Loading...
HomeMy WebLinkAboutRM 02-20-81February 20, 10:00 A. M. Presiding Of 1. ROLL CAL (Members SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING 1981 icer: Mr. F. Jay Nimtz, President 1200 County -City Building 227 W. Jefferson Boulevard South Bend, Indiana 46601 Present: Mr. F. Jay Nimtz, President Mr. Lloyd E. Robinson, Sr., Vice President Mr. A. Peter Donaldson, Secretary Mr. Robert J. Cira, Assistant Secretary Ms. Paula N. Auburn, Member Legal Cdunsel: Redevelopment Staff: Community Development Staff': News Media: Guests: 2. APPROVAL OF MINUTES Mr. Kevin J. Butler Mr. Patrick M. McMahon, Executive Director Mrs. Ann Kolata, Deputy Director Mr. Kevin C. Horton, Deputy Director Mr. Paul Falduto, Administrative Assistant Mr. Jeff Rush, Job Targeting Assistant Mr. Rick Pitts, Acquisition Specialist Mrs. Angela Coar, Executive Secretary Mrs. Hedy Robinson, Secretary Mrs. Kathryn Baumgartner, Director, Bureau of Housing Ms. Jeanne Derbeck, South Bend Tribune Ms. Anne E. Thompson, Reporter, WNDU Mr. Richard Nemeth, Photographer, WNDU Mr. Charles Brown Mrs. Charles Brown Mrs. GlendaRae Hernandez Mr. John T. Phair Mr. Charles C. Clark On moti n by Mr. Robinson, seconded by Mr. Cira and MINUTES OF REGULAR MEET - unanimo sly carried, the Minutes of the Regular ING OF FEBRUARY 6, 1981 Meeting of February 6, 1981 were approved. WERE APPROVED South Bend qedevelopment Commission Regular Mee ing February 20, 1981 3. APPROVAL OF CLAIMS On motion by Mr. Donaldson, seconded by Mr. Robinson and una imously carried, the claims totalling $23,117.06 were allowed and ordered to be paid. The authorized claims re: REDEVELOPMENT REVOLVING FUND Payroll 1 -24 -81 to 2 -06 -81 $ 6,233.73 A. B. Dick Products Company 21.20 Baldwin Cooke Company 8.35 Irene G mmon 5.69 Interna Tonal Business Machines 34.20 Indiana Bell Telephone Company 233.68 Schilli g's Sales Co., Inc. 3.18 Special y Business Forms, Inc. 88.29 Smith P troleum, Inc. 26.16 URBAN REDEVELOPMENT FUND Federal Express Corporation P.E.A. IND. R -57 Ms. Ella Pope and Benjamin Stroud TOTAL $ 6,654.51 $ 59.13 TOTAL $ 59.13 TOTAL P.E.A. MONROE- SAMPLE AREA Abstract Company of St. Joseph County, Inc. Kevin J Butler Territorial Engineering Territo ial Engineering P.E.A. I EAST BANK AREA Kevin J Butler TOTAL TOTAL 2 $ 588.00 $ 588.00 $ 120.00 57.70 3,300.00 3,825.00 $ 7,302.70 $ 311.95 $ 311.95 CLAIMS APPROVED South Bend Commission Regular Mee �edevelopment ing - February 20, 1981 3. APPROVAL, OF CLAIMS (continued) P.E.A. IND R -66 Kevin J� Butler Parker, Brunner & Hamilton P.E.A. 4 312 LOANS $ 886.30 1,055.00 TOTAL $ 1,941.30 Dan Hor ne Kissell Company Ernest and Peggy Brock E. J. W ite and Conrad Damian Circle Uumber and Mary Jane Belmarez Big "C" Lumber and Domingo and Lucia Flores Color Tile and Domingo and Lucia FLores Factory Tile and Jeffrey Gibney C. E. Lee and Jeffrey Gibney K -Mart and Mary Jane Belmarez Wayne R chert Construction and Thomas C. Alders 4. COMMUNIOATIONS a. Let er from Mrs. Kathr Bur au of Housing, req ti o Standards and Loc TOTAL $ 225.49 653.99 4.73 917.00 555.57 1,487.50 128.02 578.44 76.25 288.53 1,343.95 $ 6,259.47 GRAND TOTAL $23,117.06 umgartner, Director of g Section 8 Rehabilita- es. Mr. McMahon: Mr. Nimtz, we have a letter from Mrs. Baumgartner. It relates to one of the items that we discussed at our last meeting with respect to Section 8 Rehabilitation Standards and Local Codes, and it is simply a clarification with respect to some language that we had in the previous correspondence with re- spect to, hand '- ra:i1s being required. It was stated in the last communication that local code requires hand rails on stairways of three steps or more. Mrs. Baumgartner is writing to inform us of the correct reading, that is that the code requires hand rails on stairways of more than three steps. She points out in her letter that it is simply a minor change. I don't believe it requires any action by the Commission, but it simply is a clarification with respect to the doc ment that you looked at previously. 3 CLARIFICATION OF SECTION 8 REHABILITATION STANDARDS REGARDING HAND RAILS South Bend edevelopment Commission Regular Meeting - February 20, 1981 5. OLD BUSINESS There w4s no old business to present to the Commission 6. NEW BUSINESS a. Com ission consideration requested for a tax abate- men request relative to an area commonly referred to s 404 South Columbia Holladay Corporation). Mr. McMahon: The first item relates to a tax abate- meni request that we received with respect to 404 Sou h Columbia. The project is being developed by the Holladay Corporation. Mr. John Phair is with us thi morning. As you know, Mr. Phair has also been inv lved in the development of the River Glen., Office Building adjacent to this property. This is a piece of 1roperty that is located between the River Glen Off ce Building and Lowe's, and it is the last remain- ing parcel on Block 6. The recommended action by the Commission is before you I would direct the Commission to the second pagE of this report. As we note in the explanation section, the Staff has reviewed the information that has been submitted by Columbia Place Associates with res ect to the impact of tax abatement on their pro for a or their ability to do the project. We have fou d that the granting of tax abatement will have a significant impact upon their ability to set po- tential rents within that structure at a reasonable figure that might be pursued in South Bend success- fully at this point in time. We also note the im- pact of industrial revenue bond financing on the rent structure. In our opinion we feel that the gra ting of tax abatement will affect those rents by approximately $1.00 per square foot, and we feel that is rather substantial. We feel that the cur- rent package without tax abatement or IRB will leave then with.a figure of roughl -.r $13.00 per square foot, and we would agree that is rather difficult. The suggestion made by Columbia Place Associates is that "without tax abatement or IRB financing, in all lik lihood, the project would not take place, at least at this time under these economic conditions ", and we would not dispute that based on our review of tihat information. 4 THERE WAS NO OLD BUSI- NESS TO PRESENT TO THE COMMISSION South Bend qedevelopment Commission Regular Mee ing - February 20, 1981 6. NEW BUSINESS a. Mr.lMcMahon continues... We also make the observation that an argument can be nade in favor of the petitioner, noting that prior development in the area received either five - yea or ten -year abatements, and that the success of Block 6 is related to the continuous availability of the abatement inducement. With respect to the abo e, we feel that the abatement is for purposes of rekindling interest in the area, but not for the pur ose of continuing subsidy. However, the question remains as to when an area ceases to be blighted. In this particular case, should we turn it down, we would be implying that the area is eligible for tax abate- ment through the first six of seven parcels as they are developed, but then restrict it from the seventh parcel. We feel that this may be an arbitrary de- cision, should we choose to go that route. Let me bri a it down to the bottom line and summarize it. We spent quite a bit of time reviewing this particu- lar petition. Looking at Block 6 there is no question in cur mind, and I am sure in the Commission's mind bas d on the action previously taken, that Block 6 a num er of years ago was definitely blighted and that it vas blighted for a number of years before any activity took place. The inducement of tax abate- ment and other inducements that have been offered through Redevelopment have been the catalyst for causing that block to turn over. We think that up to this point there has been no policy that has said wher a block becomes unblighted, but certainly at SOME time that becomes the case. But there has been no information that has been put forth either by the Cit Council or by the Redevelopment Commission which has provided any developers or real estate people in the community with any type of background or guide as to when they can expect to receive abatement with res ect to an area like Block 6 and when things have mov d along to the point that abatement is no longer goi g to be available. In light of the fact that all of the parcels over there have received tax abatement in the area and this is the remaining par- cel and in light of the fact that there is no question that it was at one point blighted and that the induce- ments that have been offered through tax abatement haVE contributed to the fact that those six other dev lopment have occurred, we think it would be arbitrary for us to limit it now that we come to the seventh par- cel. We think that it would be in the Commission's 5 South Bend Commission Regular Mee �edevelopment ing - February 20, 1981 6. NEW BUSIINESS a. Mr.IMcMahon continues... interest and the City Council's to document a policy whereby people know up front at what point in time those tax abatement incentives are no longer going to be offered. In other words, when it goes from a blighted to an unblighted situation. We are cur- rently working with the City Council and will be meeting with them next Monday to review somewhat of a final proposal by us in that regard. We are suggesting, in the future as we get into areas such as Nonroe- Sample and some of the others that we are considering tax abatement for, that we put a cut -off date into that designation or that acknowledgement that tax abatement is available or will be offered in those areas, so that there is no question to any - one who is considering doing development over there, exactly when that inducement is going to be gone. I thi k this would have been a little easier to con- sider had something like this been done a number of yea s ago with Block 6, but not having had a track record or background with respect to this, I think it is the type of thing that naturally evolves as you go through any program. Because of the fact that tax abatement definitely has served to induce that dev lopment in Block 6, in that six or seven pro- perties have already received it, the Staff is recommending to the Commission that tax abatement be granted on this last parcel as well. Mr. Robinson: Pat, how many of those parcels received a f ve -year abatement and how many received a ten -year aba ement? Mr. McMahon: Four of them received five -year and two of them received ten -year abatements. The two that rec ived ten -year abatements would be the River Glen Office Building and Crowe Chizek & Company. I think the Council as well recognizes the problem with the timing on a blighted designation, as to when it is not blighted, and they agree that some ground rules sho ld be established so that it is clear to everyone inv lved as to when an area would evolve out of a bli hted state. That has not been the case on Block 6 o viously. Mr. Cira: They allow five years and ten years? 6 South Bend edevelopment Commission Regular Mee ing - February 20, 1981 6. NEW BUSINESS a. continued... Mr. McMahon: Previously the State Statute allowed five years. The Legislature a year ago changed it to en years, and since then everything submitted is subject to that ten -year abatement process. I think the five -year abatement ran through 1979 and the first part of 1980. Mr.lNimtz: Mr. Phair, the Chair recognizes you. Mr. Phair: My name is John Phair and my associate is harles Clark. We are both partners in the Col mbia Plaza Associates, who will be the owner and builder of this project. I will only talk for a minute because Pat has summarized what I was goi g to say. This is a picture of the building Cofie Associates pre ared, and I have a final set of working draw- ings if anyone would be interested in seeing those. We vould like to begin construction on or about the first of March. It is about a $1,900,000 project, a 2 ,000 sq. ft. building on two floors. We expect it vill create approximately 60 new jobs with an annual payroll in the neighborhood of $900,000. Of the $1,900,000, approximately `1,650,000 would be spe t in the local economy for labor, material and building supplies. Just to add a couple of things rel ted to Block 6, I think the tax abatement has beer a very crucial determinate in the feasibility Of Each building down there, including the Karl King Tow rand all buildings have been granted a tax abatement. Our own experience with the River Glen Office Park, which is adjacent to our proposed building, in spite of the fact that we do have tax abatement we still have the highest rentals in town and are forced to do that because of current costs. Wit out tax abatement the net rental area in the building you see here would be leased at a_minumum of 113.05 a square foot. You can recognize that this is well above market conditions, and at this lev 1 it is our position that the project would not be feasible and, consequently, would not be built at this time. I might also add that all of the public or quasi- public facilities, that is str ets, walks, sewers, water, street lights, etc., all will be paid for by us and installed by us with our own money. 7 South Bend edevelopment Commisssion Regular Mee ing - February 20, 1981 6. NEW BUSINESS a. continued ... Mr. Nimtz: What type of tenants will you have? Mr. Phair: We think it will be similar to the tenants we lave in the adjacent building. I think that about one-half of our tenants are coming from existing build- ings and the rest are new tenants to the community. We are in negotiation with a tenant, although we have not ling signed yet, who will take one -half of the building and the lion's share of the people would be moving here from Indianapolis, expanding a local office. I sincerely hope that works. Pat is familiar wit some of the tenants we have talked to who we thought were going in our first building, and as the economy got worse, a couple of them disappeared. But fortunately it has rebounded to the extent where we are about eighty per cent occupied in that one. Mr. Nimtz: I am sure you have made a thorough study of this before you have gotten this far, probably you feel there is still a demand for office space in down- towr South Bend? Mr. Phair: At this time, yes. Ms. Auburn: I would like to know what the rent in the other Block 6 buildings is. Mr. Phair: Our existing buildings? Ms. Auburn: That and others like the Whitcomb & Keller Building. Mr. Phair: We were in negotiation with a tenant who is coing into the Whitcomb & Keller Building at $10.00 per square foot (that was an insurance agency). Our rent varies a little by floor and river view. Our least expensive is $10.25 and the most expensive is $11.50. Mr. McMahon: That's in the River Glen Office Building? Mr. Phair: Right. Ms. Auburn: If you start construction, when do you expect that space to be rentable? Mr. Phair: We hope it will be available by the first of September. 8 South Bend edevelopment Commission Regular Meeting - February 20, 1981 6. NEW BUSINES a. continued... Ms. Mr. Mr. ed 1 that sec( Auburn: Next September? Phair: Yes. Cira made a motion for tax abatement to be grant - or 404 South Columbia (Holladay Corporation) and the staff report be approved. The motion was nded by Mr. Robinson and unanimously carried. b. Commission approval requested for a Non- Profit Rehabilitation Grant to St. Augustine's Parish, Dio ese of South Bend -Fort Wayne, Inc., in the amo nt of $10,000.00 for a house located at 1013 West Jefferson Boulevard. Mr. McMahon: Item 6(b) is a request for a non- profit Rehabilitation Grant for St. Augustine's Parish which will be in the amount of $10,000.00, and it will be for the property located at 1013 Wesi Jefferson Boulevard. Mrs Baumgartner has received all of the pertinent inf rmation and has noted in her letter that the tot 1 cost of rehabilitation is estimated at this point at $17,261.40. The difference over $10,000.00 obviously is going to be addressed by the parish or by he Diocese. Mrs Baumgartner: This is a new group participating in he Non - Profit Group Program. They have been wor ing on this particular project for about six mon hs now with the Diocese and with members of the par sh. I feel that they have made the commitment thal they will be able to furnish any funds above. the $10,000.00 figure either from their parish cof ers or from the Diocese, and I would therefore rec mmend approval. Mr.lNimtz: Who is in charge of St. Augustine's now? Mrs, nam( f ron Mr. St. Baumgartner: I'm not certain of the priest's We have been dealing with Kenneth Jameson their Finance Committee. Donaldson: Do they have a name other than the Augustine Parish? 0 COMMISSION RECOMMENDS URBAN DEVELOPMENT AREA DESIGNATION FOR 404 SOUTH COLUMBIA (HOLLA- DAY CORPORATION) South Bend Fiedevblopmeht Commi'ssi on Regular Meeting - February 20, 1981 6. NEW BUSINESS b. continued... Mrs. Baumgartner: No. It is going to be a parish activity. It is going to be their Lenten project and people are going to donate their time and skills in order to bring this up. Mr. Robinson: What is this project going to be for? A house? And then what is going to happen? Mrs. Baumgartner: Then they have to sell the house to a low to moderate income individual, usually at a r duced rate so that it is compatible with their income. Mr. Robinson: Suppose they didn't comply with sell - ing the house to a low or moderate income family and the could turn a buck. Does anyone have any control other than they wouldn't get any more grants? Mrs. Baumgartner: First of all, they signed an agree- ment that they will do this, and I would imagine if the do not, it can be turned over to the Legal Depart- ment and it can be pursued in that way. Mr. McMahon: It can be litigated, and obviously we would not consider them for .further activity. Mr. Nimtz: Kathy, are they like Renew and the other gro ps? Mrs. Baumgartner: Not in the experience level. Mr. Nimtz: It is going to be the same type of activity as cther groups who have been operating? Mrs. Baumgartner: Right. Mr. McMahon: The intent is to have a non - profit group that pursues this type of activity. Mrs. Baumgartner: I don't believe they are thinking of an on -going project, this isjust what the Parish wanted to do and it is in their neighborhood and they are interested in preserving their neighborhood. Mr. Robinson: Kahty, approximately how many of these gro ps of people have an on -going project? Mrs.1 Baumgartner: About four. W South Bend Commission Regular Mee �edevelopment ing - February 20, 1981 6. NEW BUSINESS b. continued... Mr. McMahon: I think dollar wise, if I recall what is submitted right now for the CD application, it would allow five or six of them in 1982, and what was funded this year is probably in that same range. Mr. Robinson: With the economy such as it is and the amount of unemployment, I think one of these days we are going to have to start looking at it fron the aspect that it is fantastic that you know peo le are going to donate their services, but at the same time they are ruining the opportunity for individuals to make a living, and I think it is goi g to have to be considered. Mr. McMahon: If that activity was going to happen wit out this grant, I would say you are right if we were displacing activity that would otherwise acc r, but I think that the nature of the program is that this is activity that would not otherwise occ r. The program is not designed to compete with other private entities. Mrs. Baumgartner: They are obligated to hire pro- fes ionals for those items that members of the parish cannot get building permits for. For example, electrical, plumbing and heating require a building certificate before any type of money would be Yeleased. Particularly in the trades, I think the3 will find they need to go to outside constractors. We ave a lot of non- profit groups that do one or two houses because that is as far as their interest goes in the program. We really have only one prime mov r in the program, and that is Renew, Inc., who COME to us year after year. Mr. McMahon: Just with this activity and prospective activity, if there are seven this year it amounts to $70,000, as they are all about $10,000. On the other hanc with respect to the rehab, it is close to $1 million, the non- profit grant is a very small percent- age Mr. Donaldson: That's true, but just way next year we two more. South Bend Commission Regular Mee �edevelopment ing - February 20, 1961 6. NEW BUSIINESS b. continued... Mr. McMahon: We are only funded at a certain level. The e can be a dozen groups, but we only have so muc money to give out. Mr. Donaldson: In other words, if you have twelve and with the amount of money we have we can only giv out grants to six? Mr.jMcMahon: Right. Mr. Robinson: I understand what you are telling us. At the same time we have to look beyond our own noses. Now you have the schools building a house a year, you have other entities doing this once a year. It doesn't amount to much, but you add up the pay of all of this and it is getting to be quite sizable. It is a heck of z lot of work in our area where we need it for epo le who need it to make a living, and I am saying we Ere going to have to start looking at it in the fut re as to how many people are really going to get inv lved and how many dollars we are talking about bec use I am, like Pete, very concerned about the sit ation and where it is going to. Mr. not Mr. all be Cira: The percentage is so small now. There is much that can be done with it. Robinson: I understand, but when you add them together, Bob, that is when it starts getting to problem. Mr. Nimtz: Robie, I agree with your point, but from my experience with Southold on some of these things, now that houses are in such bad shape that nobody with private capital wants to venture into the thing be- cau e it is too risky, they don't do it, so down it com s. Mr. Donaldson: What you are saying is that a pri- vat contractor would not want to put the money into it o rehab it. Mr.�et Nimtz: They feel there is too much risk involved to into it. 12 South Bend edevelopment Commission Regular Meeting - February 20, 1981 6. NEW BUSINESS b. continued... Mr. Robinson made a motion to approve a Non- Profit COMMISSION APPROVED A Reh bilitation Grant to St.'Augustine's Parish in NON - PROFIT REHABILITATION the amount of $10,000.00 for a house located at GRANT FOR ST. AUGUSTINE`; 101 West Jefferson Boulevard. The motion was PARISH FOR 1013 WEST sec nded by Mr. Donaldson and unanimously carried. JEFFERSON BOULEVARD c. Commission approval requested for awarding of con- tra is in connection with the South Bend Home Im- provement Loan Program in accordance with recom- men ation of the Bureau of Housing. Name Contractor Amount Lois Hurtle Shamrock Exteriors $3,538.00 416 S. Wellington Car ie Lee Gibbs Shamrock Exteriors 4,850.00 1341 N. Freemont Mr. McMahon: We have two approval requests before us recommending awarding of contracts in conjunction wit the Home Improvement Loan Program. One is for a L is Hurtle, 416 South Wellington, and the second is for Carrie Lee Gibbs at 1341 North Freemont. In bot cases Shamrock Exteriors is recommended to be the contractor, the amounts are $3,583.00 and $4,E50.00 respectively. In both cases you will find in our paper work that Shamrock was the low bidder. Mr. Nimtz: Is Mr. Brown here in regard to something lik this, or is this the proper place to recognize him. Mrs. Baumgartner: Is it in regard to these contracts or o contracts in general? Per. Brown: Contracts in general, and these too be- cause I was not allowed to bid on these houses. I have been shut out from a lot of houses that are being bidded. Pair. Nimtz: The Chair recognizes Mr. Brown. Did you bid n these or were you asked to? Mr. Brown: I wasn't even asked. My name is Charles Bro n, and what we have here, these two houses in 13 South Bend Commission Regular Mee �edevelopment ing - February 20, 1981 6. NEW BUSI c. Mr. lBrown continues... particular, we haven't been allowed to bid, we haven't been requested, there has been no advertisement or nothing. They are selecting certain contractors in there. I am the only minority contractor out there and they are taking a select group of contractors and this is who they are giving jobs to bid on. Mr.�Nimtz: Are you presently working on any particular con racts for us now, Mr. Brown, and how many? Mr. Brown: I have one that I will be starting on and I hive one that I will be starting on next month. Mr. Mr. Mr. Nimtz: How large of a crew do you have? Brown: I have five men. Robinson: Is Kathy going to talk on this? Mrs. Baumgartner: What you have before you are not bids per se, they are proposals for a home improvement loar which are solicited by the homeowners themselves. The3 are given our list of contractors which includes individuals who have the State Contractors Financial ForR on file. This list is given to the individual who has received a home improvement loan and they are then free to contact any individual on the list, or any other contractor who is willing to do the entire work and who will fill out the financial appli- cation. They are given a time deadline by which they mus get their proposals into us and then we accept the e proposals after the homeowner has obtained them. Mr. Mrs, Mr. for thi Cira: Was his name on that list? Baumgartner: Yes. McMahon: Kathy, is that the process you follow all of the loans where the homeowners are paying back. Mrs Baumgartner: Right. All of the Home Improve - men Loans. Mr. McMahon: Under what circumstances do you take bid l? Mrs Baumgartner: On the Grant Pro-gram, and pre - vio sly on the 312 Loan Program. 14 South Bend edevelopment Commission Regular Mee ing - February 20, 1981 6. NEW BUSINESS c. continued... Mr. Donaldson: Suppose the names of the contractors that you submit to the person that want their houses rehabilitated, if they are not allowed to bid, then may e there is a contractor on the list that could haVE done it cheaper than this one. Mr. McMahon: Kathy, you are suggesting that there is no bidding process. Mrs. Baumgartner: I am saying that these are not bid . Mr. McMahon: It is up to the homeowner to select fron that list whoever they want to work with? Mrs Baumgartner: Exactly. Mr. Donaldson: Suppose they select one that has the highest bid? Mrs Baumgartner: What the people select is a mini- mum of two individuals to go out to their house to sub it proposals. Mr. McMahon: Do they contact them directly or do you make that contact? Mrs Baumgartner: They contact them directly. Mr. McMahon: So they have to at least get two people to submit proposals, they could get ten? Mrs Baumgartner: Sure. Whatever they can get in the time period allowed is fine. Then they bring the pro osals into us, we analyze them and make the re- com endation you see here. Mr. Cira: Kathy, don't you feel that if they could bid on them Mr. Brown would be more competitive and pos ibly get the job done? Mrs Baumgartner: Certainly, but as soon as we be- gin to bid things you put into motion a lot of very sti f requirements, including the wage decisions and including the formal bid procedure which takes two wee s, plus a week of analysis, plus then all of the Advisory Boards, etc. 15 South Bend edevelopment Commission Regular Mee ing - February 20, 1981 6. NEW BUSINESS c. continued... Mr. Cira: The other thing about it, Kathy, is that wit all of these contractors you have to abide by rul s and regulations or you can't stay on the job. Mrs.1 Baumgartner: Certainly. Mr. Cira: You know as well as I know that some of youy people can suggest, "why don't.you call John Doe or Bill Smith up, he does good work for us," and I don't think that is fair. You are going to haVE contractors who are just going to drop out of the picture saying, "I don't have a change to bid ". I don't think that is a fair way of doing business. Mr. McMahon: I can understand perhaps how it got to the point where we don't take bids when it is a loan and it is basically the homeowner's money. On the other hand, I understand why we provide then with a list and they would pick and we re- qui e them to get at least two bids. Would there be any problem, so that someone like Mr. Brown who might not be getting too many calls, could you provide the contractors with a list of those peo le who are receiving loans so that they know who is going to be getting the money and they can makE a phone call to them and say, "we are avail- ablE to bid that work and have done work before "? Mrs. Baumgartner: Certainly, there would be no pro lem with that. And I would say further that if Mr. Brown had had a problem with this, I would havE been more than happy to discuss this before it ad gotten to this point. But no such objection has been raised to me in my office to this point and this is the first time I am hearing something to this effect. Mr. Cira: This is not a fair way of doing this. The job should be bid on with whatever contractor who would like to bid on this job. Mr. McMahon: I wouldn't say the word bid, but they sho ld have the opportunity to know who got a loan and who they can call to submit a quotation. Mr. Kira: This is very demoralizing for an inde- pendent contractor. 16 South Bend Commission Regular Mee �edevelopment ing - February 20, 1981 6. NEW BUSIINESS c. contlinued... Mr.lNimtz: The Chair recognizes Mrs. Brown. Mrs. Brown: We were told that the homeowners were not allowed to choose their contractors, they had to take whoever Redevelopment assigned. In fact, there was one particular case on Brookfield Street that this girl did not want a certain contractor in her house, but he was made to do the work against her wishes. f•"Ir . lCi ra : Who told you that? Mrs.l Brown: The homeonwer herself. Mr. Brown: Also last year, the reason HUD got into a lot of trouble, we had a house on Studebaker, they had two or three contractors in there who they sent out. They had one of your inspectors who was recom- mending certain contractors for particular jobs. I won't state his name. Ile was recommended for this job on Studebaker Street, he did a bad job, plus he never finished. We were told that all the houses would not go to a particular contractor, they would have to be bid on. There are some houses being issued out to the contractors right out there at the Bureau and I am not getting in on them, this I know. Mrs. Baumgartner: No contracts are signed or awarded without them coming to the Redevelopment Commission. And I really feel if you felt that this was going on at the Bureau of Housing, I would have appreciated it if you had mentioned it because certainly if I am not aware of something there is nothing I can do to rectify it. Mr. McMahon: First, Mr. Brown, I hope you understand we do have a couple of different types of programs tha go on here. Mr. Mr. don' bidd and of t sue rown: Yes, I know. cMahon: When we give someone a grant and they have to pay it back, then we go through a formal ng process here where we advertise in the paper he whole thing. But, when it is a loan, and many ese are loans, then the property owner has to pur- hat. 17 South Bend Commission Regular Mee �edevelopment ing - February 20, 1981 6. NEW BUSINESS c. continued... Mr. Brown: I have just finished six houses here this pasi year which were given out to advertisement and to the lowest bidder. I bid against about ten or twelve other contractors. I bid on one job where I was the lowest bidder but did not get the bid. Their reason for refusing me this job was they say I was 20 per cent low, so they could not give it to me. Another contractor, who is one of the lousiest contractors going, it's people like him that got the program in tro ble, he bid these jobs so low and he was not able to do them and this is what got them in trouble with HUD They turned right around here on a house on Kal y Street - they took the bid away from me for the simple reason they say this particular contractor is over 25 per cent lower than I am and they awarded it to him. Why is it when it is in my favor they give it to another contractor and when it is not in my favor they still hand it to another contractor, both of hem being white. I am the only minority con- tra for out there that is doing any extensive work and I have less than 5 per cent call backs, while thi particular contractor's call backs are from any - whe e from 35 to 40. Mr.�Nimtz: Kathy, do you want to reply to that? Mrs Baumgartner: I would like to reply just in terms of this particular contractor's reputation. We have had no problems with him as a general contractor. The work that he has done has been inspected by ourselves and the Sub- standard Department, and has met the sta dards that the Bureau requires. I would like to ake one point. I think Mr. Brown brought up a ver good point and I wish that he would have brought it p further if he felt that he was being excluded. Wha I would personally like to do in terms of my own sta fing is to investigate this from a personnel prob- lem standpoint and will then get back to the Commis- sioi and report to you what I did find and in what action the Bureau did take, if in fact this is true. Mr. ins wit Mch1 you Nimtz: Mr. Brown, let me ask you this. This )ector that is recommending somebody, is he still i the Department? You will tell me or Mr. ihon who the person is after the meeting, will please? In South Bend qedevelopment Commission Regular Meeting - February 20, 1981 6. NEW BUSINESS c. continued... Mr. Brown: I sure will. Mr. McMahon: We have never at a previous meeting got into debating one contractor versus another, and we don't want to today. I think what the Com- mis ion certainly wants to do is make certain that you feel you are getting a fair shake. We set up rul s to make certain that everyone is getting a faiv shake. These things aren't always in place, and sometimes; they come out of place. Mr. Brown: What I have noticed out there seems to be ome kind of personal vendetta to get rid of min city contractors. Mr.�Nimtz: Not as far as we are concerned, Mr. Bro n. Mr. Brown: I am just telling you how I personally feel. I am the only one who is left, and like I say, right now it seems like there is some personal venc etta to weed me out of here. I really don't thi k I am wanted in the program. Mr. McMahon: In the case of the loan situation, I think that the only recommendation that should come from the Bureau of Housing is, that list. And if there is someone who doesn't merit doing the work, they shouldn't be on the list. But if that list goes out, that should be the list. Secondly, I think that it would be for the benefit of the property owner that those contractors who have done work for us in the past, and have a good track record, receive notification when we approve loans so that they might have an opportunity to contact the homeowner. Would you see any problem with that Mr. Butler? Mr. Butler: No, Pat, I don't. I think that is a goo suggestion. Mr. McMahon: It is not as though there are five hun red contractors - there are not that many avail - abl . Mr. Cira: Listen, Pat, why do we have to recommend any ody? You can go out and get your own people to do �he work. l'i South Bend Commission Regular Mee Jedevelopment ing - February 20, 1981 6. NEW BUSINESS c. continued... Mr. Butler: Bob, let me interrupt just for a moment so that we know where the ground rules are. Basically, as I understand the process, these matters are sub- mit ed to the Redevelopment Commission for review and approval, not under any statutory requirement or even at this point under requirement of ordinance with re- spect to the loans. My point being that basically what the tommission and the staff of the Redevelop- meni Department can do is make suggestions to the Bur au of Housing. Mr. McMahon: It formally has to go through a body that has contracting power, and two choices in the Cit would be the Board of Public Works and the Re- dev lopment Commission. If I am not mistaken, HUD doe require it to go through a body such as that, it can't be done internally at the Bureau and re- ferred down to HUD. I understand why when it is a loar the homeowner goes through the process them - sel es and calls thomever he may wish. Now we will haVE it set up so that he can also receive a call from other contractors. What I don't understand is that if I was a homeowner with one of those loans and I got three or four quotes, but I personally just don't want to deal with the low man, since it is my loan and I am paying it back, shouldn't I have the option to o with the second man if I would sign something and send it back to you and say in writing, "I don't wani to go with that low man but want to pay the price of having the second man in my house. Mrs Baumgartner: That provision is being written int our contracts by the Legal,Department now. Up until this time that provision has not been avail - abl and the specific incident Mr. Brown is talking abo t was a bid job. Mr.lMcMahon: It was a grant and not a loan. Mrs Baumgartner: It was a loan, but the loan had been formally bid and so this particular contractor was then the lowest and best bidder, and there were no provisions in the contract that had anything to do with homeowner preference. In essence, what the homeowner did by allowing himself to be a part of the bid process was they waived their particular preference in favor of the actual bid process, and it went to the lowest and best bidder. 20 South Bend Redevelopment Commission Regular Meeting - February 20, 1981 6. NEW BUSIINESS c. contlinued... Mr. 1cMahon: As you know, when I came on board here I haJ limited background on what was done previously. The Dnly clear understanding that I have is that policies have changed from time to time and things were very confused. If that situation happened today, it w uldn't be bid, I would assume? Mrs. Baumgartner: If it was a 312 Loan it would be bid until the Legal Department writes a new set of contracts because it is still Federal money and we are still protecting it highly. The Home Improvement Loan Program, which these two contracts are, are private money. The Community Development Department just backs this money with a loan guarantee, so these are actually two direct loans from one lending in- stit tion to these two individuals. Mr. IcMahon: For the benefit of Mr. Brown, I think that there have been some changes that have been made even in the short time that I have been here with resp ct to how this is done. Also, the Commission has made some policy changes that I think have been to the benefit of the property owner and to the benefit of the ontractor. One of the policy decisions that they stru gle with, that was off and on last Fall but now is a rule here, is that previously anyone who is more than 20 per cent low wouldn't be awarded a contract, but iow the Commission has taken the position that even though you may be 20 per cent low, if you have done work before and it has been good work and there has iot been a performance problem, you will get the cont act. So now we are getting into another area that hopefully, will be clarified somewhat with respect to some of the policies that are being set up b the Legal Department and I hope you have patience with us while we go through this. Mr. rown: A few months ago I was refused a contract when I had the lowest and best bid. I also had an adde dum written in. One of the contractors was alto ed to alter his bid after the bids were set. I pointed this out to Kathy, it was at 2122 South Will'ams, the specs read, "install aluminum siding rear porch ", and it was supposed to be the whole hous . 21 South Bend Commission Regular Nee Jedevelopment ing - February 20, 1961 6. NEW BUSIINESS c. contJinued... Mr. Nimtz: I would like to make clear to you what Mr. McMahon said before, that if you have a good track record and you are more than 20 per cent low, we have disregarded that regulation and you will get it. Mr. Brown: I can point out where this certain con- tractor's track record is not correct. There is a house on Warren Street where the lady's plumbing is not working right today and she has reported it several times. He had a house on West Calvert Street, he ent in there and did such lousy work that the womaln called me in to correct it. Mr. Nimtz: We would be pleased to hear these complaints if ou would make the complaints in the proper place, Mr. Brown. Mr. Mrs. that trac shou past vuln get basi Mr. ag ap we we r part recc said of c repu time you one righ sona plai ira: Is what he is saying right? Baumgartner: No. There are a number of call backs we are taking care of that this particular con - or is involved in. I really don't think this d be an issue of pointing out bad work in the because I am sure, Mr. Brown, that we are all very rable in things like this and if we do wish to own to basics, I am sure we could get down to s on nearly all of the contractors. Zobinson: Mr. Brown, might I say this since we involved, and I remember this period of time. I there was one time where you happened to be the ^ent low bidder and you were below 20 per cent and fused to give you the jab because of requirements. was a lot of discussion at the meeting even though ?fused you. Then the next meeting came up and this icular contractor happened to be the employer of ^d and I was the one who complained like crazy and "well, if he is an employer of record it is none it business what his bid is, as long as he is a table employer who we used in the past", and at that we changed the rules or the guidelines or whatever vant to call it, and that is why you were refused ind he got the other - simply because we did change t at that point in time. If I can hear on a per - I basis where it is just me and you and your com- its, that is one thing, but this is not the place 22 South Bend R development Commission Regular Meeting - February 20, 1981 6. NEW BUSI ESS c. Mr. .obinson continues... for the complaints. I still want to know, since they have been so many changes, if the same homeowner who orrows this money at a low cost, could they do any art of that work themselves? Mrs. Baumgartner: Yes. Mr. Robinson: How much of it? Mrs. Baumgartner: The portion that they can explain to us that they are capable of doing in a very re- stricted time, usually thirty to forty -five days. Mr. Robinson: Other than what the homeowner can do himself, I can't understand why the prevailing wage or the area standard wage that we have can't be a requirement for all work other than what they can do themselves. Mr. McMahon: I have just been confused by what you have said in this regard. What a person does himself and what he hires out is a function of local codes and oth r things like that. I would assume, whether he gets his money from us or a bank, he is operating under his own ground rules. My understanding was, whether it was a loan or whether it is a bid situation, for the thi gs that are done by a contractor the wages apply in bot cases. Mrs. Baumgartner: I believe so. I believe that was a slir of what I said early. We refer the contract over to hirley Roe and then Shirley invokes whatever EEO pro edures are necessary, based on the contract. Mr. McMahon: Just because it is a loan, if it is a con ractor that is doing it we still check the wages. Mrs Baumgartner: I believe so. Mr. Cira: Why can't we handle a loan the same way as a g ant? Mrs Baumgartner: It is very time consuming. Per. Cira: Yes, but Kathy, that is a fair way of doing it �nd you would eliminate these problems. 23 South Bend Commission Regular Mee �edevelopment ing - February 20, 1981 6. NEW BUSINESS c. continued... Mrs. Baumgartner: I have no problem with that. Mr. Cira: The think I don't like about it, and I am not saying that it is going on, is I feel there could be some conniving going on between the contractor and whoever is releasing the loans. If it were a bid Situation, there would be no possible way that could hap en. Mrs Baumgartner: I have no problem with that. The onl3 thing I can mention is that when HUD came in on the 312 review, they felt we had taken the fairness sta Bard to the absurd by bidding the 312 Loans. I agr e with you wholeheartedly, and I do want to say that once again we will deal with the problem that you brought up. I would like to meet with you (Mr. Brown) whenever it is convenient for you and I will address the problem that may or may not exist at the Bur au and report back to the Commission. Mr. Nimtz: The Chair will direct that Mr. McMahon meet with Kathy and review this entire situation and give us a report within the next two meetings, if at all possible. Kevin, I think you should have your thoughts in on this matter too because I think there might be some question in that these are private loans and the part of government is guaranteeing the loan, just like a VA loan, and if it isn't repaid how much you can tell the private lender and the bor owes as to how he can spend his money. Mr. Butler: I would imagine that the Legal:'Depart- ment is reviewing all of this and it probably would be a duplication for me. Mr. McMahon: They are in the process of going through the whole thing and coming up with some guidelines. Let me talk with them and I will sit down with Kevin and we will review it. Mr. Nimtz: Mr. Brown, we are pleased to have had you here this morning and bring this to our attention. We have had some difficulty with inspectors who really are not our employees, but who we supervise as well as the entire program, and the quality of some of these inspectors has been lacking. I think the City Admini- str tion has made a number of changes, but I am in- ter sted in who this inspector might be who you have 24 South Bend Redevelopment Commission Regular Meet'ng - February 20, 1981 b. NEW BUSINESS c. Mr. Nimtz continues... talked about, but I don't want you to give his name publicly here, but either to Mr. McMahon or myself. I want to emphasize to you that these two contracts this morning, these people are borrow- ing the money and they have to repay it. If they don't then the government agency steps in and repays it and so if the person is borrowing the money and it is his money, all he has to do is get two pro- posals as to the work being done. Mr. Brown: Do you think it is fair when an in- spector will point out, "hey, don't use this guy "? Mr. Nimtz: No, it isn't fair and we will look into it. Mr. Cira made a motion to award contracts in con- COMMISSION AWARDED CONTRACTS nection with the South Bend Home Improvement Loan FOR 416 S. WELLINGTON AND Program in accordance with recommendation of the 1341 N. FREEMONT IN CON - Bureau of Housing to the above mentioned people in NECTION WITH THE SOUTH BEND amounts as stated above. The motion was seconded by HOME IMPROVEMENT LOAN PRO - Mr. Robinson and unanimously carried. GRAM Commission approval requested for an amendment to the for Professional Services" with Territorial "Agreement Enqineerinq. Mr. McMahon: Item 6(d) is a request to amend the con- tract that we have had with Territorial Engineering. They are doing the survey work in the Monroe- Sample area and this adds five parcels to the list to be surveyed at a cost of $110.00 per parcel. Mrs. Kolata: 14hen they submitted their bid before the looked at all of the parcels that we were going to ave surveyed and figured out what the.cost was and then added.them up and came up with the average cost per lot. These parcels require more time and, the efore, they are asking for a slight increase. Mr. Cira: Do you recall that all of the other par- cel were $85? Mrs Kolata: No, they were $75. Mr. Cira: They all were the same though? 25 South Bend qedevelopment Commission Regular Mee ing - February 20, 1981 6. NEW BUSINESS d. continued... Mrs Kolata: Yes. The way that they arrived at that $75 figure is by adding up the individual charges and ther dividing by the total number of lots to be sur- vey d to come up with an average cost. Mr.lCira: How did they miss the other five? Mrs Kolata: the never gave them the order for those fiv . We have since decided that it would be to our ben i fit to get information on all of the lots. Mr. Cira made a motion to approve an amendment to the COMMISSION APPROVED AN "Agreement for Professional Services" with Territorial AMENDMENT TO THE "AGREE- Engineering for an additional five parcels in the MENT FOR PROFESSIONAL Monroe-Sample area. The motion was seconded by Mr. SERVICES" WITH TERRITORIAL Robinson and unanimously carried. ENGINEERING e. Set Public Hearing and Special Meeting for Mond Mar h 2, 1981 at 8:00 a.m. Mr. McMahon: We have a request to set a special meeting of the Redevelopment Commission for March 2, 1.981 at 8:00 a.m. The purpose of that meeting is for the final public hearing with respect to a tax incremental area in the East Bank and we are doing that on Monday, March 2, 1981 because that is the Iasi day in which we can file these things to be con idered to fall under the previous assessment year. Mr.lNimtz: Kevin, do we need a motion to set this? Mr. Butler: The motion would meeting for Monday, March 2, setting of the public hearing of rotice with respect to tha thal time concerning the East Fin ncing. be to set a special and to confirm the and the publication t public hearing for Bank Tax Incremental Ms. Auburn made a motion to set a special meeting for Monday, March 2, 1981 at 8:00 a.m. for purpose of the East Bank Tax Incremental Financing. The motion was seconded by Mr. Donaldson and unanimously carried. 99 SPECIAL MEETING SET FOR MONDAY, MARCH 2, 1981 FOR PURPOSE OF PUBLIC HEARING ON EAST BANK TAX INCREMENTAL FINANCING South Bend Commission Regular Mee �edevelopment ing - February 20, 1981 7. PROGRES1 REPORTS Mr. McMahon: With respect to the East Bank area, as you know thE meeting on March 2, 1981 will be the final action with respect to the Tax Incremental issue. Also, the pur- chase offers for those parcels that we will be acquiring as per the plan will be out today, so we can expect to hear a response in that regard in the very near future. In the onroe- Sample area we are in the process of the declaration for both the redevelopment area and the tax increme tal area. I would note to the Commission that next Mo day night this issue comes up before the Common Council for public hearing and we certainly invite you to attend. That public hearing is one of the main public hearing outside of that which is held here. Mr. Nimtz: The Chair would like to announce that unless there is some other difficulty, the March 2 meeting will also take the place of the March 6 meeting and the Chair directs that a proper notice be given to that effect. As previously noted, the Chair wants to put in the record that 50 years ago today he was I.layor of the City of South Bend and James DuComb was City Judge, and the City was in good ha ds. Ns. Der eck: May I ask if this new building in Block 6 will co Plete Block 6. Mr. McMahon: That is the last parcel. I believe that a number cf parcels have room for expansion of some of the existinr buildings, but there are no vacant parcels that remain unsold. Mr. Nim z: firs. Hernandez, I read your story in the Southea t News and I appreciate your support of the project and your comments. Ms. Aubdrn: It is an excellent news letter. Mr. Nimtz: Anything further? Mr. McMahon: Only one additional item, Mr. Nimtz and.I have discussed with the Mayor some of the aspects of Century Mall and we have come to an agreement that it would bc good to have a general update with respect to all of the various aspects of Century Mall with the Commission and the Administration and by the City Council. I believe it will be held within the next two weeks, but the date has not yet been set. We felt that it would be proper to review he project and discuss where we have been and 27 South Bend 01-development Commission Regular Meeting - February 20, 1981 7. PROGRESSI REPORTS Mr. McMahon continues... where we are at, and I would simply note that this will take place and you can expect a call once the Mayor and Mr. Nim z have come to an agreement on the date. Ms. Der beck: Did you say that that would be through the Cou cil? Mr. McMahon: The Common Council would join us as well, just to review the project. I would also like to introduce a new member of our staff, Mr. Ric Pitts. Rick has joined us and will be function- ing as cur Acquisition Specialist. Mr. Pitts has a strong background in real estate, has operated Nifong Realty and was the owner at one point, and has brought to the job many of the necessary credentials we need in order to functior in that regard. He is a realtor and has a broker's license and other licenses that are necessary in order to perform in that capacity. Mr. Nimitz: Welcome. Ms. Aubt : Welcome. Haven't you also redone the home on 6dest Wayne? Mr. Piths: Yes. 8. NEXT COMMISSION MEETING The nex Commission Meeting will be a Special Meeting NEXT COMMISSION MEETING at 8:00 a.m. Monday, Harch 2, 1981, and at that time we will also conduct the Regular Meeting. 9. ADJOURNMENT There being no further business to come before the Com- ADJOURNMENT mission Mr. Cira made a motion that the meeting be adjourned. The motion was seconded by Mr. Donaldson and una imously carried. The meeting was adjourned at 11:03 a m . W . Jay 11imtz -�esi'ttent ck M. cMahon, Executive Director