2008 12:30 P.M
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MINUTES FROM THE BOARD MEETING OF THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF NEW ORLEANS, LA, INC. JANUARY 29, 2008 12:30 P.M. 10TH FLOOR – AMOCO BUILDING 1340 POYDRAS STREET Present: W. Raley Alford, III Torey Bullock Walter C. Flower III Glenda Jones Harris Susan P. Good James Paul Johnson Darrell J. Saizan C. David Thompson Tyrone A. Wilson Absent: Farrell Chatelain Nina H. Marchand Ernest P. Legier, Jr. John Koch Jimmie Thorns, Jr. Others Present: Sharon Martin, Admin. Consultant, IDB Jade Russell, Bond Counsel, Adams and Reese David Wolf, Bond Counsel, Adams and Reese Lee Reid, Adams & Reese Guests: Gionne Jourdan, Michaels Development Co./ New Savoy Place Dell Dempsey, LED Gen. David Mize Damon Burns, Morgan Keegan Jeff Thomas, Office of Recovery and Dev. Administration, City of New Orleans Eddie Scott, HANO Tom Dutel, Tatty Co. Brandy Citizen, Office of Councilman Arnie Fielkow Don Allison, Advantous Consulting Terri Franklin, Regions Bank Michon Copelin, Doucette & Doucette Stanley McDaniel, The McDaniel Group Lee Bressler, Morgan Keegan Steven Hattier, Morgan Keegan Tara Hernandez, JCH Development David Waldheim, 2400 Canal, LLC Robert Evans, 2400 Canal, LLC LaSwanda Green, Downtown Development District 1 -2- Lucy Chun, ReMax Commercial-Asian Chan. Jordan Monsour, Elkins, PLC Matt Eaton, Re-Max Commercial Im. Hoygo, Nuvote, LLC Karl Kelhor, RETG Brian Gibbs, Brian Gibbs Development Patrick Quinn Dawn Hopkins, LSU David Crias, Grais Grouop, LLC/Merrill Lynch Patricia Morris, Bureau of Governmental Research Jacob Capraro, Economic Analysis Consultants, LLC The meeting of the Board of the Industrial Development Board was called to order at 12:39PM by the Secretary-Treasurer, Susan Good, who acted as ad hoc presiding officer in the absence of the President and the Vice-President. A roll call was taken and a quorum was present. An introduction of guests was requested and held. It was noted that new appointee/Board member, Walter C. Flower III had been sworn in and recognized as the newest appointee of the Board by Mrs. Jackie Clarkson. A request by the Secretary-Treasurer for a vote for acceptance of the December 2007 minutes was offered by W. Raley Alford, III, seconded by C. David Thompson, and approved without objection. The first order of business on the agenda was as follows: FIDELITY INVESTMENT HOLDINGS Attorney David Wolf presented the overview on behalf of the Fidelity Investment Holding. He informed the Board that: 1) the applicant is seeking not exceeding $6M in GO Zone bonds, if qualified; 2) the project consisted of a rehabilitation of a shopping center located in Algiers, La. and is for improvements only; and 3) applicant does not seek a PILOT although it is listed in the application. He presented a preliminary approval resolution and gave details of the Resolution for Board consideration and preliminary approval. Mr. Jordan Monsour of Elkins, PLC, attorney for the developer, interjected that the PILOT is of no economic benefit and that the client would like to proceed to obtain tax-exempt bonds with low interest rate, i.e. GO Zone bonds. There being no further questions or discussion, Mrs. Good requested a motion for preliminary approval. A motion was offered by Mr. Thompson and seconded by Mr. Darrel Saizan. A vote was taken and preliminary approval was granted unanimously upon vote. The applicant was advised of the conditions upon which preliminary approval is granted, including the requirement for a time line; the production of a cost/benefit analysis; and that a letter detailing these requirements would be forthcoming within the next few days. 2 -3- 2400 CANAL, LLC Attorney David Wolf presented the request for preliminary approval informing the Board that the proposed development consisted of the rehabilitation of the old Pan-Am Building on Canal Street; proposing to convert the building into a commercial and residential establishment; both taxable bonds and a PILOT are being sought. Applicant representatives, Robert Evans and David Waldheim were introduced. They advised that the building is the former City Hall Annex and is listed as a historic landmark with the National Register of Historic Places; and that IDB approval is critical to the process. Mr. Steven Hattier of Morgan Keegan interjected that the primary target for the facility would be nurses’ residence, office space for the medical industry to compliment the new medical complex that is being proposed for the New Orleans area; and he clarified that “retail” entails office rental. Questions were raised as to the location of the development and whether the land on which the development is being proposed was in the area in which the new hospital was being planned. Mr. Evans informed the Board that this particular parcel was in the “black” and safe; further advising that the City has informed them to “go forward”. He and Mr. Waldheim confirmed that they have met with City officials. The timeline for the proposed construction of the project is 10 – 14 months. Mr. Thompson asked the developers to spell out the advantages of having a historic site. The Board was advised that the Federal government offers renovation tax credit on eligible projects, representing a 26% tax credit for rehabilitation and that this tax was a pass through. Mr. Thompson advised that it was germane for the Board how this tax credits work and that he would like to see an analysis of the project to determine viability of project. Mr. Thompson then asked why a “ten-year abatement”? Why not a “15-year abatement”? He stated that he would like to see the affects of both scenarios in the CBA. Mr. Tom Dutel, who owns property at 2435 Banks Street near the proposed project, advised that if not mistaken, the proposed project is included in the area of the intended VA Hospital and that he witnessed architects viewing the area (all of whom were from Ohio). He is under the impression that the land on which this development is being proposed encompasses land for the VA Hospital. He stated that he could not see the IDB approving a project that would appear to be torn down later. Mr. Dutel was informed that the IDB, in order for the project to move forward, could give preliminary approval; that the final instrument that would determine final approval of the project would be the Cost Benefit Analysis. The Secretary-Treasurer asked for a motion to approve or not approve. A motion to grant preliminary approval was offered by Mr. Saizan and seconded by Mr. Alford. A vote was taken and the vote passed unanimously. 3 -4- The applicant was informed of the conditions upon which preliminary approval is granted, including the requirement for a time line; the production of a cost/benefit analysis; and that a letter detailing these requirements would be forthcoming within the next few days. New Orleans Federal Alliance (NOFA) d/b/a Federal City Attorney David Wolf presented this matter to the Board, advising that the applicant seeks $150M of bond financing and that the representatives of the project were present. The request was not for the issuance of tax exempt bonds or a PILOT but only that the IDB would serve as a conduit for the bonds to be repaid from funds appropriated by the State. Gen. David Mize confirmed. Mr. Wolf reiterated that if the applicant is not seeking a PILOT, therefore, there is not a need for a cost/benefit analysis. Gen. Mize took the floor and thanked to the Board for reconvening as quickly as it did. He then introduced Ms. Del Dempsey, State Dept. of Economic Development, who serves as the lead person in the State’s interest in this development. She advised that the objective of the development was to maintain the current job count and keep that job count growing; she advised that former Governor Kathleen Blanco supports the project and that it is now in its final stages. They are optimistic that this will be a great economic development project for the City and State. A motion to grant preliminary approval was offered by Mr. Thompson and seconded by Mr. Saizan to grant preliminary approval. Questions were then raised: Mrs. Harris: How many non-military jobs were projected for the development? Gen. Mize: Combined federal and non-federal – 1st phase – 2600. Optimum 10,000 with 2500 military. Ms. Dempsey advised that if the project is not approved, the State could lose the base and that it is critical to move forward at this point. Mr. Saizan then interjected that understands and recalls that the base narrowly escaped closure. Gen. Mize confirmed this statement, advising that he took the matter to the BRAC commission and the recommendation was changed. Only the East part is closed. He also confirmed that the model for the proposal was based on one in Brook City in San Antonio, Texas. Mr. Tyrone Wilson stated with emphasis that he believed the project to be one of the most important projects of the City and that with respect he would hope that the IDB would push this matter to the forefront of all applications pending. He asked to have a previously offered motion for grant of preliminary approval amended to include placing this application to the head of the line. The request for the amendment was accepted by Messrs. Thompson and Saizan. A vote was taken and the vote passed unanimously. The applicant was informed of the conditions upon which preliminary approval is granted, including the requirement for a time line; the production of a cost/benefit analysis; and that a letter detailing these requirements would be forthcoming within the next few days. 4 -5- 930 Poydras Apartments, LLC/930 Poydras, LLC Mr.