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HomeMy WebLinkAbout09-406OCTOBER 27, 2009 09 -406 RESOLUTION (CARRIED 7 -0 LOST LAID OVER WITHDRAWN ) PURPOSE: RESOLUTION DESIGNATING SPOT BLIGHT OF PROJECT SITE LOCATED AT 524 KOELLER STREET (RIVER VALLEY ONE, LLC PROJECT) WHEREAS, the Redevelopment Authority of the City of Oshkosh, Wisconsin (the "Authority ") is a public body corporate and politic duly organized by the City of Oshkosh, Wisconsin (the "City ") and is authorized by Section 66.1333 of the Wisconsin Statutes, as amended (hereinafter sometimes referred to as the "Act ") to prepare redevelopment plans and urban renewal plans and undertake and carry out redevelopment and urban renewal projects within the corporate limits of the City, including but not limited to: (a) to acquire property necessary or incidental to an urban renewal program and to lease, sell or otherwise transfer such property to a public body or private party for use in accordance with a redevelopment plan and to assist private acquisition, improvement and development of blighted property for the purpose of eliminating its status as blighted property; (b) to enter into contracts determined to be necessary to effectuate the purposes of the Act; and (c) to issue revenue bonds to finance its activities; and WHEREAS, the City and the Authority have been provided with information regarding existing conditions located at 524 Koeller Street, Oshkosh, Wisconsin (the "Property "), which Property is owned by River Valley One, LLC, a Wisconsin limited liability company, attached hereto as Exhibit A (the "Blight Report "); and WHEREAS, the Property has been preliminarily identified as blighted property in need of rehabilitation and blight elimination in accordance with the Act; and WHEREAS, a notice of public hearing in the form attached as Exhibit B was published and the Authority held a public hearing in accordance with Section 66.1333(5)(c)(2) of the Wisconsin Statutes on October 21, 2009; and WHEREAS, following the public hearing, the Authority found that (a) conditions of blight exist at the Property and (b) development of the Property will alleviate blight, in accordance with Section 66.1333(6) of the Wisconsin Statutes and submitted its findings to the City Council; and NOW, THEREFORE, BE IT RESOLVED by the City Council that: 1. Findings and Determinations. It has been found and determined and is hereby declared that: (a) conditions of blight exist at the Property; and (b) development of the Property would act as an inducement for alleviation of blight and further development of the Property, thereby making more likely the accomplishment of the public purpose objectives set forth in the Act; (c) the City has reviewed the Blight Report and finds that blight existed and continues to exist on the Property; and (d) a comprehensive plan of redevelopment is not necessary with respect to the private redevelopment of the Property or the relation of the redevelopment of the Property to other property redevelopment by the Authority. 2. Spot Blight Designation. The City Council hereby finds that the Property is a blighted property in need of rehabilitation and blight elimination in accordance with the Act. 3. Waiver of Sole Property Owner. River Valley One, LLC, as the sole owner of the Property, has executed a waiver in the form attached as Exhibit C, waiving the twenty (20) day notice of hearing requirements set forth in Section 66.1333 of the Wisconsin Statutes. 4. General Authorizations. The Mayor and the City Clerk and the appropriate deputies and officials of the City, in accordance with their assigned responsibilities are hereby each authorized to execute, deliver, publish, file and record such other documents, instruments, notices and records and to take such other actions as shall be necessary or desirable to accomplish the purposes of this Resolution. Any actions taken by the Mayor and the City Clerk consistent with this Resolution are hereby ratified and confirmed. 5. TEFRA Hearing; Approval of Highest Elected Official. After the notice of public hearing relating to the proposed issuance of revenue bonds on behalf of River Valley One, LLC (the " TEFRA Hearing ") has been properly noticed and held by the Authority, the Mayor is authorized to execute an Approval of Highest Elected Official for the purposes of Section 147(f) of the Internal Revenue Code of 1986, as amended, with respect to the issuance of the bonds. 6. Effective Date; Conformity. This Resolution shall be effective immediately upon its passage and approval. To the extent that any prior resolutions of the City are inconsistent with the provisions hereof, this Resolution shall control and such prior resolutions shall be deemed amended to such extent as may be necessary to bring them in conformity with this Resolution. Adopted and approved this 27th day of October, 2009. Paul J. Esslinger, Mayor Attest: Pamela Ubrig, City Clerk EXHIBIT A BLIGHT REPORT OF PROPERTY LOCATED AT 524 KOELLER STREET IN THE CITY OF OSHKOSH (the "Project Site ") (River Valley One, LLC Project) Statutory Definitions of "Blight" Section 66.1333(2m)(bm) of the Wisconsin Statutes provides a definition of "blight" and cites certain examples of conditions of blight. Both the broad statutory definition and the blight finding which have been made by municipalities throughout the State are much broader than the classic dictionary definition of blight. Essentially the Statute provides three (3) separate routes to identify blight: 1. Property which by reason of dilapidation, deterioration, age or obsolescence, inadequate provisions of ventilation, light, air or sanitation, high density of population and overcrowding, or the existence of conditions which endanger life or property by fire and other causes, or any combination of such factors, is conducive to ill health, transmission of disease, infant mortality, juvenile delinquency or crime, and is detrimental to the public health, safety, morals or welfare; or 2. Property which by reason of faulty lot layout in relation to size, adequacy, accessibility of usefulness, unsanitary or unsafe conditions, deterioration of site or other improvements, diversity of ownership, tax or special assessment delinquency exceeding the fair market value of the land, defective or unusual conditions of title, or the existence of conditions which endanger life or property by fire and other causes, or any combination of such factors, substantially impairs or arrests the sound growth of a village, retards the provisions of housing accommodations or constitutes an economic or social liability and is a menace to the public health, safety, morals or welfare in its present condition and use; or 3. Property which is predominantly open and which because of obsolete platting, diversity of ownership, deterioration of structures or of site improvements or otherwise, substantially impairs or arrests the sound growth of the community. Narrative Description of Blight Conditions at the Property River Valley One, LLC represents that the following conditions of blight either (a) existed at the Project Site and have been remediated or (b) currently exist and will be corrected with completion of the Project to be financed with the proceeds of conduit tax - exempt Bonds: CONDITIONS OF BLIGHT The Project Site suffers from significant challenges that impair efficient economic development of the site and which will require rehabilitation and or remediation, including: The Project Site is located on vacant, undeveloped land. Economic development of the Project Site would promote sound community development and growth. The Project Site is located on a floodplain which affects the use and value of the affected property, and presents development challenges for the Borrower. The development of the Project Site will alleviate this condition by elevating the property which requires an extensive amount of fill. The land located on the east side of the Project Site is subject to numerous easements, which makes the land undevelopable and negatively affects the value of the property. EXHIBIT B NOTICE OF PUBLIC HEARING PROPOSED DESIGNATION OF SPOT BLIGHT BY THE REDEVELOPMENT AUTHORITY OF THE CITY OF OSHKOSH The Redevelopment Authority of the City of Oshkosh, Wisconsin (the "Redevelopment Authority ") has proposed to designate the property located at 524 Koeller Street in the City of Oshkosh, Wisconsin (the "Property ") as blighted Property in need of rehabilitation and blight elimination in accordance with Section 66.1333 of the Wisconsin Statutes. The Redevelopment Authority will hold a public hearing at 4:00 p.m. on October 21, 2009, at City Hall located at 215 Church Avenue, Oshkosh, Wisconsin. The purpose of this public hearing is to allow all interested parties a full opportunity to express their views with respect to the proposed designation of blight with respect to the Property in order to assist the Redevelopment Authority in making its determination. Copies of the Blight Report are available from the Executive Director at 215 Church Avenue, Oshkosh, Wisconsin, weekdays from 8:00 a.m. to 5:00 p.m. or by mail. Publish above as Class 2 Notice on: October 6, 2009 and October 13, 2009 Executive Director Redevelopment Authority of the City of Oshkosh, Wisconsin EXHIBIT C WAIVER OF NOTICE OF PROPOSED DESIGNATION OF SPOT BLIGHT BY THE REDEVELOPMENT AUTHORITY OF THE CITY OF OSHKOSH The Redevelopment Authority of the City of Oshkosh, Wisconsin (the "Redevelopment Authority ") has proposed to designate the property located at 524 Koeller Street in the City of Oshkosh, Wisconsin (the "Property ") as blighted property in need of rehabilitation and blight elimination in accordance with Section 66.1333 of the Wisconsin Statutes (the "Act "). The Redevelopment Authority will hold a public hearing at 4:00 p.m. on October 21, 2009, at City Hall located at 215 Church Avenue, Oshkosh, Wisconsin. The purpose of this public hearing is to allow all interested parties a full opportunity to express their views with respect to the proposed designation of spot blight of the Property in order to assist the Redevelopment Authority in making its determination. Copies of the Blight Report with respect to the Property are available from the Executive Director at 215 Church Avenue, Oshkosh, Wisconsin, weekdays from 8:00 a.m. to 5:00 p.m. or by mail. The undersigned, as the owner of the Property, hereby waives the twenty (20) day notice of hearing requirements set forth in Section 66.1333(5)(c)(2) of the Wisconsin Statutes. The owner further acknowledges that the Property is "Blighted Property" within the meaning of the Act, for the reasons set forth in the Blight Report. Executed this day of , 2009. River Valley One, LLC Title: EXHIBIT A BLIGHT REPORT OF PROPERTY LOCATED AT 524 KOELLER STREET IN THE CITY OF OSHKOSH (the "Project Site ") (River Valley One, LLC Project) Statutory Definitions of "Blight" Section 66.1333(2m)(bm) of the Wisconsin Statutes provides a definition of "blight" and cites certain examples of conditions of blight. Both the broad statutory definition and the blight finding which have been made by municipalities throughout the State are much broader than the classic dictionary definition of blight. Essentially the Statute provides three (3) separate routes to identify blight: 1. Property which by reason of dilapidation, deterioration, age or obsolescence, inadequate provisions of ventilation, light, air or sanitation, high density of population and overcrowding, or the existence of conditions which endanger life or property by fire and other causes, or any combination of such factors, is conducive to ill health, transmission of disease, infant mortality, juvenile delinquency or crime, and is detrimental to the public health, safety, morals or welfare; or 2. Property which by reason of faulty lot layout in relation to size, adequacy, accessibility of usefulness, unsanitary or unsafe conditions, deterioration of site or other improvements, diversity of ownership, tax or special assessment delinquency exceeding the fair market value of the land, defective or unusual conditions of title, or the existence of conditions which endanger life or property by fire and other causes, or any combination of such factors, substantially impairs or arrests the sound growth of a village, retards the provisions of housing accommodations or constitutes an economic or social liability and is a menace to the public health, safety, morals or welfare in its present condition and use; or 3. Property which is predominantly open and which because of obsolete platting, diversity of ownership, deterioration of structures or of site improvements or otherwise, substantially impairs or arrests the sound growth of the community. Narrative Description of Blight Conditions at the Property River Valley One, LLC represents that the following conditions of blight either (a) existed at the Project Site and have been remediated or (b) currently exist and will be corrected with completion of the Project to be financed with the proceeds of conduit tax - exempt Bonds: CONDITIONS OF BLIGHT The Project Site suffers from significant challenges that impair efficient economic development of the site and which will require rehabilitation and or remediation, including: The Project Site is located on vacant, undeveloped land. Economic development of the Project Site would promote sound community development and growth. => The Project Site is located on a floodplain which affects the use and value of the affected property, and presents development challenges for the Borrower. The development of the Project Site will alleviate this condition by elevating the property which requires an extensive amount of fill. => The land located on the east side of the Project Site is subject to numerous easements, which makes the land undevelopable and negatively affects the value of the property. EXHIBIT B NOTICE OF PUBLIC HEARING PROPOSED DESIGNATION OF SPOT BLIGHT BY THE REDEVELOPMENT AUTHORITY OF THE CITY OF OSHKOSH The Redevelopment Authority of the City of Oshkosh, Wisconsin (the "Redevelopment Authority ") has proposed to designate the property located at 524 Koeller Street in the City of Oshkosh, Wisconsin (the "Property ") as blighted Property in need of rehabilitation and blight elimination in accordance with Section 66.1333 of the Wisconsin Statutes. The Redevelopment Authority will hold a public hearing at 4:00 p.m. on October 21, 2009, at City Hall located at 215 Church Avenue, Oshkosh, Wisconsin. The purpose of this public hearing is to allow all interested parties a full opportunity to express their views with respect to the proposed designation of blight with respect to the Property in order to assist the Redevelopment Authority in making its determination. Copies of the Blight Report are available from the Executive Director at 215 Church Avenue, Oshkosh, Wisconsin, weekdays from 8:00 a.m. to 5:00 p.m. or by mail. Publish above as Class 2 Notice on: October 6, 2009 and October 13, 2009 Executive Director Redevelopment Authority of the City of Oshkosh, Wisconsin AWRIMO WAIVER OF NOTICE OF PROPOSED DESIGNATION OF SPOT BLIGHT BY THE REDEVELOPMENT AUTHORITY OF THE CITY OF OSHKOSH The Redevelopment Authority of the City of Oshkosh, Wisconsin (the "Redevelopment Authority ") has proposed to designate the property located at 524 Koeller Street in the City of Oshkosh, Wisconsin (the "Property ") as blighted property in need of rehabilitation and blight elimination in accordance with Section 66.1333 of the Wisconsin Statutes (the "Act "). The Redevelopment Authority will hold a public hearing at 4:00 p.m. on October 21, 2009, at City Hall located at 215 Church Avenue, Oshkosh, Wisconsin. The purpose of this public hearing is to allow all interested parties a full opportunity to express their views with respect to the proposed designation of spot blight of the Property in order to assist the Redevelopment Authority in making its determination. Copies of the Blight Report with respect to the Property are available from the Executive Director at 215 Church Avenue, Oshkosh, Wisconsin, weekdays from 8:00 a.m. to 5:00 p.m. or by mail. The undersigned, as the owner of the Property, hereby waives the twenty (20) day notice of hearing requirements set forth in Section 66.1333(5)(c)(2) of the Wisconsin Statutes. The owner further acknowledges that the Property is "Blighted Property" within the meaning of the Act, for the reasons set forth in the Blight Report. Executed this day of , 2009. River Valley One, LLC Title: 0 OIHKOf ON THE WATER TO: Honorable Mayor and Members of the Common Council FROM: Darryn Burich Director of Planning Services DATE: October 22, 2009 RE: Resolution Designating Spot Blight of Project Site Located at 524 N. Koeller Street (River Valley One, LLC Project) BACKGROUND /SUBJECT PROPERTY River Valley One, LLC has requested the Redevelopment Authority in concert with the City of Oshkosh to designate their project site located at 524 N. Koeller Street as blighted to facilitate the issuance by the Redevelopment Authority of tax- exempt revenue bonds under the Midwestern Disaster Area Bond Program authorized by Congress in October 2008. The RDA and City Council previously approved resolutions preliminarily determining the project site to be blighted and the RDA held a public hearing on October 21, 2009 regarding final consideration of the spot blight designation. Also at its October 21 st meeting, the RDA passed a resolution finding that conditions of blight exist at the property and that development of the property would act as an inducement for alleviation of blight and further development of the property. ANALYSIS The Common Council is being asked to designate the property located at 524 N. Koeller Street as blighted to facilitate the issuance of tax - exempt revenue bonds under the Midwestern Disaster Area Bond Program. Congress created the bond program through the Heartland Disaster Tax Relief Act of 2008 to assist states and designated counties within states that had sustained economic losses resulting from flooding that had occurred in 2008. To be eligible for tax exempt financing under this program the property must be located in one of the designated counties and must either be within redevelopment districts or have spot blight conditions. It is not required that the property or the property owner have actually sustained flood damage to participate in the program. Attached to the resolution are the request from the property owner for the spot blight determination as well as a Blight Report which provides information to show how the property may be deemed to qualify as a spot blighted property under State Statutes. It should be recognized that the spot blight determination is liberally construed and is associated with assisting the owners in obtaining favorable financing, which in turn can enable the developer to provide a level of improvements and an overall investment in the property and area that may not otherwise be possible. FISCAL IMPACT There is no anticipated fiscal impact from the proposed Resolution. The designation of spot blight would provide the property owner with the opportunity to secure tax - exempt bonds in support of the development of the property. Neither the City nor the RDA would be liable for payment of principal or interest on the bonds and neither would be liable if there were any default on the bonds. RECOMMENDATION At its meeting on October 21 the RDA gave unanimous approval to the request for a final designation of spot blight for the property at 524 N. Koeller Street and its intent to support issuance of the Revenue Bonds. Approved, r1 �I7q.41____ City Manager e D E V E L O P M ENT August 14, 2009 Mark A. Rohloff, City Manager Jackson Kinney, Director of Community Development City of Oshkosh 215 Church Avenue Oshkosh, WI 54901 RE: 524 N Koeller Street, LLC / Dumke & Associates, LLC . Dear Mark and Jackson: We are requesting that the Redevelopment Authority of the City of Oshkosh issue conduit tax - exempt industrial development revenue bonds on behalf of 524 N Koeller Street, LLC / Dumke & Associates, LLC, to finance a development project in the City of Oshkosh. The proposed project consists of the (a) construction of an approximately 10,000 square foot office building located at 524 N Koeller Street in the City of Oshkosh, (b) capitalized interest and (c) payment of financing fees, which project will be constructed by the company and leased to Schenck S.C. We expect that this project will create approximately 13 full -time jobs. We have consulted with Whyte Hirschboeck Dudek S.C., who will serve as Bond Counsel, regarding the bond structure for the requested financing. The Heartland Disaster Tax Relief Act was passed by Congress last year as a result of the severe storms, tornadoes and flooding throughout the Midwest. This Act allows tax - exempt Midwestern Disaster Area to be issued for projects like the one proposed by the company. MDA Bonds, which are industrial development revenue bonds, must finance a project located in one of the 30 southern affected counties of Wisconsin which were declared federal disaster areas, which includes Winnebago County. .On August 13, 2009, the RDA approved Initial Resolutions for three (3) other projects we are developing in Oshkosh. These projects are all located in an established Redevelopment Area. However, in order for the RDA to be issuer of the proposed bonds for the Koeller site, the property must already be in a designated redevelopment area or the RDA and the City can make a spot blight determination. The property located at 524 N Koeller Street is not in a designated redevelopment area. Therefore, we are requesting that the RDA make a spot blight determination with respect to the project site. A comprehensive Blight Proposal will be prepared on our behalf by Whyte Hirschboeck Dudek S.C. and will be provided to the RDA describing conditions of blight at the project site, and the preliminary resolutions to be considered by the RDA and the Common Council. If the site is spot blighted, this will allow us to do a single bond issue, with the RDA as issuer, for the Koeller Street project and the other three projects. WND/6629G116.1 r Mr. Mark A. Rohloff Mr. Jackson Kinney August 14, 2009 Page 2 We are requesting that the RDA consider a Preliminary Blight Resolution and an. Initial Bond Resolution on September 1-6, -2009. We . 'are also requesting that`the Common Council consider a Preliminary Blight Resolution on September 22, 2009. Drafts of these resolutions will. be provided by Whyte Hirschboeck Dudek S.C. At a future date, we will also request that the RDA hold public hearings relating to the spot'blight and the proposed bond issue, and to consider the Final Blight Resolution and Final Bond Resolution. The spot blight determination also requires final approval of the Common Council, and we will request that the Common Council consider a Final Blight Resolution. ' It'is inipo�taiitto riote'that'(i) we wiIllierespoiisilile'for payment of all`fees'or ofhet costs incurred by the City and the RDA in connection with the issuance of the bonds, including payment of attorneys' fees and (n) the bonds will not be general obligations of the City or the RDA. We are asking the City and the RDA to assist the company with conduit tag - exempt bond financing because the interest on the bonds issued by the RDA would be exempt from both Federal and State income taxes, which will provide a significant interest rate savings to the company, thereby promoting the success of our projects in the City during these difficult economic times. We are excited about this project and look forward to working with the City. If you have any questions regarding the project, please do not hesitate to contact me. Thank you. Very truly yours, 524 N Koeller Street, LLC An umke cc: Lynn A. Lorenson, Esq. Charles L Jarik, Esq. Lynda R. Templen, Esq.