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HomeMy WebLinkAbout6C (2)� C_ (,) Community & Economic Development r • ItS 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: Disbursement Agreement & Revised Development Agreement Rushton Building, 501 W. Washington Date: July 12, 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. On March 27, 2012, the Commission approved a Development Agreement, which delineated each party's responsibilities. 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. On May 31, 2012, the Commission approved Resolution No. 3035 and an Addendum to the Master Agency Agreement, for the Board of Public Works to oversee the Commission's participation. To take full advantage of the tax credits needed to make this project successful, the total cost of $3.4 million must be used. The attached Disbursement Agreement allows SBHF to incur all costs of the project, and thereby earn full tax credit eligibility. Commission funds will be governed by the Disbursement Agreement, which allows funds to be deposited in an escrow account, and disbursed only with Commission approval, ensuring the use is as previously agreed to in the Development Agreement. What We Do Today Makes A Difference! A revised Development Agreement is needed to incorporate the Disbursement Agreement, specifically Item 4 on the third page, which adds Exhibit G to the Development Agreement. Staff requests approval of the Disbursement Agreement and revised Development Agreement, allowing full tax credit eligibility for this project, and thereby making it as successful as possible. Memo To RC re Rushton Disbursement Agreement.doc what we Do Today Makes A Difference! DEVELOPMENT AGREEMENT (Revised) 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 make 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 December 31, 2013 ("Completion Date "). If SBHF fails to substantially complete its renovation to the Property by the Completion Date, 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. SBHF and the Commission will execute a Disbursement Agreement in the form attached hereto as Exhibit G. 5. This Agreement shall be binding upon the parties hereto and their respective successors and assigns. 6. 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. 7. 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. By: Its: ATTEST: By: Its: South Bend Redevelopment Commission By: Its: ATTEST: By: 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.