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HomeMy WebLinkAbout2002-12-04 Redevelopment Authority Minutes~- SOUTH BEND REDEVELOPMENT AUTHORITY • REGULAR MEETING December 4, 2002 1308 County-City Building 1:30 p.m. 227 West Jefferson Boulevard Presiding: Cleo Washington South Bend, IN 46601 The December 4, 2002 Regular Meeting of the Redevelopment Authority was called to order at 1:38 p.m. by Cleo Washington. There was a quorum present. 1. ROLL CALL Members Present: Mr. Cleo Washington, Vice-President Mr. Jose Alvarez, Secretary Member Absent: Ms. Carolyn V. Pfotenhauer, President Redevelopment Staff: Mr. Donald Inks, Director Mr. Owen Rock, Assistant Director Mrs. Jenny Hullinger Recording Secretary • Others: Ms. Cheryl Greene, Legal Counsel 2. APPROVAL OF MINUTES a. .Approval of the minutes of November 27, 2002 Upon a motion by Jose Alvarez, seconded by Cleo Washington and unanimously carried, the Authority approved the Minutes of the Rescheduled Regular Meeting of November 27, 2002. 3. NEW BUSINESS a. Authority approval requested for Resolution No. 148 approving the execution of a Resolution approving the transfer of real property to the South Bend Redevelopment Commission and other related matters associated with South Bend Chocolate Company Expansion Project. • Ms. Cheryl Greene said the South Bend Chocolate Company leases the CCA Building, from the Redevelopment Commission, and wants to expand its retail operations on the first floor approximately 1,600 sft. The expansion that South Bend Chocolate has proposed would bump out into the parking lot between the Hall of Fame and the CCA Building. The area for the expansion further involves a 28' non- buildable perpetual easement that the Authority granted to the H:\W PDATA\AUTHORTY\I20402.min.wpd • The South Bend Redevelopment Authority December 4, 2002 Meeting Minutes Redevelopment Commission when South Bend Chocolate first moved into the CCA building. As part of its lease with the Commission, South Bend Chocolate renovated the building and built to the lot line. In order to meet Building Codes and provide ingress and egress, the Authority granted to the Commission a perpetua126' easement. Mr. Tamer, of South Bend Chocolate, wants to build into that easement. Because such action involves the easement that the Authority granted to the Commission, and because that property on which the expansion would occur, involves the Hall of Fame (parking lot) property, such a transaction will require several of steps. First, there must be confirmation that the bond refunding for the Hall of Fame in 2000 is not violated in any way by potential use of the property by a private entity such as South Bend Chocolate. Assuming there is no violation and the Authority is willing to permit the expansion project to proceed, then the next issue to be dealt with would be the non-buildable easement. The easement would need to be changed so that there could be a building put on it, and then move the current easement out further in order to resolve any ingress and egress problems. Ms. Greene advised that she had spoken with Don Fozo, of the Building Department, and he thought that is a resolvable problem assuming there is not a problem with the bond covenants. The third thing that would have to happen is the Authority would have to transfer that `property to the Redevelopment Commission; with the Commission accepting the transfer. Next, a determination • would have to be made of the fair market rental value of the property to be leased, survey work would have to be done, the property would have to go through the disposition process and there would have to be an amendment to the existing lease with South Bend Chocolate on the CCA building. If the Authority is in agreement with this request, then the passage of Resolution No. 148 would allow staff to take additional action without having to come back to the Authority at a second meeting. This resolution authorizes the signature of a transfer resolution related to transfer property to the Redevelopment Commission and any change in easement that have to occur as a result of the change in the building. Because this involves the Hall of Fame property it is important to also have bond counsel look at this to make sure any action that we take does not in any way impair the bonds and any action per the resolution is taken only upon the approval of legal counsel, including a positive finding by bond counsel. Ms. Greene said she is in the process of reviewing the bond covenants, and has talked to Randy Rompola, and she is forming an opinion, but would like Randy Rompola to give a second opinion. Mr. Washington said his first concern is a legal concern, and wondered what type of legal liability it would have in violating the covenants. Ms. Greene said that the Resolution states that none of the actions would occur until there is an affirmative finding by legal that it is appropriate for this to go forward. This matter is in the investigative process right now; at no point will this go forward, if after looking at the bond documents, it is determined that this would violate the i 2 H:\WPDATA\AUTHORTY\120402.min.wpd The South Bend Redevelopment Authority December 4, 2002 Meeting Minutes covenants. We explained this to Mr. Tamer of South Bend Chocolate, and he can't believe there are so many legal considerations for such a small amount of property. Note that the seventh "whereas" in the resolution expressly notes that action presumes that legal has signed off on this first. Mr. Alvarez asked how much it will cost to investigate all of this. Ms. Greene said she has had informal talks with Mr. Rompola and has not received any billing from him. His recommendation was to look at the percentage of the property to be released to the Commission as compared to the overall Hall of Fame. Based on her preliminary discussions with Randy, he was comfortable with it, but she would like a very specific opinion from him in writing. Mr. Alvarez asked who would pay for that, and Mr. Inks said the Redevelopment Commission through the Downtown TIF would pay for it, but it may get passed on to South Bend Chocolate at a later time. Mr. Washington said it is correct in wanting a second legal opinion, considering the size of the bond, to protect the City from any potential liability further down the road. Mr. Alvarez asked who would be liable if, after we have received bond counsel and then later the bonds were called for some reason because of it. Ms. Greene said that any actions taken will only be upon advice of counsel. Mr. Alvarez asked how much space this new building would take. Ms. Greene said it would take out 3 or 4 parking places from the lot, but the access from ,. Michigan Street would still be there, although the drive would be cut from 24' to around 20': Ms. Greene said we cannot overlook the fact that once this is agreed to, she assumes the Building Department will ask you to give an additional easement on that. So, it is not just that footage the building, but also Building Code issues. Mr. Washington asked if the Vine has been contacted, and Ms. Greene thought Mr. Mathia had been working with all the parties involved. Mr. Inks said the Vine is a tenant in the building and leases from the South Bend Chocolate Company. Mr. Alvarez asked how long the lease is for the South Bend Chocolate Company, and Ms. Greene said they have a 20 year lease, signed in 1997 with the Redevelopment Commission. Ms. Greene said when she was first approached by Mr. Tamer she pulled all the original documents on the Hall of Fame from Archives to make sure no restrictions from the original financing had survived the refunding. She is satisfied that the only documents that need to be considered are the refunding documents of 2000. Mr. Alvarez said he wanted to make sure that South Bend Chocolate didn't have a short lease and would move away in a few years after we had gone through the expense of investigation, and Ms. Greene said since they are down to 13 years of their 20 year lease the Authority could recommend to the Commission to reinstate them to a longer period of time for the whole building. Ms. Greene said the point of Resolution No. 148 is not to say that, yes indeed this H:\WPDATAWUTHORTY\I20402.min.wpd 3 • The South Bend Redevelopment Authority December 4, 2002 Meeting Minutes is happening, but rather sending legal counsel forward to make a final determination, and provide a general endorsement of the overall project by the Authority. Mr. Alvarez said South Bend Chocolate's desire to expand shows their business is going well and that is a plus for the downtown. Mr. Inks said that is where the Commission has been on the issue. We have tried to stimulate retail in the downtown and now we have a retail. operation that is doing well and wanting to expand and we want to facilitate that. Upon a motion by Mr. Alvarez, seconded by Mr. Washington, the Authority approved Resolution No. 148 approving the execution of a Resolution approving the transfer of real property to the South Bend Redevelopment Commission and other related matters associated with South Bend Chocolate Company Expansion Project. 4. CLAIMS Claims previously reviewed and recommended for approval by the Director of Economic Development on December 4, 2002. Payment Affidavit Century Center Refunding Bonds of 2001 # 25 Ziolkowski Construction Remodeling $149,076.85 McMann Electric Remodeling 465.18 Builders Iron Works Bendix Theatre 1,014.00 Rupel Engineered Products Remodeling 265.00 Performance Plus Remodeling 1,720.00 Century Center Reimbursement for carpeting for Bendix Theatre 26,653.22 • Upon a motion by Mr. Alvarez, seconded by Mr. Washington, the Authority approved the claims submitted December 4, 2002. H:\WpDATAWUTHORTY\120402.min.wpd 4 ~~ The South Bend Redevelopment Authority November 27, 2002 Meeting Minutes 5. NEXT MEETING DATE: December 18, 2002 6. ADJOURNMENT There being no further business to come before the Redevelopment Authority the meeting was adjourned at 1:58 p.m. Gr~~ Cleo Washington, Vice-President • ~~ U ~~ ~ G Donald Inks, Director H:\WPDATAWUTHORTY\120402.min.wpd