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HomeMy WebLinkAboutRM 01-16-81January 16, 10:00 A.M. Presiding C 1. ROLL CP SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING Ficer: Mr. F. Jay Nimtz, President L 1200 County -City Building 227 W. Jefferson Boulevard South Bend, Indiana 46601 Members Present: Mr. F. Jay Nimtz, President Mr. Robert J. Cira, Assistant Secretary Ms. Paula N. Auburn, Member Members Absent: Mr. A. Peter Donaldson, Secretary Mr. Lloyd Robinson, Sr., Vice President Legal Counsel: Mr. Kevin J. Butler Redevel pment Staff: Mr. Patrick M. McMahon, Executive Director Mrs. Ann Kolata, Deputy Director Mr. Paul Falduto, Administrative Assistant Mrs. Angela Coar, Executive Secretary Mrs. Hedy Robinson, Secretary Communiy Development Staff: News Media: Guests: 2. APPROVAL OF MINUTES Mrs. Kathryn Baumgartner, Director, Bureau of Housing Ms. Jeanne Derbeck, South Bend Tribune Miss Ann E. Thompson, Reporter, WNDU Mr. Les Howard, Photographer, WNDU Mrs. GlendaRae Hernandez On moti n by Mr. Cira, seconded by Mr. Nimtz and unanimo sly carried, the Minutes of the Annual Organiz tion Meeting of January 2, 1981 were approve c. On moti n by Mr. Cira, seconded by Mr. Nimtz and unanimo sly carried, the Minutes of the Regular Meeting of January 2, 1981 were approved. 3. APPROVAL OF CLAIMS On moti n by Ms. Auburn, seconded by Mr. Cira and unanimo sly carried, the claims totalling $80,905.28 were al owed and ordered to be paid. The authorized claims re: MINUTES OF ANNUAL ORGANIZATION MEETING OF JANUARY 2, 1981 WERE APPROVED MINUTES OF REGULAR MEET- ING OF JANUARY 2, 1 -981 WERE APPROVED CLAIMS APPROVED South Bend edevelopment Commission Regular Mee ing - January 16, 1981 3. APPROVA OF CLAIMS (continued) REDEVEL PMENT REVOLVING FUND Payroll 1 -1 -81 to 1 -9 -81 A. B. Dick Products Company Alcoholism Council Busines Systems, Inc. Busines3 Systems, Inc. Indiana Bell Telephone Company Mary Ja d /b /a M. J. Typesetting Postmas er South Bend Tribune The Urban Institute Smith Petroleum, Inc. Coffee 'rime Services Coffee 'rime Services TOTAL REDEVELOPMENT DISTRICT CAPITAL Travelm re Loews L Enfant Plaza TOTAL REDEVELOPMENT DISTRICT CAPITAL OF 1972 Gruen A sociates, Inc. TOTAL P.E.A. IND. R -66 Allied Construction Company Kevin J Butler Indiana & Michigan Electric Company Redevel pment Revolving Fund TOTAL P.E.A. � 312 LOANS Department of Housing & Urban Development Saint Joseph County Records Saint Joseph County Records Saint Joseph County Records Douglas W. Way Dan Hor ne 2 $ 6,240.65 39.50 92.25 15.16 85.84 316.42 9.00 44.17 59.40 10.45 67.58 26.65 26.65 $ 7,033.72 $ 236.00 229.74 $ 465.74 $ 46.16 $ 46.16 $ 144.48 200.00 111.38 21,398.92 $21,854.78 $14,950.00 33.00 38.50 33.00 375.28 481.80 South Bend edevelopment Commission Regular Mee ing January 16, 1981 3. APPROVAL OF CLAIMS P.E.A. 312 LOANS (continued) Color Tile & Mary Hankins $ 37.00 Armente and Bishop Miller & Aardvark Construction 3,049.00 Eckler -ahey Lumber Co. & Mary Hankins 21.35 The Kis ell Company 5.75 The Kis ell Company 3.50 The Kis ell Company .40 The Kis ell Company 6.36 The Kis ell Company 7.36 The Kis ell Company 77.09 The Kis ell Company 17.31 The Kis ell Company 2.50 The Kis ell Company 27.00 Herbert Herendeen & Tri -State Home Impr vement 2,733.00 Mrs. Ga son Mincy 83.19 South Bend Roofing & Aphrodite Pappas 350.00 Cardean Parker & South Bend Hardware 15.99 Great Lakes Heating & Air Conditioning and Ed Soltesz 2,240.00 Mattie Jalentine 74.50 Floyd W chowiak & Jeanne Welsh 385.00 Albert 1. Meyers & Jeanne Welsh 1,730.00 Albert and Anna Yerga & Jurtins Construction 14,707.00 Jack and Deborah Sherwood & Charles Brown Maintenance Co., Inc. 10,020.00 TOTAL $51,504.88 GRAND TOTAL $80,905.28 4. COMMUNICATIONS Mr. McN to the way que we succ way Dep this, a the Boa sion, ar mechani the May sioner' hon: We have only one item that should be brought ommission's attention. We have had a right -of- tion with respect to the First Bank Project that ssfully negotiated through the Indiana State High - rtment. Kevin, you should have gotten a copy of d I would assume it will require a transfer from d of Public Works to the Redevelopment Commis - then we will have to transfer through a similar m as the original deal with the First Bank and iot. I would simply like to note for the Commis - benefit that that has been accomplished. 3 South Bend redevelopment Commission Regular Mee ing - January 16, 1981 4. COMMUNISATIONS (continued) Mr. Nim z: The Chair directs that this letter be received and plated on file. 5. OLD BUSINESS There w s no old business to present to the Commiss on 6. NEW BUSINESS a. Commission a ment for pro of St. Jose Sample Area. roval requested to enter into an ssional services with Abstract C County, Inc., reaardinq the Monr oe- ree- Mr. McMahon: This and Item (b) are both to secure additional information with respect to the Monroe- Sample area, primarily the area south of Bronson Street where we have limited information with re- spe t to certain properties. We are asking per- mission of the Commission to pursue a contract with Abstract Company of St. Joseph County, Inc., and a copy of that contract is in your packet. Mr. $60 Mr. Cira: The cost of the title search will be .00 per parcel? McMahon: Yes. Mr. Nimtz: I will report to the Commission that the staff reported to me that this had been let out for bid. There were two bidders, Abstract and Title Corporation and Abstract Company of St. Joseph Cou ty Inc. (Michiana Title Company did not bid as it as not invited to bid). Abstract Company of St. Joseph County Inc. was the low bidder and I au t orized them to proceed since time was of essence. Mrs. Kolata: Yes. I also called the other Commis- sioners and received approval from them to award the contract to Abstract Company of St. Joseph County Inc. 4 THERE WAS NO OLD BUSI- NESS TO PRESENT TO THE COMMISSION South Bend Commission Regular Mee �edevelopment ing - January 16, 1981 6. NEW BUSaNESS a. continued... Mr. Cira: Kevin, what is the need for a $2,000.00 own Ors policy for each parcel. Mr. Butler: Basically that is the insurance cover- age Moreithan likely we will be paying more than tha in our acquisition of those parcels. We figure tha $2,000.00 insurance coverage is really a minimum and may increase if there are any properties of Sig ificant value. If we are buying a property for $40 000 or $50,000 we may at that time want to increase the coverage. Ms. Derbeck: Does that mean that the Redevelopment Commission is going to hold these policies if you don't own the land yet, why would you have it? Mrs Kolata: We have to identify who the owners of the property are before we can even begin to think about acquiring the property. Ms. Derbeck: I don't understand what the insurance is for. Mr. Butler: We are not getting insurance now, we are get ing commitments for insurance. Mr. Nimtz: The Title Company issues a preliminary policy guaranteeing you the title to a piece of pro- perty and will issue a final policy at the time we acquire the property. Mr. Butler: And it also shows whether there are mortgages or other liens on the property which we want to have released before we acquire the property. Ms. Derbeck: The parcels that have numbers on them, are they going to be surveyed? Mr. McMahon: Yes, the area that is outlined. Those are the parcels that are being researched at this time. Ms. Derbeck: Those that do not have any marks', on them will not be surveyed? Mrs. have side Kolata: Not under this contract. Some of the others already been surveyed and some are not being con- ed for acquisition at this point. 5 South Bend edevelopment Commission Regular Mee ing January 16, 1981 6. NEW BUSINESS a. continued... Ms. Derbeck: Does this mean that you are moving ahead with the Monroe- Sample area? Mr. McMahon: Jeanne, we have been moving ahead. through the planning process for a number of months now, This is an area that we are looking at, where we ivant some basic information so that we can evaluate how it relates to our overall plan. I would think that within the next four weeks we will be sitting down with the various pertinent parties to discuss the plan prior to formally bringing it to the Commission. We will be sitting down, for instance, with representatives from the Southeast PAC The Historic Preservation Commission and the Com on Council. This will provide us with some basic information so that those that are reviewing it an evaluate some of the things we are looking for It is background information and is done pri r to the declaratory process. Ms. Derbeck: Do you have any idea when you will sta t the process to declare this a Redevelopment Area? Mr. McMahon: We would like to within the next four weeks. We are going to have to have some meetings witi a number of people before that happens. Mr. Nimtz: Jeanne, I would agree with what Pat has saiJ in that there has been a lot of staff work being done and a lot of consultation with me and the Mayor. The plan is beginning to reveal itself now as to what is to be done. It is moving forward, but I don't want to give the impression that it has been standing still because there has been a lot of hours put in by staff and members of the Commission and by the Mayor. Ms. Derbeck: I just gather there is a little sense of speed, you're giving the Abstract Company a few extra days. Mrs. Kolata: They never asked me for extra days. When we asked for a bid, what we asked for was a pri e and a time frame in which they could perform thi obligation and they gave us that. We awarded South Bend edevelopment Commission Regular Mee ing - January 16, 1981 6. NEW BUS a. Mrs1 Kolata continues... the bid and if they are interested in more days I have not heard anything. I tend to doubt it be- cause we have been getting information from them on a regular basis I don't think that they are going to need extra days. We will address that for ally if they ask for it. Mr. Nimtz: The proper procedure here is that we have a motion to approve the agreement for pro- fessional services with the Abstract Company of COMMISSION ENTERED INTO St. Joseph County Inc. AGREEMENT FOR PROFESSIONAL SERVICES WITH ABSTRACT Mr. Cira made a motion to approve the agreement for COMPANY OF ST. JOSEPH pro essional services with the Abstract Company of COUNTY, INC. REGARDING St. Joseph County Inc. Ms. Auburn seconded the MONROE- SAMPLE AREA mot on and it was unanimously carried. b. Com fission approval requested to enter into an agree- men for professional services with Territorial Engin- eer ng regarding the Monroe - Sample Area. Mr. McMahon: This item relates to the same area, Mon oe- Sample. It affects the same property that we wer abstracting. We requested proposals to do sur- vey work in that area and the low proposal was sub- mitted by a firm called Territorial Engineering which ope ates out of Knox, Indiana. The principals in the firin have been from South Bend and have worked in this are , and I have had some personal experience with re- spe t to them with performing services for the City bef re and found that they have performed. With re- spe t to their submittal, they are substantially lower, ove all about $2,000.00, then the comparative offer by ang, Feeney and Associates, who we thought quite fra kly would get it. Due to the nature of the work we feel comfortable recommending them to the Commis - sio at this time for an award for this survey work. Mr.�Nimtz: You say they have done work in this area bef re? Their principals have? Mr.IMcMahon: That is correct.. Mr.Nimtz: Any questions? Ms. Derbeck: What sort of things will they be surveying? 7 South Bend edevelopment Commission Regular Meeting - January 16, 1981 6. NEW BUSINESS b. continued... Mr. vid- bu i Mrs. the Ms. Mrs, McMahon: The individual lots. They will be pro- ng us with boundary lines and the location of dings. Kolata: We will take the title commitments from title companies and provide a copy to the surveyors. Derbeck: For the same parcels? Kolata: Yes. Mr. Cira: Couldn't you get a combination of (a) and (b) bot ? Mr. Butler: Certainly. An abstract company could have a registered land surveyor on the staff, but none of them do. Mr. Cira made a motion to approve an Agreement for Pro - fes ional Services. with Territorial Engineering. Ms. Aub rn seconded the motion and it was unanimously carri COMMISSION ENTERED INTO AGREEMENT FOR PROFESSIONAL SERVICES WITH TERRITORIAL ENGINEERING REGARDING MONROE- SAMPLE AREA 2d. c. Commission approval requested for policies related to Section 312 Underwriting Standards per the recommendation of the Bureau of Housing. Mr. McMahon: Item (c) relates to some policies that have beep brought forward to the Commission with respect to the Section 312 Program. There are two basic policies that are being suggested. This comes before the Commis- sion because the Bureau does not have the ability or the authority to establish policies and it would be a Com- mission function to adopt these policies. In the first case, as it is highlighted in Mrs. Baumgartner's letter to us, the policy relates to the indebtedness of a client getting into a 312 package, stating that their total in- deb edness not exceed 70% for any approved client. As I understand it, this is a HUD recommendation. Previous to this time there had been no standard that was utilized and I think that it is very appropriate that some stand- ard be set. The second item relates to the debt that is associated with the property. It states that the debt should not exceed the after rehab appraisal of the prop- erty. Sometimes previously it had gone up to 105% and had not been limited in that regard. I personally feel NO South Bend edevelopment Commission Regular Mee ing - January 16, 1981 6. NEW BUS NESS c. Mr. McMahon continues... quite strongly that we shouldn't exceed the after rehab cost and feel that a guideline along this line will be very appropriate. Kathy, do you have anything to add to my comments? Mrs Baumgartner: Just that we did try to get the mos conservative reading from HUD as to how they int rpret the 312 package when it comes down to them. As you are aware, some of the approvals that we have mad have been countermanded by HUD because they have thr e representatives and they do not all have the sam standards. So that something like this would not happen to the city again, we wish to find the mos conservative stand by each of the three repre- sen atives and then adopt that as our policy so we will not be countermanded. Mr. Cira: We worked on the guidelines before. Mrs. Baumgartner: It is subject to interpretation. It' what the particular HUD representative wishes to inderwrite. Mr. Cira: Why did we wait all this time before we got into something like this? Mr. McMahon I think it was necessary first to estab- lisi a pattern, because they hadn't come forward and vol nteered information saying that we have a problem wit anything over 105% or with anything over 70% as far as the client indebtedness itself is concerned. Als , we were receiving a number of them back that precipitated an inquiry down there as to why. While HUD doesn't have any formal guidelines, we have de- ter fined their informal guidelines and this is what we're recommending be adopted. Mr. Butler: Kathy, under item (a) a percent indebt- edness shall not exceed 70 %, 70% of the after appraised value? Mrs. Baumgartner: No, of their gross income. Mr. McMahon: This is the client's personal indebted- ness. There is a HUD form right on the back of the le ter from Kathy that outlines how one determines what that indebtedness is and how the percentage is w South Bend Redevelopment Commission Regular Me ting - January 16, 1981 6. NEW BUSINESS c. Mrl McMahon continues... ca culated. It is not arbitrary by us, it is con- sistence with what they would do when they are making a calculation. I think there are a number of factors we may or may not add in and this specifies it. Mr Butler: Under the second item, is that related to ap raised value? Mr;. Baumgartner: Yes. Mr Butler: How is that appraisal made. We don't hi ,e appraisers do we? Mr;. Baumgartner: Yes, we have a number of appraisers that do work for the Bureau.;. I believe we pay $55.00 ea h. There is an option that the Bureau could per - fo m these appraisals themselves and not really absorb th se costs, but we have no one who is qualified and we felt it was better to have outside appraisers. Mr McMahon: The volume does not justify bringing a pe son on board at this point. Ms Auburn: It also seems like obtaining the outside ap raisal might be a check and balance to the depart - me t . COMMISSION APPROVAL OF Ms Auburn made a motion to approve the policies re- LOCAL POLICIES RELATING la ing to Section 312 Underwriting Standards. The TO SECTION 312 UNDER - mo ion was seconded by Mr. Cira and unanimously -: -. :':WRITING STANDARDS ca ried. d. Commission requested to amend the awarding of con- tracts previously approved on December 5, 1980, per the request of the Bureau of Housing. Mr. McMahon: It has been determined by the Legal De artment that in the case of these contracts that it was not and is not necessary to go before the Co mon Council for their approval. I believe Ann anJ Kathy can expand on that. It is only necessary that they be approved pending legal review. Mr Nimtz: Kathy, would you like to give us the ba kground? 10 South Bend Redevelopment Commission Regular Me ting - January 16, 1981 6. NEW BUSINESS d. continued... Mr;. Baumgartner: I can perhaps tell you the motive of this. The Legal Department has tried, in conjunction with the Department of Community Development ' to move along the Bureau's process in terms of how long it takes to approve some- thing. We have these contracts approved by our Ad isory Board, you make the formal awarding of co tracts and that is then taken to the Common Co ncil. You are talking sometimes of as much as a two - month span of time before a contract goes through all of these steps. A person may have gone through a month of Bureau activity, so from the day they enter the door until the da a contractor walks in their door with hammer ani saw they are talking four or five months. In order to speed things up, the Legal Depart- me it recommended that this be eliminated. I be- li ve that Eugenia Schwartz has approached Kathy Ce anski- Farrand on this subject and this is wh re the agreement has been reached. Mrs. Kolata: .I would add that the reasoning be- hi id this also relates to the ordinance that was being used to bring this matter before the Common Co ncil. It related to the Neighborhood Develop- me it Program, and this is not a Neighborhood Development Program function, and Eugenia Schwartz has stated that it is her opinion that it is not ne essary to take these contracts before the Common Co ncil. Mr. Butler: The ordinance setting up the procedure requiring Common Council concurrence only relates to the Neighborhood Development Program. Mr. Nimtz: Well, that makes a difference. Mr. Cira: How do we know that these are all legitimate bids? Mrs. Kolata: These are the ones we have already approved. Mr. Butler: Subject to Common Council approval and le al review. Now you are going to be asked to elim- in to the Common Council requirement. 11 South Bend Redevelopment Commission Regular Me ting - January 16, 1981 6. NEW BUSINESS d. co6tinued... Mrs. Baumgartner: Without that motion we are un -- ab e to go any further because we must then attach al the documents and approvals from the various bo ies. Mr, Mr Mr, thf Mr. Cira: This is going to speed it up a little. Butler: Yes. McMahon: Kevin, do you feel comfortable with recommendation? Butler: Yes, I have no problem. Ms Auburn made a motion to amend the contracts pre- viously approved on December 5, 1980, to delete the necessity for any Common Council approval. The motion was seconded by Mr. Cira and unanimously carried. e. Commission approval requested for the following Grant Pr gram Bid contracts in accordance with recommenda- tion of the Bureau of Housing, pending legal review. Name. Contractor Lu y Walker Shamrock Exteriors 30 North Laurel Be Bella Blain Charles Jurtin 10 North Adams Amount $ 6,920.00 12,314.00 Ev lyn Baker Charles Brown Main- 10,873.00 701 S. Bendix tenance Co., Inc. Mr. McMahon: The information with respect to those of er bids that were submitted is attached. I be- li ve that in all cases, with the exception of the la 3t one, that it went to the low bidder. Mr 3. Baumgartner: You might want to also note that in the case of Berdella Blain, 106 North Adams, the am unt of the contract is $12,314.00 and our grant li it is $11,000.00. By means of a number of family co tributions Mrs. Blain has been able to deposit 12 COMMISSION AMENDED CONTRACTS APPROVED DECEMBER 5, 1980, DELETING NECESSITY FOR COMMON COUNCIL APPROVAL South Bend Redevelopment Commission Regular Me ting - January 16, 1981 6. NEW BUSINESS e. Mrs. Baumgartner continues... $1,314.00 into a Redevelopment Escrow Account and that way has qualified for the amount of assistance. That is also the reason for the August 8, 1980 bid opening date and the reason why it is coming to you now. Initially a recom- me dation was made because they were both 20% un er the cost. Mr Cira: Kathy, let me ask you something. If Stickler is willing to do the work and does everything that Charles Brown is supposed to do and does it for $7,900.00, why don't you give it to him? Mr McMahon: Is there a non- performance or is he just busy? . Baumgartner: Right now he is busy. Mrs McMahon: Is there a non - performance problem? . Baumgartner: No. M6 Cira: I can't see throwing away $1,400.00. Mrs. Baumgartner: I can understand. The only tU ng that I am saying is that you have indicated to us that you would like the Bureau and the Ad- visory Board to maintain the 20% rule and you would make the recommendation. Mr McMahon: Then the Commission would decide ho to handle that when it came. Mr Cira: I am more worried about the 20% over. I as not worried about the 20% under. Mr;. Kolata: I haven't attached them but I have here the other specifications for the ones that ara for the two bids under, so if you would like to look at those they are available. Mr,IBut1er:: These are established contractors, th y have been doing work for a number of years. Ha there ever been a performance problem? 13 South Bend Redevelopment Commission Regular Me ting - January 16, 1981 6. NEW BUSINESS e. continued ... Mrs. Baumgartner Not with those two. Wilton is new to us and he is working somewhat slow, but other than that there is no problem. Mr McMahon: I would suggest that the Commission might wish to consider the low bid. Mr Cira: That is what I would say. Mr. McMahon: Kathy, I think that the last time th s was before the Commission we told you to come forward with it as the 20% guideline, and the Commission would decide whether or not to go to er. Mr Cira: You have no problems with performance wi h Stickler. Mr Nimtz: I think his reputation has been alright, as far as I know. Ms Auburn: One of the things we asked for on a co ple of other occasions where we have gone with th low bidder and they have been outside the 20% is for some kind of report back to the Commission on the final product. In other words, they run in- to problems with cost and have to come back with an Cher bid - was the quality up to our standards. Pe hags we can ask for the same kind of report back on this particular house. Mrs. Baumgartner: One comment I can make is that all of the contracts that have been awarded, either using the 20% or not using the 20% rule, the con- tractors have been able to hold to the cost and we have not had to have a change.order on any of the contracts, so I think that speaks for itself. Mr. Butler: Kathy, I think we also indicated when yoj received a bid that was more than 20% below you wo ld run it past the bidder to determine whether or not they may have misunderstood specifications, etc. Mr . Baumgartner: In this instance we talked to both Stickler and Bud Wilton, and they though that they had given us true and fair bids. 14 South Bend Redevelopment Commission Regular Me ting - January 16, 1981 6. NEW BUtINESS e. continued... Mr. Cira: made a motion to award the above mentioned co tracts as follows with one exception, that the on previously recommended to be awarded to Charles Br wn Maintenance be awarded to R. A. Stickler in th amount of $7,960.00. The motion was seconded by Ms. Auburn and unanimously carried. Name Contractor Amount Lu y Walker Shamrock Exteriors $ 6,920.00 Be Bella Blain Charles Jurtin 12,314,00 Ev lyn Baker R. A. Stickler 7,960.00 Mr Nimtz: Kathy, again I want to tell you, I think yo are doing a good job and don't get distressed or up et because we upset you now and then. Mr .Baumgartner: I certainly wouldn't. I just want to make sure we are doing things the way you want them do e. Mr Nimtz: Since you have taken over things are much be ter and the change in inspectors has helped con- si erably, so just don't get discouraged. Mr$. Baumgartner: Never. Mr Butler: That motion was subject to legal review. Ka hy, with respect to that, is the Legal Department re iewing them? Mr$. Baumgartner: Yes. f. Commission approval requested for Resolution No. 632 am nding Resolution No. 626 declaring the East Bank De elopment Area to be blighted and approving a Develo me t Plan and conditions under which relocation pay- melts will be made. Mr. McMahon: The next item on the agenda relates to the East Bank. It's a formal resolution amending the East Bank Declaratory to allow for the application of the tax increment statute. It would allow us to utilize tax incremental financing for the entire East Ba k area. We feel that it is an essential tool avai ab e to the Commission in the development of the East 15 COMMISSION AWARDED THREE (3) CONTRACTS UNDER GRANT PROGRAM APPROVAL OF RESOLUTION NO. 632 AMENDING RESOLU- TION NO. 626 FOR EAST BANK DEVELOPMENT AREA South Bend Redevelopment Commission Regular Me ting - January 16, 1981 6. NEW BU�INESS f. Mrs McMahon continues... Ba k Plan itself. It allows us to utilize that in cement toward the improvement of various public related items one would normally pursue through the offices of redevelopment. This provides us with a fu ding mechanism by which these items can be ad- dr ssed. I think you are familiar with tax incre me t, this process having been done once with the do ntown area, and I don't know if there has been an change with respect to that process or the im lication for the area over and above the last tine. So we will respectfully ask that the Com- mil&sion adopt this resolution. Mr. Nimtz: Kevin, do you have any comment on this? Mr. Butler: No. I have reviewed the resolution. Mr Nimtz: The proper motion is that Resolution No 626 be amended to read as set out in Resolution No. 632, right? MButler: I think just simply the adoption of olution No. 632 would be sufficient. MrI. Cira: Just what does this mean? Mr. McMahon: The tax increment statute allows a re evelopment commission or a redevelopment entity to utilize directly the increase of taxes that are generated in an area because of redevelopment activity having been there. In the case of the East Bank, if, as a result of our program we have a number of new buildings that are built or build- ings that are improved, the tax that they would be paying increases. That increase can be utilized by the redevelopment commission to offset the debts that are incurred when they go through the district. In other words, you can utilize it to offset the cost of street improvements, parking improvements or any ty e of activity that the redevelopment commission cai legitimately pursue. The costs associated with th m can be offset by this increment. It is one of th most effective tools, I think, that we have as far as our own self -help in redevelopment areas. It allows us to do things without a total reliance on federal dollars. 16 South Bend Redevelopment Commission Regular Me ting - January 16, 1981 6. NEW BUSINESS f. continued... Mr. Cira: This wouldn't be an increase in taxes, would it? Mr. Butler: It is a terrific device. We, of course, are on the ground floor in Indiana, and we have test litigation now before the courts. The statute was ap roved by the Circuit Court here and now is going th ough the appeal process. In other communities in of er states where this has been utilized it has been ve y effective for purposes of making the necessary im rovements. Mr. McMahon: Right now we have nearly every city in th2 State supporting us with regard to the court pro - ce s we are going through. Mr. Butler: I think that again commendation is due for- the City Officials and the Commission for having again been first in line in the State of Indiana to utilize and now the other communities recognize its' im ortance. Mr. Nimtz: Fort Wayne joined with us at that time to get it to the Legislature. Mr Butler: The City, the South Bend Community School Co poration, TRANSPO, the other taxing units that re- ceive tax dollars, all, of course, have an interest.. Th law suit on file'is being brought by one of those to ing units (TRANSPO), as well as by taxpayers. Mr. McMahon: The rationale is that over the long range they will benefit. Ms Derbeck: Have you gotten any new information about how soon you can expect a ruling from the Supreme Court on the litigation? Mr. Butler: No. At one point we were anticipating that it would be April, and now I would think that it will probably be May or June. I think the motion to co rect errors has been filed with the Circuit Court, that is the next step. Once the motion to correct er ors is denied, then the plaintiffs are open to file th appeal. 17 South Bend Redevelopment Commission Regular Me ting - January 16, 1981 7. PROGRE$S REPORTS Mr. McMahon: With respect to progress reports, I think through our regular business this morning we discussed the Mo roe - Sample area and the East Bank area where a great eal of the activity is. I would say under the framework of progress reports that we have recently filed our progress report with HUD with respect to the First Bank Center Project and that the project is moving along quite well. If you would like to Jeanne, there may be some s ecific figures you can get from Ann after the meetin ,should you want to fill that in. As you can see, they a e putting up the exterior curtain to the building and th bank portion has gone extremely fast over the last fm weeks. Prior to this time it was primarily being done o the hotel. Also, the steel framework is in pro- gress or the atrium area, and we are pleased with the progre s in that area. Ms. De�beck: What is the progress on Century Mall? Mr. McMahon: We will hope that we can come forward and say something positive in the near future. At this point cannot be specific. I_can say that the process is moving positively and that we would hope that in the near future we can expand on that. Action was taken at the Common Council meeting last week. They adopted an ordinance providing $200,000.00 through a revolving loan. fund w th the intention that the Odd Fellows be the first taker of that. We also have a private party that we are negoti ting with to add another $100,000.00 to that sum and we hope to complete that negotiation in the near future We would assume that the private party would step forward and identify themselves, we have not up to this point, we feel it is their prerogative. Ms. Deibeck: You mean add to the loan? Mr. McMahon: Yes, add to the loan. Like I said, it is their rerogative to step forward. Up until this point in our negotiation with that private party we have been saying we think the Council will provide us with the $200,0)0.00. Now that they have, I think that that can be ver quickly closed and we can pursue our negotiations in tha regard. Ms. De beck: Since the Council has provided the $200,000.00, do you feel that that actually permits you to go ahead with renova ion of the Odd Fellows Building? Mr. McMahon: No. South Bend Redevelopment Commission Regular Me ting - January 16, 1981 7. PROGRE S REPORTS (continued) Mr. Ni tz: We have to look over the contract and whether it is conomically feasible or not. This has been our big qu stion and I think Ms. Auburn raised that question even b fore she saw the Janotta Report. Ms. Auburn: I had the same questions about the economic feasibility of the proposal. Mr. McMahon: It provides some assistance. We will find out how much once we ask for a resubmission of the per- tinent economic data that the Commission will be review- ing. 4e are into that negotiation process and right now that i3 the card that we will be able to throw on the table to see what comes back from the developers. Hope- fully it wil.l..be more attractive and that we ;will .see more p sitive proposals than have been presented to the Commis ion in the past. Mr. Nitntz, I would like to report to the Commission that Pat and I were at the City Council Meeting for a number of hours Monday night, and the Claeys Candy Tax Abatement came up. One of the Council Members commented on the need to improve the guidelines. Mr. McMahon: I have had some meetings with the Council Commit ee in that regard and I think I raised all of the questions to them I would like them to think about. They are in the process of reviewing that. We have had input from the Chamber and input from some real estate devel- opers iround town and such. I think that the Council is also v ry cooperatively soliciting information from other communities as to how their programs are structured and I thin< that some further definition of the guidelines will b forthcoming to us within the next 30 days. I would ike to see that done before we see another peti- tion c me and so would the Council. Mr. Ni�ntz: They passed the Claeys Abatement, didn't they? Mr. McMahon: Yes. Ms. Detbeck: What is the present condition of the Odd Fellow Building? Mrs. K lata: The roof was repaired and the windows are boardel up. The former building manager does check it out on a periodic basis to make certain that there are no serious problems. There is anti- freeze in the pipes. 19 South Bend Redevelopment Commission Regular Me ting - January 16, 1981 7. PROGREJS REPORTS (continued) Mr. Mc ahon; It has been basically weatherproofed from t e elements during the period it has been unoccu ied. Mrs. Olata: Right. I don't see that there is any furthet deterioration. Mr. Ci6 : Is the roof still leaking? Mrs. K�lata: From the best of our knowledge that was re aired a year ago. Mr. Mc ahon: We haven't received any request to do any ad itional items from the gentleman who is check- ing it for us. Mrs. H$rnandez: I don't understand how tax increment works hen someone has tax abatement also. Mr. McMahon: Tax abatement and tax increment both start off from the position that whatever your taxes are when the program begins, you continue to pay those. The old taxes you have been paying, the existing tax base that you have before you get into either program still tays the same. The abatement and the increment only a plies to what you do over and above.the new im- provem nts. In the case of an abatement situation, the increm nt would be less and the increment would build up ove a number of years as opposed to becoming im- mediat ly available in the full amount. So in the first year, the first time when they pay their increased tax, if the abatement process would be in effect they only would iave to pay 5% taxes, and the increment would only be 5% 6f what we would have seen otherwise. Mr. Ni tz: Five percent of the new taxes, not of the old. Mr. Mc ahon: As an example, let's suppose a business previo sly was paying $20,000.00 a year in taxes and now as a r sult of the new development they will be paying, without abatement or increment, $50,000.00 a year in taxes. If they had abatement granted and they started paying the $20,000.00, the abatement only would apply to the $3D,000.00 difference. So in the case of the tax increm nt program, the money would build up over a long period of time as opposed to becoming immediately avail- able. NEI South Bend Redevel- opment Commission Regular Me ting - January.16, 1981 7. PROGRESS REPORTS (continued) Mr. McMahon continues.... It can only be used for legitimate debts for that re- development district and it cannot be used any other place n the city. It can't be used in other rede- velopment areas, it has to be in that redevelopment area and only for those improvements particularly tied into tat program. We wou d expect that it will be much more of a benefit to the property owners to participate in an increment program as opposed to abatement, based on their up -front cash requirements. The two tools are locally controlled and do not use federal funds or federal support. Mr. Buller: The.First Bank /Marriott Complex has both abatem nt and it is also in an increment area. Mr. McMahon: We have no program for the increment at this t me and any program that would be developed would have t anticipate the abatement. 8. NEXT COMMISSION MEETING The ne it Regular Commission Meeting will be held at NEXT COMMISSION MEETING 10:00 .m. February 6, 1981. 9. ADJOURNMENT There being no further business to come before the Commission, Mr. Cira made a motion that the meeting ADJOURNMENT be adjourned. The motion was seconded by Ms. Auburn and unanimously carried. The meeting was adjourned at 10:58 a.m. , Prl'.sident Porick M. 21 n, Executive Director