HomeMy WebLinkAboutLBRA MINUTES 2018-10-02 UNAPPROVED UNAPPROVED
MINUTES OF THE 17th MEETING OF THE
CITY OF LIVONIA BROWNFIELD REDEVELOPMENT AUTHORITY
The 17th Meeting of the Brownfield Redevelopment Authority of Livonia was
called to order at 5:02 p.m. on Thursday, October 11, 2018, by Chairman
Engebretson.
MEMBERS PRESENT: Jack Engebretson, Chairman
Lynda Scheel, Vice Chairman
Ken Harb, Secretary
Bill Fried, Treasurer
Andrew Lendrum
Kathleen E. McIntyre (5:06)
MEMBERS ABSENT: Heather Douglas
Steven Vandette
OTHERS PRESENT: Mark Taormina, Planning & Economic
Development Director
Michael Slater, Director of Finance
Barbara Gamber, Economic Development Coordinator
Jordan Jonna, AF Jonna Companies
Thomas Wackerman, ASTI Environmental
Jason Gekiere, Tower Construction
Margie Watson, Planning Department
ROLL WAS CALLED. A quorum was present.
APPROVAL OF MINUTES
On a motion by Scheel, seconded by Lendrum, and adopted, it was:
#04-2018 RESOLVED, that the Minutes of the 16th Meeting of the City of
Livonia Brownfield Redevelopment Authority held May 2, 2018,
are hereby approved as submitted.
A roll call vote on the foregoing resolution resulted in the following:
AYES: Scheel, Lendrum, Harb, Fried, Engebretson
NAYES: None
ABSENT: Douglas, Vandette
ABSTAIN: McIntyre
Mr. Engebretson, Chairman, declared the motion is carried and the foregoing
resolution adopted.
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 2
REVIEW OF LBRA TAX CAPTURE FOR LIVONIA MARKETPLACE AND
CONSIDERATION OF TAX INCREMENT FINANCE (TIF) REIMBURSEMENT
PAYMENT #9 (S-2018) FOR AUTHORIZED ELIGIBLE EXPENSES.
Taormina: Mr. Chair, this request is for TIF reimbursement payment #9 to
the developer of the Livonia Marketplace. Pursuant to the
approved Reimbursement Agreement and Brownfield
Redevelopment Plan, the LBRA is obligated to make regular
biannual payments following 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, 2017 for the Livonia Marketplace project,
including the Walmart, Kohls and Sonic properties, totaled
$11,160,116. This represents a slight decrease over last year's
total of $11,227,351 in an amount equal to $67,235. The total
Taxable Value includes $8,980,616 in real property and
$2,179,500 in personal property. The value used to determine
what gets captured for distribution, called the Incremental Value
for Capture, is the current Total Taxable Value of the property
($11,160,116) minus the initial Base Value of the property
($5,598,960), which equals $3,381,656. For Summer 2018, the
captured amounts include $132,420.24 in Real Property taxes
and 59,055.94 in Personal Property taxes for a total of
$191,476.18. Of the total for distribution, $16,844.49, which is
20% of the captured Local Taxes, gets deposited to the LSRRF
and to pay for administrative costs, and the balance,
$174,631.69 (80%) is eligible to go to the Developer.
Engebretson: Are there any questions or comment for the staff? If not, a
motion would be in order.
On a motion by Scheel, seconded by Harb, and unanimously adopted, it was:
#05-2018 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 #9 (S-2018) to the "Owner" of the Livonia
Marketplace, Livonia Phoenix, LLC, in the amount of
$174,631.69 for the reimbursement of eligible expenses
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 3
related to the redevelopment of the Former Livonia Mall
Site; and
2. A deposit of $16,844,49 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 #7 (S-2018) FOR
AUTHORIZED ELIGIBLE EXPENSES
Taormina: This item seeks TIF reimbursement Payment #7 to the
developer of Livonia Commons located at the southwest corner
of Middlebelt and Schoolcraft Roads. The project is anchored by
Dick's Sporting Goods and JoAnn Fabrics and Crafts. Other
tenants in the shopping center include AutoZone, Rally House,
T-Mobile, Aspen Dental, Jimmy Johns, and Panda Express.
Approval of the Brownfield Plan and Reimbursement Agreement
occurred on February 19, 2014. Development of the project is
fully complete. Payment #7 corresponds with collection of 2018
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 2018
tax year, the taxable value of all the real property at Livonia
Commons totaled $3,090,090, representing a slight increase
over last year's taxable value of $3,026,533. Subtracting the
established base value of $1,740,800 results in a total
Incremental Value for Capture of $1,349,290. Applying the tax
rate for capture, 28.4359 mills, generates a total capture of
$38,368.28. Of this, $34,320.41 is paid to the Developer and
$4,047.87 (equal to 3 mills of State Education Tax capture)
goes to the Michigan Department of Treasury.
Engebretson: Any comments from the Board? If not, a motion would be in
order.
On a motion by Lendrum, seconded by Scheel, and unanimously adopted, it was:
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 4
#06-2018 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 #7 (S-2018) to the "Owner" of Livonia
Commons, TMA-LIVCOM, L.L.C., in the amount of
$34,320.31 for the reimbursement of eligible expenses,
and $4,047.87 to the Michigan Department Treasury.
A roll call vote on the foregoing resolution resulted in the following:
AYES: Lendrum, Scheel, Harb, McIntyre, Fried, Engebretson
NAYS: None
ABSENT: Douglas, Vandette
ABSTAIN: None
Mr. Engebretson, Chairman, declared the motion is carried and the foregoing
resolution adopted.
CONSIDERATION OF A REQUEST BY ASTI ENVIRONMENTAL, ON BEHALF
OF HAGGERTY SQUARE, LLC, FOR APPROVAL OF A BROWNFIELD PLAN
AND DEVELOPMENT AND REIMBURSEMENT AGREEMENT FOR
HAGGERTY SQUARE, A PLANNED GENERAL DEVELOPMENT
CONSISTING OF A RETAIL SHOPPING CENTER AND MULTI-FAMILY
HOUSING, AT 19700 AND 19750 HAGGERTY ROAD, LOCATED ON THE
EAST SIDE OF HAGGERTY ROAD BETWEEN SEVEN MILE ROAD AND
EIGHT MILE ROAD IN THE SOUTHWEST 1/4 OF SECTION 6.
Taormina: I'm going to describe the site plan so everyone has a good
understanding of the scope of this project then we'll get into the
details of the Brownfield Plan. This request for Brownfield
financing is to assist with the redevelopment of a vacant
commercial property located on the east side of Haggerty Road
between the AMC Theater complex and Costco. The name
given for the redevelopment is Haggerty Square. The subject
site is the location of the former Haggerty Tech Center, which
was developed in the mid-1980's. That development consisted
of three (3) one-story "flex-style" buildings totaling over 150,000
square feet in gross floor area (GFA). Together, the two parcels
that make up the site measure 543 feet along Haggerty Road by
871 feet in depth, for a total land area of 473,185 square feet, or
10.87 acres. Haggerty Square is a mixed-use project that
includes a combination of retail and residential land uses. The
Livonia Brownfield Redevelopment Authority
October 11, 2018
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site was approved by City Council as a Planned General
Development under a single zoning classification, C-2 General
Business, pursuant to Article XX of the Zoning Ordinance.
Planned General Developments (sometimes referred to as
Planned Unit Developments) can contain commercial and/or
office structures and uses exclusively, or residential structures
or dwelling units in a unified plan with commercial and/or office
structures and uses. The intent is to provide flexibility in the
placement, bulk and interrelationship of buildings and uses,
along with the implementation of new design concepts to
encourage more efficient use of land. This is accomplished by
allowing modifications of the provisions of the Zoning Ordinance
with respect to lot sizes and yard requirements, as well as the
allowance of uses that would not otherwise be permitted in the
zoning district within which the Planned Development is located.
The approval was granted under a Special Waiver Use process.
This project has been fully approved by City Council, and we
are in the process of reviewing a Development Agreement
between the City and the Developer. The retail portion includes
the frontage on Haggerty Road, extending for the full width of
the property, approximately 543 feet, by a depth of 280 feet, and
totaling about 3.5 acres, or roughly one-third of the overall site.
The retail is in the form of two multi-tenant buildings that will be
separated by a main, central drive aisle providing access to
parking lots on either side of and in front of the buildings. The
northerly building, identified on the plans as Building "A", is one-
story in height and 16,048 square feet in size. The southerly
building, Building "B", is also one-story in height and 14,160
square feet in size. Both buildings are designed to be
subdivided with up to six units each, allowing for a maximum
total of twelve separate businesses. Outdoor dining patios are
shown adjacent to the units at the north and south ends of both
buildings. Additionally, a drive-up lane and drive-thru window
facility is depicted on the north end-cap unit of Building "A".
Currently, the plans are preliminary with respect to the location
and number of any restaurants. Both retail buildings would be
set back approximately 151 feet from the right-of-way of
Haggerty Road. Primary access to the development will be
provided by means of a curb cut and driveway located
approximately midway along the site's frontage on Haggerty
Road. Additional access points to Haggerty Road, with
restricted turning movements, are shown at the north and south
ends of the site. Circulation and parking would be
interconnected, with most of the parking located in the front yard
Livonia Brownfield Redevelopment Authority
October 11, 2018
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between the buildings and Haggerty Road. Additional off-street
parking would be available behind the buildings. Required
parking for commercial buildings with more than four units,
known as "Group Commercial Centers", and where more than
15% of the GFA is devoted to restaurants or other places of
assembly, is computed based on a ratio of one space for each
125 square feet of useable floor space. Both buildings qualify as
a "Group Commercial Centers" because they are designed to
accommodate more than four units. As such, Building "A"
requires 103 parking spaces and Building "B" requires 91
parking spaces. Combined, this commercial center requires a
total of 194 parking spaces. The plans show a total of 187
spaces available for the retail portion of the project, resulting in
a slight deficiency of 7 spaces. Medium to high density multiple-
family housing is planned for the easterly 7.38 acres of the site,
located directly east of the two retail buildings. The housing
development would be in the form of two three-story apartment
buildings each having a footprint area of approximately 44,450
square feet. The westerly apartment building, identified as
Building "C", contains a total of 99 one, two and three-bedroom
units; whereas the proposed easterly apartment building,
identified as Building "D", will have a total of 102 one, two and
three-bedroom units. The proposed "C-shaped" buildings mirror
one another, creating a central courtyard and common area with
an in-ground swimming pool. Combined, the two apartment
buildings contain a total of 201 apartment units, representing a
density of roughly 27 dwelling units per acre. Common area
amenities for the residents include inside storage units,
including an area for bicycles, an exercise room, meeting room,
and community room. Elevators will be provided in both
buildings. Primary access to the apartment complex will be
provided via the same drive aisles serving the retail center. The
approved site plan shows three points of entry into the
apartment complex, including the main drive through the center
of the site, plus two secondary drives—one in the northwest
corner and the other in the southwest corner of the site—all
forming connections to the drive aisles and parking lots in the
shopping center. Additionally, a future connection is shown from
the east where the site lies adjacent to an undeveloped parcel
owned by the same entity that owns the adjacent gas and oil
well facility operated by West Bay Exploration. The goal is to
have Haggerty Square connect to a new road that will extend
from the Costco fuel facility south to Fox Drive and the AMC
Theater complex. Gates are shown at each entry point to the
Livonia Brownfield Redevelopment Authority
October 11, 2018
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apartment complex, indicating that access will be restricted to
only residents of the apartment complex. Required parking for
apartment buildings is computed based on a ratio of 2-1/2
parking spaces for each unit. The apartment buildings, with 201
units overall, requires 503 parking spaces. The site plan shows
323 parking spaces, resulting in a deficiency of 180 spaces. The
parking provided translates to a ratio of 1.6 parking spaces per
apartment unit. The petitioner has recent experience developing
similar projects containing approximately the same parking ratio,
which they feel is adequate. Masonry garages are depicted
along the west, north and east sides of the apartment complex.
The submitted Brownfield Plan provides a basic description of
the project, the brownfield conditions present on the site, along
with information on each of the required Plan elements. The site
is considered "eligible property" as defined by Act 381 on the
basis that: (a) it was previously utilized for commercial
purposes; (b) it is located within the City of Livonia, a qualified
local government under Act 381; and (c) it is determined to be a
Facility as defined in Part 201 of the Michigan Natural
Resources and Environmental Protection Act. Section 1.5
provides a summary of the site conditions and known
environmental contamination. The Environmental Consultant is
here and can provide additional information regarding the
historical use of this property. But it is our understanding that
prior to 1985, the site was used as a sand and gravel mining pit
that was filled with construction materials of an unknown origin.
Further testing and site sampling have revealed soil and
groundwater contamination, including elevated levels of
methane and other chemicals testing above the generic
residential and non-residential clean-up criteria of Part 201.
Page 5 of the Plan provides a summary of the eligible activities
for which the Developer is seeking reimbursement through the
capture of tax increment revenues. The major activities and
associated costs are as follows: Environmental Investigation
and Baseline Environmental Assessment/Due Care Plan
($41,650); Brownfield Plan ($10,900); Due Care Activities
($706,000); Environmental Insurance ($157,500); Site
Preparation ($2,884,000); Infrastructure ($1,905,000);
Demolition ($140,000) and a 15 percent Contingency —
Excluding Task 2 ($875,123). The estimated total for all Eligible
Expenses is $6,720,173. Site Preparation and Infrastructure
constitute the largest costs, and generally include activities
related to engineering services, erosion control, site grading,
and the relocation and installation of utilities. The next largest
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October 11, 2018
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items are Due Care Activities and Demolition, involving costs
associated with environmental remediation (vapor extraction
and barriers), and the removal of existing building as well as
other unusable site features, such as the parking lots, utilities,
and landscaping. Tax increment revenues captured on the value
of the real property above the established Base Value will be
used to reimburse the Developer for the eligible costs. The
Base Value is established according to the current pre-
construction taxable value of the property, which in this case is
$844,500. As the site is developed and the taxable value of the
property increases, the taxes paid on the incremental value
above the base value are captured by the LBRA and used to
pay the project costs. Table 2 provides a yearly estimate of the
taxable values and the captured tax amounts for each of the
separate taxing authorities. It also itemizes the approximate
reimbursement amounts to the Developer, LBRA, LSRRF, and
State of Michigan. The proposed duration of the Plan is 19
years, beginning in 2019 and ending in 2037. The first 14 years
include reimbursement payments to the Developer. The
estimated taxable value of the completed project is
approximately $13,700,000. For years 2 thru 14, the amount
allocated for reimbursement to the Developer is 80% of the
cumulative captured taxes, with the other 20% paid to the LBRA
for administrative expenses and for deposits to the LBRA's
Local Site Remediation Fund (LSRRF). Non-capturable millages
include the Zoo Authority, Art Institute and School Debt. Year
2019 is shown as the first year of tax capture based on 75% of
the development being complete. For that year only, a
proportional amount of School Education Taxes (SET) and
School Operation Taxes will be captured to pay for a portion of
the BEA (Baseline Environmental Assessment), Due Care Plan,
and for Preparation of the Brownfield Plan, all of which are pre-
approved eligible expenses. Local taxes only will be used to
reimburse the remaining eligible costs, including the LBRA
Administrative Fee and Local Site Remediation Revolving Fund
(LSRRF). In year 2020, the assumption is that the project will be
100% complete with an incremental taxable value for capture of
$9,675,742. As with the other approved Brownfield Plans, for
the last five years of the Plan (years 2033 thru 2037), the LBRA
is authorized to capture 100% of the local taxes for deposit to
the LSRRF. In the final five years of the Plan, a total of
approximately $2,621,385 would be deposited to the LSRRF.
Money available in the LSRRF can be used to pay the costs of
eligible activities on eligible property located in the City of
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 9
Livonia. We also have for your consideration this evening the
proposed Development and Reimbursement Agreement. Like
other agreements, this spells out the various obligations
between the LBRA and the Developer regarding the collection
and payment of tax increment revenues, the duration and timing
of the payments, and the retention of funds to pay for the
administrative costs of the LBRA. It outlines the terms and
conditions under which the Developer must submit proof of
payment of all eligible costs and it also limits reimbursement to
the Developer to 14 years, which corresponds to the Winter
2032 tax collection period. We have the Developer here, Jordan
Jonna, as well as his team, both the Construction Manager and
their environmental consultant. With that, I'll be happy to answer
any questions.
Engebretson: You covered everything that was in the package and you did it
well. Are there any questions for Mark? Mr. Slater?
Slater: I'll just add one thing. Mark did a great job. One additional point
being projections. The projections indicate that after the 14
years of reimbursements to the Developer, they will recapture
$4.6 million out of the estimated $6.4 million total expenses
they're going to incur. So it's not projected that they are going to
capture 100 percent of their eligible costs.
McIntyre: I'm sorry. Mike, could you repeat that please? What the total
that they would capture out of the total eligible. I see the total
eligible but what's the projection?
Slater: Total projection is $4,607,000.
McIntyre: Thank you.
Engebretson: Mr. Jonna, do you want to add anything?
Jordan Jonna, AF Jonna Companies, 3583 Telegraph, Suite 200, Bloomfield
Hills, Michigan 48302. It's a family company. Thank you very
much for taking time to see us and discuss this project. This
property came up for sale roughly about a year ago and we've
had our eyes on everything. We always thought this property
was underutilized and of course it's only a building and a half. I
cannot wait to take them down actually. Our vision with the
property was retail. It's a very good strong retail corridor. We did
complementary buildings. We did modernized buildings where
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 10
they're not the same but they do complement each other. The
back of the property has always been a struggle for the previous
developers and on how and what are the best uses back there.
We've done similar sites like this and we upgraded each one of
them. We like the multi-family component here. We feel it's a
very good strong corridor for this. We have pretty much
everything you need in this area. We have built-in retail,
entertainment right next door, the shopping is walkable at this
point. We did two u-shaped buildings because this is a very
busy site, especially with Costco and Target next door. It
creates a little privacy and a plaza area. We also did garages
along the majority of the perimeter of the property just for
screening purposes and also for covered parking, which is a big
amenity. We are stepping up a lot of our amenities into the
building. Mark touched on a few of them. We are having a
swimming pool. We are doing a big gym inside the building.
That's why it's a little smaller. One of the buildings doesn't have
as many units as the other one. We do bring in gym instructors.
Our management will bring in everything from trash valet where
you can go pick up your trash from the units to basically taking
your drying cleaning or picking it up for you. We're stepping up
our game in the amenities portion of the building. We feel it's
the best product and draws the best customers to the property.
We do look at this as an A-plus property for us. Internally, we
handle all of our management. We drive our properties. This
one will get driven probably weekly to make sure it's completely
up to standards for our portfolio. I'd be happy to answer any
questions here.
Engebretson: Jordan, I have a question. I understood from Mark's comments
that you've done something similar elsewhere. Do you really
mean that in a real high traffic area like Haggerty Road next to a
Costco and every retail in the area? The question I have is, how
do apartments work in that kind of an environment? I haven't
heard the term condominium. I heard apartment. So these are
for rent?
Jonna: They are for rent. They complement each other. Our retail
complements the multi-family section. The last one where we
had the retail in front and the multi-family in back was at Twelve
Mile and Southfield. It's a very busy intersection. We have
almost the identical square footage of the space, 30,000 feet of
retail. We have a little less units in the back. I would say 60
percent of the units are back there and they complement each
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 11
other. People use the retail all the time. They like to walk.
Actually, it works out very well. We do upgrade our units a little
bit. Everyone thinks of apartments as a little older. These are all
stainless steel, higher ceilings, all LED lights. It's a very efficient
building and we're building it a little larger too. We're not doing
studio apartments that you see in Detroit a lot. They are roughly
900 to 1,200 square feet which is a good size for a new multi-
family complex. It works.
Engebretson: I had no intent to question the integrity of what you're doing
here. It's a creative use of that property. I'm a very faithful
Costco shopper and I drive by there regularly. I think what
you've done is very creative. I'm really pleased. I do think that
there are some issues that you're going to have to overcome,
the freeway noise, for example, with residents. I'm not here to
talk about zoning or site plans. It's just an observation. As I read
the packet very carefully that thought came to my mind. It is a
real high traffic area.
Jonna: They will leave at different times. Usually we find out that they
don't all leave at the same time, so it will work.
Engebretson: I think you've done a nice job.
Jonna: Thank you very much. We're excited about this project.
Harb: I would like to know by way of background the deliberations
because I can't remember the last time we had apartments
approved in the City. Was that something that was brought up?
McIntyre: It was, Ken, and there was a lot of discussion about it, but
there's an understanding that the market is shifting and a lot of
younger people are looking for apartments, not for homes.
Certainly, we have a lot of homes and we know we attract a lot
of young millennium types, young families, but we thought this
kind of upscale product was complementary to the housing
stock in Livonia.
Scheel: Mark, can you show when you're looking down on it. That's
good. So you have carports around three sides, but not on this
side.
Jonna: Those are full garages.
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 12
Scheel: Oh. Those are full garages.
Jonna: We put garage doors on them. It's a private garage for
someone. There's fencing in between so it's not completely
walled off, but you have privacy there.
Scheel: So those are full garages, but why not on this side?
Jonna: It's actually a pretty nice view. You have a pond. You have a lot
of green area. You can see entertainment on that side. We
didn't want to completely enclose it.
Scheel: These are one-car garages?
Jonna: One and two. We do have some two-bedrooms that we offer.
We like to mix it up so people have more space.
Scheel: And they'll all be one, two and three-bedroom — no studio —
apartments? And gated entry. So there's a gated entry to the
apartment complex. From the two retail buildings in front, then
that's going to be a gated entry right there?
Jonna: Yes.
Scheel: I can see that better now.
Jonna: All entries are gated. There's four access points. We're adding a
road. That's not on our property but we are finishing the
easement with the property owner that pumps the gas in the
back, to add that road and we're adding detention back there for
him. That's a compromise.
Scheel: Okay. My next question is regarding the brownfield. Will there
have to be on-going testing on the site, Mark?
Taormina: I'll refer that question to our environmental expert, Tom.
Tom Wackerman, President, ASTI Environmental, 10448 Citation Drive South,
Suite 100, Brighton, Michigan 48116. We did the environmental
work here back in mid-2015 or whatever, the original one, and
then we did environmental work subsequently. We also wrote
the Brownfield Plan. There are three impediments on this
property as a result of its history. The first one is the fill material
which came probably as a result of construction of 275 but we
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October 11, 2018
Page 13
can't find any source material in it. In other words, when you drill
down into it, it's not like it's a landfill. It's not like there's drums
or large pockets of debris in there. It just came from somewhere
and it's got stuff in it. And this figure here shows that it's
contaminated with metals and oil-related compounds and some
volatiles, and it's all over the site. Those are the first and second
challenges, which is the unstable fill materials and subsequently
the contaminated fill material. The third challenge was we found
methane during the initial assessment. We studied it fairly
extensively for a number of years and couldn't find a source for
it. You can see this orange line is the area of the methane. It's
fluctuated between 5 and 98 percent methane over time. We
don't know whether it's natural. We can't seem to associate a
source material in the fill material with it. It's not from a leaking
gas line which we find sometimes. Consequently, when the
buildings go up, they're going to need vapor barriers and vapor
systems, and that's a big part of the cost that you see in the
Brownfield Plan. That system will probably have some sort of
long-term monitoring associated with it. Some of it will be
presumptive remedy. For example, on Haggerty, the
concentration for some reason has always been zero and there
seems to be some sort of a divide that cuts across right about
here. But we would put a gas collection system under the
building there as a presumptive remedy. So there will be
monitoring for that. In terms of the contaminated fill material,
there will be no need for monitoring for that because the entire
site will be covered either by asphalt or 18 inches of clean fill,
which will provide a barrier for any direct contact with the
material.
Scheel: So anything that has to be monitored, who is responsible for
doing that?
Jonna: We are.
Scheel: And if you ever sell this project, then the new owners take on
that responsibility and that's something that would be spelled
out to them?
Wackerman: Yes. There's a document called a Due Care Plan, which you're
all probably familiar with, which comes with the property. So
anytime where would be a subsequent sale, that Due Care Plan
would then go to the new owner. The Due Care Plan would say,
this property has vapor mitigation systems on it. They have to
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 14
be monitored in this way or managed in this way to determine
whether or not they're working. I can't tell you what the
monitoring is going to be, because we haven't designed it yet.
Some systems don't have monitoring but my guess is that this
one probably will.
Fried: Who absorbs the cost of the monitoring?
Wackerman: The owner.
Fried: Okay. I look at the Brownfield as a way to solve environmental
problems of the past, and the other aspect is your comment that
you don't have to worry about it because you're going to have
asphalt covering everything. My next question is, how is that
going to affect the runoff of the water on adjoining properties'?
Wackerman: That's a great question. So any permeable surfaces will have
self-contained piping. So any runoff from the site will not come
in contact, I mean permeable surfaces, will not come in contact
with any soils on the site before they go into the stormwater
system. Right?
Fried: Well, is the stormwater system built to accommodate the added
concentration coming off of that hard surface?
Wackerman: The added concentration'?
Fried: No, the added water.
Wackerman: Oh, yes. Will it be sufficient for the volume of water'?
Fried: Yes.
Wackerman: Oh, absolutely. In fact, there's going to be an urban stormwater
system.
Fried: I'm not raising questions just to raise questions, but I do think
that's an aspect that was not mentioned.
Jason Gekiere, Tower Construction. Absolutely. So we're in the process of
designing it, but the intention is to use an underground detention
system for the front part of the site. The back part of the site,
there's a detention pond behind it, and those stormwater
sections will be a combination of underground detention where
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 15
the apartments are, and some of the water is going to the
existing pond that is behind the drive that connects with the
Costco. It currently does not really have any detention. So the
fact that we're taking this 11 acre site and containing the
stormwater in a much better way than it was before is a big
improvement.
Fried: Who own the detention basin in the rear?
Scheel: West Bay Exploration.
Gekiere: Pat Gibson is the gentleman that runs it. They're out of Traverse
City. They've been pumping oil back there for quite a number of
years. It's a good pump for him too. It's only part of the
stormwater for the apartments that goes back there. We have a
series of underground detention pipes that are underneath the
parking lot, self-contained for the apartments, then there's a
separate system for the retail buildings that outlets to Haggerty
Road.
Fried: Do you have to pay for usage of that basin'?
Gekiere: We're working on that.
McIntyre: This is for Mr. Jonna. The concern about we're all watching the
rising interest rates. It's certainly good for rental properties,
right, because it will price some people out of the home-buying
market.
Gekiere: It will also raise the margins.
McIntyre: Yeah. That's what I'm saying. It prices people out of the housing
market because of the mortgage cost. I didn't make that clear.
What's your concern, level of nervousness, about this project
given where rates have gone since we last talked about this in
May? And I'm not asking you to predict the future.
Jonna: I understand. Interest rates are definitely a discussion at our
office all the time. Once we commit to a project, we do have the
resources to finish it, once we're committed. Depending on what
the mortgage rates are at the end of the day, it's dependent on
what type of mortgage we put on the property. For this property,
we would be very conservative. I have a seven-month old baby
boy that I want to hand this property off to one day, and we tend
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 16
not to over-mortgage our properties at all. That's how a lot of
people got in trouble back in the down times. It's on ongoing
discussion, but it just depends on how much equity is involved,
but we're very committed to the property. We actually already
purchased the property, and we have a different way of thinking
about developments than other developers around town do. We
don't have the same philosophy. We want to be very safe with
this property. We look at it as more renters but also our
mortgage price, our interest rate on the whole property will be a
lot higher and we will just take a different mortgage at that time.
McIntyre: Would you say that the brownfield incentives or recapture is
critical to you being able to break ground on this project?
Jonna: This land is almost 50 feet of fill. To get to a footing, you have
big casing systems. Because of the fact that the site was used
as a burrow pit or sand pit for the 275 project, we have
anywhere up to 52 feet of fill. Through where the buildings are,
you're anywhere from 40 to 52 feet. So that's going to require us
to put specialty deep foundations in, either a driven pile system,
which are concrete pilings, or geo-piers, which are stone piers.
We're in the process of working with the engineering
consultants to determine the loads of the building and then
select the best type of system, but if you look at the numbers
that are in the Brownfield Plan, those foundations alone are $1.5
million. And that type of foundation system is going to be
required for anything that's put on the site.
McIntyre: And the degree of remediation required for residential is a
higher standard.
Jonna: That's true. But this will be nonresidential because it will all be
retail.
McIntyre: I'm sorry. I was speaking in terms of zoning. But the remediation
required for any sort of housing is a higher level of remediation.
Is that correct?
Wackerman: It's either a higher level of remediation or a higher level of
control. In this case, it would be a higher level of control. In
other words, the plan you see before you and the Development
Plan doesn't anticipate digging out 50 feet of fill material. So the
impacts will remain but the control will allow residential use. It's
what's called a restricted residential closure, which means it
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 17
meets the residential criteria with the controls that are going to
be put on.
McIntyre: And the controls monitoring everything else?
Wackerman: The basic controls for this will be the cover, which has to be
maintained as a control, and the vapor management system
which has to be maintained.
Gekiere: There's basically a barrier underneath the buildings with venting
that has to be maintained at all times.
McIntyre: And that's required whether it's retail or residential?
Wackerman: Yeah. I don't know if you've been following it, but the vapor is
the key issue of the day now, both with the Department of
Environmental Quality and the Department of Health. So we
treat all buildings pretty much the same in terms of vapor
control.
Engebretson: It sounds pretty exotic.
McIntyre: The last question is, have you done multi-family developments
where you've had these sorts of environmental remediation
issues? The reason I ask is, there's always concern and we
have a situation in Livonia with brown water because of the Ford
Transmission. But heightened awareness, right'? So I'm
wondering if in your other developments, you've seen that
renters are able to be very comfortable with this. That was part
of the discussion, Ken, in Council was the nature of these units.
These aren't the old studio or a bunch of stuff crammed into one
bedroom, one bathroom.
Gekiere: We do about 700 projects a year in Michigan. In today's
environment, almost everyone has a vapor component to it. I
mean there's gas stations and dry cleaners everywhere. We see
residential and commercial being built on those all the time. It's
a question of whether the DEQ approves of your design. So
we've gotten to a point in this process now where we all kind of
know what the DEQ wants. I wasn't answering for your
particular portfolio, but we see it all over the place.
Wackerman: A lot of it is education. We educate them as to this is what's
going on and this is the approval from DEQ that it is safe. We do
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 18
have a management team that takes over the apartments for us.
We do not manage multi-family but we make sure it's up to
standards for us. And if it wasn't, we would make a change.
Scheel: Mark, this currently has a Commercial Rehabilitation Exemption
Certificate (CREC) on it. There's a timeline to follow when the
Brownfield gets approved for that CREC to come off, right?
Taormina: Yes. That would be rescinded probably simultaneous with the
approval of any Brownfield Plan. When it gets to Council, one
way or the other, we would expect that they would be prepared
to rescind the CREC at the same time.
Scheel: Okay. Thank you.
Harb: So only the district was established. The certificate was never
filed.
Taormina: The Commercial Rehabilitation District (CRD) was established
and the certificate was approved and I believe it was filed.
Engrebretson: Any other questions? Anything from the Finance Director?
Slater: It was a good discussion.
Engebretson: The Planning Director?
Taormina: Hopefully your packet includes everything that you need to
make an informed decision. We did provide in your electronic
packets the guidelines that we worked hard on a few months
back. It spells out some of the criteria by which you review these
projects. So nothing more at this point.
Engebretson: If we were to determine to approve this proposal, would we
need to have a separate resolution for each of these two
samples that you've provided here, one for the Brownfield itself
and the other for the Reimbursement Agreement? Those are
separate issues.
Taormina: Yes, they are. I believe your packet has prepared resolutions for
both of those items. It should be bookmarked. Mr. Harb has a
copy of it right there.
Engebretson: It's on page 31. Okay, folks. What's your pleasure?
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 19
Fried: To approve it and move it on to Council.
Engebretson: Your motion is to adopt the resolution as prepared by the staff,
right?
Taormina: The resolutions would approve the Brownfield Plan as it's been
presented to you by the applicant, and the same thing with the
Development and Reimbursement Agreement. Unless there are
any changes, you can just read the two or by reference.
Engebretson: So you want two separate resolutions. Mr. Fried has moved the
first resolution to approve the Brownfield, Is there support?
On a motion by Fried, seconded by McIntyre, and adopted, it was:
#07-2018 RESOLVED, that the Brownfield Plan for Haggerty Square,
together with Exhibits and schedules thereto, which was presented
to the Livonia Brownfield Redevelopment Authority by the City's
Planning and Finance Departments at its meeting of October 11,
2018, be approved and recommended to the City Council in
substantially the form in which it was presented to the Authority,
subject to approval as to form by the City's Law Department.
Mr. Engebretson, Chairman, declared the motion is carried and the foregoing
resolution adopted.
On a motion by Harb, seconded by Scheel, and unanimously adopted, it was:
#08-2018 RESOLVED, that a Development and Reimbursement Agreement,
providing for reimbursement of eligible costs pursuant to the
Brownfield Plan for Haggerty Square, be approved in substantially
the form of the Development and Reimbursement Agreement
between the City of Livonia Brownfield Redevelopment Authority
and Haggerty Square, LLC, which was presented to the Authority
by the City's Planning and Finance Departments on October 11,
2018, and that the Board's Chairperson, or in his absence the Vice-
Chairperson, is authorized to execute said Development and
Reimbursement Agreement on behalf of the Authority, subject to
approval as to form of said Development and Reimbursement
Agreement by the City's Law Department.
Mr. Engebretson, Chairman, declared the motion is carried and the foregoing
resolution adopted.
Livonia Brownfield Redevelopment Authority
October 11, 2018
Page 20
Wackerman: May I make a comment?
Engebretson: Sure.
Wackerman: It was a pleasure working with these guys. There were very
thorough and it worked really well. So thank you.
Engebretson: We have to agree with you. They are very capable individuals.
Obviously, you are as well. Jordan comes from a great family
we have known for decades. Good luck with your project.
Jonna: Thank you very much.
Engebretson: Item #7 is any other business that may be up for discussion
tonight.
Taormina: Both Mr. Zarbo and Mr. Buffington express their apologies for
not being able to be here. I indicated to both of them there was
no need to be here. I just wanted to pass that along. They both
would have been here if they could have been.
Engebretson: Thanks, Mark. Mark and I had a chance to talk about that a few
days ago. Realizing that there really isn't much to discuss
anymore on those projects, I told him I was fine with them not
coming. Trey Buffington flies in from where?
Taormina: St. Louis.
Engebretson: We're certainly comfortable that they weren't here. If there's
nothing else, we'll adjourn the meeting at 5:52.
On a motion by Harb, seconded by McIntyre, and unanimously adopted, the 17th
Meeting held by the City of Livonia Brownfield Redevelopment Authority on
October 11, 2018, was adjourned at 5:52 p.m.
Ken Harb, Secretary