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HomeMy WebLinkAbout12/10/07 Community and Economic Development CommitteeCommunity and Economic Development Committee ' -~ 2007 South Bend Common Council The December 10, 2007 meeting of the Community and Economic Development Committee of the South Bend Common Council was called to order by its Chairperson Council Member Derek Dieter at 4:25 p.m. in the Council's Informal Meeting Room. Persons in attendance included Council Members Dieter, Varner, White, Kirsits, Kelly, Pfeifer, Rouse and Puzzello; Citizen Member Phil Panzica, Citizen Member Martin Wolfson, Mayor Stephen Luecke, Richard Hill, Robert Mathia, Ashley Ottesen of Kite Realty Group, City Clerk John Voorde, Mrs. Kopola, Frank Perri, Public Works Director Gary Gilot, Richard Nussbaum, Don Inks, Martha Lewis, Charles Hayes, Mike Urbanski, unidentified members of the public, Jamie Loo of the South Bend Tribune and Kathleen Cekanski-Farrand, Council Attorney. Council Member Dieter noted that the Committee members include Council Members Kelly, Puzzello, White, and himself; and that Phil Panzica and Professor Marty Wolfson serve as citizen members. Bill No. 81-07: Ordinance Approvinct a Lease for Certain Public Improvements Between the South Bend Redevelopment Commission and the South Bend Redevelopment Authority for the Eddy Street Commons and Triangle Projects in the Northeast Neighborhood: Council Member Dieter called for a presentation on Bill No. 81-07 which addresses a Lease Revenue Bond to be issued by the Redevelopment Authority involving lease payments of $3,717,000 annually. Mayor Luecke made the formal presentation. He noted that an earlier Committee meeting had been held on this ordinance where much information was shared. He stated that the process has been long. The lease revenue bonds would be issued by the Redevelopment Authority with assets being used to construct a parking garage, make various street improvements, site improvements and related utility work, which would be leased to the Redevelopment Commission. Lease payments would be $3,717,000 annually with the projected private invested for this mixed use project in the Eddy Street Commons and the Triangle Project being estimated at $185,000,000. Mayor Luecke asked for a favorable recommendation to the Common Council by the Committee. Don Inks of the Department of Community and Economic Development Department provided handouts to the Committee which he highlighted. The handouts included: Community and Economic Development Committee December 10, 2007 Page 2 1. Estimated Service Schedule Comparison which is a 1-page handout which notes that $364,642 would be the cost of insurance and that the "present value of savings" would be $1.179,825 (copy attached) 2. County Option Income Tax Fund 404 Cash Flow Projection for November 30, 2007 through December 31, 2008 which is a 1-page handout which notes that the estimated cash balance as of December 31, 2007 is $6,715,066.86 and that .the estimated cash balance at December 31, 2008 is projected to be $5,798,477.86 (copy attached) 3. Eddy Street Commons Estimated Assessed Value and Tax Increment Revenues (1 page attached) Mr. Inks also noted that he sent an email response to the various questions forwarded to him by the Council Attorney (copy attached) The representative from the Indianapolis Office of Crowe provided a23-page draft document entitled "Economic and Fiscal Impacts of the Proposed Eddy Street Commons Project" dated November 29, 2007 (copy attached) Additional handouts to the Committee included: • Eddy Street Commons-Project Description, Bond Schedule prepared on 10/17/07, Private Development Costs prepared 10/17/07, Public Development Costs prepared 10/17/07, City Financing & Debt Service prepared 11/29/07, Expenditures by the University of Notre Dame Related to the Revitalization of the Northeast Neighborhood October 19, 2007, and a -flow chart on the Lease Revenue Bond (copies attached) • Draft September 19, 2007 of the Preliminary Schedule City of South Bend Redevelopment Authority Lease Rental Revenue Bonds prepared by Baker & Daniels LLP (3-pages attached) • Summary of Tax Increment Finance (TIF) Areas by Redevelopment and Economic Development Area prepared 11/26/07 (1-page attached). It was noted that Ashley Ottesen of Kite Realty Group and Richard Hill of Baker & Daniels LLP were present to answer questions. In response to questions raised by Dr. Varner, Mr. Inks stated that Phase I of the project is what is involved. Ashley Ottesen noted that Phase I involves the 23 acres which has Community and Economic Development Committee December 10, 2007 Page 3 been properly zoned. She added that commitments for the condos will run with the land. Mayor Luecke stated that Kite can appeal to have their assessment lowered. Dr. Varner noted that he is concerned about assessment reduction did not want any appeals passed onto the homeowners. He also raised concerns about the Crowe handout regarding economic vs. fiscal impacts and inquired about "new growth dollars" vs. "recycled dollars". Mr. Inks noted that $4.2 million of TIP revenue for Phase I will be generated and that $3.1 million is needed for bond payments. Mr. Inks stated that there assumptions were based on "new growth dollars" from the site. He added that COIT would be new net taxes and that there should be new net revenue to the city. They are currently working on a development agreement. Richard Hill stated that this is a complicated issue and they do not want the bonds to become taxable. Total assessment value numbers have been calculated as well as calculations for debt services with the amounts which the city is expected to be paid back. It is their intent to bind property owners so that commitments run with the land so that monies will be paid back and the restrictions properly included. Council Member Dieter inquired about the downtown Marriott Hotel and how it may be affected. Richard Nussbaum, a local attorney, stated that during the rezoning hearings North American Management which oversees the Marriott Corporation sent a letter. He stated that they believe that both Marriot hotels will be successful based on the research which they have conducted. Council Member Dieter then opened the floor to comments from the public. Charles Hayes of Marietta Street spoke in favor of the Bill. Mike Urbanski spoke in favor of the Bill noting that he believes that bids will come in lower since business is slower right now. Frank Perri of 234 S. Coquillard spoke personally in part in opposition to the Bill. He noted that it is a "great project for the community; that it is a 1St class retail project, and that he is "generally in favor". However he is very concerned about the size and the sale of the project. Mr. Perri then raised "a few of the primary areas of concern" which focused upon: Community and Economic Development Committee December 10, 2007 Page 4 • City is providing far too high funding for the resulting benefits • Impact of Marriott Convention Space on Existing Community Assets and Privately Owned Businesses • Demise of downtown Marriott which is the only luxury, full service brand in market • Public investment in parking garage primarily used for private purposes • Public funding of private infrastructure including ash removal, utility extensions and new street development. Mr. Perri requested that the Mayor request a delay on this Bill for the 30-45 days. Council Member Pfeifer noted that Holladay Property Services Inc. refused to requested commitments affecting the taking of existing businesses when they came before the Council for Portage Prairie. Dr. Varner raised questions with regard to MetroNet. Public Works Director Gary Gilot noted that the city provides the conduit and that MetroNet provides the fiber. Mayor Luecke added that state standards for job creation would not apply because it is a mixed use development. City Clerk John Voorde inquired whether the fly ash cinder would have value and whether it could be reused such as abrasive materials for the streets during the winter months. Mr. Gilot stated that he is uncertain about this but would take a look at it. He noted that the ash does not have load bearing capacity. Citizen Member Phil Panzica welcomed the project and believes that there is a market for it. He voiced support that Kite and the University of Notre Dame will pull business from outside of this area. Ashley Ottesen stated that they plan to market locally, nationally and regionally. Council Member Puzzello made a motion, seconded by Council Member White that Bill No. 81-07 be recommended favorably to Council. The motion passed. There being no further business to come before the Committee, Council. Member Dieter adjourned the meeting at 5:15 p.m. Community and Economic Development Committee December 10, 2007 Page 5 Respectful submitted, Council Member Dere irperson Community and Economic Development Committee Attachments 1200 COUNTY-CITY BUILDING 227 W. JEFFERSON BOULEVARD SOUTH BEND,INDL4NA 46601-1830 PHONE 574/ 235-9371 FAx 574/235-9021 TDD 574/ 235-5567 CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR COMMUNITY ~L ECONOMIC DEVELOPMENT JEFFREY V. GIBNEY EXECUTNE DIRECTOR rr \\ November 6, 2007 ~~ + ~-- V ~ l 4 South Bend Common Council Fourth Floor Council Chambers 400 County-City Building South Bend, IN 46601 Dear Council Member: The attached bill for your consideration and approval will approve the Lease for the Eddy Street Commons and Triangle Projects in the Northeast Neighborhood. Financing for these projects is being done as a Lease Revenue Bond to be issued by the Redevelopment Authority. Assets constructed with the bond proceeds, including a parking garage, various street improvements, site improvements and utility work, will be leased to the Redevelopment Commission. This Lease includes, provisions for lease payments of $3,717,000 per year. The Eddy Street Commons and Triangle Projects will generate $185,000,000 of private investment for a mixed use project containing retail, office and residential development along with two hotels. Jeff Gibney or I will make presentation to the Council at your December 10th meeting. If you have any questions, please-call me at 235-9339. Sinc r ly, ~~.:- Do ald E. Inks Director Economic Development cc: Jeff Gibney Don Inks ~i1~d to Clerk's Office JAN r 9 ~ JDHN VSO. BE D, IN. CITY CIEFK, COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT ~ FINANCIAL RC PROGRAM PAMELA C. MEYER DONALD E. INKS MANAGEMENT 574!235-9660 574/235-9371 ELIZABETH LEONARD FAX: 574/235-9697 574/235-9371