Business & Industrial Development Authority

Nashua Business and Industrial Development Authority Meeting Minutes July 24, 2015 1. Call to Order and Welcome The regular meeting of the Nashua Business and Industrial Development Authority was called to order at 8:16 a.m. on July 24, 2015 in City Hall Conference Room 208, by Chairman Jack Tulley. Present: Chairman Jack Tulley, Jason Haviland, Carl Andrade, Camille Pattison, Alderman McCarthy, Mayor Lozeau, David Fredette, and Denehy (by Skype) Other Attendees: Tom Galligani (City of Nashua Economic Development), James Vayo (Renaissance), Ryan Porter (Renaissance), Alderwoman Mary Ann Melizzi Golija, Michael Barrett (SMC Management), Bob Simons (SMC Management) 2. Approval of Meeting Minutes from May 15, 2015 MOTION TO APPROVE THE MINUTES PENDING MADE BY C ANDRADE. MOTION WAS SECONDED BY MAYOR LOZEAU AND APPROVED WITH B VEAR ABSTAINING. 3. Bridge Street Project Update R Porter thanked the BIDA for the opportunity to speak. He explained that he wants to introduce the team from SMC Management and update the BIDA on the recent history of the project. He described the history with Dakota Partners last year and the failure to obtain LIHTC from the New Hampshire Community Development Finance Agency. The failure resulted in the dissolution of the partnership with the BIDA. Renaissance then heard from the BIDA the desire to hold out and wait for a partner to do a market rate project. Over the past few months, Renaissance has introduced SMC to the project and has followed up with negotiations that have led to this proposed partnership. R Porter explained that SMC is a group with both equity and development experience and which is only interested in market rate development. They plan to build the 228 units of market rate housing for the first phase of the project. There are few issues that need to be resolved over the next few months, including permitting. Mike Barrett of SMC spoke about the company and the firms approach to development. M Barrett indicated that this likely will be a $35M project. The company plans to use a local bank and raise a portion of their equity locally. They are a downstream developer, which means that they get involved with projects that are already permitted. They are good at the financing and delivery of the project. We have an in-house construction manager. We don't need or want to use grants or tax credits—this just slows us down. B Simons explained that they love this project. The site is great. They may choose to modify the architecture in order to make the building easier to build. They do a lot of these types of projects. They would like to be in the ground (to start construction) by the end of winter. We will likely change the mix of unit types from 21% studios, 21% 2brms and 58% 1bdrms to 40% 1bdrms, 10% studios and 50% 2bdrms, but we still need to take a closer look. They would like to do parking underneath the first floor. 1 Mayor Lozeau asked if there will be amenities with the project, as was planned previously. B Simons explained that all of their projects include nice community centers. We like riverfront promenade aspect to the project, as well. C Pattison asked who will manage the property, once it is built. M Barrett explained that the company typically holds the property for five years and then will sell to a REIT or a similar large owner. Lately, though, our investors would like us to hold the properties longer. We’re able and equipped to do this. If we do sell it, you won’t notice a difference, however. We will sell it to another first class industry player. We’re not interested in building condominiums. R Porter explained that there is a potential to work on future phases of the project. Initially, we would like to work with the Bonnette Family about moving forward on building D. There is still work to do with permitting, as the site plan needs amendment. The skateboard park relocation and the storm water basin needs to be figured out, as well. J Tulley pointed out that we don’t want an ugly entrance to a major gateway. You mentioned changes to the architecture. B Simons agreed. We want to get input from everyone regarding the changes. Our idea is to bring these things to the BIDA. We haven't had the discussion with the architect, yet. Goal at the end of the day is to bring the same product quality forward. Mayor Lozeau indicated that she would like to see what is produce with drawings, before things move forward. C Andrade asked how the company found out about the site and what are you minimum investments for investor? M Barret indicated that the investment minimum is $100,000. We like NH. Renaissance reached out to us soon after the article appeared about our company taking over the project at the Fisher Cats Ballpark. J Haviland asked what the biggest risk for this project is. B Simons answered that they want to pin down any remaining underground history. The build is pretty standard stuff0-it’s a pretty clean site. M Barrett indicated that there is little financial risk. We spend time up-front locking in the construction contracts. Then, the interest rate and the economy are the remaining risks. We're good at moving quickly and we’ll have apartments for rent within a year of breaking ground. Our financing will be a 3 year construction loan and 5-year miniperm loan. We'll be able to do what we do. We're comfortable or we wouldn't be here. D Fredette asked what the rents will be. M Barrett indicated that the company did a market study. The rents are similar to Manchester rents. We're confident in the rents. J Tulley asked what’s next. T Galligani suggested that they BIDA accept the two communications from Renaissance, formally. The first 2 one would “clear the deck” and remove Dakota Partners formally. In addition, the BIDA should make a vote to accept Sentry Management Holding, LLC (SMC) as a partner to Renaissance for the deal. As the team anticipates a change the site plan, the BIDA would need to approve this in the future and also require an updated appraisal to determine the sale price of the land to be transferred. MOTION TO ACCEPT AND PLACE ON FILE THE COMMUNICATION FROM RENAISSANCE AT NASHUA, LLC REGARDING TERMINATION OF PARTNERSHIP WITH DAKOTA PARTNERS, INC., BY MAYOR LOZEAU AND SECONDED BY J HAVILAND. APPROVED UNANIMOUSLY. MOTION TO ACCEPT AND PLACE ON FILE COMMUNICATION FROM RENAISSANCE OF NASHUA, LLC TO ADD SENTRY MANAGEMENT HOLDING, LLC TO PARTNERSHIP OF PHASE 1 OF BRIDGE STREET WATERFRONT DEVELOPMENT PROJECT BY MAYOR LOZEAU AND SECONDED BY J HAVILAND. APPROVED UNANIMOUSLY. J Tulley asked what steps are next. R Porter revealed that they need to sign contract, which is contingent upon the vote by the BIDA. Next, they’ll have to redo the site plan and seek approval from the Planning Board. Next, they’ll need to work with the City on finding a solution to the skateboard park. We expect to gain approval in 60-90 days. D Denehy said that his enthusiasm has increased. I like what I hear. B Vear asked about timelines for performance. Mayor Lozeau asked if they could lay out a timeline for the BIDA. R Porter indicated that they could get this to the BIDA within the next couple of weeks. B Vear asked how soon they need the title to be transferred. B Simons said that they would need 60-90 days to close. They would be in the ground to start construction by February. Based upon this nod today, we'll get the team going. M Lozeau asked if there is another vote by the Board of Aldermen required. T Galligani indicated no, as last year’s vote by the BOA simply changed the method for appraising the property. The vote allowed the BIDA to release the land in phases. Mayor Lozeau described how this site has big potential. MOTION TO APPROVE RENAISSANCE TO BRING IN A THIRD PARTY DEVELOPER PARTICIPANT, SENTRY MANAGMEMENT HOLDING, LLC, TO FORM A JOINT VENTUE IN CONNECTION WITH THE ACQUISITION AND DEVELOPMERNT OF PHASE I OF THE PROJECT, PURSUANT ARTICLE 6.01 OF THE BRIDGE STREEET WATERFRONT PREFERRED DEVELOPER AGREEMENT FOR SALE OF LAND FOR PRIVATE DEVELOPMERNT DATED MAY 21, 2009 BY C ANDRADE AND SECONDED BY J HAVILAND. APPROVED UNANIMOUSLY. M Barrett said that his is great. We're looking at making this work. B Vear suggested that the team provide the BIDA with a detailed schedule for the next BIDA meeting as well as the updated appraisal. 3 4. Developer’s Forum Update T Galligani explained how the forum was a big success. He has conducted follow-up tours from various parties that couldn’t make the June 4 event. Some of the properties featured, have been placed under agreement. This includes the 34 Franklin Street property, the large mill building on Franklin Street. 5. Next Meeting Date: August 14, 2015 MOTION TO ADJOURN THE MEETING AT 9:23 BY B McCARTHY AND SECONDED BY J HAVILAND. APPROVED UNANIMOUSLY. Minutes prepared by T Galligani 4