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HomeMy WebLinkAboutEDC Minutes 7.9.2024Item 2.a CITY OF SOUTHBEND ECONOMIC DEVELOPMENT COMMISSION SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION July 9, 2024, at 4:00 pm BPW Conference Room, 13th Floor http://tinyurl.com/EDCCOSB2024 The South Bend Economic Development Commission was called to order at 4,02 pm Roll Call Members Present: Cecilia Lopez Monterrosa, President Rafael Morton, Vice -President* Renata Matousova, Secretary Luis Zapata, Commissioner Karen White, Commissioner (virtually) * departed the meeting at 4:30 pm Members Absent: None Staff: Sandra Kennedy, Corporation Council Others Present: Caleb Bauer, Executive Director, DCI Erik Glavich, Director, Growth & Opportunity, DCI Sarah Schaefer, Deputy Director, DCI Tom Everett, Barnes & Thornburg Jordan Smith, Reporter, South Bend Tribune 2. Approval of Minutes Secretary Renata Matousova motioned to approve the February 12, 2024, minutes with a direction to staff to correct typos. Commission Karen White seconded; motion carried unanimously on July 9, 2024. 3. New Business CITY OF SOUTH BEND I ECONOMIC DEVELOPMENT COMMISSION July 9, 2024 A. Presentation of Project: 466 Works Community Development Corporation (Southeast Neighborhood Project) Mr. Erik Glavich, Director of Growth and Opportunity, presented on the Southeast Neighborhood Project. A map was shown as to where the development will take place. Project cost is $8.8M and the City would support the project through a $3.5M EDC statute forgivable loan. Money would be disbursed as houses are built at a rate of $116,000 per house. Private investment commitment is about $5.3M and committed completion date is end of 2027. 30 homes will be built. The Board of Public Works recently approved the transfer of 17 vacant lots to 466 Works for the project. At least 12 of the homes will be sold to households at 120% or less of area median income. On June 27 the Redevelopment Commission approved a development agreement that authorized the $3.5M of TIF funds and established the commitments of 466 Works. The Redevelopment Commission also approved a resolution that authorized the TIF funds to be used through the form of a forgivable loan. The ordinance was introduced at the July 8 Common Council meeting and received its first reading. Vice President Rafael Morton asked what rationale was used to come up with the requirement that12 of the 30 houses would need to be sold to households at 120% or less average median income (AMI). Mr. Caleb Bauer, Executive Director of Community Investment, responded that it was 40% of the total development and the rationale was that, as appraisals have gone up in the neighborhood, it can create challenges in terms of affordability for low-income buyers. In working with 466 Works, they felt the 120% AMI rate was reasonable rate for 40% of the homes, that buyers could still qualify for a mortgage. Secretary Renata Matousova asked about the amount of payroll as a percentage of the entire project cost. Mr. Glavich commented that housing construction costs are coming in at about $290k. A slide was shown that detailed the costs 466 Works estimated, and Mr. Glavich indicated that those costs are in line with other projects we have seen. President Cecilia Lopez Monterrosa asked about whether the home would be built in sort of a subdivision and whether there are existing homes there or empty lots. Mr. Glavich indicated they are all empty lots and showed a map of all the parcels. President Cecilia Lopez Monterrosa asked what determines whether a house is 2 bedrooms or 4 bedrooms. Mr. Bauer explained that 466 Works pre -sells their homes so they work with the buyer on the home design. CITY OF SOUTH BE D I ECONOMIC DEVELOPMENT COMMISSION July 9, 2024 Commissioner Luis Zapata indicated that since First Source Bank is involved in the 466 Works project and because of his connection to First Source Bank as his employer, he will abstain during voting. Secretary Renata Matousova asked when 466 Works would be able to draw the funds. Mr. Glavich commented that they could draw up to $116,000 as they begin construction of a home. Mr. Bauer commented that the amount would be forgiven upon completion. B. Public Hearing regarding loan A notice was published in the South Bend Tribune on June 28, 2024, regarding the public hearing on the 466 Works loan. A Public Hearing regarding the loan was opened to the public for comments and considerations. No comments were made by the public. The Public Hearing was closed. C. Approval of Project Report (466 Works - Southeast Neighborhood Project) The motion was made by Secretary Renata Matousova and seconded by Commissioner Luiz Zapata. On the motion to approve the Project report: ■ Cecilia Lopez Monterrosa, President: YEA • Rafael Morton, Vice -President: YEA ■ Renata Matousova, Secretary: YEA • Luis Zapata, Commissioner: ABSTAIN • Karen White, Commissioner: YEA The motion carried with 4 YEAs and 1 Abstain; the Commission approved the project report for the 466 Works Southeast Neighborhood Project on July 9, 2024. D. Approval Of Resolution No. 2024-2 Authorizing a Direct Loan to the Developer of An Economic Development Facility (Southeast Neighborhood Project) and Approving Other Matters In Connection Therewith The motion was made by Secretary Renata Matousova and seconded by Commissioner Karen White. On the motion to approve Resolution No. 2024-2: ■ Cecilia Lopez Monterrosa, President: YEA • Rafael Morton, Vice -President: YEA • Renata Matousova, Secretary: YEA • Luis Zapata, Commissioner: ABSTAIN • Karen White, Commissioner: YEA CITY OF SOUTH BEND I ECONOMIC DEVELOPMENT COMMISSION July 9, 2024 The motion carried with 4 YEAs and 1 Abstain; the Commission approved Resolution No. 2024-2 on July 9, 2024. E. Presentation of Project: Affordable HomeMatters Indiana LLC / Intend Indiana (Lincoln Park Project) Mr. Glavich, Director of Growth and Opportunity, presented on the Lincoln Park Project. A map was shown as to where the development will take place. Project cost is $25.01M and the City would support the project through a $S.OM EDC statute forgivable loan. Money would be disbursed annually at a maximum of $1.125M per year. Private investment commitment is $20.OM and committed completion date is end of 2029. 92 homes will be built. The Board of Public Works recently approved the transfer of 43 vacant lots to Intend Indiana for the project. At least 40 of the homes will be sold to households earning less than 80% AMI; at least 17 homes will be sold to houses earning 80-12% AMI; and the remaining homes would be sold at market -rate. On June 27 the Redevelopment Commission approved a development agreement that authorized the $S.OM of TIF funds and established the commitments of Intend Indiana. The Redevelopment Commission also approved a resolution that authorized the TIF funds to be used through the form of a forgivable loan. The ordinance was introduced at the July 8 Common Council meeting and received its first reading. Secretary Renata Matousova asked if the draws on the loan would be based on the building of a house. Mr. Bauer explained that the developer would be able to draw up to $1.125M at the beginning of the construction season and that the amount would be subject to an annual appropriation from the Redevelopment Commission. President Cecilia Lopez Monterrosa asked about the developer's plans and how many homes they hope to build. Mr. Bauer indicated the developer plans to build 20 homes in the first year. F. Public Hearing regarding loan A notice was published in the South Bend Tribune on June 28, 2024, regarding the public hearing on the Affordable HomeMatters Indiana LLC / Intend Indiana loan. A Public Hearing regarding the loan was opened up to the public for comments and considerations. No comments were made by the public. The Public Hearing was closed. CITY OF SOUTH BEND I ECONOMIC DEVELOPMENT COMMISSION July 9, 2024 G. Approval of Project Report (Affordable HomeMatters Indiana LLC / Intend Indiana - Lincoln Park Project) The Motion was made by Secretary Renata Matousova and seconded by Commissioner Luiz Zapata. On the motion to approve the Project report: • Cecilia Lopez Monterrosa, President: YEA • Rafael Morton, Vice -President: Not Present Renata Matousova, Secretary: YEA Luis Zapata, Commissioner: YEA Karen White, Commissioner: YEA The motion carried unanimously; the Commission approved the project report for the Affordable HomeMatters Indiana LLC / Intend Indiana - Lincoln Park Project on July 9, 2024. H. Approval Of Resolution No. 2024-3 Authorizing a Direct Loan to the Developer of An Economic Development Facility (Lincoln Park Project) and Approving Other Matters In Connection Therewith The Motion was made by Secretary Renata Matousova and seconded by Commissioner Karen White. On the motion to approve Resolution No. 2024-3: • Cecilia Lopez Monterrosa, President: YEA ■ Rafael Morton, Vice -President: Not Present • Renata Matousova, Secretary: YEA • Luis Zapata, Commissioner: YEA • Karen White, Commissioner: YEA The motion carried unanimously; the Commission approved Resolution No. 2024-3 on July 9, 2024. Adjournment at 4:44 pm RA&Moon, Vie Presi ent ReKiata Matousova, Secretary REPORT OF THE SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION CONCERNING THE PROPOSED FINANCING OF ECONOMIC DEVELOPMENT FACILITIES FOR J.C. HART COMPANY, INC. The South Bend Economic Development Commission (the "Commission") proposes to recommend to the Common Council of the City of South Bend, Indiana (the "City"), that it provide the net proceeds of certain taxable economic development tax increment revenue bonds (the "Bonds") to J.C. Hart Company, Inc. (together with any affiliate thereof, collectively, the "Developer") for the financing of a portion of certain economic development facilities consisting of the development and construction of mixed -use development in the City. In connection therewith, the Commission hereby reports as follows: A. The proposed economic development facilities consist of the development and construction of 2 buildings housing approximately 291 apartments and an approximately 398 space structured garage which shall be located in the Riverwalk Allocation Area designated by the South Bend Redevelopment Commission (collectively, "Project"). B. The Commission estimates that except for those public works and services for which funds of the City and other parties are expected to be available, there are no public works or services, including public ways, schools, water, sewer, street lights and fire protection, which will be made necessary or desirable by the Project, because any such works or services already exist or will be provided from proceeds of the Bonds or by the Developer or other parties. C. The Commission estimates that the total costs of the Project, including capitalized interest on the Bonds, and costs related to the issuance of the Bonds, for which funding is not otherwise available will not exceed $17,000,000. D. The Commission estimates that completion of the Project will result in the creation of approximately six (6) new permanent full-time jobs with average annual salaries ranging from $39,400 to $70,100 and approximately 225 temporary construction jobs having an average hourly rate of $65.00 and that the Project will result in the expansion of further business opportunities in the City. E. The Project will have not have an adverse competitive effect on similar facilities already constructed or operating in the City as the project will compliment similar facilities and provide further opportunities for residential, retail and commercial growth in the City. [SIGNATURES FOLLOW ON NEXT PAGE] Adopted this 6th day of February, 2025. SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION ATTEST: Secretary DMS 45978784