Roll call was taken with the following members present: Michael Forbes, Jerome Rudy, Kristie Aldridge, Gregory Volk, Steve Kil, Town Manager; David Wickland, Town Attorney; and Sherry Sury, Clerk-Treasurer. William Winterhaler was absent.
Mr. Forbes nominated Jerry Rudy for Vice-President. Roll call vote: Mr. Forbes, yes; Mr. Rudy, yes; Mr. Volk, yes; Ms. Aldridge, yes. Unanimously elected.
Mr. Forbes nominated Kristie Aldridge for Secretary. Roll call vote: Mr. Forbes, yes; Mr. Rudy, yes, Mr. Winterhaler, yes (arrived 6:20), Mr. Volk, yes; Ms. Aldridge, yes. Unanimously elected.
Mr. Dan Lillis, Director of Retail Development, cited local projects they have done: Valparaiso, IN; Lemont, IL and Oswego, IL. Property they are looking at is the Wachter – O’Day property on Rt. 41. Soil testing has been done and analysis of the flood plain. They will try to save trees in back of property and retain walking path to the shrine.
Mr. Jared Olson, Site Development Engineer, provided a break down of the project phases available at this time. The project is difficult due to the site having poor soil and is in a flood plain. This will be a four-phase project. Phase I is engineering which will take 4 months and then approval by FEMA and DNR which will take 2 months about August 2003. Environmental Phase I will begin and a traffic study, which should take until the middle of October. Mid September the rest of the site-engineering plan will begin and Rt. 41 signal and road design plan, which should be done by the end of October. Approvals should be done by mid-November. He described the remaining phases which include Phase II – floodway mitigation, moving organics from lot two and adding a soil surcharge (to compact the soil) to lot two, surcharge must remain six months until July, 2004. Phase III – June 2004 – lot 4 organics removed, surcharge added. September 2004 - lot 2 utilities installed and building construction begins. October 2004 Rt. 41 improvements begin and lot 2 parking area. Lot 2 buildings (Kohl’s and Target) will be complete spring 2005 and will open July 2005 after necessary approvals are made. Phase IV – July, 2005 – remove lot 4 surcharge, install lot 4 utilities, build berm on south property line, September, 2005 – lot 4 parking area and landscaping. Business (grocery store) opens April 2006.
Mr. Larry Rogers reviewed the cost analysis chart. Almost $5M over normal cost to build land at site up because land is about four feet too low and deals with soil settlement after fill is brought in. Surcharge speeds up compaction and the wick drains draws out the moisture. See tape recording incorporated by reference
Discussion between Town Council Members and Ryan Company – Synopsis Mr. Rudy asked if they were aware of the need to protect the well heads and if the pond would be lined? They need to make every effort to protect well heads. Mr. Winterhaler questioned parking runoff filtration. Mr. Olsen stated that they have not completed plans for the pond. Traffic studies will be presented to Redevelopment Commission.
Mr. Robert Swintz – London Witte Group, CPA – retained by Ryan Companies to help find ways to finance development recommends tax increment financing bonds. Question arose who will guarantee bonds. Will stores guarantee? What is risk to town? Ryan Companies is willing to risk the difference if reimbursed from the taxes the stores generate as they are generated. Would Ryan Companies pay themselves back sooner if money was there? Idea is to have project pay for itself.
Mr. Rudy asked if the intent was to use the borrowing power of the town at a low interest rate and the good credit of the anchor stores. The town would not put up any money. Mr. Swintz confirmed this was true. The town would not have any legal / financial obligation.
Mr. Rudy would like to ensure the town is not liable in any way in the soil stabilization work.
Mr. Volk would like community input. Asked if Ryan Company pay for a cross-town letter survey?
How much debt can the project incur? Who underwrites the guarantors? Anchor stores and lending institutions. Not an open market bond, they have a lender in mind.
The possibility of sending out some type of notice (survey) to the citizens for feedback regarding the status of the request by Ryan Company was discussed. Ms. Aldridge stated that she is in favor of the community survey being done because of her canvassing of 112 homes over the weekend passing out notices in the subdivision previously discussed. The majority she said, about 97% of those, did like it.
Mr. Rudy does not want the survey to be used as a proxy; the wording must be such to convey the details correctly and is not biased. He would rather have public meetings where there could be dialogue and would like to see more of the financial aspects to see what impact the project would have. See tape recording incorporated by reference
The plans for a mass mailing to the community to invite the residents to a public meeting to hear the project proposal and provide feedback were agreed upon. The meeting will be Tuesday, April 8th. Mr. Kil will prepare and send out the letter.
Mr. Joe Hero, 11723 S Oakridge – Would like to see financials as soon as possible so there is not another loss similar to that of the ice arena situation, suggests the town hire an attorney who specializes in this area.
Mr. Tom Bush, 10178 Walsh – Questioned the possible need for additional police and fire department resources and personnel and if the town would receive additional funding to cover the increase in resources? See tape recording incorporated by reference.
Mr. Joe Hero, 11723 S Oakridge asked how long has the commission been involved with this group?
/s/ Sherry P. Sury, Clerk-Treasurer
Roll call was taken with the following members present: Michael Forbes, President; Jerome Rudy, Vice-President; Kristie Aldridge, Secretary; William Winterhaler, Member; Gregory Volk, Member; Steve Kil, Town Manager; David Wickland, Town Attorney; and Sherry Sury, Clerk-Treasurer.
Mr. Dan Lillis, Director of Retail Development gave an overview of the history for Ryan Companies. He stated the project is still in the preliminary stage and will be completed in phases. They are aware this is a well area and do not plan on building a gas station. Purpose of this presentation is to inform the community and talk about the T.I.F. Ryan will work with the Town on other constraints such as the sign ordinance.
Mr. Dick Koppy, Civil Engineer discussed studies of site elements that need to be done: remove some of flood plain from creek which must be approved by State; environmental work; traffic study; site engineering, road engineering plans and protecting the watershed. All of these elements will then be brought to the Town for approval. Infrastructure will cost about $8 million before building can take place.
Mr. Bob Swintz, London Witte Group of Indianapolis is working with Ryan Companies to partner with the Town of St. John to achieve this development. The extra cost of $8 million for infrastructure prohibits Ryan Company from funding the project on their own. They are asking the Town of St. John to provide them with the mechanism to access capital markets to raise the dollars to pay the additional costs so they can proceed with the project. They are at the meeting tonight to ask for Tax Increment Financing to raise the $8 million.
They’ll look for interim financing while waiting for the tax increment to come in. Once the funds come in they will go to the private market for investors to buy the bonds of St. John and assume the financing. The developer would also buy a bond from the Town to make up any difference in anticipation the entire $8 million was not raised. Financing would be done on a combined tax-exempt, taxable basis depending on what the ultimate use of the proceeds would be. He is proposing bonds paid over a 20-year period and based his calculations on very conservative numbers, due to an uncertain economy. The financing would be non-recourse to the Town of St. John; the investors and the developer will take all the risk. The three primary tenants’ real estate tax payments will be about $500,000 a year and will be available to pay future debt. For the total development, the tax increment will approximate about $800,000. Also about $300,000 personal property tax is anticipated from primary tenants.
Mr. Rudy asked that a brief overview of the mechanism of Tax Increment Financing be given: what is it; how does it function; how it would indemnify the Town from financial risk, bond defaults; and how it would affect the Town’s ability to raise funds for other purposes.
Mr. Bruce Donaldson of Barnes and Thornburg was invited by St John to provide input on how TIF’s work. TIF’s were provided for in the Indiana Redevelopment Statute in the 1980’s. It was designed for situations where there is property that would not be developed on it’s own; mainly deteriorated downtown areas. The community would identify an area(s) and invest funds to improve the area for development. As new development comes into the area, the resulting property taxes can be set aside and re-invested back to pay for the improvements that were made. It usually works by borrowing money through a bond issue, improving the property, and paying the bonds off as the new development comes in. Bonds can be sold in a number of ways. In today’s proposal, the bonds would be sold, improvements made to make property to be developable; if new property taxes are not sufficient to pay bonds, the developer will pay the bonds. A TIF bond can be set up so bonds are paid solely from property taxes or by the developer, and the Town would not be responsible.
The guarantors will be the three primary tenants; they would guarantee a level of property taxes or the assessed value that would service the debt.
Annual payment for a $6 million bond, for explanation purposes, would be about half a million a year. Projected revenue is based on an approximate dollar amount per square foot, which allows for $550,000 to $575,000. Excess funds can be spent at the discretion of the Redevelopment Commission: pay down the debt, distribute among taxing units or for special project(s). It is anticipated that when the project is one hundred percent completed, the three or four phases, and everyone is paying their taxes, the estimated revenue per year would be somewhere between $800 and $900 thousand dollars a year. The debt service would be $500 to $600 hundred thousand a year and that is when the taxpayers would get a defined dollar benefit realized from this project.
Ms. Aldridge does not believe the property is not a TIF area, it is not a blight area; and Rt. 41 is a prime development area.
Mr. Donaldson stated that from a legal stand point in the Redevelopment Statute there are two different types of areas: 1) blighted area and 2) an economic development area. There are different findings required for each one.
The shrine is not part of the development; the church will stay where it is.
The developer will indemnify the Town from any engineering or construction risks including damage to the building in future years in the event of settling.
Additional costs to the Town would be reimbursable. The developer’s intention does not include tax abatement. If there is a shortfall in taxes it will be made up by the development tenants.
Mr. Forbes opened the meeting to the public. He went through the sign in sheet (attached herewith – Exhibit A) and asked each individual if they would like to speak.
This is upscale area, bring upscale stores for the residents to shop in, not these. Status of Strack’s, do not bring mall into back yards; has Kohl’s and Targets been to our community to represent themselves. Cover all the bases do not need another ice arena. Snow job from Ryan Companies, property ideal for park, elimination of watershed and creek from lift station. Developer wants money before any other costs are discussed, is this the most efficient use of taxes. Asphalt contamination of water concerns; how many parking spaces are there.
How many more people will be coming into town, will increase crime and riff raff, master plan for four lane highway, 93rd will be shortcut from Illinois; increased traffic on Rt. 41 and safety of children at Lake Central. What’s the bottom line of tax benefit for citizens; more traffic congestion, accidents, retail theft, reduction of property values, limit development to highest quality proposals. Do not consider future TIF’s or tax abatements as they are not needed in St. John. Increase in overall crime. Developers who want to “skate” on town taxpayers for town services, do not need development in town.
Will the Redevelopment Commission do what the people want; want St. John to be houses. Shrine walking path put off and now a mega store; keep community the way it is; let town develop by itself, do not pay someone to develop. Stop spending money, do not want it, and do not need it. Retail saturation, there are vacancies, keep single family homes not multiple family housing. Can 10 acres be developed without a TIF; get master plan in place. Be selective with choice of stores, town should set standards. Well goes dry, let developer make offer to do something for town, don’t ask for something from town. Need protection of homes behind mall from light pollution, noise pollution.
Mr. Michael Egnatz, 10725 Gleneagle St. - invited citizens to attend the Planning Advisory Board meeting on the first Thursday of the month.
Mr. Forbes summarized four letters, two in favor, two against (attached herewith Exhibit B 1 – 4). He closed the public portion of the meeting. (Exhibits C 1 – 3 attached herewith presented to the Redevelopment Commission/Town Council at conclusion of meeting or under separate cover, requested by residents to become part of this public record)
Ms. Aldridge motioned, seconded by Mr. Volk, not to accept the TIF area and to oppose the development. Roll call vote: Mr. Rudy, yes; Ms. Aldridge, yes; Mr. Winterhaler, yes; Mr. Volk, yes, Mr. Forbes, yes. Motion passed unanimously.
/s/ Sherry P. Sury, Clerk-Treasurer
Roll call was taken with the following members present: Michael Forbes, President; Jerome Rudy, Vice-President; Kristie Aldridge, Secretary (arrived at 6:41 p.m.); Gregory Volk, Member; Steve Kil, Town Manager; David Wickland, Town Attorney; and Sherry Sury, Clerk-Treasurer. Mr. William Winterhaler was absent.
Mr. Joseph Hero, 11723 S. Oakridge - asked if the Town is paying for the internal road, if a traffic light is necessary and questioned the current fire department services.
Mr. Tom Busch, 10178 Walsh St - asked if the school would receive tax money.
/s/ Sherry P. Sury, Clerk-Treasurer
Roll call was taken with the following members present: Michael Forbes, President; Jerome Rudy, Vice-President; Kristie Aldridge, Secretary; Gregory Volk, Member; Steve Kil, Town Manager; and David Wickland, Town Attorney. Mr. William Winterhaler and Ms. Sherry Sury were absent.
Mr. Rudy motioned that the Commission approve and authorize the Town Council President to sign the Financial Advisory Services Agreement with H. J. Umbaugh & Associates received on October 6, 2003 for the South T.I.F. District, the St. John Market Place project. Ms. Aldridge seconded the motion. Roll call vote: Mr. Rudy, yes; Mr. Volk, no; Ms. Aldridge, yes; Mr. Forbes, yes. Motion carried three to one.
Mr. Rudy motioned that the Commission approve and authorize the Town Council President to sign the Bond Council Agreement with Barnes and Thornburg with the Redevelopment Commission dated October 10, 2003 with regard to the South T.I.F. District, the St. John Market Place project. Ms. Aldridge seconded motion. Roll call vote: Mr. Rudy, yes; Mr., Volk, no; Ms. Aldridge, yes; Mr. Forbes, yes. Motion carried three to one.
/s/ Sherry P. Sury, Clerk-Treasurer
Roll call was taken with the following members present: Michael Forbes, President; Jerome Rudy, Vice-President; William Winterhaler, Member; Gregory Volk, Member; Steve Kil, Town Manager; David Wickland, Town Attorney and Ms. Sherry Sury, Clerk-Treasurer were present. Kristie Aldridge was absent.
Mr. Phil Faccenda, Jr. of Barnes and Thornburg, South Bend, IN – Described the location and the proposal to divide the proposed development into more than one T.I.F. area; the developer would purchase the bonds and oversee the entire project including public improvements. An Economic Development Commission (EDC) bond would be needed; not the traditional T.I.F. bond.
Mr. Steve Carter, of H. J. Umbaugh and Associates – Gave an overview of the financial analysis and what assumptions were used to arrive at their numbers.
Mr. Brad Teibel – Stated that he has two unsigned letters of commitment because the anticipated site improvements have not been finalized. They need the T.I.F. to go through with the project and are willing to work with the Town on improvements.
Mr. Rudy motioned that the Redevelopment Commission proceed with evaluating the request for T.I.F. funding for the St. John Marketplace including the segregation of multiple allocation areas in the South T.I.F. area; a refinement of the construction cost estimate to the extent that is available; the development of the proper financial instruments from bond counsel and financial advisor so that the Town is fully indemnified for the risks; that the additional tax increment revenues beyond what is necessary to pay off the T.I.F. fund could be made available to retire the bonds earlier based upon annual decisions made; and that bond counsel and financial advisor provide an additional schedule and documentation to enable the Commission to proceed to the next step. Seconded by Mr. Winterhaler.
Mr. Joseph Hero, 11723 S. Oakridge Drive – Asked about the public improvement costs, the Town’s bonding power, and the cost of Town services during the bond period. He also inquired as to what would happen in the event of businesses filing bankruptcies.
Three ayes and one nay by Mr. Volk. Motion carried.
/s/ Sherry P. Sury, Clerk-Treasurer