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HomeMy WebLinkAboutRM 08-06-93SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING August 6, 1993 10:00 a.m. Presiding: Roman J. Piasecki Vice - President 1. ROLL CALL 1308 County -City Building 227 W. Jefferson Boulevard South Bend, Indiana Members Present: Mr. Roman J. Piasecki, Vice - President Mr. Theo F. Sharp, Secretary Mr. Michael Donoho Mr. Philip Faccenda Members Absent Ms. Paula N. Auburn, President Legal Counsel: Ms. Jenny Pitts Manier Redevelopment Staff: Mrs. Ann Kolata, Director Mrs. Cheryl Phipps, Recording Secretary Mr. Michael Beitzinger, Economic Dev. Specialist Mr. Gabriel Okafor, Economic Dev. Specialist Mr. Thomas Eddington, Economic Dev. Specialist Mr. David Norris, Economic Dev. Specialist Bureau of Housing Staff: Ms. Mary Richmond, Assistant Director Media: Mr. Don Porter, South Bend Tribune Mr. Thom Howell, U -93 Others: Mr. Jim Cierzniak Mr. Michael Rippey, North American Golf Mr. Ernest Szarwark, Barnes & Thornburg Mr. Gunther Jordan, Exacto Inc. Ms. Barbara Jordan, Exacto Inc. 2. APPROVAL OF MINUTES a. Approval of Minutes of the Regular Meeting of Friday, July 16, 1993. Upon a motion by Mr. Sharp, seconded by Mr. Faccenda and unanimously carried, the Commission approved the Minutes of the Regular Meeting of Friday, July 16, 1993. -1- COMMISSION APPROVED THE MINUTES OF THE REGULAR MEETING OF FRIDAY, JULY 16, 1993 South Bend Redevelopment Commission Regular Meeting - August 6, 1993 3. APPROVAL OF CLAIMS Claims submitted for ratification and approval August 6, 1993: ADMIN 1993 Federal Express $ 76.00 South Bend Drafting 13.80 Tri- County News 49.17 Petty Cash Reimbursement 83.77 H. J. Umbaugh & Associates 777.50 Commercial Office Products 135.99 Scenic America 68.95 Ann Kolata 56.20 Total Admin 1993 $ 1, 261.38 STUDEBAKER BOND AWN Policemen's Federal Credit Union $ 20.000.00 Total Studebaker Bond $ 20,000.00 BOND ANTICIPATION NOTE Donna Lawrence Productions $ 98,301.00 The Troyer Group 25,000.00 Total Bond Anticipation Note $ 123,301.00 SBCDA TIF GENERAL Baer Barkley & Co. $ 2,865.00 McCloskey & Pitts 3,000.00 City Awning 185.00 Boiler & Pressure Vessel Div. 33.00 Peirce & Associates 145.00 St. Joseph Title Corp. 175.00 Englewood Electric 26.25 Howard Park Hardware 12.59 South Bend Water Works 252.36 -2- South Bend Redevelopment Commission Regular Meeting - August 6, 1993 3. APPROVAL OF CLAIMS (Cont.) SBCDA TIF GENERAL continued... Real Estate Management Corp. Indiana Bell Telephone I & M Power Total SBCDA TIF General GRAND TOTAL Upon a motion by Mr. Donoho, seconded by Mr. Faccenda and unanimously carried, the Commission approved the Claims submitted August 6, 1993. 4. COMMUNICATIONS There were no Communications. 5. OLD BUSINESS There was no Old Business. 6. NEW BUSINESS a. Presentation from Michael Rippev regarding the status of Blackthorn Golf Course construction. Mr. Rippey noted that the Blackthorn Golf Course project is on schedule and within its net budget, with some line item adjustments. The heavy rains in late June /early July caused some problems, but Salyers Construction has recovered remarkably and are a little ahead of the original schedule, with grass being planted this week. The sand, which is usually put in the bunkers before grass is planted, will not be put in until winter when the ground is frozen. It -3- 311.51 51.67 614.42 $ 7,671.80 $ 152,234.18 COMMISSION APPROVED THE CLAIMS SUBMITTED AUGUST 6, 1993 THERE WERE NO COMMUNICATIONS THERE WAS NO OLD BUSINESS REPORT ON STATUS OF BLACKTHORN GOLF COURSE South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) a. continued... was critical to meet the seeding window for the various grasses to be planted. The irrigation is in and has been tested, the cart paths are in, and bunkers are dug. Opening day is expected to be in July 1994. Mr. Rippey noted that they have determined that it is possible to use a treated effiuent from the wastewater treatment plant to water the course. The well constructed for that purpose will serve as a back -up source of water, but recycled water will usually be used. That water contains many of the nutrients needed to maintain the grass, so it will be very economical to use the recycled water. The design of the course has remained essentially the same as planned. Fewer than twenty significant trees were removed. They were very pleased with the variety of trees present and have used many to the advantage of the course. They have begun to market the course, including 1) a series of interviews with Jon Thompson of WSBT which will be aired soon; 2) developed a display which will be used at the local golf shops; 3) participation in the Michiana Golf Show, which was very successful; 4) will schedule a couple of public open houses with escorted tours. The maintenance building will be occupied by September 15; the club house will be ready for occupancy by October 15. John Quickstead, former superintendent at Erskine Golf Course has been hired as the superintendent of Blackthorn. -4- South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) a. continued... Mr. Rippey noted that they have received excellent cooperation from City staff. b. Commission approval requested for Resolution No. 1183 approving an =lication for personal property tax deduction for property located at 1137 South Lafayette Street in the Sample -Ewing Development Area. ( Exacto, Inc.) Mr. Beitzinger gave the staff report on the project. Exacto is a precision machine shop. They propose to install a new RB23 CNC angle head grinder and hydraulic diamond dressing unit which will enable Exacto to maintain an existing customer and increase sales. The total cost of the project is estimated at $155,000. The project will create five new full-time jobs with an annual payroll of $72,000 and will maintain seventy existing permanent full-time and part-time jobs with an annual payroll of $1,200,000. Exacto was previously granted a ten year real property tax abatement on November 22, 1982 and is in compliance with the reporting requirements for that abatement. The property is properly zoned for the proposed use. The property is located in an area presently designated as a Tax Abatement Impact Area, in a Tax Incremental Financing Allocation Area, and is in the Sample -Ewing Development Area. The project qualifies for five years of personal property tax abatement under the tax abatement ordinance. -5- South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) b. continued... With an equipment cost of $155,000 and a constant tax rate of 14.3955, the estimated taxes on the new equipment would be approximately $14,429, without abatement. With abatement the taxes are estimated to be approximately $2,559. Therefore the cost of the abatement is approximately $11,870 over the five year period. Mr. Jordan noted that Exacto was on the brink of losing a valued customer if he could not increase production. Purchase of this equipment allows him to keep this customer's $700,000 worth of business per year and acquire an additional $500,000 worth of business. Although this opportunity has come at a financially difficult time for Exacto, it will be worth it in the long run. Upon a motion by Mr. Donoho, seconded by Mr. Sharp and unanimously carried, the Commission approved Resolution No. 1183 approving an application for personal property tax deduction for property located at 1137 S. Lafayette Boulevard in the Sample -Ewing Development Area. ( Exacto, Inc.) C. Commission approval requested for Resolution No. 1184 approving _an application for real property tax deduction for property located at 400 West Sample Street in the Sample -Ewing Development Area. (Turnmaster, Corp. d.b.a. South Bend Lathe) Mr. Beitzinger gave the staff report on this project. South Bend Lathe is a manufacturer fI COMMISSION APPROVAL REQUESTED FOR RESOLUTION NO. 1183 APPROVING AN APPLICATION FOR PERSONAL PROPERTY TAX DEDUCTION FOR PROPERTY LOCATED AT 1137 SOUTH LAFAYETTE STREET IN THE SAMPLE - EWING DEVELOPMENT AREA. (EXACTO, INC.) South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) C. continued... of high quality lathe products and associated machinery. They propose to make extensive renovations of their present building at 400 West Sample Street. The renovations include the addition of insulated interior walls; the conversion of six (6) sprinkler systems from wet systems to dry systems; the installation of ten (10) new heating units; the covering and insulating of skylights and windows; and re- roofing a portion of the roof. The project will reduce energy costs and provide for a more comfortable working environment. The total cost of the project is estimated at $352,000. The project will not create any new full-time jobs, but will maintain seventy -two (72) existing permanent full-time and part-time jobs with an annual payroll of $2,160,000. A review of the petition finds that Turnmaster has not received any previous tax abatement. The building is properly zoned for the proposed use. The property is located in a Tax Abatement Impact Area, a Tax Incremental Financing Allocation Area, and the Sample -Ewing Development Area. The project qualifies for ten years of real property tax abatement under the tax abatement ordinance. Based on a project cost of $352,000 and a constant tax rate of 14.3955, the project will, without abatement, generate approximately $168,907 in new taxes over the ten year period. With abatement, the project will generate approximately $85,298 in taxes. Therefore, the cost of the abatement is approximately $83,609 over the dA 4 South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) C. continued... ten year period. However, Mr. Beitzinger noted that since most of the improvements are interior, the assessed value may not be increased as much as is estimated here and the cost of the abatement would consequently be less. Mr. Szarwark noted that Turnmaster bought South Bend Lathe during bankruptcy. The plant facility is very antiquated. Insulation is non - existent and the heating system is inadequate, producing very poor working conditions for employees. Upon a motion by Mr. Sharp, seconded by Mr. Piasecki and unanimously carried the Commission approved Resolution No. 1184 approving an application for real property tax deduction for property located at 400 West Sample Street in the Sample -Ewing Development Area. (Turnmaster, Corp. d.b.a. South Bend Lathe) d. Commission approval requested for Resolution No. 1185 approving an aDDlication for Dersonal DroDertv tax deduction for property located at 1827 N. Bendix Drive in the Aimort Economic Development Area. (Solvay Automotive, Inc.) Mr. Beitzinger asked that item 6.d. be continued. There was no objection and the item was continued. e. Commission approval requested for Release of Urban Homesteading Agreement with Michael J. Knefely. COMMISSION APPROVAL REQUESTED FOR RESOLUTION NO. 1184 APPROVING AN APPLICATION FOR REAL PROPERTY TAX DEDUCTION FOR PROPERTY LOCATED AT 400 WEST SAMPLE STREET IN THE SAMPLE -EWING DEVELOPMENT AREA. (TURNMASTER, CORP. D.B.A. SOUTH BEND LATHE) ITEM 6.D. WAS CONTINUED UNTIL THE NEXT MEETING South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) e. continued... Mrs. Kolata explained that items 6.e. and 6.f. are related to the Bureau of Housing's Urban Homesteading Program. Mr. Knefely and Mr. Kusbach purchased homes under the program in 1988. They have fulfilled the requirements of the program, bringing the homes up to code, living in them for five years, paying taxes and maintaining insurance on the property. This release of agreement acknowledges that they have no more obligations to the program. Upon a motion by Mr. Donoho, seconded by Mr. Faccenda and unanimously carried, the Commission approved the Release of Urban Homesteading Agreement with Michael J. Knefely. f. Commission approval requested for Release of Urban Homesteading Agreement with Paul Kusbach. Upon a motion by Mr. Donoho, seconded by Mr. Sharp and unanimously carried, the Commission approved the Release of Urban Homesteading Agreement with Paul Kusbach. g. Commission approval requested for Proposals for Appraisal Services in the Airport Economic Development Area. (Hotel Lot). Mrs. Kolata noted that when we had the appraisals done for the corporate sites in the Blackthorn Corporate Park, we did not have the hotel site appraised. We would like to do that now so that the property can be put up for bid. We have received proposals U COMMISSION APPROVED THE RELEASE OF URBAN HOMESTEADING AGREEMENT WITH MICHAEL J. KNEFELY COMMISSION APPROVED THE RELEASE OF URBAN HOMESTEADING AGREEMENT WITH PAUL KUSBACH South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) g. continued... from Jerome Michaels to do the appraisal for $2,000 and from McCloskey Pitts & Associates to do an appraisal for $2,000. The staff recommends accepting the proposals. Upon a motion by Mr. Faccenda, seconded by Mr. Donoho and unanimously carried, the Commission accepted the proposals from Jerome Michaels and McCloskey -Pitts & Associates for appraisal services of Lot 3 in the Airport Economic Development Area. h. Filing of Resolution No. 1186 amending the Development Plan for the Airport Economic Development Area and setting a Public Hearing on Resolution No. 1186 for September 3, 1993. Mrs. Kolata asked that item 6.h. be struck from the agenda. There was no objection and the item was removed. i. Commission approval requested for Bid Specifications for Lots A -3 and A -4 and Lot B in Block 10 of the Sample -Ewing Development Area. Mrs. Kolata stated that the Commission set the price for Lots A -3 and A -4 and Lot B at a previous meeting. Block 10 is bounded by Broadway on the north, by Indiana on the south, by Lafayette on the west and Main Street on the east. We have been trying to acquire property and clean up the ownership of that block. We finally received title to all of the property and would like to put it up for bid. Lots A -3 and A -4 must be purchased together. The minimum bid price -10- COMMISSION ACCEPTED THE PROPOSALS FROM JEROME MICHAELS AND MCCLOSKEY -PITTS & ASSOCIATES FOR APPRAISAL SERVICES OF LOT 3 IN THE AIRPORT ECONOMIC DEVELOPMENT AREA ITEM 6.H. WAS STRUCK FROM THE AGENDA South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) i. continued... for the two is $3,250. The bid specifications state that the lots are to be used to support either new construction or additional development. The specifications contain our normal design considerations for parking, landscaping and screening. We would like to advertise the sale and receive bids on September 3, 1993. Lot B is a complete rectangle. The minimum bid price is $12,750. The same design considerations apply to this offering. Upon a motion by Mr. Sharp, seconded by Mr. Donoho and unanimously carried, the Commission approved the Bid Specifications for Lots A -3 and A -4 and Lot B in Block 10 of the Sample -Ewing Development Area. j. Commission authorization requested to publish Notice of Intended Sale of Land in the Sample -Ewing DQ&LIoSment Area with publication dates to be August 13 and August 20. 1993 and receipt of bids to be September 3. 1993. (Lots A -3 and A -4 and �1 Upon a motion by Mr. Donoho, seconded by Mr. Sharp and unanimously carried, the Commission authorized publication of the Notice of Intended Sale of Land in the Sample -Ewing Development Area with publication dates to be August 13 and August 20, 1993 and receipt of bids to be September 3, 1993. (Lots A -3 and A -4 and Lot B) k. Commission approval requested for Resolution No. 1187 related to acquisition of -11- COMMISSION APPROVED BID SPECIFICATIONS FOR LOTS A -3 AND A -4 AND LOT B IN BLOCK 10 OF THE SAMPLE -EWING DEVELOPMENT AREA COMMISSION AUTHORIZED PUBLICATION OF NOTICE OF INTENDED SALE OF LAND IN THE SAMPLE -EWING DEVELOPMENT AREA WITH PUBLICATION DATES TO BE AUGUST 13 AND AUGUST 20, 1993 AND RECEIPT OF BIDS TO BE SEPTEMBER 3, 1993. (LOTS A -3 AND A -4 AND LOT B) South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) k. continued... property in the West Washington - Chapin Development Area by Eminent Domain Mrs. Kolata explained that Resolution No. 1187 sets the Commission approved market price for several pieces of property in the West Washington - Chapin Development Area. The seven properties are along Chapin Street. All but one of the properties is vacant land. The other is a commercial structure. The price is based on the two appraisals which were received for the properties. Following approval the staff will send purchase offers for the properties. Upon a motion by Mr. Donoho, seconded by Mr. Faccenda and unanimously carried, the Commission approved Resolution No. 1187 related to acquisition of property in the West Washington - Chapin Development Area by Eminent Domain. Commission appointment of members to the Joint Committee to oversee the manage and operation of Blackthorn Golf Course. Mrs. Kolata explained that part of the agreement with the Airport Authority when they gave us land for the golf course was that we would establish a committee to oversee management and operation of the golf course. The committee is to be made up of six people: two from the Redevelopment Commission, two from the Airport Authority, the Director of Economic Development and the Director of Michiana Regional Airport. There are scheduled meeting times, one of which is to approve the annual audit. The second is to approved 5i FA COMMISSION APPROVED RESOLUTION NO. 1187 RELATED TO ACQUISITION OF PROPERTY IN THE WEST WASHINGTON - CHAPIN DEVELOPMENT AREA BY EMINENT DOMAIN South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) 1. continued... the budget for the operation and management of the golf course. The committee has not needed to meet for either of these purposes yet, but will need to be organized and meet before long to approve a management agreement when it is ready. The Airport Authority has appointed its two members and the Commission needs to do so at this time. Mr. Donoho nominated Paula Auburn and Philip Faccenda to represent the Redevelopment Commission on this committee. Mr. Sharp seconded the rw nomination. There being no further nominations, Mr. Donoho made a motion that the Commission appoint Paula Auburn and Philip Faccenda to the Joint Committee to oversee the management and operation of Blackthorn Golf Course. Mr. Sharp seconded the motion and the appointments were unanimously approved. L m. Staff report on Disposition of Property in the South Bend Central Development Area (611 S. Clinton). Mr. Eddington explained that the Watseka Theatre Corporation, the same firm that is rehabilitating the State Theater, has offered to purchase the property at 611 S. Clinton for $1.00 to rehab it and use it for a single family home. They expect the repairs to take about twelve months to complete at a cost of approximately $50,000. They would complete the rehab according to the design guidelines for the Monroe Park area. -13- COMMISSION APPOINTED PAULA AUBURN AND PHILIP FACCENDA TO THE JOINT COMMITTEE TO OVERSEE THE MANAGEMENT AND OPERATION OF BLACKTHORN GOLF COURSE South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) m. continued... Ken Allen, who plans to live in the home with his family, has had extensive rehab experience and plans to hire other Watseka employees to work with him after the State Theater is completed. Mrs. Kolata noted that the minimum offering price for the property was set at $6,000, which we felt was probably unrealistic due to the cost of the rehab it would require. The staff recommends accepting the bid, contingent upon receipt of the financing information which has been requested. We would like to have the house saved and rehabbed rather than demolishing it. Upon a motion by Mr. Faccenda, seconded by Mr. Sharp and unanimously carried, the Commission accepted the purchase offer from Watseka Theatre Corporation for 611 S. Clinton in the South Bend Central Development Area. n. Commission approval requested for Loan in connection with the West Washingaton Loan Program through the Bureau of Housing for property at 210 LaPorte Street. Mrs. Kolata noted that there has been a loan fund available through the Bureau of Housing in the West Washington - Chapin Development Area for some time for the rehab of owner - occupied homes. Kathy Baumgartner, Director of the Bureau of Housing intends to give a status report on the West Washington Loan Program at the next Commission meeting. However, this loan for a house at 210 LaPorte Street has a -14- COMMISSION ACCEPTED THE PURCHASE OFFER FROM WATSEKA THEATRE CORPORATION FOR 611 S. CLINTON IN THE SOUTH BEND CENTRAL DEVELOPMENT AREA South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) n. continued... court hearing scheduled for August 13 at which the house will be ordered demolished if there is not a plan in place for bringing it up to code. Mrs. Kolata noted that this house is located in the National Register Historic District. Therefore, federal funds cannot be used for rehabilitation unless the rehab meets the guidelines for the local Historic Preservation office and the state Historic Preservation office. Some of the work originally proposed for this house did not meet those standards and there has been some negotiation and compromise in order to be able to save the house and still keep if affordable. Mary Richmond explained the loan application. She noted that the initial rehab cost was $50,369. However, the additional costs resulting from the Historic Preservation requirements has added approximately $11,000 for a total loan amount of $63,650. The after rehab value of the home will be approximately $31,000. Kathy Baumgartner's presentation at the next Commission meeting will attempt to explain the unusually high loan to value ratio versus rehab costs. Ms. Richmond explained that the Bureau of Housing is trying to redesign the West Washington Loan Program to make it more feasible. The loan program as it has been redesigned has no grants and the interest rate is determined by the each applicant's income, up to market rate. This loan to Rev. and Mrs. Harris is for $63,650 for -15- South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) n. continued... 30 years at market rate. The monthly payment, principal and interest, will be $428.82, plus $69.00 for insurance and taxes (total, $497.82). Rev. and Mrs. Harris want this home very much. They have been very frustrated by the demands made on them by design review and Historic Preservation. They wanted a low maintenance home with vinyl siding. Historic Preservation does not usually allow vinyl siding to be used in rehab. The compromise in this case allows the use of vinyl siding on areas that had already had siding, but not on the corner boards, soffets, gables, and trim around the windows. This will mean the Harris' will have ongoing maintenance expenses to keep these parts painted. Mrs. Kolata noted that a sleeping porch and an enclosed porch on the back of the house will be torn down. She also noted that the Harrises are aware of the disproportionate after -rehab loan-to -value ratio. Mrs. Kolata noted that this has been a very difficult project to put together. The house is a major eyesore in the neighborhood now. If it is torn down it will leave a large hole. If it is rehabbed as now proposed, it will enhance the neighborhood. Mr. Piasecki asked the condition of the house next door to this one. Ms. Richmond responded that it is a rental and is in fair condition. -16- South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) n. continued... Mr. Donoho expressed concern about the after -rehab value. With the $12,000 Rev. Harris has already invested in the home, and the rehab loan amount of $63,650, he will be paying approximately $72,000 for a house that will be valued at $31,000 when it is completed. How can a house like that be resold? Ms. Richmond explained that in order to bring a house with code violations up to code, costs will be over the market value. For this reason we have had trouble marketing any loan programs we have ever had for this area. Most of the owners are elderly. They don't want to tie their properties up with mortgages. Mrs. Kolata noted that the alternative to this type of loan program, if we want to see the rehab accomplished) is to lend only the after -rehab value and grant the remainder. In effect, since the loan is for more than we could get out of the home if we sold it, if the loan goes into default, the City will have to write off part of the debt. However, there is the hope that, over time, the property will increase in value and we could get our money out of it. Mr. Piasecki asked if there was any other way of cutting the rehab costs, such as using the Christmas in April program. Mrs. Kolata responded that there is no way to cut the costs further. Mr. Sharp asked who is making this CW mortgage and what happens if it is foreclosed? Mrs. Kolata responded that the -17- South Bend Redevelopment Commission Regular Meeting - August 6, 1993 6. NEW BUSINESS (Cont.) n. continued... Commission is making the mortgage on behalf of the City of South Bend. If it is foreclosed, the house will belong to the City and we would try to dispose of it. We ( the loan fund) would have lost some of the money we put into it. Mrs. Kolata noted that she thinks that the after -rehab value is estimated low. Any potential loss is weighed against the value of upgrading the neighborhood. Mr. Donoho commented that he would support the loan as long as the owner understood the loan to value ratio. Ms. Richmond said that they did. Upon a motion by Mr. Sharp, seconded by Mr. Donoho and unanimously carried, the Commission approved the Loan in connection with the West- Washington- Chapin Rehabilitation Loan Program in the amount of $63,650 for property located at 210 LaPorte. 7. PROGRESS REPORTS Mr. Cierzniak asked for the opportunity to comment on the report made by Economics Research Associates related to the feasibility of the College Football Hall of Fame project. He presented the information which is attached to these minutes in its entirety. 8. NEXT COMMISSION MEETING The next Regular Meeting of the Redevelopment Commission is scheduled for August 20, 1993 at 10:00 a.m. COMMISSION APPROVED THE LOAN IN CONNECTION WITH THE WEST WASHINGTON - CHAPIN REHABILITATION LOAN PROGRAM IN THE AMOUNT OF $63,650 FOR PROPERTY LOCATED AT 210 LAPORTE PROGRESS REPORTS NEXT COMMISSION MEETING South Bend Redevelopment Commission Regular Meeting - August 6, 1993 9. ADJOURNMENT There being no further business to come before the Commission, Mr. Donoho made a motion that the meeting be adjourned. Mr. Sharp seconded the motion and the meeting was adjourned at 11:36 a.m. 44,4:- V Lz'e-e��- Paula N. Auburn. President -19- ADJOURNMENT /,Z z E. Kolata, Director t Remarks to the South Bend Common Council on the College Football Hall of Fame July 26, 1993 With the release of the Economic Research Associates report,which cost the City $40,000, and the management and licensing agreeements with the NFF, several alarming facts are now in the open. Tonight's remarks will deal only with the ERA report. At the next Council meeting, I'll comment on the management and licensing agreements. 1. ERA estimates that it will cost $368,454 more to operate the Hall in its first year than South Bend estimated a year ago. That is over $1,000 a day. Remember, South Bend is responsible for all operating expenses. (See the expense part of the blue sheet for specific figures.) The Hall will thus be a very expensive gamble. My assumption is that the ERA's estimates will be much closer on the expense side than on the revenue side. 2. The estimated gross expenditure for the average person attending the Hall, based on attendance of 161,878, in the first year is $11.13. That figure includes attendance revenue along with food and gift shop revenue. Either those revenue assumptions are wildly optimistic or a family's visit to the Hall will be much more expensive than is commonly believed. 3. The Capital Improvement Fund, as per the agreement with the NFF, calls for much less annual expenditure_ tha..i is suggested in the ERA report. For each of the first ten years, the expenditure for new exhibits would be $100,000 for the agreement with NFF and $369,868 as per the ERA estimate. Which figure will prove to be more accurate? Remember it is the City's intention to have a "world- class" facility. 4. If the ERA is correct about the amount of "new exhibit development" that needs to take place in the first ten years, the total spending for exhibitry will be $10,698,681. How can such a huge expenditure for museum exhibits be justified? 5. Estimated attendance of 161,878 averages 3,113 per week and 443 per day. Who in their wildest dreams can imagine such crowds flocking to this facility in downtown South Bend? Remember, total attendance outside Cincinnati never reached 100,000 per year. 6. The "Events Market," which is made up of twelve Saturday "rallies," three "festivals," and ten "College Alumni Weekend Getaways," is sheer fantasy. The idea that you can get 42,500 people at those events makes for a reckless gamble. As a point of reference, that number is greater than the yearly attendance of the Hall at Kings Island. Too many eggs are being put in that basket. Jim Cierzniak T • T Yi Anticipated Operating Budgets (1st Year) College Football Hall of Fame South Bend's Guess 7/92 Operating Revenue General`Admissions $628,000 Special: Events 65,260 Gift Shop- -Net 170,000 Mail Order- -Net Membership Rental Concessions- -Net 40,000 Total Expenses Personnel Supplies Services Capital Imp. /Maintenance Contingency $903,260 $386,580 24,700 279,900 100,000 for the Economic Research Associates' Guess 7/93 $501,670 157,500 385,290 67,426 16,188, 15,000 171,781 $1,314,855 $482,233 428,100 157,500 91,801 Total $791,180 $1,159,634 Excess of revenue over exp. $112,080 * $155,221 *ERA's "Total Earned Revenues" is $1 short. Revenue from average attendance (ERA): General $4.20 Events 3.71 Above is a comparison of the recently- released report of Economic Research Associates (ERA) and the estimates made by South Bend's Hall team in July 1992. Note that I have presented the material somewhat differently than ERA did for Year 1 of the accompanying Table 4 -7. The end result is the same. While profits are predicted for all ten years, note the anticipated "New Exhibits Development (Capital Expense)" at the bottom of Table 4 -7. Are these average weekly figures (from ERA) likely to occur? Ne Attendance (total) 3,113 Gift shop- -Net $7409 Mail order- -Net $1297 Food Service- -Net $3303 Concerning the expense, I think it is significantkthat ERA predicts $368,454 more than South Bend anticipated. I would be interested in your reaction to these figures. Jim Cierzniak 287 -.0860 Will the College Football Hall of Fame Draw Fans to "Rallies," "Festivals," and "Alumni Weekend Getaways "? In a news release of July 18, 1993, I emphasized that the recently - released report on the CFHF by Economic Research Associates of Chicago at a cost of $40,000 was a "two -edged sword." That is, it could also be used to argue against the Hall project. I wrote that phrase before a close reading of the passage quoted below on the "Events Market!'(pp. 22 -23). That market is expected to draw 42,500 fans the first year, which is 26% of total attendance. That percentage is fairly constant throughout the decade, ending at 28% for years 6 -10. As I read this section, I continually asked, "Will these ideas work in South Bend ?" They seem most unrealistic. Your reaction? Below is the complete text. Numbers in parentheses are added for detail and come from Table 3 -1 of the ERA report. Events Market This market consists of three separate submarkets: the weekly college football rallies, the College Football Festivals and the College Alumni Weekend Getaways. The College Football rallies are weekly events at the proposed College Football Hall of Fame and the Century Center that take place while games are being played on Saturdays. It is expected that the rallies will feature many large screen TV's that will show games underway across the country. We anticipate an admission fee, and that food and beverages will be available for sale. (12 C 2,000 = 24,000) Three College Football Festivals are anticipated each year. Like the College Football Rallies, it is expected that these will take place at the proposed College Football Hall of Fame and the Century Center. The first festival of the year would be a larger New Years day "Bowl Games" version of the weekly College Football Rallies. (4,500) The focus of the second festival would be the annual enshrinement of new members into the Hall of Fame. (7,000) The theme and timing of the third festival is unprogrammed at this time. (4,500) (Total of three festivals: 16,000) The College Alumni Weekend Getaways would be weekend getaways to South Bend co- sponsored each weekend by a different large midwestern college football program and alumni program. The weekends could be timed, when possible, to coincide with games that pit a school against Notre Dame. While attendance at the Alumni Weekend Getaways could come from all over, it is expected that they will primarily come from the Chicago alumni clubs of large midwestern universities. (10 @ 250 = 2,500) None of these events currently exist. Attendance estimates are based on typical attendance at similar events.... Total visitation from these three submarkets is 42,500.