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HomeMy WebLinkAbout03-25-02 Community & Economic Development A 'lCommitt a import 4ommuntt3 anti Commit aelozloinntnt (Camilla The March 25,2002 meeting of the Community and Economic Development Committee was called to order by its Chairperson, Council Member Karl King at 4:05 p.m. in the Council Informal Meeting Room. Persons in attendance included Council Members Varner, White, Ujdak, Coleman, Aranowski, King, and Pfeifer; Michael Beitzinger,Director of Economic Development Jon Hunt, Beth Leonard, Mr. Timothy D. Hernly of Barnes & Thornburg, Thomas J. Hall, Sean E. Kenyon, Larry Magliozzi Assistant City Attorney, Cheryl Greene,Michael J. Anderson,Peter J. Augustino Terry Bland of the 0410Uj t1$ IrDibttitU and Kathleen Cekanski-Farrand, Council Attorney. Council Member King noted that the first item on the agenda was to review Bill No. 02-19 which is a real property tax abatement request for the property located at 212 East I Salle for the project known as SBL Building Co.,LLC. Mr. Michael Beitzinger,Community&Economic Development Assistant Director summarized his report dated February 13, 2002. The petitioner is SBL Building Co., LLC which is a recently formed Indiana limited liability company composed of two(2) member limited liability companies, namely DS Building Co., LLC which has two (2) shareholders Konopa, Reagan & Kenyon, PC and TH Building Co., LLC, the equity owners of which are the partners of Tuesley &Hall, LLP. The petitioners plan to rehabilitate and convert the former South Bend Orthopedics Professional Office Building from a single medical user and medical rehabilitation tenant into a multi-user professional office building. The cost of renovation is estimated to be $685,000. Mr. Beitzinger noted that a building permit was issued on February 8th. Mr. Timothy D. Hernly of Barnes & Thornburg made a presentation on behalf of the petitioners. He presented a "Brief of SBL Building Co., LLC in Support of Petition" (copy attached) to the Committee. He contended that there is no legal requirement in Indiana law addressing the building permit issue,and that that issue is a matter of local policy. He noted that the petitioners have many qualifications which merit tax abatement consideration even though they may have "put the cart before the horse". He further noted that the Konopa law firm is near the end of their lease and that they are living on "borrowed time". He noted that he had discussed this matter with the County Auditor and the Portage Township Assessor. He noted that neither voiced any concern that petitioners did not qualify for the real property tax abatement. The Council Attorney then summarized her memorandum. Assistant City Attorney Cheryl Greene noted that she had reviewed this matter. They have read Mr. Hernly's brief and agree with the Council Attorney that there must be a finding of facts and compelling reasons in order for the Council to go forward on the tax abatement request. Sean E. Kenyon, a shareholder and local attorney, noted that their lease ran out in February of 2002, and that they are currently renting on a month to month basis. She noted that other tenants are examining her space for possible leasing. Mr. Hernly noted that the building permit was addressed in the instructions which accompany the tax abatement documents, however it is not addressed in state law. In light of the historical perspective presented by Mr. Beitzinger and the Council Attorney,if a waiver resolution is March 25, 2002 Page 2 required, he would recommend that action to his clients. Council President Kelly asked what the definition of"compelling reasons"would be. Mr. Beitzinger noted that a roof or substantial repairs over and above the ordinary. Dr. Varner noted that the building is currently unoccupied and unused. If a waiver is filed and granted then it appears that the Council could legally go forward on the abatement resolution. If there is a legal way to go forward, he would support it. Council Member Aranowski noted that waivers have been considered by the Council on a limited basis in the past. Council Member Coleman stated that this is a"troubling situation". He cannot recall ever having a petitioner come to the Council and tell them that they did not have a basis in law to take or not take action. He stated that in this case the Petitioner wants it "both ways". Council Member Coleman stated that in every prior case, the Council has provided the opportunity to rehab and bring a building into full service where possible. In such cases, the Petitioner acknowledged that they have the responsibility to comply with the Council's rules. Regardless of the circumstances the Council must have compelling reasons to grant a waiver prior to taking formal action on the tax abatement request. He noted that to do otherwise would"open the flood gates".Under the current circumstances, without compelling reasons, he would not support the bill. Council Member Ujdak inquired whether the project would go forward without the tax abatement. Mr. Hall stated that they would. Mr. Hernly stated that standards and obligations are established by the Council, however there is no obligation for the Council to grant an abatement. Such action is based on the Council's discretion since there is no right to an abatement. Council Member Coleman noted that there must be an acknowledgement by the petitioners of noncompliance in order to go forward. Mr. Hernly requested that Bill No. 02-19 be continued to April 8th so that he could discuss this matter further with his clients. The bill was recommended to be continued. Council Member King then called for a presentation on Bill No. 02-20 which is a three (3) year real property tax abatement request for AAK Properties, Inc., for the property located at 131 South Taylor Street. Mr. Beitzinger reviewed his reported dated March 4, 2002 (copy attached).He noted that the principal members of AAK Properties, Inc. Include Michael J. Anderson, Peter J. Augustino and Scott M. Keller who are the principals of a law firm. They have acquired the property containing a building with 20,950 square feet and plan to relocate their law firm to this location. Extensive renovations are necessary. Additionally the dilapidated apartment building on the property will be razed. The total costs of renovations are projected to exceed $270,000. The report concluded that the petitioner meets the qualifications for a three (3) year real property tax abatement under § 2- 78.1 of the South Bend Municipal Code addressing "Office Developments Within the Fast Bank Development Area and Tax Abatement Impact Area". Community and Economic Development Committee March 25, 2002 Page 3 Mr. Anderson made the presentation and assured the Committee that they did not pull a building permit on this project. He noted that he and his partners are exited about the project. Over - $600,000 in renovations will be made by the time the project is completed since they are planning on making the property into a"show piece". Following discussion, Council Member Varner made a motion, seconded by Council Member Ujdak that Bill No. 02-20 be recommended favorably to Council. The motion passed. The Committee then reviewed Bill No. 02-23 which would authorize the Mayor to submit an application for a HUD Economic Development Initiative Grant. Larry Magliozzi made the presentation. He noted that a$100,000 initiative grant is being sought to implement the Studebaker/Oliver Redevelopment Strategy. Following discussion, Council Member Ujdak made a motion, seconded by Dr. Varner that Bill No. 02-23 be recommended favorably to Council. The motion passed. There being no further business to come before the Committee, Council Member King adjourned the meeting at 4:53 p.m. Respectfully submitted, Council Member Karl King, Chairperson Community and Economic Development Committee KCF:Kmf Attachments