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HomeMy WebLinkAboutCalled Commission Meeting September 18, 2015 CALLED MEETING COMMISSION CHAMBER September 18, 2015 Augusta Richmond County Commission convened at 2:30 p.m., Friday, September 18, 2015, the Honorable Hardie Davis, Jr., Mayor, presiding. PRESENT: Hons. Sias, Frantom, Fennoy, D. Williams, Hasan, Davis, Smith, Lockett (responding by way of the telephone), members of Augusta Richmond County Commission. ABSENT: Hons. Guilfoyle and M. Williams, members of Augusta Richmond County Commission. Mr. Mayor: All right, we’re going to call this meeting to order. We’ll begin with an invocation. If you would, let us stand and pray. The invocation is given by Mayor Davis. The Pledge of Allegiance to the Flag of the United States of America was recited. Mr. Mayor: It might be appropriate the mute the telephone subscribers until we call on them if it’s possible. For us to just mute the phone. Is that possible? The Clerk: Mr. Lockett is on. We haven’t been able to reach Mr. Guilfoyle. He said that could be a possibility and if we could reach him, that would be okay. If not, that would be okay. Mr. Lockett, are you there? Mr. Lockett: Yes, I’m here. I’m in the mall in the food court. It’s the only place I could get wi-fi. Mr. Mayor: All right, Madam Clerk. If you could ask him to mute his phone, that would stop the background noise until it’s time for him to speak. The Clerk: Did you hear that, Commissioner? Mr. Lockett: No. The Clerk: The Mayor’s asking that you mute your phone. Mr. Lockett: The Mayor asked what now? The Clerk: Yeah, it’s giving us feedback. Mr. Lockett: Do I want to provide the feedback? The Clerk: Commissioner Lockett, the Mayor is asking that you mute your phone until we get to the part where we’re going to do the vote and we’ll bring you back in because your 1 phone is sending feedback to us here. Okay. Do you want us to call you back or do you just want us to put you on hold? Okay, thank you. He said we could just call him back. Mr. Mayor: Okay. All right, is everyone ready? Madam Clerk. The Clerk: Item 1. Approve a resolution authorizing the execution of the Intergovernmental Agreement with the Urban Redevelopment Agency to refund the Laney Walker Bethlehem bonds and repay the $2.5 million dollar bridge loan. Mr. Mayor: The Chair recognizes Administrator Jackson. Ms. Jackson: Yes, sir, thank you. As everybody understands, we are here today for the purpose of authorizing execution of that intergovernmental agreement. We have basically three components to that. One is to pay back or make arrangements to make payment for the balloon loan that is due in the amount of $6.71 million dollars. There is also a $2.5 million dollar bridge loan referenced in that motion or in that agenda item. That bridge loan represents additional money that the commission made available to the Laney Walker Bethlehem redevelopment project in 2014. We also have for discussion a determination from you all how much money you all want to incorporate into this bond issuance for continued redevelopment in the Laney Walker Bethlehem plan. In order to give you the documents, we provided documents to you on Wednesday evening, late Wednesday evening; we got an email out with the attachments, which addressed a comprehensive overview of all those issues. We do have a presentation today for you first from Hawthorne Welcher, Director of Housing and Community Development, to talk about the Laney Walker Bethlehem program itself, a relatively brief overview of everything that has been accomplished so far and what he would hope to accomplish with additional funding. Tim Schroer will then come to us and talk about the financing necessary to achieve the objectives I just described and then I’ll offer the recommendation at that time and we’ll be ready for your discussion and vote. Mr. Mayor: Thank you for that, Ms. Jackson. Ms. Jackson, for the record, let me mention what you have before you today on the table. You have an email that was received earlier today from a constituent with regards to the call for a forensic audit. You have the second document which is the synopsis that Ms. Jackson indicated was sent out on I believe yesterday – Ms. Jackson: Wednesday. Mr. Mayor: Wednesday. All right, then the next piece is a SPLOST, I’m sorry, the URA bonds series document that you’ll be walking through followed by the IGA. That’s the authorizing resolution and then you have the intergovernmental service agreement which is the next lengthy package and then I think there’s an overview of the Laney Walker Bethlehem revitalization. Those are the documents that you have before you at this time and as our presenters come you can refer to them in that order. The Chair recognizes Mr. Welcher. Mr. Welcher: Good afternoon, Mayor, members of the Commission. I want to take just a brief opportunity to do a couple of things as it relates to the Laney Walker Bethlehem revitalization project and the first would be to give you all a general overview of the project to 2 also provide you with some history that you may or may not know. Also to provide you with a strategy via a five-year developmental prospectus as well as provide for you the need for additional funding to continue the level of development that we have outlined for the next five years. If I could, to start off would like to provide you with a summary. Want to be sure that collectively conceptually we’re all actually thinking on the same level and the same wavelength. So definitely not going to sit here and read all of this executive summary but what I have done is highlighted key components of it that I feel are definitely necessarily important. The first thing would be is the reasoning for the Laney Walker Bethlehem project actually being created. It was created to turn around a case of blight and disinvestment, regenerating 1100 acres in the urban core. One thing that I would also add to that is the department clearly understands the focus and the commitment that was made by the Commission back in ‘08/’09 and that was the commitment of the first issuance of $8 million or $7.6 million was clearly understood that while we were turning around and regenerating these two historic areas that have been blighted for the past 40 to 50 years, it was a clear understanding that we didn’t have 40 or 50 years to bring them back. So what I want to tell you today and we’ll go through the power point briefly but from a developmental approach perspective, I want to let you all know that the approach has changed and I have substantiating documentation via my file development prospectus to back up the approach. The approach that we are taking here today is more conservative and it focuses on actually completing projects that are open as opposed to looking too far down the road. And if I were to name a couple of these projects that I believe that we need to complete, the first would be the Twiggs Street corridor which focuses on homeownership. The next would be the Foundry Project which would create in my opinion a major developmental impact to a major corridor and that would focus on multi-family development and then you have assets that we currently have at our disposal in the Land Bank and with those assets in the Land Bank, there are several things, several developmental activities or maneuvers that we actually can encounter. Our focus actually will be on scatter site infield development for homeownership rental as well as for sale. We’ll also look at packaging these lots and disposing of these lots to current and newly procured developers who are seeking development opportunities. Further with the assets that we currently have in our Land Bank, our focus will be on economic development and the uses of these assets as capital so when you talk about economic development and trying to recruit actual investors who are willing and looking to develop historic areas it’s very, very important to understand that you have to have more than one thing. Funding also is important but actually what we have and it makes it more advantageous and more attractive for investors to come in is the fact that we actually have capital at our disposal. This next bullet is key to creation of the Heritage Trail. We’ve talked about it for years but the main focus and the reason why we’re able to actually pay our annual debt service is because of this tourism fee. Well, if you talk about a tourism fee, it only makes sense that we validate this project with a tourism enhancement trail and finally but not least as there are other things that are mentioned on the developmental prospectus. Now if you would if I could bring your attention back to the actual power point presentation itself to give you a little history as it relates to this project. We talked about it being two historic areas that would encompass 1100 acres of land. Back in 2008 when we started, this project actually encompassed three or four things. One of those things was the acquiring of property. One of those things was being sure that there was an assessment done from a planning perspective and based on the initial planning assessment what we found out was 30% of the properties in Laney Walker were dilapidated and in poor condition and a greater percentage in the Bethlehem area. From there we were actually able to think about planning and that actually got us to this point 3 because there were different types of plans that we actually had to do to be sure that there were certain products that were actually put in certain places. The focus of this project and the strategy involved working from the main window streets first and then working our way back into the arteries so those main window streets actually would be your Laney Walker Blvd., th would be your Wrightsboro Road, would be your Twiggs Street, would be your 9 Street and James Brown Blvd. It was the understanding and interpretation from the various plans that actually had been created that the development on these main window streets would spark interest and once interest was spawned on your main window streets it will allow us the ability to be able with this next bond (inaudible) to be able to work back into the arteries. There was a plan and part of that plan was acquiring property. If you see here the boundary of the Laney Walker Bethlehem project and you’ll also see various colors put before you. The colors represent, and the development team actually meets every Monday, and the colors represent, the green represents site control, the dark purple represents the properties that are actually under contract so based on the developmental nodes that actually had been created, and to date we have nine. If you pay attention from A1 through A9 you’ll understand and see that there are nine developmental areas in which we have focused. Of those nine areas in which we focused, we’re currently working in six and I definitely won’t go through them one by one, but what I will do is move to highlight various developmental areas that we feel very confident about that have either been completed or we have a great percentage completed. Heritage Pine actually was our signature street and Heritage Pine is not just Pine Street but Heritage Pine actually encompasses thth 12 Street, 11 Street and Florence Street as well and the end result of Heritage Pine would include homes ranging from $115,000 to $210,000. To date on Pine Street 100% of the houses for homeownership actually have been sold. You currently have two houses that are there for restoration and we’re currently working with a family now who has identified the restoration unit there on Pine Street and would like to accompany that street as well. So the demand for the housing and for the product has been so great that we’ve actually had to bleed over, if you will, th over to 11 Street where we’ve actually also constructed several houses and currently to date there have been about 30 houses that have sold. From an inventory perspective we only have house that sits vacant. The next area that I want to bring to your attention that development is prevalent and continues to sustain itself would be the Holley Street Commons. Holley Street Commons is unique in the fact that this is an area that we partnered with one of our area non- profits/community development housing organizations, Antioch Ministries, Inc. They are continuing to adhere to their mission of providing affordable housing. They are continuing to adhere to the direction of their board in which they don’t believe speculative houses on the ground but they will move to development upon actually having a certified owner. Twiggs Street Circle. Twiggs Street Circle if you bring your attention it talks about 137 units. Twiggs Street Circle actually encompasses two different developments. It encompasses development that has already begun by the Housing Authority known as Powell Point and Powell Point actually came about because of Gilbert Manor. Federal law basically says that whenever a Housing Authority demolishes public housing, they have to replace this housing and they cannot replace this housing in a concentrated area. So one of the things in our discussion and it goes back to the disposal of land that we actually have in our Land Bank, we had an opportunity. We actually had the capital asset, we actually had land. The Housing Authority had replacement housing money so it was a perfect marriage in which they indicated that they would put 40 senior public housing units down in the Twiggs Circle development. Of these 40 public housing units that they put, we actually have 16 duplexes and eight single-family houses. To complete the 4 Twiggs Circle development we also have adjacent to Powell Point we have single-family houses for homeownership and I mentioned that earlier. As we continue from years 2015 on to 2020 the focus is on the continuance of homeownership on the Twiggs Street corridor and one of the main points I want to stress is the fact that in the MOU that we’ve actually signed with the current developer, (inaudible) of Hope, who is our partner on the Twiggs Street development, one of the things we’ve put on the MOU is that at least eight to ten of the houses actually have to be provided at an affordable rate. We’ve done that for the mere fact that we want to be sure that there is a product regardless of the homeowner who actually comes through the door and regardless of their total household income, we want to be sure that there is a product available for everybody. Whether it’s the single mother who makes $25,000 or whether it’s the family that makes $85,000, it really doesn’t matter to us. We want to be sure that there is a product available for everyone. East Mill Village. When you think about East Mill Village one of the first things that I think about is the partnership that we have with the United House of Prayer and this is also a unique relationship that I would like to highlight and it’s unique in the fact that once again we as the Augusta Housing & Community Development Department as master developers accumulate the land actually in this area. In talking to the House of Prayer, the House of Prayer, if you know anything about their developmental approach, their developmental approach is simple. They don’t focus on homeownership, they focus on rental. So when we partner with them, they had only one statement to us. Sell us the land and get out of the way. We don’t need your money to construct. We have our money to construct, but sell us the land and then we’ll be sure that the product that we put back on the ground may be not in color but what we put back on the ground actually adheres to your pattern book. The Foundry Place. The Foundry Place if you all are familiar with R. A. Dent where the old Wishbone used to be, if you’re actually familiar with where the School of Dentistry is, diagonal across from that, when you come across the railroad tracks onto Wrightsboro Road, there’s actually a Foundry site. This site from McCauley Street down to Lee Beard Way, that entire sector there, actually we are proposing that we construct a 180-unit multi-family development and it would be a rental development as well as a mixed use development with about 20,000 square feet of commercial space on the first floor. I’m very excited about this project. In my opinion of community development you know definitely is great. Building single-houses and duplexes is great. But in my opinion this actually gets us to that next level of providing and talking about bringing back community. And from here in my opinion based on the development in the first phase of 180 units, if you look at two or three persons per unit, you’re talking about an influx or a density of about 500 to 600 persons at one time. Well, what does that do? Bring in 500 or 600 persons in one development creates the density and increases the mass and what it does is allow us to have conversations with organizations with grocery stores, with community stores to be able to come in and talk about development and move towards economic development and not just community development. Why? Because the numbers are finally there. Finally before I go to the five-year prospectus, the Boulevard. The Boulevard is important. I talked about economic development. Well, you can’t have community without economic development and as you see as the slides have progressed, our mindset is also progressing not only from community development with single-family housing as I just talked about and multi-family development and now you progress once the numbers are there and you have a mass of persons within a certain area now we come back and look at the Boulevard, Laney Walker Boulevard, to provide those economic development type of products that’s necessary to complete community. This is also important to point out because here when you talk about the Boulevard, if you look at the five-year prospectus what it does is 5 we have assets. We own, you all own the Penny Savings Bank. You all own the lot where Mr. J’s Supper Club sits. You own those properties outright. Those are assets to our disposal so when we come to the table and actually start negotiating with outside investors, in my opinion we actually have a product there as well as funding in the budget to be able to make for a great conversation. So if I can quickly transition to the five year prospectus, I will only hit on a couple of highlights here. If you would like me to walk down each item I can, but for the sake of time I will summarize. From 2015 to 2020 basically what you have is the focus on a comprehensive approach which focuses on the completion of projects already ongoing or projects that have already been on the table. We’re very confident in the numbers we present here for the next five years based on this five-year prospectus. What you’re looking at is a total of 433 units. These units mass units for homeownership, units for marketing rental, units for senior housing and units that will be cleared and demolished. But one of the things that’s more important to me than the number of units across an array of developmental activities, is if you look at the total amount of funding regardless of how many years you are looking at to commit to today, it doesn’t matter. The bottom line of it is you see year by year how we’re able to take that money and use it as a tool and leverage it to create, if you just take the entire budget here based on our projection, based on us having $900,000 in our account today, then you will look at $5.9 million dollars leverages about $43 million dollars which is about a 7.2 to 1 ratio. And the last thing I’ll say about this five-year prospectus is the fact if you look all the way to the bottom right you’ll see program income of $2.1 million. What that does is reprogrammable funding which allows for going into year 2021 for us to continue as opposed to coming to this body and saying we need “x” amount of dollars. So just wanted to provide this to you all, wanted to give a summary in regards to the comprehensive approach that we have to let you in on, and that there is a clear strategy and there is a clear plan and I am prepared and the team is prepared to talk about each line item in a detailed manner when appropriate. Mr. Mayor: All right. The Chair will entertain any questions at this time with the presentation that we’ve heard thus far at the beginning. Madam Administrator. Ms. Jackson: With no questions we’ll turn it over to Tim Schroer to talk through the financing details and from there I’ll present my recommendation. Mr. Schroer: Good afternoon. Funding for the Laney Walker Bethlehem project is done through the URA, Urban Redevelopment Agency, which was created in 2010. The original concept of Laney Walker Bethlehem came in 2008. The funding source from that was described as a tourism enhancement fee. It is a $1.00 per night fee that is charged for guests that stay in hotel rooms. For that fee they are able to ride the bus, use Augusta Public Transit to ride our bus system. The goal will be to have an historic trail that would enhance tourism when that is completed. The fee was scheduled to be split between three different projects. The Convention Center which receives $350,000, $100,000 for operations, $250,000 annually for capital improvements. The next $750,000 is for the Laney Walker Bethlehem project. Currently $550,000 goes to debt service; $200,000 goes to pay as you go funds. The remaining $400,000 is scheduled to go to transit. Currently we’re bringing about $1.1 to $1.2 million dollars a year so the funding for transit has not reached its full potential. In 2010 when the program was really getting started and we were starting to make progress forward, it was decided that we would issue bonds. The bonds were issued. We issued $8 million dollars’ worth of bonds. We came 6 up with that number based on working with the departments to determine what they needed pay as you go money for projects that weren’t covered by the bonds and how much we could get. The structure of the bonds is set at a five-year balloon note. We did that because it keeps the interest rates at a reasonable level and also gives us every five years we can infuse some more money into the program. Fortunately the program was more successful than we had originally anticipated and in 2014 the Commission authorized the use of $2.5 million dollars from the urban service district as a bridge loan. This money is to be repaid when we issue the bonds for it in 2015. The refinancing today $6.71 million dollars will go to pay the bonds balloon payment. $2.5 million dollars will go to repay the bridge loan and if any additional funds for the program are allocated that will be increased, added to the bond amount. The timeline that we presented before, we came up on September 8 to the Finance Committee. On September 9 the URA board met and approved the IGA and authorized us to move forward with the bonds. September 15 actually today we’re talking about Augusta agreeing to the URA intergovernmental service th agreement. On the 24 the URA board will meet to approve the bond pricing. September 30 the bonds close, we get the cash and October 1 we pay the bonds off, the original bonds off. The program funding options that we have come up with, the three options that we’ve determined are the best options. The first option would just be no new money, leave everything as is. The bonds would be issued for $9.3 million dollars. Annual debt service would be $601,000. Pay as you go money would be $149,000. No new money for the projects. The other option would be to have $2.4 million dollars of new money. The bonds would be $11.8 million dollars; debt service would be $650,000 leaving $100,000 as pay as you go. The third option would be to have $5 million dollars in new money, annual debt service would be $795,000 and we’re looking for pay as you go money to remain at $100,000. To reach the $795,000 all three options still have the same $750,000 from tourism fees going to the project. The potential source of the additional funding of $149,000 would be from the urban service district fund balance and to do that to make it cleaner would be an allocation of $725,000 to the urban redevelopment agency from the urban service district. The administrator’s recommendation would be the $2.4 million dollars in new money. Ms. Jackson: Any questions for Tim? I’ll just go ahead with the recommendation and give you a little bit more detail about why I believe this is the correct recommendation for you at this time. Number one, it does not require any additional funds from the general fund or the urban services district fund. Number two, the debt service is a manageable amount very similar to what we’re paying now. Third this would allow us to continue with some key projects that we’ve already started, those projects being the completion of Twiggs Circle, the Foundry Phase One, Heritage Trace and the senior housing we’re doing in partnership with the Augusta Housing Authority. It would allow for continuation of the commitments we’ve made to our program partners in those areas. This also I think builds in some automatic accountability in the sense that it’s not long-term money that should last us in to 2017. At that point we’ll come back before you for you all to review the accomplishments of the program, establish whether you’re comfortable with the approach and with what we’ve accomplished during that time period and how effectively you believe that money has been utilized so at this point we believe this is a good place for us to be. We can obviously meet our obligations in terms of refunding the bonds and making the balloon payment and then moving forward with the Laney Walker project. We’re ready for any other questions. 7 st Mr. Mayor: All right. The Chair recognizes the commissioner from the 1. Mr. Fennoy: Motion to approve. Mr. Sias: Second. Mr. Mayor: All right. Now we don’t have Commissioner Lockett on the line. The Clerk phones Commissioner Lockett and states that a motion has been made to accept the recommendation of the Administrator with Mr. Fennoy and Mr. Sias making the motion. Mr. Lockett indicates that his vote would be Yes. Mr. Mayor: All right, at this point we’ve got a motion and a proper second. All those in favor will vote yea and those opposed vote no. Voting. Mr. Guilfoyle and Mr. M. Williams out. Motion carries 8-0. Mr. Mayor: All right, if there’s no further business, this meeting is adjourned. Lena J. Bonner Clerk of Commission CERTIFICATION: I, Lena J. Bonner, Clerk of Commission, hereby certify that the above is a true and correct copy of the minutes of the Called Meeting of the Augusta Richmond County Commission held on September 18, 2015. ______________________________ Clerk of Commission 8 9