Anderson Redevelopment Commission

MINUTES ANDERSON REDEVELOPMENT COMMISSION July 5, 2016 Mr. Pittman stated the resolution authorizes PUBLIC MEETING issuance of up to $7,500,000 in tax increment 4:30 p.m. revenue bonds and also formally appropriates the ED Conference Room #1 proceeds of the bonds. The bond proceeds are 120 East 8th Street required to be used for various infrastructure Anderson, IN 46016 projects of the Commission. The bonds are authorized to be sold at a private sale. The MEMBERS PRESENT maximum interest rate is six percent (6%) Kevin Sulc, President although he is confident it will not be anywhere Joe Royer, Vice President near that high. The source of payment is solely Justin Puckett, Secretary tax increment revenues. There is no back up Michael Collette, Member source for repayment. The resolution lays out Carolyn Scott, Member (arrived 4:39 p.m.) the details between the Commission and the holders of the bonds. STAFF PRESENT Ann Marie Bauer, Attorney Mr. Krohn mentioned the resolution lays out the Greg Winkler, Director parameters. The bond amount is higher in case Michael Frischkorn, Deputy Director they have to prefund the debt reserve. The parity April Phillips, Financial Specialist coverage is approximately 146% which is over Gary McKinney, Environmental/Brownfield the 125% minimum coverage ratio. Specialist Mrs. Scott arrived at the meeting. OTHERS PRESENT Doug Whitham, City Controller Mr. Winkler presented the updated funds report Ken da la Bastide, Herald-Bulletin to the members. There are a multitude of ongoing Tom Pittman, Barnes and Thornburg projects including Scatterfield West, 27th Street, Rebecca Crumes, Anderson City Council and NTN water, wastewater, drainage, road Thomas Tijerina, EPIC Initiatives work, and electric power. The Commission is very close as far as the amount of money ROLL CALL AND DECLARATION OF projected to be available this year at $11,595,000 QUORUM which includes the General Motors (GM) fund. Mr. Sulc called the meeting to order at 4:30 p.m. The Commission has indicated they prefer not to and declared a quorum with four (4) members use those funds. Those funds can only be used present. on the GM properties. The estimated cost as far as the ongoing expenses of the previously OPEN PUBLIC HEARING mentioned projects is $11,169,000. He would not Mr. Sulc opened the public hearing at 4:30 p.m. be comfortable advising the Commission to not s He explained the public hearing is in regards to ell a bond. In addition to these expenses, there Resolution #ARC14-16 a Resolution of the City of are some outstanding unknowns such as ongoing Anderson Redevelopment Commission construction contingency costs, 73rd Street Authorizing the Issuance of Tax Increment extension, Jackson Street lighting repayment to Revenue Bonds for the Purpose of Providing Anderson Municipal Power and Light, and the Funds to Pay for Redevelopment Projects and Poindexter lawsuit. These costs add about Incidental Expenses. another $2,600,000 in possible expenses. He recommends selling a $7,000,000 bond that allows a cushion and ensures the Commission is able to pay all the outstanding expenses. Since cleanup on the GM sites as well as maintenance of this is a reimbursement bond the proceeds can the properties. In light of wanting to keep a balance be used for any legal TIF purpose. of between $4,000,000-$5,000,000 for use on the priorities established, particularly the Nichol / Raible Mr. Pittman agreed. Avenue areas, Downtown, and redevelopment of Brownfield sites, the bond is the only way to make Mr. Winkler stated the NTN project expenses so this happen. With the NTN bills coming in, the far are about $1,000,000 with an anticipated Commission could be out of money in just a couple $8,500,000 more. of months. The bills will probably pick up now that work is being done and will possibly be quite large. The bond would be a good idea if the Commission No correspondence was received from the public. wants to do anything else. This is a good time for interest rates. As far as cash flow, the Commission CLOSE PUBLIC HEARING has done as much as they can. The public hearing was closed at 4:44 p.m. Mr. Collette concurred with Mr. Sulc. Since there is MINUTES an issue with cash flow, he suggested that with Mr. Royer moved to approve the June 7, 2016, future projects they need to look down the road at minutes as submitted. Mrs. Scott seconded. the impact on cash flow so the Commission is not in Motion passed unanimously; 5 yes, 0 no. this position again. FINANCIALS Ms. Crumes asked about the bond rating. Is it Mr. Sulc reviewed the financial reports. going up or down? What is the highest it has been since doing bonds? Mr. Puckett moved to approve the financial reports as submitted. Mrs. Scott seconded. Mr. Krohn stated that each bond has its own Motion passed unanimously; 5 yes, 0 no. individual rating and is only if a rating is pursued. Overall, the City’s rating is strong. He discussed INVOICES the role of the financial advisor, the underwriter, and Mr. Sulc requested that any new invoices from the broker/dealer. If needed, the City can go American Structure Point be paid from TIF through a rating. The bond issuance will be done the easiest and least expensive way possible. instead of the GM fund. Mr. Royer moved to approve Resolution ARC14-16. Mr. Collette moved to approve the invoices as Mr. Collette seconded. Motion passed unanimously; submitted. Mr. Royer seconded. Motion passed 5 yes, 0 no. unanimously; 5 yes, 0 no. Barnes & Thornburg Engagement Letter BUSINESS Mr. Sulc explained that the Commission’s questions from last month were answered by Mr. Pittman via Resolution #ARC 14-16 A Resolution of the City email. There are times and issues when Ms. Bauer of Anderson Redevelopment Commission requires legal advice and assistance. Authorizing the Issuance of Tax Increment Revenue Bonds for the Purpose of Providing Mrs. Scott asked if there was a dollar amount Funds to Pay for Redevelopment Projects and assigned to the agreement. Incidental Expenses Mr. Sulc stated he sent the members his own Mr. Sulc stated it will be an hourly rate. Mr. Pittman funding spreadsheet as it relates to what has provided the rates via email. previously been discussed. He took out the reference to the 73rd Street extension because the Mr. Collette left the meeting. members have indicated through 2017 they are not in favor of extending the road and the Commission Mr. Pittman stated that it was a range depending on is not wanting the GM money to be used for TIF the lawyer who does the work. The rates are projects. The GM fund is to be used for brownfield adjusted each year. Any time legal services are Anderson Redevelopment Commission: July 5, 2016 Page 2 provided, part of the service is to make sure the of the property the Commission owns at 26th and clients are happy with the bills. He prides himself on Monroe Streets. An offer has been made. ways to save value such as the idea of pruning of the TIF districts. This could potentially add several Mrs. Bauer stated that Mr. Tello engaged a real hundred thousands of dollars in additional revenue estate broker and submitted an offer. She and which would more than pay any bills he would have. Mr. Puckett reviewed it. Mr. Puckett requested an He sent the members information today regarding extension due the expiration dates in the road monies available. He wants to be sensitive to agreement. The request is to purchase the .81 the bills he sends and maximizing the value for the acres for $2,000 per the documents. There will Commission. He does not think the Commission will be a Phase 1 environmental completed on the be disappointed in the traffic of the bills. If the property and closing costs associated with the Commission is, he wants them to tell him. purchase. Mrs. Scott moved to approve the Barnes and Thornburg engagement letter. Mr. Royer seconded. Mr. Puckett is okay with it. It is a standard Motion passed unanimously; 4 yes, 0 no. purchase. Mrs. Scott left the meeting. Mr. Royer moved to approve Resolution ARC15- 16. Mr. Puckett seconded. Motion passed American Structure Point: Change Order unanimously; 3 yes, 0 no. Mr. Sulc mentioned the change order for $5000 was received via email. He requested that payment be UPDATES made from TIF, not the GM fund. EPA: GM Properties Mr. Royer moved to approve the change order for Mr. McKinney stated the proposals were received American Structure Point. Mr. Royer seconded. today from the ERH contractors. He has not Motion passed unanimously; 3 yes, 0 no. reviewed them yet. They will be reviewed and a contractor hired before the next meeting. He is INDOT Reimbursement Agreement hoping to have the consultant and contractor at Mr. Winkler stated that it was requested that INDOT the next meeting to give the Commission a brief go ahead and do the work. This is for the new summary of what will be done. intersection at 27th Street and Scatterfield Road. Greater Edgewood Plaza Redevelopment There is some work to be done required by INDOT. Mr. McKinney explained the work at the former INDOT wants the City to pay for the work and then Baxter Pest Control site has begun. Two more be reimbursed. This is just a heads up that there will underground storage tanks were discovered and be an agreement from INDOT that will need to be signed. removed. They will be doing soil remediation in the front of the building. They have gotten a lot Mr. Sulc asked if this work would cause the original done in a short period of time. In just one hole, project cost estimate to go up. they removed approximately 2,000 tons of soil. Mr. Winkler did not think so. He is waiting to see Mr. Sulc asked about the Speedway property. what the deduct is as far as earth being moved. They are not moving dirt for a retention facility Mr. Winkler stated the City attorney is engaged. which was originally budgeted for. This could stay There are two separate conversations with two within the budget. potential developers. Resolution ARC15-16 A Resolution of the City Mr. Tijerina proposed a temporary use of the of Anderson Redevelopment Commission former Baxter Pest Control building for his Approving the Sale of Certain Former General organization. They are currently located in the Motors Property to T-Lupe, LLC basement of Celebration Church on Arrow Mr. Sulc mentioned that Mrs. Bauer and Mr. Avenue. They hold boxing classes, yoga Puckett met with Mr. Abel regarding the purchase classes, hanging out time with teenagers from the neighborhood, etc. There are about a dozen Anderson Redevelopment Commission: July 5, 2016 Page 3 people in the fitness classes and about 25 to 30 to move forward with the understanding that teenagers in the competitive boxing classes. The someone may come along and lease or purchase problem is that there is water puddling in the the property and he would have to move out? Is building, asbestos, lead based paint, mold and it there anything that can be done to allow Mr. is very cramped and crowded. The organization Tijerina to move forward so that the building is in is looking for a larger location that they can put use at least for the next 90 days? more equipment in. He is proposing to use the former Baxter Pest Control building while it is not Mrs. Bauer stated that if an offer was received being used and development is pending whether and accepted, then they would have to move. it is for a few months or a few years. The risk would be to Mr. Tijerina. Mr. Sulc stated Mr. Tijerina approached him Mr. Tijerina understood. He is going to have to regarding this proposal. He asked Mr. Tijerina to shut down services at his current location due to make a proposal. He has no objections to this. the conditions. Mr. Tijerina stated showing activity in the area There was consensus among the members to would help the restaurants and the grocery store. allow Mr. Tijerina to temporarily use the building. He is an advocate for the neighborhood. This would be something positive for the area with Mr. Sulc asked Mrs. Bauer to work with Mr. people coming and going. An after school Tijerina to get something worked out. component with homework help would also be provided along with a healthy snack. They may Purdue/Flagship Makers Space Facility (P3) even have enough space to provide the financial Mr. Winkler stated the project is close to being on literacy courses that they have been doing at schedule. remote locations around the city. Scatterfield West Redevelopment Mrs. Bauer stated two appraisals would need to There was no additional information to report. be done on the lease and/or sale value and then the property would have to be offered for no less Italpollina than the average of the two appraisals. This Mr. Winkler stated there may be a would need to be published in the newspaper groundbreaking on July 8 and potential and a time would be set to open bids. For a negotiations on future projects. The project is period of at least 30 days if there are no bids or under construction. that meet the appraisal, then for another 30 days which is a total of 60 days then the Commission Sirmax Railroad Spur is free to negotiate. The reason the GM Mrs. Phillips stated the funds have been properties have been sold so quickly is that this received. This item will be removed from the process was done in 2006 right after the property agenda. was donated to the City. This process also needs to done for the former Edgewood Plaza NTN property and the Farm property. There was no additional information to report. Mr. Frischkorn mentioned that the appraisals Parking Garage have been ordered. It takes about four to six Mr. Sulc stated that nobody from the Board of weeks for the appraisals to be completed. Works was in attendance to give a report. Mr. Winkler stated the work that Mr. Tijerina and Wigwam his wife do with EPIC Initiatives in this community Mr. Sulc explained that the Wigwam project was is absolutely outstanding. They work with kids not a Commission project. and families. He cannot say enough good things about them or the organization. Can anything be Mr. Winkler mentioned that he talked with Mr. done on a conditional basis that would allow him Gary Hobbs. Mr. Hobbs engaged a New Market Anderson Redevelopment Commission: July 5, 2016 Page 4 Tax Credit (NMTC) attorney. He, Mrs. Bauer, and the meetings were public as per the Indiana Mr. Frischkorn have all spoken with the attorney. Code both on part of ACSC and the Commission. Based on what he is hearing, he questions the viability of the NMTC transaction. Mrs. Crumes asked if the Commission was going to tell Mr. Hobbs and Ms. Gentry they were Mr. Sulc stated it is his understanding this is not wasting their time coming before the Commission something where TIF dollars can just be handed and the City Council asking for TIF Funds. Are over to a developer. It would necessitate a bond. they wasting their time? As was discussed earlier, the Commission is not in a position to do another bond. He does not Mrs. Bauer stated this went to the City Council know what further discussion this Commission regarding approval to make the sale of the can have on the subject. He does not personally property for zero dollars. The first time she see the Commission being a forum for this personally heard any intention or question discussion regarding use of TIF on the Wigwam beyond the closing costs was when a presentation was Mrs. Crumes asked if the Wigwam was in the TIF recently made. It was not a part of previous district. conversations or agreements to her knowledge. She, as the Commission’s legal counsel, never Mrs. Bauer answered yes, it was added in August had any conversations beyond the transfer of the 2014 when the Commission acted as the pass title. through for the property. Mrs. Crumes asked if there were any other Mr. Sulc stated the property was received from properties the Commission was holding like the the Anderson Community School System (ACSC) Wigwam. and then it was immediately passed on to the current owners. In order to do this, the property Mr. Winkler clarified that the Commission was not had to be added to the district. holding the property. Mrs. Bauer stated that in the summer of 2014 the Mrs. Crumes asked if there were any other Commission passed a resolution adding the properties similar in circumstance. property to the Consolidated Redevelopment District. Mrs. Bauer did not believe so, at least not to her knowledge. Mrs. Crumes asked if it was added with the anticipation of doing something with it. Mrs. Crumes was trying to clear up the confusion. Everyone has their own version of what Mrs. Bauer answered no, it was added because happened. the Commission was asked to be the pass through entity. ACSC could donate it a Mrs. Bauer reiterated that the Commission was governmental entity and the Commission under specifically approached about the transfer. There Indiana Code had the ability to take the property was a previous potential developer and ACSC and declare they were not going to use it as a approached the Commission to be the pass project. Upon that declaration at a public through entity. Everything was done legally. At meeting and after public notices, the property no time was anything secret about what was was donated to Wigwam Holdings. intended. Mrs. Crumes asked if the Commission was Mr. Royer left the meeting. playing games. Mrs. Bauer explained that the resolution that was Mrs. Bauer answered no. This was all done approved by the Commission and the resolution above board. All the notices were published, all that was approved by the City Council was very clear that the Commission would accept the Anderson Redevelopment Commission: July 5, 2016 Page 5 property only with the guarantee that the developer would accept it. The original developer dropped out and BWI and Pinebrook Properties came on board and agreed to the transaction. Mr. Winkler stated that all communications between himself and Mr. Hobbs in writing have been very clear as far as the fact that this is not something the Commission thinks is a viable project. Mr. Sulc mentioned that when he was approached by Mr. Hobbs a few months ago he told Mr. Hobbs that what was being proposed was not TIF eligible. He did allow Mr. Hobbs the opportunity to give a presentation to the Commission though. MISCELLANEOUS ADJOURNMENT Mr. Puckett moved to adjourn the meeting. Meeting adjourned at 5:46 p.m. Anderson Redevelopment Commission: July 5, 2016 Page 6