Loading...
HomeMy WebLinkAbout2008-05-21 Redevelopment Authority MinutesSOUTH BEND REDEVELOPMENT AUTHORITY REGULAR MEETING May 21, 2008 1:30 p.m. Presiding: Jose Alvarez 1308 County-City Building 227 West Jefferson Boulevard South Bend, IN 46601 The May 21, 2008 Regular Meeting of the Redevelopment Authority was called to order at 1:29 p.m. by its President, Jose Alvarez. There was a quorum present. 1. 2. ROLL CALL Members Present Redevelopment Staff: Others: Mr. Jose Alvarez, President Ms. Carolyn V. Pfotenhauer, Vice President Mr. Ray Thomas, Secretary Mr. Don Inks, Director of Economic Development Mrs. Jenny Hullinger, Recording Secretary Cheryl Greene, Legal Counsel Elizabeth Leonard, Director of Finance and Program Management Allison Sell, Baker & Daniels, LLC APPROVAL OF MINUTES Approval of the minutes of May 7, 2008 3. Upon a motion by Ray Thomas, seconded by Carolyn Pfotenhauer, and unanimously carried, the Authority approved the Minutes of the Regular Meeting of May 7, 2008. NEW BUSINESS Authority approval requested for Resolution No. 166 approving the execution of a Note and other related documents concerning refinancing of Section 108 Loan. Ms. Leonard said in 1999 we entered into an agreement with HUD for a Section 108 Loan in the amount of $1.8 million. There is $800,000 left to pay off, and we will be paying the $200,000 principle in June. We would like to refinance the remaining $600,000 with a lower interest rate and save about $40,000. The present interest rate is 5% and the new one they are offering is around 2%. Ms. Greene has prepared the documents for this transaction. Ms. Greene said the Authority only needs to sign the contract and note to HUD. Ms. Greene is working on an opinion letter to HUD. The Council has taken the actions they needed to take in regard to this. Upon a motion by Ms. Pfotenhauer, seconded by Mr. Alvarez the Authority The South Bend Redevelopment Authority May 21, 2008 Meeting Minutes approved Resolution No. 166 approving the execution of a Note and other related documents concerning refinancing of Section 108 Loan. b. Authority approval requested for Parking Garage Lease with Kite Realty Construction, LLC Mr. Inks said he and Allison Sell have been working with Kite on the terms of the Lease. Kite and the University of Notre Dame did not complete their transaction until last night. Kite's attorney then sent us a new lease agreement, which we reviewed this morning and still have some concerns about it. Mr. Inks said after hearing Ms. Sell's report on the status of the lease the Authority could approve the lease subject to further legal review, or continue the meeting a different day or schedule a new meeting when the final lease is available. Mr. Inks said there is a certain urgency to complete the lease so that the contractors can begin their work on the project. Ms. Sell said the lease is between Kite Realty Eddy Street Garage LLC, which is a Kite entity, and the Authority. It gives the Authority an interest in the parking garage site and the garage that will be constructed. The lease that was previously approved for the bond to pay for the public improvements for the area is called the sublease in this document. There will then be a third step, a lease between the Redevelopment Commission and this same Kite entity or another Kite entity to close the loop. What we are trying to accomplish is to relieve the Authority and the Commission from any and all liability other than this lease so that the Kite entity will be responsible for everything they should be. Kite seems to be in complete agreement with this. We want to make sure we are protected in the future, such as taxes, maintenance or violating some insurance provision or whatever may arise. Mr. Alvarez asked what the strength of Kite is to have the ability to cure any deficiencies. Mr. Inks thought the entities are probably asset-less, so we want the document to loop back to Kite rather than just one of its entities. Mr. Thomas asked who the Authority's agreement is with. Mr. Inks said the Authority's agreement is with Kite's entity-Kite Realty Eddy Street Garage LLC. We are leasing the land from that entity. We will then lease the land with the improvements on it to the Redevelopment Commission, who will then lease it to the second Kite entity who will then maintain the garage. Ms. Sell said we may need a separate document from Kite stating that they will be responsible for any defaults that may occur with their created entities. Mr. Inks said he thought they were very close on finalizing the document. 2 H:\WPDATA\AUTHORTY\5-21-2008 REDEVELOPMENTAUTHORITYMINi1TES.DOC The South Bend Redevelopment Authority May 21, 2008 Meeting Minutes After discussion on the options available, the Authority chose to continue the meeting next Tuesday, May 27 at 1:30 pm. Mr. Thomas said that he will be gone from May 29 until June 8. Ms. Greene stated that she could draft a resolution that allows the Vice President to sign for the Secretary in Mr. Thomas' absence. Upon a motion by Mr. Thomas, seconded by Mr. Alvarez, the Vice President was authorized to sign in Mr. Thomas' absence in regard to this lease. Mr. Thomas would like Ms. Green to draft a resolution that can be adopted in the future that authorizes the Vice President to sign in his absence at any time. He did not want to rush into an open resolution at this time. Authority approval requested for Resolution No. 167 approving a proposed second addendum to Lease for certain additional local public improvements between the South Bend Redevelopment Authority, as Lessor, and the South Bend Redevelopment Commission, as Lessee, approving preliminary plans, specifications and other related matters. (Century Center 2008 Project) Mr. Inks reviewed the list of repairs and replacements that Century Center wants to do to their facility that would be covered by the bond. There are also a number of enhancements to the building, grounds and streetscape that they would like to do if there is TIF money available in the downtown. We have not received a report from our consultant to know what TIF money would be available after the new legislation is in place, so we cannot make any commitments on the enhancements at this point. As the amount of money is made available then the lease will be amended. The amount of the major repairs is estimated at $7,829,330. The enhancements total $2,156,863. Ms. Sell said the bonds for the project would be a lease finance construction addendum to the 1993 lease that is in place. The maximum annual payment would not be more than $1,109,000 and would come from the Redevelopment Commission to the Redevelopment Authority. The maximum length of time for the bonds would be twenty years. Upon a motion by Ms. Pfotenhauer, seconded by Mr. Thomas, the Authority approved Resolution No. 167 approving a proposed second addendum to Lease for certain additional local public improvements between the South Bend Redevelopment Authority, as Lessor, and the South Bend Redevelopment Commission, as Lessee, approving preliminary plans, specifications and other related matters. (Century Center 2008 Project) 4. NEXT MEETING DATE: a continued meeting date of May 27, 2008 3 H:\WPDATA\AUTHORTY\5-21-2008 REDEVELOPMENTAUTHORITYMINi1TES.DOC The South Bend Redevelopment Authority May 21, 2008 Meeting Minutes 5. ADJOURNMENT The Redevelopment Authority noted it would continue its meeting on Tuesday, May 27 at 1:30pm in the Board of Public Works Meeting Room. At that time the Authority will consider the Parking Garage Lease with Kite Realty Construction, LLC 4 H:\WPDATA\AUTHORTY\5-21-2008 REDEVELOPMENTAUTHORITYMINi1TES.DOC