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HomeMy WebLinkAbout03-10-06 Redevelopment Commission Minutes MinutesSOUTH BEND REDEVELOPMENT COMMISSION RESCHEDULED REGULAR MEETING March 10, 2006 10:00 a.m. 227 West Jefferson Boulevard Presiding: Marcia I. Jones, President South Bend, Indiana 1. ROLL CALL Members Present: Ms. Marcia Jones, President Mr. Karl King, Vice President Mr. Greg Downes, Secretary Mr. Hardie B lake, Jr. Mr. William Hojnacki Legal Counsel: Ms. Cheryl Greene, Esq. Mr. Shawn Peterson, Esq. Redevelopment Staff: Mr. Don Inks, Director Ms. Sharon T. Kendall, Executive Director Mrs. Cheryl Phipps, Recording Secretary Mr. Timothy Williams, Economic Development Specialist Mr. Andrew Laurent, Economic Development Specialist Ms. Jennifer Laurent, Economic Development Specialist Mr. Nicholas Witwer, Economic Development Specialist Others Present: Ms. Pam Paluszewski, Legal Dept. Ms. Jamie Loo, South Bend Tribune Mr. Paul Phair, Holladay Corporation Mr. Andrew Nemeth Mr. Dean Bergeman, Eco-Urban Collaborative Mr. Michael Keen, Eco-Urban Collaborative Mr. Donald Schefineyer Mr. Tuck Langland, Fire Arts Ms. Janice Langland, Fire Arts Ms. Martha Lewis Mr. King noted a Revised Agenda for the March 10, 2006 meeting. The Revised Agenda differs from the original Agenda by the addition of Item 6.B.(2), a staff report on the Rink Riverside site disposition, and the acknowledgement under Item 8 that there will be a special meeting on March 24. Mr. King made a motion that the Revised Agenda be COMMISSION APPROVED THE REVISED accepted and approved. Mr. Downes seconded the motion AGENDA DATED MARCH 10, 2006 and the Commission approved the Revised Agenda dated March 10, 2006. South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 2. APPROVAL OF MINUTES A. Approval of Minutes of the Regular Meeting of Friday, March 3, 2006. Upon a motion by Mr. King, seconded by Mr. Hojnacki and unanimously carried, the Commission approved the Minutes of the Regular Meeting of Friday, March 3, 2006. COMMISSION APPROVED THE MINUTES OF THE REGULAR MEETING OF FRIDAY, MARCH 3, 2006 3. APPROVAL OF CLAIMS Redevelopment Commission Claims submitted March 10, 2006 for approval. 420 FUND TIF DISTRICT-SBCDA GENERAL CB Richard Ellis Nations Rent DTSB South Bend ~Uater Works 870.93 56.76 27,626.15 272.19 Upon a motion by Mr. Hojnacki, seconded by Mr. Downes and unanimously carried, the Commission approved the Claims submitted March 10, 2006, and ordered checks to be released 28,826.03 COMMISSION APPROVED THE CLAIMS SUBMITTED MARCH l O, 2006, AND ORDERED THE CHECKS TO BE RELEASED 4. COMMUNICATIONS There Were n0 CommunlcatlonS. THERE WERE NO COMMUNICATIONS 5. OLD BUSINESS There was no Old Business. THERE WAS NO OLD BUSINESS 6. NEW BUSINESS A. Receipt of Bids (1) Receipt of Bids for the sale and development of real estate and ground 2 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) A. Receipt of Bids () continued... rights as a parking and retail facility supporting and subject to the use of the air rights as 150-175 unit residential condominium/hotel development, including all necessary access and supporting easements, all located at 121 South St. Joseph St. Mr. Inks noted that no bids were received by the 10:00 a.m. deadline. Ms. Greene advised the Commission the Commission has met its statutory obligation for offering the property for sale through the public bidding process as required by I.C. 36- 7-14-22. As such, in accordance with I.C. 36-7-14-22(h) the Commission is free to entertain any private negotiations with respect to this property; however, the Commission may not dispose of the property on different terms than those designated on the Commission's offering sheet for a period of thirty (30) days from date that the Commission has designated as the date for receiving bids. The thirty (30) day period will end on April 9, 2006. Upon a motion by Mr. King, seconded by NO BIDS WERE RECEIVED Mr. Downes and unanimously carried, the Commission acknowledged there were no bids received by the 10:00 a.m. deadline. 3 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (1) Commission approval requested for Contract for Sale of Land with South Bend Chocolate Company, Inc. in the South Bend Central Development Area. (Former Osco's site) Ms. Laurent noted that on December 16, 2005 the Commission received a proposal from South Bend Chocolate Company for the purchase and redevelopment of the former Osco Drug site at 128 South Michigan St. On January 3 staff made its report to the Commission and, as directed by the Commission, presented evidence and proposed findings to the Commission on January 17, 2006 in support of the purchase price offered in the Developer's proposal, as well as an analysis of the Developer's intended uses for the property. The Commission adopted said findings at the January 17, 2006 meeting. South Bend Chocolate Company plans to expand the space of its current tenant, Nicholas J. Spa, and the South Bend Chocolate Company would become a flagship store, expanding with a card, convenience and candy store. Staff believes this is a phenomenal project for downtown South Bend. Before the Commission today is a signed Contract for Sale of Land which memorializes the terms of the sale which terms had been previously agreed to by the Commission. South Bend Chocolate Company would like to close on the real estate transaction within the next week or 4 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... two. A kick-off of construction is planned on March 30.Ms. Greene requested that the Commission approve not only the Contract for Sale of Land but also execution of any other documents necessary for closing, including a Quit Claim Deed, subject to review and approval by Legal Counsel. Upon a motion by Mr. Hojnacki, seconded by Mr. Downes and unanimously carried, the Commission approved the Contract for Sale of Land with South Bend Chocolate Company, Inc. and authorized execution of any documents necessary for closing. Mr. King asked that Item 6.B.(2) be moved to the end of New Business. There was no objection and the item was so moved. (2) Staff report on disposition of property in the South Bend Central Development Area. (Rink Riverside site) C. Sample-Ewing Development Area (1) Commission approval requested for Contract for Sale of Land with Habitat for Humanity of St. Joseph County in the Sample-Ewing Development Area. (SW corner Sample & Fellows) Ms. Greene noted that Habitat for Humanity initially approached the staff in May 2004 with a proposal for purchase and development of this property. Habitat has met with staff several times over the past few COMMISSION APPROVED THE CONTRACT FOR SALE OF LAND WITH SOUTH BEND CHOCOLATE COMPANY, INC. AND AUTHORIZED EXECUTION OF ANY DOCUMENTS NECESSARY FOR CLOSING ITEM 6.B.(2) WAS MOVED TO THE END OF NEW BUSINESS 5 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) C. Sample-Ewing Development Area () continued... years in order to revise its proposal. The final proposal was approved October 7, 2005 We have been waiting for Habitat to assemble other property in connection with its proposal. That acquisition is now complete and the Contract for Sale of Land to Habitat for Humanity has been prepared according to the proposal that was accepted October 7. Upon a motion by Mr. King, seconded by Mr. Downes and unanimously carried the Commission approved the Contract for Sale of Land with Habitat for Humanity of St. Joseph County in the Sample-Ewing Development Area. (SW corner Sample & Fellows) D. Airport Economic Development Area (1) Commission approval requested for Resolution No. 2230 appointing the Board of Public Works of South Bend, as limited agent for utility improvements. Mr. Peterson noted that staff has been working with the developer for the hotel project in Blackthorn Corporate Park. Sewer and water lines need to be relocated. The Board of Public Works will bid out the work on behalf of the Commission. Upon a motion by Mr. Downes, seconded by Mr. Hojnacki and unanimously carried, the Commission approved Resolution No. 2230 COMMISSION APPROVED THE CONTRACT FOR SALE OF LAND WITH HABITAT FOR HUMANITY OF ST. JOSEPH COUNTY IN THE SAMPLE-SWING DEVELOPMENT AREA. (SW CORNER SAMPLE c~L FELLOWS) COMMISSION APPROVED RESOLUTION N0.2230 APPOINTING THE BOARD OF PUBLIC WORKS OF SOUTH BEND, AS LIMITED AGENT FOR UTILITY IMPROVEMENTS 6 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) D. Sample-Ewing Development Area () continued... appointing the Board of Public Works of South Bend, as limited agent for utility improvements. E. South Bend Medical Services District There was no business in the South Bend Medical Services District. F. West Washington-Chapin Development Area There was no business in the West Washington- ChapinDevelopment Area. G. South Side Development Area There was no business in the South Side Development Area. H. Northeast Neighborhood Development Area There was no business in the Northeast Neighborhood Development Area. I. Douglas Road Economic Development Area There was no business in the Douglas Road Economic Development Area. B. South Bend Central Development Area (1) Staff report on disposition of property in the South Bend Central Development Area. (Rink Riverside site) Ms. Laurent noted that Mike Keen and Dean 7 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B South Bend Central Development Area () continued... Bergeman, partners in the Eco-Urban Collaborative, have submitted a proposal for development of the Rink Riverside site. They have been provided a list of questions the Commission has concerning their proposal and have prepared a written response to those questions which will be transcribed into the minutes of this meeting. Also, Commissioners may ask for additional clarification or ask additional questions at this time. 1. Purchase Price offered by Applicant a. Your proposal states "It is in order to make the project financially viable that we are offering a bid of $ l ... as well as requesting other assistance." Does this mean that Eco-Urban Collaborative is not willing and able to proceed with the proposal unless the city agrees to (i) sell the Site for $1 and (ii) provide at no cost all the items listed under "Participation by City of South Bend?" Written Answer: Eco-Urban Collaborative is able to proceed, but may not be willing. Eco-Urban has offered $1 because it does not believe that the current market for residential, commercial, and retail properties is strong enough to support sale prices or rental rates that would allow it to complete the project 8 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... profitably if it must factor in the land cost. One of the reasons Eco-Urban is interested in working with the City of South Bend to complete this project successfully is to help contribute to the continuing revitalization of downtown South Bend. In particular, Eco-Urban hopes to contribute to a remigration of urban residents that will lead to the establishment of a vibrant downtown and the kind of square foot sales and rental rates that could support continued mixed- use development without city assistance. Mr. Hojnacki noted there is a big difference between "full cost" and "no cost." He asked if there was room for compromise. Mr. Keen responded that there is room for compromise. Mr. Hojnacki asked if Eco-Urban knows what the maximum is they would be willing to pay for the land. Mr. Keen responded that there are a number of possibilities. Eco-Urban's financial projections show they would need to sell at $308,000 per unit without adding in land cost. They could see paying for the land and raising the price of the units if the city would make additional improvements such as building a parking garage. Eco-Urban could pay $300,000 for the land, but they would have to ask for something else from the city to make that work financially. They would like to 9 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... work with the city to come up with good faith negotiations. They will put all their numbers on the table. Mr. Bergeman noted that they have shared their pro formas with staff already. Mr. King asked for clarification: IsEco- Urban is saying that if land costs go up, it forces up the price of its product to the point that no one would buy it? Mr. Keen responded that their market research has shown that people will pay about $300,000 to move downtown. They believe the reason the project on the Wharf site has not moved forward is that its units were projected to sell for $250,000 to $425,000 and the market analysis did not support that. Eco-Urban's market analysis confirms that. Mr. Keen noted Eco-Urban believes they could have a much more vibrant market for the loft units proposed for Phase II, selling them for $120,000 to $150,000. Mr. Bergeman added that another thing that factors into calculation is the South Bend tax rate. Based on an estimated value of $300,000, the annual tax bill of each unit would be $6,000. Mr. King asked if that doesn't make Eco- Urbanwonder if building residential here is a good idea. If it doesn't appear to be economically wise, why do you think it's a good idea to build residential on this site? Mr. Keen responded that they believe this 10 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... is an investment in the future. There are c it ie s that have invested in bringing residential downtown. That has been the secret across the country to downtown revitalization. People follow people. Where cities have been able to create a critical mass of residents, that catalyzes things. If we were making this proposal in Chicago, we wouldn't be asking for free land. VUe'd be bidding three times the asking price and we'd be able to sell the units for $700,000. They have the critical residential mass already. Mr. Keen indicated they had just convened a focus group of young professionals who were excited about this kind of vision. They have come from urban areas where they've earned their degrees and they want to live in an urban area, but there isn't anything like that here. VUe think the city and Eco-Urban will benefit from rising real estate rates. Mr. Bergeman responded to Mr. King's question regarding Eco-Urban's interest in developing the property as residential. VUe simply take the 7-8 residential row houses we're proposing and assume a tax rate of $6,000. Your payback on the property is seven years. That doesn't even include the buying potential of the owners, probably averaging a billion and a half net worth. So you start thinking about the type of people you are bringing downtown. We look at this as truly an investment in South Bend. Also, when 11 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... you combine this with our focus on an energy stewardship based approach, you've got to be pretty excited about the fact that we want to invest in S o uth B end for the right reasons. What we're asking back from the city is really a pretty minimal investment in terms of the capacity of this site, and, as we've demonstrated on the rest of Sycamore Street, we can bring upward of ninety people on one block. No new sewer, no new water, no new roads. We do have a good model, but it has to start slowly in South Bend, helping people realize there is an alternative to the suburbs. South Bend is a great place to be and we believe in that. We're trying not to ask for very much, but we do feel like the payback to the city, just purely in tax base, is a very short term return for a long term view. b. Your proposal states "...we believe it is only fair and responsible stewardship of the city's economic resources that if the city shares some of the risk and investment in a development project, it should also share in some of the return." Does this mean that you propose to establish a legal relationship with the city whereby the city would be entitled to receive some of the profit that may be produced by your development? Written Answer: Yes. If yes, please provide the details of your proposal including: (i) the definition of 12 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... the "profit" that would be shared with the city that is, how "profit" would be computed, (ii) the percentage of such "profit" to which the city would be entitled, (iii) whether the city would also be required to accept liability for the same percentage of any losses that may be incurred by your development. If no, please explain what the statement quoted means. Written Answer: In the RFP released by the Commission, there is a statement which indicates the city may be willing to enter into a partnership with the developers, though it does not specify what the details of such a partnership should or would entail. Eco-Urban Collaborative is willing to establish a legal relationship with the city whereby the city would be entitled to receive some of the profit that may be produced by the development. We think that might be a good model to establish. However, Eco- Urbancan only provide the details of what any such arrange might consist of after it has been informed what kind of participation the city wishes to offer. Eco-Urban assumes that these details would be the result of good faith negotiations intended to offer the greatest benefit possible to both the city and Eco- Urban Collaborative. It does not anticipate the city would be responsible for any losses that maybe incurred by the development. 13 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... Mr. King asked how "profit" would be defined. With all the numbers submitted, where do you compute the profit that would be sharable? Mr. Bergeman responded that prior to submitting the RFP Eco-Urban sat down with staff to try to get its hands around this statement (the partnership). We were given the impression that this would be a model that we would be developing, so we're willing to put our numbers on the table and come to a reasonable model. We did not have anything specific in mind. Z. Proposed Site purchase -all 0.83 acres Your proposal states "Our proposal has gone beyond the limits of this site to include a vision for both sides of Sycamore St. north to LaSalle Street, for which we estimate that... another 23-69 residential units... could be added...with only minimal investment by the city." Does this mean that you would enter into a contract to purchase the Rink Site ~ if the contract obligates the city to undertake the further investment referred to? Written Answer: No. Eco-Urban Collaborative may well be interested and willing to enter into a contract to purchase the Rink Site without any commitment on the city's part to undertake further investment. However, while Eco-Urban may not require a 14 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... commitment to additional investment on the city's part, it will require a commitment as to what further development in the immediate area will entail. Like any developer, Eco- Urbancannot commit to several million dollars worth of development without some understanding of what is likely to occur around the site. For example, the possibility of a fast-food establishment, drive-thru bank, unsightly parking garage, or other developments that would undermine the value of its own would negatively impact Eco- Urban'swillingness to go forward with the project. So, too, would the building of any above ground walkways. As has been the case in Minneapolis, Charlotte, and Cincinnati, such walkways tend to dampen pedestrian traffic on the ground and hinder the development ofstreet-level businesses. Maintaining and fostering such traffic and business is fundamental to Eco-Urban's vision for the site and the city. This is why Eco-Urban thinks it is so important that part of any development on this site require some sort of master planning so that the city and developers can have the confidence necessary to move forward with long-term investments. Mr. Bergeman added that Eco-Urban expects that the city would share that vision for Eco- Urban to acquire the additional properties-not necessarily that the city would acquire the properties for them, but give them first right of refusal so we could control our own destiny. For example, there's a real estate office and a cell tower that sits on the east 15 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... side of the street, so those are some issues that, together, we're going to have to work out in order to realize this vision. We have had substantial conversations already with the Maennerchor Club and feel like we have a good relationship established with them. We have shared our plans with them, so I think we've done a lot of due diligence for our part. Mr. Hojnacki asked how Eco-Urban would resolve the Maennerchor relocation. Who would pay for it? Mr. Keen responded that Eco-Urban has discussed with Maennerchor the possibility of trading some of the Phase II retail space for its present building. We want the Maennerchor Club to stay where it's at. We think they are part of the history of the place. They help define the place. They've been there since the 1870s. We don't need all the retail space. We could give them 1,000 sft or 2,000 sft. We've discussed this with them. Mr. Hojnacki asked if, then, there would be no cost to the city to provide the Maennerchor site for development. Mr. Keen responded that the city would not need to pay for its relocation, but Eco- Urbanwould like the city to be a negotiating partner and provide a master plan for that area would be important. 16 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... 3. Description of proposed development - private investment a) It appears that the $ 5, 510,15 8 "Total Project Cost" shown in your proposal includes amounts that neither you nor the eventual owners would actually pay-i.e., land cost of $337,500 and site improvements cost of $122,600. Is this correct? Written Answer: This is correct. At the suggestion of the staff, Eco-Urban Collaborative has provided as accurate an estimate of the costs as it could, in order to demonstrate to the Commission just what it will take to complete this project, and why it has offered only $1 for the property. These figures are based on cost estimates from two well-regarded local construction firms. From these figures, it is quite clear that given the level of the current real estate market in South Bend, Eco-Urban cannot complete this project profitably if the above costs are included. Eco-Urban Collaborative would like to point out that the tax load on the residential properties of Phase I alone is likely to amount to $35,000-40,000/year. If the taxes for the commercial office space and Phase II are added, the city will see a return of tax revenues from the property of more than the cost of the land within 5-7 years of project completion. For the most part, site improvement costs, 17 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... i. e., street, sidewalks, and river walk, will need to be made whatever the ultimate use. b} It appears from the description of financing in your proposal that all the private investment will consist ofdown- paymentsand debt service paid by eventual owners of the townhouses, office building, and condominiums. Is this correct? Written Answer: No. Ms. Jones asked, "What is correct?" Mr. Keen responded that in addition to that kind of support, Eco-Urban partners are prepared to put in some of their own private investment. Mr. Bergeman added that there are other third parties who are very interested in investing if that should be necessary. A case in point: If we decided we'd like to do Phase I and Phase II at the same time, we'd probably seek a third party so we could do the whole project atone time. Mr. King asked where in the proposal it says Eco-Urban Collaborative would put in any private investment? Mr. Keen responded that it is not in the proposal, but Eco-Urban is prepared to put in up to $250,000 of private investment. Mr. Bergeman indicated that they have talked to several financial institutions. It is amazing the various approaches they'd 18 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... be willing to entertain. That's one reason we're being somewhat vague. Depending on who wants to move ahead with us on this project, it will determine the exact terms of the contract. Since we've submitted that proposal, we've continued to do our due diligence and learned a lot more about possible options of what we need to bring to the table, should it be a traditional form of financing, which would be as much as 25%. We're prepared to do that. c) Your proposal states that "both principals intend to make this site their new residential and business addresses." Except for these investments, will either of the principals or Eco-Urban Collaborative, LLC invest any equity capital in the development? If yes, by whom and in what amounts will such investment be made? Written Answer: Yes. The amount will depend upon what kind of ultimate deal Eco-Urban is able to negotiate with both the city and interested financial parties including banks and other potential investors. d) With regard to availability of tax exemptions/credits: 1) To what extent does your financing rely on the successful application for these exemptions and/or credits? Written Answer: Eco-Urban 19 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... Collaborative's financing does not directly rely on the successful application for these tax exemptions and/or credits. However, likely success of the project is probably dependent at least on the exemptions. As the Commission is aware, since the recent changes in the assessments, tax rates in downtown South Bend have sky-rocketed and are exerting a chilling effect on the desire of many households otherwise interested in relocating to downtown. Tax abatements and exemptions can help the city to offset this negative influence. Frankly, we're hoping the state does something to straighten this out and not punish center CltleS. Ms. Jones noted that that would then stretch out the time until the city could recoup its investment. Mr. Keen agreed. 2) Please provide a reference of similar projects in other communities which have received these credits and the time line for app lic at io n/approval? Written Answer: It is Eco-Urban Collaborative'sunderstanthng that the recent development by the Cooreman group in South Bend has received such consideration. Eco-Urban does not know the time-line. It would have to rely on the redevelopment staff and their expertise and familiarity with past practice and timing in South Bend, as well as other communities, to help determine this. 20 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... 5. Description of proposed development -jobs to be created or retained as the result of improvements on the Site Your proposal refers to "two creative businesses...employing 25 people" on the site. Does this mean that 25 new jobs will be created as the result of your development, or are the 25 people already employed by the two businesses at their present locations? If the latter is the case and your development does not proceed, will some or all of the 25 jobs be lost? Written Answer: The two creative businesses with whom Eco-Urban is working are both in need of new space. The jobs to which Eco-Urban refers are of people already employed at their present locations. If this development does not proceed on this site Eco-Urban will need to find another. If that turns out to be somewhere other than South Bend, then there is a chance that some or all of those jobs will be lost since both these businesses are very interested in relocating in the kind eco-urban development proposed. Mr. Keen added that in addition to jobs related to the commercial offices in Phase I, Phase II calls for some retail which should bring additional jobs to the site. 21 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... Mr. Bergeman indicated that he intends to expand his business, MPA Associates, at the new office on the site, so there would be some additional jobs in his firm. 6. Description of proposed development whe her the Property, when improved, will be sold or rented, proposed buyers and/or ttenants a) It appears from your proposal that the part of the Site occupied by Phase I development will be sold to the occupants of the row houses and commercial office spaces. Is this correct? Written Answer: Yes. b} Will the "retail and residential block along Sycamore Street" developed as Phase II be owned by Eco-Urban Collaborative, LLC or will it be owned by the occupants? Written Answer: Eco-Urban Collaborative will maintain ownership of the ground floor retail portion of Phase II. The upper floors will consist of lofts which will be owner-occupied. c) When you refer to Phase Icondos -will these be totally owner owned/ operated or will there be an owners association; and if so, what are the anticipated ongoing association/ maintenance fees? Written Answer: The condos and lofts of Phase I and Phase II will be owner owned/operated. However, in both cases there will need to be an owners 22 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... association established to take care of common property and maintenance fees. The exact amount of the fees will be determined by the owners association based on the services it wishes to provide and maintain. Mr. Bergeman added that Eco-Urban anticipates, through Phase II with retail coming online, that it would employ a full time service person. That person could serve the residential units also. d) Please list, or give examples of, the businesses likely to be the tenants who will pay $12 - $15 SF + CAM for the retail spaces developed in Phase II. Written Answer: Eco-Urban Collaborative plan to establish this area as an eco urban and cultural arts destination for South Bend. It will market these properties to a selection of businesses (ideally locally owned) which cater to this lifestyle and provides the services and products its residential, commercial, and retail clients have indicated they would like to have in the focus groups that it has been holding. These include but are not limited to a coffeehouse, a bistro or other type o f small re staurant, a wine bar, a small grocery, an art gallery or book store, an outdoor sports store (walking, biking etc), a health business (spa), an environmental products and services boutique, as well as an assortment of professional offices and services including legal, real estate, medical, etc. Eco-Urban 23 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... has already begun conversations with some local business persons, as well as a couple of national chains. No one has committed as yet. Mr. Hojnacki asked, "On a scale of one to ten, how interested are those you've talked to?" Mr. Keen responded that the interest level was about a five. Mr. Bergeman noted a couple of recent announcements of new retail in the downtown. That's the kind of synergy needed to encourage other businesses to locate downtown. Mr. Hojnacki noted that each retail business needs a certain minimum amount of traffic. Will there be enough people there to actually support the types of businesses you are envisioning? Mr. Keen referred to the market data in the proposal. There are quite a few people within a five to seven minute walk o f the site. A coffee house would be a good anchor element. Coupled with a bistro and a wine bar, they could draw a critical mass of people. It's the chicken-and-egg problem. ~Ue think using the beauty of the river with some small, appealing businesses would do the trick. e) You mentioned that the condos on Hill Street received no offers at $180,000 for 2000 GSF. In light of that, what is the basis for your confidence level of pre- construction commitments for the 7 town homes at $308,000? 24 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (} continued... Written Answer: Eco-Urban Collaborative'srnnfidence is based on the responses it has gotten during the focus groups it has conducted, as well as the outpouring of interest it has received as a result of the media coverage associated with this public bidding process. Eco- Urban is also aware of market research in Mishawaka that confirms its findings. This confidence is also based on the recent history of sales on Hill Street and the fact that this development is located much more centrally. 7. Description of proposed development - timeline outlining when major development actions will occuN a) Please provide a timeline for the major development actions described as "Phase I" in your proposal. Written Answer: The schedule for our project is dependent upon receiving approval from the City to proceed and also will be impacted by the time of year as a result of the timing of that decision. If a decision is made in a reasonable time frame, we anticipate construction starting in March of 2007, with the completion of Phase I planned for October to November of 2007. Phase II would ideally start construction in March of 2008 and complete construction by March of 2009. The following is given in months rather than specific dates due to this uncertainty: 25 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (} continued... Preliminary Project Schedule Phase I Market and Pre-sell remaining three (3) story units 3 - 6 months Continue to Develop Final Site Plan with City 1 month Develop Project Financing Ongoing Continue to Develop Architectural Plans 4 - 6 months Bid Project 1 month Finalize Project Financing /Closing 1 month Start Construction 8 months b} Please provide a timeline for the major development actions described as "Phase II" in your proposal. Phase II Market and Pre-sell Retail and Loft Units 3 - 6 months Develop Project Financing Ongoing Continue to Develop Architectural Plans 4 - 6 months Bid Project 1 month Finalize Project Financing /Closing 1 month Start Construction 8 -12 months Mr. Bergeman mentioned, again, that Phase II maybe completed at the same time as Phase I. They would need to be 50%pre-leased. Part of the consideration when they try to negotiate is whether Eco- Urbancontrols the land. Residentially, there's tremendous interest in the 18 units. There could be more than 18 units if some are made smaller to accommodate single, young professionals interested in purchasing 500 sft. Discussions with the Chamber of Commerce revealed that other 26 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... cities sometimes provide seed money for young professionals to get their first housing in order to keep them in their communities. Mr. Bergeman would like to discuss incentives with the city staff. There's a lot of excitement about Eco- Urban's residential units. 8. Ability of the Applicant to finance and complete the development as proposed a) What impact does the LEED building philosophy have on up-front construction costs? Written Answer: The impact LEED has on up front costs depends upon what elements are actually incorporated and how well they are integrated from the beginning of the project in the design phase through construction. For example, a green roof can add up to $6.00 per square foot of rooftop. On the other hand, because it reduces ambient temperature of the building 5 to 7 degrees, the additional cost can be offset by reduction in the amount of HVAC expenditure. Actual determination of the impact will require climate modeling based on the specific design elements integrated into the structure. Based on other LEED projects that have been completed, the impact can be anywhere from 0 to 15% increase. b) It appears from your proposal that all financing related to the development would be funds provided or borrowed by 27 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... the eventual owners; i.e., (a) down- payments and mortgages by purchasers of the residential units and (b) down- payments, bank financing, and SBA 504 loans by purchasers of the office space. Is this correct? Written Answer: This will be an important part of the financing. However, depending on the terms of the deal Eco- Urban is able to negotiate with the city, it also plans to invest funds of its own, as well as seek additional investors if necessary, particularly if it seems possible to do Phase II at the same time. Mr. Schefineyer noted that, as a mortgage banker, he is familiar with financing condo projects. Eco-Urban keeps saying it intends to use the down payments as part of the equity. That's not permitted under Indiana law. Payments must be put into escrow until the project is actually completed. You can't use down payments from potential owners to finance construction of the property. That has to be done with equity put in by the development group itself. Mr. Bergeman responded that Mr. Schefineyer is correct. Based on discussions with financial institutions ...conceptually that money would go into escrow. c) Have any financial institutions indicated what % of the town homes must be pre- sold before financing will be granted? 28 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (} continued... Written Answer: One financial institution indicated to us that it would require 100% of the commercial and at least 50% of the town homes to be financed before financing will be granted. The three other financial firms have indicated that these percentages will depend upon the ultimate financial package required and what kind of participation the city chooses to offer. For example, if we get the land at low or now cost, that would reduce the percentage they would expect to see up front. Also, we have commitments for 100% of the commercial and 25% of the townhouse development. We're pretty confident we wouldn't have too much trouble getting the additional 25% commitment. Mr. King asked about the level of commitment from financial institutions. In Eco-Urban's proposal there were a couple of letters from financial institutions that were kind of a "nice-to-meet you, good luck with your project" letters. Mr. King asked if there have been subsequent conversations that have yielded more specific indications of willingness by the financial institutions to provide the financing needed? Mr. Keen responded that they have had those additional conversations and received assurances, as well as with interested parties who might be willing to invest in the project. 29 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... d) Does the financing plan described above mean that (a) each unit will be separately constructed when its owner has secured financing, or (b) no construction will begin until all units have been sold and their owners have secured financing? If neither of the foregoing is correct, then how will the financing and construction work? Written Answer: All of the units will be constructed at the same time, along with the commercial office space. Construction will begin as soon as Eco- Urbanhas completed architectural and construction drawings for the site. Two of the financial institutions with which Eco- Urbanhas held discussions are interested in offering a financing package that would include mortgages for those owners who meet their requirements. One has expressed an interest in taking advantage of a new type of mortgage, the Energy Efficient Mortgage (EEM), which is being supported by the federal government. Bringing such a product to South Bend will allow potential residential and commercial buyers to obtain additional leverage for their investments based on projected energy savings of green building. If conditions allow, Eco-Urban would actually like to construct Phase I and Phase II at the same time. e) Would Eco-Urban Collaborative, LLC be willing to provide the city a performance and payment bond to assure that the 30 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (} continued... development can be financed and completed? Written Answer: Yes, if deemed necessary. Mr. Bergeman asked how often that is required. Mr. Inks responded that on virtually every project the city requires a performance guarantee. 9. Public improvements or investments that may be requested of the City of South Bend and/or the South Bend Redevelopment Commission Your proposal lists the following as "Participation By City Of South Bend" • Adopt our master plan for Sycamore St. • Assist in property acquisition, Maennerchor, Aflac, et al. • Assist in relocation of cell tower • Land at no cost • Rebuild East Bank walkway and river bank along western property line • Streetscape improvements-curbs, sidewalk, trees, tree lawn, pedestrian lighting, street furniture along Sycamore and Colfax • Extend utilities front Sycamore to east property line at no cost • Provide topographic survey 31 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... • Provide soil borings • 10 year tax abatement • Keep Fire Arts as permanent residents in current location • Development partnership wherein city participates in risk and reward • Phase I environmental testing • Collaboration in "People and Places of Mill Race Isle Walking Tour" Would you proceed with your development o~ if the city agrees to all of the above? If no, please state which of the above you would not require. Written Answer: No. Without having the details of what the city is willing to complete, Eco-Urban Collaborative cannot really determine which it may or may not require. Eco-Urban would look forward to negotiating with the city on a good faith basis to reach an agreement that would best serve both parties as well as contribute to the success of the project. It can say that it could not continue with the project if Sycamore Street were to be closed or overhead walkways were constructed. Eco-Urban would also be very concerned about any plans to replace Fire Arts, Inc. with some other use since it is fundamental to its vision of developing Mill Race Isle as a cultural arts district and destination. While not absolutely necessary, Eco-Urban would like to reiterate its desire to rename Colfax 32 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... Avenue either "Avenue of the Arts" or "Colfax Avenue of the Arts." Mr. Keen: We would be willing to negotiate the "people and places of Mill Race Isle walking tour." That is not essential. ~Ue would also need to have master planning. Without a master plan we wouldn't have any confidence of what was going to happen around our development. Mr. King: I understand your idea that we'll all get together and negotiate. You also know that you're not the only one that's made a proposal to buy this property. There are some legal constraints on what we can do and there's also the practicality of shooting at a moving target. That doesn't work in business or public affairs very well. So we can't just leave everything totally open about these proposals with you saying, "Let's get together and talk about it." We can get together and talk about it, but not after you've been awarded the contract. I'm not trying to be negative about this, but I'd like you to understand that this is a transaction that we have to do in accordance with state law and with the policies of the city government of South Bend-that, as well as our own personal feelings of responsibility here. Some of the things that you have in your proposal are no small thing. For example, "assist in relocation of the cell tower." If you say, absolutely, if you can't move that cell 33 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... tower, we're not going forward, that's pretty important. Because it's our understanding that moving the cell tower, if it can be done at all, is in excess of a million dollar project. If you're saying the cell tower has got to go, just like you've got to leave the people in Fire Arts or we're not building our green development here, then we know that that's a factor that we have to confront. Before we can even talk to you any more we have to come up with the million bucks. Mr. Bergeman: It probably affects both projects, I expect. Mr. King: Probably does. But we need know before, not after. Mr. Bergeman: It's not a deal breaker, but it's something we have to creatively integrate into our concept. Mr. King: Understood. But the way this question was written was to ask you about deal breakers. Specifically, the question said, "Would you proceed with your development o~ if the city agrees to all of the above. If no, please state which of the above you would not require. So, when you tell us the things you would not require, what's left we would consider to be deal breakers. Right? In other words, maybe it's shorter. Maybe there are only two things on here that you would require. VUe need to know what the deal breakers are. 34 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... Mr. Keen: I understand that. One, I suppose we could think about that. But business does work through the process of negotiation. Public po licy might not allow us to, so part of our question would be if there's some way we could have some conversation about that. We can probably come through and put some of these things down. There might be a possibility, too, one could imagine, since we've got one, two three, twelve items there, a variety of different options that one could look at. In some sense, any one option exists in a context. Would it be all right for us to provide you with answers to this in written form, say on Monday, so we could sit down and think more carefully and write up deal breakers? Mr. King: One of the things that is different about this than some of the business negotiations you may be familiar with is this is public business. We can't sit down and negotiate with you in private. We don't really want to negotiate in public. What we asked you for as part of our public process was a response to our request for proposals, and when we felt we needed additional information to better understand your initial response to our RFP, we sent you ahead of time a list of written questions which you've now had for about a month, right? Our hope was that in the course of this public meeting we'd get your answers to those questions on the public record. If you 35 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... need more time to think about it, my view is that we'd need to invite you back to another public meeting and have you give your answers then. Our hope is that you understand that we sent you the questions in advance. We sent similar questions to the competing bidder. We asked for those answers to be given to our questions, not "we can't answer that because it's part of a later process." To be frank with you, I think you're being non-responsive, here. We've tried to adhere to what's required public policy and you haven't been much help. What I would like you to do is either respond today, or, if you need more time, come to another public meeting and be specifically responsive to the questions that have been given to you in advance. I'm speaking only for myself, but I know that when the Commission discussed the idea of inviting the bidders into answer more questions, it was our idea that we wanted to go through this process in public and get specific answers that would become part of our decision-making process. Mr. Bergeman asked, in the case of several of these issues, are we able to work with staff'? For example, like the East Bank Walkway. I can see structural steel at the bottom of those piers. I know that it needs attention. So, as part of our development, that needs to be addressed. Architecturally, it will become our front street. It will become the sidewalk by which people enter our development. So 36 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... in the case of something like that, how do we talk about those things back and forth? I don't know that it's a deal breaker, but it doesn't work with what we showed you on January 20. We listed things also in good faith hoping for some feedback, like "that's something that would betaken care of by public works" and "we'll work together to get that taken care of." How can we have that kind ofgive-and-take? We can arrive at a reasonable list. We're not trying to be unreasonable here, but in the case of something like that, we really could be talking about a million dollars torebuild that walkway. I don't know if there are plans in place in future capital budgets that we could collaborate with and hope it would compliment our site plan. Can anyone help us understand how we should anticipate some of those items? Mr. Hojnacki: We've been sitting here for an hour or so and I don't know that I know any more about your plans than I did at the beginning. We talked about Sycamore Street. We can deal with that. You talk about land at no cost. I'm not willing to support a project when you're not going to pay anything for the land. You've got to give me a number: here's what we're willing to pay for this land. It may not have to be full price, but it's got to be something more than nothing. You were talking about developing a partnership where the city participates in risk and reward. What does that mean in terms of dollars and cents? 37 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (} continued... Ten year tax abatement. We can talk about that, I suppose. I'm looking here and saying as a representative of the public, what is the public going to get from your project? It looks like we're paying the entire freight. You're not putting any money into this thing. You talk in a vague way about having some potential financing, but you don't have anything concrete now. I'm kind of frustrated about this whole process. Mr. Keen: Well, the frustration is a little bit shared. We've been trying to get some feedback as well. There's some stuff we're not getting answers on. Mr. Hojnacki: What haven't you gotten an answer on? Mr. Keen: We tried to find some information out about tax load and tax information. We haven't been able to get much of that. We've been trying to get some information about what kinds of deals might be-the city is the one who put in the RFP that we would be willing to engage in some sort of partnership. We asked to see what that might be-no response. So we're sort of feeling like... Mr. Hojnacki: You've got to tell us what you're going to do ! What we have is a piece of property over here that we're trying to do something with. What we said to anybody who's interested, tell us what yo u want to do with it and we' 11 38 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (} continued... consider it. The burden is really on you guys, isn't it? Mr. Keen: I think the burden is on both parties-for the city to work in good faith with developers and for developers not to have to be shooting in the dark. If you'll just give us a couple of seconds I think we can give you an answer. We understand the problem that we can't sit here and negotiate twelve items. On the other hand we thought we might be able to arrangethose negotiations through the staff so we could work with the staff to come up with some sense of what would be a reasonable package. We assumed that's what the staff does for you guys. If that's not possible, then what we can do is try to respond to that. Mr. Downes: It just seems so obvious to me that when you came up with the concept for this, there had to be deal breakers. Some of them have to be on that list. All we're asking is what the deal breakers are. Mr. Bergeman: Item one and two are linked together and that would be a deal breaker, because that's the vision of Sycamore Street, as is item three. Mr. Downes: I understood with Maennerchor, there's no financial assistance being request from the city. Mr. Bergeman: Other than the shared vision that you would support the 39 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... continued vision down that side of the street. That's absolutely correct. The cell tower, Karl knows the value of it as I do because it's been a challenge for a lot of us to get our hands around. We're certainly willing to work around that, so it's not a deal breaker from that standpoint. If there's anything we could do together to make that a more successful outcome, that would be much appreciated. Land is certainly a deal breaker. The East Bank Walkway, as I've just tried to describe in architectural terms, is a deal breaker simply from the standpoint that it's floating out in the middle of the river and it's not in good structural repair. It's not something I think the city should be OK with, and, certainly, it doesn't compliment what we're trying to do with our investment here. I don't think there's anything else on this list, other than our vision of an arts district. We can't mandate that anybody stays, but I guess that's part of number one, supporting our vision of Sycamore Street. Those are really the items that have impact on our project. Mr. King: So, the first five items are the "must haves." Master plan for Sycamore Street, assist in property acquisition, assistance in relocation of cell tower, land a one dollar, and rebuild East Bank walkway. Those items are a must. Mr. Bergeman: Yes. But what I want to clarify is that items one, two, and three, 40 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... are no cost to the city. We're not asking you to buy the Maennerchor Club. We're not asking you to relocate the cell tower. If that's not going to happen, we'll work around it. But the land, I would say is the... 10. Plans must meet current code.. and zoning ~equirernents, Would your site plan require any variances from current code and zoning requirements? If yes, please describe each such variance. Written Answer: None that Eco-Urban Collaborative is currently aware of. 11. Applicant is willing to accept responsibility for knowing and meeting all enviNOnmental standaNds Are you willing to accept responsibility for knowing and meeting all environ- mental standards and paying any related costs? Written Answer: It is Eco-Urban Collaborative'sunderstanthng that the site is not a brown field, and the city is offering it as a clean site. As long as the information that has been provided by the city is accurate and reflects due diligence, Eco-Urban is willing to accept this responsibility. If the information is inaccurate and this is in fact a brown field site, Eco-Urban would want to work with 41 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... the city to bring it into compliance. Mr. Bergeman: I think in any land transaction, Phase I is due diligence. We would expect to see that. 12. Other factors which will assure the Commission that the sale of the Property, if made, will further the execution of the South Bend Central Development Area Development Plan and will best serve the interest of the community, fi^om the standpoint of both human and economic welfare. Please provide specific examples of locations where "green building" has been successfully implemented for multi-family residential projects. Written Answer: Attached is a list of projects from the United States and around the world (primarily U.S.), many of which have received national and international recognition and brought positive attention to the cities in which they have been constructed. Residential: 1. Battery Park City-New York, NY 2. Benedict Commons-Aspen, CO 3. Civano-Tuscon, AZ 4. Conservation Coop-Ottawa, Canada 5. DeweesIslanl-Barrier Island, SC 6. Ecolonia-Netherlands 7. EcoVillage of Loudoun County- Taylorstown, VA 8. Haymount-Caroline County, VA 9. Jackson Meadow-Stillwater, MN 42 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (} continued... 10. Prairie Crossing-Granyslake, IL Mixed Use: 11.2211 West 4th-Vancouver, Canada 12. Bamberton-Vancouver Island, Canada 13. Clackamas Town Center-Clackamas, OR 14. Cleveland EcoVdlage-Cleveland, OH 15. Coffee Creek-Chesterton, IN 16. Denver Dry Goods Building-Denver, CO 17. Elitcheardens-Denver, CO 18. Laguna West-Laguna, Ca 19. Mashpee Commons-Mashpee, MA 20. Middleton Hills-Madison, WI 21.OldElm Village-Petaluma, CA 22. Pilsen East/Podmajersky-Chicago, IL 23. Play Vista-Lost Angeles, CA 24. Prisam Nurenberg, Germany 25. Second Street Studios-Santa Fe, NM 26. The Crossings-Mountain View, CA Mr. Keen: Some of these are mixed use. 2211 West 4th, Vancouver, Canada, that's a rehab of a factory building that was turned into mixed use. That is an example of a property that has a lot of visibility. They saved themselves about $80,000 on marketing because they didn't need to do marketing. Both number 11 and number 16, Denver Dry Goods Building, Denver, Colorado, were able to sell out. They've got waiting lists and they've gotten a lot of marketing. In addition, both of those 43 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... developments have brought a fair amount of attention to Vancouver and to Denver. They are reported regularly in the literature on green building in architectural types of literature. Every one of these has a Web site. We could also make available to the staff and Commissioners a disk that gives the details on each of these. Ms. Jones: I'm particularly interested in number 14, the Cleveland, Ohio, one because it's Midwestern. We're not Chicago, we're not Denver. We won't have the draw that those places have. Cleveland is a similar place, although bigger than South Bend. Is that development similar to yours? Mr. Keen: I suspect it's bigger. Mixed use. The same types of principles, in terms of the urban design, density, as well as the kinds of technology used in the building. Ms. Jones: And, likewise, number 20, the Madison, Wisconsin, one, because that's a college town, there might be some similarities there. Those are the two that struck me as maybe .. . Mr. Bergeman: Would you like us to get you some additional information on those? Ms. Jones: Please. That would be great. 44 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... Mr. Schefineyer stated that he liked the idea of this type of development on the East Bank. As a member of the Howard Park/East Bank group, our entire group supports this type of a vision for the East Bank. But, I can't help but sit back, wearing my developer's hat, and say that some of the conditions, the issues that are involved in this development such as the relocation of the cell tower, rebuilding the East Bank walkway, are very high dollar amounts in comparison to the potential development value and property. It almost seems to me that in order to get past some of these, you have to have a much higher volume of development for it to happen. I would love to see this development group successful. I don't want to see them get into the middle of something with their life savings and their time and their effort and these great ideas that they have and then have the reality of development and financing come crashing around their ears. I'd like to invite them to consider some other sites in the East Bank/Howard Park area that might be more reasonable, given the size of the development. Mr. Peterson: I had one question as to your financing. In your proposal, you have the Commission giving you land worth $300,000. Today, you also mentioned that you were discussing numerous financing options with various lenders. When you were discussing those options with them, were you contemplating allowing the lenders to have a mortgage on the property to get that 45 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... financing? I would imagine that they would either want a mortgage on the property or some equity placed as collateral. We typically do not allow our developers to place a mortgage on the property until the development is complete so it could easily revert back to the Commission should the developer not be able to complete it. Mr. Bergeman: There are no strings attached. To pickup on that comment, in terms of the partnership, one of the things we could enter into with the city is that the City of South Bend could be a partner in this because they bring the land to the deal. And then they would benefit from some of the profit. That's one way we could structure a win-win situation that would allow the project to go ahead. We have discussed that with our financial institutions and they're perfectly acceptable to those types of agreements. That's just one example that we've come across, trying to respond to the RFP of how we could make this awin-win situation. Mr. Keen: I appreciate Mr. Schefineyer's comments, although I think we could probably pay due diligence to our own financial situation. I would like to ask Mr. Schefineyer if he has any potential future fiduciary interest in this property or any relationship with anyone else who does, that his comments might reflect? 46 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... Mr. Schefineyer: My interest is in seeing the area and the site developed to its highest and best use. To that extent I've looked at both plans as they were reported in the paper. It appears to me that the one that has the greatest financial feasibility is the larger project. Mr. Keen: So that indicates that you don't have any fiiture desires to develop anything on that site or participate in anything on that site? Mr. Schefineyer: No. My development years are over. Mr. Hojnacki: Mike, in a very serious way, you have the old Wharf site that John Phair owns. That's going to be sitting there vacant, in your conception. Do you have ideas or thoughts or plans to do with it? Mr. Keen: VUe don't own that site. Mr. Hojnacki: Well, certainly whatever happens there is going to affect your project. Mr. Keen: A couple of ideas. Quite frankly, we think that the office complex that John has propo sed there, if he did not put the cutout there on Colfax Street, which we don't think is a very good idea because what that tends to do is cutouts stop pedestrian traffic and they make dams, so if John were to move his cutout around the back and put his office complex right here, we think that having an 47 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... office complex would be a terrific compliment to what we have, as long as there's not a walkway coming down Sycamore because what that means is that those folks don't want to live in the city, they want to live above it. We think there are some real possibilities for some terrific synergy here. We're competitors right now. Whoever gets this site ... if it's John, then John's going to be working with what he's got thereto do his whole thing. If it's us, the day after we get this site, Holladay is our best friend because now we both have an incredible interest in working together. We've met with them. We've shared our plans with them and they've shared their plans with us. We both know the details of each. We've tried to maintain a po sitive relationship with them because we see them as important partners on that island and we want to continue to work with them. If we do not want to go forward with the office complex, the way we see this is that, the reason they have let that sit empty over there is because they just didn't see a way to make the residential go on that. Our suspicion is it's because they were trying to bite off too big of a chunk of too many residential units at too high a price to begin with. Our vision is that a smaller element acting as an urban catalyst can help to then catalyze further development upon there. You could take this project we've got right here and practically flip it over. Or, if John were interested in working together with us on something like 48 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... this... The other possibility for us would be to turn this into all condos. You would have condos on every side. And for John to put the retail along here, so we would have retail on this street going through. There's a lot of potential for collaboration on that. It's up to the city to decide whether you want to put a hotel there. As a citizen, I'd rather see the LaSalle Hotel be turned into a boutique hotel, and part of the city fabric. I think if we put a hotel there, that's going to compete with that. But that's the city's decision to make, not ours. Mr. Bergeman: On a more human note, I think what separates the two proposals, and I don't know that it's really been understood by people, is truly the environmental aspect of what we're proposing for the City of South Bend. I don't know that people can really get their hands quite around the concept of sustainable design. The fact that we would be reducing energy bills by as much as 30%- 50%. So each of you could look at your own energy bills (we've had a very mild winter). What does it mean that we care about everybody's air quality. I mean that very sincerely. That's not a rhetorical question. This is truly something about the future of South Bend. It's not just another bunch of bricks and sticks and mortar. This is an environment that will make a difference in South Bend. It's not another greenfield development in the corn fields of St. Joseph County. You need to think about that in very real terms. There aren't any more dinosaurs 49 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... running around. The tipping point has been reached for oil in our country and the model that we currently live in cannot be sustained. We can either be leaders, or we can continue to build dinosaurs that will be obsolete. I think there are some real human issues here; for example, on that site Holladay is proposing an office building. I think that's wonderful. Great tax base. We're proposing an environment where twenty-five people will live there 24/7. We'll work there, take care of it, we don't go home from it. It becomes part of the city. It's a completely different vision. Both projects are outstanding on their merit, and I know you have a tough decision. We've done our best to provide all of you with answers to the best of our ability. We appreciate that opportunity. Obviously, we believe passionately in what we are trying to do. Mr. King: We want to thank you for coming in today and taking the time to respond to these questions and, hopefully, explain you project, along with the effort you already had invested preparing the proposal. Mr. Keen: We'd also like to publicly thank the staff, Sharon, Jennifer and Don, for their work with us. We would also like to commend the Commission for making this a public discussion. To our knowledge, from what we've understood, this is perhaps one of the first times the Commission has put these bids out and held these public hearings. We know that takes a lot of time on your part. 50 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area () continued... We think this kind of transparency is really terrific. We support that regardless of the outcome of the project. We really appreciate that and your time. Thank you. Ms. Jones: You are absolutely right. I think the public appreciates it and they deserve it. That's what we're trying to do Mr. Peterson: I had one comment, as far as the financing. One of the things here in the proposal is the Commission's giving land for $300,000 over and start the financing of it. When you're talking with the banks, are you anticipating having a mortgage on that property, to get your financing as equity, or is your equity, are they securing your commitment elsewhere, so if that just doesn't move forward, because, typically, it would revert back to the Commission so we don't have to acquire it again-make everybody part of the process. Mr. Keen: We think it's good for South Bend and anything that's good for South Bend will make a good project. 7. PROGRESS REPORTS There was no report. 8. NEXT COMMISSION MEETING PROGRESS REPORTS The next meeting of the Redevelopment Commission is NEXT COMMISSION MEETING a Special Meeting scheduled for Friday, March 24, 2006 at 10:00 a.m. 51 South Bend Redevelopment Commission Rescheduled Regular Meeting -March 10, 2006 8. NEXT COMMISSION MEETING (CONT.) The next Regular Meeting of the Redevelopment Commission is scheduled for Friday, April 7, 2006 at 10:00 a.m. 9. ADJOURNMENT There being no further business to come before the ADJOURNMENT Redevelopment Commission, Mr. King made a motion that the meeting be adjourned. Mr. Downes seconded the motion and the meeting was adjourned at 11:33 a.m. Donald E. Inks, Director Marcia I. Jones, President 52