HomeMy WebLinkAboutLBRA MINUTES 2011-12-12MINUTES OF THE FOURTH MEETING OF THE
CITY OF LIVONIA BROWNFIELD REDEVELOPMENT AUTHORITY
The fourth meeting of the Brownfield Redevelopment Authority of Livonia was called
to order at 5:05 p.m. on Monday, September 12, 2011, by Chairman Jack
Engebretson.
MEMBERS PRESENT:
MEMBERS ABSENT:
Paul Condon
Jack Engebretson, Chairman
Ken Harb
Ashley Krueger. Secretary
Lynda Scheel, Vice Chairman
Enrico Soave
Joe Taylor, Treasurer
Jim Cambridge
Bill Fried
OTHERS PRESENT: Michael Slater, Director of Finance
Mark Taormina, Planning & Economic Development Director
Margie Watson, Program Supervisor, Planning
ROLL WAS CALLED. A quorum was present.
APPROVAL OF MINUTES
On a motion by Scheel, seconded by Krueger, and unanimously adopted, it was:
#01-11 RESOLVED, that the Minutes of the Third Meeting of
the City of Livonia Brownfield Redevelopment Authority held
October 19, 2009, are hereby approved as submitted.
Chairman Engebretson declared the resolution adopted
ELECTION OF OFFICERS AND BYLAW AMENDMENTS
The Board decided to hold the Election of Officers until the next meeting, which is
anticipated to be held in March, 2012. In the meantime, the Board discussed
amending the Bylaws to eliminate term limits for officers and the requirement to hold
an annual meeting in the second calendar quarter of each year. Chairman
Engebretson suggested that the Board hold an annual meeting, at a minimum, to
review finances. Mark Taormina responded that meetings will be taking place at
least twice per year to approve the disbursement of funds back to the developer of
the Livonia Marketplace in accordance with the Reimbursement Agreement.
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September 12, 2011
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On a motion by Krueger, seconded by Taylor, and unanimously adopted, it was:
#02-11 RESOLVED, that Article III, Officers, Section 2,
Nomination, Election and Term of Office, of the ByLaws of the
Brownfield Redevelopment Authority of Livonia are hereby
amended to abolish the term limit requirement by eliminating the
last sentence of the section which states that "No person shall
hold office for more than three successive terms."
Chairman Engebretson declared the resolution adopted
On a motion by Harb, seconded by Soave, and unanimously adopted, it was:
#03-11 RESOLVED, that Article II, Directors, Section 6,
Meetings, of the ByLaws of the Brownfield Redevelopment
Authority of Livonia is hereby amended to eliminate the
requirement that the annual meeting must be held in the second
calendar quarter of each year.
Chairman Engebretson declared the resolution adopted.
Mr. Taormina will forward these bylaw amendment resolutions to the City Council for
the approval.
Enrico Soave requested that a Nominating Committee be formed as is mandated by
the Bylaws and which states that members of the Nominating Committee shall be
appointed by the Chairman. Chairman Engebretson asked for volunteers, at which
time Ms. Scheel, Mr. Harb and Mr. Soave agreed to serve on the Committee.
Chairman Engebretson then appointed Ms. Scheel to act as Chairperson.
UPDATE ON THE FORMER LIVONIA MALL REIMBURSEMENT AGREEMENT
Mark Taormina presented an overview and update on the Livonia Marketplace
Brownfield Plan and Reimbursement Agreement as follows:.
Construction Update
From a construction standpoint, the Livonia Marketplace project, as a
whole, is about 70-80% complete., Wal-Mart and 3 of the 4 outbuildings
opened last August, and Kohls has purchased Buildable Area "B" located
immediately west of Wal-Mart and recently broke ground on a new 64,300
sq. ft. department store that is scheduled to open in the fall of 2012.
Remaining to be built are Buildable Areas "G" (shown on the site plan as a
2,828 sq.ft. bank pad) and °C (shown as a 20,000 sq. ft. multi -tenant retail
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September 12, 2011
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building). Also available for future redevelopment is the former Baker's
Square Restaurant (6,100 sq. ft.).
Brownfield Plan
The Brownfield Plan for the Former Livonia Mall Site was approved by the
LBRA and the Livonia City Council in December of 2008, and provides the
basis for eligibility under the Michigan Brownfield Redevelopment
Financing Act (PA 381 of 1996, as amended). It outlines the critical
elements of the partnership between the LBRA and the Owner, Livonia
Phoenix, LLC, including a summary of the eligible activities and a
description of the costs, an estimate of captured taxable value and tax
increment revenues, the method of financing, and a description of
reimbursements by the authority. The activities eligible for reimbursement
fall under six (6) main categories: 1) Site Assessment, 2) Asbestos
Abatement and Hazardous Materials, 3) Demolition, 4) Site Preparation
(including Engineering), 5) Infrastructure Improvements, and 6) Cost of
Preparing the Brownfield/Act 381 Work Plans. Altogether, the estimated
sum total of all of the costs eligible for reimbursement is $6,580,704.
Reimbursement Agreement
The LBRA's involvement with the Livonia Marketplace redevelopment will
continue through the duration of the Brownfield Plan, which remains in
effect long enough to meet the Authority's reimbursement obligations
under the Reimbursement Agreement. Under the terms of that
Agreement, the Board must approve periodic reimbursement payments,
but only to the extent that monies are owed for costs that Livonia Phoenix,
LLC has incurred on eligible activities and further provided that sufficient
tax increments have been generated from real and personal property
taxes actually paid. The duration of the reimbursement payments is set
for a maximum of 13 years, and commences on December 17, 2011 or
upon completion of all of the buildings as depicted on the site plan
approved by the City Council, whichever occurs first. This "lag" between
when the project began and the commencement date for the
reimbursement payments was intended to maximize the value of the
project, thus increasing the captured tax increments and the return back to
the developer.
What Actually Gets "Captured"
Reimbursement includes the available tax increments from real and
personal property taxes actually paid on the subject property(s). In the
case of Livonia Marketplace, the available tax increment is the amount of
taxes collected on the aggregate value of all real and personal property
above the established Brownfield Initial Taxable Value of $5,598,960.
This "base value" represents the overall taxable value of the property as of
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September 12, 2011
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12/31/07, prior to demolition, and was intended to prevent the City from
going "backwards" in the amount of general fund tax revenues. At the end
of 13 years (or possibly sooner), the maximum the Owner can get paid is
$6.6M provided the total of all eligible expenses meets or exceeds this
amount. However, the total payback after 13 years could actually be less
than this, since the amount of incremental taxes available for
reimbursement is dependent on the overall taxable value of the property
as well as what actually gets collected. During the 13 -year reimbursement
period, a certain amount of the captured revenues will be retained by the
LBRA to pay the LBRA's administrative and operating costs and to fund a
Local Site Remediation Revolving Fund (LSRRF). The LSRRF will be
established by the LBRA for the sole purpose of performing eligible
activities on eligible properties consistent with Act 381.
TURBO
Another "tool" being used to help incentivize the redevelopment of the
former Livonia Mall site is Wayne County's TURBO Program, which is
administered through the County Land Bank. Inclusion in the TURBO
Program allowed the developer to receive a full one (1) year exemption of
real property taxes in 2009. In addition, for years 2010 thru 2014, the
developer will receive TURBO disbursements equal to 50% of real
property taxes actually paid.
What's Next
December 17, 2011 marks the commencement of the reimbursement
period and "triggers" the date for collecting tax revenues for future
payment to the Owner. Because winter 2011 taxes are not due until
February 2012, the amount of taxes collected and available for
reimbursement will not be known until such time. Under the terms of the
Reimbursement Agreement, the Owner may periodically submit to the
LBRA a statement of costs (including copies of invoices) of eligible
activities paid or incurred for reimbursement. From the date of receipt, the
LBRA has 60 days to review the submission and confirm the activities
qualify for reimbursement, and 105 days to actually pay the amounts
approved, but only to the extent that tax increments are available.
To date, the Owner has submitted three (3) separate preliminary "draw"
requests totaling $4,237,860. The first payment, which we anticipate will
occur sometime in March or April, will constitute only a small fraction of
this since the available amount will be based on what actually gets
collected from the Winter 2011 taxes. Once staff is able to confirm the
statement of invoices and make determination on the amount of
incremental tax revenue available for reimbursement, a meeting of the
LBRA will be convened to obtain authorization. From that point forward,
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September 12, 2011
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we anticipate making bi-annual payments that will generally coincide with
the winter and summer tax collection deadlines.
Mr. Slater advised financial statements will be provided to the Board as they become
available, and that an investment policy will need to be established.
On a motion by Scheel, seconded by Harb, and unanimously adopted, the Fourth
Meeting held by the City of Livonia Brownfield Redevelopment Authority on
September 12, 2011, was adjourned at 6:00 p.m.
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Ashl V. Krueger, Secretary