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Community & Economic Development
1200 County -City Building, 227 West Jefferson, South Bend, Indiana 46601 -1830 Phone 574/235 -9371 Fax 574/235 -9021
To: South Bend Redevelopment Commission
From: Bill Schalliol, ACED PS
Subject: Disposition Proposal - Union Station Properties, L.P.
604 S. Scott Street (former Millennium Environmental, Inc.)
Date: November 17, 2011
Attached to this staff report is a proposal from Union Station Properties, L.P. regarding their
interest in purchasing the Commission owned property located at 604 South Scott Street in
the Airport Economic Development Area. This 2.6 acre property, site of the former
Millennium Environmental, Inc., was acquired by the Redevelopment Commission through
an agreement with the St. Joseph County Commissioners in 2008. At the time the property
was acquired by the Commission, there was $598,225.03 of delinquent property taxes,
$249,374.00 in various judgments, $21,757 in personal property judgments, and various
unpaid Code Enforcement citations. As part of the deal with the Commissioners and other
agencies to waive all of the judgments and delinquent payments, the City committed to
clear the site, coordinate with Indiana Department of Environmental Management to
remediate various environmental issues, and ultimately put the property back into active
use as an industrial development site. IDEM received demolition and remediation bids for
the property on November 17th and is preparing to complete final clean -up on the southern
end of the site. At this point, IDEM has issued a comfort letter for the northern end of the
site.
On June 14, 2011, the Redevelopment Commission approved Resolution No. 2897, which
set the value of the property at $42,500 (the average of two MAI appraisals),. Staff reported
on July 12, 2011 that no bids for the property were received, thus allowing the
Redevelopment Commission to approve a purchase after 30 days' time at a negotiated
price.
The proposal before the Commission is from Union Station Properties. Staff has been
working with Union Station Properties on their planning for a two phase development of a
technology district centered around the Union Station technology center hub. Phase 1 of
the project includes the following items:
1. Acquisition and reuse of the Millennium Environmental property
2. Vacation of United Drive to connect Millennium and Union Station properties
3. Development of an Electrical Express Feeder System for the Utility Network
What We Do Today Makes A Difference!
The proposed purchase of the former Millennium Environmental property will benefit the
Union Station technology center in the following ways:
• Provide space necessary to increase Union Station's building footprint by 40%
(40,000 sq. ft.)
• Provide an ideal landing zone for the mechanical equipment that produces the power
product
• Enable a 65% (19,000 sq. ft.) expansion of data center floorspace through the
expansion of the building footprint and reclamation of square footage by relocating
mechanical equipment
• Provide space necessary for a secure loading dock area, which is a critical
component of the business operations
• Provide space necessary to expand the current utilization of patent - pending
combined power, heating and cooling technology
Union Station's purpose for acquiring the aforementioned property is to increase the current
footprint to accommodate the sustained growth of the past several years. The growth
strategy employs a 2 -phase approach.
Phase / will utilize the proposed land as a site for electrical generation equipment, loading
dock access points, and an express electrical feeder duct bank that would have the
capability to serve the Union Station and future containerized compute customers on the
Millennium Parcel. To integrate the properties, the vacated roadway will serve as a
dedicated mechanical corridor and equipment access point for the complex. The intention
is to extend the physical footprint by constructing a 2 -story addition on the West end of
Union Station and adding a building sufficient to support mechanical equipment expansion.
The proposed timeframe for Phase / completion is Q2 2012.
With Phase / complete, Union Station will have the ability to continue to add to its existing
electrical and mechanical infrastructure. In Phase //, Union Station plans to build the
capabilities to serve surrounding buildings and /or properties with its proprietary combined
power, heating and cooling approach. Phase // timeline is to be determined following a
comprehensive review by private and public officials.
At this time, staff would respectfully request Redevelopment Commission approval of the
proposal to purchase the subject property and to begin the legal process to dispose of the
property to Union Station properties.
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Union Station Properties, LP
Administrative Offices
6561 Lonewolf Dr., Suite 100
South Bend, Indiana 46628
Phone:574 - 233 -5183
Fax:574 - 236 -4242
November 16, 2011
Union Station Properties
506 West South Street
South Bend, IN 46601
Ms. Marcia I. Jones
President, Redevelopment Commission Board
1200 County -City Building
227 West Jefferson Blvd.
South Bend, IN 46601
Ms. Jones,
The intent of this letter is to submit a proposal requesting that the Redevelopment Commission
Board would approve Union Station Properties to acquire ownership of 1) the former
Millennium Environmental, Inc. property located at 604 S. Scott Street (hereafter "Millennium
Parcel "); and 2) the parcel of land resulting from the vacation of a section of —950 feet of
roadway located between the corner of United Drive and South Street and United Drive and
Scott Street. As part of this proposal, we respectfully request that any environmental work for
the site by the Indiana Department of Environmental Management (IDEM) and a complete audit
be completed on the property. Attached to this letter, please find a site -map of the proposed
request detailing the integration of the parcels to the Union Station.
Today, Union Station is Indiana's second largest carrier hotel and the region's largest data
center. Our mission is to continue to leverage our capabilities to build world -class infrastructure
to enhance and expand our core products; space, conditioned power, and connectivity.
Succinctly, this proposal will benefit Union Station in the following ways:
• Provide space necessary to increase Union Station's building footprint by 40% (40,000
sq. ft.)
• Provide an ideal landing zone for the mechanical equipment that produces our power
product
• Enable a 65% (19,000 sq. ft.) expansion of data center floorspace through the expansion
of the building footprint and reclamation of square footage by relocating mechanical
equipment
• Provide space necessary for a secure loading dock area, which is a critical component of
our business operations
• Provide space necessary to expand the current utilization of our patent - pending combined
power, heating and cooling technology
Union Station's purpose for acquiring the aforementioned property is to increase our current
footprint to accommodate our sustained growth of the past several years. Our growth strategy
employs a 2 -phase approach.
Phase I will utilize the proposed land as a site for electrical generation equipment, loading dock
access points, and an express electrical feeder duct bank that would have the capability to serve
the Union Station and future containerized compute customers on the Millennium Parcel. To
integrate the properties, the vacated roadway will serve as a dedicated mechanical corridor and
equipment access point for the complex. Our intention is to extend the physical footprint by
constructing a 2 -story addition on the West end of Union Station and adding a building sufficient
to support mechanical equipment expansion. Our proposed timeframe for Phase 1 completion is
Q2 2012.
With Phase 1 complete, Union Station will have the ability to continue to add to our existing
electrical and mechanical infrastructure. In Phase 11, Union Station plans to build the
capabilities to serve surrounding buildings and /or properties with our proprietary combined
power, heating and cooling approach. Phase 11 timeline is to be determined following a
comprehensive review by private and public officials.
On behalf of Union Station, we want to thank the Redevelopment Commission Board for your
consideration of this proposal. Through this foundational piece, Union Station will be in an
excellent position to better serve our existing customers and bring more high technology
business to South Bend.
Regards,
Shane M. Fimbel, Ph.D.
Chief Operating Officer
Union Station Properties
s.fimbel@global- access.us
574.472.0735
Kevin M. Smit
CEO
Union Station Properties
k.smithAdsm- inc.us
574.514.2959
Union Station Technology Center Background Information:
Once a thriving hub connecting people via railcar, Union Station has been transformed into a
state -of -the -art hub for digital information. Our Tier III, 24X7 facility provides an ideal
geographic location for carrier operations, off -site data center, high - performance computing,
data - transport and disaster recovery operations.
Since 1979, Kevin Smith has continuously developed and adaptively reused the property.
Today, our focus on infrastructure has allowed Union Station to become Indiana's second largest
carrier hotel with over 6,000 fiber end points within the building and hosting over 16 national
carriers, including AT &T, US Signal, Level 3, Cogent, and the St. Joe Valley Metronet. In
addition to robust connectivity to the world, Union Station offers low -cost computing space and
power that enable our customers to compete in the global technology marketplace. At Union
Station, we are highly experienced data center owner /operators with over 30 years of
infrastructure development and management experience. With world -class redundant power and
cooling, connectivity to a wide variety of carriers, and 24X7 physical access control, Union
Station provides any organization a scalable platform to build and grow IT infrastructure.
In recent years, we have experienced tremendous growth as a result of our relentless focus on our
infrastructure as a service (IAAS) model. By concentrating on the construction, maintenance,
and management of three core ingredients; space, power, and connectivity, this allows our
customers to focus specifically on the growth of IT infrastructure. This focus has attracted a
multitude of organizations looking to utilize our platform, including several national and multi-
national corporations located within the building. For example, the University of Notre Dame
with its super- computing capabilities, which serves over 90% of the research faculty, several
managed service providers with co- location capabilities, and a variety of Fortune 500 clientele.
From IT to healthcare companies, financial services to law firms, and just about every industry in
between, Union Station is host to hundreds of organizations critical IT infrastructure. In addition
to our main data center, we also control end points at 350 East Cermak in Chicago (the world's
largest data center) and Henry Street in Indianapolis (the State's largest Carrier Hotel).
Collectively, these assets serve not only to catalyze the growth of our business, but they also
serve as the foundation for our community's high tech growth opportunities.
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