Economic Development Commission

MINUTES ECONOMIC DEVELOPMENT COMMISSION March 9, 2017 PUBLIC MEETING for other finances, allows them to acquire it, and 4:30 p.m. make improvements to it. Conference Room #1 120 East 8th Street Mr. Umpleby discussed this pass through bond. Anderson, IN 46016 There are two phases. This is the inducement stage. There will be a final stage. The inducement stage MEMBERS PRESENT asks the Commission to approve a resolution saying Bill Nagengast, President you are inclined to approve this after all the Roger Reed, Member additional steps have been accomplished. There Antony Bibbs, Member are low income tax credits that are going thru the Lisa Hobbs, Member Indiana Housing and Community Development Authority (IHCDA). They need something from the MEMBERS ABSENT City saying they are inclined to do this. This also Mary Jamerson, Secretary / Treasurer allows the developer to incur costs prior to the issuance of the bond and it allows them to recover STAFF PRESENT the costs after the bond is issued. They will come Tim Lanane, City Attorney back at a later time for a public hearing, final Greg Winkler, Director resolution, and then final City Council approval. He April Phillips, Economic Development Staff discussed tax credits and how they work. Karen Pettigrew, Economic Development Staff Mr. Winkler stated this bond does not count against the City’s bank certified limit of $10,000,000. OTHERS PRESENT Ken de la Bastide, Herald-Bulletin Mr. Umpleby stated this does not count against the Doug Whitham, City Controller City’s credit or anything. Pass through literally David Umpleby, Krieg DeVault means pass through in this regard. Justin Brown, Buckingham Companies Rebecca Crumes, City Council Mr. Bibbs asked if there no risk to the City or minimal risk to the City. ROLL CALL AND DECLARATION OF Mr. Winkler stated there was no risk. If there is a QUORUM default, then it goes back to the Cottages of Mr. Nagengast called the meeting to order at Anderson, LLC. 4:30 p.m. and declared a quorum with four (4) members in attendance. Mr. Whitham concurred. MINUTES Mr. Lanane concurred also. This is an amazing Ms. Hobbs moved to approve the January 12, 2017, thing the federal government allows the City to do for minutes as received. Mr. Reed seconded. Motion private entities. passed; 4 yes, 0 no. Mr. Brown explained Buckingham Companies is a BUSINESS 30 year old fully integrated real estate company in Central Indiana. The property is owned by the Resolution EDC01-17 Inducement Resolution Buckingham Foundation which is their sister for Cottages of Anderson Housing Partners, organization 501c3 charitable giving arm of the LLC. company. Any cash flow generated from property Mr. Winkler explained this is basically a conduit or will go the foundation and back in the community in pass-through bond. The Commission nor the City is forms of grants. This is a great way to fund responsible for selling the bond, underwriting the charitable giving and it is close to the core business bond, or guaranteeing the bond. It is only passing which is real estate development and property through the City’s tax exempt bond authority. This is management. He mentioned how the company was part of a total funding package of just under started and how they have branched out. They have $9,000,000. They are asking for a $5,000,000 pass- been involved with Cottages of Anderson for many through bond. They will be responsible for taking it to years as a third party manager. They purchased the the market and selling it. This makes them eligible facility and will be investing $22,000 per unit. The rents will remain at 60 percent AMI. The restriction of 55-years old and older will be removed; although they believe the majority of tenants will be 55-years old and older. Mr. de la Bastide asked how many units there were. Mr. Brown answered 122 units. Mr. Lanane commented that the administration supports the project. There is no liability on the behalf of the City. He asked what the occupancy rate was. Mr. Brown answered 96 percent. Mrs. Crumes asked if this property was in the TIF district. Mr. Winkler answered no. A discussion was held on the original focus of the company. Mrs. Crumes asked if there was no risk to the City who then assumes the risk. Mr. Winkler stated there is no risk to the City. There is risk, but it is being assumed by the developer. Mr. Lanane stated the bond documents will state specifically the debt is to be satisfied solely out of the revenues of the project and it will never be considered as a general obligation debt on the City. Mr. Umpleby pointed out that on these types of financings with a four percent tax credit, the bond is collateralized by cash the entire time. Mr. Bibbs moved to approve Resolution EDC01-17 Inducement Resolution for Cottages of Anderson Housing Partners, LLC. Mr. Reed seconded. Motion passed unanimously; 4 yes, 0 no. Mr. Lanane mentioned there was a report that was part of this resolution. He suggested approving the report also. Mr. Bibbs moved to approve the Report of the Anderson Economic Development Commission concerning the Proposed Financing of Economic Development Facilities for Cottages of Anderson Partners, LLC. Ms. Hobbs seconded. Motion passed unanimously; 4 yes, 0 no. MISCELLANEOUS ADJOURNMENT Mr. Bibbs moved to adjourn. Mr. Nagengast adjourned the meeting at 4:52 p.m. Economic Development Commission (EDC): March 9, 2017 Page 2