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MEETING OF THE DOWNTOWN DEVELOPMENT AUTHORITY

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MEETING OF THE DOWNTOWN DEVELOPMENT AUTHORITY Powered By Docstoc
					                     MEETING OF THE
             DOWNTOWN DEVELOPMENT AUTHORITY
                                Wednesday, January 9, 2008

                                       8:30 a.m. Meeting

                                      Room 601, City Hall
                                           AGENDA


1.    Call to order
2.    Introduction of new student representatives
3.    Approval of minutes of December 12, 2007 meeting (enclosed)
4.    Election of Officers
5.    DDA financial reports for December 2007 (enclosed)
6.    Audited Financial Statements – Fiscal Year Ending June 30, 2007 (enclosed)
7.    Update – Arena Bond Refunding (enclosed)
8.    Appointment of Committees (enclosed)
9.    Update - DDA Boundary Expansion
10.   Update - Ionia DASH Property Acquisition (enclosed)
11.   Update - Economic Development Project (enclosed)
12.   Development Support – The Gallery on Fulton (enclosed)
13.   Executive Director’s Report
14.   Public Comment
15.   Board Member Discussion
16.   Adjournment




                      The VISION of the Downtown Development Authority is to be recognized as the
                      organization providing key leadership in the development of a market driven,
                      dynamic downtown.

                      This market driven, dynamic downtown will enjoy competitive, fully leased
                      office market, a wide range of housing options, and unique retail offerings
                      including a range of dining and entertainment.
                                                                UNAPPROVED MINUTES


        MEETING OF THE DOWNTOWN DEVELOPMENT AUTHORITY

                                   December 12, 2007


1.   Call to Order – The meeting was called to order at 8:32 a.m. by Chair Kayem Dunn.

2.   Attendance

     Present: John Canepa, Dave Cassard, Kayem Dunn, Paul Mayhue, *Juan Olivarez, and
     Brandi Allaway (Student Representative)

     Absent: Mayor George Heartwell, Cathy Mueller, Joe Tomaselli, and Michelle VanDyke

     Others Present: Jay Fowler (Executive Director), Judy Everett (DDA Secretary), Jana
     Wallace (DDA Treasurer), Richard Wendt (DDA Counsel), Scott Buhrer, Anne Marie
     Bessette, Pam Ritsema (Staff), Sam Cummings, Nick Koster (Second Story Properties),
     Pam Opyd (Grubb & Ellis/Paramont/Commerce), and others.

     Ms. Dunn announced that this is the last meeting for student representative Brandi
     Allaway. Mr. Fowler thanked Ms. Allaway for her good attendance. The DDA Board
     applauded Ms. Allway and wished her well.

3.   Discussion – Gallery on Fulton (Division and Fulton)

     Jay Fowler explained that the southwest corner of Division and Fulton was occupied by a
     municipal parking ramp, which was demolished in 2004 after it reached the end of its
     useful life. The City went through an RFP process in 2005 for redevelopment of the site,
     and received five proposals. The proposal received from a development partnership
     consisting of RSC & Associates of Chicago and Second Story Properties of Grand Rapids
     was selected, and a development agreement related to the project was approved by the
     City Commission in November 2005. In the past two years, the development team has
     been working diligently with the City of Grand Rapids. At this point, the DDA has not
     been involved in this development project.

     Sam Cummings from Second Story Properties displayed a model of the Gallery on
     Fulton. He explained the location is a small, but important development site. They have
     made revisions to the original plans to best meet the needs and demands of the public and
     to improve the feasibility of the project. He explained the importance of the anchor
     tenant, the Urban Institute for Contemporary Art (UICA). The project will provide for
     273 public parking spaces for nearby businesses, and offers 36 residential rental
     apartments, as well as storefronts along Fulton Street. He noted that he is working with
     the City’s Economic Development Department for approval of Brownfield tax credits.
     Groundbreaking is anticipated to take place in April.

     *Juan Olivarez arrived at 8:43 a.m.
Downtown Development Authority
Minutes – December 12, 2007
Page 2

      Mr. Mayhue said that in looking into the next three to five years in the future, he felt the
      certain audience that will be attracted to the UICA may not be sufficient enough to
      economically revitalize downtown. He said he would like to see a broader audience that
      would be attracted to the site, which would assist downtown retailers. Mr. Cummings
      responded that the UICA will attract a culturally and age diverse audience, which is the
      targeted audience for this location. He noted that the UICA does include a movie theatre
      with two screens.

      Ms. Dunn asked the projected price of the apartments, and Mr. Cummings answered that
      they are expecting to charge about $1.60 per square foot per month (i.e. 1,000 square foot
      two-bedroom apartment will be $1,600 a month). He noted that a “live green” committee
      has been formed for this LEED project, the first in Grand Rapids.

      Mr. Fowler explained that no action is required on this subject by the DDA today.
      However, he anticipates that the board will be presented with a development support
      policy and term sheet at the January DDA meeting.

4.    Approval of Minutes

      Motion: John Canepa, supported by Dave Cassard, moved approval of the minutes of the
      November 14 and November 28, 2007 DDA meetings, as submitted. Motion carried.

5.    DDA Preliminary Financial Reports for November 2007

      Ms. Wallace presented the DDA financial statements for the five-month period ending
      November 30, 2007, including Statement A – Balance Sheet, Statement B – Comparison
      of FY2007 Annual Budget vs. Actual, Statement C – Statement of Current Project
      Expenses, and Statement D – Summary of Expenditures, with a total amount of
      expenditures at $1,209,083.75.

      Ms. Wallace requested approval of Statement D – Summary of Expenditures.

      Motion: John Canepa, supported by Dave Cassard, moved to approve Statement D –
      Summary of Expenditures and Payments for November, 2007 as recommended. Motion
      carried.

6.    Approve extension of construction agreement for Tall House

      Mr. Fowler explained that the DDA entered into a Development and Reimbursement
      Agreement with Tall House at 45 Ionia LLC in July 2006, for a mixed use development
      on Ionia SW, south of Weston. Per this development agreement, construction was to
      begin by December 31, 2007. However, the developer is requesting an extension to
      September 2008.
Downtown Development Authority
Minutes – December 12, 2007
Page 3


      Mary Witte from Tall House described the proposed mixed use project. She explained
      that the first floor will contain commercial/office space, or possibly a restaurant.
      Residents of the condominiums on the upper floors will be encouraged to use a “green”
      vehicle which is available at no cost, and she described the “Live Green at Tall House”
      incentive program. She noted that the starting price will be $150,000 for the
      condominiums, and their website is receiving much interest from people from the
      medical mile.

      Mr. Fowler explained that Tall House at 45 Ionia LLC has requested an extension of the
      construction commencement date from December 31, 2007 to September 30, 2008, and
      also an extension of the completion date from December 31, 2009 to September 30, 2010.
      He further explained that per the development agreement, the DDA currently receives a
      portion of the parking revenues from the current surface parking lot on the portion of the
      property where the project will be located until such time the developer gets possession
      of the property. However, the developer is now requesting receipt of those parking
      revenues. Mr. Canepa and Mr. Mayhue asked why the parking revenues would now be
      turned over to the developer, rather than continuing the current practice. Mr. Canepa
      said that it appears the DDA will be penalized under the proposed terms, and Mr.
      Mayhue agreed. Mr. Fowler answered that the developer owns the property but
      recognized the need for public parking in this area, and therefore allowed the City to
      continue operating a surface parking lot and also allowed the City to continue collecting
      the revenue. At this time, a letter of credit from the bank is requesting a $100,000
      payment from the developer, so the timing is right for the developer to receive the
      parking revenues in an estimated amount of $14,500. Mr. Wendt noted that the parking
      revenues will cease when construction of the project begins and the surface parking lot is
      demolished. There was further discussion regarding these parking revenues.

      Motion: John Canepa, supported by Dave Cassard, moved to approve a “Resolution
      approving term sheet related to the Tall House project and Authoring the preparation
      and execution of an amendment to the Development and Reimbursement Agreement with
      Tall House at 45 Ionia, LLC, related thereto.” Motion carried.

7.    Update on refunding of arena bonds

      Mr. Wendt explained that at its November 28, 2007 special meeting, the DDA board
      adopted a resolution to refund a portion of the arena bonds, and authorized the minimum
      amount of cash to be received as a result of the arena bond refund to be $2.75 million.
      Since that time, there has been concern about the AAA rating of Ambac, the bond
      insurance company, which would affect the amount of the refund.

      Scott Buhrer said that Jay Fowler, Dick Wendt, Jana Wallace, and he have been
      committed to the refunding project, and said they may ask the State to postpone the
Downtown Development Authority
Minutes – December 12, 2007
Page 4

      closing date. He noted the importance of the letter of confirmation from the State
      Treasury as a protected obligation. A discussion followed.

      Staff recommended approval of a “First amendment to resolution authorizing the
      issuance of tax increment revenue refunding and improvement bonds for the purpose of
      refunding certain outstanding bonds and financing certain public facilities, including
      costs of issuance thereof, and authorizing and delegating authorized officers to make
      certain determinations and to take certain actions in connection with the sale and delivery
      of said bonds.”

      Motion: Paul Mayhue, supported by John Canepa, moved approval of the above named
      resolution regarding the refunding of Arena Bonds as recommended. Motion carried.

8.    2008 DDA Meeting Schedule

      Mr. Fowler explained that the schedule for the DDA meetings in 2008 are the second
      Wednesday of each month, except for November, which will be held on the first
      Wednesday of the month due to a conflict with the City Commission.

9.    Executive Director’s Report

      Mr. Fowler reported that the City Commission held a public hearing on December 4,
      2007 on the DDA plan amendment and boundary expansion, where approximately six
      people commented. As a result of those comments, a slight change will be made to the
      boundaries on the west side. The City Commission will be asked to approve the DDA
      Boundary Expansion and Plan Amendment on December 18. Taxing units will have 60
      days from that date to request to opt out. It was noted that at a meeting with the taxing
      jurisdictions, Kent County expressed their skepticism, but appreciated the ratchet back
      even though it doesn’t fit their model. Mr. Wendt noted that the Grand Rapids Public
      Library announced their support of the plan at the public hearing.

10.   Public Comment

      None.

11.   Board Member Discussion

      Mr. Mayhue briefly announced that the campaign “Report the crime: It’s NOT
      snitchin’,” is moving forward, and he has a meeting scheduled with the sign shop.

12.   Adjournment

      The meeting adjourned at 9:37 a.m.
                                                                        Agenda Item 5.
                                                                        Jan 9, 2008
                                                                        DDA Meeting

DATE:         January 4, 2008

TO:           Jay Fowler
              Downtown Development Authority Executive Director

FROM:         Jana M. Wallace
              Downtown Development Authority Treasurer

SUBJECT:      December 31, 2007 Financial Statements


Attached are the Downtown Development Authority FY2008 financial statements for the six
month period ended December 31, 2007.

The attached statements include the following:

        Statement A: Balance Sheet

        Statement B: Comparison of FY2008 Budget vs Actual Results

        Statement C: Statement of Current Project Expenses

        Statement D: Summary of Expenditures

Items to note:
   - Interest revenue remains negative for two sub-funds due to year-end accrual reversals
   - Annual principal and semi-annual interest expense for the Public Museum parking ramp
      debt service was paid this month.
   - Actual administration expenses are below budget trend for the current fiscal year

Please call me at 456-4514 if you have any questions.

Attachments
                                                  STATEMENT A

                               DOWNTOWN DEVELOPMENT AUTHORITY
                                                Balance Sheet
                                              December 31, 2007


                                                    Non-Tax              Debt          Local Tax
                                                   Increment          Increment        Increment             TOTAL
ASSETS
 Pooled cash and investments                      $ 6,054,872     $ 5,385,260      $ 6,750,885          $  18,191,017
 Petty cash                                               -                -                200                   200
 Investments held by trustee                              -          5,455,501              -               5,455,501
 General fixed assets                                     -                -         87,884,628            87,884,628
 Future tax increment revenues anticipated                -         39,320,720          860,690            40,181,410
TOTAL ASSETS                                      $ 6,054,872     $ 50,161,481     $ 95,496,403         $ 151,712,756

LIABILITIES AND FUND EQUITY
Liabilities
                                                                                                    1
 Current liabilities                              $         -     $          -     $       13,520       $        13,520
 Contract payable                                           -                -            860,690               860,690
 Bonds payable                                              -         39,320,720              -              39,320,720
                             T OTAL LIABILITIES             -         39,320,720          874,210            40,194,930

Fund balance / equity:
 Investments in general fixed assets                        -                -         87,884,628            87,884,628
 Non-tax reserve                                      6,054,872              -                -               6,054,872
 Reserve for compensated absences                           -                -             48,315                48,315
 Reserve for encumbrances                                   -                -             36,808                36,808
 Reserve for authorized projects                            -                -          6,652,442             6,652,442
 Reserve for long-term lease                                -          1,400,000              -               1,400,000
 Reserve for bond indenture                                 -          9,440,761              -               9,440,761
                            TOTAL FUND EQUIT Y        6,054,872       10,840,761       94,622,193           111,517,826

TOTAL LIABILITIES AND FUND EQUITY                 $ 6,054,872     $ 50,161,481     $ 95,496,403         $ 151,712,756

Note 1: Accrued payroll expense for pay period ending December 29, 2007.
                                                                                              ddastmts-dec07.xls jmw 01032008
                                                           STATEMENT B
                                     DOWNTOWN DEVELOPMENT AUTHORITY
                                    Comparison of FY2008 Budget vs Actual Results
                                          July 1, 2007 - December 31, 2007

                                                Non-Tax Increment               Debt Tax Increm ent                Local Tax Increment
                                                Budget     Actual              Budget        Actual                Budget       Actual
REVENUES
                                                                                                           1
Property Tax Increment - General               $    -        $      -      $ 6,326,356 $ 8,168,229             $ 3,227,141        $ 3,580,622
Property Tax Increment - Transit Millage            -               -              -           -                   197,764            197,764
Property Tax Increment - New Developments           -               -              -           -                   216,859                -
Property Rental - Parking Lots                  166,678         57,558             -           -                       -                  -
Interest on Investments                         287,449        (41,866)        186,536     173,399                 258,673             (8,582)
Brownfield Authority Reimbursements                 -               -              -           -                    45,000                -
Building R e-Use Incentive Reimbursement            -               -              -           -                       -               30,885
Miscellaneous Fees / Reimbursements                 -               -              -           -                       500              1,267
Rentals - Other                                  66,510         27,666             -           -                       -                  -
Campau Promenade Phase 1 Reimbursemt                -               -              -           -                       -               83,189
DASH Lot 6B Sold to Interurban Transit Prtnrshp     -          400,000             -           -                       -              255,138
From / (To) Fund Balance                         53,263             -         (186,536)        -                 4,743,159                -
                            TOTAL REVENUES $ 573,900         $ 443,358     $ 6,326,356 $ 8,341,628             $ 8,689,096        $ 4,140,283

EXPENSES
Project Expenditures
  Development Support                         $        -     $    10,000   $         -     $         -         $ 2,260,174        $ 2,380,707
  Parks, Open Space and Cultural                       -              -              -               -           1,420,000             70,200
  Streetscape Improvements                             -              -              -               -           3,660,000            838,013
  Infrastructure Improvements                          -              -              -               -             125,000                -
               Sub-Total Project Expenditures          -          10,000             -               -           7,465,174          3,288,920

Debt Service
 Principal                                             -             -         3,210,000         195,000            298,853              27,000
 Interest and Paying Agent Fees                        -             -         2,089,553       1,047,214            233,807              21,940
                      Sub-Total Debt Service           -             -         5,299,553       1,242,214            532,660              48,940

Administration and Other Services
 Administration                                      1,000            -              -               -              528,618            243,547
 Asset Maintenance                                 204,000        18,945             -               -                  -                  -
 Developer Tax Increment Reimbursements                -              -              -               -              162,644                -
 Estimated Capture to be Returned                      -              -        1,026,803             -                  -                  -
 Police - Ticketed Event Traffic Control            73,440        13,458             -               -                  -                  -
 Public Information and Marketing                   90,000        47,948             -               -                  -                  -
 Rosa Parks Circle Ice Skating                      41,600            -              -               -                  -                  -
 Snowmelt Operations                                63,860                           -               -                  -                  -
 Special Event Program Support                     100,000        47,375             -               -                  -                  -
       Sub-Total Admin and Other Services          573,900       127,726       1,026,803             -              691,262            243,547

                          TOTAL EXPENSES $ 573,900           $ 137,726     $ 6,326,356     $ 1,242,214         $ 8,689,096        $ 3,581,407

EXCESS / (DEFICIT)                             $       -     $ 305,632     $         -     $ 7,099,414         $          -       $    558,876

Note 1: Includes $552,924 reserved for prior year and $700,000 for 2006 Form 2604-related reimbursements.
Note 2: Includes $13, 520 accrual for pay period ending December 29, 2007 payroll expenses.                         ddastmts-dec07.xls jmw 01032008
                                                   STATEMENT C
                                  DOWNTOWN DEVELOPMENT AUTHORITY
                                  Statement of Current Project Expenditures
                                             December 31, 2007
                                                  Project                        EXPENDITURES                      Available
                  Project Title                  Budget             Month         Fiscal Year      All Years        Budget
Accessibility and Mobility Repairs             $    105,000       $       -       $       -    $           -     $    105,000
Ah-Nab-Awen Riverwalk Replacement                   330,000               -               -                -          330,000
Areaway Fill Program (ARIP)                         280,056               -            21,000          230,706         49,350
                                                              2
Arts & Entertainment Marketing                      175,000             6,104          48,645          109,645         65,355
                                                              3
Arts & Entertainment Marketing                      175,000             6,104          47,948           68,948        106,052
Ballet Building Public Improvements                 105,000                 33              33          75,413         29,587
Building Re-use Incentive Program (BRIP)          2,099,820               -               -         1,949,820         150,000
Campau / Pearl Streetscape Improvements           1,585,000               -           109,861          961,686        623,314
Cherry Street 2 - Commerce to Division              695,000            31,596          31,596          152,517        542,483
DASH # 7 Lot - Emergency Capital Repairs            150,000               -               -             85,593         64,407
Development Project Reimbursements                  665,855               -               -            450,281        215,574
                                                              1
Downtown Brochure Update                             15,000               -               -                -           15,000
Downtown Lighting & Signal Improvements              88,927               -               -             63,927         25,000
                                                              1
Downtown Residential Market Analysis                 25,000               -               -                -           25,000
Grand River Restoration Study                        75,000               -               -                -           75,000
Grandville Ave 2 - Cherry to Bartlett             1,772,148               384         525,159       1,245,440         526,708
Grandville Avenue 1 - Oakes to Cherry               235,000               -               -             14,924        220,076
Grandville Avenue 3 - W eston to Oakes            1,150,000               -               -                -        1,150,000
Infrastructure Reserve                            1,700,410               -               -            350,410      1,350,000
Ionia Avenue 6 - Lyon to Michigan                 1,670,000               -             7,400       1,301,624         368,376
Ionia Avenue 7 - Louis to Fountain                1,500,000               -               -             15,318      1,484,682
Louis Campau Promenade - Restore Phase 1            680,000               222           8,042           41,358        638,642
Louis Street 2 - Monroe to Ottawa                   336,000            19,850         163,997          265,346         70,654
Monroe Center - Phase 3                             300,000               -               -                -          300,000
                                                              1
Monroe Center Snowmelt Operations                    63,860               -               -                -           63,860
New DASH Parking Expansion Project                2,000,000         2,038,172       2,048,172       2,048,172         (48,172)
Oakes Street 1 - Grandville to Ottawa               390,000               -               -              6,800        383,200
Oakes Street 2 - Commerce to Division               312,000               -               -             11,512        300,488
Parks, Open Spaces and Cultural                     400,000               -            42,710          196,315        203,685
                                                              1
Project and Fixed Asset Maintenance                 104,000               -               -                -          104,000
Public Museum-Parking Ramp Capital Repairs          200,000               660          37,477          180,197         19,803
Public Museum-Riverwalk Capital Repairs             100,000               -            19,416          104,130         (4,130)
Public Transit Millage Improvements               1,307,593               -           200,000          920,131        387,462
River Edge - South of Fulton                        657,994               -               -              7,994        650,000
Rosa Parks Circle Modifications                      45,000               -               -                -           45,000
                                                              1
Rosa Parks Circle Skating Operations                 41,600               -               -                -           41,600
Senior Center Support                               320,000               -               -                -          320,000
                                                              1
Shuttle Bus Replacements                            250,000               -               -                -          250,000
Skywalk Wayfinding Sign Improvements                 50,000               -               -                -           50,000
Snowmelt System Repairs / Investigation              93,987               -               -             28,987         65,000
                                                              1
Special Event Annual Support                        100,000               -            47,375           47,375         52,625
Streetscape Improvement Incentive Program           218,222               -            35,000          113,222        105,000
Streetscape Improvements                          1,050,000               -               -              2,500      1,047,500
Support for District Development                    827,958               -               414           23,891        804,067
                                                              1
Ticketed Events - Police Services                    73,440               -            13,458           13,458         59,982
                                                              1
Wayfinding Sign Maintenance                         100,000               -            14,508           14,508         85,492
Winter Avenue Building Lease                             -                -               -                -              -
                                       TOTAL   $ 24,618,870       $ 2,103,125     $ 3,422,211  $   11,102,148    $ 13,516,722

Note 1: Current year (FY2008) budget only.
Note 2: Paid from local tax increment
Note 3: Paid from non-tax increment
                                                                   STATEMENT D
                                                 DOWNTOWN DEVELOPMENT AUTHORITY
                                                            Summary of Expenditures
                                                           December 1 through 31, 2007

Source                    Vendor                               Purpose / Project                                Description                     Amount
Local     Sohago, Inc.                         New DASH Parking Expansion Project             Purchase 435 Ionia SW                         $ 1,306,263.10
Local     West Michigan Leasing, Inc.          New DASH Parking Expansion Project             Purchase 109 113 115 & 131 Logal SW               731,908.85
Debt      Bank of New York - Mellon            City County Bldg Authority Series 1993 bonds   Annual principal payment                          195,000.00
Local     City of Grand Rapids                 Administration                                 Staff services - December, 2007                    39,957.43
Debt      Bank of New York - Mellon            City County Bldg Authority Series 1993 bonds   Semi-annual interest payment                       39,875.00
Local     Alley Properties                     Cherry Street 2 - Commerce to Division         Right-of-way lawsuit settlement                    31,596.00
Local     Wyoming Excavators, Inc.             Louis Street 2 - Monroe to Ottawa              Construction services thru 08/31/2007              19,849.70
Non-tax   Tall House at 45 Ionia, LLC          Parking Revenue from 45 Ionia parking lot      July, 2006 - Nov, 2007 net revenues                14,545.00
Local     City Treasurer - Budget Office       Administration                                 Support services allocation - Dec, 2007             5,122.85
Local     BDO Seidman LLP                      Administration                                 Annual year-end financial statement audit           4,500.00
Local     Downtown Alliance                    Arts & Entertainment Marketing                 DDA marketing funds - print media                   4,251.00
Non-tax   Downtown Alliance                    Arts & Entertainment Marketing                 DDA marketing funds - print media                   4,251.00
Local     Dickinson Wright                     Administration                                 Legal services - Sonnevelt/Wdhse prop 10/07         2,425.90
Local     Downtown Alliance                    Arts & Entertainment Marketing                 DDA marketing funds - CVB Michigan radio            1,852.50
Non-tax   Downtown Alliance                    Arts & Entertainment Marketing                 DDA marketing funds - CVB Michigan radio            1,852.50
Local     Dickinson Wright                     Administration                                 Legal services - Forms 2604 audit 10/07             1,489.50
Local     City Treasurer - Facilities Mnmt     Administration                                 Office space & maintenance - Nov, 2007              1,229.65
Local     City Treasurer - Info Technology     Administration                                 Computer access & support - Dec, 2007               1,072.95
Local     Dickinson Wright                     Administration                                 Legal services - plan/expansion 10/2007               976.45
Local     Dickinson Wright                     Administration                                 Legal services - various matters 10/2007              680.20
Non-tax   City Treasurer - Streets             Singer Sculpture                               Electrical use - Sept and Oct, 2007                   643.58
Local     Western American Mailers, Inc.       Administration                                 Public notice mailing for plan amendment              474.96
Local     International Downtown Association   Administration                                 Annual membership dues                                450.00
Local     Walker Parking Consultants           Public Museum-Parking Ramp Capital Repairs     Engineering services through 10/31/2007               441.60
Local     The Herald Co / Grand Rapids Press   Administration                                 Official proceedings published 11/17/07               432.00
Local     Geotech, Inc.                        Grandville Ave 2 - Cherry to Bartlett          Construction engineering 10/2007                      384.00
Local     The Herald Co / Grand Rapids Press   Administration                                 Expansion proposal published 11/13/2007               285.60
Local     The Herald Co / Grand Rapids Press   Administration                                 Expansion proposal published 11/14/2007               285.60
Local     City Treasurer - Parking Services    Administration                                 Parking - Exec Director/Secretary Dec, 2007           278.00
Local     O'Boyle Cowell Blalock & Assoc.      Louis Campau Promenade - Restore Phase 1       Engineering services through 11/25/07                 221.80
Local     Walker Parking Consultants           Public Museum-Parking Ramp Capital Repairs     Engineering services through 11/30/07                 218.42
Local     City Treasurer - Facilities Mnmt     Administration                                 Metered mail - November, 2007                         127.89
Local     City Treasurer - Info Technology     Administration                                 Telephone charges - November, 2007                    127.06
Local     Office Depot                         Administration                                 Copy paper and ink cartridges                          89.63
Local     Sir Speedy                           Administration                                 Business cards - Fowler, Pratt, Bessette               74.85
Local     City Treasurer - Parking Services    Administration                                 Parking validations November, 2007                     60.00
Local     Integrity Business Solutions, LLC    Administration                                 Office supplies                                        57.65
Local     Michigan Office Solutions            Administration                                 Copier maintenance - November 2007                     57.39
Local     City Treasurer - Parking Services    Administration                                 Minutes for Smart Auto Meter                           50.00
Local     Dickinson Wright                     Administration                                 Legal services - GRAM warming area 10/07               49.65
Local     City Treasurer - Parking Services    Administration                                 Parking - Planner December, 2007                       40.00
Local     Dickinson Wright                     Ballet Building Public Improvements            Legal services - vacation of Goodrich 10/07            33.10
Local     City Treasurer - Motor Equipment     Administration                                 City motor pool vehicle usage - Nov, 2007              10.00
                                                                                                       DECEMBER, 2007 EXPENDITURES          $ 2,413,592.36
Local - Local Tax Increment
Debt - Debt Tax Increment
Non-Tax - Non-Tax Increment
A complete copy of the Grand Rapids Downtown Development Authority’s Audited

Financial Statements for fiscal year ending June 30, 2007, may be obtained from the

DDA Office located on the ninth floor of City Hall, 300 Monroe N.W.
                                                                                   Agenda Item #7
                                                                                   January 9, 2008
                                                                                   DDA Meeting
DATE:         January 4, 2008

TO:           Downtown Development Authority

FROM:         Jana M. Wallace, Treasurer
              Downtown Development Authority

SUBJECT:      Status of Potential Partial Refunding of Series 1994 Arena Bonds

At the DDA’s December 12, 2007 meeting, City of Grand Rapids Chief Financial Officer Scott
Buhrer discussed his concerns regarding the scheduled issuance of the Arena refunding
bonds the following week. At the time, market conditions were unsettled due to the recent
impacts and disclosures of record numbers of sub-prime mortgage foreclosures as well as
concerns that certain bond insurance firms, including Ambac, the State’s insurer for the Arena
bond refunding deal, might be unreasonably exposed to claims resulting from those
foreclosures. Shortly before the December DDA meeting, Moody’s rating agency had
announced its upcoming review of bond insurance firms and was expected to issue the results
of this review just prior to or after the scheduled selling of the Michigan Municipal Bond
Authority (MMBA) bonds for several local units including the Grand Rapids DDA.

Further, DDA and City required commitments from the State of Michigan, in particular, the
letter providing assurance of the “protected obligation” status of the refunding Arena bonds,
was not in hand. Repeated requests to the State and other members of the MMBA
underwriting team for the letter and certificates were not addressed to staff’s satisfaction.
Certain technical requirements were also not fully addressed. (For example, structuring the
“new money” portion of the DDA refunding bonds around the gross net amount financed for the
“refunding” portion of the refunding bonds.)

In the end, Scott Buhrer decided that it would be in the best interest of the DDA and the City to
defer the issuance of the DDA refunding bonds until market conditions are more settled and
concerns regarding protected status and debt structure were fully addressed. The withdrawal
of the DDA from the issue did not prevent the issue from proceeding - the MMBA issued
bonds, as scheduled, on behalf of the other local units.

On January 3, 2008, the DDA financing team discussed with the State’s underwriters current
options and steps for issuing the Arena refunding bonds. At this point, no decisions have been
made but it is expected that the refunding will take place within the next two months.

Please call me at 456-4514 if you have any questions.

cc:     Scott Buhrer, Chief Financial Officer
        Jay Fowler, Executive Director                        ddaarenabnddelay.doc jmw
                                                                           Agenda Item 8.
                                                                           January 9, 2008
                                                                           DDA Meeting
DATE:        January 4, 2008

TO:          Downtown Development Authority

FROM:        Kayem Dunn
             DDA Chair

SUBJECT:     Appointments


Article VI of the DDA Rules of Procedure provides that at the annual meeting committees will
be evaluated, reappointed or dissolved. It is my recommendation that a Priority Committee,
consisting of four members, again be established for calendar year 2008.

Article VI also provides for the Chair to appoint members to serve on committees of the Board.
Please be advised that I have reappointed Mayor Heartwell, David Cassard, John Canepa,
and Kayem Dunn to serve as members of the Priority Committee for 2008.

Article V also provides for the Chair to select members to serve on any advisory board, with
the advice and consent of the Board. It is my request that Catherine Mueller, Gretchen
Minnhaar, Wayne Norlin and Tom Dowling be reapproved as the DDA’s Priority Programs
Advisory Board.

KD:JF:je
                                                                                Agenda Item 10.
                                                                                January 9, 2008
                                                                                DDA Meeting
DATE:           January 4, 2008

TO:             Downtown Development Authority

FROM:          Jay Fowler
               DDA Executive Director

SUBJECT:        Ionia DASH Property Acquisition


As authorized by the board on October 10, 2007, the DDA has acquired four properties on the
west side of Ionia Avenue, SW, between Logan and Wealthy Streets. The closing occurred on
December 29, 2007. As a follow-up to this transaction, the board should be aware of the
following issues or requests:

      1. Property contamination. As a part of our due diligence, several types of
         environmental contamination were discovered at the site. A low level of contaminated
         is to be expected at an urban site, especially one that was actively used for industrial
         and rail road purposes, as this one was. However, some environmental aspects of this
         site were not acceptable to the DDA. Of particular concern are contamination levels
         related to leaking diesel and gasoline storage tanks that had been previously removed
         from the site. As a result, we have entered into an escrow agreement with one of the
         sellers. The seller is responsible for conducting further investigations and for
         remediating the site by April 30, 2008.
      2. Property tenants. The property at 109 Logan has three tenants that would like to
         remain in the building on a month-to-month basis, until such time as they find a new
         business location or the DDA notifies them to vacate. In addition to the revenue to be
         generated, it is better to have the building occupied and maintained as long as
         possible. Staff requests authorization to negotiate and enter into leases with three
         existing tenants, subject to the approval of legal counsel.
      3. Operating expenses. Along with property ownership comes expenses related to the
         ownership of these properties and buildings, including utilities, alarm operations, facility
         maintenance & repairs, and insurance. Staff request authorization to incur necessary
         expenses relating to the ownership and operations of these properties.
                                                                                 Agenda Item #11
                                                                                 January 9, 2008
                                                                                 DDA Meeting
DATE:         January 4, 2008

TO:           Downtown Development Authority

FROM:         Jay Fowler
              Executive Director

SUBJECT:      Economic Development Pilot Project

On September 12 the Downtown Development Authority authorized a special economic
development project to evaluate the conditions of the downtown retail environment.
Anne Marie Bessette has coordinated this effort on behalf of the DDA, and the Downtown
Alliance has also actively participated.

Since October 17, forty-six retention calls have been made. Individual reports are being
written for each visit, as well as an overall report that will identify common issues needing
attention and barriers to retail success. In November, staff facilitated a meeting of real estate
brokers to discuss the retail environment from their perspective.

Anne Marie will give a brief summary of these efforts at the January 9 meeting.
                                                                           Agenda Item 12.
                                                                           January 9, 2008
                                                                           DDA Meeting
DATE:        December 7, 2007

TO:          Downtown Development Authority

FROM:        Jay Fowler
             DDA Executive Director

SUBJECT:     The Gallery on Fulton


At its December 12, 2007 meeting, the DDA received an update regarding the status of The
Gallery on Fulton, a proposed $39 million mixed use development project on the former site of
the City Center Parking Ramp located on the southwest corner of Division and Fulton. A more
detailed summary of the project is attached. The developer’s current option to purchase the
property from the City is scheduled to expire on January 31, 2008.

The development team is requesting assistance from the DDA in two aspects of the project:

   1. Through a development reimbursement agreement, consistent with the DDA’s
      Development Support Policy, reimbursement of eligible expenses not to exceed
      $724,000. Reimbursement occurs from a portion of the tax increment that would be
      generated by this project.

   2. To assist in short term cash flow viability for the project, it is requested that the DDA
      purchase a portion of the land on behalf of the project. Upon completion of the project,
      the developers will make an interest-only payment on the value of the land for the first
      five years, and then begin principal payments on the outstanding balance until paid in
      full. The calculated value of the land is $854,400. The DDA’s interest in the project
      would be secured by the proposed TIF payments outlined above and by a due-on-sale
      provision in the development agreement.

If the DDA is in agreement with this course of action, an extension to the current option would
be recommended to the City Commission on January 29. Also, staff would continue
discussions with the developer and present a detailed term sheet or agreement for approval of
the DDA board on February 13.
  CITY CENTER RAMP SITE

  January 2008




Prepared by: Two West Fulton, LLC
CITY CENTER RAMP SITE
JANUARY 2008


EXECUTIVE SUMMARY


       Two West Fulton, LLC, a partnership between RSC & Associates and Second Story
Properties, is developing The Gallery on Fulton, a mixed-use development in Grand Rapids,
Michigan.

        The development of The Gallery will
contribute to the current renaissance of
downtown Grand Rapids and is located at the
convergence of Grand Rapids’ art,
entertainment, cultural and historic districts.
The Project will act as a connector between
the business district, the Heartside Historic
District, arts district, and entertainment. The
Project will provide Grand Rapids residents as
well as office and medical employees,
convention visitors, tourists, and college
students with all that city living has to offer
including restaurant / retail shops and the
Urban Institute for Contemporary Art which
offers a wide array of cultural and
entertainment programs.

        The Gallery will contain 66 for-rent luxury residential units, approximately 2,800 square
feet of retail/restaurant space, a 35,000 square foot gallery / theater / entertainment space
purchased by the Urban Institute of Contemporary Art, and a parking garage with approximately
262 spaces. Two West Fulton, LLC intends to draw people to the proposed commercial spaces
by taking advantage of both of the site’s corner exposures and excellent location. The northwest
corner will feature the galleries of the cultural entertainment-based UICA program that, in
addition to the Van Andel Arena and other neighboring entertainment venues, will direct
pedestrian traffic through the site. The northeast corner will be reserved for the entrance to the
culturally based UICA. Two West Fulton, LLC plans to link the corners with a two-tier
pedestrian walkway and exhibition gallery designed to facilitate pedestrian access to the main
galleries and theaters. This corner will mirror the layout of the neighboring buildings and
compliment the open space of the plaza adjacent to the Children’s Museum. To the west and
across the street are two successful restaurants and entertainment venues which have helped
create an entertainment / restaurant presence complimenting the B.O.B. entertainment and
restaurant area three blocks away.

       The Project has received preliminary design approval from the Historical Preservation
Commission and conceptual design approval from the City of Grand Rapids. We anticipate to
close on the property at the end of January 2008 and construction to begin in the Spring/Early
Summary of 2008 and last for approximately 18 months.
CITY CENTER RAMP SITE
JANUARY 2008


FINANCIAL SUMMARY


       The original proposal included for-sale housing, a market which is at an historical low
and is now affecting other aspects of the economy. The volatile state of the lending market is
another factor that is serving to further degrade the for-sale housing market. Equity and
construction lenders alike remain cautious and selective on financing projects.

        Two West Fulton, LLC has worked closely with City staff to find creative avenues in
which to develop a project that is both worthy of the ideal location and meets the requirements of
both the City and Developer for a financially feasible mixed-use project. Due to the state of the
for-sale housing market, the rental market is strengthening and Two West Fulton, LLC has
converted the for-sale condominium units to for-rent luxury apartments which will maintain the
24/7 environment, meeting the requirements of the RFP, while providing a Project that is
economically feasible.

        The Development Team is researching and utilizing creative design and construction
materials and methods to reduce the cost of construction to a point that renders this component
financially feasible. The Project cost is currently estimated at approximately $31.9 million and is
summarized below.

Project Costs
                            Apartments       Specialty Retail       UICA               Parking               Total
Land Acquisition
                        $                -      $      25,000   $     105,000      $                 -   $     130,000
                                         -               9.01               3.15                     -
Hard Costs:
                        $      10,954,980       $    506,493    $    6,249,761     $      7,170,059      $ 24,881,294
                                   145.60              182.52          187.56                    70.90   $      117.11

Soft Costs:                                                                                                  Per Space
                                                                                             27,367
                        $       3,514,636       $    209,922    $     687,331      $      2,518,932      $ 6,930,822
                                    46.71               75.65              20.63                 24.91   $       32.62
                                                                                           9,614.25          Per Space
TOTAL PROJECT COSTS     $      14,469,617       $    741,415    $    7,042,093     $      9,688,991      $ 31,942,116
                                   192.31              267.18          211.34                    95.80   $      150.34
                                                                                             36,981          Per Space
Brownfield Allocation                                                                                    $ (2,487,009)
                              (1,837,009)                            (400,000)             (250,000)
Total With Brownfield
Allocation                     12,632,608            741,415         6,642,093            9,438,991      $ 29,455,107
                                                                                             36,027          Per Space
CITY CENTER RAMP SITE
JANUARY 2008


FINANCIAL SUMMARY


        Even with these efforts, the feasibility of the Project is dependent on several tax credit
incentives including New Market Tax Credits, Brownfield Tax Credits, DDA TIF assistance, and
a DDA Land Note, which are summarized below.



              Financial Assistance Requested

              NMTC Assumptions - Residential/Retail Building

              Eligible Commercial SF                      36,096
              Eligible Apartment SF                       61,697
              Eligible Cost                          $10,000,000
              Credit Factor                              39.00%
              Monetization Factor                        70.00%
              Gross Monetized Value                   $2,730,000
              Monetization Date                      March 2008
              Costs                                     $900,000
              Net Monetized Value                                       $1,830,000

              Brownfield SBT Credit Assumptions

              Eligible Expenses                      $31,087,616
              Credit Factor                              10.00%
              Monetization Factor                        80.00%
              Net Monetized Value                                       $2,487,009

              DDA TIFF

              Maximum Support                           $724,500
              (See calculations on following page)
                                                                          $724,500
              DDA Land Loan

              Principal                                   $854,400
              Total Interest - 4.5%                       $406,647
              Term - 17 Years (2 yrs dev./15 yrs operating)
              Total Payment                                             $1,261,047
CITY CENTER RAMP SITE
JANUARY 2008


FINANCIAL SUMMARY




                        TIF Eligible Cost Analysis



                                                            Public
                        Line Item                        Improvements

                        Abatement
                        Demolition                      $           -
                        Sitework/Grading                $           -
                        Parking                         $           -
                        Streetscape                     $        86,250
                        Streets                         $        86,250
                        Site Utilities                  $        57,500
                        ADA Requirements                $       494,500
                        Subtotal Hard Costs             $       724,500
                        Contingency                  4% $           -
                        General Conditions           4% Incl. Above
                        Construction Management      5% Incl. Above
                        Total Hard Costs                $       724,500



                        TOTAL TIF ELIGIBLE COSTS         $     724,500




       For granting the DDA Land Note of $854,400, the DDA will receive the Annual DDA
TIF Reimbursement Payment as collateral for the Annual Land Note Payments as described in
Exhibit G of the Amended and Restated Development Agreement between the City of Grand
Rapids and Two West Fulton, LLC. In the event the Annual Land Note Payment is not made,
the DDA will be authorized to deduct the Annual Land Note Payment from the Annual DDA TIF
Reimbursement Payment with the balance of the Annual DDA TIF Reimbursement Payment
being released within 10 business days to Two West Fulton, LLC.
CITY CENTER RAMP SITE
JANUARY 2008


FINANCIAL SUMMARY


        In addition to the initial investment of $31.9 million, the project will provide
approximately 250 construction jobs over a two-year period and approximately 32 permanent
jobs related to restaurant/retail stores, janitors, engineers, residential administrative positions,
etc.). Also, approximately 100 full time residents will live at the project. The following is a list
of benefits the Project will generate for the City.


CITY BENEFITS

                                            Annual       10 Year Total              Assumptions
Annual real estate tax increment is           120,000             1,200,000
projected to generate on average
approximately

100 full time residents with an average       728,220             7,282,198   Assumes a 2.5% annual
income of $60,000 are projected to                                            escalation over a 10 year
spend approximately 10% or more of                                            period.
their earnings annually in and around the
neighboring retail/restaurants/cultural
establishments or approximately

32 permanent jobs will generate                43,021               430,210   Assumes a 2.5% annual
approximately $100/month/employee of                                          escalation over a 10 year
expenditures in and around the                                                period.
neighboring retail/restaurants/cultural
establishments or approximately


TOTAL CITY BENEFIT                            891,241             8,912,408



        The relocation of the UICA to the Gallery will anchor and nurture the emerging Avenue
for the Arts. A highly visible, world class contemporary arts facility will perfectly compliment
the new Grand Rapids Art Museum and the Meijer Gardens and Sculpture Park, creating a
powerful cultural magnet for tourism and conventions as well as educational opportunities. The
UICA has one of the highest levels of repeat attendance of all cultural attractions in West
Michigan and achieved 10-20% growth in both membership and visitation in 2003, 2004 and
2005, and is expected to grow significantly in their new location. UICA’s membership is nearly
the same size as the Grand Rapids Art Museum.

       UICA also has a unique ability to attract young, urban, innovation-oriented professionals
to Grand Rapids. The new Gallery on Fulton will create unprecedented economic and
programmatic synergies between UICA, ArtWorks (youth programs), Actors Theatre and
CITY CENTER RAMP SITE
JANUARY 2008


FINANCIAL SUMMARY


neighboring residential / retail / restaurants. The following is a projection of the City benefits
from this new world class arts facility.


                UICA CITY BENEFITS

                                                                10 Year Total
                  The annual impact of the three nonprofit          1,300,000
                  organizations when located at
                  the Gallery on Fulton (regional
                  expenditures related to operating)



                  The annual impact of visitors to these            1,298,500
                  nonprofit attractions (expenditures for
                  meals before/after events, gifts, clothing,
                  transportation, child care, lodging, etc.)



                  Local and state government revenue                  343,800
                  related to above items



                  TOTAL ANNUAL BENEFIT                              2,942,300
CITY CENTER RAMP SITE
JANUARY 2008


PROJECT SUMMARY




       The Development Agreement was fully
executed between the City of Grand Rapids and
Two West Fulton, LLC on November 22, 2005.
The First Addendum to the Development
Agreement incorporating a six (6) month
extension of the Closing to July 31, 2007 was
unanimously approved by the Committee of the
Whole on January 24, 2007 and the Second
Addendum to the Development Agreement
incorporating an additional six (6) month
extension of the Closing to January 31, 2008
was unanimously approved by the Committee of
the Whole on July 25, 2007.

        The Project site is located in Grand
Rapids, Michigan on a 37,189 square foot site
bounded by Fulton Street on the north, Division
Street on the east, Commerce Avenue on the
west, and a private lot with existing
improvements on the south. The Project will
include an 8 story mid-rise residential structure
atop a retail podium. The tower will include 66
rental units. The retail component includes a
35,000 square foot space for the UICA as well
as approximately 2,800 square feet that is
designated for retail/restaurant space.      The
parking program includes a 262 space parking
garage.

                                      The Gallery will be designed to be as
                               environmentally friendly as possible – the first green
                               residential project in Michigan. The construction of the
                               building will utilize recyclable materials including steel,
                               glass and aluminum and will be LEED certified. We are
                               also designing a green roof system with climate tolerant
                               plantings that will reduce the amount and rate of storm
                               water runoff and water consumption.
CITY CENTER RAMP SITE
JANUARY 2008


PROJECT SUMMARY


       The design team, led by Built Form Architects, has worked closely with the City
and the UICA to ensure the incorporation of specific requirements for both the cultural
space and the parking garage in the drawings. Two West Fulton, LLC appeared before
the Design Team in May 2007 to review the progress of the Project design with the City
on an informal basis. Comments regarding stormwater detention and traffic safety were
received from the City and incorporated into the design.




                                                                                GALLERY
       The development team presented the Project design and suggested
materials to the Historic Preservation Commission, the Heartside Business
Association and the Dwelling Place (member of the Heartside Business
Association) in May 2007. The Project received enthusiastic support from
the community organizations.


                                                                             On Fulton

				
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