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HomeMy WebLinkAbout2. MinutesSOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING Thursday, July 25, 2013 9:30 a.m. 227 West Jefferson Boulevard Presiding: Marcia I. Jones, President South Bend, Indiana 1. ROLL CALL Members Present: Ms. Marcia Jones, President Valeria Schey, Secretary Mr. Don Inks Members Absent: Dr. David Varner, Vice President Mr. Greg Downes Legal Counsel: Mr. Lawrence Meteiver, Esq. Redevelopment Staff: Mr. David Relos, Economic Development Specialist Mrs. Cheryl Phipps, Recording Secretary Ms. Debrah Jennings, Property Manager Ms. Ann Kolata, Brownfields Specialist Others Present: 2. APPROVAL OF MINUTES Mr. Scott Ford, Executive Director Mr. Chris Fielding, Assistant Executive Director Ms. Mo Miller Mr. Conrad Damian Mr. Cecil Eastman Mr. Erin Blasko, South Bend Tribune Mr. Dan Cory Ms. Thao Nguyen A. Approval of Minutes of the Regular Meeting of Thursday, July 11, 2013 Upon a motion by Ms. Schey, seconded by Mr. Inks and unanimously carried, the Commission approved the Minutes of the Regular Meeting of Thursday, July 11, 2013. South Bend Redevelopment Commission Regular Meeting — Thursday, July 25, 2013 3. APPROVAL OF CLAIMS 324 AIRPORT AEDA C & E Excavating Inc. Owners Association at Blackthorn Jones Petrie Rafinski Faegre Baker Daniels Cressy & Everett Meridian Title 420 FUND TIF DISTRICT -SBCDA GENERAL Faegre Baker Daniels Rose Pest Solution Midwest Step Saver, Inc. Zimmerman Volk Associates Inc. CB Richard Ellis South Bend Water Works 429 TIF FUND NORTHEAST DISTRICT Jackson Trucking & Excavation, Inc. 24,408.80 Site Improvements Lot 4 of Ignition Park 12,679.07 Landscaping/irrigation Maintenance 1,520.00 Ivy Tower - Utility Survey 279.65 Legal Services 6,608.84 Management Services for Bosch Site 349,252.82 Acquisition of 1505 S Kendall 666.40 Legal Services 105.00 LaSalle Hotel 98.80 Morris Performing Arts Center 21,000.00 Residential Market Potential 625.51 Management Fee and Expense Reimbursement 40.00 325 S Lafayette 2,736.25 Demolitions AEP Power Lines 430 SOUTH SIDE DEVELOPMENT AREA Metropolitan Title of Indiana LLC 109,399.27 Christopher B. Burke Engineering 3,379.50 St. Joseph County Republican Party 17,130.00 Reith -Riley Construction Co., Inc. 310,862.33 Cardno JFNew 1,257.70 $ 862,049.94 Acquisition of 4404 S Fellows St. Fellows St. and Ireland Rd Intersection Purchase of right -of -way for Main St /Lafayette Blvd Connector Main St /Lafayette Blvd Fellows St. Upon a motion by Ms. Schey, seconded by Mr. Inks and unanimously carried, the Commission approved the Claims submitted Thursday, July 25, 2013. 4. COMMUNICATIONS There were no Communications. 2 South Bend Redevelopment Commission Regular Meeting — Thursday, July 25, 2013 5. OLD BUSINESS There was no Old Business. 6. NEW BUSINESS A. South Bend Central Development Area (1) Proposal for appraisal services agreement related to the tax appeal for the College Football Hall of Fame. Mr. Relos noted that Rick Pitts, a MAI Certified Indiana Appraiser, appraised the College Football Hall of Fame in 2010. We would now like him to provide a Value In Use appraisal for the Hall. This type of appraisal will be needed for the property tax appeal currently pending. Value In Use is defined by the Real Property Assessment Manual as: "The value of property is for a specified use. The concept holds value to be inherent in property itself, that is, the value based on the ability of the asset to produce revenue or utility through ownership. The value a specific property has for a specific use." The appraisal will value the Hall as it was intended to be used, i.e., as a museum, in addition to normal valuation methods. Since the appeal is for the 2012 pay 2013 taxes, the appraisal will value the Hall as of the assessment date the appeal is based, or March 1, 2012. Having the Hall's assessed value be closer to its market value will assist in its eventual disposition. Staff requests approval of this Professional Services Agreement in the amount of $4,800. Upon a motion by Ms. Schey, seconded by Mr. Inks and unanimously carried, the Commission approved the Proposal for appraisal services agreement related to the tax appeal for the College Football Hall of Fame. B. Airport Economic Development Area (1) Staff Report on Studebaker /Oliver project. Ms. Kolata noted that South Bend's Redevelopment Commission has reached a milestone in its Studebaker /Oliver Redevelopment project, the largest brownfield project in Indiana, with the successful conclusion of the environmental cost recovery phase of its efforts. About Studebaker. The site is located generally north and south of Sample Street between Franklin and Prairie. Studebaker Motor Company was, for a time, the fourth largest automaker in the United States. It was based in South Bend. Most of its operations were consolidated at this single plant. At its peak in the 1940s and 1950s, several hundred South Bend Redevelopment Commission Regular Meeting — Thursday, July 25, 2013 6. NEW BUSINESS B. Airport Economic Development Area (1) continued... thousand automobiles and trucks were built there each year. Studebaker abruptly ceased auto manufacturing in the United States and closed the plant in 1963. The plant was mostly underutilized after Studebaker. About Oliver Plow. The site is located generally near Chapin Street south of the Conrail tracks. Oliver developed a best - selling hardened steel plow in the late 1800s. By 1910, the company was manufacturing a wide variety of farm tillage implements in addition to the chilled plow. At the peak of production in the early part of the 20th Century, the company used over 40,000 tons of iron per year. All manufacturing activities at the site ceased in the 1980s. South Bend is meeting the challenge of returning its historic industrial core to a job providing, taxpaying and physically attractive part of the community. In 2000, at the 104 acre former Studebaker automotive manufacturing facility, there were 3.6 million square feet of buildings which were 83% vacant. At the 36 acre former Oliver facility, over 900,000 square feet of buildings were 87% vacant. Many of the buildings were obsolete and in deteriorated condition. Multi -story buildings with low ceiling heights, mismatched floor levels, small bay sizes and large numbers of structural columns were not in demand for manufacturing or warehousing. The costs and uncertainty associated with environmental conditions created by Studebaker, Oliver and other former industries also deterred redevelopment. The accomplishments are many. The Commission has demolished nearly 5 million square feet of buildings in total. At Studebaker, the Commission demolished 2.8 million square feet of buildings, reconstructed and extended streets (with more to come in 2014) and sold two sites for new development: Transpo, a 160,000 square foot $22 million LEED Platinum building; and Data Realty, a 45,000 square foot, $15 million facility. In 2009 the area south of Sample Street was renamed Ignition Park, a state certified technology park designed to attract high -tech and research based businesses. Private development of the 804,000 square foot former Studebaker Building #84 is beginning. At Oliver, the Commission demolished over 900,000 square feet of buildings, created Oliver Industrial Park and constructed Oliver Plow Court and sold three sites for new development: Rose Brick; Underground Pipe & Valve; and ABC Plumbing Supply. These businesses added 97,000 square feet of new development with new investment of $5.2 million. At both Studebaker and Oliver, the Commission has remediated environmental conditions left behind by years of heavy industry, coordinating with and reporting to the Indiana Department of Environmental Management (IDEM) throughout the process. These environmental conditions include asbestos in building construction, PCB - containing 4 South Bend Redevelopment Commission Regular Meeting — Thursday, July 25, 2013 6. NEW BUSINESS B. Airport Economic Development Area (1) continued... electrical equipment, metals and arsenic in on -site soils and chlorinated solvents and petroleum in on -site groundwater. The Commission sought to recover a portion of the environmental costs from third - parties associated with former activities at the sites, hiring the environmental specialist law firm of Plews Shadley Racher & Braun LLP to represent it. Challenges included the fact that some potentially responsible parties and their insurers no longer existed or were insolvent. Nor were all environmental testing, remediation and disposal costs even potentially recoverable. The ten -year effort took the Commission's attorneys to federal and bankruptcy courts in several states and through Indiana's court system up to the Indiana Supreme Court twice. Key victories included proving that an existing company was the successor to Studebaker's automotive manufacturing liabilities and defeating statute of limitations claims. The effort required at least half a dozen mediations and settlement meetings resulting in 10 settlements. The amounts are confidential at the demand of the litigants paying them, but they yielded the Commission a total of approximately $5.6 million to offset environmental remediation costs. The Commission thanks the Studebaker National Museum and its staff, who helped the Commission's attorneys, found essential historical documents, as well as the dozen or so retired Studebaker and Oliver employees who also provided much helpful information. The total costs of the entire Studebaker /Oliver Plow Works project to date are approximately $26.8 million. The major costs include approximately $16.2 million in demolition, $3.6 million in land purchase and business relocation, $2.3 million in capital improvements, $2.8 million in engineering and $1.9 million in related professional services. $6.0 million of these costs have been paid for by state and federal grants. Environmental costs of $6.7 million are included in the numbers mentioned above, in the demolition, engineering and professional services categories. While most of the work is complete, both the Studebaker and Oliver areas are still in the Voluntary Remediation Program of the Indiana Department of Environmental Management. Additional groundwater testing and possible remediation will continue until the VRP program has been completed. Ms. Schey asked if there are copies of this summary available. Ms. Kolata responded that she has copies and will distribute them following her presentation. Ms. Schey asked if the Airport Economic Development Area will receive the $5.6 million from this settlement. Ms. Kolata responded that it will not. Some of the money was originally being deposited in a Redevelopment grant fund, but now the bulk of the money is in the loss recovery fund, on a separate line. Over the years, the City of South Bend has South Bend Redevelopment Commission Regular Meeting — Thursday, July 25, 2013 6. NEW BUSINESS B. Airport Economic Development Area (1) continued... received all of the $5.6 million with some of the money coming as early as 2005 or 2007. We have approximately $4.8 million remaining. Ms. Schey asked that a paper trail be made available so the public could see when and where these funds were deposited and how they were used. Ms. Kolata responded that they are public information. Only a very small portion from a few years ago has been appropriated; the bulk of the payments came in earlier this month and is not appropriated yet. Ms. Schey asked if the $6 million that was received through grants was also in a separate budget from the Redevelopment budget. Ms. Kolata responded that a lot of the grant funds came in starting around 2000 and 2002 and were deposited in Fund 209. That also includes some money that was spent directly by EPA which did approximately $800,000 to $900,000 worth of work. So this is counted as a grant but was never received as cash. Ms. Schey wanted to confirm that the project to date has cost the city $26.8 million; with approximately $12 million of this was received from other sources and taxpayers money. Ms. Kolata responded that it is. When this project was started in 1999, the community came together with an Advisory Committee to develop a plan for how to deal with the older buildings. The Advisory Committee recommended the adoption of the plan, which then was approved by the Council and the Commission, and since then staff has been implementing the plan. The plan stated it would take somewhere between 5 -15yrs and would cost between $13 -$30 million dollars. We are right on target in terms of how long it has taken and what the actual cost would be to accomplish this. The variable at the time was the environmental costs; no one had a feel for how much environmental work would need to be done, but also the demolition estimates were low. One of the key components of it was that as a community, when Studebaker was at its thriving best, with 20,000- 25,000 people working there, they were not all South Bend residents. Staff made an appeal to the County, State, and Federal Governments, stating that this was not just a local benefit; it was a community and area wide benefit and they should help with the costs. Both the State and Federal governments came through with grants, and staff has used a small portion of the County Option Income Tax (COIT). Mostly it's been the AEDA TIF which was tapped, a very small amount of general fund, and the big source was the Section 108 loan against HUD dollars, which is being paid back by a State program called Community Revitalization Enhancement District (CREED). Money is collected from this program each year and is used to make the payment to Section 108. There are about 5 -6 years remaining on that loan. Ms. Schey asked if the property now has a clean bill of health. Ms. Kolata responded that it does not. There are ground water issues that are being dealt with. The buildings are down and those issues are taken care of; we believe the soil is remediated; there still is more testing to be done. Until all of the buildings were down, we could not get good testing done Cel South Bend Redevelopment Commission Regular Meeting — Thursday, July 25, 2013 6. NEW BUSINESS B. Airport Economic Development Area (1) continued... under the buildings. So when the last large building was demolished, the Foundry, a lot of environmental testing has been done to prove that that was the issue. Staff is still working with the State on ground water. The ground water issues we have don't affect the drinking water; drinking water is monitored every few seconds. There are definitely chemicals in the ground water and one of the things that are being determined is if there are any more source areas. Staff does not have a sense of what the final cost will be for this testing, until we do this, the money shouldn't be spent for anything until the testing is complete. Ms. Jones asked if the HUD funds will be repaid during the life expectancy of the CREED program. Ms. Kolata responded that the loan was set up expecting that we would use CREED first, then the AEDA TIF. Mr. Inks responded that the loan was for 10 years, intending that the CREED would repay it all. With the economy declining in 2007, we took a hit with CREED, so the AEDA TIF is picking up a little bit of the payment. Ms. Kolata responded that the loan should be nearly repaid by the time CREED expires, but she's not sure the payments will be completely covered by CREED. Mr. Inks asked if it was correct that the city was able to pursue the insurance policies because there were standard clauses at that time and those clauses are no longer typically standard in insurance policies. Ms. Kolata noted that the opposite was true: there weren't standard clauses before 1987. It's called environmental exclusion. Liability was being covered except for environmental. This was not a simple project. This could not have been accomplished without the legal team of Plews Shadley Racher & Braun LLP as well as the environmental consultants, Hull and Associates, who provided all of the data, and Andy Beckman of Studebaker Museum. Though the awards do not fully cover the city's costs for remediation, Ms. Kolata is confident we could not have gotten any more from any of the insurance companies involved. Ms. Schey asked whether the documents will eventually be revealed showing who has paid how much. Ms. Kolata responded that the documents will remain confidential. What can be seen are appropriations, the total amount that was paid. If we were unwilling to guarantee confidentiality, we could not have gotten the money. C. West Washington- Chapin Development Area There was no business in the West Washington- Chapin Development Area. 7 South Bend Redevelopment Commission Regular Meeting — Thursday, July 25, 2013 6. NEW BUSINESS D. South Side Development Area There was no business in the South Side Development Area. E. Northeast Neighborhood Development Area There was no business in the Northeast Neighborhood Development Area. F. Douglas Road Development Area There was no business in the Douglas Road Development Area. G. Ratification of Services Contracts Use/Agency Lot Event Dates of Use Downtown South Wayne St. Parking First Friday Rooftop August 2, 2013, 8:00 Bend, Inc. Garage, 121 Wayne Party a.m. through August 3, St. 2013, 8:00 a.m. Upon a motion by Mr. Inks, seconded by Ms. Schey and unanimously carried, the Commission ratified the Services Contracts that were approved by staff since July 11, 2013. 7. PROGRESS REPORTS There were no Progress Reports 8. NEXT COMMISSION MEETING The Next Regular Meeting of the Redevelopment Commission is scheduled for Thursday, August 15, 2013 at 9:30 a.m. 9. ADJOURNMENT There being no further business to come before the Redevelopment Commission, Mr. Inks made a motion that the meeting be adjourned. Ms. Schey seconded. The meeting was adjourned at 9:58 a.m. Scott Ford, Director Marcia I. Jones, President