May 24, 2010


The regular meeting of the City of Mishawaka Redevelopment Commission was called to order at 6:30 p.m., Monday, May 24, 2010, in Room 106, City Hall, 600 East Third Street, Mishawaka, Indiana.  Commissioners Eberhart, O’Dell, Troiola, Mammolenti, Gebo, and Stillson were present.  Also in attendance:  Lory Timmer, Community Development Director; Kari Myers, Administrative Planner; John Gourley, Legal Counsel; and Gary West, Director of Engineering.


Commissioner O’Dell moved to approve the minutes of the April 26, 2010 meeting.  Commissioner Mammolenti seconded; motion carried.



City Engineer Gary West updated the Commission on the following projects:

·       Main Street - Mishawaka Ave to Battell

·       Demolitions at Main & McKinley

·       Church / Union Improvements

·       Central Park (River Crossing 2)

·       Milburn Blvd Closing



Lory Timmer presented Resolution 2010-11 to the Commission and said the City has reached an agreement with the owner of Pleasureland Museum.  Redevelopment Attorney John Gourley was part of the negotiation team, and he provided the Commission with details of the settlement.  Commissioner Gebo moved for approval of Resolution 2010-11.  Commissioner Troiola seconded; motion carried.



Mrs. Timmer presented Resolution 2010-12.  She said this property is important to the City’s NSP strategy.  However, because it isn’t vacant or foreclosed upon, we can’t acquire it with NSP funds.  The Department will instead acquire it with CDBG funds under the activity “Spot Blight Removal with Intent to Rebuild”.  The average of two independent appraisals placed the value at $107,000.00, and an offer was made for that amount, and accepted by the owners. 


Mrs. Timmer said the building has two residential apartments and one commercial unit.  The commercial space has been vacant for 10 years, but both apartments are occupied.   We have engaged the services of a relocation specialist to assist with finding new residences for the tenants.  The owners have items stored in the building which will also have to be moved, so we will be responsible for those moving and relocation costs, as well.  The building will be demolished, and 548-550-552 W. Sixth Street will be replatted into two similarly sized lots.  Two Habitat homes will be built on the sites.  Commissioner O’Dell moved to approve Resolution 2010-12.  Commissioner Gebo seconded; motion carried.



Mrs. Timmer presented a Buy-Sell Agreement for 646 Lincolnway East which is a vacant, foreclosed-upon seven-unit apartment building.  TCU had the property appraised within the last six months and the value was determined to be $55,000.00.  The City offered $50,000.00 and TCU accepted the price.  The City will have two independent appraisers asses the property and if they feel it is worth less than $50,000.00, our offer is null and void.  Commissioner Mammolenti moved to approve the Buy-Sell Agreement for 646 Lincolnway East.  Commissioner O’Dell seconded; motion carried.



CDBG Subrecipients

At the September 2009 meeting, Mrs. Timmer said approval was given to fund the following public service agencies for Program Year 2010:

·       Family & Children’s Center                                         $  9,500

·       Stone Soup Community                                               $  4,500

·       Boys & Girls Club Before & After School Program   $20,000

·       YMCA BASE Program                                               $10,000

·       REAL Services Older Adult Crime Victim Program  $  5,000

·       REAL Services Adult Guardianship Program             $  5,000

·       Home Management Resources                                     $  4,500


Neighborhood Stabilization Program (NSP) Grant

River Center Apartments:  The contract for removal of all asbestos from 402 Lincolnway West was awarded to Specialty Systems, Inc. of South Bend for the amount of $41,930.00.  After asbestos has been removed, the utilities will be shut off in the building until winter.


Mrs. Timmer updated the Commission, stating that of the twenty properties we proposed acquiring for the neighborhood revitalization portion of the NSP grant; three have been acquired so far:

·       530 W. Sixth Street / 531 W. Fifth Street (future Habitat site)

·       548 W. Sixth Street (future Habitat site)

·       550-552 W. Sixth Street (future Habitat site)


Demolition is scheduled to begin the week of May 24 on 530 W. Sixth Street.  Habitat will begin its build on that site in July 2010.  Quotes for the demolition of 548-550-552 W. Sixth Street will be received by the Board of Public Works and Safety on June 8, 2010.


Sellers have signed purchase agreements for five other properties (the Commission approved the acquisition resolutions at the April 2010 meeting:

·       407 W. Sixth Street (future FTHB site)

·       519 W. Sixth Street (future FTHB site)

·       501 W. Sixth Street (future FHTB site)

·       327 Milburn Court (future Habitat site)

·       513 S. Taylor Street (future Habitat site)


Closings haven’t been scheduled yet, but it’s expected that we will acquire these properties by Friday, May 28, 2010.  Six (6) more properties have been submitted to Indiana Housing and Community Development Authority for acquisition approval, and we hope to have that authorization by the end of this week, also.  Acquisition resolutions will be presented at the June 28 meeting.


Mrs. Timmer indicated she is working very hard with our real estate consultant, Neighborhood Development Associates, to secure signed purchase agreements for six (6) more properties.  The original grant proposal stated that we would acquire 20 properties.  Of those 20, we stated that eight would be rehabbed, eight would be demolished for First Time Home Buyer lots, and four would be demolished for Habitat for Humanity homes.  By far, most of the homes that we have identified for acquisition are best suited for demolition.  Only two are candidates for rehab.  Therefore, a proposal modification request has been submitted to IHCDA to reduce the number of rehabs to four, and increase the number of Habitat homes to eight.  We would still do eight First Time Homebuyer houses.




Mrs. Timmer explained that the NSP grant guidelines dictate that grant recipients must have all contracts that will be paid with NSP funds signed by September 21.  Since we have fully executed buy-sell agreements for five of the NSP properties that we will donate to Habitat, she presented Memorandums of Understanding with Habitat for those lots.  These MoUs are identical to what has been approved in the past; the only difference is the amount of the Development Subsidy.  In the past, we’ve subsidized each Mishawaka Habitat build with $15,000 of HOME funds.  The subsidy allowed them to provide extra or upgraded amenities to the homes’ exteriors, making them blend into the surrounding neighborhoods.  We limited it to $15,000 because that was typically all we could spare from our HOME grant after constructing First Time Homebuyer houses.  However, we have $2,000,000 in NSP funds to spend.  We also have to spend $500,000 of that $2 million on very low income families.  Habitat participants fall into that category.  Therefore, to make sure we meet the requirement, we are providing Habitat with a $50,000 development subsidy for each two-story house they build, and $40,000 for each one-story.  To construct a two-story home they must hire professional contractors to frame the second-story and roof the house.  The houses will have details such as poured concrete porches, garages with carriage lights, washers and dryers and hydro seeded lawns.


Mrs. Timmer said we are also providing a $30,000.00 subsidy from our HOME funds for a Habitat build at 126 W. Tenth Street.  This site is not in our NSP area, so we don’t have the funds to provide quite as much towards development.  Our HOME funding this year is more than enough to build three First Time Homebuyer houses, but not enough to build four, so we will provide Habitat with a larger than usual subsidy using those funds.  Habitat will still provide amenities that will allow the house to match the styles of other homes in the neighborhood.  The MoUs we’re presenting for approval tonight are for the following addresses / subsidy levels:


·       126 W. 10th Street                    $30,000 (HOME funds)

·       530 W. Sixth Street                  $55,000 (includes $5,000 for design)

·       548 W. Sixth Street                  $50,000

·       550 W. Sixth Street                  $50,000

·       513 S. Taylor Street                 $50,000

·       327 Milburn Court                   $40,000


Commissioner Gebo moved to approve the MoUs with Habitat as presented.  Commissioner Troiola seconded; motion carried.



The program is off to a slow this start this year due to the steps that must be followed to acquire property through the NSP program.  However, we do know which lots we will build on for the 2010 program year:


·       407 W. Sixth Street

·       501 W. Sixth Street

·       519 W. Sixth Street


These are lots that we hope to close on yet this week.  We will then perform asbestos testing and removal, and demolish the structures by mid-August.  Sites will be rough-graded, and the builders should be able to start digging foundations in September.


There are 12 families on our First Time Homebuyer waiting list.  Program Coordinator, Andrew West, will begin the process of third-party income verification within the next few weeks.



Client #814 is 51 years old and heads a household of four.  This is his fifth Rollover Deferred Payment review.  His annual salary of $27,360.00 places him at 43% AMI.  His Housing to Income Ratio, if he was required to repay his Redevelopment Department loan, would be 22%. 


Because their Housing to Income Ratio is below 30%, the client meets the criteria for loan payback.  Therefore, the recommendation is that he begins repayment of his Redevelopment Department loan, with terms of $168.89 per month at 1.5% interest for 240 months (20 years).  Commissioner Mammolenti moved that Client #814 begin repayment of his Redevelopment Department loan in the amount of $168.89 per month.  Commissioner Gebo seconded; motion carried.



Client #1096 would like to set up a home equity line of credit with INOVA Federal Credit Union for $12,600.00 to purchase a foreclosed house in a short sale. This would allow her to move her disabled sister from Georgia to Mishawaka. In order for INOVA Federal Credit Union to approve the new mortgage, the Redevelopment Commission would have to subordinate our loan that is currently in 2nd position, moving us down to 3rd position.


The present mortgage balance is $36,595.82 with monthly payments of $541.00 (taxes and insurance are currently escrowed). She has 94 payments remaining. The new 2nd mortgage will be a 15-year (180 payments) fixed rate loan at 4.0% interest, with payments of $126.00 a month. She currently pays 110.52 monthly towards her Redevelopment loan.  If the line of credit was approved, her monthly obligation would be $778.  The client wouldn’t have had to request subordination if her home had appraised higher.  In 2008 the client refinanced her home, and at that time it appraised for $80,000.  The most recent appraisal, which was a drive-by appraisal, stated a value of $62,000.  Commissioner Troiola moved to deny the subordination request based on the most recent property appraisal.  Commissioner Gebo seconded; motion carried.



Mary Phillips School Apartments:  In March 2009, Colleen Olund, Executive Director of the Mishawaka Housing Authority (MHA), requested that the Commission release the security on the Mary Phillips School Apartments.  This action would allow the MHA to use the building as collateral to obtain private funding for improvements at the River View 500 building.  Mary Phillips School Apartments currently has a CDBG redevelopment loan secured by the building.  The original loan amount was $425,000, but it has been paid down to $310,981.  The resolution to release the lien was approved unanimously by the Commission in March 2009.




Client #1016 passed away in 2009 and 1st Source Bank is foreclosing on the property.  They currently have a first mortgage of $39,000, and have requested that the Redevelopment Commission write-off its loan balance of $15,460.  The estate has approximately $80,000 in debt, and 1st Source’s reasoning is that if we release our lien, the other creditors will be paid.  The home is currently listed for sale at $50,000. 


Per Mr. Gourley, we have a good chance of recouping at least part of the balance of our loan when the house sells.  Therefore, the recommendation is to keep the loan in place.  Commissioner Gebo moved to deny the request to write off the balance of the loan.  Commissioner Troiola seconded; motion carried.



The next regular meeting of the Redevelopment Commission will be June 28, 2010 at 6:30 p.m. in room 205.


The meeting was adjourned at 8:25 p.m.


(Signature on file)                                                        (Signature on file)                               

Kari Myers, Administrative Planner                           M. Gilbert Eberhart, President


(Signature on file)       

Lory L. Timmer, Community Development Director


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