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HomeMy WebLinkAboutRM 11-07-80November T, 1980 10:00 a.m Presiding Officer: 1. ROLL SOUTH BEND REDEVELOPMENT COIN11ISSION REGULAR MEETING Mr. F. Jay Nimtz President 1200 County -City Building 224 W. Jefferson Boulevard South Bend, Indiana 46601 Mlembe s Present: Mr. F. Jay Nimtz, President Mr. Lloyd E. Robinson, Sr., Vice President Mr. A. Peter Donaldson, Secretary Mr. Robert J. Cira, Assistant Secretary I`4s. Paula N. Auburn, Member Legal Counsel: Mr. Kevin J. Butler Redev lobment Staff: M1r. Patrick M. Md,Iahon, Executive Director Mrs. Ann Kolata, Deputy Director Mfr. Kevin Horton, Assistant Director Mr. Paul Falduto, Employment Targeting Asst. Mrs. Angela Coar, Executive Secretary Mfrs. Hedy Robinson, Secretary CommLuiity Development Mrs. Kathryn Baumgartner, Director, Bureau_. Staff: of Housing Mr. David Daren, Assistant Director, Bureau of Housing News Media: Judy Johnson, South Bend Tribune Guests: D. H. Claeys, Businessman Gregg Claeys, Businessman Jerry Claeys, Jr., Businessman John Kagel, Chamber of Commerce Glenda Hernandez, Southeast P.A.C. 2. APPRO AL OF HIT\= On mo ion by Mfr. Robinson, seconded by Mr. Cira, and unanimously carried, the Minutes of the MINUTES OF REGULAR Regular Meeting of October 17, 1980 were MEETING OF OCTOBER 17, apnro ed. 1980 WERE, APPROVED 3. APPRM OF CLAIMS On motion by Ms. Auburn, seconded by M4r.. Robinson, CLAIMS APPROVED and tuianimously carried, the claims totalling $38J79.18 were allowed and ordered to be paid. The authorized claims are: South B, Regular 3. APP'. Redevelopment Commission ting - November 7, 1980 OF CLAIMS (continued) LENT REVOLVING FUND Payroll: 10 -04 -80 to 10 -17 -80 The American Academy of Political and Social Science Busin ss Systems, Inc. Busin ss Systems, Inc. City cf South Bend James R. Meehan & Associates James R. Meehan & Associates Osco Irug R. L. Polk & Company Postmaster Slide raft Laboratories, Inc. Mary Jay d /b /a/ M. J. Typesetting DISTRICT CAPITAL OF 1972 Ann EJ Kolata P.E.A. — EAST BANK AREA Kevin J. Butler, Attorney P.E.AJ - IND. R -66 Kevin J. Butler, Attorney Kevin J. Butler, Attorney Commuifty Development ConnLulity Development Indiana & Michigan Electric Co. Tri -C unty News P.E.Aj - 312 LOANS IB $ 7,912.28 22.73 40.64 13.37 17.78 37.25 5.95 34.03 67.00 49.19 22.50 $ 8,227.72 $ 41.45 TOTAL $ 41.45 $ 394.20 TOTAL $ 394.20 Herbert Herendeen & Bruce Michaels Albert & Anna Yerga and Area Services, Inc Jeff Gibney and Model Tech Jeff kbney bney and Barany Home Improvements Jeff and Circle Lumber E $ 200.00 1,255.95 4,589.75 9,446.07 20.25 31.83 $15,543.85 $ 3,110.04 1,160.00 425.88 630.00 313.83 South Ben .Redevelovment Commission Regular M eting - November 7, 1980 3. APPROVAL OF CLAIMS (continued) 0 P.E.A.I -- 312 LOANS Englewood Electric Supply Company and De is Nolan Wickes Lumber and Dennis Nolan Wickes Lumber and Verna Dorn Robert W. Friend, Jr. Herbert T. Herendeen The Practical Answer and Thomas or Cinderella Nawrot Kisse 1 Company Armen ter and Bishop Miller and Aardvark Co struction Company TOTAL GRANT TOTAL !CATIONS Mr. M nlahon We have received the following letter from Mr. Ernest J, Szarwark in reference to the East Bank Center's petition for tax abatement. November 7, 1980 South Bend Redevelopment Commission Count -City Building South Bend, Indiana 46601 RE: least Bank Project Gentlemen: In order to allow us sufficient time to gather the data recently requested by your staff, I respectfully request that you postpone the heaEil2g on our petition for tax abatement to the November 21, 1980 Commission meeting. In order that this not create complications vis- a-vis the 30 -day time period prescribed by local ordinance, I request that you treat this as a ithdrawal of our prior petition and a resub fission of the petition. Sincerely yours, S/ Ernest J. Szarwark $ 75.37 510.18 159.10 368.44 511.96 104.83 26.33 6,576.00 $13,971.96 ` $38,179.18 LETTER FROM MR. ERNEST J. SZARWARK REGARDING TAX ABATHIENT PETITION FOR 401 EAST COLFAX South BOd Redevelopment Commission Regular Meeting - November 7, 1980 4. COMMUNICATIONS (continued) Mr. imtz: Unless there is some objection, the Chair directs that this be received and placed on file and that the petition be placed on the agenda for November 21, 1980 Mr. Donaldson moved that the letter be placed on file and that the petition be placed on the agenda for November 21, 1980, seconded by Mr. Cira and unanimously carried. S. OLD B SINESS There was no old business to present to the C mmission. 6. NEW B SINESS a. C mmission approval requested for awarding or contracts in connection with the HUD Audit Clean-Up Activity Program;'in accor- Uin ce with recommendation of the Bureau of__ Housing. N1 . McMahon: We have some contracts under the HUD Clean -Up Activity as a result of the HJD audit of last fall. We have fifteen (15) different contracts for consideration at fifteen (15) different properties. We have reviewed them with the staff and find that a 1 of the contractors that are recommended are the low contractors that had submitted complete bids. We did have a few contractors that submitted incomplete bids and those were, obviously, rejected. Name Contractor Amount Mattie B. Hoover Stateside Construction $2,204.00 1342 E. Howard Red John Shith R. A. Stickler 65,005.00 415 E. Ohio Leona Now cki Shamrock Exteriors 2,445.00 1345 W. Fisher Jessie Ga son Shamrock Exteriors 1614 S. F llows 9 2,337.00 NO OLD BUSINESS TO PRESENT TO COMMISSION South Be Redevelopment Commission Regular eting - November 7, 1980 6. NEW B SINESS a. c ntinue.d.... Name Contractor Amount John Luch wski Shamrock Exteriors $1,434.00 2417 W. Hiron Eddie Warren Stateside Construction 2,406.00 429 Harris Celia Sta howiak Charlie Brown 1,700.00 1525 Fish r Amanda De aets Wilton Construction 564.00 609 Kosci szko James Williams Wilton Construction 1,235.00 1029 Lawn ale Arlene Ro eman Shamrock Exteriors 2,493.00 1824 West rn Ave Betty Williams Jim Diedrich 1,135.00 1013 Lind ey Alex Olsz wski Jim Diedrich 555.00 514 S. Warren Benjamin McFadden Shamrock Exteriors 1,466.00 1036 Talbot Anna Bolo ar Wilton Construction 11228.00 411 S. Grant Betty Cas�ler Shamrock Exteriors 3,096.00 618 Dubai Mr. Nimtz: These contracts are a result of the HUD Audit finding that some inspec- t ons were not Quite up to par and addi- tional work had to be done. Money for this activity is coming out of Community Develop- ment funds. Kathy, do you have any further comments? Mrs. Baumgartner: Only that the contract for John Smith at 415 E. Ohio Street awarded to R.A. Stickler will require Common Council approval as it is over $5,000. 61 South Ben4 Redevelopment Commission Regular M eting - November 7, 1980 6. NEW B SINESS a. continued... Mr. Nimtz: All right, what is the pleasure of the Commission, do you went to go through these or what? Mr. Robinson: Mr. Chairman, I would like to make a statement after reading the minutes of the previous meeting, I'd like to point out that Stickler Plumbing is not the one that we really thought it was. It is a smaller concern than the old Stickler Plumbing outfit. I just wanted to pass that information . Mr. Donaldson: What do you mean by that? Mr. Robinson: It is not Stickler Plumbing. e man that used to be Stickler Plumbing is now going under the name of Standard Con- solidated. M ..Cira: What is the affiliation between t e Stickler Construction Company and Stickler "J* Robinson: If there is any, it might be a cousin or something like that, but it is n t tied in with the old Stickler Plumbing. s. Baumgartner: Not to contradict that, t the R.A. Stickler who was R.A. Stickler ambing with the Bureau was the same person esented to you as R.A. Stickler Contracting; wever there are many Sticklers' in the ambing business and Dick is one of the minor ickler's. This is the same Stickler con - stently brought before you in the past years. . Robinson: I don't know how many years u are going back. s. Baumgartner: I would say four or five. . Robinson: Okay, I am going beyond that. t. The other Stickler Plumbing was the one at is the union plumber now operating in this wn under the name of Standard Consolidated. 0 South Ben Redevelopment Commission Regular M eking - November 7, 1980 6. NEW BUSINESS a. cdntinued... Mr. Cira: Kathy, on this one for Smith you recommend awarding it to Stickler for $6,005 and the cost estimate was 035. Mrs. Baumgartner: You will notice that the cost estimates on nearly one -half are 30 to 50 percent under what the bids came in at. I really can't give you too much e lanation .for why that exists. It is the same cost estimate that we have used on all other contracts. The only thing that we have been able to venture is that perhaps these are smaller jobs and they don't have the amount of overhead that they do on larger jobs. Mr. Cira: If we can't use that cost estimate as a form of tool, why even h ve the estimate. Mrs. Baumgartner: I think what we said the last time is that on the HUD Clean - Up Activity we weren't adhering to the cost estimate at all because they are small jobs and don't have that percentage of over- head that are on much larger jobs. Just for your information, the cost estimate book will be completed within the next two weeks so we will have updated cost estimate with modifiers f r local costs. . Nimtz: Some of these estimates are really ld. I am looking at Eddie Warren and that one ns anywhere from $2400.00 to $7300.00,then u jump over to Amanda DeBaets and it runs om $565.00 to $1370.00. Mrs. Baumgartner: I think the variance showed a range from 14% under our cost estimate to 510% over our cost estimate. There was no p ttern. . Cira: Is it too much of an effort to have ne of these re -bid? 7 South.Ben Redevelopment Commission Regular M eting - November 7, 1980 6. NEW BUSINESS a. continued..... Mrs. Baumgartner: We are on a very tight time schedule that we are working against. I really don't know, we could perhaps have them rebid. Nimtz: Kathy, as I understand it, the ommendation is all for the lowest bidder, that right? Mts. Baumgartner: Right. M . Nimtz: Bob, what I am afraid you are going to get into if you ask for a re -bid, you will get into about a 2% jump anyway. 14r. McMahon: It appears as if the low bid, in a'-most every case, is backed up with another bid v ry close to it. There are one or two bids that would indicate that the people that did take the time to bid a little bit closer, there is some support for that price. q1 . Nimtz: Kathy, are there any more? qrs. Baumgartner: There are 12 more to go. C0DM4ISSION APPROVAL GRANTED FOR AWARDING q . Robinson moved that the contracts be OF CONTRACTS IN CON - aiarded to the above mentioned contractors, NECTION WITH THE HUD s bonded by Mr. Donaldson,and unanimously AUDIT CLEAN -UP ACTIVITY Tried- PROGRAM b. Commission approval requested for a tax a atement request relative to an area McMahon: The next item on the agenda ates to a tax abatement request relative the area commonly referred to as S2S South for Street, Claeys Candy. The staff has pared a recommendation for the Commission. October 9, 1980 a petition was received m the property owners, Jerry and Don Claeys. staff has undertaken an investigation and ommends to the Commission that the area does qualify as an Urban Development area suant to the applicable code for the lowing reasons. 0 South Ben Redevelopment Commission Regular M eting - November 7, 1980 6. NEW b. Mt. McMahon continues... nditions exist in the area in .estion which can be corrected by !gulatory process or by the ordinary ,eration of private enterprise. The 'ea in question has not been bypassed underutilized due to economic cir- mstances which have deterred normal velopment, and the area in question s not become undesirable for, or im- ssible of, normal development and cupancy because of any lack of de- lopment, cessation of growth, deterio- tion of improvements or character of cupancy, age, obsolesence, substan rd buildings or other factors which ve impaired values or prevent a normal velopment of property or use of As background information the report goes an to state that the property in question was purchased by the petitioners in June, 1979, and three structures on the property were demolished in September, of that year. Claey's is constructing an 111.000 square foot addition to their pre- sent building at a cost of $380,000.00. The addition is to be used for expansion p rposes. This will create five new jobs. Me area is currently zoned "D" Light Industrial and all utilities are present. Visual inspection of the exterior con- d-' tions of the area were undertaken to determine whether the area had become undesirable for, or impossible of, normal development and occupancy due to a lack of development or a deterioration of improvements. Due to the fact that construction on the site has begun, it w s impossible to offer any inspection observations relative to the previous condition of the property. A check of the Building Department showed that a building permit was issued September 25, 1 80. we South Bend Redevelopment Commission Regular Meeting - November 7, 1980 6. NEW b. W. McMahon continues... .e intent of the tax abatement gislation is to provide a means encourage the redevelopment or habilitation of blighted, deterio- ted or underutilized conditions which der normal circumstances cannot occur. erefore, the conditions necessary to Clare this area an Urban Development ea do not exist as evidenced by the velopment that is presently taking hi summary, we feel that the activity mere is a healthy activity. We certain - 1 are pleased that Claeys is in a position t expand their business, but we feel that t is expansion activity would have taken pace, and obviously is in the process of t king place, irrespective to any tax a atement consideration. . Nimtz: The Chair recognizes Jerry Claeys. Mr. Jerry Claeys: I also would like to make a few statements, but I will let our attorney .\4r. Fred Boynton go ahead, then maybe Don C aeys and Gregg Claeys will want to make some comments. . Nimtz: The Chair recognizes Fred Boynton. M-. Boynton: Thank you. The property is 1 cated on Taylor Street at the intersection o- South, adjacent to the railroad tracks. T e expansion is taking place on two lots. Y u really can't get any additional area to die south because of the railroad tracks and the rest of the property is bounded by the C aeys building, which has been there for a n ber of years, and also the Housing Project so that there is really no additional space to expand. It is an area that has not been developed recently. When Claeys decided they w,-re going to expand, they had to decide w ether to work through the EDC bond issue, d ask for tax abatement to assist in this p oject or whether they were going to leave 10 South Ben4 Redevelopment Commission Regular M eting - November 7, 1980 6. NEW WSINESS b. M$. Boynton continues... the area which would have taken probably 30 jobs with it. This way it will preserve the jobs and it will also create at least S more. Me property there, prior to Claeys purchasing it in June, had a couple of tattered houses on the site. I don't think that there is any question that this qualifies and that needs the assistance of tax abatement to make t e project completed. Do you have ything further that you want to add, J rrv? Mr. J. Claeys: As a small manufacturer in South Bend, even though we did go ahead and start the project, we had ample opportunity to leave the area. Just as an example, the City of Plymouth invited. us down there, as you well know, and they are taking a lot of small industries out of our area. We could have gone down there d they would have furnished us a plant for 10 years with absolutely no taxes at all. Here you have the opportunity to keep a small plant like ours in the City of South B nd and we went ahead and decided to go a- h ad and build in South Bend because we felt this is where we really wanted to be. We had offers from Texas and Tennessee and Arkansas, d all kinds of places. Many people think that we sell most of our candy in the City of South Bend, but the City of South Bend can only possibly take 10 of our candy, 99% of our candy goes to other states in the eastern half of the United States, and we could have been just as well located in Tennessee or Kentucky. We had many, many good offers, but we went ahead in South Bend, bought the property next to us when it was available, thinking that maybe in the long t rm the City might appreciate it and help us out on the tax situation. We happen to bE, the only company in that particular area that is paying any taxes at all. All the way to Western Avenue you don't get a dime out off the property. All the way to Chapin Street you don't get a dime out of the property. We a e the only people in the area that are paying 11 South Ben Redevelopment Commission Regular M eting - November 7, 1980 6. NEW b. M #. J. Claeys continues... y taxes at all to help support the City, the Commissions, and all the other things, and we think we have a p rfect right to come up here and ask for some tax abatement on this even though the time element doesn't correspond with maybe some of the rules and regulations. Another thing, in talking with the Mayor the other day, he was very, very pleased because our building is right in the area of where you are trying to do something to develop the Studebaker property. We are the entrance to it, you might say. If you went the place to look junky like it was looking, the three or four houses that w re up there were absolutely a disgrace tc the City, you wonder if sometimes does the City really want to progress. We feel t at we are doing something to help the City make it look better, and we are particularly ii an area that you are trying to develop. Y u can see our place from here and you can s e the Studebaker Complex from here, and it does need some help. Tax abatement is ore of the things that we are certainly entitled to come up here and ask for, w ether you grant it or not, that depends upon you. . Nimtz: Thank you, Jerry. Don Claeys: I would like to add that are not asking for permanent tax abate - .t, only for a small period of time. NIT. Gregg Claeys: I think one of the iffportant things that I would like to re- iterate is the fact that it's a temporary tax abatement and the important thing is that we want to stay in the City and be a p rt of the City and grow with the City and t at is the main reason we are up here re- q esting abatement. Nimtz: I don't know what the legal ation is here, but let me say this to Commission. 12 South Ben Redevelopment Commission Regular M eting - November 7, 1980 6. NEW b. W. Nimtz continues.... ter we turned down Mossberg's and the City Council went ahead and then ATE got written up in the newspaper. I was pleased when you bought the p operty there because I knew we hadn't b en getting rent on it for a long time. . J. Claeys: The whole area was really ing to pot, and it reflected upon the using project around there, and I can 11 you that Jess Dickenson told me after bought it that he was real pleased be- use he thought maybe this might help the using project get to work and improve the using project. . Nimtz: Let me ask this. Have the gulations been changed where it said the project was started you weren't igible. Butler: The law does not state a tax a atement cannot be granted after work has ccnnenced or after a building permit has been issued. Basically, I think it is a p licy decision that had been made at the time the Department Staff and the Common Ccuncil Committee were working on the p ocedures and policies for the program last January and February. So that is a policy determination. It is within t e Ordinance. M . McMahon: No, I can say that it is n t. If I might expand a little bit. We think that everything the Claeys are doing is great for the neighborhood. We think it is fantastic that their business is in a p sition that they can expand. There is absolutely no question that this is really a step up and it certainly has a benefit to the general area. There is no question that everything that Mr. Claeys stated is true and we recognize that. The whole question of tax a atement and the purpose of the statute, and something that I think the Council as well is ccming to grips with at this point, is the 13 South Ben Redevelopment Commission Regular eting - November 7, 1980 6. NEW BUSINESS b. W. McMahon continues... fact that there are a number of programs that are available to the C aeys, such as economic development bonds. Tax abatement however, is something that we look at from the standpoint, I believe the Council is as well at this point particularly in light of the number of petitions that t ey have seen lately, it doesn't come d wn to as much of a timing question as t whether you started before or not, as whether or not you can substantiate t at it is necessary to make the project h ppen, and the though it that if it is n t necessary to make the project happen, iE normal business activity and normal e onomics are going to result in this a tivity anyway, then tax abatement s ould not be applied. Tax abatement s ould be used as an incentive to encour -. a e activity in distressed areas where it is not possible for that to happen through r utine business procedures. I think, fortunately, the Tribune looked at it ii their editorial as something that any- one in South Bend should be able to claim because there is a statute on the books. I think that they, perhaps, did not look at the intent of the statute when they came forward with that. Nonetheless, t at is the basis for our recommendation. M . Nimtz: I understand that. The reason I mentioned this, we looked like we had a b ack eye or something after the Mossberg b tition. Mc. Cira: How firm is our recommendation. Y u know we turned down Mossberg's and they g t it, we might turn down these guys and t ey still might get it. What difference d es this make? Robinson: That's right, so as far as I concerned these people are just as entitled it as anybody else and I will make the motion t they are entitled to a tax abatement. 14 South Ben Redevelopment Commission Regular M ehing - November 7, 1980 6. NEW BUSINESS b. c6ntinues... Robinson moved that the staff ommendation not be accepted, and.. t the application for tax abatement sent to the City Council with a fa able recommendation of the Redevelop - t Commission, seconded by Mr. Donaldson passed unanimously. Mr. Nimtz: Let me say this to the staff. Technically, I think you are right. I am just looking at the public relations and politics of this thing, and I think when you compare this to Mossberg's the City C uncil will approve it. Mr. McMahon: I hope that the Claey's people recognize where we are coming from in that regard and we are very pleased to see the activity that is going on. Mr. Butler: I would like to make a point though that this would not be deemed to set a precedent with respect to tax abatement. This is a determination that is made on the facts in this case, the facts as presented b th in the report and by the Claeys and their Counsel. Each case has to be con- sidered on its facts and I think that the Redevelopment Department staff and the City Administration and the Common Council may within the next month or two, be restruc- t ring the tax abatement procedures and p licies, to make them clearer. Donaldson: In all fairness to the ff, the staff went according to the k. Mr. Nimtz: That is right, they are doing it the way the thing is written. Donaldson: Is there a time frame on tax abatement. , McMahon: The statute is pretty clear, it's iduated over a 10 year period. It is basically zivalent of one -half the taxes over the ten -year -iod. 15 South Ben Redevelopment Commission Regular M eting - November 7, 1980 6. NEW BUSINESS b. continued... M . J. Claeys: Thank you for your time, 2 ntlemen. c. C mmission approval re nested for a tax abate- ment request relative to an area commonly T (erred to as 401 East Colfax Avenue (East 43 nk Center) . Mr. McMahon: The next item on the agenda pertains to the letter that we had request- ing that the tax abatement for the East Bank Center be tabled for consideration at the next meeting. Mr. Nimtz: That is to be placed on the agenda for November 21, 1980. 7. PROGA .SS REPORTS There were no Progress Reports to present to the Co M— sion COrM!IISSION RECOMMENDS URBAN DEVELOPMENT AREA DESIGNATION FOR PROPERTY AT 525 S. TAYLOR STREET NO PROGRESS REPORTS TO PRESENT TO COH4ISSION 8. NEXT O',IMSSION MEETING The next regularly scheduled South Bend Redevelop- NEXT COWISSION MEETING ment Commission meeting will be held on November 21, 1980 at 10:00 arm. a There being no further information to come before the Commission,, Mr. Donaldson made a motion that the meeting be adjourned, seconded by 14r. Cira, the motion was unanimously carried. The meeting was adjourned at 10:35 a.m. CM �� 16 F I 60 , Mc"?ahon, Executive Director