Battle Creek Tax Increment Finance Authority

BATTLE CREEK TAX INCREMENT FINANCE AUTHORITY Tuesday, August 28, 2012 At the special meeting of the Battle Creek Tax Increment Finance Authority held on Tuesday, August 28, 2012 at 3:00 p.m. at the Frederick R. Brydges Customs Cargo Center, the following were in attendance: Messrs. Bowman, Christensen, Cutshall, Czerney, Karre, Noble, Scott, Rae, Tsuchiyama and Ms. Tuggle. Absent was: Messrs. Bobrofsky, Frantz and Stewart. Also in attendance were: Messrs. Mumford, Michael Ortega (Lewis Reed & Allen P.C.), Voshell and Mmes. Albrant and Young. Mr. Rae called the meeting to order at 3:00 p.m. APPROVAL OF MINUTES Mr. Czerney noted that he was present at the July 24, 2012 meeting and the minutes reflected he was absent. MOTION: Mr. Czerney moved that the Battle Creek Tax Increment Finance Authority Board of Directors approve the minutes of the July 24, 2012 meeting as amended. Mr. Cutshall supported the motion and it was unanimously approved. ROBBINS BUILDING/CHILD CARE /LITTLE RAINBOWS PRESCHOOL AND DAYCARE Mr. Voshell stated that a revised lease agreement was included in the board package. This is a new lease agreement with Christopher L. Trapp, CEO of Little Rainbows Preschool and Daycare, LLC. The agreement has also been modified for signature by Michael Rae, Vice Chairman. Mr. Albert Bobrofsky is currently in the hospital with double pneumonia and we wish him a speedy recovery. Mr. Rae stated that board members have had the opportunity to review the lease and it was discussed extensively at the last meeting. MOTION: Mr. Bowman moved that the Battle Creek Tax Increment Finance Authority Board of Directors approve the lease agreement with Little Rainbows Preschool and Daycare, LLC. as presented. Mr. Karre supported the motion and it was unanimously approved. UPDATE LAND EXCHANGE WITH MDOT/WALTERS-DIMMICK Mr. Mumford introduced Michael Ortega, lawyer, long standing and great reputation on environmental law. Mr. Mumford stated that we all know that Walters-Dimmick has polluted our property, the question in front of the BCTIFA Board is now what? BCTIFA Board Page 2 – Minutes August 28, 2012 Mr. Karre questioned that if Mr. Ortega make suggestions to the BCTIFA Board it is a public record and the advice would not be protected, unless Mr. Ortega is hired first. Mr. Mumford was fine with the fact that the public knows we are trying to get advice before we travel down some road. We are not in litigation or litigation strategy at this point and this can be discussed in an open public session. Mr. Karre suggested that we go into closed session to receive the technical advice from Mr. Ortega. Mr. Karre was concerned with discussing the technical advice in an open public session. Mr. Rae stated that the purpose was to get some expertise and to find the best person to represent the BCTIFA Board. Mr. Ortega is interested in taking on the case. Mr. Voshell stated that communications had come to an end with Walters-Dimmick. Michigan Department of Transportation (MDOT) agreed to switch the existing park and ride lot with the BCTIFA-owned site that is polluted behind the Walters-Dimmick Shell gas station. Mr. Mumford stated Walters-Dimmick has taken the position that the water on the BCTIFA- owned parcel is not usable. Walters-Dimmick believes that the solution is to run municipal infrastructure water to the parcel, therefore, making the site usable. The question we have is that true? Are there any other damages that we should be seeking? Does this affect the value of the property? Can we use the property over the next ten years? What is the BCTIFA Board opinion on the damages in an environmental case. Mr. Karre was concerned with discussing the technical advice in an open public session. Mr. Mumford stated that there were two choices: appoint a committee to meet privately with Mr. Ortega and bring back a committee report; continue with discussion in open session. Mr. Ortega stated that we can discuss the process and not the details. He would offer how long it would take, what stages, what product would be generated, at what estimated cost. If the Board decided to retain Mr. Ortega, that would be privileged and not subject to the open meetings. Mr. Ortega stated that he has experience in environmental cases. He first met Daryl Mumford in the mid 80’s. He is a full time environmental lawyer. He has several cases similar to this one. He is currently working on cases involving Enbridge. He proposed meeting with our consultants, SME, engineers, etc. first and then seek out an appraiser. The key issue is an appraisal on contaminated property because it is complicated. After that has been done, he would prepare an initial conclusion for the BCTIFA Board, either Option A or Option B. Standard rate per hour is $275.00, however he proposed $225.00 per hour. Mr. Tsuchiyama asked in his view right now, a point of moving forward, are we really damaged? Mr. Ortega stated that is not the end of the analysis. There is going to be a legal burden for this property for time to come. Having the monitoring wells on the property gives it a value. BCTIFA Board Page 3 – Minutes August 28, 2012 Mr. Karre noted that George Bratcher is an appraiser located in Battle Creek and he certainly would have the qualifications for this matter. Mr. Bratcher was an assessor for the City and has done numerous projects for Battle Creek Unlimited. MOTION: Mr. Karre moved that the Battle Creek Tax Increment Finance Authority Board of Directors hire/retain Michael Ortega as the environmental lawyer at the price of $225 per hour on the Walters-Dimmick project as presented. Mr. Christenson supported the motion and it was unanimously approved. Mr. Karre asked if Mr. Ortega recommended a subcommittee of the BCTIFA Board as a resource other than working with staff and Mr. Mumford. Mr. Ortega stated that he would leave that in the discretion of the BCTIFA Board. Mr. Mumford stated that the BCTIFA Board should be able to get legal advice from counsel confidentially. Mr. Tsuchiyama recommended that a small subcommittee be created. PROJECT UPDATES Mr. Voshell reported on the recent announcement made by Janesville Acoustics on 225 new jobs to Battle Creek. The company will be moving into the former AMT Freight building located at 2500 Logistics Drive. Mr. Voshell stated that he has meet with the Plant Manager. The company is planning to have the building ready by October. Hiring will begin shortly afterwards. The City Commission will review the tax abatement credits at a meeting scheduled for September 4. The company plans to occupy 280,000 sq. ft. of the 308,000 sq. ft. building. The final product is distributed to the Detroit 3, Toyota, and Honda. They make a felt and fiber material that is placed behind dashboards and door panels, under the hoods, etc. They supply to the truck and off road vehicle industries. The company has a sales operation in Detroit. The parent company is out of Janesville, Wisconsin. Project CME Food is a prospect that is in town today and Mr. Dehn is meeting with representatives at the West Columbia Avenue site. The property is listed for $25,000 an acre. This project is projected to create 200 jobs. Mr. Voshell stated that there may be a need to negotiate the reduction of land price for the jobs and the investment made. We do not know anything on the investment, but we do know that the company is in the food industry. The BCTIFA Board was in agreement to allow staff the ability to negotiate the price for the land. Mr. Karre asked for an update status on the personal property tax. Mr. Tsuchiyama stated that something could happen during lame duck session or later. Something will be done to eliminate personal property tax, but it needs to be done right. He is concerned with the impact the election will have on it, the shift in power will change the dynamics. BCTIFA Board Page 4 – Minutes August 28, 2012 Project Heavy Metal is a German prospect interested in an existing building located in the Fort Custer Industrial Park. Since the last BCTIFA meeting, staff has hosted the family to our community. The president brought his wife and three children. The family is very impressed with the community. Staff continues to work on two very important issues, energy power and training issues. Staff has discussed the issue with the Governor’s Senior Policy Energy Advisor who has a presentation that she is willing to make to the company. Our community is $.02-.03 higher than the competing State of Ohio. Staff is working with Kellogg Community College, Michigan Works! Agency and the Michigan Economic Development Corporation on the training issues. This project would involve 60 jobs. This project looks promising, but no documents have been signed. Mr. Rae stated that our community was in the running for the Volkswagen plant. One of the principle reasons we did not get the plant was the question on sufficient power. Michigan is very heavy in natural gas utilized. We need to look into this as one of the advantages. Mr. Voshell provided the Governor’s Advisor position on the energy issue: 1) Other states have not done their cleanup to EPA standards that Michigan has already done. Consumers Energy has put the scrubbers in the pipes to remove the pollutants. The cost to clean the emissions will be higher for other states than what Michigan was. This will put other states at an even to even or higher than what Michigan’s cost is currently. 2) Michigan has greater diversification in the generation of electricity energy including natural gas. Staff is not sure who is calling the shots on the 10 N. Clark Road (former USO building). The building was not included in the bankruptcy. A bankruptcy judge declined an offer that was low. PUBLIC COMMENTS No comments were made. ADJOURN There being no further business, the meeting was adjourned at 3:40 p.m.