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HomeMy WebLinkAbout2011-11-15 Redev Authority Minutes SOUTH BEND REDEVELOPMENT AUTHORITY REGULAR RESCHEDULED MEETING November 15, 2011 1308 County-City Building 10:00 a.m. 227 West Jefferson Boulevard Presiding: Jose Alvarez South Bend, IN 46601 The November 15, 2011 Regular Meeting of the Redevelopment Authority was called to order at 10:05 a.m. by its President, Jose Alvarez. There was a quorum present. 1. ROLL CALL Members Present: Mr. Jose Alvarez, President Ms. Carolyn V. Pfotenhauer, Vice President Member Absent: Mr. Ray Thomas, Secretary Redevelopment Staff: Mr. David Relos, Economic Development Planner Mrs. Jenny Hullinger, Recording Secretary Mr. Larry Metiever, Legal Counsel Others: Mr. David Matthews (part of meeting) 2. APPROVAL OF MINUTES a. Approval of the minutes of September 7, 2011 Upon a motion by Carolyn Pfotenhauer, seconded by Jose Alvarez, the Authority approved the Minutes of the Regular Meeting of September 7, 2011. 3. NEW BUSINESS a. Authority approval of View Easement for River Race Townhomes, LLC Mr. Relos said the first half of the parking lot on the north side of the Emporium is owned by the Emporium and the second half is owned by the Redevelopment Authority. Mr. David Matthews is ready to build townhomes on the property across from the Emporium and would like a view easement with the Authority to protect the view of those who will purchase the town homes. Ms. Pfotenhauer asked what his timetable was. Mr. Relos said as soon as Mr. Matthews has this easement he is ready to start putting fill in to raise the site up some. There will be 10 townhomes with a commercial space on the north and south ends of the development. There will be 70 parking spaces. The townhomes will be about 2 '% stories high and similar to a Chicago brownstone. If they are raised up then headlights from cars on the street won't shine in their windows. There will be light coming in the homes from the top. These are more mid range in price— around $200,000. These will all have two car garages with additional pad for two cars. There is guest parking along Jefferson for patrons of the businesses or for C The Redevelopment Authority November 15, 2011 Meeting Minutes their guests. The parking access would be off the alley. Mr. Alvarez thought this is a good use for this property. Mr. Alvarez asked where people will shop. Mr. Relos said we need more critical mass before the stores will come. Ms. Pfotenhauer asked about the occupancy rate of Stephenson Mill and Mr. Relos said it is full. Mr. Meteiver said they just went through a major refinancing and got some investment tax credits. Mr. Meteiver said the view easement would allow the Authority to continue to use their property as a parking lot, and allow the portable rest room facilities to be between the Authority's property and the race —that property is owned by the Park Department. Any trees that currently exist on the property would remain. If any trees are removed then any new trees will be subject to a six foot height limitation. There are a lot of trees along the Park's property now that are not affected by this agreement. Mr. Matthews is working with the Park Department on this issue, as well. The northwest corner of Mr. Matthew's property is the dominant property in this easement. Mr. Alvarez asked what Mr. Matthews would build in that corner. Mr. Meteiver said he can build what ever he wants there. He thinks the City has a development agreement with Mr. Matthews for the whole development. Ms. Pfotenhauer asked what would happen if the development wouldn't happen for some reason. Mr. Meteiver said the easement is not contingent upon any development. Mr. Matthews arrived at this point, having been delayed by a meeting that ran an hour over. Mr. Matthews said he would be happy to have the easement be given back to the Authority if he doesn't build in the time agreement established with the City. Ms. Pfotenhauer asked if that could be added into the document for clarity. Mr. Matthews said he didn't think his attorney would have any objection to that. Ms. Photenhauer wondered if Mr. Matthews had something in mind for the commercial property. Mr. Matthews said the commercial property on the north will be a ground floor café and a second story restaurant with an outside bar that folds off of it onto the rooftop. He will not build the southern commercial property until he has a tenant who wants it. He said there will be 70 parking spaces. Mr. Alvarez asked how the Rink site development was going. Mr. Matthews said there were some delays in building but there is only one unit that has not been sold. The development is moving quickly now. There are six premium lots, with a potential of ten units. He thought the Rink site would probably be built in phases over three years, but all six were built in the first phase with just one left to be sold. The demand was much higher than anticipated. Mr. Matthews said right now he is putting up sixty four condos next to Notre Dame—townhomes, flats and estates, from 1,400sft to 5,400sft each. This is a 2 The Redevelopment Authority November 15, 2011 Meeting Minutes $35M development. Although people didn't know what he did, he had 500 groups come through in the first year to look at the condos. 100 of the 500 were from South Bend. The first year of the Ivy Quad development only four were sold, the second year seventeen were sold. This development allows people to see the quality of his development so he can sell them a unit on the river. In trying to fix South Bend, five years ago all he heard was that people won't move downtown because there is no grocery store or drug store. But he believes if the City gives free land for development that people will move in because their housing will cost less and their taxes will be less but they will still be paying property tax. They will be willing to drive a mile or two to a grocery store which is closer perhaps than if they lived in Granger. They will have a view of the river. This is the first time this type of housing has been built in the area in thirty years. South Bend used to have this type of dense urban housing. In Chicago people think of Michigan Avenue, but what makes Chicago is all of the dense neighborhoods near the downtown that feed into the downtown. To fix the downtown you need to improve people's perception of the downtown and have more people living there. As you have the critical mass of housing you will have businesses come to cater to the demand that comes from it. Mr. Matthews said he has been trying to get people to move into good, quality housing. The six on the river will get people's attention. The density of the development at the Troeger site on Niles Avenue is about 20-22 units per acre. If he finds other parking lots to do the same thing in he is creating that same density. The Transpo site on the river is ten and one half acres. With this type of housing you could have 220 homes, at $250,000 per home, which is $50M of assessed value in ten acres, and would net $500,000 in property taxes for the City. Compare this to a subdivision in Granger where each house sits on a quarter to a third of an acre and your assessed value goes up eight fold per acre. That acre costs the same to maintain for police patrol, snow removal, and maintaining the roads. At the Troeger site he is trying to use the view of the river as an example of row houses that he can stamp out around the city. Mr. Alvarez asked what his market was. Mr. Matthews said he can say how much they will cost but there is not a market presently, but he believes he is creating one. Mr. Alvarez asked about plans for west of the river. Mr. Matthews said he has plans for west of the river but not for units to sell. To improve an area, the first people willing to move in are risk oblivious, and then you have the cautious who are willing to take a risk because they see the potential. Then there are the Hipsters and Yuppies, and then perhaps the New Jersey dentist. The New Jersey dentist won't move in on the west side of South Bend. To step up the downtown west of the river- you start with the less expensive uses—the artist, the hipster. The people he is selling to are the hipster type—they like living downtown. The current lending market— Sallie Mae and Freddie Mac don't lend money to new condo projects. If a condo project exists and is 75% sold out and has less than 15% investor ownerships that can turn as rentals, and if it is turned over to the homeownership association to self manage then Freddie and Fannie will give you 3 The Redevelopment Authority November 15, 2011 Meeting Minutes a conventional loan with a fixed rate for 30 year and they can sell it on Wall Street. A building like the LaSalle Hotel, if turned into condos, the last 25% can get conventional financing, the first 75% have to buy it with cash or get it from a local lender who keeps it on their books. They have a higher interest rate, so it is more expensive for someone to buy. Those who are looking to buy a condo in the downtown area right now have to be a cash buyer or self financed or a rental. In downtown Chicago most of the condo buildings were built as rentals and later turned into condos. For the Troeger site, what he is comfortable investing in is 1,600sft townhomes, two stories, unfinished basements that can be finished, that can be sold for $250,000. These will each have a two car garage, two car driveway, three bedrooms, three and a half bathrooms, no roof top deck but they can have a view of the river. Those purchasing them needing a loan will need a household income of$38,500. If they have debt then they would need to make $50-60,000 per year. There are enough employers in the downtown to pay employees enough to buy these. He thinks the reason the City is willing to subsidize the land is that the market isn't currently here but he thinks he can create it. Mr. Alvarez noted the need for help for west of the river. Mr. Matthews said it is tough to start in the middle of a problem, it is better to start on the side. If you get good quality housing here, and pedestrians on the street to give a sense of security, you can increase the denser housing and more people on the street. The denser the housing the better the City is able financially to do better police patrols. If this is successful then he would like to be able to duplicate it at the Transpo site and have enough units for a potential $500,000 in tax revenues for the City. This would be the best chance to build an urban neighborhood. Mr. Matthews said at the Rink site he brought in over 1,000 truck loads of dirt to raise the site up to give the great views in order to make the property desirable. The City had the property for sale for seven years and was not able to get someone to develop it. Mr. Meteiver stated the addition to the easement in paragraph five would be: If the Grantee fails to develop the Dominant Real Property as provided in the Development Agreement with the City, then this View Easement shall terminate and revert to the Grantor. Upon a motion by Ms. Pfotenhauer, seconded by Mr. Alvarez, the Authority adopted the view easement as amended by Mr. Meteiver. 4. NEXT MEETING DATE: December 6, 2011 5. ADJOURNMENT 4 The Redevelopment Authority Meeting Minutes There being no further business to come before the Redevelopment Authority the meeting was adjourned at 10:47 a.m. SAS Jose crhvarez, President I onald Inks, Director } 5