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.
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Ken Harb, Secretary