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HomeMy WebLinkAbout09-09-19 Community Investment �4SOU�HB \ . U ~ C w a PEACE 1865 OFFICE OF THE CITY CLERK KAREEMAH FOWLER, CITY CLERK COMMUNITY INVESTMENT SEPTEMBER 9, 2019 3:31 P.M. Committee Members Present: Gavin Ferlic Committee Members Absent: Regina Williams-Preston, Dr. Oliver Davis, Sharon McBride Other Council Present: Tim Scott,Jo M. Broden, John Voorde, Karen White, Jake Teshka Other Council Absent: None Others Present: Lisa Horton, Dawn Jones, Bob Palmer Presenters: Jitin Kain, Mike Noland, Andrew Kostielney Agenda: Dan Buckenmeyer-Community Investment Department Kenneth Herman-J.S.K. Bill No. 19-51- Waiver of Non-Compliance for JSK Development Inc./Ireland Hospitality LLC (Holiday Inn Express Hotel) Bill No. 19-52- Waiver of Non-Compliance for JSK Development Inc./Southhold LLC (Marriott Hotel) Bill No. 19-53- Waiver of Non- Compliance for Development Inc./Southhold LLC (former Hall of Fame) Bill No. 19-54- Waiver of Non-Compliance for the LaSalle Apartments LLC Bill No. 19-51- Waiver of Non-Compliance for JSK Development Inc./Ireland Hospitality LLC (Holiday Inn Express Hotel) Bill No. 19-52- Waiver of Non-Compliance for JSK Development Inc./Southhold LLC (Marriott Hotel) INTEGRITY' SERVICE'ACCESSIBILITY JENNIFER M.COFFMAN BIANCA L.TIRADo JOSEPH R MOLNAR CHIEF DEPUTY/DIRECTOR OF OPERATIONS DEPUTY/DIRECTOR OF POLICY ORDINANCE VIOLATION CLERK EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227 W.Jefferson Blvd.I South Bend,Indiana 46601 I p 574.235.9221 I f 574.235.9173 I www.southbendin.gov •CITYOFSOUTH BEND OFFICE OF THE CLERK Bill No. 19-53- Waiver of Non- Compliance for Development Inc./Southhold LLC(former Hall of Fame) Mr.Dan Buckenmeyer,Director of Business Development,Department of Community Investment with offices on the 14th floor of this building stated, I am here today to present a few requests for waivers. So, as we all know, the tax abatement payment process is folks come in and get an abatement. Every year the Department of Community Investment starts in spring, works through a process of managing compliance that is done through a number of different documents that go to a number of different places. Our key document is the CF1. Compliance Form One (1), which I will note that our team has a zero (0) defect rate with. We were one hundred percent(100%)this year. We were one hundred percent(100%)last year. I think some of you recall in 2018 there were a few waivers that came in and we were batting cleanup for a few meetings to do some waivers at that time, but we have fixed the process in the Department of Community Investment and in the City for making sure we have all those forms in. There are other forms that need to go into the County, unfortunately, our team as much as we do, frankly, to manage communications to the tax abatement recipients and so on, and assure they're in compliance, we don't have visibility into the County Offices, specifically the Auditor's office to know when those or if those have been received. We have seventy-five (75) abatements out there right now as we speak. So, having missed four(4) actual pieces of paper out of that, I think there's a pretty darn good hit rate. I think out of seventy-five (75), there are a few forms for each. So, we're asking for a little help for our friends here and I'm going to take you through who we're talking about.The first set,the first three (3) are all the same firm, it's JSK Development. At a high level, all the projects we're bringing through to you today brought in over 32 million dollars in private investment for these four (4) total projects, created one hundred twenty-one (121) new jobs. The Department of Community Investment is supporting these and just supporting the request for these waivers on behalf of these folks. We want them to continue to invest in South Bend. We want South Bend to be viewed as business friendly. You know,help them just kind of work through just this little patch here. These are some before photos of Ireland Hospitality. This is down St. Joseph just south of Ireland Road and Michigan.You can see that we did the resolution in 2015. It was a six(6)year phase in.Almost 7 million dollars in private investment, thirty-six (36) new jobs. Today it looks like this. It is actually right across the street if you will, or the parking lot from the new Menards where Councilmember Teshka is going to be doing that ribbon cutting tomorrow night. In any event, it's visible from the bypass, great location, great facility, smoke free, four (4) floors, eighty-two (82) rooms,twenty-five(25) suites. Five(5)handicap accessible rooms. So, a gorgeous facility. Again, one(1) form was not sent in,but these are some pictures of the inside and again thirty-six(36)new employees there. Mr. Buckenmeyer asked, (Speaking to Mr. Kenneth Roman, Executive Vice President for JSK) And that opened up last May is that correct? Mr. Roman replied, It was in July. Mr. Buckenmeyer continued, The second one on the list here, it's hard to imagine or remember it looking this way,but this is next door or was next door to the former Hall of Fame. A nine(9) year phase in, over$12 million, almost$12.5 million in private investment. Seventy-six (76) new jobs and the gorgeous new Courtyard Marriott. You were telling me that this won an award, best built award in the Marriott system nationwide. So, if you haven't been in there, it's fantastic. Five (5) EXCELLENCE ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld i South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 2 CITY OF SOUTH BEND OFFICE OF THE CLERK floors, one hundred thirty-two (132)rooms, eight(8) suites, car rental. It's just a beautiful facility. They're adding, as I understand it, some meeting rooms on the first(1st)floor right now. So, again, have coffee there if you haven't already. The final one(1)for JSK,is then the former Hall of Fame. So, we, the City, sold the Hall of Fame to JSK Development about a year ago. We know they're still working on the future use of that. I've had a lot of conversations and so on, and we're helping wherever we can. That was a two (2) year vacant building type phase in. So, again, these three (3) together, it was the form three twenty-two (322)-RE that didn't make it to the Auditor's office. I know they had some personnel changes and so on, that may have affected some of that. I'll allow them to talk for a moment, and unless you have any further questions for me on these three (3) particular ones. Councilmember Gavin Ferlic stated, So,just confirming, outside of just not filing paperwork, have all the criteria for the tax abatement been met? Dan Buckenmeyer replied, Exceeded, yes. Councilmember Gavin Ferlic asked, Just want to make a general statement, you know, relative to when I started on Community Investment, maybe 2012, 2013. And we used to bring seven (7) eight (8) nine (9) ten (10) eleven (11) companies and I think it's while we want to be perfect, I think having two (2) companies for this year is still really good progress, and we understand that things just happen sometimes, and, you know, deadlines get missed, but we have this process to rectify that when it happens. So, I'll leave it at that but open up to any questions anybody might have. Councilmember John Voorde stated, I just wanted to compliment Community Investment because you're doing apparently, so much better a job than the past where there might have been a dozen (12). Mr. Buckenmeyer stated, It would be wrong if I didn't recognize Angelina Billo who is really the muscle behind this. Councilmember Karen L. White asked, What has been the rate of business for those two (2) locations?The Marriott and the one(1)on Michigan in terms of any vacancies that you might have had since you've been open, but also your relationship with the Century Center because you're directly across from them. Kenneth Roman, Executive Vice President for JSK, 247 N. Dixie Way, South Bend, IN stated, You were asking how many businesses we've had. So, when you say vacancy, are you referring to the retail space in the building? Councilmember Karen White replied, I'm looking more towards your occupancy right now, but you can also throw in the retail information as well. Mr. Roman stated, The hotel is performing very well. We're ramping nicely. We'd like to be ramped above one hundred percent (100%). Market Index we're just under one hundred-ninety- five (195) to two hundred (200). Performing at a slight financial loss here today but the numbers are promising. We do have some retail space on the first (11 floor of the Courtyard that hasn't been leased yet. We're going to be converting some of that to meeting space for the hotel. We're EXCELLENCE I ACCOUNTABILITY I INNOVATION INCLUSION I EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 11D 574.235.5567 www.southbendin.gov 3 410 CITY OF SOUTH BEND OFFICE OF THE CLERK partnered with Century Center,but for very small meetings where the client just really wants to be in the hotel and have a small meeting. We're using that to accommodate them. So,the relationship with the Century Center is great. I think that as far as the business center side of the hotel, that's going very well. Committee Chair Gavin Ferlic, stated, I think we've got a really good summary. Is there anything else that the petitioner would like to say? Mr. Roman stated, I just want to apologize for being one (1) of the two (2) companies this year that's before you. We made a big mistake,but financially, it would be a big hardship for us where the hotels are performing now. We had an executive that formerly handled all of this for us and he was excellent in doing this and we missed the mark internally, we apologize and ask for a one (1) time assistance with this. Concilmember Jo M.Broden asked,How about the third(3rd)property that we're looking at today, the actual Hall of Fame, any updates to that? Or are there any challenges that you'd like to bring to our attention? Mr. Roman replied, It's a financial challenge. It's an ongoing challenge to find a Mixed-Use tenant for that building. We still intend to move in and occupy a portion of that space,which is vey small in comparison to the size of the structure. We continue to fill inquiries on a regular basis, but haven't found anything significant or anything that's going to come to fruition at this point. So, it's more of a financial, well, it's operating at a financial loss basically. Committee Chair Gavin Ferlic opened the meeting to the public for anyone wishing to speak in favor or opposition to Bill No. 19-51, Bill No. 19-52 or Bill No. 19-53. Seeing none, Committee Chair Gavin Ferlic turned back to the Council for any further comment. There were no other comments from the Council on any of the first(1St)three (3)bills. Committee Chair Gavin Ferlic, stated that Bill No. 19-51,Bill No. 19-52 and Bill No. 19-53 would be sent to the full Council with no recommendation due to the fact that there was no quorum. Bill No. 19-54- Waiver of Non-Compliance for the LaSalle Apartments LLC Dan Buckenmeyer stated,The project here is LaSalle Apartments at the former LaSalle Hotel.The petitioner is Real America. Val Parado of Indianapolis who did this project. This one(1)was a ten (10) year phase in. Almost 13 million in private investment. I will allow them to expand on this, but I know they've made additional investments recently. At least nine(9) new jobs. There is the before(referring to the power point presentation,which can be obtained in the City Clerk's Office), and here is the after grand opening photo. Nine (9) floors, sixty-seven (67) apartments, eight-five hundred square feet(8,500) of commercial space on the main floor, which most of that is filled up with amenities for the residents there and so on. So, again, similar situation actually, in this case, the same form three twenty-two RE (322-RE), that same form that goes to the Auditor, this is typically a one(1) time form. In this case, because they were midway through the project the first (1St) year this form was required, because usually it is a one (1) time form, they didn't realize that it needed to be done a second(2nd)time. And again, as much outreach that Angelina and our team does to let them know, the County doesn't have that same outreach, so they weren't notified that there would be other compliance. I'll let them expand on that, but I think that again, it's certainly EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f574.235.9173 TTD574.235.5567 www.southbendin.gov 4 CITY OFSOUTH BEND OFFICE OF THE CLERK not malicious. Certainly,just an oversight of something that usually follows a different timeline or at least a one (1) time submission. We've got Roy Marshky and Jeff Ryan from Real America here. So, if you have any other questions for me, I'd be happy to answer them. Committee Chair Gavin Ferlic asked, Are all of their applications met? Mr. Buckenmeyer replied, Yes, exceeded. Councilmember Jo M. Broden asked, Just for clarification, the information is on the form, but the County doesn't have that same level of follow up correct? Right? Mr. Buckenmeyer replied, They do not have any functionality or anyone that goes out and proactively asks for that. We do it within our own department with the help of Angelina, and we actually contract with Crowe Horvath who does additional follow-up and intake for us, and that's part of the fix from two (2) years ago when we had so many of these. Jeff Ryan, Vice President of Development for Real America with offices at 10501 Hague Road, Fishers, IN stated, As Mr. Buckenmeyer said, we placed this building in service in December of 2016,and filed the three twenty-two RE(322-RE). The building was one hundred percent(100%) placed in service at that time,but it was not fully assessed. It was assessed over two(2) years, and with that, it was our mistake. We did not know that we needed to file that again. We have been filing the CF1 timely on it. It was just not knowing that there was a second(2nd) year because they only partially assessed it in the first (1St) year. It was not until we received our tax bill earlier this year, which we did pay in full to make sure that we stayed in their good graces, but very much we would ask for you to help us to correct this. Councilmember John Voorde stated, With the sixty-seven apartments, are you fully leased? Mr. Ryan replied, Yes. That has gone very well. The retail has been a little rougher for us. We've got three (3) great tenants in there. When we first started talking with the City back in 2015 when we started this, we had heard about a bunch of restaurants that might want to have a space here. None of that materialized, so we are running an event center there that has a great place for a wedding by the way. Also, we have what we call suite one(1). When you look at the building it's on the right side. We had a furniture company in there for a while, but they left. So, we've had a little rougher time on that which is also one of the reasons why it's important for us to reinstate the tax abatement. The event center had been ramping up. It's getting more used. Word of mouth is out and it's getting more advertising,but the apartments have been one hundred percent(100%) leased up as projected on that and has stayed well. Committee Chair Gavin Ferlic, stated, Seeing no other questions, we'll go to the public. Is there anyone here from the public wishing to speak in favor or in opposition to Bill No. 19-54? Seeing none, I apologize there is no quorum here so this will go to the Council with no recommendation With that, the Community Investment meeting is adjourned. EXCELLENCE ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld I South Bend,Indiana 46601 p 574.235.9221 f574.235.9173 TTD574.235.5567 www.southbendin.gov 5 ®CITY OF SOUTH BEND I OFFICE OF THE CLERK Respect Submitt d, Gavin Ferlic, Committee Chair EXCELLENCE ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227 W.Jefferson BvId South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 6