healthy markets. Since 2010,we've been adding our ability to occupy space a lot faster than we are building it,which speaks to a very healthy market. Since 2010,unsurprisingly, office has been a weak sector for the Midwest. It is a lot harder to build an office building than it used to be. We are now having less office space per worker. It used to be around two hundred and fifty (250) square feet and now it is down to about one hundred and fifty(150). We have significantly reduced our demand for office space across the board. This has been a big change. Retail is, without a doubt, the most complex sector. I was just looking at a mall yesterday that had a Carson's, Burlington Coat Factory and a Sears, and it is in trouble. We have three of those stores that are in bankruptcy or at least soon will be. We are going to see big changes. I think the retail conversation is something to keep in mind as we are buying retail differently from what we used to. That has to be factored into this analysis. Mr. Foyle continued, One (1) of the things that was important to me was to put the reduced travel time into Downtown Chicago into context. I think this is where working closely with the transportation team to be clear about the opportunity of getting an under ninety (90) minute commute time was critically important. If you look at the Metro System that connects Downtown Y p Y Y Chicago to a very large multi-county region, it is not unrealistic to talk about a segment of people who would live here and work Downtown. Again, it is not a huge number, but it is a realistic conversation that I don't think we can have today because of the travel time. That gets you into a conversation about those people moving here and living here. What we wanted to do was try to find a rational framework to have a conversation about the amount of development we could anticipate in these different locations. For Honeywell, we acknowledged the reality of two (2) different trajectories. One (1) was more of an industrial trajectory and the other was more of a Mixed-Use trajectory. I think one (1) of the things we worked closely with the City on was how much vacant industrial land we have as well as the extent to which we would explicitly choose to preserve the industrial development at Honeywell. I think it is,perhaps,the fifth largest contiguous piece of industrial land in the City. So again, over time, that could be an important reason to consider continued industrial use versus over a higher value residential use. We are ultimately trying to understand the existing use and then obviously the value of that space. There is a category in here called industrial which includes flex and that is office-showroom, so, fifty percent (50%) office and fifty percent(50%)warehouse. EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227 W.Jefferson BvldI South Bend,Indiana 46601Ip574.235.9221If574.235.9173ITM574.235.5567 lwww.southbendin.gov 6 ®CITY OF SOUTH BEND I OFFICE OF THE CLERK Mr. Foyle went on, What this model is trying to do is correlate expectations for density with other certain details of things like South Bend's Consent Decree. This means we have to think about the preservation of storm water and that impacts our calculations to a certain extent. So again,the goal today is not to set policy but to start thinking about the shares of development we might expect to unfold at each of the locations and the amount of space we might want to use, all in hope to give us a framework for our conversation. Thinking about these sites, they are all very different. Particularly, the site at the airport and the Chocolate Factory site included more of a retail commercial conversation and not an industrial conversation. We were more concerned about the idea of residential development in proximity to an airport as a general idea. What you see in all of these assumptions is the extent to which we add residential development. That would obviously be a higher value real estate use compared to industrial, simply on a square foot basis. That factor alone starts to influence the values we are generating from these different sites as well as the densities we are going to achieve at these different sites. Mr. Foyle continued, Behind these tables (referencing the presentation) is a tremendous amount of information. I think one (1) of the things we looked at very carefully between Honeywell and Amtrak was to understand the differences in real estate value. When we look at Honeywell, there is at least a sense that real estate values have stabilized. Whereas at Amtrak there is more concern about real estate values as they may have not stabilized yet. They are generally slightly lower as well. We are also looking at the amount of land we have around each of these locations. What you see in the presentation is just a set of assumptions that are allowing us to have a conversation about how we might understand and program the square footage. You will see this notion of how we try to allocate demand. Downtown is six hundred and seventy (670) dwelling units, Amtrak is two hundred and seventy (270), Honeywell Mixed-Use is four hundred and seventy (470), and Honeywell Industrial is two hundred and twenty(220).Again,obviously,Downtown,we can build a dense building that we can't build at other locations. That is our reality. I think one (1) of the assumptions we did make in this program is we felt that the pure office conversation would only happen Downtown whereas we could have a flex office location at any of the other station locations. That is also an important detail. Obviously it is cheaper to build flex office than it is to build just office. Mr. Foyle went on, Again, we are trying to get to this notion of real estate built value. When we think about these as reality, when we look at Downtown, we can build, whether it is an apartment or condominium project. There are a number of projects right now that are talking about$200,000 - $400,000 homes. The developer can look at that program and can move forward. I think there are other station locations where land may be at a premium that may influence our judgment over whether or not that is a realistic outcome. It is not to say a developer wouldn't try. We are trying to find a realistic starting point for the conversation. We are getting at this notion of our values and trying to get the notion of the square footage. So again for Honeywell and Chocolate,we can start to talk about significant chunks of industrial space.The main thing with industrial space these days is we're building 200,000 — 400,000 square foot buildings. Some of these internet fulfillment centers may be up to 500,000 square feet. That is a very different land paradigm than what we are talking about for retail or apartments. So they are different land use conversations. Mr. Foyle continued, These values are trying to reflect what a realistic outcome could be over the next ten (10) years. Obviously things like inflation come into play, the reality of what will likely EXCELLENCE I ACCOUNTABILITY ( INNOVATION I INCLUSION ( EMPOWERMENT 455 County-City Building 1227W Jefferson Bvld I South Bend,Indiana 466011 p 574.235.9221 If574.235.91731TM574.235.5567lwww.southbendin.gov 7 CITY OF SOUTH BEND I OFFICE OF THE CLERK be another economic downturn at some point. And then, ultimately, we want to take that information and put it into a question of economic impact. Essentially we want to take this new value of construction, factoring some reasonable assumptions for inflation, and that will give us new built value over time. What you see here is this notion of the anticipated capital costs for our different station locations relative to our expectations of what could be the value of new real estate development. We also assess the resulting possible tax proceeds that could flow over a ten (10) year period from these different locations. There are a few things I think that are important to comment on. There is a large amount of vacant land around the airport that is subject to FAA guidance in terms of land use. There is not as much vacant land around the airport as one would think. Our laser focus here is a quarter to half mile radius of study area around each station location. The beauty with Downtown, of course, is we don't need a very large parcel to build a significant amount of housing. Again, it is a very different density conversation. The key with Downtown versus Honeywell, the Downtown station is a much more expensive station to build. So while we see a significant premium in real estate value, it is a significantly more expensive station. That is why we get to a conversation about Honeywell being less expensive to build with relevant real estate development. We have had people say that our assumptions for Honeywell might be a little bit optimistic so I think that is also part of the conversation as well. Mr. Foyle went on, To summarize these things, for Amtrak specifically, the home values are modest. That is not a bad thing it is just how it is. I think getting to our airport station,there is not necessarily a lot of land available in immediate proximity. We would be losing parking as well. The FAA is one (1) of those unique federal agencies that actually cares what kind of trees you plant next to an airport. Those are trees that don't encourage birds. Development around airports is not a casual thing and we want to think about that. We tried to summarize all the variables to understand our expectations. This is all based on facts on the ground as we see it. There is a decision to make regarding an industrial trajectory versus a retail or mixed-use trajectory. They offer different implications for value.Again,we need to understand the comparison to alternatives from a cost standpoint. We need to evaluate these different scenarios from a cost standpoint and what they mean. There are realities of different assumptions for each one (1) in terms of private owner developer plans. There is a lot of other adjacent land needing to be unlocked for each of these station locations. I Council President Scott opened the floor to public comment from the Administration. Mayor Pete Buttigieg,Mayor of the City of South Bend with offices on the 14th floor of the County- City Building, stated, First of all, I would like to thank the team from AECOM for all the analysis that went into this. The full report and technical documentation has been circulated and I think it has been made available online too. This is the first time I've seen it in this form but we have been going back and forth with the team a lot. I want to own up to the fact of having publicly said we had hoped to see this in February. One (1) of the main reasons that it is a few weeks later than that is because we kept asking questions and they had to continue going back to the study to double check things with their data.I think it was worth it and would like to thank the Council for weighing in on the issue because really, it was out of a desire to be responsive to the Council Resolution that we ask for this study. Obviously there is a ton of information here and, I think as a community,we will all be taking it in for a little while. I would like to share some of my main takeaways that I see in it before others from the community share theirs. EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1 227 W.Jefferson Bvld I South Bend,Indiana 466011 p 574.235.9221 If 574.235.9173 1 TTD 574.235.55671 www.southbendin.gov 8 ®CITY OF SOUTH BEND I OFFICE OF THE CLERK Mayor Buttigieg continued, The first thing that I found surprising, but important, is that there is relatively little variations among the travel time in the different options. That is not really something one would expect. You would think the further west the station, the quicker the route would be. But really, all of them were within a couple of minutes of each other. That was an interesting finding. The second thing that I think is pretty clear from the data is that the rerouted airport option is more expensive than we originally expected and may also have a little bit less economic development potential than I would have guessed before we got this analysis back. The third is that this study validates that Downtown appears to be the highest reward but also the highest cost option. There is a lot of potential around it but we are also looking at north of$100 million. That is something we should think about from a long term planning perspective in the sense that while on one (1) hand we don't have that kind of funding available, on the other hand, it is not a preposterous figure if we were to make it a major and essential community priority. The fourth interesting finding is that the Honeywell option could be done for quite a bit less. A lot depends on whether the track is altered or whether we are just talking about adding a station. Of course a lot also depends on what features the station ought to have. As I looked at the data, it seemed there be what one might describe as a skinny option that might make sense. The fifth thing that comes out in some of the memos is that there are some differences in the speed of the ability to complete the different options because they involve different environmental impacts. That is something else to consider. I think most of us are very eager to start capturing the economic benefit of that ninety (90) minute ride as quickly as possible but some options can be delivered more quickly than others and that is a little bit separate from the question of cost. Those are some of my initial reactions with this preliminary data. I also want to clarify, as the consultant team said,their role was not to say which option was the answer, but to provide more information than we had in order for us to make an informed decision. I know this is a decision that, obviously, the Administration needs come to through dialogue with other stakeholders,especially NICTD. It has to make sense for us and for them and we are interested and eager to get the Council's and public's opinion on this. Thank you to everybody that got us to this point. Councilmember Karen White left the meeting at 5:41 p.m. Council President Scott stated, I would like to recognize Vice President Oliver Davis for leading the charge on the resolution that this Council brought forth as well as the Administration for taking on this task to look at the different options. He then opened the floor to questions and comments from the Committee and Council Members. Councilmember John Voorde stated, This is certainly a worth-while exercise. There is a lot to consider in the short and long term. There is also a lot to consider in terms of economic feasibility and impact. I don't think we will end up with paralysis by analysis but I think this is necessary. I'm glad the Administration took the lead in doing this. Committeemember Davis stated,Thank you,President Scott,for your comments. I would also like to thank the other sponsors, Councilmembers Voorde, Williams-Preston and White. I would also like to thank our Council for encouraging this whole effort of us looking at a study. I would like to thank Mayor Pete, Eric Horvath and Jitin Kain. We all came together to put it together which I really appreciate. I would like to thank the members of Ardmore and a lot of other people here who really came together to says let's be pro-transit and pro-housing at the same time. I would like EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1 227 W.Jefferson Bvld I South Bend,Indiana 46601 p 574.235.9221 lf574.235.9173 ITTD574.235.5567 1www.southbendin.gov 9 ®CITY OF SOUTH BEND I OFFICE OF THE CLERK to ask in terms of some of the questions,number one(1), Downtown was the station q � ( )� placed, specifically? I put all my thoughts about Downtown in the same kind of question. Where are you saying Downtown? The Mayor just alluded to this, in terms of travel time, when I saw it, the something of getting off at Honeywell and then something getting off at Downtown almost having the same exact time stood out to me. I need some more explanation on how that is possible for that so I can explain that to people a little bit better. Secondly, what is your version of Downtown and how far for that? Another thing,just for the record, I know you looked at the Amtrak site. Was there any consideration for the TRANSPO site in terms of the bus terminal Downtown?Was there an consideration to that?Because I know in the Gar area where South Shore gets off, all of that Y Y g is tied into almost the same kind of building? Was there any consideration? Because South Shore, in Gary, when you get off at that stop, it gives off that sort of thing. So was that the target area or did you even look at that or is that possible? Those are more first initial thoughts. Mr. Wacker replied, You asked a lot of questions and I will try to remember. First,the Downtown site was originally looked at to be Union Station. We wanted to see if we could get to Union Station. That doesn't look feasible anymore because of the infrastructure built on the vacant property that was railroad property at one (1) time. We did look at the TRANSPO site and it gets a little more complicated, but, that is not necessarily infeasible. The location we selected was just north of Union Station,between Union Station and the baseball field. It is now a City street named South Street. That seemed to be the most logical location to have a platform and train come into. It is very close to the TRANSPO site but it is not within the TRANSPO site. Committeemember Davis asked, So you're looking still near the ballpark but right up there from that standpoint? Mr. Wacker replied, Yes, we are looking at the street itself, either a portion or all of the street for the tracks and the platform. Committeemember Davis interjected, And you're still saying that if you did that, the time would be the same? Mr. Wacker replied, To get Downtown is a little over a mile further. If the tracks are updated and the South Shore line is running seventy (70) miles an hour, we are talking one (1) minute difference. That is reflected but, again, our range was eighty-two (82)to eighty-four(84)minutes. Will it take a little longer to get Downtown as opposed to the Honeywell site? Yes, but it is not more than two (2) minutes. From our perspective it is simply a rounding error as far as trying to get Downtown within ninety minutes. Committeemember Davis interjected,What's that stoplight you get to right before you get to South Bend? Mr. Wacker replied, Hudson Lake. Committeemember Davis continued, So you're saying from Hudson Lake, that is the last stop, it would go straight into Downtown with no stops? Mr. Wacker replied, Yes, absolutely. EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227W.Jefferson Bvld South Bend,Indiana 466011 p 574.235.9221 If 574.235.9173 1 TTD574.235.5567 I www.southbendin.gov 10 ®CITY OF SOUTH BEND I OFFICE OF THE CLERK Committeemember Davis went on, So if you look at it from that, at seventy (70) miles an hour, that is pretty much the same concept of doing it from Hudson Lake? The reason it is a little bit different is, and I can see it in my head, but I just want to talk it out because you realize we all drive it. When we drive it we have the stoplights and everything else and potholes so we have to put our brain into our transit mode of train and then, from that standpoint, that makes the two (2) minutes possible from that standpoint. Mr. Wacker replied, Absolutely. Mr. Brewer stated, Each station location had a quarter and half mile ring drawn around them. So for Downtown,this means half of the area is south of the station which means it is a very industrial flavor and the north side of that ring pulls in a large portion of Downtown. The other station locations have grade crossings,too. The ability to get across what is, in fact,already a busy freight corridor starts to influence the extent of what will happen in those areas. Committeemember Davis asked, When you looked at the economic impact with the possibility of a few of the sites opening sooner, did that affect the numbers? Did you put that in your analysis? Mr. Brewer replied, A fair amount of judgment went into those numbers. Honeywell could potentially happen one (1) to two (2) years faster than Downtown, in theory. From a real estate standpoint, there is an equal way of the extent to which a developer acting on their own without incentives can instantly pursue a project and make it happen.Those values are not to a point where it is a clear-cut opportunity so one (1) of the things we talked about was it being vacant land and asked what the best use for that land will be long term. There is an argument that it could move forward relatively quickly from a Mixed-Use standpoint. We are trying to balance this post- recession world. There are few fewer developers than there were in 2007. Pre-recession, the average developer knew exactly what they were doing. This is a different world now and we are trying to understand and predict what our development community will do in the next two (2) and three(3)years. That is part of the excitement of this. I think we came up with reasonable outcomes. Honeywell might be able to move forward a little more quickly but again, from a density standpoint, we could build more housing on smaller parcels and potentially have a greater effect Downtown with a taller building. Committeemember Davis then stated, With the security issue, I know there have been people in the media saying there are security issues. We you configured a place and set it up,what were your thoughts regarding security, safety and how did that factor into your thoughts of putting this together? Mr. Wacker replied, Security came into play in the O&M costs. When we spoke with South Shore and NICTD,they told us there would have to be a certain level of their security at the stand alone sites. Those sites are the Honeywell, Amtrak and Downtown. The Chocolate Factory and the airport sites were assumed there is already some security there. It didn't play into our costs other than O&M costs and it didn't have any influence on ridership. Most of that is because NICTD suggested we needed extra security and they provided the numbers for what it would cost. One(1) thing I wanted to point out,too, in regard to the environmental action required for these sites. The Honeywell site is by far the easiest as it is on the existing line. There would probably be minimal environmental documentation required and could go to construction the fastest. Downtown and EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227 W.Jefferson Bvld I South Bend,Indiana 466011 p 574.235.9221 If 574.235.9173 1 TM574.235.5567 I www.southbendin.gov 11 ®CITY OF SOUTH BEND I OFFICE OF THE CLERK the Chocolate Factory sites would probably require a complete environmental impact statement but it wouldn't take less than three (3) years for that. There is quite a big difference between the shortest and longest amount of time before you can get to construction. Committeemember Regina Williams-Preston stated Around the Honeywell site there were some environmental issues with regard to contamination back in the day. Did that come up? Mr. Brewer stated We had a conversation with staff about environmental conditions. The short answer to that is that there is an expectation that there are some environmental conditions present in that area that will have to be addressed. I would not say the City was overly nervous of those conditions but I think they are aware of the reality that these are old industrial sites.The assumption made was that we wouldn't be able to quantify the likely impact from the remediation standpoint. We talked about the social justice component of a brownfield development as that site would move forward. Mr. Foyle stated, We did have an allowance for remediation. It was not very scientific how we came up with it but we did want a reserve,just in case. Councilmember Jo M. Broden stated, I have a couple questions about process. You are looking at ten(10)year predictions on some of this. How much conversation have you had, at this point,with our developer community? Mr. Brewer replied, The critical starting point for us was as much fact-based as possible. We wanted to start with as much of a detailed inventory of land that could be developed to understand the framework of our conversation. We wanted to have a clear understanding of the zoning. We wanted to find the clear path to transactions and that was a driver of those conversations. We had a number of conversations with City staff about what developments were and weren't happening. We tried to get an understanding of where in the City neighborhoods there has been acquiring and demolishing of properties. There are infill opportunities in different areas. This was definitely a study where we didn't want to cause concerns by only talking to one (1) or few developers. This was intended to be as fact-based as possible. Councilmember Broden followed up,Was there an allowance plugged in here in terms of capacity? You talked about how some of these sites have more of a pure readiness. Did you look at our capacity as a City to incentivize? Mr.Brewer replied,We are always sensitive to incentive conversations.It is a broader set of policy we didn't necessarily get to because it is by default, policy, and you may choose to do things by policy reasons. I think our intent was to understand which station areas have the most latent capacity for development to be built on. We also struggled with parking for each station. Our main intent was to find the most straightforward number of how much land there is and find the net acreage of what we are working with.The next step is to start hypothetically applying development to that vacant land. Councilmember Broden followed up, So your focus point was on new construction? Is there another process here to look at for redevelopment? Mr. Brewer replied, For Honeywell, Amtrak and Downtown, there is an opportunity for that. All things being equal, renovation should be a little more cost-effective than construction. That is not EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1 227 W.Jefferson Bvld I South Bend,Indiana 466011 p 574.235.9221 If 574.235.9173 TrD 574.235.5567 www.southbendin.gov 12 ®CITY OF SOUTH BEND I OFFICE OF THE CLERK always true if it is an historic building. We believe renovation may unlock a quicker development and it is a lot harder to envision new construction,to be honest. Councilmember Broden followed up, What about other communities that are eighty-two (82) to eighty-four(84)minutes outside of Downtown Chicago?What are those other communities doing? Mr. Brewer replied, That would be looking at parallel station locations that are on the edge of the metro system.They tend to be,fundamentally, a lot smaller. When you think about South Bend, it is a major city and is parallel to a Rockford, IL, which doesn't have metro access. It is a very interesting alternative for South Bend to have this. Councilmember Broden then asked, What about cargo development within your various alternatives? Mr. Brewer replied, The working assumption with all of these station locations is that we are talking about the movement of passengers. It was not unrealistic to have a conversation about cargo. I think the cargo conversation is tough because it would be a unique set of activities. It was not a driver of our conversation but it would start a different set of conversations that impact these sites. Councilmember Broden followed up, Obviously you were focused on City benefits. I guess I would like to know the broader picture in terms of County benefits. Mr. Brewer replied, It is clear today that a significant number of people take the train from this region and go to Chicago all the time.Enhanced travel time will only grow that market opportunity and I would not describe that opportunity as vast but it is a significant change from what you have today. Council President Scott stated, I don't have a ton of questions because the information is new. I think each one (1) of these sites will have some type of different economic impact. I'm glad this was unbiased and fact-based. I look forward to the environmental assessments and those will change the identity of development around those areas. I'm glad there are the economic impact numbers within this. I have a few questions for Eric Horvath. One (1) concern I have is the horn silencing of the train. If we bring South Shore into this mix that needs to be part of the study you have started. We need to continue looking at silent crossings and would like to know where we are at with that study as well. Councilmember Jo M. Broden left the meeting at 6:10 p.m. Council President Scott continued,I would also like to know the next steps in this process in regard to our City's Administration. We will probably have more meetings with more input but we need to digest this data. Mr. Horvath replied, We are moving forward with the continued study for the silencing of the horns on the West Side of town. We have established a meeting with both Norfolk Southern and CSX coming into town to look at the existing equipment that is in place now. That is one (1) of the first things we need to do to make sure we understand what has already been updated. As part of that, we will keep in mind the potential for a South Shore line going Downtown and the subsequent impact. We will move forward as the current conditions exist. In terms of next steps, EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227W.Jefferson BvldI South Bend,Indiana 46601 p574.235.92211f574.235.9173 TTD574.235.55671www•southbendin.gov 13 CITY OF SOUTH BEND I OFFICE OF THE CLERK we wanted to get these facts and because there is a lot here to look at, we want to digest this.Now we have some really good data to make the good decisions. Some of that will be figuring out what's best for the community long term. Ultimately, the Mayor is going to have to make a decision in conjunction with NICTD because they are the partner in this process. Although the City will be paying for the new station, NICTD will be operating it. Of course there are other stakeholder that will need to be part of that development. There will be more to come. Council President Scott asked, Was there any planning of phases to these plans? Mr. Wacker replied, Each station has a different route and I don't know you would be saving anything if you start anything elsewhere.I don't know what would be saved or lost doing an interim site. Committeemember Davis asked,When you look at these kind of studies,did you look at the impact of Chicago traffic coming to South Bend? A lot of the talk has been about us going to Chicago? What traffic would we generate West coming East? Mr. Foyle replied, From my experience in Metro, I realized the vast majority of the market they serve is taking people to jobs in the Downtown area. That is something the current South Shore service doesn't really do well with because of the travel time. The market would be primarily people going from here to do work in Chicago. It is mostly people going from here to Chicago. Committeemember Davis stated, The Administration said they would put forward $25 million from TIF. With all of this information, does our Administration see any potential changes with that? Mr. Horvath replied, Clearly it is much more difficult finding funding for a $100 million project as opposed to a$14 million or $25 million project. It will take a considerable amount of effort to make sure we have a number of pieces in place. First and foremost, there would probably have to be involvement from a number of entities outside of the City. There also may be other avenues of funding. It comes down to the decision. We would have to figure that out. Council President Scott opened the floor to comments from members of the public. Richard Collins, 55478 Moss Road, stated, I am with the Ardmore neighbors. First of all this was something we don't really see too often and that is the City government and citizens outside of the City, working together to get a good and profitable route without eliminating our homes. I want to thank all of you, very, very much for taking this on because this is not easy for you guys either. The Mayor is not here anymore but I want to thank him, too. Just listening to us is a marvelous thing. The citizens with a citizen government, and that is what you are. I can't thank you enough. Michael Harradon, 23289 Grove Street, stated, I want to thank the Council as well as the companies involved in doing the economic study. The one (1) thing I did not see as part of the economic study was an actual neighborhood study. I would like to know what each of these routes would do to neighborhoods individually. My favorite option was the Honeywell location. Recent activities in that area have called for more security in that area. Having that there will increase the traffic level and that will bring down the crime rate. I think that is something the City of South Bend needs to have. It is not just a want anymore. Thank you all for your time. EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227W.Jefferson Bvld I South Bend,Indiana 466011 p 574.235.9221 if574.235.9173 ITTD 574.235.5567 www.southbendin.gov 14 i CITY OF SOUTH BEND i OFFICE OF THE CLERK Marty Wolfson, 809 Park Avenue, stated, I would also like to thank the Council and the City Administration for supporting this study and for the people who did the study. This is excellent data and good information. I also want to thank the people from Ardmore that pushed this to the forefront.It seems to me after seeing all the data that we can take off the table the option of building out at the airport and through the Ardmore neighborhood. I am also an economist. We like numbers. Some numbers are not the same in the sense of economic possibilities. We need to do what we can to build up the economic opportunities on the West Side. Kevin Smith, 509 W. South Street, stated, I've been at Union Station since 1979. One (1) thing I challenge us to look at is the digital economy of the future. We are in a unique position.By chance, the South Shore runs by Cermak which is one(1)of the largest carrier hotels in the country.Having that digital interchange of digital and intellectual traffic would be extremely important. I've lost several large deals because they wanted to translocate their people from Downtown and the data center and we weren't able to do that efficiently. I know that would help immensely. Lastly, this is a quality of life issue. We are looking at 3,000 new technical jobs. I'm challenged with bringing people here. I just brought someone in from Ireland and, ironically they work four(4) days a week here and then they go to Chicago. Kenneth Anderson, 4207 Irish Hills, stated, I am a life-long South Bend resident. I love the South Shore. My first experience with South Shore was when I was eleven and would ride it from the Downtown station to my aunt in Michigan City.The Downtown station was at the northwest corner of LaSalle and Michigan. I want to bring up a topic that could be a tripping point. It is the experience of being an edge community person, living in Illinois, taking a ninety (90) minute trip to Downtown Chicago for their dream job. Their experience is different from a ninety(90)minute trip from South Bend to Downtown Chicago. They are radically different because of the Eastern Time zone. You do the math. The time zone of the body clock will be a challenge. I support the efforts of this Administration to take a fantastic asset and make it better, however, I don't think that can ever happen, vocationally. Recreationally, I'm all for the ninety (90) minute trip to Downtown Chicago. I can't see anybody doing it as part of their job. With no further business, Council President Scott adjourned the Community Investment Committee meeting at 6:27 p.m. Respectfully S mi ed, Reg n Wi iams-Preston,Vice Chairperson EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building I227W.Jefferson Bvld I South Bend,Indiana 466011p574.235.9221If574.235.9173IM574.235.5567 www.southbendin.gov 15 I