Meeting Minutes State College Borough Redevelopment Authority April 26, 2017
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1 Meeting Minutes State College Borough Redevelopment Authority April 26, 2017 The State College Borough Redevelopment Authority (RDA) met on Wednesday, April 26, 2017 in the State College Municipal Building, 243 South Allen Street in Room 241. Chairman Lenker called the meeting to order at 12:00 p.m. Members Present Sally Lenker, Chairman; Colleen Ritter and James Shincovich Others Present Ed LeClear, Planning Director; Jenna Wargo, Planner; Sarah E. Smith, Administrative Assistant; Roger Dunlap, Chief Financial Officer/Assistant Borough Manager; Dwight Miller, Manager of Financial Services; Chris Gibbons, Concord Public Financial Advisors, Inc.; and other interested parties Approval of Minutes Chairman Lenker made one correction to the minutes under the Chair Report. Chairman Lenker inquired when the Fairmount Avenue property would be on the market. Mr. LeClear reported that there were contractors working on the project. A motion was made by Ms. Ritter to approve the minutes of March 22, 2017, as corrected. The motion was seconded by Mr. Shincovich. The vote was unanimously in favor. Chair Report Chairman Lenker had nothing to report. Public Hour No citizens were present to discuss items not on the agenda. Neighborhood Sustainability Program (NSP) Line-of Credit Approval The Borough had been continuing work on the NSP and had hired Concord Public Financial Advisors, Inc. to solicit proposals for a new line-of-credit (LOC). Mr. Chris Gibbons was in attendance to review the proposals and offer a recommendation. Mr. Gibbon s presentation included: Existing LOCs would expire on May 1, When Borough Council approved moving forward with a new LOC, the consultant requested proposals from 27 banks and received 9 proposals in response.
2 8 proposals gave a variable rate and 1 proposal gave a fixed rate. The proposals were ranked and the best rate was First National Bank (FNB). The second-best rate was from BB&T which came in at.5% higher than FNB, but they had an overall cap on the interest rate at.5% lower than FNB s cap. If the rate increased by.25% seven times over the term, then BB&T would be the better proposal. The history of the HIP showed that the loan was never maxed out so if that trend continued the FNB proposal would be the better deal. Mr. Miller noted that it would make more sense to take the FNB proposal as it would save money over the short term and if the rates were skyrocketing then the Borough could pay off the loan and get a lower rate at a later date. He also noted that the new FNB loan would be at a lower rate than the current FNB loan. The Authority s comments included: Chairman Lenker inquired how many years the LOC would be for and Mr. Gibbons responded that it would be a 3-year term. Ms. Ritter inquired if the interest rate would change when the federal rates changed and Mr. Miller stated that was correct and they usually changed around once a month. Ms. Ritter made a motion to accept and sign the resolution with FNB and Mr. Shincovich seconded the motion. The vote was unanimously in favor. Mr. Dunlap, Mr. Gibbons and Mr. Miller left the meeting at 12:12 p.m. State College Town Centre Update Request for Qualifications Review & Recommendations Mr. Michael Gaughan joined the meeting via conference phone at 12:16 p.m. Mr. LeClear s update on the State College Town Centre included: There were 3 quotes received in response to the Request For Quotations (RFQ). There were 30 companies that spoke with Borough representatives and over 500 companies saw it. Staff recommended that RDA prequalify two of the companies rather than all three as Liberty had more of a suburban mindset without much understanding of the issues with an urban site. In addition, the other two companies had a better understanding of how to handle the Town Centre if the United States Postal Services (USPS) site was not able to be included. Highland Holding Group, one of the companies that had submitted, was a local company and they were the most creative on what they were proposing with the possibility for a multiple vendor community space. The prequalification s would only give the companies time and money into their proposals. There was also some interest in office space in the downtown. There was another project being built that would be testing out if office space would work downtown.
3 The Capstone Group was mostly a student housing developer, but they had some ideas for other projects as well. When they came in for their interview, they were checking to see if undergraduate student housing would be permitted, but staff explained it was not what the Borough was interested in. Capstone was also considering graduate housing, low income housing, senior housing and office space. There would be no risk on the Borough s side with prequalifying the companies to work on the proposals. Mr. LeClear and Mr. Gaughan had been working on getting First National Bank (FNB) to work with the project. Mr. LeClear noted that the local members of FNB were willing to work with the project, but the staff in Pittsburgh were hesitant of it. Mr. Gaughan noted that it was important to work with companies that have the same vision as the Borough and it seemed that the two suggested companies shared the Borough s vision for the site. There may be some cost to including some of the softer community uses, but the ideas would get more detailed in the second round of proposals. The next round would also review the timeline. It was possible that both companies could come back with proposals that were not feasible. One company was local with local resources and knowledge while the other one wanted to get into the market and came with national resources. Mr. Gaughan noted that there may be two proposals from each company one proposal with the USPS site included and one without it. The final USPS contract would be completed once there was a proposal approved. The Authority s comments included: Chairman Lenker noted that the Highland Holding Group seemed to be most tuned into what the entrepreneurs wanted. Mr. Shincovich inquired if there would be confusion with USPS if both companies were discussing possibilities with them. Mr. LeClear stated that Borough staff could speak with USPS to let them know there would be two teams speaking with them regarding the site. Mr. Shincovich noted that a lot of options would open up if the Borough were able to use the USPS site. Mr. LeClear noted that he had heard a lot about the need for conference spaces and hotels downtown. Chairman Lenker suggested building hotel beds rather than student homes. Mr. Shincovich noted that Liberty had included hotels in their proposal, but Mr. LeClear responded that Liberty only worked with Hampton Inns. Mr. Shincovich inquired if USPS would still want to have a retail presence even if the truck sorting was handled off site. Mr. LeClear responded that they would want a traditional space with retail, but without the truck sorting. Mr. Gaughan noted that USPS did not want to be a property owner, but they wished to keep their retail presence on site. He also noted that this was good for the developer as that would mean at least one guaranteed long term tenant. Mr. LeClear noted that FNB was similarly uninterested in owning the property, but still wished to keep the assets that they had. Mr. Gaughan had begun drafting the Request For Proposals (RFP) and it was inadvisable to prequalify only one company.
4 Mr. Shincovich made a motion to prequalify Highland Holding Group and Capstone Group. Mr. Shincovich noted that he was nervous about seeing student housing. Mr. LeClear stated that they had seen the student homes, but in the interview with Capstone it was clear that they had other plans as well. Mr. Shincovich inquired what would be put into the RFP for long-term options for the land. Mr. LeClear stated that they would ask for different options and see what the developers came up with. Mr. Gaughan noted that there were a lot of positives to a ground lease with long term use covenants which could prevent student housing. He stated that the ground lease would not be available at USPS and the biggest challenge with a ground lease would be financial. Capstone Group had experience with ground leases. Mr. Shincovich inquired if part of the RFP could require financial statements from the developers. Mr. LeClear stated that they would review what to ask for in the RFP. Mr. Gaughan stated that Highland Holding Group had given auditor information and some prequalification s as part of the RFQ. The financials would be worked through in the RFP. Ms. Ritter seconded Mr. Shincovich s motion to prequalify Highland Holding Group and Capstone Group. The vote was unanimously in favor. Mr. LeClear noted that the Borough was nearing the end of its initial contract period with the National Development Council (NDC). He discussed continuing the contract for an additional three-month period. Ms. Ritter made a motion to continue the professional services with NDC for a threemonth period. Mr. Shincovich seconded the motion. The vote was unanimously in favor. Mr. Gaughan left the meeting at 12:35 p.m. Official Reports and Correspondence Borough Council: Mr. LeClear reported that Borough Council would be reviewing a zoning amendment on May 1. The amendment would be to downzone a portion of the downtown area. Mr. Shincovich inquired what the implication of the ordinance would be and Mr. LeClear responded that a developer would still be able to build a project like the Fraser Centre, but not one like the Metropolitan. The amendment would reduce the capacity to 3 residential Floor Area Ratio (FAR). It would also significantly reduce the development of student housing in the west end of town. He noted that there may still be some interest from hotel developers. Mr. LeClear stated that there could be some testing of new office space development downtown but the problem in the area is parking. He stated that the Borough had been looking at other sites for additional public parking facilities. In addition, Borough Council would be discussing the Historical and Architectural Review Board (HARB). Mr. LeClear noted that the Historic Resources Committee (HRC) had voted to approve forming a HARB in the Borough. He explained that the proposal and been presented to Borough Council the previous month. Mr. Shincovich inquired if staff would suggest a partial HARB. Mr. LeClear stated that it could be part of
5 the discussion on May 1. He noted that Borough Council would first need to decide if they wanted to discuss a HARB at all and then staff could discuss the different pieces that normally make up a HARB. Chairman Lenker expressed concern of whether the general public knew about the proposed HARB. Ms. Venegoni stated that she did not think many people were aware. She noted that the Highlands Neighborhood Association was aware, but that she had not seen anything on the Listserv. Mr. LeClear stated that a big issue in starting the HARB would be to make sure that everything was in place to have it run smoothly as soon as it would be started. Chairman Lenker expressed concern that residents may not be thinking about the HARB now, but that they would get upset in the future when they went to do something to their home and they were not permitted to do so or they had to get additional permits in order to do so. Mr. LeClear acknowledged that might be a concern since there were many things that would need permits under a HARB that did not require a permit currently. Mr. Shincovich suggested that there needed to be something in place to protect against the demolitions of contributing properties. Mr. LeClear stated that there seemed to be value in protecting demolitions as well as evaluating new constructions. Mr. Shincovich noted that there might be trouble if the fraternity houses shut down. Planning Commission: Mr. LeClear reported that the zoning update process had started. Staff Reports: Mr. LeClear reported Student Home Licensing was almost complete. There were some denial letters that would be mailed out in the upcoming weeks, but all the licenses had been mailed out for the applications that had been approved. Staff would also be dealing with properties that had changed ownership since the original mailings and with the remainder of the property owners who had not responded to the original mailings. Mr. LeClear stated that Ms. Donna Queeney had informed him that she would be attending an upcoming meeting of the Highlands Civic Association to discuss Discovery Space and the State College Town Centre. Adjournment With no further business to discuss, Chairman Lenker made a motion to adjourn the meeting at 12:51 p.m. The Redevelopment Authority convened to an Executive Session. Respectfully submitted by, Sarah E. Smith, Administrative Assistant
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