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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 Brownfield Redevelopment Authority 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? Brownfield Redevelopment Authority May 11, 2016 Page 4 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 Brownfield Redevelopment Authority 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 Brownfield Redevelopment Authority May 11, 2016 Page 6 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 Brownfield Redevelopment Authority May 11, 2016 Page 7 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 Brownfield Redevelopment Authority 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 Brownfield Redevelopment Authority May 11, 2016 Page 9 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. Brownfield Redevelopment Authority May 11, 2016 Page 10 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. Brownfield Redevelopment Authority 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. Brownfield Redevelopment Authority 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