05/29/07 Council Meeting Minutes

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REGULAR MEETING MAY 29, 2007 Ms. Wade advised that as agent for Key SB, LLC/The Hinman Company, they are requesting the waiver of $477,000 for the building permit numbers 105995 and 106222 pulled on March 13, 2007 and March 26, 2007 respectively for construction of the second, fourth and fifth floors of the Key Bank Building. Baker and Daniels lease at their current location expired December 31, 2006. Baker and Daniels received month-to- monthtenancy from the current Landlord prior to expiration of their lease. In March 2007, Baker and Daniels notified the current Landlord that they would not be renewing their lease. In turn, the Landlord gave them a fum expiration date of January 31, 2008. Additionally, they are working with a prospective tenant outside of South Bend that is currently considering substantially backfilling the Baker and Daniels existing space in the First Bank Building. Baker and Daniels construction is set to begin between July 1 gc and July 15~` and is scheduled to take approximately eighteen to twenty weeks with move in tentatively scheduled for December 15, 2007. Due to the significant material impact, magnitude and complexity of the project to accommodate Baker and Daniels as a new, multi-floor tenant of this building, the inherent need to shift the current tenants on floors 11, 12, 13 and 14 to floors, 2, 4 and 5 because of expedited due process delays and timing issues. The Hinman Company has contemplated openly from commencement of the negotiations, the inherent need for tax abatement to be economically successful for all parties concerned, including new and existing tenants as well as the Landlord. After review it was determined that this project only qualifies for a nine (9) year abatement. Mr. Richard L. Hill, Attorney at Law, Baker & Daniels, LLP, First Bank Building, 205 W. Jefferson Blvd., Suite 250, South Bend, Indiana. Mr. Hill advised that for the last ten (10) years they have been working with the City of South Bend looking at various sites and options to address their office space needs. They were pleased to announce in March 2007 they entered into a fifteen (15) year lease for the top four (4) floors of the Key Bank Building with options on additional space as their space needs grow. This summer they will initiate a construction project that will involve the complete demolition of the top four (4) floors and a rebuild to a true Class "A" space that will meet the needs of their professionals and also obviously the needs of their clients. They anticipate that the Baker and Daniels investment only will approximate $4 million dollars in construction, furniture, fixtures and equipment to utilize the new space. Over the next five (5) years they expect that within that space they will grow incrementally from their current level offifty-two (52) to approximately seventy three (73) to seventy five (75) people over that period of time. The granting of this abatement permits their rental rate to be economically viable, this is a rate that is higher than some other options that they had outside of the downtown, but they very much felt that they needed to be in the core business district and were very happy that they are able not only to have their space needs met, but to be involved in a pretty significant redevelopment of the building and the surrounding area. They also have as a condition of their lease that the lobby are would be upgraded and remodeled as well as the plaza and fagade of the building. Councilmember Varner stated that in light of the special exception which was granted two weeks ago, this request would essentially be for 100% of the entire project. So, there won't be a second request coming later. Council Attorney Kathleen Cekanski-Farrand replied no, this is it. Councilmember White thanked everyone involved in these projects, and as the Council begins to look at development such as the prior resolutions for a hotel on the south side, town homes on the east side and this extensive rehabilitation of the Key Bank Building, it BILLS -FIRST READING 16