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HomeMy WebLinkAboutCCM-12-10-90 Special CARMEL CITY COUNCIL SPECIAL MEETING MINUTES December 10, 1990 7:00 P.M. ONE CIVIC SQUARE/COUNCIL CHAMBERS The special meeting of the Carmel City Council was called to order by Mayor Dorothy Hancock. Council members present were Annabelle Ogle, Minnie Doane, David Adams, Frank Fleming, Tom Irvin, Lee Lonzo and Alan Potasnik. City Attorney Steve Andrews and Clerk- Treasurer Susan W. Jones were also in attendance. The Mayor began the meeting by asking the parliamentarian, Councilor Lonzo, to address the clarification of which agenda to use. The Mayor and Clerk-Treasurer both sent out agendas and the Clerk-Treasurer's agenda had a third item that was not included on the Mayor's agenda. Councilor Lonzo said it was his determination that, since the mayor was the only person who could call a special meeting, that precedent dictates the mayor would set the agenda. Councilor Lonzo also stated that he talked with the clerk-treasurer on Monday and that the third item on the agenda was requested by Tom Kendall. It was inappropriate for Mr. Kendall to be placed on the agenda, Lonzo said. Councilor Potasnik agreed with Councilor Lonzo stating that, since the mayor was the only one to call the meeting, she would be the only one to know the purpose. Councilor Lonzo did suggest that the rules be suspended and allow the public to speak. Councilor Potasnik had no problem with this suggestion. Councilor Lonzo then made a motion to use the mayor's agenda. The motion was seconded by Councilor Potasnik. Councilor Fleming voted nay on this motion. Councilors Doane, Adams, Lonzo, Potasnik, Irvin and Ogle all voted aye. Motion passed 6 to 1. RESOLUTION 90-12-10-l/A RESOLUTION APPROVING THE FORMATION OF A BUILDING CORPORATION FOR THE PURPOSE OF FINANCING, CONSTRUCTING, RENOVATING, AND EQUIPPING CERTAIN FACILITIES AND LEASING THE SAME Steve Andrews TO THE CITY OR OTHER ENTITIES AND RELATED MATTERS: explained this Resolution to the Council and to the public. Steve Andrews explained this building corporation was similar to the one used in Phase I and Phase II of Civic Square with the exception that this building corporation is being formed with only three members and the name has been changed from Civic Square Building Corporation to Carmel Square Centre Building Corporation. Andrews stated that the first board consisted of five members and there might be a possibility that the mayor could or would appoint two more later but for now the corporation was being formed with only three. Andrews stated that Dan O'Malia, who serves on numerous other boards in the City, did not wish to serve again. Evan Parks was not in favor of this phase and, rather than force this project down anyone's throat, the corporation would just be formed with a majority of the remaining members. Those members are John D. Proffitt, Kenneth M. Keltner and William A. York. At this time Councilor Lonzo made a motion to suspend the rules and allow for a public hearing. The motion was seconded by Councilor Irvin. Before the vote, Councilor Potasnik asked if he meant public hearing or public input. Councilor Lonzo stated he meant public input. All members voted aye. Motion carried. Andrews asked if this public input would be for item #l or both items Councilor Lonzo stated he had no problem with the public addressing both items at this time. James Garretson, a previous council member, spoke in favor this phase and the purchase of this building. Lee Bardach, who attended Carmel High School, thanked Mr. Garretson for his comments and thanked the council for the opportunity to speak on this issue. Mr. Bardach agreed with Mr. Garretson on the right to debate an issue and felt it was healthy. Mr. Bardach stated he felt the problem is this building is "his vision" but is not "my vision." The two visions are very different. Mr. Bardach stated he was glad Mr. Garretson was willing to accept tax increases for projects such as this but he was not. Mr. Bardach said it was everything that concerned him. There was the cost for 116th Street, the cost of the new high school, the cost of civic square and so many other things going on that concerned him. Mr. Bardach asked for the council to address the use of the building up front and felt it was a bad business judgement to make a purchase such as this without first knowing the purpose. At this time, Tom Kendall asked to be put on the agenda after item #2 was discussed because he had specific questions that needed answered and would not be making his normal comments. The Council, however, asked Mr. Kendall to speak now rather than wait. Mr. Kendall first stated that it was not the clerk-treasurer that leaked the sale of this building to the press, but if his memory served him well, it was a member of the council. Mr. Kendall agreed with Mr. Bardach on the public's right to speak and debate this issue. Mr. Kendall stated there were a number of people who are now afraid to stand up and speak for fear of being put in their place by the Council. Mr. Kendall said his taxes went up 70% last year and he did not wish to see them go up again this year. Mr. Kendall began to ask specific questions, asking for an answer to each of his questions. Councilor Lonzo stated the purpose of suspending the rules was for public input and that the council was not on trial. Councilor Potasnik said there was opportunity for public input and that if the Council chooses to answer the questions they will, if not they won't. Councilor Irvin stated that council has discussed this issue in great depth and would like an opportunity to listen to Mr. Kendall's questions and have time to formulate answers but that not all of his questions could be answered tonight. At this time, Mr. Kendall read the following questions to the Council. 1. Why did you form a new building corporation rather than assign this to the Carmel Civic Square Building Corporation that already owns the buildings in Civic Square? 2. Exactly are the City's NEEDs that are to be fulfilled with the purchase of this building? A. What is it about these that create a NEED as opposed to a desire? 3. The City currently owns other buildings that are vacant such as the old City Hall, the meeting hall, etc. Why wouldn't these buildings satisfy these "needs" for the City? 4. Is this a "Done Deal"? A. (If Yes) Please explain how one should go about "undoing" it. B. (If No) How would a group of concerned citizens go about preventing it from becoming a "done deal"? C. How many independent appraisals have been performed to date at the request of the Council and what are the results? 5. Will the City be entering into a lease agreement with the new building corporation? (If no, why? and how will the City be involved?) A. Will this be a lease/purchase agre ement where the building corporation will abandon the building or see it for $1 back to the Cty at the end of the lease? B. Will the City be leasing the entire building? C. How much will the estimated lease payments be per year? E. Wil l the City be able to determine who subleases the premises or is that a decision left solely up to the Building Corporation? F. If not for profit groups such as the Dad's Club and the Carmel Symphony lease space at "bargain" rates, what criteria will be applied to other groups that may seek space at the same price so that there will be no discrimination? G. What rate do you estimate you will to charge these charitable groups per square foot in order to not loose money f or the City? H. What kind of title will the City hold? I. Is the title going to be insured? 6. What is the estimated square footage rent that must be charged in order to repay the bond, attorney fees, taxes, maintenance, insurance, utilities, etc. in order to assure that the citizens are not subsidizing the building? 7. What are the projected annual maintenance costs of the building? 8. What contingencies are planned for the subleases (if subleased) to guard against rising costs, lease defaults, vacant space, etc.? 9. What safeguards, if can't be fully leased, not a liability to the city? 10. What work remains to be done to obtain a Certificate of Occupancy? (If Yes) What is the estimated cost to do that work? 11. Developers estimate that it costs $4-6 per square foot to make an area leasable (walls, carpet, electrical, heating, A/C, etc.) What kind of financial provisions are being made for the City or the Building Corporation to pay for these improvements prior to leasing/subleasing any space to other tenants? 12. What is the estimated gross amount sought from a bond issue? A. What percentage will the City Attorney and/or outside counsel receive for the bond issue? B. Who determines the percentage the City Attorney gets for the bond issue. Does the bond issue in any way pay for "past due" services as was suggested is often the case in an article published in last Sunday's Indianapolis Star (12/9/90)? C. At what point in time do you expect to see the bond issue brought up? 13. Will a public hearing be held for the bond issue? A. (If Yes) Since the entire Council is behind the project 100%, and no doubt the appointed building commission members will be too, what measures will be taken to assure the public that any concerns they may make not be falling on the ears of people who have a predetermined position? 14. When the full $12 million of Civic Square was added to the tax roles this year, it attributed almost 43 cents per $100 of assessed valuation to our property taxes, or about 38% of our overall tax increase. That was based on a total assessed valuation in Carmel of over $271.5 million. In 1991, since there as been considerable growth in the City and other areas have been annexed, the City's assessed valuation has risen to over $306.3 million, the impact on our 1991 taxes for Civic Square will only be about 31 cents per 100. That does not represent a tax decrease, it only reflects more people paying for a fixed amount. Based on the 1991 assessed valuation, what rate do you expect to see after the bond issue hits the tax roles and do you expect it to occur in 1991 or 1992? A. (If Yes) Since the 1991 budget has already been approved, will you see an additional appropriation and will a public hearing be held for this appropriation? 15. Assuming the proposed "teen center" is a great success and remains so over the years, is there sufficient parking facilities to accommodate all of the teenagers? A. Assuming that it will be run in such a way as to not become a cash liability to the City, how will be profits from the "teen center" be used? Will they be applied to reduce the cost o the bond issue to the public or will they be used to buy other things? 16. Will you be publishing a schedule or time table in the newspaper so the public will know exactly when you plan to close on the building, hold the public hearings, let bids for renovation, etc.? Jim Quinn, resident of Carmel, stated he spoke with Councilor Annabelle Ogle on three different occasions concerning her conflict of interest with Union State Bank, Merchants and Ash Realty and stated he never received a return call from her on this matter. Mr. Quinn also suggested a conflict of interest on the part of the Mayor since her campaign treasurer was President of Union State Bank (Merchants). Andrews addressed that issue by saying that he was probably at fault for not asking Mrs. Ogle to hold her vote. Conflict of interest would come if the mayor or a member of Council were to receive some type of remuneration for their efforts on this project. Mr. Andrews also stated that the President of Union State Bank, George Burrell might have been the mayor's treasurer in the last campaign but that was not the case anymore and besides, the mayor can't vote on this. Mr. Andrews stated that Mr. Quinn's point is well taken and it would be best if Councilor Ogle not vote to eliminate any appearance of conflict. Katherine Benjamin, 11214 Moss Drive asked about the City having two independent appraisals. Mrs. Benjamin cited state code that requires a city to have two written appraisals before they could buy a building and that the city could not pay any higher than the average of the two appraisals. Mrs. Benjamin wanted to know if that had been done, who did them and what were the results and were they done prior to the signing of the original purchase agreement. Andrews said that according to what he was told by bond counsel, Ice, Miller, Donadio and Ryan, the city was not the one purchasing the building so no appraisals were needed. The actual purchase is being done by the building corporation. Mr. Andrews said Ash Realty has an appraisal and that our own consultant was doing an appraisal but at this time did not have that information or when that would be available. Mr. Bardach then asked the city to follow the "spirit of the law" rather than the "letter of the law". Andrews said nothing was being done in secret and that if the building reports come back that it will fall down around us then we simply return the building to the bank. Andrews said that regardless of how the leak got out there were all kinds of buyers once the price was disclosed. The original bid was made for $750,000 and the asking price was $1.8 million. Steve said Merchants had nearly $2.2 million in the building. Steve said the city would walk away from this deal if the building isn't sound but right now, preliminary engineering reports, done by the city's own consultant, indicate that the building just has some minor problems. Jim Quinn asked Andrews how he could ignore the statutes on the requirement for appraisals. Again, Steve Andrews stated that the city is not buying the building but the building corporation is actually buying the building. Katherine Benjamin asked how the council could assign the right to purchase the building over to the new building corporation when the first purchase agreement had the Civic Square Building Corporation listed on it rather than the Civic Square Centre Building Corporation. Benjamin also asked how the city approves the bonding if the building corporation will eventually hold title. Andrews stated it was a game of sorts, created by lawyers to go outside the tax freeze. Cities and schools have no other way of making these types of purchases because of the tax freeze. Andrews stated many other cities and schools use this method. Councilor Potasnik asked Mr. Andrews to outline the time frame so the public could continue to be included on this. Andrews stated the building corporation needed to sign the bond anticipation note by no later than December 31, 1990 or the entire deal would lapse. Steve said the note was for eighteen months with a roll-over of up to five years maximum. The timetable for the Council would be to start the bonding process within the next few months. If bond rates were to go up, it would be best for the Council to sit on this and wait it out. Andrews said the building corporation would hold public hearings on this but that a 501C3 Bond issue could be used and that doesn't call for any public hearings. Mr. Andrews stated he had talked with bond counsel and indicated to them that the council wanted a public hearing on this project. Councilor Potasnik stated he wanted the public input guarded. Councilor Potasnik then asked if this Resolution was the same deal as Phase I and Phase II but the only difference is five members were on the first board and now there is only three with the Mayor being able to appoint two more. Councilor Potasnik asked the mayor if it was her intent to appoint two more members. The mayor replied yes. Andrews said the first thing to happen was to assign the rights over to the building corporation to buy it. The city will eventually lease the building back. The council will approve the bond issue but the building corporation would do the leasing. Councilor Adams said the original purchase agreement would need to be changed in Section III, subsection B to change the name of the building corporation to The Carmel Square Centre Building Corporation from the Civic Square Building Corporation. Councilor Irvin made a motion to approve Resolution 90-12-10-1. Councilor Ogle asked to be removed from the vote for the evening. The motion was seconded by Councilor Adams. All members, with the exception of Councilor Ogle, voted aye. Motion carried. Councilor Adams made a motion to authorize the City Attorney to change the original purchase agreement to include the new building corporation. The motion was seconded by Councilor Lonzo. All members, with the exception of Councilor Ogle, voted aye. Motion carried. Councilor Lonzo made a motion to pass Resolution 90-12-10-2. The motion was seconded by Councilor Irvin. All members voted aye. Motion carried. All members, with the exception of Councilor Ogle, voted aye. Motion carried. There being no other business before the Council the meeting was adjourned. APPROVED ATTEST Remarks for the Carmel City Council December 10, 1990 by James D. Garretson 55 York Drive Carmel, In 46032 I. Thank Council for time II. Comment on Political Life We are in the political season--the quadrennial exercise of democracy. This season brings out an abundance of people with diverse opinions, and I believe we should be quite thankful for that dialogue. I have been away from this p olitical arena now for three years. I have a great appreciation for those who enter the arena and take the abuse that is often leveled on them. The one thing I detested most, however, in my 12 years service on the Council was the pettiness of the arena. I always thought there were plenty of issues that needed airing and debate, but I grew weary of the back biting, knit picking pettiness of those who chose to attack people and procedures when they could not have their way on the issues. I've been teaching long enough to know that the kid who yells the loudest in class is not necessarily the one who knows the right answers, but rather someone who craves attention. Sometimes I think our media representatives forget that in the amount of ink they give to the critics. Now with regard to the proposal to purchase the Civil Center Building for the city: I believe this is a great issue, a valid issue for public debate. Those against its purchase site reasons such as cost, another bond issue, a lack of specific plan on the building's utilization; some question its worth vis a vis what the Council has agreed to pay for it; and some question the need for a community center itself. At the outset let me say I believe it is totally bogus to claim the Council and the Administration acted improperly in meeting in executive sessions to privately negotiate the sale. The law provides only three reasons for executive sessions--individual personnel matters, possible litigation, and the purchase of property. If government ent ities tried to purchase land publicly, the price of property would escalate phenomenally. The General Assembly recognized this problem in granting exemptions for land acquisition. I regret that in this instance that the Clerk Treasurer chose to ignore the sanctity of the executive sessions to disclose publicly the negotiations that were in place. My guess is, though I don't know for a fact, that exposure harmed the city's side of negotiations and may have cost the citizens several thousands of dollars--but you folks are better situation to answer that. Secondly, it is bogus to believe a community center was not envisioned at this site. I have been privy to all the planning and negotiations that went into this project prior to 1988. I would like to retrace those steps for a few minutes. During Mayor Pickett's administration the Council was concerned about the future of the administration and services of the city. We were outgrowing our facilities and various departments were split up and housed all over town. Our dream was to bring all such services together. We commissioned the firm of Wright, Porteous and Lowe to study the city's needs and to tell us how much land we would need to bring everything together. This report concluded that we would need fifteen acres to accomplish our goal. Phase II involved finding a site. Mayor Reiman named me chairman of that committee. We concluded quickly that downtown was not suitable if we needed 15 acres. Three potential sites were studied--the old Moffitt farm located north and west of the Kroger development on Rangeline Road, the Estridge property located just north of the Pizza Hut on Rangeline Road, and the Wilfong property located at 126th and Keystone Avenue. Each had a significant problem. The owners of the Moffitt farm had sold land for the Kroger development for $65,000 an acre. Clearly, sufficient land would cost the city between $500,000 and $1 million. The Estridge price was $75,000 an acre and there were only five acres available. We would have had to negotiated a purchase of the Ward property to the north and property owned by Josh Fineberg to the east. That site potentially could have exceeded $1 million. The Wilfong land was not pursued because 1) it contained only 11 acres, 2) the fire chief did not like the site, and 3) the homeowners nearby objected. At this discouraging point a broker approached me with a proposal from a client to sell the city 13 and 1/2 acres of land where we now stand. The price was $18,500 an acre. By this time we were all becoming concerned that all potential sites near Old Town Carmel were being used up. Likewise, we thought if we could acquire the land, we might have something to trade later, which had certain tax advantages to prospective sellers. Thus, we purchased this land. During Mayor Reiman's 2nd administration, we became concerned that the land might not be suitable for a city complex. It was overgrown with wild vegetation and appeared to be low ground compared to Rangeline. I was able to interest a Ball State College of Architecture and Planning class in our project. A sophomore design class made our site its semester project. Representatives from the class talked to all our department heads and examined the site in great detail. At this time we talked to them about three or four major components to the project: a master fire station, a city hall and a community center. Later it was decided to separate the police station from city hall. When the BSU class presented to us their two dozen or so renditions, almost all contained a community center as well as city hall, fire station and police station. The next step was taken in the middle of Mayor Reiman's second administration--the selection of an architect. The mayor and council had already decided that 1) the entire ar ea should be planned ahead of time with one theme, so we wouldn't end up with buildings of different architectural styles; 2) we agreed on a colonial theme to the architecture--our feeling being that in Old Town Carmel, the only two decent pieces of architecture were the Union State Bank and the Methodist Church; 3) that landscaping would be a major component to the project. HNTB was chosen to design the site plan and Phase I of the development. We opted for the Georgian style of architecture rather than Federalist. In the course of discussions with the architects, the idea of a focal point for the site and the community developed, thus the decision to have a square and fountain. We were concerned that Carmel had lost its center. Downtown Carmel had been the center of the community from 1837 to 1967--from the time Daniel Warren platted Bethlehem. For the next 20 years Keystone Square become more of a nucleus. There were no significant historical landmarks, save an unimpressive small Carnegie Library and the flowing well. A Civic Square would give the city a new center--a new focus-- a new nucleus. The square was originally designed to be a tall monstrosity that Mayor Reiman, to her credit, had reduced so that it would not overwhelm the Williamsburg Village campus effect. Phase I of the developing included site development, the master fire station, building the square and fountain, and reconstruction of the street. During Mayor Reiman's last year, the decision was made to proceed with Phase II including the police station and city hall. The last act of Mayor Reiman and the last Council was the selection of an architect. Before leaving office I talked to Mayor-elect Hancock about acquiring the property located west of city hall where a large chemical tank stood. Unfortunately, the property was purchase by John Kirby prior to the city taking action. I was keenly disappointed for I had envisioned that property as an ideal location for the last component of the square--the community center. Now we come to the present proposal. Some argue that we would never be interested in this property if it weren't located where it is. I agree, but I don't see why that is a negative. In business, in education, and government, we see opportunities arise all the time that we had not planned for. I see this site as an opportunity of finishing the Square. Its architecture is not strictly Georgian, but it's close enough to fit harmoniously with the Square. I find the price to be another great opportunity. Several years ago we tried to purchase just 40 feet off the north side of that property. We were prepared to pay $104,000, but a court decided it was worth $135,000, and we would not pay that. The entire site, devoid of any structure, must have a value in excess of $250,000, based on that appraisal of several years ago. That means the building is costing the city less than $32 a square foot. I ask you to compare that to the contemporary cost of any public building, which I know will be in the neighborhood of $100 per square foot. Even if the city eventually has to double its cost on the building through maintenance and refurbishing, the total cost is less than 2/3 of what present new construction runs. I do not fault you for a lack of a specific utilization plan at this point. However, I have no doubts that community organizations such as Dad's Club, the Chamber of Commerce, the Senior Citizens, the various foundations now existing in the community, the Carmel Symphony, United Way, even branches from offices in the Court House, will at some time find it desirable to locate in this facility. A teen center, or some such facility aimed at the youth of the community may or may not be a viable option, but the space used for such an effort could have multiple uses for a variety of organizations. I honestly believe that this project is an opportunity that should not be ignored. As a city councilman for 12 years I was guided by a premise that my obligation was to the future of Carmel. I tried to vote in favor of projects that had a long term benefit to the community. I feel this project is such an opportunity. I regret as much as anyone else that the economy is in bad shape. I don't like the prospect of my property tax bill going up next year again, but like Justice Holmes, "I never complain about my taxes, because with taxes I buy civilization." Finally, let me leave you with one final story. One of the great men I have known in this community was Howard Hunt. Howard was on the School Reorganization Commission in the county that recommended the creation of Carmel Clay Schools in 1956. He was on the first school board of that district and voted to acquire the land the present high school is on. Now Howard was a ge m. He wasn't a business executive. He was an electrician, and worked for Foster Kendall Elevators for years. I asked him once why he hadn't acquired more land for the school, when it was available--the land where Harrowgate is now located. He gave me that small patented smile of his and said, "Jim, they wanted $1,800 an acre for that land." Thank you for your time.