Local Development Finance Authority

CITY OF STERLING HEIGHTS Special Meeting of the LOCAL DEVELOPMENT FINANCE AUTHORITY CITY OF STERLING HEIGHTS 40555 UTICA ROAD 586-446-2730 CITY COUNCIL CHAMBERS July 15, 2011 5:30 PM MEETING CALLED TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL APPROVAL OF AGENDA APPROVAL OF MINUTES OF May 18, 2011 NEW BUSINESS 1. To award the bid for a general contractor to repair, remodel, and improve 6633 18 Mile Road to T.H. Marsh Construction, 32121 Woodward Avenue, Suite 300, Royal Oak, MI 48073 at a base bid cost of $372,000 and authorize Victor Martin, Chair of the LDFA, to sign the contract on behalf of the LDFA. 2. To approve the fiscal year 2011/2012 schedule of regular Local Development Financing Authority meetings and direct the City Clerk to post a notice in accordance with Michigan’s Open Meetings Act. OLD BUSINESS BOARD MEMBERS REPORT PUBLIC COMMENT ADJOURNMENT  CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY MINUTES OF THE MEETING May 18, 2011– 5:30 P.M. 40555 Utica Road, Sterling Heights, MI 48313 586-446-2730 City Council Chambers Draft John Lamerato called the meeting to order at 5:35 p.m. Pledge of Allegiance Members present at roll call: Stephan Cassin, David Corba, Lori Doughty, John Lamerato, John Lettang (late), Casey Sobczak, Irene Spanos, David Wilson, Zac Zachary Members absent: Richard Kincaid, Victor Martin (excused) Also in attendance: Denice A. Gerstenberg, Business Development Manager, Al Khavari of Terra-Telesis, Andreas Lindert of Sanza LLC, and John Lopes of Microcide Research Center LLC Motion to Approve the Agenda as amended Moved by Wilson, supported by Sobczak, to approve the agenda as presented. Ayes: All Nays: None Motion carried. Motion to Approve the Minutes of Regular Meeting February 16, 2011 Moved by Cassin, supported by Wilson, to approve the Minutes as presented. Ayes: All Nays: None Motion carried. New Business Ms. Gerstenberg introduced, Jennifer Varney the new City Treasurer, Wayne Blizman of Oakland University, and Jeff Barry of Oakland University, Al Khavari of Terra-Telesis, Andreas Lindert of Sanza LLC, and John Lopes of Microcide Research Center LLC Mr. Lettang questioned who would be reviewing the workers comp insurance. Mr. Carufel, the Cities Risk Manager, addressed the board, that he reviews each applicant prior to the final review of the board. Mr. Wilson questioned if this was a sole proprietor. Mr. Al Kavari, stated he was a sole proprietor at this time. Mr. Wilson questioned if it was the responsibility of the Cities Risk Manager to review the insurance on behalf of the board. Mr. Carufel replied yes, that prior to the tenant moving in he would be reviewing the documents. Mr. Lettang questioned why there is a difference in the Lease Rental square foot Rates. Ms. Gerstenberg replied that the rental rates are negotiated by the recruitment team and based on the ability to pay, and then the fact that the spaces are oddly shaped and not all lease space is usable space. Motion to approve the lease agreement between Terra-Telesis and the Local Development Finance Authority Moved by Sobczak, supported by Spanos to approve the motion Ayes: All Nays: None Motion carried. Motion to approve the lease agreement between Sanza LLC and the Local Development Finance Authority Moved by Lettang, supported by Wilson to approve the motion Ayes: All Nays: None Motion carried. Motion to approve the lease agreement between Microcide Research Center LLC and the Local Development Finance Authority Moved by Wilson, supported by Spanos to approve the motion Ayes: All Nays: None Motion carried. Mr. Clark Andrews gave an extensive review of the EDA Grant, and the timeline that has brought us up to today and reasons for these additional items to be approve today. Mr. Wilson questioned the EDA’s request to review each lease. Mr. Andrews replied that we have an approved standard lease agreement with the EDA that we will be using for all new tenants. Mr. Wilson questioned the liability of the general leases to the LDFA. Ms. Gerstenberg replied that we would not have to go back to the EDA with these lease agreements, if and when the EDA makes changes to the Lease Agreements, then the next round of leases would include those changes, the three leases that were approved tonight are only for one year, so any changes will be incorporated when they expire and/or are renewed. Mr. Wilson noted in Sec E of the Indemnification Agreement, Comerica Bank should be removed. Ms. Doughty with regards to the covenant of use and purpose after the 20 years, does that conflict with Mr. Dammon thoughts if he did want to repurchase this property. Mr. Andrews stated that Mr. Dammon is aware of the changes that the EDA requires. Ms. Doughty questioned what would trigger the EDA to say a violation of the agreement has occurred. Mr. Andrews stated that the EDA’s intention is to restrict the use of public funds for a private use, which the public receives no benefit from. Ms. Doughty questioned if the LDFA board members are liable for the LDFA’s default. Mr. Andrews stated that only the LDFA is responsible, and only the LDFA’s assets or account balances would be used for liability issues, also the LDFA has liability insurance. There is no personal liability to the board members. Mr. Lettang inquired what the $391,000 grant was going to buy. Mr. Andrews stated that the building was designed as a Day Care Center, and the child size bathroom fixtures need to be removed, and that communication lines were not included in the original construction. General modifications to existing plumbing, electrical and communication needed to be done to update the space to usable tenant spaces. Mr. Lettang questioned the flow of funds, do we pay this upfront, and get reimbursed with the grant, and what is the timeline of the project. Mr. Andrews stated that the construction timeline is very short and we expect a September 1, 2011 deadline. Ms. Gerstenberg stated that the grant is a reimbursement grant, and a 60-day construction timeline. The City pays the bills upfront and then the City will request reimbursement from the EDA, most grants are done this way now, once proof of payment has been submitted then funds are released back to the City. Motion to approve Escrow Agreement between Michigan Municipal Risk Management Authority, City of Sterling Heights, and the Local Development Financing Authority (LDFA), Covenant of Purpose, Use and Ownership with Economic Development Administration (EDA), and Indemnification Agreement as amended and subject to final City Approval and EDA Approval Moved by Wilson, supported by Spanos to approve the motion Ayes: All Nays: None Motion carried. Old Business None Board Members Report None Public Comment None Adjournment Moved by Lettang supported by Spanos to adjourn. Ayes: All Nays: None Motion carried. The meeting adjourned at 6:35 p.m. TJ Minutes Approved 7/13/11 John Lettang Secretary  LDFA Business Sterling Heights, Michigan 7/15/2011 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To Award the Contract between the LDFA and T.H. Marsh Construction in the amount of $372,000.00 for the interior renovations at 6633 18 Mile Road pending the EDA award amendment letter. Submitted By: Denice A. Gerstenberg, Business Development Manager, 446.2731 Executive Summary In April 2010, the City submitted an application to the Economic Development Administration – U.S. Department of Commerce for an Economic Adjustment Assistance award from the EDA on behalf of the City and the LDFA to provide funding to defray the cost of making certain improvements and renovations to a building located at 6633 18 Mile Road, Sterling Heights, Michigan. On September 20, 2010, the EDA approved the Award. On June 7, 2011, the EDA authorized the City/LDFA to advertise for construction bids for the Project. In response to the advertisement for bids, two bids were received on June 28, 2011: one from Evangelista Corporation and a second from T.H. Marsh Construction. Per EDA guidelines, the base bid was a lump sum inclusive of all work. Deduct alternates were listed in case the lump sum bid was over budget, but the project came in approximately 20% below the architect’s estimate and deducts were not necessary. Evangelista Corporation, the low bidder at $278,800, could not be considered for award of the contract because its bid did not comply with the bid specifications in numerous material respects. (See Inter-office Memorandum from Mark Carufel, Purchasing Manager.) The second bid of $372,000 was received from T.H. Marsh Construction, which appears to be a conforming bid in all respects. Architect George Hartman reviewed the bids and asked specific questions to insure that the bid pricing was inclusive of all items identified in the specifications and the contractor could meet the timetable. Mr. Hartman reviewed both bids and determined that only the T.H. Marsh Construction bid meets all of the bid specifications. It is recommended that the construction contract be awarded to T.H. Marsh Construction, the lowest qualified bidder. Construction completion is expected before September 1, 2011. Suggested Action: MOVED BY: SECONDED BY: RESOLVED, to award the bid for a general contractor to repair, remodel, and improve 6633 18 Mile Road to T.H. Marsh Construction, 32121 Woodward Avenue, Suite 300, Royal Oak, MI 48073 at a base bid cost of $372,000 and authorize Victor Martin, Chair of the LDFA, to sign the contract on behalf of the LDFA.  Local Development Financing Authority Sterling Heights, Michigan Item No: Meeting: 07/13/11 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the schedule of the regular Local Development Financing Authority Contact: Denice A. Gerstenberg, Business Development Manager, 446.2731 Executive Summary The Local Development Financing Authority regular meetings are held on the third Wednesday of the month at 5:30 pm. In the recent past, notice of the regular meetings of the Local Development Financing Authority was provided through the publishing and mailing of the Sterling Heights City Calendar to businesses and households and posting to the City website. Because the calendar is no longer being distributed in this manner, the Local Development Financing Authority will now annually approve the schedule of regular Local Development Financing Authority meetings for the fiscal year and the schedule will be posted on the City website and posted at City Hall. The schedule of regular meetings for fiscal year 2011/12 is attached. This new practice will assist in providing public notice of the Local Development Financing Authority’s regular public meetings. Suggested Action: MOVED BY: SECONDED BY: RESOLVED, to approve the fiscal year 2011/2012 schedule of regular Local Development Financing Authority Meetings and direct the City Clerk to post a notice in accordance with Michigan’s Open Meetings Act.  City of Sterling Heights 40555 Utica Road Post Office Box 8009 Sterling Heights, MI 48311-8009 (586) 446-CITY Notice of Local Development Finance Authority Regular Meeting Dates, Times, and Locations in Fiscal Year 2011/2012 Location of Meetings (unless otherwise noted below): City Hall Council Chambers located at 40555 Utica Road, Sterling Heights, MI 48311-8009 Wednesday, July 20, 2011 at 5:30 pm Wednesday August 17, 2011 at 7:30 pm Wednesday, September 21, 2011 at 7:30 pm Wednesday, October 19, 2011 at 7:30 pm Wednesday, November 16, 2011 at 7:30 pm Wednesday, December 21, 2011 at 7:30 pm Wednesday, January 18, 2012 at 7:30 pm Wednesday, February 15, 2012 at 7:30 pm Wednesday, March 21, 2012 at 7:30 pm Wednesday, April 18, 2012 at 7:30 pm Wednesday, May 16, 2012 at 7:30 pm Wednesday, June 20, 2012 at 7:30 pm