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REGULAR MEETING NOVEMBER 14, 2016
<br />that there are not housing options attractive to young talent. Mr. Higbee stated that this is a
<br />unique project from which households will benefit. It will bring new people in, there will be new
<br />demand for services, it will raise property values within the neighborhood. Those who might rent
<br />at this property like the fact that they would be close to work; that they are close to amenities and
<br />a grocery store. The opportunity for in -fill single - family development is significant in this
<br />neighborhood and the neighborhood plan calls for some of that. The market for Millennials and
<br />Baby Boomers is huge, with Millennials overtaking Baby Boomers in volume of population.
<br />Millennials want density, transit options, and walkability. Baby Boomers want to lower overall
<br />housing costs, convenience, and walkability.
<br />Mr. Higbee then turned to the notion of enhancing the urban fabric. South Bend has a history of
<br />mid- to high -rise buildings in this community. For instance, the County -City Building at one-
<br />hundred and ninety -three (193) feet, or the Tower Building at one - hundred and fifty -seven (15 7)
<br />feet, or the Aloft Hotel at three- hundred (300) feet. Mr. Higbee stated that height visibly defines
<br />the downtown area and the immediate downtown area. This building has the ability to define the
<br />East Bank in an appropriate location, right on the edge of western edge of the East Bank,
<br />interacting and bookending with downtown. Mr. Higbee stated that the project is feasible; that
<br />there is sight control; that there is an identified market; that there is a growing market with
<br />Millennials and Baby Boomers, but that that market is not really coming into South Bend,
<br />therefore there is a need for developers that are willing to take the risk and attract that market in;
<br />that the City -State partnership is in place; and that there is a proven developer with a financing
<br />track record. It is unusual for a community to have all those variables in spades, and South Bend
<br />does. On the subject of whether or not this project will encourage additional investment, Mr.
<br />Higbee stated that the density does bring additional demand for services such as eating,
<br />entertainment, health care, dry goods, groceries, etc., transitioning the millennial market into
<br />potential customers for nearby urban neighborhoods. Having a residential project of scale is
<br />ultimately what will make the grocery store possible.
<br />Dave Matthews, petitioner of the bill, returned to the podium to continue the presentation. The
<br />project is a $50,000,000 build. The annual taxes are just over $1,000,000 a year of additional
<br />revenue coming in. That is about $11,000,000 to $12,000,000 over a decade, or $100,000 per
<br />year per floor, or $1,000,000 per decade per floor. Mr. Matthews stated that when height is
<br />subtracted from the building, the cost to the city is $1,000,000 per decade in additional revenue.
<br />These would be lowered for the first decade with their first proposal for an aggressive tax
<br />abatement to help pay for the parking garage, because, due to the Regional Cities Initiative's
<br />grant of $5,000,000, Matthews LLC is able to present this without asking for a check from the
<br />City. When Matthews LLC first approached the City, they asked whether or not they could get
<br />the same deal that Eddy Street Commons did, where the City pays for and builds the garage —at
<br />$20,000,000, in the case of Eddy Street Commons —and then Matthews would do all the
<br />development and pay their property tax bill. Mr. Matthews stated that the problem was that in the
<br />case of the Eddy Street Commons project, the big hotel has yet to be built and the area is upside-
<br />down in tax collection. If the City had not reorganized TIF districts, that parking garage would
<br />have been paid out of South Bend citizens' general fund. Instead, the City decided not to do that
<br />again. An alternative offered by the City is an aggressive tax abatement. If a developer would
<br />like to take the risk and pay for the garage themselves, they can take out a loan and put the risk
<br />upon their own shoulders, then the City will encourage an aggressive tax abatement so that
<br />money saved on the increase in taxes can be used to pay the developer's own private bond on the
<br />parking structure. In such an arrangement, the City is not at -risk. Mr. Matthews stated that the
<br />specifically proposed height of his structure is needed to make the math work. If the project
<br />remains at one - hundred and seventy -five (175) feet, twelve (12) stories, then the project
<br />generates nearly $1,200,000 of additional tax revenue per year. If the project drops in height to
<br />seven (7) stories, then it will generate $600,000 of additional tax revenue a year. Adherence to
<br />the original sixty (60) foot, four (4) stories plan, then just under $400,000 of additional tax
<br />revenue would be collected per year.
<br />Chairperson Gavin Ferlic announced that this was the time allotted for the Council's questions
<br />and requested that Councilmembers ask no more than a maximum of two questions to the
<br />petitioner and the presenters.
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