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HomeMy WebLinkAboutSM 03-11-94SOUTH BEND REDEVELOPMENT COMMISSION SPECIAL MEETING March 11, 1994 Room 455,County -City Building 10:00 a.m. 227 W. Jefferson Boulevard Presiding: Paula N. Auburn South Bend, Indiana President I. ROLL CALL Members Present: Ms. Paula N. Auburn, President Mr. Roman J. Piasecki, Vice - President Mr. Theo F. Sharp, Secretary Mr. Michael Donoho Members Absent: Mr. Philip Faccenda Legal Counsel: Ms. Jenny Pitts Manier Redevelopment Staff: Mrs. Ann Kolata, Director Mrs. Cheryl Phipps, Recording Secretary Media: Mr. Thom Howell, U -93 Mr. Don Porter, South Bend Tribune Mr. Mike Collins, WNDU Mr. Norm Stangland, WSBT Others: Joseph E. Kernan, Mayor Mr. Kevin Horton, City Controller Mr. Richard Nussbaum, City Attorney Ms. Mary Marshall, Center City Associates Mr. Donald Niezgodski Ms. Susan Visser, South Bend Museum of Art Ms. June Edwards, Art Center Board Mr. Brian Hedman, Century Center Ms. Mikki Dobski, Hall of Fame Mr. Jon Williams, Community Affairs Mr. Thomas Zakrewski, Common Council Mr. Richard Hill, Baker & Daniels Mr. Mike Claytor, Municipal Consultants Mr. Jim Cierzniak Ms. Joyce Boaler Mr. Gene Oakley I- -1- APPROVAL OF MINUTES There were no Minutes. THERE WERE NO MINUTES 3. APPROVAL OF CLAIMS Claims Submitted March 11, 1994 for Approval EVOUPSOM Business Communications Center $ 6.00 Baker & Daniels 112.00 Indiana Michigan Power 6.65 Ken Herceg & Associates 720.59 South Bend Tribune 61.39 South Bend Water Works 50.00 Tri County News 36.15 York Title & Escrow, Inc. 400.00 Commercial Office Products 22.50 TOTAL $ 2,415.28 S.B.C.D.A. TIF - GENERAL ACCOUNT (420 (0� Gibson -Lewis $ 50.00 TOTAL $ 50.00 14 SAMPLE -EWING DEVELOPMENT AREA (414 Ken Herceg & Associates $ 6,138.00 Indiana Michigan Power Co. 4,098.72 James Wells 3,270.00 Kropp Fire Protection 487.00 Milliken Construction & James Wells 2,205.00 Milliken Construction & Robert Ivey 2,205.00 Michael Vaughn 225.00 NIPSCO 20, 837.22 Peirce & Associates 4,150.00 Paul Davis Systems 186.34 Robert V. Ivey 3,270.00 South Bend Water Works 20.00 York Title & Escrow, Inc. 7,340.00 TOTAL $ 54,432.28 -2- uth Bend Redevelopment Commission pecial Meeting - March 11, 1994 3. APPROVAL OF MINUTES (Cont.) HALL OF FAME (437) Tri County News Sculpture Basis TOTAL GRAND TOTAL Upon a motion by Mr. Donoho, seconded by Mr. Sharp and unanimously carried, the Commission approved Claims submitted March 11, 1994. 4. COMMUNICATIONS There were no Communications. OLD BUSINESS There was no Old Business. 6. NEW BUSINESS a. Commission approval requested for Resolution No. 1235 approving the issuance of South Bend Redevelopment Authority Lease Rental Revenue Bonds and regarding other related matters. Mayor Kernan noted that we are asking for the Commissions approval of the issuance of the Redevelopment Authority Lease Rental Revenue Bonds for the construction of the College Football Hall of Fame as well as improvements to be made to Century Center. -3- $ 65.07 15.250.00 $ 15,315.07 $ 72,212.63 COMMISSION APPROVED CLAIMS SUBMITTED MARCH 11, 1994 THERE WERE NO COMMUNICATIONS THERE WAS NO OLD BUSINESS Duth Bend Redevelopment Commission pecial Meeting -March 11, 1994 6. NEW BUSINESS (Cont.) a. continued... Mayor Kernan noted that two years ago when the Commission passed bond anticipation notes for construction of the Hall of Fame, we indicated that the taxpayers of South Bend would be protected from being taxed to pay for the bond. The plan that is in place today provides that protection. The National Football Foundation, who are our partners in the development of the Hall of Fame, have stepped forward to provide a $4,500,000 guarantee on the bonds. In addition, a group of private citizens will provide a $2,500,000 guarantee. The plan is still to construct the Hall of Fame through corporate sponsorships and private donations, but these guarantees provide the necessary security to move ahead today. The University of Notre Dame has also agreed to provide human resources, including Dr. Bill Sexton and Dr. Phil Faccenda, to assist the fund raising efforts. This funding package also includes the recent passage by the Indiana General Assembly of a 1 % increase in the Hotel /Motel Tax which will be used as an insurance policy for the debt financing. Mayor Kernan will be asking the Hotel /Motel Board of Tax Commissioners to appropriate the first year to the first year and a half of those funds to pre- opening costs associated with the Hall of Fame, with an emphasis -4- ,%,,gh Bend Redevelopment Commission al Meeting - March 11, 1994 6. NEW BUSINESS (Cont.) a. continued... on promotional activity. We need to take advantage of the period between ground breaking and the opening to market and promote the Hall of Fame. At the end of 1995, we will review the fund raising efforts to see if future use of the hotel /motel tax increase is needed to cover any shortfall. If so, then all or part of that increased revenue from the hotel /motel tax would be available to use for debt service. We conservatively expect that that would cover about $4,000,000 of the debt service. Mayor Kernan noted that revenues from the Hall of Fame could also be used to cover debt service, if that was necessary. Mayor Kernan stated that he feels the financing plan put forward today is better than the original plan for several reasons: 1) It will help our fund raising efforts to have the support of the National Football Foundation. Their participation should help insure the success of the Hall of Fame; 2) The commitment of citizens in the amount of $2,500,000 demonstrates that there is significant community support for this project and demonstrates confidence that this plan is going to work; 3) The commitment from the University of Notre Dame to take over the fund raising. -5- k.Puth Bend Redevelopment Commission Special Meeting - March 11, 1994 6. NEW BUSINESS (Cont.) a. continued... The improvements to Century Center should enable Century Center to attract more conventions and have a greater economic impact on the community by utilizing space already existing within the Center. Mr. Hedman showed an artist's rendering and floor plan for the improvements to be made to Century Center. The present planter along the St. Joseph Street side of the building will be removed and an addition will be constructed in that location to house the South Bend Museum of Art's permanent collection and Museum Shop. Bendix Theater back stage space will be converted to classrooms for the art museum. There will be an escalator put in to move people between the street level and the river level. Mr. Hedman also noted that the College Football Hall of Fame will help enormously to differentiate the Century Center from its competitors. He is delighted at the prospects of marketing with that additional attraction. His peers in the industry are jealous. Susan Visser, Director of the South Bend Regional Museum of Art, noted that the Museum has been a collecting institution since its beginning. They have a very fine permanent collection of art work that reflects historical Indiana art as well as contemporary art of Indiana, the region and the country. As the City's -6- truth Bend Redevelopment Commission Special Meeting - March 11, 1994 6. NEW BUSINESS (Cont.) a. continued... art museum, they are looking forward to having that collection on permanent display. The new galleries at Century Center will enable them to do that. Ms. Auburn noted that this is not a public hearing, but offered the public in attendance an opportunity to speak. Joyce Boaler had a number of questions to ask the Mayor /Commission: 1) The press release states that "the $4.5 million and $2.5 million will be relieved as corporate sponsorship revenue is committed." What does that mean? It seems that the $4.5 million from the National Football Foundation and the $2.5 million from citizens are no more than a loan. The city will pay it back as revenue comes in. If all they are doing is loaning the $4.5 million, are we giving them interest on that money? If that is all they are doing, they are not giving anything at all toward the building. They are not investing anything in it. 2) The newspaper reported that two funds were going to be used. Earlier the paper said that $1.3 million in TIF funds; yesterday it said that $1.5 million in TIF funds would be used for the Hall. If it is now $1.5 million, how much do we take in annually in TIF funds. In the last three to five years, what has been the annual expenditure of TIF? On what kind of infrastructure is this spent? From where -7- uth Bend Redevelopment Commission pedal Meeting _ March 11, 1994 6. NEW BUSINESS (Cont.) a. continued... will that money come if we are depleting $1.5 million annually? I would like answers to all of those questions. Also, what will be the admission charges to this Hall of Fame? I question why we've encouraged architecture that's not in harmony with the existing downtown structure. It's rather ghastly. It doesn't fit in with the Marriott nor Century Center. Ms. Boaler also stated that the money for the Hall of Fame fluctuates according to the newspaper reports. It is variously reported as $14,000,000, $15,800,000 and $15,500,000. She asked that that be clarified. How much are we paying for the storage of the collection of artifacts, to whom are we paying it, and for how long? Ms. Auburn noted that all of the questions asked by Ms. Boaler have been discussed between the Commission, the Controller, and the Mayor. She explained that a guarantee of the bond issue means that the guaranteeing party will step forward and make the debt payment if there are no other funding sources. It is the Commission's intention, as well as the Mayor's intention, to fund the Hall of Fame with corporate sponsorships. That has not changed. i -8- uth Bend Redevelopment Commission pedal Meeting - March 11, 1994 6. NEW BUSINESS (Cont.) a. continued... Ms. Auburn noted that tax incremental financing estimates vary because the actual amount of TIF available is not known until the taxes are paid. The estimates are projected based on previous years' tax collection and known new development. Our consultants have been extremely conservative in their projections. Steve Queior indicated the Chamber of Commerce's strong support of this project. Whereas a couple of years ago the positive impact of the Hall of Fame on South Bend's tourism was theoretical, now, as the Bureau of Convention and Tourism has begun to advertise the potential Hall of Fame, the response has been extremely positive. Mr. CierLniak made the following statement: That giant sucking sound. We heard it yesterday as an uncritical media responded with delighted squeals of oh's and ah's to the news release of Mayor Joseph E. Kernan which proclaimed wonderful news. Yes $7, 000, 000 of assured financing for the College Football Hall of Fame has been attained. Mayor Kernan had thus reached his comfort level on the project and we can now proceed to break ground. Unfortunately, Kernan's comfort level is not the same as that of many citizens who have followed the project for the past 20 months. -9- outh Bend Redevelopment Commission Special Meeting - March 11, 1994 6 NEW BUSINESS (Cont.) a. continued... We expected to hear talk of cash on hand or firm pledges, something of that kind. Instead, Kernan talked about commitments and guarantees. No mention was made of actual money being received after 20 months of seeking corporate contributors. This was astounding, and via the hall team's boast back in July of 1992 that they would raise $7, 000, 000 within 60 days. Even more astounding than the news that not one major corporate contributor had signed on to back the hall was contained in this sentence contained in Don Porter's article yesterday: "The Mayor said he anticipates that none of the pledges for the hall, particularly the potential hotel /motel tax receipts, will need to be called. " Do you get it? In the wonderful land of Hall of Fame finances, the $7,000,000 so triumphantly announced yesterday won't be needed because the Hall will be paid for by private contributors. After 20 months of failure in getting money from private contributors, Kernan keeps whispering in our ears, "Trust me. " And the media responds with a loud sucking noise. Lost in the reporting of Kernan's descent from the mount of the $7,000,000 inscribed on two tablets, was any mention of the sham and deceit displayed in recent months by the Mayor. While cries of "show us your list of contributors " arose from the populace, and even the media, Kernan responded time and again with pious -10- e luth Bend Redevelopment Commission ecial Meeting - March 11, 1994 6. NEW BUSINESS (Cont.) a. continued... assertions that he was protecting the confidentiality of his corporate benefactors. Yesterday we found out that there was nothing to protect. Not one corporation needed anonymity because not one corporation had signed on as a sponsor. Shame on you, Mayor Kernan, for that deception. Shame on you South Bend media for not calling the Mayor to task for that deception. I urge the Commission to table the bond motion before it to give citizens at least two weeks to digest it and to ask questions. This project has been delayed before. There should be a brief delay now for public consideration of a drastically new financial plan which Kernan has unveiled at the eleventh hour. We will be paying at least $37, 000, 000 for those bonds over the next twenty -five years. Let's get it right before we take on that huge commitment for a project that has been a failure for the past forty-five years. Thank you very much. Mr. Oakley noted that the $14,000,000 cost for the Hall of Fame is not a total cost. The public is under the misconception that $14,000,000 will pay off the bonds. It will take $37,400,000. That is a shortfall of $23,000,000. The public does not understand this. Mr. Oakley asked the Commission if they know the names of the local citizens C-� who are guaranteeing $2,500,000 of the -11- outh Bend Redevelopment Commission Special Meeting - March 11, 1994 6. NEW BUSINESS (Cont.) a. continued... bonds and whether those people are capable of providing that kind of money. Is that money put into a trust fund? He assumed the Commission would have that information before approving the issuance of the bonds. Mr. Oakley provided a request for information under the Freedom of Information Act, noting that "you are only excluded on gifts. These local citizens have not made a gift. They've made a commitment, which is in the records of the city, but not a give as set forth in the Indiana Code. " Ms. Auburn responded that the Commission does not intend to disclose the names of the local citizens at this meeting. Mr. Oakley asked if the Commission has the names. Ms. Auburn responded that he could rest assured that everything is in place and taken care of. Ms. Auburn noted that Century Center has been a positive experience for the community of South Bend. When she moved to South Bend in 1973, there was community debate, and, in fact, a group of individuals who tried to stop the development of Century Center. It took community leadership that had vision and calculated risk - takers to move the -12- k uth Bend Redevelopment Commission elpecial Meeting - March 11, 1994 6. NEW BUSINESS (Cont.) a. continued... community forward. It was a very unique learning experience to see that kind of process in a small community. A community needs to move forward, to have vision, and take calculated risks. Nothing happens in this world without that kind of vision and leadership. There will always be individuals who question that, and rightly so. At some point a decision must be made and forward movement put into place. Mr. Donoho asked how soon construction would start? Mayor Kernan responded that it will take approximately three weeks to secure the site for construction and issue contracts to proceed. The ground breaking will probably take place during the first week of April. The construction bids have been taken and the bids are less than the engineering estimate. Mr. Sharp also commented on the vision it takes to do a project like this. During the 31 years he has been in South Bend, he has seen the community change from a rather desperate state to the marvelous community it is today. That has not been done without the vision of the Mayor and Brian Hedman. This community is moving toward an even brighter future than has been demonstrated in the recent past. This particular decision will probably go down in history as one of the great -13- keuth Bend Redevelopment Commission Special Meeting - March 11, 1994 6. NEW BUSINESS (Cont.) a. continued... decisions of the City. We are fortunate to have been selected as a site for this tourist attraction. Mr. Sharp also noted that combining the bonds was an excellent way to achieve cost savings. The improvements to Century Center, especially those for the art museum, are very important to increasing the quality of life in the community also. He thanked the Mayor and Brian Hedman for their diligent pursuit of these programs. C-11 Mr. Piasecki remembered similar community opposition against the construction of Coveleski Stadium, predicting failure. The Commission had the vision to move ahead and it has been a wonderful addition to the quality of life in South Bend. The entire nation will envy us for the Hall of Fame. Mayor Kernan responded to Mr. Oakley's comments about the difference between the face value of the bonds and the total cost. The financing package that has been put together accommodates the receipt of donations (or funds) over a seven year period rather than the 20 year term of the bonds. These funds will be borrowed at tax exempt rates, invested at taxable rates, and used to defease the bonds as they become due, for a net break -even effect. -14- South Bend Redevelopment Commission Special Meeting - March 11, 1994 6. NEW BUSINESS (Cont.) a. continued... Upon a motion by Mr. Donoho, seconded by Mr. Sharp and unanimously carried, the Commission approved Resolution No. 1235 approving the issuance of South Bend Redevelopment Authority Lease Rental Revenue Bonds and regarding other related matters. b. Commission approval requested for Resolution No. 1236 approving the transfer of real property to the South Bend Redevelopment Authority. Mrs. Kolata explained that the AWN Redevelopment Commission owns the property on which the Hall of Fame is to be built. In order for the Redevelopment Authority to sell bonds for the project, it must own the property. Resolution No. 1236 transfers the land to the Authority. Upon a motion by Mr. Piasecki, seconded by Mr. Sharp and unanimously carried, the Commission approved Resolution No. 1236 approving the transfer of real property to the South Bend Redevelopment Authority. C. Commission ratification of petition to Common Council to vacate a portion of Service Court #5. Mrs. Kolata noted that the property just transferred to the Redevelopment Authority was two pieces on either side of a service drive. Mrs. Kolata noted -15- COMMISSION APPROVED RESOLUTION NO. 1235 APPROVING THE ISSUANCE OF SOUTH BEND REDEVELOPMENT AUTHORITY LEASE RENTAL REVENUE BONDS AND REGARDING OTHER RELATED MATTERS COMMISSION APPROVED RESOLUTION NO. 1236 APPROVING THE TRANSFER OF REAL PROPERTY TO THE SOUTH BEND REDEVELOPMENT AUTHORITY South Bend Redevelopment Commission Special Meeting - March 11, 1994 6. NEW BUSINESS (Cont.) C. continued... that earlier this week she signed a petition to vacate the portion of the service drive that is between the two pieces of property from Washington Street to the Jefferson Street Parking Garage. The Hall of Fame will be constructed over this vacated service court. Access will be provided to the remaining portion of the service drive off of St. Joseph Street. Upon a motion by Mr. Sharp, seconded by Mr. Piasecki and unanimously carried, the Commission ratified the petition to Common Council to vacate a portion of Service Court #5. 7. PROGRESS REPORTS There were no Progress Reports. 8. NEXT COMMISSION MEETING The next Regular Meeting of the Commission is scheduled for March 18, 1994 at 10:00 a.m. April 1 is a holiday for City employees. The Commission is considering rescheduling the April 1 meeting to Thursday, March 31, 1994. The staff will check on the availability of Commission members prior the the March 18 meeting. -16- COMMISSION RATIFIED THE PETITION TO COMMON COUNCIL TO VACATE A PORTION OF SERVICE COURT #5 PROGRESS REPORTS NEXT COMMISSION MEETING South Bend Redevelopment Commission Special Meeting - March 11, 1994 9. ADJOURNMENT There being no further business to come before the Redevelopment Commission, Mr. Donoho made a motion that the meeting be adjourned. Mr. Piasecki seconded the motion and the meeting was adjourned at 11:05 a.m. Paula N. Auburn, President -17- ADJOURNMENT Ann E. Kolata, Director