Zionsville Redevelopment Commission (ZRDC)

MINUTES OF THE NOVEMBER 14, 2012 MEETING OF THE ZIONSVILLE REDEVELOPMENT COMMISSION A special meeting of the Zionsville Redevelopment Commission (“Commission”) was held on Wednesday, November 14th, at 6:30 p.m. in the Zionsville Town Hall Conference Center. Notice of the meeting was duly given to all Commissioners and posted in the notice area of the Town Hall.Those present at the meeting included Commissioners Mike Latz, John Tousley, Mark Plassman, Carol Marquiss, Craig Anderson, Town Manager Ed Mitro, Town Planning/ED Director Wayne DeLong, Ed Mitro, Boone EDC Executive Director Dax Norton, and Town Attorney Andy Buroker. Mike Latz called the meeting to order at 6:30p.m. The first agenda item was the approval of the October 22, 2012, meeting minutes. Mark Plassman made a motion to approve the October 22, 2012 meeting minutes with suggested corrections, Carol Marquiss seconded the motion. The motion was approved 5 to 0. Mike Latz stated that Old Business would be deferred to the regular RDC meeting to be held on Monday, November 26th, 2012. The next agenda item under New Business was a discussion and consideration of a resolution authorizing property acquisition and sale related to the Dow property. As part of that resolution, the RDC also discussed and considered an assignment agreement between the Zionsville Community School Corporation and the Zionsville Redevelopment Commission for assignment of excess land of the Dow property and consideration for an exclusive development agreement between Rockland Development LLC and the RDC to provide development services to the RDC. Mike Latz opened the discussion by describing the project and resolution in detail and asking the commission for questions regarding the resolution and project. He stated that the ZCS School Board currently is in possession of bond money for the purposes of capital projects. The ZCS School Board approved the use of the bond proceeds to purchase the 126 acres of the Dow Property and use a portion of the property to construct a maintenance facility. The remainder of the land would be acquired by the RDC for development purposes. The RDC would assign TIF funds to the School Board to cover interest and principle payments on the bonds and the ZCS School Board would hold a mortgage on the property. Andy Buroker stated that this resolution was a mirror resolution to the ZCS School Board resolution as required by law. He explained that under state law municipalities must have mirror ordinances and resolutions when dealing with land holdings. Mike Latz then discussed the appraisals and land value associated with the assignment agreement. He stated that the appraisals that were completed for the RDC in the summer had been updated for $500. A second appraisal was completed and was funded with the $41,000 grant the RDC approved in October for due diligence. One appraisal valued the land at $4,100,000 and the other valued the land at $5,700,000. Andy Buroker stated that the value would be the mean of the appraisals with the assumption that the utilities would be completed. Mike Latz stated that the RDC would make up any difference to the land values if the utilities were not completed on time. Andy Buroker stated that both appraisals have assumptions and clauses that assume utilities. The RDC is covered legally with the addition of these clauses. Questions and comments pertaining to the resolution follow: • Craig Anderson stated that he was confused at the differences in the numbers between each appraisal. • John Tousley asked why Rockland was backing out of the deal. Mike Latz stated that they were not backing out of the deal. • John Tousley asked if Rockland would still develop the property if the ZCS School Board backed out. • John Tousley stated that more time was needed to gather information before making decisions and asked if Dow would be willing to extend the deadline on the purchase agreement. • Craig Anderson asked if the new appraisal numbers were in line with the appraisal completed previously. • John Tousley asked if Town Council involvement was necessary. Ed Mitro stated that the council had no vote in this matter. • John Tousley asked if a representative of the developer was present. Mike Latz stated no one with Rockland was present. The commission agreed that a representative from Rockland must be present at the next meeting. • Craig Anderson asked if a representative of the ZCS School Board was present. Mike Latz stated no. The commission agreed that a representative of the ZCS School Board must be present at the next meeting. • Mike Latz stated that the goal for the evening was not to take a vote but to present the project, resolutions and exhibits and gather comments and questions from commissioners prior to moving forward with next steps. • Craig Anderson asked for an explanation of the utilities clause in the appraisals. • John Tousley asked if the RDC would be responsible for additional remediation. Andy Buroker stated there were 2 sites on the property still under remediation. He stated that the industrial graveyard site (Remediation Area #1) was not included in the purchase and assignment. He stated that Dow would continue to own and monitor that site. Andy Buroker also stated that 26 acres around the pond (Remediation Area #2) was completing remediation at this time. John Tousley asked if the RDC would own Remediation Area #2. Andy Buroker stated yes. • John Tousley asked if the Town had received No Further Action Letters from IDEM or the EPA. Andy Buroker stated no because there was still action to be completed. Andy Buroker stated that there were agreement in place between Down and IDEM/EPA.  • Andy Buroker stated that Remediation Area #2 could be sold but not built on or covered up until the remediation was complete. • Mike Latz stated that federal law would protect the Town and RDC from environmental clean-up liabilities. • Craig Anderson asked if there were conversations with Dow to indemnify the town. • John Tousley asked how much of the land was developable. • Mike Latz stated that he would discuss an indemnification and hold harmless letter from Dow. Mike Latz then described the assignment agreement in detail. The RDC will pay the ZCS School Corporation $285,000 in interest. Anything beyond would go toward principle. He stated that the financial goal of the RDC would be the achievement of 150% bond coverage, $1,000,000 cash balance in the TIF and 50% of debt obligation to the ZCS School Board. He stated that when the RDC achieves the 50% obligation that the RDC could potentially sell land and have funds remaining after the debt obligation was paid to the ZCS School Board for purposes of use in the TIF. Mike Latz then described the goal of the ZCS School Corporation and the partnership with the RDC. Mark Plassman asked Mike Latz and Andy Buroker to describe why the ZCS School Corporation was using these bond proceeds for this partnership. Mike Latz stated that the bonds can only be used for capital projects like the proposed maintenance facility. John Tousley asked when the commission could see more information and a more complete version of the assignment agreement. Questions and comments pertaining to the assignment agreement follow: • Section 2 (a). Mike Latz stated that if ZCS refinances the bonds at a future time and reduces the payment, any additional savings would go toward the principle. • Section 2 (b) Mike Latz stated that he believed the ZCS School corporation would use 10 acres. • The commissioners had many questions regarding Section 2 (c). Mike Latz stated that info would be forthcoming for answers to this section. • John Tousley, Craig Anderson and Mark Plassman had many questions about Section 2 (d). John Tousley asked if this obligation would stop other projects in the TIF. Mike Latz stated that this is why he would like to build the 150% coverage and $1,000,000 balance. • Section 5 (a) and (b). The commissioners had many questions about the ownership of Rockland and requested that a representative of Rockland attend the next meeting to provide details.  • Mike Latz stated that one of the entities involved in Rockland is Paul Kite companies. John Tousley asked if Paul Kite would answer questions. Mike Latz stated that he would do so. Mike Latz described the Crowe Horwath TIF analysis and focused on Exhibit A and B. Questions and comments about the Crowe Horwath TIF analysis follow: • Mike Latz commented that the bond payment timeline in Exhibit A would move from 2013 to 2014. • John Tousley • The commissioners discussed the projected TIF revenues in exhibit B and all agreed that Paul Kite must be present at the next meeting to discuss the numbers in detail and justify the accelerated timeline and revenue numbers. • Craig Anderson stated that there would be no way that the TIF would generate the numbers projected in the 5 year timeline proposed. The commissioners asked that this be discussed by Paul Kite as well. • Mark Plassman asked about the “refunds”. Andy Buroker explained that the bond was a refunding bond. He stated that no matter what the sale ends up being the ZCS School Corporation would only receive the per price per acre in the agreement. • Craig Anderson asked about the hiring of Crowe. Mike Latz stated it was Rockland and was funded with the $41,000 due diligence grant approved at a previous meeting. • Mark Plassman had concerns about revenue in 2016, 2017, 2018. Mike Latz then presented and gave a detailed overview of the development agreement. Questions and comments regarding the development agreement follow: • Commissioners asked that Paul Kite attend the next meeting and explain the structure of Rockland and give details about how they would perform under this agreement. • John Tousley asked if Rockland had any money down. Andy Buroker stated that they had earnest money committed. • John Tousley asked if this would be a recordable document. Andy Buroker stated that it would not. • Section 2. The commissioners had concerns that the term of 4 years was too long • Section 3. The commissioners would like to see the language changed to the RDC will have the option to renew. The commissioners asked about the costs Kite would incur to promote and market the property. The commissioners  suggested that language be changed from 1 year for each 10 acres sold to 1 year for each 20 acres sold. • Section 4. The RDC will be selling the land and Rockland will be responsible for providing capital associated with site development or vertical development. The RDC will not be providing capital for these items. • The commissioners asked that Section 4, bullet point 7 be removed from the document. • The commissioners asked many questions regarding Section 5 (b). The commission asked that (b) be removed from the document. • The commissioners asked many questions about section 5 (c). Mark Plassman asked why the RDC should pay the developer 2%. Craig Anderson stated that this fee should be associated with and a part of the costs to build the building. John Tousely asked if the developer would receive 2% for the construction of the utilities. Mike Latz stated that Rockland has not been asked to manage the utilities. John Tousley stated the he would like to see specifics related to the 2%. The commissioners asked for more details and stated that they feel this fee should be associated with any 3rd party deal associated with the land. They feel the RDC should not incur this cost. • The commissioners asked that language in section 5(d) be changed from written letters to signed and executed letters. • The commissioners had questions about language in section 6 (b). • Mike Latz asked that language in section 6 (d) be added to read, “necessary in Developer’s reasonable opinion for the development and confirmed by the RDC. • Section 6 (f). John Tousely asked if this would be a commission process like the Micro Loan. Mark Plassman stated that he was concerned about speed to market. Craig Anderson suggested that the approval be made at the next scheduled RDC meeting or a special meeting could be held if speed to market was an issue for the closing of the deal. • The commission would like section 6 (g) removed from the document. • John Tousely stated that there was no notice with opportunity to cure. Andy Buroker stated that this was being worked on. John Tousley also mentioned the absence of a breach provision. Craig Anderson stated that he was appreciative of the hard work of Mike Latz and many others, but said that he would like to see representation from the ZCS School Board and Rockland at the next meeting. Craig Anderson stated that he would be out of town for the next meeting. ? made a motion to adjourn the meeting, ? seconded the motion. The motion passed 5-0.  The next meeting of the commission will be held at 6:30 on Monday, November 26th, 2012. The meeting was adjourned at 8:25p.m.