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HomeMy WebLinkAbout06-05-09 Redevelopment Commission Minutes SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING June 5, 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 Ms. Stephanie Spivey Members Absent: Mr. Greg Downes Mr. Donald Alford Legal Counsel: Mr. Charles S. Leone, Esq. Mr. Lawrence Meteiver, Esq. Redevelopment Staff: Mr. Don Inks, Director Mrs. Cheryl Phipps, Recording Secretary Mr. Robert Mathia, Economic Development Specialist Ms. Jennifer Laurent, Economic Development Specialist Mr. David Relos, Economic Development Specialist Ms. Debrah Jennings, Property Manager Others Present: Mr. Jeff Gibney, Executive Director Mr. Tom Price, Mayor’s Office Dr. Virginia Calvin, Ivy Tech Community College Mr. Bob Placek, Ivy Tech Community College Ms. Barbara Duncanson, Ivy Tech Community College Ms. Moe Miller, Charles Hayes Communications Mr. John Phair, Holladay Corporation Mr. Paul Phair, Holladay Corporation Ms. Rita Kopala Ms. GlendaRae Hernandez Ms. Marty Wolfson, Community Forum for Economic Dev 2. APPROVAL OF MINUTES A. Approval of Minutes of the Regular Meeting of Friday, May 15, 2009. CM Upon a motion by Mr. Varner, seconded by Ms. OMMISSION APPROVED THE INUTES OF THE RMF,M15,2009 EGULAR EETING OF RIDAY AY King and unanimously carried, the Commission approved the Minutes of the Regular Meeting of Friday, May 15, 2009. South Bend Redevelopment Commission Regular Meeting –June 5, 2009 3. APPROVAL OF CLAIMS Redevelopment Commission Claims submitted June 5, 2009 for approval. 305 FUND SBCDA BOND Majority Builders, Inc. 7,998.62 101 N Michigan Exterior 324 AIRPORT AEDA Concrete & Asphalt Recycling, LLC. 7,226.70 LaSalle Square Lot Indiana Michigan Power 20.61 420 S. William St. Baker & Daniels 1,080.00 South Bend Parks Recreation Dept. 2,824.00 Lawn Maintenance Wightman Petrie 44,167.50 Phase II Environmentals Indiana Michigan Power 149.02 1010 N Bendix Dr. Indiana Michigan Power 7.00 501 Wenger St. DHA 13,770.00 Survey Work DHA 1,672.00 Survey Work The Blue Waters Group 12,315.70 MIND Project Area Meridian Title Corp 556,972.45 Ziolkowski Properties 420 FUND TIF DISTRICT-SBCDA GENERAL South Bend Parks Recreation Dept. 452.00 Lawn Maintenance Rose Pest Solution 93.00 LaSalle Hotel Pest Control 225 S. Main St Parking Lot / Ampco System Parking 2,302.54 121 S. St. Joseph Surface Lot 118 S. William St. (The Wightman Petrie 1,205.00 Manor) Sign Designs 685.00 Colfax Landing Site Sign 422 TIF DISTRICT WEST WASHINGTON South Bend Parks Recreation Dept. 92.00 Lawn Maintenance Meridian Title Crop 100.00 1045 W. Washington St. R.E. Pitts & Associates, Inc. 3,350.00 Appraisal Services Jerome E. Michaels, MAI 3,850.00 Appraisal Report 430 FUND SOUTHSIDE DEVELOPMENT TIF AREA #1 South Bend Parks Recreation Dept. 94.00 Lawn Maintenance 454 FUND AIRPORT URBAN ENT. ZONE Project Impact 51,924.00 Job Training Services $ 712,351.14 2 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 3. APPROVAL OF CLAIMS (CONT.) CC Upon a motion by Ms. King, seconded by Mr. Varner OMMISSION APPROVED THE LAIMS J5,2009, SUBMITTED UNE AND ORDERED THE and unanimously carried, the Commission approved the CHECKS TO BE RELEASED Claims submitted June 5, 2009, and ordered checks to be released. 4. COMMUNICATIONS (1) Communication from Joseph Tillman, Progressive Urban Industries To: Marcia Jones Redevelopment Commission President To whom it may concern, I wish to take great exception to your response to my letter of 5-11-09. You state that the city’s administration of HUD-funded projects does not fall under the supervision of the Redevelopment Commission I believe this assertion to be incorrect based on the following facts: 1. On the Redevelopment Commission web site it is stated that the Commission is charged with the responsibility of examining areas of the city that are blighted and in need of development. Generally, these types of funds are HUD funds, which are subject to the provisions of section 3. 2. Under IC 36-7-14-22.2 whenever property is granted or sold to the Urban Enterprise Association that, among other responsibilities, if the property is demolished or rehabbed the provisions of CFR 135.1 be enforced. I am astounded by your efforts to pass this responsibility on. You should know full well that the Redevelopment Commission is accountable for enforcing the law. Please stop passing the buck concerning your responsibilities and inform the 3 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 4. COMMUNICATIONS (CONT.) 1. continued… public of your past, present and future efforts to comply with the law. Respectfully, Joseph Tillman Progressive Urban Industries CLC Mr. Inks noted that staff does not believe the Code OMMISSIONERS DIRECTED EGAL OUNSEL TO M.T’ STUDY THE MATTER R ILLMANS LETTER of Federal Regulations applies to the Commission, M.T RAISES AND DRAFT A REPLY TO R ILLMAN but we believe it is appropriate to refer his letter to legal counsel and let them look into it and help us draft a response to Mr. Tillman. Commissioners agreed and the matter was referred to Legal. 5. OLD BUSINESS TOB There was no Old Business. HERE WAS NO LD USINESS 6. NEW BUSINESS A. Tax Abatements (1) Resolution No. 2588 approving an application for real property tax deduction for property known as Lot 2 in the Portage Prairie area of the Airport Economic Development Area. (Ontario Partners) Mr. Mathia gave the report on the project. Ontario Partners intends to construct a $5,000,000 development known as the Ontario Building in the Portage Prairie Development Area. It will be a speculative, 157,500 sft, light industrial building that will house multiple tenants performing a variety of business functions, such as medical supply, data storage, food/general 4 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) A. Tax Abatements (1) continued… distribution, printing or light assembly. The building will be constructed using pre-cast concrete panels. The building will utilize green building techniques such as florescent lighting. The building will be the second in the Portage Prairie Development Area which is expected to produce a total of over $350,000,000 in private investment. The first speculative building was the Huron Building which currently has 60 people working in it on a daily basis. Because of the speculative nature of the proposed project, the petitioners are facing short deadlines. At this time they are still collecting information to support the tax abatement petition. The information provided to date can only support a base abatement of three years. The petitioners are requesting a nine-year abatement in accordance with Section 5.7 (Tax Abatement) contained in the Project Agreement signed by the Commission and the petitioners on July 21, 2006. In the interest of conserving time, the petition is being submitted to the Commission for its consideration at this time. The petitioners intend to submit additional information prior to the Common Council meeting to consider their confirming resolution. At that time final points will be awarded and the length of the abatement term set. For purposes of the Redevelopment Commission we are estimating the term at nine years to allow for adjustment up to the full amount they have requested. Anything less will result in a 5 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) A. Tax Abatements (1) continued… reduction in the amount of tax revenue abated. Assuming a nine-year abatement term is approved, the total taxes to be abated during that term are estimated to be $635,240. Total taxes to be paid during the nine-year term are estimated at $723,671. For comparison purposes, if the term became three years, total taxes to be abated are estimated at $268,416. Total taxes to be paid over a three-year term are estimated at $184,554. There are no estimates regarding creation of new or existing, permanent, full or part-time jobs regarding the building due to the speculative nature of the project. 1. Neither Waggoner Farm nor Ontario Partners has received a previous tax abatement. The Huron Building received a nine-year real property tax abatement on August 14, 2006. Holladay Properties, developer for the Ontario and Huron Buildings, has received previous tax abatements through various limited partnerships and limited liability corporations. 2. The property is properly zoned for the proposed project. 3. The property is located in the Airport Economic Development Area, which is a Tax Increment Allocation Area; therefore, the petition for real property tax abatement must 6 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) A. Tax Abatements (1) continued… first be approved by the South Bend Redevelopment Commission. 4. A review of the Tax Abatement Ordinance finds that the petitioner can meet the qualifications for up to a nine-year real property tax abatement. Mr. John Phair noted that the Ontario building will be of similar style as the Huron Building and 8,000 sft larger. A start date for construction has not been determined. They are negotiating with potential tenants. The financing environment is much tighter and requires some preleasing. As soon as Ontario Partners can secure some leases and financing, they will move ahead. They need tax abatement to be competitive in today’s leasing environment. Mr. Varner noted that except in the first year of the project when taxes are 100% abated, even abated projects pay more in taxes than a vacant piece of property. CRN.2588 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. 2588 L2PP KNOWN AS OT IN THE ORTAGE RAIRIE approving an application for real property tax AE AREA OF THE IRPORT CONOMIC deduction for property known as Lot 2 in the DA.(WF EVELOPMENT REA AGGONER ARM DLP/OP) Portage Prairie area of the Airport Economic EVELOPMENT NTARIO ARTNERS Development Area. (Waggoner Farm Development LP/Ontario Partners) 7 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) Mr. Inks asked permission to consider item 6.C.(1) out of order and at this point in the meeting. There was no objection and the item was so moved. C. Airport Economic Development Area (1) Staff report on adding properties to the Acquisition List (E. Sample, 914 S. Lafayette, 400 blk W. Indiana) Mr. Inks noted that in the past staff would simply bring a declaratory resolution to the Commission to add properties to an acquisition list. Staff would like to institute some preliminary actions prior to taking that step. We would like to ask the Commission’s permission to study the potential for acquiring the properties, including ordering appraisals, or estimates of acquisition costs, and survey and title work to get a truer financial picture prior to adding property to the acquisition list; then staff would bring the results of the study to the Commission with a recommendation about adding the property to the acquisition list. With the Commission’s authorization, based on the study, staff would then prepare a resolution to add the property to the acquisition list. Mr. Gibney gave the report on the properties staff recommends adding to the acquisition list of the AEDA. Under the new statutory requirements that took effect in July 2008, the Commission must, through a deliberate action, direct staff to prepare the appropriate documentation to amend a development plan. In the case of an amendment to the resolution or plan for an 8 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) C. Airport Economic Development Area (1) continued… existing redevelopment project area, the Commission must determine the following: (1) The amendment is reasonable and appropriate when considered in relation to the original resolution or plan and the purposes of this chapter; (2) The resolution or plan, with the proposed amendment, conforms to the comprehensive plan for the unit Upon satisfactory determination of the above two points, the Commission shall cause to be prepared the following data: (A) Maps and plats showing the boundaries of the area in which property would be acquired for, or otherwise affected by, the establishment of a redevelopment project area or the amendment of the resolution or plan for an existing area; (B) The location of the various parcels of property, streets, alleys, and other features affecting the acquisition, clearance, remediation, replatting, replanning, rezoning, or redevelopment of the area; (C) The parts of the area acquired, if any, that are to be devoted to public purposes under the redevelopment plan; (D) Lists of the owners of the parcels of property proposed to be acquired and an estimate of the costs, if any, to be incurred 9 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) C. Airport Economic Development Area (1) continued… for the acquisition and redevelopment of property. Staff requests the Commission’s direction to develop the appropriate documentation to add the following three specific target areas to the acquisition list for the AEDA: Area 1 (Ivy Tech Campus Expansion Area) This area is in the 200 – 400 blocks of East Sample Street near the Ivy Tech campus, and on either side of the new Ivy Tech administrative offices. There are four properties which would be acquired and eventually transferred to Ivy Tech for their much needed expansion of classrooms, storage, and parking. This would be a joint effort between the Redevelopment Commission and Ivy Tech, whereby the Redevelopment Commission would purchase and do certain demolition and facade work, and Ivy Tech would do the interior work to make these buildings classroom ready. Area 2 (Ignition Park – Main Campus) This is the Airgas property, 914 S Lafayette, which is a pressurized tank filling facility located to the south of Hamilton Towing, on the east side of Lafayette. Airgas is in the process of moving its business to Elkhart, and this purchase, along with Hamilton Towing, would be of use on the fringe of Ignition Park for future development. Area 3 (Ignition Park – South Expansion) This area is north of Indiana Avenue, 10 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) C. Airport Economic Development Area (1) continued… between Franklin and Taylor Streets. As far back as 1971, Indiana Avenue was identified as the logical southern boundary for the redevelopment of the Studebaker Corridor. In the 1995 Rum Village Neighborhood Action Plan, the area north of Indiana and south of the rail road tracks, between Franklin and Prairie, was identified as “weak residential,” and it was suggested this area be redeveloped as a business park. The addition of these parcels for acquisition will be a first step in the long overdue redevelopment of this area. With the purchase of the Burton properties (Waste Management) at the end of last year, the Commission already owns more than half of the land mass within this area. The acquisitions within this area would affect eleven property owners, one of whom has already expressed interest in selling to the Commission. Two others are vacant lots. Staff requests Commission approval to begin the process of adding these three specific target areas to the acquisition list of the AEDA’s Development Plan. C Upon a motion by Mr. Varner, seconded by OMMISSION AUTHORIZED STAFF TO BEGIN THE PROCESS OF ADDING PROPERTIES IN THE Mr. King and unanimously carried, the AEDA IRPORT CONOMIC EVELOPMENT REA TO Commission authorized staff to begin the DP’AL THE EVELOPMENT LANS CQUISITION IST process of adding properties in the Airport Economic Development Area to the Development Plan’s Acquisition List. 11 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (1) Staff report on adding properties to the Acquisition List (Coveleski neighborhood) Staff requests the Commission’s direction to develop the appropriate documentation to add the following 17 parcels to the acquisition list for the South Bend Central Development Area: a. The Manor at 118 S William (2 parcels) b. Fred’s Transmission at 501 W Western (3 parcels) c. GMS Realty-Toyota Properties in the 300 & 400 blk of Western (10 parcels) d. Schillings Camera Store at 325-329 S. Lafayette (1 parcel) e. Nor Systems Inc. Computer Store at 301 S. Lafayette (1 parcel) The Manor is a former housing and program center owned by the Madison Center which has been vacant since summer 2008. Originally built as a nursing home, the building has become functionally challenged. It would serve the William Street corridor as a cleared development site to allow for new residential or mixed use development. The Commission has previously removed inconsistent land uses in this corridor by acquiring the former Basic Machine property (William and LaSalle) and the former Gates storage and salvage lot (William and Wayne). The Commission activities involved with this property would include acquisition, demolition, site prep and marketing for redevelopment. Located on the Coveleski Park proposed 12 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (1) continued… housing block, the acquisition of the Fred’s Transmission properties would allow for controlled infill development along William and Taylor and allow for control of the development on Western Avenue. The Commission presently owns all but three parcels on this block (excluding the three parcels with this request). The Commission activities involved with this property would include acquisition, demolition, site prep and marketing for redevelopment for both mixed use and mixed scale residential development. The twelve parcels located in the two square block area between William, Western, Lafayette and Wayne include the former Gates Toyota Sales lot and sales building, the current Gates service center, the former Schilling’s Camera store, and the Nor systems Inc. computer store. The purpose for placing these properties on the acquisition list at this time is twofold. First, the Coveleski Park plan has identified these two blocks for mixed use development and the action to add the properties to the acquisition list would be consistent with the plan. Second, the vacation of the Gates Toyota use from the site, coupled with the vacation of the Schilling’s building, would allow for a large percentage of the area to be acquired in the event that a large format user were to be interested in an urban location. The only other large format site (3.2 acres) is the former Studebaker Museum block between Lafayette and Main as compared to the 5.8 acre development site that could be 13 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (1) continued… assembled in this proposed development block. Staff requests the Commission’s direction to develop the appropriate documentation to begin the public process to add these 17 parcels to the acquisition list for the South Bend Central Development Area. The majority of the properties proposed for addition to the acquisition list are properties identified within the Coveleski Park plan and the inclusion of The Manor parcels are consistent with the larger redevelopment goals for William Street of removing buildings with inconsistent land uses. The amendment is reasonable and appropriate when considered in relation to the plan and the purposes of the South Bend Central Development Area, and the plan, with the proposed amendment, conforms to the comprehensive plan for the development area. C Upon a motion by Mr. Varner, seconded by OMMISSION AUTHORIZED STAFF TO BEGIN THE S PROCESS OF ADDING PROPERTIES IN THE OUTH Mr. King and unanimously carried, the BCDA END ENTRAL EVELOPMENT REA TO THE Commission authorized staff to begin the DP’AL EVELOPMENT LANS CQUISITION IST process of adding properties in the South Bend Central Development Area to the Development Plan’s Acquisition List. (2) Amendment to Proposal for improvements to Voorde Drive from the Bendix/Voorde intersection improvement project to Sheridan. Mr. Inks asked that item 6.C.(2) be 14 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (2) continued… withdrawn. C6.C.(2). Upon a motion by Mr. Varner, seconded by OMMISSION WITHDREW ITEM Ms. King and unanimously carried, the Commission withdrew item 6.C.(2). (3) Purchase Agreement for Ziolkowski properties. Mr. Relos noted that on May 1 the Redevelopment Commission approved a purchase plan for the Ziolkowski properties which set the purchase and relocation amounts at a total value not to exceed $1,810,800. The properties being purchased include several properties in the block bounded by Sample, Lafayette, Broadway and Franklin. The acquisition will facilitate the Transpo relocation to Ignition Park. The purchase agreement covered all the properties. Today we’re asking to split the purchase agreement into two separate transactions, one purchasing from Ziolkowski Properties LLC and one from B & C Properties LLC, a real estate holding company established by Ziolkowski to hold the new property site, the former PEI Genesis building on Bendix. The total price for the property has not changed. The purchase agreement with Ziolkowski Properties pays $588,780 for everything except the parcel at the southeast corner of Franklin and Sample. The parcel at Franklin and Sample will be transferred to B & C 15 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) B. South Bend Central Development Area (3) continued… Properties to allow for a mechanism to transfer the remainder of the land acquisition and relocation funds directly to the relocation and purchase of the PEI Genesis property. The purchase agreement with B & C Properties pays $2,000 for the parcel at the southeast corner of Franklin and Sample and the $320,020 previously directed to the site land value will be added to the relocation value of $900,000. Staff requests approval of this modification and the new purchase agreements. C Upon a motion by Ms. King, seconded by OMMISSION MODIFIED THE TERMS OF THE PAZ URCHASE GREEMENT FOR THE IOLKOWSKI Mr. Varner and unanimously carried, the P PROPERTIES AND APPROVED A URCHASE Commission modified the terms of the AB&CPLLC GREEMENT WITH ROPERTIES Purchase Agreement for the Ziolkowski properties and approved a Purchase Agreement with B & C Properties LLC. 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. 16 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) G. Douglas Road Economic Development Area There was no business in the Douglas Road Economic Development Area. H. Ratification of Temporary Use Agreement Ms. Jennings noted that Downtown South Bend wishes to facilitate the use of vacant retail space in Redevelopment owned property by downtown businesses that don’t have first floor space to st participate in the 1 Fridays events throughout the summer and fall. Downtown South Bend will manage the use of the space and which businesses use which space. CTU Upon a motion by Mr. Varner, seconded by Ms. OMMISSION RATIFIED THE EMPORARY SE ADSB GREEMENT WITH OWNTOWN OUTH END King and unanimously carried, the Commission 1F2009 ST FOR RIDAY EVENTS IN ratified the Temporary Use Agreement with st Downtown South Bend for 1 Friday events in 2009. I. Other (1) Proposal from Crowe Horwath to prepare the City of South Bend Tax Increment Financing Neutralization Worksheets. Mr. Inks noted that Crowe Horwath has submitted a proposal to prepare the City of South Bend Tax Increment Financing Neutralization Worksheets, including collecting the necessary data, preparing the worksheets for each TIF area and filing the worksheets with the Auditor’s office. The total cost is not to exceed $20,000 for professional fees and $2,500 for incidental costs related to communication, printing, travel expenses and other similar expenses. 17 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) I. Other (1) continued… These calculations are necessary every year in which there is a reassessment of all properties. Historically, these calculations were only required once every ten years when a general reassessment was done. However, now these calculations are needed every year, since every year all property values are adjusted for market trending. This calculation adjusts the base assessed value for each TIF area to “neutralize” the effect of the reassessment. To achieve this neutralization, the base assessed values are adjusted to reflect growth in the county versus the TIF area, and to achieve the amount of tax revenue collected in the prior year plus tax revenue due to new “real growth” and tax abatement roll offs. Mr. Inks noted that the Commission has used Crowe for a number of years and find them to be very reliable. Staff recommends approving the proposal. Mr. Varner asked if the Department of Local Government Finance has its own numbers run and compares them to ours, or simply accepts the numbers we provide. Mr. Inks responded that he is not aware that the DLGF contracts for a separate neutralization accounting. Ms. King suggested that if this is an annual need, we should bid the work out every few years. Mr. Inks agreed. 18 South Bend Redevelopment Commission Regular Meeting –June 5, 2009 6. NEW BUSINESS (CONT.) I. Other (1) continued… C Upon a motion by Ms. King, seconded by OMMISSION APPROVED THE PROPOSAL FROM CHC ROWE ORWATH TO PREPARE THE ITY OF Mr. Varner and unanimously carried, the SBTIF OUTH END AX NCREMENT INANCING Commission approved the proposal from NW EUTRALIZATION ORKSHEETS Crowe Horwath to prepare the City of South Bend Tax Increment Financing Neutralization Worksheets. 7. PROGRESS REPORTS PR Ms. Laurent invited Commissioners to a tour of 101 ROGRESS EPORTS North Michigan, the rehab of the American National Bank building and construction of the adjacent office/residential condo building to take place immediately after today’s meeting. 8. NEXT COMMISSION MEETING NCM The next meeting of the Redevelopment Commission is EXT OMMISSION EETING scheduled for Friday, June 19, 2009 at 10:00 a.m. 9. ADJOURNMENT A There being no further business to come before the DJOURNMENT Redevelopment Commission, Ms. King made a motion that the meeting be adjourned. Mr. Varner seconded the motion and the meeting was adjourned at 10:50 a.m. 19