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Home My WebLink AboutRM 11-16-79SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING November 1 1979 10:00 A.M. Presiding fficer: F. Jay Nimtz, President 1. ROLL CALL 1200 County -City Building 227 West Jefferson Boulevard South Bend, Indiana 46601 Member Present: Mr. F. Jay Nimtz, President Mr. Lloyd E. Robinson, Sr., Vice President Mr. A. Peter Donaldson, Secretary Mr. Robert J. Cira, Assistant Secretary Ms. Paula N. Auburn, Member Legal counsel: Mr. Kevin J. Butler Redevelopment Staff: Mr. Carl Ellison, Director Mrs. Ann Kolata, Deputy Director Mr. Kevin C. Horton, Real Estate Officer Ms. Ann Bathon, Acquisition Specialist Mr. Bill Fox, Relocation Specialist Mrs. Jane A. Zimmerman, Executive Secretary Ms. Denise Fleming, Secretary Community Development Staff: Ms. Shirley F. McCoy, Contract Compliance Officer Mrs. Barbara J. Radican, Performance Standards Monitor Mrs. Theresa M. Ellett, Monitor Mr. James Harcus, Director, Bureau of Housing Ms. Karina Ceuterick, Graphics Technician Mr. Herman Lee, Planner Mr. Paul Falduto, Planner News M dia: Mr. Dave Anderson, Reporter, WNDU -TV Mr. Dick Nemeth, Photographer, WNDU -TV Mr. John McKnight, Reporter, WSBT -TV Mr. Isaiah Cooks, Photographer, WSBT -TV Mr. Larry Ford, Reporter, WSJV -TV Mr. John Winey, Photographer, WSJV -TV Ms. Jeanne Derbeck, Reporter, South Bend Tribune Mr. Joe Raymond, Photographer, South Bend Tribune Guests Mr. Jim Wagoner, President, Abstract Co. of St. Joseph County Ms. Kathryn Clayborn Mrs. Janet S. Allen Ms. Irene J. Sibrel Mr. Ted Wasielwski, President, Historic Preservation Commission Mrs. Ruth Price, Historic Preservation Commission Mr. Arthur A. Largent, Board Member, Southold Heritage Mr. Jerry Miller, Jannotta Associates South Bend Redevelopment Commission Regular Me ting - November 16, 1979 1. ROLL CALL Guests) (continued) 2. APPROV�L OF MINUTES Ms. Mary Ann Minne Mr. Paul Toliver, General Manager, Transpo Mr. T. Brooks Brademas Mr. Frederick C. Treadway Mr. Stephen J. Luche Mr. David Gibney Mr. John Stamper Ms. Debbie Goldstein Mr. John Leszczynski Mr. Donald Blandford Mr. Maurice M. Tulchinsky Ms. Edith Hawley Mr. Jim Masters Ms. Barbara Schankerman Ms. Glenda Rae Hernandez, Southeast P.A.C. Mr. John T. Pharr Mr. Peter M. Helmschrott On mot on by Mr. Robinson, seconded.by Ms. Auburn, and unanim usly carried, the Minutes of the Regular Meeting of Nov mber 2, 1979, were approved. 3. APPROVAL OF CLAIMS On motion by Mr. Donaldson, seconded by Mr. Robinson, and unanimously carried, the claims totalling $74,709.96 were allowed and ordered to be paid. The authorized claims are: REDEVELOPMENT REVOLVING FUND Payrol 10 -20 -79 to 11 -02 -79 A. B. lick Products Co. Kevin . Butler Busine s Systems, Inc. Doroth Z. Deane - Petty Cash Carl E lison Kevin . Horton Instan Copy of Indiana, Inc. Makiel ki Art Shop Postma ter Qualit Glass Service, Inc. Amoco it Company Pictur Equipment Company -2- TOTAL $ 5,341.43 160.00 200.00 56.03 68.25 18.34 102.10 10.00 13.95 165.33 10.00 45.89 6.65 $ 6,197.97 MINUTES OF NOVEMBER 2, 1979 APPROVED CLAIMS APPROVED South BendlRedevelopment Commission Regular Me ting - November 16, 1979 3. APPROV L OF CLAIMS (continued) REDEVELOPMENT DISTRICT CAPITAL OF 1972 Gruen Associates, Inc. $ 10,400.24 TOTAL $ 10,400.24 Kevin J. Butler $ 3,664.17 Indiana & Michigan Electric Comp. 11.14 Lang, Feeney & Associates, Inc. 507.00 Redevelopment Revolving Fund 18,931.64 S. M. Eix Associates, Inc. 37.50 Ray Br den 72.00 TOTAL $ 23,223.45 P.E.A. MONROE - SAMPLE AREA The Abstract and Title Comp. $ 2,000.00 Lang, Feeney and Associates, Inc. 980.00 TOTAL $ 2,980.00 P.E.A.'EAST BANK AREA Michia a Title Corporation TOTAL 312 LOANS St. Joseph County Treasurer Heights Finance Michia a Title Corporation Thomas Nawrot Bever13 Fisette Abstract Company of St. Joseph County, Inc. Ramon Fodriguez Rose F el & Materials, Inc. & Willie Smith C & S ervice, Inc. & Linda Mason Ehlers Insulation & Kevin Ervin Campbell Electric & Willa Logan Wickes Lumber & Charles & Movita Stewart Wickes Lumber & Willie Smith Dave W itaker Aluminum & Insulation Co. a d Dorothy Pope, Jurtin`s Construction Co. & Richard D bozykowski -3- $ 500.00 $ 500.00 $ 205.85 2,438.73 852.50 332.41 104.00 503.00 10,476.00 22.83 354.90 517.50 872.00 83.76 207.58 3,150.00 5,691.00 South Bend Redevelopment Commission Regular Me ting - November 16, 1979 3. APPROVAL OF CLAIMS 312 LO NS (continued) Ray Bo kaj & Eddie Metz $ 920.00 Williams Home Center & John Bank 958.67 River Valley Building Supply, Inc. and Randolph & Luanne Zima 810.58 Richar & Brenda Ferguson 9.86 IndianE Glass Company & Vincent Klees 230.88 South Bend Supply Co. & Brenda & Richard F rguson 534.25 John Wolf & Son Heating & Air Conditioning add Kevin Ervin 2,132.30 TOTAL $ 31,408.30 GRAND TOTAL $ 74,709.96 4. COMMUNICATIONS Mr. Ellison: Mr. Nimtz, there have been a number of items in the public record regarding the matter of Mr. Butler and an alleged conflict of interest situation which result - ed in the letter from Mayor Nemeth to you. On behalf of the Commission, about a week ago, we publicly acknowledged the situation, as any public agency has certain responsibi- lities in this type of situation. The first of which is to acknowledge that a conflict of interest has been alleged and the second is to indicate what actions are necessary to assure the pu lic that the Commission will continue to operate above- oard as it has done historically. As a result of this, a vari ty of actions have taken place, both on the part of the Commission and the staff. We do have some recommenda- tions Yegarding how to handle our relationship with Michiana Title ompany, but with respect to the specific charges relate to Mr. Butler, I'd want to throw the matter back to the Ch i r. Mr. Ni tz: The Chair will state that he met with Mr. Butler and Mr. Jim Wagoner, of the Abstract Company of St. Joseph County, and with Ann Kolata of the staff as Carl was engaged in the report concerning the Odd Fellows Building. With that introduction, I'll call on Jim Wagoner, President of the Abstract Company of St. Joseph County in the J.M.S. Bldg. Mr. Wagoner: First of all I would like to comment on the bad reporting that took place in the South Bend Tribune last night where it indicated that a new complaint was offered. There ere about four or five errors in that article. I wish they would get the Abstract Company's name correct. It is Abstract Company of St. Joseph County. There are mistakes in this reporting and I was certainly surprised to read -4 LETTER FROM THE HONORABLE PETER J. NEMETH, MAYOR REGARDING LEGAL COUNSEL KEVIN J. BUTLER South Bend Redevelopment Commission Regular Me ting .November 16, 1979 4. COMMUNICATIONS Mr. Wagoner continues... this a ticle last night. I have a letter that I would like to rea to you addressed to the President of the South Bend R development Commission, Mr. F. Jay Nimtz: Deat Mt. Nimtz: As you know, in response to my t ere o4 NovembeA 8, . 1919, you arctranged a meeting between yvutus et' 6, Kevin Buteen and Ann Kotata o A e CommL6sion',s sta46, and myzetj, owe attonney ce BancAo 4t, and S 2t Keyes o4 cure o 44ice, which Was head on Tuesday, November 13, 1979 at the C mmission's oij ce, Got the purpose o4 expiating and tAycng to teso.eve the possibte con4ti.et o4 ikteAe,6t quest on to ms ed by ws . Oct o4 that meeting, two undeutand.ings have evolved. Fitst, that the sta4j wiU recommend to the Comm. 6zion Vat no 4uAthen otderus 4ot titte insutcance wiU be given by the Commission to Michiana TZae'Cotp. zumcng the Commilssion adopts such a tu.Ce, thus satigy out 4iut complaint. Second, that Pii.chiana Title Cotp. wit2 withdraw 4tom and wiU to jAa%n Jtom whiting any t tee in3utanee 4ot the Comm zzion and in paAt i.cutat, w,i U tejtain Atom w " `ng any �uxthen t t2e insutance on the so- called " .crest Bank -Ma" i;ot Comptex" . Z J this undetstanding catvLied out, it wiU satis4y out second and .past c mptain-t. We 4eee that these -two actions wilt remove the ptoba- 6 y unintentional con6tict a4 intete/st, and even the a peatance o4 such con4tict. This was outs pAimaty c ncetn. Mr. Nii here t letter letter concer true. the Le it cou for pol icy asked James D. Wagoner, President itz: Thank you, Mr. Wagoner. I appreciate your being its morning, making this statement and reading this I might say, after Jim had written his original that he was under the impression that the big policy ling the building had already been let. That is not The only possible preliminary policy was concerning tsehold Interest which was a very minor policy so that Id be included that Thursday when the bond closing First Bank Center project took place. The big had not been let, and in fact since then you've been =or a bid on that big policy? Is that correct? -5- South Ben0edevelopment Commission Regular Me ting - November 16, 1979 4. COMMUNICATIONS (continued) Mr. Wa6oner: That's correct. Mr. Ni tz: I think two things need to be done. I think it would be unfair for the Commission to say that no further policies will be written or asked of Michiana Title if Mr. Butler is no longer the attorney for the Commission, but I think vre should make a motion that as long as Kevin Butler is the Chief Legal Counsel for the Redevelopment Commission the st ff will not order any further title work from Michiana Title �ompany. Do I hear such a motion? Mr . i a: I have a question.. If Kevin's firm is in compe- titioCn as a sealed bid, why wouldn't they be allowed to bid on it? Mr. Ni�tz: Well, he's willing to agree to this. I agree with y u, but Kevin is agreeable to this arrangement. Mr. Ci a: In the future, something of this nature may come up again in some other situation. I don't think it should be allowed.. Mr. Butler: I appreciate what you are saying, but I think there s no need for even a semblance of conflict of interest, which 's the term, that has been used. We're really talking about 'nside advantage, using position for unfair advantage. There s no need for even a semblance of that. As I say, this m tter brings that quite clearly home to all of us. Mr. Ni tz: Do I hear a motion? It is the recommendation of the Chair that in light of the resolution of this issue with the Ab tract Company of St. Joseph County, that there really is no conflict of interest and the Chair would entertain a motion that Kevin Butler be retained as Chief Legal Counsel of the Commission. A motion was made by Mr. Donaldson, seconded by Mr. Robinson, to ret in Kevin Butler as Chief Legal Counsel for the Commis - sion a d as long as he is the Attorney, no future orders for title insurance would be given by the Commission or the Bureau of Housing to Michiana Title Corp., and was unanimously carried. Mr. Ro inson: I'm inclined to agree with Bob. Also, I think that ir this case that Kevin, because I'm sure the Mayor got some hat from the general public about this when it was broughi to their light and was spread on the face of the news- paper and all the television stations, I think he was tried and hung before he even had a trial. I think it's unfair and I think Kevin has done a fine job, and kept us all out of jai'. So I know for one I certainly wouldn't want to lose h m. am APPROVAL WAS GRANTED TO RETAIN KEVIN BUTLER AS CHIEF LEGAL COUN- SEL FOR THE COMMISSION South Bend Redevelopment Commission Regular Me ting - November 16, 1979 4. COMMUNICATIONS (continued) Ms. De beck: There's something that was said that I didn't quite clearly understand. This was not a major policy, the minor policy was written for the moment? Mr. Bu ler: The sale of bonds, economic development bonds, generally is a mortgage situation. It is handled like `a mortgage loan. At the time the bonds are sold, that corre- sponds to the closing of a mortgage. The person who is making the mortgage or buying the bonds, has a checklist of 40 to 50 items, including title insurance, surveys, builder's risk insurance, soil test and so forth. In this particular case,; we knew that HUD was requiring a closing early on. Construction is not going to commence until next year. So far as the bond sale is concerned, that did occur. The proceeds from the sale of those bonds will be held in a trust account until next spring. So all of these items n the checklist are not going to be necessary until someti a next spring when the disbursement begins. It's at tha time that the lender needs the protection that is includ d in all of these documents, including a 10,000 millioi dollar mortgagee policy. Ms. De beck: What they (Michiana Title Corp.) did was just a smal policy? Mr. Butler: It was a ground lease policy. Mr. Ni tz: Actually, the selection of that particular com- pany was made by Aetna, who drew the closing papers. Ms. De beck: I understand the larger policy will come later? Was Kevin's firm chosen because you were in a hurry? Mr. Ni tz: Actually, the closing papers were drawn by Aetna. I don't know whether they asked the other companies for bids or not but they did ask :Michiana for a bid, which was given. They d ew the closing papers, we did not, and they named Michiana Title. Mr. Butler: That was related to the final policy. Michiana Title Was named as the escrow agent, which had not been determined by the developer, which is the party that has to make the determination. Incidentally, I meant to make this point, so that the record is clear. It has been stated that I am tie President. I am one of nine owners of Michiana Title. There are seven equal interests, and one lesser in- terest, owned by two individuals. My interest approximates 13 per ent. I am not the President of Michiana Title, I am a m tuber of the Board of Directors, as are all the share- holder of Michiana Title. This is simply for the record. 6t South BendlRedevelopment Commission Regular Me ting - November 16, 1979 4. COMMUNICATIONS (continued) Mr. Da a Anderson: Mr. President, you have said that there will b no further business with Michiana Title Corp? Mr. Ni tz: That is correct, long as Kevin Butler is the Coun -� sel fo the Redevelopment Commission. Mr. Da a Anderson: On the claims docket approved this morning, there were claims that were dated past November 2nd. What I'm asking is on the 19th of October of this year there was 312 Loan title work for $698.50 for Michiana Title, on the 2nd of Novemb r, according to your Minutes on the claims docket there as the $1,150.00 title insurance policy that I assume was foy the First Bank Project, there was also five other 312 loans involving Michiana Title worth $362.00. My question is on this current claims docket, is there any business with Michia a Title from the Bureau of Housing or Redevelopment? Mr. Ellison: There are claims both relative to 312 loans and to the East Bank development areas. In both instances, what you should be aware of is that the Commission is the LPA for 312 Loan purposes. We approve loan applicants, and we handle the es row accounts for the financing. With respect to the companies they use, that takes place within the Bureau of Housing. We do not get involved in it. Obviously, as. a result of the Commissions action this morning, that process will stop. With respect to the East Bank Development Area, the pr liminary title search work done by Michiana Title is already done. The Commission simply this morning okayed the claims to pay the bill for work already done. That falls under the definition of those things in progress, which the Chair indicated should go through. Mr. Dave Anderson: There will be no other further business with Michiana Title as of today? Mr. Ellison: If there is something outstanding that we have not paid for, there could be, but I think that it's probably for tho most part completed. Mr. Bu ler: I have asked Michiana Title to terminate all activi . I've asked Mr. Newman if he would please do that, termin to all activity with respect to any existing orders. Mr. Da a Anderson: Carl is there any way you can tell me how mu h these claims were today for the 312's and East Bank? Mr. Ni tz: Let's move on, you can get that later, after the me ting. -8- South BendlRedevelopment Commission Regular Me ting - .November 16, 1979 5. OLD BUSINESS Mr. Ellison: There is no old business except for the Odd Fellow Building, which will be the first of progress reports. 6. NEW BU$INESS. a. Commission approval requested taqe Fo organization dvisory Board "A" for amount of $8,000.00 on, Inc., a not -for- litation of the follow- properties: Property Bureau of Housing Estimated Cost 1313 Liston $16,971.31 1317 Liston 11,234.62 1319 Liston 8,206.39 1325 Liston 9,436.23 Mr Harcus: I think Southold Heritage Foundation should be commended for the unique manner in which they are try- ing to process these homes and make them available to low and moderate income people of the City of South Bend. First of all, having FHA approve the properties and ap raise them at the rehabilitated value. With that fi ure, they are asking the mortgage company to state fi ures at the market value after rehabilitation and en er an agreement to provide mortgages at those figures of er rehabilitation to eligible low and moderate income pe ple. This is a unique manner of block impact and should be highly recommended. Of course, anything above th $8,000.00 as noted in my letter of November 14, will be financed by Southold Heritage Foundation. The re- qu st for approval of these grants is based upon them sh wing evidence of title. Mr Nimtz: Being President, also of Southold Heritage Foundation, Inc. disqualifies himself and places Mr. Lloyd Robinson, Vice President in the Chair. Mr. Robinson: I'd like to ask a question of you Mr. Ha cus or Carl. Is there any other Commission or Council or anyone involved in this decision about these loans, otter than the Redevelopment Commission? Mr Ellison: Non- profit group grants (correct me if I' wrong, Jim) are not subject to approval by the Common Co ncil Mr.1 Cira: Isn't it unusual to have four houses in the sa a block? -9- NO OLD BUSINESS PRESENTED COMMISSION APPROVAL FOR REHABILITATION OF FOUR PROPERTIES FOR SOUTHOLD HERI- TAGE FOUNDATION, INC. South Bend Redevelopment Commission Regular Me ting - November 16, 1979 6. NEW BU INESS a. codtinued... Mr. Ellison: I don't know how familiar you are with the 13 CO block of Liston Street. It's inside the Model Neigh - bo hood and the Community Development Neighborhood Stra to y Area referred to as the Near West Side. What they arE apparently seeking to do is to acquire and rehabili- tate four properties along the street that has seen some sp t demolition and some properties that have been vacant anc boarded for a period of time. They are trying to de onstrate that through a non - profit organization and with the utilization of some public dollars, they can not only retain those four units in the housing stock, but provide housing for lower income people as well. I wo ld imagine the mechanics would be this, if we approve thE nQn- profit group grant for $8,000.00, according to thE rules of that program, they can use the $8,000.00 for acquisition costs and /or rehabilitation. Since it is a grant to a non - profit group, they then apparently fi d a buyer who presumably, say through a 312 loan, . co ld accomplish the balance of the repairs that may be ne essary. So that what you could wind up with is a 312 or other financial mechanism which provides a first mortgage for a family. This process allows a family th t.ordinarily could not afford to buy a house an afford- able homeownership opportunity. It's complex, but a very in ovative way to try to achieve homeownership for lower in ome people, to concentrate efforts in a particular bl ck in the community that has already seen substantial de erioration and to demonstrate what you can do if you co centrate and orchestrate the coordination of public, pr vate and non - profit efforts within a particular aria of the community. Mr. Robinson: Do I hear a motion for approval for these grants for Southold Heritage Foundation? Ms Auburn: I have a couple of questions. I'd like to know if we know who the mortgage company is and I'd like to know if the mortgages are going to be let at the current market rate? Mr Ellison: It depends on the nature of the family in- vo ved. If, for instance, you have a family of four and their annual income was $7,000.00, if the non - profit group grant for 1313 Liston is $8,000.00 and somebody has to then put up another $8,900.00 to rehab the -10- South Bend Redevelopment Commission Regular Me ting - November 16, 1979 6. NEW BUJINESS (cintin a. Mr.1 Ellison continues... pr perty, I don't know that that family with its economic circumstances would be able to get FHA approval, whether thE lender wants to buy it or not. So it may be necessary in some situations to determine if that family is eligible for a 312 loan, which is given a.3 percent rate, and allow it to pay that first mortgage. That particular situation wo ldn't need the FHA appraisal and so on, to the degree it would for an FHA assisted mortgage. The program offers .a rest deal of flexibility to take a housing resource and then match a family or families with a variety of finan- cial circumstances.to get them into that house so that the house becomes productive, becomes rehabilitated and becomes an asset to the community. I like these kinds of efforts anc frankly think the City and non - profit organizations should concentrate dollars in this manner to a greater decree, because I believe the concentration of dollars along these lines offers better opportunity to reinforce whet investment otherwise would take place in the area. To me it's better to rehabilitate four houses on that street than one house. Mr Cira: The thing,is, Carl, have these houses been put .up for bid yet? One house has $16,000.00 the other ho se $11,000.00? Mr Art Largent: These houses are boarded up. All four are privately owned. One has been condemned. Three are in the process and if something isn't done they will be condemned. These houses are also 300 ft. away from one Southold is doing right now on the corner of Studebaker and Liston. I happen to be in the mortgage business, I have talked to two people already that looked at these to get a regular conventional mortgage. A lender can look at these properties with a completed value using what mo ies Southold has put in as sort of an equity for the bu er where the buyer can qualify for mortgage with very li tle down compared to regular 20% down. That's what we ar looking at, to try to do four of them in one block. Th same four that are boarded now will be condemned and pr bably demolished otherwise. Mr. Harcus: Just one point for clarification, normally the non - profit agency is required to pay any rehabilitation expense that are above $8,000.00. Southold is making an investment here beside you. The second point is to safe- guard the property during the months of rehabilitation. After the health and safety items are serviced we encour- ag occupancy on a rental basis. To establish the ultimate bu er from the low - moderate income that person can become th renter and the protector of the property during the re abilitation. You can further, according to the Boo South Bend Redevelopment Commission Regular Me ting - November 16, 1979 6. NEW BUSINESS a. Mr.1 Harcus continues. M1 flexibility of the program, have the renter who is the ultimate buyer invest sweat equity in the property, to create his viability as the ultimate buyer. So frequently you rent to the ultimate buyer, you encourage them to put in two or three thousand dollars of sweat equity which re uces the `initial investment in the property for total re abilita'tion. Ruth Price I think the uniqueness of this project is that it builds into the conventional system of home buy- ing and mortgaging in the community. It takes no outside government subsidies, other than the $8,000.00 grant. The $8,000.00 gives us abase from which we can operate, Incidentally, we already have a firm buyer for one of them, so there are buyers and people are coming back into the city. They are looking for reasonably priced houses and what we are trying to do is to try to phase out government activity and put it back into the private sector. Mr. Ellison: I think this opportunity to approve these grants indicates something significant going on in the community. That is that the non- profit organization, and a man in the housing and lending business of Art Largent's caliber who speaks to support this issue, suggest that we're at a period in South Bend where those forces neces- say to cause the city to turn around exist. Certainly, the approval. of these four non- profit grants will serve to reinforce that process. I think we ought to acknow- ledge that and be proud of it. Mr.l Robinson: Hearing no further comment, do I hear a otion for approval? On motion by Mr. Cira, seconded by Ms. Auburn the request for four (4) non - profit grants in the amount of $8,000.00 each to Southold Heritage Foundation, Inc. for rehabili- tation was unanimously carried. ission approval requested for Change Order #6, with . u,. Stickler Plum in ,fora decrease in contract rice ?7.00, for an ., amended contract total of 0 ,a at th e s of 1305 E. Sorin in letter from Mr. -12- Bend, In us.* Di rec ana as set r, Bureau CHANGE ORDER #6 WITH R.A. STICKLER PLUMBING APPROVED South Be Regular 6. NEW C. u nd Redevelopment Commission Mee ing - November 16, 1979 BUSINESS continued... Mr. Harcus: Just prior to service Bureau Inspector discu! sed plumbing specifications with homeowner, The homeowner stated preference of retaining existing cast iron bath tul and Inspector noted that 'water closet has been recently mod fied to accommodate use by the handicapped. To simplify arrangements it was agreed that plumbing contrac- for 1305 E. Sorin should be cancelled. The Commissioners are requested to approve the attached related Change Ord r No. 6 which reduces cost by $427.00. Mr. Robinson made a motion to approve Change Order #6, witi R. A. Stickler Plumbing, for a decrease in contract pri e of $427.00, at the address of 1305 E. Sorin St., sec nded by Ms. Auburn, and the motion was unanimously carr,ied. Comnission approval requested for Change Order #7, with R. N. Stickler Plumbing, for a decrease in contract rice of 195.00, for an amended contract total of $199.00, at the address of.513 Arthur Street, South Bend, Indiana, as set forth in letter from Mr. James Harcus, Director, Bureau of Housing. Harcus: Original specifications for 513 Arthur St. Mr. pre cribed replacement of bath tub. Homeowner now insist; tha any wall damage resulting from this exercise be rem died with wall the exactly matching that presently in lace. Such cannot be done. The Commissioners are the efore requested to approve the attached Change Order #7 which deletes tub replacement from contract for a savings of $195.00. Mr. Cira made a motion to approve Change Order #7, with R. . Stickler Plumbing, for a decrease in contract price of $195.00, at the address of 513 Arthur Street, seconded by Ir. Robinson, and the motion was unanimously carried. Co fission approval requested for Change Order #6, with PlaVConstruction Company, for an increase in contract ri .00, for an amended contract total-of ,4, the address of 946 E. Sorin, South Bend, Indet forth in letter from Mr. James Harcus, Dir eau of Housing. -13- CHANGE ORDER #7 WITH R.A. STICKLER PLUMBING APPROVED CHANGE ORDER #6 WITH PLAIA CON- STRUCTION COMPANY APPROVED South Be Regular 6. NEW e. M nd Redevelopment Commission Meeting - November 16, 1979 BUSINESS tinued... co Mr. Harcus: With homeowners concurrence an attempt was mace to provide reasonable cabinet storage by utilizing some of the existing, units in the small kitchen at 946 E. Sorin Street,. It did not materialize.. The Commis - si ners are requested to approve the attached Change Or er No. b calling for the installation of additional but small units for a cost increase of $382,00, Ms. Auburn made a motion to approve Change Order #6, wi- Pl is Construction Company, for an increase in contract price of $382.00, at the address of 946 E. Sorin St., seconded by Mr. Robinson, and the motion was unanimousl; carried. Cor ission a proval requested for Change Order #4, with P1 is Construction Com an , for an increase in contract of 310.08, for an amended contract total of F.ce 846.08, at the address of 1111 East Miner Street, South Bend, Indiana, as set forth in letter from Mr. James Harcus, Director, Bureau of Housing. Harcus: When bathtub at 1111 E. Miner was being Mr. re laced it was discovered that flooring had deterio- rated to the point that joists and subfloor had to be re laced. Because of the nature of the structural defe an emergency order to proceed was issued. The Commis- si ners are requested to approve the attached related Change Order No. 4 which increases cost by $310.08. Mr Robinson made a motion to approve Change Order #.4, with Plaia Construction Company, for an increase in contract price of $310.08, at the address of 1111 East Miner Street, seconded by Ms. Auburn, and the motion was unanimously carried. Commission approval requested for Change Order #5, with R. A. Stickler Plumbing, for an increase in contract of 120.00, for an amended contract total of F9ice 2.00, at the address of 1111 E. Miner Street, South Be d, Indiana, as set forth in letter from Mr. James Harcus, Director, Bureau of Housing. Harcus: After servicing repair of deteriorated joi Mr. and subfloor (Change Order #4) at 1111 E. Miner it was discovered that the original water closet was itself so distorted that it could not fit flush with new level fl Because of the nature of this problem an emergency noti to proceed was issued for a water closet replacement. -14- i th cts sts oor. ce CHANGE ORDER #4 WITH PLAZA CON- STRUCTION COMPANY APPROVED CHANGE ORDER #5 WITH R.A. STICKLER PLUMBING APPROVED South Bend Redevelopment Commission Regular Me ting November 16, 1979 6. NEW BUSINESS f. Mr. Harcus continues... We request that the Commissioners approve the attached re- lated Change Order No. 5 which increases cost by $120.00, Ms Auburn made a motion to approve Change Order #5, with R. A. Stickler Plumbing, for an increase in contract price of $120.00, at the address of 1111 E. Miner Street, seconded by Mr. Robinson, and the motion was unanimously carried. g. Conmission approval requested for Change Order #3, with CHANGE ORDER #3 Plaia Construction Company, for an amended contract total WITH PLAIA CON - of 1,088.00, at the address of 1237 E. Miner Street STRUCTION COMPANY So th Bend, Indiana, as set forth in letter from Mr. APPROVED. James Harcus, Director, Bureau of Housing. Mr. Harcus: It was discovered that the upper cement step of the set specified to be replaced at 1237 E. Miner was actually lodged in the structure foundation. We hesitate to disturb this arrangement. The Commissioners are re- qu sted to approve the attached Change'Order No. 3 which prescribes replacement of only the hazardous bottom step anc repair of some badly damaged cement walkway leading to steps. No change in contract price would result. Mr. Robinson made a motion to approve Change Order #3, with Plaia Construction Company, for no change in con- tract price, at the address of 1237 E. Miner Street, seconded by Ms. Auburn,,and the motion was unanimously carried. h. Co fission approval requested for Change Order #5, with CHANGE ORDER #5 Pl ia`Construction Company, for an increase in contract WITH PLAIA CON - price of $147.00, for an amended contract total of STRUCTION COMPANY $4,247.00, at the address of 1111 East Sorin, South APPROVED Bend, Indiana, as set forth in letter from Mr. James Harcus, Director, Bureau of Housing. Mr. Harcus: While replacing bath tub at 1111 E. Sorin, sutifloor and joists fell through with contractor. The Commissioners are requested to approve Change Order No. 5 which prescribes joists, subfloor replacement and a new heat run necessitated by water cl set installation (Change Order No. 4). This increases co t by $147.00. Mr. Robinson made a motion to approve Change Order #5, with Plaia Construction Company, for an increase in contract price of $147.00, at the address of 1111 East So in, seconded by Mr. Cira, and the motion was unani- mo sly carried. -15- .South BendlRedevelopment Commission Regular Me ting - November 16, 1979 6. NEW BUSINESS i . Cc R. of issi . St (continued) approval requE ler 'Plumbing f 8.00, for an amei ddress of 1111 E orth in letter f, u of Housing. ted for Change Order #4 r an increase in contract contract total of 579.00 James th a, as r, Mr. Harcus: While performing the Initial Inspection of 1111 E. Sorin Street the bathroom.was noted to be weak and somewhat soggy. Appropriately, rehabilitation speci- fications were written prescribing replacement of under la ment and tile, while plumbing specification awaited determination. The original flooring has been removed per Change Order No. 5 and it has been determined that certain pipe and the water closet collar be replaced. Be- cause of the nature of the defects an emergency notice to proceed was issued. We request that the Commissioners ap rove attached Change Order No. 4 for a cost increase of $88.00. Mr Donaldson made a motion to approve Change Order #4, with R. A. Stickler Plumbing, for an increase in contract price of'$88.00, at the address of 1111 E. Sorin St., seconded by Mr. Cira, and the motion was unanimously carried. 7. PROGRESS REPORTS a. The Odd Fellows Buildinc Mr. Ellison: Members of the Commission., the Staff recom- me dation in summary form has already been expressed publicly. It was our feeling that that was necessary because the Odd Fellows decision the Commission has to make is a very difficult one, a very significant one. We think we have spent enough time evaluating the situa- tion to form a point of view. But I should state at the ou set that the staff recommendation reflects in large part one point of view. Our analysis generally indi ca es the Odd Fellows Building is a judgment call.. It ca go either way. It becomes a matter of what one con- siders to be important from a priority standpoint and what one considers to be an acceptable limit of public investment in that particular matter. I want to note that we did not expect each of the prospective deve- lopers to give us "take to the bank" type of proposals. We thought that there would be some weaknesses in them that could be corrected during a negotiation process. We were more concerned about the economics of their M posals and to what extent the prospective developer k into account and displayed those costs associated -16- CHANGE ORDER #4 14ITH R.A. STICKLER PLUMBING APPROVED DISCUSSION ON THE ODD FELLOWS BUILDING South Bend Redevelopment Commission Regular Meeting T November 16, 1979 7. PROGRESS REPORTS a. Mr. Ellison continues... with whatever they intend to do. With respect to the four proposals, we think three warran- ted great consideration. The one proposal regarding the conversion of the building to housing, we decided very early on, should.not warrant further consideration because the proposal is too problematic. There are too many con- ditions associated with it. If FHA insurance is available, if an approval can be received in 60 days, and on, and on. We also felt that their proposal gave no market data and did not demonstrate that there exists within South Bend a capacity to rent residential space in the Odd Fellows Building at, the rents indicated.. Finally and most signifi- cantly, we felt that the proposal would require a change in the Urban.Renewal Plan.which we think would compete with publicly acknowledged plans for the East Bank, which call for a substantial rehab residential emphasis. We also felt that the developer's proposition under which the Commission or the City would be asked to provide approximately 50 parking spaces on a lease basis inside a public garage facility to be built is unrealistic since the City does not offer parking on a 24 hour a day basis. So because of the parking, because of the need to change the Urban Renewal Plan and the conditions associated with that proposal, the staff, at least in its consideration, eliminated it very early on as simply being not suitable. With respect to the other three proposals, we have had what I would describe as limited conversation with the prospec- tive developers. We were not concerned so much about trying to ask a million questions to get some absolute assurance that the proposal could work financially, because in the first place none of them appeared to work financially. The all appeared to need some additional work before a lender would buy into them. We did that intentionally so as to avoid being in a position, if you will, of negotiating with prospective developers while they are competing with one another. That may or may not have been a wise thing to do, but we felt it appropriate particularly when we began to realize more and more certain significant things. One signi- ficant thing is that, the Odd Fellows Building as an office facility, apparently was not going to survive without public sector intervention. The first public action was to acquire the building and to relocate its tenants. Our analysis seems to reveal that that had a positive effect on older office space in and around downtown South Bend. Further we note that even though we spent some $288,000 to acquire the building, and approximately another $50,000 to relocate the tenants, that even if we were to sell the building to -17- South Bend Redevelopment Commission Regular Me ting — November 16, 1979 7. PROGREgS RE a. MrJ Ellison continues... a rrospective developer for $10,000, $100,00 or $1.00 or gi e the building away altogether, we believe additional pu lic sector investment will still be necessary to cause onE of those developments to happen.. That investment might in Jude loan_ guarantees, it might include interest subsi- d:i s, it may include a variety of things, but we were not co fident in our analysis that the interest rates as indi- ca ed could be achieved, and secondarily we were concerned that the proposals did not include cost identification for every potential item they're going to have. In light of all that, we felt it was necessary to indicate to the Commission that, in our view, the Odd Fellows Building is a risky proposition. If the Commission elects to retain th building, it has to understand that that will involve some substantial additional investment on our part. That in estment will include on an immediate basis doing some - th ng about the.roof_ problem Mr. Brademas called to our attention. Certainly, to board those windows that remain open and also to take some action to protect the plumbing from a winterization standpoint during the winter that is fo thcoming.; We are not that concerned about those parti- cular costs. Obviously, the more substantial costs we think the public sector will eventually have to put forth will be related to assuring that the private financial arrangement will work. In any event, we do not believe the building, in light of all the prospective development issues facing the commu ni y, should be considered a high priority. We therefore wo ld prefer as a staff to invest our time in the Monroe- Sample, East Bank and the Century Mall projects. We do . not find that there is a clear relationship between the fate of this building and the Century Mall project. As fay as we are concerned there is no relationship whatso- ever since the Century Mall investor group obviously made no effort to make a bid to acquire the building. Thus, a rresumption that their deal hinges on this deal I think is incorrect. I have no indication from them that it does. Thus, the Odd Fellows Building in many respects should be looked at on its own, as an economic proposition pure anc simple. Our opinion is that the deal is too risky to warrant taking more chances with the property, and thus, we have concluded it's necessary for us to recommend to YOL that we reject the proposed redevelopment bids and instead award a bid to demolish the building and cause it to happen as quickly as possible. Again, I want to restate, if the Commission does elect to save the building or attiempt to do that, simply bear in mind that.the staff's South Bend Redevelopment Commission Regular Me ting - November 16, 1979 7. PROGRESS REPORTS a. MrI Ellison continues... point of view is that it will require substantial invest- me t beyond simply time and writing down the cost to an ac eptable figure;.that it is a risky proposition and that tha Commission should only take that action if it sees that building as a.high enough priority in downtown South Bend to warrant the kind of time and effort I think is necessary, Th2 staff would appreciate it if the Chair would recoognize Mr. Jerry Miller, of Nick Jannotta and Associates. We have consulted with them regarding the economics of these pr posals and Mr: Miller has a few comments he wants to shire with the Commission and the public. Tha Chair recognizes Mr. Jerry Miller. Mr. Jerry Miller: Our firm has been asked to consider the re ovation of the Odd Fellows Building in the context of th entire Redevelopment effort in the downtown area, but pa ticularly relative to the Century Mall and other nearby sites earmarked for newer office development. We've ana- lyzed and evaluated specific proposals for the renovation of that building as to the financial soundness and the advisability of proceeding further with negotiations. We fo nd that while the renovation of the Odd Fellows Build- inj may be desirable from some standpoints, I think all th ngs being equal, it is better to save our buildings ra her than to demolish -them, that overall (1) it does not re resent the most attractive opportunity for office deve- lopment in the downtown Redevelopment area, and (2) other sires should be given higher priority and greater atten- tion at this time. Our evaluation of the proposals them - se ves found marginally feasible projects which pose in- ordinate risks to the Redevelopment Authority and we be- li ve the City of South Bend. Marginal feasibility lay in such factors as, number one sanguine assumptions re- garding rent levels, which if not fully attained would re lut in uneconomic operation and negative cash flow. Secondly, inadequate consideration of the time, the effort, the cost necessary to reach a breakeven or full occupancy in the project. Thirdly, inadequate and in- complete detailing of all the costs incurred during the development process. We understand these are not finance ready proposals, but even in light of that, the detail- ing was not great enough that we feel we could recommend proceeding further. This is important because detailing of the costs, we feel, and adequate consideration of all the costs 'are necessary to ensure that a quality product -19- South Bend Redevelopment Commission Regular Me ting - November 16, 1979 7. PROGRE a. Mr 1s ne br th on su it S REPORTS Jerry Miller continues... provided in the building. Quality product will be essary in order to market.that property and reach a akeven.rental and occupancy. Fourthly, all but one of proposals lacked any substantial cash equity outlay the part of the developer. Cash equity °which would en,- e that the developer has a stake in the project should be less successful than anticipated. In summary, we've suggested to the Redevelopment Authority that if a proposal for renovation be approved and pursued that the Redevelopment Authority, number one receive from the developer a sum of money placed in escrow demonstrating th good faith of that developer, Secondly, of course, mo e detailing on 'physical plans and costing out those ph sical palns. And thirdly, that the developer finalizes hi arrangement for financing. We feel that only after th se three steps are taken will the interest of the Redevelopment Authority and the City be fully attained and recognized. Thank you, Mr. President. Mrl Nimtz: Thank you, Jerry. Mr Robinson: If we were to consider the developer's pro- posals, would it be unreasonable if this Commission were to request a firm commitment made by the developers and show proof that he has 75 or 80% bona fide occupancy in the building already? In other words, I feel that unless we have something along this line, all this has to be pure speculation, because if they are going to remodel this building, which at the present time, if I remember correctly, the rooms are just like override broom closets so whoever the prospective tenant might be, they're going to have to re ovate this building to suit their prospective tenant. Vm saying that unless they have firm commitment of a certain percentage, I feel that it's still speculative in nature and I'm not sure we want to see the building stand as it is and if they can't get the proper tenants, and can't get it filled up. It's in bad shag right now. Mr. Ellison: If we make an effort to follow the Jannotta recommendation with respect to a developer putting some dollars in, which is a way of saying if we're going to take a substantial risk, then you take a substantial risk. That be and that, if the developer is capable of securing financ- ing, whoever is going to do the financing will certainly require that they be able to achieve tenancy at a certain rate during a particular period.. So, normally we're not as -20- South Bend Redevelopment Commission Regular Meeting - November 16, 1979 7. PROGRESS REPORTS a. Mr. Ellison continues... concerned about what percent they have at a point in time, it's the lender who is concerned about that. And as long as the lender would irrevocably commit himself to financing thE project, then I would ,think we are adequately protected. I hould point out one thing to make the staff recommenda- ti n very, very clear. From our point of view there are tw decisions that have to be made. The first one is, the bu lding stays or the building goes. The second decision is, wh the prospective developer might be if the building is, going to stay. Now as we see it, we have lead the prospec- tive developers to believe that in light of the fact that none of theta offered our asking price, if the decision is to save the building we should reject all the bids and in,, st uct`the staff to negotiate the prospective deve- lopers. Thus, during the 90 day time period that's required by law, we'd be able to determine whether or not one of those proposals can be made bankable.. We would expect to ve then come back to the Commission after the period has been completed with a bankable deal that presumably would in- vo ve the disposition of the building for less that $295, 00i.00. The Commission cannot dispose of that building for le s than that amount until 91 days from the date it finds th proposals are not acceptable and the date it has indi- ca ed that it has entered into a period of negotiation. In short, then, until we know which way the building is go ng, it's very difficult for the staff to work with the developers to make the.deals more sound, because we cannot of ord to be in a negotiation position now unless we know th t there is an absolute public commitment to save the bu lding. Mr. Cira: Carl, since it does not stand in the way of the Ce tury Mall, I.don't know why we can't delay that 90 days. Mr. Brademas showed a big interest in the Odd Fellows Build- ing. I think he should deserve a chance to come up with the �! fi ancial conditions that Mr. Jannotta's group suggested. Ms. Auburn: I have not been able to be involved with the Ja notta Company when they were here in town, nor the staff be ause of my work schedule. I have stumbled along in my ow ..uninformed manner, not having either an architectuarl, en ineering or financial background. I have looked at all fo r of the projects. I discounted the housing project for tha same reason that Carl has indicated, without discussing anj of that with the staff. I have some questions about tha financing feasibility of all three projects. I don't kn w a lot about financing, but Mr. T. Brooks Brademas has zero percent equity put up, and I don't know of any bonding -21- South BendlRedevelopment Commission Regular Me ting - November 16, 1979 7. PROGRE$S REPORTS a. Msl Auburn continues... company that will quote a bond with zero percent equity. The American Development Corp. has a 32 percent equity ratio, which is very low. The National Mobile Concrete bid has a 21 percent equity ratio, which is high enough that I believe that they could receive bonding, based on t4 t. I also have a question on the American Development Corp. proposal because I came up with a $27 sq. ft. amount in their perspective and Jannotta has come up with $52 sq. ft. So there appears to be a discrepence there. Neither the American Development Corp. nor the 100 Center dealt with the exterior east and south walls at all and if you go and look at the east and south facing walls, something must be do he to those walls and that's not built into the cost. I. have a question as to whether we're talking about Class A space. I believe that the period of time that this comes on the market it will be on at a range that puts it directly in Class B and not Class A. So the proposals are talking about one thing, I think the market is going to dictate another when we get it there. It appears to me that the time lines set forth in the proposals are far too short be- cause it will take at least three months to put together the bonding requirements and usually another 12 to 18. mo the on top of that as a rehab time so we're talking about a or 22 year time limit, not the year or year and a half th t we've been talkina about. I have a question as to whether the developers can buy the Odd Fellows Building and sit on it and wait until the land value appreciates and then simply turn around and sell the la d, for which most of them have bid almost nothing for and capitalize on that as far as speculative financing. I'm no sure, and maybe Mr. Miller can answer this question for me they did do the debt coverage ratios but that varies very widely from industry.to industry and I'm interested on what is the normal debt ratio for the kind of analysis that we're looking at. I'd be interested in knowing if anyone ha come.up with firm bond commitments based upon the pro- posal, and I'd also be interested in knowing what charac- teristics distinguish Class A from Class B from Class C of ice space, because I think that's a key issue in the Odd Fellows Building. I'd like to end.my remarks by saying I'm no of the bulldozer mentality, I don't think. I've lived in the West Washington district prior to the time that it wa fashionable and stuck it out through a period of time wh n everyone was leaving and not moving in. I've been in- vo ved with Tippecanoe and enjoy living next door to that -22 South Bend Redevelopment Commission Regular Me ting - November 16, 1979 7. PROGREdS`REPORTS a. Ms .1 Auburn continues... structure. So I don't think I'm coming from a demolition perspective at all, but 'I would like to point out that in my uneducated manner I came up with some real problems with pulling this off, as much as I'd like to see the build -. in saved. Mr. Miller: First of all, as far as the cost from the Ameri- car Development Corp. proposal, I think if you look at that pr posal closely and tally up all.the indirect costs; all thE soft costs, etc. you'17'come up with a higher number. With respect to the number of square feet, there is a cost per foot of net rentable area not per foot of the entire gross portion of the structure. I do that because I prefer to relate it to the productive space in the building, just ho many square feet for producing revenues. I'll point out also that that per sq. ft. figure ranges all the way, in th three office development proposals anyway, all the way from $45 up to $66.63 a sq. ft. The latter one is approach- inc a point where it's no more economical to redevelop that than it is.to build new space, which leads to your next qu stion concerning the Class of space. 'Of course it's di ficult for me to gauge, as I didn't have detailed plans, an so forth. I wouldn't say necessarily the renovated sp ce is not Class A space. I think.it can be some ex cellent space provided in older buildings. You only need to go to the Loop in Chicago to see some. In this case I ha some serious questions as to whether what they were building would really produce the quality of space that th y were saying it would. And that it would indeed gene- ra a the revenues that they claimed they would. I think th t can only be determined through further investigation anc further detailing. I also was concerned about the exteriors and exactly what they were doing. There seem to be some very strong inconsistencies among the proposals of what they propose to do and how much it was going to cost. So a proposed to do a lot more for a lot less. I don't kn w whether that'.s because they typically operate more of Iciently or what, but that raised some questions in my mi d. As far as speculating on the land, that one I can't answer. I on't know of any sort of restraints on that activity, I suppose that it would be possible to build them into any co tract for sale. As far as debt coverage goes, we typi- cally like to look at 14 (1.25%) or thereabouts. On a pr ject of this nature, where it's not large and where a sm 11 reduction in your revenues can reduce that ratio ra idly, you want to have at least 1.2, 5 up front, and -23- South Bend Redevelopment Commission Regular Me ting - November 16, 1979 7. PROGREtS REPORTS a. Mr� Jerry Miller continues... we ve demonstrated in our analysis that if you fail to at rain the full occupancy or if you fail to attain the full rental projections that they use, you're coming too close to a breakeven point I think for the financier to be comfortable. Mr Nimtz: Kevin, do you want to answer the question as to whether a developer could buy the building, hold on to it for a period of time and then demolish it and sell th land? Mr Butler: They could not do that if our contract laid it to a specific proposal, they would have to accomplish that proposal. Now ultimately, somewhere down the line, a deci- si n could be made with respect to the demolition but that would have to be economically after the money has been sp nt to accomplish the renovation, that would have to be ma y years down the road. Mr Nimtz: I'm sure that many of you would like to speak on this matter, however, let me say that I have had two me tings with the Mayor -elect yesterday, and one this mo ning,.and,in light of that I received a letter from the ho orable Roger Parent, Mayor -elect City of South Bend, wh ch I'll interject into the meeting at this point: De Mn. Nimtz: I te/s pee t4utt y tequest the Redevetopment Co m-izz ioneu to postpone theik decision conceAning the de otition o4 the Odd Fe22ows Bui eding. I am quite con- e ned about the Redevetopment sta44',s neeommendation's that "the Odd Fettowz Buitding must be demoU6hed as soon as roo zibte ". My position negaxd.ing the JutuAe o4 the Odd Fettows Buitd- in has been eeeaA and consistent. 14 the Odd FeUows BuUding stands in the way o4 the initiation and suece�ss- eomptetion o4 the pkoposed Centutcy Matt, then it ,s h u2d be demoti s hed. The decision to demo.e ins h the buizd- inj zhoutd xest on at tea3t two basic 4acatox6: (1) that th e .us a cteoti need to demos h the bui' ding, and (2 ) th,zt thence is a ctean attenhat ive Jots the zite, which .in udez a 4eas.ibte de4.in.Lave 4inancia- plan with a nea- s o tabty cetr to in 4unding s ounce. I can 4.ind no sta44 neeommendations oh statements by po enti.a2 devetopens which have indicated that both the Odd FeUows Buied.ing nenovati.on and the eovustfcucti,on o4 CentuAy MaU could not proceed together within a common -24- South Bend Redevelopment Commission Regular Meeting - November 16, 1979 7. PROGRE S REPORTS a. Mr. Nimtz continues... design concept. In addition, I beUeve ptiesent uncefttain- ties and high .interest nate�s, eoupted with the tatge in- vestment o f pubt is 4unds tequited to Hsu cce&s jut2y compete CemtuAy ,MaU, tequite that aU opti<onz be te4t open dot the n orris nq admin 6tAation and the C�it y Counc iZ. hough the ztaJ4 t ecommendati.on estates that "the bwitding coutd be saved... ", the staJ4 concludes that additionat pis tic sector time and .investment woutd be necrosaty to as uke the successjut tcenovation o4 the Odd Pe.Uow-s Buie -d- in . The .6taJ4 4ututhet concludes that the tenovat.ion o4 the building is not "a high enough pAi,o,uty" to deserve an adcitionat .investment o4 public seetoA time and tesou&c&s. Th6t last cohauz ion is not a proper one 4or the sta4i but, l nk.2y, is within the purview o4 the Redevetopment Co .i�s�s ion. A,Uhough the Mayors has made &ubztantia- ptogtesz on the to evetopment o4 "downtown" and should be eomptimented 4ot initiative and succeszes, the Centu&y MaU. Project stiU t gins only a concept in teim o4 design, con4.igutiation anc I composition. Financial data has been ptepated; we know the ptce.P,im inalcy pubtic and ptuivate s eetot costs However, we have no commitment and no de4in i to funding z ouree 4o& the pu tic costs. Yet the deciz i on to .invest pt.ivate gunds .us coytingent upon a de4.in.ite and binding commitment o4 pubt is ,se of gunds. In eonctus.ion, I be,Pieve that those who w,i.0 have toimpte- mept the Century Mall Project must be allowed to have ava i- ta .2e aft pozzible development and .investment opt.ionb, .in- ding the pozz ibit ty o6 renovating and teu�s.ing the Odd Fdlow,s Suitding. To reiterate, .i4 demolition o� the Odd Feltom Bu it-ding is nequ,uced jot the initiation and success- comptetion o f the ptopozed Century MaU, I would suppotrt the demotiti:on o4 the structu&e. However, untie that time eo es, att pozs.ibte options shoutd be kept open 4ot the d.i 4.icu.?t task o f continuing and compteti:ng the udevetop- meyt o4 our downtown. Th e4ote, I &estate my request 4ot a po-stponement o� your de ' .ion concenning the Odd fe22ow6 Building and hope to me with you in the neat 4utute. Thank you 4ot eon�s,idet ing my teque t. Sti eetety, Roger O. Parent, President, Common Couneit, Mat ro&- elect. Mr Nimtz: I also have a letter from Mary Christine Adams, Councilman at Large. -25- South Bend Redevelopment Commission Regular Meeting - November 16, 1979 7. PROGRESS REPORTS a. Mr. Nimtz continues... Comm-izzion Membets : I would fluke to take this oppot- y to 4oAma t y speak out again against the pnopoz ed ition o4 the Odd EeUows Building. The decision to demot ash this downtown buitding, in tight o4 bwsineszmen who . have o6 jetied to pXesenve it, I beUeve ,se des out a �signa.2 that the City o6 South Fend ,cis unwctZ ng to accept ptivate help to ptesetve ouA downtown. The pu.bti.c has afro spoken out on 6eveAa2 oecas,i.onz, and I betievethe majotity o4 oux people wish to have the Odd Fettm Bud -ding pnets ehved. I h the Commisstion to teconsidet the decision to demolish, an to weigh ate o� the jactotvs which ate in the best i enest o f out C.i ty',5 4ututce. Thnk you. S.i.ncete2y, Many Chtistine Adams, Counci man - at Lange. Mr. Nimtz: well, there was no decision made as you well kn w, that „decision is. to be made this morning. It's the Chair recommendation that we accede to the request of Mayor-elect Roger Parent. I told him I do not control this Commission but you generally follow my suggestions, anc it's my recommendation to you that we accede to the re nest of the Mayor - elect. Now, Commissioner Donaldson has to leave in about 10 minutes. I think we should have so a discussion here on this, but I think you (Mr. Do aldson) should be allowed to vote on this issue and so we'll proceed to anybody that wants to make some comments. I call on your expertise, Mr. Brademas right now cerning the roof? Mr. Brademas: I think for a few hundred dollars that it - wo ld be possible to seal the roof that is leaking in the so thwest corner, and along the parapet on the north wall. Ot er than that our investigation of the building indicates that outside of the windows that are open that it is water - ti ht. There is one boiler tube that has a crack in it that would need to be replaced in order to provide heat in the building, hopefully while we're working in there th s winter. Outside of that, the building does not pr sent any problems that would cost any amount of money at all. -26- South Bend Redevelopment Commission Regular Me ting November 16, 1979 7. PROGRESS REPORTS a. coriti nued'. . Mr Nmtz: I'll give you an opportunity to reply to some qu stions that have been raised by Mr. Miller of the Ja notta firm and by Commissioner Auburn. Mr. Brademas: I think Mr. President, if I may, I'll try to very quickly read a prepared statement and I'll go-as fat as possible in view of time, but, before I do that let me say that I will be giving an invitation to all members of the Commission and to the Community at large probably wi hin the next several weeks to come and have a preview in pection of a house that was to be demolished that we mo ed into the W. Washington St. area and I think you'll fi d that with about 90 days time, with, no actual infusion of public sector monies that we have gotten an architec- to a7 gem there. My statement is entitled "The Odd Fellows Building Could Pet-form Well For Downtown" which is a quote from the Rouse study: On Match 26, 1979,.Mayat Nemeth totd the membetus aj_the Common Counctt that a detetm-i.nati,on o4 wh.ethet to demo ,&sh the, Odd Fe -Uows Bu.i.tding would await a matke t study te- poAted by the Amet.iean City Cotpo&att;on. The Ametican City Cotpotati.on, which is a zubs.idiatcy o6 the Rotse Company, is tecagnized throughout the cou.ntAy as a j' whose expetr ,ise in the economic, phys.ieat. and gnan devefopmentJs of downtown areas is second to none. The Rouse Company its e j a te�spons.ibte not on.2y Oat the can s ctian o4 numerous ma9of eommencca devetapments through- out thtough- out the eountAy but -is ptobabty best known jot the devetop- ment aj the New Town o6 Cotumb,ia., Matytand and jot the to ovat.%on o4 Paneu i e ilaU in downtown Boston and the New Ma0et Commete iae Area tenovati,on in the city of Phitadetphia. In ezzence, the Ameti.ean City Cottpotati.on and its patent, the Roaze Company, ate not just theoteticat economists and ptan- n . They have had .bong and sueee z iut expetr i.ence in the to ovation and &enewa.2 o4 cen►,t,Lat atceas in a number o4 c i ti m .in this countAy. N be otd.ingty, it made a gtceat dea e o4 common sense 4ot the y o4 South Bend, in eonj on with the St. Joseph Bank f Trust Company, to commission the P,ous e Company and its vacan City CotpoiLation to ccAAY out the study which Mayvt ie th ptom>is ed the Co unit woutd be used as the basis to `.evni.ne whether of not the Odd Fettows Building shoutd demot shed. 27- 1. South Bend�Redevelopment Commission Regular Me ting - November 16, 1979 7. PROGRE S REPORTS a. Mr.1 Brademas continues... Thct .gong- awaited study was teeeived eat.ey in Ju.ey of zh yeat and stated, among other impotrtant �jact6, , the 4o tow ng, ►►p esent metAopot tan area o44:ice space o f some 2.7 m-%U -i.on ,sq ate fleet Z pto9ecied to inctea6e to atmost 3 m tt on by 19M Based on eu,rAent penjotmanee and peanned .imptovements, downtown can teasonabty be erected to captutce 50 to 55 pet- - ce o4 this gnowth. Deducting two o44 ice deve.�opmewt's un eAway, the Memotiat Medieat Building of 20,000 squate fleet and the Fiut Bank Bui.eding o$ 50,000 s quatce fleet, Leaves a neA, demand of 55,000 squcvte fleet o4 downtown Ceass A space by 1982 and a jutthet demand o4 110,000 6quoAe fleet between M3 and 1985 4ot a totat o4 165,000 squati.e fleet by 1985. Thts does not inetude app,%ox imateey 40,000 to 45,000 6quoAe jeo needed by the Fedetat GoveAnment." llhAtheAmo,ke, these 6igutes do not .include ptospective o4Aiee ents not eutvicent?ey toeated in the St Joseph County area vhc m i ' ht be ntetLated in moving tegionae on eotpotate he dquatrteu to the downtown South Bend area. They eou.ed ne uite a zigni6.icant amount a6 add%ti.onat o6$.ice space." "T e cu"ent 990 occupancy &a-te in downtown South fiend Ctass A pace us in :i is e.e4 a con4iAmat.ion o4 tenant demand 4ot ad onat competitive o44.ice space." The Ametu.can city Cotpotation'.s tecommendations in the k to oAt on the deve.2opment concept 4ot the Century Malt state the 4ottow.ing in te4etence to the Odd Fetteows Buffed ing, "The buteding has been 4ound to be bas.icatty sound, attAac- ti e and weU toeated. 1n cons.idetr ing the situation 4tom ent mat ket cond%tt.ons 4otc o44.ice space in downtown South Bey d, it would be neeessaty to renovate totatty the intetu.ot and extetr iot o4 the bu td.ing. Such tenovation woui'd .inc eude ceytW aA conditioning, automatic eeevatou, new catpeting, modern tighting j.ixtutes, and new windows. 14 this cowed be done at coasts petmit i4g tents ztcgn.ij ica.ntt y tower than those anticipated in the new FiAst Band Ru.ieding, the Odd F ows Buitding coued pet4otm wet 4ot downtown. 11 woued expand the Lange o4 o44iee .inventoty avaitabte to spective tenants and coined be compteted and tented �sooneA n a new sttuetuAe. Since the two bucrWngs (new Hut k and Odd Fettows) o4�jet two distinct tevets o4 tent and L?,it ie,s, they eoutd be ma&keted to a w.idet Lange o4 3peetive tenants." -28- South Bend Redevelopment Commission Regular Me ting - November 16, 1979 7. PROGREdS REPORTS a. Mr.1 Brademas continues. The Amet.iean City Cotpotat ion tepo&t continues to estate, "The Sobth Bend Depa&tment o f Redeve..eopment shoutd put the banding on the ma ket immediateZy and v igotourt y s ot•i:e it ,i wtetest A& Cm potentiat deve2opens." This is ptceci�seZy what the South _. Bed Department aj RedeveZopment hats done and there can be no question that the Department has teee ived a pnopozat that is eompteteZy consiztent with the spec 4ic recommendation o4 th4 American City Covotation tepotrt. Today aU t nteZUgent Ametr icans undetr stand the abs otu to ne e/s/s,ity_ aA conveuation o4 energy. This, o6 coutvse, does not mean j uat savings on go s of ine, heating oU of natutcat g . _ It mean, az .impotrtantty, the best utiX,izat:ion o4 the pt pent tesounces that we have. It is etear that a substan- amount o4 energy wou.2d be wasted in the demotition o4 the Odd Fellows Bu i Wng and that it wooed cast the taxpayeu u accts o4 one- quaxten mU..Uon dottax6 which wou-d be an o '.oht Zozls . ed on cu. v ent conttucct on costs, to teptaee the same 73 000 �squaLe feet o4 space in the Odd 1=ettows Binding cobtd wed apptcoach a total PA $7 mitt ion. On the othetc hand, it is c2e aty jeas.ibte, as we have documented in out pn posat, to comptetety tenovate the Odd 1=eUow6 Bu- tding in tine with the tecommendat.ion a4 the American City Catpo- t "on tepatt, Got apptcax imatet y one -th trd that east. In the city o4 Mishawaka., we have just tceeenfi2y completed the ttenovation o f the otd Wootwotrth Bu itding containing some 18,000 �squatze fleet, which renovation was eantr ied out in apritoximatety a,90 day peJri.od. This renovation was done {got welt under $15.00 pet square foot .inctud.ing heating, ai& conditioning, new bui ding Monts, tighting, catcpeting, etc. We pnapoze to .invest over $30.00 pet squa&e {soot in the )Lena- v ` "on o � the Odd FeUows Bu i td%ng . O renovation of the Wootwotrth Su tding ptovided the oppat tun4ty jot thte.e new bws.inesz ens to go into bus.ina s in the city and one existing bevs.inaz to expand substantiaUy. Tb thet existing buz ine�sz and thous e potent iat new bwsines s e3 had been joheed to kind space in a new buitding at the tate�s thct must be commanded with canttuction casts today )Leach- .in $90.00 pen squatce 400t, none a4 these buts.inazes wowed ha e been able to expand of to have statcted bus.inesa . In the same vein with the Odd 1=eUows BuUAng, to teak it down would deny an oppatrtuw{ty Oat many .6maUet bws.ine&s 4itms, who wowed have a tsttcong a44in-ity 4ot a downtown Zo ation, to Zocate in this area. We have demonttated with -29- South Bend Redevelopment Commission Regular Meeting - November 16, 1979 7. PROGRESS REPORTS a. Mr. Brademas continues... a 25 year otd group o4 buitdingz, the 100 Center in M.i�sh- aw ka., which contains atmort twice the amount o$ zpace o4 the Odd FeUows Buit -ding, that we have the technical abit ty and 4inanciae stAen9 h to e44ecti:vety catvey out taste6u.0 and 4ea6ibte teha.bittation. M attchdtects, engineetus, ptannetc�s and devetopeu, we have Hsu ee3-s4utty developed .some 2,000 muZt%- 4am-iP -y housing units at a eort in exce6z o4 X30 md.Uion as weU as the 900 Center Co ptex with a cost o4 approx-imatety $77,- m-i Q,?,ion. The atchi- tectuW, enq ineetLi.ng and devetopment flees 4otc the tcenovation o4 the Odd �e.P.2ows Bu-itding, which wo utd .6e in excess. o4 on - quainter m.%Uion dotcu, would be ,cnve-sted to the pno- je Aso that thetze can be no doubt that we wou.ed be making a ajotc equity .inve/stment in the devetopment. In addition, as the membeu o6 the Commi6z ion know, under the terms o4 an Economic Deveeopment Comm,i zion Bond TZ'sue, the pAine i pat o1c pk ncipa.Z6 involved in the devetopment must z.i n petvsona..P.2y on the .loan. It has been indicated that one o4 the nea3on�s 4or the staJ4 recommendation 4or the demob t-i n o4 the building was that it woutd enta it too much o4 th e sta44' -6 time in conjunction with the nenovati.on There .cis no basis in tAuth 4or .such a statement. In 6act, upon h acqu.i� ition o4 the propekty, thence would be no reason whctsoeveA 4o& the Redevetopment Comm &s.ion on the it zta.4�1 to be 4utrthen .involved with the project, except ass .i.ntenes- e �spectatou to see what a magni4ici.ent fob we wou.2d be ab e to do in the succe/ss4ut renovation o4 the buitd.ing. It has been Jutrther stated that another treason 4or recom me ding the demo.?ition of the buitding would be that it wot,td be neceszany to pouts additionat pubtie monies into the pnaj eet. Once again, that is no Jqundation in 4act 40 Such a statement. We do not tcequike that a pat king A ctutce on other Atructtvices paid 4o& with pubt i.c 6unds be given to u3 i az a condition on 4or ca,, y ing out a zucce�sd - b p6 ect. We do not need not do we request any pubPic 4und6 to be .in- J , ed into the tcenovat.ion. To the eontsiatcy, acceptance of ouA. propozat wiU Save the taxpayeu upwards of one-quaAtetc miftion do meatus which w U not have to be expended to demoti6h the building. ma South Bend Redevelopment Commission Regular Me ting November 16, 1979 7. PROGRESS REPORTS a. Mr. Brademas continues... Finatty, it has been ,indicated by Redevetapment Comm-i 6z ion ne resentativens that a thiAd teatson _4ori wanting to demozish the bu-i ed ing was to insutze that thete would not be any com- peAi,tive o 4j ice space when-the new Fi ust Bank Buitd.ing was occupied. 143. .in 4act, that ' i6 one a4 the tat ionatets 4or tUz ptoposed decision, we wowed �stAongZy zugge6t that a pu t�:c entity has no businezz in attempting to sti4te com- p e�i "on by deAstAoying a buitding that ctea4ty eoued be ,su ee6qu2y renovated in ondet to insute that another b4Wng, the present >bnt Bank, wowed not have the Odd owes &dUing as competition. In .summaAy, the Roevse Ame scan City Cotcponation teporrt, w ch Nit. Nemeth has ptedged to the Common Councit to Jo ow, ctea,,ty states that .iJ a via.b.ee devetopeA can be 4o nd, and ceAt.ainZy one has been 4ound, that the Odd fi ow,s Bu itding shout-d be renovated and that it can seAve the, commun-ity wett. It iz not an ovetstatement to say that the desttuetion o4 the, Odd 1=eUows Bu%tding wowed be nothing �shoAt o6 a commu- y tragedy and would botcdeA on the csr im-inat. CeAtainty the ;irl te&etsts o4 the vast ma j otd t y o A the citizens of South Bend who would be beneJ ted today and gak yeatrs to ca e by the tenovation o4 the Odd FeUowz Bui.edi.ng Ahoutd o0weigh the detsi ets o4 those handout a4 pets ones who, 40n S o e unexpta fined neaps o n, Wish to demot-us h this J,i.ne bui t d.i.ng . We ask that the Commizz.i,on &eject the sta44 teeommendat .on and, a4teA going through the 4oAmat ities o6 &ej ect i.ng the pt pozatz that have been received, enter into negotiations with ups jot the acquisition and tenovation of the Odd E ow:s Buitding into asttuctuAe that every citizen in the co munity can be kightJuUy proud o4. Mr. Nimtz: Thank you Brooks. Brooks and I discussed this matter yesterday, and I told him I think the thing got messed up in the translation, just as Mr. Wagoner said in his newspaper story about the question of space.. I think thE point was that it was a question of what Paula has said here, it would be Class B office space possibly, and would not be able to compete with the other office space. I don't think it was a matter of cutting down the competition, I think it was a question of whether it would be rentable or not. So that Pete can vote here.we will continue to listen to pe ple, I think I feel the pulse of this group, that we're going to accept the recommendation of the Mayor -elect -31 South Bend Redevelopment Commission Regular Me Ling - November 16, 1979 7. PROGRESS REPORTS a. Mrl Nimtz continues... Roger Parent. It would be my recommendation to you, I've no discussed this with the Mayor - elect, but I think al- though he's going to have all sorts of problems on his hands in forming a new administration I don't think we can delay .this indefinitely. I agree with Carl, we have problems th t if we keep this building up and just let it stand, we ha e- expense. Kevin, what do you feel we should do here - to the second meeting in January or what? Mr. Butler: I think as Carl suggested, regardless of what the decision the Commission makes, all of the bids should be rejected, for demolition and renovation. Regardless of whether you decide to demolish or renovate or wait on the matter the bids for renovation should be rejected today, be ause they cannot be accepted the way they are Mr Nimtz: Are there any other developer's here? Mr Donald Blandford from National Mobile Concrete Corp. Mr Blandford: I'm attending this meeting not only as a representative or officer of that corporation, but more importantly as a citizen of the City of South Bend. I have listened with a great deal of interest. I think some points Mr. Brademas indicated in his presentation, in to ms of the involvement of the private sector and public se for and the charge this Commission has and interfacing wi h the business environment, I wholeheartedly support 10)%. I've also listened with a great deal of interest, wh ch this is the first opportunity I have had to do so, th recommendation and advice of the presentation of Mr. Mi ler of the firm in Chicago. In regards to our proposal, ours is no doubt the most ex- pensive and therefore, has the most involvement from an equity point of view. I don't think we should be preoccu- pied with whether or not we have prospective tenants be- cause realistically the end finance is really going to dictate whether the proposal will go or.not. That basically can be very simply decided within a 60 to 90 day period of time. And that in effect is the responsibility of the in- dividual prospective developers, the final point to prove their capability.of carrying out_the project. If that can be done, I honestly feel that the responsibility and obliga- ti n of the City of South Bend and just as importantly, yo r Commission, has been transferred to the private sector. -32- South Bend Redevelopment Commission Regular Me ting November 16, 1979 7. PROGRd S REPORTS a. Mr. Donald B1`andford continues... As indicated earlier _there is some concern about the pro- sp ctive developer purchasing the land and then waiting for thE market to appreciate, I guess in coalition with the Century Mall and then capitalize on that." That is not the in ent of our organization, that could very easily be deter- mined as mentioned earlier in a contract of purchase. In summary, our organization feels it's a very viable pro po al, it would serve the City of 'South Bend very well. Our ap roach is somewhat different, we're definitely going after th Class A market. We'll be in direct competition if you will, with First Bank Bldg., that's our intent. And that ba ically is the timing intent. We want to get going, get th project completed: before our competition,in the "hole" do s. But that's just an interface of the free enterprise sy tem. I think our proposal was.complete, realistically, not only in hard cost but soft cost as well. Because the soft cost-in our proposal is very significant as with any proposal put together. I was hoping that there would have been some questions asked in terms of the proposals, and I'm glad you clarified earlier this morning that it is very we 1, in a sense,.that we were not looking at proposals in the sense of taking them to the bank. I would be willing to entertain any specific questions that any of the Commis - si ners and /or Mr. Miller may have at this point in time. Mr. Nimtz: You understand the same thing I asked Mr, Br demas, if the Commission accepts my recommendation that we postpone this until January that we must reject all bids this morning. Mrs Blandford: Yes, I understand. Mr Nimtz: Commissioner Auburn has a question to put to Ted Wasielwski,'the President of Historic Preservation Commission. Ms Auburn: I understand your interest and intent in try- ing to renegotiate having the Odd Fellows Building put on the Historic Register, but I personally had some concern that I was being threatened to move on an issue before we might be ready. I'd like to know what your future intent is if we accept the proposal that's on the table Are you go ng to use that time to try to pursue getting that build- in put on the Historic Register? -33- South Bend edevelopment Commission Regular Meeting - November 16, 1979 7. PROGRESIS REPORTS a. continued... Mr. Ted Wasielwski: Well, based on the recent newspaper article, the staff recommendation, we have sent the appli- cation to the State Preservation,Office as of last evening. We have been in contact with the State Preservation Office anc the National Advisory Council has informed us that they arE in the process of starting a letter of inquiry to the Re evelopment Commission concerning the Historical Status of that building. The major reason the building was denied on the original application is that it was not 50 years of age. At this time the building has attained the 50 year ag , so the Advisory Council has said that they would inform you by writing in the next few days that the case is reopen- ed. Since there were federal funds used in the acquisition of the building they will review the project. J would think 6 -8 weeks would be plenty of time.to ascertain that. So in view of Mr. Nimtz's timetable, I think everything will be decided by that time period. By the way, just because the building will be placed on the National Register of Historic Places through and including the W. Washington St eet district, that does not mean that the building co 1d not be demolished at some future date. Ms Auburn: I guess my concern is that if you succeed in doing that and we have an economic albatross around our neck, who's going to take responsibility for that? Is thE Commission willing? Mr. Wasielwski: Well, I would think that the Commission has acted in the good faith of the community, in trying to protect the building. I don't think that the intent here is to cause any economic hardship for the City of South Bend. The intent was trying to stave off the possible qu ck demolition of the building. As you can see we've acted along the lines where we attempt to change in all as- pects to cause anyone any economic hardship up to this po nt. However, when you have economic bids for rehabilita- ti n of the building, and you still talk about demolition, we were left with no choice but.to go ahead and try to save the building as'long as possible. We're not saying that the building cannot be demolished, it could be demolished if it is on the National Register or not. Ms Auburn: Then we've reached some kind of gentlemen's ag eement between your group and our group that if the pr ject is not financially feasible that you will not st nd in the way of destruction of the building? -34- South Bend Redevelopment Commission Regular Mee ing - November 16 1979 7. PROGRESS REPORTS a. conitinued... Mr. Wasielwski: That is probably true, yes we would not. We have always stated that case and we have always stated the case that the Odd Fellows Building would not stand in the way of Century Mall.. It seems like over the years these two things have been put together, and the Historic Preser- va ion Commission has always been put on the defensive. Ms. Auburn: But my concern is, if we give time, if we accept the proposal that's on the table to pursue talking to the developers and they are not able to get the bond financing and if for whatever reason those projects are not going to go through,, it appears to me that the only alternative at that point may be to demolish the building. I'd like to know that we're going to have your cooperation if we reach that point in time to do that. Mr. lklasielwski: That is correct, of course I can't speak for the entire Commission but I can speak for myself right now. All historical buildings, if it is a matter of econo- mic hardship,.can be demolished. That `.s in all law, our local ordinances as well as the federal. In case the City of South Bend would be placed in an economic hardship the building can still be demolished. Ms. Auburn: I don't want to spend another 6 months trying to decide and define what's economic hardship for the City. Mr. Ellison: In light of the Commission's actions, the ball game is different now. It's not the same ballgame. I want the Commission to be very aware of that. The Advisory Coun -' cif has a perfect right to reopen it's consideration of the building on the basis that the building may in fact be eli- gible for the Register as part of the W. Washington Histori- cal District. The Advisory Council's regulations require that their comment period generally take 60 days, provided we provide them with all the information they require during their analysis. My experience with the Advisory Council, based on the last go -round on the Odd Fellows Building, is that they do not in fact provide you with a definite answer in 60 days. I would recommend to the Commission that in order to protect public interest, that the Commission in- struct the staff to specifically go back to the Keeper of the Register, the ultimate federal authority, to determine whether it's historic or not and request a determination from the Keeper as to whether or not that building is eli- gible for inclusion in the W. Washington District. It's my own personal view that that building is not historic, -35- South Bend Redevelopment Commission Regular Me ting - November 16, 1979 7. PROGREtS REPORTS a. MrI Ellison continues... an that this is the only way to get a very quick answer to th t question and therefore protect us. The problem with th Advisory Council and dragging the thing on could be that we may find ourselves in the situation the City of Mishawaka fo nd itself in, which.is a very costly public proposition. Es entially what it comes down to is we have to demonstrate th t there is no economic means to save that building, and ob iously there are a number of factors involved in any economic analysis. The problem I have with groups like the Ad isory Council or Historic Preservation is that they come from a biased point of view. They are not economists any more than I'm an economist, I think we have to control as many factors regarding that building locally as possible. In light of the Commission's actions, I personally don't want to deal with the Advisory Council, I'd much prefer to go to the ultimate federal authority, get the determination', gel; that question settled. If the building is historic, or if it is eligible for inclusion in the district, that has significant ramifications on the design of the mall, and significant ramifications on any subsequent Commission action that may be necessary relative to the block to the north of it The problem with the Historic Preservation is that it is a very subjective course for anybody. My feeling is that the standards, the criteria are very loose, they're subject to a great deal of interpretation, a great deal of subjec- tivity. The worst thing the public sector can do is be in a position where we cannot move because of somebody else dictating to us that we have not done enough. I think it's in our interest to settle that question as rapidly as possible. Mr Cira: Carl, is it possible for them to withdraw their Do ition on the Historical site? Mr. Ellison: -My own feeling is that, in light of the environ- me tal requirements as they relate to the Community Develop- me tit money that was used to acquire the structure, I think the previous environmental review satisfies this question of the relationship of the building to the district. In our va t discussions with the Keeper of the Register and with the Ad isory Council of the Historic Preservation and the State Hi tonic Preservation Office we went into this question, the qu stion of the relationship of that building and others to th W. Washington district and relationship of those to the Odl Fellows, and the JMS and the Oliver Building in a his to is district. It just seems to me that our only alterna- tie is to get the thing settled one way or another, and th only way I know to do that is to request this determina- ti n and to provide the evidence that is necessary to su aort that. -36 South Bend Redevelopment Commission Regular Me ting - November 16, 1979 7. PROGRESS REPORTS a. continued... Mr. Robinson: Ted, lid like to ask you a question. I real- iZE you weren't the party that I had a discussion with at a pr vious meeting when Century Mall was proposed and we were talking about buying up the buildings and demolition. At that time John Oxian was here. My question is, if you can ac ieve the goal you're trying to get, what effect would that have on the outside of the structure? Because at that tine John Oxian told me the whole trend of the Historic Preservation Society was to maintain the outside structure anc appearance of what originally was. Now in one of these pr posals, they proposed redoing the whole outside of that building in glass. Now, if you were to achieve what you arE trying to do, in. essence you'd be interfering with that marts right to renovate that building like he wants to. Mr. Wasielwski: bell, that brings up a very good point be- cause one of the reasons I held back on sending the appli- cation was in the hope that we could go to one of the pro- posed developers, if the building was saved. However, with thE threat of the demolition that came out recently in the parer we had no choice but to.send the application. In of er words, one of the reasons we didn't want to send the ap lication was because we wanted to talk to the individual de eloper that was going to be selected. But since the bids came in the thing looked like it was noinn downhill, so we se t the application. Let me explain, there are two desig- nations, actually there are three or more designations of historical structures, Local, National Register, and National La dmark. We are talking about Local and National Register. ThE National Register of Historic Districts has no specific standard associated with it. What that means is that the laws are not written that you can't do this, you can't do that. The impact, the purpose for the National Register of Historic Places and the Tax Reform Act that included the Historical Preservation Act, was to say that federal funds could not be used to destroy the fabric of America, histori- cally. That was the intent, and that's what the intent is in this particular case. The Local Landmark, which we also ap lied for to the City Council after the October meeting, that particular ordinance controls the facade, the outside of the building. That is subject to discussion within the City Council. It's open to public debate and normally, the ow er would be included in the thing, but in this case the ow ership is the City of South Bend and we went ahead. By thE way, that was done 22 months ago with the City Council in view of recent transaction. No, there is nothing, unless the Council would pass a local landmark status on th building, then it would prevent them from going ahead wi h their development. -37- South Bend Redevelopment Commission Regular Me ting - November 16, 1979 7. PROGRESS REPORTS a. co tinned... Mr. Donaldson made a motion that any decision on the Odd Fellows Building be delayed until the second meeting in January, 1980, seconded. by Ms, Auburn, and the motion wa unanimously carried. Mr. Ellison: dust for clarification, Ted, am I understand- inc now that the Commission "s interest is to preserve the building as a historic structure, it's no longer just pre se ving the building? I need to know which the case is and if it is to save the building, then we can negotiate in good faith with all three proposals. If the notion is that the building becomes historic, although there are not local standards, obviously a.proposal such as National Mobile Co crete's would not normally be suited to a building that is historic, if that'.s the reason for surviving. I need to know the Commission's intent in order to negotiate fairly with a prospective developer. Mr. Wasielwski: Carl, you know the only way the Historic Preservation Commission can preserve a historical area. At this particualr point we must use those means. Thy Chair recognizes Mr. Fred Treadway. Mr. Treadway: I am an interior business contractor, I've been associated with the building with one of the developers. As you are going over some of the things, I've read the paper, such as, you think the developer's were sincere in their efforts. I've spent hours on this thing, and I'm only one po -tion of it. I come in with National Mobile Concrete, I kn w Brooks Brademas, I do a lot of work. If you want to ke p the structure looking the same, well then you don't wait to go with those guys. You asked for bids, you wanted something that would interface well with Century Center. Now, would you go with somebody else because they did what you want? I think if they spent the time, three developer's, you ought to negotiate.with all three developer's. Mr Nimtz We're going to negotiate with everybody, but th point Carl is making, if you get a Historic Preserva- ti n connotation of that building, you may not be able to do any thing to the outside of it. Mr I' ma Ellison: In other words, we no longer !ely, at this stage, if we don't control tt building. If that building becomes a Fe not known the Council to make anything •k without there being some standards. -38- can negotiate the facade of local landmark, a local land- South Bend edevelopment Commission Regular Mee ing - November 16, 1979 7. PROGRESS REPORTS a. con{ hued... Mr. Treadway: What I am saying is that you don't have to change the outside. Mr. Ellison: Obviously, we knew that. From the staff's poi t of v'fiew, we tried to say,the issue was whether we're gofi g to save the building or not, It's got nothing to do wit Historic Preservation, it's just got to do with the building., The first decision would be whether it's`up or. it15 down, and then we have a chance to negotiate with all the developers, or redoing their proposals in a number of ways to accomplish a bankable deal. That might include dropping the glass for some other kind of treatment, it might include requiring Mr. Brademas to take a very heavy expense to do terra cotta all around the building. It may include a lot of variables, but in eigher case if an outside force like the Advisory Council dictates do's and don'ts, if they rule the building historically, then we are in a difficult position to negotiate or operate above- board and have the controls the Commission is designed to have. That's my only concern. So, I'd much prefer to simply get the historic question settled. Mr. Cira: Carl, my biggest answer I'd like to have is, if we delay this until the first of the year and see that thE deals will not go through and we want to demolish the building, then it's a historical site, we won't be able to demolish the building. Now, that's what I don't want. Mr. Ellison: Well, that could happen. we're in a high risk poker situation. Mr. Cira: Well, can't we get some kind of agreement from Mr. Wasielwski over this? Mr. Ellison: Well, I think we do have it. Let me state ve y clearly and unequivocally, I don't have any problem with the action the Commission has taken. I don't have any problems with Ted or Ruth or anybody else that's involved in that. I just want to be very sure that the Commission anc public understand the ramification . of their actions, If I were in Ted's position, frankly I'd do the same thing, Bui we have to understand the significance of it and to the ex ent we have to do certain things, I think, in response to it. It''s not a vendetta against Ted or the Historic Pre- servation Commission. It's just that I think what the Redevelopment Commission has to have ultimate decision _ making authority. Because if we're going to go with one of these -39- South Bend edevelopment Commission Regular Mee ing - November 16, 1979 7. PROGRESIS REPORTS a. Mr.lEllison continues... developers, we have to be able to represent to them that we're the guys they`re negotiating with. Not us and the Advisory Council or the Common Council or the Local Historic Preservatton Commission. The Chair recognizes Mrs. Ruth Price. Mrs. Price: I'd just like to make a statement for this gentleman. We say it again; listing on the National Register does not keep you from demolition of a building, It does not restrict you. What it does, if you demolish a building and build a building in its place, commercial interest cannot write off the cost of demolition, That is thE extent of any financial damages in relation to demoli- ti n of a National Register property. To my knowledge, the Re evelopment Department could take that building down any- tine it wanted, and have no other than if the federal funds wo ld be involved. And as long as the Advisory Council con- fe s in what the City . is doing, you are on safe ground. The Ad sory Council is.set to monitor federal funds, and that's all it does. And I don't quite agree with Carl that it comes from one stance. They monitor all kinds of circumstances. So I'would say that no way; as far as I'm personally con ce ned. It is the intent of the Commission to see that the building is not demolished for a purpose that does not seem ob ious to it. As far as local restrictions, whether the building may stay or go or what may happen to it, that deci- si n will be made with a new Common Council; then it is up fo public debate and public forum and I'll go with it any day. Mr. Ellison: Well, Ruth, I just want to point out though if YOL look at the record of the Advisory Council, or Historic Preservation around the country, when it comes to develop - me t agencies, actions on the part of those bodies are signi�- fi ant. For example, the Lockfield Gardens in Indianapolis is a deteriorated public housing project. It probably does deserve the Register, because it's one of the first done in the '3O's, a WPA project. It's one of the few examples that remain in this country. It has 40 times more significance than the Odd Fellows Building ever could. In that instance, for economic reason, the City wanted to tear it down and co perate with the private sector to cause something else to happen. They were enjoined from doing that, and that project continues to sit there today, to deteriorate and crumble. Novi, I don't know how the City of Indianapolis is going to get out of that box, but they've been in it for more than a year and a half, and it appears that they may be in it for -40- South Bend Redevelopment Commission Regular Me ting - November 16, 1979 7. PROGREgS REPORTS a. Mr.I Ellison continues... a longer period. That's why I react very strongly to out- si e forces getting involved in this kind or decision, Be- cause the nature of the preservation movement is not so much to preserve a.structure, as it is to preserve that structure's exterior fabric. It seems to me that, if for instance, the Commission were simply to seek ,a Local Landmark designation, then the decision ^making would be local. If the Advisory Council is involved, it's no longer local. and that's my pr bl em Mrs. Ruth Price: I guess my response to that would be that thE Historic Preservation Commission was created by ordinance to identify the architectural fabric of the City of South Be d. We've been in existance since 1975. We have always be n very eager to talk with developers in the City and th conversation has not taken place. Now you're saying yo 're being pressed, you want to know, now is the time you talk to us. I think we could develop a conversation, Mr. Robinson: I too feel somewhat like Commissioner Auburn fe is that, the way it came across from the paper and all thE press and media coverage that it has, it did make the hairs on my back stand up, because if it hadn't been for the su gestion of our Chairman, and I'll listen to him, ,I would ha e definitely voted against it just because there was pr ssure coming from you people. Mr. Wasielwski: I'm sorry if we exhibited the idea of pressure, but I guess along the years that has been estab- lished, basically because of our role in the community. However, I would be willing, Monday night we have a meeting, to entertain a motion that we tell the State Preservation of ice to go directly to the Keeper of the National Register and if the Commission so agree to do that, that should cir- cunivent any problems that you would have. That would answer our questions in terms of the historical aspects of the building. If that is satisfactory with you, I will enter to n that motion Monday night. Mr Cira: If they're going to have that vote Monday, why ca 't we wait and vote on this at our next meeting? Mr. Nimtz: Whatever the Commission decides. I might say as a member of both Commissions, I think you saw my statement in the public _press, that I admonish the Historic Preserva- tion Commission that any delay which would cause economic -41- South Bend Commission Regular Mee �edevelopment ing - November 16, 1979 7. PROGRES� REPORTS a. Mr. Nimtz continues... los to downtown South Bend, or a developer pulling out and so n, would be around their neck. They know their public rel tions image is not too good, and if they do anything fur her here to deter the economic _ development of South Bend, I t ink their public relations image is going to deter further. I guess we've got no.money from the City of South Bend for use in the Historic Preservation Commission and they probably won't get any. I'm sure they're acquainted with their shakey public relations image with the press, the public and the City Council. Mr. Butler: May I make a recommendation for three consecu- tive motions based upon the motion that has already occurred? First, it would be a motion regarding the demolition bids that have been received by the Commission. All the demoli- tion bids should be rejected. The second motion would be that all of the renovation.bids received by the Commission be rejected. The third motion would, rather than simply delaying any action until the first of the year, authorize the staff to begin negotiations now with the developers who have submitted proposals as well as with any other developer. We have to be open to negotiate with any other developers who have an interest in the project. These negotiations will be for the purpose of determining whether the concerns that thE staff and the Jannotta group indicated today can be satisfied. At the same time, as a part of that same motion, thE staff should be directed to work with the Historic Preservation Commission to determine what the specific effect of the action that has been taken is, and then secondly to tr to reach an accommendation in accord so that we can. av rt an economically disastrous result as a result of the delay. Mr. Nimtz: Your third motion is actually a recision and re ision of the first motion? Mr� Butler: No. I think you have indicated by the first mo ion that you want to take some action, Mr Nimtz: Commissioner Cira has suggested that we revise th t first motion. Mr Butler: Perhaps the first motion would be to rescind th motion that was made earlier, followed by the motions I ust mentioned. Carl do you have anything to add to that? !Epa South Pend Redevelopment Commission Regul# Meeting - November 16, 1979 7. PROGRESS REPORTS a. continued... Mr. Ellison: Perhaps there should be a rider on the third motion that the Commission explicitly instruct the staff to contact the Keeper of the Register. The Historic Preserva- tion Office will do that, but we need to be able to identify what information the Keeper has to make his determination so we can supplement that information with our own. Mr. Butler: With a view then of reporting back with respect to everything that is learned, at least by the second meeting in January. Mr. Robinson made a motion that the motion previously passed by the Commission to delay action on the Odd Fellows building be reconsidered and rescinded, seconded by Ms. Auburn, and the motion was unanimously carried. Mr. Robinson made a motion that all demolition bids for Contract No. 41 be rejected, seconded by Mr. Cira, and the motion was unanimously carried. Mr. Robinson made a motion that all renovation bids for the Odd Fellows Building be rejected, seconded by Mr. Cira and the motion was unanimously carried. Mr. Robinson made a motion authorizing the staff to negotiate with the bidders and any other interested developers with respect to renovation of the Odd Fellows Building and directing the Staff to contact the Keeper of the National Register of Historic Places regarding a determination as to whether the Odd Fellows Building is eligible for inclusion in an expanded West Washington Historical District,k and to provide a comprehensive report to the Commission not later than its meeting on January 18, 1980, with interim progress reports as appropriate, seconded by Mr. Cira, and the motion was unanimously carried." The Chair recognizes Mrs. Glenda Rae Hernandez: Mrs. Hernandez: This is a totally different matter. At our last Advisory Board Pbeting that was held inside the P.A.C., Inc. of which I am President, I was requested by the Advisory Board to read this letter to you which I received last summer. In January we were given to believe that the Section 108 funds, which were applied for to be used for the demolition in our area could only be used for acquisition, demolition and relocation. At a workshop this summer at IUSB I heard that these funds were being used in Indianapolis for other purposes and I wrote to HUD for clarification and this is their response to me. -43- South Bend Commission Regular Mee�edevelopment ing - November 16, 1979 7. PROG M REPORTS . Glenda R. Hernandez continues.... a Mtus. Hernandez: Subject: Request 6o& Ctatr i 4 cation o J Ups o6 Section 108 Loan Funds B- 79 -MC-18 -0011 tettet is in tte1spontse to yowt inqui ty o6 Juty 30, 1979, vtdfng the above subject. Section 108 a�) the Housing and Community Deve.2opment Act o4 1974J. as amended in 1977, ptovidess that mettopoP,ctan cWe�s (such as South Bend and Ind.ia:napoZbs) arse P- Ugibte to apply PA :loan guatanteels The aovettwing tteguZat i.ona 4on the Section 108 Loan Guatantee Pttog&am ate pttov.ided as Section 570.700 to 570.705 in the Janucty 18, 1978 Federcae Re. iztm Lon guarantee assistance may onty be used 4on the Jottowing thAee punpozes, which ate set 4oAth at Section 570.701: 1. 2. 3. ho Us Th in Acquisition o4 teat prtopexty (wheAe acquisition is othe%- wuse e.P,igibte 4ot b.tock grant cus/sistance); RehabiZ tation o4 pubticty owned ott acqu>vted tteaZ pno- petrty (where such Aeha )—AZct at i on is otherwis e e2,i.gibte 4ot bZoch g&ant assistance); and Payment o4 ketated expenses o4 .intetest, demotition, tte- tocation, and site -i.mpttovements . City o4 Indianapo.P 6 is ut-i iz.ing Section 108 4unds in a >ing 4evotv.ing 4und. The City uses this 4und to aequi to nehab,ititate ptopettties, and then to subsequentey ttessate n. Ptea6e be advised that Section 108 4unds may not be 1 to 6.inanee ttehab.%P.itation o4 ptoi.vatety owned ptopett iez . existence o4 the Expekimentat ousing Attowance Pttogttam >outh Bend has no destelrmin.ing e44ect on the type o f ttehabi ztdon which may be undertaken with Section 108 6unds. As t.ioeusty stated, there ate governing tegulattions eoneexn- e.Ptig.ibte activities. 14 we may be o4 AuAthek assistance to you, ptea6e 4ee.b 4ttee to contact the CPD Repnessentat.ive 4ott youA area, Eteanot G nget, at 317 -269 -6218. Sincettety, Howard L. Campbe.U, A,tca Managmac.. Mr. Nimtz: Thank You. Mrs. Hernandez: Just one other comment. In your October 5t meeting, I was under the impression that the two apprai sets that you hired were to go through the area and give a eneral appraisal, but what seems to be happening is that pe ple are getting letters indicating intent to purchase, -44- South Bend edevelopment Commission Regular Meeting - November 16, 1979 7. PROGRESS REPORTS a. Mrs. Glenda R. Hernandez continues... even though this has not been officially approved by you as an Jrban Development Area and the surveyors and appraisers are actually meeting individually, with these people on a. specific appraisal, That may have been my misunderstanding, but I was under the impression that it was to be a general appraisal, windshield survey kind of thing at this point. Mr. Ellison: I can clarify both points, but we'll have to do them in reverse order. If we did communicate that Section 108 funds could not be used for rehabilitation, that was certainly not our intent. What we're doing is all the preparatory steps that are necessary to get the declaratory. State law requires the process, and furthermore HUD regula- tions, which cover the 108 money which we intend to use to do the project require that we send out those notices of intent to acquire, so that the homeowner and intended dis`- placee has an opportunity to be present when the appraiser goes through to specifically appraise their property.. Now the reason for that is that they may be able to point out features of the property or other factors which the apprai- ser can take into account and use in determining a value. We're also required to provide a great deal of information by HUD regulations at the point in time we send that letter. That's why we sent along something called "When a Public Agency Acquires Your Property" which generally explains the total gamut of procedures. If it turns out that as a result of the two appraisals, and as the Commission gets to the plan process and determines it does not wish to acquire the pro- perty and would not include it on his acquisition list then the property owner would be so advised. That's specifically why we indicated in the letter that the letter itself does not constitute an offer to purchase nor does it make the pe son who receives the letter eligible for the relocation be refits. That process happens later. We cannot control hov that letter is written, it follows the regulation and is necessary. We received some calls and tried to explain to people what we're doing. For example, the new owners of the Tire Service Company that is in the process of being co structed received the same letter. We indicated to them that we intended to have every parcel inside the impact area ap raised so that when the Commission, reviews the appraisals to determine how much money is, necessary, which it has to state in its declaratory resolution, we'll be in a position to know which properties are going to be acquired based on funds that are available. And if we did elect not to acquire the property they would be so notified, With respect to the 108, I don't recall which letter you're re erring to that you may have gotten. Any indication -45- South Bend Redevelopment Commission Regular Me ting - November 16, 1979 7. PROGREdS REPORTS a. Mr.1 Ellison continues. that you could not use 108 for personal rehabilitation was in lire with what the regulation law requires. As I recall So theast P.A.C. was saying in a lot of ways, why don't you USE this money to repair our houses and were using as a model thE standard CD Program where we fn fact rehabilitate pri- vately owned property. You can use 108 funds for rehabili- to ion, but what you have to do is first buy the house, then re abilitate it and then presumably put it back for resale or some other purpose. You cannot rehabilitate privately ow red property. So to that extent we were probably appro- priate in indicating that a rehab could not be done with the Section 108 Program. I want to further note that there might be some example where it could in fact occur. If for in. stance the final plan calls for the removing of certain houses, we would clearly be using 108 money to acquire that house for moving and then resell it to whoever is in it based on their relocation benefits. But it's obvious that th ultimate.thrust of the project is more for a conversion of a residential area to do something else. Th4 Chair recognizes Mr. Paul Toliver, General Manager, Transpo. Mr. Toliver: The motion to the staff was that they receive and review and renegotiate proposals for the renovation of th Odd Fellows Building, as opposed to receiving proposals for the use of the property? Mr. Nimtz: That is correct.. I might say there has been great cooperation between Mr. Toliver and the Redevelopment Commis- sion, we're pleased to have you here this morning. We under- stand each other's problems. 8. NEXT C6MMISS'ION MEETING a The neit regularly scheduled South Bend Redevelopment Commis- sion Meting will be held on December 7, 1979, at 10:00 a.m. NEXT COMMISSION MEETING There being no further business to come before the Commission, ADJOURNMENT Mr. Robinson made a motion that the meeting be adjourned, seconded by ter. Cira, and the motion was unanimously carried. The meeting was adjourned at 1,41.:10 P.M. -46- South Bend Regular Me .edevelopment Commission ing - November 16, 1979 -47- Carl Ellison, Executive Director