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HomeMy WebLinkAbout2007-10-17 Redevelopment Authority Minutes • SOUTH BEND REDEVELOPMENT AUTHORITY REGULAR MEETING October 17, 2007 1308 County-City Building 1:30 p.m. 227 West Jefferson Boulevard Presiding: Carolyn Pfotenhauer South Bend, IN 46601 The October 17, 2007 Regular Meeting of the Redevelopment Authority was. called to order at 1:30 p.m. by. There was a quorum present. L ROLL CALL Members Present Member Absent: Redevelopment Staff Others Present:• Mr. Ray Thomas, Vice President Mr. Jose Alvarez, Secretary Ms. Carolyn V. Pfotenhauer, President Mr. Don Inks Mrs. Jenny Hullinger, Recording Secretary Mr. Rich Hill, Baker & Daniels Ms. Ashley Ottesen, Kite Development 2. APPROVAL OF MINUTES a. Approval of the minutes of October 10, 2007 Upon a motion by Mr. Alvarez, seconded by Mr. Thomas, and carried, the Authority approved the Minutes of the Regular Meeting of October 10, 2007.' 3. NEW BUSINESS a. Redevelopment Authority approval of Resolution No. 161. approving a proposed lease for certain land and- local public improvements between the. South Bend, Redevelopment Authority, as Lessor, and the South Bend Redevelopment Commission, as Lessee, approving preliminary plans, specifications and cost estimates for the. prof ects and other related matters. Mr. Alvarez asked Mr. Inks. to explain. this in his own words. Mr. Inks said there are three central pieces as we initially start construction. The first will be a full service hotel with 51 condominiums on top, a total of nine stories. There will be a limited service hotel next to it and both would front on Edison across from the University. Mr. Alvarez asked the definition of "limited service." Ms. Ottesen, of Kite, said a limited service hotel is one that doesn't have a full. service restaurant or large banquet facilities. It would be a Hampton or a Spring Hill :Suites, where a full service hotel would be a Marriott or Hilton. Mr. Inks said at the corner of Eddy and Edison and coming toward the downtown will be mixed use of retail, office space and 268 apartments. The other key component is a 1281 space parking garage, which will have -one level below ground and four above ground, • .The South Bend Redevelopment Authority October 17, 2007 Meeting Minutes that will provide the parking for the hotel, the apartments, the retail, and for the condos that rap the garage on the south side. There will be some surface parking but not enough to support the density of the project, so the garage is needed. The later phases will be primarily residential with town homes. Don asked Ms. Ottesen to describe this phase in more detail. Ms. Ottesen-said there will be five different offerings: condos over the full service hotel; condos rapping the parking garage, three-story row homes, and courtyard town homes that will be south of Napoleon Street. The. town homes will be two and a half story, larger residential homes. There will also be a stacked flat product that is a typical condo building where everyone enters off a common corridor. Mr. Alvarez asked what the projected selling prices would be for the different units. Ms. Ottesen said they have not released any pricing to date. They will range greatly from an affordable. first home price. for the garage-wrapped condos, to the condos over the hotel that: will have an excellent view. and could be rather pricey. Mr. Alvarez asked if the homes will be for mixed income development and wondered who the intended buyers will be. Ms. Ottesen said the. target market. is .very broad-young professionals who work. downtown, alumni that come back to South Bend due to their ties with Notre Dame as well as empty nesters who no longer want to maintain a yard and a large home. Mr. Inks said the Eddy Street Commons Proper is all market rate development, the triangle development which will be just south of that will. be 61 or 62 single family homes will be mixed use in that 30% will be -set aside for low to moderate income and the other 70% will be at market rate. To support the development of thisproject there is a real need for infrastructure, and a key component of that is the extension of Napoleon from Eddy Street. over to State Road 23. The triangle development. will need all new infrastructures: the existing infrastructure will be taken out and replaced, as well as some new infrastructure at the south end of that project. There will need to be significant improvements on Eddy, a fair dollar amount on Edison, and the rest of it is the three streets in that area for Georgiana, Burns and Dewey. Mr. Alvarez asked if we knew the State's time frame for widening State Road 23. Mr. Inks said Mr. Gilot, from our Engineering: Department, has been pushing. the State to begin this project but we don't have a-start date from them: We are going to do what we need to do to make this project happen and then work with the State to expedite S.R. 23. Mr. Alvarez thought the project was very good for South. Bend and that it will enhance the attraction of South Bend from other parts of the community and the Midwest. Mr. Alvarez asked if the lease had been signed. Mr. Hill said it has not. Last Friday the Redevelopment Commission approved the form of lease and scheduled a public hearing that will be held on November 2, 2007.. While the lease has been approved by the Commission, it will not be executed until the State Department. of H:\WPDATA\A T 2 U HORTY\101707.MIN.DOC ~J The South Bend Redevelopment Authority October 17, 2007 Meeting Minutes Local Government Finance authorizes that. Two additional steps that are necessary are approval by the City Council; which will be scheduled for November 26, and then going to the Department of Local Government Finance (DLGF) December 13. After all of those are approvals are received then the lease can be executed by the Redevelopment Authority and the Redevelopment. Commission. • • The Authority will be the .issuer of the bonds and once the improvements are. .constructed the improvements will-be leased by the Redevelopment Commission. The Redevelopment Commission will devote the Tax Increment Revenue (TIF) -that. will be generated by the project to make principal interest payments on the bonds. The Redevelopment Commission has previously approved a housing program for the area so that for the first. time those portions that would be constructed and developed by Kite that would be assessed as residential would also be producing TIF that would be devoted to this financing. Mr. Alvarez asked if there would be tax abatement in this project and Mr. Hill said there would not be any:. Mr. Hill said we are contemplating a $36M bond issue that would be mature in 25 years and we would have maximum annual lease payments that would approximate $3.7M. These amounts are all high ends, and after we go through the public hearing process we will not be able to increase. any of the amounts but can decrease them. These are broad perimeters that have a higher interest rate than the actual interest rate. This is to get the public process. started and to move through the City-Council and the DLGF. Mr. Alvarez asked if we were sure that the payments will be lower than the $3.7M. Mr. Hill said there has been a substantial amount of work by the City and Kite to make .sure the assessed value that is produced is more than sufficient to make the. principle lease payments on the bond: Mr. Inks said that in addition to bond counsel we also have Crowe Chizek working with us as financial counsel. While the City and Kite have been working on assessed value,.we also have an independent third party that is reviewing all of that work and computing what they believe will be the TIF revenues. Mr. Hill said that is an important point because the State will also independently look at the adequacy of the revenues to be able to make.-the lease payments so that principle interest payments can be made. Mr. Alvarez asked when the Authority conveys the. title to the Commission if the Authority's rights will be protected. Mr. Hill said the only revenue being devoted is the TIF revenue, although, for purposes of marketing the bonds if the DLGF .approves them, they can be marketed with: a backup of property taxes. This project is not viewed as a control project, meaning that if if were a controlled project, we would have to go through a petition or remonstrance process. A controlled project is one that anticipates the use of property tax revenue, but this is the. opposite, it anticipates that TIF revenue will be adequate. Mr. Inks elaborated a bit and said the initial estimates, which are still being reviewed,-show roughly $4.1M in H:\WPDATA\AUTHORTY\ 101707.MIN.DOC 3 The South Bend Redevelopment Authority October 17, 2007 Meeting Minutes annual TIF revenues coming off the project and debt service of about $3.1M so we expect there will be a significant coverage on an annual basis to cover the debt service, leaving about $1M potential excess TIF coming off the project each year. Mr. Alvarez liked the anticipated number of jobs created in this project and said he assumed that Kite will use local people in the construction process. Ms. Ottesen said they do use local people in the construction. They have had their construction team meeting with local contractors already. Mr. Inks said the numbers showed a piece of the economic impact analysis that we had done. For a significant project like this we felt it was appropriate to go out and hire an independent consultant and we have done that with Crowe, who has sent us an initial draft of an economic impact analysis for this project. They are refining those numbers and we should have a final draft of that as they complete the assessed value work. We can then share that with everyone. This piece of the report on the job site is probably complete, but the other aspects of the project are still in process. Upon a motion by Mr. Alvarez, seconded by Mr. Thomas, the Authority approved Resolution No. 161 approving a proposed lease for certain land and local public improvements between the South Bend Redevelopment Authority, as Lessor, and the South Bend Redevelopment Commission, as Lessee, approving preliminary plans, specifications and cost estimates for the projects and other related matters. 4. NEXT MEETING DATE: November 7, 2007 5. ADJOURNMENT There being no further business to come before the Redevelopment Authority the meeting was adjourned at 1:45 p.m. Secretary-Treasurer Donald Inks, Director 4 H:\W PDATA\AUTHORTY\! 01707.MIN.DOC