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HomeMy WebLinkAboutLBRA MINUTES 2016-12-12 (2) MINUTES OF THE 12th MEETING OF THE CITY OF LIVONIA BROWNFIELD REDEVELOPMENT AUTHORITY The 12th Meeting of the Brownfield Redevelopment Authority of Livonia was called to order at 5:00 p.m. on Monday, December 12, 2016, by Vice Chairman Lynda Scheel. MEMBERS PRESENT: Lynda Scheel, Vice Chairman Ken Harb, Secretary Paul Condon Kathleen E. McIntyre Bill Fried (5:15 arrival) MEMBERS ABSENT: Jack Engebretson, Chairman Joe Taylor, Treasurer 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 McIntyre, seconded by Harb, and unanimously adopted, it was: #12-2016 RESOLVED, that the Minutes of the 11th Meeting of the City of Livonia Brownfield Redevelopment Authority held May 11, 2016, are hereby approved as submitted. A roll call vote on the foregoing resolution resulted in the following: AYES: Harb, McIntyre, Condon NAYES: None ABSENT: Engebretson, Taylor ABSTAIN: Scheel Ms. Scheel, Acting Chairman, declared the motion is carried and the foregoing resolution adopted. Brownfield Redevelopment Authority December 12, 2016 Page 2 REVIEW OF LBRA TAX CAPTURE FOR LIVONIA MARKETPLACE AND CONSIDERATION OF TAX INCREMENT FINANCE (TIF) REIMBURSEMENT PAYMENT #5 (S-2016) FOR AUTHORIZED ELIGIBLE EXPENSES. Scheel: Mr. Taormina did you want to present this? Taormina: This item seeks LBRA's approval of reimbursement payment #5 to the developer of the Livonia Marketplace. Pursuant to the Reimbursement Agreement, the LBRA is obligated to make regular biannual payments per a schedule generally coinciding with the City's collection of both winter and summer taxes. Final payment occurs upon fulfillment of all outstanding reimbursement requests up to $6.6 million dollars, but in no event later than tax increment revenues collected through the Winter 2025 tax bill, whichever occurs first. The Total Taxable Value of all the real and personal property as of December 31, 2015, for the Livonia Marketplace project, including the Walmart, Kohl's and Sonic properties, totaled $10,948,820. The total Taxable Value includes $8,528,200 in real property and $2,420,620 in personal property. This is a reduction from the prior year of over $1.5M due mainly to tax appeals filed on behalf of Walmart and Kohls. Slater: This year was almost all Walmart. Taormina: So that's the reason for the decline in the value, which obviously has an effect on the capture. For the Summer 2016 tax collection period, the total taxes for capture equals the sum of the real property capture ($115,049.42) plus the personal property capture ($65,888.93), which amounts to $180,938.35. Of this, $36,187.67 (20%) will be deposited to the LSRRF, and $144,750.68 (80%) is eligible to go to the Developer. We have prepared a resolution to that effect, and we continue to provide the Board with a running total of the payments. This is only the Brownfield Reimbursement portion for this property. Scheel: Does anyone have any questions regarding the explanation that Mark just gave? Condon: Just one, Mark. Walmart had filed an appeal for their taxes. Is that something we should expect each year? Taormina: No. Brownfield Redevelopment Authority December 12, 2016 Page 3 Condon: It's a one time thing. Slater: This is related to that whole big box issue. The Assessor can explain this better, but in essence, you can't value the property based on rent. It's based upon a single user, the theory being that if it's vacated, it's not useable by anybody else. That's the theory. Taormina: These are the values as of December 31, 2015, that apply to the 2016 tax year, both winter and summer. And for the next tax collection periods, the developed Sonic site will be included in the overall value since the business opened a month or so ago. Condon: Just one other quick question. The funds that go into the LSRRF, what can those be used towards? Taormina: Those can be used for a variety of expenses related to paying the costs of eligible activities on eligible properties. It can be used for certain expenses associated with brownfield projects, such as baseline environmental studies and clean-up activities. This Board will have the discretion at some point, if requested by an applicant for environmental testing and other services, to utilize a portion of that fund for that. The statute provides the criteria the Board has in how the funds can be used. Condon It's been a while since we talked about that. That is all I have. Schell: Any other questions? If not, the recommendation and resolution before us is to approve the distribution of captured taxes from the Livonia Marketplace project. Would anybody like to make that motion? On a motion by Condon, seconded by McIntyre, and unanimously adopted, it was: #13-2016 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 #5 (S-2016) to the "Owner" of the Livonia Marketplace, Livonia Phoenix, LLC, in the amount of $144,750.68 for the reimbursement of eligible expenses related to the redevelopment of the Former Livonia Mall Site; and Brownfield Redevelopment Authority December 12, 2016 Page 4 2. A deposit of $36,187.67 into the Livonia Brownfield Redevelopment Authority's Local Site Remediation Revolving Fund. Ms. Scheel, Acting Chairman, declared the motion is carried and the foregoing resolution adopted. Taormina: Karl, do you want to give us an update on the project? Karl Zarbo, Director of Operations, Lormax Stern Development Company. Thanks for having us here again and for working with us for all these years. We're 87 percent leased across the street. We had a few vacancies pop up and we're filling those out. There is a new Tropical Smoothie where the old Radio Shack was at the end cap of one of the outbuildings. Z-Fit took most of what was vacant from Happy Pizza down to the telephone network. They've been open since July. It's a nice looking unit. We have a nail salon under lease but it won't be open until after the first of the year. Sonic opened last week. The numbers were very, very solid. It's been nice to have traffic problems for a short period of time. Across the street at the old Farmer Jack, we have preliminary site plan approval from the Planning Commission, but I still have two or three major financial issues to try to resolve with LA Fitness. It's about six months behind where it should be. I'd like to believe it's just a lot of people distracted with the holidays coming up. I think we'll get it back on track early next year. I still feel pretty comfortable that we'll get it done. Scheel: What is the projected date now? Zarbo: Well, we've got to go through Council and I'm going to guess, if things go well, it will take two Council appearances. We've got drawings and those types of things pretty much cued up and ready to go. I'm going to hope if things go well, we could break ground April 1, but that depends. I've got a set of drawings going back and forth. We'll see what the County's comments are. We've probably got seven items to go to the Zoning Board of Appeals. No one anticipated this long. I think the first time we met we told everyone there were some fairly serious economic challenges. There are three fairly significant financial issues left on the table. I believe we'll get it resolved and hopefully you'll see something April 1. Brownfield Redevelopment Authority December 12, 2016 Page 5 Scheel: Okay. Does anybody else have any questions for Mr. Zarbo? Harb: Did you have to put in a retention pond? Zarbo: Oh, yes. Harb: Where is that located? Zarbo: Even though the property is 40 some years old, there is a 10 foot storm drain that has about 5 percent capacity on the property. We're going to take 1.5 acres and not only build a retention pond, but come into their new compliance since we actually got started on the thing. It looks like it's over $1 million to add a hole in the ground. Harb: Is that a state or county requirement? Zarbo: It's a County issue. That's where it lies. We've taken several stabs at trying to use common sense and it's not going to work. We'll continue to have a retention pond bigger than this room that won't have any water in it and we'll dig a big hole and engineer it for a 100 year flood plain, ultimately, which will go into the 10-foot drain. Condon: Is that a complete teardown of the building? Zarbo: Yes. What was approved with the Planning Commission was a complete site redevelopment. The building will come down. Foundations will come out. Underground utilities will come out. All the landscaping will come out. All the asphalt will come out. The outbuilding to the east probably won't be built right out of the ground but the one to the west will be built and LA Fitness is 37,000 square feet. Condon: Where will the retention pond be located? Zarbo: All the way to the east and to the south. It's 1.25 acres up against the other shopping center. Have a great holiday and thank you for all your help. Scheel: Thank you. Brownfield Redevelopment Authority December 12, 2016 Page 6 REVIEW OF LBRA TAX CAPTURE FOR LIVONIA COMMONS AND CONSIDERATION OF REIMBURSEMENT PAYMENT #3 (S-2016) FOR AUTHORIZED ELIGIBLE EXPENSES Taormina: This request is for TIF reimbursement Payment #3 to the developers of the Livonia Commons shopping center. Payment #3 coincides with collection of 2016 Summer taxes. The Livonia Commons Brownfield Plan captures only the incremental taxes on the real property. Personal property is not included as part of the TIF capture. For the 2015 tax year, the taxable value of all the real property at Livonia Commons totaled $2,739,280, representing an increase of only 0.3% from the previous year's taxable value of $2,731,090. Subtracting the established base value of $1,740,800 results in a total Incremental Value for Capture of $998,480. Applying the tax rate for capture, 26.4607, generates a total capture of $26,420.48, of which $21,140.04 will go to the developer for reimbursement of eligible expenses, $2,285 to pay for accrued administrative expenses associated with conducting an internal audit of the Livonia Marketplace brownfield reimbursement procedures, and $2,995.44 to the Michigan Department of Treasury to pay back a portion of the state education tax capture (3 mills). Please note the change in the name of the entity receiving the reimbursement, TMA- LIVCOM, L.L.C.. We provided in your packet information regarding the assignment and assumption of the new owner. It's basically the same entity as what existed but under a new name. Scheel So that's instead of Livonia Commons? It's going to be called the TMA? Taormina: The project will still be referred to as Livonia Commons, but the owner is now TMA-LIVCOM. Scheel: Do we have a motion to approve the distribution of captured taxes from the Livonia Commons Project? On a motion by McIntyre, seconded by Harb, and unanimously adopted, it was: #14-2016 RESOLVED, that the City of Livonia Brownfield Redevelopment Authority does hereby approve the distribution of Captured Taxes from the Livonia Commons Project as follows: Brownfield Redevelopment Authority December 12, 2016 Page 7 Payment #3 (S-2016) to the "Owner" of Livonia Commons, TMA-LIVCOM, L.L.C., in the amount of $21,140.04 for the reimbursement of eligible expenses Ms. Scheel, Acting Chairman, declared the motion is carried and the foregoing resolution adopted. Taormina: Trey Buffington is here if he'd like to give us an update on that. Trey Buffington, National Real Estate Management. I'm representing Livonia Commons. As of today, we are 100 percent occupied. Panda Express just opened last week. They are rolling out nationwide. They are very excited about this location. It's been a great project. They've been great to work with. Taormina: I'd like to point out that, like Sonic, the Panda Express was new construction this past year, so that too will be added to the value for next year's capture. Harb: That's the only out-building on that property, right? Taormina: No, there's another outbuilding. Harb: What is in that one? Buffington: Jimmy John's, Aspen Dental, T-Mobil. Slater: There will not be any other new construction, though. Buffington: No. We had some challenges there. It was a California company. There were some environmental issues but we were able to satisfy those. Taormina: Panda Express basically sits right where the contamination was located. All the soil had to be replaced and it was the reason for the Brownfield in this case. The expenses associated with the audit will be a one-time expense. The 3 mill payback to the Michigan Treasurer is only with the Summer collection. Scheel: Thank you very much for being here this evening. Is there any other business to come before the Board? I'll take a motion to adjourn. Brownfield Redevelopment Authority December 12, 2016 Page 8 On a motion by Fried, seconded by McIntyre, and unanimously adopted, the 12th Meeting held by the City of Livonia Brownfield Redevelopment Authority on December 12, 2016, was adjourned at 5:22 p.m. /61/1 /c1/1 Ken Harb, Secretary