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HomeMy WebLinkAbout2 Redevelopment Commission Minutes 09.24.26 - SignedSouth Bend Redevelopment Commission 215 S. Dr. Martin Luther King, Jr. Blvd., Room 301, South Bend, Indiana Minutes Regular Meeting September 24, 2026 – 9:30 a.m. City Hall Council Chambers 3rd Floor or via: https://tinyurl.com/RDC2025-2026-Meetings Meeting Recording Link: https://tinyurl.com/RDC-Meeting-Recordings The South Bend Redevelopment Commission was called to order at 9:30 a.m. President David Relos presiding. 1. ROLL CALL Members Present: David Relos, President Karen White, Vice President Eli Wax, Secretary Ophelia Gooden-Rodgers, Commissioner Maureen Miller, Commissioner Members Absent: Marcus Ellison, Non-Voting Advisor Legal Counsel: Danielle Campbell Weiss, Senior Asst. City Attorney Redevelopment Staff: Darryl Scott, Executive Director, DCI Joseph Molnar, Deputy Director, DCI April Canahuati, Asst. Dir. of Growth and Opp., DCI Erin Michaels, Property Development Manager, DCI Allison Doctor, Project Manager, DCI - Virtual Laura Hensley, Board Secretary, DCI Attending: Charlotte Brach, Assist. City Engineer, Public Works Megan Shuetz, KCG Indianapolis Matt Barrett, 110 S. Niles Ave. Tina Patton, 707 Sherman Ave. Rebecca Ford, 120 W. Donald St. 2. Approval of Minutes A. Approval of Minutes of the Regular Meeting of Thursday, September 10, 2026 CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – September 24, 2026 Page | 2 Upon a motion by Ophelia Gooden-Rodgers for approval, second by Eli Wax, the motion carried unanimously; the Commission approved the minutes of the regular meeting of September 10, 2026. 3. Approval of Claims A. Claims Allowances September 1, 2026 Upon a motion by Eli Wax for approval second by Karen White, the motion carried unanimously; the Commission approved the claims allowances of September 1, 2026. B. Claims Allowances September 8, 2026 Upon a motion by Eli Wax for approval second by Karen White, the motion carried unanimously; the Commission approved the claims allowances of September 8, 2026. 4. Old Business A. None 5. New Business A. South Side Development Area 1. Resolution No. 3679 (Authorizing use of TIF to fund Forgivable Loan KCG) Joseph Molnar, Deputy Director of Community Investment, presented proposed affordable housing development located at the vacant parcels near Donald St. and Main St. The project site currently consists of three parcels that will be combined through a lot line adjustment. Mr. Molnar provided an overview of the City's rationale for investing in affordable housing projects, noting the significant challenges associated with developing affordable housing both locally and nationally. The presentation emphasized that public investment helps bridge financing gaps and supports the development of safe, quality housing for residents. Mr. Molnar provided a brief history of the project, noting that the Resolution before the Board would amend a previously approved agreement by updating the entity that will receive the development subsidy. In June 2025, the Redevelopment Commission entered into a purchase agreement with KCG Development for the property at 2020 S. Main Street, contingent upon the developer securing Low-Income Housing Tax Credits (LIHTC) for a 50-unit affordable housing project. KCG received the LIHTC award in November 2025, and the City subsequently approved a $1 million local match commitment as CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – September 24, 2026 Page | 3 required by the program. During project due diligence, site analysis and geotechnical studies identified challenging soil conditions and increased construction costs. In response, the developer increased its minimum private investment commitment from $13 million to $15 million to keep the project moving forward. Mr. Molnar explained that the proposed Resolution would increase the City's TIF-funded loan commitment from $1 million to $1.7 million. No previously approved funds have been expended. The additional funding would help address site preparation costs and other cost increases while supporting the construction of 50 affordable housing units. If all development, affordability, and management requirements are met, the loan may be eligible for forgiveness under the terms of the agreement. Plans for the development include a quality multifamily residential building with off-street parking and design features intended to complement the surrounding neighborhood. Megan Shuetz, with KCG Development LLC, remains committed to completing the project despite rising costs. Since last year, the project budget has increased by approximately $2 million, driven by higher construction costs, market conditions, and site-related challenges identified through the bidding and due diligence processes. Ground-penetrating radar revealed buried foundations and demolition debris across the site, requiring an estimated $700,000 in remediation to prepare the property for construction. The project team has worked throughout the year to address these cost increases, secure permits, and finalize financing. Efforts to utilize the City's bidding process resulted in a 90 to 120-day delay but yielded no bids. The developer expressed appreciation for the City's willingness to provide funding through a loan, allowing the project to move forward. Additional site investigations confirmed that while buried debris and foundations must be removed and soils reconditioned, no environmental contamination was identified. Secretary Wax asked about the project's financing structure and the use of a single-purpose ownership entity for the development. Danielle Campbell Weiss, Senior Asst. City Attorney explained that the resolution is the first step in the process of converting the City's support to an Economic Development Commission forgivable loan. State requirements require the Resolution to be approved before proceeding through the Economic Development Commission, Common Council, and Plan Commission, after which the matter will return to the Redevelopment Commission for final consideration. CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – September 24, 2026 Page | 4 An amended Development Agreement, and potentially an amended Purchase Agreement, will be presented to the Redevelopment Commission at a future meeting once negotiations are complete. Ms. Weiss clarified that these actions do not represent additional funding but are multiple procedural steps to restructure the existing assistance into a forgivable loan model. The change is intended to better align with low-income housing tax credit financing requirements and support the development of affordable housing. Ms. Shuetz discussed recent updates to the project, including commitments from the Housing Authority of South Bend for Section 8 vouchers serving the lowest-income households and the award of Section 811 vouchers designated for individuals with disabilities. The project has also partnered with Housing Opportunities to provide supportive services to qualifying residents. These additions were described as enhancements since the project's previous presentation to the Board. President Relos asked whether the use of a new entity to receive the loan was common practice and whether similar structures had been used for other tax credit projects. Mr. Relos also sought assurance that the new entity remained affiliated with the developer and that adequate protection was in place for the City. Ms. Shuetz explained that affordable housing tax credit developments are typically structured through single-purpose entities created solely to own and operate a specific project. Similar structures have been used in other housing developments. The ownership entity includes both the developer and the tax credit investor, who remains involved throughout the compliance period and long-term operation of the project. Staff confirmed that the new entity is affiliated with the developer and exists as part of the project's financing and ownership structure, ensuring ongoing responsibility and accountability for the development. Mr. Molnar noted that similar tax credit developments in South Bend, including Diamond View Apartments and South Bend Thrive, have been successfully completed and provide quality affordable housing for residents. The project was presented as part of the City's ongoing effort to address housing needs and expand affordable housing opportunities throughout the community. Commissioner Gooden-Rodgers asked whether local contractors would be utilized for the project. Ms. Shuetz stated that bid opportunities were distributed to hundreds of contractors, including local firms. While CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – September 24, 2026 Page | 5 construction contracts have not yet been awarded, the project team has actively conducted local outreach and worked with the City's Engineering Department to identify and engage local contractors throughout the procurement process. Commissioner Gooden-Rodgers emphasized the importance of ensuring the long-term maintenance and quality of affordable housing developments, noting that residents deserve safe, well-maintained homes and that developments receiving City support should be properly managed over time. Ms. Shuetz affirmed its commitment to long-term ownership and maintenance of the property. She noted that the development will be subject to regular inspections and compliance requirements through the Low-Income Housing Tax Credit program, providing additional oversight beyond local standards. Mr. Molnar also highlighted that quality management is essential to maintaining occupancy and serving residents. The City further noted that long-term ownership, regulatory oversight, and available enforcement mechanisms help ensure the property remains well maintained and provides quality affordable housing for residents. Rebecca Ford, a nearby resident, shared concerns about the site's former industrial use, stating that demolition of debris and potentially hazardous materials may have been buried on the property. The resident questioned whether soil testing had been sufficient, expressed concerns about transparency regarding site conditions, and urged additional investigation to ensure the safety of neighboring residents and children who use nearby properties. Joseph Molnar stated that extensive environmental due diligence has been completed, including Phase I and Phase II environmental assessments, geotechnical investigations, and soil testing conducted by both the City and the developer. Testing performed in 2026 found no contamination above residential standards, and the results will be made publicly available. While buried rubble has been identified and will be removed, no hazardous soil conditions were detected. He emphasized that all required environmental reviews have been completed and that the project site will be remediated and prepared in accordance with applicable standards before development proceeds. Commission members emphasized the importance of ongoing environmental oversight and public transparency, particularly given the site's industrial history. Ms. Shuetz with KCG noted that environmental testing and review are standard requirements for redevelopment projects and expressed a commitment to sharing the reports with the public. CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – September 24, 2026 Page | 6 Secretary Wax asked whether construction would stop if unexpected environmental contamination was discovered during excavation. Mr. Molnar confirmed that if any signs of contamination are uncovered during construction, work would immediately stop and the appropriate environmental authorities would be notified for further investigation and remediation. Based on all testing completed to date, no environmental concerns have been identified; however, any future discoveries would be addressed before work resumes. Upon a motion by Eli Wax for approval, seconded by Maureen Miller, the motion carried unanimously; the Commission approved Resolution No. 3679 as presented on September 24, 2026. 6. Progress Reports A. Tax Abatement None B. Common Council Vice President White asked for a report regarding how many vacant lots the City currently has. Mr. Molnar and staff have agreed to pull the numbers. Commissioner Gooden-Rodges encouraged residents to attend Fusion Fest this weekend. C. Other Joseph Molnar, Deputy Director of Community Investment, gave updates on the following. • The Department of Community Investment presented its 2027 budget to the Common Council. The proposed budget includes a reduction of more than 5% and the elimination of three currently vacant positions. He also discussed Redevelopment Commission TIF-funded activities and noted that budget discussions are ongoing. • Stadium Flats construction is proceeding despite the fire. • Diamond View ribbon cutting ceremony has been rescheduled. • The Allen Edwin northern project is scheduled to be occupied by the end of 2026. • The Advantix project is progressing and should be leased soon. 7. Next Commission Meeting Thursday, October 8, 2026, 9:30 a.m., City Hall Council Chambers 3rd Floor 8. Adjournment Thursday, September 24, 2026, 10:28 a.m. CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – September 24, 2026 Page | 7 ______________________________ ______________________________ Eli Wax, Secretary David Relos, President