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HomeMy WebLinkAbout6C (1)(1-9 CO 6pVT Community & Economic Development''' i. s 1200 County -City Building, 227 West Jefferson, South Bend, Indiana 46601 -1830 Phone 574/235 -9371 Fax 574/235 -9021 To: Redevelopment Co mis " n, Board of Public Works From: Bill Schalliol Subject: Resolution 3052 and Addendum To Master Agency Agreement Union Station Technology Center, MOU 1 Budget Date: June 21, 2012 Attached to this memorandum is Resolution 3052 and the Addendum to Master Agency Agreement for the Union Station Technology Center, MOU 1 Budget. In March 2012, the Redevelopment Commission entered into a binding Memorandum of Understanding ( "MOU ") with the Union Station Technology Center ( "USTC ") team. The MOU contemplated energy service upgrades to the USTC that would be aided by the use of $2.2 million of Airport Economic Development Area TIF funds. The TIF funds would pay for conduit and power grid extensions from the AEP substation on Main Street to the USTC as well as the purchase of power equipment to help provide power and other resources to the center. This Resolution and Addendum authorize the Board of Public Works to be the Commission's agent in contracting for infrastructure improvements and equipment for the first Phase of the USTC project. The total budget for all improvements, based upon the MOU, is $2.2 million dollars. A scope of work relative to this budget is being developed and bidding for the equipment purchase and installation will be working its way through the Board in July. Work is presently underway on the conduit extension component of this work from the substation north to South Street and in to the USTC. Staff requests favorable approval of Resolution 3052 and the Addendum. What We Do Today Makes A Difference! RESOLUTION NO. 3052 RESOLUTION OF THE SOUTH BEND REDEVELOPMENT COMMISSION APPROVING AND AUTHORIZING THE EXECUTION OF AN ADDENDUM TO THE MASTER AGENCY AGREEMENT (Union Station Technology Center, MOU 1 Budget) WHEREAS, effective January 1, 2012, the South Bend Department of Redevelopment, acting by and through its Redevelopment Commission (the "Commission ") and the South Bend Board of Public Works (the "BPW ") entered into a Master Agency Agreement which authorized the BPW to act as agent for and on behalf of the Commission for certain projects during 2012; and WHEREAS, pursuant to the Master Agency Agreement, the Commission desires to add the Union Station Technology Center, MOU 1 Budget to the Master Agency Agreement by way of this Addendum. NOW, THEREFORE, BE IT RESOLVED by the South Bend Redevelopment Commission as follows: Section 1. The Commission hereby approves the Addendum to Master Agency Agreement (Union Station Technology Center, MOU 1 Budget) and hereby authorizes its execution in substantially the form attached hereto with such changes as the Commission may deem necessary or appropriate upon the advice of counsel, said execution thereof to be conclusive evidence of the Commission's approval of such changes. The Clerk is hereby directed to file a copy of the Addendum with the BPW. Section 2. This Resolution shall be in full force and effect after its adoption by the Commission. Section 3. Commission staff members are authorized to execute on behalf of the Commission any documents necessary to carry out the intent of this resolution. i 7 ADOPTED at a meeting of the South Bend Redevelopment Commission held on June 28, 2012, at 9:30 a.m., in Room 1308, County -City Building, South Bend, Indiana 46601. CITY OF SOUTH BEND, DEPARTMENT OF REDEVELOPMENT South Bend Redevelopment Commission ATTEST: South Bend Redevelopment Commission ADDENDUM TO MASTER AGENCY AGREEMENT (Union Station Technology Center, MOU 1 Budget) (3052 -12) This Addendum to Master Agency Agreement (this "Addendum "), made and entered into as of the 10th day of July, 2012, by and between the South Bend Department of Redevelopment, acting by and through its Redevelopment Commission (the "Commission ") and the City of South Bend, Indiana, a municipal corporation duly organized and existing pursuant to the laws of the State of Indiana, acting by and through its Board of Public Works (the "BPW ") for purposes of the Commission designating the BPW to act as the Commission's agent to undertake the Union Station Technology Center, MOU 1 Budget (the "Project "). WHEREAS, effective January 1, 2012, the Commission and the BPW entered into a Master Agency Agreement which authorized the BPW to act as agent for and on behalf of the Commission for certain projects during 2012; and WHEREAS, pursuant to the Master Agency Agreement, the Commission desires to add the Union Station Technology Center, MOU 1 Budget to the Master Agency Agreement by way of this Addendum. NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the BPW and the Commission agree as follows: 1. The Commission hereby empowers and appoints the BPW, pursuant to the Master Agency Agreement, to act as the Commission's agent for the limited purpose of contracting for and managing the completion of the Project, the scope of said Project being more specifically described in "Exhibit A ", attached hereto and made a part hereof. 2. All of the terms and conditions of the Master Agency Agreement shall control this appointment and this Addendum shall be attached to the Master Agency Agreement. 3. Commission staff members are authorized to execute on behalf of the Commission any documents necessary to carry out the intent of this resolution. IN WITNESS WHEREOF, the undersigned execute this Addendum to Master Agency Agreement to be effective as of the date first written above. (Signature Page Follows) CITY OF SOUTH BEND, DEPARTMENT OF REDEVELOPMENT South Bend Redevelopment Commission ATTEST: South Bend Redevelopment Commission CITY OF SOUTH BEND, INDIANA BOARD OF PUBLIC WORKS Gary Gilot, President Don Inks, Member Kathryn Roos, Member Mark Neal, Member Michael Mecham, Member ATTEST: Linda Martin, Clerk F.xhihit "A" Union Station Technology Center, MOU 1 Budget The project budget for improvements and equipment purchases related to Memorandum of Understanding #I entered into by the South Bend Redevelopment Commission on March 8, 2012, was capped at Two Million Two Hundred Thousand Dollars ($2,200,000.00). MOU 1 is attached as documentation for Exhibit A MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding (the "Agreement ") effective as of March 2012 is made and entered into by and between the City of South Bend, Indiana, a political subdivision and municipal corporation of the State of Indiana, by and through its South Bend Redevelopment Commission (the "Commission "), and Union Station Properties, LP, an Indiana Limited Partnership ( "Union Station ") (each individually a "Party" and collectively the "Parties "). STATEMENT OF FACTS A. The Commission is the Governing Body of the City of South Bend, Department of Redevelopment (the "Department ") and exists and operates under the provisions of I.C. 36 -7 -14, commonly known as the "Redevelopment of Cities and Towns Act of 1953 ", as amended from time to time (the "Act "). B. Union Station owns property in the South Bend Central Development Area ( "SBCDA ") as established by the Commission, commonly known as 506 West South Street, South Bend, Indiana 46601 (the "Property "). C. Union Station is contemplating an expansion of its operations as a three (3) phased private development to be known as the Union Station Technology Center (hereafter defined as "USTC ") on land boarded or bounded by South Street, Lafayette Boulevard, Sample Street, and Prairie Avenue (the "Renaissance District ") in the Airport Economic Development Area ( "ADEA "), as established by the Commission in South Bend, Indiana. D. Since 1979, Union Station has continuously developed and adaptively reused the Property, allowing Union Station to become Indiana's second largest "carrier hotel" with over six thousand (6,000) fiber end points within the building and hosting over sixteen (16) national carriers. E. Union Station offers low cost, computing space and power, which enables its customers to compete in the global technology marketplace. F. The focus of the USTC is to enhance and expand Union Station's core products of space, power, and connectivity. The proposed phased development will provide the space necessary for the mechanical equipment that produces power product, expand data center floor space, enable a secure loading dock area, and scale up the current utilization of the patent pending combined heating and cooling technology known as the Integrated Central Power System (the "IC Power System "). G. Without this expansion, Union Station will not be able to accommodate its sustained growth over the next several years, nor will it be able to assist in the economic development of the Coveleski Planning Development District to the north, and Ignition Park to the south. H. The Commission has already taken steps to assist in the USTC by authorizing at its November 22, 2011, meeting a proposal for professional services by Wightman Petrie related to master planning and street vacation and also to permit staff and the City Legal Department to begin the process of negotiating an appropriate Agreement for the sale and development of the Millennium Environmental site, illustrated on 1 -C of Exhibit "1" which is incorporated herein by reference consisting of 2.6 acres at 604 South Scott Street, in the AEDA (the "Millennium Site "). I. At its January 3, 2012 meeting, the Commission authorized a proposal for a Phase I Environmental Site Assessment, Asbestos Containing Material Survey, and Lead Paint Survey for Ivy Tower, commonly known as 635 South Lafayette; 600 United Drive, and vacant lot on United Drive, situated in the City of South Bend, Indiana ( "Ivy Tower Building "). J. This Agreement is Phase I of the USTC (Phases II and III will be the subject matter- of one (1) or two (2) other separate agreements between the Parties). As part of Phases II and III, it is contemplated Union Station or an affiliate of Union Station will purchase the Ivy Tower Building to expand the capabilities to provide not only Union Station but the surrounding community with an IC Power System. This public private infrastructure development will be capable of serving the SBCDA, Ignition Park, and other secondary buildings within close proximity to the Property. K. The City of South Bend, through its Board of Public Works, has taken further action in support of the USTC by planning and preparing for bid the installation of a communication and power duct bank which connects a power substation on Lafayette Street which will then connect to Union Station and other business and properties in the general vicinity. A depiction of the proposed communication and power duct bank is found on Exhibit "1" as item 1 -A and 1 -B. L. The Commission on June 14, 2011, approved Resolution No. 2897 which set the value of the Millennium Site at $42,500 and further reported on July 12, 2011 no bids for the Millennium Site were received, thus allowing the Commission to approve a purchase at a negotiated price. As part of this Agreement, the Commission and Union Station have agreed on a price of Forty -Two Thousand Five Hundred Dollars ($42,500) for the purchase of the Millennium Site by Union Station or its affiliate. K M. The benefits to the USTC as a result of Phase I of this Agreement shall be to: (i.) Increase the building footprint of the Renaissance District by a minimum of twenty thousand (20,000) square feet. (ii.) Allow USTC to expand product offerings such as containerized computer infrastructure. (iii.) Provide space necessary for secure loading dock areas which are a critical component of Union Station's business operations. (iv.) Provide space necessary to expand the current utilization of the IC Power System. N. The benefits to the City as a result of Phase I of this Agreement will include: (i.) Increase of high technology and support jobs in the Renaissance District from forty (40) to one hundred thirty (130) within the next five (5) years. (ii.) Increase spending for support services in the Renaissance District to local companies from Five Hundred Thousand Dollars ($500,000) per year to Two Million Dollars ($2,000,000) per year over the next five (5) years. (iii.) During the construction phase in the Renaissance District, provide up to forty (40) additional construction jobs. O. The potential benefits to the City as a result of Phases II and III may include: (i). Adaptive reuse of buildings with historic significance within the SBCDA and the AEDA, including the Ivy Tower Building as a collaborative multi - tenant facility to revitalize the Renaissance District. (ii.) Enhanced power sources and infrastructure to support not only the USTC, but also Ignition Park and the Economic Development Initiatives in the Coveleski Planning Development District. (iii.) Further leverage previous public investments made to date that have supported the St. Joseph Valley Metronet. (iv.) Providing a framework to enable surplus energy utilization from the USTC to other buildings, including the St. Joseph County Jail, South Bend Police Station, Studebaker Headquarters, Stanley Coveleski Regional Stadium, Claeys Candy, Ivy Tower, Ignition Park, and the SBCDA. 3 (v) Allow South Bend to be competitive on an international scale for the development of advanced energy systems, such as the IC Power System. (vi) Provide a potential of One Hundred Twenty Thousand Dollars ($120,000) in annual net energy savings to City and other governmental agencies' facilities. P. The Parties recognize that: (i.) The City and the Commission must take additional actions in order to implement certain of the initiatives set forth herein including, in some instances, completion of the required statutory and regulatory positions, and the Cities' and the Commissions' obligations hereunder shall be subject to completing such additional actions. (ii.) The obligations of the City and the Commission hereunder are subject to Union Station and /or any of its affiliates fulfilling their respective obligations hereunder; and (iii.) The obligations of Union Station hereunder is subject to the City and the Commission fulfilling their respective obligations hereunder. (iv.) As part of the additional actions required to better define the obligations of the Parties, timetables must be established to govern when each Party must complete their respective obligations under the Agreement. (v) The commitments made in this Agreement for Phase I are binding on the Parties. (vi) Phases II and III are intended to be items for future discussion depending upon the growth and success of Phase I. NOW THEREFORE, the Parties hereby agree the foregoing Statement of Facts are accurate and incorporated into this Agreement for all purposes and further agree as follows: Section 1. Commission Agreements. The Commission agrees with Union Station as follows: (a.) Phase I Commitments. (i) The Commission shall subject to further proceedings required by law, sell to Union Station for the sum of Forty -two Thousand Five Hundred Dollars ($42,500), the Millennium Site, depicted as Item 1 -C on Exhibit 1, and shall take all steps reasonably necessary to support the vacation of United Drive in order to make the Millennium Site developable for the purposes stated herein, and shall provide Union Station with a comfort letter from the Indiana Department of Environmental Management allowing Union Station to purchase the Millennium Site without any environmental liability or claims of lienholders. (ii) The Commission shall take all steps reasonably necessary in order to immediately construct the proposed communication and power duct bank depicted as Item 1 -A and 1- B on Exhibit "I", under specifications consistent with the initiatives described in the Agreement, including the proposed components to support an upgrade of equipment capable of up to five Megawatts ( "5 MW ") as part of the IC Power System. It is contemplated that the cost of the proposed system will be Two Million Two Hundred Thousand Dollars ($2,200,000) as described in Exhibit "2" which is attached hereto and incorporated herein by reference. Section 2. Union Station Commitments. The Union Station agrees with the Commission as follows: (a.) Phase I Commitments. (i) Purchase the Millennium Parcel from the Commission consistent with the Commission's Phase I Commitments described in Section 1(a)(i). Cooperate with the Commission in order to facilitate the vacation of United Drive. (ii) Make no less than seven million five hundred thousand dollars ($7,500,000) in proposed improvements to expand the IC Power System up to Five Megawatts ( "5 MW ") of capability and improvements in the Renaissance District to support the component parts of the expanded IC Power System. A list of the proposed improvements to be made is attached hereto and made a part hereof as Exhibit 'W'. (iii). In order to permit Commission to recapture its Phase I Commitment described in Section l (a)(ii), an annual review shall take place between the representatives from Union Station and the Department of Community and Economic Development to calculate the Other Benefits as defined in Exhibit "3" which is attached hereto and is incorporated herein by reference. (iv). In the event there is a shortfall in the Other Revenues provided by Union Station when compared to the total amount the Commission has paid pursuant to Section I(a)(ii) amortized over a ten (10) year period ( "Investment Recapture Period "), Union Station will pay to the Commission within thirty (30) days of receiving the calculation contemplated under Exhibit "3 ". Notwithstanding anything to the contrary, the first payment due from Union Station, if any, shall be due and payable after the third annual review is completed. Any balance due from the first three (3) annual reviews may be paid by Union Station at that time or to amortize the payment over the remaining seven (7) years of the Investment 5 Recapture Period. From the fourth (4 °i) year of the Investment Recapture Period forward, any payments from Union Station will be due on an annual basis as described above. (v) Provide the Commission and any other applicable government agencies with all information reasonably necessary to complete the actions contemplated by this Agreement and acknowledge and understand all such information to the extent provided to a governmental agency may be subject to the Indiana Access to Public Records Act. (vi) Provide the Commission with an annual report concerning the progress of Union Station's Phase I Commitments. To the extent possible, this report shall be at a regularly scheduled Commission meeting. Section 3. Notices. Any notices, requests, or other communications required or permitted to be given hereunder shall be in writing and shall be either (i) delivered by hand, (ii) mailed by United States registered mail, return receipt requested, postage prepaid, (iii) sent by a reputable, national overnight delivery services (ie: Federal Express), or (iv) sent by facsimile (with the original being sent by one of the other permitted means or by regular United States mail) and addressed to each party at the applicable address set forth herein. Any such notice, request, or other communication shall be considered given or delivered, as the case may be, on the date of hand delivery (if delivered by hand), on the third (3'.d) day following deposit in the United States mail (if sent by United States registered mail), on the next business day following deposit with an overnight delivery service with instructions to deliver on the next day or on the next business day (if sent by overnight delivery service), or on the day sent by facsimile (if sent by facsimile, provided the original is sent by one of the other permitted means as provided in this paragraph or by regular United States mail). Union Station: Union Station Properties, LLC Attn: Kevin M. Smith 6561 Lonewolf Drive, Suite 100 South Bend, Indiana 46628 D Commission: South Bend Redevelopment Commission Attn: Don Inks 12th Floor, County -City Building South Bend, IN 46601 Section 4. Miscellaneous. The following general terms are made a part of this Agreement: (a.) The tern of this Agreement shall be for a period of one (1) year ( "Initial Tern "), and it shall automatically renew for an additional period of one (l) year ("Renewal Tern ") unless either Party provides written notice of its intention to terminate the Agreement at least one hundred twenty (120) days prior to the expiration of the Initial Term or any Renewal Term. (b.) This Agreement shall bind, and inure to the benefit of, the Parties and their heirs, personal and legal representatives, and successors and assigns. (b.) This Agreement shall be interpreted by the laws of the State of Indiana and any venue for any action related to this Agreement shall be in the St. Joseph County, Indiana Courts. (c.) In the event of any Parties' failure to perform or observe any of the covenants, terms or conditions in this Agreement, the defaulting Party shall pay the other Parties' attorney fees, costs and expenses, including expenses of preparing any notice of delinquency request for performance, whether or not any legal action is instituted, including by reason of enforcing the non - defaulting Parties' rights hereunder. (d.) Any Parties' failure to enforce any of its rights or remedies upon the other Parties' breach of any of the covenants, terms or conditions of this Agreement shall not be deemed a waiver of those rights or remedies, nor shall its failure bar or abridge any of its rights or remedies upon any subsequent default. (e.) If any covenant, term or condition of this Agreement is held invalid or unenforceable by a court, the remaining covenants, terms or conditions shall not be affected by such an occurrence. Each covenant, term and condition of this Agreement shall be given effect and enforced against the breaching Party to the fullest extent permitted by law. (f.) This Agreement constitutes the entire Agreement between the Parties and may not be modified except in writing, signed by both Parties. Any prior understanding or 7 representation of any kind preceding the date of this Agreement shall not be binding on either Party except to the extent incorporated in this Agreement. (g.) The undersigned persons executing and delivering this Agreement on behalf of each Party represent and certify they are duly authorized with authority to execute this Agreement; they have the full legal right, power and authority to enter into this Agreement and to grant the rights and perform the obligations contained herein; to the extent any third party consent or approval is required to grant such rights or perform such obligations hereunder those third party consents or approvals will be obtained, but each Party may rely on this Agreement as a valid and binding obligation, enforceable in accordance with its terms. (h.) This Agreement may be executed in counterparts, each of which when taken together shall constitute one and the same instrument. [SIGNATURES CONTAINED ON FOLLOWING PAGE] IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by the duly authorized officers effective as of the date set forth above. SOUTH BEND UNION STATION PROPERTIES, LP REDEVELOPMENT COMMISSION See signatures Exhibit 4 (last page) By: Its President Attest: GlobalaccNOU11 RAN FV 7 Kevin M. Smith Its Managing Partner EXHIBIT 1 SCHEMATIC DEPICTION OF PHASE I AND PHASE II PROJECTS _. „' �...•�a+ •ten..- w.,.;..,.- %"�°`"•ins'""�� ���,�,Y9117.7:�`�' -v' "` `�*�.� �'._ / - - Y � • �• fit(= � � �Y.. � T R! Lij 11 ndy;,7l'1 M� 117i.vi AL IfY I j E A- I !, Ft EXHIBIT 2 ITEMIZATION OF COMMISSION'S PHASE I COMMITMENT Duct bank and wire installation $ 250,000 Electrical transformer $ 75,000 Electrical and thermal equipment $1,875,000 TOTAL ESTIMATED Phase I Commission Commitment: $2,200,000 EXHIBIT 3 CRITERIA TO DETERMINE PUBLIC BENEFIT OF RENAISSANCE DISTRICT'S PHASE I AND PHASE II COMMITMENTS The Commission will invest Two Million Two Hundred Thousand Dollars ($2,200,000) in improvements (described in Exhibit "2''). The Two Million Two Hundred Thousand Dollars ($2,200,000) will be returned to the Commission pursuant to Section 2(a)(iv) ( "Payments Due Commission "). Any Payments due the Commission from Union Station shall be offset by Other Revenues generated by the Phase I Commitments according to the calculation contained in this Exhibit "3 ". "Other Revenues" are defined as incremental increases in real and personal property taxes, increases in local income taxes and any energy savings, after recoupment of any Commission Capital investment required to realize the energy savings due to the Phase I Commitments of Union Station to arrive at the deduction to be made from the Payments Due Commission. Incremental Increases in real property taxes shall be deterniined by establishing the assessed value for taxes payable in 2012 as the Base Assessed Value, which shall be subtracted from subsequent years assessed value to get an incremental increase,. The Base Assessed Value shall be adjusted each year to account for changes not due to the Project (ie: inflation or trending). The St. Joseph County Assessor's Property Tax Records shall be used for purposes of these annual calculations. Property taxes shall be calculated for the adjusted Base Assessed Value and subjected from the then current year's real property tax bill to arrive at the deduction to be made from the Payments Due Commission. Incremental Increases in personal property taxes shall be determined by the property values reported on the State of Indiana Forms 103 and 104 for property purchased after March 1, 2012 and subsequent years. A calculation shall be made each year to determine the amount of personal property taxes which are due to personal property acquired on or before March 1, 2012 and which are due to personal property acquired after March 1, 2012. The personal property taxes related to acquisitions after March 1, 2012 shall be a deduction from Payments Due Commission, to the extent of the City of South Bend, Indiana's ( "City ") share of these taxes. Union Station shall provide the City with copies of their Forms 103 and 104 on an annual basis for purposes of this calculation. Incremental Increase in local income taxes shall be determined by establishing the value of the wages earned from businesses located on the Property prior to 2012 ( "Property Wages "), based on Certifications of number of full -time employees ( "FTEs ") and /or Gross Payroll from Union Station and tenant resident clients located on the Property, then subtracting this from the current year's value of Property Wages, based on current year's Certifications of number of FTEs and Gross Wages. This increase in Gross Wages shall be multiplied by the local income tax rate (currently 1.75 %), and the multiplied by the City's share of these income taxes (currently 40 %). The resulting value shall be a deduction from the Payments Due Commission. Union Station shall be responsible for collecting all certifications. Incremental Increases in energy savings shall be deterniined by establishing a baseline of energy costs immediately prior to undertaking any energy saving project, then comparing future energy bills to determine any savings. Savings shall first be applied to any capital costs incurred by the Commission to implement the energy savings project. After the Commission has recovered 100% of its capital costs, the energy savings shall be deducted from the Payments Due Commission. EXHIBIT 4 ITEMIZATION OF RENAISSANCE DISTRICT'S PROPOSED PHASE I IMPROVEMENTS Electrical Equipment • Generators • Electrical conductor • Uninterrupted Power Supplies • Labor Cooling Equipment • Chillers • Cooling towers • Thermal Distribution Piping • Ancillary Equipment • Labor $5,200,000 $3,500,000 General Construction • Conduit (electrical and fiber optics) • Building Automation Systems • Modular Data Center Environments • Perimeter Security Systems • Mechanical and Customer Corridors • Structural and building support systems • Pad mounts for MEP equipment $2,980,000 BEND 'COMMISSION