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HomeMy WebLinkAbout1993-11-04 Minutesr~ ~J SOUTH BEND REDEVELOPMENT AUTHORITY REGULAR MEETING November 4, 1993 4:30 p.m. Presiding: Joseph Wroblewski President 1308 County-City Building 227 W. Jefferson Boulevard South Bend, Indiana 46601 The November 4, 1993 Regular Meeting of the Redevelopment Authority was called to order at 4:40 p.m. by its President, Joseph Wroblewski. There was a quorum present. 1. ROLL CALL Members Present: Members Absent: Legal Counsel: 2. Mr. Joseph i~Vroblewski, President Mr. Donald K. Fewell, Secretary Mr. Andre B. Gammage, Vice-President Ms. Jenny Pitts Manier Redevelopment Staff: Mrs. Ann Kolata, Director Mrs. Cheryl Phipps, Recording Secretary Mr. James Riggs, Economic Dev. Specialist Mr. Tom Eddington, Economic Dev. Specialist Media: Mr. Don Porter, South Bend Tribune Others: Mr. Kevin Horton, Controller Ms. Lori Bikowski Mr. Jon Williams, Community Affairs Mr. Richard Hill, Baker & Daniels Mr. Randy Rompola, Baker & Daniels Mr. Mike Claytor, Municipal Consultants Mr. Brian Redman, Director, Century Center Ms. Susan Visser, South Bend Art Museum Ms. Mikki Dobski Mr. Richard A. Nussbaum III Ms. Joyce Boaler APPROVAL OF MINUTES a. A~~roval of Minutes of the Regular Meeting_ of Thursday. October 21, 1993. • South Bend Redevelopment Authority Regular Meeting -November 4, 1993 2. APPROVAL OF MINUTES (Cont. ) a. continued... Upon a motion by Mr. Fewell, seconded by Mr. Wroblewski and unanimously carried, the Authority approved the Minutes of the Regular Meeting of Thursday, October 21, 1993. 3. NEW. BUSINESS a. Authority approval requested for Resolution No. 84 establishine its intent that certain vreliminary redevel~ment costs be reimbursed from the proceeds of Redevelopment Authority Lease Rental Revenue Bonds. Mr. Horton gave a presentation explauung the purpose and structure of the bond issue. The bond issue will combine two separate bonds into one in order to save on issuance costs: a bond to fund acquisition improvements, repairs, and renovations at Century Center and a bond to fund the design and construction of the College Football Hall of Fame. Mr. Horton noted that the City hopes to be in a position to start construction on the Hall of Fame in March 1994. In order to meet that timetable, the technical process for the bonds needs to begin. However, since the City is not ready to disclose the results of its corporate solicitation at this time, and since the Authority will want to have that information before a final commitment to issue bonds is made, the City is adding an additional step to the bond process. By beginning the bond process now, the Lease will be considered by the Redevelopment Commission and following its approval, the process can move forward to get approval from the State Tax Board. Both the Redevelopment Commission and the Common Council will then have the opportunity to recommend to the South Bend Redevelopment Authority that it proceed to issue the bonds. Under the current timetable the Commission will consider its recommendation to the Authority on February 4, 1994 and the Council will consider its recommendation to the Authority on February 14, 1994. The Authority would not move forward with the issuance of the bonds without Commission and Council support. The Redevelopment Authority will then authorize issuance of the bonds on February 17. If the Commission is not satisfied with the corporate solicitation, it can recommend that the Hall of Fame portion of the bond be delayed or terminated. The Century Center portion of the bond could go forward alone. This method allows for maximum flexibility while still moving forward, -2- South Bend Redevelopment Authority Regular Meeting -November 4, 1993 3. NEW BUSINPSS (Cont.) a. continued... Century Center is a critical facility in the economic development of the downtown. It is desperately in need of a new roof. The staff has also been looking ahead to their future needs in order to position the facility well for the next ten to fifteen years. Three factors control the proposal made to the Commission at this time: 1) Currently, the City, the school corporation and the HoteUMotel Tax Board make a total of $496,000 per year in lease payments on a lease that runs to 2004. Those bodies cannot afford to make a larger payment. 2) The TIF district has a tremendous burden and cannot afford the additional burden of supporting .Century Center. 3) Century Center is a 220,000 square foot facility. Any facility that size has periodic major maintenance needs. We cannot afford to be in a position where their only source to meet these important needs is the Civil City budget or .the HoteUMotel Tax Board. With those conditions in mind, we propose to convey the building from the Civic Center Building Authority to the Redevelopment • Authority. The Redevelopment Commission would be in a better position than the City or HoteUMotel Tax Board to address the large but critical needs of Century Center. Century Center asked Alan Ritchie to design a renovation of Century Center for $2.6 million that would meet its needs for the next ten to fifteen years.. Alan Ritchie was the architect from the Johnson-Burgee group which originally designed Century Center. A $2.6 million bond could be paid off by extending the current lease payment an additional ten years, to the year 2014. The total amount of the bond issue for Century Center will be $6.4 million. $3.2 million will be used to pay off the existing bond in order to convey Century Center to the Redevelopment Authority. $2.6 million will be used for improvements. Capitalized interest accounts for the remaining $600,000. The second element of this bond issue is the College Football Hall of Fame. The Hall of Fame will be a $14 million project. The City will make certain public improvements, as it does with any downtown development project. Those improvements, totalling $700,000, will include such things as landscaping, street improvements, and, in this case, constructing a tunnel to connect Century Center to the Hall of Fame. Capitalized interest and issuance costs will be $1,046,722 for a total expenditure of $15.7 million. Netting out investment earnings, the total bond for the Hall of Fame will be $15.48 million -3- South Bend Redevelopment Authority Regular Meeting -November 4, 1993 3. NEW BUSINESS (Cont.) a. continued... Mr. Horton noted that the projection shows a shortfall of approximately $40,000 per year on the Century Center bond debt service, which will be made up by tax increment. We hope that figure will decrease as the construction costs are firmed up. Mr. Horton explained the Hall of Fame bond structure. He noted that, although we intend to pay the Hall of Fame bond off with corporate donations, it would not be possible to sell a bond structured with that revenue stream. In order to sell an A rated bond at the best interest rate possible, we have structured the bond as if it were to be paid by tax increment. Using a conservative projection of TIF revenue from the downtown TIF district, a repayment schedule has been developed which would keep bond payments at or below expected TIF revenue to the year 2019. Therefore, to the bond market this looks like astraight-forward TIF bond. The other advantage that • gives the City is that, if a corporation cannot make its commitment in a given year, there would be tax increment enough to make the lease payment. We don't anticipate that happening, but we feel that we have an obligation to cover that contingency. As contributions come in, they will be used to purchase treasury securities which will defease the bonds. The end result is that the U.S. government will be paying the principal and interest on the bond. The Lease must name the maximum lease payment which would be required during the term of the lease. The estimated highest lease payment that will be required for the Century Center portion of the project is $538,000 per year and, therefore, the Lease establishes the maximum semi-annual lease payment for the Century Center portion during the first years of the project at $300,000 and the maximum semi-annual lease payment during the remaining years at $300,000. According to the proposed debt service schedule, the maximum debt service for the Hall of Fame portion of the project is .$2,685,000 per year and, therefore, the Lease establishes the maximum semi-annual lease payment for the Hall of Fame portion during the first years of the project at $660,000 and the maximum semi-annual lease payment during the remaining years at $1,600,000. -4- • South Bend Redevelopment Authority Regular Meeting -November 4, 1993 3. NEW BUSINESS (Cont.) a. continued... Mr, Horton noted that the Lease is structured to assure that there is no mixing of proceeds nor debt service between the Century Center and Hall of Fame portions of the project. Mr. Horton summarized the benefits of this bond issue: 1) the College Football Hall of Fame; 2) a new owner for Century Center; 3) some impressive improvements to Century Center; and 4) lower costs of issuance and better interest rates. Mr. Horton noted that the projected profits from running the Hall of Fame, as shown on the market study from Economic Research Associates, were not used at all as a revenue stream in this bond. Mr. Rompola noted that once we get through the lease .approval process and • get the final order from the State Board of Tax Commissioners we would come back to the Commission and then to the Council for their separate recommendation to the Redevelopment Authority concerning the issuance of bonds to fund the project. The Redevelopment Authority will not issue any bonds until it has the final approval of the Common Council after the lease has been approved by the state. Mr. Hill noted that Resolution No. 85 is different than similar resolutions stating intent to issue bonds in that it states that no bonds will be issued until the Mayor and Common Council make an additional determination (following the entire lease approval process) to move ahead with issuance. Resolution No. 85 also approves a proposed form of lease which sets out two different levels of maximum lease rental amounts for each portion of the bond. Mrs. Kolata noted that Resolution No. 84 states the Authority's intent to issue bonds for constructing and equipping the College Football Hall of Fame and the acquisition and construction of improvements and expansion to Century Center and to consider preliminary costs incurred by the Authority or Commission as eligible expenses out of the bond issue. Upon a motion by Mr. Fewell, seconded by Mr. Wroblewski and unanunously carried, the Authority approved Resolution No. 84 establishing its intent that -5- . South Bend Redevelopment Authority Regular Meeting -November 4, 1993 3. NEW BUSINESS (Cont.) a. continued... certain preliminary redevelopment costs be reimbursed from the proceeds of Redevelopment Authority Lease Rental Revenue Bonds. b. Authority approval reauested for Resolution No. 85 anproving_a proposed lease for certain land and public improvements between the South Bend Redevelopment Authority, as Lessor and the South Bend Redevelopment Commission, as Lessee approving~reluninary plans, specifications and cost estimates for the pro,~ects and other related matters. Mrs. Kolata noted that, in addition to what Mr. Hill stated, Resolution No. 85 also approved the plans, specifications and cost estimates for the projects and Resolution No. 85 approves the proposed Lease between the Commission and the Authority, dated November 1, 1993. • Upon a motion by Mr. Fewell, seconded by Mr. Wroblewski and unanimously carried, the Authority approved Resolution No. 85 approving a proposed lease for certain land and public improvements between the South Bend Redevelopment Authority, as Lessor, and the South Bend Redevelopment Commission, as Lessee, approving preliminary plans, specifications. and cost estimates for the projects and other related matters. c. Authority approval reauested for Agreement with Boswell Golf Architecture, Inc for landscape design services for Blackthorn Golf Course. Mr. Riggs explained that North American Golf, our consultant for Blackthorn Golf Course project has recommended that we enter into an agreement with Boswell Golf Architecture to put together a landscaping plan for certain areas of the golf course that have not yet been addressed: the entrance areas, the tees and greens, etc. The landscaping will probably be ,done over the next few years when we have staff at the golf course. The cost of the contract is $3,000. Upon a motion by Mr. Fewell, seconded by Mr. Wroblewski and unanmously carried, the Authority approved the Agreement with Boswell Golf Architecture Inc. for landscape design services for Blackthorn Golf Course. -6- South Bend Redevelopment Authority Regular Meeting -November 4, 1993 3. NEW BUSINESS (Cont.) d. Authority authorization requested to sign Petition in support of the establishment of Improvement District. Mr. Riggs showed a map of the boundaries of the proposed Improvement District. The Industrial Foundation contacted us about establishing an Economic Improvement District in the Airport Industrial Park and the Toll Road Industrial Park. An Improvement District will allow the businesses in the area to take over the role of covenant enforcement. The Redevelopment Authority owns five parcels of land in the Toll Road Industrial Park; therefore, the Authority, as landowner, must sign the petition to show its approval of the establishment of the improvement district. Mrs. Kolata noted that the staff has met with other property owners in the proposed district. There are other property owners who are interested in establishing this district. We don't know if the petition drive will be successful, but we think it is to everyone's advantage that there be a strong • business organization operating in the area. Upon a motion by Mr. Fewell, seconded by Mr. Wroblewski and unanimously carried, the Authority authorized signing a Petition in support of the establishment of an Economic Improvement District. e. Authori~r approval reauested for Contract for Sale of Land for Private Redevelopment with Watseka Corporation. Mrs. Kolata explained that one of the properties the Redevelopment Authority bought through the bond process has been leased to the Commission which put it up for sale. The property is located at 611 S. Clinton. The Commission received a proposal for the property. Mr Eddington explained that the Watseka Theater Corporation has proposed to purchase the property for $1.00 and renovate the house for the single family residence of its principle. The house is in extremely bad condition. It has been on a Code Enforcement repair list for a number of years. The renovation will cost them approximately $50,000. They will paint and repair the exterior, replace the windows and doors, put in a new kitchen, etc. We have asked that they begin renovation on the exterior and complete the renovation within twelve months. They have agreed to our design guidelines and timetable. The staff recommends accepting their proposal. -7- • South Bend Redevelopment Authority Regular Meeting -November 4, 1993 3. NEW BUSINESS (Cont.) e. continued... Upon. a motion by Mr. Fewell, seconded by Mr. Wroblewski and unanunously carried, the Authority approved the Contract for Sale of Land for Private Redevelopment with Watseka Corporation for 611 S. Slinton Street. 4. APPROVAL OF CLAIMS Claims submitted for payment November 4, 1993 1991 AIRPORT TAX EXEMPT BOND Illinois Lawn Equipment, Inc. $64,690.00 Kenney Machinery Corporation $1,728.00 JW Turf, Inc. $4,340.00 1993 AIRPORT TAXABLE BOND Moody's Investors Service $5, 800.00 BLACKTHORN CONSTRUCTION FUND North American Golf $3,500.00 North American Golf $2,502.50 Pence-Dickens & Heeter $63.60 National Inventory Reserve $270.00 Indiana Michigan Power Co $1,127.44 Boswell Golf Architecture, Inc. $3,000.00 Pence-Dickens & Heeter $319.22 Serviscape $947.04 John Quickstead -Petty Cash $100.00 5. ADJOURNMENT There being no further business to come before the Redevelopment Authority, Mr. Fewell made a motion that the meeting be adjourned. Mr. Wroblewski seconded the motion and the meeting was adjourned at 5:25 p.m. `~ c / L Jo h .Wroblewski, President E. Kolata, Director • -8-