Loading...
HomeMy WebLinkAbout05-28-19 Community Investment SpUTH 44.6 h U C7„ WVi' !- PEACEya , lfZi 1865 OFFICE OF THE CITY CLERK KAREEMAH FOWLER, CITY CLERK COMMUNITY INVESTMENT MAY 28, 2019 3:30 P.M. Committee Members Present: Gavin Ferlic, Dr. Oliver Davis, Kyle Copelin(citizen member), Sharon L. McBride (late) Committee Members Absent: Regina Williams-Preston Other Council Present: Tim Scott,Jo M. Broden (late), Jake Teshka(late), Karen White(late) Other Council Absent: John Voorde Others Present: Bianca Tirado, Graham Sparks, Bob Palmer Presenters: Beth Leonard Inks, Chris Dressel,Tim Corcoran, Dave Relos, Dan Buckenmeyer, Dave Mathews, Regina Emberton, Amy Varga Agenda: Bill No. 19-35- Resolution to Approve of the Written Order of the Area Plan Commission Regarding the Proposed Tax Increment Finance(TIF) Area Realignment Bill No. 19-37- Releasing Assessed Value from Douglas Road TIF Area for 2019 pay 2020 Update: Commerce Project on LaSalle and Sycamore- Dave Matthews, LLC Committee Chair Gavin Ferlic called to order the Community Investment Committee meeting at 3:30 p.m. He introduced members of the Committee and proceeded with the agenda. Bill No. 19-35- Resolution to Approve of the Written Order of the Area Plan Commission Regarding the Proposed Tax Increment Finance (TIF) Area Realignment Committee Chair Ferlic announced, This bill was sent favorably to the full Council last meeting. Committee Chair Ferlic opened the floor to members of the Committee for further comments. There was none. He then opened the floor to members of the public wishing to speak in favor of or in opposition to the legislation. There were none. Committee Chair Ferlic withheld the previous recommendation and sent Bill No. 19-35 to the full Council with a favorable recommendation. INTEGRITY' SERVICE'ACCESSIBILITY JENNIFER M.CoFFMA.N BIANCA L.TIRADO JOSEPH R.MOLNAR CHIEF DEPUTY/DIRECTOR OF OPERATIONS DEPUTY/DIRECTOR OF POLICY ORDINANCE VIOLATION CLERK EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227 W.Jefferson Blvd.I South Bend,Indiana 46601 I p 574.235.9221 I f 574.235.9173 I www.southbendin.gov •CITYOF SOUTH BEND I OFFICE OF THE CLERK BM No. 19-37- Releasing Assessed Value from Douglas Road rea for 2019 pay 2020 Councilmember Karen White arrived at the meeting at 3:31 p.m. Beth Leonard Inks, Director of Redevelopment Finance for the Department of Community Investment with offices located on the 14th floor of the County-City Building, stated, This is a technical requirement with the Douglas Road TIF. If you remember, we no longer need that TIF money,but we left the TIF open because we are spending the last$200,000 on a utility move. We are releasing it for next t year. We've already released it for this year. This is with the hope of closing the TIF before we would have received any money for this year. Councilmember Jake Teshka arrived at the meeting at 3:32 p.m. Committee Chair Ferlic opened the floor to members of the public wishing to speak in favor of or in opposition to the legislation. Committeemember Dr. Oliver Davis made a motion to send Bill No. 19-37 to the full Council with a favorable recommendation. Committeemember Kyle Copelin seconded this motion which carried by a voice vote of three(3) ayes. Committeemember Sharon L. McBride arrived at the meeting at 3:32 p.m. Councilmember Jo M. Broden arrived at the meeting at 3:32 p.m. Council President Tim Scott asked Committee Chair Ferlic to reopen discussion on Bill No. 19- 35, due to the recent arrival of Council Members. Bill No. 19-35- Resolution to Approve of the Written Order of the Area Plan Commission Regarding the Proposed Tax Increment Finance (TIF) Area Realignment Committee Chair Ferlic stated, We did previously provide a recommendation at the Committee level and it was continued at the Council level. Committee Chair Ferlic then opened the floor to questions and comments from Committee and Council Members. Councilmember Karen White stated, We are looking at all of the TIF Districts and realignments. When I look at this, clearly, we would be taking action for basically a new Council. There were some concerns brought forth at the last meeting, if I'm not mistaken, to try and ensure that at the Redevelopment level, there is opportunity for public input. The way the meetings are scheduled, the timing does not give that type of opportunity as well. One (1) thing I was thinking about is in light of the amount of dollars being allocated for the various districts, I think it would enhance transparency and communication, if we can even just get a report from the Redevelopment Commission. They should come before the Council and talk about all their different things. This is especially important as we begin to look at the breadth and the scope of what is being done and what is being requested. I do have some concerns about how we are going to operate and then the action we take this evening, the impact it is going to have. Committeemember Dr. Davis interjected, Would you like to add what you just suggested as an amendment to the passage of that? EXCELLENCE ACCOUNTABILITY ! INNOVATION 1 INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 2 ',CITY OF SOUTH BEND OFFICE OF THE CLERK Councilmember White stated, I think adding an amendment will not necessarily get us to where we need to be. I think it would be helpful, but I want to hear from the public, too, regarding these various realignments but to also ensure that our citizens have the opportunity to attend these Redevelopment Commission meetings. Committeemember Sharon L. McBride stated, I actually got some phone calls last night from my area. They were asking about money being moved from the South Side and they wanted to know where it was going and why. So, I think those are good questions and I think they said they are coming today to speak about it. Committee Chair Ferlic stated, I did ask Redevelopment President, Marsha Jones, at the last meeting to consider a different time. I'm hopeful she is open to that. Committeemember Dr. Davis interjected,But that's why I said,to me,if she is not,I think a portion of this amendment being passed should be contingent on that being put into place. If it's not, it's just wishful thinking. We've asked them in the past to do certain things and, basically, we have gotten the cold shoulder. I think if an amendment is put into place, now and future Council, we will still get the same kind of reaction. Councilmember Jo M. Broden stated, I just want to concur with the folks who brought up the timing of the meetings. Certainly, reports are important and that can be hit on a quarterly basis. Heretofore, we have received some annual reporting, you know, relative to abatements or TIFs. You know, stuff that is statutorily required. However, I do think, again, to concur, the amount of dollars that are going through there, I think public engagement could be higher. To that end, I actually asked for some stats over just the past two (2) years in terms of public participation at the meetings, an outright list of those individuals,petitioners, city employees and the media. If we are going to move the meetings, I suggest we look at 5:00 p.m.,similar to the Parks Board. Aside from public participation, being educated by the process is something that could be an outcome of that. I do think,also,if we are going to look at this,and one(1)of the pushbacks is,and it's a reasonable one(1), is that there is an impact on the City employees and those individuals who routinely attend these meetings. So, I think we have to find ways to accommodate that, as a Council and as an Administration, their participation on those frequent meeting dates and, hopefully, at a different time. She passed out handouts to Committee and Council Members (which are available in the City Clerk's Office) and stated, One (1) of the things the research guided me to is also that the media participation is only really four(4). Michiana Observer, I believe that is just a blogger, the South Bend Tribune, WNDU and WSBT. So, in terms of coverage at those events, between individual members of the public and Council Members, most of us are precluded from that because of our job schedules. So, again, the importance of it, I don't want to under state. Committeemember Dr. Davis stated, Going along with what she said, the ability to even speak at these meetings is not encouraged. It's a problem. Even as a Council Member. I wasn't a Council Member that day, but they gave me the courtesy to speak, but it shouldn't be a courtesy. It should be everybody. Chris Dressel, Senior Planner for the Department of Community Investment with offices located on the 14th floor of the County-City Building, stated, Well, I will try to answer these concerns in EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 3 ®CITY OF SOUTH BEND OFFICE OF THE CLERK the most efficient way as possible. We had been able to do this in a way that is not wasteful of anyone's time. We prepared a response to some of Councilmember Broden's concerns in our PowerPoint, if you could put that up on the screen (referencing a slide in a presentation which is available in the City Clerk's Office). We have a group of individuals here to answer other questions, too. Councilmember Broden interjected, And thank you for the changes, I'm sorry, I should have mentioned that. Tim Corcoran, Director of Planning for the Department of Community Investment with offices located on the 14th floor of the County-City Building, stated, Apologies for being a few minutes late to the start of this. I didn't hear all the questions, but I heard the timing of the meeting was a big issue. This particular adjustment and the development plan updates don't talk to those because that is not what this is about. This is just about changing a boundary and making sure the development plans are in line with the City's Comprehensive Plan and that we've gone through a voluntary public process to help inform the people and residents that will be included in the new adjusted areas as well as on the acquisition list. He continued,To that, if you were to choose, for instance,not to take any action tonight, or to vote this down, effectively nothing would change. So, I think it is important for me and for all of us to move forward in a positive direction tonight with these adjustments. We are also on a very tight timeline. Milestones hit (referencing a slide in the presentation), we delayed last week because of some of the text amendments that Councilmember Broden asked for. It is my opinion that we cannot delay tonight. Otherwise, it will restart the three (3)month process again and I don't think it would actually accomplish the things you guys are asking for. That is something we need to talk about more internally. There was another comment about members of the public not being able to speak during a Redevelopment Commission meeting. Councilmember Broden interjected, By law, they don't have to be given the opportunity to speak. Dave Relos, Property Development Manager for the Department of Community Investment with offices located on the 14th floor of the County-City Building, stated, By law, we don't have to, right. But, if someone has comments,we listen and if there are people there whose project it is, we let them speak. They are always asked to inform the Commission of the project. Oftentimes, though, we allow for public comment. Committeemember Dr. Davis interjected, I respect what Mr. Corcoran has said in a sense, but at the same time, I will say this. That would almost throw everything we said just out the window. I think sometimes the reason why we, as a Council, have felt the need to say things like this is because of those same kinds of responses when we've had that. It's like, well, we have to move on, we have to move on, and we don't see that. I encourage my colleagues to think really closely about approving such action tonight without having some amendments and some of those other things as a part of this. Because, if we don't show any amendments to these kinds of issues, they will just continue to do this, and it will be a practice for the years to come. Mr. Corcoran replied, To be fair, we have been talking to Council since last October about this. To wait until this point seems to me to be maybe not the best way to go about it. We've had a lot EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 4 CITY OFSOUTH BEND OFFICE OF THE CLERK of time to talk about the meetings and we can continue to talk about the meetings. This has zero (0) impact on when the meetings are. Committeemember Dr. Davis interrupted, I mean, from that standpoint, but there is a reason why we need to do that. So, I respect what you have shared but,no, this does have more impact on that. It does have those kinds of things and it does send a message that we need to be able to send. We also have talked to Area Plan, even way before you have come on. So,this is not something brand new. This is something that we have decided to, I think for some of us, to put a line in the sand. So, that's up to you. I mean, we're cool. No need for further remarks. Committee Chair Ferlic then opened the floor to members of the public wishing to speak in favor of or in opposition to the legislation. Jim Bognar, 807 West Washington Street, stated, I am in favor of the resolution, but I direct my comments specifically to the Council. I ask for your indulgence. I do want to point out, in helping the Redevelopment folks, a year ago tomorrow, the presentation was made to this Council about changing the TIF Districts. At that time, the Director was here and had quite a discussion. So, Council has had a full year to have a very clear idea about what was going to happen. My problem is specifically with the Council. There are four (4) members here, currently, that voted in 2014. Councilmember Dr. Davis, at the time, was President of the Council. The mayor was not here as he was serving in Afghanistan. We have had a turnover of three (3) individuals as head of Community Investment, and most of the people who were in Community Investment don't remember anything that was done in 2014, other than what they've read. At that time, and I hope Councilmember Dr. Davis will correct me if I'm wrong, there was going to be widespread work on getting more continuity with Council and the Board of Public Works, where the money was going to be spent. There were going to be more efforts from the Redevelopment Commission as to how money was going to be spent. There was going to be more information in specific Council Districts as to how TIF money was going to be spent. So, it was passed with the understanding that was going to be done. It could never get done. I could ask, for example, President Scott if he knows specifically the Colfax Avenue two (2)-way costs. You probably don't know, it was close to half a million dollars. So, when TIF projects happen in districts, for example, you have several where money is being spent and Council Members don't know.You have to change the way you're doing things. All due respect to your leadership,whenever the Administration has said something, I've felt often when somebody is speaking negatively about it, you've hushed people. I've felt that way about it for the last four (4) years. The failure is not on the part of the Administration. The failure is on the part of the Council. We are talking about eighteen (18) year's worth of changes on this.That is significant. We desperately need continuity both on the Administration and Council side. It's not about passing this and changing this. I'm for some of the changes that are made. But where has Council been?Why at the last minute are we talking about these things?Councilmember Dr. Davis, am I saying anything that we didn't talk about, in this room, five (5) years ago? And I think a lot of people are reluctant, quite frankly, to say something about this is, what is the definition of insanity? Doing the same thing over and over again and expecting a different result. The Administration and the Council need to come together so that they can understand how money is being spent in a better way,and can articulate that,on both sides. Instead,people say$2.9 million has been spent in the last three (3) Redevelopment Commission meetings. What has it been spent on? Nobody knows. That breeds problems. Why can't we figure out a way to work together? If it EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend.Indiana 46601 p 574.235.9221 f 574.235.9173 TfD 574.235.5567 www.southbendin.gov 5 CITY OF SOUTH BEND OFFICE OF THE CLERK has to be delayed, it has to be delayed. I can see where some Council Members are quite frankly saying we did the biggest change over back in 2014 that had ever been done, and it got nothing. I've been to most of these meetings and I've studied most of this. When are all of you going to work together? If this passes tonight, we'll be back to the same thing. It'll be appointments to the Board of Public Works that has no Council Members on it. It will be the Redevelopment Commission with different people, and we won't be getting to the heart of what we need to, and that is to inform neighbors. I know in our neighborhood, you have spoken plainly about West Washington Street. But, a lot of people didn't know how much money was spent on the two (2)- way conversion of Colfax. The reason why they didn't know that is because no one was reaching out, until recently, to tell them. Even though there were things being said, it wasn't getting to the people. So, how do we do that? Why would Council not want to pass this? Because, if they pass it, no one from the Administration is ever going to come back in and say there is a different way to do this. We are all here because we care about the community. I've reached the end of the line, five (5) years of looking at this, and asking when are we going to work together? Thank you. Councilmember Dr. Davis interjected,You're welcome. Committee Chair Ferlic stated, I would like to remind everyone that we already have made a recommendation,just at the Committee level on this bill but I encourage you all to touch base with Dave and Tim, as well as members of the Administration, in the time in between Committee and full Council to see if there are any amendments or other things worth considering. I will just state that, from the Administration's standpoint, I think they have tried and have done a number of things. Whether it be highlighting different items before Redevelopment meetings in the Council Member's district, as well as working collaboratively with Council in how they spend TIF dollars. They used to be spent pretty specifically and we've since shifted because of Council feedback. While I think there is always opportunity for improvement, I do think the Administration and Redevelopment has been receptive to Council in the past. Committeemember Dr. Davis interjected, They've been receptive in many ways, but in terms of what they clearly shared that we were going to do,the whole realignment, that is what Mr. Bognar is talking about. That piece of whatever their receptiveness would be has not been in place. That is what we are talking about. That part of it has not been done. Update: Commerce Project on LaSalle and Sycamore- Dave Matthews, LLC Dan Buckenmeyer, Director of Business Development for the Department of Community Investment with offices located on the 14th floor of the County-City Building, stated, So, you all have received a great deal of communication on this. I'll just reiterate to frame it, and then have Mr. Matthews speak. Again, the Commerce Project was conceived and received support from the City of South Bend back in January 2017. At Council, it came in the form of a tax abatement and in the form of an Area Board of Zoning Appeals height variance. Then at the Redevelopment Commission, it came in the form of a TIF allotment for the project. So, the project is underway. There are still a few loose ends. We do not want to release any funding or support until a few things happen. Private funding needs to be secured so we know the project is going to happen, and then there were a few things in the development agreement that also specify the presence of a grocery store and pharmacy. That was an extensive part of the discussion, even with a representative from Martin's present at a lot of those meetings back in 2017. With us today are EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 6 CITY OF SOUTH BEND OFFICE OF THE CLERK Dave Matthews, Regina Emberton and Amy Varga. We have public and private funding represented, as well as the City of South Bend's contributions. I think we can answer any questions you might have but really, we wanted to frame this up. You were given a new proposed Exhibit B.One(1)of the issues around the discussion of the grocery store,now that we don't have Martin's in the same form here, having been sold to a new corporate entity, we did not have the definition, if you will, of a grocery store or a pharmacy. So, we wanted to shore some of that up to make sure the deliverables that come with the project are equal to those that were anticipated or inspected by Council and the Redevelopment Commission at that time. There have been some significant changes, we think, in the last two (2) and a half years, in the way people do shop. A lot of people do it from their couch and it ends up at their door. There may even be an argument for a different model. Committeemember Dr. Davis asked, When the sale was done for Martin's, was there any talk in that sale about this project? Was there anything that came up in that kind of thing? What is the role of the new company? Do they have this option? Or was it just thrown out with the sale? Mr. Buckenmeyer replied, What the City was looking for was either a lease or a letter on intent in terms of some sort of grocery partner and, or, pharmacy partner. But, we didn't have any specific conversations at that time of the transition. Committeemember Dr. Davis asked, So when that sale happened, was everything we did, was everything thrown out? Council President Scott stated, It's a whole new company. Committeemember Dr. Davis replied, I understand but, in their negotiations, was there anything that kept something? Like for instance in their negotiations, they kept their names Martin's on all their places. So, they've made that. So, was there anything kept? Mr. Buckenmeyer replied,There was no existing written commitment,prior to the sale to Spartan Nash, so there was nothing that would follow through. To my knowledge, there was nothing. Committeemember Dr. Davis followed up, So when that sale happened, everything we planned was thrown out? Mr. Buckenmeyer replied, Probably. Committeemember Dr. Davis stated, Ok, I thought that, but I just wanted to make sure. Mr. Buckenmeyer stated, And that is why we are here. Committeemember Dr. Davis interrupted, I know, I understand. Mr. Buckenmeyer continued,Mr. Matthews may propose some new ideas and new models.Again, there is another thing to point out that is important, this is not a resolution. There is no ordinance and there is nothing to vote on. This is informational and is looking for your support and understanding as we move forward with this project. David Matthews,401 East Colfax Avenue, stated, So, we have a big hole in the ground. We broke ground a few months ago. Full Home from Indianapolis has been using a lot of nearby contractors, EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 7 CITY OF SOUTH BEND ! OFFICE OF THE CLERK typically about fifty (50) a day. We are excavating and dug out the first (1St) floor. We put in somewhere around four hundred and ninety(490) pilings into the ground. We started framing and pouring concrete walls of the first (1st) floor. We have our sub-basement water collection and pumps installed. So, moving along, we've hit several stumbling blocks. The biggest item of discussion is talking about Martin's Super Market. So, when they did the sale, there was a discussion of this project but when they took possession and controlled ownership in January,they reached out and said,hey,we know you had a lot of discussions and we didn't. We want to restart those conversations. So, they signed a new letter of intent and started running their own numbers to account for things like how big of a store it should be. He continued, To talk about the pharmacy, we need to know what has to be inside of it, parking requirements, etcetera. Maybe after a month or two (2), they came back and said we are still looking at going forward but they are a definite"No"on the pharmacy component. So, we started looking out for pharmacists. We've had very good conversations with one (1) who plans to open in the facility.We are not ready to announce that publicly yet,but we think we have that component taken care of. Now, it's the question of what we do for the grocery side. Our commitment with the RDA and the City, the language is similar but vague. A full-service grocery store and pharmacy. It's much more specific on how many dollars we have to spend, how many apartments we have to open up, and the square footage of commercial retail. Not all of it has to be a grocery store, but, the question at hand is what is going to make sense for both the legal side and then also what we have to deliver to honor the expectation of providing a grocery store. What does a full-service grocery store and pharmacy look like? He went on, So, the current conversation we are having, and this is all open to discussion. We haven't signed anything yet, so, if you have strong feelings one (1) way or the other, this, and going forward privately, feel free to reach out and share your thoughts with us. We are looking at having a pharmacy open up inside the Commerce Center as the Commerce Center gets re- envisioned, specifically the first(1st) floor. So, for those who haven't been through,it is a 107,000 square foot office building. I bought it out of foreclosure in 2015. We've stepped it up tremendously. We have a coworking space that is opening up inside, I think we have five (5) tenants already moved in, even though we haven't started advertising it yet. We have a food incubator that is in construction now, modeled after Baker and Rose and what we did in the Emporium Building. So, the Emporium Building had a little café built out. We did a call for proposals,we had four(4)people submit. What became Baker and Rose had the best presentation. They moved in and they pay the utility bills and they pay a percentage of gross sales. So, if sales are slow, there is no minimum rent, so, we can't evict them because they didn't pay rent because they didn't have any business. It was a chance for that vendor to move into a restaurant location without hundreds of thousands of dollars of build-out expense. So, they moved in and they announced they are moving out into the old Dainty Maid spot. So, after a year and a half in this incubator, they got a reputation, created a catering business, and are ready to move up. Now we are marketing that for another entrepreneur, somebody who is more of a Chef who hasn't had the experience running a business, to practice without having to take on that expense. Committee Chair Ferlic stated, Just so we stay on topic, I would like to hear about the particulars about the agreement that will be changing. EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f574.235.9173 TTD574.235.5567 vvvvvv.southbendin.gov 8 CI"I Y OF SOUTH BEND OFFICE OF THE CLERK Mr. Matthews replied,The agreement says we have to have a$27 million spend. Of which,we are probably spending $42 million. We are supposed to open one hundred and forty-four (144) apartments, a parking garage, and 30,000 square feet of retail commercial, I think? I would have to look at it. Of that, 15,000 is fourth(4th) floor office and then 15,000 and 5,000 is first(Pt) floor retail. Of that 15,000 square foot section, that is the space in conversations with Martin's that we wanted to designate as future grocery.Now,we are trying to find out if Spartan Nash doesn't move forward, how should we transition so we can still honor our commitment to provide a full-service grocery store in the neighborhood, but there is no definition of full-service grocery store. Going online there isn't a definition of a full-service grocery store. So, what does that actually mean? Committeemember Dr. Davis interjected, Wow. Mr. Matthews continued, We presented something to the Department of Community Investment following what the alcohol and tobacco companies require for a full-service grocery store. They came back with a document that you guys have that we've had a quick look at but seems a bit too restrictive. The agreement we have with the City does say that if we don't deliver the grocery store and pharmacy, the City can call back not just their$5 million in TIF but the extra$2.5 million. So, from the City being protected standpoint, there is a huge stick if we don't deliver of$7.5 million. So, we will open a grocery store even if we have to open one (1) ourselves. We don't want to do that, but we will honor that commitment. We are looking to have a conversation about what the expectations are for that. Further to complicate it, from 2016 when we started having the conversation until now, we have a four (4) month old child and we don't go to the grocery store anymore. We use Shipt and groceries get delivered. As the Amazon effect hits grocery stores, that seems to be happening more and more often. So, in the neighborhood, it seems like a smaller grocery store location makes sense. But, we may not have to have the full Meyer-Martin's. That was always the intent was to have a smaller scale store as opposed to the SR-23 and Ironwood Martin's. Now the question is, if Martin's isn't doing it and we end up finding another party, or end up providing it ourselves, what is the expectation? Committeemember Dr. Davis stated, I have a question. When is the deadline for Spartan Nash to get back to you? Mr. Matthews replied, There is no deadline. It is an open conversation. There is a letter of intent, stating they are interested, but not saying they are moving forward by a date. Committeemember Dr. Davis followed up, What role does the City play? Is it all up to you as an organization? Mr. Matthews replied, Our responsibility is to provide a grocery store and pharmacy with this development. The City's responsibility is to pay $5 million of TIF, which they are currently stalling. That is a frustration as a developer because it is not in their contract. Committeemember Dr. Davis then asked, Is Spartan Nash the only option? I know everything was strictly with Martin's and that stuff. Has there been any outreach to places like Kroger? Mr. Matthews replied,Yes, so, we have relationships with other grocery providers in the region to see if they are interested. We have heard no from some, and we've heard questions from others, but we have had no one jumping at the bit. If we did,we probably wouldn't be having this meeting. EXCELLENCE ACCOUNTABILITY INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 9 CITY OF SOUTH BEND OFFICE OF THE CLERK Committeemember Dr. Davis followed up, So, basically you are still waiting on that but there is still the possibility but, in the meantime, the $7 million is what you're talking about. Mr. Matthews replied, Right, so, we don't want to get caught in a year and a half and not have a grocery store. I need to have a backup plan. If we can't get somebody who makes it easy for us, signs a lease and takes care of it, we still know that we have to provide it. So,what do we want me to provide, specifically? How do we want to define full service grocery store with pharmacy? There has been discussion from the City saying the pharmacy needs to be located in the grocery store. I think the entire development counts. Can I put the pharmacy where the pharmacist wants to go? Along the hallway in the Commerce Center with better signage? How do we want to have these conversations? Councilmember White asked,Are you asking the Council,based on your presentation,to give you feedback on how we vision a full-service grocery store? Or are you just giving us an update on the challenges? Mr. Matthews replied, I basically see two (2)paths. One (1)path is the assumption and intent that we had. The other is what do we put in the legal document and the attorneys say, ok. I must satisfy the legal document because, if I don't, that is incredibly lethal. But then I also want to satisfy as much of the intent as practical. It's been years. So, we wanted to come to the City and see what you guys know, let you know what is going on, and let you in on our current situation to see what is really important to you. Councilmember White followed up, Is there a timeframe on that in terms of giving feedback? Mr. Matthews replied, You can call me, text me. You can give it here. Committee Chair Ferlic stated, I would say since Community Investment is leading the discussion, I would say reach out if you do have thoughts about what the definition of a full-service grocery store is. Committeemember Copelin asked, How does the definition of that affect the overall project funding? Mr. Matthews replied, We've always budgeted for the grocery store to not pay much rent, to incentivize them to get in. So,on the plus side,it doesn't really affect our financials no matter what we do because we weren't expecting to get much from all the conversations we had with Martin's. They saw it as a civic community long-term investment more so than a no-brainer decision. That is part of the reason why,to get them to the table,there was the conversation about all the different funding sources. From a banking standpoint, our lender Centier Bank does have concerns. They mostly stem from the marketability of the apartments without having a grocer lined up. They've asked us to make some concessions and make them feel confident with their private investment. So, they are secure. The State and the Regional Cities funds, they feel confident so long as we meet the terms of our agreement and open up the grocery and pharmacy that are good. Committeemember Dr. Davis asked, Can you also include our attorney in those discussions, as you look for those definitions and as we work on that? That would be helpful. Mr. Matthews replied,Yeah,we have the two(2)paths.We have the intent and then the document. EXCELLENCE I ACCOUNTABILITY i INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 10 CITY OF SOUTH BEND OFFICE OF THE CLERK Councilmember Tim Scott stated, I appreciate the transparency in all of this. Even when we did this deal, you came before Council and said here,pick one(1)of the three(3) options. I appreciate that. My only comment on whatever grocery store you go with is that it is all inclusive. Anybody from the lower end of our income to the higher end of our income should be able to walk into that store and take advantage of that. That is my one (1) and only piece of advice. I hope the Administration understands that once the next development comes before us to ask Council for our suggestion, as Mr. Bognar said, this is all part of TIF money which we don't have any say in other than our representative, Gavin Ferlic, on this. I do appreciate the openness on the conversation but, you know. I know your number, I can call you up, and I can also call up the Administration if we are having issues. I appreciate your willingness to converse,but I have a huge concern about what precedent this sets going forward. Councilmember Broden stated, I will follow up on Councilmember Scott's comments. By definition, I think we are being asked to weigh in on what was given as an addendum, correct? So, definitionally,my understanding is that document is kind of what is going to go forward from here. Then I think, also definitionally, I think with regard to this overall project and what was brought before us, maybe all three (3) parties, Council, the Regional Cities group and then certainly the public, the transformational aspect of this, and I think what drove us all in on the TIF and tax abatements, was the grocery store concept. So, getting this nailed down is critical. If the question is here today, or the weighing in, if you would, is definitional, anybody can give definition to that. I mean, there is the Webster Dictionary on that. There is this piece which I see as something that could work in terms of something traditional or perhaps a little bit different. I do know, though, that the public record is replete with conversations on the pharmacy,the grocery store,office retail and residential. Those kind of were morphed into different agreements but were pretty much consistent, if not in the public record here before Council, but certainly within the Regional Cities group and the kind of promotional stuff that was cranked out from that group. All of those things were, I think, really important for the community, the Mayor and this Council, and I guess it hit the transformation aspect that opened up those Regional Cities dollars. I don't want to lose track of any of those balls, frankly, and I'm happy you are here today to provide that update. But Martin's is not Spartan Nash and that was also a sales pull, I think. There was a lot of excitement about getting the local group in, right? All the better. So, all of that was important. I think conceptually, though, and getting back to the definition, what was put forth was specifically the Goshen store as a model. So, I want to make sure we aren't going too far from the record of this. And, I think the record itself informs up on some of these definitional aspects, both the formal record and then the informal record of the public like media and other pieces cranked out. She continued, So, definitionally, you know, if this is going to be embedded into this agreement, I don't believe I have any issues with that. But, I guess I am, maybe similar to Tim's comment, if the Redevelopment Commission or staff is looking for a green light, or maybe even a yellow light in terms of the money on this, to your point, I really do think what's changed here, similar to if you were going to go from condos to apartments, 20,000 square feet versus 60,000 square feet of commercial, if you're going to change any of the components that goes into that space, I think there is, and parking I think is a huge one(1)as we've discussed before.You could be in at a really low level of space and then, you know, go three (3) times the amount once you put that underground. So, I think the financials on this, in terms of what we have to date, and what has EXCELLENCE ACCOUNTABILITY ; INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f574.235.9173 TTD 574.235.5567 www.southbendin.gov 11 CITY OF SOUTH BEND OFFICE OF THE CLERK changed, is really important. And, I had shared that I hoped we would have a comparative piece, and I don't know if that was shared with you, but a comparative piece of when we last saw this at Council, the abatement, you know, the number crunching behind the TIF and the abatement, because if we are messing with the parts and components of this project, it will get to that. Mr. Matthews replied, I don't think any of us are messing with the components or parts. Councilmember Broden followed up, I don't know that. I guess that is what I want. I suggest a real good score card in terms of this update. Mr. Matthews replied, I'm letting you know that we are meeting all the requirements of our documents and hitting all of what we agreed on last Council Meeting. The question at hand, and why I think the Administration brought me here,was to see if you had questions and conversations about the grant. We have to provide a grocery store. That is in the document. The question is, and there is concern from the Administration and the Department of Community Investment, are we going to have a local pharmacist open up something or are we going to try and get a CVS or a Walgreens? What would our preference be? Do we rather have someone local do it? Would we prefer to have a national brand that is more organized but send profits out? Same things for the grocery side. Would we rather have local, less-sophisticated operators? Or, should we try to get a national presence that has more sophistication? I think that was a lot of the concern. We've not had any conversations about changing the square footage. And actually, the dollar amount has actually gone up so that only works to the City's advantage and future tax collection. So, I don't think we have to worry about that. If we don't have Spartan Nash, we will find somebody else. If we find somebody else, it might be someone regional, national, local. It might be we strike out. We still have to deliver. We've had conversations with local competent providers to see if they want to open up extensions here in the East Bank. I know George McCree was concerned when he found out Martin's was going to move a block away, for his bakery business. I posed this idea to him and he is very interested in having the bakery department in whatever this super market might be, if we don't get an easily signed lease to take care of it. As the developer, we have to deliver but there is undefined nuance in this business. So, the Administration thought it would make sense for me to come before you to let you know this conversation is going on and to see if there are any strong feelings, one (1) way or another, or guidance and suggestions. Regina Emberton, 635 South Lafayette Boulevard, stated, I'm here representing the RDA and more to your point, I just wanted to note the RDA is very supportive of the project and definitely want to see it come to fruition. Through the Regional Cities initiative, we allocated$4.9 million to go toward the project. We see evidence of the project progressing, but I will note in the contract with the developer, we require a grocery store as well. That is a critical component in order for us to fund. So, that is something that is in the contract. The nature of the Regional Cities funding requires a local match and that is part of the reason why the City was invested in the project as well. So,we are unable to invest any of the funds allocated for the project until the City has invested the local match dollars and the private investment is invested as well. So, in a sense, the decision on the City's investment unlocks the State funding, as well. I will also note, in our agreement with the developer, if there are material changes to the project, we would have to go back to the IEDC to get approval on that. A material change is a defined as a change in the nature of the project, a EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 12 /CITY OF SOUTH BEND OFFICE OF THE CLERK change in ownership, or a five percent(5%),plus or minus, change in the overall budget. I thought those factors would contextually help. Councilmember Jake Teshka stated, So, this is now not going to be a Martin's, but Spartan Nash hasn't declined, they just haven't jumped in. That wouldn't be a material change? As long as a grocery store is there, whether it's a Trader Joe's, a plug for Trader Joe's, if you could get Trader Joe's, I would like a Trader Joe's. So, I'm somewhat confused but I just want clarity. So, the Council at this point, there is no official action for the Council to take. This is informational to update us and gather input. Ms. Emberton replied,Yes, and from the RDA's perspective,we did see the list that was provided by the Administration. We shared that with our Council and they were comfortable with that.They said if the City approves that, we as an RDA wouldn't ask for something more than that. They are really deferring to the City of South Bend. Councilmember Teshka followed up, So,if I could ask Mr. Buckenmeyer,what would satisfy DCI in this regard? Is it a signed lease? For the City to release the $5 million in TIF, thus allowing Regional Cities and the private investment,the$10 million of this project being held up right now, what is the point at which we say we are satisfied? Mr. Buckenmeyer replied, Without a clear definition and with the, I guess, socialized expectation of a Martin's, DCI wanted to put some definition around the possibility of there not being a Martin's, Trader Joe's or what have you. If this is constructed and put together, it still needs to look and feel like a cohesive grocery store that meets the needs of the community. We as DCI looked at it and wanted to find the definition beyond what was socialized at that time. Again,there is no action to take here. Because this was socialized in concert with the abatement and the height restriction discussions, it would be part of the RDC agreement, Exhibit B of the development agreement formally, but again, because these things were all discussed in your Chambers as it were, we wanted the Council to be well aware of where this is and where it could be going. Councilmember Teshka followed up, Not to say you didn't answer my question, but I feel like the question wasn't answered. At what point, where are we comfortable releasing the TIF dollars? Is it a signed lease from a grocer? Mr. Buckenmeyer replied, Sorry, I missed that. The absence, at this point in time in the project, of a lease or an LOI, or anything definite, cause the concern and prompted us to build this definition. So, if there is a lease from Martin's tomorrow, go. But in lieu of that, I think this is a good compromise because it sets some parameters for whether it's a Martin's or a Matthews. We want to make sure the community gets what it was promised. Committeemember Copelin asked, Isn't part of the idea that this will be a long-term solution to the downtown's needs for a grocery store? I'm just trying to wrap my head around this. Mr. Buckenmeyer replied, We wanted to have a discussion to see what Martin's or a Trader Joe's would bring to the table. If somebody else is coming to the table, we need to clearly define what that would be, and we are asking those be included. Committee Chair Ferlic stated, I encourage all to continue providing feedback to Dan if you have feedback on this matter. EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 13 ®CITY OF SOUTH BEND I OFFICE OF THE CLERK Amy Varga, 52356 Windermere Court, stated, I'm here representing Centier Bank and I just wanted to speak positively on behalf of the project. We have provided a loan commitment and it's approved. We are targeted to close June 15. We are just finishing up our due diligence and are working through the final items to get to the closing table. We are just looking forward to supporting this. It has to be collaborative effort between the City,the private funding and the RDA to make it all work. We are just trying to figure out who goes first (1St). Of course, everyone's expectations at the beginning were to have a Martin's but, unfortunately, that was out of anyone's control. This is where we are today and how do we resolve it so that we can continue to move forward? But,we are very excited about the project and working with the City. We think it's going to be great for the town and we are targeted to have a closing here very shortly. Committeemember Broden stated, Before you close, please, with regard to the agreement itself, not to go back into it all, but there are some responsibilities of the Redevelopment Commission. I'm sorry, I'm part-time. I would have red-lined this if I could have. I would like to provide this into the record (which is available in the City Clerk's Office), with the Department and Mr. Matthews'as well with just,again,trying to get a sense of where we are at on this overall and make sure the record is very specific with regard to what drove some of our earlier decisions from Redevelopment standpoint and also from Council. There should be enough copies for everybody. There are some questions in there related to reporting requirements, etcetera, that I think are important. When you are working with a development agreement, on both sides, everybody uses that as your base document for the enticing conversation. So, I appreciate the content pursing this addendum that we are going to do. I guess I also want to get some clarity off line as well for the benefit of the Council with regard to other investments that were tucked in. I thought I understood that they were the River Race Flats and the East Bank Flats. You know, bring everybody up to date and how those relate in terms of timing and delivery. Thanks. With no further business, Committee Chair Ferlic adjourned the Community Investment Committee meeting at 4:33 p.m. Respectfully Submitted, Gavin Ferlic, Committee Chair EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvid South Bend,Indiana 46601 p 574.235.9221 f574.235.9173 TTD574.235.5567 wwwsouthbendin.gov 14