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HomeMy WebLinkAbout07-12-11 Redevelopment Commission Minutes SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING July 12, 2011 4:00 p.m. 227 West Jefferson Boulevard Presiding: Marcia I. Jones, President South Bend, Indiana 1. ROLL CALL Members Present: Ms. Marcia Jones, President Dr. David Varner, Vice President Ms. Nancy King, Secretary Mr. Greg Downes Ms. Stephanie Spivey Members Absent: Mr. Donald Alford Legal Counsel: Mr. Lawrence Meteiver, Esq. Redevelopment Staff Mr. Don Inks, Director Mrs. Cheryl Phipps, Recording Secretary Mr. David Relos, Economic Development Specialist Mr. Matthew Sikora, Economic Development Specialist Ms. Debrah Jennings, Property Manager Ms. Kathy Hahn, Loan Servicing Officer Ms. Liz Maradik, Economic Development Planner Others Present: Mr. Jeffrey Gibney, Executive Director Mr. Tom Price, Mayor's Office Ms. Tamara Nicholl-Smith, Director, DTSB Ms. Rita Kopala Mr. Marty Wolfson, Community Forum for Economic Dev Ms. Mo Miller, Prism Science Mr. Mark Seaman, Prism Science Ms. Ann Puzzello, Common Council Mr. Phil Byrd, South Bend Heritage Foundation Mr. Richard Nussbaum Ms. Marguerite Taylor, Northeast Neighborhood Organization Mr. Dale Devon Mr. Bill Stenz, Northeast Neighborhood Council President Mr. David Bartkus Mr. Charlie Thompson, St. Vincent DePaul Mr. David Divik Mr. Jordan Lantz Mr. Kyle Chamberlin South Bend Redevelopment Commission Regular Meeting—July 12, 2011 2. APPROVAL OF MINUTES A. Approval of Minutes of the Regular Meeting of Tuesday, June 28, 2011. Mr. Varner noted that at the June 28 meeting he had pointed out that a $755,648.42 claim from Larson-Danielson Const. Co., Inc, listed under the 430 Fund South Side Development TIF Area#I,for Coveleski Stadium renovations appeared to be listed under the wrong funding source. The correction has been made in the Claims List in the Minutes of the meeting, putting the claim under the 438 Fund Coveleski Bond. Upon a motion by Mr. Varner, seconded by Mr. COMMISSION APPROVED THE MINUTES OF THE Downes and unanimously carried, the Commission REGULAR MEETING OF TUESDAY,JUNE 28, approved the Minutes of the Regular Meeting of 2011 Tuesday, June 28, 2011. 3. APPROVAL OF CLAIMS Redevelopment Commission Claims submitted July 12, 2011 for approval. 324 AIRPORT AEDA D14A 5,928.00 Data Realty Site and adjacent lots South Bend Water Works 159.08 Sprinkler System 1000 Fellows Weaver Boos Consultants 25,106.87 Studebaker Area A Demolition Ph IV Blue Waters Group Inc 59,950.48 Ignition Park Marketing & Other Meridian Title Corporation 200.00 1531 Kemble/701 W Indiana Ave 622, 626 Lincoln Way E/620 Columbia/602 Richard J. Svobode 1,750.00 Carroll/628 Rush ARC 71.99 Mayflower Rd Ken Herceg &Associates 16,055.00 Sheridan Ave &Lincoln Way West Design Lehman&Lehman Inc 11,881.47 Voorde Park Master Plan Michaels Appraisal Svcs 1,775.00 Appraisal Fee Plews, Shadley Racher 9,353.61 Studebaker/Oliver Environmental Recovery Christopher B. Burke Engineering 1,786.75 Demo of 1503 / 1505 Prairie Ave DLZ 22,893.75 Studebaker Demo/Underground Pipe Abonmarche 1,400.00 LaSalle Square C &E Excavating 82,980.83 Trade Drive 2 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 3. APPROVAL OF CLAIMS (CONT.) 324 AIRPORT AEDA continued... Oliver Plow Mem/Oliver Trail/Oliver Industrial L. L. Geans Construction 113,327.25 Park Entry Sign DLZ 9,250.00 Olive Rd Extension Design Survey Oliver Trail System along Olive Plow D14A 1,855.00 Ct./Chapin/United Dr. 420 FUND TIF DISTRICT-SBCDA GENERAL Wightman Petrie 12,100.00 Western/Wayne Development Block ARC 157.85 Memorial Hospital Streetscape Indiana Michigan Power 181.75 LaSalle Hotel Schindler Elevator Corp 157.17 LaSalle Hotel Indiana Michigan Power 8.92 325 S Lafayette Blvd Indiana Michigan Power 267.92 329 Lafayette Martell Electric, LLC 2,876.44 Covelesk St Dugout Improvements Abonmarche 900.00 621 East Jefferson Streetscape Ziolkowski Construction 118,831.90 Coveleski Stadium Indiana Earth Inc. 10,835.40 Demo Fred's Transmission& Clutch 422 FUND WEST WASHINGTON DISTRICT Wightman Petrie 2,775.00 601-605 W Washington Ave/ 109-111 N Taylor 426 FUND SOUTH BEND CENTRAL MEDICAL DISTRICT Ancon Construction, Inc 266,226.12 Memorial Hospital Streetscapes Improvements Walsh&Kelly Inc 304,885.30 Memorial Hospital Streetscapes Improvements 438 FUND COVELESKI BOND Ziolkowski Construction 45,711.00 Coveleski Stadium $ 1,131,639.85 Upon a motion by Mr. Downes, seconded by Ms. King COMMISSION APPROVED THE CLAIMS and unanimously carried, the Commission approved the SUBMITTED JULY 12,2011,AND ORDERED THE Claims submitted July 12, 2011, and ordered checks to CHECKS TO BE RELEASED be released. 4. COMMUNICATIONS There were no Communications. THERE WERE NO COMMUNICATIONS 3 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 5. OLD BUSINESS A. Northeast Neighborhood Development Area (1) Continued Public Hearing on Resolution No. 2901 confirming a resolution amending the Development Plan for the Northeast Neighborhood Development Area and adopting the Northeast Neighborhood Design Guidelines. Mr. Inks noted that the Public Hearing on Resolution No. 2901 was scheduled for June 28, 2011, but it was discovered that the affected property owners and registered neighborhood associations had not been notified of the hearing. A letter was sent to affected property owners and registered neighborhood organizations on June 30, 2011, notifying them of the continued Public Hearing. The Public Hearing was opened for anyone who had come to speak, but continued to today's meeting so that any affected property owners or registered neighborhood organizations could have opportunity to speak. Ms. Jones asked if there was anyone who CONTINUED PUBLIC HEARING ON RESOLUTION wished to speak regarding Resolution No.2901. No. 2901. Mr. Bill Stenz, Northeast Neighborhood Council President, spoke and emphasized that Liz Maradik and the neighborhood is very much in favor of Resolution No. 2901. Ms. Marguerite Taylor, Vice President of the Northeast Neighborhood Organization and a member of the NNRO, spoke and mentioned the fact that this resolution has been in the works for years. The NNRO participated in the development of the guidelines. She 4 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 5. OLD BUSINESS (CONT.) A. Northeast Neighborhood Development Area (1) continued... encouraged the Commission to approve Resolution No. 2901. There was no one else who wished to speak. Ms. Jones closed the Public Hearing for whatever action the Commission wished to take. Mr. Varner questioned who would be administering the guidelines. Ms. Maradik responded that they are just the guidelines; there isn't any enforcement mechanism for them, so no one will be administering. The zoning overlay, based on the guidelines, will be administered by the Building Dept. Mr. Varner asked whether a person selling their old home would then be subject only to the old building codes. Or might a building permit withheld? Ms. Maradik responded that the guidelines would not prohibit a building permit from being issued. (2) Consideration of Resolution No. 2901. Upon a motion by Ms. King, seconded by COMMISSION APPROVED RESOLUTION No.2901 Mr. Downes and unanimously carried, the CONFIRMING A RESOLUTION AMENDING THE Commission approved Resolution No. 2901 DEVELOPMENT PLAN FOR THE NORTHEAST NEIGHBORHOOD DEVELOPMENT UREA, confirming a resolution amending the RESOLUTION No.2901 AND ADOPTING THE Development Plan for the Northeast NORTHEAST NEIGHBORHOOD DESIGN Neighborhood Development Area, GUIDELINES. Resolution No. 2901 and adopting the Northeast Neighborhood Design Guidelines. 5 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS A. Public Hearing (1) Public Hearing on Resolution No. 2875 confirming a resolution amending the Development Plan for the Airport Economic Development Area and adding one or more parcels to the List of Parcels to be Acquired. (3408 Ardmore Trail, St. Vincent DePaul Society). Mr. Inks noted that the public hearing file is complete, containing: (1) A copy of Resolution No. 2871 amending the Development Plan for the Airport Economic Development Area and adding one or more parcels to the List of Parcels to be Acquired; (2) a copy of Area Plan Commission Resolution No. 217-11 approving declaratory Resolutions No. 2688 and 2692 of the Redevelopment Commission; (3) a copy of South Bend Common Council Resolution No. 4110-11 approving declaratory Resolutions No. 2688 and 2692 of the Redevelopment Commission; (4) a copy of the Notice of Hearing; (5) a copy of Resolution No. 2875; (6) an affidavit from Jacki Krolczyk, Advertising Director of the South Bend Tribune, that the Notice of Hearing was published in that newspaper on June 17, 2011; (7) an affidavit from Richard Andrysiak, Classified Manager of the Tri- County News, that the Notice of Hearing was published in that newspaper on June 17, 2011; (8) a statement from David Relos that on August 10, 2010, affected property owners and registered neighborhood associations were sent notice of the Public Hearing; (9)the mail was checked prior to this meeting. As of 10:00 a.m., August 10, 2010 (for the record, the date of August 10, 6 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) A. Public Hearing (1) continued... 2010, was originally reported in the original memo to the Commission, however, Mr. Relos noted the correct date as June 15, 2011), there were_0 written remonstrances received related to Resolution No. 2875. Mr. Relos noted that Resolution No. 2875 is the final action in amending the Development Plan to add 3408 Ardmore Trail, the St. Vincent DePaul building in LaSalle Square, to the acquisition list. Ms. Jones asked if there was anyone who PUBLIC HEARING ON RESOLUTION No.2875 wished to speak regarding Resolution No. 2875. Seeing none, Ms. Jones closed the public portion and opened the Commission portion. (2) Consideration of Resolution No. 2875. Upon a motion by Mr. Downes, seconded by COMMISSION APPROVED ON RESOLUTION Ms. King and unanimously carried, the No. 2875 CONFIRMING A RESOLUTION AMENDING THE DEVELOPMENT PLAN FOR THE Commission approved On Resolution AIRPORT ECONOMIC DEVELOPMENT AREA AND No. 2875 confirming a resolution amending ADDING ONE OR MORE PARCELS TO THE LIST OF the Development Plan for the Airport PARCELS TO BE ACQUIRED. (3408 ARDMORE Economic Development Area and adding one TRAIL,ST.VINCENT DEPAUL BUILDING AT or more parcels to the List of Parcels to be LASALLE SQUARE). Acquired. (3408 Ardmore Trail, St. Vincent DePaul building at LaSalle Square). B. Receipt of Bids (1) Receipt of Bids for 502 W. Western Avenue in The South Bend Central Development Area (former Harmon Auto Glass). 7 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) B. Receipt of Bids (1) continued... Mr. Inks noted that one bid was received by the 3:00 p.m. deadline today. The bid was from Granger Community Church located in Granger, Indiana. It wants the building to increase its capacity to serve the community by providing opportunity for local individuals or businesses to participate in community development initiatives that create economic empowerment. Granger Community provides mentoring, coaching, and educational opportunities in an environment were inspiring entrepreneurs can grow, develop, and be mentored within a supportive entrepreneur-specific community. Mr. Inks recommends that the bid be referred to staff for review and recommendation to be considered at a future meeting. Upon a motion by Ms. King, seconded by COMMISSION ACKNOWLEDGED THE BID Mr. Downes and unanimously carried, the RECEIVED FROM GRANGER COMMUNITY Commission acknowledged the bid received CHURCH FOR 502 W.WESTERN AVENUE AND REFERRED IT TO STAFF FOR REVIEW AND from Granger Community Church for 502 W. RECOMMENDATION Western Avenue and referred it to staff for review and recommendation. (2) Receipt of Bids for 604 S. Scott Street in the Airport Economic Development Area (Millennium Environmental Inc.). Mr. Inks noted that no bids were received for NO BIDS WERE RECEIVED 604 S. Scott Street. Ms. Jones asked Mr. Inks for an explanation to the public as to what happens when there are no bids. Mr. Inks relayed that since there 8 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) B. Receipt of Bids (2) continued... are no bids, the city is in a 30-day waiting period before the Commission can entertain any offers for the property that don't meet the bid specifications. C. Tax Abatements (1) Resolution No. 2922 approving an application for real property tax deduction for property located at 1122 Notre Dame Avenue in the Northeast Neighborhood Development Area. (John and Jennifer Sejdinaj). Ms. Hahn reported that Dale DeVon intends to construct an approximate 3,000 square foot, single-family home at 1122 Notre Dame Avenue for John and Jennifer Sejdinaj. The home will have four bedrooms, 3 '/2 bathrooms, a partially finished basement, two-car garage, and a screened in porch. The project is part of the Notre Dame Avenue Housing Program and, as such, will follow the design specifications and standards required by that program. The cost of the home will be approximately $600,000. Total taxes to be abated during the five-year abatement period are estimated at $1,893.34. Total taxes to be paid during the five-year abatement period are estimated at $31,837.55. John and Jennifer Sejdinaj have not been granted any previous tax abatements. The property is properly zoned for the proposed project. The property is located in the 9 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) C. Tax Abatements (1) continued... Northeast Neighborhood Development Area, which is a Tax Incremental Allocation Area, but is not located in the Northeast Neighborhood's residential TIF area. Therefore, approval of the tax abatement petition by the South Bend Redevelopment Commission is required. The project qualifies for five years of residential tax abatement under the tax abatement ordinance. Ms. Hahn introduced Mr. DeVon for any further questions. Mr. Varner questioned whether Ron Gale was the previous property owner asked about whether the large lot was created by combining two lots. Mr. DeVon responded that Mr. Gale was the previous property owner and that the 99 ft. lot was just one lot. Upon a motion by Mr. Downes, seconded by COMMISSION APPROVED RESOLUTION No.2922 Mr. Varner and unanimously carried, the APPROVING AN APPLICATION FOR REAL Commission approved Resolution No. 2922 PROPERTY TAX DEDUCTION FOR PROPERTY LOCATED AT 1122 NOTRE DAME AVENUE IN THE approving an application for real property tax NORTHEAST NEIGHBORHOOD DEVELOPMENT deduction for property located at 1 122 Notre UREA. (JOHN AND JENNIFER SEJDINAJ). Dame Avenue in the Northeast Neighbor- hood Development Area. (John and Jennifer Sejdinaj). D. South Bend Central Development Area (1) Policy for Early Lease Termination. Mr. Inks noted that D(1) and D(2) are the same agenda item: the staff report and the 10 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) D. South Bend Central Development Area (1) continued... Policy to Waive Lease Term for Vacating Tenants. Under the following conditions the Redevelopment Commission will consider an early termination of a lease upon a tenant's request. 1) The tenant has occupied the space for at least one year. 2) The tenant is current on all payments due the Redevelopment Commission, including but not limited to rent and CAM. 3) Rent paid shall be at least sufficient to cover any cost of tenant improvements and leasing commissions paid by the Redevelopment Commission. 4) Condition of the space at move out must conform to the requirements of the lease. 5) The business does not relocate to another space for a period of not less than one year. If the above conditions are met and the Commission provides for an early termination of the lease, it will be conditioned on item five above. Should the business relocate within a year the Commission's early termination will be null and void, and the former tenant will be held to the original term of the lease. 11 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) D. South Bend Central Development Area (2) Policy to Waive Lease Term for Vacating Tenants. Occasionally a tenant in the Michigan Street Shops or Wayne Street Retail space will move out before the term of their lease has expired. Under certain conditions it may be appropriate to release the tenant from the terms of the lease. When an early voluntary move-out occurs, the Commission has the right under the lease to collect rent for the space until the term expires or until the space is leased to another party, whichever occurs first. Voluntary move-outs in Commission owned retail spaces have occurred primarily due to tenants acknowledging their business cannot be sustained. In lieu of incurring further debt and falling behind on rent, some tenants have taken the proactive step of working with the Commission to vacate the space before their lease term has expired. While the Policy to Waive Lease Term for Vacating Tenants is more specific than this explanation, the conditions required to release a tenant from the original lease term would ensure the tenant has paid all rent and any other expenses due, and is not relocating to another store front. Recently, the city has seen more experimentation with its downtown retail space such as the Pop Up Shops. It's seen other unique businesses occupy the retail space. The downtown has had a yoga 12 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) D. South Bend Central Development Area (2) continued... business and a fine stationary business. Another unique business is Bombay Imports, which did well until the recession then needed some relief which the Commission granted. As the city continues to lease retail space, it is expected there will be businesses that are good fits, and others where the fit may ultimately not be right. This type of policy recognizes the Commission's willingness to be flexible and work with businesses that make a good faith effort, keep current on their rent and give notice of their need to vacate before the lease term expires. The policy itself has provisions that the tenant would occupy the space for at least one year, need to be current on all payments due the Redevelopment Commission including, but not limited to, rent and CAM. The rent that's paid must be at least sufficient to cover the cost of tenant improvements and leasing commissions that the Redevelopment Commission fronted for the project, and the condition of the space at move-out must conform to the requirements of the lease. Lastly, Mr. Inks noted that the policy intends to discourage tenants from leaving downtown retail spaces because they found a cheaper space someplace else. Therefore, the policy includes the provision that for one year tenants would be prohibited from opening at another location. Mr. Varner felt that that requirement should 13 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) D. South Bend Central Development Area (2) continued... have some sort of geographic limitations. Mr. Meteiver noted the contemplation was that it be within the downtown area. Mr. Varner thought the policy should clearly state that it not relocate within the downtown for one year. Ms. King, in reference to the same issue, that the business not relocate to another space for a period of not less than one year, asked for clarification whether it would not only be "our" space within the city limits but "anybody's" space. Mr. Inks agreed. Ms. King questioned if the tenant is there a year, how much would the city want to enforce its lease should that location not work? We don't want to push tenants out of South Bend that otherwise might relocate to another spot in South Bend; yet we want to be supportive of the general economic productivity. Mr. Inks indicated staff would modify the policy to clarify these intents. Upon a motion by Mr. Downes, seconded by COMMISSION APPROVED THE POLICY FOR EARLY Mr. Varner and unanimously carried, the LEASE TERMINATION WITH THE CHANGES Commission approved the Policy for Early DISCUSSED. Lease Termination with the changes discussed. Ms. Jones asked that staff bring the policy back for approval with the requested changes. 14 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) D. South Bend Central Development Area (3) Operation, Maintenance and Easement Agreement (South Bend Marriott) Estoppel and Release (Atrium). The Redevelopment Commission is being asked to certify it has reviewed the two Estoppel and Release Agreements and to the best of its knowledge, the statements contained therein are true, correct and complete in all material respects. The Commission is also being asked to release Host from its obligations upon closing of the sale of the Hotel and the ground lessee's interest in the land underlying the Hotel by Buyer, and upon Buyer's assumption in writing of all of Host's rights, duties, and obligations related to the Walkway Agreement. The Estoppels essentially indicate that Host and FBCLP (First Bank Center Limited Partnership) are in compliance with the Walkway Agreement (Construction, Easement, Restriction and Operating Agreement), the Common Facilities Management Agreement and the Operation, Maintenance and Easement Agreement, except for"Common Facilities Items Not in Good Condition or Repair" which is attached to the Estoppels as an Exhibit. The Estopples also indicate there is no default in any of these Agreements and no amendments other than identified. In order to make a recommendation to the Redevelopment Commission regarding these Estoppel's, staff has had the City Attorney's office review the estoppels and attached 15 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) D. South Bend Central Development Area (3) continued... exhibits. Staff has also sought input from the City's Department of Public Works Director and City Engineer to see if they were aware of any additional repairs or maintenance needed for the facilities covered by these documents, and there were none. Staff also checked with a representative of Scott Herczeg, Director of Operations & Building Engineer for Century Center. Scott was not aware of any maintenance or repairs required of Host of FBCLP under the documents. A representative of 1st Source Bank is also being contacted, but was not available at the writing of this report. Staff recommends approval of the Certification and Release. Mr. Richard Nussbaum noted that Operation, Maintenance and Easement Agreement is a natural result of the Memorandum of Understanding the Commission approved last December. Built into the MOU was the possibility that the current owner of the hotel building would sell their interest to another party. They have sold it to another party and are in the process of closing that sale. The documents the Commission had to review are documents required as part of that closing. There are certain agreements in regard to the operation and the maintenance of common areas in the building and around the building —the 1st Source Bank and Marriott building. The major parties required to comply with those agreements are the owner of the 1st Source Bank building, a limited partnership 16 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) D. South Bend Central Development Area (3) continued... located in Minnesota, and Host Hotels, which owns the Marriott building. The buyer, Jenna Hotel Investments, is going to step into the shoes of Host Hotels. Jenna Hotel Investments wants to be sure they're not buying a lot of problems. The agreements have been drafted. There is a list of things to be fixed and Jenna will be responsible. That is not an unusual request in a transaction of this type. Due diligence has been done with regard to Jenna Investments and its capability to take over this hotel. The brand of hotel can not be disclosed. It's common knowledge that Jenna Hotel Investments has a number of subsidiaries/affiliates, including Doubletree. It has recently renovated a Doubletree Hotel in Cleveland, OH at a cost of$17,000,000. Jenna is not only in the process of going through the closing with regard to the purchase of the property but also working with the brand hotel itself to make sure that it is up to Jenna's standards. The list Mr. Nussbaum reviewed of the types of renovations that they are going to make, are much more extensive than what was contemplated within the MOU looked at last December. Upon a motion by Ms. King, seconded by COMMISSION APPROVED THE OPERATION, Mr. Downes and unanimously carried, the MAINTENANCE AND EASEMENT AGREEMENT Commission approved the Operation, (SOUTH BEND MARRIOTT)ESTOPPEL AND Maintenance and Easement Agreement RELEASE(ATRIUM) (South Bend Marriott)Estoppel and Release (Atrium) 17 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) D. South Bend Central Development Area (4) Construction, Easement, Restriction and Operating Agreement (South Bend Marriott) Estoppel and Release (Walkway Agreement). The second agreement has to do with the walkway from the hotel over to the Century Center. The situation is similar where the two entities maintain their own buildings. Century Center maintains the walkway and gets reimbursed by the hotel. Based upon extensive investigation, there aren't any issues with regard to repairs. The city is not assuming any responsibilities. There aren't any issues other than what's being disclosed in the estoppel agreements. There is a time crunch. The closing should take place before the end of July and these documents will help facilitate that closing. Mr. Inks questioned releasing information to which Mr. Nussbaum responded that the MOU contemplated that so long as the new buyer (Jenna Hotel Investments) agreed to assume all of the responsibilities of the MOU, Host Hotels would then be released from that responsibility. After evaluating Jenna, its finances and projects around the country, he believes this is a better situation for the city. Ms. King asked if signing this agreement in any way precludes Jenna's responsibility going forward. Mr. Nussbaum's response was no. Mr. Downes asked if a representative from 18 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) D. South Bend Central Development Area (4) continued... 1st Source was contacted. Mr. Inks responded that he spoke to a representative from the bank. They had no other concerns. Ms. Jones questioned the 30 percent payment of cost. Who pays the other 70 percent? Mr. Nussbaum replied that 70 percent is paid by the hotel owner and 30 percent is paid by the office building owner. Mr. Varner questioned whether there would be further city investment requested. Mr. Nussbaum answered that there will be more private investment than we thought when we entered into the MOU. Mr. Gibney added that Jenna will not be coming back to the Commission for additional investment. Upon a motion by Ms. King, seconded by COMMISSION MOVED FOR SEPARATE APPROVAL Mr. Downes and unanimously carried, the OF OPERATION,MAINTENANCE AND EASEMENT Commission moved for separate approval of AGREEMENT(SOUTH BEND MARRIOTT) ESTOPPEL AND RELEASE(ATRIUM)AND Operation, Maintenance and Easement CONSTRUCTION,EASEMENT,RESTRICTION AND Agreement (South Bend Marriott)Estoppel OPERATING AGREEMENT(SOUTH BEND and Release (Atrium) and Construction, MARRIOTT)ESTOPPEL AND RELEASE Easement, Restriction and Operating (WALKWAY AGREEMENT). Agreement (South Bend Marriott)Estoppel and Release (Walkway Agreement). (5) Letter of Intent to Lease retail space at 117 E. Wayne Street (in Wayne Street Garage). Ms. Jennings noted that the Wayne Street garage retail space is one of the Commission's most difficult retail spaces to lease. Vesuvio's Pizza has submitted a 19 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) D. South Bend Central Development Area (5) continued... Letter of Intent (LOI)to lease the former State Cafe space located at 117 Wayne St. Vesuvio's Pizza has been operating in the downtown South Bend area for over five years. Because, its current location is going through some major renovations it is being forced to find a new location. Its owners have viewed 117 Wayne St. and are interested in leasing the space for a term of three years beginning August 1, 2011. They are offering to pay a base rent of$18,000 annually or $1,500 monthly in year one. The annual rent for year two will be $21,000 or $1,750 monthly. The annual rent for year three will be $24,000 annually or $2,000 monthly. The tenant will be responsible for payment of all utilities and interior maintenance. Although, a Letter of Intent was submitted, the final lease agreement is pending a background check on Vesuvio's Pizza. Staff recommended approval of the Letter of Intent. Ms. Jones questioned whether there is CAM in this agreement? Ms. Jennings replied that there is not because there is not a common area. The city will shovel the sidewalk but they take care of all other maintenance issues. Upon a motion by Mr. Varner, seconded by COMMISSION APPROVED THE LETTER OF INTENT Mr. Downes and unanimously carried, the To LEASE RETAIL SPACE AT 117 E.WAYNE Commission approved the Letter of Intent to STREET(IN WAYNE STREET GARAGE)TO VEsuvio'S PIZZA. 20 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) D. South Bend Central Development Area (5) continued... Lease retail space at 117 E. Wayne Street(in Wayne Street Garage)to Vesuvio's Pizza. E. Airport Economic Development Area (1) Administrative Settlement for acquisition of 1503-1505 S. Kemble Avenue. Mr. Relos noted that on October 15, 2010, the Commission approved Resolution No. 2780, which authorized the purchase of this property for $35,000, the average of two independent appraisals. The owners of this property are two brothers, one of which lives with his wife in the house. These brothers inherited the property from their parents. There are two other living brothers, and a deceased sister and brother with surviving children. The proceeds from this sale will be evenly split between the original six children or their surviving children. Because of this, the brothers would like an administrative settlement instead of relocation assistance, which under the Relocation Act they would be eligible for. Under the Act, the estimated acquisition and relocation costs associated with this property would be $47,600. The owners have asked for $48,600, which is $8,100 for each of the six shares. Staff feels the total acquisition cost of $48,600 is reasonable for this property, and requests approval of the administrative 21 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) E. Airport Economic Development Area (1) continued... settlement. Upon a motion by Ms. King, seconded by APPROVED ADMINISTRATIVE SETTLEMENT FOR Mr. Downes and unanimously carried, the ACQUISITION OF 1503-1505 S.KEMBLE AVENUE Commission approved Administrative IN THE AMOUNT OF$48,600. Settlement for acquisition of 1503-1505 S. Kemble Avenue in the amount of$48,600. (2) Resolution No. 2914 related to acquisition of property at 1510 S. Kendall St. Mr. Relos noted 1510 S. Kendall was added to the Airport Economic Development Area Acquisition List by Resolution No. 2668 on May 21, 2010. It is a two story, four bedroom single family residence with a two car garage. The property owner would like participate in the goals of the Commission in its efforts to clean and clear this area, and contacted staff of their interest in selling this property. Resolution No. 2914 sets the acquisition value of the property at $21,750, the average of two independent appraisals. Staff recommends approval. Upon a motion by Mr. Varner, seconded by COMMISSION APPROVED RESOLUTION No.2914 Mr. Downes and unanimously carried, the RELATED TO ACQUISITION OF PROPERTY AT 1510 Commission approved Resolution No. 2914 S.KENDALL ST. related to acquisition of property at 1510 S. Kendall St. (3) Administrative Settlement for 1510 s. Kendall St. 22 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) E. Airport Economic Development Area (3) continued... Mr. Relos noted that staff has been working with the property owner to reasonably reach an agreement to acquire this property. The property owner has expressed interest in selling this property, but in lieu of being relocated, prefers to receive a lump sum payment. Under the Act, acquisition and relocation costs would amount to approximately $50,000, which is the amount the owners would accept as a lump sum payment. The owners currently are purchasing this property on land contract. After paying off the land contract, the owners would have almost $34,000 to acquire another home. They have found another home in this price range, and upon approval of the administrative settlement, would move forward with its acquisition. Staff feels this lump sum administrative settlement of$50,000 is reasonable for this property, in light of its size and amenities, and requests your approval. Upon a motion by Mr. Varner, seconded by COMMISSION APPROVED RESOLUTION No.2914 Mr. Downes and unanimously carried, the RELATED TO ACQUISITION OF PROPERTY AT 1510 Commission approved Resolution No. 2914 S.KENDALL ST.IN THE AMOUNT OF$50,000 related to acquisition of property at 1510 S. Kendall St. in the amount of$50,000. (4) Administrative Settlement for acquisition of 921 N. Bendix Drive. Mr. Sikora noted that during Sterling Group 23 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) E. Airport Economic Development Area (4) continued... LLC's initial application for tax credits for a 72-unit senior housing project (Heritage Place at LaSalle Square)the city had agreed to support the project by purchasing property from Faith Apostolic Temple, Inc. and donating it to the development. A contract offering $200,000 was drafted for the property and submitted to Faith Apostolic, Inc. as part of the original tax credit application process. On August 20, 2010 Resolution No. 2862 was approved, setting the offering price for this property at $69,500, the average of two independent appraisals. We feel it is in the best interests of furthering this project to honor the original agreement with Faith Apostolic Temple, Inc. and offer $200,000. As part of a Purchase Agreement, Faith Apostolic Temple, Inc. has been asked to donate an additional 1.03 acres to the city as right-of-way to allow for improvements along Bonds Avenue into LaSalle Square. They have agreed to do so. Upon a motion by Mr. Downes, seconded by COMMISSION APPROVED THE ADMINISTRATIVE Mr. Varner and unanimously carried, the SETTLEMENT OF$130,000 FOR ACQUISITION OF Commission approved the Administrative 921 N.BENDix DRIVE Settlement of$130,000 for acquisition of 921 N. Bendix Drive. (5) Administrative Settlement for acquisition of 1007 N. Bendix Drive. Mr. Sikora noted that on October 23, 2009 Resolution No. 2611 was approved, setting 24 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) E. Airport Economic Development Area (5) continued... the offering price for this property at $137,000, the average of two independent appraisals. Despite continued negotiations, the current owners have held to their price of $325,000, which they base on their own research of comparables. Despite the disparity, staff feels this is an opportunity to expand the scope of the housing development to allow the building to open toward and connect more fully to Bendix Drive and create opportunities for retail development at the northeast edge of LaSalle Square and to remove a building whose on-site business remains at odds with its LaSalle Square neighbors. In order to offset the above disparity and to keep our projected administrative settlement ($88,000) more in line with that of other settlements, Sterling Group LLC has agreed to put $100,000 toward the acquisition of Fernando's. Given the overall value of an expanded development within LaSalle Square, as well as the additional private sector support offered to help with acquisition, Staff requests the Commission's approval of the administrative settlement of$88,000 (and a total request of$225,000) for the acquisition of this property. Mr. Sikora noted that staff has been discussing approximately $460,000 in road improvements around the LaSalle Square development also. 25 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) E. Airport Economic Development Area (5) continued... Ms. King questioned the total investment amount and does it include the roadway? Mr. Sikora explained, yes, $890,000 which does include the roadway. Upon a motion by Mr. Downes, seconded by COMMISSION APPROVED THE ADMINISTRATIVE Mr. Varner and unanimously carried, the SETTLEMENT FOR ACQUISITION OF 1007 N. Commission approved the Administrative BENDIx DRIVE IN THE AMOUNT OF$225,000. Settlement for acquisition of 1007 N. Bendix Drive in the amount of$225,000. F. West Washington-Chapin Development Area (1) Resolution No. 2915 approving and authorizing the execution of an Addendum to the Master Agency Agreement (Taylor Washington Demolitions). Mr. Relos noted that this Addendum covers two structures at the northwest corner of Taylor and West Washington. The two properties were acquired on June 29, 2011, and are being demolished in preparation for making this site acceptable for an historic house move or new in-fill housing. It is estimated that the total cost of this project will be $75,000, which includes asbestos abatement prior to demolition, and demolition and property clearance. Staff requests your approval of this Agency Agreement in a not-to-exceed amount of $75,000. 26 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) F. West Washington-Chapin Development Area (1) continued... Upon a motion by Mr. Downes, seconded by COMMISSION APPROVED RESOLUTION No.2915 Ms. King and unanimously carried, the APPROVING AND AUTHORIZING THE EXECUTION Commission approved Resolution No. 2915 OF AN ADDENDUM TO THE MASTER AGENCY AGREEMENT(TAYLOR WASHINGTON approving and authorizing the execution of DEMOLITIONS). an Addendum to the Master Agency Agreement (Taylor Washington Demolitions). (2) Proposal for professional services for the northwest corner of West Washington & Taylor Streets. (Asbestos Inspection Reports). Mr. Relos noted that before demolition specs can be written for the two structures referenced above, an asbestos inspection needs to be completed for each of them. These structures are at 601 — 605 W. Washington and 109 — 111 N. Taylor. In addition, 601 — 605 W. Washington was a gas station in the 1930's— 1940's. It is recommended that Ground Penetrating Radar (GPR) be used to ensure no underground storage tanks remain, though it is expected they do not. The cost to do these inspections is as follows: 109 — 111 N. Taylor: $800, asbestos inspection 601 — 605 W. Washington: $800, asbestos inspection $700, GPR 27 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) F. West Washington-Chapin Development Area (2) continued... Staff requests approval of this Professional Services Agreement with Wightman Petrie, in a not-to-exceed amount of$2,300,. Upon a motion by Mr. Downes, seconded by COMMISSION APPROVED THE PROPOSAL FOR Ms. King and unanimously carried, the PROFESSIONAL SERVICES FROM WIGHTMAN Commission approved the proposal for PETRIE IN THE NOT-TO-EXCEED AMOUNT OF professional services from Wightman Petrie $2,300 THE NOT-TO-EXCEED AMOUNT OF in the not-to-exceed amount of$2,300. G. South Side Development Area (1) Resolution No. 2921 determining that the tax increment for Erskine Village to be collected in the year 2012 may be allocated to the respective taxing units and other related matters. Mr. Inks noted that at the last meeting the Commission took action related to all the other existing TIF areas and noted that there was no excess assessed value in them, but we reserved Erskine Village for action at this meeting after completing our review. We've done that and the recommendation is to release the full increment of assessed value for one year for taxes to be paid in 2012. These taxes would be released to the other taxing jurisdictions which would collect them if the TIF were not in place. This TIF was originally established to facilitate the demolition and reuse of the former Scottsdale Mall site. All of the improvements planned for this TIF area have been completed. The only remaining 28 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) G. South Side Development Area (1) continued... obligation of the TIF is the pledge of TIF to repayment of an EDC bond. The Redevelopment Commission currently has cash on hand in the amount of$5,364,446 with an annual bond payment of about $500,000. At the end of the year we expect to receive additional tax receipts of about $1,285,000. If this amount is received, then we will have sufficient funds to defease the bonds. The first opportunity to pay off the bonds is not until February, 2017, so the amount to defease the bonds will need to include the interest payments through that date. If the tax receipts at the end of the year are not sufficient to defease the bonds, then the Redevelopment Commission will likely need to collect at least part of the increment for taxes payable in 2013. Once the bonds are defeased, then the Commission can consider whether the Erskine Village TIF should be undeclared and the increment released back to the main South Side Development Area, or released in perpetuity to the other taxing jurisdictions as was the Erskine Commons TIF. Mr. Varner asked what the annual income expected for this TIP Mr. Inks responded that it is $2,600,000 annually. The city received $1,285,000 at the end of June and expects a similar of higher amount at the end of year 2011. 29 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) G. South Side Development Area (1) continued... Mr. Inks noted that Mr. Bill Schalliol has been very instrumental in all that has been accomplished with TIF on the south side. Upon a motion by Mr. Varner, seconded by COMMISSION APPROVED RESOLUTION No.2921 Mr. Downes unanimously carried, the DETERMINING THAT THE TAX INCREMENT FOR Commission approved Resolution No. 2921 ERSKINE VILLAGE TO BE COLLECTED IN THE YEAR 2012 MAY BE ALLOCATED TO THE determining that the tax increment for RESPECTIVE TAXING UNITS AND OTHER RELATED Erskine Village to be collected in the year MATTERS. 2012 may be allocated to the respective taxing units and other related matters. H. Northeast Neighborhood Development Area There was no business in the Northeast Neighborhood Development Area Development Area. I. Douglas Road Economic Development Area There was no business in the Douglas Road Economic Development Area. J. Other (1) Resolution No. 2920 appointing members to the Development Design Review Committee. Mr. Inks noted that staff is bringing forward two individual, Christopher Hartz and Lesley Annis, for appointment to the Development Design Review Committee. Additionally, staff is also recommending the reappointment of Pat Brown and William Panzica. All appointments would be for terms of two 30 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) J. Other (1) continued... years as called for in the Municipal Code Chapter 6, Article 3, Sec. 6-7.1. The Development Design Review committee is composed of nine members, five appointed by the Redevelopment Commission and four by virtue of their position (i.e. City Engineer, City Building Commissioner, Director of the St. Joseph County Area Plan Commission and the Director of the Division of Redevelopment). There are three Development Design Areas, South Bend Central Development Design Area, Studebaker Corridor Design Area and the Airport Economic Development Design Area (all with boundaries coterminous with the Development Areas established by the Redevelopment Commission). These areas have design guidelines established by the Redevelopment Commission. Any exterior improvements in these areas need to conform to the guidelines. If improvements are proposed which are not consistent with the guidelines then the proposal is referred to the Development Design Review Committee, which can waive the guideline requirements if appropriate. Ms. Jones asked who the fifth member is. Mr. Inks noted there is one open slot. Ms. King asked if all members are architects. Mr. Inks responded that Pat Brown is a landscape architect, and the rest are building architects. 31 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) J. Other (1) continued... Upon a motion by Ms. King, seconded by COMMISSION APPROVED RESOLUTION No.2920 Mr. Downes unanimously carried, the APPOINTING MEMBERS TO THE DEVELOPMENT Commission approved Resolution No. 2920 DESIGN REVIEW COMMITTEE. appointing members to the Development Design Review Committee. K. Ratification of Service Contracts Commission Role in Service Contract Staff Transaction Contractor Provided Amount Member 701 W Indiana Acquisition Meridian Title Title Work $100 Relos (Donna Lee's Tavern) 701 W. Indiana Acquisition Michaels Appraisal $2,775 Relos Appraisal Services 701 W. Indiana Acquisition David Waszak Appraisal $,2900 Relos Appraisals 1527 S Kemble St Acquisition Witt Appraisal Appraisal $700 Relos Services 1527 S Kemble St Acquisition Michaels Appraisal $650 Relos Appraisal Services 1517 S. Kendall Acquisition Witt Appraisal Appraisal $350 Relos Services 1517 S Kendall Acquisition Michaels Appraisal $375 Relos Appraisal Services Upon a motion by Mr. Downes, seconded by Ms. COMMISSION RATIFIED THE SERVICES King unanimously carried, the Commission ratified CONTRACTS APPROVED SINCE JUNE 28,2011 the Services Contracts approved since June 28, 2011. 32 South Bend Redevelopment Commission Regular Meeting—July 12, 2011 6. NEW BUSINESS (CONT.) L. Ratification of Temporary Use Agreements Use/Agency Lot Event Dates of Use College Football Hall of Northwest Jefferson Enshrinement July 15, 16 and Fame and St. Joseph Festival staging 17, 2011 parking lot area Upon a motion by Mr. Downes, seconded by Ms. COMMISSION RATIFIED THE TEMPORARY USE King unanimously carried, the Commission ratified AGREEMENTS APPROVED SINCE JUNE 28,2011 the Temporary Use Agreements approved since June 28, 2011 7. PROGRESS REPORTS There were no Progress Reports No PROGRESS REPORTS 8. NEXT COMMISSION MEETING The next meeting of the Redevelopment Commission is NEXT COMMISSION MEETING scheduled for Tuesday, July 26, 2011 at 4:00 p.m. 9. ADJOURNMENT There being no further business to come before the ADJOURNMENT Redevelopment Commission, Ms. King made a motion that the meeting be adjourned. Mr. Downes seconded the motion and the meeting was adjourned at 4:55 p.m. 33