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HomeMy WebLinkAboutCRC-09-12-011 CARMEL REDEVELOPMENT COMMISSION Meeting, Tuesday, September 12, 2001 President Rick Roesch called the meeting to order at 7 p.m. with all Commission members present. Also present were Phil Dunlap, Steve Engelking, Les Olds, Deron Kintner and Sue Beesley, from McHale, Cook & Welch, Tim Ochs Brian Shapiro, Sally Shapiro, Zeff Weiss, Chris McComas, Sarena McComas, Loren Matthes, Karl Haas, Ron Renken, owner of the Village Cleaners. Phyllis Morrissey present as support staff. Merchants’ Pointe Project Ms. Beesley explained the resolutions being presented. “There are three things before you. The first is an amended Declaratory Resolution. You have passed this Declaratory Resolution previously. This is being amended because the improvements are already completed for the most part so you will be acquiring them, much as you did with Merchants’ Square. The resolution is being amended to add the term acquisition. The second item is the additional appropriation resolution and that is so the bond proceeds can be appropriated and spent once the bonds are sold. Those are the two items for which you do need to hold a public hearing. Notice has been given for both of those to have a public hearing this evening. Finally, there is the bond resolution which authorizes the issuance of the bonds. As a part of that there is also a bond purchase agreement and a taxpayer agreement. We are at the stage we spoke about last time and are working out some of these terms. I do want the minutes to reflect that this resolution is still giving a lot of flexibility to the President of your Commission so that depending upon the market we can choose what sort of time we want to go with, since it’s a variable rate. This resolution also refers to notes. We have no intention of issuing notes prior to issuing bonds but in the event something happens we’ll already have that authority and not need to come back to you. We are still looking to close this at the end of the month. Mr. Roesch: The reason for the urgency at the end of the month is because they are already building the project. They took out a bank loan to do this and it is due the end of this month. Public Hearing for the Merchants’ Pointe project was opened at 7:04 p.m. He asked if there was anyone here from the public to speak for or against these resolutions. No one came forward. The Public Hearing was closed at 7:06 p.m. Mr. Carter moved the additional resolutions [No. 11-2001, the Amending Declaratory Resolution and No. 12-2001, the Additional Appropriation Resolution] on Merchants’ Pointe be approved. Following a second by Ms. Snyder, the motion was unanimously approved. 2 Mr. Roesch asked if there were any questions on the Bond Resolution. Mr. Koven asked that the resolutions be given numbers so the record of approval is more clear. He asked that the minutes be amended to reflect the numbers. Ms. Morrissey assigned the numbers. The Amending Declaratory Resolution is 11-2001. Resolution 12-2001 is the Additional Appropriation Resolution. Resolution 13-2001 is the Bond Resolution (58 pages). [The Bond Purchase Agreement and the Taxpayer Agreement are referenced in the Bond Resolution. They will be filled in completely before execution.] Ms. Snyder moved the CRC approve Bond Resolution No. 13-2001. Following a second by Mr. Carter, the motion was unanimously approved. Bid Opening for Parcel #5 One bid was received. It was from BJS, LLC, Brian Shapiro, and is for $250,000 per acre, for a total of 2.4 acres. Mr. Haas stated the bid doesn’t conform in two respects. The price is below the minimum bid. Also it requires the CRC to complete and pay for work not originally listed as the Commission’s responsibility. Nonetheless, it is the only bid we received and it is higher than Mr. Shapiro’s original offer. Mr. Roesch: We do not have any bids tonight that meet our criteria and we should reject this only bid while at the same time work very closely with Mr. Shapiro. After thirty days we can begin to negotiate, not only on this, but other parcels with individuals if necessary. Mr. Haas agreed. Mr. Koven: I have a comment. I don’t think what we’ve done here tonight is good for the City in light of where we are. This whole proposal lacks credibility. If, in fact, our intention was to actually get developers to do this, we would have had more than nineteen days available from the time this was first published until tonight’s meeting. While I have no problem with what Mr. Shapiro wants to do out here, this is set up or designed so we will fail at getting any other bids, so we can go out and have private conversations with people, in the back room, if you will. I think this thing just smacks of impropriety. Mr. Roesch: I would differ with you, John, in that we have a legal process that we did have to go through. It's unlikely that someone would bid on the whole thing on a speculative basis. I said that and it was said in the press. I think we have a duty to the citizens to “feel the waters” and see what is the best case scenario and see if there was any interest on that. That’s what we’ve done. This is the result I expected even if we’d given sixty or ninety days because it’s such a highly speculative thing. 3 Mr. Burke: Or even other kinds of interest, telephone calls, inquiries, other conversations, could have come out of the press and all the notices. I think the process is fair and appropriate. The twelve [business] days are enough time for any developer to respond. Ms. Snyder: I think so, too, John. We’ve got a project here of interest. They are interested in our piece; we are interested in their business. I think it’s a good use. Having said all that, we’d have to have a good bid process. But this has been out in the marketplace for more than several years. We’ve had lots of publicity. Developers have looked at this lots. This little thing was like putting a sign up and saying if you want to take a swing at it, now’s your chance. But nobody decided to do that. Mr. Haas: Keep in mind that the legislature decided the amount of time required by notice. Mr. Koven: I’m not surprised that that’s the way the law reads. I’m just saying if in fact our intention was that we would have somebody that would address this, I would have expected they would have more than twelve days. I don’t care if it’s been discussed for eons. How many copies of this packet were even requested? What effort did we make to mail it to people who may have inquired and had no idea what we’re doing in our little closed meetings here that are seldom reported in the newspaper to even know this was out for bids. What attempt did we make to make sure this was in the hands of people who might have had an interest in doing that. If our intention was only to develop the 2.9 acres, then that’s all we should have requested proposals for. Because what this does is makes the whole thing fair game now is for us to sit in the back room and negotiate with anybody we want to. Which is totally inappropriate, as far as I’m concerned, for this Commission to be doing, not the intent of what we’re supposed to be doing. Mr. Roesch: In previous bidding processes, like on the office part, it is still unsold and we’re still having talks with people. On that parcel, even well after the bidding process, 5-6 packages were picked up for that, and we received nothing. But we do public notice this. This is enormously speculative and that’s why we have redevelopment commissions. Mr. Haas: We have two options. Members of the Commission expressed frustration that we couldn’t move more quickly on this property because it hadn’t previously been offered. This puts us in the position where when we do have more interest expressed in other portions of the retail project, we can move quickly with those developers, having offered it once. If the Commission would rather, there’s nothing wrong with re-offering each piece as someone expresses interest in them. It’s a balance between being able to work with interested parties expeditiously and then making sure there is as much time, John, as you think everyone needs. We did comply with the law and if we don’t re-offer when we work with other developers, we’ll still be complying with the law as we negotiate with them. Of course, whatever is negotiated would come back before the Commission for approval at a public meeting where we can have comment. But we can change our process if that’s the will. 4 Mr. Carter: I don’t see any need to change our process. As you said, we’ve complied with the law. I certainly agree with Luci’s comments. John, you know as well as I do, that this has been shopped for a long time, even before you came on this Commission. It was shopped in Las Vegas at the shopping center developers convention. We’ve talked about that as a group. The Mayor made a report on that. In fact, the Mayor even asked us to possibly hold off so the two or three people that he had who possibly had interest in this from that convention could make proposals. Further discussion ensued. Mr. Roesch: I appreciate your agreeing with me, Ron, and I appreciate John’s comments. I don’t think John is trying to slow the Commission down. I think John is concerned about the propriety of a longer time frame. I hear that and we’re not all going to agree on things like that. Mr. Carter: Rick, there patently is no impropriety here. Mr. Roesch: No, there isn’t. Mr. Koven: I’m not saying there is any impropriety here, Ron. Why don’t we just draw a border around the whole thing and get an appraisal of it and then we can just make the deals as they come? And that’s what’s been done before. We’ve got one piece of property here that we sold without even going out for proposals. Mr. Carter: And we didn’t have to. Mr. Koven: Yeah, I know. We paid $450,000 more for Carmel Gate than it even appraised for. In the case of Brian Shapiro we could have gone out and, as we did, identified the legal description of that property, requested bids on that property. If anyone else bids, that’s fine, and we deal with that. But what we’ve done now is effectively put that whole front section on the table. We anticipated and expected (in your own words) to get no bids because nobody could afford to do it. And now we can sit here and wheel and deal and make all the backroom deals without having to go back to the public, out for bids, requests for proposals, or anything. And if that’s the way the Redevelopment Commission wants to do business, that’s fine. I don’t agree with it and I won’t agree with it. Mr. Roesch: I hear your disagreement. I don’t think they’re backroom deals because we do… Mr. Koven [Interrupting] Oh, they’re done at public meetings, but they’re not done with a competitive nature. Mr. Roesch: Well, I think if we get anything in a competitive environment, I think indeed we’ll make it very competitive. That would be my wish, John, to make it very competitive. We just haven’t had that much interest at this point. 5 Mr. Burke: Yes. When somebody expresses interest, then we’ll we negotiate with anybody. Mr. Koven: But you haven’t been here long enough to say that. Mr. Burke: I’ve been in the town for twenty-five years. Further discussion ensued. Mr. Roesch: I suggest some of these issues should be discussed one on one. I appreciate everybody’s sentiments and we are not always going to agree on everything. I would like to entertain a motion to reject this bid for Parcel #5. So moved by Mr. Burke. Following a second by Mr. Carter, the motion was unanimously approved. Minutes from the meetings of August 7 and August 23. Mr. Roesch noted there were not actually minutes for the two executive sessions on August 7. They are listings of those attending and the subject of the session. Ms. Snyder moved the CRC approve the minutes from the August 7 and August 23 meetings as mailed. Following a second by Mr. Carter, the motion was approved with four favorable votes. Mr. Koven abstained. No Report from Mayor due to his absence. Report from Director Mr. Engelking reported environmental assessments for two properties were delivered to him today. August Mack did a Phase I on the Goodyear property. It is recommended we do a Phase II because of the in-ground lifts and the storage materials in barrels outside the building. This would include soil and ground water assessments which will involve borings. They indicate there is the possibility of asbestos used in the construction of the building and other evidence of spillage in the storage areas of the building. Determination needs to be made whether there was an oil/water separator used. Ms. Snyder noted the CRC cannot make a settlement on that property without knowing what the environmental impact is and how much it’s going to cost. Mr. Haas recommended the Phase II be ordered. He said this would have no effect currently on the condemnation proceedings. It would have a definite effect if we don’t reach a settlement and we’re in the damages phase and the issue before the court is the 6 value of the property. Then it would affect the appraised value and we’d want to have the appraisers update their appraisals to reflect it. Mr. Haas continued: There’s been no change in the current settlement negotiations. The Commission provisionally approved converting the action from a zoning case into an inverse condemnation case. The City’s counsel is still working on that. Dave Coots was to do the pleadings to convert the case and they haven’t been provided yet. I don’t think we are in a particular rush to have it converted. The City’s counsel is also making sure Goodyear is added to the converted case on the terms that the Commission approved. Ms. Snyder: If we have an appraisal and then we get a Phase II with whatever recommendations for remedies and the estimated costs, why do we need to pay for another appraisal? Why can’t we just say, “We’ll pay this price and you fix it and then we’ll take it.”? Mr. Haas: We can do that. We’re not required to update the appraisal. Mr. Engelking reported the Phase II on the Sitzmark building was a little over $4600. Mr. Roesch asked for a motion to obtain a Phase II for up to $4600 on the Huffer property. So moved by Ms. Snyder. Following a second by Mr. Carter, the motion was unanimously approved. Mr. Engelking said he would contact them tomorrow. Director’s Report (continued) Mr. Engelking reported on the Phase II on the Sitzmark (Harrigan property): The laboratory reports asbestos concentration greater than one percent, the drywall joint compound is friable and if it is actually an ACM (which means it can disperse into the air) it must be removed by a certified asbestos abatement contractor prior to any renovation activities. Further tests have been ordered to determine concentration of asbestos. The roof material is friable making it important to remove it while the weather is warm rather than cold. The more overriding concern is concentrations of PCE which is a common drycleaning solvent which were found to exist in the subsurface investigation. They were above the RISC clean up goals for soil and groundwater in both residential and non-residential type sites. Field screening indicated the presence of PCE impacts in the soil in borings from the ground surface to at least 24 feet in depth. Additional investigation would be required to determine the full lateral and vertical extent of both soil and groundwater impacts. Mr. Haas: The asbestos aspect is not particularly alarming. Cost to remove it would not be very high. However, the PCEs are problematic. The good news is out of three core samples they only found concentrations above even the residential levels in one of the cores. [It was determined that the borings were in the area to the rear of the drycleaners.] It is alarming that the concentrations were found all the way to a depth of 24 feet. We will be required to do some more testing to find out the extent of the problem and then get some estimates on the feasibility and costs of remediation or containment. 7 It is possible to get IDEM approval for some chemicals to leave them in the soil. Essentially what you do is fence them off underground. You leave the contaminated soil in place. Mr. Roesch: That would preclude us from selling the property if it’s contained. We would have to retain that. If it’s under a parking lot… Mr. Haas: It’s not that it would preclude us selling it; but most people wouldn’t be willing to take it. Mr. Burke: Or we could fix it. Mr. Roesch: There is property all over the place where containment has been done, especially by governmental agencies where it’s contained and a parking lot’s put over it. Some of the roads are over soil like this. Mr. Burke: But from what I understand, we didn’t want to be in the real estate business. Mr. Haas: It would be possible even though you retained title to grant whoever owns the property around it, use and responsibility for maintenance of whatever is on top. For instance, a parking lot. You’d have a square in the middle of a parking lot where technically you owned fee title, somebody else paves it, takes care of it, pays the taxes on it. Mr. Roesch: How this affects our lease will need to be discussed in our Executive Session. Mr. Koven: How did we end up owning this property without doing this test in the first place? Mr. Haas: I can’t tell you that. I didn’t represent the Commission on that acquisition. Mr. Roesch: The Commission was represented at that time by the City’s Legal Office, the City Attorney and the Assistant City Attorney, who handled the closing. I can tell you that per the purchase agreement that we signed, we were to do any environmentals prior to closing. Those simply were not done and the property was closed and it was closed by the City’s Legal Department. It was Doug [Haney] and Craig Carpenter (who was here about three months). Craig Carpenter actually handled the closing. Ms. Snyder: I consider that the height of irresponsibility. Everybody here knew that this thing had to be done because we knew we were going to have environmental problems. Mr. Roesch: That is true and it is true that we, as Commission members, can’t micromanage all these things and we rely on experts whom we hire or City employees. Karl is not going to involve us in a closing unless that is done. 8 Mr. Koven: I thought even a transfer of property didn’t preclude liability. I thought the previous owner of the property was still liable under law. Mr. Roesch: There is, and Carpenter, the attorney who closed (may have relied upon this). There is a document signed by the seller stating three items, where she is certifying, are in compliance. Karl, please check this out. Mr. Haas: It’s probably an affidavit that the property is not under the responsible property transfer law and probably consists of certification that you don’t have a community right- to-know site situation where you’re dealing daily with chemicals and you have to notify the local authorities so if there’s a fire there, the firemen know what they’re facing. That it’s not listed as a super fund site and the third item is that there aren’t underground storage tanks which have not been closed in compliance with the law. What we have here doesn’t meet any of those requirements. Now there may have been some other representations in the purchase agreement and I’d be glad to look at that. The ultimate responsibility, of course, rests with the party that caused the contamination. Mr. Roesch: We closed this in 1997. I’m not sure what the regulations for dry cleaners were at that point in time. It seems to me that it’s been since then that the regulations were established. Do you want me to look into that? Mr. Carter: On the other hand, as a Commission, we probably would have wound up with this site one way or the other in the long run. Number one, because of the overall deal and number two, because with the attendant environmental problems it would have probably been a more than prime candidate for the Redevelopment Commission to, unfortunately, have to take on. We probably, though, would have wound up with it at a lower cost. That’s why we need to have these environmentals done before we start after pieces of property. Ms. Snyder: There are obviously problem buildings here, a building that houses a dry cleaners, a building that has lifts and they have hydraulic fluids. You’d be surprised if it was clean. There are others that you could probably do a “pass” on. Mr. Roesch: First of all, we need to look at the real magnitude of this and then get an estimate of what it costs to determine the magnitude of it. This needs to be brought back to the Commission. Ms. Snyder has the name of a company who can handle the cleanup and will get it to Mr. Engelking tomorrow. Discussion continued. Mr. Carter recommended the CRC get an estimate to take the buildings down while it is still warm enough so the roof material is safer to remove. 9 Mr. Haas recommended Mr. Engelking talk to August Mack and some other companies to get a combined further testing and bid for remediation or containment at the same time. “Based on this information I don’t think anyone can bid.” The members agreed. Mr. Olds is to get an estimate to take the Sitzmark building down. A copy of the environmental report was given to Mr. Shapiro. Demolition of the Kroger complex Mr. Engelking continued: Mr. Olds has specification packages for the demolition of the Kroger complex. Cripe Engineering is still working on the Old Town parcel at Monon and Main (Parcel #8). They anticipate having the specifications back from AMLI within a week. Casas de Amore has asked for permission to add three other activities to their workday to increase their publicity. They would like to provide tethered hot air balloon rides, have another nonprofit group to serve hot dogs and hamburgers, and a band with sound equipment to provide music to entertain the workers. Mr. Roesch asked if we had received the Certificate of Insurance. This will be requested right away and Mr. Engelking will have it forwarded to Mr. Haas for review. Mr. Roesch noted the insurance question has been discussed before. The CRC was told at the first two or three meetings after formation, that the City’s insurance covered the CRC. That was before Mr. Haas represented us. “I think we need to look at that again and have Mr. Haas look at it. I do not feel comfortable with [being told ‘you’re covered’].” Mr. Haas will follow up. General consensus was to grant permission for the food and the music, but deny the tethered balloon. Mr. Engelking will relay the decision to the group. Mr. Koven noted it is important that they be told these are all the requests that can be granted by the CRC since there are no more meetings prior to their event. Mr. Helsel has requested permission to use the Kroger parking lot for Christmas tree sales or Parcel #8 (Printsley). It was noted that it is very possible demolition will be going on at both sites. This request will be denied. After discussion, Mr. Koven moved the CRC adopt a general policy not to lease or rent any property CRC owns. Following a second by Ms. Snyder, the motion was unanimously approved. Financial Report Mr. Roesch asked Mr. Engelking to verify the December TIF income figure and also the debt service fee. 10 Mr. Koven: Did we receive the $20,000 from Rotary Club? It’s listed back in May. Mr. Engelking will verify. If not, an invoice will need to be prepared and sent. Mr. Roesch noted some figures will be discussed in Executive Session and then will need to be moved into October. Ms. Snyder: And then the Huffer purchase will come out in October. Mr. Haas said it could be later than October. Mr. Koven: Why haven’t we closed on AMLI downtown? Mr. Haas: The project agreement has not been signed because they wanted to change the design. Our negotiations with AMLI were tied to the damage claim for what occurred on City Center parcel and most recently they have been delaying it as well to make sure agreement was reached with respect to the delay of the reflecting pond. Mr. Roesch: But I believe you have the reflecting pond agreement for them to sign off on and Mr. Thomas said he was ready to give the money on Old Town then. Mr. Roesch asked Mr. Haas to get the money this month. Mr. Koven: We have an obligation to notify our Street Department that they’re not going to have access to this building. They are going to think they have winter storage. I know they’re still using it. If we’re closing on it, but not tearing it down this year, then the City needs to lease it back. Mr. Engelking said he has notified the street commissioner that the goal is to get the buildings down before the end of the year, but he will verify that. He noted he needed the demolition bid packages within the next two weeks to get the bid opening set in October. The Sitzmark building will possibly be added to the demolition package. Mr. Haas will contact the tenant right away to let him know what is happening. Mr. Roesch: I have a question for Les [Olds] and Steve [Engelking]. In the Financial Report there is an expense listed in October for $500,000 for reflecting pond and in November $351,000 for streetscape. With the reflecting pond being delayed until next year, is that $500,000 “stuck in there”? Mr. Roesch asked Mr. Engelking to discuss this with Ms. Mielke. Mr. Olds said an invoice for the streetscape work at the earliest would arrive in November, and be due in December. 11 Mr. Burke will meet with Ms. Mielke about the Financial Report. After discussion with Mr. Haas, it was determined that four separate packages for the streetscape and reflecting pond will be sent out because they consist of four subgroups. The bids will be due October 10 and good for ninety days. Report from Attorney All his issues were addressed already. No check was needed with the bid on Parcel #5 since it was rejected. Report from Architect Mr. Olds reported that several alternates are being requested on the bid packages for the reflecting pond. One alternate is the concrete wall and rail for the ice skating area. We’re also including as an alternate, the drains necessary to lower the water level in that section down to 3-6 inches. We have put a compression piece all the way around the base. I want to make sure the Commission understands this is an “old-fashioned” type skating area. It’s like when you put a hose out and flood an area. When the sun comes out it might get slushy and even evaporate. It’s going to be rough surfaced at times. It has no coils underneath it to keep it frozen. Mr. Olds continued: We are also requesting alternate bids on the pavilion towers which were part of the original design. I had a discussion with Jim Thomas and told him we could not at this time afford to build the pavilions. We’re asking for a price to see what they would cost. They have lighted lanterns on top. The reflecting pond has all the things in it we that we wanted: two fountains, the loggia, the lights, the landscape, all the pieces, but we’re taking a series of alternates. We’ve done an updated cost estimate which I’ve included in the packet. It’s not significantly different. We’ve simplified some of the streetscape work. The major difference is Parcel #6 streetscape. The sidewalk was in excellent shape. Ryland has agreed to accept it as is. Sugar maples are planned as the street trees. The street lighting that runs along the side will be a shielded globe fixture so that the light when it comes out will run more parallel with the street and not shine so much into the residence windows. The lighting is metal halide which is a little whiter but has a touch of yellow. Mr. Engelking asked if there was a light at the corner of Autumn Drive and Third. It needs to be kept in mind because it was committed to. Mr. Olds agreed. The pavilions will have illuminated lanterns on top. The loggia also has lighting underneath it. The pavilion roof will be copper, the treated kind which does not turn green. 12 Ms. Snyder said we would get requests for weddings. A policy should be set. Mr. Olds said CSO is proposing that the concrete of the reflecting pond be sealed with a waterproofing material in black. A water source is included for use when needed. Reports from CRC Members Ms. Snyder said late last year Mr. Kestner was given permission to use one of the Sitzmark buildings for temporary excess storage. Winston Long has been using the previous beauty salon area for storage. These uses are still occurring. A sidewalk sale was even held at one location. No rent is being collected for these uses. It was decided both will be notified by Mr. Engelking to vacate the premises with thirty days notice. Ms. Snyder moved the current unpaying tenants be asked to vacate the premises in thirty days. Following a second by Mr. Burke, the motion was unanimously approved. On another matter, Mr. Koven reported Mr. Kestner is a tenant in our building now and also a landlord in our building now and still collecting rent from the people who are leasing. He’s not paying any rent to be in our building and he’s running a business from there and there’s no place that that’s addressed in writing. Not in the purchase agreement and not in the project agreement. “I’ve already asked Mr. Haas about it and he said he was not our attorney at the time that was negotiated.” Mr. Haas: I’ll look at the Project Agreement again. I think it is in it. Mr. Koven: Why would we turn around and buy a building for 1.4 million dollars and leave the owner of the building in charge of the building (which we’ve never done before) as the landlord, still collecting the rent, not paying any rent himself while he’s building his new building on the Monon Trail? That is what we refer to as a “sweetheart deal”. Mr. Roesch: I can’t answer that. I can say that when this has come up in the past there have been justifications given for that. In all fairness, I’ll state some of those justifications. One is we had to do some extraordinary things because we wanted to acquire that piece of property for the whole City Center project. The other reason was that he is purchasing the most architecturally challenging piece of property to build on. Those are some things I’ve heard and reasons given. As it turns out, in retrospect, I would say that this has been a very expensive proposition for us. Mr. Koven: I don’t mean to be argumentative, but we had two bids [appraisals] on that property (Carmel Gate). One was a million ten thousand, the other was a million fifty thousand. Both of them, in order to achieve that price, had to take into consideration, not the value of the property, but the income stream and stretch it to get it there. We paid a million, four hundred and fifty thousand dollars. That’s four hundred thousand more than the most expensive appraisal. While the property he is developing now may have been the least appealing, we have contributed $190,000 to the construction of that property in addition to having paid $400,000 more than the appraised price and leaving him still 13 there collecting rents… I’m putting together a report to this Commission on exactly what we have. I was not a party to that. I didn’t vote to make that deal. I wasn’t on the Commission. Mr. Carter: Yes, you were. If you look at the Wednesday, June 28, 2000, minutes… Mr. Koven [Interrupting]: This deal was struck long before that. Mr. Carter: If you look at the minutes; I’ll read the minutes. You were involved with the discussion on the trade of the Kestner property. Mr. Koven: It isn’t a trade. Mr. Carter: Resolution 11-2000 approving the exchange of the Kestner site. “Mr. Haas: This is a resolution to exchange the Kestner property for a site in City Center and then make a payment of $1,200,000 and in addition perform certain site work which was outlined in the information given by Mr. Olds at the last meeting. The cash payment is to reflect a difference in value between the current Kestner site which has space available for these tenants and the new Kestner site which is smaller. It will accommodate a larger bike shop, but it won’t accommodate space for other tenants. As a condition, Kestner will be obligated to construct a bike shop on his new site. Continuing to quote the minutes: “Mr. Roesch: I have a question. In the second paragraph the cash payment reflects the difference in value between the larger improved Kestner site and the smaller unimproved Kestner site. Are we obligated as a Commission to have appraisals on both these sites? How does that affect this resolution? “Mr. Haas: There have been appraisals on the land in the City Center site that’s being exchanged and there are appraisals on the Kestner building. They are required. “Mr. Roesch: But we don’t know what those are. And how current they are. “Mr. Carter made a motion to take the Kestner Resolution off the table. Following a second by Ms. Boldt the motion was approved. The vote was four in favor and one opposed (Mr. Koven). “It was noted the exchange of the Kestner property is subject to the AMLI closing and the funds coming out of escrow. “Mr. Haas said it didn’t matter how old the appraisals were. They were still valid. The appraisals we have are three years old. One is for $1,010,000. The other is for $1,050,000. Discussion followed. “Mr. Koven: What’s the value of the land we’re trading? It should actually be that appraisal price less the cost of that since we’re trading. 14 “Mayor Brainard: We believe the current property he owns is worth $1,400,000 which is supported by the appraisals plus reasonable inflation. “Discussion followed regarding land values in Carmel. “Mr. Roesch: I’m inclined to think that with these appraisals that this is okay but for protection that prior to [other sales] we should get updates of appraisals if they’re this old in the future. “Mr. Carter suggested this question be put on the next agenda for discussion. “Mr. Koven called for the question. “Ms. Boldt moved for approval of Resolution 11-2000 authorizing the purchase and trade of the Kestner property per the terms of the resolution subject to the AMLI release of the escrow funds. Following a second by Mr. Carter the motion was approved. The vote was four in favor and one opposed (Mr. Koven).” So… Mr. Koven: I’m not saying… but we didn’t negotiate that deal. That deal was negotiated long before that. That’s why the appraisals are four years old and I didn’t vote for it, so there you go. But there’s no discussion there about him staying the landlord. There’s no discussion about not paying rent. There would be no reason that I can think of otherwise that would be contemplated that would be part of it because it was never disclosed. I’ve not found it in the project agreement. There is no purchase agreement that I can find. So how this deal was negotiated, who negotiated it, I don’t have any idea. But it is one helluva sweetheart deal. Mr. Shapiro ought to see what we did there and we probably ought to do another one like that, but I don’t think that’s appropriate for the Redevelopment Commission to be doing. I have no problem with the two projects. And what’s going to happen when he moves out of there? Is he still going to be the landlord in charge of that building? Mr. Roesch: I would say publicly that that deal, whatever deal was negotiated, the Commission was not part of that negotiation. I’m not aware of any Commission member being involved in that. Mr. Koven [interrupting]: Oh, I’m not surprised by that. It doesn’t surprise me at all. I was told it was negotiated by the Mayor and Ron [Carter]. Mr. Carter: I had nothing whatsoever to do with the negotiations. Who told you that? Mr. Koven: A reliable source. Mr. Roesch: I think one important thing to say here is that there were negotiations on various pieces of property prior to us passing resolutions which allowed us control and I think that everybody involved at this point understands that if there are any negotiations, that those negotiations are subject to CRC approval and it’s advisable to have somebody, 15 one of the CRC members, involved in those negotiations so that we don’t have this sort of thing happen. I’m not aware of anything new. These are old things. They are not current things that we’ve done. We are exercising more control over these things because of more fiscal responsibility than was done in the past. Mr. Koven: I agree with that. That’s part of what I’m going to report back to this Commission. When I requested copies of the appraisals, they were nowhere to be found. They were finally delivered to me at our last Commission meeting. I had to sign a receipt for them and I still have them in my possession. But at the last meeting when those were put in front of me, Mr. Carter asked me what I was going to do with those and I said I was going to investigate those. I said I was a little concerned that we had a “sweetheart deal” there and Mr. Kestner was able to get ahold of that property without it going out for any kind of an RFP or any discussion or opportunity to make it available for anybody else. And Ron told me I didn’t know what I was talking about and other people had been queried and other people had had an opportunity get involved. And I asked if Bike Line was one of those and he said yes. Two days later I went down to those people and told them who I was and explained to them what I was dealing with and asked them if they had ever been approached. The gentleman who is one of the three partners who owns it, indicated nobody had ever made inquiries to them if they had any interest in that property whatsoever. Nobody had ever been approached at all and they would have had an interest in the property had it been made available where they could make a proposal. The fact is there was never an RFP or competitive quotes on the piece of property. And that is not an appropriate way for us to do business, in my opinion. Ms. Snyder: Well, as Rick says, it was before we had control, and as you rightly say, it’s not the way to do business. And both of those are true statements. What concerns me more than that is the fact that you can’t seem to find a purchase agreement for this. Mr. Koven: There is no purchase agreement. Mr. Haas: It’s all part of the project. Mr. Koven: Now the project agreement’s dated in the year 2000. This was all put together three years ago, maybe, four years ago, at the time these appraisals were done. And so what I’m saying is there was no [purchase] agreement there. So what we agreed to in the year 2000, there was no supporting documentation to bring us to that point. When this whole thing was negotiated, I have no idea. To my knowledge it was never put in writing until we adopted a project agreement, so therefore there was no purchase agreement. Mr. Haas: That is correct. Mr. Koven: So there’s nothing that recited what was agreed to two and a half years ago before I even came on this Commission as to what this deal was all about. Mr. Haas: That’s correct also. 16 Mr. Koven: We were forced into this position, or I feel like I was forced as a Commission member and I voted no which was all I could do, to bless something that I had no input on nor had anyone on this Commission had any input on. It was just kind of “here it is, take it or leave it, this what you have to do.” It’s been negotiated, but there’s nothing in writing to prove what was negotiated. Mr. Haas: The project agreement was in fact a culmination of the negotiations and as we purchased and sold the property we had at least [inaudible]. So I don’t think it’s surprising that there was no writing prior to the project agreement. Ms. Snyder: Then are you saying the project agreement allows Mr. Kestner to be there rent free and yet collect rents while we own the buildings after we have closed? Mr. Haas: Yes. Ms. Snyder: Why couldn’t John find it if we have a project agreement? Mr. Haas: I don’t know. Mr. Roesch asked Mr. Haas to look into that. He also asked Mr. Engelking to see if he could find the appraisals for the original 62 acre plot. Ms. Snyder: Are we to assume that any deal we do is going to have a file that contains either a purchase agreement, a project agreement, appraisals, obviously our resolutions, any other pertinent facts in the Clerk-Treasurer’s office? Do we want Phyllis to create a second file? Mr. Haas: I think Phyllis needs to have a second file. Diana [Cordray, Clerk-Treasurer] has directed me not to send to her documents except documents that have to do with direct financial obligations. Mr. Engelking: She has told me that did not include appraisals, so how do you term her statement? Mr. Haas: Closing statements, project agreements… Ms. Morrissey: Then why do I have to send her all the signed resolutions? Mr. Haas: I don’t know. So far as I know, it’s not a matter of law as to what Diana has to have as to specific documents. It’s her policy on how she’s fulfilling that. Mr. Carter: I think anything that has to do with something we voted on, whether in the form of a resolution or a motion should by law go to the Clerk Treasurer. I think that’s the repository for every body in this community. 17 Mr. Roesch: I think so too. Mr. Koven: It needs to be in a common place anyway. If it’s not going to be physically in her office, it needs to be someplace under her control. I was really upset when I went to find a file. Mr. Roesch: I think any legal documents this Commission generates should be there. I also think anything that we do contractually, it should be in the Clerk-Treasurer’s office, closing documents, all purchase agreements. I consider appraisals part of a transaction because we’re required by law to have two appraisals. Rather than go back and say did you do everything like you’re supposed to (like we can’t do here) you pull out the file and say here’s everything. We did everything as we were supposed to. Ms. Snyder suggested a letter from the President of the Commission be sent to the Clerk Treasurer of the City telling her what we expect to keep in our files. Mr. Carter: We need a full set in Phyllis’ office besides. Mr. Roesch agreed. “There have been times when we’ve had people question things, I’ve asked them to go to Phyllis.” Copies can be made since it’s public record and we can be reimbursed for our costs. Mr. Koven: My understanding is when we start to do that Mr. Engelking will have to request everything in duplicate or triplicate. Making copies is difficult since much of it is bound. Mr. Roesch: I get a minimum of three [copies] or sometimes four of any appraisals. When I get closing documents, I get a minimum of four and have four signed copies and I have those bound and indexed. So even if something is misfiled, it’s still available in other places. Ms. Snyder asked Ms. Morrissey to write a letter to the Clerk Treasurer for Mr. Roesch to sign, requesting the CT to accept documentation for all of our transactions, that would include appraisals because we consider them official documents and necessary. Mr. Koven: The environmental study we got tonight…that’s something that goes in each of those files. Mr. Engelking: They gave me three originals and ten copies. Mr. Haas: I’ve been ordering three to four copies. We’re now putting together closing binders in which all these documents, including environmental reports and appraisals will be indexed. I’ll provide those to Phyllis and the Clerk. Ms. Snyder: If Phyllis is going to be required for us to keep copies, where? 18 Mr. Koven: We need to provide a file cabinet and then we need to provide the control over it so things don’t disappear. It was decided a locking lateral file cabinet needs to be ordered. It will be placed in the Department of Community Services. Phyllis will get a cost. Mr. Carter to Mr. Koven: Getting back to the specific question, if you haven’t talked to the Mayor, why don’t you ask him what his rationale was in putting this together? See what he has to say. If it’s a valid business reason, then that’s appropriate. If it’s not a valid business reason, then we need to talk about that. Mr. Koven: When I get done with my report, I’ll consider that. I’ll at least give him a copy of my report. It was decided the project needs to be reviewed on the issue of paying rent. Mr. Haas: With regard to the RFP, when you do an exchange, an RFP is not required by the statute and the reason it’s not is because if you want to acquire the current Kestner property, a term of the RFP would have been conveying the current Kestner property in exchange for the other site. And only one person can fulfill that condition. Mr. Koven: I still have a question about what you’re defining as an exchange. I don’t know whether this is a legal exchange. It might be in the eyes of some, but it’s not in the eyes of the IRS. Mr. Burke: It’s a trade. Mr. Koven: In an exchange like that, there’s a third party that’s supposed to hold the funds. Mr. Roesch: I assume he’s going to have to pay taxes. Mr. Burke: We don’t care. It’s none of our business. Mr. Roesch asked if the Commission wanted to consider meeting twice per month. After a brief discussion it was decided the members preferred one longer meeting rather than two per month. Special meetings might still be called. Members were in favor of moving the meetings along more quickly. It was noted it is helpful to have material ahead of time. A time guideline will be set at the beginning of every meeting. Mr. Haas will prepare a brief resolution addressing the time limitations for submitting material the CRC. Anything received after the deadlines will not be heard at the upcoming meeting. Approval of Invoices 19 Discussion followed. Mr. Olds explained to the Commission’s satisfaction the questioned invoices for CSO. He will look into the $3,583 Cinergy invoice for the lift station at City Center and Third Avenue. Mr. Burke moved the CRC approve all invoices submitted except the Cinergy invoice. Following a second by Mr. Carter, the motion was unanimously approved. Old Business Mr. Roesch has talked with Mr. Kestner several times about the stairway/ramp problem, reminding the Commission of the costs of different alternatives. He noted people are using Mr. Kestner’s service path as access to the Monon now. Since this access is something that enhances the Monon, the Parks Department will be contacted to see if they might consider installing a more permanent access after getting an easement from Mr. Kestner. Discussion followed. Ms. Snyder moved the CRC not pay for any more work on Mr. Kestner’s property. Mr. Burke pointed out that no motion is needed. There was no motion to the contrary. New Business None Next Meeting is October 10 in the Caucus Rooms Adjournment Mr. Koven moved the meeting be adjourned. Following a second by Ms. Snyder, the motion was approved and the meeting was adjourned at 10:15 p.m. z:\redevcomm\2001 Sept 12 min.doc