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HomeMy WebLinkAbout06-26-14 Redevelopment Commission Minutes SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING June 26, 2014 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 Dr. David Varner, Vice President Mr. Don Inks, Secretary Mr. Greg Downes Ms. Valerie Schey Mr. Stan Wruble (part of meeting) Legal Counsel: Mr. Lawrence Meteiver, Esq. Redevelopment Staff: Mr. David Relos, Economic Development Specialist Mrs. Cheryl Phipps, Recording Secretary Ms. Kathy Hahn Ms. Debrah Jennings Others Present: Mr. Scott Ford, Executive Director Ms. Beth Leonard Inks, Director Mr. Chris Fielding, Assistant Exec Director Mr. Brock Zeeb, Director, Economic Resources Mr. Jitin Kain, Director, Planning Mr. Eric Horvath, Director, Public Works Mr. Gary Gilot Ms. Linda Martin, Clerk of the Board of Pub Works Mr. Cecil Eastman Mr. Mark Neal, Acting Mayor Mr. Oliver Davis, Common Council Mr. Tim Sexton,Notre Dame Mr. Phil Faccenda Mr. Joshua Cameron Mr. Richard Billo,Notre Dame Mr. Scott C. Morris Ms. Liz Rulli Mr. Shawn Peterson Mr. Mika Daigle, South Bend Regional Airport Mr. Randy Jones Ms. Kara Boyles Ms. Katrina Marquardt 1 South Bend Redevelopment Commission Regular Meeting—June 26, 2014 1. ROLL CALL (CONT.) Mr. Aaron Perri, DTSB Mr. Rick Doolittle, Grubb & Ellis Mr. Andrew Nemeth Ms. Mo Miller Mr. Conrad Damian Ms. Kelli Stopczynski, WSBT-TV Ms. Meghan Schiller, ABC57 Mr. Erin Blasko, South Bend Tribune 2. APPROVAL OF MINUTES A. Approval of Minutes of the Regular Meeting of Thursday, May 29, 2014 Upon a motion by Mr. Downes, seconded by Mr. Varner and unanimously carried, the Commission approved the Minutes of the Regular Meeting of Thursday, May 29, 2014. 3. APPROVAL OF CLAIMS 324 AIRPORT AEDA Weaver Boos Consultants 7,686.67 Ivy Tower South Bend Water Works 269.50 4212/4224 Fellows/Ardmore/Prast Environmental Assurance Company, Inc. 101,078.00 Ivy Tower Kolata Enterprises LLC 2,760.00 Prof Svcs Environm'I Remediation Faegre Baker Daniels 100.00 Legal Services IDEM 17.28 Service Meridian Title Corporation 475.00 Ignition Pk Hull & Associates 24,847.12 Conduct on & Off Site/ Ignition Pk Plews Shadley Racher& Braun 37,437.42 Legal Services South Bend Tribune 58.98 Notice to Bidders Meridian Title Corporation 100.00 Title Search Causey Demgen & Moore P.C. 1,750.00 Verification of the Mathematical Accuracy of the Computations of Cash Crowe Horwath 40,000.00 Refunding Bonds Wells Fargo 500.00 District Bond 2012 420 FUND TIF DISTRICT-SBCDA GENERAL Faegre Baker Daniels 987.27 Legal Services Edward J. White, Inc. 339.08 The Vine South Bend Water Works 387.04 410 W Wayne St. / 325 S Lafayette Blvd DTSB 20,750.00 Beautification & Recruitment Program DTSB 1,587.38 Parking Surface Lots Rose Pest Solutions 218.00 LaSalle Hotel 2 South Bend Redevelopment Commission Regular Meeting—June 26, 2014 3. APPROVAL OF CLAIMS (CONT.) 420 FUND TIF DISTRICT-SBCDA GENERAL Jones Petrie Rafinski 1,700.00 Service Agreement for Phase II Abonmarche 2,050.00 Colfax & Hill Drainage Improvements Michiana Lock & Key, Inc. 1,409.19 Keypad/Master Key/Labor 426 FUND SOUTH BEND CENTRAL MEDICAL DISTRICT Faegre Baker Daniels 858.50 Legal Services 430 SOUTH SIDE DEVELOPMENT AREA Ireland Realty and Teachers Credit Union 6,737.00 Purchase Temporary ROW Ireland Rd DLZ 10,772.00 So. Bend Bowen St. Sidewalk RW/ Ireland RW/ Fellows St RW Clerk of St. Joseph Superior Court 14,540.00 Appraised for Permanent &Temporary ROW at 4412 Fellows St. Clerk of St. Joseph Superior Court 6,600.00 Court-Appointed Appraisers for Condemnation at 4412 Fellows St. Christopher B. Burke Engineering, LLC 4,475.75 South Side Corridor vs Intersection Improv Jones Petrie Rafinski 3,558.40 Hill & Colfax Lot Purchase Jones Petrie Rafinski 750.00 High & Ireland $ 279,415.43 Upon a motion by Mr. Downes, seconded by Mr. Inks and unanimously carried, the Commission approved and ratified the Claims submitted June 26, 2014. 4. COMMUNICATIONS There were no Communications. 5. OLD BUSINESS There was no Old Business. 6. NEW BUSINESS A. South Bend Central Development Area (1) Staff report on 201 N. Michigan St. settlement and next steps Mr. Meteiver noted that the City of South Bend commenced a law suit against The Vine restaurant. Format, Inc. is the entity that was actually operating there. The city also filed an attachment to the property of The Vine at the time the lawsuit was filed. Based upon that 3 South Bend Redevelopment Commission Regular Meeting—June 26, 2014 6. NEW BUSINESS (CONT.) A. South Bend Central Development Area (1) continued... attachment, the city was able to recover$30,825 which covered all of the rent and common area maintenance that was due and owing under the lease through the lease termination date of June 30, 2014. The balance claimed in the lawsuit then was simply for the late fees that had accrued for the last six months. The owners of The Vine contacted the city and proposed a settlement of the lawsuit,that being the payment of$2,000 in additional money, a release of the attached property, and allowing The Vine until July 7 to remove its property. The city is prepared to go forward with a request for proposals on the property next week with a response date of July 22. Staff requests approval of the $2,000 settlement and dismissal of the lawsuit. Upon a motion by Mr. Varner, seconded by Mr. Inks and unanimously carried, the Commission approved the settlement with The Vine restaurant and dismissal of the lawsuit. B. Airport Economic Development Area (1) Memorandum of Understanding with Nello Inc. Mr. Fielding noted that the staff has negotiated a development agreement with Nello Inc. which will construct a building north of the ethanol plant. They are committing to 524 jobs over the next ten years and the retention of 40 managerial jobs in downtown South Bend. The agreement outlines the Redevelopment Commission's investment as described at the May 15 meeting, and the clawback provisions which will commence if the company's commitments are not met. Staff requests approval of the Memorandum of Understanding. Ms. Schey asked for clarification on the number of jobs to be created. She thought the original estimate was 280. Mr. Fielding responded that when they report jobs they will do so on a yearly basis, so there are benchmark milestones. In year five when they build their expansion, they have committed to hiring 280 employees. Over the course of the full ten years they are committing to 524 jobs. Upon a motion by Mr. Downes, seconded by Ms. Schey and unanimously carried,the Commission approved the Memorandum of Understanding with Nello Inc. (2) Staff report on economic development in the Airport Economic Development Area Mr. Fielding noted that staff has negotiated terms for a Redevelopment Commission investment at the South Bend International Airport. The airport is a critical asset to our community. With the recent announcement introducing the new South Bend international gates, it will give our local businesses access to global markets and give our staff the ability to attract new businesses to our community. We've been working with the Airport 4 South Bend Redevelopment Commission Regular Meeting—June 26, 2014 6. NEW BUSINESS (CONT.) B. Airport Economic Development Area (2) continued... Authority team to identify funding to assist in infrastructure upgrades at the airport that will help attract a new Fixed Base Operator(FBO)to Corporate Wings. Corporate Wings is a full service international aviation service company specializing in private jet charters, acquisition, maintenance and financing. Corporate Wings is planning to repurpose the former DHL facility with extensive internal and external renovations totaling $6.5M over the next twelve months. Their commitment will create eighteen new jobs, including aircraft technicians, managers and customer service staff. And, it is anticipated that many of the upgrades will allow the airport to continue to attract additional flights from new carriers in and out of the airport in the future. • Staff negotiated terms where the Redevelopment Commission would assist the Airport Authority in completion of several construction projects in an amount not to exceed $1.5M. These projects include, but are not limited to, design, fence modifications, site preparation, ramp construction, asphalt paving, and construction administration, and site enhancements. All of the projects will fall under the guidelines of the FFA. Staff requests permission to move forward with a development agreement outlining these terms. Ms. Schey asked whether this is for consumer or private use. Mr. Randy Jones responded that the role of the FBO is to provide services to private and commercial aviation uses. Corporate Wings is the gas station,the maintenance facility, the garage, and the concierge for the city. Upon a motion by Mr. Varner, seconded by Mr. Downes and unanimously carried,the Commission approved there terms outlined above and authorized staff to prepare a development agreement with Corporate Wings. Mr. Fielding also reported on a project on agreement to terms that will make South Bend the base of future jet engine compulsion research for aerospace companies, including the General Electric Corporation. In collaboration with five public and private partners, we've been able to attract a commitment from General Electric for$13.5M worth of funding for research that will be conducted in a new facility at Ignition Park. This project represents development of the nation's foremost research and test facility for advancing technology used in massive gas turbine engines used by commercial military aircraft power plants in the oil and gas industry. We are pleased to announce that we have successfully negotiated investment from multiple partners: the Indiana Economic Development Corp (IEDC) committing to $2M in cash reimbursement, and the University of Notre Dame also agreeing to $3.4M in cash reimbursement to the Redevelopment Commission to assist with the purchase of equipment for the facility. After the partner contributions,total funding being requested from the Redevelopment Commission long term will be $2.1M. Staff is requesting consideration to initially invest $7.5M into the cost and implementation of a 10 5 South Bend Redevelopment Commission Regular Meeting—June 26, 2014 6. NEW BUSINESS (CONT.) B. Airport Economic Development Area (2) continued... megawatt jet propulsion engine rig that will serve as the basis for testing and research. $3.4M of that will be reimbursed. The development of this $36M facility and the attraction of a Fortune 100 company to our community would not have been possible without our partners stepping in to assist with the cost of construction and equipment. In addition to the potential corporate attraction to support this center, we've been able to secure a commitment to create 57 jobs through 2018 with an average wage of$38/hr. It is anticipated that the facility will be housed in a second multi-tenant facility at Ignition Park, to be constructed by Great Lakes Capital, Thirteen acres of Ignition Park were sold to Great Lakes Capital under a development agreement to construct a multi-tenant campus. In addition,the development of facility and the location of a 10 megawatt jet testing rig will require the construction of a new power facility to serve the project. This will serve the future expansion of the entire Renaissance District. AEP has agreed to cover the cost of the new facility. Negotiations for the location of that substation are ongoing. The Commission may be asked to contribute land for the substation. Staff requests approval to move into final negotiations and prepare finalized written agreements later this summer. Mr. Varner clarified that the research will be testing components, not jet engines. Also,he thought it was interesting to note that this seems to him like a replacement of Honeywell and Bendix who,before their demise, made components for Lockheed. This feels like the rebirth of that. Good for us. Mr. Varner asked over what period the reimbursement will occur. Mr. Fielding responded that we are expecting the reimbursements from all partners would be made by the end of 2014. Ms. Jones asked the total Commission investment. Mr. Fielding responded that the Commission's initial investment will be $7.5, but after reimbursements,the Commission outlay will be about$2.1M. Upon a motion by Mr. Downes, seconded by Mr. Varner and unanimously carried,the Commission authorized staff to enter into final negotiations and document preparation with a short term commitment of the Commission being $7.5M and, after partnership contributions, a net commitment of$2.1M. (3) Staff report on appraisals of Blackthorn Golf Course Mr. Relos noted that on April 24, 2014,the Commission authorized staff to hire two appraisers to value the Blackthorn Golf Course and its improvements. Those two appraisers 6 South Bend Redevelopment Commission Regular Meeting—June 26, 2014 6. NEW BUSINESS (CONT.) B. Airport Economic Development Area (3) continued... were Hughes & Company and Valbridge Property Advisers, both well known, national golf course appraisal companies. The appraisals have been received, and as an update, the values arrived at are: Valbridge - $1,560,000 Hughes - $1,750,000 Therefore,the fair market value as determined by averaging the two appraisals, is $1,655,000. The Department of Community Investment will continue to weigh options for the course, and will report back to the Commission when options arise. Mr. Varner asked whether these evaluations represent fee simple ownership. Mr. Relos responded that they do. Mr. Varner asked whether the appraisals break out what portion of the value is for land and what for the business. Mr. Zeeb responded that they both valued the course multiple ways. The highest and best use is still is a golf course. The values are inclusive of capital investment that you need too make in a golf course. Mr. Varner asked whether the valuations consider the fact that food services are constrained. Mr. Zeeb responded that the appraisers were informed of that. Mr. Downes said he had read the appraisals and noted that they valued the revenue stream. Then they used(eight or nine) comparable sales in the region that had sold in the last two years. He found it interesting that both appraisals said that the cost approach(the cost to build the course)would not be valid. He asked if anyone remembered what it had cost to construct Blackthorn Golf Course, because it was a unique property in that it required a lot less earth movement than most courses. Mr. Varner thought it was about$3.5M. Mr. Downes said that was very inexpensive at the time. However, this valuation is reflective of the declining golf market and the overbuilding of golf courses. Mr. Downes said it was hard for him to believe that the golf course isn't worth more money. Mr. Downes asked what the next step is. Mr. Relos replied that staff will try to consider options and determine a strategy for the golf course. (4) Resolution No. 3217 approving and authorizing the execution of an Addendum to the Master Agency Agreement (Ignition Park Multi-Tenant Campus) 7 South Bend Redevelopment Commission Regular Meeting—June 26, 2014 6. NEW BUSINESS (CONT.) B. Airport Economic Development Area (4) continued... Mr. Relos noted that Resolution No. 3217 approves an agency agreement with the Board of Works to oversee infrastructure improvements for the 13-acre site Great Lakes Capital plan to develop a three building,multi-tenant campus in Ignition Park. The development agreement with Great Lakes Capital for this project was approved on March 27, 2014. Staff requests approval of Resolution No. 3217 and the Addendum to the Master Agency Agreement in a not-to-exceed amount of$2,700,000. Mr. Varner asked whether the Commission's commitment is constrained to only site improvements and infrastructure, or will we be covering façade enhancements as was done for Data Realty. Mr. Relos responded that the development agreement states "local public improvements including site work, parking improvements, façade enhancements if necessary, utility and other site and infrastructure related improvements which will be agreed upon when the final plans for the project are approved." Mr. Fielding responded that staffs number one goal in a development agreement is to stay out of façade improvements. Our conversation with Great Lakes Capital has focused on concrete foundations so that as a city we can assure we are following all of IDEM's guidelines for the site. Upon a motion by Mr. Downes, seconded by Mr. Varner and unanimously carried,the Commission approved Resolution No. 3217 approving and authorizing the execution of an Addendum to the Master Agency Agreement(Ignition Park Multi-Tenant Campus) (5) Resolution No. 3219 approving and authorizing the execution of an Amendment to the Addendum to the Master Agency Agreement. (Hamilton 917 S. Lafayette Demo Project) Mr. Relos noted that Resolution No. 3219 authorizes an increase to the budget for demolition and clearance of the remaining (SW corner) of the Hamilton Towing property. The budget for the demolition was $80,000. When the Board of Public Works received bids for the demolition,the low bid came in at$89,500. That bid includes a$5,000 unforeseen environmental allowance, so if they don't find any environmental issues, the actual price will be $84,500. Staff requests approval of Resolution No. 3219 in an amount not-to-exceed $100,000. Mr. Relos noted that in sites like this it is not uncommon to find old foundations that require additional expense to remove. Upon a motion by Mr. Varner, seconded by Mr. Inks and unanimously carried,the Commission approved Resolution No. 3219 approving and authorizing the execution of an Amendment to the Addendum to the Master Agency Agreement with a not-to-exceed budget of$100,000 (Hamilton 917 S. Lafayette Demo Project). 8 South Bend Redevelopment Commission Regular Meeting—June 26, 2014 6. NEW BUSINESS (CONT.) C. West Washington-Chapin Development Area There was no business in the West Washington-Chapin Development Area. D. South Side Development Area (1) Resolution No. 3218 determining that the tax increment for Erskine Village to be collected in the Year 2015 may be allocated to the respective taxing units and other related matters. Ms. Leonard noted that staff intends to pay off the debt on the bond for the South Side Allocation Area No. 3 as soon as we are allowed to, in 2017. We already have enough cash on hand to make the remaining payments, so we are releasing the TIF for the use of the other taxing jurisdictions in 2015. State law requires the other jurisdictions to be notified of the TIF's availability by June 14 of each year. This year,the Common Council must also approve the release of TIF by that June 14 deadline. Upon a motion by Mr. Downes, seconded by Mr. Inks and unanimously carried, the Commission approved Resolution No. 3218 determining that the tax increment for Erskine Village to be collected in the Year 2015 may be allocated to the respective taxing units and other related matters. 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 Commission Role in Contract Staff Transaction Contractor Service Provided Amount Member 802-812 S. Lafayette Disposition R. E. Pitts Appraisal $825 Relos 802-812 S. Lafayette Disposition Steve Sante Appraisal $750 Relos Upon a motion by Mr. Downes, seconded by Mr. Inks and unanimously carried,the Commission ratified the Services Contracts approved by staff since the May 29, 2014 meeting. 9 South Bend Redevelopment Commission Regular Meeting—June 26, 2014 6. NEW BUSINESS (CONT.) H. Ratification of Temporary Use Agreement Upon a motion by Mr. Downes, seconded by Mr. Inks and unanimously carried,the Commission ratified the Temporary Use Agreement with Downtown South Bend for use of the Wayne Street Parking Garage for a fireworks viewing on July 4, 2014. 7. PROGRESS REPORTS Tax Abatement: Ms. Hahn reported that the Common Council approved a declaratory resolution for a tax abatement for JJ White who is moving into a vacant building at 1904 N. Kenmore St. The abatement is for a two-year real property abatement. They will make an investment of$85,000 to renovate the building. Taxes to be abated over two years are estimated at $25,527. Taxes to be paid over the same two years are estimated at $14,696. They will retain six office workers and forty-two field reps being paid$25/hr for a payroll of$2,490,000. They will also create five office jobs and 25 field rep jobs with a payroll of$1,560,000. The confirming resolution on this abatement will be considered at the Council's July 14 meeting. 8. NEXT COMMISSION MEETING The Next Regular Meeting of the Redevelopment Commission is scheduled for 9:30 a.m., July 10, 2014. 9. ADJOURNMENT There being no further business to come before the Redevelopment Commission,the meeting was adjourned at 10:00 a.m. ► . Scot C. Ford, Executive Director Marcia I. Jones,Or sident 10