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HomeMy WebLinkAboutRM 01-02-80January 2 9:21 A.M. Presidinc 1. ROLL 2. J. SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING 1980 1200 County -City Building 227 W. Jefferson Boulevard Officer: Mr. F. Jay Nimtz, South Bend, Indiana 46601 President Membel -s Present: Legal News 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 Counsel: Mr. Kevin J. Butler �-lopment Staff: Mr. Carl Ellison, Director Mrs. Ann Kolata, Deputy Director Mr. Kevin Horton, Real Estate Officer Ms. Ann Bathon; Acquisition Specialist Mr. Bill Fox, Relocation Specialist Mrs. Jane Zimmerman, Executive Secretary Ms. Denise Fleming, Secretary Guest: ia: Mr. Mr. Ms. Ms. Mr. Mr. Mr. Ms. Mr. OF MINUTES John McKnight, Reporter, WSBT -TV Frank Vellner, Photographer, WSBT -TV Jeanne Derbeck, Reporter, South Bend Tribune Judy L. Johnson, Reporter, South Bend Tribune Larry Ford, Reporter, WSJV -TV John Winey, Photographer, WSJV -TV D.A. Murphy, Photographer, South Bend Tribune Ann Thompson, Reporter, WNDU -TV Les Howard, Photographer, WNDU -TV Mr. Richard Hill, City Attorney Honorable Irene Gammon, City Clerk Ms. Glenda Rae Hernandez, S.E. PAC There were no minutes to present to the Commi Sion. TAL OF CLAIMS There were no claims to present to the Commi sion. NO MINUTES WERE PRESENTED NO CLAIMS WERE PRESENTED South Bend Redevelopment Commission Regular eting January 2, 1980 4. COMMUNICATIONS a. Letter from T. Brooks Brademas, wit T to the General Services Ellison: Mr. Chairman, as you may call, at the Commission's last regular meeting in December, Mr. Brademas appeared and ring the course of that meeting verbally suggested method of saving the Odd Fellows Building which uld essentially provide for about 40,000 sq. ft. of it to be leased to GSA. Mr. Brademas represented t at he had a major tenant for the first floor and r the ninth and tenth floors. He appeared to be trying to respond to Commissioner Auburn's question. E-iring the course of that meeting, I went to great 1 ngth to try to indicate the status of the GSA b ilding relative to the bus lot, and indicated that wing GSA lease space in a renovated Odd Fellows b ilding was not a very good idea. As a result of t at meeting and a re -check of Mr. Brademas' investors wrote the following letter: (Mr. Ellison read the letter to everyone present) 21, 1979 t. F. Jay Ni.mtz, Pnelsident Guth Bend Redeve.eopment Comm bszion to Ducomb.. N-imtz, 9 Ducomb 11 Cot4ax Avenue )uth Bend, Indiana Jay: am wt&Wng to you at this time negatcd%ng oun pneviouts .vpozae to have the GenvLae Se,%vice�s Admin.irsttiati.on wsidetc nenti.ng the 40,000 sq. 4t. o4 o44ce space at eoued be made avaitabte in the &enovated Odd ttow,s Buitdi,ng. e Aati.onaee 4otc this ptcaposae was two -4otd. Fitust, wowed ptcov ide the needed space at a cost z avings to e taxpayett o f 6i,ve to six dottau a squatce Joot. condey, it wowed have been an immediate answetc to the neeAn,s naized by some membetvs o6 the Comm. zzion, incipatty Commizz onetc Aubutcn, as to the Jinanci.ae ab.i,P..i t y o4 v uA ptco poz a2. -2- LETTER FROM T. BROOKS BRADEMAS WITHDRAWING PROPOSAL TO LEASE SPACE WITHIN THE ODD FELLOWS BUILDING TO GENERAL SERVICES ADMINISTRATION South B Regular Redevelopment Commission ting - January 2, 1980 4 COM"I CAT IONS a. Getter from Mr. Brademas continued) ... We teasoned that i4 we had matfieted 40,000 . 6t.. of space to the Genetat Setw.ice/s Adm.in ttati.on, since we have a.?tready zeeuAed a comm-i t- ent {ion the gnou.nd 4toot and the ninth and nth JtooAs of the building, this would mean that 100% o 4 the building had been pneeommitted and etce cowed be no q ue,st ion about the 4inane i.a2 v ab-ie.ity. However, we have had an oppotitunity to di,s eu6/s this in some deta it with the {jitcm that h committed to provide the $2.5 m-%Won o4 nano ing to percmit us to Iota y tenovate the bidtding, and they be?.ieve that we wou.2d be in a ongen pozition with out pnojeet t�j the new G A bui e.ding were consttruated. lit addition.. they are o6 the opinion jytom the-it own anatysis, which iz 4uUy suppotrted by the ,studies o4 the Rouse Company, that thetce is a ve&y stung demand jon o jj iee space in the ptc ivate etot. They have suggested 6t&ongty that we tap c s market. They point out, and we 4u t y concuA, at at today's cowstnucti.on costs it WiU not be p sz ibte to pnov.i,de newly consttcucted space at the $ 0 to $12 pen s quaAe foot torte which the Rouse C mpany tepoAt .indicated woued need to be met in 1 , 79 dot2.a us, in oAdet to tap a �sign- 4cant potrtion o the ma&ket. OL& decision to w.ithdtaw out pnopozae and to not p e/ss JuAther on the idea o4 teasing the Odd 1=eUows Bidtding to the GSA at6o stems Jtom ouA undetustanding o the des-itce on the pact of the City to use the phopozed new GSA buiedi,ng as pact o4 the matching ctot n conjunction with a teque�st jon another U in Grant to .6 uppotrt the deveto pment o4 Centulty It is certainty not our wish to do anything that w ued dettcact Jnom the s uccets.6 o j the Maet d vetopment and the overall downtown renewat p gram. Accotcdingt y, we ate advising you that w cute witkdAawing o un pro pops al that the o j 4%ee � ace in the Odd 1=e llow�s Building be ut i Uzed by t o GSA in view o f the/ se 4aetotus . -3- South Bed Redevelopment Commission Regular Meeting January 2, 1980 4. COMMUNICATIONS a. l(Letter from Mr. Brademas continued) ... th the continuing ens eatat i,on in the cost o4 w cowsttucti,on averaging 12 to 2 pe&cent a nth a month, it becomes .inctez ingty appatcent at the tenovat.ion of the Odd Fettowz Buie.ding .n play an important and veAy positive toZe in e eanty tenewa2 o4 downtown South Bend. t is out hope that we can enter Into negotiations ;th the Commission at a veAy ea,rty date, Aso that can take maximum advantage of the jaet that fete ate a number o4 excet2ent tocat zubconttaetotus to, due to the gene t.2 }atobtenz o4 high intehe�st mts in the eonsttuction .indcustny, have excess zpac ty and put them to wo&k at a veAy eaAty z te. ate heady to meet with Commission neptm enta- tvez at they. convenience. .ndest pensonaf tcegatds. S/ . Brooks Bnadema6 uiZdet /Deveto pet The air directed that this letter be received and placed on file. Mr. Nimt : This item is not on the agenda, but I did receive a letter from former Mayor Peter J. Nemeth. LETTER FROM FORMER MAYOR (He read the letter to everyone present) PETER J. NEMETH RE: MICHIANA ecembeA 27, 1979 TITLE CORP. AND KEVIN J. BUTLER F. Jay N.imtz, Ptce/s.ident edeveto pment Commission aunty -City Buitding outh Bend, Indiana 46601 Re: M.ieh.i,ana Titte Cotpotation 9 Kevin J. But2eA -4- South Be Redevelopment Commission Regular 10eeting January 2, 1980 4. COMMdJNICATIONS (letter from former Mayor Peter J. Nemeth to Mr F. Jay Nimtz) continued.... Mt. Nimtz: y the pro v.usionz o J Indiana Code 8- 7 -7 -5, I have setected two of the Jive nuste" who in turn appointed you to your o4jice. vouant to Indiana Code 18- 7 -7 -9, I and the City ouncit have ceAtain uspons,ib.ititiez o4 oveA- i ght with tees peat to you& actions. t ,cis in this context that I submit to you jot 'outs very .seAiouis cons.idetation the attached iemotandum tegoAd.ing the tetati.ons h i.p o4 f L. Buffet with your Commi�ss.ion and M.i,ch Tana it2e Cotpotat ion. I suggest that, bejote you :ake any AuAth.e t action with tees peat to this utter, you appoint an .independent speciat .ouns e.2 to review the memorandum and to report :o you with te�spect to its subject matteA. taut y yo utus , S/ J. Nemeth Mr. Nimtz: I spent a good part of New Years Day reviewing the memorandum (attached to Mayor Peter J. Nemeth's letter). It is a review of conflict of interest and the situation here. One thing I would like to say is that it is a very good advocacy memor- andwii. Lawyers, when they are on one side, have to pres nt to the Judge the best memorandum they can concerning their side. I have heard of some cases where lawyers will cite cases hoping the Judge won't read them too closely, thinking that it will support their poin of view, whereas if you look at the fine print it doesn't exactly say that. In any event, there are a number of cases cited in the memorandum; I haven't looked all of them up, but practically all of t em I have looked up don't concern this matter. There, is one corporate case they have mentioned and in that case the person involved had a majority interest in the corporation; the rest of the cases they cited concern a special statute or there was a partnership or an indi idual proprietorship. -5- South Be *d Redevelopment Commission Regular eeting January 2, 1980 4. COMMUNICATIONS Mr. Vimtz continues.... i.e other thing I regret is the listing of he policies which were written by Michiana itle Corporation. The majority of those itle policies were not ordered by the adevelopment Commission. They were ordered y someone in the Bureau of Housing, and we had :) control over the ordering of those policies. he Commission only approves claims, in which ark or services have been done for the Bureau f Housing. I have discussed the memorandum ith one or two of the Commissioners informally, ut I haven't had time to have a full meeting ith all of the Commissioners concerning this atter. Mr. Butler: To this point I have basically remained silent on the matter, but I would like to make a few comments now for the record. I have also reviewed the Mayor's and Mr. Brunner's memorandum in some dept . It includes four charges of conflict. First of all the East Bank Title work. Last summer, Mayor Nemeth told the Redevelopment Department staff that he wanted the Monroe - Sample and the East Bank declared "blighted" before he left office. That declaration process is lengthy and it involves a number of steps including securing the title information, surveys and appraisals for each of the parcels. In September, the staff determined that the title information could not be provided within the time available without utilizing all three of the title companies present in the community. Michiana Title Corporation processed ten orders for the Depa tment of Redevelopment at $50.00 per order. The 3econd area of charged conflict is the First Bank rriott leasehold title work. On Monday, October 15, 1979, three days before the HUD imposed deadLine for closing, AE'INA Insurance Company, the lend r, called to ask for immediate delivery of the title work. I called the Redevelopment Department to ask when the title work had been submitted, and was told at that point that no title work had been orde ed. Because of the obvious, critical emergency I assumed responsibility and immediately ordered the preliminary commitment for title insurance from Mich Lana Title Corporation because I was absolutely confident that it would then be available for delivery the next day, Tuesday, October 18, 1979. South Be *d Redevelopment Commission Regular Meeting - January 2, 1980 4. COMMONICATIONS Mr. kutler continues... premium for that particular title work $1,150.00. he third area of charged conflict is related o the Bureau of Housing - 312 Rehab Loan itle work. The Bureau of Housing is an agency f the City of South Bend, directly under the ontrol of the Redevelopment Commission. The edevelopment Commission attorney has no involve - ent with the Bureau or its staff, or the pro - essing of title work for 312 rehab loans. I ad no knowledge that the Bureau had ordered itle work from Michiana Title Corporation; I on't know the circumstances under which that itle work was ordered. The Redevelopment ommission does not sign the claims for the ureau, but I have no role whatsoever in the laims process. Michiana Title Corporation rocessed twenty eight (28) orders for the ureau of Housing, with premiums totalling 2,289.00. That was the bulk of the 3,900+ involved. he fourth particular charge of conflict of aterest was the First Bank/Marriott Mortgage itle work. Neither I nor any other person ith Michiana Title Corporation solicited this itle work. No order for title work was placed t any time with Michiana Title Corporation y the developers, and no work was ever per - ormed by Michiana Title Corporation for the evelopers. In October and November 1979, the evelopers did seek quotes from the three local ompanies. To my knowledge the title work till has not been ordered. I do believe this harge is a fabrication which is designed to stablish what the other charges of conflict id not establish, and that is simply the pectre of profit motive. I have been the ttorney for the Redevelopment Commission for fight years. I have been involved in title nsurance for almost five years, but only in he two very recent emergency situations out - ined above, has title work been ordered by the edevelopment Department from Michiana Title orporation. During the last eight years I elieve I have worked quite hard for the epartment, and at the same time we have reduced -7- South Bed Redevelopment Commission Regular Meeting - January 2, 1980 4. COW NICATIONS Mr. Butler continues... he legal fees to the Commission drastically. am very proud of my record of service and ntegrity. The members of the Commission and he department staff know that I am extremely rateful for the confidence which they have onsistently expressed in me and in my work. regret the repeated pressures that have been laced on the Commission to remove me as their ttorney through the years and the time the embers have had to spend on this particular ase especially, when they had to vote on this atter. Obviously, I cannot advise the Com- ission concerning the Nemeth - Brunner memo. I o believe that the appointment of special ounsel to review the memorandum would be a elcome opportunity to clear the air in this atter. Nimtz: Thank you, Mr. Butler. I do believe that Commissioner Auburn has a motion she d like to present to the Commission. Auburn: The letter I had written follows on Mr. Butler's comments concerning appoint - nt of outside special counsel. I, as a mmissioner, feel that we place Mr. Butler . an extremely tenuous position when we ask m to give us legal counsel on a matter that is involved in. Likewise, Mr. Nimtz, as esident of the Commission, is not in a position give us, as Commissioners, outside legal vice on how to handle a matter such as this .en it comes before us. I think we owe it ourselves as Commissioners, I think we owe it the staff, I think we owe it to Mr. Butler, d I think we owe it to the public to engage an tside neutral party to advise us on how to ndle this matter. There are apparently some legations that would have severe legal ramifi- tions on not only the "hole ", but perhaps some the other matters that the Commission has tered into and I think that we need someone guide us on how to proceed. South Bed Redevelopment Commission Regular eeting January 2, 1980 4. CONK �WICATIONS (continued) [s. Auburn made a motion that the Redevelopment bmmissioners get outside counsel to advise the ommission in the conflict of interest matter oncerning Kevin J. Butler with three criteria; ) that the legal counsel be from a law firm n excess of six principals; 2) that the law irm located outside of the boundaries of the hird Congressional district; and 3) that the law irm engaged have no principal that has nor has ad any business, legal or political relation hip with any of the principals with Ducomb, imtz, & Ducomb, Sweeney, Butler & Simeri, Parker, runner & Hamilton, and Peter J. Nemeth $ ssociates, there was no second to the motion, herefore, the motion failed for lack of a second. r. Nimtz: First of all may I introduce our new ity Attorney, Mr. Richard Hill, with whom I have alked this morning. I would suggest this to the ommission .... hiring somebody is a difficult thing ad when you try to set these criteria, it really s limiting. What I would suggest is that we ask he Circuit Court Judge to recommend someone as he outside legal counsel to advise the Commission s to whether there has been a conflict of interest. iat is my recommendation to the Commission. Auburn: Mr. President, I am not sure that that Id get us out of the sphere of some of the concerns t what is being done is politically motivated. t of my rationale for going outside of the third trict is to take us outside of this sphere of al politics, and to get someone whose profession reputation, and livelihood does not depend upon al political liaisons of the community. . Robinson: As far as I am concerned, this tter happened in St. Joseph County, and the erican Bar Association in this town is just qualified, and the members thereof, as any her City. I think that because it has ppened in St. Joseph County, it should be ndled in St. Joseph County. I think the esent situation is being blown way out of oportion, because I don't think that there s much profit made. I know from being volved with attorneys considerably myself at this is not the only source of income for e law firm of Sweeney, Butler, and Simeri. ME MOTION BY MS. AUBURN TO OBTAIN INDEPENDENT LEGAL COUNSEL FAILS FOR LACK OF A SECOND South Be d Redevelopment Commission Regular fvleeting - January 2, 1980 4. COW NICATIONS Mr. kobinson continues... know that there is a limitation of the amount of ime that any lawyer can spend. The only thing I hink that truly has happened with this case is that here was an honest mistake made. If the motivation as for profit, I wouldn't think that would be too mart of a decision, simply because I know this articular law firm is very involved locally on arious governmental agencies. Also, Mr. Butler s only one little portion of Michiana Title Cor- onation and I think that he has done an outstanding ob. r. Robinson made a motion to obtain outside legal ounsel from the Circuit Court Judge to advise the ommission as to whether there has been a conflict f interest, or as to whether there will be a ontinuing conflict of interest with the Michiana itle Corporation. s. Auburn: I would like to clarify my statement o Mr. Robinson. I asked for an outside legal irm to give us, as Commissioners, legal guidance n how to proceed in handling this matter and I hink there is a big difference. [r. Robinson therefore made a motion that the edevelopment Commission request the Circuit ourt Judge to appoint an attorney as an outside egal counsel to advise the Commission as to hether there will be a continuing conflict of nterest if we employ Mr. Kevin J. Butler and ontinue to use Wchiana Title Corporation without ny restrictions as to who the Judge appoints..... [r. Cira: Mr. Nimtz, why must we continue to have his problem, why don't we just drop this? Ls. Auburn: The problem stems from the fact that hen you go through audits, such as the State oard of Accounts, HUD etc. there is a concern that he monies that have been paid will be disallowed, and n two years we will be back here talking about the ame issue again. Only then it will be under more erious types of conditions because we are going o have to pay back a lot of funds. I think that s Commissioners it behooves us to not ask Kevin o fulfill that role at this point in time, rather han seeking outside general counsel to simply Avise us on how to proceed with this matter. -10- South Bond Redevelopment Commission Regular Meeting - January 2, 1980 4. COMMUNICATIONS (continued) Mr. Nimtz: I feel that is what Mr. Robinson wants to do here ... it is a matter of what is the motion. Ms. Auburn: I still feel there are problems because my memo says this may be politically motivated ..... I have concerns about leaving it within the local community. If we leave it open for the Circuit Court Judge to decide on legal counsel, and go anywhere he wants to obtain this counsel, I will, with reservations, support your motion. \Ir. Robinson made a motion that the Commission request the Circuit Court Judge of St. Joseph County to appoint independent legal counsel for the Commission to investigate and advise the Commission as to whether there has been a conflict :)f interest, and whether there will continue to 3e a conflict of interest if we retain Kevin Butler as our legal counsel, seconded by Mr. Donaldson, and the motion was unanimously carried. (The Chair also voted "aye ") 4r. Hill: I have a question as to whether the Circuit Court Judge would be limited to the appointing of counsel that would be from this community. dr. Nimtz: The motion leaves it open to whomever the Judge wants to appoint. He may have trouble Jbtaining any one to do this. r. Donaldson: If the Circuit Court Judge of t. Jospeh County has trouble in obtaining legal ounsel would he then seek counsel from anywhere e wishes to do so? r. Nimtz: That is correct. The Chair will ait upon the Circuit Court and explain this ituation to him and request him to appoint ndependent counsel. Mr. Butler, do we need a Dtion to have counsel paid for? . Butler: No. Ellison: I don't believe the Department of velopment will have any trouble paying for the ices of legal counsel. - 11 - South Bond Redevelopment Commission Regular Meeting January 2, 1980 4. COMPXICATIONS (continued) Ms. Auburn: Mr. Chairman, I would like for you, out of respect and courtesy to the new administration to .nvite the new City Attorney to go with you to see the Judze. Mr. Nimtz: I will consider that. I really don't know tha the City attorney is involved directly. 5. OLD The 6. NEW a. INESS NO OLD BUSINESS was no old business to present to the Commission PRESENTED ideration of regi -10. st to settle Claim Parcel #66 -32 s. Kolata: I have the details of this case. It wolves a letter address from DeVere Goheen to Nimtz several weeks ago which was referred to e Commission and then to the staff for investi tion and report. . Nimtz: To refresh your recollection—The dy whose property we have acquired has died, it is an estate, and DeVere Goheen claims that we nolished the house without notice to the lady etc. Ors. Kolata: Upon investigation, we did not proceed )ut of order. The suit had gone into condemnation, the money was placed into Court for the settlement, the money was then taken out of the Court by the )riginal woman, and at that point the Department of 2development did have title to the property and lid demolish the property. The person in question ias since died and her son is asking for more money. ['he case has been in the Court and it has been held ;ince about 1976. Originally, the case went into lourt in 1974; it is still being held on the locket and has been postponed. The question is )ver whether we should try to settle out of court For slightly more money or whether we should let Lt follow the regular Court procedure. We don't Find that there is any reason to believe that the )epartment of Redevelopment has acted improperly Ln demolishing the house. -12- CONSIDERATION OF REQUEST TO SETTLE CLAIM PARCEL #66 -32, NDPA -10 South Bond Redevelopment Commission Regular Meeting - January 2, 1980 6. NEK IBU5INESS (continued) a. (continued... a Nimtz: There is also a question here to whether there has been a fair appraisal not by the Court appointed appraisers. [r. Kolata: Originally our appraisals were alued at $5,050. The Court appraisal figures ame in at $5,400. That check went into the ourt in 1974 and the check was withdrawn. ecently, the original owner's son has had an ppraiser who stated that he had gone into the omes when they were still intact, and he felt hat they were worth $11,000, not the $5,400 hat the Court appointed appraisers had set. hey are trying to settle for a higher amount han the $5,400. Chair directed that Mr. George Patton, deputy sel to the Commission, proceed to trial with matter, and advise Mr. Goheen that we cannot de to his request.. Ellison: I'd like to mention that this parcel within the NDPA -10 project area that ultimately ulted in the construction of Dean Johnson park the Southeast neighborhood. ted for Consultant Inc. and Carl El ison. between r. Ellison: I.was asked a few weeks ago, by a irm called Abt. Associates, Inc., a consulting irm out of Cambridge, Massachussetts that is nder contract with HUD, to basically evaluate he guidebook HUD suggests using in doing environ- ental reviews. They have been asked to revise it nd also to make some recommendations to HUD as o changes in regulations that are necessary to ake the environmental review process work better n a national level. Abt's contract with HUD equires that they secure a national panel of xperts and I was asked to be one of these xperts, primarily from a local point of view. have a feeling that it results in part from y great interest in the historic preservation rea as it relates to environmental review processes. n any event, I agreed to do this without any nderstanding of the details. This is essentially five month project in which Abt. Associates sends o a panel bits of information which are then to be -13- CONSULTANT AGREEMENT REQUEST BETWEEN ABT. ASSOCIATES, INC. AND CARL ELLISON APPROVED South Bond Redevelopment Commission Regular Meeting January 2, 1980 6. NEW b. (continued... (Mr. Ellison continues) -eviewed and comments are to be sent back hrough the mail. There is to be one meeting .eld towards the end of the project, sometime .n the spring, in Washington, D.C. What I did not expect and what then becomes the subject of the .gender item is that Abt. Associates, Inc. has ent me a contract, an actual consultant agree- tent, which I did discuss verbally with [r. Butler. It would appear that Abt. ssociates, Inc. wishes to contract with me as an ndividual. I do have some rpoblems with this ince the apparent reason they asked me to ,articipate is because of my public role. Under he terms of the contract, not only will they eimburse travel and related expenses to attend meeting, but they will also pay me on an ourly basis. It seems to me that we should not ose the money, and essentially what I would ike the Commission to do is have me enter nto the contract in my public capacity with he understanding that any compensation for ctual time received, would be signed over to he Commission, so that as a result of the ontract, we won't lose the dollars. There are o circumstances in which I would want to be ompensated as an individual. Again, this is ased on the presumption that the basis for my election is my public position. I have erved on quote a few panels. I always prefer o do that in a public role and not as a rivate citizen. Nimtz: I congratulate you on this gnition. I think.more will be forth ng as the years roll along, because you really an expert in this whole thing. Donaldson made a motion to authorize and !ct the Executive Director, of the Depart of Redevelopment to enter into an agree- with Abt. Associates, Inc. for the ultation services, and any monies received efrom concerning time be assigned to the velopment Commission, seconded by Auburn and the motion was unanimously -14- South Bed Redevelopment Commission Regular Meeting January 2, 1980 mime 1'hetj were no progress reports to present to t e Commission. FLOOR DISCUSSIONS Mr. imtz: Mr. Ellison, is the trip still prop sed to Washington concerning the Odd Fell ws Building? Mr. Alison: At this juncture, it does not appe r that it is necessary. Mr. imtz:. If you do have to go, would I need authorization from the Commission to go or c3n I just go? Mr. llison: You can just go. If the trip does appear necessary, it would more likely be next month. The Cha# recognized Ms. Jeanne Derbeck: �p4e rrbeck: I am wondering why it does not necessary that you go to Washington abou the Odd Fellows Building? Mr. llison: I have reason to believe that when the State Historic Preservation Office meet on this matter, they will not forward the nomination to the Keeper of the National Regi ter. If the State does that, then presinably the matter would be settled without getting the Advisory Council, the State Historic Preservation Office or the Keeper of the Register involved in the determination. It would obviously appear that this would be the most efficient solution and less expensive to the taxpayer. I have had several conversations with the Keeper's staff, the Advisory Council staff, and with the State Historic Preservation Office, and the result of all those conversations appears to suggest that the matter is going to be resolved without our need to spend additional time and effort on this matter. -is- NO PROGRESS REPORTS WERE PRESENTED DISCUSSIONS CONCERNING ODD FELLOWS BUILDING South Band Redevelopment Commission Regular Meeting - January 2, 1980 FLOOR DISCUSSIONS (continued) Ms. rbeck: I don't like to drag out a topic DISCUSSIONS CON- which has probably been unpleasant for you CERNING KEVIN J. today, but I do think there are some loose BUTLER - POSSIBLE ends on this discussion of the Nemeth's admin- CONFLICT OF INTEREST istration memorandum about Kevin Butler which have not been answered, and I think the public deserves an answer. One is that on this smaller title insurance policy on the "hole ". Are you finding that you have to have this replaced? Mr. imtz: We have asked for bids and I beli ve we have received the policy, which has peen requested. Ms. rbeck: You mean that you have awarded that. Mr. llison: That is correct. A letter was writ en to the two remaining title companies requ sting written quotations to replace the poll ies for the bank and hotel ( "hole "). I beli ve that both companies had a date of December 20, 1979 to give us those quota- tions. Both arrived and the quotes were $850.00 and $895.00. We simply took the low quote, accepted it, and issued a Notice to Proceed to Abstract Company of St. Joseph County, Inc. Ms. rbeck: The question is now is the premium going to be refunded by Michiana Title Corporation for the policy that was not used? Mr. imtz: I do not know if it has been refunded as o F to date. Ms. erbeck: In the memorandum the question was rais d ... suppose there was difficulty in obtaining the efund of the premium, how can your attorney act or you to get the premium refunded when he is a so a member of the Michiana Title Corporation? Mr. llison: Ms. Derbeck, the memorandum discusses the 3o called disgorgement issue. Presumably that is one of the issues, I gather, that the outside coup el would examine. -16- South Bind Redevelopment Commission Regular Meeting - January 2, 1980 FLOOR DISCUSSIONS (continued) Ms. Derbeck: That is an issue you didn't ever. bring up. In case it becomes some kin of.an issue between Michiana Title Corporation and the Commission, there is a conflict of interest, is there not, in having an attorney who just happens to work for Michiana Title Corporation again? Mr. Ellison: How do you mean—that we do more business with Michiana Title Corporation? Ms. Derbeck: Does not the Commission see a conflict of interest in having their attorney rep esenting them against Michiana Title Corporation should it become necessary? Mr.Pllison: Obviously, we have to await word froM our outside counsel. Ms. erbeck The Mayor raised that point in his Memorandum. Mr. imtz: Let me explain the concept of title insurance to you. I, as an independent lawyer, put in a request to one of the companies for title insurance. They then issue what they call a pre- liminary policy, or commitment that they will issue a policy. My name and my law firm is not mentioned at all on that policy. When a policy is issued, it is directly between a title company and the person buying the land. Redevelop - men wouldn't be a part of this at all. My inde- pendent client wouldn't be in there at all. When a policy is issued, it is a contract between the title company and the buyer. It will be a policy between Rahn Properties and the title company that the title is alright. Ms. Derbeck: I understand that, but you still have an instance here where it could have happened... that you would have legal counsel if Michiana Title Corporation had refused to refund the policy. Mr. Butler: I could answer that question very readily, but that is why I am not doing it ... precisely for the reason that you are suggesting—the special counsel is going to have to answer that question; 1) whether there is need for replacement of policy and return of premium, and then 2) that being the case, the Commission would have to address itself, if they determine that "yes" the policies had to be replaced, whether the money has to be returned. -17- South B d Redevelopment Commission Regular Meeting - January 2, 1980 FLOOR DISCUSSIONS Mr.lButier continues... the Commission would have to ss itself as to how to go about that. Is. Derbeck: There was another suggestion made :hat (I am not being an advocate to the Mayor—or raking a side because it is a very complicated .ssue) I feel should be answered—because there rere items in that memorandum which should be Brought up and answered. I forget just exactly Low it was said but there was some kind of uggestion that perhaps the independent developers, rho are going to independently order the title work, could think that the thing to do is to hire Rchiana Title. 1r. Ellison: It has been stated several times publicly that no judgement has been made by either the bank or the hotel relative to the actual ssuance of the policy, and there has been some .ndication that quotations either have been sought ,r are going to be sought sometime before next pring from both of those entities. There is no ,vidence at this point to suggest that the bank �r the hotel has in fact done business with [ichiana Title Corporation relative to those itles. We would not have any control over the ,ig policies. Is. Derbeck: Maybe so, but this does not answer he issue in that people might think that it is he thing to do. [r. Nimtz: Mr. Butler has already stated that .e had spoken to Mr. Newman, of Michiana Title orporation, not to issue a quote or write a olicy on the big project. As I understand it ommissioner Cira and Commissioner Robinson objected on November 16, 1979, when Mr. Butler directed that o further policies be issued for Redevelopment hrough Michiana Title Corporation) objected because hey said it was cutting down on competition, and hat they felt that his having a minority interest houldn't prevent Michiana Title from writing olicies. That his 13% interest wasn't a conflict f interest, etc. I really think your question s academic. sm South Be d Redevelopment Commission Regular eeting - January 2, 1980 FLOOR DISCUSSIONS (continued) s. Auburn: I think the issue Ms Derbeck s bringing out is good, and I think it is omething that Mr. Butler and the rest of us ave discussed. All of us have tried to do usiness and set up the Commission in such a ay that it is not an issue. The question is, f the developer looks at that coming into outh Bend, do they automatically assume that the lace to do business is where we all do business, r what we all own, because that would give you the nside track in getting things approved by the omission. I would hope that what comes back nd what we have talked about with the Michiana itle Corporation (not doing business with evelopers), would satisfy that. r. Richard Hill: We have discussed that par- ticular issue earlier in terms of whether the cope of special counsel would include looking t what the Commission, or the action of the Commission, has taken relating to Michiana, and ave special counsel address the issue of whether at does take it out of the conflict situation. ut I would think that really what it comes down o is looking at what steps the Commission has aken and then having outside counsel determine Nether that is adequate. . Derbeck: A very important point that yor Nemeth's memorandum stressed.that this s. the potential to jeopardize some downtown velopments. Nimtz: The Commission's staff has had some cussions with the regional counsel of HUD. ically, he has said he is not getting involved local issues, that he was satisfied with the lacement of the policy, and as far as he was cerned. that ended the matter. is. Derbeck: I agree that there was not a sub - >tantial amount of money involved but I am not >ure that really makes a difference. It is the LDDearance of a conflict that makes a difference. -19- South Bed Redevelopment Commission Regular Neeting - January 2, 1980 FLOOR DISCUSSIONS (continued) [r. Ellison: The question is whether the :omission has dealt with the matter openly, ublicly, and in a reasonable fashion. ibviously, any time you go*to the step of ppointing outside counsel, it is very clear hat the Commission continues to deal with the latter in a reasonable fashion. Ms. Derbeck, 'ou may know that a matter of this nature is -ery complicated. When there is a tremendous ifference of opinion, the only thing a person an do is essentially rely on the system to .elp it solve the problem. So, the motion hick was made this morning to seek assistance 'rom the Circuit Court Judge is part of a ontinuing Commission process to resolve the atter. While there might be feelings that he Commission do other things, certainly he Commission should be judged very reasonably t this point. . Robinson: I believe some of us on this mission feel that there was.a mistake le, and anybody who doesn't make a mistake not doing anything. r, Butler: Ms. Derbeck, in terms of the omission having been forced to make this ssue public, Mr. Ellison had a press conference, nd made the matter public a couple of days fter Mr. Nimtz received the letter from r. Wagoner. . Derbeck: Yes, but Mr. Wagoner would probably ve gone ahead and made it public anyway. Butler: The matter was resolved between Wagoner and the Commission prior to the xt meeting. Is that not a correct statement? Derbeck: This has been a very publicized ter that I think people are concerned about, I feel they deserve to have these questions wered and you answer the questions your own In a case such as this, on behalf of the tic, I would like the correct answers. I o had a few discussions with Mayor Parent he agrees somewhat with former Mayor Nemeth's orandum. Do you think that the action today acceptable to Mayor Roger Parent? -20- South B Regular FLOOR Redevelopment Commission ting _ January 2, 1980 IONS (continued) Mr. Hill: Yes. I think that Mayor Parent's position more than anything else, has to be independent towards counsel and advice. I might add that I would support some of the concerns expressed in terms of the selection process, and I do think the kinds of things discussed in Ms. Auburn's motion will very likely be considered by Judge Montgomery in his selection process. I feel very comfortable with that action being taken. Larry Ford: What is your progress on the ury Tull this year? [r. Ellison: I think in 1980 it should, in some ,espects, be a more productive year than 1979. learly we are at a point where there is great omentum and great anticipation. With respect o the mall, my guess is that we will see some rogress in 1980. We probably will not see all he development tied down in that time period, ut we will probably see at least part of it tart actual construction in the spring. he question is how do we go about the details f what the elements are in causing those things o become a reality. I think 1980, from the tandpoint of the mall, is a year of opportunity or us to continue progress. I think we are oing to find substantial achievement during his year as long as we can maintain a good trong working relationship between the Commission, ity administration and the public at large. don't have any reason to believe that those elationships will not occur. . Nimtz: The only issue which concerns me is Elation, which is a very difficult factor. r. Hill, it has been very good to have you attend ur meeting; please feel free to join us anytime. e welcome your advice and suggestions. 8. NEXTICOMMISSION MEETING The 41ext regularly scheduled South Bend Redevelopment Comm ssion Meeting will be held on January 18, 1980, at 1 :00 A.M. -21- PROGRESS PROJECTED FOR CENTURY MALL FOR 1980 NEXT COMMISSION MEETING South Bond Redevelopment Commission Regular Meeting January 2, 1980 91 ADJOURNMENT Thee being no further business to come before the Conmiission, TIr. Robinson made a motion that the meeting be adjourned, seconded by Mr. Donaldson, and the motion was unanimously carried. The meeting was adjourned at 10:05 A. M. t Carl Ellison, Executive Director -22-