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HomeMy WebLinkAbout2 Redevelopment Commission Minutes 10.09.25 - Signed CITY OF SOUTH BEND REDEVELOPMENT COMMISSION SOUTH BEND REDEVELOPMENT COMMISSION MINUTES October 9, 2025, 2025, at 9:30 a.m. Council Chambers 4th Floor, County/City Building https://tinyurl.com/RDC-2025-2T Meeting Recording Link: https://tinyurl.com/RDC-Meeting-Recordings The South Bend Redevelopment Commission was called to order at 9:32 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: Danielle Campbell Weiss, Senior Asst. City Attorney Redevelopment Staff: Caleb Bauer, Exec. Director, DCI Erik Glavich, Director of Growth and Opportunity, DCI Joseph Molnar, Asst. Dir. of Growth and Opp., DCI Erin Michaels, Property Development Manager, DCI Laura Hensley, Board Secretary, DCI Zach Hurst, Senior Engineer, Engineering Department Others Present: Tina Patton, Cross Community Dan & Easter Baber, Owners of Michigan Motorsports Alyson Herzig, 52560 Willow Bend Dr. Brian Cherry, 707 Sherman Ave. Terrance Sibanda, 707 Sherman Ave. Kara Kelly, Weigand Construction Ginger Reilly, SB Tribune CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – October 9, 2025 2 2. Approval of Minutes A. Approval of Minutes of the Regular Meeting of Thursday, September 25, 2025. Upon a motion by Ophelia Gooden-Rodgers for approval, second by David Relos, the motion carried unanimously; the Commission approved the minutes of the regular meeting of September 25, 2025. 3. Approval of Claims A. Claims Allowances September 16, 2025 Upon a motion by David Relos for approval second by Ophelia Gooden- Rodgers, the motion carried unanimously; the Commission approved the claims allowances of September 16, 2025. 4. Old Business A. None 5. New Business A. River West Development Area 1. Budget Request (Rabbi Shulman Demolition) Caleb Bauer, Executive Director of Community Investment, presented this budget request for $1,500,000 to pay for demolition of the apartment building on Western Ave. The City of South Bend, in partnership with the Housing Authority, is working on redeveloping the Monroe Circle and Rabbi Shulman sites. Recently, the state awarded funding through the READI Blight and Redevelopment Program, separate from the READI 2.0 round, which also provided support for the Western Ave. Transformation District. Additionally, the Lilly Endowment’s Gift 8 Program awarded a grant to the Community Foundation of St. Joseph County. Altogether, these grants will support a major redevelopment project totaling around 205 housing units in phase one. This phase is already underway with the developer, The Michaels Organization. A formal agreement will be presented soon, but demolition of the Rabbi Shulman building is moving forward now. To fund the demolition, the City has applied for a $10 million Section 108 loan from HUD, which would be repaid over 25 years using a small portion of the City’s annual Community Development Block Grant (CDBG) funds. HUD has reviewed the draft application and gave CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – October 9, 2025 3 approval to submit it formally, which was done just before the federal government shutdown. The decision timeline is now uncertain, but the City expects to receive the loan, which would reimburse demolition costs. If the federal government shutdown continues and delays the award notification for the Section 108 loan, we may need to postpone the demolition. We can only use the loan funds to reimburse costs after we officially receive the award. So, while we expect these funds to be reimbursed, we will not proceed with demolition unless that reimbursement is confirmed. To be clear, the uncertainty lies in the timeline due to the federal government shutdown—not in the availability of funding itself. Zach Hurst, Senior Engineer, stated bids were opened and read aloud at the September 23 Board of Public Works meeting. Nine bids were received, with the lowest responsive bid being submitted by Green Demolition at a price of $1,348,000. The project is anticipated to begin in November with building cleanout and asbestos abatement. Demolition will continue through the winter with final grading and seeding to be completed before April 15, 2026. Secretary Wax asked for clarification that he understands correctly, you're requesting appropriation today, but you won’t actually spend it until you receive confirmation that it will be reimbursed, right? Mr. Bauer said, to walk you through our thinking: if the federal government shutdown were to extend significantly beyond this date, we might consider amending the scope of the READI reimbursement dollars with the State of Indiana. That could also lead to an amendment of the Section 108 loan—essentially allowing the state’s grant funds to cover the demolition costs, while Section 108 loan funds could then be used to reimburse other project-related expenses. We have several options available, and we won’t proceed until we’re confident that the expenditure meets the eligibility criteria for reimbursement from one of the applicable grant or loan sources supporting this project. President Warner and Vice President Relos asked what the next steps after the demolition are and how does HUD fit into the picture. Mr. Bauer explained how HUD fits into the picture. HUD plays a role in this project through its Section 108 loan program, which allows cities to borrow against future Community Development Block Grant (CDBG) allocations. In this case, the City of South Bend is applying for a $10 million Section 108 loan to help fund infrastructure work for both Phase 1 and Phase 2 of the redevelopment project. The loan would be repaid over 25 years using a portion of the city’s annual CDBG funds, and the CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – October 9, 2025 4 interest rate is around 2%, which is more favorable than traditional redevelopment bonds. This financing approach enables the city to move forward with demolition and infrastructure work without immediately spending its own funds. The city will only proceed once it confirms that the expenses are eligible for reimbursement from one of the available sources, whether that’s the Section 108 loan, READI funds from the State of Indiana, or other grants. Although HUD doesn’t directly fund redevelopment of Housing Authority properties, the team explored the Choice Neighborhoods Initiative. Unfortunately, the site didn’t qualify due to prior blight mitigation efforts. Instead, the City pursued a Lilly Endowment grant, which supports a similar mixed-income redevelopment model. The redevelopment plan for the Rabbi Shulman block includes: • A mix of market-rate, low-income housing tax credit (LIHTC) units, and public housing replacement units. • Units will be intermingled across buildings to avoid income segregation. • The site will feature higher density, ADA-accessible buildings, green space, and a daycare facility. The current plan includes: • A four-story, 74-unit building at Taylor and Western Ave. • Several three-story walk-up buildings with varying unit counts. • A new street to break up the block and improve accessibility. • Two-story walk-ups on the Scott St. side. • A shared park for residents and the public. *President Warner noted for the record that Marcus Ellison arrived. Upon a motion by Eli Wax for approval, seconded by Gillian Shaw, the motion carried unanimously; the Commission approved the Budget Request as presented on October 9, 2025. 2. Purchase Agreement (3315 William Richardson Ct.) Joseph Molnar, Assistant Director of Growth and Opportunity, presented this purchase agreement (sale) with 4Boys4 Investments LLC for 3315 William Richardson Court. The proposed Purchase Agreement is for property owned by the Redevelopment Commission located at 3315 William Richardson Court. The RDC acquired this property from the Industrial Revolving Fund (“IRF”) on June 25th 2019 and per the Memorandum of Understanding dated December 13, 2018 between the RDC and IRF this transfer was solely to permit the RDC CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – October 9, 2025 5 to market and sell the property to a third party and the proceeds of the sale will be transferred to IRF. 4Boys4 Investments LLC is an entity of Michigan Motorsports who wish to move their business to the City of South Bend from Niles, MI. Michigan Motorsports is a family-owned business that provides high- quality, affordable performance parts for various automotive engines. The Agreement commits Michigan Motorsports to the following terms: • Purchase Price: $50,000.00 • Due Diligence Period: 90 days • Closing Deadline: 30 days after due diligence period • Minimum Investment: $4,000,000.00 • Construction Start Deadline: 12 months after closing • Construction Completion Deadline: 36 months after closing • Certificate of Completion issued by the RDC once construction is complete • Job Creation Requirement: 20 full-time jobs and maintain for 5 years after Construction Completion Date • Reporting must be submitted to RDC on June 30th and December 31st of each year until substantial completion of construction and on April 15th of each year after completion of construction The sale of this property will bring currently vacant land to productive use, while bringing a successful business to the City of South Bend. Dan Baber and his wife, Easter, founded Michigan Motorsports, a web- based retailer for performance automotive parts. They help customers upgrade vehicles, like installing modern engines in classic cars—and provide design support and parts. The business began in their basement, expanded to a building in Niles, and now has 15 employees. On busy days, they ship up to 1,000 orders across the U.S. and internationally. After outgrowing their Niles location, they found this site as a potential new headquarters and distribution center in South Bend, just 10 minutes away. The site offers better logistics and access to a larger talent pool, making it ideal for continued growth. Commissioner Ellison asked, “are you recommending a sale price of $50,000 for the property because that’s realistically what we could get? I understand it was previously offered at $169,000 about five years ago with no bids, and while there’s been some interest since then, nothing substantial has materialized. Does the $50,000 reflect an incentive to attract Michigan Motorsports to South Bend, including the economic benefits like employee relocation and income tax revenue—even if it’s below the appraised value?” Mr. Molnar explained the $50,000 sale CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – October 9, 2025 6 price is intended as an incentive to bring Michigan Motorsports to South Bend—encouraging them to relocate operations and employees, which would generate local income tax revenue. While the price is likely below the appraised value, it reflects a strategic decision similar to other negotiated sales where property is offered below market to support economic development. In this case, the company plans to invest over $4 million into the city, making the site selection mutually beneficial. Secretary Wax thanked the company for developing and choosing South Bend. Upon a motion by Eli Wax for approval, seconded by Ophelia Gooden- Rodgers, the motion carried unanimously; the Commission approved the Purchase Agreement as presented on October 9, 2025. 3. Development Agreement (Cross Community) Joseph Molnar, Assistant Director of Growth and Opportunity, presented this Development Agreement with Cross Community, a local nonprofit developer who has been building affordable housing in the Near Northwest Neighborhood. The Development Agreement commits Cross Community to constructing a new six-unit apartment complex and two affordable single-family homes. This Agreement specifies that (1) the Funding Amount provided by Redevelopment Commission will not exceed $480,000 and (2) the Private Investment by the Developer will be no less than $1.3 million. The Developer agrees to complete the project by the end of 2028. The Funding Amount will be used to install new utilities, construct new curbs, sidewalks and/or pedestrian walkways, and construct foundations of housing units in support of the project. Tina Patton, President of Cross Community shared that the organization was founded in 2016 and has partnered with the City of South Bend through a pilot subsidy program. They built five single- family homes in the Near Northwest neighborhood, which are now occupied and well-maintained by families. Cross Community also runs a financial literacy program, having trained over 250 families to prepare for homeownership. While housing inventory is limited, new developments—about 150 homes over five years—are planned by outside organizations. Tina emphasized her pride in being a local developer contributing to affordable housing in South Bend. She expressed excitement about continuing the partnership with the City and helping individuals improve their finances. Many of those served had previously been denied by banks, but now they’re being approved CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – October 9, 2025 7 and becoming homeowners. Commissioner Gooden-Rodgers thanked Ms. Patton for her efforts. Upon a motion by Ophelia Gooden-Rodgers for approval, seconded by Troy Warner, the motion carried unanimously; the Commission approved the Development Agreement as presented on October 9, 2025. B. River East Development Area 1. Opening of Proposals (Former Singer Sewing Building – Oaklawn) Joseph Molnar, Assistant Director of Growth and Opportunity, stated we received no proposal(s) prior to the deadline. Mr. Molnar stated that we will continue to provide the RFP online and consider interest for the site on a rolling basis and will reach out to local developers who had expressed interest in the property during the Proposal process. C. Redevelopment General Fund (a.k.a Pokagon Fund) 1. Budget Request (Early Childhood Learning Grant with Ready to Grow St. Joseph) Caleb Bauer, Executive Director of Community Investment, presented this budget request for an annual $100,000 appropriation to support Ready to Grow St. Joe, a local nonprofit focused on improving daycare quality through Indiana’s Paths to Quality program. This program helps daycare centers meet state standards, build trust with families, and expand capacity. Last year’s funding was matched by a private foundation, doubling the impact to $200,000. Ready to Grow St. Joe, led by Terri Kosik, works to increase access to high-quality childcare in South Bend, where demand far exceeds supply. There are 14,900 children under six and 7,200 school-age children needing care, but only 7,900 licensed spots exist—many not at the highest quality levels. The grant supports providers already enrolled in Paths to Quality, helping them move toward levels 3 and 4 through training and technical assistance. The goal is to expand high-quality childcare options and improve educational and workforce outcomes in the community. South Bend Community School Corporation’s new Pre-K program is one example of strong local partnerships. About 25% of providers are not yet in the Paths to Quality program, but many are progressing, with 13% at the highest level. CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – October 9, 2025 8 A $200,000 grant—half from the Commission and half from an anonymous foundation—was awarded to 38 South Bend providers already enrolled in Paths to Quality. The goal is to help them reach Levels 3 and 4 through training and technical support. Most recipients are licensed home daycare providers, and nearly 25% of 2022 grantees have already advanced a level. All are participating in Ready to Grow events. Due to high demand, we’re requesting an additional $100,000 for another grant period, with hopes of a matching contribution from the foundation. I don’t have an agreement in front of me today regarding funding from the Anonymous Family Foundation. However, I do have a conversation scheduled and understand there is an intent to pursue another matching opportunity. The goal is to ensure these funds are leveraged effectively so we can support another larger program round. Commissioner Shaw asked, “Does the program provide any support in making childcare more affordable for the community, or is it primarily focused on quality improvements for the facilities that receive funding?” Mr. Bauer stated, I know Terri could speak to this more eloquently, but I understand that participation in the Paths to Quality program can enhance a provider’s voucher-based reimbursement through the Indiana Child Care Network. So, while the benefit may be indirect, advancing through that quality pathway does help. Upon a motion by Eli Wax for approval, seconded by Ophelia Gooden- Rodgers, the motion carried unanimously; the Commission approved the Budget Request as presented on October 9, 2025. 6. Progress Reports A. Tax Abatement None B. Common Council None C. Other Caleb Bauer, Executive Director of Community Investment, wanted to give a quick update since there have been some public questions about the sidewalk repair and reconstruction project near Marshall School, which includes repairing and replacing sidewalks on the north side of Byron Dr. That’s part of the base bid we’re pursuing. There are also two optional add-ons in the bid package: one for resurfacing the courts in the park and CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – October 9, 2025 9 another for sidewalk work on Springbrook. These could be awarded later depending on how things move forward. There’s been some confusion about whether this is part of the Safe Routes to School program. That’s a great matching grant program run by the state to improve ADA access on school walking routes, and it’s still active. But not all sidewalk projects fall under that program, this one was already approved separately. President Warner also commented, sometimes people assume that if one thing is true, something else can’t be. In this case, the project wasn’t listed under the Safe Routes to School program because that’s a federal initiative tied to specific census tracts with qualifying income levels. This school isn’t located in one of those tracts, so it wasn’t eligible for that funding. That’s why the project was brought to the RDC for support. I understand there were concerns about whether the City should be responsible for sidewalks on school property, but we moved forward and approved the repairs. There have also been conversations about sidewalk gaps near other public schools. If we want to explore those, we’ll likely need to have discussions with the school corporation about potential cost- sharing. 7.Next Commission Meeting Thursday, October 23, 2025, 9:30 a.m. at the Council Chambers, 4th Floor County-City Building. 8.Adjournment Thursday, October 9, 2025, 10:26 a.m. ______________________________ ______________________________ Eli Wax, Secretary Troy Warner, President