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HomeMy WebLinkAbout6F (3)� F 0) .. Community & Economic Development r ', 1200 County -City Building, 227 West Jefferson, South Bend, Indiana 46601 -1830 Phone 574/235 -9371 Fax 574/235 -9021 To: Redevelopment Commission From: David Relos, Economic Development Planner�j k - Subject: Rushton Building, 501 W. Washington K/" Memorandum of Understanding (MOU) & Development Agreement Date: October 25, 2011 Built in 1906 by the brothers John and Edward Rush, respectively the President and Treasurer of the Fidelity Land Company, the four story Rushton was the City's first high rise apartment building. The building first housed key people who played pivotal roles in turn of the century South Bend, and later housed many of the teachers at Central High School. Since 2002, the building has stood vacant. Indiana Landmarks for the past several years has tried to gain control of the building, and now stands ready to turn the building over to South Bend Heritage Foundation (SBHF) for development into a 23 unit, low to moderate income senior housing complex. Because the Rushton was built with common kitchen and dining areas, extensive remodeling of the building is required. Total development costs are estimated to be $3.4 million. Funding for the project will come from $2.8 million Low Income Housing Tax Credits and $277,700 Historic Tax Credits. To fully fund the project, SBHF requests $322,300 in West Washington Chapin Development Area TIF. The attached MOU and Development Agreement detail each party's responsibilities. Commission improvements will allow off street parking for residents and visitors, necessary site utility upgrades, sidewalks and curbs, landscaping and lighting, exterior tuck pointing and cleaning, and new thermo windows. Commission participation in this project is contingent on SBHF being granted the Low Income and Historic Tax Credits through the Indiana Housing & Community Development Authority and the Indiana Division of Historic Preservation, which will be announced in February 2012. If the tax credits are awarded, construction will begin October 2012, with project completion October 2013. Staff requests Commission approval of this MOU and Development Agreement, to allow this signature building to be repurposed into a senior housing complex on the edge of the downtown area. What We Do Today Makes A Difference! SOUTH BEND HERITAGE FOUNDATION 803 LINCOLNWAY WEST SOUTH BEND, IN 46616 PHONE(S74)289 -1066 FAx(S74)289 -4SSO October 17, 2011 The South Bend Redevelopment Commission 1200 County-City Building South Bend, In 46601 RE: The Historic Rushton Apartments Dear Commissioners, South Bend Heritage Foundation (SBHF) and Historic Landmarks Foundation of Indiana, are collaborating to acquire and rehabilitate The Rushton into a 23 -unit rental housing development for seniors (see attached floor plans/photos). As developer and owner, SBHF will form a new single -asset entity to apply for Low - Income Housing Tax Credits (LIHTCs) by the November 1, 2011 deadline established by the Indiana Housing & Community Development Authority (IHCDA). The project is proposed as a 23 -unit, $3.4 million (total development costs), with $2.8 million in LIHTC equity and $277,700 in Historic Tax Credits (HTCs). Upon completion of the project in 2013, The Historic Rushton Senior Apartments Limited Partnership (LP) will be a wholly owned, managed and operated subsidiary of South Bend Heritage Foundation for no less than fifteen (15) years. We are respectfully requesting a partnership with the South Bend Redevelopment Commission to transform this long - standing problem property into a signature development for downtown and the historic West Washington Neighborhood. As you are probably aware the building is in need of a complete "gut' rehab. As a result of the extensive work required, a funding gap has resulted. To overcome this challenge, we are proposing that roughly $322,300 (detailed below) from the West Washington TIF be invested in the project. The request represents slightly less than 10% of the total development costs of the project. Netglbor VM"_ CXAIM1163 M[MFFt Please know the TIF funds would not be needed until late 2012 but a "soft" commitment from the Redevelopment Commission is required in order for the project to receive a LIHTC reservation from (IHCDA). LIHTC reservations are scheduled to be announced in February, 2012 following the review of applications submitted by November 1, 2011 deadline. As such, the LIHTC application for The Historic Rushton Apartments depends upon receiving conditional approval from the Redevelopment Commission for the aforementioned TIF request. Summary of Coats CATEGORY AMOUNT Site Utilities/Fire T $ 30,000 SidewaWCwbs $35,000 Parking Lots Improvements $ 50,000 Exterior Li $ 20,000 Landscaping $ 7,000 Exterior Masonry Rgmir/Cleaning 5 35000 Window&—inchWing replacement of frames $116,000 Subtotal $293,000 Contingency 10% 5 29,300 Total Requea $322,300 We are excited about the opportunity to serve a growing senior population in need of high quality, well managed, affordable housing in our community. Given its great location adjacent to downtown South Bend amenities, medical services and historic district attractions like the Northern Indiana Center for History, the Rushton is perfectly situated to be a highly sought after senior housing project. It is also important to note that should this project receive an award, it will provide local construction jobs and bring much needed private investment (via tax credit investors) to one of our most important downtown neighborhoods. Thank you for considering this important request. If you have questions or require additional information, please contact me at 289 -1066 ext 216. 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O �_ LU ~ UYZ W Z OLLI �D:O Z�`�,� (n W Z we �� zz� r mL cyb do oy`r O~ ~f zo O¢�¢$� O Q co I- ca m fi No�p3 �a `Yi�� oo =_ Sao' =¢m —e Q d o o �z¢ �t% w ¢ "� O d CO w d K LL oo d II d Z W 2 W CD m W O CL _ � mi CL > .A t . f' J Y ' �� MEMORANDUM OF UNDERSTANDING By and Between South Bend Redevelopment Commission and South Bend Heritage Foundation, Inc. RUSHTON APTS. PROJECT THIS MEMORANDUM OF UNDERSTANDING, dated as of the day of October, 2011, is made and entered into between the South Bend Redevelopment Commission, for and on behalf of the City of South Bend, Department of Redevelopment (the "Commission ") and South Bend Heritage Foundation, Inc., an Indiana non -profit corporation, ( "SBHF "). RECITALS WHEREAS, Indiana Landmarks is the owner of real property situated in the City of South Bend, St. Joseph County, Indiana, located within the West Washington- Chapin Development Area (the "Area ") and more particularly described in EXHIBIT A (the "Rushton Apts. "); and WHEREAS, Indiana Landmarks desires to transfer the Rushton Apts. to SBHF on the condition that SBHF performs certain improvements to the Rushton Apts. (the "SBHF Improvements "); and WHEREAS, SBHF is willing to accept the Rushton Apts. from Indiana Landmarks on the condition that the Commission perform further improvements to the Rushton Apts. (the "Commission Improvements "); and WHEREAS, the Rushton Apts. are located in the West Washington- Chapin Development Area; and WHEREAS, SBHF is willing to grant an easement to the Commission and the Commission is willing to accept said easement to a portion of the Rushton Apts. from SBHF, in order to complete the Commission Improvements; and WHEREAS, SBHF is willing to complete the SBHF Improvements; and WHEREAS, the Commission Improvements and the SBHF Improvements will be a benefit to the health and welfare of all of the community's residents by rehabilitating a structure which is currently vacant and in a deteriorating state of disrepair. NOW, THEREFORE, the Parties hereby agree and represent as follows: 1) SBHF will accept the Rushton Apts. from Indiana Landmarks. 2) SBHF will grant an easement and the Commission will accept said easement to a portion of the Rushton Apts. 3) The Commission will complete the Commission Improvements as follows: a) Under an agency agreement with the South Bend Board of Public works to perform the following infrastructure improvements at a cost not to exceed $65,000.00: i) bringing in / upgrading site utilities ii) fire suppression tap; and iii) sidewalks and curbs. b) parking lot, exterior lighting, and landscaping at the new parking lot at a cost not to exceed $77,000. c) exterior masonry repair & cleaning and new windows at a cost not to exceed $151,000. d) plus 10% contingency of the total of $29,300. e) Commission's maximum commitment will be $322,300. 3) SBHF agrees to use its best efforts in applying for and securing low income tax credits and historic tax credits. 4) The Commission's commitments are subject to appropriation by the South Bend Redevelopment Commission at the time that the Commission's funds are required, which is estimated to be early 2013. 5) Both parties' commitments are subject to approvals from the following authorities: a) Indiana Division of Historic Preservation (historic tax credits) b) Indiana Housing & Community Development Authority (low income tax credits) c) Indiana Landmarks (to approve the sale to SBHF) d) Board of Zoning Appeals (approve rezoning of two lots on Colfax for off street parking) 6) The parties will enter into a Development Agreement in substantially the form attached as EXHIBIT B. 7) The parties understand that time is of the essence and all will proceed, in good faith, toward finalizing the Development Agreement by February 28, 2012. The purpose of this Memorandum of Understanding is to set forth the discussions that the parties have had with one another to date with respect to the Rushton Apts. Because of the Commission's appropriation procedures, the executed Memorandum of Understanding provides merely a statement of the parties' mutual good faith intentions to proceed with the improvements to the Rushton Apts. The terms of the final agreement shall be set forth in a Development Agreement following the completion of SBHF's tax credit application procedures. (Remainder of page intentionally left blank) IN WITNESS WHEREOF, the Parties hereto have caused this Memorandum of Understanding to be executed as of the day and year first above written. SOUTH BEND HERITAGE CITY OF SOUTH BEND, FOUNDATION, INC. DEPARTMENT OF REDEVELOPMENT Signature Signature Printed Name and Tille Printed Name and Title South Bend Redevelopment Commission ATTEST: Signature Printed ame and Title South Bend Redevelopment Commission EXHIBIT A Legal Description of the Rushton Apts. PARCEL I: A strip of land 3 feet wide and 94 feet long, being a part of BOL No. 24 of the First Plat of Out Lots of the Town, now City of South Bend, platted by the State Bank of Indiana, and described as follows, viz: Beginning on the West line of North William Street, at a point 100 feet North of the North line of West Washington Street, being the present Southeast corner of said Out Lot; thence running North 3 feet; thence West 94 feet to a private alley, 6 feet wide; thence South 3 feet; thence East 94 feet to the place of beginning. PARCEL II: A part of BOL No. 24 of the First Plat of Out Lots of the Town, now City of South Bend, platted by the State Bank of Indiana, which part is bounded by a line running as Follows, viz: Beginning at the Southeast corner of BOL No. 24 being at the Northwest corner of Washington and William Streets in said City; thence running West on the North line of Washington Street 50 feet; thence North 100 feet; thence East 50 feet to the West line of William Street; thence South on the West line of William Street 100 feet to the place of beginning. EXHIBIT B Form of Development Agreement DEVELOPMENT AGREEMENT Between the City of South Bend Redevelopment Commission and South Bend Heritage Foundation THIS Agreement, dated the day of , 2011, is made and entered into between the SOUTH BEND REDEVELOPMENT COMMISSION (the "Commission ") and SOUTH BEND HERITAGE FOUNDATION "SBHF "), a nonprofit corporation organized and duly existing under the laws of (the South Bend Redevelopment Commission and SBHF being sometimes refe to herein individually as a "Party" and collectively as the "Parties "). WHEREAS, SBHF is party to an agreem wR�,reby it hts and expects to acquire the real property commonly known as 501 W as gton, South Indiana 46601, and all improvements thereon, described in Exhibi (the "Pr erty "); and WHEREAS, the donation by SBHF ssion Nanasement of a portion of the Property described in Exhibit B (the "D d Property ") will be made for the sole purpose of allowing the Commissi to renovate and i ve portions of the structure (the "Project ") for low income senior housin WHEREAS, SBHF intends rem upgrac�'the Property, excluding the Donated Property, from an existing vacant a rt o a twenty -three (23) unit low income senior housing c d making ificant p ate capital investment in order to improve its interior an terio arance and nctionality; and WHERE BH roposed in ment in redevelopment of the structure furthers the goals of the W evelopment Area Development Plan, and WHERE e Co on considers the Project a benefit to the health and wel re of the Comm 's resi ts, and EREAS, tj Commission has identified a public purpose in SBHF's physical redevelopment 61%Lbuildirfand use as a low income senior housing complex; and WHER , the Commission wishes to participate as a development partner with SBHF by undertaking4ertain renovations which would not otherwise be privately funded, and in so doing, the Commission hopes to enhance the viability and vibrancy of the Project. NOW, THEREFORE, the Parties hereby agree and represent as follows: 1. The Recitals are incorporated into the operative provisions of this Agreement as if fully set out herein. 2. SBHF will convey an Easement in the Donated Property to the Commission in a form which is satisfactory to SBHF and the Commission (the "Easement "). SBHF will not warrant title to the Donated Property nor provide title insurance, provided, however, the Commission may refrain from accepting the Easement to the Property if, in its sole discretion, SBHF is unable to convey an acceptable Easement to the Donated Property. The term of the Easement shall be for a period of one Easement is executed, but the Commission shall have an option Easement for two (2) consecutive six (6) month periods by is Commission's intent to renew fifteen (15) days prior to the ex ' term or any subsequent six (6) month renewal. In any eve e Ea years from the date of the Easement unless the parties a in riting, A professional architect or architgffral firm Commission, will assess the renovation needs N cost estimates for the renovation. The renovation the Architect to the Commission and SBHF for apcontract with the Commission, will wo with the through an interagency agreement with t mi, advertise and bid the Project, and oversee activity. jU year from the date the cretion to renew the ling SBHF notice of the the original one (1) year 1knt shall expire two (2) xtension. ( "Architect ") to le to the perty, draft pl nd develop imates will presented by e approved, the Architect, under trend Board of Public Works, e bid specifications, publicly The source of funding for he oJ e West Washington Chapin Development Area Tax Financing ( "TIF "). he Commission's approved total Project budget is Thr un wenty -Two housand hree Hundred and 00 /100 Dollars ($322,300.00), sub' pprop on by the C mission ( "Project Costs "). Project Costs in excess of this amount of b ended with further approval by the Commission. A preliminary outline of the ro'ect to be contracted through public bid is attached he it C. ceptua of the interior renovation are attached hereto as Exhibit ,with tha ' n o ity to be undertaken by the Commission so noted. The const n schedule fo roiec ched hereto as Exhibit E. The ted Property will be under the control and maintained by the Commission the term the Easement . All expenses relating to the control and operation of the Donated rt*ses a ny adjacent portions of the Property owned by SBHF, including utility charges, sha rtioned such that SBHF shall be deemed to have been obligated for all expenses relating period prior to the date of the Easement and the Commission shall be obligated for all expelating to the Donated Property for the term of the Easement. SBHF agrees to take reasonable steps of security during the term of the Easement for the Donated Property to secure and protect the Donated Property and improvements and personal property thereon from damages and losses, and to not allow any liens or encumbrances of any kind to attach to the Donated Property. The Commission, also, agrees to work with SBHF to assure that reasonable and mutually accepted liability and casualty insurance protection is in place in relation to the Donated Property and the improvements thereon so as to reasonably protect their respective interests. The Project is scheduled to be completed by October 31, 2013. If SBHF fails to substantially complete its renovation plans to the Property within a reasonable time, the Commission may terminate the Easement and SBHF will pay to the Commission all documented expenses incurred for the Donated Property, less any expenses reimbursed by the title insurance policy, if partial rehabilitation is due to any title defects or newly discovered encumbrances. SBHF will invest approximately $3.1 million in non - Commission funds to renovate the Property as a low income senior housing complex, and shall provide ongoingAVerational and building maintenance expenses ( "Operational Obligations" or "Operations ") rth in Exhibit F. 4. This Agreement shall be binding VrV ie s hereto and their respective successors and assigns. 5. The Parties agree to take s actt 6ns, includin execution and delivery of documents and instruments, as maybe essary o appropriate to ou the terms and intent of this Agreement and to aid and assi ther in ing out the t and intent. 6. No recourse under or upon any ob on, covenant, or agreement of this Agreement or for any claim based the or otherwise in r thereof shall be had against the appointed or elected public officials oft or the Comm or their respective officers, agents, and employees, in any amount sub rms and co s herein, and no liability, right or claim at law or in equity shall attac o or incurre y the public officials of the City, the Commission or their respective offi rs, nt , loyees and all such claims are hereby expressly waived sed as a co ' on of and a consideration for the execution of this Agreement by e Co ion, provi such elected officials, officers, agents, and employees are ac ' ursuant lawful au rit and are uniformly enforcing and /or administering the laws, anc tices and cedures of the City and the Commission. No recourse under or upo t or agreement of this Agreement or for any claim base the n respe eof shall be had against the officers, agents, or emnlov of SBHF amou biect to the terms and conditions herein. 7. If an rtion oiis Agreement, or its application to any person, entity, or property, i invalid or forceable, the application or validity of any other portion of this Agreement sh t be affec 8. arties shall each bear their own costs and expenses with respect to this Agreement and th er matters contemplated hereby, including, without limitation, the fees and expenses of their spective legal counsel. 9. This Agreement shall be construed in accordance with the laws of the State of Indiana. 10. This Agreement may be executed in more than one counterpart which, when executed, shall together constitute one agreement. the SOL By: Its: By: Its: EXHIBIT A Property LEGAL Building PARCEL I: A strip of land 3 feet wide and 94 feet long, being a Plat of Out Lots of the Town, now City of South Bend, platted b; described as follows, viz: Beginning on the West line of North North of the North line of West Washington Street, being I Out Lot; thence running North 3 feet; thence West 94 fe o South 3 feet; thence East 94 feet to the place of begin PARCEL II: A part of BOL No. 24 of the First ut Lot" Bend, platted by the State Bank of Indiana, which pa ou viz: Beginning at the Southeast corner of BOL No. f Washington and William Streets in 'd City; thence Washington Street 50 feet; thence North t; thence East Street; thence South on the West line of et 100 feet Legal Parking lots The west half of the e alf o South Bend, except lowing. of the east line of bank t 22 feet west of east line of s alley; then the along s i line o Colfa ComuilMy known as 5 Coll F%QL No. 24 of the First State Bank of Indiana, and Street, at a point 100 feet L Ieast corner of said 6 feet wide; thence the Town, no y of South ky a line runrAg as Follows, at the Northwest corner of West on the North line of -t to the West line of William ace of beginning. numbered in the Stale Banks first addition to the City of ginning on t south line of Colfax Avenue, 53.13 feet west est line of Wi street); thence south parallel with 53.13 tance of 199 feet to the north line of public line o ublic alley, a distance of 1.77 feet; thence east enue a distance of 2.32 feet to the place of beginning. a Bend, Indiana Key No 71018- 1023 -0970 The East XBndianale, est ha banllout lot numbered 22 of the first plat of out lots of the town, now City end, ed by the State Bank of Indiana. Commonly know as 512 W. Colfax, S No 71018 -1023 -0969 EXHIBIT B Donated Property EXHIBIT C Scope of Work The scope of work for the Rushton Building is extensive. The interior of the building will be completely demolished to core components and rebuilt (approx 17,767 sq. ft.). For example, floor framing will be repaired and replaced, a new central stairway constructed, new blocking, beams and framing will be installed as well as all trims (reuse exi when able), flooring, walls and cabinets. HVAC, electric and plumbing will be complet ew s stems. All units will receive new appliances. A Kroppe fire system will be insta fire suppression. A new central elevator will be installed requiring footers and mec ical the basement. On the exterior, a new roof will be installed, the existing brink a will b pointed, limestone repaired /replaced and new brick veneer applied where All windo 1 be repaired and or replaced. EXHIBIT D Conceptual Plan Upon completion, the Historic Rushton Senior Apartments Building will contain 23 units (15 one BR, 3 two BR and 5 Studio) two units will be constructed per the American Disability Act and will house handicap persons accordingly. The building will also house a community room, laundry facility and leasing office. A central elevator will provide ea access for residents to reach their apartments (see attached building plans). Convenient sh parking is available on street and a large parking lot will be available to resident acent to the site. A small covered parking facility is also planned. Begin Construction: EXHIBIT E Construction Schedule October 2012 October 2012- January 2013: Interior Demolition, install new roof, doors, preliminary electric installation. January 2013 -June 2013: HVAC, electric, plumbing, new windows, parking lot construction. Pre -lease ma July 2013 - October 2013: Exterior finishes, final All construction completed. October 2013 - February 2014: stab Finalize all marketing, Went complete sting windows and interior finishes, occupancy certifications and EXHIBIT F Operational Obligations Rushton residents must be 55 years of age and over and meet certain income guidelines. All entrances to the building will be secured and a resident controlled security system will be utilized and monitored by management. Building maintenance will be provide by South Bend Heritage Foundation, and a part-time leasing agent will be housed in the bui s scheduling allows, social activities for residents will be offered, as part of South JMd Heritage's Resident Life Coordinator Initiative. Public transportation is directly availab4outon residents. Located in the West Washington National Register H signature historic housing development for the tram and the West Washington neighborhood. Community and Economic Development Impact: At least $1,973,009 for construction payroll and building Rehabilitate a long- standing historic operty that v demolished at a cost to the City; Inject roughly $3,493,977 of private equit mi Create a new base of seniors living near nto services; Provide high quality, cultural amenities. will serve as a ,n South Bend vacant or be will purchase goods and cal facilities, recreational and