Evansville Redevelopment Authority-Minutes--11-15-2005

Evansville Redevelopment Authority

Regular Meeting

Tuesday, November 15, 2005, 7:00 PM

City Hall, 31 S. Madison St., Evansville, WI

MINUTES
Chairperson Hagen called the meeting to order at 7:02 PM. Present were Chairperson Hagen, Vice-Chairperson Eager, Ald. Anderson, Betsy Ahner, Dean Arnold and John Decker. Bill Connors, Executive Director, and James Otterstein, Rock County Economic Development Authority, also were present. Ald. Sornson and Ald. Aikman were present in the audience.

The agenda was approved as presented by the executive director, except that item 8a was moved to be immediately after item 5.

Motion by Eager, seconded by Decker, to approve the minutes of the July 11 and October 18, 2005, regular meetings. Motion passed.

There were no citizen appearances on items not listed on the agenda, and no public hearings.

New Business
Ed Francois and Roger Berg made a presentation regarding a potential project to redevelop the building located at 7, E. Main St., which originally was the Economy Store, and which currently is occupied by Dave’s Ace Hardware. Ace is moving to a new store on the east side in the spring of 2006, and the developers think it is likely that the building will be hard to lease back up between then and the completion of the Main St. reconstruction project in the fall of 2007. They have an option or contract to purchase the building with contingencies, and believe the street project provides a great opportunity to redevelop the building during 2006-07. Their vision is to have retail/service/office space on the main floor and in the basement, and possibly 10 one-bedroom apartments on the top floor. To know if the project is feasible, they need to spend about $10,000 on the services of an architect and the Virchow Krause accounting firm. They anticipate that they will need to receive all of the tax increment generated by the project, to the full extent allowed by law, to make the project work financially. They want to know if the Redevelopment Authority or other city committees see any roadblocks to the project before they spend the initial $10,000 to determine if the project is feasible.

Vice-Chairperson Eager raised the issue of parking. Mr. Berg said they have discussed this issue with the Council and will need assurances that the current city policy of allowing one permit for parking in the city lot for each residential unit would continue well into the future. He said they would like the parking stalls in the city lot for their residential tenants to be marked as such.

The commissioners said they saw no roadblocks, and were unanimous in their enthusiastic support for the project.

Redevelopment Authority Policies and Application Form
The commissioners decided to hold a public hearing on their policies and application form after some expressions of concern about them, particularly the text about providing assistance in the form of an interest-bearing loan. The commissioners pointed out that the text also says the commissioners have the discretion to alter the loan rate and/or term. Mr. Eager said he thinks criteria should be established for altering the loan rate and term, and those criteria should be ranked in order of priority. Mr. Decker pointed out that the current policy does list some criteria.

Mr. Connors said he thinks the policy should be changed to say that the commissioners also have the authority to give a grant, because in his mind, a forgivable loan means there are performance requirements the developer must meet after the project is completed that will justify forgiveness of the loan, and there will not be meaningful post-construction performance requirements for all projects. Mr. Otterstein said that if the policy says grants are available, everyone will ask for a grant, and that since there are performance requirements for all grants, any benefit that could be conferred in the form of a grant also can be conferred in the form of a forgivable loan.

The public hearing was opened at 7:50 PM.

Ald. Sornson said developers are going to want grants, not interest bearing loans. He said that giving grants is what the Redevelopment Authority has done thus far, and that is his understanding of how a TIF district is supposed to work. Repayment of the city’s investment is supposed to come from the tax increment, not from the developer repaying a loan. Mr. Connors said that most of the projects in TID No. 5 thus far have involved grants, but for the Grange Building project, the assistance was given in the form of forgivable loans. Chairperson Hagen pointed out that the current policy says the commissioners have the discretion not to charge interest on the loan or even to require it to be repaid.

Ald. Aikman asked whether the commissioners could make a forgivable loan into the functional equivalent of a grant by making the requirements for forgiveness quick and easy to perform. Mr. Otterstein said that is correct.

Vice-Chairperson Eager said the problem in the situation with the potential exterior restoration project at 19 W. Church St. is that some people thought Mr. Connors should be the Redevelopment Authority’s point person for discussing what forms of assistance are and are not available, and he does not think that should be the case.

Richard Woulfe, 255 E. Main St., asked what would be the criteria used for adjusting the loan term and interest rate, for example, in the case of the potential project at 7 E. Main St.

Ms. Ahner said that she would prefer that the policy say that the commissioners have the authority to give assistance in the form of grants, forgiveable loans, or interest bearing loans, depending on the merits of the project. She believes the current text is not inviting. Mr. Otterstein reiterated that if the policy says grants or forgivable loans are available, everyone will ask for grants and forgivable loans. Mr. Decker said that completing the project alone was often a major accomplishment and could be sufficient performance to justify forgiveness of a loan.

Ald. Aikman said the Council could overrule the Redevelopment Authority if the Council thinks the commissioners have become too loose with the TIF money, but the Council cannot override the commissioners if the Council thinks they are being too conservative. She encouraged the commissioners not to be too conservative. She said some projects just will not pay for themselves, but still are good projects.

The public hearing was closed at 8:17 PM.

Mr. Decker said he thought the potential historic restoration project at 19 W. Church St. was a good candidate for TIF assistance because it added housing units to the downtown area, increased the tax base, and accomplished historic restoration. He thinks all of these should be included in the criteria for altering the loan term and interest rate.

Vice-Chairperson Eager said he thinks the policy should be written more clearly so that everyone can understand it without need for assistance interpreting it, and that if there are gray areas in the policy, city staff should not attempt to explain the policy but instead encourage the potential applicant to come to a Redevelopment Authority meeting and ask questions or call individual commissioners. Mr. Connors said that when Mr. Berg caught him as he passed through the big room on the second floor of City Hall and asked him, under the new policy, was an interest-bearing loan the only assistance he could receive for the projects regarding which he and Mr. Connors had had past discussions (including the potential historic restoration project at 19 W. Church St.), Mr. Connors responded he did not know, because the policy was new. Mr. Connors said he pointed out to Mr. Berg that the policy provided that the commissioners have the authority to alter the loan rate and term. Later, Mr. Berg called Mr. Connors and said he understood that he could obtain more generous assistance than an interest bearing loan, but that he did not want to have to ask for assistance more generous than the standard policy, so he was not going to submit an application for assistance with the historic restoration project at 19 W. Church St., and instead would use vinyl siding on the building. Mr. Otterstein said that at Mr. Connors’ request, he called Mr. Berg to explain the purpose of the policy and the kinds of assistance that might be available to him, and it is his impression that Mr. Berg decided not to apply for assistance with the project at 19 W. Church St. for a variety of reasons. The consensus of the commissioners was that if Mr. Connors or any other city staff are asked a question about the Redevelopment Authority’s policies, staff should politely decline to answer the question and instead encourage the questioner to attend the next meeting of the Authority or to call individual commissioners.

Ms. Ahner reiterated her belief that the text of the policy needs to be changed to make clear that more forms of assistance are available. She said that if Roger Berg, who has had past dealings with the Redevelopment Authority, could misunderstand the policy and be discouraged by it, there is a good chance that others without experience with the Redevelopment Authority would also be discouraged.

The commissioners will consider bringing proposals for changes to the text of the policies to the next regular meeting of the redevelopment authority.

Unfinished Business
Mr. Connors had no new information on the financial condition of the TID No. 5. He reported, as he had indicated in a previous email message, that the roller rink property has been sold again. He also reported that he soon will receive large maps of TID No. 5 to provide to the commissioners.

New Business (continued)
Mr. Eager reported that he has been contacted by a Beloit College student who would like to work with the Redevelopment Authority to study the impact of public opinion on expenditure of public funds for economic development or redevelopment projects. The commissioners expressed interest in working with the student.

Motion by Eager, seconded by Arnold, to convene into closed session pursuant to Wis. Stats. Sec. 19.85(1)(e), deliberation or negotiating the purchasing of public properties, the investing of public funds, or conducting other specified public business, whenever competitive or bargaining reason requires a closed session, to discuss possibly pursuing the purchase of or acquisition of options to purchase property located within TID No. 5, subject to approval by the Common Council, and not to reconvene into open session. Motion passed unanimously on a roll call vote at 8:35 PM.

Motion by Eager, seconded by Anderson, to adjourn. Motion passed.

The meeting adjourned at 8:57 PM.

Prepared by William E. Connors, Executive Director

The Minutes are not official until approved by the Authority.