09-28-15 Common Council Meeting Minutes

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REGULAR MEETING September 28, 2015 WASHINGTON ST. SOUTH BEND IN 46601 AS AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A TEN (10) YEAR REAL PROPERTY TAX ABATEMENT FOR A RETAIL PROPERTY LOCATED AT THE TOWER AT WASHINGTON SQUARE 15-91 A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND DESIGNATING A CERTAIN AREA WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS 211 W WASHINGTON ST. SOUTH BEND IN 46601 AS AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A TEN (10) YEAR REAL PROPERTY TAX ABATEMENT FOR A PARKING GARAGE LOCATED AT THE TOWER AT WASHINGTON SQUARE Councilmember Gavin Ferlic, Chairperson, Community Investment Committee met this afternoon and did not have a quorum and the Resolutions 15-89, 15-90, 15-91 were sent with no recommendation. th Presenter: Chris Fielding, Department of Community Investment, Offices on the 14 floor – Before you represent three (3) of four (4) potential tax abatements negotiated on the project. The building is going to be subdivided into four marketable sections: the resident, the hotel, the parking garage, and the commercial space. The subplot process has already begun. The curb tax can never be applied to the hotel section of the building between now and the confirming resolution which may be sixty (60) to seventy (70) days. They will finish the replot of the entire structure in the next seven (7) days. At the point prior to the confirming resolution we made sure we have tax code numbers for all four parcels. We will be coming to the next meeting, we have a UUC Resolution to create residential property in the downtown area. That meeting has been scheduled. We do not anticipate any problems. The total project will create eighty-two (82) new jobs, sixty-three (63) in the hotel, twenty (20) in the retail space, and one (1) as park garage attendant with an annual payroll of 2.7 million dollars. We do have multiple exceptions to the local code. On the hotel tax key we are requesting ten (10) year vacant building tax abatement with a modified schedule. Under state code 6-1.1-12.1 modified in July 2015 to allow the Council up to ten (10) years at any schedule agreed upon at the local level. That schedule is a 100% for the first two (2) years while they are in construction and ramp up ninety percent (90%) rd for the 3 year, then eighty-five (85%) for the next three (3) years, and sixty percent (60%) for the last three (3) years. That will be the same schedule applied to the standard abatements that will not exceed ten (10) years either, for residential, commercial, and parking garage. We are also proposing in the MOA 36 months instead of the standard 24 months we typically allow for a project to be completed due to the scope of the project. We expect a return on this within the next 60 days. At that time we will have formal tax due numbers. The proposed investment in the property is approximately $33.3 million dollars, total public investment with the abatements which will have a direct correlation to the amount of money they put into the building. The petitioner is here from the Kramer Group to answer any questions about the new construction that you may have. Petitioner: Robert Kramer, Kramer Design Group 1420 Broadway Detroit, MI– I am here representing the ownership on this property. Kramer Design Group is a firm of architects and nature designers planners. The bulk of our work is adaptive reuse. We recently completed a project of similar scope in downtown Detroit in a loft hotel with luxury houses above with mixed use retail on the ground floor. It did not have a parking component. It opened approximately a year ago to date with great success. Apartments 100% leased and the hotels have been doing well since day one (1). It is typical for our firm to be involved in these mixed-use projects. We do a lot of hotel work nationally as well as residential. We were first awarded this project when it was just the hotel component about six (6) months ago. We observed the parking garage deck was in severe disrepair: two structural issues where the salts ate away at the concrete and supporting steel. A big change in direction there, very quickly we discovered the majority of the facility had reached its useful life. Subsequently our firm has been involved in comprehensive planning exercises for the entire facility. This is a daylight view of key interest when we were studying the property and trying to understand where to put in entrances to the facility we became aware through the excellent work of the City of the streetscapes program, the two-way 35