HomeMy WebLinkAbout12-05-11 Community & Economic Development CommitteeCOMMUNITY AND ECONOMIC DEVELOPMENT DECEMBER 5, 2011
Community and Economic Development Committee Members Present: Chairperson Tim
Rouse; Henry Davis; Karen White
Other Councilmember's Present: Derek Dieter; David Varner
Other's Present: Rich Hill; Andrew Nemeth; Kevin Allen; Kathleen Cekanski - Farrand; Mayor
Stephen Luecke; Mr. Satish "Sunny" Gabhawala; Mark McDonnel; Linda Wolfson; Dan lanello
Agenda: Update on Chase Tower Resolution No. 4127 -11
Chairperson Rouse opened the meeting notice a quorum of the committee was present as well as
Councilmember's Varner and Dieter. After briefly describing the purpose of the meeting
Chairperson Rouse called upon Vice - Chairperson Henry Davis to further elaborate on the
purpose and intent of the resolution adopted by the Council on November 14, 2011, by a vote of
7 -2. Mr. Davis explained the resolution was aimed at attracting and leveraging financial
incentives for the potential rehabilitation of the Chase Tower. Mr. Davis said it was important to
keep the Chase open and viable. To that end, Mr. Davis said he had met with a private
developer in hopes of developing a public - private partnership to save the Chase. Mr. Davis
underlined the importance of the commitment of public dollars citing both symbolic and actual
economic multiplier benefits.
Chairperson Rouse then asked the Mayor to come to the table. The Mayor said there have been
discussions among his office, the investor represented by Baker Daniels, and the
developer /broker Andrew Nemeth. The Mayor called the ongoing discussions a process of
discovery. Specific criteria needs to be met when using public dollars to protect and insure the
public interest. He said they are close to satisfying this criteria. He noted that because of
imminent foreclosure, deadlines had to be set and met. The Council Attorney Kathleen Cekanski-
Farrand would work with the City Clerk's Office to see that legalities of the process were met.
The Mayor said an appropriation bill would be filed for 1" reading on December 12, 2011 and a
special meeting for 2" and 3`d reading would be called for December 19, 2011. Either the Mayor
of Five Councilmember's could issue a call for this special meeting.
Moving to questions from the committee, Councilmember White asked from where the money
would come? The Mayor said from general fund reserves. Councilmember Dieter asked what
the $5.7 million was for and what do we get in return? In response, Mr. Satish "Sunny"
Gabhawala aided by Rich Hill said the total investment was $19 million. $11 million would be
used for parking garage /office improvements. The city would get a 99 year leasehold interest in
the garage and would also get assurance of a mid -upper level hotel, for 10 years. Mr. Satish
"Sunny" Gabhawala said through Mr. Hill that he would commit to $1.5 million in emergency
elevator repairs. Councilmember White asked the status of the 22 tenants in the bldg. Andrew
Nemeth said he would provide more tenant information.
Derek Dieter asked if the tenants were part of the investment group. Nemeth said no. In
response to Dieter's question as to other potential buyers, the Mayor said two others came
forward but were now on the sidelines. David Varner asked if the agreement could be in writing
48 hrs. before a vote so the Council could study the proposal? Varner also wondered why a
downtown TIF backed bond could be used for the city's share.
Mayor Luecke said using the general fund was easier, adding the targeted reserve of 20% of
annual operating expenditures was now actually at a 50% level. Varner then asked if the
deadline for Council action on the 19th was certain. Rich Hill said an extension could be
negotiated; but at a cost. Allowing comment from the public, Chairperson Rouse recognized Mr.
Dan lanello. He is President of the Nello Corp., a global communication tower firm. The Nello
Corp. occupies the entire 20th floor employing 35 people. He would have to consider relocating if
the Chase Building were not rehabilitated. Mark McDonnell, owner of the LaSalle Grille, said
South Bend cannot afford to see the Chase go dark. Linda Wolfson, an interested citizen said the
general well being of the downtown was important; but more information needed to be
forthcoming to build public support for the bail -out.
Chairperson Rouse adjourned the meeting at 5:55 p.m.
Respectfully Submitted,
Timothy Rous irperson
Community & conomic Development Committee