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Rochester Hills, MI

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Rochester Hills

Minutes

Local Development Finance Authority

Jennifer Berwick, Clarence Brantley, Michael Damone, Michael Ellis, Lois Golden,

Tammy Muczynski, William Mull, Theresa Mungioli, Kris Pawlowski,

Cassie Patterson, Stephan Slavik, Owen Winnie

7:30 AM

1000 Rochester Hills Drive

Thursday, July 8, 2010

CALL TO ORDER

Chairperson Stephan Slavik called the Regular LDFA Meeting to order at

7:32 a.m. in Conference Room 221.

ROLL CALL

Clarence Brantley, Michael Damone, Michael Ellis, Lois Golden, Stephan

Slavik, Kris Pawlowski and Owen Winnie

Present

7 -

Theresa Mungioli, Tammy Muczynski, William Mull, Cassie Patterson and

Jennifer Berwick

Absent

5 -

Quorum present.

Also present: Dan Casey, Manager of Economic Development

Paul Davis, City Engineer

Kurt Dawson, Director of Treasury/Assessing

Keith Sawdon, Director of Fiscal

APPROVAL OF MINUTES

2010-0276

April 1, 2010 Regular Meeting

A motion was made by Ellis, seconded by Damone, that this matter be Approved

as Amended. The motion CARRIED by the following vote:

Aye

Brantley, Damone, Ellis, Golden, Slavik, Pawlowski and Winnie

7 -

Absent

Mungioli, Muczynski, Mull, Patterson and Berwick

5 -

COMMUNICATIONS

There were no Communications brought forward.

UNFINISHED BUSINESS

2009-0042

Technology Drive Update

Mr. Davis advised that the City would be able to begin the connection to

Adams Road this year and would go out for bids in the next few weeks.

The Board discussed the trail crossings and truck traffic, and Mr. Davis

confirmed with Ms. Golden who should get a copy of the design for the

trail crossings.

This matter was Discussed

2010-0012

Crooks Road/M-59 Interchange Update

Mr. Davis stated that the interchange project would move forward quickly

now that MDOT found extra money in its budget. The intent was to bid it

in late fall and construct it in 2011, and it should take one construction

season. He had forwarded letters to business owners in the area, asking

for input about whether they would prefer that the bridge be entirely closed

or partially closed (maintain two-way traffic). If completely closed, it would

be done about three months sooner, but the majority of respondents

wanted it only partially closed. The group discussed paving Crooks on

the north side of the bridge to Hamlin and whether the LDFA could get

involved. The City had Major Road Funds, but would not likely pay to

improve a County road, and the County would not likely pay the City

back. Ms. Golden suggested that it should be added to the CIP. Mr.

Damone asked whether they could use some of the funds slated for the

industrial tech parks to benefit the whole area.

This matter was Discussed

2010-0281

M-59 Update

Mr. Davis reported that the project was still on track and that last week, a

media event celebrated the project being halfway completed. It was

questionable whether the noise barriers would be built because of

MDOT’s funding.

This matter was Discussed

2009-0223

Concrete Slab Replacement Project - Technology Drive

Mr. Davis advised that this project would go to Council on July 19 so they

could move forward. Mr. Casey felt it would put the entirety of the road in

good condition for the next few years, but there was a lot of need in the

district for the monies budgeted.

Mr. Casey mentioned that 13 catch basins that would be repaired on

Waterview, which was the result of a complaint from a business. He was

not sure how it would be funded, but they had the ability to transfer funds,

and the LDFA could cover the cost. Mr. Davis said that the City crews

were doing the work, and in his opinion, just because it was being done in

the LDFA district, he did not think the LDFA had to cover the cost. It

would be the Major or Local Road Fund or the Drain Fund, and he would

come back with costs. He agreed that they should be proactive and

perhaps start putting some funding aside since the catch basins were

integral to the roads.

Ms. Golden suggested that the Board might take a road trip sometime in

the future to help them prioritize things. Mr. Casey agreed it would be a

good thing to do after the M-59 Corridor Study was completed.

This matter was Discussed

NEW BUSINESS

2008-0356

Preferred Developer RFP (City owned property on Hamlin)

Mr. Casey stated that there had been a significant spike in activity in the

last two months. A new company is leasing the former Avon Gear

building, which is 62k square feet, and bringing all brand new jobs. He

noted that the project is in the heavy truck industry for brake systems and

electronic control modules. He also informed that Mariah Industries was

moving to Rochester Hills from Shelby Township; a company was moving

here from Troy; and that there were numerous other pending deals.

There was some traction in the medical devices industry, and he had

been working with three start-ups looking for buildings.

Mr. Casey recapped that the City had been trying to sell the balance of

the Hamlin property, for which it paid a premium in 1999, for a number of

years. Staff had decided to go out for bids to select a preferred

developer. The City would look for a full service company that could

develop the site, finance and construct the assets and manage them. He

brought up a new construction project that had surfaced for a company

that would design, build and lease back. The City was in early

negotiations, and it looked pretty good. The project would come back to

the LDFA board at some time, because of the incentives being discussed

to support the project. The LDFA budgeted $751k for development,

which was available to negotiate a deal. The City wanted to make the site

development ready - with regards to stormwater retention, environmental

issues, marketing, etc.

Mr. Damone asked if the LDFA’s income would increase if buildings were

constructed, and Mr. Casey agreed. They discussed how the City would

value the property and opined about accumulating enough revenue for

the development to pay back the Water and Sewer Fund, which paid for

the land, and the LDFA.

Ms. Golden asked if the City had thought about pursuing DNR Trust Fund

monies for improvements to the water or the adjacent trail. Oakland

Township kept getting millions for their parks, and she wondered why the

City could not. Mr. Casey said that the City’s interest was to maximize

the development potential of the property because they needed to

generate as much revenue as possible.

Mr. Damone pointed out that if they were in private industry and subject to

certain financial rules, they would have to write the property down. The

City was hiding a problem and banks had been chastised for doing the

same thing. Mr. Sawdon said that he had to recognize it at cost until a

sale point.

Mr. Winnie asked if the LDFA could capture anything if they took control

of the property at zero value. Mr. Casey thought it would remain tax

exempt property, which might change if the LDFA purchased it. The

lease could be payment in lieu of taxes. Since the Water and Sewer

Department owned the land, he would like to keep it there unless there

was someone to restructure and come up with something that made

sense.

Mr. Ellis thought that the highest return the City would get would be if they

dumped it and got next to nothing in relationship to what was paid for the

property. He felt that money in the pocket today was worth more than

waiting five-ten years hoping things would improve. If they gave the

property to someone to develop, the value of the property would be less

than the cost. They could do nothing and put it on the back burner until

things changed or put it up for sale and see what they could get, which

would not be a lot.

Mr. Slavik suggested using the trail and doing a park concept to make the

property more saleable.

Mr. Davis said that the Water and Sewer Department would not want to

give away property just to benefit the General Fund. Mr. Ellis said he had

no problem with Mr. Casey finding someone to work with, but his feeling

was that when everything was said and done, it would be a long time

before they found anyone to develop it. He felt that if the City really

wanted money coming back in, they should sell it, but not give it away.

Mr. Damone maintained that the value was not there, and that someday

the City would have to recognize it.

It was determined that no one took issue with seeking a preferred

developer.

This matter was Discussed

2010-0280

REI Property at Hamlin and Adams (Proposed Medical

Campus)

Mr. Casey advised that the (former suburban softball) property was owned

by REI, and that there was an existing, approved Brownfield Plan for the

site. There was a consent judgment that covered development, which put

four development zones in place. The consent judgment capped the

amount of commercial that could be built at 500k square feet and defined

where it could be. There could potentially be two million square feet of

development. There was a lot of discussion about remediation, but

nothing had occurred since 2004 except some testing. Several months

ago, the developers began holding meetings with individuals outside of

the City, which included Oakland County, Oakland University and some

legislators, and they began working on a concept for a medical park. The

goal was to acquire State and Federal funds to help with the clean up.

The meetings included discussions about developing the property in

conjunction with Oakland University’s new medical school. The economic

impact of the medical school was expected to bring over $1 billion.

Beaumont was an important part of the medical school, as was

Beaumont’s commercialization center. Oakland County was important

because it had the potential, through the Drain Commission, to provide

bonds and some funding for stormwater and infrastructure. Dr. Russi

from OU and Doug Smith, from Oakland County discussed the medical

school in front of City Council and discussed the possibility of the site

being developed as a medical campus. They believed this was the

correct location in Oakland County to attract such companies as medical,

life sciences and research and development. The City had not seen

different concept plans than those with the original consent judgment, and

there had been no requests to amend it. REI had not submitted any new

work plans to review, so there was nothing for the City to respond to at this

point. The City liked the concept of a medical campus, which would

provide huge opportunities to create a knowledge-based economy with

high paying jobs. It could potentially result in leasing of some of the

vacant office buildings or converting of some of the industrial buildings to

support medical, and create new tax base. The BRA met and approved a

$1m grant application, but that was the only thing that had happened with

the City. The BRA had the leaderhsip role, but the LDFA could get

involved in the future.

This matter was Discussed

ANY OTHER BUSINESS

NEXT MEETING DATE

The Chair reminded the Board that the next Regular Meeting was

scheduled for October 7, 2010.

ADJOURNMENT

Hearing no further business to come before the LDFA Board, the Chair

adjourned the Regular Meeting at 9:28 a.m.

Respectfully Submitted,

______________________________

Stephan Slavik, Chairperson

Local Development Financing Authority