The URL can be used to link to this page

Home My WebLink AboutLBRA MINUTES 2012-04-11MINUTES OF THE FIFTH MEETING OF THE CITY OF LIVONIA BROWNFIELD REDEVELOPMENT AUTHORITY The fifth meeting of the Brownfield Redevelopment Authority of Livonia was called to order at 5:00 p.m. on Wednesday, April 11, 2012, by Chairman Jack Engebretson. MEMBERS PRESENT: MEMBERS ABSENT Jack Engebretson, Chairman Lynda Scheel, Vice Chairman Joe Taylor, Treasurer Ashley Krueger. Secretary Jim Cambridge Paul Condon Ken Harb Enrico Soave Bill Fried OTHERS PRESENT: Jack Kirksey, Mayor Mark Taormina, Planning & Economic Development Director Michael Slater, Director of Finance Karl Zarbo, Livonia Phoenix, L.L.C. Margie Watson, Program Supervisor, Planning ROLL WAS CALLED. A quorum was present. APPROVAL OF MINUTES On a motion by Scheel, seconded by Condon, and unanimously adopted, it was: #01-12 RESOLVED, that the Minutes of the Fourth Meeting of the City of Livonia Brownfield Redevelopment Authority held September 12, 2011, are hereby approved as submitted. Mr. Engebretson, Chairman, declared the motion is carried and the foregoing resolution adopted. REVIEW OF LBRA TAX CAPTURE FOR LIVONIA MARKETPLACE Kirksey: I appreciate everybody's effort on this Board. Engebretson: We appreciate the opportunity to serve. Mark or Mike, would you like to begin? Brownfield Redevelopment Authority April 11, 2012 Page 2 Taormina: This item represents the first reimbursement payment request to the Developers of the Livonia Marketplace as part of the Livonia Brownfield Redevelopment Authority's (LBRA) obligation under the terms of the Brownfield Plan and Reimbursement Agreement approved in 2008. Moving forward, the LBRA will be asked to make biannual payments that generally coincide with the City's collection of winter and summer taxes. This regular payment schedule is expected to continue through the duration of the Reimbursement Agreement, which is set for a maximum of thirteen (13) years or until the year 2024. Under the terms of the Agreement, the Board must approve periodic reimbursement payments to the extent that monies are owed for costs that Livonia Phoenix, L.L.C. has incurred on eligible activities and further provided that sufficient tax increments have been generated from real and personal property taxes actually paid. In general, the funds available for reimbursement (referred to as the tax increment or captured taxes), represent the difference between the total amount of taxes collected on all the real and personal property that makes up the Livonia Marketplace (including the Walmart, Kohl's, old Bakers Square, and other retail Outlots) and the taxes generated from the established Brownfield Initial Taxable Value of $5,598,960. This is referred to as the "base value," and is a fixed amount. It represents the overall taxable value of the property as of December 31, 2007, prior to demolition, and was established in order to prevent the City from going "backwards" in the amount of tax revenues being generated from the site. Thus, the amount of tax increment depends on how much more the aggregate taxable value of the property exceeds the base value. However, since the Developer is also receiving a TURBO benefit until the end of 2014 equal to 50% of all of the real property taxes paid, for the first three (3) years of the TIF payback period, 50% of the real property value must be deducted from the overall taxable value. At the end of 13 years (or possibly sooner), the maximum the Owner can get paid is $6.6M provided the total of all eligible expenses meets or exceeds this amount. In addition, 20% of the captured tax dollars will be retained by the Livonia Brownfield Redevelopment Authority to pay the administrative costs of the Authority, and will be deposited into a Local Site Remediation Revolving Fund (LSRRF). December 17, 2011, marked the official commencement date of the reimbursement period. As of that date, the taxable value of all the real and personal property at Livonia Marketplace totaled $11,687,230.00. Of that amount, $9,699,150.00 constitutes the Brownfield Redevelopment Authority April 11, 2012 Page 3 taxable value of all the real property, and $1,988,080.00 represents the value of all the personal property. Based on these values, the total of the Winter 2011 tax collection was approximately $185,540.00 including $153,979.00 in real property taxes and $31,561.00 in personal property taxes, which is reflected on the Tax Capture table. With respect to TURBO, the Wayne County Land Bank will reimburse the Owner for one- half of the real property taxes, or $76,989.00. In determining the tax increment, the base value of $5,598,960.00 is subtracted from the sum total of the remaining taxable value of the real property ($4,849,575.00) plus the taxable value of the personal property ($1,988,080.00). The net result is the Incremental Value for Capture, which equals $1,238,695.00. Applying the Winter tax rate of 15.8755 mils to this value results in a total tax "capture" of $19,664.00. Of this, $3,932.98 (20%) will go to the LSRRF, and the balance of $15,731.92 (80%) is eligible to go to Livonia Phoenix, L.L.C. To date, the Owner has submitted three (3) separate "draw" requests that itemize and provide details on the various eligible expenses totaling more than $4.2M. The Brownfield Authority will have to begin to meet regularly to (4w approve reimbursement payments to the owner of the Livonia Marketplace. These meetings will coincide with the City's Winter and Summer tax collections. Soave: Did someone comb though these submissions? Slater: Mark has spent more time on these documents. Be assured that we will not be returning any monies to the owner than they are entitled to. Taormina: We have all of this information catalogued and, if you wish, we will get the appropriate pages to you, or you are welcome to review this information contained in these books. Engebretson: We have complete and total trust in the Planning and Finance Departments. The briefest possible presentation is fine. You have done a wonderful job of educating us on this process. Kirksey: I share Mr. Engrebretson's observations. Taormina: Mike Slater has put together the table on page 3 showing the breakdown of the Tax Capture figures. 7 Brownfield Redevelopment Authority April 11, 2012 Page 4 Harb: Do you know what Kohl's taxable value will add to this? Slater: We won't know that amount until next winter when the Assessor comes out with those numbers. Condon: What taxes were generated from the real property taxes? Slater: A total of $153,979.00 in real property taxes was captured from the Winter 2011 tax collection. Zarbo: Thank you for allowing me to be here. I would like to express that they have been fantastic to work with. There is the ability to capture $6.6 million over a 13 year period. It will take some time to work it through the system. We do have the Brownfield Agreement to qualify, and it will be 30 to 45 days when Kohl's is closed out. We will have one more request for a draw. Taormina: There will be all sorts of variables applied to these numbers. There will be different mil rates applied for the Summer tax collection, the expiration of TURBO, and two more buildings at the Livonia Marketplace will increase the numbers. Engebretson: It's a good project and we're happy to partner with Livonia Phoenix. Harb: I see that Sears has a new fagade and entranceway. When did they decide to be a part of the Marketplace? Zarbo: The west elevation will interface with Sears. There were documents signed for easements. Kirksey: Our relationship with Sears has fell into disrepair. It's very puzzling how they operate. Taylor: Has the closing of Great Indoors put a nail in Sear's coffin? Engebretson: It has been my belief that their decisions would make a classic business case for how not to run a business. On a motion by Krueger, seconded by Harb, and unanimously adopted, it was: :9 Brownfield Redevelopment Authority April 11, 2012 Page 5 #02-12 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 #1 (W-2011) to the owner of the Livonia Marketplace, Livonia Phoenix, L.L.C., in the amount of $15,731.92 for the reimbursement of eligible expenses related to the redevelopment of the Former Livonia Mail Site; and 2. A deposit of $3,932.98 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. BYLAW AMENDMENTS Council Resolution #331-11 approving the changes to the LBRA bylaws was received and filed. ELECTION OF OFFICERS Chairman of the Nominating Committee, Lynda Scheel, advised that no one had expressed an interest in changing the existing officers, and that the Bylaws require an election of officers at the LBRA's annual meeting. On a motion by Scheel, seconded by Condon, and unanimously adopted, it was: #03-12 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. On a motion by Scheel, seconded by Condon, and unanimously adopted, it was: #04-12 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. Brownfield Redevelopment Authority April 11, 2012 Page 6 Mr. Engebretson, Chairman, declared the motion is carried and the foregoing resolution adopted. On a motion by Scheel, seconded by Condon, and unanimously adopted, it was: #05-12 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. On a motion by Scheel, seconded by Condon, and unanimously adopted, it was: #06-12 RESOLVED, that Ashley V. Krueger is hereby re -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. On a motion by Scheel, seconded by Harb, and unanimously adopted, the Fifth Meeting held by the City of Livonia Brownfield Redevelopment Authority on April 11, 2012, was adjourned at 5:40 p.m. JIL, As le V Krueger, Secretary