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HomeMy WebLinkAbout02-13-14 Redevelopment Commission MinutesSOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING February 13, 2014 9:30 a.m. 227 West Jefferson Boulevard Presiding: Marcia I. Jones, President South Bend, Indiana 1. ROLL CALL Members Present: Members Absent: Legal Counsel: Ms. Marcia Jones, President Dr. David Varner, Vice President Mr. Don Inks, Secretary Ms. Valerie Schey Mr. Stan Wruble (part of meeting) Mr. Greg Downes Mr. Lawrence Meteiver, Esq. Redevelopment Staff: Mr. David Relos, Economic Development Specialist Mrs. Cheryl Phipps, Recording Secretary Mr. Brock Zeeb, Director Economic Resources Ms. Debrah Jennings, Property Manager Others Present: Mr. Scott Ford, Executive Director Mr. Jitin Kain, Director of Planning Mr. Chris Fielding, Director Business Development Ms. Beth Leonard Inks, Director John March Mr. Cecil Eastman, Admin & Finance Ms. Mo Miller Mr. Mark Seaman, Prism Science Mr. Erin Blasko, South Bend Tribune Mr. Mark Peterson, WNDU -TV Cameraman, WNDU -TV 2. APPROVAL OF MINUTES A. Approval of Minutes of the Regular Meeting of Thursday, January 30, 2014 Upon a motion by Ms. Schey, seconded by Mr. Inks and unanimously carried, the Commission approved the Minutes of the Regular Meeting of Thursday, January 30, 2014 South Bend Redevelopment Commission Regular Meeting — February 13, 2014 3. APPROVAL OF CLAIMS Redevelopment Commission Claims submitted February 13, 2014 for approval 324 AIRPORT AREA Plews Shadley Racher & Braun IDEM Cressy & Everett Management Sopko, Nussbaum, Inabnit & Kaczmarek South Bend Water Works Ann Kolata Owner's Association at Blackthorn, Inc. Jones Petrie Rafinski South Bend Parks & Recreation 3,926.00 Environmental Development Related 1,174.89 Oliver Plow 2,081.92 Property management services at Bosch 4,925.00 Legal Services 2,331.49 4224 Fellows St / 2721 Kenwood Ave / 401 Bendix Dr 2,981.00 Agreement Environmental Remediation 44,985.63 Management Assessment 420 FUND TIF DISTRICT -SBCDA GENERAL 1,237.50 Ignition Pk 2,657.14 Snow Removal South Bend Water Works 214.53 410 W Wayne Downtown South Bend 22,500.00 Downtown beautification services Sopko, Nussbaum, Inabnit & 650.00 Legal Services Kaczmarek ISU 805.00 Investigator Hours/ NGO Data Fees South Bend Parks & Recreation 2,657.14 Snow Removal 430 FUND SOUTH SIDE DEVELOPMENT TIF AREA #1 DLZ 280.00 Fellows St Christoper B. Burke 5,793.00 South Side Corridor Intersection DLZ 1,180.00 Bowen St. Sidewalk Right of Way Total $100,380.24 Upon a motion by Mr. Inks, seconded by Ms. Schey and unanimously carried, the Commission approved the Claims submitted February 13, 2014. 4. COMMUNICATIONS There were no Communications. 5. OLD BUSINESS There was no Old Business. 2 South Bend Redevelopment Commission Regular Meeting — February 13, 2014 6. NEW BUSINESS Mr. Relos noted that bids were due today on three properties offered for disposition: 118 -124 S. William St., 332 W. Jefferson Blvd., 1503 -1505 Prairie Ave. No bids were received for any of the properties. Mr. Relos noted that if interest is eventually expressed in any of these properties, a bid lower than the offering price may be considered after 30 days from this date. A. Public Hearings (1) Public Hearing on Resolution No. 3197 appropriating monies from the Redevelopment General Fund (Fund 433) for the purpose of paying for certain expenses incurred by the Redevelopment Commission. Mr. Relos noted that the public hearing file is complete, containing (1) a copy of the Notice of Hearing; a copy of Resolution No. 3197, the subject of the public hearing; (3) an affidavit from Kim Wilson, Advertising Director of the South Bend Tribune, that the Notice of Hearing was published in that newspaper on January 24, 2014; and (4) an affidavit from Jason Jolly, Classified Manager of the Tri- County News, that the Notice of Hearing was published in that newspaper on January 24, 2014. Mr. March noted that Resolution No. 3197 appropriates $20,000 for outside legal expenses. It can be used when a TIF area doesn't have the resources to make a payment on a legal bill. Ms. Jones opened the public hearing for whoever wished to speak regarding Resolution No. 3197. There was no one who wished to speak. Ms. Jones closed the public hearing for whatever action the Commission wished to take. (2) Consideration of Resolution No. 3197. Mr. Varner asked whether these funds are for a certain TIF district, or for any TIF district's use. Mr. Relos responded that Fund 433 is for the legal expenses of any TIF district or for redevelopment expenses that are not related to a TIF district. Ms. Schey noted that there has been discussion about expanding the Airport TIF to include Lincolnway West. She wondered if these funds might be used for legal expenses regarding that expansion or whether the city's legal department would work on that. Mr. Meteiver said those legal expenses could come either fiom city staff or from outside legal services. Upon a motion by Mr. Varner, seconded by Mr. Inks and unanimously carried, the Commission approved Resolution No. 3197 appropriating monies from the Redevelopment General Fund (Fund 433) for the purpose of paying for certain expenses incurred by the Redevelopment Commission. South Bend Redevelopment Commission Regular Meeting — February 13, 2014 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area There was no business in the South Bend Central Development Area. C. Airport Economic Development Area (1) Resolution No. 3204 approving and authorizing the execution of an Addendum to the Master Agency Agreement (Ignition Park South Demolitions Phase 5 Project) Mr. Relos noted that Resolution No 3204 and the associated Agency Agreement is to clean and clear two properties acquired by the Commission in Ignition Park South. Included in this work will be the demolition and environmental remediation of two properties, 1510 S. Taylor and 1505 S. Kendall. Staff requests approval of Resolution No. 3204 for the environmental remediation, demolition, and associated site work at these properties, in a not -to- exceed amount of $60,000. Ms. Schey noted that for the Vacant and Abandoned Homes initiative, the average demolition price is $6,000. Why would this cost be $60,000 for two homes. Mr. Relos responded that one of these is a house, the other is a commercial building. Mr. Meteiver added that the Commission often has to do the environmental remediation prior to demolition, so those costs are anticipated in the $60,000. We expect the cost to be less than $60,000, but staff wants approval of this amount in case the bids come in that high. Ms. Schey asked whether the Studebaker insurance settlement funds might be available for environmental remediation of that property. Mr. Relos responded that there shouldn't be any large environmental remediation required for either of these buildings. Also, we expect there might be some site work that Code Enforcement doesn't include in their demolition costs. Mr. Wruble asked whether the tavern is an ongoing business. Mr. Relos responded that it is not. We'acquired it at tax sale, waited until we had the deed and intend to bid them for demolition at the same time hoping for a lower bid. Mr. Varner asked whether any unused portion of the $60,000 would need to be approved before it could be used for a different expenses. Mr. Relos said only the amount of the bid would be incumbered. Any remainder would be available to another AEDA use within the budget with Commission's approval. Upon a motion by Mr. Varner, seconded by Mr. Inks and unanimously carried, the Commission approved Resolution No. 3204 approving and authorizing the execution of an Addendum to the Master Agency Agreement (Ignition Park South Demolitions Phase 5 Project) 4 South Bend Redevelopment Commission Regular Meeting — February 13, 2014 6. NEW BUSINESS (CONT.) C. Airport Economic Development Area (2) Resolution No. 3205 approving and authorizing the execution of an Addendum to the Master Agency Agreement (Hamilton 917 S. Lafayette Demo Project) Resolution No. 3205 and its Agency Agreement is for cleaning and clearing the Hamilton Towing property at 917 S. Lafayette, at the southwest corner of Lafayette and Sample. This property was acquired along with 802 and 910 S. Lafayette from Hamilton Towing in June 2012. Date of possession for 917 S. Lafayette is June 30, 2014, with demolition occurring soon thereafter. Staff will work with the City's Engineering Department to prepare demo specs, quote the project, and oversee the work. The estimated budget for this project is $80,000. Staff requests approval of Resolution No. 3205 for the environmental remediation, demolition, and associated site work at this property, in a not -to- exceed amount of $80,000. Mr. Inks asked which of the Hamilton Towing buildings is to be demolished here. Mr. Relos responded that the towing part of the business operated out of 910 S. Lafayette, a much older building on the east side. When we demolished that building, the towing was temporarily brought over to this building at 917 S. Lafayette. It would be the building that mainly housed the body shop. Mr. Inks asked if environmental testing has been done. Mr. Relos responded that a Phae I environmental assessment was done a little over a year ago. Hamilton stored some vehicles behind this building which leaked a little oil -- -not very deep. The environmental remediation should be minimal. Upon a motion by Mr. Inks, seconded by Mr. Varner and unanimously carried, the Commission approved Resolution No. 3205 approving and authorizing the execution of an Addendum to the Master Agency Agreement (Hamilton 917 S. Lafayette Demo Project) (3) Resolution No. 3206 related to acquisition of property in the Airport Economic Development Area. Mr. Relos noted that over the past few years the Commission has approved the addition of various properties to the acquisition list of the Airport Economic Development Area. Occasionally a property that has been added to the acquisition list appears on a tax sale from the county. At the upcoming St. Joseph County Commissioner's March 2014 tax sale, one property added is expected to be among those offered. Staff believes purchasing this property from the tax sale will allow for lower costs in the acquisition process. This (unidentified) property has gone through the acquisition process, with the Commission approving an acquisition price. Staff requests approval of Resolution No. 3206, to take the necessary steps to register and bid on this parcel up to the previously approved purchase price. South Bend Redevelopment Commission Regular Meeting— February 13, 2014 6. NEW BUSINESS (CONT.) C. Airport Economic Development Area (3) continued... Ms. Schey asked whether the property is expected to be demolished. Mr. Relos responded that it would be cleared for development. Upon a motion by Ms. Schey, seconded by Mr. Inks and unanimously carried, the Commission approved Resolution No. 3206 related to acquisition of property in the Airport Economic Development Area (4) Resolution No. 3207 appointing members to the Ignition Park Architectural Review Board. Mr. Kain noted that the Common Council approved the Ignition Park PUD in December 2010. Among other things, the PUD required the establishment of the Ignition Park Architectural Review Board (ARB). The ARB consists of five members, four of which are appointed by the Commission and one by the Common Council. The four Commission appointees are the Director of Ignition Park, the Executive Director of Community Investment, and two citizen members, who may be employees of the City of South Bend. Resolution No. 3207 appoints two citizen members to the Ignition Park ARB: Eric Horvath, Director of Public Works and Doug Marsh, Vice President and University Architect for the University of Notre Dame du Lac. Staff requests approval. Ms. Schey asked if the ARB members set the standards for acceptable development for Ignition Park. Mr. Kain responded that there are design guidelines already in place for Ignition Park. The ARB reviews site plans, elevations, architectural materials, etc. to see that they conform to those guidelines. Ms. Schey asked which legislative body enforces those standards. Mr. Kain responded that they are guidelines, so the ARB is an advisory board. Mr. Varner noted that the city made a pretty heavy investment in the Data Realty building. He wondered if we expect to make similarly significant investment in future projects to assure that the design guidelines are met. Mr. Kain responded that staff does not expect the same financial investment in other projects. The guidelines are fairly general, so they allow for a variety of design options. The ARB can allow exceptions to those design guidelines. Mr. Varner noted that development has been slow to take off in Ignition Park. He wondered if that is because the design standards are too restrictive and projects are going elsewhere. Mr. Kain responded that the design guidelines are actually pretty general, only two pages long. South Bend Redevelopment Commission Regular Meeting — February 13, 2014 6. NEW BUSINESS (CONT.) C. Airport Economic Development Area (4) continued... Upon a motion by Ms. Schey, seconded by Mr. Inks and unanimously carried, the Commission approved Resolution No. 3207 appointing members to the Ignition Park Architectural Review Board. (5) Transfer Blackthorn Golf Course Debt Service Reserve Cash into Operations Cash Account. Mr. March noted that the Blackthorn Golf Course bond is paid off, there is $51,000 in the city's cash account. These funds originally came from the Operations Cash at Blackthorn, but sat in the debt service reserve account until final payoff. Since the operations cash is now with Billy Casper, our fiscal agent, it is appropriate to transfer the cash to Bill Casper. This action will not increase Blackthom Golf Course's budget. The money will still belong to the city, just like all of the operations cash, and will be tracked, reviewed and audited just like all city money. Staff requests approval of the transfer to Billy Casper Golf. Ms. Jones asked whether the management agreement we have with Billy Casper Golf contains an item for capital reserve. We have talked a lot about making sure they have set aside appropriate funds for large capital improvements. Ms. Leonard responded that the capital improvements are always part of the city budget. There is nothing in the agreement about reserving cash from operations for capital improvements. Every year when we approve their budget, there is barely enough to operate the course, never any extra for capital improvements. Mr. Varner suggested that setting up a capital account would result in an expectation each year that Billy Casper contribute to that account. That would at least stimulate the conversation. Ms. Leonard said staff could look at that for the next budget. Upon a motion by Mr. Varner, seconded by Mr. Inks and unanimously carried, the Commission approved the transfer of Blackthom Golf Course Debt Service Reserve Cash into Operations Cash Account managed by Billy Casper Golf. (6) Staff report on Ethanol Plant Mr. Fielding noted that DCI staff has had the privilege of working with Noble Americas through their acquisition of the shuttered Ethanol Plant. This has been a long and complicated project that our community will see come back to life in mid -2014. Noble Americas completed the acquisition process in late 2013 and immediately began completing their due diligence to assess (1) why the plant went bankrupt and (2) how to become for efficient through state of the art upgrades. It became increasingly obvious that if the plant is South Bend Redevelopment Commission Regular Meeting — February 13, 2014 6. NEW BUSINESS (CONT.) C. Airport Economic Development Area (6) continued... not upgraded significantly it was only worth its value in scrap and that the City would have to be a willing partner if was to return to production. The DCI staff has been included at every turn and has witnessed the projected capital expenditures costs rise from $12 million to now $28 million with work already well under way and a projected start-up date of June 1, 2014. Staff feels we have negotiated a responsible level of participation in the project. The final negotiated public investment figures we anticipate being included in a development agreement include up to $2,000,000 to purchase equipment through the BPW public bidding process that will be leased back to Noble America for 5 years at a base rate of $100,000 per year with potential escalations contingent upon jobs created and sustained over a five year period (please see attached petition).The equipment to be purchased is a corn oil extraction unit that will make the plant more sustainable and more resilient to the margins of the commodities market. In addition, in a worst case scenario the RDC has the ability to remove the unit from the plant and resell it to recoup TIF investment. Staff proposes that the Redevelopment Commission use TIF funding from the Airport Economic Development Area and the Redevelopment Authority would purchase the equipment for approximately $2,000,000 and as a base would lease that equipment back to Noble Americas for $100,000 per year over five years, with an additional fallback that the lease rate would rise should they fail to meet the job creation projections they've committed to. DCI staff is requesting that the RDC approve moving into negotiations of the terms of a development agreement to be brought back for approval at your next meeting. Mr. Varner asked whether the $40,000,000 of improvements would be taxable. Mr. Fielding responded that they would be. Estimated Acquisition cost Estimated Capital investmenttupgrades Real Property Tat revenue (2012) Personal Pro erty Tax Revenue (2012) Waste Water revenues Average hourl wa a $8,000,000 $28,000,000 $170,276 $398,064 $2,000,000+ $27.00 er hour DCI staff is requesting that the RDC approve moving into negotiations of the terms of a development agreement to be brought back for approval at your next meeting. Mr. Varner asked whether the $40,000,000 of improvements would be taxable. Mr. Fielding responded that they would be. South Bend Redevelopment Commission Regular Meeting — February 13, 2014 6. NEW BUSINESS (CONT.) C. Airport Economic Development Area (6) continued... Mr. Varner asked whether Noble Americas will expect tax abatement. Mr. Fielding responded that they will expect tax abatement. However, we've made no indication that we will allow any exceptions to the ordinance. Over the life of any abatement they would still be paying almost 52 -54% of what they would without abatement, so there would be a tremendous upside. Mr. Varner suggested providing a cash flow sheet that shows how much would be paid in taxes even with tax abatement. Otherwise the public will only hear the $2,000,000 investment number. Mr. Fielding responded that they will certainly provide those numbers at the time the tax abatement is considered. He noted that in addition to the tax value, there is the additional value of 50 jobs that will pay $55- 60,000 per year. The ethanol plant is also one of the biggest users of the city's sewer, so the city will receive money from that source also. Ms. Jones raised the environmental impact of the ethanol plant when it was in production before. She wondered how much of the improvements they make will improve that negative impact. Mr. Fielding responded that simply the plant's coming back into production will result in improvement. Mr. Horvath of Public Works is working diligently on the permanent well solution. Noble has been very gracious with us. They immediately signed our utilities agreement. The pump that we've always had running there to address those issues will continue to run until the plant starts or the well starts. The indication is that even if they lower the amount of ground water being pumped by the plant on a daily basis it would still address nearly all of those issues, minus the wells. There is a permanent solution being put into place. Upon a motion by Ms. Schey, seconded by Mr. Inks and unanimously carried, the Commission authorized staff to proceed with preparation of a development agreement with Noble America for the former ethanol plant, based on the terms described in the staff report. D. West Washington- Chapin Development Area There was no business in the West Washington- Chapin Development Area. E. South Side Development Area There was no business in the South Side Development Area. F. Northeast Neighborhood Development Area There was no business in the Northeast Neighborhood Development Area. South Bend Redevelopment Commission Regular Meeting — February 13, 2014 6. NEW BUSINESS (CONT.) G. Douglas Road Development Area There was no business in the Douglas Road Development Area. 7. PROGRESS REPORTS There were no Progress Reports 8. NEXT COMMISSION MEETING The Next Regular Meeting of the Redevelopment Commission is scheduled for 9:30 a.m., February 27, 2014. 9. ADJOURNMENT There being no further business to come before the Redevelopment Commission, Ms. Schey made a motion that the meeting be adjourned. Mr. Varner seconded. The meeting was adjourned at 10:03 a.m. Scott C. Ford, Executive Director Ill] 4 Marcia I. Jones, Ere dent