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HomeMy WebLinkAbout02-11-08 Community and Economic DevelopmentFm .~" Community and Economic Development Committee 2008 South Bend Common Council The February 11, 2008 meeting of the Community and Economic Development Committee of the South Bend Common Council was called to order by its Chairperson Council Member Derek Dieter at 3:55 p.m. in the Council's Informal Meeting Room. Persons in attendance included Council Members Dieter, Varner, Henry Davis, White, LaFountain, Rouse, Oliver Davis, Kirsits, and Puzzello; Mayor Stephen Luecke, Public Works Director Gary Gilot, Interim City Controller John Murphy, Don Inks, Elizabeth Leonard, Mrs. Kopola, Martha Lewis, Ann Kolata, Tom Price, Robert Mathia, City Clerk John Voorde, Jeff Vitton, Bill Schalliol, Marty Wolfson, Bill Hollingsworth, Mark Smith, Jeff Gibney, Catherine Andres, Jamie Loo of the South Bend Tribune and Kathleen Cekanski-Farrand, Council Attorney. Council Member Dieter noted that the Committee members include Council Members Henry Davis, Ann Puzzello, Karen White and himself as Chairperson. Council Member Dieter then introduced the two (2) citizen members of the Committee: Catherine Andres and Mark Smith. Bill No. 09-08: Administration Request to Close SEDA TIF Fund No. 414 and Transfer Funds to AEDA TIF Fund No. 324: Council Member Dieter called for a formal presentation on Bill No. 09-08 which is a request to closie the SEDA TIF Fund No. 414 and transfer said funds to the AEDA TIF Fund No. 324. Elizabeth Leonard, Director of Financial & Program Management for the community & Economic Development Department made the presentation. Ms. Leonard stated that the Bill would close the Sample-Ewing Development Area (SEWDA) TIF Fund (Fund 414) and transfer all of the remaining monies to the Airport Economic Development Area (AEDA) TIF Fund No. 324. This would be consistent with the expansion of the AEDA which will include the SEDA boundaries; and facilitate improved accountability. In response to a question from Council Member Dieter, Ms. Leonard stated that the balance in the fund is $648,788.70 and that encumbrances outstanding total $24,006.15. There was no one from the public who spoke in favor or in opposition to the Bill. Community and Economic Development Committee February 11, 2008 Page 2 Council Member Puzzello made a motion, seconded by Council Member White that Bill No. 09-08 be recommended favorably to Council. The motion passed. Bill No. 08-13: Ten (101 Year Tax Abatement Request for McKinley Apartments Housing, LP: Council Member Dieter called for a formal presentation on Bill No. 08-13 which is a request of McKinley Apartments Housing Partners, LP for a ten (10) year real property tax abatement for the property known as the old Target Store Retail Complex located on the north side of McKinley Avenue, west of Hickory. Bob Mathia, Economic Development Assistant Director reviewed his multi-page report dated January 28, 2008 (copy attached). He noted that: • Petitioner proposes to construct 208 1, 2, 3, and 4-bedroom apartment units in two (2) phases • 13 apartments will be set aside for disabled residents • Taxes to be paid of the ten (10) year period are estimated to be $1,952,324 • Taxes to be abated are estimated to be $1,913,666 • Petitioner meets the qualifications for a ten (10) year real property tax abatement under Section 2-77 of the South Bend Municipal Code entitled "Multi-Family Residential Developments" William J. Hollingsworth of Equal Development, LLC with offices located at 12557 Blandford Street, Carmel, Indiana made the formal presentation. He noted that the proposed development with be a quality development and that he will own the development 100% (See McKinley Apartments Ownership Structure flow-chart) In response to questions from Dr. Varner, Mr. Hollingsworth stated that the proposed development is designed to be a market leading affordable property for long-term competitiveness and viability. The buildings will be two-stories. Rents will be based on income and will be a part of a tax credit program resulting in monthly rents running from $350 to $850. He noted that the property in question has been vacant for a significant period of time. In response to questions from Council Member Kirsits, Mr. Hollingsworth noted that their development on SR 23 does have a community building and that one is proposed for the McKinley development. Council Member Puzzello noted that it is somewhat unusual to act upon the tax abatement request prior to the zoning being finalized. She noted that if the zoning is not approved that the tax abatement would not be valid. Community and Economic Development Committee February 11, 2008 Page 3 Mr. Hollingsworth stated that time is of the essence in light of the March 7th state application deadline for the tax credit program. He noted that as part of this program no more than 1/3 of a persons income can be spent on housing. Average income levels would be $40,000. He added that the proposed development is consistent with City Plan. In response to a question from Council Member Oliver Davis, Mr. Hollingsworth stated that security will be handled by the management company depending on need. He also noted that discounts will be provided to police officers to live in the development. Council Member Puzzello noted that the developer held a neighborhood meeting and that they were basically okay with the proposal. Council Member Kirsits noted that fencing on the west must be well maintained in light of persons using the area as a cut-thru. Mr. Hollingsworth noted that they are also considering a landscaped barrier for the west property line. Council President Rouse noted that he has received emails from persons living west of the proposed development voicing concerns. He also expressed concern about the time line on this request. Bill Schalliol of the Division of Economic Development noted that the rezoning and tax abatement requests were filed at the same time in light of the deadlines involved for the state tax credit program. Mr. Mathia noted that his department has had the petition since January 22, 2008, and that their written report was filed with the Office of the City Clerk on January 28, 2008. In response to questions from Council Member Henry Davis, Jr., Mr. Mathia noted that the petitioner qualifies for a ten (10) year tax abatement under the governing provisions of the South Bend Municipal Code. He noted that the "Public Benefit Points Summary" in his report shows that the developer earned 427 points out of 1,000 as shown in the report. The minimum would have been three (3) years, but the project qualifies for ten (10) years under the city ordinance. Council Member White made a motion, seconded by Council Member Puzzello that Bill No. 08-13 be recommended favorably to Council. The motion passed. Community and Economic Development Committee February 11, 2008 Page 4 City Administration's Uadate TIF-LaSalle Square: Council Member Dieter then called upon Jeff Gibney, Interim Director of the Department of Community and Economic Development to provide an update on TIF-LaSalle Square. Jeff Gibney, Interim Director of the Department of Community and Economic Development, noted that no TIF monies have been spent in LaSalle Square, however they have been appropriated. Jeff Vitton of Community and Economic Development provided a handout which was a draft letter requesting proposals from consultants to complete the LaSalle Square Area Redevelopment Plan (copy attached). The reverse side was a listing of twenty-five (25) planning firms. The deadline for a response is March 10, 2008. Mayor Luecke will be appointing a Steering Committee to review and give recommendations. They are working with St. Joseph Regional Medical Center and Memorial Hospital on a possible joint venture fora "Bendix Physicians Group". Joint planning is underway with Honeywell; and market rate housing is being studied. Mr. Vitton noted that they have also posted the request for proposals on Planning.org which is a national website and have received ten (10) responses to date. In response to a question from Council Member Dieter regarding the South Shore, Mr. Vitton stated that the airport would be represented on the Steering Committee. He added that some "retail nibbles" have been received; and that discussions have been ongoing with St. Vincent DePaul who have noted difficulties with the location for retail. Dr. Varner voiced concern whether the round-abouts have had an adverse affect on retail, noting that before it was a straight shot to the bypass. He voiced concern about the possible severe restriction to the flow of traffic. Mr. Gibney stated that their department would provide a map to the Council of the airport economic development area through Jeff Vitton, noting that the area is much more attractive today. Council Member Kirsits noted that he travels in this area a lot, and that persons are starting to get offers. Council President Rouse noted that there is a meeting tomorrow at LaSalle Square. The Community and Economic Development Department will have representatives in attendance and will show maps of the expanded areas. Council Member Dieter thanked everyone for the update. Community and Economic Development Committee February 11, 2008 Page 5 Miscellaneous Business: Council Member Dieter noted that he had the one-page proposed "Position Statement on Tax Abatement" sent to the Council by email and was also provided in each of the Council Member's mail boxes. (copy attached). He noted that it was being presented for discussion, and is offered in light of Mayor Luecke's recent update on HB 1001. He noted that the proposed statement would not be a moratorium. In response to a question from Dr. Varner, Mr. Mathia indicated that there is one (1) personal and one (1) real property tax abatement in process related to the same project. Council President Rouse noted that the Council must be prudent in this area, and commended Council Member Dieter for monitoring current recipients of tax abatement. President Rouse stated that if HB 1001 is passed in its current version, that it will not be business as usual. Council Member Dieter stated that letters have gone out to those recipients who were considered in preliminary non-compliance by the City Administration. The response date is February 22"d The Council Attorney noted that Council Member Dieter sent notice to nine (9) companies who are currently receiving abatements. Mr. Mathia noted that we are coming into a building season, and perhaps discussion should also take place on the policy of pulling building permits. Council Member LaFountain voiced support of looking at that policy, but that discussion on the policy statement should take place. Mayor Luecke stated that he did not support ceasing taking tax abatement applications. He is concerned about the loss of revenue, but tax abatement is a phase in program of taxes which generates more revenue. He added that he has not proposed any city lay- offs, and that the Administration is carefully monitoring HB 1001 with TACT. Mayor Luecke noted for example that what if a developer came forward on the LaSalle Hotel or what if a developer proposed to create 300 jobs in the Studebaker Corridor during the 6- 8week period addressed in the proposed policy. He stated that he appreciates the Council's concern if HB 1001 is passed as is but does not believe that tax abatement should be eliminated. He hoped that there would be broader discussions. Community and Economic Development Committee February 11, 2008 Page 6 Council President Rouse voice concern over provisions in the current version of HB 1001 which treat long-term residents of the city differently than new persons with regard to mortgage exemptions, homestead credits, etc. Mayor Luecke noted that the Council has already implemented protections in the memorandum of agreement (MOA) with regard to the current circuit breaker language. Council Member Oliver Davis stated that it might be beneficial to be briefed by State Senator John Broden. Council Member White noted that she would like additional time to address this topic. She hoped that the Council and the Administration could "dig deeper to find out the true impact of the proposed state law". She hoped that no proposed development projects would be negatively impacted. Dr. Varner noted that he has been a supporter of tax abatements which create new assessments for the city. However he believes that concerns raised should be carefully studied. If the state law ends up with a 1% cap for home owners, he questions the need going forward for residential tax abatements. He stated that he likes the idea of a delay so that more information could be studied. He added that for large projects during a 6- week period, that there could be interim thresholds in place to capture such new large developments. Council Member White noted that "large projects" would have to be defined. Council Member Dieter suggested that everyone send their comments on the proposed "Position Statement on Tax Abatement" to him. In response to questions from President Rouse, Mr. Mathia and the Council Attorney noted that claw back provisions and the circuit breaker language is in the MOAs which must be filed with the City Clerk's Office, prior to the Council moving forward on the Confirmatory Resolution for such projects. Toro and Accuride are the only abatements which have been taken away by the Common Council. Council President Rouse stated that tax abatement may be a "great economic tool" as many have stated, however he wants to see that data and evaluate it. He stated that he has a serious concern for the entire city and that is why he is working with Council Member Dieter on this topic. Community and Economic Development Committee February 11, 2008 Page 7 Council Member Dieter stated that the current tax abatement program will continue, and again encouraged the Council and the Administration to send him their comments on the proposed policy statement. In response to a question from Council Member Puzzello, Council Member Dieter stated that the entire Council would vote on a position statement. Dr. Varner noted that last week the Information and Technology Committee met and asked Public Works Director Gary Gilot to prepare a new RFP on the video-taping of Common Council meetings. Mr. Gilot has suggested using a "selection matrix" and provided cone-page summary (copy attached). The Board of Public Works will be receiving the RFPs for greater transparency. He suggested that the Council Members send their thoughts and comments to him. There being no further business to come before the Committee, Council Member Dieter adjourned the Committee meeting at 5:11 p.m. Respectfully mitted, Council Member Derek D. Dieter, Chairperson Community and Economic Development Committee Attachments