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HomeMy WebLinkAbout2 EDC Meeting Minutes 2.5.2026 - Signed South Bend Economic Development Commission 215 S. Dr. Martin Luther King, Jr. Blvd., Room 301, South Bend, Indiana Minutes Scheduled Meeting February 5, 2026 – 9:30 a.m. City Hall Council Chambers 3rd Floor or via: https://tinyurl.com/EDC-Jan2026 Meeting Recording Link: https://tinyurl.com/EDC-Meeting-Recordings The South Bend Economic Development Commission was called to order at 10:11 p.m. 1. Roll Call Members Present: Cecilia Lopez Monterrosa, President Rafael Morton, Vice-President Renata Matousova, Secretary Karen White, Commissioner Members Virtually: Luis Zapata, Commissioner Legal Counsel: Jenna Throw, City Attorney Staff Present: Caleb Bauer, Executive Director, DCI Erik Glavich, Director, Growth & Opportunity, DCI Joseph Molnar, Asst. Dir. of Growth and Opp., DCI Laura Hensley, Board Secretary, DCI Attending: Thomas Everett, Barnes & Thornburg Steve Condrin, Colfax Corner ML, LLC Juliane Balog, South Bend Tribune Murray Miller, 23698 Western Ave. Tom Sardelli, Ancora – Virtual 2. Approval of Minutes A. Approval of the Minutes of September 18, 2025 The motion was made by Renata Matousova and seconded by Karen White. On the motion to approve the Minutes of the Meeting of September 18, 2025: • Cecilia Lopez Monterrosa, President: YEA • Rafael Morton, Vice-President: YEA • Renata Matousova, Secretary: YEA • Luis Zapata, Commissioner: YEA CITY OF SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION MEETING – February 5, 2026 Page | 2 • Karen White, Commissioner: YEA The motion carried with all 5 YEAs and the Commission approved the Minutes of the Meeting of September 18, 2025. 3. Election of Officers A. Nominations were made by Renata Matousova for Cecilia Lopez Monterrosa to be the President, seconded by Rafael Morton. On the motion to approve Cecilia Lopez Monterrosa to be the President on February 5, 2026: • Cecilia Lopez Monterrosa, President: YEA • Rafael Morton, Vice-President: YEA • Renata Matousova, Secretary: YEA • Luis Zapata, Commissioner: YEA • Karen White, Commissioner: YEA The motion carried with all 5 YEAs and the Commission approved Cecilia Lopez Monterrosa to be the President on February 5, 2026. B. Nominations were made by Karen White for Rafael Morton to be the Vice- President, seconded by Renata Matousova. On the motion to approve Rafael Morton to be the Vice-President on February 5, 2026: • Cecilia Lopez Monterrosa, President: YEA • Rafael Morton, Vice-President: YEA • Renata Matousova, Secretary: YEA • Luis Zapata, Commissioner: YEA • Karen White, Commissioner: YEA The motion carried with all 5 YEAs and the Commission approved Rafael Morton to be the Vice-President on February 5, 2026. C. Nominations were made by Cecilia Lopez Monterrosa for Renata Matousova to be the Secretary, seconded by Rafael Morton On the motion to approve Renata Matousova to be the Secretary on February 5, 2026: • Cecilia Lopez Monterrosa, President: YEA CITY OF SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION MEETING – February 5, 2026 Page | 3 • Rafael Morton, Vice-President: YEA • Renata Matousova, Secretary: YEA • Luis Zapata, Commissioner: YEA • Karen White, Commissioner: YEA The motion carried with all 5 YEAs and the Commission approved Renata Matousova to be the Secretary on February 5, 2026. 4. New Business A. Colfax Corner Project (Colfax Corner ML, LLC) a. Overview of Documents for Approval i. Report of the South Bend Economic Development Commission Concerning the Proposed Financing of Economic Development Facilities for Colfax Corner ML, LLC ii. Form of Trust Indenture iii. Form of Financing and Loan Agreement iv. Form of Common Council Bond Ordinance Caleb Bauer, Executive Director of Community Investment, presented the overview of documents. The proposed economic development agreement applies to Colfax Corner MLLLC, which owns the former South Bend Tribune building, as well as the Main Street Row properties. These properties are currently part of active negotiations. There is more than $1.1 billion in private investment already planned for downtown South Bend. This tool helps turn those plans into reality and could support even more investment from future projects that are not yet under negotiation. The district boundaries were intentionally drawn to focus on areas with low current property value, such as parking lots, vacant sites, and underused or deteriorating buildings. Higher-value properties were largely excluded. This is because only new tax revenue generated after the district is established will be captured, and the goal is to avoid redirecting revenue from properties that already contribute significantly. An agreement between the City of South Bend and the State of Indiana, signed by the Indiana Economic Development Corporation (IEDC), governs how funds are distributed to the City, the Redevelopment Commission, and the Economic Development Commission. The Innovation Development District (IDD) was established as of March 15 of this year. That date sets the baseline for sales and income tax revenue within the district. Any revenue above that baseline is considered incremental and can be captured for up to 30 years. The district can capture up to $15 million per year in combined state sales and income tax revenue. It will take many years to reach that level. The first $7.5 million each year is automatically returned to the City for use within the district. The second $7.5 million requires prior approval from IEDC, which ensures coordination CITY OF SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION MEETING – February 5, 2026 Page | 4 and alignment with state priorities. The approval process is designed to be streamlined. Over 30 years, the state’s total contribution is capped at $225 million. If that cap is reached before the district expires, the agreement allows for good-faith negotiations to potentially increase the cap. This district provides strong returns on investment for both the City and the State. If the full $225 million is realized, it would fund major strategic downtown projects. A Baker Tilly analysis estimates that the completed district could add more than $1 billion annually to Indiana’s GDP and generate over $600 million in state and local tax revenue. State incentives would not exceed 20% of any single project. The district is expected to support nearly 2,500 new jobs in South Bend, with additional indirect and induced job growth. It also supports the creation of an innovation hub that enables the University of Notre Dame to expand applied research. In a full build-out scenario, the district could generate approximately $45 million annually in state sales and income tax revenue, meaning the state would return only about one-third of what is generated. The district aligns closely with the downtown plan currently under development. Projects underway, proposed developments, and future opportunity sites largely overlap with the IDD boundary. This gives the City a powerful tool to move quickly on future redevelopment opportunities. The long-term vision is a vibrant, connected downtown that welcomes everyone to gather, live, work, and enjoy community life. Mr. Bauer stated that before you today are several agreements and a resolution related to the Colfax Corner MLLLC project. As part of today’s process, a public hearing is required. The Colfax Corner project is located on the block north of Colfax Ave., between Lafayette Bldv. and Main St. The project includes both redevelopment and new construction. The existing South Bend Tribune building will be renovated, and a new office building will be constructed on the site currently occupied by the Main Street Row buildings. The financing terms range from 25 to 30 years. No existing City revenue is pledged to this project. Instead, the project uses only the new taxes generated once development is complete. This approach allows the City to preserve other revenue for core services and infrastructure needs elsewhere. Key metrics include approximately 400 full-time employees (or equivalent) occupying about 202,000 square feet across the renovated existing building and the new construction. The total investment is $154 million, with an estimated direct economic impact of more than $750 million over 10 years. Approximately 35% of the space will be occupied by university faculty and staff, and 90% of construction labor will be sourced locally. CITY OF SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION MEETING – February 5, 2026 Page | 5 The only additional commitment from the City and State relates to stormwater management. Much of downtown west of the river uses a combined sewer system, where stormwater and wastewater share the same pipes. Under the City’s EPA-mandated Long Term Control Plan, South Bend is working to reduce sewer overflows into the St. Joseph River. This is a long-term effort with costs exceeding $600 million. Because of the combined sewer system, stormwater management can be challenging in dense urban areas. While developments are typically required to store stormwater on site, that can be difficult when buildings cover most of a parcel. For this project, the developer will store as much stormwater on site as possible, and the City is already designing a shared stormwater solution that will connect to an existing outfall. This system would serve multiple development sites and would involve utility funds already planned for this purpose. As of today, February 5, this project is in the second step of the approval process. The Common Council has completed the first reading of the related bond ordinance. Today’s actions include a public hearing and a resolution to adopt the financing documents. If approved, the item will be returned to the Common Council on February 9, with final approval expected at the Redevelopment Commission on February 12. The requested bond authorization is up to $30.8 million. This amount represents a maximum cap. The final bond amount will be set at closing and will not exceed this authorization, as final documents and projections are completed. Tom Sardelli with Ancora stated that we are partnering with the University of Notre Dame on the development side of this project. I want to express our sincere appreciation for the City’s support. Quite simply, without the City’s partnership, this project would be financially challenging to deliver. We are grateful for the collaboration and for the opportunity to move this forward as a catalytic project—not only for the Tech and Talent District, but for downtown as a whole. Thank you for your continued consideration of the Colfax Corner project. A question was then raised by Secretary Matousova regarding bond financing: Since this is a developer-purchased, negotiated bond, how is the interest rate determined? Additionally, if project revenues do not fully support debt service, is the City responsible in any way for repayment? Caleb Bauer responded that the interest rate we have been using is based on monitoring comparable taxable and tax-exempt issuances as a general benchmark; however, the final rate will be negotiated. We will finalize the interest rate as we get closer to closing, but in general it is expected to be lower than what we would obtain through the public bond market. CITY OF SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION MEETING – February 5, 2026 Page | 6 With respect to risk, there is no obligation on the part of the City of South Bend. If project revenues are not generated at a level sufficient to cover debt service obligations, that risk rests entirely with the developer. In this case, because the developer is also the purchaser of the bonds, it is easier for them to absorb that risk than it would be under a traditional taxpayer- backed agreement. Importantly, there is no obligation for the City to levy new taxes or take any other action if revenues do not support the debt service obligations. Vice President Morton asked of the approximately 400 jobs being projected, how many are expected to be affiliated with the university? Mr. Bauer explained approximately one-third of the projected jobs, roughly 100 to 150 positions, would be affiliated with the university, based on current estimates. The remaining two-thirds would be associated with other tenants located within the development. There are active discussions underway with additional tenants that may be located on the campus. While the university will defer announcements of any such tenants, both the university and the development partners, including Colfax Corner ML LLC, are engaged in ongoing lease negotiations. At this time, those conversations are active, though no specific tenant announcements have been finalized. Mr. Sardelli clarified that, beyond Notre Dame’s role as the anchor institution within the development, we are targeting companies in advanced industries—such as advanced computing, data analytics, and artificial intelligence—whose research and development activities complement the university’s strengths. These represent the key focus areas we are targeting at a high level, and we are encouraged by the interest the project has already generated. We are currently engaged in several productive conversations, and when the appropriate time comes, we will be able to share more specific information about those prospective partners. Commissioner White had concerns about how many of these jobs might be filled by local residents versus individuals relocating from outside the area. She continues that we have a responsibility to ensure qualified local candidates have access to these opportunities. Mr. Bauer responded that, we won’t have a detailed breakdown of where employees will come from until leases are finalized. That said, the intent is to strike a balance—both attracting talent from outside the community and ensuring the project delivers meaningful benefits locally. The development includes community- facing programming and university-related uses that will relocate to this site, creating shared benefits for the community, the university, and the city overall. In addition, the goal is for this to be a catalytic environment by bringing students, researchers, and employers together in a central location. While that may attract some out-of-market talent, it is also expected to support local businesses and encourage additional housing, dining, and CITY OF SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION MEETING – February 5, 2026 Page | 7 retail activity, ensuring strong local participation and economic benefits. Mr. Sardelli added, as we think about our target tenants and bring students, researchers, and employers together in a central location, the goal is to create a catalytic environment. This is not only about attracting some talent from outside the region, but also about supporting local businesses and encouraging new housing, dining, and retail activity in the core. Overall, the intent is to draw the community into the project while balancing the attraction of out-of-market talent with opportunities to leverage and benefit local residents as well. President Monterrosa expressed concerns about whether that focus may limit opportunities for local residents and result primarily in university- affiliated hires. If this project is supported by community investment, it’s important that it meaningfully benefits the local community as well. Mr. Sardelli responded that while some new positions will be in advanced sectors, the broader goal is to connect university programs, workforce training, and high-tech employers in a central downtown location to create jobs, skills, and shared spaces that benefit the entire community. Although the focus may appear sector-specific, we also anticipate broader community benefits, including increased housing, dining, and retail activity nearby. We recognize the need to balance these priorities and are committed to staying attentive to that as the project moves forward. Secretary Matousova asked with the university relocating some jobs and new tenants being added, is the intent for this space to function as an incubation environment for startups—perhaps commercializing Notre Dame technologies—or is it more focused on research and commercialization more broadly? I’m trying to better understand the overall goal of the project. Mr. Sardelli explained that portions of the program will focus on entrepreneurship, linking commercialization with research and innovation. Some Notre Dame units will support these efforts, along with intentional engagement of local entrepreneurs. While this represents a limited portion of the overall presence, it is an intentional part of the program mix. As a follow-up, will Notre Dame employees working in the development be included in the income-tax capture referenced in the IDD and Mr. Bauer stated yes. B. Public Hearing on Project and Economic Development Revenue Bond Financing