HomeMy WebLinkAboutLBRA MINUTES 2016-05-11 MINUTES OF THE 11th MEETING OF THE
CITY OF LIVONIA BROWNFIELD REDEVELOPMENT AUTHORITY
The 11th Meeting of the Brownfield Redevelopment Authority of Livonia was
called to order at 5:00 p.m. on Wednesday, May 11, 2016, by Chairman Jack
Engebretson.
MEMBERS PRESENT: Jack Engebretson, Chairman
Joe Taylor, Treasurer
Ken Harb, Secretary
Paul Condon
Kathleen E. McIntyre
Bill Fried (arrived at 5:10)
MEMBERS ABSENT: Lynda Scheel, Vice Chairman
OTHERS PRESENT: Mark Taormina, Planning & Economic
Development Director
Michael Slater, Director of Finance
Barbara Gamber, Economic Development Coordinator
Karl Zarbo, Lormax Stern Development Company
Trey Buffington, National Real Estate Management
Margie Watson, Planning Department
ROLL WAS CALLED. A quorum was present.
APPROVAL OF MINUTES
On a motion by Harb, seconded by Taylor, and unanimously adopted, it was:
#04-2016 RESOLVED, that the Minutes of the Tenth Meeting of the City
of Livonia Brownfield Redevelopment Authority held January 27,
2016, are hereby approved as submitted.
A roll call vote on the foregoing resolution resulted in the following:
AYES: Harb. Taylor, McIntyre, Condon, Engebretson
NAYES: None
ABSENT: Scheel
ABSTAIN: None
Mr. Engebretson, Chairman, declared the motion is carried and the foregoing
resolution adopted.
Brownfield Redevelopment Authority
May 11, 2016
Page 2
REVIEW OF LBRA TAX CAPTURE FOR LIVONIA MARKETPLACE AND
CONSIDERATION OF TAX INCREMENT FINANCE (TIF) REIMBURSEMENT
PAYMENT#4 (W-2015) FOR AUTHORIZED ELIGIBLE EXPENSES.
Engebretson: We will ask Mr. Taormina and Mr. Slater to walk us through this.
Taormina: I'll do the first part. This is Payment #4 to the Developer of the
Livonia Marketplace. These are the values set as of December
31, 2014. The Total Taxable Value is $12,457,300. The Total
Taxable Value includes $9,685,670 in real property and
$2,771,630 in personal property. We apply the Winter Tax rate
to the capturable value, which in this case totals $6.83 million.
Again, we take the total value but we have to subtract out the
base value. When that is done, we are left with an incremental
value for capture of about $6.843 million. Applying the Winter
tax rate, which does not capture the zoo or the art millages, the
total is about 16.6 mills. It equates to total taxes for capture of
$111,725.05. As was indicated, there was an adjustment of
about $6,114.00 to correct an error from the summer distribution
which mistakenly included the Wayne County Judgment Levy
and which is exempt from TIF capture. When we make that
adjustment, the total for distribution is $105,610.00. Then we
have to split out the amount going to the Revolving Fund, which
is 20%, and then the balance of 80% to the Developer. We're
asking for a resolution that would approve the distribution of
$21,122.19 into the Livonia Brownfield Redevelopment
Authority's Local Site Remediation Revolving Fund and
$84,488.76 to the Developer.
Engebretson: Thank you, Mark. Questions or comments? Does anyone want
to add to that description of events?
Taormina: One of the things we'll do is provide a running total, which might
be helpful.
Slater: These sheets are presented really well.
McIntyre: I have a question. The 20% or $21,122.19 for the Revolving
Fund goes to what, Mark?
Taormina: The funds becomes available to the Brownfield Authority for
future projects, studies and administrative expenses. The
statute provides precisely what those dollars can be utilized for
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May 11, 2016
Page 3
and, in fact, we're currently using some of those administrative
funds to pay for consultant services in connection with an audit.
McIntyre: Perfect. That was my question. I couldn't remember. I just
wanted to confirm that it stays with the LBRA.
Taormina: That is correct.
Engebretson: Anything else? Any commentary from the development interest,
Mr. Zarbo?
Karl Zarbo, Director of Operations, Lormax Stern Development Company. No. If
you have any questions, I'd be happy to answer.
Engebretson: I don't think there are any questions, Karl, but we appreciate
you coming. We will need a motion to approve.
On a motion by Condon, seconded by McIntyre, and unanimously adopted, it
was:
#05-2016 RESOLVED, that the City of Livonia Brownfield Redevelopment
Authority does hereby approve the distribution of Captured
Taxes from the Livonia Marketplace Project as follows:
1. Payment #4 (W-2015) to the "Owner" of the Livonia
Marketplace, Livonia Phoenix, LLC, in the amount of
$84,488.76 for the reimbursement of eligible expenses
related to the redevelopment of the Former Livonia Mall
Site; and
2. A deposit of $21,122.19 into the Livonia Brownfield
Redevelopment Authority's Local Site Remediation
Revolving Fund.
Mr. Engebretson, Chairman, declared the motion is carried and the foregoing
resolution adopted.
REVIEW OF LBRA TAX CAPTURE FOR LIVONIA COMMONS AND
CONSIDERATION OF REIMBURSEMENT PAYMENT #2 (W-2015) FOR
AUTHORIZED ELIGIBLE EXPENSES
Engebretson: Mark, are you going to do this one?
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Taormina: I'll present this as well. Mike can jump in any time. This is
Payment #2 to the Developers of the Livonia Commons. There
are many differences between the two projects, Livonia
Commons and Livonia Marketplace. One captures both real and
personal property taxes, one just captures real; one is located
within the Livonia Public School district and the other one is
located within the Clarenceville School district, and they have
different milages. It captures school taxes at different times, one
during the winter taxes and one during the summer taxes, and a
host of other differences. And the Revolving Fund, pursuant to
the Reimbursement Agreement we have with Livonia
Commons, it will not be until the last five years after capture that
we will be placing money into the Revolving Fund from that
development. So bottom line is, we have a capturable value of
about $990,290. When we apply the tax rate for capture, which
in this case is 25.8861 mils, and that is different from Commons
because here we're in the Clarenceville School District and they
apply the school taxes during the Winter collection period.
Slater: This is Livonia Commons which is in the Livonia Public School
district.
Taormina: Oh, I'm sorry. I got that backwards. We did capture the taxes for
Livonia Schools during the Winter collection period. It results in
a total for distribution of $25,634.75. On the previous capture,
we did mistakenly capture dollars to the Revolving Fund, and
we will be returning those funds back to the Developer in an
amount of roughly $4,600.00, but that is not reflected here. That
will be a separate adjustment we'll make internally.
Engebretson: Will we be hearing about that the next time we meet? I'm just
curious as to how much concern we have to have for those kind
of details.
Slater: I can tell you why it happened. The copy of the Reimbursement
Agreement that I have in my file has language very similar to the
Livonia Marketplace agreement where there was an 80/20 split.
In the final version of the Reimbursement Agreement, the
language was changed. I don't know where in the process that
changed, but somewhere in the process it changed. I was using
a different version of the Reimbursement Agreement that called
for an 80/20 split. Of course we want to pay attention to all the
details. We hope to get some help from the consultant in terms
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May 11, 2016
Page 5
of paying attention to details and things we may not be aware
of. That's part of the reason we're bringing them on board.
Engebretson: I think you have support for doing that. We trust your judgment,
and I'm certain everyone is comfortable with where we are.
Slater: The other check and balance is that the Developer is looking at
these. If they don't like something they see, they would let us
know, which is a good thing.
Engebretson: Absolutely. Are there any questions or comments? Oh, Mr.
Fried. Did you just come in?
Fried: Yes.
McIntyre: About five minutes ago.
Engebretson: Let the record show that Mr. Fried did arrive. Any comments,
sir?
Trey Buffington, National Real Estate Management. No. I'm just here to
represent Livonia Commons, the developer.
Engebretson: Okay. We will need a motion.
On a motion by McIntyre, seconded by Taylor, and unanimously adopted, it was:
#06-2016 RESOLVED, that the City of Livonia Brownfield Redevelopment
Authority does hereby approve the distribution of Captured
Taxes from the Livonia Commons Project as follows:
Payment #2 (W-2015) to the "Owner" of Livonia
Commons, Tobeck Realty Corporation, on behalf of
National Real Estate Management Corp., and the
Antonoff Family Trust Partnership, L.L.P., in the amount
of $25,634.75 for the reimbursement of eligible
expenses
Mr. Engebretson, Chairman, declared the motion is carried and the foregoing
resolution adopted.
Taormina: Just to mention about Livonia Commons. I think with the Auto
Zone going in at the south end of the complex, and when the
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Panda Express restaurant is built, it will be 100 percent
complete and occupied.
Buffington: Yes, and then 1,800 square feet vacancy in the out lot.
Condon: What did you say about Jimmy John's?
Buffington: As far as the out lot building, Jimmy John's will be 1,800 square
feet.
Condon: Okay. I thought you said they weren't going to be there.
Engebretson: So you are virtually finished?
Buffington: Yes. We're just finalizing the plans for Panda Express. Auto
Zone is already under construction.
Engebretson: Thank you for being here.
SME CONSULTING AGREEMENT
Engebretson: Who is going to do the update on the consulting agreement?
Taormina: I will. As you know, Mr. Chairman, we contacted each of the
Board Members a couple months ago, back in January or
February, to initiate a study, basically something that Mr. Slater
and myself had decided the timing was right. Again, as Mike
described all the complexities here and to make sure we're
doing everything right, we sat down with SME, who you will
recall also gave us our initial orientation on the Brownfield
Authority process. We put together a scope of services, a series
of five tasks. They are all interrelated but essentially what
they're doing is looking at the two active projects we have going,
making sure we're doing everything correctly, and through that
process they will also make sure that Tasks 3, 4 and 5 are all
being done properly. They are mostly done with the Marketplace
audit. They have identified a few minor discrepancies on some
of the invoices and other things, but they are relatively minor.
We passed those along to Mr. Zarbo, and he is in the process of
correcting those. We have not yet received the information back
on the audit from Livonia Commons, but we expect that
sometime soon, as well as completion of the other tasks. Mike, I
don't know if you want to add anything, but one of the things we
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Mr. Chairman, and one thing we didn't receive initially, was
formal endorsement or support by the Authority for these
services.
Engebretson: So you would like to do that tonight?
Mr. Taormina: Yes, sir.
Engebretson: Okay. I'm sure everybody had an opportunity to read the brief
letter here. I'm equally confident that everyone will agree that
this is a very wise move and that's why we have this Revolving
Fund to do important things like this to take a little pressure off
our internal resources and to assist the staff in executing the
very difficult task.
Slater: I would like to point out one thing. Task 5, in essence, is exactly
what Member McIntyre was referencing in terms of our
Revolving Fund and administrative fund in terms of what are the
rules for using those dollars.
Engebretson: Mr. Slater, as you indicated earlier, the use of these funds is
governed by statute. So this is more of a compliance type of
activity then?
Slater: Yes, it is by statute but reading this is a lot tougher than it
sounds.
Engebretson: That's what we have lawyers for.
Slater: Right. Even the people that are experts in this, say it is the
worse statute they've ever had to decipher because it is
complicated. For every rule, there is an exception it seems like.
Some statutes we have no problem reading. They make sense;
we get it. This one I think is well worth having people who are 11
experts in this field to just make sure our interpretation of it is
correct.
Engebretson: I think that we all support your position, Mr. Slater.
Harb: What do you expect the costs to be within the next year?
Slater: Administrative costs. This is kind of a one time deal unless we
have a new brownfield project. I would expect we would ask
them to review the costs and invoices for that project also. In
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May 11, 2016
Page 8
terms of what we have in place now, I don't expect we will need
any further assistance from them. There is provision to charge
the Brownfield for administrative time, Mark's time, my time, the
Law Department and other staff. We've not done that to date. I
guess we could consider that but Mark and I are working pretty
cheap.
Condon: Just a question. I notice on the last page under Authorization, it
says it "will provide these services on a time and material basis,"
but yet they're quoting . . . are these not to exceed estimates, do
you think'? Because generally if someone, in my experience,
when they give a total price for an item, it kind of eliminates the
time and material part of the contract.
Taormina: I think they bill time and materials up to the amounts, not to
exceed. We've only been billed thus far for Task 1 and I think it
was right at that number.
Slater: But they are under those.
Condon: As long as we understand it's a not to exceed price here.
Slater: It's not to exceed.
Condon: Great. Thank you.
Engebretson: I'm surprised it's not a lot more.
Condon: I am too. That's why I asked.
Engebretson: Is there any further discussion on this?
McIntyre: I just want to say any money I look at, given the potential that
you can be liable if there is an inadvertent mistake due to its
complexity, I think this is incredibly reasonable to protect us
from a potentially limitless cost for non-compliance.
Taormina: One of our goals, too, is to really put this thing on autopilot as
much as possible to help reduce those administrative costs,
automate as much as possible the process.
Slater: Mark and I have spent a lot of time on this. Our concern is, we
walk out the door. There really isn't a cookie cutter method for
somebody to follow behind us. As part of this we hope to, like
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Mark said, put much more on autopilot so someone can step in
and do it without having to have years of getting up to speed.
Engebretson: The reality is that goes on for a long time, and there will be a
changeover.
Fried: I notice that the record retention, basically they're going to retain
the records that we have reasonable access to, but then at their
sole discretion, they may dispose of all such records. I think that
if it's our property that these records are on, I think we should be
concerned about how on a historical basis we have those
records available. If they want to say, well, they could be used
against us in some legal action, I think we can try and say we
will hold them harmless, but I do think if we want the records, I
think we should retain those records. We could always say no,
but I mean it's not our property, it's the property of them, but it's
in the jurisdiction of the City and you never know when you
need to go back to old records for various analysis.
Engebretson: Which records are you referring to?
Fried: It just simply says records retention. "SME will retain pertinent
records relating to the services performed." The services
performed we're making judgments on, and I think we need to
have that record retained for future use. You just never know
when you need to go back for historical analysis.
Engebretson: Did the Law Department look at this?
Slater: I don't know if they did or not, but in regard to that specific issue,
whatever records SME has, they are copies of records that we
are retaining. So we're not relying on them to keep any records
on our behalf. It's simply copies. Any work products that they
provide to us, we will obviously maintain in our files. So I guess
I'm not concerned what they do with their files because we have
the originals.
Fried: Okay. Well, as I say, they say "all reports, field data, field notes,
laboratory test data, calculations, estimates and other
documents prepared by SME in connection with this project
shall be considered instruments of service" and remain in their
possession, and I'm not sure.
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Slater: I think that is standard boiler plate really. It doesn't have an
impact on us.
Fried: Okay. If you're satisfied you will have records on a historical
basis, who am I to question that.
McIntyre: The only thing I was going to add is, it probably wouldn't be a
bad idea to have the Law Department just look at that. But to
your point, we would have copies of everything that would be
subject to our own records.
Condon: Correct me if I'm wrong, but the work product that they're getting
is coming from us. So we've already got the data. They're
evaluating that data and giving us a report on it. So I think we're
okay with it myself, but I understand your point.
Engebretson: And with the wonderful verbatim minutes that are prepared of
these minutes, the minutes will reflect that there was in depth
discussion relative to this matter on the concern and the
resolution of why that concern may not apply in this particular
instance, and so someone down the road can look back at
these minutes and satisfy themselves that we did our job
diligently. Thank you for your comment. I appreciate that. So
what we need then is a formal resolution to put this agreement
in place that confirms the informal approval that was done in
between our last meeting and this meeting. Is that fairly stated,
Mark or Mike?
On a motion by Fried, seconded by Condon, and unanimously adopted, it was:
#07-2016 RESOLVED, that the City of Livonia Brownfield Redevelopment
Authority does hereby formally approve the agreement with
SME, 43980 Plymouth Oaks Blvd., Plymouth, Michigan 48170,
to provide brownfield consulting services to the City of Livonia
Brownfield Redevelopment Authority (LBRA), which agreement
was executed on February 16, 2016.
Mr. Engebretson, Chairman, declared the motion is carried and the foregoing
resolution adopted.
Brownfield Redevelopment Authority
May 11, 2016
Page 11
ELECTION OF OFFICERS
Engebretson: Now we come to the election of officers. I will inquire as to
whether or not anyone would like to change. I would be glad to
step aside if somebody else would like to step up.
McIntyre: You do a fantastic job.
On a motion by McIntyre, seconded by Harb, and unanimously adopted, it was:
#08-2016 RESOLVED, that Jack Engebretson is hereby re-appointed to
serve as Chairman of the City of Livonia Brownfield
Redevelopment Authority for a one-year period or until a
successor is elected.
Mr. Engebretson, Chairman, declared the motion is carried and the foregoing
resolution adopted.
Engebretson: Then there would be a Vice Chairman. Lynda is in New York
with a new granddaughter and can't be here today. She is
willing to serve in that capacity on an ongoing basis, and she is
also happy to yield to someone else if there is interest in taking
on that responsibility.
On a motion by McIntyre, seconded by Harb, and unanimously adopted, it was:
#09-2016 RESOLVED, that Lynda Scheel is hereby re-appointed to serve
as Vice Chair of the City of Livonia Brownfield Redevelopment
Authority for a one-year period or until a successor is elected.
Mr. Engebretson, Chairman, declared the motion is carried and the foregoing
resolution adopted.
Engebretson: Now the position of Treasurer.
Taylor: It's a very simple job. I'm kind of fading away from everything.
McIntyre: Don't use that term. You're not fading away from anything. You
are pursuing other things. How's that?
Taylor: If someone else would like to be the Treasurer, I would be
happy to step down. I know it's a tough job.
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May 11, 2016
Page 12
On a motion by Condon, seconded by McIntyre, and unanimously adopted, it
was:
#10-2016 RESOLVED, that Joe Taylor is hereby re-appointed to serve as
Treasurer of the City of Livonia Brownfield Redevelopment
Authority for a one-year period or until a successor is elected.
Mr. Engebretson, Chairman, declared the motion is carried and the foregoing
resolution adopted.
Engebretson: Now for the position of Secretary. You're the one that gets the
meeting started.
On a motion by Taylor, seconded by Condon, and unanimously adopted, it was:
#11-2016 RESOLVED, that Kenneth Harb is hereby appointed to serve as
Secretary of the City of Livonia Brownfield Redevelopment
Authority for a one-year period or until a successor is elected.
Mr. Engebretson, Chairman, declared the motion is carried and the foregoing
resolution adopted.
Engebretson: Is there anything on anyone's mind that we should be taking up
at this meeting tonight?
McIntyre: Just the usual. A thank you to the phenomenal staff. That goes
for their departments too. We're extremely lucky because many
communities, I know this from my past life, do not have the
luxury of this staff. It's just a given.
Condon: Not being totally in the City Hall loop, is there anything on the
horizon that the Board should be considering? Are there any
projects upcoming?
Taormina: One in particular, nothing has been filed yet, but we're in
discussions with Mr. Zarbo on another property.
Engebretson: Across the street?
Taormina: It is across the street on Seven Mile Road.
Engebretson: They've been talking about that for several years.
Taormina: It's getting closer.
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May 11, 2016
Page 13
Engebretson: Good. I didn't know that was still under consideration in moving
forward.
On a motion by Fried, seconded by McIntyre, and unanimously adopted, the 11th
Meeting held by the City of Livonia Brownfield Redevelopment Authority on May
11, 2016, was adjourned at 5:32 p.m.
Ken Harb, Secretary