Special Joint Common Council and Finance Meeting - Budget

CITY OF SHAWANO SPECIAL JOINT COMMON COUNCIL & FINANCE COMMITTEE MEETING AGENDA WEDNESDAY, SEPTEMBER 27, 2023 6:00 PM SHAWANO CITY HALL, 127 S. SAWYER STREET, SHAWANO TO JOIN THE MEETING VIA ZOOM, PLEASE CLICK THE LINK BELOW https://us02web.zoom.us/j/83915440671pwd=YkU2dHdwSkU1T29WU2plb2gxK1pnQT09 MEETING ID: 839 1544 0671 PASSCODE: 701530 1) CALL TO ORDER 2) PLEDGE OF ALLEGIANCE 3) ROLL CALL 4) REPORT OF CLERK FOR COMPLIANCE WITH OPEN MEETING LAW 5) APPROVAL OF AGENDA AND/OR OTHER MATTERS AUTHORIZED BY LAW 6) PUBLIC COMMENT 7) RESOLUTIONS/ORDINANCES A. Resolution No.104-23: Approve Development Agreement between the City of Shawano and 148 South Main Street, LLC 8) 2024 CITY OF SHAWANO BUDGET DISCUSSION 9) CLOSED SESSION Go into CLOSED SESSION under Wisconsin State Statute 19.85 (1) (c) Considering employment, promotion, compensation or performance evaluation data of any public employee over which the governmental body has jurisdiction or exercises responsibility, and Wisconsin State Statute 19.85 (1) (e) for deliberating or negotiating the purchasing of public properties, the investing of public funds, or conducting other specified public business, whenever competitive or bargaining reasons require a closed session. Page 1 of 8  10) OPEN SESSION Return to OPEN SESSION per Wisconsin State Statutes 19.85 (2) to take appropriate action, if required, on closed session matters. 11) ADJOURN DISABLED ACCESSIBLE (Contact City Clerk prior to meeting if require additional services.) It is possible that members of and possibly a quorum of members of other governmental bodies of the municipality may be in attendance at the above-stated meeting to gather information; no action will be taken by any governmental body at the above-stated meeting other than the governmental body specifically referred to above in this notice. Page 2 of 8  City of Shawano 127 S Sawyer Street, Shawano, WI 54166 (715) 526-6138 Fax: (715) 526-5751 RESOLUTION NO. 104-23 SPONSORED BY: Shawano Redevelopment Authority INTRODUCED BY: SECONDED BY: WHEREAS, the attached Development Agreement between the Shawano Redevelopment Authority (hereinafter “RDA”), and 148 South Main Street, LLC (hereinafter “Owner”); and WHEREAS, Owner has purchased and intends to renovate the property at 146 South Main Street hereinafter “property”; and WHEREAS, Owner has applied for a renovation grant through the Wisconsin Economic Development (WEDC) Community Development Investment Program; and WHEREAS, Owner is seeking additional funding assistance through the City of Shawano Tax Increment Finance District No.9 (TID #9) and the City’s Housing Stock Revitalization Program; and WHEREAS, the property lies within the boundary of Tax Increment Finance District No. 9 (TID #9); and WHEREAS, the City has authorized the RDA to negotiate and enter into development agreements for projects advancing the goals of blight elimination and economic development; and WHEREAS, the RDA desires to assist Owner in said improvements to the building located on the property described above; and WHEREAS, such assistance is contemplated and in accordance with objectives identified in the TID #9 Project Plan; and WHEREAS, this agreement is entered into between the parties to set forth the agreement of the parties and the respective obligations of both parties; NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Shawano that: 1. The attached Development Agreement is hereby approved. 2. The Mayor and City Clerk are hereby authorized and directed to execute said agreement. Adopted: Signed: Bruce Milavitz, Mayor Signed: Lesley Nemetz, City Clerk Page 3 of 8  DEVELOPER’S AGREEMENT BETWEEN THE CITY OF SHAWANO, WISCONSIN & 148 SOUTH MAIN, LLC This agreement made and entered into this 27th day of September 2023, by and between the City of Shawano, designating authority to the Shawano Redevelopment Authority (hereinafter “RDA”) and 148 South Main Street, LLC (hereinafter “Owner”). WHEREAS, Owner has purchased and intends to renovate the property at 146 South Main Street hereinafter “property”; and WHEREAS, Owner has applied for a renovation grant through the Wisconsin Economic Development (WEDC) Community Development Investment Program; and WHEREAS, Owner is seeking additional funding assistance through the City of Shawano Tax Increment Finance District No.9 (TID #9) and the City’s Housing Stock Revitalization Program; and WHEREAS, the property lies within the boundary of Tax Increment Finance District No. 9 (TID #9); and WHEREAS, the City has authorized the RDA to negotiate and enter into development agreements for projects advancing the goals of blight elimination and economic development; and WHEREAS, the RDA desires to assist Owner in said improvements to the building located on the property described above; and WHEREAS, such assistance is contemplated and in accordance with objectives identified in the TID #9 Project Plan; and WHEREAS, this agreement is entered into between the parties to set forth the agreement of the parties and the respective obligations of both parties; NOW, THEREFORE, in consideration of the mutual agreements as set forth herein, the parties agree as follows: SECTION I PROJECT PLAN Owner has purchased and is renovating the property as described above, with the intention of redeveloping the retail space on the first floor and the creation of multiple apartments on the second level. The owner has sought out private funding for the project through WEDC’s Community Development Investment Program. Owner is also seeking local funding through the City’s Tax Increment Financing Program (TID #9) and the City’s Housing Stock Revitalization Program. The total cost of the project, including acquisition, is estimated at $530,000 with the renovation portion estimated at $380,000. Owner is anticipating $150,000 of the project cost to be granted by the WEDC’s Community Investment Grant. The RDA desires to assist Owner in said project by participating with grants and entry into a low-interest loan arrangement, the terms of which are set forth herein. Page 4 of 8  SECTION II OWNER AGREEMENTS/RESPONSIBILITIES Owner agrees as follows: 1. Owner has purchased and is in the process of renovating the building located on the above-described property, with substantial completion of said remodeling/renovation to be completed by December 31, 2023. Owner will have said building substantially completed by that date so that an occupancy permit can be issued. 2. Owner anticipates the project including, building purchase and construction at a total cost $530,000. The remodeling/renovation of said building is estimated to result in an increase in assessed value which is currently $70,100 (2022 assessment). The scheduled improvement costs are outlined in Exhibit A for the subject property. Owner shall complete the scope of work as detailed to be eligible for development incentive. 3. Owner will provide a detailed budget to the RDA, in a form acceptable to the RDA, with said budget to set forth the anticipated income and expenses for the operation of the businesses upon project completion. Owner shall provide copies of annual tax returns and profit and loss statements and shall provide said financial information as provided in this Paragraph until all loan payments have been paid to RDA. 4. A project plan for the development/remodeling of the building has been provided for RDA to ensure compliance to the RDA’s zoning code. 5. Owner shall provide to the RDA Clerk’s office Certificates of Insurance, naming the RDA as an additional insured, for insurance coverage for the remodeled and improved property located at 146 S. Main Street, 54166 in order to secure and protect the RDA’s interest in the improvements in the event that the building is damaged or destroyed during the time that the RDA’s loan is outstanding. The amount of said insurance shall be at least in the amount of the RDA’s outstanding loan balance. SECTION III RDA’S AGREEMENTS/RESPONSIBILITIES RDA agrees as follows, subject to Owner complying with Owner Agreements/Responsibilities set forth in the preceding section and as otherwise provided herein: 1. RDA agrees to provide a grant of Sixty-Five Thousand ($65,000) dollars, which monies will be paid from the City’s Housing Revitalization fund, which accumulates funds upon tax increment district closures. Said grant is to be specifically utilized for the renovation costs related to the 2nd story housing renovation. Grant fund distribution is contingent upon substantial completion and documentation of the actual investment identified in Exhibit A and in Section II Page 5 of 8  (2) and (3) above. Material departures from the anticipated improvement costs and Scope of Work detailed in Exhibit A shall be approved by RDA and may result in modification of the grant amount. 2. RDA also agrees to provide a grant of Thirty-Five Thousand ($35,000) dollars, which money will be paid from the city Tax Increment Finance District No. 9. Said funds are to be used for the renovation of the first-floor retail space. Grant fund distribution is contingent upon substantial completion and documentation of the actual investment identified in Exhibit A and in Section II (2) and (3) above. Material departures from the anticipated improvement costs and Scope of Work detailed in Exhibit A shall be approved by RDA and may result in modification of the grant amount. 3. RDA will provide a low-interest loan of Fifty Thousand ($50,000) dollars, with an interest rate of four percent (4%) per annum, with said payments to be amortized over a period of ten (10) years. The RDA agrees that the loan of a maximum amount of Fifty Thousand ($50,000) dollars shall be established as an account upon which the Owner may draw upon as their construction and remodeling needs occur. The RDA agrees to a deferral of 6 months on any principal and interest payments, although interest shall accrue on any monies drawn on said Fifty Thousand ($50,000) dollar loan. The deferral period for any payments shall commence on the date of the first draw on the loan. Said monies will be taken from the Tax Increment Financing District (TID) No. 9. SECTION IV MISCELLANEOUS REQUIREMENTS 1. The parties agree to cooperate in signing any necessary additional documents, including but not limited to a Promissory Note and Second Mortgage giving the RDA a second priority security interest in the property described herein. In addition, there shall be a Personal Guarantee given to the RDA by Owner’s members Heather and David Pahl, to insure repayment of the loan. The parties understand that the execution of said Note and Mortgage and Personal Guarantee shall occur at the time that Owner have advised the RDA that no further draws on the low-interest loan will be made. 2. Owner grants to the RDA, its officials, employees, agents, contractors and sub-contractors, access to the property described herein in order to determine the progress of the remodeling/renovation of the building, as the RDA needs to protect its interest due to the grant and loan which the parties are participating with. 3. It is expressly understood and agreed that the terms of this agreement are covenants running with the land and are binding on the RDA and Owner and any and all successors and assignors. 4. Owner shall not assign this agreement or obligations arising hereunder or under the referenced agreements without the prior written consent of the RDA. Page 6 of 8 5. Owner agrees to indemnify and hold harmless the RDA, its officers, agents and employees, and shall defend the same, from and against any and all liability, claims, loss, damages, interest, action, suits, judgments, costs, expenses, attorney fees and the like, to whomsoever owed and by whomsoever and whenever brought or obtained, which may in any manner result from or arise in the course of or out of the performance of the work required by RDA under this and the referenced agreements, including but not limited to negligence and the breach of any duty whether imposed by statutes, ordinances, regulations, order, degree or law of any sort or by contract on the part of Owner, its officers, employees, agents, workmen or independent contractors, in carrying out the work and in supervising and safeguarding the same in any respect whatsoever, including claims arising under federal, state or local law. 6. The City Clerk shall record this Developer’s Agreement with the Shawano County Register of Deeds upon passage and publication. SECTION V NOTICES Any notices required or desired to be given shall be given as follows: RDA of Shawano: Eddie Sheppard, City Administrator or office Holder 127 S. Sawyer Street Shawano, WI 54166 148 South Main LLC, LLC 146 S. Main Street Shawano, WI 54166 Dated this _____ day of ______________, 2023. Shawano Redevelopment Authority By:_____________________________ Jeanne Cronce, Chairperson Page 7 of 8  Dated this _____ day of ______________, 2023. City of Shawano By:_____________________________ Bruce Milavitz, Mayor By:_____________________________ Lesley Nemetz, City Clerk Dated this _____ day of ______________, 2023. 148 S. Main, LLC By:____________________________ _______________, President By:____________________________ _______________, Secretary This instrument was drafted by: Keith Steckbauer, City/RDA Attorney PO Box 200 Dale, WI 54166 Page 8 of 8