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HomeMy WebLinkAbout03-20-09 Redevelopment Commission Minutes SOUTH 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 Office 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-Gors, 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.) CM Upon a motion by Mr. Varner, seconded by Mr. OMMISSION APPROVED THE INUTES OF THE RMF,M6, EGULAR EETING OF RIDAY ARCH Alford and unanimously carried, the Commission 2009 approved the Minutes of the Regular Meeting of Friday, March 6, 2009. 3. APPROVAL OF CLAIMS Redevelopment Commission Claims submitted March 20, 2009 for approval. 305 FUND SBCDA BOND Lehman & Lehman Inc. 6,430.50 Century Center Streetscape Majority Building Inc. 101 North Michigan 98,942.59 Troyer Group Inc. 16,124.12 WNIT 324 AIRPORT AEDA South Bend Heritage Foundation, Inc. 6,021.70 Christman Construction HG Christman Construction Co. 60,217.00 Bendix Family Physicians 1010 N Bendix Indian Michigan Power 6.65 501 Wenger St SPRK SYS/JOHNSON BLV Crowe Horwath 10,366.43 2007 Pay 2008 Tax Increment Financing Neutralization Worksheets 420 FUND TIF DISTRICT-SBCDA GENERAL South Bend Tribune 108.96 Coveleski Neighborhood Housing Block Demolition Project Tri County News 58.61 Coveleski Neighborhood Housing Block Demolition Project SBD Reprographics 88.28 Coveleski Housing Demo Meridian Title Corporation 1,900.00 S Michigan, Western & Main JJR East Bank Master Plan Phase 2 5,000.00 422 FUND WEST WASHINGTON Kaser Spraker Construction 72,697.80 Natatorium Phase 3-B Restoration South Bend Heritage Foundation, Inc. 7,269.78 Natatorium, Phase II Program Delivery South Bend Heritage Foundation, Inc. 4,762.79 Natatorium Phase 3-B Restoration Total $ 289,995.21 CC Upon a motion by Ms. King, seconded by Mr. Varner and OMMISSION APPROVED THE LAIMS M20,2009, SUBMITTED ARCH AND ORDERED unanimously carried, the Commission approved the Claims THE CHECKS TO BE RELEASED submitted March 20, 2009, and ordered checks to be released. 2 South Bend Redevelopment Commission Regular Meeting –March 20, 2009 4. COMMUNICATIONS TC There were no Communications. HERE WERE NO OMMUNICATIONS 5. OLD BUSINESS TOB There was no Old Business. HERE WAS NO LD USINESS 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- family home as their primary residence. The home will be two stories, with three bedrooms and three bathrooms, a front porch, a finished basement and a two-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 program. 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 $2,216. 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 Neighborhood 3 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 Neighborhood’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. CRN.2571 Upon a motion by Ms. King, seconded by OMMISSION APPROVED ESOLUTION O APPROVING AN APPLICATION FOR REAL Mr. Varner and unanimously carried, the PROPERTY TAX DEDUCTION FOR PROPERTY Commission approved Resolution No. 2571 1029NDA LOCATED AT OTRE AME VENUE IN THE approving an application for real property tax NND ORTHEAST EIGHBORHOOD EVELOPMENT deduction for property located at 1029 Notre A.(RD.KS.B) REA OBERT AND ELLEY RETZ 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 KeyBank Plaza 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 investment is represented in the renovations undertaken by the building owners and key new and existing tenants, including Baker & Daniels law firm, KeyBank, and CB Richard Ellis. In support of the project, the Redevelopment Commission purchased the plaza space immediately west of the building along Michigan Street 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 identifies the Developer’s responsibility 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 term of 25 years, and the right to purchase the property after a term 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 Commission’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 Commission 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 Commission protected? Mr. Meteiver responded that the mortgage would be on the leasehold interest. The leasehold interest is inferior to the mortgage interest because of the chain of title. They are borrowing only against their interest, not against the property. CW Upon a motion by Mr. Alford, seconded by OMMISSION APPROVED THE AIVER AND CMKBP ONSENT TO ORTGAGE FOR EYANK LAZA Mr. Varner and unanimously carried, the Commission 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 errors. The first was in item 4. Budget. Ampco must 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 corrects 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. CA Upon a motion by Ms. Kings, seconded by OMMISSION APPROVED THE MENDMENT TO PGMS ARKING ARAGE ANAGEMENT ERVICES Mr. Alford and unanimously carried, the A(L,MS., GREEMENT EIGHTON AIN T AND Commission approved the Amendment to WS.) AYNE T GARAGES Parking Garage Management Services Agreement (Leighton, Main St., and Wayne St. garages) C. Airport Economic Development Area (1) Environmental Testing and Removal Agreement with 3 G Properties (700 S. Lafayette) Ms. Kolata noted that there are two 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 Corrugated Cardboard Company although 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 2005 Tecumseh was interested in purchasing the real estate and had a Phase II environmental 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 and 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. 8 South Bend Redevelopment Commission Regular Meeting –March 20, 2009 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 1111 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. CE Upon a motion by Ms. King, seconded by OMMISSION APPROVED THE NVIRONMENTAL TRA3G ESTING AND EMOVAL GREEMENT WITH Mr. Varner and unanimously carried, the P, ROPERTIES PENDING FINAL LEGAL REVIEW Commission approved the Environmental (700S.L) AFAYETTE 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 Agreement 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 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 term of the agreement 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. CE Upon a motion by Ms. King, seconded by OMMISSION APPROVED THE NVIRONMENTAL IA3GP, NDEMNITY GREEMENT WITH ROPERTIES Mr. Varner and unanimously carried, the (700S. PENDING FINAL LEGAL REVIEW Commission approved the Environmental L) AFAYETTE Indemnity 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 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 from the Engman Natatorium and future site of the IUSB Center for Civil Rights. Hansel Center is an historic landmark building in the West Washington / Chapin Street National Historic District. 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 Notre 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 from 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 Dame’s commitment, pledged by private donors, would be approximately $800,000, and would be used for the extensive remodeling that would be required of this brick building and its carriage house and grounds. The City’s commitment would be $500,000 for exterior work and purchase of the 11 South Bend Redevelopment Commission Regular Meeting –March 20, 2009 6. NEW BUSINESS (CONT.) D. West Washington-Chapin Development Area (1) continued… building. Funding this commitment 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 amount would pay off the mortgage and taxes owed on the property. Upon completion of the City’s commitment, the property would be transferred 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 (1) 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 TIF collections, but when they are received, staff will do an additional appropriation of whatever is available for use on Hansel Center. The remainder of the city’s commitment to Hansel Center would then be paid from the Community Development Block Grant funds. Mr. Varner 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 might 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 any 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 Foundation 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 carriage house portion of the property. Mr. Cardenas responded that they intend to use that for an artists’ residency program. 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 narrow 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… C Upon a motion by Mr. Alford, seconded by OMMISSION AUTHORIZED STAFF TO BEGIN THE HC PROCESS OF ADDING ANSEL ENTER TO THE Ms. King and unanimously carried, the WW-CD EST ASHINGTONHAPIN EVELOPMENT Commission authorized staff to begin the A REA ACQUISITION LIST AND TO USE UP TO process of adding Hansel Center to the West $370,000WWCDATIF OF TO CARRY OUT THE Washington-Chapin Development Area PROJECT acquisition list and to use up to $370,000 of WWCDA TIF to carry 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 Northeast Neighborhood Development Area. G. Douglas Road Economic Development Area There was no business in the Douglas Road Economic Development Area. H. Ratification of Temporary Use Agreement CM Upon a motion by Ms. King, seconded by Mr. OMMISSION AUTHORIZED USE OF THE AIN SGND/SBV TREET ARAGE BY OTRE AME ISITORS Alford and unanimously carried, the Commission BNCAAW’ UREAU FOR THE OMENS authorized use of the Main Street Garage by Notre BBM16-27,2009 ASKETBALL ANNER ARCH Dame/SB Visitors Bureau for the NCAA Women’s Basketball Banner March 16-27, 2009. 15 South Bend Redevelopment Commission Regular Meeting –March 20, 2009 6. NEW BUSINESS (CONT.) I. Ratification of Services Contracts Commission Role in Service Contract 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 PR There was no report. ROGRESS EPORTS 8. NEXT COMMISSION MEETING NCM The next meeting of the Redevelopment Commission is EXT OMMISSION EETING scheduled for Friday, April 3, 2009 at 10:00 a.m. 9. ADJOURNMENT A There being no further business to come before the DJOURNMENT Redevelopment Commission, Mr. Varner made a motion that the meeting be adjourned. Ms. King seconded the motion and the meeting was adjourned at 10:45 a.m. 16