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HomeMy WebLinkAbout2. Minutes 3/20/09SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING March 20, 2009 10:00 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 Ms. Nancy King, Secretary Mr. Donald Alford Members Absent: Mr. Greg Downes Ms. Stephanie Spivey Legal Counsel: Mr. Charles S. Leone, Esq. Mr. Lawrence Meteiver, Esq. Redevelopment Staff: Mr. Don Inks, Director Mrs. Cheryl Phipps, Recording Secretary Ms. Kathy Hahn, Loan Servicing Officer Mr. David Relos, Economic Development Specialist Ms. Ann Kolata, Senior Development Specialist Ms. Debrah Jennings, Property Manager Others Present: Mr. Tom Price, Mayor"s Oltice Ms. Jamie Loo, South Bend Tribune Ms. Rita Kopala Ms. GlendaRae Hernandez Ms. Linda Wolfson, Community Forum for Economic Dev Mr. Mark Seaman, Prism Environmental Ms. Catherine Hostetler, Historic Preservation Ms. Gladys Muhammad, South Bend Heritage Foundation Mr. Phillip Byrd, South Bend Heritage Foundation Ms. Marguerite Taylor, South Bend Heritage Foundation Mr. Gilbert Cardenas, University of Notre Dame Mr. Allort Brown-Gorr, University of Notre Dame Mr. Robert Bretz 2. APPROVAL OF MINUTES A. Approval of Minutes of the Regular Meeting of Friday, March 6, 2009. South Bend Redevelopment Commission Regular Meeting -March 20, 2009 2. APPROVAL OF MINUTES (CONT.) Upon a motion by Mr. Varner, seconded by Mr. Alford and unanimously cai-r•ied, the Commission approved the Minutes of the Regular Meeting of Friday, March 6, 2009. 3. APPROVAL OF CLAIMS COMMISSION APPROVED THE MINUTES OF THE REGULAR MEETING OF FRIDAY, MARCH 6, 2009 Redevelopment Conmlission Claims submitted March 20, 2009 for approval. 305 FUND SBCDA BOND Lehman & Lehman Inc. 6,430.50 Century Center Streetscape Majority Building Inc. 98,942.59 101 North Michigan Troyer Group Inc. 16,124.12 WNIT 324 AIRPORT AEDA South Bend Heritage Foundation, Inc. HG Christman Construction Co. Indian Michigan Power Crowe Horvath 6,021.70 Christman Construction 60,217.00 Bendix Family Physicians 1010 N Bendix 6.65 501 Wenger St SPRK SYS/JOHNSON BLV 10,366.43 2007 Pay 2008 Tax Increment Financing Neutralization Worksheets 420 FUND TIF DISTRICT-SBCDA GENERAL South Bend Tribune Tri County News SBD Reprographics Meridian Title Corporation JJR 422 FUND WEST WASHINGTON Kaser Spraker Construction South Bend Heritage Foundation, Inc. South Bend Heritage Foundation, Inc. Total 108.96 58.61 88.28 1,900.00 5,000.00 72,697.80 7,269.78 4,762.79 $ 289,995.21 Upon a motion by Ms. King, seconded by Mr. Varner and unanimously ca17-ied, the Commission approved the Claims submitted March 20, 2009, and ordered checks to be released. Coveleski Neighborhood Housing Block Demolition Project Coveleski Neighborhood Housing Block Demolition Project Coveleski Housing Demo S Michigan, Western & Main East Bank Master Plan Phase 2 Natatorium Phase 3-B Restoration Natatorium, Phase II Program Delivery Natatorium Phase 3-B Restoration COMMISSION APPROVED THE CLAIMS SUBMITTED MARCH 2O, 2009, AND ORDERED THE CHECKS TO BE RELEASED 2 South Bend Redevelopment Commission Regular Meeting -March 20, 2009 4. COMMUNICATIONS There were no Communications. 5. OLD BUSINESS There was no Old Business. 6. NEW BUSINESS A. Tax Abatements (1) Resolution No. 2571 approving an application for real property tax deduction for property located at 1029 Notre Dame Avenue in the Northeast Neighborhood Development Area. (Robert D. and Kelley S. Bretz) Ms. Hahn gave the staff report on the project. Robert and Kelley Bretz intend to construct an approximate 3,000 square foot, single- familyhome as their primary residence. The horse will be two stories, with three bedrooms and three bathrooms, a front porch, a finished basement and atwo-car garage. The project is part of the Notre Dame Avenue Housing Program and as such will follow the design specifications and standards required by that prognam. The cost of the home will be approximately $450,000. Based on that project cost, total taxes to be abated during the (5) five-year abatement period are estimated to be 52,216. Total taxes to be paid during the (5) five-year abatement period are estimated to be $24,036. The Bretzes have not had any previous tax abatements. The property is properly zoned for the proposed project. The property is located in the Northeast Nei~~hborhood THERE WERE NO COMMUNICATIONS THERE WAS NO OLD BUSINESS South Bend Redevelopment Commission Regular Meeting -March 20, 2009 6. NEW BUSINESS (CONT.) A. Tax Abatement (1) continued... Development Area, which is a Tax Incremental Allocation Area; therefore, approval of the tax abatement petition by the South Bend Redevelopment Commission is required. However, the property is not located within the Northeast Neiehborhood's residential TIF area. The project qualifies for a five-year residential tax abatement under the tax abatement ordinance. Mr. Varner asked whether the project costs for these estimates include the land. Ms. Hahn responded that it did not. The estimate was only for new construction. Mr. Varner asked if it wouldn't be more accurate to include the land. Mr. Inks agreed that it would, in projects such as this. It would increase the amount of taxes paid, not the amount abated, since the abatement has a cap. Upon a motion by Ms. King, seconded by Mr. Vai~ler and unanimously can-ied, the Commission approved Resolution No. 2571 approving an application for real property tax deduction for property located at 1029 Notre Dame Avenue in the Northeast Neighborhood Development Area. (Robert D. and Kelley S. Bretz) B. South Bend Central Development Area (1) Waiver and Consent to Mortgage for KevBank Plaza COMMISSION APPROVED RESOLUTION NO. 2571 APPROVING AN APPLICATION FOR REAL PROPERTY TAX DEDUCTION FOR PROPERTY LOCATED AT l O29 NOTRE DAME AVENUE IN THE NORTHEAST NEIGHBORHOOD DEVELOPMENT AREA. (ROBERT D. AND KELLEY S. BRETZ~ 4 South Bend Redevelopment Commission Regular Meeting -March 20, 2009 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (1) continued... Mr. Meteiver noted that on October 3, 2008, the Commission entered into a Lease Agreement with Key S.B., in fulfillment of an MOU dated April 6, 2007, which in turn outlined terms of a development project pursued by the Hinman Company of Kalamazoo, Michigan, the owners of the Key Bank building in the South Bend Central Development Area. The project was a great success, and a total of $6.175 million in new private inveshnent is represented in the renovations undertaken by the building owners and key new and existing tenants, including Baker & Daniels law fin11, KeyBank, and CB Richard Ellis. In support of the project, the Redevelopment Commission purchased the plaza space immediately west of the building along Michigan Sheet and funded and directed improvements to the public gathering space, with the intent of leasing the property back to the Hinman Company. Our lease agreement identities the Developer"s responsibilit}~ to maintain and manage the property in exchange for the right to lease it back from the Commission for $1.00 per year for a ten11 of 25 years, and the right to purchase the property after a teen of 25 years for $1.00. The lease agreement did not specifically address rights to obtain credit using the property interest under a leasehold mortgage, but Key S.B. has requested the right to do so. Such a provision is often standard in our 5 South Bend Redevelopment Commission Regular Meeting -March 20, 2009 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (1) continued... agreements, as long as the Conunission"s property interest is duly protected. Finding no objection to Key S.B."s request, staff and legal counsel present for your consideration a Waiver and Consent to Mortgage with Centier Bank that outlines terms found to be appropriate and mutually beneficial for both the Conunission and Key S.B. Mr. Varner asked how the Commission"s interests are protected in this document. If there is a mortgage taken on that property for a certain amount of time, and by the end of that time there is a liability on the property, how is the Conunission protected? Mr. Meteiver responded that flee mortgage would be on the leasehold interest. The leasehold interest is inferior to the mortgage interest because of the chain of title. They are bon-owing only against their interest, not against the property. Upon a motion by Mr. Alford, seconded by Mr. Varner and unanimously can-ied, the Conunission approved the Waiver and Consent to Mortgage for KeyBank Plaza. (2) Amendment to Parking Garage Management Services Agreement (Leighton, Main St, and Wayne St garages) Ms. Jennings noted that, after execution of the Parking Management Agreement with Ampco, staff and Ampco noticed two en•ors. The first was in item 4. Budget. Ampco must COMMISSION APPROVED THE WAIVER AND CONSENT TO MORTGAGE FOR KEYBANK PLAZA 6 South Bend Redevelopment Commission Regular Meeting -March 20, 2009 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (2) continued... submit a proposed budget by June 1 of each year to be approved by the Common Council in September of each year. The second was in item 7. Management Fee. The incentive fees for the Leighton and Wayne Street garages were reversed. This amendment con•ects both errors. Ms. Jennings noted that Ampco noticed the error in incentive fees, and though the mistake was in their favor, they pointed it out. Upon a motion by Ms. Kings, seconded by Mr. Alford and unanimously carried, the Commission approved the Amendment to Parking Garage Management Services Agreement (Leighton, Main St., and Wayne St. garages) C. Airport Economic Development Area (1) Environmental Testing and Removal Agreement H~ith 3 G Properties (700 S. Lafa~~ette) Ms. Kolata noted that there are rivo items on the Redevelopment Commission agenda related to the property at 700 S. Lafayette. That was the site of the former Transwestern Building that the Commission bought and demolished in the early 1990s. The Commission sold the property in 1995 to Design Packaging Inc. The business was sold several years later to Tecumseh Co~-~•ugated Cardboard Company although COMMISSION APPROVED THE AMENDMENT TO PARKING GARAGE MANAGEMENT SERVICES AGREEMENT (LEIGHTON, MAIN ST., AND WAYNE ST. GARAGES) 7 South Bend Redevelopment Commission Regular Meeting -March 20, 2009 6. NEW BUSINESS (CONT.) C. Airport Economic Development Area (1) continued... the real estate stayed under Design Packaging ownership. In ?005 Tecumseh was interested in purchasing the real estate and had a Phase II enviromilental site assessment conducted using an Indiana Site Assessment Grant to the City of South Bend. That site assessment reported that there were several areas where the fill dirt that was brought in for the building demolition had levels of metals that exceeded Indiana Department of Environmental Management (IDEM) standards. Apparently there were no regulations in the early 1990s to test fill dirt at the time of the building demolition. Tecumseh intended to purchase the real estate but never went through with the transaction. Design Packaging eventually moved out of the building and the building has been vacant for the last couple of years. Late last year 3 G Properties entered into a purchase agreement with the building owner to buy the property and use it for River Bend Hose. This purchase agreement is contingent on the Commission agreeing to test soils at the property and remove soil that exceeds IDEM limits. We believe that there are two areas to test and remediate. This work is covered by the Environmental Testing Removal Agreement with 3 G Properties. We don't know the cost. but we think it's the Commission's responsibility to take care of it. South Bend Redevelopment Commission Regular Meeting-March 20, ?009 6. NEW BUSINESS (CONT.) C. Airport Economic Development Area (1) continued... Ms. Kolata noted that once the property has been purchased by 3 G Properties, the building will be expanded by approximately 9,000 square feet and River Bend Hose will be able to expand its business and consolidate some of its operations into the building. They will also continue to operate out of their main location at 1 1 1 1 S. Main Street. Ms. Kolata noted that legal counsel is still reviewing one item in the agreements, so approval should be given subject to final legal review. Upon a motion by Ms. King, seconded by Mr. Varner and unanimously can-ied, the Commission approved the Environmental Testing and Removal Agreement with 3 G Properties, pending final legal review. (700 S. Lafayette) (2) Environmental Indemnity Agreement with 3 G Properties (700 S. Lafayette) Ms. Kolata noted that the purchase agreement is also contingent on the Commission approving an Environmental Indemnity A.~reement with 3 G Properties. Our original transaction with Design Packaging included an Environmental Indemnity Agreement that lasted for ten years. This was amended to add Tecumseh Corrugated Cardboard Company and extended for an additional five years. The Environmental Indemnity Agreement with 3 COMMISSION APPROVED THE ENVIRONMENTAL TESTING AND REMOVAL AGREEMENT WITH 3 G PROPERTIES. PENDING FINAL LEGAL REVIEW (700 S. LAFAYETTE) 9 South Bend Redevelopment Commission Regular Meeting -March 20, 2009 6. NEW BUSINESS (CONT.) C. Airport Economic Development Area (2) continued... G Properties is a new document but provides essentially the same indemnity that was originally provided to Design Packaging. The te~7n of the age-Bement is ten years. Approval of this document is necessary for the property sale to take place. Mr. Varner asked if the law makes the Commission responsible for environmental problems forever, since Studebaker no longer exits. Ms. Kolata responded that a recent Indiana Supreme Court decision found that Cooper Industries is the successor to Studebaker and, therefore, responsible for environmental problems, so we are pursuing a claim against Cooper Industries for environmental remediation of most of the Studebaker properties. However, the Commission acquired the Transwestern building too long ago and the statute of limitations has expired on this property. Upon a motion by Ms. King, seconded by Mr. Varner and unanimously carried, the COII11111SSlon apprOVed t}le EriVlromnental Indenu~ity Agreement with 3 G Properties, pending final legal review (700 S. Lafayette) D. West Washington-Chapin Development Area (1) Staff report on Hansel Center Mr. Relos noted that staff requests the Commission consider funding the adaptive reuse of the former Hansel Center, which is in the West Washington Chapin COMMISSION APPROVED THEENVIRONMENTAL INDEMNITY AGREEMENT WITH 3 G PROPERTIES, PENDING FINAL LEGAL REVIEW (700 $. LAFAYETTE) 10 South Bend Redevelopment Commission Regular Meeting -March 20, 2009 6. NEW BUSINESS (CONT.) D. West Washington-Chapin Development Area (1) continued... Development Area (WWCDA). Hansel Center is located at 1045 W. Washington Street, across the street fi-om the Engman Natatoriwn and future site of the IUSB Center for Civil Rights. Hansel Center is an historic landmark building in the West Washington / Chapin Sheet National Historic Distl•ict. It was built in 1925 as a Children"s Dispensary. and later served as a neighborhood center and as the administrative offices for Head Start. It has been vacant since August 2003 and has been vandalized by scrappers. A proposed joint venture between the City of South Bend and University of Notre Dame would rehabilitate the building to house the Noh•e Dame Center for Art and Culture, which would house the Institute for Latino Studies, Segura Publishing (a fine art print house which would relocate here fi-om Tempe Arizona), among numerous other print and arts related community and university projects. Total project cost for renovation is estimated to be $1.3 million. Notre Dames commitment, pledged by private donors, would be approximately 5800,000, and would be used for the extensive remodeling that would be required of this brick building and its can-iage house and grounds. The City's commitment would be $500,000 for exterior work and purchase of the South Bend Redevelopment Co~llmission Regular Meeting -March 20, 2009 6. NEW BUSINESS (CONT.) D. West Washington-Chapin Development Area (I) continued... building. Funding this connnitment would be up to $370,000 from the West Washington Chapin TIF and $130,000 from Community Development Block Grant funds. The cost to purchase the property from South Bend Heritage Foundation, which has been caretaker of the building for many years, would be approximately $100,000. This a~llount would pay off the mortgage and taxes owed on the property. Upon completion of the City's commitment. the property would be transfen•ed to Notre Dame, which would be responsible for the operation and long term care of the building. This project would help anchor this area of city -both strong reasons for the city's involvement in this project. The actions requested by the Commission today are as follows: (1) Authorization to begin the process to add this property to the acquisition list for the WWCDA. This building will need to be added to the acquisition list in this Development Area, subject to being approved by the City Council and Area Plan Commission, to allow for the building purchase and spending of city funds on the renovation; (2) Authorization to use up to $370,000 in TIF dollars for this project to be used for exterior work on the buildings and grounds. Mr. Inks noted that Hansel Center was on the appropriation list approved in January, but only for about $325,000. Since then the cost 12 South Bend Redevelopment Commission Regular Meeting -March 20, 2009 6. NEW BUSINESS (CONT.) D. West Washington-Chapin Development Area (I) continued... estimates have been refined and the cost is anticipated to be closer to $370,000. Staff is only expecting about $340,000 of TIF to be available in the WWCDA. The city has not yet received its 2008 T1F collections, but when they are received, staff will do an additional appropriation of whatever is available for use on Hansel Center. The 1'elllallldel' OI the Clty'S COllllllltlllellt t0 Hansel Center would then be paid from the Community Development Block Grant funds. Mr. Vanier asked the mortgage balance on the building. Mr. Inks responded that the balance is $70,000-75,000. The taxes have been appealed and the new amount not been set. Mr. Varner wanted assurance that the $100,000 number was not flexible upward and that the city would only pay the mortgage balance and taxes due. Mr. Inks assured him that was so. Ms. Jones asked if the renovated property mi~~ht have any taxable entity using it. Mr. Cardenas said that a commercial business will be moving from Arizona to operate there, but it will not be a commercial business then, but under Notre Dame. Mr. Byrd noted that the building had never been taxable for anv of its past uses. That's what the tax appeal was about. If the appeal leaves any taxes still due, they will be old taxes. Future use of the building will not be taxable at all. 13 South Bend Redevelopment Commission Regular Meeting -March 20, 2009 6. NEW BUSINESS (CONT.) D. West Washington-Chapin Development Area (1) continued... Ms. Muhammad said South Bend Heritage Fowldation considers the whole project a win-win for all parties. The neighborhood will benefit from the building"s rehab and reuse, and the synergy between it and the other museums will help all of them. Ms. Taylor noted that the building has been vandalized. It needs to be reused. It can only bring good things to the west side of South Bend. She urged Commission approval. Mr. Varner asked if there was a planned use for the cai-~-iage house portion of the property. Mr. Cardenas responded that they intend to use that for an artists" residenc}~ pro~~ram. The Latino studies program is currently housed in McKenna hall and an off campus building on Notre Dame Ave. They have been told they will eventually have to vacate the off campus property, so this will give Latino studies a new location off campus, with more space. Ms. Hostetler noted that Hansel Center is on the National Register, both as part of the West Washington National Register District and as a single site. She expressed support for this wonderful project. Mr. Inks noted that the long nan-ow design of Hansel Center has prevented it from being reused for commercial or non-profit use until now. This seems to be a perfect fit and opportunity for reuse. 14 South Bend Redevelopment Commission Regular Meeting -March 20, 2009 6. NEW BUSINESS (CONT.) D. West Washington-Chapin Development Area (1) continued... Upon a IIlOt10I1 by Mr. Alfol'd, SeCOnded by COMMISSION AUTHORIZED STAFF TO BEGIN THE MS. Km~,T and UnanlmOUSly Ca11'led, the PROCESS OF ADDING HANSEL CENTER TO THE COI111111SS1011 aut1101'1Zed Staft t0 begin the WEST WASHINGTON-CHAPIN DEVELOPMENT prOCCSS Ot addlllg HaI1Se1 Center t0 the West AREA ACQUISITION LIST AND TO USE UP TO X370.000 OF WWCDA TIF TO CARRY OUT THE Washington-Chapin Development Area PROTECT acquisition list and to use up to $370,000 of WWCDA TIF to can•y out the project. 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 Nol-theast Neighborhood Development Area. G. Douglas Road Economic Development Area There was no business in the Douglas Road Economic Development Area. H. Ratification of Temporar~~ Use Agreement Upon a IllOtlOn by 1vIS. King, SCCOnded by IVII'. COMMISSION AUTHORIZED USE OF THE MAIN A1t01'd aIld Unan11110US1y CalTled, the COI111111SSIOn STREET GARAGE BY NOTRE DAME/SB VISITORS BUREAU FOR THE NCAA WOMEN~S aUth01'1Zed USe Of the Maln StI'eet Gal'age by Notre BASKETBALL BANNER MARCH 16->7, ?009 Dame/SB Visitors Bureau for the NCAA Women's Basketball Banner March 16-27, ?009. 15 South Bend Redevelopment Commission Regular Meeting -March 20, 2009 6. NEW BUSINESS (CONT.) I. Ratification of Services Contracts Commission Role in Service Conh•act Staff Property Description Transaction Contractor Provided Amount Member Engel property, south Acquisition Meridian Title Title work $300 Relos of tracks from Waster Management Engle property Acquisition Jerome Michaels Appraisal $2,400 Relos 411 W. Indiana Engle property Acquisition Ralph Lauver Appraisal $2,450 Relos 411 W. Indiana 7. PROGRESS REPORTS There was no report. PROGRESS REPORTS 8. NEXT COMMISSION MEETING The next meeting of the Redevelopment Commission is NEST COMMISSION MEETING scheduled for Friday. April 3, 2009 at 10:00 a.m. 9. ADJOURNMENT There being no further business to come before the AD.IOURNMENT Redevelopment Commission, Mr. Varner made a motion that the meeting be adjourned. Ms. King seconded the motion and the meeting was adjourned at 10:4> a.m. Donald E. Inks, Director 16