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HomeMy WebLinkAbout05-02-08 Redevelopment Commission MinutesSOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING May 2, 2008 10:00 a.m. 227 West Jefferson Boulevard Presiding: Karl King, Vice-President South Bend, Indiana 1. ROLL CALL Members Present: Members Absent: Legal Counsel: Mr. Karl King, Vice President Mr. Greg Downes, Secretary Mr. Hardie Blake, Jr. Dr. David Varner Ms. Marcia Jones, President Mr. Charles S. Leone, Esq. Mr. Lawrence Meteiver, Esq. Redevelopment Staf£ Mr. Don Inks, Director Mrs . Cheryl Phipps, Recording Secretary Mr. Bill Schalliol, Economic Development Specialist Mr. Robert Mathia, Economic Development Specialist Ms. Ann Kolata, Economic Development Specialist Ms. Debrah Jennings, Property Manager Others Present: Mr. Tom Price, Mayor's Office Ms. Catherine Fanello, Controller Mr. Jeff Vitton, Community Development Ms. Sheral Litell, Grubb & Ellis Ms. Donna Chamblee, Cooreman Real Estate Mr. Robert Jagger, Old Fort Building Supply Ms. Rita Kopala Ms. Linda Wolfson, Community Forum for Economic Dev Mr. Sam Kariuki Ms. Betty Kariuki 2. APPROVAL OF MINUTES A. Approval of Minutes of the Regular Meeting of Friday, April 18, 2008. Upon a motion by Mr. Downes, seconded by Mr. COMMISSION arrxovED TxE MINUTES of TxE Blake and unanimously carried, the Commission REGUEax MEETING of FRIDAY, Arx1E 18, approved the Minutes of the Regular Meeting of zoo8 Friday, April 18, 2008. South Bend Redevelopment Commission Regular Meeting -May 2, 2008 3. APPROVAL OF CLAIMS Redevelopment Commission Claims submitted May 2, 2008 for approval. Claims REDEVELOPMENT COMMISSION submitted 324 AIRPORT AEDA Sopko, Nussbaum, Inabnit &Kaczmarek 3,757.50 420 FUND TIF DISTRICT-SBCDA GENERAL Sopko, Nussbaum, Inabnit &Kaczmarek 2,216.25 Ampro System Parking 1,610.69 CB Richard 608.30 $ 8,192.74 Upon a motion by Mr. Downes, seconded by Mr. Blake and unanimously carried, the Commission approved the Claims submitted May 2, 2008, and ordered checks to be released. 4. COMMUNICATIONS There were no Communications. 5. OLD BUSINESS There was no Old Business. 6. NEW BUSINESS A. Receipt of Bids (1) Receipt of Bids for the Eddy St. Commons Parking Garage in the Northeast Neighborhood Development Area. Mr. Leone noted that one bid was received by the 10:00 a.m., May 2, 2008, deadline. The envelope was not marked as a proposal. It was inadvertently opened by a staff person. COMMISSION APPROVED THE CLAIMS SUBMITTED MAY 2, 2008, AND ORDERED THE CHECKS TO BE RELEASED THERE WERE NO COMMUNICATIONS THERE WAS NO OLD BUSINESS 2 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) A. Receipt of Bids (1) continued... The staff person has completed an affidavit stating that she did open the proposal, but did not review the contents. The staff person also has no authority over the disposition process. Mr. Schalliol noted that the bid received was from Kite Realty Group and Trust. He referred that bid to staff for review during the meeting and recommendation at the end of the meeting. Dr. Varner asked if we were anticipating any other bids. Mr. Inks responded that we were not. Receipt of bids was advertised, but staff was not aware of any other interest in the property. Upon a motion by Mr. Downes, seconded by Mr. Blake and unanimously carried, the Commission acknowledged the bid received from Kite Realty Group for the Eddy Street Parking Garage and referred the bid to staff for review and recommendation at the end of the meeting. B. Tax Abatements (1) Commission approval requested for Resolution No. 2451 approving an application for real property tax deduction for property in the Airport Economic Development Area (Old Fort Building Supply) COMMISSION ACKNOWLEDGED THE BID RECEIVED FROM KITE REALTY GROUP FOR THE EDDY STREET PARKING GARAGE AND REFERRED THE BID TO STAFF FOR REVIEW AND RECOMMENDATION AT THE END OF THE MEETING South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) B. Tax Abatements (1) continued... Mr. Mathia noted that Old Fort Building Supply proposes to construct a 12,000 sft storage warehouse with the addition of an outside storage area for products specific to Old Fort's business. The additional capacity will enable the company to buy in larger volume and remain competitive in the current downturn of the construction industry. The estimated dollar value of the project is $325,000. Old Fort Building Supply is a major supplier of construction materials to the Michiana area. Between 80% and 90% of the company's sales are to professional contractors and subcontractors. The main product lines are brick, architectural block, stone, landscaping pavers and wall, drywall, steel studs, insulation, acoustical ceilings and related products. Mr. Mathia noted that Old Fort Building Supply is located in the Urban Enterprise Zone and may qualify for the Enterprise Zone Investment deduction, a 10-year deduction which covers 100% of assessed value from new investment, but requires the company to contribute 25% of the savings to the Urban Enterprise Association. If the company receives the LTEZ designation, the tax abatement designation will become null and void. During the five-year abatement it is estimated that $33,441 in taxes will be abated. Total taxes to be paid during that 4 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) B. Tax Abatements (1) continued... same five years is estimated at $22,294. The project is expected to create two new, permanent, full-time jobs representing a new annual payroll of $62,000. The project will also retain twenty existing, permanent, full- time jobs and one permanent part-time job representing an annual payroll of $950,000. Mr. Mathia noted that Old Fort received a previous tax abatement in 2006. The property is properly zoned for the proposed use. The property is within the Airport Economic Development Area, a tax increment financing allocation area; therefore, the petition for real property tax deduction must first be approved by the South Bend Redevelopment Commission. The project qualifies for five years of real property tax deduction under the tax abatement ordinance. Dr. Varner asked if Old Fort qualified for the Urban Enterprise Zone designation in 2006. Mr. Jagger responded that they constructed a new building on the site of the 2006 project. Since there was no building there, the Urban Enterprise Zone designation did not apply. Mr. Mathia noted that Old Fort could choose between the LTEZ designation or tax abatement, depending on which would be more beneficial. South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) B. Tax Abatements (1) continued... Upon a motion by Mr. Downes, seconded by Dr. Varner and unanimously carried, the Commission approved Resolution No. 2451 approving an application for real property tax deduction for property in the Airport Economic Development Area (Old Fort Building Supply) (2) Commission approval requested for Resolution No. 2452 approving an application for real property tax deduction for property in the Airport Economic Development Area (Villas at Lake Blackthorn, Section 1) Mr. Mathia noted that Section I of the Villas at Lake Blackthorn was granted afive-year residential real property tax abatement on December 9, 2002. The Council's resolution confirmed its residentially distressed area (RDA) designation approved November 12, 2002 in its declaratory resolution. The RDA designation begins on the date the declaratory resolution was approved and runs for five years. The Villas at Lake Blackthorn received a one year extension on the RDA designation, understanding that Cooreman Realty Group would petition for an additional five years of tax abatement this year to allow the developer time to complete the sale of all lots in Section I. Section I has a total of one hundred one home sites, fifty-one of which are still available for sale. The subdivision is located on approximately 56 acres, with a large lake, COMMISSION APPROVED RESOLUTION NO. 2451 APPROVING AN APPLICATION FOR REAL PROPERTY TAX DEDUCTION FOR PROPERTY IN THE AIRPORT ECONOMIC DEVELOPMENT UREA (OLD FORT BUILDING SUPPLY 6 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) B. Tax Abatements (2) continued... a gazebo park, and another small year-round pond. Homes in Section I average 1,800 sft with three bedrooms, two baths and a two car garage. The average value of the homes is $250,000. Section II has a separate tax abatement and is not located in any tax increment allocation area administered by the Redevelopment Commission. Taxes to be abated during the five-year abatement period are estimated at $10,219 per home, or a total of $521,169 for the fifty- one unsold sites. The taxes to be paid during the five-year abatement period for each home are estimated at $14,960, or atotal of $762,960 for the unsold sites. Mr. Mathia noted that Cooreman Realty Group has received two previous tax abatements, the one year extension, and has a five-year abatement pending for Section II of the Villas at Lake Blackthorn. The property is properly zoned for the proposed use. The property is located in the Airport Economic Development Area, a tax increment allocation area; therefore, approval of the abatement by the South Bend Redevelopment Commission is required. The project qualifies for five years of residential tax abatement under the tax abatement ordinance. It is anticipated that the term of the new RDA will be made consecutive with the term of the existing RDA, i.e., from November 12, 2008 through November 11, 2013. 7 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) B. Tax Abatements (2) continued... Dr. Varner asked if the calculations of abatement are based on the new system with its caps or on the old system. Mr. Mathia responded that he is still using the old system until we get the new numbers. Dr. Varner asked what becomes of the abatements granted during this time if the 1% cap holds. Do they still get an abatement in addition to the 1% cap? Mr. Mathia responded that the Council will have to decide how to handle them. Dr. Varner thought people should be made aware of the possibility that the Council might declare a moratorium on tax abatements. The purpose of abatement was to level the playing field between city and county for new housing development. The 1% cap will do that. Mr. King asked Ms. Chamblee the impact of the Council's potential rescinding of tax abatements because of HB 1001 on the feasibility of Cooreman's development. Ms. Chamblee said that their experience is that even with tax abatement, city homes still pay more taxes than those outside the city. They will still need abatement as an incentive to purchase in the Villas. Dr. Varner stated that if the cap is 1%, it's 1%. A house in Lake Blackthorn will have the same taxes as a house of the same value in Westwood Knolls. So, there would be a distinct advantage to also have tax abatement for the Lake Blackthorn homes. 8 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) B. Tax Abatements (2) continued... Ms. Fanello said that the 1% cap will, indeed, equalize the tax rate between the city and county. That is a great incentive for people to move to the city. Mr. King asked if Ms. Chamblee would want to go forward with this tax abatement, even if it was possible that the Council might rescind the abatement later. Ms. Chamblee agreed that she would. Mr. Downes asked if it was realistic to expect to sell all the lots in five years, considering current market conditions. Ms. Chamblee responded that current market conditions don't last forever. They hope to revisit the 800 or so clients in their database who decided not to buy because of the high taxes and find them more ready to buy in this new environment. Dr. Varner said that as a Council member he has been a proponent of tax abatement as an incentive. He hopes that if the need for an equalizer has disappeared that tax abatement would be discontinued. Upon a motion by Dr. Varner, seconded by Mr. Downes and unanimously carried, the Commission approved Resolution No. 2452 approving an application for real property tax deduction for property in the Airport Economic Development Area (Villas at Lake Blackthorn, Section I) COMMISSION APPROVED RESOLUTION NO. 2452 APPROVING AN APPLICATION FOR REAL PROPERTY TAX DEDUCTION FOR PROPERTY IN THE AIRPORT ECONOMIC DEVELOPMENT UREA (VILLAS AT LAKE BLACKTHORN, SECTION I~ 9 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) C. South Bend Central Development Area (1) Commission approval requested for Resolution No. 2453 related to the gift of property needed for redevelopment in the South Bend Central Development Area. (332 W. Jefferson) Mr. Schalliol noted that in early 2007 the City of South Bend was approached by the property owner of the building at 332 West Jefferson about donation of the structure to the city. The building is in disrepair, is delinquent on property tax payment and is a blighting structure in a neighborhood that has slowly been rehabilitating itself. Mr. Schalliol noted that the Commission has moved the South Bend Central Development Area boundaries and added the property to its acquisition list in November 2007, performed site surveys and environmental overviews and spent months working through several title issues. It is now in a position to be able to accept the donated property. On April 28 the Board of Public Works opened bids for demolition of the property and will award the contract at its meeting on May 8, pending Commission action. The short term plan for the site is demolition, with long term plans to redesign the parking and access related to the adjacent H&G and future WNIT parking areas. Staff requests Commission approval of Resolution No. 2453. Dr. Varner asked who the donor is. Mr. Schalliol responded that the donor is Center City Housing, owned by Tom Brademas. 10 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) C. South Bend Central Development Area (1) continued... Upon a motion by Mr. Downes, seconded by Mr. Blake and unanimously carried, the Commission approved Resolution No. 2453 related to the gift of property needed for redevelopment in the South Bend Central Development Area. (332 W. Jefferson) D. Airport Economic Development Area (1) Commission approval requested for proposal for professional services in the Airport Economic Development Area. (Consulting services, LaSalle Square Area Redevelopment Plan) Mr. Vitton noted that at its March 28 meeting Commission approved a draft contract for consulting services with zpd+a in the amount of $50,000 plus reimbursable expenses, conditioned on the terms of the contract being substantially the same as presented and reimbursable expenses capped at $5,000. The final contract contains an additional reimbursable expense in paragraph 3.4, overnight lodging, if authorized by the city representative. Staff recommends approval of the revised contract. Dr. Varner asked if the Commission has done business with zpd+a before, noting that we seem to use a lot of firms from Chicago. Mr. Vitton responded that we have not used zpd+a before. Mr. King asked about the timeline. Mr. Vitton responded that the first steering COMMISSION APPROVED RESOLUTION NO. 2453 RELATED TO THE GIFT OF PROPERTY NEEDED FOR REDEVELOPMENT IN THE SOUTH BEND CENTRAL DEVELOPMENT AREA. (332 W. JEFFERSON 11 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) D. Airport Economic Development Area (1) continued... committee meeting will be May 14, with the first public meeting about 3-4 weeks later. Upon a motion by Mr. Downes, seconded by Dr. Varner and unanimously carried, the Commission approved the proposal for professional services in the Airport Economic Development Area. (Consulting services, LaSalle Square Area Redevelopment Plan) (2) Commission authorization requested to file a Special Exception Petition with the Board of Zoning Appeals for property located in the 900 block of Oliver Plow Court, and authorization requested for Danch, Harner & Associates, Inc. to represent the Commission at the Board of Zoning Appeals hearing. Ms. Kolata noted that the property requiring the special exception is in the northwest corner of the Oliver Industrial Park. The Commission owns the property. Staff has been negotiating with Underground Pipe and Valve which is currently located in the Studebaker area in the old foundry. We have been negotiating to purchase that property. Underground Pipe and Valve has identified this site as the one they would like to move to. However, there are a couple of things related to their proposed site plan that need special consideration. One is the amount of outside storage that they would have on the site. That is the request for the Special Exception. The exception is to permit almost COMMISSION APPROVED THE PROPOSAL FOR PROFESSIONAL SERVICES IN THE AIRPORT ECONOMIC DEVELOPMENT AREA. (CONSULTING SERVICES, LASALLE SQUARE AREA REDEVELOPMENT PLAN 12 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) D. Airport Economic Development Area (1) continued... an acre more outside storage than would normally be allowed. The total site is 6.5 acres. They are proposing to have about 4 acres of that as outside storage. We feel that the Special Exception is acceptable because of where the site is located near a railroad that is on a 10 ft high embankment. In the variance, we are asking that the storage be allowed to go all the way to the lot line instead of 100 ft inside the lot line. The types of material they store outside are primarily sewer and water pipe. Ms. Kolata noted that the next request is at the west property line where there is a 40 ft setback. We'd like a variance to only 20 ft. Ms. Kolata noted that staff is aware of the impact of having that much storage area and have been working with the engineering department over how the drainage will work. Ms. Kolata noted that it is difficult to find a location that meets the needs of a business requiring this much storage. It doesn't make economic sense for them to provide inside storage for all of that material that doesn't need to be protected from the weather. Mr. Blake noted that the nearby residents may not be knowledgeable enough to realize they should care about this issue or that they can object. He thought someone needs to meet with them to articulate the concerns and explain the process. Ms. Kolata noted that staff has notified everyone with in the 13 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) D. Airport Economic Development Area (1) continued... appropriate radius about the Board of Zoning Appeals hearing. She will also schedule a meeting before the hearing to explain it to residents. Dr. Varner asked if we plan to require that the outside storage be organized. Ms. Kolata responded that we could. Dr. Varner also suggested they get an estimate on using pervious pavement and consider using it for such a large paved surface to make it more environmentally friendly. Ms. Kolata noted that this is a brownfield site. In some brownfield sites, you don't want any additional water going through the ground. She didn't believe that was true of this site, however. Mr. King asked about the retention basin. Ms. Kolata noted that the retention area will be expanded by the city to handle the storm water from the nearby KROC Center. Upon a motion by Dr. Varner, seconded by Mr. Downes and unanimously carried, the Commission authorized the filing of a Special Exception Petition with the Board of Zoning Appeals for property located in the 900 block of Oliver Plow Court, and authorized Danch, Harner & Associates, Inc. to represent the Commission at the Board of Zoning Appeals hearing. 14 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) E. West Washington-Chapin Development Area There was no business in the West Washington- Chapin Development Area. F. South Side Development Area There was no business in the South Side Development Area. G. Northeast Neighborhood Development Area (1) Commission approval requested for Improvement Easement Agreement in the Northeast Neighborhood Development Area. (Eddy Street Commons site) Mr. Inks noted that this is an easement agreement between the University of Notre Dame, Kite Realty Group and the Redevelopment Commission. It is an easement upon the Eddy Street Commons development site for the purpose of developing, constructing and performing the improvements of the project: the road improvements, the parking garage, utilities, anything to be funded by the city for the project. There are two other pieces of property rights we still need to obtain: right of way for Napoleon St., a portion of Eddy St., Burns and Duey; and a lease from Kite to the Redevelopment Authority. Mr. Inks noted that the easement includes a provision for the university and the developer to terminate the agreement unilaterally, but not before the improvements are made or before the Commission disposes of its rights in the property. Once the garage is constructed, the Commission will go through 15 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) G. Northeast Neighborhood Development Area (1) continued... a bid process to dispose of the easement. Dr. Varner asked who owns the land at this time. Mr. Inks responded that parts of it are owned by the University of Notre Dame, parts by Kite. The transaction to convey university land to Kite is expected to take place within a week. The easements that Kite is granting would not become effective until they own the property. Mr. Inks noted that the legal description for the easement is not yet available, so the Commission would authorize execution of the final document. Upon a motion by Mr. Downes, seconded by Mr. Blake and unanimously carried, the Commission approved the form of Improvement Easement Agreement in the Northeast Neighborhood Development Area and authorized Commissioners to execute the agreement subject to final review and approval by legal counsel. (Eddy Street Commons site) H. Douglas Road Economic Development Area There was no business in the Douglas Road Economic Development Area. COMMISSION APPROVED THE FORM OF IMPROVEMENT EASEMENT AGREEMENT IN THE NORTHEAST NEIGHBORHOOD DEVELOPMENT AREA AND AUTHORIZED COMMISSIONERS TO EXECUTE THE AGREEMENT SUBJECT TO FINAL REVIEW AND APPROVAL BY LEGAL COUNSEL. (EDDY STREET COMMONS SITE 16 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) L Ratification of Service Contracts Property Commission Role Service Contract Staff Description in Transaction Contractor Provided Amount Member Cove Park, Ph 3 Pre- Acquisition Meridian Title Title $700.00 Schalliol (7 parcels) Searches Int. Harvester Acquisition Meridian Title Title $200.00 Schalliol Bldg. (2 parcels) Searches Gates - 200 Blk Pre- Acquisition Wightman Petrie Phase 1 ESA $1,900.00 Schalliol Gates - 300-400 Pre- Acquisition Wightman Petrie Phase 1 ESA $2,300.00 Schalliol Blk Fred's Pre- Acquisition Wightman Petrie Phase 1 ESA $1,800.00 Schalliol Transmission TOTAL $6,900.00 Upon a motion by Mr. Downes, seconded by Mr. Blake and unanimously carried, the Commission ratified the service contracts listed above. A. Receipt of Bids (1) continued... Mr. Inks noted that after reviewing the bid received from Kite Realty Group, it seems that the bid was incomplete. It does not include the Proposal Form which would specify price and all of the other conditions of the sale. The application appeared to be complete in all other respects. It appeared that it was inadvertently omitted during the copying process as the page numbering had a gap. He recommended rejecting the bid from Kite Realty Group. COMMISSION RATIFIED THE SERVICE CONTRACTS LISTED ABOVE. 17 South Bend Redevelopment Commission Regular Meeting -May 2, 2008 6. NEW BUSINESS (CONT.) A. Receipt of Bids (1) continued... Upon a motion by Mr. Downes, seconded by Dr. Varner and unanimously carried, the Commission rejected the bid from Kite Realty Group for the Eddy Street Parking Garage. 7. PROGRESS REPORTS There was no report. 8. NEXT COMMISSION MEETING The next meeting of the Redevelopment Commission is scheduled for Friday, May 16, 2008 at 10:00 a.m. 9. ADJOURNMENT There being no further business to come before the Redevelopment Commission, Mr. Downes made a motion that the meeting be adjourned. Mr. Blake COMMISSION REJECTED THE BID FROM KITE REALTY GROUP FOR THE EDDY STREET PARKING GARAGE PROGRESS REPORTS NEXT COMMISSION MEETING ADJOURNMENT seconded the motion and the meeting was adjourned at 10:50 a.m. ~~ .. ~` . ~a1~'E ;~is~ ~ .. ... A+Iar~~a I. James, Frei 18