Local Development Finance Authority

CITY OF STERLING HEIGHTS Regular Meeting of the LOCAL DEVELOPMENT FINANCE AUTHORITY 40555 Utica Road, Sterling Heights 586-884-9322 June 19, 2018 8:00 AM MEETING CALLED TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL APPROVAL OF AGENDA APPROVAL OF MINUTES OF May 15, 2018 Regular Meeting NEW BUSINESS 1. To consider a Proposal from Issue Media Group for a marketing partnership. (Presentation – Luke Bonner, Senior Economic Development Advisor and Brian Boyle, Issue Media Group). 2. Discussion of Velocity and presentation of financials. (Presentation – Jennifer Varney, Finance and Budget Director). 3. Move, to adopt the LDFA Budget for fiscal year 2018/19. 4. To approve three Lease Termination Agreements and one Lease Agreement between Sequris Group and the Local Development Finance Authority (LDFA). 5. To approve the Lease Termination Agreement between SAPA Transmissions and the Local Development Finance Authority (LDFA). OLD BUSINESS PUBLIC COMMENT ADJOURNMENT  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 inquire 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  Business of the Local Development Finance Meeting: 06/19/18 Authority Sterling Heights, Michigan AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To consider a Proposal from Issue Media Group for a marketing partnership. (Presentation - Luke Bonner, Senior Economic Development Advisor and Brian Boyle, Issue Media Group). Submitted By: Office of Economic Development 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: Issue Media Group (IMG) will partner with the City of Sterling Heights and a coalition of community stakeholders to identify and capture the story of talent, investment, innovation and emerging assets that are shaping the future of Sterling Heights. Program Pricing “On the Ground” Embedded Journalism (4mos) $42,000 Pop Up Community Newsroom (2mos) $10,000 Underwriting & Advertising and Brand (6mos) $18,000 Monthly Dedicated Sterling Heights Edition (12 editions) $12,000 5% Discount for 2 year commitment $77,900 / year The LDFA is requested to support this proposal by contributing $50,000, which is estimated to account for 65% of the cost and content generated by this initiative. The City of Sterling Heights general fund will be requested to consider $27,900, to cover the remaining 35% of the cost and content targeted towards quality of life. The funds used to cover the cost of this partnership agreement will come from the LDFA “local” tax capture, and not the Smartzone “school” capture. Suggested Action: MOVED BY: SECONDED BY: RESOLVED, to approve the proposal between the City of Sterling Heights Local Development Finance Authority and Issue Media Group for a marketing partnership. TO: Phil Hunsberger, Chairman Sterling Heights LDFA FROM: Luke Bonner, Sr. Economic Development Advisor CC: LDFA Board Members Kathryn Quell, Building Services Specialist Jason Castor, City Development Director Bridget Kozlowski, Community Relations Director Jeffery Bahorski, Assistant City Manager Mark Vanderpool, City Manager DATE: June 19, 2018 RE: Issue Media Group Proposal Dear Mr. Hunsberger: Issue Media Group (IMG) is an Inc. 5000 Detroit-based media company. We publish online magazines about growth, investment, and the people leading communities into the new economy in 21 regions across the U.S. and Canada. IMG overs what's next in cities, creating new narratives that document transformation and growth. IMG journalists identify influencers – the change-makers and doers moving cities and regions forward. IMG reports on micro-investment in job creation and development and map small transactions that create large-scale impact and change and provide hyperlocal engagement with influencers, research and data, and audience. The staff is requesting $50,000 to fund 65% of the total project cost. The other portion of the project will be funded by the City’s general fund, if approved ($27,900 or 35%) Ideally, the City will also be able to engage with private businesses to underwrite some of the costs as well. The goal through this partnership is to bring attention to Sterling Heights whereas the current news media has deficient bandwidth to cover all stories. Primarily, politics, crime, and major investments are covered by the media. So many other good news stories are gone untold or uncovered. This is an opportunity to place new light on the business and community dealings of the city. Senior Economic Development Advisor  City of Sterling Heights + Metromode Annual Partnership Proposal OVERVIEW & STRATEGY Issue Media Group (IMG) will partner with the City of Sterling Heights and a coalition of community stakeholders to identify and capture the story of talent, investment, innovation and emerging assets that are shaping the future of Sterling Heights. During an annual engagement, IMG will actively engage community stakeholders while employing a variety of approaches to uncover and capture stories of talent, innovation, and place-based transformation while convening community conversations and regularly programmed events. The stories will be published in Metromode, selected for publication to a statewide Michigan audience, made available for syndication and re-use to Sterling Heights program partners and stakeholders and activated in social media channels. - Proposed Program Deliverables - 1. On the Ground Overview(Embedded Journalism) The “On The Ground” program helps to tell the story of the people, projects and innovations that are creating “what’s next” for underreported communities. The program helps increase the communications capacity of the organizations working to improve narrative, increase community engagement and grow the economy. The intended impact is for additional “solutions-oriented” media coverage, engagement and ultimately understanding of the community, resulting in awareness and investments that can contribute to the vitality and prosperity of the community. Metromode will collaborate with City of Sterling Heights and its network of community stakeholders on connecting and orienting a dedicated journalist in the city. In order to establish a lasting relationship with the community and the groups involved with the project, Issue Media Group (IMG) builds added time into the commitment for the journalist to research the history of the community and develop an editorial framework based on the interests of the community. He or she will attend monthly community events and convenings, create a pop-up community newsroom and host regular editorial advisory to engage residents and city-wide stakeholders for story ideas and networking. On The Ground programs are tailored to approach the needs of each community differently and intended as part of a long-term partnership towards creating long-term media and community activation impact Metromode will use an “embedded journalism” model to maintain a media / community engagement presence in the City of Sterling Heights for a period of 4-months. Metromode will focus weekly editorial coverage and community engagement on the community to tell the story of the people, projects and innovations that are shaping “what’s next” for the community. • 30-day program design + setup o Dedicated project lead, editor, and engagement manager identified o City of Sterling Heights & community stakeholders identified as community partners to extend relationships to the Metromode journalist o Design program events and convenings  o Determine program narratives and story arch o Community orientation o Outreach for media partnerships o Research on history of selected community o Development of event and editorial framework • Dedicated lead journalist / project editor​ (Embedded Journalist + Weekly Engagement) o Journalist will collaborate with the community to identify people, projects, organization and innovations that are shaping “what’s next” for the community. o Will develop and manage editorial calendar on a weekly basis. o Will produce, assign, edit and coordinate editorial content and photography. o Will hold regular “office hours” in order to maintain consistent availability for engagement opportunities and story ideas from stakeholders and public o Will lead weekly community engagement program as designed with input from City of Sterling Heights & community stakeholders • Weekly content o Embedded Journalist will publish at least one piece of content about Sterling Heights per week o Content could take the form of news pieces, guest posts/Q & A’s, mini features, full features etc. o In addition to the Metromode editorial team, Metromode may also source and pay local contributors from the community such as writers, photographers, videographers, and caterers when available. o Metromode retains all editorial decisions without approval from program partners and funders. • Social media strategy and execution o Journalist will establish and / or maintain a social media presence allowing people to see inside the community through Facebook, Twitter, Instagram, etc. o Journalist will post weekly and will boost content throughout time of contract o Social media will be generated from weekly engagement program o Efforts will be made to integrate partner channels ● Video showcasing the Sterling Heights community ○ Metromode will produce short-form (2-3 minute) video content within the community ○ Metromode will post on social media ○ Video focus or topic to be informed by partners and advisory group ● Support of existing Sterling Heights events and programs o Engagement with existing Sterling Heights events and meetings o Journalist will attend 2 meetings/events per month o Will likely result in additional social media posts and/or coverage Note: Metromode & IMG requires minimum 4 weeks from contract execution to identify talent. *Coordination with the Sterling Heights Metromode will partner with City of Sterling Heights and community stakeholders on the project while our journalist is embedded in Sterling Heights. City of Sterling Heights will make connections, attend meetings, and assist the journalist with his or her acclimation to the community. **Weekly Publishing Metromode will publish weekly stories from within the designated community over the 4-months of this program but will continue our focus on stories emerging out of this area in other sections of our publication from innovation & development news to pictorial profiles to event coverage happening within the designated boundaries. Community Conversation Event Metromode will produce a minimum of one (1) Community Conversation event during time of contract with focus on specific subject of interest to our partners and informed by advisory group. The event will be designed to foster community and conversation with emerging place based business in Sterling Heights. Speaker Series Wrap Event IMG will partner with City of Sterling Heights to hold one speaker series event that features thought leaders, city builders and “doers” as panelists at the event in a way that engages the community around a key theme. Topic example “The Future of Sterling Heights.” Summary of Recommended OTG Program Deliverables: ● Project editor Embedded Journalist (ongoing) ● Weekly community engagement piece OTG (TBD during kick-off advisory meeting) ● Community Conversation (1) ● Speaker Series Wrap Event (1) ● Social Media + Boosting (minimum 8 posts per week) ● Weekly content including original photography published in Metromode ● Original Series Wrap video (1) ● City of Sterling Heights branding and attributions + event promotion ● Content reuse rights ● Advisory Group convenings (2) ● Program metrics and impact reporting *Program deliverables may change in response to City of Sterling Heights input 2. “POP UP” Community Newsroom Overview IMG/Metromode will partner with Sterling Heights community stakeholders on coordinating and producing a weekly community engagement hub designed to create greater awareness of unique assets, catalytic activity, talent, and future vision of Sterling Heights while supporting and increasing communications capacity of the community. ● Metromode assigned community reporter will staff the newsroom four (4) hours per week for four (4) consecutive weeks in public locations in the city ● One dedicated kick-off editorial advisory meeting with Metromode community reporter, Sterling Heights community stakeholders* to help inform editorial content, photo essay, and Facebook Live interviewees ● Includes minimum 1 scheduled Facebook Live / interview per week with additional narrative driven by organic foot traffic/audience ● One feature story published to introduce community / profile assets, issues and opportunities. ● One wrap-up feature story to be published at conclusion of project. ● One photo essay to be published at conclusion of project  *Sterling Heights to help select with inviting community stakeholders 3. Underwriting - Metromode Focus Community IMG/Metromode will provide ongoing underwriting support and position Sterling Heights as a FOCUS community in Metromode during all periods of time when there is no special program being conducted in Sterling Heights. ● Two dedicated editorial advisory meetings (dates determined at contract execution) ● Dedicated Project Editor contracted to develop and publish 1 feature story and 2 news hits per month with original photography ● Social Media promotional strategy developed and executed for Metromode social channels ● Community Microsite will be integrated into Metromode platform, Sterling Heights will be positioned as a Focus City during the contract term. For all Program Options Sterling Heights Will Receive The Following Benefits: Quarterly Metromode Editorial Advisory Participation Sterling Heights will be invited to participate in quarterly coalition meetings hosted by Metromode editorial team and designed to connect SE Michigan stakeholders on overall mission of Metromode and inform editorial content and content calendar development. City of Sterling Heights Advertising and Content Re-use ● Sterling Heights and community partners will receive advertising placement on Metromode homepage and e-newsletter; Additional ad placement will be aligned to underwritten areas of content and run of site in best available sections of Metromode. Ads will run in 24/7 hour rotation & placed within 48 hours of receipt. Ad specs found here: http://www.issuemediagroup.com/sponsors/specs.aspx ● City of Sterling Heights and community partners will receive content re-use rights, having the ability to reuse program content on their websites, newsletter, social media, and other online communication channels ● Metromode will offer underwritten content to existing media partners to help advance the narrative. Content reuse is at the discretion of media partners. With additional resources, Metromode will make efforts to expand content reuse and social media engagement. ● IMG will assist in developing a content syndication plan.  - Program Terms - This contract contains the entire agreement between IMG and City of Sterling Heights and there are no other conditions in any other written or oral agreement concerning the subject matter in this contract. No amendment, change or modification to this contract will be effective unless it is in writing and signed by both parties. This contract supersedes any prior written or oral agreement between IMG and City of Sterling Heights unless otherwise specified. Program Pricing “On the Ground” Embedded Journalism (4mos) $42,000 Pop Up Community Newsroom (2mos) $10,000 Underwriting & Advertising and Brand (6mos) $18,000 Monthly Dedicated Sterling Heights Edition (12 editions) $12,000 Proposed Timeline and Schedule​ (To be evolved and finalized with input from program advisors) ● July: Discovery & publish Emerging Sterling Heights feature story (Introducing Sterling Heights as a Metromode FOCUS City) ● August - October: On The Ground ● November - December: 1 feature + 2 news hits per month ● January - February: POP UP Community Newsroom ● March - April: Continued Underwriting ● May - June: Underwriting + Entrepreneurship Event ● Monthly: Sterling Heights wrap up edition sent to Sterling Heights provided email list under Sterling Heights brand Total Program Investment $82,000 5% Discount for 2 year commitment $77,900 / year Schedule: TBD Payment Terms: 50% due at signing; 50% due 6 mos from program start - Program Approval - By signing this contract City of Sterling Heights allows Issue Media Group to proceed with the work described in this proposal. Please return via email to Brian Boyle at brian@issuemediagroup.com or via fax to 734-310-6000. Accepted by City of Sterling Heights: Accepted by Issue Media Group: Brian Boyle / CEO DATE DATE City of Sterling Heights Issue Media Group Issue Media Group’s Underwriting Policy Issue Media Group offers its underwriters the opportunity to directly align their brands with content about talent, innovation, diversity, and place. In addition, IMG provides corporations, governments, institutions, nonprofits, and foundations with similarly focused missions a way to use their media budgets to support and expand coverage of job growth, economic development, real estate, non-profit innovation, city building, and placemaking. Underwriting is the basis of our model as a publication. Underwriters are considered crucial to our organization and their support is the reason that IMG is able to produce content within a broad spectrum of topics. Support from underwriters allows IMG to dedicate editorial resources to cover key issue areas that are of importance to both the underwriter and IMG’s mission. We work with like-minded stakeholders who have shared values and missions. Because of our intersecting interests, we may cover our underwriters' work journalistically. However, IMG observes strict boundaries regarding the direction, review, and approval of content that is published. IMG encourages underwriters to pitch ideas through Editorial Advisories and to our editorial teams. We value the knowledge our partners bring to our work, and we encourage underwriters to send story ideas, trends in underwriters' areas of expertise, and press releases. However, published content is at the discretion of the editorial teams and all final decisions regarding content are made without client approval. While underwriters are not allowed to review or approve content, IMG works with them to establish focus areas that will be included in coverage. If an underwriter desires the ability to direct or edit content, the content will be considered “Partner Content,” and given a treatment that distinguishes it from editorial content. The underwriter's logo will be embedded in the story and a transparency statement will be included. IMG works with underwriters to fully understand the issues they care about. However, IMG trusts its editorial teams to shape stories around issues in a way that will resonate with readers. IMG honors truthfulness and strives to avoid conflicts of interest in our reporting. This includes real conflicts and acts that may appear to be a conflict. To this end, we opt to disclose any relationships with underwriters that could be perceived as complicating our journalistic mission.  LDFA Business Sterling Heights, Michigan 6/19/18 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve three Lease Termination Agreements and one Lease Agreement between Sequris Group and the Local Development Finance Authority (LDFA). Submitted By: Kathryn Quell, Building Services Specialist Executive Summary Attached for LDFA review are three Lease Termination Agreements between Sequris Group and the Local Development Finance Authority (LDFA) for spaces: #2-D, #2-E and #2-F. These Lease Agreements were on a month-to-month basis. Additionally, Sequris Group has submitted a month-to-month Lease Agreement for space #2-I consisting of 799 square feet at a rate of $1165.00/month. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve three Lease Termination Agreements and one Lease Agreement between Sequris Group and the Local Development Finance Authority (LDFA).  LDFA Business Sterling Heights, Michigan 6/19/18 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Lease Termination Agreement between SAPA Transmissions and the Local Development Finance Authority (LDFA). Submitted By: Kathryn Quell, Building Services Specialist Executive Summary Attached for LDFA review is a Lease Termination Agreement between SAPA Transmissions and the Local Development Finance Authority (LDFA) for space #2-C. The Lease Agreement was on a month-to-month basis. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve the Lease Termination Agreement between SAPA Transmissions and the Local Development Finance Authority (LDFA).