MEETING OF A CARMEL REDEVELOPMENT COMMISSION FOR THE MONTH OF MARCH, AND WE'RE HERE IN
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CITY COUNCIL CHAMBERS.WE DO HAVE A QUORUM OF OUR MEMBERS PRESENT AND I BELIEVE COMMISSIONER BROOKS IS ALSO WITH US TELEPHONICALLY.
I'LL CALL THE MEETING TO ORDER AND WE'LL BEGIN WITH THE PLEDGE OF ALLEGIANCE.
[PLEDGE OF ALLEGIANCE]
OF THE MINUTES FOR THE MEETING OF FEBRUARY 19TH.[APPROVAL OF MINUTES]
ARE THERE ANY CORRECTIONS OR ADDITIONS TO THOSE MINUTES? THANK YOU. IS THERE A SECOND.THANK YOU. THANK YOU, COMMISSIONER.
WITH THAT, WE WILL MOVE TO VOTE.
YOU NEED TO DO A VOTE OF CALL.
YES, I DO. OK, GO AHEAD AND PLEASE CALL THE ROLL MR. HAMMER. AYE.
THANK YOU VERY MUCH. IT IS THEY ARE APPROVED.
WE'LL NOW MOVE ON TO THE FINANCIAL MATTERS.
[FINANCIAL MATTERS]
WE'LL BEGIN WITH THE CASH FLOW REPORT.JUST ONE SECOND. IT LOOKS LIKE NOBODY HIT THE THE TALLY ON THE VOTED ON THE LAST ONE DIGITALLY. YEAH.
[INAUDIBLE] NO. I THINK IT'S ALL PLUGGED IN.
GOT TO STAY SIX FEET AWAY FROM YOU.
WELL, THE MINUTES WERE APPROVED. WE'LL MOVE ON.
MIKE, DO YOU WANT TO GO AHEAD AND.
RUN THROUGH THE CASH FLOW REPORT FOR US.
SURE. THANK YOU. THE COMMISSION HAD AN ENDING BALANCE OF ONE MILLION NINE HUNDRED THIRTY SEVEN THOUSAND FOUR HUNDRED SEVEN DOLLARS, INCLUDING RESTRICTED FUNDS.
IT WAS SEVEN MILLION EIGHT HUNDRED TWENTY EIGHT THOUSAND SIX HUNDRED FOURTEEN DOLLARS.
THANK YOU MR. LEE. ANY QUESTIONS REGARDING THE END OF THE MONTH, FEBRUARY BALANCES.
SEEING NONE. LET'S SEE, WE WILL MOVE ON TO I GUESS THE UPDATE ON OUTSTANDING RECEIVABLES, PRESUMABLY NO CHANGE HAS THERE BEEN ANY CHANGE IN RECEIVABLES MIKE? NO. OK. AND THEY WILL MOVE ON.
FINALLY, THE APPROVAL OF CLAIMS.
[Approval of Claims]
MR. LEE, YOU HAVE PLACED BEFORE YOU.JUST THE NON OPERATING EXPENSES THIS MONTH IN THE AMOUNT OF ONE HUNDRED THIRTY SEVEN THOUSAND FIVE HUNDRED SEVEN DOLLARS AND EIGHT CENTS.
ANY QUESTIONS FOR MR. LEE ABOUT THE [INAUDIBLE].
SEEING NONE. IF IT'S YOUR PLEASURE, GENTLEMEN THE CHAIR WOULD ENTERTAIN A MOTION.
WE NEED A SECOND SOMEWHERE. SECOND.
THANK YOU, BILL. WITH THAT, IF YOU WOULD, CALL THE ROLL, MICHAEL.
AYE. MR. WORRELL. AYE. MR. CAMPAGNA. AYE.
MR. BROOKS. AYE. AND IT IS APPROVED.
THANK YOU VERY MUCH. LET'S SEE, WE HAVE ACTION ITEM NUMBER ONE, WHICH IS A CHANGE ORDER.
[Approval of Change Orders – Action Item #1]
MR. DIRECTOR, DO YOU WANT TO TOUCH ON THIS QUICKLY FOR US? YES. THANK YOU, MR. PRESIDENT.WE HAVE TWO CHANGE ORDERS FOR THE HOTEL.
ONE IS A REDESIGN AND ELECTRICAL GENERATOR.
THIS IS RELATED TO ACTUALLY SAVING MONEY BY NOT HAVING THE HOTEL HAVE ITS OWN ELECTRICAL GENERATOR, BUT RUNNING POWER OR A GENERATOR TO THE CITY CENTER OVERALL GENERATOR. THIS WORK WAS ACTUALLY DONE A WHILE AGO.
BUT IT STILL NEEDS TO BE APPROVED FORMALLY HERE.
THE OTHER IS A LOW VOLTAGE WORK FOR THE MODEL ROOM.
WHICH HAS ALSO ALREADY BEEN DONE.
THEY TOTALED TWENTY EIGHT THOUSAND DOLLARS.
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THANK YOU VERY MUCH. QUESTIONS, GENTLEMAN? IF NOT, IF IT'S YOUR PLEASURE CHAIR WOULD ENTERTAIN A MOTION OF APPROVAL.I WILL GO AND MAKE A MOTION THAT WE APPROVE JUST A MINUTE HERE, THAT WE APPROVED THE CHANGE ORDERS FOR THE DESIGN OF THE HOTEL PROJECT PER STATE BOARD OF ACCOUNTS REQUIREMENTS IN THE AMOUNT OF TWENTY EIGHT THOUSAND SIX HUNDRED EIGHTEEN DOLLARS.
THIS WOULD BE PAYABLE FROM THE 9O2 FUND.
THANK YOU COMMISIONER. IS THERE A SECOND? SECOND. THANK YOU.
MICHAEL, IF YOU'D CALL THE ROLL, IF YOU'D USE YOUR VOTING MACHINES.
GUESS YOU HAVE TO HIT THIS ONE.
WE WILL NOW MOVE ON TO OUR EXECUTIVE DIRECTORS REPORT.
MR. DIRECTOR. MIKE, I JUST WANNA BE CLEAR ON THAT LAST VOTE.
IT SHOWED THAT MY APPROVAL THAT BUT I ABSTAINED.
I THINK IS THE ONE THAT YOU CLICKED ON INSTEAD OF.
BUT IT DID SHOW ONE ABSTENTION SO WE'LL JUST NOTE THAT IN THE MINUTES THAT IT WAS YOUR ABSTENTION. THANK YOU.
EXCUSE ME. THANK YOU, COMMISSIONER.
MR. DIRECTOR. WELL, THE SITUATION IS CERTAINLY INTERESTING ALL AROUND.
[EXECUTIVE DIRECTOR REPORT]
CONSTRUCTION PROJECTS ARE ONGOING.HOTEL CARMICHAEL PROJECT IS ONGOING.
WE'VE NOT SEEN ANY DELAYS AS FAR AS CONSTRUCTION TODAY TO THE SCHEDULE.
BUT GENERALLY, EVERYTHING IS MOVING FORWARD.
BUT WE ARE REASSESSING OPENING DATES FOR THE CARMICHAEL.
WE ARE FOLLOWING THE RECOMMENDATIONS OF THE CDC, THE VARIOUS GOVERNMENT UNITS AND THE RECOMMENDATIONS OF OUR HOTEL MANAGER AS WELL.
SO THE SITUATION REMAINS FLUID.
IT'S SOMETHING WE'RE LOOKING AT EVERYTHING ELSE SEEMS TO BE MOVING FORWARD.
WE'RE TRACKING THE STATUS OF VARIOUS PROJECTS IN THE DIFFERENT STAGES THAT THEY ARE, THERE IS CERTAINLY UNCERTAINTY ALL AROUND.
THE NATURE OF THAT REDEVELOPMENT PROJECTS THAT THIS COMMISSION DEALS WITH ARE TWO YEAR THREE YEAR PROJECTS.
SO, YOU KNOW, LOOKING OUT OVER THE HORIZON, THE HOPE IS THAT EVERYTHING WILL CONTINUE TO OPERATE AS NORMAL, BUT THERE IS A LOT OF UNCERTAINTY GOING ON RIGHT NOW.
WE'RE JUST DOING OUR BEST TO KEEP UP WITH IT AND PROVIDE EVERYBODY ANSWERS THAT WE CAN.
OTHER THAN THAT, NOT MUCH TO REPORT.
I'M HAPPY TO ANSWER ANY QUESTIONS.
YOU KNOW, WE'VE GOT SOME PROPERTIES THAT WE'RE MANAGING AND WE'VE GOT RETAILERS IN THERE.
HAS ANYBODY CONTACTED YOU NOW, AS WE'VE GOT, YOU KNOW, VARIOUS SHUT DOWNS WHETHER ITS RESTAURANTS OR THAT TYPE OF THING, AND WE THOUGHT ABOUT, YOU KNOW, IF THEY ASK WHAT KIND OF CONCESSIONS WE COULD WE COULD DO IF NEEDED.
JUST TRYING TO HAVE A PLAN PUT TOGETHER.
YEAH, I KNOW THE MAYOR IS CERTAINLY CONSIDERING ALL OPTIONS.
I THINK WE'RE GOING TO KIND OF ASSESS ON AN INDIVIDUAL BASIS.
BUT I THINK THE APPROACH WE HAVE TO TAKE IS KIND OF A HOLISTIC APPROACH THAT IS FAIR TO EVERYBODY AND DOENS'T REFERENCE TREATMENT OF CERTAIN RETAILERS OVER OTHERS.
AND WE'RE CERTAINLY LOOKING FOR GUIDANCE GENERALLY ON THE CITY FROM THE CITY SIDE ON THAT, BECAUSE I KNOW THAT THERE ARE A LOT OF BUSINESSES THAT ARE.
THAT ARE DEALING WITH DIFFICULTIES RIGHT NOW.
WE HAVE A LOT OF LOCAL BUSINESSES IN THE CITY.
NOT JUST THE ONES THAT HAPPENED TO BE, FOR THE TIME BEING, IN PLAZA'S THAT THE REDEVELOPMENT COMMISSION OR ONE OF OUR PARTNERS ARE MANAGING.
WE'RE GOING TO TAKE OUR CUES KIND OF FROM THE MAYOR AND FROM THE COUNCIL ON HOW TO APPROACH THAT IN A EQUITABLE MANNER.
BUT IT'S CERTAINLY SOMETHING WE'RE TRACKING.
ANOTHER QUESTION TO DIRECTOR [INAUDIBLE] MR. PRESIDENT, I THINK WHAT I WOULD LIKE TO KNOW AND MAYBE YOU CAN'T DO IT NOW, BUT HOW MANY?
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THERE'S BEEN SOME TURNOVER AND CHANGE IN TENANTS.HOW MANY ORGANIZATIONS ARE WE DEALING WITH RIGHT NOW? DO YOU KNOW THAT NUMBER OFF TOP OF YOUR HEAD? THERE ARE ABOUT 20 TENANTS I WOULD SAY.
OK, ACROSS ALL THE PROPERTIES? YES. OUR PROPERTY AS OF TODAY, IS JUST MONON SQUARE.
MONON. OK. SO THERE'S NO ONE OVER AT ACROSS THE STREET? NO, THAT PROPERTY HAS BEEN TRANSFERRED TO OLD TOWN.
OK. IN THE PURCHASE IN THE TRANSFER DOCUMENTS, OLD TOWN, CRC MANDATED THAT EVERY TENANT WOULD HAVE AT LEAST TWELVE MONTHS NOTICE BEFORE ANYTHING HAPPENS.
SO I. BECAUSE OF THE DIFFICULTY OF, I THINK, YOU KNOW, INCREDIBLE SHORT TERM PUTTING A NEW BUSINESS IN THERE JUST TO BE IN THERE FOR NOT A LONG TIME.
OLD TOWN ACTUALLY WILL WORK WITH ALL THE BUSINESSES, EVEN THE ONES FACING DIFFICULTIES AND WE CAN CERTAINLY MAKE SURE OF THAT FOR MONON SQUARE, WHICH IS REALLY THE BIG PLACE WE HAVE TENANTS. THERE ARE ABOUT 20 ENTITIES.
YOU KNOW, WE HAVE TO TAKE OUR CUES KIND OF FROM THE MAYOR AND THE CITY COUNCIL ON HOW THE CITY WOULD LIKE TO APPROACH ALL BUSINESSES.
AND I THINK ANY ANY LANDLORD IS LOOKING AT THE UNKNOWN, WE DON'T KNOW HOW LONG THIS COULD GO ON. SO TO YOUR POINT THERE.
IT'S PROBABLY PREMATURE TO START MAKING A WHOLE LOT OF OFFERS YET TILL WE KNOW EXACTLY WHAT WE'RE UP AGAINST, WHAT WE'RE DEALING WITH.
I'M GOING TO TURN MY QUESTIONS OVER TO THE HOTEL.
SO BASED ON WHAT YOU KNOW TODAY, YOU'RE TALKING ABOUT POSSIBLY MOVING THE OPENING.
SO WHAT? SO GIVE US SOME COLOR ON THAT.
JUST FOR PEOPLE WHO ARE WATCHING.
WHAT IS IT NOW WHAT? YOU KNOW, WHAT ARE YOU THINKING ABOUT? AND THEN I'M MOST CURIOUS, WHAT DOES THAT IMPACT? WHAT ORGANIZATIONS, GROUPS, DOLLARS WOULD BE AFFECTED BY THAT? I THINK THE OVERARCHING ANSWER OF THAT IS THAT THE SITUATION IS REALLY FLUID.
FAIR ENOUGH. FAIR ENOUGH. WE'RE SUPPOSED TO OPEN WHAT DAY? BECAUSE I'VE HEARD A LOT OF DIFFERENT. WE WERE GOING TO BE OPEN IN MAY.
I KNOW. IN MAY. WHAT WAS THERE A DATE? THERE WASN'T A IT WAS A.
WELL, IT WAS A FLUID DATE IN MAY.
OK. IT'S THE BEST I CAN DO THERE.
WE DO OUR BEST TO PUT OURSELVES IN A POSITION WHERE MARIOTT ALLOWS US TO OPEN.
SURE. AND WE WERE WORKING TOWARDS THAT BUT THE SPECIFIC DATE IN MAY WAS NOT CERTAIN, OK.
AND WAS THAT FOR ROOMS OR WAS THERE SOME EVENT IN MAY THAT WE WERE TRYING TO MEET? IT WAS IT WAS FOR ROOMS, OK.
WHEN THE SITUATION IS NORMAL AND THERE IS NOT A PANDEMIC, YOU WANT TO BE OPEN IN MAY IN CENTRAL INDIANA. SO.
WELL. NOW THAT ALL ORGANIZATIONS ARE BASICALLY CANCELING EVERYTHING.
THAT MONTH OF MAY IS NOT SO CRITICAL.
USUALLY WHEN YOU'RE GETTING READY TO OPEN A HOTEL YOU HAVE HIRED ON YOUR MANAGEMENT EMPLOYEES, YOUR MANAGER LEVEL EMPLOYEES TO WHO THEN BE RESPONSIBLE FOR RUNNING THEIR OWN PROFIT CENTERS OR THEIR OWN PORTIONS OF THE HOTEL AND HIRING ON THOSE STAFF.
YOU USUALLY HIRE THE MANAGEMENT FAIRLY EARLY ON.
SO THE HOTEL IS HIRED ON THAT MANAGEMENT ALREADY.
THE HOTEL. BUT THEN YOUR BIG HIRING SPREE OF MOST OF THE EMPLOYEES OF THE HOTEL HAPPENED IN THE LAST 45 DAYS, ESSENTIALLY.
SO THE HOTEL WAS ACTUALLY GOING TO HOLD A EMPLOYMENT FAIR HERE FAIRLY SOON.
SO. WHAT WE'RE DOING NOW IS WE'RE KIND OF WATCHING AND DELAYING AND WAITING UNTIL IT REALLY IS THE RIGHT TIME TO OPEN.
AND, YOU KNOW, WE'RE TAKING OUR GUIDANCE NOT JUST FROM THE GOVERNMENT UNITS, BUT FROM THE MANAGER ITSELF. AND.
THESE GUYS THESE GUYS KNOW WHAT THEY'RE DOING.
I'M NOT SURE IT'S GOING TO BE IN JUNE, BUT THE SITUATION IS FLUID.
I MEAN, YOU CAN EVEN SEE IT WITH CERTAIN GOVERNORS, CERTAIN MAYORS OF.
SOME HAVE CANCELED ALL SCHOOL.
SOME HAVE CANCELED SCHOOL FOR A MONTH.
AND IT'S JUST IT'S THE SAME THING THAT WE ALSO HAVE TO KIND OF TRACK.
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WHEN IS THE HOSPITALITY INDUSTRY GOING TO KICK BACK IN? SO IT'S TOUGH TO SAY TODAY IN MARCH.WHEN THAT'S GONNA HAPPEN, WHEN NO ONE REALLY KNOWS.
WELL, WHAT WE NEED TO DO TO PUT OURSELVES IN THE BEST POSITION IS FINALIZE CONSTRUCTION OF THE HOTEL. SO WE'RE NOT.
REGARDLESS OF OPENING, WE NEED TO FINISH CONSTRUCTION SO WE'RE NOT PAYING GENERAL CONDITIONS AND NOT PAYING EXTRA FEES TO OUR CONSTRUCTION COMPANIES.
EVERYTHING IS ALL SAID AND DONE.
WE KNOW GENERALLY FROM WHEN ELEVATORS ARE DONE, WHICH IS GOING TO BE PRETTY CLOSE TO WHEN EVERYTHING ELSE IS DONE, THAT KICKS OFF LIKE A 30 DAY TIMELINE FOR MARRIOTT TO TO DO ALL THEIR FINAL TRAINING AND FINAL INSPECTIONS AND TO ALLOW US TO OPEN.
WE HAD PREVIOUSLY BEEN TRACKING THOSE IN A WAY WHERE MARRIOTT WOULD COME IN AND DO PARTIAL INSPECTIONS. BECAUSE OF THE CORONAVIRUS MARRIOTT IS PRETTY WELL LOCKED DOWN ON ONLY THE MOST ESSENTIAL TRAVEL, SO THEY'RE NOT GOING TO BE ANY EXCEPTIONS OR ANY WAVERING FROM THEIR VERY STRICT RULES.
SO 30 DAYS FROM WHEN EVERYTHING IS DONE CONSTRUCTION WISE, IT'S PRETTY CLEAR THAT THAT'S GOING TO BE OUR TIMELINE THAT WE ARE ABLE TO OPEN.
BUT WE HAVE TO LISTEN TO MARRIOTT AND WE HAVE TO LISTEN TO OUR MANAGEMENT COMPANY ABOUT WHAT IS THE RIGHT TIME TO OPEN.
BECAUSE IF THE CDC HAS PUT IN A RULE THAT SAYS [INAUDIBLE].
I UNDERSTAND. IN PLACES MORE THAN 10 PEOPLE YOU DON'T WANT TO HIRE ON 60 STAFF JUST TO OPEN TO THAT. I UNDERSTAND.
SO ALL THAT WE CAN DO NOW IS JUST TO CONTINUE PROVIDE THE PUBLIC AND THE COUNCIL AND THIS COMMISSION UPDATES AND \TRUST OUR EXPERTS ON THAT.
SO AS A COMMISSIONER, WHAT ARE THEN WHAT ARE THE NEGATIVE IMPACTS THAT MAY BE OUT OF OUR CONTROL, BUT THAT I SHOULD BE THINKING ABOUT WORRYING ABOUT EVERY DAY OR WEEK THAT THE HOTEL DOES NOT OPEN.
HOW DOES THAT AFFECT US? BECAUSE YOU ARE CORRECT. WE'RE NOT GOING TO GO AGAINST THE CDC, WE'RE GONNA FOLLOW THE GUIDANCE. BUT THERE ARE ALWAYS CONSEQUENCES.
WHAT ARE THE THINGS THAT YOU'RE THINKING ABOUT? WHAT ARE THE THINGS I SHOULD BE THINKING ABOUT AS A COMMISSIONER? CERTAINLY AT SOME POINT.
SO WE KNOW THIS THIS HOTEL PROJECT IS INTERESTING BECAUSE OF IN IN ALL OF OUR DOCUMENTS WITH THE CONSTRUCTION, WITH OUR TRADES, WE ESSENTIALLY HAVE A 60 DAY, 60 DAYS TO PAY THE TRADES AFTER WORK IS DONE, WHICH IS PRETTY, PRETTY STRETCHED OUT COMPARED TO OTHER CONSTRUCTION DEALS. SO WHAT THIS MEANS IS THAT WE ARE JUST NOW.
INTO THE FIRST MORTGAGE, ON THE HOTEL, INTO THE LOAN AND THAT HOTEL.
WHICH IS PRETTY UNUSUAL THAT THE HOTEL IS IN THIS FAR ALONG IN THE.
AND THE THE PRIMARY LENDER HASN'T FUNDED YET.
SO NOW THE PRIMARY LENDER HAS JUST I THINK THIS MONTH FINALLY FUNDING.
WHAT THIS MEANS IS THAT IN OUR IN OUR PRO FORMA WHERE OTHERWISE YOU WOULD HAVE BEEN CARRYING A LOT OF MONEY FOR INTEREST PRIOR TO HOTEL PROFITS BEING MADE.
WE DO HAVE A RESERVOIR OF INTEREST THAT THAT WE'VE BEEN CARING TO START MAKING THOSE PAYMENTS. RIGHT, THAT THE BIG ELEPHANT IN THE ROOM OBVIOUSLY IS AT A CERTAIN POINT, ONCE YOUR HOTEL LOAN HAS FULLY FUNDED, YOU GOT TO START MAKING INTEREST PAYMENTS.
AGAIN, THIS PROJECT IS DIFFERENT THAN MOST OTHER PROJECTS BECAUSE ONLY TWENTY FIVE POINT FIVE MILLION IS THE HOTEL LOAN COMPARED TO ALL THE OTHER EQUITY THAT'S BEEN PUT IN.
IT'S A MUCH SMALLER PORTION OF THE HOTEL DEAL THAT'S A LOAN.
AND AGAIN, BECAUSE WE ARE SO CLOSE TO THE HOTEL BEING IN READY TO OPEN STAGE COMPARED TO HOW LONG THE LOAN HAS BEEN FUNDING, THE CONSTRUCTIONAL HAS BEEN FUNDING.
WE HAVE A LOT OF MORE RESERVES TO MAKE THOSE INTEREST PAYMENTS THAN ON OTHER DEALS, BUT AT A CERTAIN POINT YOU DO NEED TO HIRE ON AND YOU DO NEED TO START MAKING REVENUE AS A HOTEL ENTITY TO PAY OFF THE INTEREST ON THE LOAN THAT.
THAT'S CERTAINLY A THING THAT SHOULD BE TRACKED. I CAN HELP OUT MAYBE A LITTLE BIT.
WHEN WE UNDERWROTE THIS LOAN, CERTAINLY THERE'S INTEREST CARRY IN THE LOAN ITSELF FOR A PERIOD OF TIME, AND I THINK HAS HENRY SAID WE HAVEN'T HAD TO DRAW ON THAT LOAN.
SO THE BILLS PAID TO DATE [INAUDIBLE].
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WE ALSO HAVE WORKING CAPITAL BUILT IN TO OUR CAPITAL STACK.SO WHETHER IT'S OUR CASH OR PROCEEDS FROM THE LOAN, IT'S CERTAINLY CONTEMPLATED TO TAKE CARE OF THE NEGATIVE CASH FLOW IN THE STARTUP.
SO REALLY THE FIRST 12 MONTHS WE'RE LOOKING AT SAYING THAT YOU'RE NOT GOING TO BE PROFITABLE, ANY NEW BUSINESSES SO THOSE ITEMS HAVE BEEN CONTEMPLATED AND WITH SLOWING THE HIRING.
I MEAN, YOU HAVE TO HAVE CERTAIN MANAGEMENT THERE.
THEN YOU'RE GOING TO SLOW THE NEED TO BE USING OUR WORKING CAPITAL.
SO MOVING THAT BACK IN, LET'S JUST SAY IT'S 60 OR 90 DAYS.
THAT'S NOT THAT'S NOT A CATASTROPHIC EVENT.
SO I THINK IT'S IMPORTANT TO, YOU KNOW, TO DELVE INTO THAT.
BUT I WAS GOING BRING THAT UP AFTER YOU WERE DONE.
BUT THAT'S PERFECT BECAUSE IT IS NOT CONTEMPLATED THE DELAY.
BUT I THINK BECAUSE OF THE WAY THIS DEAL HAS BEEN STRUCTURED, THAT THERE'S ADEQUATE INTEREST RESERVES BASED ON WHAT WE'RE SEEING TODAY THE OTHER PORTION OF THAT THAT IS WORTH NOTING IS THAT MOST HOTELS HAVE ON THE LOAN SIDE.
MOST HOTELS HAVE A FIXED INTEREST RATE.
ON THIS DEAL, WE DON'T HAVE A FIXED INTEREST RATE.
WE HAVE A VARIABLE INTEREST RATE.
SO BECAUSE THE FEDERAL RATE DROPPED DOWN.
OUR HOTEL ACTUAL RATE THAT WE'RE PAYING.
AND SO WHERE WE HAD CONTEMPLATED LARGER RATE WITH MORE RESERVES SET ASIDE TO PAY THE LARGER RATE IN THE FIRST YEAR, HAVING THE RATES ADJUST VARIABLY TO A DROP CLOSE TO ZERO BY THE FEDERAL GOVERNMENT MEANS WE HAVE MORE MONEY TO PAY THE INTEREST.
YES, AND I'M NOT EXACTLY SURE WHAT THE SPREAD IS, BUT I THINK WE STRESS THAT WHEN WE WERE LOOKED AT IT UP TO 6 PERCENT AND THAT RATE IN A VARIABLE RATE TODAY IS PROBABLY IN THE 3 LOW 3S. SO JUST TO TO BRING COLOR TO THAT.
OURS IS [INAUDIBLE] PLUS TWO HUNDRED TWENTY FIVE BASIS POINTS.
YEAH. [INAUDIBLE] POINT SEVEN FIVE YESTERDAY.
WE CALCULATED THIS ON AN ANNUAL BASIS COMPARED TO WHERE WE WERE WHEN WE CLOSED AND WHAT WE SET ASIDE RESERVES FOR, WE'RE SAVING FIVE HUNDRED SEVENTY THOUSAND DOLLARS A YEAR IN INTEREST ALONE BASED ON THE LOWERING OF THIS. SO WE'VE YOU KNOW, WE ALWAYS BUILD IN.
SO MAYBE TO SUMMARIZE. YOU ALWAYS BUILD IN THAT YOU NEED TO.
THAT IT TAKES TIME TO HIT OCCUPANCY IN THE FIRST YEAR, FOR EXAMPLE, HOTELS SET ASIDE WHAT'S CALLED PIP DOLLARS TO PAY FOR REMODELING AND NEW FURNITURE EVERY 7 TO 10 YEARS IN THE FIRST YEAR. WE'RE NOT SETTING ASIDE.
BUT BECAUSE THERE'S A VARIABLE RATE HERE.
BECAUSE WE'RE IN A 60 MONTH, 60 DAY DELAY OF PAYING PER CONTRACT, PAYING OUR CONTRACTORS.
AND AT THIS STAGE IS WHEN THE FIRST MORTGAGE IS FINALLY LENDING.
WE HAVE A LOT MORE PROTECTIONS IN PLACE AGAINST THAT LOAN.
BUT AT SOME POINT. WE DON'T KNOW IF THE LAST THREE MONTHS WERE GOOD, IF IT LASTS FOR FOUR MONTHS WE'RE GOOD IF IT LASTS FOR A YEAR.
RIGHT. SO JUST A COUPLE MORE IF I AND I WE PROBABLY ALL HAVE NOWHERE ELSE TO GO.
RIGHT. SO A COUPLE MORE QUESTIONS.
STAY AT THE HOTEL. SO WE'VE ALWAYS BEEN TALKING ABOUT THE OPENING OF THE HOTEL.
WHEN IS THERE A DATE SET FOR CONSTRUCTION TO BE COMPLETED? CONSTRUCTION WILL PROBABLY BE WRAPPED UP BY MID-MAY.
MID-MAY. OK. AND THEN COULD YOU CLARIFY FOR ANYONE WHO MIGHT BE WATCHING WHAT WE MEAN WHEN WE SAY WE'RE MAKING THE MORTGAGE PAYMENT? WHAT IS THE ENTITY THAT IS MAKING THAT PAYMENT AND WHO ARE WE TALKING ABOUT? RIGHT. SO THEEQUITY THAT THIS COMMISSION AND THE COUNCIL HAVE CONTRIBUTED TO THE HOTEL [INAUDIBLE] GOES TO A AS A CONTRIBUTION IN RETURN FOR LET'S CALL IT A PERCENT INTEREST IN THE HOTEL GOES TO A ULTIMATELY AN ENTITY THAT IS A COMBINATION OF A NONPROFIT AND A PRIVATE ENTITY, THEN LEASES TO A PRIVATE HOTEL ENTITY.
[00:25:01]
SO THE HOTEL ITSELF IS A PRIVATE ENTITY THAT PAYS TAXES AND IS A BUSINESS THAT AT SOME POINT THE CITY CAN SALVAGE ITS STAKE IN, GET ITS RETURN BACK AND HAVE THE BUSINESS CONTINUE OPERATING AS A PRIVATE BUSINESS AS IT IS NOW.SO TODAY, I MEAN, THE OPERATIONS OF THE HOTEL ARE A PRIVATE VENTURE.
BECAUSE OF THE SUBSTANTIAL CONTRIBUTION THAT WE DID PUT INTO THE HOTEL, IT'S.
WE ARE BEING INCREDIBLY OPEN ABOUT IT AND WE ARE RUNNING CONSTRUCTION ISSUES THROUGH PUBLIC MEETINGS AND BEING PRETTY TRANSPARENT WITH WHAT'S HAPPENING WITH THE HOTEL.
BUT IT IS A HOTEL ENTITY THAT'S RESPONSIBLE FOR MAKING PAYMENTS.
THANK YOU. OTHER QUESTIONS, COMMISSIONER? AND TO BE FULLY CLEAR ON THE FINANCING MECHANISMS, THERE ARE TWO LOANS THAT CDC IS ACQUIRED THAT WAS FURTHER EQUITY INTO THIS DEAL.
AND THOSE TWO LOANS HAVE INTEREST CARRY BUILT IN TO THEM AS WELL.
SO THERE'S A. LET'S DEFINE THOSE MONON SQUARE IS THAT WHAT YOU MEAN AND THE JAMES BUILDING. THE JAMES BUILDING AND MONON SQUARE, BOTH OF THOSE LOANS HAVE INTEREST CARRY INTEREST RESERVES BUILT IN.
SO, FOR EXAMPLE, ON MONON SQUARE, THAT WAS THE PROPERTY THAT THE REDEVELOPMENT COMMISSION PURCHASED FOR [INAUDIBLE] MILLION DOLLARS.
THAT PROPERTY HAS BEEN TRANSFERRED TO A NONPROFIT.
THE NONPROFIT TOOK OUT A TWO AND A HALF MILLION DOLLAR LOAN ON THAT PROPERTY.
2.3 MILLION WENT INTO THE HOTEL AS EQUITY.
TWO HUNDRED THOUSAND SITS OUT OF THAT LOAN PROCEEDS, SITS IN AN ACCOUNT AND IS USED TO PAY THE INTEREST ON THAT LOAN AND THE RENT'S COMING OFF OF [INAUDIBLE] SQUARE MORE THAN DOUBLE THE [INAUDIBLE] 40. IS IT ABOUT $40,000? IT'S ABOUT $40,000 PER MONTH.
THIRTY, FORTY THOUSAND PER MONTH THAT WE'RE RECEIVING.
RIGHT. AND THAT IS BEING TRACKED IN THE BACK OF OUR FINANCE PACKAGE THAT MIKE DOES.
INCOME EXPENSES SO WE CAN SEE WHAT'S GOING ON WITH THOSE.
I THINK GENERALLY ON THE HOTEL, IT'S WE HAVE PROTECTIONS BUILT IN THAT WILL LAST FOR A CERTAIN AMOUNT OF TIME. THE SITUATION IS FLUID AND ALL WE CAN DO IS JUST ADJUST TO THE NEWS EVERY MONTH. AND I WOULD JUST LIKE TO SAY THANK YOU FOR.
I KNOW THE FINANCE COMMITTEE HAS REALLY BEEN ON THIS THING.
YOU HAVE ALL THE DETAILS AND I REALLY APPRECIATE THE INFORMATION I'M RECEIVING AND THE LEADERSHIP AND THE GUIDANCE.
BUT YOU KNOW WHAT? YOUR YOUR EXPERIENCE IN THIS INDUSTRY HAS BEEN CRITICAL.
SO, OF COURSE, THANK YOU TO MIKE AS WELL.
THANK YOU. OTHER QUESTIONS, COMMENTS.
IF NOT, WE WILL MOVE ON TO THE COMMITTEE REPORTS.
WE'LL BEGIN WITH THE FINANCE COMMITTEE COMMISSIONER BOWERS.
[COMMITTEE REPORTS]
WE DID NOT SPECIFICALLY MEET.WE WILL MOVE ON TO THE ARCHITECTURAL REVIEW COMMITTEE.
AND YES, WE DID MEET WE MET ON THE SECOND OF MARCH.
WE REVIEWED PROSCENIUM WORK ARCHITECTURE AND APPROVED IT WITH COMMENTS.
WE APPROVED HAMILTON WEST WITH THE UNDERSTANDING AND EXPECTATION AS THE TENANTS TAILOR THEIR STOREFRONTS, THOSE CUSTOMIZED STOREFRONTS.
THOSE PLANS WOULD BE REVIEWED AND APPROVED BY A CITY PLANNING AND REDEVELOPMENT DEPARTMENTS. AND THEN THE PUBLIC RESTROOMS IN THE CARMEL CITY CENTER, WHICH WE ALL KNOW IS ALONG THE [INAUDIBLE] ADJACENT TO THE WEST SIDE OF THE CARMICHAEL.
THEY WERE APPROVED. THAT WAS THE EXTENT OF THE MEETING, MR. PRESIDENT. THANK YOU, COMMISSIONER BROOKS, ANY QUESTIONS ABOUT THE ARCHITECTURAL COMMITTEE. SAYING NONE, WE WILL MOVE ON TO OLD BUSINESSES.
IS THERE ANY OLD BUSINESS TO COME BEFORE US TODAY?
[OLD BUSINESS]
SO, SEEING NONE, WE'LL MOVE ON TO NEW BUSINESS, AND OUR FIRST ITEM IS ACTION ITEM NUMBER[NEW BUSINESS]
TWO, WHICH IS THE DECLARATORY RESOLUTION 2020-07 REGARDING THE LOT ONE ALLOCATION AREA.[Action Item #2 – Declaratory Resolution 2020-07 RE: Lot One allocation area]
AND MR. LEE. THANK YOU.SO THIS IS THE FIRST STEP IN SETTING UP ANOTHER ALLOCATION AREA.
JUST A REMINDER. IT STARTS WITH A DECLARATORY RESOLUTION AT THE CRC.
THEN IT GOES TO THE PLANNING COMMISSION.
THEN IT GOES TO CITY COUNCIL AND THEN FINALLY COMES BACK FOR A CONFIRMATORY RESOLUTION WITH THE CRC AGAIN, AS IS THE FIRST STEP IN THAT PROCESS.
AND THIS IS TO CREATE AN ALLOCATION AREA FOR LOT 1, WHICH IS THE SITE FOR WHERE THE
[00:30:05]
CURRENT PNC BANK IS SITTING AT THE MAIN AND RANGE LINE.AND SO IT'S JUST THAT FIRST STEP.
AND PLEASE LET ME KNOW IF YOU HAVE ANY QUESTIONS.
AS I RECALL, THE PROCESS NEXT WOULD GO TO THE PLANNING COMMISSION.
THEN TO THE CITY COUNCIL AND THEN BACK HERE FOR A PUBLIC HEARING AND THE FINAL CONFIRMATORY RESOLUTION.
THAT'S CORRECT. SO WE'RE BEGINNING THAT PROCESS.
ANY QUESTIONS OF MR. LEE REGARDING THE LOT ONE ALLOCATION AREA? YES, THANKS. THE THE OLD LAW FIRM BUILDING THAT IS PART OF THIS NOW.
THERE WAS NO THAT BUILDING WAS ALL IT WAS NOT ALREADY AFFECTED BY ANOTHER ALLOCATION AREA, IS THAT CORRECT? THAT'S THAT'S CORRECT.
OK. ALL RIGHT. SO AND WHAT IS CURRENTLY GOING ON IN THAT BUILDING RIGHT NOW? IT IS COMPLETELY VACANT. BUT ARE WE USING IT FOR TRAINING OR ANYTHING FOR THE FIRE DEPARTMENT? YES.
RIGHT. OK. AND WILL THAT CONTINUE FOR A WHILE? YES, I BELIEVE THEY'RE USING ALL THREE OF THOSE PROPERTIES FOR TRAINING AND IT WILL CONTINUE UNTIL WE GET CLOSE TO DEMOLITION.
I SPOKE TO THE FIRE CHIEF ABOUT THIS JUST OVER THE WEEKEND.
IN FACT, THE FIRE DEPARTMENT'S ARE THE ONLY PEOPLE AT THIS POINT WHO HAVE THE KEYS TO THOSE BUILDINGS, OK, SO THEY'RE IN CHARGE.
THAT'S SAFE. YEAH, THAT'S RIGHT.
AND WE WILL WE KEEP THEM UPDATED, OBVIOUSLY.
OK. BUT I'M NOT WALKING IN THERE.
IS THERE A PROPOSAL YET THAT GOES ALONG WITH THIS DECLARATORY? THERE IS NOT A PROPOSAL THE WAY THAT WE GENERALLY TRY TO HAVE THESE DEALS MOVE FORWARD.
IS THAT AS THE REDEVELOPMENT COMMISSION NEGOTIATES DEALS AND ULTIMATELY VOTES ON THOSE DEALS IN ITS PUBLIC MEETINGS.
THE GOAL IS ALWAYS TO BRING THESE MEETINGS TO REALLY THE ULTIMATE DECISION MAKER ON THESE THINGS, WHICH IS THE CITY COUNCIL, BECAUSE THE REDEVELOPMENT COMMISSION CAN'T MOVE FORWARD WITHOUT THE CITY COUNCIL APPROVING BONDS APPROVING ALLOCATION AREA.
THE NATURE OF THE STATE STATUTE HERE REQUIRES FOR AN ALLOCATION AREA VOTE TO COME TO COUNCIL TO HAVE IT FIRST BE VOTED ON AT THE REDEVELOPED COMMISSION AND AT PLAN COMMISSION, WHICH ESPECIALLY IN THESE TIMES COULD JUST TAKE MONTHS.
THE GOAL IS WHEN THERE IS A DEAL THAT WE HOPE THAT THE COUNCIL BLESSES, THAT WE BRING THE DEAL TOGETHER WITH ALLOCATION AREA TO THE COUNCIL.
AND SO WE REGULARLY ONCE WE KIND OF HAVE A GOOD IDEA OF WHAT IS GOING TO BE THE ALLOCATION AREA FOR A FUTURE DEAL.
WE REGULARLY GET STARTED EARLY ON THE ALLOCATION AREAS THAT THE REDEVELOPMENT COMMISSION, SO WE COULD BRING THE DEALS NOT PIECEMEAL, BUT AS ONE PACKAGE TO COUNCIL WHEN IT'S TIME FOR THAT. OTHER QUESTIONS AT THIS POINT.
SEEING NONE IF IT'S YOUR PLEASURE.
GENTLEMEN, THE CHAIRMAN ENTERTAIN A MOTION OF APPROVAL.
AND IT'S BEEN MOVED AND SECONDED.
IS APPROVED. THANK YOU VERY MUCH.
WE WILL NOW MOVE ON TO OUR THIRD ACTION ITEM, WHICH IS APPROVAL OF A CONTRACT AMENDMENT
[Action Item #3 – Approval of contract amendment for Monon architectural fees]
WITH [INAUDIBLE] ASSOCIATES WITH THE MONON TRIAL DESIGN.MR. DIRECTOR. THE MONON TRAIL HAS ALWAYS BEEN A PARTNERSHIP PROJECT BETWEEN THE REDEVELOPMENT DEPARTMENT AND THE ENGINEERING DEPARTMENT AND WITH THE ENGINEERING DEPARTMENT, TAKE IT ON KIND OF THE HEAVY LOAD OF DAY TO DAY MANAGEMENT AND THE REDEVELOPMENT COMMISSION KIND OF PROVIDING ITS ARCHITECTURAL OVERSIGHT EARLY ON.
THIS IS THE FINAL PORTION OR AN ADDITIONAL PORTION TO THE MONON TRAIL PROJECT.
MY FAVORITE PART OF THE PARTNERSHIP BETWEEN US AND ENGINEERING IS THAT THIS IS ENGINEERING'S BUDGET. BUT THE REDEVELOPMENT DEPARTMENT IS THE ONE THAT HOLDS THE CONTRACT. AND SO ENGINEERING HAS TAKEN A LEAD ON NEGOTIATING THE CONTRACT.
NEGOTIATING THE EXACT AMOUNT TO BE PAID THAT ENGINEERING IS PAYING BECAUSE WE EVEN FROM, YOU KNOW, A FEW YEARS AGO BECAUSE WE ARE THE PARTY TO THE CONTRACT WHEN ENGINEERING AND [INAUDIBLE] FIGURE OUT THE CONTRACT, WE
[00:35:03]
APPROVE IT HERE AT THIS COMMISSION, BUT WE FOLLOW KIND OF ENGINEERING'S LEAD ON IT.SO ENGINEERING HAS NEGOTIATED THIS AMENDMENT TO THE CONTRACT.
ENGINEERING IS PAYING FOR THIS.
WE ARE ALMOST CEREMONIALLY THEN APPROVING IT.
THANK YOU, MR. DIRECTOR, QUESTIONS.
THANK YOU. NEED A SECOND SOMEWHERE, GENTLEMEN? SECOND, THANK YOU, COMMISSIONER.
IF YOU WOULD, MR. LEE, CALL THE ROLL. MR. HAMMER. AYE. MR. BOWERS. AYE.
MR. BROOKS. AYE. THANK YOU, GENTLEMEN, IT IS APPROVED.
WITH THAT IS THERE ANY OTHER BUSINESS TO COME BEFORE US TODAY, MR. DIRECTOR? THERE IS NOT.
MR. PRESIDENT, THANK YOU VERY MUCH.
WELL, WITH THAT, I WOULD REMIND EVERYONE THAT OUR NEXT REGULAR MEETING WILL BE ON WEDNESDAY, APRIL 15TH AND HERE IN THE CITY COUNCIL CHAMBERS.
BUT IT LOOKS LIKE THE FEDERAL GOVERNMENT IS DELAYING SOME OF THAT.
WHO KNOWS? BUT ANYWAY, IN CLOSING, LET ME BEFORE I ASK FOR A MOTION TO ADJOURN.
LET ME JUST REMIND EVERYONE, YOU KNOW, IN THESE DIFFICULT TIMES IF YOU HAVE SOME ELDERLY NEIGHBORS, YOU KNOW, GIVE ME A CALL.
MAKE SURE THEY'RE OK IF YOU'RE GOING TO THE GROCERY STORE AND GO TO PICK UP STUFF AGAIN.
GIVE THEM A CALL AND SEE IF YOU CAN BRING SOMETHING TO THEM.
AND HOPEFULLY THAT'LL THAT WILL HELP DEAL WITH SOME OF THE PROBLEMS WE HAVE HERE WITH FOLKS THAT ARE HAVING TO SHELTER IN PLACE AND WHATEVER.
THE OTHER THING IS WE DO HAVE SOME FOOD BANKS HERE IN TOWN.
I KNOW COMMISSIONER WORELL'S WIFE WORKS AT THE ONE, LADY OF MOUNT CARMEL.
MY WIFE WORKS OVER AT THE ONE AT CARMEL UNITED METHODIST.
AND THESE ARE IMPORTANT THESE DAYS BECAUSE THERE ARE PEOPLE THAT, IF THEY'RE HAVING TO SHELTER IN PLACE, MAY NOT BE EATING.
AND WE WANT TO MAKE SURE THAT WE CAN GET THROUGH THE CURRENT DIFFICULTIES WITH AS LITTLE DISRUPTION AS WE CAN.
SO THOSE ARE VERY GOOD ORGANIZATIONS TO SUPPORT.
SO WITH THAT, I WISH EVERYONE GOOD HEALTH.
AND UNLESS THERE'S AN OBJECTION, I'LL DECLARE US TO BE ADJOURNED.
* This transcript was compiled from uncorrected Closed Captioning.