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HomeMy WebLinkAboutCRC-10-02-01 CARMEL REDEVELOPMENT COMMISSION Meeting, Tuesday, October 2, 2001 President Rick Roesch called the meeting to order at 5:34 p.m. Commission members Luci Snyder, John Koven, Ron Carter and Ed Burke were all present, constituting a quorum. Also present were David Valinetz and Gregg Romaine from Sesco (Supreme Environmental Service Company), Karl Haas, Les Olds, Steve Engelking, Wayne Wilson, Kelli Hahn, and Phil Dunlap from the Indianapolis Star. Phyllis Morrissey present as support staff. Environmental Situation on Harrigan Property Mr. Roesch noted additional funds will need to be appropriated to determine the extent of the contamination on the property. "The property was closed prior to the CRC hiring our own direct counsel by the City's Counsel at the time. The Environmental Phase One was not done which would have led us to a Phase Two and even further concerns which probably would have affected the price. Karl has looked into that. We're told that this was `a conscious decision'." Mr. Haas: That's correct. Mr. Roesch: So there are several things we need to discuss. We need to get the appropriation to find the extent of the pollution. It does affect the negotiations we'll be having with a potential purchaser of the property, Brian Shapiro. We believe the pollution flow has gone downhill to the northwest rather than up near the street so we think the first site he proposes to purchase is probably not polluted but we would need to determine that before we can do anything. Ms. Snyder: Have we done a Phase One? Mr. Engelking: No, we have not done a Phase One. We did a Phase Two that had a partial Phase One incorporated in it which resulted in the findings that we are now discussing. Ms. Snyder: The reason we are having to do this is because the mortgage holder for Shapiro wants to make sure that this contamination isn't bleeding onto the primary site. Mr. Roesch: That's true and also we need to know the extent of this. Mr. Roesch continued: I invited Dave Valinetz to also bid on this project. I had a conversation with Dave yesterday. He is formerly with IDEM and was talking about some additional enhancements we might do. In fairness to the other [potential bidders] I've asked Dave not to give a presentation on his bid price, but there are some types of insurance we can purchase to mitigate the financial damage. There are some grants available and Dave is aware of these things and he has done this on other polluted projects. 1 Mr. Valinetz presented two different proposals. One would include sampling to determine the extent of the contamination, but above and beyond that, "the thing we do as a firm, we're very familiar with what needs to be done in these situations. We've put together a separate proposal to investigate all your options, such as historical insurance possibilities, grants for cities, low interest loans for mitigation" [from the Indiana Development Finance Authority]. There was also a package available for CRC members listing Sesco's experience and credentials. Mr. Valinetz gave one example and displayed a chart of an actual case in which the settlement was in the six figures. He also noted that his company actually owns environmentally impaired properties which they have revitalized. Mr. Romaine, attorney with Sesco, further detailed the company's qualifications. Mr. Engelking said he had not received the quotes he had requested from two other companies. They were asked to have them by the next meeting, October 10. Mr. Koven: I'd like to have a little better understanding of how we got here in the first place. Mr. Roesch: This property was one of the first pieces of property that we purchased and the closing was handled by the City Administration. In this case, it was the City Attorney's office, Craig Carpenter, a part time attorney working for the City Attorney, Doug Haney. In the original purchase agreement we had the right to do a Phase One. However, at closing, apparently no Phase One was done. The Phase One would have tipped us off that there was potentially a problem which would have resulted in going to a Phase Two, to see what is there that was identified by Phase One that we need to look at. That was not done. Mr. Koven: Do we know why? Mr. Roesch: Karl made some inquiries and we were looking at the potential of errors and omissions policies. Mr. Koven: This was before my time [on the Commission]. Who negotiated this? Did the Redevelopment Commission negotiate this? Mr. Roesch: No. This was negotiated by the Mayor. Ms. Snyder: Why do we have to pay this? Cut to the chase... we didn't negotiate this. We didn't know anything about it. Mr. Carter [interrupting]: Yes, we did. 2 Ms. Snyder: No, we didn't. Mr. Carter: We signed the contract is signed by the Redevelopment Commission. Mr. Roesch: It is. Ms. Snyder: Okay, Ron. But a Phase One wasn't done. It's rudimentary. If somebody didn't do it, that somebody is responsible. Unfortunately, that somebody appears to be the City Attorney. Can we sue the City Attorney? Well, I don't think so; we'll be suing ourselves. Can we go after him through the errors and omissions insurance? I think we probably pay the errors and omissions insurance. But we didn't negotiate this. We did not not allow a Phase One. Somebody else did it for us. Mr. Carter: First off the bat, right now we don't know what the extent of this is. We may be in a complete dither here over something that is frankly not going to be that big a deal. We ought to look at what the extent is and then start to, if it's necessary, lay blame at that point in time. Ms. Snyder: I don't want to lay blame. I understand what you're saying. Yes, I think you're right. We need to find out what this thing is going to cost, how bad the contamination is, has it spread, and all those things. I don't intend to lay blame, but I don't intend to pay for anything that I didn't do. Or in this case, should have done but didn't do. I think it is virtually criminal that it wasn't done. Mr. Carter: I don't think it's criminal that it wasn't done. This is done in other purchases of land by other Redevelopment Commissions. Ms. Snyder [interrupting]: Not very often! Mr. Carter: It was done by Indianapolis on a number of Circle Center properties. Ms. Snyder: Not unless they know the extent of the cost, Ron. When you say, "I'm going to pay `x', but I think I've got contamination." I do a Phase One. If I do [have contamination], I do a Phase Two. I find out the cost of mitigation. I say, "I'm going to take `x' and subtract the cost of mitigation and pay you `y That's what you do if you know you're responsible. If you don't know the cost of mitigation, you're flying absolutely blind. And that's not right! That's not prudent. You can do that if it's your own money but this isn't our own money. This is taxpayer money. Mr. Carter: Well, let's move ahead and see what the extent of this is. Ms. Snyder: I think we have to. Mr. Roesch agreeing, stated it affects a potential sale "which I believe we want to occur." 3 Mr. Burke: So we can incur the cost, find out what it is, and if somebody owes us money later we can always go after them. Mr. Roesch: Karl is prepared to pursue some things there. And there are other alternatives. I apologize for bringing everybody in and having you guys [from Sesco] come in so late, but I wanted everybody to know there are other things that can be done. Discussion continued. Mr. Roesch confirmed with Mr. Haas that he is not and has not closed on any property without requiring a Phase One environmental be done. Mr. Roesch suggested the CRC approve at this point up to $10,000. Discussion continued. It was noted that the bid from Sesco should be kept "sealed" at this point so they would not be at a disadvantage in the bidding process. Mr. Haas told the Sesco representatives they were not bound... if they wanted to reduce their bid after this meeting that would be permitted. Mr. Carter expressed a concern about how long it is taking to get anything done on the environmental problem. "How soon are we going to be able to get somebody in the field doing the sampling we need done Mr. Roesch: That's why we're having this meeting. We need to appropriate the money so we can get somebody in the field quickly and determine whether it [contamination] is on the plot that Shapiro proposes to buy. We could sell a certain portion if the pollution hasn't gone uphill. Then we'd have to clean up the other portions before they can be sold. Discussion continued. Mr. Wilson: To not have an environmental done is unheard of in the dry cleaning business from a lending standpoint. The second thing is the presumption in place that this is strictly a problem related only to the dry cleaners. Has any consideration been given to the beauty shop because it also has a bunch of products on the EPA list? Mr. Engelking: The Phase Two that was done only identified something related to cleaning products. It didn't show anything... Mr. Wilson: What's the radius? Did it study the entire plot area? Mr. Engelking: They took four borings as I recall. They found it in each of the borings down to the water level. The magnitude is what we're trying get now, the depth and width that it pervades throughout the soil. Mr. Koven: How do we know it's not under the building? 4 Mr. Roesch said the consultants agree that could be a problem. "It appears the flow is to the northwest. There are two things we're hoping to accomplish here. One is to determine the width of the pollution by doing borings. The other purpose is to find the extent throughout the whole parcel to determine how much expense potentially we're going to incur to do the mitigation." Discussion continued about the possibility of pollution being under the buildings. Mr. Valinetz noted the PCE involved with dry cleaners is known as a "sinker" meaning it goes down and out. Mr. Engelking will contact the other potential bidders to hurry them along. Mr. Burke moved the CRC approve $10,000 to expand the environmental study. Mr. Roesch will decide which company will be doing the work after he receives the quotes. He will consult with CRC members if necessary. Following a second by Ms. Snyder, the motion was unanimously approved. Liquor Licenses for City Center Mr. Roesch said liquor licenses "in hand" had been discussed as a possibility for enhancing some of the parcels in City Center. Mr. Haas: There are a limited number of liquor licenses and there are four new ones being auctioned for this area [because of the increase in population shown by the recent census figures]. These would permit liquor to be served at restaurants, not carry -out. Normally what happens if somebody wants to open a restaurant which serves liquor in Carmel, in addition to acquiring the land, he or she has to find someone from whom to purchase a license at an unknown cost. We had an opportunity to bid on one or more licenses that are being offered. My strong guess is that any sit down restaurant that wants to open in City Center will want to serve alcohol and will require a license. It would enhance the value of the property if those liquor licenses are already held by the Redevelopment Commission and are available for sale along with the land. We wouldn't be able to sell the liquor licenses at a profit. [If a license is unused and being sold, this cannot be done at a profit.] Discussion followed. Mr. Haas: At the auction, the licenses will be sold separately so you could end up with divergent prices on the licenses. Mr. Haas continued: If the land is enhanced because it has a liquor license you can enjoy the enhanced value of the land, though the money that's paid for the liquor license itself can't exceed what you've paid. 5 My recommendation if you're going to bid, you decide on how many you're going to bid, you set a maximum individual price and a maximum aggregate price that you'd be willing to pay. In other words, you might decide that if you can get one of these three way liquor licenses for $15,000, that's a great bargain and at that price you'd take two. But you don't necessarily need to bid on or approve bidding on or purchasing all four or leaving it at an open -ended amount. If we're going to bid, you need to authorize someone to do the bidding for you and then set the bid parameters. CRC members struggled with the decision whether liquor licenses should be purchased with public funds. Mr. Carter said he felt the CRC would be a developer or facilitator and as such this would not be improper but he "could go either way At this point, the CRC has $3,000 invested in the process. Mr. Wilson pointed out that a liquor license might be important to have as "support" for a restaurant near the proposed performing arts center. After further discussion Mr. Burke made a motion the CRC proceed with the process. Following a second by Ms. Snyder, the motion was approved, three to two, with Ms. Snyder and Mr. Koven opposed. Mr. Burke moved the CRC authorize the bidder to spend up to $15,000 aggregate for one or two licenses, not spending more than $15,000 and not getting more than two licenses. Discussion followed. Following a second by Ms. Snyder, the motion was approved, four to one, with Mr. Koven opposed. Discussion followed about who would attend the auction. It was decided John Koven would do the bidding, Thursday morning at the South Government Building in Indianapolis. A certified check is due from the successful bidder within thirty days. There being no further business before the CRC, Mr. Burke moved the meeting be adjourned. Following a second by Ms. Snyder, the motion was unanimously approved and the meeting was adjourned at 6:53 p.m. 6