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HomeMy WebLinkAboutMinutes - 48th - November 18, 1982 signedqti MINUTES OF A REGULAR MEETING OF THE ECONOMIC DEVELOPMENT CORPORATION OF LIVONIA A Regular Meeting of the Economic Development Corporation of Livonia was called to order by the Chairman, Peter Ventura, at approximately 5:07 p.m., November 18, 1982, in the Council Chambers of the City Hall, 33000 Civic Center Drive, Livonia, Michigan. The Secretary called the roll: Directors Present: Mr. Kenneth Hale Mr. Frank Hand Mr. Alan Helmkamp Ms. Helen Kavanaugh Mr. Ron Mardiros Mr. Angelo Plakas Mr. Peter Ventura Directors Absent: Mr. Robert Jankowski Mr. Stanley Telman Others Present: Mr. Sheldon P. Winkelman, Attorney for Goldman Mr. Martin R. Goldman, Applicant Mr. Harold Blumenstein, Paragon Properties Mr. Charles Lazette, Garrett Tool & Engineering Mr. Ronald Clapham, Miller/Canfield Mr. Daniel J. Gilmartin, Executive Director Ms. Marie E. King, Recording Secretary 0n a motion by Mr. Hale, supported by Mrs. Kavanaugh, it was #82-283 RESOLVED, that the minutes of November 15, 1982, of the Special Meeting of the Economic Development Corporation of Livonia be approved as submitted. A roll call vote was taken on the foregoing motion with the following results: AYES: Hale, Hand, Helmkamp, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None The Chairman declared the resolution adopted. The Chairman introduced the guests, Mr. Goldman, Mr. Winkelman, Mr. Clapham, Mr. Blumenstein, and Mr. Lazette to the members of the Board. Mr. Winkelman gave a brief update on the proposed project for the applicant, Mr. Martin R. Goldman. The proposed project calls for the acquisition, by MG -III, of 13 industrial buildings in the City of Livonia. Five of the buildings have been completed and are occupied; the other eight buildings are in various stages of completion. The original project was started under an inducement resolution issued by the Wayne 316 County EDC in 1979, prior to the incorporation of the Livonia EDC. However, because of the state of affairs of the economy, Paragon Properties (the original applicant) was unable to sell the bonds. The land was purchased on a land contract from Mr. Charles Lazette; and due to lack of funds, Paragon Properties is behind in their payments to Mr. Lazette. However, if the Livonia EDC grants Mr. Goldman the EDC financing, as soon as the bonds are issued and the deal closed, Paragon Properties would be able to satisfy their land contract with Mr. Lazette. Mr. Blumenstein showed a site plan to the directors. He explained that Paragon Properties was just never able to place the bonds. Consequently, they ran out of money to complete their buildings. Mr. Hand said actually what we have here is a real estate transaction of five completed buildings and eight buildings in various stages of completion. He asked the applicant what assurances the EDC has that this project is going to fly this time, when it did not fly the last time. Mr. Blumenstein said that the developer is putting in more money. The portion of the project that was completed has been very successful. Since they were unable to place the bonds last time, they just ran out of money. Mr. Hand asked how many partners would there be in this newly formed partnership. Mr. Goldman said there would be a maximum of ten partners. Mr. Hand reminded the applicant that the EDC fee is 1/10 of 1% of the project cost due upon issuance of the Inducement Resolution, which means an additional $9,500.00 is due before the project can proceed any further. Ron Clapham said Miller/Canfield prepared the Resolution of Inducement for an amount not to exceed $10,000,000, although the applicant only requested, $8,500,000, to cover any incidentals that might come up over the course of issuing the bonds. The fee is based upon the inducement resolution amount. Mr. Hand said that is why the amount should be identified correctly at this time. Mr. Helmkamp said we have adopted this policy to make sure the applicants 317 do their homework and save themselves some money in the long run. Mr. Ventura said Mr. Goldman has signed the application which explains the EDC's fee policy, and he is sure Mr. Goldman understands what he signed. Mr. Goldman said he would like the Resolution of Inducement to be for $8,000,000 not $10,000,000. On a motion by Mr. Hale, supported by Mr. Mardiros, it was #82-284 RESOLVED that the resolution be corrected to read $8,000,000. A roll call vote was taken on the foregoing resolution with the following results: AYES: Hale, Hand, Helmkamp, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None Mr. Winkelman asked if the $8,000 fee would be refundable if the City Council denied their request? Mr. Helmkamp said he believes in other EDC discussions it was decided that all be the $500.00 application fee would be refunded. Mr. Hand clarified that if the project was denied by the City Council and it was not the fault of the petitioner, the money would be refunded; but if it was because the applicant was unable to place the bonds, the money would not be refunded. It is incumbent upon the petitioner that at this step his financing should be in place. Mr. Winkelman said he understands. Mr.Plakas questioned whether all these buildings on separate sites and at various levels of development could be termed a project; and whether this is a legal use for EDC funding since the buildings have already been started. How is the EDC inducing the project when it is already there. Is this permissable? Mr. Ron Clapham from Miller/Canfield answered Mr. Plakas. He said a project is considered under the Act 338 at two levels: 1. Does it meet the guidelines of serving a public purpose -- a public purpose being defined as providing new jobs, and/or preserving old jobs. 2. Each EDC must establish its own policy as to whether or not this is the type of project it wishes to consider. This is your own choice and a matter of your own policy. This project would provide new jobs in the buildings which are not completed at this time, and it would preserve those jobs in the buildings presently occupied. 318 Mr. Helmkamp said that the bottom line, then, is that this project does qualify? Mr. Clapham replied, yes. On a motion by Ken Hale, supported by Ron Mardiros, it was #82-285 WHEREAS, there has been presented to the Board of Directors of The Economic Development Corporation of the City of Livonia (the "Corporation") a proposal relating to the acquisition of existing industrial buildings, the machinery, equipment and furnishings therein and the land therefor, together with the acquisition and completion of certain additional industrial buildings to be located in the City of Livonia, County of Wayne (the "Incorporating Unit") as described in Exhibit A attached hereto, for use by Martin R. Goldman and/or MG -III Associates, a Michigan limited partnership formed or to be formed (the "Company"); and WHEREAS, said proposal appears to have merit as a "Project" as defined in Act 338, Michigan Public Acts of 1974, as amended (the "Act"), and to meet the need for programs, services and facilities as described in the Act; and WHEREAS, although a "Project Plan" as defined in the Act has not yet been completed or approved with respect to the proposed facility (the "Project), it is likely that the Project will require issuance of revenue bonds by the Corporation; and WHEREAS, it is desirable to begin proceedings under the Act with respect to the Project and to retain the services of bond counsel to begin preparation of documents with respect to such revenue bonds in order to induce the Company to implement the proposal so as to provide to the Incorporating Unit and its citizens necessary programs, services and facilities; NOW, THEREFORE, BE IT RESOLVED THAT: 1. Pursuant to Section 8(1) of the Act, the Board of Directors of the Corporation upon the advice of the Company hereby proposes that the land area described in Exhibit A attached hereto and made part hereof is the land area which will be acquired in the implementation of the Project and hereby designates to the Incorporating Unit's legislative body said land area described in Exhibit A as the project area for the Project. 2. The Secretary of the Corporation be and is hereby directed to (a) communicate the proposed project area boundaries to the aforesaid legislative body by conveying to each of the foregoing bodies a certified copy of this resolution, and (b) notify the Chief Executive Officer of the Incorporating Unit of this Corporation's intent to commence a project that two additional directors of the Corporation representative of neighbor- hood residents and business interests likely to be affected by the proposed Project may be appointed. 319 3. In order to more fully induce the location of the Project in the proposed project area and subject to the hereinafter special provisions, the Corporation will issue its economic development limited obligation revenue bonds in an amount presently estimated not to exceed Eight Million Dollars ($8,000,000), for the purpose of paying all or part of the cost of the Project and the costs incidental to the issuance of the bonds. Said bonds will be issued pursuant to the Act provided that a lease, lease purchase contract or installment sales contract or loan agreement, and other documents and details pertaining to the bonds are prepared with such provisions and details as are acceptable to and approved by this Board of Directors and provided, further, that all other necessary action is taken in conformance with the Act and provided, further, that the bonds can be sold. 4. The proceedings and agreements relating to the Corporation's acquisition of the Project and issuance of the bonds shall contain such provisions and details as shall absolutely and completely make certain that under no circumstances will the Corporation, the Incorporating Unit, the State of Michigan or any of its taxpayers or citizens, ever be re- quired to pay the principal of and interest on, or any costs relating to the bonds from tax revenues or other funds of such governmental units, and shall in addition contain provisions fully protecting the Corporation, the Incorporating Unit and the State of Michigan against any other liability and all costs relating to the bonds or the Project. 5. By adoption of this resolution the Corporation assumes no obligation or liability to the Company for any loss or damage that may result to the Company from the adoption of this resolution and all costs of the issuance of the bonds and any and all other costs relating to the acquisition, financing, ownership or operation of the Project shall be paid from the proceeds of sale of the bonds or by the Company. 6. The firm of Miller, Canfield, Paddock and Stone of Detroit, Michigan, is hereby designated and retained by the Corporation as bond counsel with respect to the revenue bonds to be issued in connection with the Project, and is authorized and directed to prepare and submit to all appropriate parties all proceedings, agreements and other docu- ments as shall be necessary or appropriate in connection with the issuance of such bonds, to make application on behalf of the Corporation to the United States Internal Revenue Service and other governmental agencies for such income tax and other rulings and approvals as may be necessary in relation to the issuance of such bonds, and the Secretary of this Corporation is authorized to execute such powers of attorney and other documents as may be appropriate in connection with the foregoing. The legal fees of Miller, Canfield, Paddock and Stone for work done in connection with the Project shall be paid from the proceeds of sale of such bonds or by the Company and in any event shall be at no cost to the Corporation. A roll call vote was taken on the foregoing motion with the following results: AYES: Hale, Hand, Helmkamp, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None The Chairman declared the resolution adopted. 320 On a motion by Frank Hand, supported by Alan Helmkamp, it was #/82-286 RESOLVED, that the applicant would pay $8,000.00 in fees to the Livonia EDC; but in the event that the City Council should reject the applicant's proposal, the fee would be refunded except for the $500.00 application fee. A roll call vote was taken on the foregoing motion with the following results: AYES: Hale, Hand, Helmkamp, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None The Chairman declared the resolution adopted. The next item on the agenda was the election of officers. The floor was opened for the nomination for the office of Chairman. Mr. Hale nominated Mr. Ventura. Mrs. Kavanaugh seconded the nomination. There being no further nominations for the office of Chairman, On a motion by Mr. Mardiros, supported by Mrs. Kavanaugh, it was #/82-287 RESOLVED, that the nominations for the office of Chairman be closed. A roll call vote was taken on the foregoing motion with the following results: AYES: Hale, Hand, Helmkamp, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None The Chairman for 1982-83 will be Mr. Ventura, by acclamation. The floor was opened for nominations for the office of Vice Chairman. Frank Hand nominated Angelo Plakas; Mr. Plakas declined. Frank Hand nominated Alan Helmkamp; Mr. Helmkamp declined. Alan Helmkamp nominated Ken Hale. There being no further nominations for the office of Vice Chairman, On a motion by Mr. Hand, supported by Mr. Helmkamp, it was #/82- 288 RESOLVED, that the nominations for the office of Vice Chairman be closed. A roll call vote was taken on the foregoing motion with the following results: AYES: Hale, Hand, Helmkamp, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None 321 The Vice Chairman for 1982-83 will be Mr. Hale, by acclamation. The floor was opened for nominations for the office of Treasurer. Frank Hand nominated Ron Mardiros; Mr. Mardiros declined. Ron Mardiros nominated Alan Helmkamp. On a motion by Mr. Hand, supported by Mrs. Kavanaugh, it was #82-289 RESOLVED that the nominations for the office of Treasurer be closed. A roll call vote was taken on the foregoing motion with the following results: AYES: Hale, Hand, Helmkamp, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None The Treasurer for 1982-83 will be Mr. Helmkamp, by acclamation. The floor was opened for nominations for the office of Secretary. Ken Hale nominated Ron Mardiros. There being no further nominations, On a motion by Mr. Hand, supported by Mr. Hale, it was #82-290 RESOLVED that the nominations for the office of Secretary be closed. A roll call vote was taken on the foregoing motion with the following results: AYES: Hale, Hand, Helmkamp, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None The Secretary for 1982-83 will be Mr. Mardiros, by acclamation. Mrs. Kavanaugh gave the Treasurer's Report. Currently, there is $22,650.82 in the various accounts. $22,000 is invested in C.D. Accounts; $642.17 is in the Savings Account; and $8.65 is in the Checking Account. On a motion by Mr. Hale, supported by Mr. Mardiros, it was ##82- 291 RESOLVED, that the Treasurer's Report be accepted as presented. A roll call vote was taken on the foregoing motion with the following results: AYES: Hale, Hand, Helmkamp, Kavanaugh, Mardiros, Plakas, Ventura NAYS: None 322 The Chairman declared the resolution adopted. On a motion by Mr. Helmkamp, supported by Mrs. Kavanaugh, and unanimously approved, it was i182-292 RESOLVED, that the Regular Meeting of the Economic Development Corporation of the City of Livonia be adjourned at 5:45 p.m., Thursday, November 18, 1982. Respectfully submitted, Frank Hand, Secretary FH/mk