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HomeMy WebLinkAboutCRC-10-15-08CRC Meeting, October 15, 2008 1 CARMEL REDEVELOPMENT COMMISSION Meeting, Wednesday, October 15, 2008 President Ron Carter called the meeting to order at 6:33 p.m. Commissioner members Rick Sharp, Carolyn Anker, Jeff Worrell, Bill Hammer and Stephen Backer were present, constituting a quorum. Also present were Mayor Brainard, Karl Haas, Les Olds, Sherry Mielke, Andrea Stumpf and Matt Worthley. Others present: From CSO: Dan Moriarity, Brandon Bogan Keystone Construction: Joe Pieters Other members of the public or media: Bruce Donaldson, Rich Starkey, Jason Semler, Rick Osborne, Tony Eisenhut, Steve Pittman, Paul Rioux, Kevin Rider, Nancy Heck, Luci Snyder, Tom Pitman, Melanie Hayes, Mark Worthley, Nancy Worthley Approval of Minutes September 15, 2008 – Transferred to November CRC meeting for approval due to lack of proper motion. September 17, 2008 – Moved for approval by Ms. Anker, seconded by Mr. Worrell and unanimously approved. September 18, 2008 – Moved for approval by Mr. Hammer, seconded by Ms. Anker and passed with an abstention from Mr. Worrell. Financial Matters Ms. Mielke reported the September end of month operating balance is $6,758,429. The CRC has received no notification from Hamilton County regarding an estimated date for the second TIF distribution. All indications show the November tax bills are being sent on time. Ms. Mielke requested the Commission’s approval to pay invoices from the CRC General Fund in the amount of $785,985.39. Mr. Hammer moved for approval, seconded by Mr. Sharp and unanimously approved. Ms. Mielke requested the approval of the Disbursement of Funds from the PAC Construction Fund in the amount of $2,104,377.76. Mr. Worrell moved for approval, seconded by Ms. Anker and unanimously approved. Mayor Brainard made a presentation regarding cost escalations for the Performing Arts Center (PAC). [Please see attached presentation print out]. Mayor Brainard explained the TIF revenues received have far exceeded the forecasted amounts. In December of 2005, the estimated surplus TIF for 2008 was an estimated $18 million. For October 2008, the estimated surplus TIF for the life of the project is now just over $148 million which equals a 732% increase. The estimated TIF revenue received is 73% higher than estimated in the December 2005 forecast. CRC Meeting, October 15, 2008 2 However, costs for the PAC have escalated due to an increase in material and construction costs. The cost of materials used for construction has risen faster (30.2%) than the consumer price index (14.5%). The most extreme price increases have been for diesel fuel (329 % increase), copper and steel products (30% increase). Changes that were also made to the City Center Theatre from a black box theatre to a proscenium theatre resulting in an $8.5 million cost increase. The upgrade is estimated to pay for itself due to the high demand for that type of theatre from the identified users. Escalating costs were originally thought to be covered by private fundraising. To date, $3 million have been raised and is not sufficient to cover the costs. To be able to approve the next set of construction contracts, funds must be available. At this time, there is $45 million in cash, which is not enough to award the contracts. Mayor Brainard asked the CRC to approve the installment purchase plan to cover the gap from the additional TIF revenue for the costs of the additional items. Three installments can be issued over a three-year period. The lease payment alternative is structured so that it can be paid off at any time without payment penalty. Some final installments may not be necessary depending on private fundraising. The CRC has ultimate control in regards to approval of funds. The Mayor reported that the decisions that have led to the need for additional funds, have been those of the executive branch (Mayor and staff), and not those of the CRC. Only commercial properties pay into a TIF district ensuring that no residential taxpayers’ dollars are used to fund the project (except for owner occupied houses three stories or higher). Businesses that benefit from the project pay the taxes to fund the project. Residential taxes are not increasing due to the approval of an additional $45 million for the project. Discussion ensued. Mr. Sharp asked if the financial projects included the Parcel 47 – Keystone Construction area slated for development. Jason Semler with Umbaugh & Associates, stated that including the additional commitment (Parcel 47), there would be more than $1.6 million in surplus for 10-15 years, then decreasing to approximately $1 million in 2020. Therefore, there is sufficient revenue for the project. If the CRC does not support the $45 million lease installment plan, drastic changes have to be made to the PAC rendering it no longer able to perform its purpose. Additionally, the smaller theatre would not be built. This would negatively affect future operating costs. Mayor Brainard and Karl Haas explained how the CRC has ultimate control of the funds under the loan program. According to Resolution 2008-11, the funding is “designated by the Commission for participation in the loan program.” Each transaction will be structured as an installment purchase by the CRC from one of its designated lenders. CRC Meeting, October 15, 2008 3 Each time there is a contract with the CRC as a specified “party,” it will be brought before the Commission for approval. Each loan transaction would first have to be approved by the CRC. Secondly, a vote would take place deciding whether the construction contract is eligible for participation in this project. Approval of a contract by itself would not qualify for participation in the program. The loan program has a $45 million cap. Approving the $45 million allows approval of construction contracts to happen more quickly and helps tie down escalating construction costs. Ron Carter summarized the discussion: the features of the project have gone up, the benefits of the project have gone up, the costs have gone up. The need for an additional $45 million is a combination of these. Fundraising is slower than expected, but it is still anticipated to be successful as the building nears completion. The construction needs to progress, and the Mayor is asking for the CRC to provide funding to keep it on schedule. If the private funding is successful, the CRC may not draw down the entire $45 million. Mr. Haas also stated the program can be stopped at any time by the vote of the Commission. Ms. Anker moved to approve Resolution 2008-11 approving the CRC installment purchase contracts. Seconded by Mr. Hammer and unanimously approved. Mr. Sharp stated he disliked being in the position where the CRC’s choices are circumscribed. Mr. Hammer questioned Mr. Haas if there would be any problems regarding obtaining the loan due to the current credit market. Mr. Haas stated a representative from Regions Bank was eager to move forward. Mr. Sharp requested that all members of the CRC receive a breakdown of all proposed costs for the three items outlined in the term sheet within one week. Mr. Olds stated he would provide the information and would continue to attempt to meet with Mr. Sharp to go over the costs. He is also available to meet with Commissioners to review in detail the draft outline of costs. Committee Reports Mr. Sharp, Plan Review Panel (PLP) Chairman, reported the PRP met on September 18, 2008. The members of the PLP also include Jeff Worrell and Les Olds. The PLP, Steve Sturtz and Laurence Armstrong (Pedcor Design Group) reviewed the design development plans for Parcel 7C. Parcel 7C is located south of the PAC and contains the small performance theatre, parking garage, several office buildings and loft condominiums on the Monon Trail. The committee voted unanimously to recommend to the full Commission approval of the design concepts as submitted, allowing the architects to move forward on the project. Mr. Olds reported that with the approval of the design concept plans, the architects will be moving forward on completion of construction documents for the garage and theatre portion of the project. The Energy Center construction is complete and will be followed up with construction beginning on the McComas Construction building on the southwest corner of the project. CRC Meeting, October 15, 2008 4 Mr. Sharp moved to approve Parcel 7C design concepts as being in substantial compliance with the documents dated 6-12-08 as they have been submitted and approved by the Carmel Redevelopment Commission Plan Review Panel on September 18, 2008. Seconded by Mr. Worrell and unanimously approved. Update on Properties The opening for the Indiana Design Center is on schedule for early spring 2009. No date has been set by the developer. Construction on First Ave. SW is currently underway. Mr. Olds reported the north gateway construction will begin soon. The gateway has been moved farther north, in response to concerns from area property owners. The arch is now 16 ft. wider with the sidewalks now inside the arches. There will be additional costs but are anticipated to fall within the approved budget amount. Ms. Anker questioned a scheduled date for bringing an ARTEC engineer to Carmel to discuss the design of the theatre. Mr. Olds reported he would prefer to get the CRC’s input before bringing a representative from ARTEC to Carmel to finalize the official interior layout of the building. Mr. Sharp suggested gathering the interested groups to provide input as well while ARTEC is available. Arts & Design District Update Ms. Mielke reported the next Gallery Walk is Saturday, November 8th from 5-10 p.m. Mr. Olds reported various merchants in the area have contacted him requesting assistance in upgrading their existing facades. Old Business Approval of Resolution 2008-8 Richard Starkey with Barnes & Thornburg was present to give an overview of the process of establishing the Economic Development Area Plan and confirmatory resolution confirming the TIF area. The CRC has adopted a declaratory resolution and has received approval from City Council and the Carmel Plan Commission, and a Public Hearing was held at the previous CRC meeting. Approval of Resolution 2008-8 is the final stage for the adoption. Mr. Hammer questioned the status of the road design. Mr. Pittman reported that he has met with City Engineer, Mike McBride. Pittman Partners was asked to increase the depth of surface to 1.5 inches, put in a turn lane for the school, and extend the curb to the 146th Street right-of-way. Ms. Anker moved to approve Resolution 2008-8 declaring the Legacy Project EDA to be an Economic Development Area, approving the Economic Development Plan and establishing a TIF Allocation Area. Seconded by Mr. Worrell and approved 4-1. Mr. Sharp did not vote in favor of the motion, as he felt this was an inappropriate use of TIF funding as well. CRC Meeting, October 15, 2008 5 Mr. Backer stated, in his opinion, this would be a long-term negative impact on the school system. Mr. Worrell stated he would be voting for Resolution 2008-8 as he feels it benefits the residents in the area since they will be receiving a road that will not be paid for from taxpayers dollars and will be done in a much timelier manner. Mr. Carter stated he felt it was important to not leave the school with residents in Legacy having no way of getting there except on a two-way road. The CRC could have also left access to Hazel Dell as a two-lane road until development caught up with the area at which time it would have to be upgraded. Instead, with the approval, the CRC will be getting the development and infrastructure done ahead of time. Mr. Hammer stated he felt Pittman Partners does a quality job of development and that he supports the project. This puts the development ahead of the curve for a side of town that needs it with the new River Road and the new road connecting River Road to Hazel Dell. It is also important to keep development moving in these unfortunate economic times. Approval of Project Agreement between CRC and Keystone Group, LLC Mr. Carter gave an overview of the steps that have been taken to approve a project agreement between the CRC and Keystone Group, LLC for development of Parcel 47 Project. Mr. Olds reported the environmental demolition is scheduled to start that week with the removal of asbestos from the inside and outside of the buildings. Mr. Hammer remarked on his approval for the interior plaza that will be used as public space. Mr. Carter also noted this will be Carmel’s first LEED certified building including a green roof. Mr. Sharp moved to approve the Project Agreement between the Carmel Redevelopment Commission and Keystone Group, LLC. Seconded by Mr. Hammer. Mr. Sharp moved to amend the motion to include “in substantially final form subject to the conclusion of the exhibits in the final form of the document.” Seconded by Ms. Anker. The motion was unanimously approved. Approval Resolution 2008-10 Mr. Haas explained with the approval of the Project Agreement, the final action needing to take place is the approval of Resolution 2008-10 establishing the TIF and pledge the TIF to make available for the construction of the garage. Mr. Hammer moved to un-table Resolution 2008-10. Seconded by Mr. Worrell and unanimously approved. CRC Meeting, October 15, 2008 6 Ms. Anker moved to approve Resolution 2008-10 Pledging the TIF from the Arts District Lofts and Shoppes Tax Allocation Area to the payment of Keystone’s Economic Development Revenue Bonds. Seconded by Mr. Hammer and unanimously approved. Approval of PAC Bid Package #5 and Bid Package #6 Mr. Olds reported the construction manager has given his recommendations on Bid Packages 5 & 6 for awarding the contracts. The construction manager recommends awarding contracts for Bid Package #5 in the total amount of $16,431,240 and for Bid Package #6 in the amount of $2,400,304. The CRC is asked to award these contracts subject to available funding. With approval, the contractors will know we are moving forward and will award the contracts once the funding is in place. At this time, the CRC has awarded contracts for bricks and mortar in the amount of $70 million based on the bond money and interest on the bond money in place. The CRC cannot award future contracts unless additional funding is approved. The contacts need to be awarded even though the payment on the contracts will not occur until late 2009/2010. Mr. Sharp asked if the contracts in bid packages #5 and #6 are all base bids, or if they include upgrades or alternates. Mr. Olds stated there are some upgrades in each of the bids that need approval from the Commission. Discussion ensued. Tony Eisenhut, construction manager from Sheil Sexton, was present to discuss the combined bid packages. [Mr. Backer leaves at 8:14 p.m.] Mr. Hammer requested that in the future, that bids are organized identifying when there is an alternate and when there is an “upgrade” or scope of work change for the benefit of the Commission. If there are opportunities for value engineering, those should be noted as well as an opportunity to save money. Mr. Sharp moved to approve action item #6 (PAC Bid Package 5) and action item #7 (PAC Bid Package 6) in their entirety, subject to the funds becoming available and the Executive Director and Construction Manager disclosing to us [CRC] details of any scope of work changes or upgrades. Seconded by Mr. Hammer. Mr. Sharp moved to amend his motion by being provided with any scope of work changes or upgrades and that same being approved by the Commission. Seconded by Mr. Hammer. Mr. Hammer asked Mr. Sharp if would entertain a further amendment that also included opportunities for value engineering at different levels and see significant savings. CRC Meeting, October 15, 2008 7 Mr. Haas suggested that Mr. Sharp move for approval of action items 6 & 7 and the bid packages subject to the availability of funds and also subject to the CRC being provided information on upgrades or value engineering with an opportunity to evaluate and approve any upgrades or recommendations on value engineering. The motion passed unanimously. New Business There is no new business at this time. Other Business Mr. Sharp questioned if we are able to find the best deal on this lease, and if it is in the best interest to bid out the separate pieces of Parcel 7C. Mr. Olds stated he will take Mr. Sharp’s suggestion under advisement, but that the theatre and the garage must be built together because of the joint footings and close proximity. There is no way to build one without extreme penalty to the other. 100% of a smaller garage or 70% of a larger garage is owned by the CRC. Discussion ensued. Adjourn Mr. Sharp moved the meeting be adjourned and seconded by Mr. Worrell. The meeting was adjourned at 8:43 p.m.