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HomeMy WebLinkAboutRM 07-11-80SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING July 11, 1980 1200 County -City Bldg. 10:00 A.M. 227 W. Jefferson Blvd. Presiding Of icer: Mr. F. Jay Nimtz, South Bend, IN. 46601 President 1. ROLL CAL Members resent: Mr. F. Jay Nimtz, President Mr. Lloyd E. Robinson, Sr., Vice President Mr. Robert Cira, Assistant Secretary Members Absent: Legal Co*sel: Ms. Paula N. Auburn, Member Mr. A. Peter Donaldson, Secretary Mr. Kevin J. Butler Staff: Mr. Carl Ellison, Executive Director Mrs. Ann Kolata, Director Mr. Kevin Horton, Assistant Director Ms. Ann Bathon, Acquisition Specialist Mr. Bill Fox, Relocation Specialist Mr. Paul Falduto, Employment Targeting Asst. Mrs. Jane Zimmerman, Executive Secretary Mrs. Hedy Robinson, Secretary Comunit7 Development Staff: News Media: Guests: 2. APPROVAL OF MINUTES Mrs. Judith Walton, Bureau of Housing Ms. Mary Richmond, Bureau of Housing Ms. Jeanne Derbeck, Reporter, South Bend Tribune Mr. Dave Anderson, Reporter, WNDU Mr. Richard Hill, City Attorney Mr. Ernest Szarwark, Attorney at Law Ms. Glenda Rae Hernandez, President, SE PAC Mr. Thomas Loosbrock, V.P., Gruen Associates, Inc. On motio by Mr. Cira, seconded by Mr. Robi son, and unanimously carried., the Minutes of the Regular Meeting of Friday, une 20, 1980 were approved. 3. APPROVALS OF CLAIMS On motiorl by Mr. Robinson, seconded by Mr. Cira and unanimously carried, the claims totalling--$34,567.98 were allowed and ordered to be p 'd. The authorized claims are: MINUTES OF REGULAR MEETING OF JUNE 20, 1980 WERE APPROVED CLAIMS APPROVED South Bend edevelopment Commission Regular Mee ing - July 11, 1980 3. APPROVAL OF CLAIMS (continued) REDEVEL PM WT REVOLVING FUND Payroll 5 -31 -80 to 6 -13 -80 $ 5,959.75 Business Systems, Inc. 72.67 Business Systems, Inc. 26.24 Emery Air Freight 42.43 International Business Machines Corp. 37.76 Indiana Bell Telephone Company 430.96 Indiana Bell Telephone Company 496.77 Makiels i Art Shop 30.50 Nat'l. Comunity Development Association 750.00 National Council for Urban Economic Development 7.00 Osco Dnig 5.33 Osco Dnig 6.99 PlastiTmttic Arts Corporation 4.90 Schilli gs Sales Co., Inc. 3.35 St. Joe Bank Travel Agency 232.00 St. Joseph County Board of Commissioners 62.99 St. Joseph County Board of Commissioners 82.87 Coffee 'ime Services 10.00 Derrick Campbell 38.00 Smith Petroleum, Inc. .54.38 ',NT DISTRICT CAPITAL South Bond Tribune Holiday Inn of Worcester TOTAL $ 8,354.89 TOTAL T DISTRICT CAPITAL OF 1972 Gruen A,4sociates, Inc. Gruen sociates, Inc. Cesar P lli & Associates, Architects P.E.A. =j MONROE= SAMPLE AREA Lang, FE John G. Richard TOTAL ney and Associates, Inc. ence Associates, Inc. Nichols Associates, Inc. TOTAL 2 $ 81.48 78.94 $ 160.42 $ 3,000.00 843.80 run_ in $ 4,383.90 $ 500.00 3,550.00 900.00 $ 4,950.00 South Bend 4edevelopment Commission Regular Mee ing - July 11, 1980 3. APPROVAL OF CLAIMS (continued) P. E. A. -1 EAST BANK AREA Lang, Feeney & Associates, Inc. Lang, F eney & Associates, Inc. TOTAL P.E.A. -1 IND. R-66 Kevin J. Butler James E. Childs & Associates, Inc. Indiana Glass Company Indiana & Michigan Electric Company Seifer Icafe & Lock Service South Bend Tribune Tri- Cotwty News Nicholas C. Jannotta & Associates, Ltd. TOTAL P.E.A. � 312 LOANS Abstract Co. of St. Joseph County, Inc. Jurtin's Construction Co. & Verna Dorn R. A. Stickler Plumbing & Joyce M. Sarvari Aphrodite Pappas & Statewide Construction Ray Boc aj & Hilda Boney Paul Hayden F & F Electric & Hattie Jenkins Jim Kowalski & Ruby Dunfee Tri-State Home Improvements & Paul Hayden J.E. Wa z, Inc. & Willie & Terry Smith Kissell & Co. & Laura Pettit Dea And ews & Barany Home Improvements Jeanne Welsh & Kerry Davis & Al Forgerousse The Old Building Recycling Co. & Hattie Jenkins Law's Plumbing & Hattie Jenkins Domingo Flores &B & W Electric 4. COMMUNICATIONS a. Le TOTAL GRAND TOTAL ;t from 'James D. Kreidle of Kirchner 9 $ 800.00 600.00 $ 1,400.00 $ 200.00 200.00 221.20 22.94 51.00 66.12 82.00 878.45 $ 1,721.71 $ 688.00 465.00 260.00 1,136.44 50.00 238.16 739.00 615.00 65.00 174.82 114.50 850.00 1,000.00 4,203.44 1,812.70 1,185.00 $13,597.06 $34,567.98 South Bend R Regular Meet elopment Commission - July 11, 1980 4. COMMUNICATIONS a. Mr. Ellison: We have received a letter from Mr. Kreidle of Kirchner Moore & Company, which is a response to a letter we sent regarding the agreement entered into quite some time ago, relative to Kirchner & Moore providing se ices regarding tax incremental bond fin cing. The letter reads as follows: Mt. Ca,ct Ett.ison Executive Diuctotc Red vetopment Commizz ion City o g South Bend Jut y 1, 1980 1200 County -City Bui ding South Bend, Indiana 46601 Re: Contract 6o,% Ptca jess.ionae Se vicu Between the South Bend Redevetopment Commission 9 K.ttcchneA, Moore 9 Company DW Mn. Ettison: We have tcece ived your tettex evneeAning ouk Aetw.icM to the South Bend Redeve opment Commission, in connection with a ptwgnam o j tax ,ineAementa2 bond 1 have been assigned to the ptcojeet and ptan to com tete the s ehv.ices as set out in our aguement. 1 tL gnet the decay and appa&ent ean4us.ion oveA youtc pt o ee t, howevete, I bet.ieve we have things wdl in cG t at this paint. In he past 1 worked with John Goemaws on other 4in naings 4atc the City o4 South Bend and on one occasion I accompanied 6ounetc Mayotc Peters Nemeth to New YoAk to attend a meeting with the tcating agencies ,in onnecti on with the paAk ing jac i2.itie�5 bonds. I j e T am somewhat 4am-i Zi aA with the City's �s 4.inanc ia2 pta and can be o4 �s eAvice to you in connection with yo tax .inc ementat band j.inane i.ng ptcog&am. To 6uxtheA .indicate out .interest in eampteting the .ices, neees/sany ban your program, I wou,2d tike to sch duce a meeting at your convenience with the vaxiou6 pea to .invotved to became better acquainted with yours pro'eet. South Bend edevelopment Commission Regular Mee ing - July 11, 1980 4. COMMUNI TIONS a. letter from Kirchner, Moore & Company continued... Pted6e tet us heat Jynom you as to when it woutd be convenient to meet. Shoutd you have any que,stion.6 in the meantime, ptease do not hesitate to datt me at out expense. very tuty youA6, S/ James D. Kneid2e Mr. Ellison: I am happy to report as a result of this letter and a conversation with Mr. Kreidle, that Kirchner Moore appears to be back on the track Witt, us. Mr. Nimtz: There is no action necessary, is that correct? Mr. Ellison: That is correct. The Chair directed that the letter from Mr. James D. Zidle of Kirchner, Moore and Company be rec ed and placed on file. b. Letter from John Voorde, Chairman of the Human Resources Economic Development Committee of- the South Bend Common Council. Re: Tax Abate- ment Petition toy Mi b. bampie Street. Mr. Ellison: The letter reads as follows: Juty 7, 1980 Mn. Catrt Etti6on, D-ctc.ecton DepaAtment of Redevetopment Ca y -Cd ty Bu itdi.ng South Bend, Indiana 46602 Dw Mk. Etti6 on: At the June 23, 1980 meeting o4 the human Resounces and Economic Development Committee o4 the South Bend Common Cou.ncit the 4ottowing issue ways d-iA cu�ss ed in tight o4 the Tax Abatement Petition on jite jot 301 Eas t Sampte StAeet: 5 LETTER FROM MR. JAMES D. KREIDLE OF KIRCHNER, MOORE & COMPANY WAS RECEIVED AND PLACED ON FILE South Bend edevelopment Commission Regular Mee ing - July 11, 1980 4. CONMUNIaTIONS b. letter from Mr. Voorde continued..... May the immediate suA ou.nding a&ea a 6o be taken into eows.idenation when tev.iew.ing a petition ion tax abatement eows.ideAation? It aa6 the unan.i,mows position o6 the Committee th tand .i,mmediatety adjacent to, ok eontiguouz to, the .land petitioning bon tax abatement eon6 id- on, zhoufd be taken into eows.ideAation atong with the other important tae to&s nequ iAed in the p " "on, when neview.ing a petition Jo& tax ab ement eo n6 idnat ion. AdditionaUy, the Committee u.nani.mou.6ty tceeom- men ed that the Pet Boner, Moz s berg and Company, Inc., nece.ive a Javonabty recommendation. A Re,sotution to that ei4eet witt be 4ited with the City Cte k on Wednesday, and wilt be set Jots pub tic heaniing on July 14, 1980. S-ineenety, S/ John Voorde Chaurman Mr. imtz: In our discussions we felt this might happen. I thought I made it very clear at the meeting a few weeks ago that under the ordinance, we made the only recommendation we could. If the City Council wants to do otherwise, that is fine but I do think they are going to have to amend the ordinance if this is going to be their desire. I have no.objection to that but I have certainly been against the Supreme Court and anybody else legislating when they are iot a legislative body, and I feel it is up tD the City Council to decide what the policies are to be. Mr. Ellison, what I would sugg st that we do is that the next time the City Council has a caucus that we attend and Bugg st that we have no objection to their char es if they so desire, but that they show d amend the ordinance. Mrs. Kolata: I had a meeting with Mr. Voorde and . Cekanski- Farrand in regard to this matt r and there has been talk of amending the Drdinance but it has not been along the lines that you have mentioned. South Bend R development Gc)mission Regular Meeting July 11, 1980 4. COMMUNI TIONS b. Mrs. Kolata continues... What they are concerned about is shortening the ".ime period involved, however, they are goin to wait until this petition has fini hed its route. Mr. imtz: With those comments, the Chair will direct that the letter from Mr. John Voor e be received and placed on file. Mr. llison: Can the staff then presume that in reviewing subsequent tax abatement peti ions that we stick to the practice from the initial ordinance? Mr. imtz: Mr. Butler would you presume that we follow the original ordinance re- gard' g tax abatement petitions? Mr. Butler: Yes. Mr. Why should we have guidelines to f �ira: flow? Mr. imtz: There is no use for us to try to f llow the exact guidelines and have the City Council to say they have different idea 3. This is the reason I feel that if this is g ing to be their desire we should tell them that they should change the guidelines accordingly. Mr. Butler: They are using the Redevelopment Commission in an advisory capacity and of course at tie meeting you may be spending approximately ten Lo fifteen minutes on the matter. The staff is sending a great deal of time in reviewing the requests, so I feel it is important that the staff know what those guidelines are. Ms. rbeck: Are you changing your recommendation sinco the City Council decided to change their ideas? Mr, imtz: No. The request with Mossberg is acad mic because we filed a staff report and the City Council is proceeding with the tax abatement reau st. 7 LETTER FROM MR. JOHN VOORDE WAS DIRECTED TO BE RECEIVED AND PLACED ON FILE (RE: TAX ABATEMENT FOR 301 E. SAMPLE STREET) South Bend edevelopment Commission Regular Mee ing - July 11, 1980 4. COMMUNI b. continued.... Mr. Ellison: Yes. The Human Resources Coiwittee will certainly recommend to the City Council the process involved in granting tax abatement. What I am specifically asking is that the way we look at the ordinance; it is eauired of us that we look at particular are es and that is precisely what we did. I sirgly want some guidelines to suggest what we Are to continue to do. S. OLD BUS a. Co ission approval requested to authorize the Executive Director to execute a contract for professional services with Baird & Warner Inc. in connection with the Century Mall Pro'ect. Mr. Ellison: The contract is a revision of the previous contract under which Baird & Warner, for a period of approximately three months, will undertake a number of tasks. Specifically, they will review a variety of existent data and data of a market nature gen rated by Rouse; review the architectural solutions to the mall and to provide some advice to us with respect to aesthetics, operational economics, and other factors. The would do a variety of other functions and for that they would receive compensation at a rate of $3,000 or $4,000 a month or a min fee of $10,000.00. The importance of the Baird & Warner contract is that it is essential that the City and all the various agencies who are involved in trying to co lete the mall project have a retail lessor's expertise involved in the project at this point. In addition, we need to have re- evaluated the economics of the retail portion of the project. Baird & Wanier will provide these services and, in a period of approximately eight to twelve weeks, an indication as to whether, in their opinion, the project as proposed can proceed from an economic viewpoint. The $10,000.00 involved is, in my judgement, not many dollars given the value of the se ice because we have been working on the mall project since 1977 and it has F� South Bend edevelopment Commission Regular Meeting - July 11, 1980 5. OLD BUS a. Mr.lEllison continues... been a long difficult effort, but we are at a point where we need assistance froin Baird $ Warner. Mr. Nimtz: Mr. Butler, do you have any co ents about the contract? Mr. Butler: No. Mr. Nimtz: Mr. Hill do you have any co ents? Mr. Richard Hill: Just to reiterate on what Mr. Ellison said in that I think the work is essentially to come up in a relatively short period of time with a report to the Commission in terms of the economic feasibility of going ahead with the project. At the same time, Gruen Associates will be working with further design of the project. Gruen would be able to work closely with Baird & Warner in terms of the interior design and how that would be tak ng shape. Mr. Cira: W. Ellison, did I hear you say.. a minimum of $10,000 or a maximum of $10,000? Mr. Ellison: It is actually a minimum. In the event the contract is terminated for some reason after thirty or forty days they will still get $10,000.00. In order to make it worthwhile for them to provide this kind of se ice they need minimum protection. Mr. Robinson: What are they going to do other than conduct a survey and make a recommendation whether they feel a project of this nature would be successful? What else is going to be entailed? Mr. Ellison: Mr. Robinson, essentially, their are going to work with Gruen to take the project to the next step. We have had it at the broad conceptual stage where we have a model that is a picture of the possibility. In order to put that into a position where you can take it to a bank, the retail expertise is necessary because that is something the City does not have. Q7 South Bend Redevelopment Corrmiission Regular Meet�ng - July 11, 1980 5. OLD BUS a. Mr. Allison continues.... We n ed an expert to work with us and with the architect to refine the plari3 so that we can get a better handle on c st and other economics of the project. The ity will then be in a better position, after four to twelve weeks, of knowing whether or not the project will go the next step which is to begin the package deal in hard and fast fashion. In order to a complish that they will need to be familiar with existing data that has been generated. They will have to review the Rouse Market information, project construction, as well as other variables. They will also have to look at t e. work Gruen & Associates has done to this point and will do with respect to how the retail is designed. One question we have talked about over the last couple of years is that the mall is going to have second level retail; and that is difficult to achieve in any market. There are many particular things which have to be done for the design of.that second level of retail to give it a better chance of doing well economically. Gruen can design a retail mall but Gruen is not a retail leasing expert; Baird & Warner is that. They are the ones who seek the stores for the project. It is necessary to put them and Gruen together so that we can take the project more closely to the stage where we were able to rackage it in a way that we can determine whether in fact it can happen. If it can hap en, we then package it. It is simply a r finement step and a very long process which is not uncommon in large scale multi- use economic development projects. Mr. Robinson: Fine, but the original int nt of the project was that it was to be financed by private developers. Part of it.is going to be financed by the City and part of it by the federal gov rnment, but now what you are saying to ne is that the City is being involved in the total project and they are going to le the developer and do the whole project without any private investors. W South Bend development Commission Regular Meeting - July 11, 1980 5. OLD a. continuea.... Mr. Ellison: Well at this stage the City is in fact playing the role of major developer... yes we are. Nobody intended for that to happen a few years ago, but the nature of downtown develop- ment is that the public sector has to take the risk at a certain point in time. We are now at a point in time whe e we have purchased approximately $4 million worth of real estate which is Etanding. We will be spending ano her $300,000 to clear the site. Cle rly,it is in the public interest then to Co whatever is necessary to make the project happen, and we have taken nun roes steps to refine the notion of what is possible, having Gruen inv lved a year ago to do the design. It has helped us at least to get some COrE work from all these various actors downtown (the retailers, the central office users) about what concept can worl in downtown South Bend. Now having that, it is time, because of our investment to this point, to keel the ball rolling. In order to act as master developer to get the deal to the point where we can go, if necessary, and obtain a developer to do the private portion. There was never a contemplation that a retail mall would actually be developed by the City, but things that we are doi g now are things that a developer would ordinarily have to do if this werE simply a retail development in a corn field, but it is not. It is mix d -use redevelopment, it is compli- cat d and it involves public and private actions which have to be coordinated. Traditionally, in that kind of process, the public sector will initially take the lead and take the cost responsibility. I think it is one of those things where we eally don't have a choice, if we really want to make the project happen. 11 South Bend edevelopment Commission Regular Mee ing —July 11, 1980 5. OLD BUS a. continued.... Mr. Cira: What you are really saying is that you have $4 million invested and that there is no backing out. Mr. Ellison: That is correct. Basically, it is the cost of the acquisition, the ref cation, and the plans to take place. That is a lot of public confidence that the project will in fact happen. Certainly the Commission's actions today will help to turther demonstrate that. Mr. Nimtz: We have Mr. Loosbrock here from Gru Associates who might have a few words to say. Mr. Loosbrock: I think that it has been pretty well covered. Our association with the project will, I think, help to carry the project even a step further. Our working with Baird & Warner will help to reflect attitudes and opinions regarding any suggestions that they might have, with certain limitations. We would then establish all of these systems for the project as a whole and then it could be bro en down into various parts. Mr. Ellison: I might add to Mr. Loosbrock's coiments that there is a bit of urgency now because one of the intimate actors in the project (the Public Transportation Corporation) as you know has submitted its application for the Transit Terminal related portion of the project. Since that would sit on top of the below grade parking garage, which needs to be refined froir a standpoint, it is critically important that we take the steps of contracting with Bai d $ Warner and also, under a later item on the agenda, execute another contract with Gruen to permit us to be in a position so that we do not hinder Transpo's effort with respect to the overall project. 12 South Bend R development Commission Regular Meeting July 11, 1980 S. OLD BUS a. conzanuea..... Mr. ira: Mr. Ellison, I have one question on t is contract. This is for three mont s for a minimun of $10,000. Now, say the mall does go through, is this contract good for the mall after it is being built for their advice or do we have to sign anot er contract with them thereafter, and how nuch would that be? Will they get a flat percentage for the total cost of the mall. Mr. Ellison: Whey they get into actual leasing, they will of course want a flat percentage of the leases they bring in. It is frankly the hope and expectation that Baird & Warner might possibly function as a leasing agent for whatever private developer or investor group might actually be involved in the retail portion of the project. If there may be the need for additional services or if we do experience difficulties along the way and find that it has to be carried with the public sector continuing to play a lead role, we then in fact would need to invest some additional dollars. The problem with economic development is that you never know today everything you have to do tomorrow. Mr. Robinson made a motion to approve and authorize the Executive Director to execute a contract for professional services with Baird F Warner, Inc. in connection with the Century Mall project, and that the President and Sec etary be authorized to enter into that agreement, seconded by Mr. Cira, and the motion was unanimously carried. 13 COMMISSION APPROVAL GRANTED FOR EXECUTIVE DIRECTOR TO EXECUTE A CONTRACT FOR PROFESSIONAL SERVICES WITH BAIRD & WARNER, INC. IN CONNECTION WITH THE CENTURY MALL PROJECT South Bend 4edevelopment Commission Regular Mee ing - July 11, 1980 6. NEW BUS a. Coma fission -. uested for the following Section 312 Name Amount Loan No. Jessie Richardson $16,550.00 18 /QMC- 0011/89/1 1029 Burns Avenue South Bend, IN. 46617 Ms. Richmond: The Bureau of Housing is presenting this loan for reapproval. It was approved at the previous meeting, but when we received the mortgage verification we found out that there was an additional $500.00 owed; therefore, we ask for the cancellation of the previous loan and the anti oval of this one. Mr. Ellison: Ms. Richmond you are saying tha there is a $500.00 amount which is nec ssary to pay off the old mortgage? Ms.(Richmond: That is correct. Mr. Ellison: I might say to the Commission tha this has been a caste that the Bureau of Housing has been involved with for one year. It involves a young woman with small children who was living with a relative in unit which was in need of repairs. The relative was about to lose the house due to foreclosure, having only about $1,500 to $1,800 indebtedness. Contact was made with the lender and the lender held off in foreclosing on the promise that a 312 loan to take out the indebtedness would be made, and that the owner of the house would have it repaired. I believe today that this will. finally achieve this and will allow the lender to not only receive the balance of the mortgage payment but will in fact allow the unit to be fehabilitated. Mr. " z: Mr. Butler, is it necessary tha a motion include the recision of the previous approval? Mr. the Butler: No, just a motion to cover increased amount. 14 South Bend edevelopment Commission Regular Meeting - July 11, 1980 6. NEW BUS a. continued.... rol Mr. Robinson made a motion to approve a 312 loan to Jessie Richardson, of 1029 Burns Avenue, South Bend, Indiana, 4661-7 for an increase in the loan amoimt of $500.00, bringing the total amo t of the 312 loan to $16,550.00 (loan was previously approved for $16,050.00 at the June 20, 1980 Regular Conpission Meeting), seconded by Mr. Cira, and the motion was unanimously car tied. ion approval requested for ect Mr. Butler: We have received the following documents for execution. These have been through many stages of draft and redraft. First of the dociffnents is the easement agreement and grant of rights in the easement area in favor of Rahn Properties. (All of these relate to the "hole" pro ect). The second document is an easement document in favor of FBT Bancorp, Inc. The third document is a joint development agreement. The fourth document is an operation maintenance and easement agreement. The fifth document is an agreement for conveyance in favor of Rahn and the sixth and final document is an agree- ment for conveyance in favor of FBT. With respect to the last three documents the Commission is entering into those dociments. They are approving those doctments only as to specific parts relating to the ground lease, they are not parties to the entire document in those three cases. I believe these doc ents have been in the draft stage for the last six or seven months, and the have been reviewed through the various draft stages by the City Att rney's Office, by Mr. Brunner and mys If. 15 COMMISSION APPROVAL OF A 312 LOAN TO JESSIE RICHARDSON South Bend 4edevelopment Commission Regular Mee ing - July 11, 1980 6. NEW BUS b. continued.... Mr. Robinson made a motion to app ove the ancillary agreements relative to Disposition Parcels No(s) 4 -1, 4 -31, and 4 -32 in Ind. R -66 Project Area, seconded by Mr. Cira, and the motion was unanimously c. Tax Abatement request relative to an area commonly referred to:as Beacon Heights. Mr. Ellison: On June 27, 1980 a petition was filed with the City Clerk, for a tax abatement request for Beacon Hei hts which is a multi- family, World War II type housing project on Ardmore Trail built in the early 40's. It is pro osed to be substantially rehabili- tat d with some additional units added to the area. The staff undertook inves- tigation and in the report recommended that the Commission find that the area qualifies as an urban development area for reasons of condition and other impairments of development. The report notes that Gibbons - Grable of Canton, Ohio is the petitioner in this case. Gibbons- Gra le is the company that developed Karl King Towers on Block 6 and owns other real estate ventures around the country. Gibbons- Grable intends to purchase Beacon Heights in its current con ition for $625,000.00. They will then use Section 8 assistance to substantially rehabilitate the project and to do 150 units of mixed size and construct 24 more units. The reason that the need to construct 24 new units is that they are specifically seeking to avoid any displacement of lower income house- holds that currently occupy the project area. They intend to first construct 24 new units and then move the families fro units to be rehabilitated into new uni s, rehabilitate those units and then move the families back. 16 ANCILLARY AGREEMENTS RELATIVE TO DISPOSITION PARCELS NO(S) 4 -1, 4 -31, AND 4 -32 IN IND. R -66 APPROVED BY THE COMMISSION South Bend edevelopment Commission Regular Meeting July 11, 1980 c. contilnued..... They avoid relocation costs and displacement. Our investigation reveals that the petitioner intEnds to either use 11 -b tax exempt financing or ,% tandem financing or if possible a com- bination of the two. The total project cost is 16,166,622.00. We note that a visual ins ection was undertaken and while the units app Ear to be generally occupied, we did note an accelerating rate of exterior disrepair. Bas Ed on our experience a correlation can be made between exterior of residential conditions and interior ones. We find that ever. though no interior inspections took place we are confident that those inspections would reveal that interior conditions are ind ed decaying due to age and economic circumstances. We have checked substandard records and have found that there is an outstanding complaint order against 315S to 3523 Putman and 3433 Curtis. That complaint order has been out, starding for nine months, therefore, we conclude that the regulatory process has apparently not been effective in improving conditions. Finally, based on Ihe conversation with HUD Area Manager, Howard Campbell, the proposed reh bilitation and construction pro ect has received a firm commitment froii HUD for Section 8 Housing Assistance payments. We note that under the Houqing Act of 1937, which was the basis for the Section 8 program and the regulations that implement it, the purpose of substantial rehabili- tation is to improve property to safe and sanitary conditions. We conclude then that since HUD has made a permanent co fitment to the project, it is rather obvious that HUD believes the conditions in the area to be deteriorating. There- fore, the staff concludes in the report that the department believes the area qualifies for tax abatement for the afore men ioned reasons. 17 South Bend development Commission Regular Meeting - July 11, 1980 6. NEW BUS Mr. Ellison continues ..... (c) In supplemental observations we simply indicate that it could be argued that no public purpose exists to provide tax abatement to an assisted housing project since the federal government permits the calculation of full real estate taxes in project proposals. Since Section 8 program guarantees the developer both a rental market and adequate general income for a period of up to 40 years, these projects would seem to be able to function economically without the need of further public assistance, such as tax abatement. However, given the current economic situation with respect to housing, the cost of money, the cost of construction, and the cost of operation, many good projects are pushed beyond the point of feasibility. The staff, in order to determine the extent to which this project is feasible, analyzed the HUD financing documents which have been approved relative to the project. We also looked at the financial impact of taxes. Our analysis reveals that the project would not be feasible if the abatement is not granted. This will dictate the need for.the developer to seek higher rent levels from the federal government and since those rent levels and other long term costs to the government are primary factors in project selection, the higher rents, in cur opinion, would render the project ext emely non - competitive and therefore for all practicable purposes, not feasible. The report finds that given the community neec. for additional safe and sanitary houEing, lower income housing, the additional jobs the project offers, the project does provide substantial ben fit which warrants favorable tax abatement consideration. Finally, we went through and calculated the taxes and found that the cost of the abatement to the City over ten years (assuming a level tax rate and a level assessed value) is $457,000.00 or $45,786.00 per year. 18 South Bend 1edevelopment Commission Regular Mee ing - July 11, 1980 6. NEW BUSINESS c. Mr.lEllison continues..... Thelle are some photographs of the project if the Commissioners are not aware of its location. Mr. Robinson: Mr. Ellison, about how many people are residing in this project Mr. Ellison: We didn't check the percent of occupancy but I would gather it is at least 500 occupied, and that is a very conservative figure. Mr. Cira: When would they have the project completed? Mr. Ellison: The nature of Section 8 projects is that if they have the financing worked out, they can start construction by this fall and they shodId have the project completed in approximately eighteen months. The actual cost of the rehabilitation is about $2z million and the cost of the construction of the new units is approximately one half million to one million dollars and about $200,000 to $300,000 in site improvements. Mr. Cira: The landlord will have one set amount that he can charge people? Mr. Ellison: That is correct. He is pe fitted a certain escalation per year and that is typically negotiated. Mr. Robinson made a motion to approve the staff report recommending tax abatement for an area commonly referred to as Beacon Heights, and that the tax abate- ment report be referred to the Common CoLrcil, seconded by Mr. Cira, and the motion was unanimously carried. d. Tax abatement request relative to an area co my referred to as the Southwest corner of ashingtori 4 Grant Streets. 19 COMISSION APPROVAL GRANTED FOR STAFF REPORT RECOMMENDING TAX ABATEMENT TO AN AREA COMMONLY REFERRED TO AS BEACON HEIGHTS South Bend edevelopment Commission Regular Mee ing - July 11, 1980 6. NEW d. contiinued..... Mr. Ellison: On July 9, 1980, the petition for tax abatement consideration for property located at the Southwest corner of Washington and Grant Street, commonly referred to as 210C W. Washington Street was filed with the City Clerk. The staff undertook a study and based on its study recommends that the Commission find that the area qualifies as an urban development area pursuant to the statute for the following reasons. Those reasons are ess ntially the ones outlined on the petition. In the explanation the report indicates that Mr. Batteast is in the construction business and that he owns the largest minority construction company in outh Bend and in the State of Indiana. Mr. Batteast plans to construct a 4,000 sq. ft. office building on the subject property and in turn intends to least it long term to the Urban League. The Urban League intends to use the structure as a principal office. The project is estimated at $195,000.00. This project may be familiar to the Commission because as the report.indicates, the Merry Avenue site was sold in June 1979 by the Coimiission to Robert Hepler, who in turn sold the subject 2.15 undeveloped acres to Robert Batteast. In order for that transaction to occur, and before our Coimiission approval, the Redevelopment CoTmission in fact did approve that transaction earlier in the year. The report indicates.that a visual inspection took place which confirms that the area in cuestion remains vacant and under- utilized and situated near properties, with the exception of new construction by Mr. Hepler, with different signs of deterioration and decay. We also checked the environmental complaints and found a long list of litter complaints and weeds for general period during which the rpoperty was in public hands. The report goes on to say that inasmuch as the area in question is urban renewal land it remains underutilized and re ins undeveloped despite its sale last year to a private party. 20 South Bend 4edevelopment Commission Regular Mee ing July 11, 1980 6. NEW BUS d. contiinued..... Mr. Ellison continues....... The Department clearly feels that the area qualifies from a condition standpoint as an urban development area. Under supplemental observation-the report simply asks that the Commission concur in the petitioners claim of public benefits that include a modern office building, addition of $195,000 valuation to the tax roles, -a building that will enhance the neighborhood, the creation of jobs, and finally to provide construction that would eliminate the need for further governmental action to rehabilitate these specific areas for which abatement is petitioned. There is a note in the report that says... "the Commission further notes the historic public benefit of minority owned redevelopment of a non- residential nature occurring on urban renewal land. Given the percentage of minorities within the community's population, this historic project is long overdue." That. suggests that this is the first ex le of a minority owned non- residential venture on urban renewal land in South Bend. The report finally concludes that while the petitioner did not provide detailed project financing information, the Redevelopment staff is familiar with these details and offers its opinion that. the project cannot be completed without tax abatement. It did note that the abatement cost, making assumptions with respect to assessed valuation and tax rate found that the cost of the aba ement over ten years to the City, if is it granted, would be $33,660.00. Mr. Szarwark: First of all I would like to give the Commissioners Exhibit "C" (pictures of the property for which abatement is requested. Secondly, let me thank the Coirdissioners for considering this petition so Iromptly. As Mr. Ellison stated, this is z situation in which the land in que tion has been under public ownership until just recently. 21 South Bend edevelopment Commission Regular Mee ing - July 11, 1980 6. NEW d. Mr.ISzarwark continues... This construction company has a commitment from the Urban League to finish by Nov tuber a 4,000 sq. ft. building to be use as an office building. The area in question is familiar to me for a couple of reasons. It is on the corner of Grant and W. Washington. I resided on Grant Street with my parents until I co leted law school and I used to pass by this particular piece of property. I can.testify that this is an area which has needed for some time some substantial red velopment. The area has hit very bad economic times, and has been going through this period for some time. The land in question has nothing built on it and has quite a few weeds, which presents certain environmental and health problems. Tai we are planning on doing is building ,000 sq. ft. office building and I thi k it can be something we can b-e very pro d of. Mr. Cira: Has the lease been approved yet petween the Urban League and Mr. Batteast? Mr. Szarwark: They have entered into an agr ement, whereby if the project is completed by November, they will move in. Mr. Robinson made a motion to approve the report of the Redevelopment Staff to cepprove a tax abatement request rel tive to an area commonly referred to zs the Southwest corner of Washington and Grant Streets, and to present this rep rt to the Common Council, seconded by r. Cira, and the motion was unanimously e. Co ission approval requested for Resolution I aut oriziiig the execution o Redevelop- ment Agreement (s) or'the isposition of land an t e execution ot quit-claim deed(sJ for ThTtt6nsfer'bf title thereto in connection wit lari to ' .e , is ose o In 't e 'L ale Park Proiect;'In . R-57. 22 COMMISSION APPROVAL GRANTED FOR STAFF REPORT RECOMMEN- DING TAX ABATEMENT IN AN AREA REFERRED TO AS THE SOUTHWEST CORNER OF WASHINGTON & GRANT STREETS South Bend edevelopment Commission Regular Mee ing - July 11, 1980 6. NEW e. con inuea....... Par el # Name Amount 3-10 Shirley Elzey $1.00 105 N. Kaley 16-1,16-20, Jessie Harris $4.00 16-21 121 S. Camden Ms. Bathon: These are part of our Phase I dollar lots. The first one had been turned down as ineligible and turned out to be an adjoining owner buying on land contract. The staff decided to go ahead and sell to her. The other owner originally wanted to buy one lot but found out that they were eligible for all five so they purchased the five lot 4. (owned one and purchased only four additional lots). Mr. Robinson made a motion to approve Resolution #618 authorizing the execution of Redevelopment Agreement(s) for the disposition of land and the execution of quit-claim deed(s) for the transfer of title thereto in connection with land to be disposed of in the LaSalle Park Pro ect, Ind. R -57 (Parcel #3 -10 to Shi ley Elzey of 105 N. Kaley for $1.00, Par el No.(s) 16 -1, 16 -20, and 16 -21 to Jes ie Harris, of 121 S. Camden for $4.00) seconded by Mr. Cira, and the motion was unanimously carried. f. conmlissioh apptoval,requ6sted to authorize the Executive Director to execute a contract or bro essional services wi ruen Associates Mr. Ellison: Previously the Chair recognized Mr. Tom Loosbrock, and I would like to introduce him again. Mr. Loosbrock would you like to describe in further detail the mechanics of this contract? Mr. Loosbrock: As 1 mentioned before, we will be starting with the concept that has been est blished thus far; proceeding with the entire project as a whole and precisely delineating all the parts that we have now. We will work witl Baird & Warner and all the City Agencies inv lved in the refining of the design. WA COMMISSION APPROVAL GRANTED FOR RESOLUTION #618 FOR SALE OF LAND IN LASALLE PARK FOR $1.00 PER LOT TO SHIRLEY ELZEY AND JESSSIE HARRIS South Bend R development Commission Regular Meet ng.- July 11, 1980 6. NEW BUS f. Mr. toosbrock continues,.. The objective here is to refine the project as a whole before separating it into various parts. There will be separate owners later on. We will get into code anal sis. We plan to discuss these problems and leet with the City Building Department officials, State Fire Marshall, and those who have jurisdiction over matters like that so they are involved in the project. We will establish the structural systems and mechanical and electrical systems. In addition, we will establish the basic price of the project and develop all of those things to a level so that as an enti e project it is rather well esta lished. At that time we will have CORP eted this phase of our work "and can sepa ate it into individual elements. Mr. imtz: Thank you Mr. Loosbrock. Because of the time exigencies here we didn't receive this contract until the th of July. I directed a memorandum to Mr. Richard Hill and Mr. Thomas Brunier to have their comments concerning this contract and Mr. Brunner replied as f flows: Dea&I M,%. Nimtz: I ha e reviewed the dtait eovt)iaet Jon additionat atchiteetuAat seAvice/s which has een submitted to the City by Gnu.en Aszo2iate,s. The pujrpose o4 this aguement is tq pneaysety define the space )LequiAe- men4 o4 the propopsed Cevttuny MaU project. As a &ens u2t o � my nevtew eeAtain amendments have been suggested by the City, and accepted by G%uen, which have the e�4eet of Jutrthen deli eating the _ scope o A s ehvices and the ci,% tance s under which JufrtheA anchiteetu&a.2 ,seAv "eez w.cU be provided. 24 South Bend 4Tdevelopment Commission Regular Mee ing - July 11, 1980 6. NEW BUS f. continued.... it ass z ub com Unb 06 3 my recommendation that th.vs cont act, mended, be accepted by the Commission ee t to Mn. ButeeAl z review o6 it6 ti,anee with Department o6 Hou6ing and n. Development techwi,cat nequiAements he Indiana Redevetopment Act. very tuey youu, S/ Thomz J. Munnen Mr. Cira: How much money have we spent for studies for the mall? Mr. Ellison: We had a previous contract with Gruen for $100,000. We shared the cost of the American City (The Rouse Subsidiary) study. Our share was about $42,000. We have spent probably about $10.000 to $20,000 in studies related to the Odd Fellows Building, and I believe that is about all. Mr. the Mr. the the the Nimtz: I don't believe we should count Odd Fellows Building. Cira: There is no doubt in my mind that Gruen Company is a very good company, but thing about it is that once you have first study you seem to have to keep .ng studies. How do we know they are 11 competitive, as far as a quality company? Mr. Ellison: We could probably find an architect who might have a slightly different fee structure but architecture's fees are fairly standard. There is not really any difference in the fees charged by F. Murphy in the Bank Project. These fees are necessary if the project is to be completed. Mr. Cira: That is correct, but an architect set a basic fee for the plans, basically 6 t 70 of the total project. 25 South Bend edevelopment Commission Regular Mee ing - July 11, 1980 6. NEW BUSINESS f. contlinued..... Mr. Ellison: That is correct. If you look at it that way, we need the additional $100,000 because we are not near the magic number yet. The other thing Mr. Cira, is that Mayor Nemeth had an architect selection cormittee, and that committee recommended to the Mayor the selection of Gruen after a n ber of other architects were inter- viewed. That was based in part on Gruen's previous experience and commitment to dow towns and also their experience witl retail centers. It also had to do with the fact that Gruen had done son exciting designs. Mr. Hill: Gruen is well out of the study phase because if you look at the attach- ments in terms of their function, when this phase is completed, they are very close to the next stage which is then putting together the drawings for the construction people. They are really bringing the project up to that point and there is just some har "nuts and bolts" architectural wor to be performed under this phase. Mr. Cira made a motion that the Executive Director be authorized to execute a contract for professional services with Gruen Associates, Inc., in connection with the Century Mall Project subject to legal counsel review and approval, sec nded by Mr. Robinson, and the motion was unanimously carried. Ms. Bat on: We have closed out Phase I of our Ilan with LaSalle Park, and we will begin P ase II on Monday, July 14, 1980. We will then sell our 48 remaining lots for $1.00 per lot. After the two week enrollment period a drawing will be held (a time and date will be set later). It will be similar to the Homesteading Program where names will be drawr. out of a. hat. 26 COMISSION APPROVAL GRANTED FOR A CONTRACT FOR PROFESSIONAL SERVICES WITH GRUEN ASSOCIATES LASALLE PARK DISPOSITION PLAN PAHSE II BEGINS South Bend Regular Me, 7. -elopment Commission — July 11, 1980 REPORTS (continued) Mrs. Ko ata: I might add that we have also placed an ad in the South Bend Tribune to notify people, and we plan to be in the LaSalle Park area next week distributing flyers. I would like to mention that at our next Commission Meeting being held on July 25, 1980, we are going to have two important events. One will be the public hearing on tax incremental financing (the amendment to our declaratory resolution) for IND. R -66 ar . The other item is the opening of bids on the land that we have up for sale near Baer's Building. Bids are to be received by 9 o'clock on the 25th day of July and opening is scheduled for 10:00 A M. Mr. Ellison: At this time we do not have anything to report on the Odd Fellows Mr. Dave Anderson: Mr. Ellison, could you please tell me if the detailed design of the Gentury Mall will contain the Clock Tower or is it going to be the Odd Fellows Buildin ? Mr. Ell son Under the Scope of Services of the Gru n contract they have to look at the overall project including the Odd Fellows Ms. Der beck: Is it possible that Gruen might look at the Odd..Fellows Building and say that it doesn't fit? Mr. Ellison: It is possible, but usually an architect would leave those kind of determin- ations to the owner. An owner dictates a vision, and an architect helps to make that vision a reality. 8. NEXT COWSSION MEETING The nex opment July 25 Regularly scheduled South Bend Redevel mmission Meeting will be held on 1980 at 10:00 A.M. 27 COMMISSION MEETING EVENTS FOR THE 25TH OF JULY: PUBLIC HEARING ON INCRE- MENTAL TAX FINANCING AND OPENING OF BIDS FOR SALE OF LAND NEAR BAER'S BUILDING NEXT COMMISSION MEETING South Bend edevelopment Commission Regular Meeting - July 11, 1980 9. ADJOUPMIENT There being no further business to come before the Commission, Mr. Robinson made a motion that the meeting be adjourned, seconded by Mr. Cira, and the motion was unanimously carried. The meeting was adjourn Ed at 11:10 A.M. 28 ADJOURNMENT Carl Ellison, Executive Director