Loading...
HomeMy WebLinkAboutRedevelopment Commission Minutes 08.28.25 - Signed CITY OF SOUTH BEND REDEVELOPMENT COMMISSION SOUTH BEND REDEVELOPMENT COMMISSION MINUTES August 28, 2025, 2025, at 9:30 a.m. BPW Conference Room, 13th Floor, County-City Building https://tinyurl.com/RDC-2025-4T Meeting Recording Link: https://tinyurl.com/RDC-Meeting-Recordings The South Bend Redevelopment Commission was called to order at 9:31 a.m. President Troy Warner presiding. 1. ROLL CALL • Troy Warner, President – (Council) January 2025 to December 2025 • Dave Relos, Vice President – (Mayor) January 2025 to December 2025 • Eli Wax, Secretary – (Mayor) February 2025 to December 2025 • Gillian Shaw, Commissioner – (Mayor) January 2025 to December 2025 • Ophelia Gooden-Rodgers, Commissioner – (Council) February 2025 to December 2025 • Marcus Ellison, Non-Voting Advisor – (School Board) February 2025 to December 2026 Legal Staff: Sandra Kennedy, Corporation Council - Virtual Danielle Campbell Weiss, Senior Asst. City Attorney Redevelopment Staff: Caleb Bauer, Exec. Director, DCI Erik Glavich, Director of Growth and Opportunity, DCI Lewis Kouassi, Director of Finance, DCI Joseph Molnar, Asst. Dir. of Growth and Opp., DCI Erin Michaels, Property Development Manager, DCI Tim Corcoran, Chief Planner, DCI Laura Hensley, Board Secretary, DCI Others Present: Riley Ellingsen, Earth Designs Real Estate LLC Frank Perri, Earth Designs Real Estate LLC Tom Panzica, Panzica Building Corporation William Panzica, Panzica Building Corporation Ginger Reilly, South Bend Tribune CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – August 28, 2025 2 2. Approval of Minutes A. Approval of Minutes of the Regular Meeting of Thursday, August 14, 2025. Commissioner Shaw pointed out a typo in Item #5A6, in the second paragraph, the word Latent should have been Leighton. The change was made in the posted minutes. Upon a motion by Eli Wax for approval, second by David Relos, the motion carried unanimously; the Commission approved the minutes with the noted typo fixed of the regular meeting of August 14, 2025. 3. Approval of Claims A. Claims Allowances August 12, 2025 Upon a motion by Ophelia Gooden-Rodgers for approval second by David Relos, the motion carried unanimously; the Commission approved the claims allowances of August 12, 2025. 4. Old Business A. None 5. New Business A. River West Development Area 1. Purchase Agreement (Sunoco on 1335 Portage Ave.) Joseph Molnar, Assistant Director of Growth and Opportunity, presented the purchase agreement for $100,850 for the Sunoco service station located at 1335 Portage Ave. The parcel would nicely connect with the Portage Elwood Shopping Center. It currently has its own direct access from Portage Avenue, but it shares the same block with the shopping center. Looking at the site from Portage Avenue, it used to be an auto repair shop dating back to the 1950s. The owner recently passed away, and the family chose not to continue the business. They reached out about selling the property, which is how the city got involved. To recap: • In June 2022, the Board of Public Works (BPW) acquired the Drewry’s site. • In December 2024, RDC purchased the Portage Elwood Shopping Center. CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – August 28, 2025 3 • Plans for the area include new housing, commercial spaces, and a full redevelopment of the previously rundown shopping center and brewery. The parcel at 1335 Portage Avenue, built in the 1950s, went up for sale this summer. Acquiring it would give the city more space along Portage Avenue for better site design. Currently, the shopping center’s access from Portage is quite narrow, just a driveway. Owning 1335 Portage Ave. would extend access all the way to the bridge, improving the overall design and connectivity of the Portage Avenue redevelopment. • Purchase Price: The city is proposing to buy the property for $100,850, which is the average of two commissioned commercial appraisals. • Due Diligence Period: The purchase agreement includes a 60-day due diligence period. During this time: • A Phase I environmental assessment has already been completed, providing liability protections if the Redevelopment Commission (RDC) proceeds. • Title work will be initiated if the agreement is approved, ensuring the property can be fully transferred to the RDC before closing. • Closing Period: If everything checks out, there will be a 30-day closing period to finalize the purchase. Commissioner Gooden-Rodgers asked about us reaching out to the owners of 1335 Portage Ave. prior and Mr. Molnar stated no, and we have not been in discussions with the liquor store on the corner. Vice President Relos asked about any environmental issues with the site. Mr. Molnar stated that surprisingly nothing the City couldn’t handle. President Warner stated that he believed the tanks were removed a few years back. President Warner also thought it would be advantageous to reach out to the nearby liquor store as well. Upon a motion by David Relos for approval second by Eli Wax, the motion carried unanimously; the Commission approved the Purchase Agreement as presented on August 28, 2025. 2. Resolution No. 3647 (Accepting Drewry’s Property 1408 Elwood from BPW) Joseph Molnar, Assistant Director of Growth and Opportunity, stated that in 2022, the city acquired the Drewry’s Brewery site through a tax certificate, placing it under the Board of Public Works (BPW). CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – August 28, 2025 4 Since then, extensive work has been done on the site, including environmental testing and contaminant removal, in partnership with the EPA and IDEM. Now that cleanup is nearing completion, it makes sense to transfer ownership to the Redevelopment Commission, which is better suited for redevelopment efforts. The RDC already owns the adjacent shopping center, so having both properties under one entity simplifies future plans like subdividing the land or entering into development agreements. The Board of Public Works approved the transfer earlier this week. If the RDC agrees today, city staff will execute the deed and record the transfer with the recorder’s office. This change doesn’t affect RDC’s cleanup responsibilities—RDC has already contributed funding via TIF. The transfer is mainly a legal step that gives RDC the authority to move forward with redevelopment, including creating lots or working with developers. RDC’s structure is more flexible for these tasks than BPW’s. Upon a motion by Eli Wax for approval, seconded by Gillian Shaw, the motion carried unanimously; the Commission approved Resolution No. 3647 as presented on August 28, 2025. 3. Real Estate Donation Agreement (Property at 1724 Kendall St.) Erin Michaels, Property Development Manager, presented this donation agreement for one vacant residential lot in Rum Village, being transferred to the Redevelopment Commission (RDC) by a local builder who acquired it through a tax sale a few years ago. The builder has since decided they no longer have an interest in the property and would like to donate it to the City. The lot is currently zoned U1 (Urban Neighborhood 1) and measures approximately 0.1 acres, with dimensions of 35 feet wide by 130 feet long making it fully buildable for residential use. Under the proposed agreement, the City would have a 60-day due diligence period to conduct any necessary research on the lot. The closing would then occur within 30 days following that period. As part of the agreement, the City would cover all closing costs and recording fees, which are estimated to total a few hundred dollars. This is considered a favorable agreement, as the City already owns 30 vacant lots in this area. Adding this parcel to our portfolio would support future neighborhood development efforts, potentially through a scattered-site housing initiative with a developer. Secretary Wax asked if there are any apparent issues that the RDC would need to invest in. Ms. Michaels stated that she’s looked at the Sanborn maps and historical aerials and this lot has been vacant and CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – August 28, 2025 5 would only require mowing. Vice President Relos asked if they were current on paying taxes so the next installment in November would be taken care of by the City and Ms. Michael’s stated that when she last checked, they were current on paying taxes. Upon a motion by Ophelia Gooden-Rodgers for approval, seconded by Troy Warner, the motion carried unanimously; the Commission approved the Donation Agreement as presented on August 28, 2025. 4. Second Amendment to Development Agreement (The Monreaux) This Amendment was Tabled and will be presented at the September 11, 2025 meeting. Upon a motion by David Relos to table, seconded by Eli Wax, the motion carried unanimously; the Commission tabled the Amendment as presented on August 28, 2025. B. River East Development Area 1. Development Agreement (The Yard) Erik Glavich, Director of Growth and Opportunity, presented a development agreement for $3,075,000 in TIF support with a total investment of $14,075,000 for the project, with a December 31, 2029 completion date. The development is called The Yard, located on East La Salle between Hill Street and Niles Avenue. The developer is Earth Designs, owned by local developer Frank Perri. The agreement covers several properties: • On the north side of LaSalle, it includes parcels Mr. Perri has assembled, including a former gas station he purchased and cleaned up by removing the tanks. • On the south side, it includes the ivy-covered building and the surrounding parking lot, which will support the northern development. Mr. Perri already has a tenant lined up for the building. Mr. Perri has invested significant time and resources into revitalizing the East Bank neighborhood, and this project continues that momentum. The Yard will be a mixed-use, family-friendly destination featuring: • Restaurants and ice cream shops • A band shell for concerts • Assembly kitchen space • Private event space CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – August 28, 2025 6 • Open areas for kids and community gatherings It’s located right off The Link trail, the main connection between downtown South Bend and Notre Dame, making it a great spot for visitors and residents alike. The goal is to create a “third space”—a welcoming place for people to gather, relax, and engage with the community. This development will help connect the east side of the river with downtown and drive more foot traffic and economic activity. We’ve seen the positive impact of Mr. Perri’s work in the East Bank, and this project builds on that success. Frank Perri stated that Earth Design’s Yard Project in South Bend’s East Bank is a community-focused space designed to enhance livability and attract visitors. It’s part of a broader effort to revitalize the area with food, events, and boutique retail. • Timeline: Construction on two sites is expected to begin within 18– 24 months, with a final deadline of December 2029. • Features: Ice cream shop, bagel shop, pavilion with bar and event space, food trucks, and shared parking. • Business Model: Mostly free public access; revenue from food, drinks, and private events. • Goal: Activate the Link Trail and create a vibrant, mixed-use destination. Caleb Bauer, Director of Community Investment, emphasized the importance of pairing residential growth with quality-of-life experiences. The Yard’s location along the Link Trail is strategic, serving as a midway point between downtown and the university. Commissioner Shaw asked if there would be a fee to enter the gated area and Riley Ellingsen with Earth Designs Real Estate LLC stated there may be a charge for only ticketed concert events. He also stated that food and beverage sales will be the main revenue sources yet maintain both a public and private atmosphere. Secretary Wax asked about a reference to Section 8.3 that was not in the agreement in the packet. Staff explained Section 8.3 had been inadvertently deleted but the term had been agreed to, so the correct version was printed and provided to the Commissioners to review and approve. Matt Barrett inquired about establishing a minimum number of public opening hours. In response, Mr. Bauer emphasized that the intention is to operate these businesses in a manner that ensures they remain open and actively engaged with the public. CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – August 28, 2025 7 Upon a motion by Troy Warner for approval with the missing Section 8.3 language, regarding Liquidated Damages Defined (Exhibit E), seconded by Eli Wax, the motion carried unanimously; the Commission approved the Development Agreement with the amended language on August 28, 2025. 2. Second Amendment to Development Agreement (Cascade-Wharf Partners, LLC) Joseph Molnar, Assistant Director of Growth and Opportunity, stated in the agreement included in the packet, there was a typo in Section F. It states that “Section 9.4 shall be deleted in the following text,” but no text followed. To clarify, we are not proposing to delete Section 9.4. The updated version—prepared by Laura Hensley—simply removes that erroneous line. As a result, the lettering of subsequent sections (G and onward) shifts up by one letter, but there are no substantive changes to the content. On to the development agreement itself: to orient ourselves, this pertains to the site formerly known as the Wharf site, now referred to as the Cascade Building. The Redevelopment Commission and Wharf Partners originally entered into a development agreement in February 2018, which was amended once in December of the same year. The agreement envisioned a two-phase project for the complete redevelopment of the vacant property located along the Saint Joseph River in the East Bank neighborhood, just north of Seitz Park. Let’s begin with an overview of Phase One. The Redevelopment Commission (RDC) committed just over $2.7 million to the project and fully expended that amount. The developer originally committed $19.25 million, but the actual investment totaled approximately $24.5 million— an increase of more than $5 million beyond the initial commitment. Regarding job creation, the original development agreement required a minimum of 20 jobs from the restaurant component. According to reports from the developer, that number has doubled, with current employment ranging between 40 to 45 positions, depending on exact hiring levels at the time. Before the project began, the assessed value of the Phase One parcel was just over $100,000, resulting in a tax liability of approximately $3,000. Today, the assessed value of the completed Phase One development stands at $22,356,000, with the actual paid tax liability reflected in the 2024 pay year with a payback period of 13 years. Under the original agreement, the developer was required to accommodate the needs of the City’s Seitz Park renovation and the University of Notre Dame’s hydroelectric project. Specifically, they CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – August 28, 2025 8 were obligated not to interfere with those projects through the construction of theirs. As many of you know, both the Hydro Project and the Seitz Park improvements experienced significant unforeseen delays—delays that were entirely outside the developer’s control, as they were not responsible for the other construction of those improvements. These delays directly impacted the developer’s ability to begin Phase Two. The agreement required the developer to accommodate the construction timeline for the other projects, and in fact, much of the Phase Two site was needed as a laydown area for Seitz Park construction materials. Seitz Park officially reopened in summer 2025, nearly three years later than originally expected. To clarify: no RDC funding has been spent on Phase Two to date while the developer waited to begin this portion of the project. Mr. Molnar presented an image from 2023 showing the developer’s parcel (outlined in blue) and the Riverwalk. You can see how the Phase Two area was occupied by construction staging for Seitz Park, making it impossible for the developer to proceed with their work during that time. Second Amendment Overview The proposal before you today is the Second Amendment to the original development agreement. This amendment updates several key figures and reflects the evolution of the project: • Total RDC funding increases from $5.237 million to $9.737 million across both phases. • The developer’s minimum private investment commitment increases from $38.5 million to $63 million. o That’s a $4.5 million increase in RDC commitment. o And a $24.5 million increase in the developer’s commitment. The amendment also includes an updated project plan for Phase Two. Originally envisioned as a five-story building with a possible second structure, the revised plan now calls for: • A single eight-story tower with underground parking (similar to Phase One). • A minimum of 20-24 residential units. • At least 10,000 square feet of commercial space. • Flexibility for an additional floor of either residential or commercial use. The construction timeline is also updated: • Start of construction: June 2026 CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – August 28, 2025 9 • Completion: 2029 Finally, the developer is no longer seeking a tax abatement for the residential portion of Phase 2. The original agreement anticipated a request for a 5- or 6-year, 100% abatement, but that has been removed. This has been replaced with a potential abatement for the commercial portion of the new building. The RDC also retains the right to withdraw funding if the Common Council does not approve the updated terms. Mr. Molnar explains that the tax payback period for Phase Two, similar to what we reviewed for The Yard. • The developer is committed to investing at least $38.5 million in Phase Two. • The current assessed value of the parcel is $83,000, with annual taxes just under $3,000. • Based on our modeling, the projected assessed value after completion is expected to exceed $27 million. This estimate is conservative, considering Phase One is assessed just below that and Phase Two is larger. • This would result in an estimated annual tax liability between $480,000 and $563,000, depending on whether the residential units are owner-occupied or rented. We’ve split the estimate to reflect both possibilities. Given these projections, the payback period for the city’s investment in Phase Two is estimated at 12 to 15 years, based on conservative assumptions and excluding any income tax contributions. • This model does account for tax abatements—assuming council approval of a payment in lieu of taxes. If the developer proceeds without abatements, the tax revenue would increase, and the payback period would shorten. Looking at the Cascade Project as a whole, including both phases: • The city’s support represents just over 13% of the total investment. • For comparison, The Yard had a slightly higher percentage due to its community-building focus. • The combined investment across all parties for both projects is just under $87 million. Mr. Perri stated that he’s excited along with his partners—Mr. Tom, Phillip, and Bill Panzica—to finally be getting Phase II going after the delays that were no fault of their own. Mr. Panzica explained that our building has to be post-tensioned concrete to get the views. We have a lot of glass, so we have more of an urban style of building. We call it a metro style that you would see in Chicago or Indianapolis or larger CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – August 28, 2025 10 cities. And when people come to South Bend, they're very impressed that we have that sort of product. And we were able to attract many people who came here from out of town and chose to live downtown instead of in Granger because South Bend was able to provide that walkable metro lifestyle. He stated that the support of the Redevelopment Commission and Community Investment has really been key to their success to make the product affordable and attainable, not only to people coming in from out of town, but to local people as well. Caleb Bauer added that it’s important to consider how construction materials impact the city’s long-term return on investment. In this case, the building is being constructed with post-tensioned concrete, which offers a much longer lifespan compared to traditional wood-frame (or “stick-built”) structures. While wood-frame buildings can last several decades, they often begin to show wear after 40 to 50 years. In contrast, a concrete structure like this could last close to 100 years or more. That means it can continue generating property tax revenue for the city over a much longer period. So, while we are being asked to support this project, we’re also investing in a building that will be a long-term asset on the riverfront— likely serving the community for generations. Secretary Wax asked about (Subsection F) of the Amendment and why that provision wasn’t updated. Mr. Molnar explained that we’re keeping it as it was in the original agreement. Its inclusion in the document in the packet was simply an error, and oversight wasn’t something we had discussed with the developer. That said, the question is valid. Based on past experience, we’ve learned the importance of updating certain provisions in our standard agreements, especially when there’s a significant new investment being made. The fee provision, in particular, is meant to protect the city’s interests. There is value in updating the language, and we did try to strengthen parts of the agreement where possible. However, since this agreement dates back to 2018, our goal was to keep the amendment focused—updating the project plan and terms without rewriting the entire document. That’s why we didn’t raise this specific change during negotiations. Also, this is the last agreement still in progress that predates current staff, so we aimed to maintain consistency with how similar agreements have been handled. Commissioner Ellison asked about what is planned for the retail space, and Mr. Perri is open to ideas but would like to see a complimentary breakfast/lunch or day spa on the first floor. Commissioner Gooden- Rodgers asked about how many condos are expected, Mr. Perri stated CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – August 28, 2025 11 20-25 units. Vice President Relos thanked the developers for their commitment to completing this project. Resident Matt Barrett expressed concerns about the total investment amount per market rate unit for this project and how that relates to the City’s investment in affordable housing units. He also suggested listing out more conditions in the agreements to make sure taxpayers get the value of their investments. Mr. Barrett also recommended formally amending agreements to officially extend deadlines when extenuating circumstances prohibit the original completion timeframes. Commissioner Wax noted that in the case of this deadline, the lack of performance was on the City and Notre Dame side, and not the Developers, but agreed generally with keeping agreements up to date with amendments where appropriate. Mr. Panzica commented that between the two buildings, the project will allow for a huge expansion of the tax base, contributing around $700,000 to $800,000 per year, and that it will not be a single developer paying these taxes. Once the condos are sold, roughly 42 different stakeholders will be on site paying those property taxes as well as income taxes and other contributions. Upon a motion by Eli Wax to amend Section F. Upon a motion by David Relos for approval as amended, seconded by Eli Wax, the motion carried unanimously; the Commission approved the Second Amendment as presented on August 28, 2025. 6. Progress Reports A. Tax Abatement B. Common Council C. Other Joseph Molnar, Assistant Director of Growth and Opportunity, updated the former City Center Place (also known as Center City Place) on South Michigan Street, which is undergoing redevelopment. The Redevelopment Commission (RDC) approved a development agreement with the new owner of the building, originally called the Grand Leader Building. They’re currently removing the façade and siding added in the 1960s to reveal the original stonework underneath—which is already improving the building’s appearance, even in its dusty state. In addition: • The RDC held a groundbreaking for Allen Edwin, a project for which the city provided land. CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – August 28, 2025 12 •Advantix has also broken ground on two projects focused on affordable and workforce housing. They didn’t hold a formal ceremony due to tight deadlines related to their LIHTC (Low- Income Housing Tax Credit) requirements. •The purchase agreement with Stoic Distillery for a site that previously had an agreement with Bare Hands has seen progress at the site. Stoic has received its state distilling permit, which starts a one-year countdown before they can open for in-person service. The goal is to launch a tasting room within a year. In the meantime, their spirits are already available in local stores. 7.Next Commission Meeting Thursday, September 11, 2025, 9:30 a.m. in the 4th. Floor Council Chambers of the County-City Building. 8.Adjournment Thursday, August 28, 2025, 11:07 a.m. ______________________________ ______________________________ Eli Wax, Secretary Troy Warner, President