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HomeMy WebLinkAbout2B Redevelopment Commission Minutes 01.09.25 - Amended - Signed CITY OF SOUTH BEND REDEVELOPMENT COMMISSION SOUTH BEND REDEVELOPMENT COMMISSION MINUTES January 9, 2025, at 9:30 a.m. BPW Conference Room, 13th Floor, County-City Building https://tinyurl.com/RDC-2025-2T The South Bend Redevelopment Commission was called to order at 9:32 a.m. President Troy Warner presiding. 1. ROLL CALL Members Present: Troy Warner, President David Relos, Vice President Eli Wax, Commissioner Gillian Shaw, Commissioner Leslie Wesley, Member At-Large Members Absent: Vivian Sallie, Secretary Legal Staff: Sandra Kennedy, Corporation Council - Virtual Danielle Campbell Weiss, Asst. City Attorney Redevelopment Staff: Caleb Bauer, Exec. Director, DCI Sarah Schaefer, Deputy Director, DCI Erik Glavich, Director of Growth and Opportunity, DCI Rosa Tomas, Director of Finance - Virtual Joseph Molnar, Asst. Dir. of Growth and Opp., DCI Erin Michaels, Property Development Manager - Virtual Michael Divita, Principal Planner - Virtual Laura Hensley, Board Secretary, DCI Others Present: Ophelia Gooden-Rodgers, Councilwoman Greg Swiercz, SB Tribune Chandler Sturgis, J.C. Hart Company, Inc. Randy, Rompola, Barnes & Thornburg LLP CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING –January 9, 2025 2 Matt Eckerle, Baker Tilly - Virtual Matt Barrett, 110 S. Niles Ave. Tina Patton, Cross Community Mark Peterson, WSBT News 2. 2025 Election of Officers A. Approval of 2025 Redevelopment Commission Board Upon a motion by Eli Wax for approval, second by Gillian Shaw, the motion carried unanimously; the Commission approved the Officers of the 2025 Redevelopment Commission. 3. Approval of Minutes A. Approval of Minutes of the Regular Meeting of Thursday, December 12, 2024 Upon a motion by David Relos for approval, second by Eli Wax, the motion carried unanimously; the Commission approved the minutes of the regular meeting of December 12, 2024. 4. Approval of Claims A. Claims Allowances December 10, 2024 Commissioner Wax asked about the progress of Drewry’s site and Joseph Molnar, Assistant Director of Growth and Opportunity, stated that Phase II is wrapping up and Phase III will commence this summer. Commissioner Wax also asked about the progress on the YMCA demolition project and Mr. Molnar stated that 2/3 of the building is down. President Warner also stated that it will be going to Council for rezoning at the end of the month. Upon a motion by David Relos for approval second by Eli Wax, the motion carried unanimously; the Commission approved the claims allowances of December 10, 2024. B. Claims Allowances December 31, 2024 Upon a motion by David Relos for approval second by Eli Wax, the motion carried unanimously; the Commission approved the claims allowances of December 31, 2024. CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING –January 9, 2025 3 5.Old Business A.None 6.New Business A.River West Development Area 1.Resolution No. 3626 Approving Development Agreement (J.C. Hart Company) Caleb Bauer, Executive Director of Community Investment, presented items 6A1 and 6A2 together. This Resolution approving the Development Agreement for J.C Hart Company, Inc., supporting the redevelopment project in the Riverwalk Allocation Area. Mr. Bauer stated that this is a project-based tax-exempt financing development agreement with developers J.C. Hart Company Inc. Mr. Bauer explained the agreement is for transformative residential housing for two (2) multi-family residential buildings (291 total apartments) and a 398-space parking garage. A minimum $61.5 million in private investment with City funds infrastructure (new street; utilities) through $5.64 million READI 2.0 award on the west bank of the St. Joseph river. He stated that the Crowe headquarters would remain, however, the southern building would be demolished. Mr. Bauer explained that the apartments would be market rate and gave a breakdown of the units (12 studio units, 156 one-bedroom units, 103 two-bedrooms units, and 20 three-bedroom units) with 398 parking spaces in the garage and 214 surface lot spaces. Mr. Bauer stated that private investment commitment is $61.5 million minimum, a developer-purchase bond issuance that generates an estimated $14.845 million in gross proceeds, with $11.925 million in net proceeds after funding bond issuance costs and capitalized interest. 90% of incremental revenue pledged to debt service and an estimated total principal and interest of $29.7 million over a 20-year term.1 An additional 6%incremental revenue up to $1.342 million (then reverts to 90%). Mr. Bauer explained the timeline for the project starting January-March 2025, Redevelopment Commission, Economic Development Commission & Common Council review, end of March, developer closes on project property, mid-year, close the bond, then infrastructure and developer construction begins, and completion of the project will be then end of 2028. Vice President Relos asked about the additional 6% increment captured and Mr. Bauer stated that the debt service commitments we're proposing today is a self-funded incentive and only using property tax revenues from the development itself to fund this bond issuance. Commissioner Shaw asked about the READI 2.0 award and how it impacts this project. Mr. Bauer explained that it 1 The correct timeframe is a 25-year term. For purposes of clarifying the record, the Redevelopment Commission corrected this misstatement at its March 13, 2025 meeting. CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING –January 9, 2025 4 was for the overall Riverfront West area, and this includes this project, and we were awarded $5.6 million, and it is enough for the J.C. Hart project for the street network and utility relocation costs. Chandler Sturgis, with J.C. Hart Company, Inc., explained that there is TIF funding needed at the site with all of the utilities underground and the expense of rerouting them as well as the demolition of the existing building. Mr. Sturgis stated that the parking garage will also factor into the cost. President Warner recapped, we are capturing the increase in taxes that will come from the finalized development and using that then to pay the bond plus then there will be the excess left from that to go towards the parking garage and $1.3 million and then potentially the excess will go into the TIF. Mr. Bauer stated that separately the READI 2.0 award, from the Regional Development Authority, is matched by the increment in the project-based TIFF. Therefore, at this time we're not requesting any appropriation of the River West Development Area tax agreement financing revenues. Commissioner Wax asked how confident the READI 2.0 award will cover the majority of the project needs and Mr. Bauer stated he was confident it would cover the utility relocation. Commissioner Wax also asked about previous J.C. Hart projects and Mr. Sturgis gave the success of Midtown Flats in Carmel, Modan Square and the East Bank in Noblesville as examples. He explained that J. C. Hart has been in business since 1976 and manages over 6000 units in the greater Indianapolis area as well as in Bloomington, West Lafayette and Toledo, Ohio. Commissioner Shaw asked about the use of local contactors and Mr. Sturgis stated that they would act as general contractors and would make the best effort to use local contactors as that is more cost effective. Mr. Randy Rompola with Barnes & Thornburg stated that the Bond is a common financing tool that's used across the state. He stated that the mechanism of financing is a bit unique in the sense that the Redevelopment Commission or the Redevelopment Authority isn't the bond issuer, it's the City of South Bend using the economic development statute. He explained that the Redevelopment Commission pledges the increment from the project to the payment of the debt service. The Common Council will adopt a bond ordinance that will authorize the issuance of the bonds, and the bonds will be issued through the City. The Redevelopment Commission’s role is to first adopt the declaratory resolution designate this project specific allocation area and complete that process. And the second step would be coming later, having a Redevelopment Commission Resolution where you would actually pledge the project increment to pay the debt service on the bonds, and that pledge goes to the payment of the bonds that are being issued by the City. The bond proceeds, then will be sold and the bond proceeds, then will be by the City loan pursuant CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING –January 9, 2025 5 to a loan agreement to the developer. The obligation is for the City to act as a conduit, essentially, the City is not at risk. Mr. Bauer explained that this plays into the broader strategy in the downtown area of adding housing units that will enhance again the viability of retail and restaurants and then bring more full-time employees back into the downtown area from large employers as well as providing housing for all income levels. Matt Barrett asked that residential property does not increase in value and does not affect TIF zones. Mr. Bauer clarified that single family residential only applies to this not apartments which are considered commercial property, but this project would be considered commercial property. Mr. Matt Eckerle, with Baker Tilly stated that apartment complexes are assessed at 2% tax cap rules. Tina Patton asked about how long until the complex should be fully occupied, and Mr. Sturgis stated that there are many variables however, roughly 42 months from the Summer of 2025. Ms. Julie Morgan via Teams chat asked if there would be handicapped accessible units planned and Mr. Sturgis stated per building codes there would be 4 ground units and possibly more with the elevator. Commissioner Relos asked about the progress of the survey and Mr. Bauer stated the survey is on-going. Upon a motion by Eli Wax for approval, seconded by David Relos, the motion carried unanimously; the Commission approved Resolution No. 3626 as presented on January 9, 2025. 2.Resolution No. 3627 Establishing New Allocation Area (J.C. Hart Company) Upon a motion by Eli Wax for approval, seconded by David Relos, the motion carried unanimously; the Commission approved Resolution No. 3627 as presented on January 9, 2025. 3.Bid Specifications for Disposition of Property (808 S. Lafayette Blvd.) Joseph Molnar, Assistant Director of Growth and Opportunity, presented together Items 6A3, 6A4 and 6A5. The Bid Specifications & Design Considerations, Notice of Intended Disposition, and Resolution No. 3625 to begin the Disposition process for the property at 808 S. Lafayette Blvd. have already been through the disposition process and are tabled. Upon a motion by Eli Wax to table Items 6A3, 6A4 and 6A5, seconded by Troy Warner, the motion carried unanimously; the Commission tabled Items 6A3, 6A4 and 6A5 on January 9, 2025. CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING –January 9, 2025 6 4.Notice of Intended Disposition of Property (808 S. Lafayette Blvd.) 5.Resolution No. 3625 for Disposition of Property (808 S. Lafayette Blvd.) 6. Approval of Request for Proposal (Main Street Housing) Joseph Molnar, Assistant Director of Growth and Opportunity, presented this Request for Proposals for a long-term lease of the land located adjacent to the Morris Performing Arts Center to enhance the phase III parking garage with 60–90-unit housing development. Mr. Molnar stated that the RFP sets the project requirements, submission requirements, evaluation criteria, process for evaluation and timeline and proposed two options for developers to use. In one option the parking garage would go on top of the apartments and the other option they are distinctly separated. He also shared the timeline. President Warner asked about height requirements and Mr. Molnar stated that the downtown zoning ordinance is a 12-story limit. Vice President Relos asked about the Hoffman parcel and Mr. Molnar stated the RDC took ownership of that last year in an option to purchase agreement. President Warner suggested an open house to publicize the RFP as well as the standard advising that is required. Commissioner Wax asked about who would operate the garage. Mr. Bauer explained that the intent of the goals of the Raclin Murphy Encore Center is to have a parking structure connected to the Morris and as the costs increased, we needed a better option to find a developer that could capture that increment similar to the Eddy Street Commons garage. Ophelia Gooden-Rodgers, Councilwoman shared reservations with the request. Leslie Wesley, Member At-Large, asked where the production trucks would access the Morris and Mr. Bauer showed the rendering with the larger garage opening that would accommodate large trucks for the loading dock. Ms. Wesley asked about affordable housing options in these most recent proposals. Mr. Bauer explained that the Madison Lifestyle District project is going to be rented between 80 and 120% of area medium income, which is at a workforce housing level versus the J.C. Hart project on the riverfront for higher income levels. He stated that affordable housing requires a combination of federal, state and local subsidy. We've had great success with the local low- income housing tax credit awards with affordable housing being developed east of Four Winds Field at Diamond View, the corner of Michigan and Monroe, the Monreaux, which is the Devereaux Peters’ project as part of the READI awards and part of the Lilly Endowment gift aid awards. The Rabbi Shulman block, and through the combined awards is about $18 million that's been awarded to that redevelopment project of affordable housing. He explained that the findings of the CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING –January 9, 2025 7 Kinder Institute report are that there is need for housing supply at different income levels. Ms. Wesley asked if this information is accessible on the website. Commissioner Wax reiterated that the RDC is aggressively and trying to rebuild South Bend both on the business side, but especially on the housing side to prevent providing opportunities literally across the spectrum from very affordable to the middle all the way to the top. Upon a motion by Eli Wax for approval, seconded by Gillian Shaw, the motion carried unanimously; the Commission approved the Request for Proposal as presented on January 9, 2025. 7. Budget Request (Improvements to RDC Owned Properties) Joseph Molnar, Assistant Director of Growth and Opportunity, presented this Budget Request for $100,000 to provide funds for improvements at the Leighton Building, Union Station downtown, the Main/Wayne Parking Garage, and the Portage Elwood Shopping Center with active tenants. Councilwoman Gooden-Rodgers, asked about specifics regarding improvements. Mr. Molnar shared it’s for things like new fire suppression systems that we have are no longer sufficient or up-to-code, and other improvements to the properties. Upon a motion by David Relos for approval, seconded by Eli Wax, the motion carried unanimously; the Commission approved the Budget Request as presented on January 9, 2025. 8. Fund Appropriation (Affordable HomeMatters Lincoln Park) Sarah Schaefer, Deputy Director of Community Investment, presented this Fund Appropriation for $1.25 million for the second year of the EDC statute forgivable loan to Affordable HomeMatters to build new housing in Lincoln Park. The request is for 92 new construction, single family homes in Lincoln Park with an expected completion date of December 2029. Ms. Schaefer explained that the appropriation is for 2025 and we're not giving this to the organizations right away. They would have to still make the request to us for the funds, but as the funding and reimbursement agreement says, the Commission considers appropriations on an annual basis for this loan. They have to submit an annual allocation plan to us before we approve their draw, they explain what they're planning to do in the coming year with the funding and what they've done in the past year. The progress to date on the Lincoln Park project, is they've done pre-development for 10 of the 92 lots, poured 5 foundations, hosted a meet-and-greet with local contractors and help “homeownership 101 series” to build potential buyers. Commissioner Wax asked if City staff was happy with the CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING –January 9, 2025 8 progress and Ms. Schaefer stated that we are on pace and there has been discussion regarding design however, they are easy to work with and we are engaging local partners such as the South Bend Heritage Foundation and Habitat for Humanity as well. Upon a motion by Eli Wax for approval, seconded by David Relos, the motion carried unanimously; the Commission approved the Fund Appropriation as presented on January 9, 2025. B. South Side Development Area 1. 2025 Fund Appropriation (466 Works Loan) Sarah Schaefer, Deputy Director of Community Investment, presented this Fund Appropriation for $1,160,000 million for the second year of the EDC statute forgivable loan to 466 Works to build new housing on the South side. The request is for 30 new construction, single family homes with an expected completion date of December 2027. Ms. Schaefer explained that this is the same forgivable loan approved last June under a $9 million project with $3.5 million from TIF. The difference is rather than a maximum per year appropriation, it's a maximum subsidy of $116,000 per house and expect to build 10 new homes in 2025 with the same draw process as Lincoln Park. Commissioner Wax asked about how to get to the $116 per house and Ms. Schaefer stated that the maximum is $116 per house. Commissioner Shaw asked if 10 was the maximum build and Ms. Shaefer confirmed that we would just prefer to do one appropriation per year. Tina Patton is in favor of the project. Upon a motion by Troy Warner for approval, seconded by Eli Wax, the motion carried unanimously; the Commission approved the Fund Appropriation as presented on January 9, 2025. 7. Progress Reports A. Tax Abatement B. Common Council C. Updates Joseph Molnar, Assistant Director of Growth and Opportunity, stated that the City met with the childcare center at 415 E. Madison (Oaklawn) and had a productive conversation about whether they wanted to stay in the building, and we will proceed with due diligence and work with them. CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING –January 9, 2025 9 D.Other 8.Next Commission Meeting Thursday, January 23, 2025, 9:30 a.m. 9.Adjournment Thursday, January 9, 2025, 11:07 a.m. ______________________________ _____________________________ Eli Wax, Secretary Troy Warner, President