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HomeMy WebLinkAbout6C (1)(2)Community & Economic Development �Am i J86 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 Subject: Rushton Building, 501 W. Washington Development Agreement & Access Agreement Date: March 27, 2012 On October 25, 2011, the Commission entered into an MOU with South Bend Heritage Foundation, for the rehabilitation of the historic Rushton Building, at the northwest corner of W. Washington and William St. Because the Rushton was built with common kitchen and dining areas, and has stood vacant since 2002, extensive remodeling of the building is required. The building will be converted into a 23 unit, low to moderate income senior housing complex. 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, $322,300 in West Washington Chapin Development Area TIF was approved. To facilitate this work, SBHF is granting the Commission access to the site via an Access Agreement, which is attached to the Development Agreement. 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 was contingent on SBHF being granted the Low Income Tax Credits through the Indiana Housing & Community Development Authority, which were granted last month. As part of the MOU, the parties are to enter into a Development Agreement in substantially the form as Exhibit B of the MOU. This Development Agreement is attached to this staff report. Construction is scheduled to begin October 2012, with project completion October 2013. Staff requests Commission approval of this Development & Access 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! DEVELOPMENT AGREEMENT Between the City of South Bend Redevelopment Commission and South Bend Heritage Foundation, Inc. THIS Agreement, dated the day of , 2012, is made and entered into between the SOUTH BEND REDEVELOPMENT COMMISSION (the "Commission ") and SOUTH BEND HERITAGE FOUNDATION, INC. ( "SBHF "), a nonprofit corporation organized and duly existing under the laws of Indiana (the South Bend Redevelopment Commission and SBHF being sometimes referred to herein individually as a "Party" and collectively as the "Parties "). WHEREAS, SBHF is party to an agreement whereby it has rights and expects to acquire the real property commonly known as 501 W. Washington, South Bend, Indiana 46601, and all improvements thereon, described in Exhibit A (the "Property "); and WHEREAS, the donation by SBHF to the Commission of an Access Agreement to the Property described in Exhibit A (the "Donated Property ") will be made for the sole purpose of allowing the Commission to renovate and improve portions of the structure and parking lot (the "Project ") for low income senior housing; and WHEREAS, a wholly owned subsidiary of SBHF is the general partner of Historic Rushton LP ( "Partnership "), which will own and operate the project; and WHEREAS, SBHF and the Partnership intend to remodel and upgrade the Property from an existing vacant apartment facility, into a twenty -three (23) unit low income senior housing complex and making a significant private capital investment in order to improve its interior and exterior appearance and functionality; and WHEREAS, SBHF's proposed investment in redevelopment of the structure furthers the goals of the West Washington Chapin Development Area Development Plan, and WHEREAS, the Commission considers the Project a benefit to the health and welfare of all of the community's residents, and WHEREAS, the Commission has identified a public purpose in SBHF's physical redevelopment of the building and use as a low income senior housing complex; and WHEREAS, the Commission wishes to participate as a development partner with SBHF by undertaking certain 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: I . The Recitals are incorporated into the operative provisions of this Agreement as if fully set out herein. 2. SBHF will convey an Access Agreement in the Donated Property to the Commission in a form which is satisfactory to SBHF and the Commission (the "Access "). SBHF will not warrant title to the Donated Property nor provide title insurance, provided, however, the Commission may refrain from accepting the Access to the Property if, in its sole discretion, SBHF is unable to convey an acceptable Access to the Donated Property. The term of the Access shall be for a period of one (1) year from the date the Access is executed, but the Commission shall have an option at its discretion to renew the Access for two (2) consecutive six (6) month periods by providing SBHF notice of the Commission's intent to renew fifteen (15) days prior to the expiration of the original one (1) year term or any subsequent six (6) month renewal. In any event, the Access shall expire two (2) years from the date of the Access unless the parties agree, in writing, to an extension. A professional architect or architectural firm ( "Architect ") acceptable to the Commission, will assess the renovation needs of the Donated Property, draft plans and develop cost estimates for the renovation. The renovation plans and cost estimates will be presented by the Architect to the Commission and SBHF for approval. Once approved, the Architect, under contract with the Commission, will work with the City of South Bend Board of Public Works, through an interagency agreement with the Commission, to refine the bid specifications, publicly advertise and bid the Project, and oversee construction activity. The source of funding for the project is the West Washington Chapin Development Area Tax Increment Financing fund ( "TIF "). The Commission's approved total Project budget is Three Hundred Twenty -Two Thousand Three Hundred and 00 /100 Dollars ($322,300.00), subject to appropriation by the Commission ( "Project Costs "). Project Costs in excess of this amount may not be expended without further approval by the Commission. A preliminary outline of the scope of work on the Project to be contracted through public bid is attached hereto as Exhibit C. Conceptual plans of the interior renovation are attached hereto as Exhibit D, with that portion of activity to be undertaken by the Commission so noted. The construction schedule for the Project is attached hereto as Exhibit E. 3. The Donated Property will be under the control and maintained by the Commission during the term of the Access. All expenses relating to the control and operation of the Donated Property, and any adjacent portions of the Property owned by SBHF, including utility charges, shall be apportioned such that SBHF shall be deemed to have been obligated for all expenses relating to the period prior to the date of the Access and the Commission shall be obligated for all expenses relating to the Donated Property for the term of the Access. SBHF agrees to take reasonable steps of security during the term of the Access 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 Access 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 ongoing operational and building maintenance expenses ( "Operational Obligations" or "Operations ") as set forth in Exhibit F. 4. This Agreement shall be binding upon the parties hereto and their respective successors and assigns. 5. The Parties agree to take such actions, including the execution and delivery of documents and instruments, as may be necessary or appropriate to carry out the terms and intent of this Agreement and to aid and assist each other in carrying out the terms and intent. 6. No recourse under or upon any obligation, covenant, or agreement of this Agreement or for any claim based thereon or otherwise in respect thereof shall be had against the appointed or elected public officials of the City or the Commission or their respective officers, agents, and employees, in any amount subject to the terms and conditions herein, and no liability, right or claim at law or in equity shall attach to or shall be incurred by the public officials of the City, the Commission or their respective officers, agents, and employees and all such claims are hereby expressly waived and released as a condition of and as a consideration for the execution of this Agreement by the Commission, provided such elected officials, officers, agents, and employees are acting pursuant to lawful authority and are uniformly enforcing and/or administering the laws, ordinances, practices and procedures of the City and the Commission. No recourse under or upon any obligation covenant or agreement of this Agreement or for any claim based thereon or otherwise in respect thereof shall be had against the officers, agents, or employees of SBHF in any amount subject to the terms and conditions herein. 7. If any portion of this Agreement, or its application to any person, entity, or property, is held invalid or unenforceable, the application or validity of any other portion of this Agreement shall not be affected. 8. The Parties shall each bear their own costs and expenses with respect to this Agreement and the other matters contemplated hereby, including, without limitation, the fees and expenses of their respective 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. IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first above written. South Bend Heritage Foundation, Inc. South Bend Redevelopment Commission By: By: Its: Its: ATTEST: ATTEST: By: By: Its: Its: EXHIBIT A Property LEGAL Building 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. Legal Parking lots The west half of the east half of lot numbered 22 in the State Banks first addition to the City of South Bend, except the following: Beginning on the south line of Colfax Avenue, 53.13 feet west of the east line of bank out lot 22 (west line of William street); thence south parallel with 53.13 feet west of east line of said bank out lot 22 a distance of 199 feet to the north line of public alley; thence west along the north line of said public alley, a distance of 1.77 feet; thence east along south line of said Colfax avenue a distance of 2.32 feet to the place of beginning. Commonly known as 508 W. Colfax, South Bend, Indiana Key No 71018- 1023 -0970 The East half of the west half of bank out lot numbered 22 of the first plat of out lots of the town, now City of South Bend, platted by the State Bank of Indiana. Commonly know as 512 W. Colfax, South Bend, Indiana Key No 71018- 1023 -0969 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 existing when able), flooring, walls and cabinets. HVAC, electric and plumbing will be completely new systems. All units will receive new appliances. A Kroppe fire system will be installed for fire suppression. A new central elevator will be installed requiring footers and mechanical pit in the basement. On the exterior, a new roof will be installed, the existing brink facade will be tuck pointed, limestone repaired /replaced and new brick veneer applied where needed. All windows will be repaired and or replaced. A parking lot will also be constructed close to the building on two existing vacant lots. An existing structure on one of the lots will be utilized for covered parking. The lot will be constructed per the existing zoning ordinance. All set -back, lighting, landscaping and spacing requirements will be followed accordingly. As part of the tax credit award, certain environmentally - friendly or "green certified" products and procedures will also be utilized. 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 easy access for residents to reach their apartments (see attached building plans). Convenient short-term parking is available on street and a large parking lot will be available to residents adjacent to the site. A small covered parking facility is also planned. EXHIBIT E Construction Schedule Begin Construction: October 2012 October 2012- January 2013: Interior Demolition, install new roof, secure existing windows and doors, preliminary electric installation. January 2013 -June 2013: HVAC, electric, plumbing, interior carpentry, primary interior finishes, new windows, parking lot construction. Pre -lease marketing begins July 2013- October 2013: Exterior finishes, final interior finishes, complete all interior carpentry. All construction completed. October 2013 - February 2014: Finalize all marketing, resident occupancy certifications and stabilization, building fully occupied and operational. 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 provided by South Bend Heritage Foundation, and a part-time leasing agent will be housed in the building. As scheduling allows, social activities for residents will be offered, as part of South Bend Heritage's Resident Life Coordinator Initiative. Public transportation is directly available to Rushton residents. Located in the West Washington National Register Historic District, The Rushton will serve as a signature historic housing development for the transition area between downtown South Bend and the West Washington neighborhood. Community and Economic Development Impact: At least $1,973,009 for construction payroll and building materials; Rehabilitate a long- standing historic property that would otherwise remain vacant or be demolished at a cost to the City; Inject roughly $3,493,977 of private equity into our community; Create a new base of seniors living near downtown South Bend that will purchase goods and services; Provide high quality, affordable housing for seniors near medical facilities, recreational and cultural amenities. AUTHORIZATION FOR ENTRY UPON AND THE TEMPORARY USE OF PRIVATE PROPERTY THIS AGREEMENT is made effective the day of , 2012, by and between the CITY OF SOUTH BEND, DEPARTMENT OF REDEVELOPMENT, acting by and through its South Bend Redevelopment Commission (the "Commission ") and SOUTH BEND HERITAGE FOUNDATION, INC. (the "Organization "). RECITALS WHEREAS, the Organization is the owner of certain real property and improvements located in St. Joseph County, Indiana, which property is located on West Washington Street and West Colfax Avenue, in South Bend, Indiana, and known as: Parcel No. Address Common Name 18 -1023 -0966 501 W. Washington Rushton Building 18- 1023 -0970 508 W. Colfax vacant lot Colfax 18- 1023 -0969 512 W. Colfax vacant lot Colfax (collectively, the "Organization Property "); and WHEREAS, the Organization Property is located near the west side of the City's Central Business District and the Commission desires that the area should be renovated and enhanced, which will result in a more desirable look to this area and better marketing of the City's oldest Historic District and Museum Campus which is in the best interests of the Citizens of South Bend; and WHEREAS, the Organization desires to demolish and remove certain improvements located on the Organization Property; and WHEREAS, the Commission has the expertise and capability to accomplish the demolition and removal desired by the Organization (the "Demolition Activity "); and WHEREAS, the Organization desires to renovate the fagade on certain improvements located on the Organization Property; and WHEREAS, the Commission has the expertise and capability to accomplish the facade improvements desired by the Organization (the "Fagade Activity "); and WHEREAS, the Organization desires to make certain site improvements located on the Organization Property; and WHEREAS, the Commission has the expertise and capability to accomplish the site improvements desired by the Organization (the "Site Activity "); and WHEREAS, the Commission is willing to complete the Demolition Activity, the Facade Activity, and the Site Activity in order to further the Commission's desire to improve the area in this near west side of the City and the Organization Property; and WHEREAS, the Organization is willing to grant to the Commission, its employees and agents access to and the non - exclusive use of the Organization Property to conduct the Demolition Activity, the Fagade Activity, and the Site Activity subject to certain terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: I. The Organization grants to the Commission, its employees and agents, a temporary, non - exclusive right on, in and across the Organization Property for the purpose of conducting the Demolition Activity, the Fagade Activity, and the Site Activity (collectively, the "Activities ") described herein. This non - exclusive right to enter upon and use the Organization Property for the Activities is available only as set forth herein. 2. The parties agree that the Activities shall consist of the following: a. The Commission will demolish existing improvements necessary to carry out the fagade and site improvements on these parcels, before October 31, 2013. b. The Commission will contract for and complete the fagade renovation and site improvements in the estimated amount of $322,300.00 on these parcels, before October 31, 2013. 3. In consideration for authorization and approval by the Organization for the Commission to enter upon and use the Organization Property in conducting the Activity, the Organization hereby agrees and undertakes to hold the City of South Bend, Indiana, its agents, contractors, employees, successors and assigns, free and harmless from any liability, loss, costs, damages or expenses, including attorney's fees, which the City of South Bend may suffer or incur, as a result of any claims or actions which may be brought by any person or entity arising out of the approval granted herein by the Organization. If any action is brought against the City of South Bend or its agents, contractors, employees, successors and assigns, because of the aforementioned Activity, the Organization agrees to defend such action or proceedings at its own expense and to pay any judgment rendered therein. 4. The Parties understand and agree that the access rights granted under this agreement to accomplish the Activities are temporary and do not constitute either a lease or an interest in the Organization Property. 4 5. Except as otherwise provided in this Agreement, upon any default in or breach of this Agreement by either party or any successor to such party, such party (or successor), upon written notice from the other, shall proceed immediately to cure or remedy such default or breach within thirty (30) days after receiving the notice. If action is not taken or not diligently pursued, or the default or breach is not cured or remedied within a reasonable time, the aggrieved party may institute proceedings necessary or desirable in its sole opinion to cure and remedy the default or breach, including, but not limited to, proceedings to compel specific performance by the party in default or breach of its obligations. 6. No member, official, or employee of the City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, or employee participate in any decision relating to this Agreement which affects his personal interests or the interests of any corporation, limited liability company, partnership or association in which he /she is, directly or indirectly, interested. No member, official or employee of the City shall be personally liable to the Organization, or any successor in interest, in the event of any default or breach by the City or for any amount that may become due to the Organization, its successors or assigns or on any obligations under the terms of this Agreement. 7. A notice, demand or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally and a. in the case of the Organization, is addressed to or delivered personally to the Organization as follows: South Bend Heritage Foundation, Inc. ATTN: Executive Director 803 Lincoln Way West South Bend, Indiana 46616 b. in the case of the Commission, is addressed to or delivered personally to the Commission as follows: South Bend Board of Public Works 1316 County -City Building 227 West Jefferson Boulevard South Bend, Indiana 46601 ATTN: President With copy to: City Attorney Department of Law 1400 County -City Building 3 227 West Jefferson Boulevard South Bend, Indiana 46601 or at such other address with respect to such party as that party may from time to time designate in writing and forward to the other party as provided in this Section. 8. The Commission will secure at its expense, all necessary permits and authorizations needed in order to conduct the Activities. 9. The Commission understands and agrees that it will, at its own expense, observe and comply with all statutes, laws, ordinances, requirements, orders, rules and regulations of all governmental authorities. 10. The Organization, at its expense, shall maintain during the term of this Agreement, general liability insurance on the Organization Property covering the Organization as the named insured and identifying the City of South Bend, Indiana, as an additional insured with terms satisfactory to the Commission and with companies qualified to do business in the State of Indiana, for limits of not less than $1,000,000.00 for bodily injury, including death resulting therefrom, and personal injury for any one (1) person in any one (1) occurrence, $5,000,000.00 for such injuries for all persons for any one (1) occurrence, $700,000.00 property damage insurance, or a combined single limit in the amount of $5,000,000.00. Notwithstanding the foregoing, the Organization shall, at all times, maintain said general liability insurance naming the City of South Bend, Indiana, as an "additional insured" for bodily injury, including death resulting therefrom and personal injury with limits sufficient to cover the Commission's exposure to liability for said injuries, which amounts are set forth at Indiana Code § 34- 13 -3 -4, as the same may be amended, superseded or recodified from time to time. 11. The Organization, for itself and its successors and assigns, agrees that during the term of this Agreement, the Organization shall not discriminate on the basis of race, color, creed, sex or national origin in the sale, lease, rental, use or occupancy of the Organization Property. 12. This Agreement shall be governed by the laws of the State of Indiana. 13. The undersigned person(s) executing and delivering this Agreement on behalf of the Organization represents and certifies that s/he is a duly authorized member of the Organization and has been fully empowered, by proper action by the Organization to execute and deliver this Agreement and that all necessary corporate action has been taken and done by the Organization. 14. The access rights granted under this agreement shall expire on October 31, 2013 without any further action on the part of either party. IN WITNESS WHEREOF, the Parties have each executed this Agreement as of the date first written above. 4 ATTEST: Printed Name and Title ATTEST: Printed Name and Title South Bend Redevelopment Commission South Bend Heritage Foundation, Inc. Signature arco Alariani. Executive Director CITY OF SOUTH BEND, DEPARTMENT OF REDEVELOPMENT Signature Printed Name and Title South Bend Redevelopment Commission 5 STATE OF INDIANA ) ) SS: ST. JOSEPH COUNTY ) Before me, the undersigned, a Notary Public, in and for said County and State, personally appeared Marco Mariani, known to me to be the Executive Director of SOUTH BEND HERITAGE FOUNDATION, INC., and acknowledged the execution of the foregoing Agreement. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day of 12012. Notary Public Residing in St. Joseph County, IN My Commission Expires: STATE OF INDIANA ) ) SS: ST. JOSEPH COUNTY ) Before me, the undersigned, a Notary Public, in and for said County and State, personally appeared and , known to me to be the and of the South Bend Redevelopment Commission and acknowledged the execution of the foregoing Agreement. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day of , 2012. Notary Public Residing in St. Joseph County, IN My Commission Expires: I affirm, under the penalties for perjury, that I have taken reasonable care to redact each Social Security number in this document unless required by law. Lawrence J. Meteiver This instrument was prepared by Lawrence J. Meteiver, Assistant City Attorney, City of South Bend, 227 West Jefferson, 1400 County -City Building, South Bend, Indiana 46601. 0 EXHIBIT "A" Activities Parcels