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HomeMy WebLinkAboutCRC-02-01-00CARMEL REDEVELOPMENT COMMISSION Tuesday, February 1, 2000 DOCS Conference Room 5:30 p.m. AGENDA 1. Call to Order 2. Approval of Minutes 1/18/2000 Meeting 3. Financial.Report 4. Old Business 5. New Business A. Approval of Invoices to be paid B. Resolution No. 1-2000, approving the execution by Carmel Redevelopment Commission and acceptance of the Project Agreement and the Amendment for the bid submitted by AMLI Residential Properties, L.P. C. Resolution No: 2-2000, authorizing (a) the acceptance by Carmel Redevelopment Commission of the assignment from Davis Homes. LLC, of its right, title, and interest in the Purchase Agreement; and (b) the acquisition of the G & H Real Estate for the Purchase Price pursuant to the Purchase Agreement. D. Resolution No. 3-2000, authorizing (a) the acceptance by Carmel Redevelopment Commission of the assignment from Davis Homes, LLC, of its right, title and interest in the Option Agreement: (b) the exercise of the Option; and (c) at such time as adequate funds are available, the acquisition of the WLB Real Estate for the Purchase Price pursuant to the Option Agreement. E. Other New Business 6. Schedule Next Meeting 7. Adjournment z\redevcomm\2000 February 1 Agenda CARMEL REDEVELOPMENT COMMISSION Meeting, Tuesday, February 1, 2000 Oaths of Office were administered'to the five members of the CRC by Clerk-Treasurer Diana Cordray prior to the meeting. The meeting was called to order at 5:40 p.m. by President Rick Roesch. Present were Amy Boldt, Ron Carter, Susan Westermeier, and John Koven. Also present was Mayor Jim Brainard, Clerk- Treasurer Diana Cordray, Councilor Wayne Wilson, Judy Hagan, Clay Township Trustee, Joe Staehler, City of Carmel Director of Administration, Karl Haas, Attorney, from Wallack, Somers & Haas, and Phyllis Morrissey as staff support. ADProval of Minutes from January 18, 2000, was tabled until next meeting Financial Report Clerk-Treasurer Cordray reported the balance as of today is $1,340,714. Mayor Brainard is working on cash flow statements and hopes to have those ready for upcoming meetings soon. Old Business The invoice presented at the last meeting for $6,322.50 for negotiation of a lease by the City will be paid by the City, not CRC. New invoices will be distributed before the next meeting New Business Invoices will be presented for payment at next week's meeting. The next item of New Business is Resolution 1-2000 approving the execution by Carmel Redevelopment Commission and acceptance of the Project Agreement and the Amendment for the bid submitted by AMLI Residential Properties, L.P. Mr. Roesch asked Mr. Haas to explain the resolution to the commission. Mr. Haas reported we have a copy of the agreement signed by the City and AMLI. This agreement is in the form approved by the CRC. The delay is because mitigating the wetlands was more complicated than originally expected. The site plans have now been finalized and reviewed and approved by CSO. AMLI has thirty-five days before they have to deposit the full purchase price into escrow. Right now MEM has given an oral sign-off on the approval of wetlands mitigation. We're still waiting for the written approval. Zoning has to be completed. At that point, the money can come out of escrow and be available for the CRC. Ms. Boldt asked what happens if the approval isn't received from IDEM within the thirty-five days. Mr. Haas replied that the money then just stays in escrow for a longer period. He does not expect any further hitches. AMLI has lived up to their commitments. Mayor Brainard noted the wetlands that will now be retained on site will enhance the project because there will be more wooded area maintained as you drive west on City Center Drive. We're touching less than three acres of the existing wetlands which is important in seeking approval. Because of the off-site mitigation there will be more wetlands in this watershed area than there was when we started. Mayor Brainard said the total cost of the mitigation will be between $300,000-400,000. CRC Meeting Minutes of 2/I/2000 (continued) Page Two Mr. Koven asked if that was a cost that was anticipated when we sold it. Mayor Brainard replied affirmative but we didn't ]mow how much it would be. Until we chose the plan,.the negotiations with IDEM couldn't be started. Mr. Koven asked how this mitigation costs affected the net proceeds. Mayor Brainard replied that we expected to net $2.8 million and we received $4,000,000 from AMLI so we're ahead. In the original pro forma we had a general category of almost $1,000,000 which was for landscaping/ wetlands, unexpected things like this which would come up. Mr. Haas said the net will be more than 1.2 million. Mr. Koven asked if AMLI ended up getting less land than they originally expected. Mr. Haas responded affirmative, but the City is offering them more land so they will have enough to do the full development. Mr. Haas said AMLI is actually going to take title to the wetlands, then we'll do an offering of an additional four acres in exchange for the wetlands. AMLI will bid and then end up with the same number of acres they need. Mr. Roesch asked if there are time limits for the escrow? Mr. Haas said it can stay in escrow for 120 days after their plans are completed. Mr. Roesch: After March 5 or 6? Mr. Haas said yes, basically. Ms. Westermeier asked about the rezoning issue for multi-family use. Mayor Brainard: We're going to ask the Plan Commission to waive their normal process because we have involved the same City staff with that who serve as staff advisors for the Plan Commission. The same staff would do the review for the Plan Commission. We suspect they will waive. I've had some talks with some members of the Plan Commission and I don't think they have a problem with that; they seem comfortable with it. In the worse case scenario it would be 60-75 days; best case scenario it would be 30 days. Ms. Westermeier asked if the decision on the wetlands would be forthcoming within the next 30- 60 days, too. Mayor Brainard replied that we have verbal approval from IDEM. We've worked with the J. K. New Company, who is in the business of securing wetlands for off site mitigation. They've worked.with the County Parks Department and found some sites within this watershed which helps keep the costs down for us. Mr. Koven asked for some clarification on the amendment to the project agreement and if the exhibits all completed. Mr. Haas: Exhibit C still needs to be finalized. CSO just hasn't finished that. Those are the construction plans. I don't think there's any problem with getting it completed. Part of it's the utility package. Mayor Brainard' reminded the commission that we have continuing architectural control CRC Meeting Minutes of 2/I/2000 (continued) Page Three Mr. Haas: CSO is responsible for Exhibit C and Exhibit H. I am responsible for Exhibit M which is for insurance policy coverages. They've got $2,000,000 coverage in general liability with a $30,000,000 excess liability and then workers' comp is statutory and standard automobile liability ' Mr. Roesch asked if those would be complete before the CRC signs the agreement. Mr. Haas: Exhibit C won't be complete before the agreement is signed. It will still have to be finalized. I think frankly what needs to be done for C to be finalized is for CSO to take Exhibit C and where it says "preliminary" and put "final" on it. Then it will be done. Mr. Roesch: I'm wondering how we can execute the agreements if the amendments aren't all done. Mr. Haas: The project amendment contemplates that C is not complete and that it will be complete. Ms. Westermeier asked what kind of effect it had if it changed from preliminary to final. Mr. Haas: I think that it's only a question of final locations; making sure that the utility lines run in the right place. I don't have any reason to think they don't but CSO needs to confirm, now that the buildings are in place, that the utilities the city is going to run are all in the right location. Exhibit C would not have to have been included in the document. There are:other plans that still have to be finalized. Discussion followed about the need to have legible copies of documents which are to be executed earlier so commission members have time to review them. Mr. Koven asked Mr. Haas to explain the urgency of these documents. Mr. Haas: It starts the due diligence, the thirty-five day period before they deposit the money starts the day that this is approved and signed, so it speeds up the selling. It was.suggested that all members' e-mail could be used to forward documents, so faxes would not have be used since faxing often reduces the documents and can make them illegible. Mr. Haas: Unfortunately, sometimes documents are changing up to the time of the meeting, but at least if we had e-mail we could get them to you. There being no further questions about Resolution 1-2000, Mr. Carter, moved the Commission approve the resolution. Ms. Boldt seconded the motion and it was approved unanimously. Mr. Roesch: The next resolution before us is Resolution 2-2000, the acceptance by the Commission of the assignment from Davis Homes their interest in the purchase agreement and acquisition of G & H Real Estate for the purchase price of $450,000. Mayor Brainard: The appraisers have faxed us their evaluations. One has appraised the property at $545,700 and the other is $535,000. CRC Meeting Minutes of 2/I12000 (continued) Page Four Clerk-Treasurer Cordray asked if these' appraisals.should be paid by the CRC. After a brief discussion it was determined this would be correct, rather than the City paying for them. Mayor Brainard: We weren't required to get appraisals on these properties but thought it would be good to have them nonetheless because we're assuming the right to buy from the private sector. I think it's good to have them on file, especially since they're favorable. Mr. Haas: As the Mayor starting working on the Old Towne project then Davis Homes became interested in that project. Brad Davis went out and negotiated this purchase agreement to acquire the property that's bounded by Main Street on the north, First Street SW on the south, First Avenue SW on the east and Second Avenue SW on the west, basically the entire city block. He did that in anticipation of Davis Homes participating in this development project. We agreed with Davis to see if during a certain period of time he could get the project going on his own, then the city had the right to step in and he agreed that he would assign this purchase agreement to the CRC. The period for closing runs out on Monday. The appraisals themselves are good news, but now they are available for the public review and it is unlikely that if we go past Monday we'll be able to buy the property for $445,000, since it's now appraised in excess of $500,000. So the resolution is to accept the assignment and then close on the purchase agreement. Ms. Boldt: Are we under any obligation to Davis Development to allow them to further participate in the development? Mr. Haas: No, once title to the property is transferred to the CRC, then we would have to go through an offering process. It is still the hope that Davis will make a bid and it will be a redevelopmentproject with Davis. But there is no obligation on the part of the CRC and no guarantee.to Davis. Mayor Brainard: Two weeks ago I met with Cripe Architects, Brad Davis and a gentlemen he's brought in to do the commercial/retail side of it and Davis will do the apartments up above. They're working hard on the designs and the pro formas, so I'm encouraged that they will be bidding. Mr. Koven asked if there was a particular reason why this agreement was signed off and agreed to back on August 7, 1999, and we were not made aware of it until a week ago. The Mayor came to us in October and asked us for permission to go along with this and this was already a done deal at that point. Mayor Brainard: This one had to get done first and no earnest money had gone hard, I believe, until after I came to you on October 13'". Before this could be a deal, we needed to get the other side of the property under control to the west and that's the negotiation that took a lot longer. Mr. Koven: I understand that. But this was a "drop dead" deal on August the 7ih irregardless of acquiring the other property next door. Brad Davis couldn't negotiate out of this contract. There was a 90 day period, but at 90 days, the buyer deposits an additional $15,000 which was nonrefundable for any reason. But the thing is we met three weeks ago and there was nothing on our agenda that tells us we needed to have a closing by February 6 or T". CRC Meeting Minutes of 2/1/2000 (continued) Page Five Mayor Brainard: But we covered that back in October or November Mr. Koven: No, we didn't. I'm just trying to figure out why we had to wait till the last minute to do this. Because if we had known back in August that this was going to close by February 6 s or something was going to happen... Mayor.Brainard: We were hoping AMLI would be completed before we had to do this, so we held off. Mr. Koven: I don't have a problem with that, but the commission was not made aware of this that I know of until a week ago. Mr. Roesch: I think that as we have more projects to deal with, then that's why we need the cash flow report on an ongoing basis so we have a timeline of what's coming up, where the money's coming from and how we're going to pay for it. We're talking about a lot of money and because of that we need to be aware of that. Mayor Brainard: I'll ask Karl to come up with these on a regular basis, so if we have any questions about how these agreements are proceeding... I don't necessarily know myself from day to day. Mr. Koven: It's not so much knowing how they are proceeding; it's just knowing they even exist. We were not even aware of the fact that they even existed. I was not aware this purchase agreement even existed. Mr. Roesch: Yes, regarding this specific purchase agreement, but in all fairness to everybody I think we did (and we probably did not get that in the minutes) when we had the unveiling for the newspapers. We did briefly talk about the acquisition and that Davis was going to be involved. Mr. Koven: I'm just saying that three weeks ago we had a regularly scheduled meeting and on our agenda should have been something on our agenda that told us we.needed to close this by February 6h. Mr. Roesch: We should have. Mayor Brainard: I was only here for the last two minutes of that meeting so I'll take the blame for that. Mr. Roesch: On.some of the other projects, there is a kind of timeline schedule. That perhaps is what we should have done on this project. And if we couple that with some projected cash flows I think we'll have good control and know what's coming. Ms. Boldt: Which source of funds will be utilized if we approve this purchase? Clerk-Treasurer Cordray said it would be from the bond issue. Ms. Westermeier asked if we had a bond payment coming up. Clerk-Treasurer Cordray noted this payment will come out of the general fund using COIT money, not the bond issue. CRC Meeting Minutes of 2/1/2000 (continued) Page Six A letter from Neal Steinbart was distributed which, stated that the Redevelopment Commission is authorized to purchase property in this area. This was in response to a request from the CRC for an opinion on whether the. City Center bond funds could be used for projects other than City Center. The letter of opinion received from Mr. Steinbart °stated the Indiana Code Section 36-7-25-3(a) provides: Projects, improvements, or purposes that may be financed by a [redevelopment] commission in blighted or economic development areas may be financed if the projects, improvements; or purposes are not located in those areas or the redevelopment district as lone as the projects improvements or purposes directly serve or benefit those areas (Emphasis added.) Mayor Brainard: The thought was that we wanted to try to create a Main Street with ,a center to it using a series of bond issues, one would be to redo Old Towne. Phase Two is planned, has been on the books fora couple of years now, which shows the City Center development going all the way up to Old Towne, with a nice streetscape. Old Towne would be the north anchor and Merchants Square the southern anchor with the City Center in the middle. The combined effort is to create that southern anchor, make sure Merchants Square is solid, which it seems to be now, get the roads in and the corridors so people can come over. It's bigger than just that City Center area itself, the whole plan works together, getting that connection made. So I think even though it's not right at the City Center it's certainly within the spirit of serving that area. And what we're trying to do is redevelop that whole area so we don't have,a blighted mess right in the middle of our downtown area. Ms: Cordray: I fully agree with the theory. I just get very concerned. If, in fact, the AMLI property had closed, the proceeds that we net from that very clearly could be used for whatever purposes. Mr. Koven: What happens to a property once we buy it, with regard to real estate taxes? How does it get off the teal estate tax roles and when does it get off the real estate tax roles? Mr. Haas: It stays on the real estate tax roles until the next assessment period. It will go off in March 2000. The 1999 (payable 2000) taxes still have to be.paid. Mr. Koven: It looks like to me if I read this correctly; we're goingback and reimburse them for last November's taxes, in addition to the purchase price.. Do we know how much that:is? Mr. Haas: I don't have that number with me right now. That was part of the negotiation of the purchase price. But as I look at this further, it probably will be only a partial or maybe no reimbursement at all because against that tax installment is offset what the City of Carmel pays as a tenant. The Street Department is leasing part of this property already and paying a portion of the real estate taxes so it will only be a portion of what comes back. CRC Meeting Minutes of 211/2000 (continued) Page Seven Ms. Boldt: Since the lease is referred to inhere, we should have a copy for our records Mr. Roesch: Is it correct that at closing we have to get good and marketable title and does that cover environmental issues? Mr. Haas: No, the environmental issues are separate from the title issues. In this contract the seller is indemnifying the buyer against any liability due to a violation of federal, state or local law. So if there's an environmental problem that constitutes a violation of federal, state or local law, then there's an indemnity from the seller. Councilor Wilson: Just remember in the history of that area when Main Street was redone, they hit some underground storage tanks right in that area. There used to be a gas station there. Is that all resolved? Mr. Haas: Apparently. There are no guarantees Mayor Brainard, August Max, an environmental, management company, looked at it prior to closing. We'll have a, final report. If there is something serious we'll know that before the closing. Ms. Boldt: The property was reviewed then, on an environmental basis? Mayor Brainard said yes. Mr. Roesch called for a motion to approve Resolution 2-2000. Mr. Carter moved the CRC approve Resolution 2-2000. Ms. Westermeier seconded. Moved and seconded that we approve Resolution 2-2000 authorizing our acceptance of the assignment from Davis Homes of its rights in the acquisition of G & H real estate in Old Towne. Approved unanimously. Discussion followed about how quickly the property can be cleared. The tenants are all on a month to month basis. Mayor Brainard noted the present tenants have been told this is being done so we will have more small businesses in downtown Carmel. So we will try to phase it so no one is actually kicked out. Mr. Roesch: The third resolution we have before us is Resolution 3-2000, authorizing (a) the acceptance by Carmel Redevelopment Commission of the assignment from Davis Homes, LLC, of its right, title and interest in the Option Agreement; (b) the exercise of the Option; and (c) at such time as adequate funds are available, the acquisition of the WLB Real Estate for the Purchase'Price pursuant to the Option Agreement. Mr. Roesch: What does adequate funds mean? I don't think we want to close it at this point until we have the AMLI closing and have more funds available. Mayor Brainard: This would bring us down to about 5300,000. We don't anticipate any major requests for funding from the CRC until AMLI closes, nothing over $20,000-$30,000. Mr. Koven: In my opinion we didn't get a very good deal on this one. Mr. Beverage bought it for $435,000 and we're paying $600,000 in less than a year, irregardless of what an appraisal's going to show. CRC Meeting Minutes of 211 /2000 (continued) Page Eight Mayor Brainard: If you combine both appraisals valuations together we're coming out about what the appraisals will show. Mr. Roesch: The thing we are doing with a lot of the redevelopment, is upping the ante very quickly. Mayor Brainard: When the rezone takes place, we're going to add 50-70% probably overnight to the value of this. Mr. Carter noted overall property values in the vicinity will just shoot up. Mayor Brainard said property taxes in the area will certainly increase once these old buildings are replaced. Mr. Koven asked if we can tear the buildings down immediately? Mayor Brainard: All will be torn down, except the large one by the Monon. The reports are mixed on it, whether to restore it and use.it for something else, such as a restaurant with outside seating on the Morton. We don't want to be in a position to tell the developer what to do. We'll leave it up to the architects and developers. Mayor Brainard: The "drop dead" date on this one is February 28ih. We've already asked for an extension to no avail. Mr. Carter: I'd like to see us get this put together. I think we can get moving on this more rapidly than we can on the Kroger building. As a.commission we've looked at these things and put them together, but we haven't moved to show the community the fruits,of our labor. Mr. Roesch: It is more of an eyesore and will have an immediate impact on the surrounding property. Mr: Haas: We have to exercise by February 280. Then there's fifteen more days to close. I expect by March 15`h, even though you won't have the use of the AMLI money at least it would be in escrow. Discussion followed about upcoming invoices and the cash flow for the following weeks. Mr. Roesch stated the commission does not want to get into any more "drop dead" situations. He also noted everyone will be more comfortable once the cash flow projections are in place. Mayor Brainard said the next thing which will come up are Goodyear and Kestner closings, but those are six months our. Demolitions will cost_510,000-$15,000. We have verbal understandings of what it's going to take them to move. Kestner is about $1.1, rough numbers. That's net after he buys a $100,000 parcel in City Center. Probably about the same about for Goodyear. Mr. Koven discussed a motion agreeing.to this, but having a March 8ih "drop dead" date on it. Not to be closed prior to March 81h. Mr. Roesch asked if there.was a motion to pass Resolution 3-2000. Mr. Carter so moved. Ms. Boldt seconded the motion. Mr. Roesch stated, "It's been moved and seconded that we approve motion 3-2000 authorizing the acceptance by Carmel Redevelopment Commission of the CRC Meeting Minutes of 2/1/2000 (continued) Page Nine assignment from Davis Homes, LLC, of its rights.in the acquisition of the WLB Real Estate:" The motion was approved with four in favor, one opposed. Mr. Koven declined to approve the motion without the statement about March 8". Discussion followed. Mr. Carter restated the motion to include that the acquisition will not be closed prior to March 8h. Mr. Koven seconded. The motion was approved unanimously. Ms. Boldt: As a redevelopment commission, do we would have the opportunity to seek financing for a purchase if we need it outside.a bond issue? Answered affirmatively. Election of Officers Moved and seconded that the following will serve as officers for the coming year: Mr. Roesch, President; Ms. Westermeier, Vice President; and Ms..Boldt, Secretary. Approved. Old Business Ms. Boldt: What is the amount needed for the Hazel Dell arbitrage? Mr. Roesch: Neal Steinbart, the attorney handling that, will be at the next meeting (February 7`h) and will have that calculated. It is a small amount, probably $5.000 or $6,000. Mr. Koven: I have one thing I'd like to say. I'm disappointed in the way this meeting came about and I would hope that in the future that we, as a Commission, don't let this happen to us again, that we end up with not enough time to prepare, to read, get organized, ask questions, making critical issues like we had to do tonight. We're spending lots of dollars and 1 just feel very uncomfortable doing that without the opportunity to read it. Some of this could have been on the agenda last meeting and some of it could have been on the agenda next meeting and we end up with a special meeting here because of a failure to plan. I think that I don't want to be part of this again. Mr_Roesch: I think we need to send a message to our attorneys and our city departments that we do need time. These things are complicated. There are multi-issues that are going to come about and we're all public servants and all willing to do what's necessary to move these things forward, but we also need not to be pushed where we are in a position where we can make mistakes. We don't want to make mistakes. I think everybody needs to be cognizant of that. When we're doing something at the last minute, we do need all the attachments, etc., they need to be gotten to Phyllis quickly for distribution. E-mail is a good time saver and a means of getting things out. It would be a lot easier on all of us if we had a chance to look at these things prior. Discussion followed. Ms. Boldt asked how many other individual parcels might we be looking at to purchase on Main Street/City Center. Mayor Brainard noted an idea on the wish list, the possibility of opening up the Range Line Road area east of the City Hall complex, Mohawk Place someday. We need some projects completed, though, before we take on too much more. Only two more properties in the initial City Center, Phase One. CRC Meeting Minutes of 2/1/2000 (continued) Page Ten Ms. Boldt: I think it's really great that we're getting some frontage property out of this so the public knows where we are. Next Meetinz will be Monday, February 7, 2000. The Public Hearing will be first on the agenda, then we will go on to regular business. Adjournment Mr. Koven moved the meeting be adjourned. Following a second by Mr. Carter, the motion was approved and the meeting adjourned.