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HomeMy WebLinkAbout02-15-08 Redevelopment Commission MinutesSOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING February 15, 2008 10:00 a.m. 227 West Jefferson Boulevard Presiding: Marcia I. Jones, President South Bend, Indiana 1. ROLL CALL Members Present: Ms. Marcia Jones, President Mr. Karl King, Vice President Mr. Greg Downes, Secretary Mr. Hardie Blake, Jr. Mr. Ken Peczkowski Legal Counsel: Mr. Charles S. Leone, Esq. Mr. Lawrence Meteiver, Esq. Redevelopment Staf£ Mr. Don Inks, Director Mrs . Cheryl Phipps, Recording Secretary Mr. Bill Schalliol, Economic Development Specialist Mr. Robert Mathia, Economic Development Specialist Ms. Jennifer Laurent, Economic Development Specialist Ms. Debrah Jennings, Property Manager Others Present: Mr. Tom Price, Mayor's Office Mr. Lynn Coleman, Mayor's Office Mr. Phil Byrd, South Bend Heritage Foundation Mr. Pat Lynch, South Bend Heritage Foundation Ms. Gladys Muhammad, South Bend Heritage Foundation Mr. Pat Pinnick, South Bend Heritage Foundation Mr. Greg Jurgonski Mr. Dave Kimble Ms. Pamela Meyer, Community Development Ms. Diana Harris, IUSB Ms. Karen White, IUSB Ms. Catherine Hostetler, Historic Preservation Mr. Wayne Dootlittle Mr. David Rhoa, Lake Michigan Mailers Ms. Charlotte Pfeifer Mr. Mark Peterson, WNDU Cameraman, WNDU Ms. Rita Kopala Ms. GlendaRae Hernandez Ms. Linda Wolfson, Community Forum for Economic Dev Mr. William Eagan South Bend Redevelopment Commission Regular Meeting -February 15, 2008 2. APPROVAL OF MINUTES A. Approval of Minutes of the Rescheduled Regular Meeting of Wednesday, February 6, 2008. Upon a motion by Mr. King, seconded by Mr. Downes and unanimously carried, the Commission approved the Minutes of the Rescheduled Regular Meeting of Wednesday, February 6, 2008. 3. APPROVAL OF CLAIMS COMMISSION APPROVED THE MINUTES OF THE RESCHEDULED REGULAR MEETING OF WEDNESDAY, FEBRUARY 6, 2008 Redevelopment Commission Claims submitted February 15, 2008 for approval. 324 AIRPORT AEDA Sopko, Nussbaum, Inabnit &Kaczmarek 2,036.25 414 SAMPLE EW1NG GENERAL Indiana Michigan Power 6.88 420 FUND TIF DISTRICT-SBCDA GENERAL Rose Pest Solutions 90.00 NIPSCO 2.44 Dynamic Mechanical Service Inc. 167.77 Michiana Lock & Key, Inc. 103.25 Schindler Elevator Corp 134.91 Rose Pest Solutions 90.00 Sopko, Nussbaum, Inabnit &Kaczmarek 1,473.75 Grauvogel & Associates 1,570.00 Indiana Michigan Power 273.67 Quality Environmental Professionals, Inc. 3,442.72 AT & T 57.33 JJR 3,600.00 CB Richard Ellis 195.54 $ 13,244.51 Upon a motion by Mr. Downes, seconded by Mr. King and unanimously carried, the Commission approved the Claims submitted February 15, 2008, and ordered checks to be released COMMISSION APPROVED THE CLAIMS SUBMITTED FEBRUARY 15, 2008, AND ORDERED THE CHECKS TO BE RELEASED 2 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 4. COMMUNICATIONS There were no Communications. THERE wExE No COMMUNICATIONS 5. OLD BUSINESS A. Airport Economic Development Area (1) Commission approval requested for Deed of Easement to Indiana Michigan Power Company (Oliver Industrial Park) Mr. Meteiver noted that the Deed of Easement from Indiana Michigan Power is for a utility easement in a portion of the Oliver Industrial Park. It is related to the construction of the new transmission line from the new Studebaker substation heading west towards the airport area substation. Originally planned to head out Lincolnway West, the route was modified in response to neighborhood concerns. The new route takes it along industrial areas and is much more acceptable to the neighborhoods. Because of the new route, the line needs to cross over a portion of the Oliver Industrial Park. The line is an important improvement to electric transmission reliability for South Bend. It provides a redundant source of power to much of the city. Staff recommends approval. Upon a motion by Mr. King, seconded by COMMISSION arrxovED TxE GRANT of Mr. Downes and unanimously carried, the EASEMENT To INDIANA MICffiGAN PowEx Commission approved the Grant of Easement COMPANY (OLIVER INDUSTRIAL Paxx) to Indiana Michigan Power Company (Oliver Industrial Park). South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS A. Tax Abatements (1) Commission approval requested for Resolution No. 2436 approving an application for personal property tax deduction for property located at 3445 William Richardson Drive in the Airport Economic Development Area. (Lake Michigan Mailers/Jade Elephant Holding) Mr. Mathia noted that Item 6. A (1) and 6.A(2) are related in that they are real and personal property abatement requests for the same company. Lake Michigan Mailers, Inc. dba Jade Elephant Holding, LLC is proposing to develop a 4.75 acre site to include construction of an approximate 13,000 square foot mail assembly and document processing facility. The facility will also serve as a "hot site" for disaster recovery for Lake Michigan Mailers' document creation and mail assembly operations located in Kalamazoo, Michigan. In addition, the site will serve as a sales facility and customer training site for customers located in northern Indiana. The estimated cost of the building is $720,000. The site is currently owned by Ancon Construction Company. It will be purchased by Jade Elephant Holding which will in turn lease the site to Lake Michigan Mailers, Inc. Lake Michigan Mailers will own the equipment placed on the site. The new equipment to be installed on the site has a total estimated cost of $1,216,873. It will be used for mailpiece assembly, mailpiece bar-coding, sorting and preliminary distribution, data processing and management, and document creation and 4 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) A. Tax Abatements (1) continued... final assembly. The new equipment consists of various inserting, sorting and document management systems and data processing equipment. It is estimated that the total project will create five new permanent, full-time jobs and six new part-time jobs within the first year, representing a new annual payroll of $250,000. This is a totally new facility, so there are no existing employees. The property is properly zoned for the proposed use. The property falls within the Airport Economic Development Area, a tax increment allocation area; therefore, the petitions for tax abatement must first be approved by the South Bend Redevelopment Commission. The project qualifies for five years of personal property tax deduction and four years of real property tax deduction under the tax abatement ordinance. Based on the $1,216,873 cost of equipment, the total taxes to be abated during the five- year personal property abatement period are estimated at $74,138. Total taxes to be paid during the same period are $38,580. Staff recommends approval. Mr. Downes asked Mr. Rhoa why the company decided to locate in South Bend. Mr. Rhoa responded that the company has been looking for two years for a place to expand in Michigan, Ohio or Indiana. South Bend was chosen because of the number of South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) A. Tax Abatements (1) continued... clients it has in the area and they feel they will be able to get up and running here in the least amount of time. Mr. King made a motion to approve Resolution No. 2436 approving an application for personal property tax deduction for property located at 3445 William Richardson Drive in the Airport Economic Development Area. Mr. Downes seconded the motion. The motion carried on a vote of four to one with Mr. Peczkowski opposed. (2) Commission approval requested for Resolution No. 2437 approving an application for real property tax deduction for property located at 3445 William Richardson Drive in the Airport Economic Development Area. (Jade Elephant Holding/Lake Michigan Mailers) Mr. Mathia noted that based on the $720,000 of real property improvements, the total taxes to be abated during the four year real property abatement period are estimated at $61,526. Total taxes to be paid during the same period are estimated at $36,914. Staff recommends approval. Mr. King made a motion to approve Resolution No. 2437 approving an application for real property tax deduction for property located at 3445 William Richardson Drive in the Airport Economic Development Area. Mr. Downes seconded COMMISSION APPROVED RESOLUTION NO. 2436 APPROVING AN APPLICATION FOR PERSONAL PROPERTY TAX DEDUCTION FOR PROPERTY LOCATED AT 3445 WILLIAM RICHARDSON DRIVE IN THE AIRPORT ECONOMIC DEVELOPMENT AREA (LAKE MICHIGAN MAILERS/JADE ELEPHANT HOLDING COMMISSION APPROVED RESOLUTION NO. 2437 APPROVING AN APPLICATION FOR REAL PROPERTY TAX DEDUCTION FOR PROPERTY LOCATED AT 3445 WILLIAM RICHARDSON DRIVE IN THE AIRPORT ECONOMIC DEVELOPMENT AREA (JADE ELEPHANT HOLDING/LAKE MICHIGAN MAILERS 6 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) A. Tax Abatements (2) continued... the motion. The motion carried on a vote of four to one with Mr. Peczkowski opposed. B. Housing (1) Commission approval requested for Resolution No. 2439 regarding forgiveness of a promissory note secured by a real estate mortgage for the Historic Dunbar Corner project. Pamela Meyer noted that the Historic Dunbar Corner project (HDCP) is a seven structure project at the corner of Colfax and LaPorte Streets. The Commission made a $112,500 loan to South Bend Heritage Foundation in 1991 through the Rental Rehab Program to assist in the rehab those homes. The Rental Rehab program was a housing assistance program of the Department of Housing and Urban Development (HUD) designed to allow for the forgiveness of loans made over a ten year period if the property was consistently made available to low and moderate income individuals and was kept free of code violations during that time. The Historic Dunbar Corner project was a historic tax credit project and was supported by numerous external sources in addition to the Rental Rehab loan. Due to the constraints of the other financial support for the project, the term of forgiveness was altered to 15 years. The 15-year period of the loan has transpired. The project remains 7 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) B. Housing (1) continued... true to its provision of low and moderate income assistance, and has not had code violations. The project is in need of additional investment. South Bend Heritage is pursuing re-syndication of the tax credits and forgiveness of the earlier loan is needed. Staff recommends approving Resolution No. 2439, forgiving the loan. Mr. King noted that legal counsel had suggested the Commission could approve Resolution No. 2439 on condition that South Bend Heritage Foundation continue the project's low/moderate income availability for another 15 years, that South Bend Heritage Foundation execute its plan to combine the West Washington Homes Project (WWHI') and HDCP and re- syndicate the combined entities into one new tax credit project, and that a restrictive covenant be recorded which would allow for recapture of the funds used in the improvement of the property in the event there is a change in the use of the property to a use not eligible under the Rental Rehabilitation Program. Mr. King said he favored such conditions. Mr. Peczkowski asked why an interest rate of 8.35% per year was included in the loan documents when the intent was to forgive the loan entirely. Mr. Jurgonski responded that that was the going rate of interest at the time, and it was included in case the project didn't South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) B. Housing (1) continued... fulfill the program requirements and payback would be required. Mr. Peczkowski asked what re-syndication of the tax credits means. Mr. Jurgonski responded that tax credits are issued by the State of Indiana. South Bend Heritage Foundation will set up a taxable, wholly owned subsidiary to own the credits which can be sold to raise money for the improvement project. Mr. Peczkowski noted that this item's presence on the Commission's agenda must mean the Commission has the option to refuse to forgive the loan. Why might it do so? Mr. Jurgonski explained that the financing of the previous project could not have the loan written as forgivable, so it was not. The Commission is not obligated. Forgiveness of the loan, however, would help finance the current improvements. Mr. Peczkowski asked who the beneficiaries of the tax credits are. Mr. 7urgonski responded that large corporations would purchase the tax credits and use them to reduce their taxes. Upon a motion by Mr. King, seconded by Mr. Downes and unanimously carried, the Commission approved Resolution No. 2439 regarding forgiveness of a promissory note secured by a real estate mortgage for the Historic Dunbar Corner project subject to execution of an agreement between the COMMISSION APPROVED RESOLUTION NO. 2439 REGARDING FORGIVENESS OF A PROMISSORY NOTE SECURED BY A REAL ESTATE MORTGAGE FOR THE HISTORIC DUNBAR CORNER PROJECT SUBJECT TO EXECUTION OF AN AGREEMENT BETWEEN THE COMMISSION AND SOUTH BEND HERITAGE FOUNDATION TO CONTINUE THE PROJECT'S LOW/MODERATE INCOME AVAILABILITY FOR ANOTHER 15 YEARS, 9 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) B. Housing (1) continued... Commission and South Bend Heritage Foundation to continue the project's low/moderate income availability for another 15 years, executing a plan to combine the West Washington Homes Project (WWHP) and HDCP and re-syndicate the combined entities into one new tax credit project, and recording a restrictive covenant which would allow for recapture of the funds used in the improvement of the property in the event there is a change in the use of the property to a use not eligible under the Rental Rehabilitation Program. C. South Bend Central Development Area (1) Commission approval requested for Certificate of Completion for property located at 105 N. Niles Avenue in the South Bend Central Development Area. (AM General Bldg.) Ms. Laurent noted that on May 11, 1989 the Commission entered into a development agreement with Holladay Corporation for the construction of the AM General office building on the East Bank. Holladay long ago fulfilled all obligations of the agreement within the time limits set forth to the satisfaction of the Department. This Certificate of Completion is needed to update the property owner's title work, appropriately removing notations of the Commission's interest in the property. Staff recommends approval. EXECUTING A PLAN TO COMBINE THE WEST WASHINGTON HOMES PROJECT (WWHP) AND HDCP AND RE-SYNDICATE THE COMBINED ENTITIES INTO ONE NEW TAX CREDIT PROJECT, AND RECORDING A RESTRICTIVE COVENANT WHICH WOULD ALLOW FOR RECAPTURE OF THE FUNDS USED IN THE IMPROVEMENT OF THE PROPERTY IN THE EVENT THERE IS A CHANGE IN THE USE OF THE PROPERTY TO A USE NOT ELIGIBLE UNDER THE RENTAL REHABILITATION PROGRAM 10 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) C. South Bend Central Development Area (1) continued... Upon a motion by Mr. Downes, seconded by Mr. Blake and unanimously carried, the Commission approved the Certificate of Completion for property located at 105 N. Niles Avenue in the South Bend Central Development Area. (AM General Bldg.) (2) Commission approval requested for Commercial Property Management and Leasing Agreement (CB Richard Ellis) Ms. Jennings noted that this is a property management agreement with CB Richard Ellis. The properties they will manage under the agreement are the Wayne Street Garage retail space, the Leighton Plaza Garage, and the Leighton Plaza Courtyard. The term of the agreement is one year beginning February 1, 2008 and ending January 31, 2009 with the option of the Commission to renew for successive one-year periods. CB Richard Ellis has been managing the properties for more than two years. Mr. Peczkowski asked if this type of contract is open to bidding. Might there be others who wish to manage these properties? Mr. Inks responded that CB Richard Ellis has done a fine job for us, but staff recognizes the need to bid the contract. It is staff s intent during 2008 to identify other potential companies that could provide these services and before expiration of this agreement request proposals from all interested parties. Staff agrees we need to keep costs competitive. COMMISSION APPROVED THE CERTIFICATE OF COMPLETION FOR PROPERTY LOCATED AT 105 N. MILES AVENUE IN THE SOUTH BEND CENTRAL DEVELOPMENT AREA. (AM GENERAL BLDG. 11 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) C. South Bend Central Development Area (2) continued... Mr. Inks also noted that staff will be approaching the Ampco contract the same way. We are not dissatisfied with Ampco's services, but want to make sure we get the best price for those services. Mr. Downes asked if the terms have changed from our previous agreement with CB Richard Ellis. Mr. Inks responded that the Wayne Street Garage used to be separated out and had different terms as to how the cash flowed. It has been combined with these properties and standardized in this document so all of our properties are being handled in the same way. He noted that CB RE does keep a cash account for us so that they can quickly respond to emergency situations. Mr. Peczkowski noted that in the compensation section several of the items give a minimum fee or percentage of gross revenues collected. He asked which way that is usually paid. Ms. Jennings responded that CBRE usually pays the minimum fee. Upon a motion by Mr. Downes, seconded by Mr. Blake and unanimously carried, the Commission approved the Commercial Property Management and Leasing Agreement (CB Richard Ellis). D. Airport Economic Development Area There was no business in the Airport Economic Development Area. COMMISSION APPROVED THE COMMERCIAL PROPERTY MANAGEMENT AND LEASING AGREEMENT (CB RICHARD ELLIS~ 12 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) E. West Washington-Chapin Development Area (1) Staff report on West Washington-Chapin budget and project update. Mr. Inks noted that when the West Washington-Chapin budget was approved for calendar year 2008 several projects were listed for potential funding in the upcoming year. Two changes have occurred since that budget was accepted. The first is a downsizing of the total budget due to significantly lower TIF revenues being received than we had anticipated. The budget has been decreased from the $1,200,000 originally appropriated to $565,103, the TIF revenues received. We are in the process of working with the County Auditor to figure out why the TIF revenue collections were so low in that area. We know that the assessed values staff used were higher than the assessed values which were ultimately used by the County. However, even using the reduced assessed values, we don't calculate as low a number as we received. Mr. Inks also noted that the priorities on the list of potential projects have become clearer. The Natatorium is now proposed for $450,000 of additional renovations. That project was included in the list of projects that might be funded in 2008. Mr. Inks noted that he had supplied the Commissioners with a report from Pat Lynch of South Bend Heritage Foundation outlining the cost of the work done to date, the proposed work under the $450,000 and future work to be done funded by fundraising efforts. He noted that DVD's were distributed to the 13 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) E. West Washington-Chapin Development Area (1) continued... Commissioners previously, going through the Natatorium, visually explaining the building as well as the civil rights aspect and how it would be used in the program. Mr. Lynch reported on the status of construction. He noted that this project has generated tremendous excitement in the area. For years South Bend Heritage has been asked what it was going to do with the "Nat." It will be a civil rights heritage center. To date demolition has been completed, as well as architectural and engineering. Most of the shell of the proposed addition has been constructed. The funds South Bend Heritage is asking for now are specifically intended to get the building ready for occupancy. After that, South Bend Heritage will fund the exterior, including the Peace Garden. Ms. Muhammad commented on the importance of the project to South Bend. Its presence in the community will help make South Bend a more culturally diverse and inclusive community. The mission of the "Nat" is to preserve the civil rights movement as it occurred locally, as well as to teach Indiana University students about how ordinary citizens make a difference in their community. It will provide forums, educational workshops and ongoing dialogue about race in our community. The Nat is the last standing symbol that tells a story about segregation in South Bend. Ms. Pfeifer noted that the Nat will take its 14 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) E. West Washington-Chapin Development Area (1) continued... place along side the Northern Indiana Center for History, the Studebaker Museum and Tippecanoe Place, in bringing tourism to the area. Ms. Harris talked about IUSB's responsibility to the Natatorium and the status of fundraising to date. She noted that approximately $83,000 has been raised for the inside of the building. $200,000 is needed for that, as well as $100,000 for the garden. IUSB will provide the education there at no charge to participants: reading programs to elementary children; 21st Century Scholars program to help prevent dropouts; and a Leadership Academy for studying civil rights. Mr. Peczkowski asked if South Bend Heritage Foundation will be the ultimate owner of the Natatorium. Mr. Inks responded that that is correct, and they will lease it for a nominal amount to IUSB to operate the civil rights museum at that location. Mr. Peczkowski asked who would be responsible for its maintenance. Ms. Harris responded that IUSB will maintain it. Mr. Peczkowski asked how it will be staffed. Ms. White responded that IUSB will provide staffing out of its budget. Mr. Blake indicated that he didn't know originally whether he was in favor of the 15 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) E. West Washington-Chapin Development Area (1) continued... Natatorium or not. He is now in favor. The key to life is hope. The Natatorium can create hope for those who lose hope. We need that kind of hope for our community as well as our nation. We can change almost any community if we offer hope. Mr. Peczkowski asked the larger meaning of this TIF shortfall. Mr. Inks responded that we don't know the ultimate impact. That's why we're looking into the reason. All we know now is that we have a new budget for 2008 of $565,000. We may find that the distribution is not correct. Mr. Peczkowski asked if South Bend Heritage Foundation was providing its labor for free. Mr. Inks responded that the construction work is being done by contractors. Those contracts are bid through the Board of Public Works. This money would be used to pay for those contracts. South Bend Heritage receives a fee for being the project manager. Upon a motion by Mr. King, seconded by Mr. Downes and unanimously carried, the Commission acknowledged and accepted the staff report on the West Washington-Chapin Development Area budget and on the revisions to the costs of the Natatorium rehabilitation and reuse project. F. South Side Development Area There was no business in the South Side Development Area. COMMISSION ACKNOWLEDGED AND ACCEPTED THE STAFF REPORT ON THE WEST WASHINGTON- CHAPINDEVELOPMENT AREA BUDGET AND ON THE REVISIONS TO THE COSTS OF THE NATATORIUM REHABILITATION AND REUSE PROJECT 16 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) G. Northeast Neighborhood Development Area (1) Commission authorization requested to contract for disposition appraisals for the Eddy Street Commons parking garage. Mr. Inks noted that at its last meeting the Commission approved the Development Agreement for the Eddy Street Commons project. Part of that Development Agreement is for the city to construct a parking garage and for the Redevelopment Commission to dispose of the garage via a lease. The Development Agreement sets a timeframe to accomplish that disposition. We need to move quickly on that disposition. Mr. Inks contacted four appraisers that we typically use. Only one responded with a proposal for performing a disposition appraisal. The others responded that they could not provide a quote at this time. The proposal is from Rick Pitts in the amount of $5,500. Mr. Inks requested approval of the proposal from Rick Pitts and authorization for Mr. Inks to solicit and accept another proposal in an amount not to exceed $6,000. Two appraisals are required to set a disposition price. Upon a motion by Mr. King, seconded by Mr. Downes and unanimously carried, the Commission approved the request for proposals for disposition appraisals for the Eddy Street Commons garage site and accepted the proposal of Rick Pitts in the amount of $5,500 and authorized Mr. Inks to accept an additional proposal in an amount not to exceed $6,000, subject to ratification by the Commission. COMMISSION APPROVED THE REQUEST FOR PROPOSALS FOR DISPOSITION APPRAISALS FOR THE EDDY STREET COMMONS GARAGE SITE AND ACCEPTED THE PROPOSAL OF RICK PITTS IN THE AMOUNT OF $5,500 AND AUTHORIZED MR. INKS TO ACCEPT AN ADDITIONAL PROPOSAL IN AN AMOUNT NOT TO EXCEED $6,000, SUBJECT TO RATIFICATION BY THE COMMISSION 17 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) H. Douglas Road Economic Development Area There was no business in the Douglas Road Economic Development Area. L Ratification of Service Contracts Mr. Inks noted that the list provided are the service contracts the staff engaged since the last meeting, in accordance with guidelines set in Resolution No. 2430. Commission Role in Contract Staff Property Description Transaction Contractor Service Provided Amount Member 415 S. William Acquisition Witt Appraisal Multi-family $750.00 Schalliol services, Inc. Residential Appraisal 415 S. William Acquisition Christopher J. Multi-family $900.00 Schalliol Michaels Residential Appraisal Mr. Peczkowski asked where this property is. Mr. Schalliol responded that it is across the street from the synagogue. The owner has expressed interest in selling to the Commission. Staff has some interest in acquiring it. Upon a motion by Mr. King, seconded by Mr. Downes and unanimously carried, the Commission ratified Service Contracts engaged by staff since February 6, 2008. J. Other (1) Commission approval requested for Resolution No. 2438 setting procedures for Temporary Use Agreements. COMMISSION RATIFIED SERVICE CONTRACTS ENGAGED BY STAFF SINCE FEBRUARY 6, 2008 Mr. Leone noted that Resolution No. 2438 is similar to Resolution No. 2430 adopted at the 18 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) J. Other (1) continued... February 6 meeting. It delegates to staff the authority to initiate agreements on relatively routine matters, particularly requests for use of Commission owned property and requests from service providers or developers needing temporary access for assessment or repair. With Mr. Inks' approval, Debrah Jennings may initiate those types of agreements. The Commission would ratify those agreements at its next meeting. Upon a motion by Mr. King, seconded by Mr. Downes and unanimously carried, the Commission approved Resolution No. 2438 setting procedures for Temporary Use Agreements. (2) Commission discussion and consideration of Tax Abatement Policy. Ms. Jones noted that on Monday, February 11, the Common Council considered whether or not they should stop approving tax abatements until new property tax legislation is passed and analyzed. Since that directly affects this Commission, she thought it appropriate to consider the implications of such decisions and what the Commission could do to make sure it has all the information available when making that decision. She wanted staff to compile info from the last several years: the types of abatements, size of abatements, revenue generated, what we've done with those revenues. The budgeting we've done for the TIF areas could be severely impacted by COMMISSION APPROVED RESOLUTION NO. 2438 SETTING PROCEDURES FOR TEMPORARY USE AGREEMENTS 19 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) J. Other (2) continued... changes in the tax law. If the city is considering altering its tax abatement policy, it needs to do it with as much information as possible. Mr. Peczkowski noted that historical information could be biased both ways. When a study is done, you prove what you want to prove. Ms. Jones interrupted to say she is not proposing a study, but research. We won't draw any conclusions from it. It will be a report of abatements that were approved, revenue generated, and revenue that was spent. Those are in budgets that are available to anyone. We have collected that information. We're not out to prove or disprove anything. Mr. Peczkowski responded that in the case of jobs created, it might have been reported that they were, but were they really? Ms. Jones said that would be another discussion. Right now she would just like the numbers gathered together. Mr. King stated that this discussion needs to be framed so what was about to start here doesn't happen. His understanding of the Council's discussion is that they were expressing concern about the effect of legislation that may be passed by the Indiana General Assembly between now and March 14 and the effect it might have on funds coming into our TIF districts and our 20 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) J. Other (2) continued... ability to service the outstanding debt on those TIF districts. They were not opening up a discussion of the whole philosophical underpinning of tax abatements and whether we should have them or not. They were talking about a temporary moratorium on tax abatements until we know better what the effects onus will be of legislation that eventually emerges from the General Assembly. Mr. King said that he will not as a Redevelopment Commissioner engage in a discussion any broader than that specific topic: a temporary moratorium on tax abatements, pending our learning the effects of legislation that's being discussed in the General Assembly. Life is too short to reexamine public policy that has been in place for decades in the State of Indiana and the City of South Bend. The Commission is closer to the ground when it comes to these tax abatement projects than the Council is. We could be of service to them and help them in making public policy by providing information from our historical records and from our knowledge of things that might be in the pipeline. If we can help the Council in this period of uncertainty, that's part of our job. Mr. Peczkowski asked where that discussion could take place. Mr. King responded that it should be discussed with the Common Council. Mr. Blake stated that issuing a temporary moratorium seems like a sensible thing to do. 21 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) J. Other (2) continued... You need to know the impact; at least start the discussion. Mr. Inks noted that the moratorium period is relatively short, four weeks unless there's an extended session. There may be projects that come in during that time that need to move forward. They might lose out on the possibility of tax abatement because of the moratorium since our tax abatement policy forbids pulling a building permit before the Council passes the designating resolution. Bob Mathia mentioned this dilemma to the Council at its meeting; Mr. Inks didn't remember whether the Council was willing to make some accommodation for that, such as approving the designating resolution, making the applicant aware that the confirming resolution wouldn't be passed until the moratorium was lifted and might not be passed at all. Mr. Downes noted that there needs to be some flexibility with any moratorium. South Bend wouldn't want to lose a great project because of the moratorium. Mr. King asked staff to find out if the moratorium could have financial limits, such as a commercial project with an anticipated assessed value of less than $25M, or a residential project with an anticipated assessed value of more than $150,000, so as to not ruin an opportunity for this community to secure a very large project, or to allow a small residential project to go through for a 22 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 6. NEW BUSINESS (CONT.) J. Other (2) continued... low income family in a distressed neighborhood. Mr. Leone noted that although there is a lot of uncertainty about the tax legislation that will be approved by the General Assembly, some things are known about their structure. What we're hearing generally is that the bills fix levies. Whether or not a tax abatement is granted would not have much effect at all on the levy. Staff will look at the basic principles that have emerged to determine what effect tax abatement would have, if any. Mr. King summarized the assignment that staff will provide the information so the Commission can make a recommendation to the Mayor and Council on what policy should be established. 7. PROGRESS REPORTS Mr. Inks referred to Resolution No. 2430 adopted at the PROGRESS REPORTS Feb 6 meeting deferring to staff the ability to enter into contracts with service providers on projects the Commission had expressed interest in acquiring property. Mr. Schalliol wanted to introduce some properties where staff may want to engage such services. Mr. Schalliol noted that on S. Main St. between Bowman and Donald is the former EMI manufacturing facility. The current owner is in default and has abandoned the property. The Industrial Revolving Fund is involved, but considering abandonment of it. The property is behind on taxes at least $100,000. Staff may 23 South Bend Redevelopment Commission Regular Meeting -February 15, 2008 7. PROGRESS REPORTS (CONT.) like to acquire the property, demolish the building and make it available for new development. There is some other positive development occurring and we may want to support that by eliminating this blighting influence. Mr. Schalliol also reported that staff has begun talking with property owners in the Coveleski Park area. He showed a drawing of that area with properties we own or expect to acquire highlighted, as well as other properties which have expressed interest in being acquired. Staff may want to do the necessary due diligence to determine our level of interest for those as well. 8. NEXT COMMISSION MEETING The next meeting of the Redevelopment Commission is scheduled for Friday, February 29, 2008 at 10:00 a.m. 9. ADJOURNMENT There being no further business to come before the Redevelopment Commission, Mr. King made a motion that the meeting be adjourned. Mr. Downes seconded the motion and the meeting was adjourned at 11:16 a.m. ~~ .. - ~a1~'E ;;iliso~~ ~ .. .. . NEXT COMMISSION MEETING ADJOURNMENT :. 24