The URL can be used to link to this page

Home My WebLink AboutRM 11-03-00R G SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING November 3, 2000 10:00 a.m. Presiding: Robert W. Hunt, President 1. ROLL CALL Members Present: Member Absent: Legal Counsel: 1308 County -City Building 227 West Jefferson Boulevard South Bend, Indiana Mr. Robert W. Hunt, President Mr. Philip J. Faccenda, Secretary Mr. Matt Kahn, Member Mr. Jim Caldwell, Member Ms. Marcia Jones, Vice - President Ms. Ann Carol Nash Redevelopment Staff. Mr. Don Inks, Director Ms. Debi Perkins, Recording Secretary Mr. Owen Rock, Economic Development Specialist Mr. Andy Laurent, Economic Development Specialist Mr. Michael Giulioni, Economic Development Specialist Mr. Robert Case, Economic Development Specialist Mr. Marco Mariani, Economic Development Specialist Others Present: Mr. Jay Harwood, South Bend Chocolate Company Mr. Mark Tamer, South Bend Chocolate Company Mr. Thomas Panzica, Panzica Development Group Ms. Magdalena Del Valle, Property Owner 2. APPROVAL OF MINUTES a. Commission approval of the Minutes of the Regular Meeting of October 20, 2000. Upon a motion by Mr. Kahn, seconded by Mr. Caldwell and unanimously carried, the Commission approved the Minutes of the Regular Meeting of October 20, 2000. -1- COMMISSION APPROVED THE MINUTES OF THE REGULAR MEETING OF OCTOBER 20, 2000 South Bend Redevelopment Commission Regular Meeting - November 03, 2000 3. CLAIMS Redevelopment Commission Claims submitted November 3, 2000 for approval. 212 CDBG COMMUNITY DEVELOPMENT Meridian Title Corporation $500.00 Jerome E. Michaels $10,000.00 Global Products $4.00 R.E. Pitts & Associates, Inc. $4,000.00 Indiana Association of Cities & Towns $50.00 South Bend Tribune $162.14 APA $75.00 Petty Cash $119.36 Insty -Prints $14.00 Dainty Maid Bake Shop $34.95 Verizon Wireless $29.36 324 FUND The Holladay Group David Waszak Appraisals, Inc. $9,600.00 $3,500.00 Abonmarche Environmental, Inc. $1,000.00 Abonmarche Consultants of Indiana $10,000.00 Wightman Schaeffer, Inc. $19,885.25 R.E. Pitts & Associates, Inc. $3,500.00 CBLD $10.19 Meridian Title $736.00 Designs on Nature $53,341.55 J.F. New & Associates, Inc. $124.05 Small Inc. $44,417.72 414 SAMPLE -EWING FUND Grauvogel & Associates $5,904.20 Petty Cash $163.00 lyz South Bend Redevelopment Commission Regular Meeting - November 03, 2000 3. CLAIMS (CONT.) 420 SBCDA Farrington Appraisal Baer Barkley & Co. 424 TIF- SBCDA- BUILDING OPERATIONS CB Richard Ellis South C & S Service, Inc. Total All Claims Upon a motion by Mr. Caldwell, seconded by Mr. Kahn and unanimously carried, the Commission approved the Claims submitted November 03, 2000, and ordered the checks to be released. 4. COMMUNICATIONS There were no Communications. 5. OLD BUSINESS There was no Old Business. 6. NEW BUSINESS a. Staff report on disposition of property in the Airport Economic Development Area. (Lot 4, Blackthorn Corporate Park) Mr. Rock introduced Mr. Panzica, who made the presentation. Mr. Panzica stated, "We faxed a letter over this morning that since you were in Executive Session, you didn't see it. We revised the proposal that we had made to Owen Rock several -3- $500.00 $1,200.00 $368.23 $1,007.25 $170,246.25 COMMISSION APPROVED THE CLAIMS SUBMITTED NOVEMBER 03, 2000, AND ORDERED THE CHECKS TO BE RELEASED THERE WERE NO COMMUNICATIONS THERE WAS NO OLD BUSINESS South Bend Redevelopment Commission Regular Meeting - November 03, 2000 6. NEW BUSINESS (CONT.) a. continued... days ago. What Crescent Michiana Properties is proposing to do is to immediately exercise its take down right on Blackthorn Lot #4, which is immediately north of the lot that houses the Associates facility. We are going to ask the Commission to execute with us an early entry construction indemnification agreement that would allow us to immediately begin to develop the southern 60 ft. of that property as additional parking for the Associates facility. I'm sure that the Commission is aware that because of the hiring they have been doing out there and the expansion of the facility, they have far exceeded the employment that was anticipated, so they are now parking out on Crescent Circle, which is creating a problem for the City. We are concerned about snow plowing and such. They have asked us to try to get this parking, at least a binder in, in the year 2000 construction season and the early entry agreement would allow us to do that while we are still dotting the i's and crossing the is on the purchase agreement. Then our intention is to take the remainder of that site and to build Crescent 2, which was part of our original master plan on a spec basis. Originally, we had not desired to do that, but it appears that there is no market unless you have a building, so we are committing that within 12 months, to build a shell of Crescent 2, to finish all the exterior improvements and leave the interior open and unfinished, so that we could accommodate the needs of different users that might come to the building. -4- South Bend Redevelopment Commission Regular Meeting - November 03, 2000 6. NEW BUSINESS (CONT.) a. continued... were not given a copy of the letter. Owen has it in his hands now, but that is basically what we said in the letter is that we are asking that the Commission allow us to exercise the take -down at the price and terms that were negotiated two years ago when we purchased this. Then we would immediately put in this parking in this calendar year and would next year break ground on the second building. " Mr. Rock recommended to the Commission that they approve the indemnification and that Mr. Panzica send in a formal application and proposal to appear on the next agenda. 1C Upon a motion by Mr. Faccenda, seconded by Mr. Caldwell and unanimously carried, the Commission approved the indemnification agreement for Lot #4, Blackthorn Corporate Park. b. Commission approval requested for an Addendum to Agreement for Lease and Development of Real Property By and Between the South Bend Redevelopment Commission and Studebaker Autoparts Sales Corporation dated January 7, 2000. Mr. Inks noted that the original agreement called for the project to be completed by June 1, 2000. -5- COMMISSION APPROVED THE INDEMNIFICATION AGREEMENT FOR LOT #4, BLACKTHORN CORPORATE PARK South Bend Redevelopment Commission Regular Meeting - November 03, 2000 6. NEW BUSINESS (CONT.) b. continued... The amendment states that construction shall be substantially completed and qualify for the award of a Certificate of Completion on or before June 01, 2001. Upon a motion by Mr. Faccenda, seconded by Mr. Kahn and unanimously carried, the Commission approved the request for an Addendum to Agreement for Lease and Development of Real Property By and Between the South Bend Redevelopment Commission and Studebaker Autoparts Sales Corporation dated January 7, 2000. c. Commission approval requested for Subordination Agreement between Bank One, Indiana, NA and the City of South Bend, Department of Redevelopment. ( Draga Investments, LLC) Mr. Inks explained that the Commission conveyed a parcel of land to Draga Investments, LLC with a Contract for Sale of Land, which causes the land to revert back to the Commission if Draga doesn't meet the performance requirements of the Contract. In order for Bank One, Indiana, NA to lend to Draga, Bank One requires the Commission's right to the property be subordinated to Bank One's right. The staff recommends approving the Subordination Agreement so that Draga can borrow the money necessary to complete the project. So COMMISSION APPROVED THE REQUEST FOR AN ADDENDUM TO AGREEMENT FOR LEASE AND DEVELOPMENT OF REAL PROPERTY BY AND BETWEEN THE SOUTH BEND REDEVELOPMENT COMMISSION AND STUDEBAKER AUTOPARTS SALES CORPORATION DATED JANUARY 7, 2000 South Bend Redevelopment Commission Regular Meeting - November 03, 2000 6. NEW BUSINESS (CONT.) c. continued... Upon a motion by Mr. Caldwell, seconded by Mr. Kahn and unanimously carried, the Commission approved the Subordination Agreement between Bank One, Indiana, NA and the City of South Bend, Department of Redevelopment. (Drags Investments, LLC) d. Staff report on disposition of property in the Sample -Ewing Development Area. (305 E. Broadway Street) Mr. Mariani reported that the property located at 305 E. Broadway Street was advertised for sale according to the State Redevelopment Law and the official bidding period concluded September 4, 2000 with no offers received at the minimum offering price of $1000. He stated that he had received two requests to purchase the property for $1.00. One offer was made by Magdalena Del Valle who lives on the east side of the 40 foot parcel and another offer was made by Carmen Del Valle who lives on the west side. Each wishes to increase the size of their respective property with the purchase. The staff has negotiated with the parties and they are willing to each take half of the available parcel for $1.00 each. The staff recommends accepting the offers. -7- COMMISSION APPROVED THE SUBORDINATION AGREEMENT BETWEEN BANK ONE, INDIANA, NA AND THE CITY OF SOUTH BEND, DEPARTMENT OF REDEVELOPMENT (DRAGA INVESTMENTS, LLC) South Bend Redevelopment Commission Regular Meeting - November 03, 2000 6. NEW BUSINESS (CONT.) d. continued... Upon a motion by Mr. Faccenda, seconded by Mr. Caldwell and unanimously carried, the Commission approved the disposition of the east 20 feet of the parcel located at 305 East Broadway to Magdalena Del Valle for the purchase price of $1.00 Upon a motion by Mr. Faccenda, seconded by Mr. Caldwell and unanimously carried, the Commission approved the disposition of the west 20 feet of the parcel located at 305 East Broadway to Carmen Del Valle for the purchase price of $1.00 e. Commission approval requested for Satisfaction of Obligations and Release of Mortgage. (Rental Rehab) Mr. Inks explained that under the Rental Rehab Loan Program a landlord receives a loan which is forgiven 10% per year over ten years if the conditions of the loan program are met. This Release of Mortgage is for property located at 739 Laporte. The borrower met all the obligations under the mortgage and the loan has been fully forgiven as of March 20, 2000. Upon a motion Mr. Kahn, seconded by Mr. Faccenda and unanimously carried, the Commission approved the Satisfaction of Obligations and Release of Mortgage. (Rental Rehab) -8- COMMISSION APPROVED THE DISPOSITION OF THE EAST 20 FEET OF THE PARCEL LOCATED AT 305 EAST BROADWAY TO MAGDALENA DEL VALLE FOR THE PURCHASE PRICE OF $1.00 COMMISSION APPROVED THE DISPOSITION OF THE WEST 20 FEET OF THE PARCEL LOCATED AT 305 EAST BROADWAY TO CARMEN DEL VALLE FOR THE PURCHASE PRICE OF $1.00 COMMISSION APPROVED THE SATISFACTION OF OBLIGATIONS AND RELEASE OF MORTGAGE (RENTAL REHAB) South Bend Redevelopment Commission Regular Meeting - November 03, 2000 6. NEW BUSINESS (CONT.) L Commission approval requested for Loan and Grant in connection with the Affordable Loan Program for property located at 2513 Rush St. (Linda M. White) Mr. Inks noted that the loan amount is $2,050 and the grant amount is $1,227.60. Upon a motion by Mr. Kahn, seconded by Mr. Caldwell and unanimously carried, the Commission approved the Loan and Grant in connection with the Affordable Loan Program for property located at 2513 Rush St. (Linda M. White) g. Commission approval requested for Loan and Grant in connection with the Affordable Loan Program for property located at 1210 N. Huey. (Jennie B. Harris) Mr. Inks noted that the loan amount is $3,600 and the grant amount is $3,393.50. Upon a motion by Mr. Kahn, seconded by Mr. Caldwell and unanimously carried, the Commission approved the Loan and Grant in connection with the Affordable Loan Program for property located at 1210 N. Huey. (Jennie B. Harris) h. Commission approval requested for Loan and Grant in connection with the Affordable Loan Program for property located at 3012 Longley. (Alice Karezewski) 10 COMMISSION APPROVED THE LOAN AND GRANT IN CONNECTION WITH THE AFFORDABLE LOAN PROGRAM FOR PROPERTY LOCATED AT 2513 RUSH ST. (LINDA M. WHITE) COMMISSION APPROVED THE REQUEST FOR LOAN AND GRANT IN CONNECTION WITH THE AFFORDABLE LOAN PROGRAM FOR PROPERTY LOCATED AT 1210 N. HUEY (JENNIE B. HARRIS) South Bend Redevelopment Commission Regular Meeting - November 03, 2000 6. NEW BUSINESS (CONT.) h. continued... Mr. Inks noted that the loan amount is $4,150 and the grant amount is $3,958.90. Upon a motion by Mr. Kahn, seconded by Mr. Caldwell and unanimously carried, the Commission approved the Loan and Grant in connection with the Affordable Loan Program for property located at 3012 Longley. (Alice Karezewski) i. Commission approval requested for Loan and Grant in connection with the Affordable Loan Program for property located at 529 S. Wellington. (Neva Mullin) Mr. Inks noted that the loan amount is $1,800 and the grant amount is $500.50. Upon a motion by Mr. Kahn, seconded by Mr. Caldwell and unanimously carried, the Commission approved the Loan and Grant in connection with the Affordable Loan Program for property located at 529 S. Wellington. (Neva Mullin) j. Commission approval requested for Loan and Grant in connection with the Affordable Loan Program for property located at 601 Camden. (Geraldine Litka) Mr. Inks noted that the loan amount is $6,950 and the grant amount is $5,045.70 Upon a motion by Mr. Kahn, seconded by Mr. Caldwell and unanimously carried, the Commission approved the Loan and Grant -10- COMMISSION APPROVED THE LOAN AND GRANT IN CONNECTION WITH THE AFFORDABLE LOAN PROGRAM FOR PROPERTY LOCATED AT 3012 LONGLEY (ALICE KAREZEWSKI) COMMISSION APPROVED THE LOAN AND GRANT IN CONNECTION WITH THE AFFORDABLE LOAN PROGRAM FOR PROPERTY LOCATED AT 529 S. WELLINGTON (NEVA MULLIN) COMMISSION APPROVED THE LOAN AND GRANT IN CONNECTION WITH THE AFFORDABLE LOAN PROGRAM FOR PROPERTY LOCATED AT 601 CAMDEN (GERALDINE LITKA) South Bend Redevelopment Commission Regular Meeting - November 03, 2000 6. NEW BUSINESS (CONT.) j. continued... in connection with the Affordable Loan Program for property located at 601 Camden. (Geraldine Litka) k. Presentation of development concept for the South Bend Central Development Area. (South Bend Chocolate Company) Mr. Harwood and Mr. Tamer, representing the South Bend Chocolate Company, gave a slide presentation of the development concept. *A hard copy of the presentation is attached to the minutes. Mr. Faccenda noted that his son represents the company and therefore, to avoid a conflict of interest, he would not vote. Upon a motion by Mr. Kahn, seconded by Mr. Caldwell and unanimously carried, the Commission agreed to endorse the development concepts as presented by the representatives of the South Bend Chocolate Company. Mr. Faccenda abstained. 7. PROGRESS REPORTS 8. NEXT COMMISSION MEETING The next Regular Meeting of the Redevelopment Commission is scheduled for November 17, 2000, at 10:00 a.m. 9. ADJOURNMENT There being no further business to come before the Redevelopment Commission, Mr. Faccenda made a motion that the meeting be adjourned. Mr. Caldwell seconded the motion and the meeting was adjourned at 11:30 a.m. -11- COMMISSION AGREED TO ENDORSE THE DEVELOPMENT CONCEPTS AS PRESENTED BY THE REPRESENTATIVES OF THE SOUTH BEND CHOCOLATE COMPANY. MR. FACCENDA ABSTAINED THERE WERE NO PROGRESS REPORTS NEXT COMMISSION MEETING ADJOURNMENT South Bend Redevelopment Commission Regular Meeting - November 03, 2000 Robert W. Hunt, President -12- Donald E. Inks, Director- !I a Introducing EAST RACE PLACE MARKETPLACE August 11, 2000 east-race-1 IM03M (9 Vl� In lk OFFICEPLACE Flo! ra EXECUTIVE SUMMARY I. Phase I The SBCC Development Corporation proposes to buy the current Commerce Center on East Colfax St. in South Bend. The building is currently used as office space, but we plan to repackage the 83,305 sq. ft. building into more of a mixed -use development. The South Bend Chocolate Company would move their factory and outlet store to the building. We will also build a restaurant addition to the East Race side of the building and develop a retail portion of the project. II. Phase II Phase II portion of the project includes the construction of another office /retail building to the north of the Commerce Center. We will also develop an East Race Master Plan incorporating Rose Fuel & Material's property. III. Cost The budgeted costs of the project are as follows: Phase I- between $4,785,000 — $5,085,000 IV. Financing With the South Bend Chocolate Company as our partner, the SBCC Development Corporation is seeking financing for phase I of this project. We are looking at three methods of financing, or a combination of the three: a conventional bank loan, B.D.C. loan from the City, and a loan from the current owners. The two companies will spend between $1 -$1.4 million dollars into the finished East Race Place project. SBCC DEVELOPMENT CORP. CURRENT STRUCTURE Jay Harwood and Mark Tamer founded the SBCC DEVELOPMENT CORP. Jay and Mark formed this company to develop the Gridiron Row building in downtown South Bend. They also own the South Bend Chocolate Company. Jay is currently employed by Rose Fuel and Materials, a masonry supply company located just off the East Race, and will be running the Development Corp. full-time by the end of the year. Brad Toothaker of CB Richard Ellis, has recently joined the SBCC's Board of Directors as an investor. His knowledge of the downtown rental and real estate markets will be valuable to the success of the company. The Corporation was founded with the intent to develop buildings for the South Bend Chocolate Company. Mark had a plan to start a'Chocolate Cafe' but had not found a suitable location. Finally we came across what is now known as the 'Gridiron Row' building. With the help of the Chocolate Company as our first renter, this building became very viable to renovate and lease to other tenants. With the Chocolate Company already leasing, we found that other tenants were anxious to rent space. GRIDIRON ROW BUILDING Introduction: The Gridiron Row building at 121 S. Michigan St., located in downtown South Bend next to the College Football Hall of Fame. The SBCC has renovated this building over the last two years and has a lease from the city with an option to buy in twenty years. There is almost 10,000 sq ft. of lease able space in the building, and is 100% occupied. There is a loan with St. Joe Capital Bank for $390,000 that will be paid off in thirteen years. PLAN FOR RENOVATION AND EXPANSION OF THE COMMERCE CENTER Introduction: The Commerce Center (CC) is a commercial building located in the East Bank in South Bend's downtown at 401 E Colfax. The building is a renovated 83,305 sq. ft. power plant. The CC has lost two major tenants and the owners, Capozzoli Advisory for Pensions appear ready to sell. Our plan is to buy the CC, renovate it, repackage it, and build on space for a new restaurant and cafe. There is also a plan for a second phase of the project that consists of the construction of a new office /retail building and a master plan for the East Race. Our feeling is that the building has great value, but not in its current condition. The building needs better marketing and a different tenant mix. Furthermore, the building does not fully embrace the East Bank nor draw people to it. The East Bank area has for years been a key development for the City. But it is time for a face -lift. Our marketing, expansion and renovations will accomplish this and turn the building into the centerpiece of the East Bank. Renovation: We plan to renovate Memorial's old space into new space for the South Bend Chocolate Company's factory, new tour area, their corporate office, and outlet store. We will need to remodel the atrium to accommodate the restaurant and other specialty retail outlets. Other uses in the atrium could include a tourist information area for the Convention and Visitors Bureau. These, coupled with the hairstylist already located in the atrium, should give the atrium its own identity as a retail area. Expansion: Our plan calls for a restaurant addition to be added to the east of the building adjacent to the Score's space. This space will have outdoor seating and be connected with the atrium We also would like an area for outdoor entertainment. There will also be an addition of a new `Chocolate Cafe -on the race' next to the restaurant. We will add on a new glass entrance between the two spaces, with neon lights and signs. Marketing Plan: The CC building will need a new image to reflect its new tenants, new direction, and new uses. First we will rename the building 'East Race Place'. This will be the name for the entire building with the retail space being called 'East Race Marketplace', and the office space called 'East Race Officeplace'. This will give both the retail and office space their own identity. The new East Race Place logos are on the cover sheet. We will use these logos on all signage, letterheads, and promotional materials. We would also like to see the City use our logos for all their signs concerning the East Race. This would turn our building into the focal point of the East Race, and also keep the project in the headlines. However, the heart of our marketing plan will be to bring people to the building by the renovation of the lobby, the Chocolate Company's tour area, and the new restaurant that looks out over the Race. (The Chocolate Company on its own projects 30,000 tourists through their space by the first year.) These changes should bring new vitality to the building with the goal of retaining existing tenants and attracting new ones. Similar to the SBCC Development Corp.'s Gridiron Row Building. We also need the City of South Bend to commit to turning the East Race into a tourist/retail area. With the help of the Convention and Visitors Bureau and The Indiana State Tourism Commission, we would like to see 'Tourists Walks' through the East Race and West Washington Street. This will link together the not - for -profit attractions with the Chocolate Company to better market to tourists. We also would like to see minor infrastructure changes and better marketing of the East Race to cater more to retail. These changes with proper marketing can transform the area to a'Destination Spot' for both tourists and residents of South Bend. This will give us a marketing advantage toward new tenants (both retail and office) while increa property values of the entire East Race District. Purchase of The Commerce Center: We are at the end of negotiations for 1 of the Commerce Center. Total expenditures for the build -out of the building additions will be between $4,785,000 - $5,085,000 With the SBCC Development and South Bend Chocolate Company funding between 18 % -24% of the project through current and future cash flow of both businesses, over the next two years. The remaining funds will be through various forms of financing. PHASE II EXPANSION & EAST RACE MASTER PLAN We propose to add a new building north of the adjacent CC building. We envision an office /retail building with the retail portion on the ground floor facing the East Race. Our greatest hurdle will be the city's commitment to additional parking in the East Bank. A Build -to -Suit arrangement will be required with the new tenant before any construction can begin. We have also begun plans for an East Race Master Plan. We have hired a local architect, David Sassano, to develop this plan. David is also a member of the Downtown Partnership and will develop this plan in conjunction with the Partnership's own plans for the East Race. Our plan will include parking and a greater density of retail and office space along the East Race. We have already been in contact with three national restaurant chains, and have started to ; develop the concept of the `Brickyard Shops', a retail area located on Rose Fuel & Material's property. The corner block of Madison Street and Niles Ave. will be the initial phase of our `Brickyard Shops'. In conjunction with the East Race Master Plan, the SBCC Development Corp. will also develop a new location for Rose Fuel & Materials. Rose Fuel has been located in South Bend for over 86 years, and it is very important to them to remain located in the city. Preliminary sites are in the process of being located. SUMMARY By August of 2002, the Chocolate Company will occul remodeled 89,500 sq. ft. East Race Place. With many 1U.JL6- L%,LL.. JAa,%;;,, WIZ; t,wJcL;L wC wut be at least 95% occupied for the years to follow. We will have our renovations, restaurant and cafe additions complete, and will be working with the City of South Bend, The Downtown Steering Committee, and private investors on phase II of the project. The Chocolate Company will need a new factory in the next 3 -4 years. Our other option would be to build a new factory and tour area. This option would probably cost in the neighborhood of $1.5 million with similar type of build -out numbers. Though a new place would lend itself better to future expansion, it would not have the impact for the company or for the City of South Bend as will East Race Place. We also would not be able to piggyback the success of the Chocolate Company into the development of other retail outlets and office space. Hence we do not perceive this investment into the Commerce Center as risky but as a great opportunity. 4�7a (P rnrn d �nn rn z Dun It_ Al Ul D -0 Cl D nd ru to n m/ �i;� East Race Place- THE PROPOSED MOVE OF THE SOUTH BEND CHOCOLATE Wel n PROPOSED MOVE OF SOUTH BEND CHOCOLATE COMPANY The South Bend Chocolate Company is currently investigating options to stay at their current location move to a site near the Toll way, or relocate closer to area attractions in South Bend's downtown. This report deals with a proposed move downtown. PROPOSAL: Relocate plant, corporate office to the Commerce Center at 401 E. Colfax. Our intent is to not only move our plant, but to create a major tourist attraction by expanding our existing tour facilities. We currently attract 15,000 people to tour our Sample Street plant. TIMETABLE: Move to be completed by August 1' 2002 with a graduated move -in starting the spring of 2001. TOUR FACILITIES AND DESCRIPTION: Tours will begin with a 15 -20 min. film on chocolate. Then visitors will enter replica of an ancient Mayan ruin, traverse a small bridge and enter a tropical rain forest and see a reproduction of a cacao tree. Displays will educate the visitor about chocolate during this part of the tour. After exiting the rain forest, the visitor will wind through displays that tell the story of chocolate, its history, impact on our culture, diet, with all displays pointing to a final display about the South Bend Chocolate Company. Finally, each group will be able to tour part of the factory. cr The tours will take place in the old Health and Lifestyle lobby and mezzanine. The current windows that allow people to view racquetball players will allow visitors to look into part of the factory. After the tour is complete, visitors will end up in our outlet store and new Chocolate Cafe to make purchases. MARKETING PLAN: We will expand on our existing market, which includes local and regional schools, clubs, associations, and out -of -town tour buses. Mark is on the Convention and Visitor's Board and will continue to work with them. We plan to develop a new tour brochure, and use 2 staff members to operate tour area. This staff will additionally market the tours when unoccupied with them, and work directly with area hotels and attractions for referrals and co- marketing opportunities. Pre - opening plans a. Press releases- create some anticipation with consumers b. Co -op press - market project with City, DT Partnership, etc. c. Schedule Grand Opening- guests list, when, etc. i. Invite VIP's, politicians, the press, downtown businessmen, etc. d. Send out tourist flyers to schools, organizations, daycares, and Visitor Centers within 120 -mile radius. 2. Grand Opening Day Plan ® a. Coordinate opening day w /Chocolate Company staff for downtown blitz b. Grand Opening tours c. Give -a ways TOUR FEES: Charge for the tour will be between $3.00- $5.00, with discounts for groups. This income will support better staffing and marketing of tours. Income from Tour Fees- 1` year- $54,000490,000 2nd'year- $60,000 4100,000 3`d year- $66,000 4110,000 4`h year- $69,000 4115,000 We do not feel we lose any tours by charging a fee. We are currently one of the few free attractions. Most importantly, we estimate that our outlet/cafe sales will range from $500,000- $700,000 per year. This compares to our 1998 outlet store sales, which was around $140,000. Finally, we will clearly be marketing the company better which will lead to more sales overall. However, calculating this amount is too speculative to quantify. FACTORY MOVE & TOUR FACILITY BUDGET 1. Exterior Signage $10,000- $25,000 (We have two different types we're looking at) 2. Tour Facility a. Theater i. Large Video Wall $10,000 ii. Treatments $5,000 iii. Seats (benches) $5,000 b. Multi -media Presentation $10,000 c. New Floor Coverings $5,000 3. Lobby (1S` floor) Build out a. Computerized Reservation System $18,000425,000 b. Phones $500 c. New Floor Coverings $10,000 d. Display Shelves $3,000 e. Books, posters, apparel for store $10,000 f. General Treatments $5,000 4. Mezzanine Build out a. Mayan Temple b. History of Chocolate Features in Ruin i. Fog Machine U. Displays c. Tropical Rain Forest i. Cacao and other Trees H. Flooring iii. Bridge iv. Displays about Cacao Plant v. Charts vi. Big See - through Globe d. General Exhibit Area i. Money does grow on Trees ii. Processing iii. Giants in the Chocolate Industry iv. Chocolate and your Health v. Myth and Chocolate vi. Chocolate & Culture vii. Flooring e. Chocolate Factory Overlook i. Wall Demo and Rebuilding Costs H. General Treatments 5.Outlet Store & Lobby a. Better AC b. Cases & Counters c. Lighting d. Misc. e. Signs $100,000 $2,750 $75,000 $26,000 $7,000 $4,000 $3,000 $1,500 $1,300 $18,000432,000 $10,000 $1,000 $20,000 $25,000 $5,000 $10,000 $3,000 6. Cafe Build out $155,0004190,000 7. Office Renovation a. (Suite 300 space) i. Move in $2,000 ii. Training Center $5,000 iii. Treatments $10,000 iv. Phones $6,000 v. Computers $6,000 b. Loft Space/Racquetball Courts i. Demolition $10,000 ii. Windows Dev. Corp. iii. Treatments $5,000 iv. Partition Walls $15,000 v. Flooring $12,000 vi. New AC & Heat $30,000 8. Factory a. Enrobing area i. Wall Demo ii, Electrical iii. Move in b. Panning Area c. Dock/Receiving Area d. Finished Goods Storage e. Raw Product Storage f. General Factory Issues i. Electricity ii. Lighting iii. Flooring iv. Expandability v. Ceiling g. Employee Break & Locker Area Sub - total: Contingency 5% - 20% Grand Total: CONCLUSION $5,000415,000 $40,000 $4,000 $50,000 $7,500410,000 $35,000 $20,000435,000 $10,000 $15,000- $25,000 $25,000 $5,000 $16,000420,000 --------------- - - - - -- $860,050- $1,002,550 $903,052- $1,203,060 There seems to be much risk in putting $900,000 41,200,000 into one of the oldest rehabbed buildings in the downtown. The rewards though include increased revenue from the tourist facility and Cafd /Outlet Store and better marketing of our Company that will lead to increased sales. We believe this plan will have an incredible impact to the East Race and to downtown South Bend. For this reason, we will ask the City for $300,000 to move our factory and build this state -of the art tourist facility and Chocolate Museum to drive tourism in the downtown. With the City's help, we believe that this proposal is a viable option for the South Bend Chocolate Company. East Race Place- THE 2 -YEAR CAPITAL EXPENDITURE PLAN A C a EAST RACE PLACE- 2-YEAR CAPITAL EXPENDITURE PLAN We propose to buy the current Commerce Center and create an exciting mixed -use development. The building will be called East Race Place. This transformation will happen in 5 phases- Phase I- we have an Intent to Purchase with the current owners. Our plan is to purchase the building, and immediately remarket and rename the building. Purchase of the building- $3,000,000 Loan from current owners- $2,400,000 Down payment- $600,000 New signage $45,000 Purchase of land west of parking garage $15,000 Phase II- Extend existing atrium out to the Race and create new entryway. New entryway- $75,000 Phase III- Begin building of the new restaurant and Chocolate Cafe spaces. Restaurant and Cafe additions- $750,000 Phase IV- Chocolate Company completes move and opens tourist facility. Factory and tour facility build -out- To be open by August of 2002 $900,000- $1,200,000 This makes the total cost for the two companies between $4,785,000- $5,085,000 These funds will come from SBCC Development- $100,000 - $200,000 Chocolate Co. $900,000 - $1,200,000 Financing the additional amount Though the SBCC Dev. Corp. is only spending $100,000 of their own funds to purchase the Commerce Center, by August of 2002, the South Bend Chocolate Company and the SBCC Development Corporation will have funded 18%-24% of the project with financing accounting for the remaining of the project. 76%-82% Restaurant & Cafe additions- East Race Place Rent able Square footage - Restaurant- 3580 sq.ft. Atrium Renovation 1200 sq ft. Outdoor seating 1400 sq.ft. Cafe- 2600 sq ft. Construction Numbers- Budget costs --------- - - - - -- New Entry Way- 32' long, 15' wide all glass entry 16' glass sidewalls with round glass tops. Neon lighting throughout. Concrete steps with ramp. TOTAL COST: $75,000 Cafe and Restaurant additions - Excavation and site utilities- $15,000 Concrete footings- 155 yds. $43,000 Concrete slab- Rest. w /stairs 135 yds. $28,000 Cafd 90 yds. $24,000 Exterior Masonry 16' high exterior walls W/ 2' parapet wall- 6,246 sq.ft. of wall with 14 arched window /doors $130,000 Brick with block backup W11 Structural Joist & deck. Exposed trusses $43,000 Roofing- 1 -ply EPM roof $37,000 Fire Protection Sprinkling $12,600 Electric- service to both spaces, power $83,000 to neon entrance and ext. neon lights, and exterior patio lighting Mechanical HVAC- exposed spiral ducts. $114,000 Roof top units, new air units in atrium Glass Windows and Doors- $47,000 Exterior Includes fencing and brick paving $34,000 Landscaping Painting exterior doors and frames $6,000 Atrium Renovation $40,000 General Conditions includes all soft costs $56,000 Contingency $40,000 --------------- -- TOTAL COST: $752,600 W11 East Race Place- THE PUBLIC'S ROLE AND THEIR PAYOFF V� M� lu ^ -� V C f� ruO V V rOr^ ,,V^1 V1 f� CCD r L �P � "_ J �� r F�, Jf- �� 1 JJ y ^� ...., l.`� ��' "� 0 THE PUBLIC'S ROLE The City of South Bend is currently implementing the B.D.I. Plan for our downtown community. The South Bend Downtown Partnership has taken this plan and created goals and strategies for the downtown. The South Bend Redevelopment Commission also has development goals for the downtown and East Bank areas. These goals and some key strategies are as follows: DOWNTOWN PARTNERSHIP'S GOAL - `A vibrant Downtown that by combining excellent working conditions with great living and entertainment environments is an attractive central core for civic life in South Bend.' KEY STRATEGIES - 1. Develop a public /private partnership that effectively integrates the resources of both sectors on behalf of the Downtown. 2. Establish a Downtown Development Concept that includes: - active and visible special facilities, such as the Century Center, College Football Hall of Fame, Morris performing Arts Center, Northern Indiana Center for History, Studebaker National Museum, and Coveleski Stadium. -a vibrant mixed -use specialty district on the East Bank. -a broader array of hospitality- oriented businesses (i.e. hotels, restaurants & entertainment) in the immediate vicinity of the Century Center. Though these are just some of the ideas written out by the Downtown Partnership, one can see how East Race Place fits into their plans for the Downtown. But there are many risks to two small companies in such a large -scale project. These risks range from the purchasing of one the oldest rehabbed buildings in the city to land locking the growth of the Chocolate Company. It is for these reasons we need this public /private partnership spelled out by the Downtown Partnership. SOUTH BEND CENTRAL REDEVELOPMENT AREA PLAN- GOAL- `The overall goal for the Area is to achieve the economic revitalization and physical redevelopment of the Area as attractive, exciting, unique and viable urban center for people, businesses, and institutions.' EAST BANK OBJECTIVES- a) To encourage projects that complement developments and activities in the Central Business District. b) To develop additional recreational and entertainment facilities and uses that will enhance the passive and active recreational usage within the East Bank and provide year -round sources of activity. c) To provide adequate private and public parking that is accessible, attractive and complementary to the East Race Waterway, the St. Joseph River and adjacent parks. d) To maximize the use of the East Race Waterway and minimize the potential conflict between public use of the East Race Waterway and private development of surrounding properties. e) To establish a strong regional identity for the East Bank and a National identity for the East Race Waterway. 0 To create a pedestrian oriented environment within the East Bank and strengthen the pedestrian connection with the Central Business District. IL These are only some of the goals that South Bend Redevelopment has for the area, but it's very easy to see the importance of East Race Place to these plans. East Race Place can be the catalyst and tool for the City to meet their goals for the East Bank as well as the Central Business District. THE PUBLIC'S ROLE- The Public can exercise its partnership role in this exciting project through: a) a low interest Business Development Corporation or Industrial Revolving Fund loan. 1) for the purchase of the Commerce Center 2) possible loan for the restaurant and cafe addition (may not be needed) b) a 10 -year `East Race' tax abatement for 1) addition and remodeling costs to the building 2) a new building on the Commerce Center's property c) City's assistance in relocation of Chocolate Company and build -out of tour facility These funds will be used for state -of -the -art displays to drive more tourists to the downtown. d) Assistance in parking for East Race Place 1) purchase I &M parking garage and lease to SBCC Development 2) the closing of Sycamore Street 3) additional parking assistance for East Race Place and other East Race projects. e) East Race Historic District 1) revamp the signage in 20 block East Race area a) signage to match proposed Historic Heritage Walk b) signage along Raceway improved, updated, and designed to match other signage 2) enhance Colfax St. Bridge to better link East Bank with the Morris Civic and Central City 3) a Convention & Visitors Bureau marketing presence in East Race Place and East Bank a) signage throughout city pointing tourists to CVB and East Race Place 4) Ethnic Festival activities to extend to East Race Place 5) Provide South Bend Chocolate with special exemption to manufacture in A -3 Zoning 6) Downtown Partnership to work with SBCC Dev. To create master plan for East Bank With this type of commitment from our community, we will be able to brand and market our downtown and city to bring in more tourist and retail dollars while helping to ensure thriving businesses in the East Race. N WHAT'S THE PAYOFF FOR THE CITY- What exactly does East Race Place and the subsequent development of an East Race plan mean for our community? 1) Brings jobs to the East Race - relocates 40 -60 jobs by August of 2002 - creates 40 -60 new jobs by August of 2002 2) retail and development catalyst - greater opportunity of success for start-up businesses and the creation of up to 300 new jobs - new vitality to area, associating East Bank with successful businesses - will make new project start-ups more likely - open opportunities for East Race to become a retail incubator 3) tourist dollars - will increase the # of downtown tourist by 20-30% initially - Chocolate Company can help market other not - for -profit attractions while raising their attendance between 2 -5% - provides City with tangible evidence that their commitment to tourism(i.e. the Hall of Fame) has a payoff -The South Bend Chocolate Company will become the city's #1 attraction 4) increase tax base in the East Bank 5) will slow or stop office /retail migration to Edison Lakes by creating market advantage that translates into "Hey, this is a growing, cool place to live and work." 6) end the need for continued city assistance with projects: market will ensure profitability 7) Marketing & Branding of the City -South Bend Chocolate Company to become a symbol of our community that we can market and be proud of -we will offer our knowledge in marketing to the community - become a company name that will become synonymous with the City of South Bend (i.e. Hershey, PA.) Together these translate to the South Bend Chocolate Company becoming the catalyst for a vibrant downtown that is an attractive central core for civic life in South Bend. � r z z z � O O O � r a m m 4 v) rn r A� CJQ CD N OO CA CD V� i t = � °5'�' o n o C a. CD b _ a. CD P CD � CD D n ¢' `C ° Ln ° • y c: .-• o � s Evs p 69 7� n o �CD N CD . °� ; °o ° o�10 ° OC°D O ►' O N W CD O "h O O Ln (� Uq CD -� (�D 0. Q. C n O' O� -,Go tea~ m� c Y� `G P w ; + ; tz c� CCD P UQ n �j cD r � L° Q �° cn 3 c o R° CD CD ° n 1, O GA n CD W CD o 0 O o ° a a a o o d z C7 N o� o N o o N o 7� o n � = w �o o = •a m � � o n a cn n �O �w -,) 6) n o CD CD CD o CD M _ En O - (. ¢' CL C1 �G CL CD 0 CD �. CD o =5• o� s,� � era CL 0 C o� °Q �P7, (n� ; 0 U ; ° CD o o -, ° o o CD o C Z; •� a1 �, X oo Ln cND m � CTS u. o �' o' � D o.. o � • ¢- x ° � (� � 5 = � CD � ao' Cri <. .b � � Ci7 (D CL CD �, °, .� CD � � .� o o cn CD co CD / a Now. \ § . � �- . \ }� |� \� \ § . �- � �.� . f. I .r 2 � �. -- � ! GEUAK 5T. Hill- ffTl- -ff i 1'11-\L)ISOI4 s1KEEr �� rr n i ., 0 "We have to reaffirm the importance of downtown to this whole community. We make an error when we think the rest of the city and the county automatically see it as important. Until that happens, we'll be conducting dieT a lot of guerilla warfare." -Jon Hunt New Downtown Master Plan I It's About Time... • The war begins! • We leverage our community dollars for maximum impact. • We "Proact" instead of react. • We build a retail magnet attraction in downtown South Bend. " To develop downtown into a vibrant city center that satisfies St Joseph County's demand for urban office space, urban residential units, entertainment and unique shopping.° - Minion Statement Strategic Action Plan It's About Time... we fully implement our plan. 2 It's About Time... we recognize that South Bend is on the cusp of a renaissance. Cultural Nortbern Indian Center for CIVIC Morris Perfomting Arts Center 3 Culinary Chocolate Cafd It's About Time... we make a project like East Race Place and the South Bend Chocolate Company a reality. `To develop downtown into a vibrant city center that satisfies St Joseph County's demand for urban office space, urban residential units, entertainment and unique shopping" - Mission Statement Strategic Action Plan 4 "To develop downtown into a vibrant city center that satisfies SL Joseph County's demand for urban office space, urban residential units, entertainment and unique shopping" - Mission Statement Strategic Action Plan "To develop downtown into a vibrant city center that satisfies St Joseph County's demand for urban office space, urban residential units, entertainment and unique shoppin Mission Statement Strategic Action Plan AGENDA SBCC Development & the Gridiron Row Building AGENDA 1. SBCC Development & the Gridiron Row Building 2. East Race Place & the South Bend Chocolate Company AGENDA 1. SBCC Development & the Gridiron Row Building 2. East Race Place & the South Bend Chocolate Company 3. Project Costs AGENDA 1. SBCC Development & the Gridiron Row Building 2. East Race Place & the South Bend Chocolate Company 3. Project Costs 4. The Public's Role Z AGENDA 1. SBCC Development & the Gridiron Row Building 2. East Race Place & the South Bend Chocolate Company 3. Project Costs 4. The Public's Role 5. Why? What's the Payoff? 1. SBCC Development and the Gridiron Row Building 7 2. East Race Place and the South Bend Chocolate Company Phase 1: We have Intent to Purchase with current owners. Plan to purchase, then rename and remarket building. Phase 2: Extend existing atrium out to Race and create new entryway. Phase 3: Begin building of new restaurant and Chocolate Cafe spaces. ro$ i;_� Phase 4: Chocolate Company completes move and opens tourist attraction Our marketing, expansion and renovation will have East Race Place the centerpiece of future East Bank development. The South Bend Chocolate Company Factory and Tour Facility "On the Race" 10 -Over 15,000 people already touring Sample Street factory. -New & improved multi -level tour will draw thousands more from Midwest, U.S., and around the world. -Tours to begin w/ 15 -20 minute film on chocolate. -Visitors then enter unique tour facil ity. 11 The South Bend Chocolate Cafe "On the Race, Current Cafd very successful, especially weekend and Morris event nights. -Will cater more to daytime East Race business. Cafb will increase sales per customer and generate sales from out -of -town visitors. -Will complement new restaurant in same way downtown C66 does The Vine. 12 3. Project Costs PHASE 1 Plurchaseofbmkling $3,000,000 L. bum current ownm 52,400,000 Down payment 5600,000 New sigmge $45,000 Purchase of land west ofpadcing garage $15,000 TOTAL: $3,060,000 PHASE 2 New entryway $75,000 13 PHASE 3 Restaurant and Cafd additions $750,000 PHASE 4 Factory & tour facility $900,000 build-out to $1,200,000 (to be open by Aug 2002) TOTAL COST $4,785,000 - $5,085,000 14 Funds to come from: SBCC Development $100,000 - 200,000 S Chocolate Co. $900,000 -1,200,000 Financing Balance 4. The Public's Role `The key to development of a successful strategic plan and its subsequent implementation is the development ofa public/private partnership which integrates the resources of both sectors on behalf of the district." Strategic Action Plan 15 The City can exercise its partnership role in this exciting project through: a) A low interest BDC or IRF loans The City can exercise its partnership role in this exciting project through: b) A 10 -year Fast Race tax abatement for 1) addition & remodeling costs to building 2) a new building on the Commerce Center's property I, The City can exercise its partnership role in this exciting project through: c) Assistance in relocation of Chocolate Company and build -out of tourfacility The City can exercise its partnership role this exciting project through: d) Assistance in parking for East Race Place 1) purchase I & M parking garage and lease to SBCC 2) closing of Sycamore St. 3) additional parking assistance for East Race Place and other East Race projects 17 The City can exercise its partnership role in this exciting project through: e) East Race Historic District 1) revamp signage in 20 block Fast Race area - signage to match proposed Historic Heritage Walk THE I&M POWER PLANT � .su.r.o.w....tuu� pf � �" ,apt r•�.� The City can exercise its partnership role in this exciting project through: e) East Race Historic District l) revamp signage in 20 block East Race area signage to match proposed Historic Heritage Walk signage along Raceway improved, updated and designed to matchother signage 2) enhance Colfax bridge to better link East Race with Morris Civic and central City 18 The City can exercise its partnership role in this exciting project through: e) East Race Historic District 3) CVB marketing presence in East Race Place and East Bank 4) Ethnic Festival activities to extend to East Race Place i) Provide South Bend Chocolate Company special exemption to manufacture in A -3 zoning 6) South Bend Downtown Partnership to work with SBCC developers to create master plan for East Bank sr.a.r. ra.u... ■r�s Rr11ulY1 R.r..r Dwdv � R.W.4 -1 c —Na Rrd o..a.P.r Rt a..H OW W b� East Bank NE Development Possibilities 5. Why? What's the Payoff? 19 South Bend Redevelopment Area Plan goal `The overall goal for the Area is to achieve the economic revitalization and physical redevelopment of the Area as attractive, exciting, unique and viable urban center for people, businesses, and institutions.' South Bend Redevelopment Area Plan East Bank Objectives a) To encourage projects that complement developments and activities in the Central Business District. b) To develop additional recreational and entertainment facilities within the East Bank c) To provide adequate private and public parking that is acoessible, attractive and complementary to the Fast Race Waterway. South Bend Redevelopment Area Plan East Bank Objectives d) To maximize the use of the East Race Waterway and private development of surrounding properties. e) To establish a strong regional identity for the East Bank and a National identity for the East Race Waterway. f) To create a pedestrian oriented environment within the East Bank and an th the pedestrian connection with the Central Business District 20 5. Why? a) this project does exactly what South Band Redevelopment calls for b) it gives The Chocolate Company an exciting place to market the company building sets up perfectly for tourist facility location helps market The Chocolate Company with other area attractions creating a synergy great location for Cafd and development of other retail outlets along Race c) it gives the Downtown Partnership and Redevelopment a majorvictory .& catalyst for future development 5. Why? What's the Payoff? East Race Place can have a major economic impact for everybody! 5. Why? What's the Payoff? For The South Bend Chocolate Company... a) tourism dollars increases dollars spent from each tourist will nearly double number of tourists by first year b) increased exposure for company - will improve marketing of products throughout Midwest & U. S. 21 5. Why? What's the Payoff? For SBCC Development Corp... a) will turn Commerce Center into valuable asset b) opens doors for future East Race developments retail additions new office / retail building development on Rose Fuel's property will deliver master plan for East Race within 12 months Brickyard Shops Cant of Nib Ave. red Mdi� St 5. Why? What's the Payoff? For the community... a) brims jobs to East Race relocates 4460 by August 2002 creates 4060 new jobs by August 2002 b) retail and development catalyst greater opportunity of success for start-up businesses and creation of up to 300 jobs new vitality to area, associating East Race with successful businesses will make new project start -ups more likely - open opportunities for East Race to become a retail incubator 22 5. Why? What's the Payoff? For the community... C) tourist dollars Will increase number of downtown tourists by 20.309/9 initially Chocolate Company can help market other not - for -profit attractions and raise their attendance 2 -5% provides City with tangible evidence that their commitment to tourism (ie. Hall of Fame) has payoff the South Berl Chocolate Company will become .tor the city's number one attraction 5. Why? What's the Payoff? For the community... d) increase tax base in the East Bads e) slow or stop office / retail migration to Edison Lakes by creating market advantage f) end the need for ccntimred city assistance with projects: market will ensure profitability 5. Why? What's the Payoff? For marketing and branding... a) the community has bad difficulty and limited success marketing the downtown Why? It's not their job We creed companies like the South Bend Chocolate Company to help market city b) community leaders have a major and real need to market downtown, but the ultimate success of marketing is by the private sector 23 r- - 9 _;r , 1i{E SOuni BEND CHOCOLATE C,O.V1PA.1'Y ELKHART TOLL PLAZAS Candy • Gourmet Coffee • Ice Cream 1 r- A _ "We have to reaffirm. the importance of downtown to this whole community. he works We make an error when - _ we think the rest of the city �= and the county automatically see it as important. Until _. = r l that happens, we'll be conducting = -= =° a lot of guerilla warfare." JS. soldier - - Jar Hunt New Downtown Master Plan It's About Time... to become a symbol our community can market and be proud of to offer our knowledge in marketing to the community 25 Historic Boulevards Project, Chicago, Illinois It's About Time... - to become a symbol our community can market and be proud of - to offer our knowledge in marketing to the community - to become a company name that will be synonymous with City of South Bend 26 R It will be good for the South Bend Chocolate Company. It will be good for our community! RA