Local Development Finance Authority
Regular MeetingSterling Heights, MI · May 15, 2018
Minutes
CITY OF STERLING HEIGHTS
LOCAL DEVELOPMENT FINANCE AUTHORITY
Approved
MINUTES OF THE REGULAR MEETING
May 15, 2018 – 8:00 a.m.
6633 18 Mile Road, Sterling Heights, MI 48314
586-884-9322
Velocity Building
Phil Hunsberger called the meeting to order at 8:00 a.m.
Pledge of Allegiance
Members present at roll call: Stephanie Eagen, Ellanore Evans, Phillip Hunsberger, John
Lettang, Fred Molnar, Steve Pomaville, Jim Ruma, Camille Silda, Jill Tomyn, Corey Venetis
Members absent: David Corba, Laurel Johnson, Richard Kincaid, Orest Zachary
Also in attendance: Luke Bonner, CEO Bonner Advisory Group, Senior Economic Development
Advisor – City of Sterling Heights; Kathryn Quell, Management Services Specialist – City of
Sterling Heights; Jason Castor, City Development Director – City of Sterling Heights, Chris
McLeod, City Planner – City of Sterling Heights; Larry Herriman, Executive Director – Macomb
OU Incubator; Dr. David Stone, Associate Vice President-Research – Oakland University;
Valerie Knoll, FCA; Eric Goedtle – FCA.
Motion to Approve the Agenda
Moved by Eagen, supported by Venetis, to approve the agenda as presented.
Ayes: All
Nays: None
Motion carried.
Motion to Approve the Minutes of March 20, 2018 Regular Meeting
Moved by Lettang, supported by Evans, to approve the minutes as presented.
Ayes: All
Nays: None
Motion carried.
New Business
Presentation – LDFA 101.
Mr. Bonner presented an overview of the LDFA and SmartZone.
Mr. Molnar stated that the Third Amended Plan of the LDFA has never been officially presented
to the MEDC for approval. Mr. Bonner stated that a year ago the City of Sterling Heights was
going to partner our SmartZone with Genoa Township through a program offered by the MEDC.
Genoa Township failed to complete the application process. Therefore, the language of the
partnership will have to be removed from the Third Amended Plan and then the plan will be
submitted to the MEDC for approval. Mr. Molnar also commented that in order to continue as a
SmartZone, a linkage needs to be made to a four year university. Mr. Bonner then discussed that
a future meeting will be taking place between the City of Sterling Heights, Oakland University
and Macomb County as to the direction of the incubator. Mr. Bonner stated that there is ten
years left of tax capture for the SmartZone. Additionally, Mr. Bonner stated that funding cannot
go directly to a company but it can go to a service provider. Mr. Bonner stated that the city is
looking at a career tech K-12 robotics program. Mr. Herriman stated that the incubator was built
to create a program of entreprenuership. Mr. Herriman stated that the TIF capture funding is
going more towards the physical building rather than the programs to develop entreprenuers. Mr.
Bonner stated that the when the incubator started, the programs were being funded by grant
dollars that have now been depleted. Mr. Herriman stated that in the meetings at the start of the
incubator, it was discussed that as the TIF capture increased, more money would be put in the
programs as the grant money decreased. Mr. Herriman said that now that TIF capture is going to
road improvements and other areas than the programs. Mr. Bonner stated that the broad
categories of spending are eligible and have built in flexibility. Mr. Bonner stated that we are at a
different point in time from when the incubator first started in regards to revenue, grant dollars
and start ups. Dr. Stone stated that Oakland University has put $650,000 to support the programs
and will not be able to continue at that level of spending support. Dr. Stone stated that the
university loves to help the communities and companies and do the work, but would like to see it
happen as the state intended by utilizing the TIF capture to fund the programs. Mr. Bonner stated
that today with the increase in TIF capture we are now in a different place and it is time to
evaluate where do we want to go and what direction should the building be headed. Mr. Bonner
stated that the LDFA Board will be updated after the meetings take place between the City of
Sterling Heights, Oakland University and Macomb County.
To approve the reimbursement request from FCA US LLC and authorize the Chairperson
to sign, as applicable, all documents required in conjunction with this approval.
Ms. Knoll thanked the City of Sterling Heights and the LDFA for their support of the project for
the Dodge Ram. Mr. Goedtle, Construction Manager, gave an overview of the project. Mr.
Bonner outlined the reimbursement agreement and stated that this is the second half of the
reimbursement. Mr. Bonner stated that FCA has provided all the required documentation and the
city, along with the City’s auditor, Plant and Moran, has determined that all the paperwork is in
order for the reimbursement to be approved.
Moved by Pomaville, supported by Lettang to approve the reimbursement request from FCA US
LLC and authorize the Chairperson to sign, as applicable, all documents required in conjunction
with this approval.
Ayes: All
Nays: None
Motion carried.
Move, to adopt the LDFA Budget for fiscal year 2018/19.
Mr. Castor presented that in the LDFA budget, funding is earmarked as $400,000 for signage,
$600,000 for road repairs, and $50,000 for marketing. This funding is coming from the tax
capture. Ms. Eagen asked where the money is reported that Oakland University is contributing.
Mr. Bonner answered that that money is not part of the city budget. It is Oakland University
money. Mr. Hunsberger inquired if the revenue is a projection. Mr. Bonner stated yes and as a
follow up will split the revenue reporting for the next meeting. Ms. Silda stated that when the
incubator started it was run mainly on grants and that Larry Herriman has done a great job
continuing those grants but that now they have dried up. Ms. Silda stated she is not feeling a
cohesiveness between the parties and perhaps the discussions, as to the state of the incubator,
should have occurred prior to budget approval. Mr. Molnar stated that the disconnect in the
relationships between the parties could have improvement through discussions. He agreed that
these discussions should have taken place before asking for a budget. Dr. Stone stated that it
would not make sense to allocate all of the money and then have a meeting where there is no
funding. Dr. Stone said that, with the staffing cuts, it has gotten difficult to run the program the
way it should be run. He also stated that Oakland University has been back filling with
volunteers and staff to continue the program. Dr. Stone stated that he is asking for support to run
the program as the state outlines and support the reporting required. He stated that he can’t
sustain the program with the funding that is being received right now. Ms. Silda stated that the
meeting to take place between the city and OU may have an impact on the budget. Mr. Bonner
stated that a contract does not exist between the city and OU. A contract, outlining the
agreement between the parties, needs to be in place. Mr. Bonner stated that the city has asked
for meetings. Many changes have occurred with leadership, the economy, the tax capture, grant
money, and other factors. Mr. Bonner said that OU has never approached the city to discuss the
decline in the funding on their end. Mr. Bonner stated that with the increase in tax capture, an
opportunity exists to develop a very productive program. Mr. Bonner said that moving forward,
we currently don’t have a contract, or a proposal of the program. We need to develop a core
program, determine how we are going to fund it and make it a reality by working together. Mr.
Molnar stated that if you look at other incubators, they all have an agreement or contract. One
needs to exist to bring in the cohesiveness. Mr. Molnar said this is an opportunity to reboot the
program and make it more functional. Mr. Hunsberger inquired if the City Council has already
approved the budget. Mr. Bonner confirmed. Ms. Eagen stated that we have a meeting in June to
approve the budget after which a meeting will have occurred between the city and OU. Mr.
Lettang inquired what if an agreement is not reached between the city and OU. Mr. Bonner
stated that the incubator will continue status quo until a specific program is identified. Mr.
Bonner stated that approving the budget does not lock the LDFA in regards to allocating funding.
Amendments can occur throughout the year as deemed necessary. Mr. Hunsberger stated that
the budget approval will be deferred until June and a meeting between the city and OU be set up
prior to the June LDFA meeting. He said at that time hopefully there will be some clarity as to
the direction of the incubator. Mr. Bonner stated the meetings will include himself, Mark
Vanderpool - city manager, Jeff Bahorski - assistant city manager, Kathryn, Dr. Stone, Larry
Herriman and John Paul Rea – Macomb County, and Fred Molnar – MEDC.
Old Business
Board Members Report
Public Comment
None
Adjournment
Moved by Evans, supported by Lettang to adjourn.
Ayes: All
Nays: None
Motion carried.
The meeting adjourned at 9:46 am.
Kq
Minutes Approved 6/19/2018
John Lettang
Secretary
Agenda
CITY OF STERLING HEIGHTS
Regular Meeting of the
LOCAL DEVELOPMENT FINANCE AUTHORITY
6633 18 Mile Road, Sterling Heights
586-884-9322
VELOCITY BUILDING
May 15, 2018
8:00 AM
MEETING CALLED TO ORDER
PLEDGE OF ALLEGIANCE
ROLL CALL
APPROVAL OF AGENDA
APPROVAL OF MINUTES OF March 20, 2018 Regular Meeting
NEW BUSINESS
1. To approve the reimbursement request from FCA US LLC and authorize
the Chairperson to sign, as applicable, all documents required in
conjunction with this approval.
2. Move, to adopt the LDFA Budget for fiscal year 2018/19.
3. Presentation – Overview of the LDFA and SmartZone by Luke Bonner,
CEO – Bonner Advisory Group, Senior Economic Development Advisor –
City of Sterling Heights.
OLD BUSINESS
PUBLIC COMMENT
ADJOURNMENT
CITY OF STERLING HEIGHTS
LOCAL DEVELOPMENT FINANCE AUTHORITY
Draft
MINUTES OF THE REGULAR MEETING
March 20, 2018 – 8:00 a.m.
6633 18 Mile Road, Sterling Heights, MI 48314
586-884-9322
Velocity Building
Phil Hunsberger called the meeting to order at 8:00 a.m.
Pledge of Allegiance
Members present at roll call: David Corba, Stephanie Eagen, Ellanore Evans, Phillip Hunsberger,
Laurel Johnson, Richard Kincaid, John Lettang, Steve Pomaville, Jim Ruma, Jill Tomyn
Members absent: Fred Molnar, Camille Silda, Corey Venetis, Orest Zachary
Also in attendance: Luke Bonner, CEO Bonner Advisory Group, Senior Economic Development
Advisor – City of Sterling Heights; Kathryn Quell, Management Services Specialist – City of
Sterling Heights; Jason Castor, City Development Director – City of Sterling Heights, Jeff
Bahorski, Assistant City Manager – City of Sterling Heights; Keith Potter – MMRMA; Chelsea
O’Malley – MMRMA; Andrea Chom, Business Manager – Macomb OU Incubator.
Motion to Approve the Agenda
Moved by Lettang, supported by Kincaid, to approve the agenda as presented.
Ayes: All
Nays: None
Motion carried.
Motion to Approve the Minutes of January 24, 2018 Regular Meeting
Moved by Kincaid, supported by Evans, to approve the minutes as presented.
Ayes: All
Nays: None
Motion carried.
New Business
To approve spending proposal in the SmartZone.
Mr. Bonner presented that looking forward to the 2018/2019 proposed budget, it is
recommended that funds from the LDFA be allocated as follows: $50,000 Marketing, $400,000
to complete the signage program, and $600,000 dedicated to road repairs in the form of concrete
repair work. The Sterling Heights City Council approves the framework of the Budget and the
LDFA works within the approved framework. At the next meeting, the LDFA will be asked to
adopt the 2018/19 Budget. Additionally at the next meeting, an overview discussion of the
LDFA and SmartZone will take place.
Moved by Lettang, supported by Evans to approve setting aside $1,050,000 from LDFA funds
per the following allocation: $600,000 road repairs, $400,000 signage and $50,000 marketing.
Ayes: All
Nays: None
Motion carried.
Old Business
Mr. Potter, Michigan Municipal Risk Management Authority, stated that although the coverage
for contents states $25,175 of coverage, the MMRMA covers an additional $1,000,000 on top of
the estimated $25,175 for contents. All property is at replacement value.
Board Members Report
Public Comment
None
Adjournment
Moved by Evans, supported by Kincaid to adjourn.
Ayes: All
Nays: None
Motion carried.
The meeting adjourned at 8:50 am.
Kq
Business of the Local
Development Finance Meeting: 5/15/18
Authority
Sterling Heights, Michigan
AGENDA STATEMENT
OMB AS03 Rev. 11/04
Item Title: To consider the Reimbursement Request from FCA US LLC to the Local Development Finance
Authority for reimbursable activities not to exceed $438,187 at 8111 Van Dyke Avenue
(Presentation - Luke Bonner, Senior Economic Development Advisor).
Submitted By: Office of Assessing
Contact Person/Telephone: Luke Bonner, Senior Economic Development Advisor
Administration (initial as applicable) Attachments
City Clerk x Resolution Minutes
Finance & Budget Director Ordinance Plan/Map
City Attorney (as to legal form) x Contract x Other
City Manager
Check box if this agenda item requires billing/revenue collection (fees, etc.) by Treasury Office
Executive Summary:
FCA US LLC, a Delaware limited liability company (Applicant), is a major automotive manufacturer that owns
and operates the Sterling Stamping Plant and Sterling Heights Assembly Plant (SHAP) in Sterling Heights.
Applicant is seeking $438,187 in Local Development Finance Authority (LDFA) incentives for a new real
property investment of $72,300,000 at the site of the old SHAP, commonly known as 38111 Van Dyke.
Applicant is substantially renovating the old paint shop and portions of the old assembly facility to facilitate
the relocation of production of the RAM 1500 pick-up truck to SHAP.
The Applicant is seeking reimbursement for LDFA eligible activities related to the demolition of the on-site
waste water treatment facility, and environmental remediation required to complete construction of a
150,000 s.f. test track facility. On December 6th, 2016, the City Council authorized the transfer of $900,000 of
general fund dollars, previously trademarked for “redevelopment projects” in past city budgets, to the LDFA
in order to complete this partnership with FCA.
On November 15, 2016 the LDFA adopted a resolution approving a redevelopment agreement with FCA
approving $900,000 of funds available for reimbursement to FCA for eligible activities incurred at SHAP.
In addition to this real property investment, Applicant will be equipping the new facility with personal
property valued at approximately $1,012,300,000. As a direct result of these new investments, 700 new jobs
are expected to be created in Sterling Heights, which will generate an overall positive economic impact for
the regional economy of $112,000,000, annually (Multiplier Factor of 4 x Wages of $40,000/job created x 700
jobs).
The reimbursement of eligible activities through the LDFA is part of the overall incentive package provided
to FCA by the City of Sterling Heights and State of Michigan in order to secure both the jobs and investment
securing SHAP’s long term viability.
Attached are the following to assist with your consideration:
• Final Development Agreement between LDFA and FCA US LLC
• Test Track Reimbursement Request
• Confirmation letter by CCC that FCA has paid all invoices
• Email from Nick Makie, City of Sterling Heights Controller
Suggested Action:
MOVED BY: SECONDED BY:
RESOLVED, to approve the Reimbursement Request from FCA US LLC and authorize the Chairperson to sign,
as applicable, all documents required in conjunction with this approval.
Hi Valerie,
After review, I am comfortable with our documentation and support reimbursement. Please submit your
official request so we can get approval scheduled with the board.
Thanks,
Nick Makie, CPA | Controller
City of Sterling Heights
40555 Utica Road | Sterling Heights, MI 48313
T (586)446-2321| F (586)276-4075
www.sterling-heights.net
IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, or the employee or agent responsible for delivering this message to the
intended recipient, you are hereby notified that any dissemination, distribution, forwarding, or copying of this communication is strictly
prohibited. If received in error, please notify the sender immediately by reply email and delete the original message, including attachments.
From: Knol Valerie (FCA) [mailto:Valerie.Knol@fcagroup.com]
Sent: Thursday, April 05, 2018 2:45 PM
To: Luke Bonner; Nick Makie
Subject: letter from CCC for test track - LDFA
Nick & Luke,
Attached is a letter from CCC referencing the PO# and stating they have been paid by FCA and they have
paid Site Development. Please review and let me know if this will satisfy your requirements for a paper
trail. If this is good, I will prepare the former letter requesting reimbursement and email to you so you
can schedule the LDFA meeting.
Thanks,
Valerie
_______________________________________
Valerie Knol
Manager, State and Local Government Relations
FCA US LLC
CIMS 485-13-35
1000 Chrysler Dr., Auburn Hills, MI USA 48326-2766
Telephone: +1 (248) 576-2224
valerie.knol@fcagroup.com
LDFA Business
Sterling Heights, Michigan
5/15/18
AGENDA STATEMENT
OMB AS03 Rev. 11/04
Item Title: Move, to adopt the LDFA Budget for fiscal year 2018/19.
Submitted By: Jason Castor, City Development Director, City of Sterling Heights
MOVED BY: SECONDED BY:
RESOLVED: to adopt the LDFA Budget for fiscal year 2018/19.
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