WEBVTT

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- All right, so this is the Economic Development Commission meeting. And it is, I think it's Tuesday,

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- May 19th. And it's, because of me, 4.04 PM. Everybody else was here on time. Or you control time.

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- That's true. You control time and space. All right, so let's first do the roll call. So call your roll.

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- I'm Ms. Vidal, county council representative. Vanessa McClary. Tim Hankey. And I'm Kurt Soren.

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- Dee De La Rosa. Jane Coversman. Staff. And we have a bunch of people in the room here. So let's start

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- with Tyler. For the record, Tyler Kalachnik. I'm an attorney with Ice Miller LLP in Indianapolis. I

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- practice municipal finance exclusively.

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- Nathan, executive director for the Bloomington Housing Authority. Brian Still, director of real estate

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- development for the Bloomington Housing Authority. And then we got Jeff and John back there. Jeff McKim,

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- city controller. John Fernandez, amplify Bloomington. All right. So we have approval of minutes next

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- on the agenda. And these are minutes from our, was it real Monday? We met on Monday?

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- March 17th? No, that is me writing these on a Monday. OK. I was going to say, we don't usually meet

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- on Monday. So if we could just make that small change, make sure we have the right thing. Vanessa caught

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- another change that I didn't get communicated to Dee. And it said she was attended partially. Partially

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- in attendance online.

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- So I'd like to correct my mistake. Oh, because you were here. Yeah, you were here, but it was a. She

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- was virtual. She's now here. Yeah, you were virtual, but I think you showed up a little bit late, and

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- I did not. Listen, guys, I'm having a rough time. But the truth of the matter is she does such good

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- work that even when she's here part-time, she's doing full-time work. Well, they would have to say Kirk

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- was here partially today. That's exactly right. So let's not get into that, probably. That's right.

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- Any other, thank you. Any other changes with regard to the minutes? We have a motion to approve that.

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- All in favor say aye. Anybody opposed? So we have moved through number two on our agenda. We're really

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- hopping along. New business.

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- A bunch of bullet points. This is exciting. So we have a first on the new business of BHA bond finance

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- project. So I'm going to turn it over to Jane to introduce. Sure. So we have Tyler Klatchnik, Nate Ferreira,

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- and Ryan Still here from BHA and representing BHA. They're refinancing and repackaging some bonds, and

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- they have an obligation to do

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- meet some public reporting requirements. So they're going to offer a presentation to us today. Was that

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- factual? Not refinancing yet. OK. Yes. Yeah. So it wasn't factual. Thank you for having us. OK. Tyler,

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- do you have any more comments? For what? You can have those. Oh, copies, yes. Oh, no. There's an extra

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- one right here at the end. So if anybody needs it. Thanks. OK. I have two. There. We're done. I have two.

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- So we do appreciate the forum and ability to appear before the Economic Development Commission. I have

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- been before you in the past on what we would term as a conduit financing, where the developer is seeking

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- volume cap and 4% tax credits. So this is going to vary a little bit.

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- And in those instances as well, we were under 36.712 Indiana code, which does require the Economic

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- Development Commission as one means to advance to the city common council. So today is more a introductory

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- meeting for purposes of

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- letting the city know what the project is and where we are in the process. In order to ultimately issue

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- bonds, not only will Bloomington Housing Authority have to approve it through their board, but these

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- common council as well will need to adopt a resolution. So again, today is completely preliminary more

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- to vet the project and kind of let the council know

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- the commission know where we stand. Tyler, can I ask a general question? Just so I kind of

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- have an understanding what you're doing here. What, or maybe it's to you, what is the Bloomington Housing

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- Authority's current relationship with this property? Do they own it? No, no, no. Right now, we are solely

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- pursuing getting rated to sell bonds. We are working with a broker.

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- in relation to this property who is doing due diligence on these five properties from Hometown Group.

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- So you have an interest in acquiring the property? Yeah. OK, thank you. Yeah. So importantly, with the

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- past state legislative session, there was a change to Indiana Code 36-718 in

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- the ability of local housing authorities, the method in which they sell bonds. Previously, they were

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- one of the only entities left in the state that could not sell bonds at what's deemed a negotiated sale.

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- In other words, they would have had, in order to sell bonds, these local housing authorities would have

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- had to publish notice, take bids, and kind of whatever

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- Purchasers said the rate was they had to take it a negotiated sale allows the issuer of bonds to work

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- with an underwriter throughout the process in order to You know, hopefully the underwriter knows more

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- about the market than the issuer about the capital markets and so it allows them to develop a structure

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- that is more likely to be accepted in the market because

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- on a competitive sale basis, if it's not a kind of run of the mill water sewer deal, a lot

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- of the underwriters or bond purchasers don't understand the credit. And so housing particularly is a,

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- I don't want to say a story credit, but more of a needs more explanation for an investor. Those types

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- of investors are used to getting

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- a disclosure document that shows things like market study, describes the properties, describes

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- the improvements. You really can't do that through a competitive sale where you're publishing notice

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- in a newspaper and hoping that someone sees it and picks it up. So all that to say, at the outset here,

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- the contemplated team for this working group

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- bring these bonds eventually to market for ultimately purchasing the properties and improving these

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- properties. The entities that do have a fiduciary duty to Bloomington Housing Authority are Ice Miller,

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- which would be myself. And there's several other attorneys, of course, working on it from Ice Miller.

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- CFX is the financial advisor for the Indiana Housing Committee Development Authority.

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- And they have a national presence in multifamily housing and single-family mortgage-backed revenue bonds.

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- So I would say they are very quantitatively inclined. They understand the market, understand what's

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- achievable with ratings. So they are a well-respected financial advisor.

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- Colliers is probably everyone has heard that name from a real estate perspective. They do have a capital

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- markets team that is in this project as an underwriter, wanting to take these bonds to market. So the

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- job of the underwriter is to basically go call on investors. Once they have the securities ability to

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- do so, there's certain steps that

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- They can't obviously use insider information and things like that and tell people about a deal before

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- it's public. But they are ultimately the ones that are going to be responsible for selling the bonds

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- and trying to get the best interest rate for Bloomington Housing Authority. So the mechanics of the

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- deal is Collier's has proposed not just a pledge of the project revenue, so rents and fees that

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- are paid by the tenants to repay the debt that will be represented by the bonds. But surplus funds of

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- the housing authority, which is a concept through HUD, and I'm sure Nathan and Ryan know it better than

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- I do, but essentially after all your HUD obligations are paid, there's a bucket of money called surplus

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- funds. And so the idea from Collier's

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- And obviously, CFX will want them to confirm all this as we go through the rating agency process. But

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- the idea would be that those surplus funds become available, if needed, to pay the project if rents

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- and fees are not sufficient to make debt service payments. So as we mentioned, Standard & Poor's is being

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- We're knocking on their door at this point to ask for a rating. These types of bonds are the nomenclature.

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- They're not conduit bonds again. They're termed essential function bonds because instead of, and Kurt

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- is familiar with this, I think from Indiana Finance Authority, volume cap is a special category of private

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- activity bonds.

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- These are not private activity bonds because the properties will be owned by a governmental entity.

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- So they don't have to worry about things like the kind of tests that private activity bonds have to

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- worry about. They don't have to go to the Indiana Finance Authority to get permission to issue on a

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- tax-exempt basis because they are providing an essential function the same way the city could issue

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- on its own.

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- they are able to do so themselves. And in an abundance of caution, because you've got to get a rating

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- that could affect other credit relationships, the first step will be to get a confidential rating from

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- S&P to basically say, do we want to post this and put this up as our credit rating? So it's more of

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- a prudent kind of deliberate step.

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- rating might be. I know that's I mean it's definitely we've definitely been well sorry I shouldn't say

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- the words like definitely. Indications have been that at least triple B so investment grade. We've met

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- with a number of housing authorities on the west coast that have done this and they were mostly a minus

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- rated that's what they reported. And so again going back to kind of Collier's rule I'm down here on

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- the next to last bullet point on this first slide, the bonds will be offered not on a wide basis, but

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- they have a set of investors that Collier's, I think, believes has an appetite for this kind of paper.

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- So it's a limited offering. It won't be something you see in the bond buyer or published on the Municipal

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- Securities Rulemaking Board's website.

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- Just because they the underwriter believes that this is the proper method for getting the best interest

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- rate Okay, and then as I mentioned the common Council must approve once Bloomington Housing Authority

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- takes its steps and we've fully gone through the process to have documentation to call substantially

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- final that would be when We would feel comfortable because we

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- Our role as bond counsel, at the end of the day, we have to give an unqualified opinion that these are

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- valid and that interest on the bonds are tax exempt. So we have to be certain in order to do that. So

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- we want to make sure that when we present this transaction to the board of Bloomington Housing Authority

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- and also to the common counsel that there's not much left to do in the documents other than

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- Here's what came back from pricing the bonds. We went out to the market. Underwriter said, hey, this

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- is the interest rate. OK, let's fill that in. So concurrently, due diligence on these properties is

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- happening through a broker that we're working with. And so the five properties here total 924 units.

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- I mean, Housing Authority is really interested in this.

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- for preservation purposes. Some of these properties are in very poor shape and are at great locations

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- for demoing and turning into student luxury housing. We would prefer to be able to retain these in the

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- community as workforce housing, preserving some of those more naturally occurring affordable rents.

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- There's some other benefits, obviously, to us, too. We don't have the capacity to property manage this,

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- so we would bring in an outside property manager. And this is also a new source of revenue for us. HUD

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- funding has become a bit more questionable in the last couple years, which is 90% of our budget, where

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- this would create a new revenue source that's

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- is more or less restricted, I should say, allowing us to operate and expand our affordable

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- housing development initiatives. In addition, a couple of these properties are known for being poorly

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- managed and are in bad shape. So I think the city, particularly Hand, has expressed interest in us acquiring

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- these so that we can gradually bring them up to the standard that we believe they should be at.

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- You can see some of those kind of naturally occurring rents there. Those are well below the average.

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- Just to give you an idea, 100% AMI for a two-bedroom right now, the rent in Bloomington is around $1,800.

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- So these average rents are well below that. Our intention would be to acquire these and do some capital

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- expenses, expenditures to

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- bring them up to a better standard and still maintain those lower rents. When you say lower rents, do

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- you anticipate that you'd need to raise the rents some from what they are now to make the economics

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- work? It's not how it's been presented to us at this point that rents could stay pretty close to that

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- below 100% AMI range. And honestly, we wouldn't want to

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- go above that or much above that just to stay in line with our mission and the tax abatement that would

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- come with this that is part of what makes this whole deal possible. So one other purpose for this is

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- it gives us kind of a runway for future affordable housing development, redevelopment projects. So our

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- intent would be in the next five years to probably identify the worst of these and do some kind of HUD

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- use some kind of HUD tool to redevelop these and build in some deeper affordability, closer to like

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- what we have in our RAD units at Cresmont and Walnut Woods. So this gives us plenty of runway for the

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- next 10 years to create more affordable units in Bloomington. So is there any correlation between the

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- percent occupied and what the condition of the space may be?

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- And I'm in here the second part. And what condition the space may be, the buildings may be in? Yes,

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- I'd say there's a correlation. Some of the percentage occupied goes down to 69, it looks like. Yeah.

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- Woodland Springs, Kingston Manor have, and not just the two of those, but have a number of units offline

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- just to not having sufficient upkeep and management issues.

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- There's un-repaired units that were damaged by fire. All of that would be brought up to code if we were

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- to purchase these. I may have a question. So would this bond be acquisition and improvement? Do you

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- have any money that you're putting into it? We are, the only pre-development funds we're putting in are

00:19:15.938 --> 00:19:22.485
- for legal and financial advising. Nine million in CAPEX would be built into this deal. And that's, I

00:19:22.485 --> 00:19:28.967
- kind of describe what some of that work would look like. In addition, there's some, we're hoping to

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- do some energy efficiency upgrades through state programs in addition to this nine million. In addition

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- to CAPEX, you're borrowing acquisition.

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- Are you including that in capex? No, this will all be paid for through the sale of bonds. The total

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- project, I think maybe if you're asking the total project, this $9 million just represents improvements,

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- right? Yeah. And the total project will be what about? Last, so this is a bit of a shifting landscape

00:19:59.190 --> 00:20:04.830
- at the moment, but it was $82 million. Is that? I'm sorry? $82 million. $82 million.

00:20:04.962 --> 00:20:13.882
- This includes a $65 million existing Fannie Mae loan that we would assume. OK. And then you talked about

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- this as being future recurring revenue. So you've done some kind of a pro forma that indicates that

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- you'll be able to make your bond payments, your maintenance, and so on. Obviously, your management companies

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- cost and have money left over.

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- We have our broker has done a pro forma for us in it Over seven years. It would be about 25 million

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- dollars in revenue for the Housing Authority access, right? Yeah Which would open lots of doors for

00:20:52.313 --> 00:21:01.172
- us in terms of affordable housing development Do any of these do any of your managers and I bet the

00:21:01.172 --> 00:21:02.590
- answer. Yes Cfx

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- Do they also do that kind of a proforma? Oh, yes. That's why we brought them on. They will turn some

00:21:14.609 --> 00:21:26.568
- proformas upside down. We understand this is a somewhat risky approach. We also feel obligated to take

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- some risk, given the housing issues in Bloomington.

00:21:32.930 --> 00:21:39.771
- also just given kind of a shifting landscape with HUD and what our housing authority is going to look

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- like in the next 10, 20 years. We have remained kind of ahead of the curve with affordable

00:21:45.874 --> 00:21:52.581
- housing development, and we just want to keep on the front of that and be carrying out our mission.

00:21:52.581 --> 00:21:59.422
- So. Just from the Peanut Gallery, you were the first housing authority in the state to take advantage

00:21:59.422 --> 00:22:02.910
- of the RAD program. Oh, were we? I didn't actually.

00:22:04.322 --> 00:22:16.757
- Rental assistance demonstration. Does anybody want to go see a fun chart? It's an oldie but a goodie.

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- I had to change some arrows. So I just mostly described this in the opening, but let's just start with

00:22:29.313 --> 00:22:33.214
- BHA as the issuer of the bonds.

00:22:33.826 --> 00:22:41.732
- So you can follow the Bloomington Housing Authority issues, the tax exempt bonds. The underwriter, for

00:22:41.732 --> 00:22:49.484
- a moment in time, will purchase them pursuant to a bond purchase agreement. And there is risk to the

00:22:49.484 --> 00:22:57.390
- underwriter between the time of when they go out to the market, the bond underwriter, Colliers in this

00:22:57.390 --> 00:23:02.302
- case, they will go out to the market on a day, one or two days,

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- and take orders from these investors. I don't necessarily know who they might be in this case, but I

00:23:12.080 --> 00:23:21.609
- know Warren Buffett's company buys a lot of this paper, Invesco, Vanguard. And for a time period between

00:23:21.609 --> 00:23:31.774
- when they have signed an agreement with these investors that are at the top here, basically Collier's is stuck.

00:23:31.906 --> 00:23:40.786
- If something happens in the market, there are conditions that say if the stock market closes or there's

00:23:40.786 --> 00:23:49.495
- hostilities that make sale impossible, then they get to cancel everything. But otherwise, it's locked

00:23:49.495 --> 00:23:58.119
- in at that point. And so in exchange for the bond underwriter delivering the bonds to the investors,

00:23:58.119 --> 00:24:01.534
- the investors say, thanks for the bond.

00:24:01.826 --> 00:24:10.312
- bond here's 82 million dollars bond underwriter takes their cut sends that money back to Bloomington

00:24:10.312 --> 00:24:18.799
- Housing Authority who then gets to improve and purchase these properties and over the course of time

00:24:18.799 --> 00:24:27.790
- the project revenues flow from Bloomington Housing Authority's ownership from the tenants and constituents

00:24:27.790 --> 00:24:29.470
- that live there and

00:24:30.338 --> 00:24:39.533
- Again, there's the surplus funds component that's hopefully going to, if it was just the project being

00:24:39.533 --> 00:24:48.550
- rated, the rating agency would not give it the same rating because of the ability of the Bloomington

00:24:48.550 --> 00:24:57.924
- Housing Authority to make those surplus funds available. And this is contemplated probably to be 20-year

00:24:57.924 --> 00:24:59.710
- debt, 25-year debt.

00:25:00.514 --> 00:25:11.087
- fixed rate, nothing too exotic. So. You know what the current rates are for Triple B? I'm not a financial

00:25:11.087 --> 00:25:21.063
- advisor. You don't want a lawyer with a calculator. I mean, on a deal like this, if I had to guess,

00:25:21.063 --> 00:25:27.646
- I don't know. What have they been showing? Six and a half, seven?

00:25:28.130 --> 00:25:35.051
- I don't know if I can answer your question specifically, but before we were thinking about getting rated

00:25:35.051 --> 00:25:41.708
- ourselves to do this deal, so we were just thinking about using the properties themselves as kind of

00:25:41.708 --> 00:25:48.497
- the collateral for the project, that was at 8%. When we decided to go through the bond rating process,

00:25:48.497 --> 00:25:55.154
- it dropped to like five and a quarter, but I don't know where it's at right now. I wish I could do a

00:25:55.154 --> 00:25:57.790
- cool market update like an underwriter,

00:25:58.562 --> 00:26:06.882
- I can say the short end of the curve is going to move. The long end of the curve is going to stay the

00:26:06.882 --> 00:26:15.202
- same. And you never know what's going to happen with the Fed. So the financing all it means is clear.

00:26:15.202 --> 00:26:23.766
- But I'm more interested in our capacity to take on 900 extra units. Is BHA ready to have 900 extra units

00:26:23.766 --> 00:26:27.518
- just administratively and so on? So we won't.

00:26:27.906 --> 00:26:36.612
- property manage this property manager it's it's beyond our capacity we do have housing choice vouchers

00:26:36.612 --> 00:26:45.063
- and for these five properties so that won't change our goal would be to gradually add more vouchers

00:26:45.063 --> 00:26:49.374
- through something like another rat conversion okay

00:26:49.570 --> 00:26:57.146
- And then what are the thoughts of, and not that you need to have an answer for this, but just as we

00:26:57.146 --> 00:27:04.798
- think about economic development, what are the thoughts of reinvestment of the surplus income in the

00:27:04.798 --> 00:27:12.450
- years ahead? That's a good question. And honestly, we've been mostly focused on trying to understand

00:27:12.450 --> 00:27:17.374
- and make the deal work. But I can tell you there's some staffing

00:27:17.570 --> 00:27:25.918
- that we would add to our team that would expand our ability to do. A lot of staff with $25 billion.

00:27:25.918 --> 00:27:34.600
- Well, a small portion of this would add to our ability to do more complicated affordable housing deals.

00:27:34.600 --> 00:27:43.198
- So we're going to add some expertise and bring it in-house. I'll add, too, that we have yet to see the

00:27:43.198 --> 00:27:47.038
- document structure. I don't have a good idea.

00:27:47.586 --> 00:27:55.736
- what the rating agencies and investors will say, hey, you've got to keep this amount of surplus funds

00:27:55.736 --> 00:28:03.726
- on hand while this debt's outstanding. Certainly not that much, but they're going to want some sort

00:28:03.726 --> 00:28:11.876
- of reserve, right? We've contemplated a number of other deals that we would like to do. These are all

00:28:11.876 --> 00:28:16.830
- existing units, so it's more a matter of just improving them.

00:28:17.154 --> 00:28:28.766
- getting those occupancies higher than they are right now. So just to bring it back with a nice little

00:28:28.766 --> 00:28:39.468
- timeline of how we hope to proceed, today is step one. We're just trying to familiarize staff

00:28:39.468 --> 00:28:45.502
- and representatives of the city with this financing.

00:28:45.634 --> 00:28:56.429
- Nathan's board is having a meeting next week, right? Where we'll hopefully have a resolution introduced

00:28:56.429 --> 00:29:06.810
- and adopted that serves the purpose of delegating some authority to executive staff for things like

00:29:06.810 --> 00:29:12.830
- contracts, purchase agreements, as if that moves forward.

00:29:13.250 --> 00:29:20.938
- And from a federal tax perspective, to the extent they start spending money on things like

00:29:20.938 --> 00:29:29.556
- capital expenditures, they would be able to reimburse that with tax exempt proceeds. It's called, for

00:29:29.556 --> 00:29:38.089
- tax purposes, an inducement resolution meant to induce a developer to go ahead and proceed. And then

00:29:38.089 --> 00:29:40.286
- following that, again, we

00:29:41.186 --> 00:29:49.121
- We'd like to see the documents come from the underwriting team. And that'll be our job as bond counsel

00:29:49.121 --> 00:29:56.903
- and the financial advisor to look over those, make sure that they comport with what we're being told

00:29:56.903 --> 00:30:04.761
- the rating agency criteria is, and ultimately make sure that it works for investors, that we can give

00:30:04.761 --> 00:30:10.462
- an opinion for the tax-exempt interest on it, and that the AHA is getting

00:30:11.042 --> 00:30:20.004
- you know, favorable and market standard terms. Our job as bond counsel, once we see the set of documents

00:30:20.004 --> 00:30:28.369
- that will be provided from colliers and their counsel, will be to make sure that those documents,

00:30:28.369 --> 00:30:37.246
- you know, kind of match what we've been told from the rating agencies, because the rating agencies will

00:30:37.246 --> 00:30:39.294
- also review it and say,

00:30:39.458 --> 00:30:48.074
- Yes, this meets our criteria. And we've examined your financials. Thus, your rating is triple B plus,

00:30:48.074 --> 00:30:56.858
- A minus, because we see you've got good management. We see you've got liquidity. And also, you're using

00:30:56.858 --> 00:31:05.305
- a structure that we believe, as we can tell investors, is this amount of risk, right? Not triple A,

00:31:05.305 --> 00:31:06.910
- safe like a, well,

00:31:08.386 --> 00:31:17.920
- I can't even say that about US government anymore. But did you also say, Tyler, that earlier you said

00:31:17.920 --> 00:31:27.922
- you have fiduciary duty. Yes. Is that part of it regarding rates and fees that they're going to be offered

00:31:27.922 --> 00:31:35.774
- ultimately? In other words, you can give them counsel as to what? Yes. OK. I would.

00:31:36.194 --> 00:31:44.445
- Maybe Nathan can add some color, but I'm pretty proud of the job I did on this underwriter and broker

00:31:44.445 --> 00:31:52.615
- recently. Ice Miller's known for cutting other people's fees down. In your own? No comment. OK. So I

00:31:52.615 --> 00:32:00.947
- was going to ask about the communes, how they were chosen as the bond underwriters. So you chose them?

00:32:00.947 --> 00:32:04.830
- Is that how it was? No. No. How does that work?

00:32:06.338 --> 00:32:15.435
- So this all came to our awareness through a broker named Lighthouse. Collier's is somebody that they've

00:32:15.435 --> 00:32:24.270
- worked with. So they brought that to the table. Yeah, there are, from what I've seen, maybe three or

00:32:24.270 --> 00:32:33.542
- four groups that kind of do these essential function bonds. Collier's is one of them. Stiefel was another

00:32:33.542 --> 00:32:34.942
- one I know that

00:32:35.586 --> 00:32:44.225
- Lighthouse mentioned Key Bank. So how did you go about choosing Colliers then? Maybe that's the fundamental

00:32:44.225 --> 00:32:52.304
- question, right? Yes. It was based on the recommendation. We asked around. I do know the banker that

00:32:52.304 --> 00:33:00.622
- is leading it for Colliers. We've worked on a lot of, as I said, conduit deals together. So he has been

00:33:00.622 --> 00:33:02.622
- in the housing space for

00:33:05.186 --> 00:33:10.937
- 15 years. Todd, that's really, with a negotiated offering, that's generally the practice though, don't

00:33:10.937 --> 00:33:16.800
- you go out and pick the... Yes, that's exactly, I mean that is the... Because on the competitive, that's

00:33:16.800 --> 00:33:22.886
- where you let the underwriters compete with each other to get the lowest cost. Correct. But with negotiated,

00:33:22.886 --> 00:33:28.749
- because it's a special type of issue, you're only gonna have a very small universe of people that can...

00:33:28.749 --> 00:33:33.886
- Right. Can underwrite these. So that's the reason you basically pick the... And some of the

00:33:33.986 --> 00:33:43.862
- I didn't mention. Jeffries, who's based in New York, is one of the, they were the vanguard of these

00:33:43.862 --> 00:33:54.035
- deals in California. The size of these deals may not be attractive to a firm like Jeffries. Thank you.

00:33:54.035 --> 00:34:02.430
- So that raises an interesting question. If you alluded to California, how many other

00:34:03.202 --> 00:34:11.112
- Housing authorities have done this sort of similar thing. Just curious. It's primarily on the West Coast.

00:34:11.112 --> 00:34:18.948
- I would give an example. The Midwest, kind of the leader in the Midwest right now would be the Columbus,

00:34:18.948 --> 00:34:26.485
- Ohio Metropolitan Housing Authority. They've received a lot of attention awards. I believe they have

00:34:26.485 --> 00:34:30.366
- an A-plus rating. Obviously, Columbus, larger city.

00:34:32.290 --> 00:34:40.532
- And so they've done several transactions using this model. So we're on the smaller side to try this.

00:34:40.532 --> 00:34:48.856
- So just to wrap this up, once we do have documents that have been through the ringer a few times with

00:34:48.856 --> 00:34:57.425
- the rating agencies, with the underwriter and their counsel, from our perspective and from the financial

00:34:57.425 --> 00:35:01.342
- advisor perspective and from BHA's perspective,

00:35:01.954 --> 00:35:07.974
- You know, can't have too many people ever looking at a trust indenture. But we will present

00:35:07.974 --> 00:35:15.106
- those substantially final documents, plus the offering document that basically says everything the documents

00:35:15.106 --> 00:35:21.715
- say, if you ever notice that. We just repeat ourselves a lot. That's the document that will be used.

00:35:21.715 --> 00:35:28.389
- The disclosure document or the limited offering memorandum gets used by the underwriter to go out and

00:35:28.389 --> 00:35:31.006
- say, hey, Vanguard, I've got this deal.

00:35:31.490 --> 00:35:38.841
- Would you mind taking a look at this book and telling me what you think the interest rate you'd buy

00:35:38.841 --> 00:35:46.634
- these at would be? So we will take that to Bloomington Housing Authority's board. And then again, because

00:35:46.634 --> 00:35:54.206
- of the statute, go to the Common Council at that point as well before we can take the bonds to market.

00:36:01.474 --> 00:36:10.924
- And again, these vary from those conduit bonds just because they are payable from revenues of the Bloomington

00:36:10.924 --> 00:36:19.516
- Housing Authority versus those when I've been before you in the past. It's solely from the project.

00:36:19.516 --> 00:36:28.193
- But there's still no effect on the constitutional debt limit of the city. It's not like you're going

00:36:28.193 --> 00:36:30.942
- to give a bank qualified status

00:36:31.298 --> 00:36:38.255
- and issuing some of your essential, if you want to build a courthouse that you're not going to issue

00:36:38.255 --> 00:36:45.350
- more than $20 million that year. You could still do that and get a good rate from a bank. So. Is there

00:36:45.350 --> 00:36:52.445
- anything between now and the time that you talk to counsel that would be useful from this body outside

00:36:52.445 --> 00:36:59.678
- of just giving us and telling us that this is happening? From my perspective, if you are in contact with

00:37:00.258 --> 00:37:09.553
- city councilors just to let them know that you're- Try not to be. I understand. I think, aren't some

00:37:09.553 --> 00:37:19.123
- of you representatives of the council? Also try not to do that. Okay, but so in sort of updating- Yeah,

00:37:19.123 --> 00:37:28.694
- just an awareness that when we are able to come back with the documents to be able to say, I know about

00:37:28.694 --> 00:37:29.982
- this project,

00:37:30.114 --> 00:37:38.397
- You know, we've heard it. We don't have any objection, unless you do, for these people moving forward

00:37:38.397 --> 00:37:46.599
- as an agenda item. And we'll be pleading to get on your city council schedule probably during budget

00:37:46.599 --> 00:37:55.126
- time. Just throwing that out there. Hopefully, we'll get ahead of that. We have a longer time just here,

00:37:55.126 --> 00:37:59.998
- so it's good. OK, but the timing of all this is going to be

00:38:00.226 --> 00:38:09.760
- It's critical. Yeah. Okay. So what happened during that? We can go early. We'll try. Yeah. Does the

00:38:09.760 --> 00:38:19.772
- project have a name? Not yet. Yeah, name it. Curt, do you have a comment? Signetti. Signetti apartments.

00:38:19.772 --> 00:38:28.734
- I think it's a bold move. There's bunches of risks involved. Management, probably number one.

00:38:29.218 --> 00:38:38.828
- but then the risk to the housing authority, because you're pledging surplus. But you couldn't build

00:38:38.828 --> 00:38:49.014
- as much housing in 10 years, 20 years. And the cost would be much less. Even if certain counselors charge

00:38:49.014 --> 00:38:57.182
- a lot, it's probably going to work out OK. If you can manage those management risks,

00:38:57.506 --> 00:39:10.021
- I applaud you, I think. Good luck. Appreciate it. And I'll just add that if this deal doesn't work out,

00:39:10.021 --> 00:39:22.296
- we will be raided and we will continue to look for other properties. So it may not end up being these

00:39:22.296 --> 00:39:27.230
- 924 units. It could be another purchase.

00:39:28.098 --> 00:39:37.982
- be in a more ready position then. So. Great. Thanks for your comments. Thanks for a thorough presentation.

00:39:37.982 --> 00:39:47.589
- Yeah. Just take care of me at the AIF. These are all on bus mounts, right? These are all on bus mounts,

00:39:47.589 --> 00:39:55.902
- all the units? They are. Yeah, they're all city. Women's Springs is partly in the county,

00:39:56.226 --> 00:40:10.366
- Yeah, that's important to people we serve, for sure. Thanks for having us. Thank you. Are you kicking us out?

00:40:10.594 --> 00:40:31.460
- Sometimes in the past when I've been here we all walked out together. I was just wanting to do a public

00:40:31.460 --> 00:40:37.278
- finance presentation for the

00:40:39.298 --> 00:40:47.222
- business school real estate club but I asked them if SPIA students could come and they said well there's

00:40:47.222 --> 00:40:54.920
- limited space so I wanted to ask you because I one of my favorite people in the world is Dan Cole and

00:40:54.920 --> 00:41:02.618
- I'm writing a law review article about zoning and it won't necessarily be about that but I think it'd

00:41:02.618 --> 00:41:08.958
- be good to have the SPIA students you obviously give them a good exposure to it but

00:41:10.306 --> 00:41:16.226
- The law school up in India only has public finance class once every two or three years. Let me know

00:41:16.226 --> 00:41:22.205
- if I can help you with that. Yeah. Well, I'll email you. I just need a forum. Let me know, because I

00:41:22.205 --> 00:41:28.480
- get in touch with the right people. I need to work on my public speaking. I'll see you in the IFA meeting

00:41:28.480 --> 00:41:34.755
- sometime in the future. Yeah, I don't think I'm going to be there on Thursday. Yeah. It's a small agenda.

00:41:34.755 --> 00:41:39.550
- Do you fly the flag everywhere, or is that special for your trip to Bloomington?

00:41:39.746 --> 00:41:57.491
- You'll never know. That's a lawyer's answer. I'm a two-time grad. Come on. All right. That's actually

00:41:57.491 --> 00:42:02.014
- pretty interesting. Yeah.

00:42:02.594 --> 00:42:09.212
- at least they had more housing available in a decent price range for folks. Absolutely. Well, and stabilizing

00:42:09.212 --> 00:42:15.288
- those aging units. Absolutely. Yeah, because I know the Kingston Manor, I see that all the time, and

00:42:15.288 --> 00:42:21.365
- I think it's falling apart. Yeah, and now with on crossing a number of times. You have to go look at

00:42:21.365 --> 00:42:24.734
- the other ones. There have been thousands, as you know,

00:42:24.898 --> 00:42:31.972
- new luxury student housing. Bill. Have you? I didn't notice. Sometimes when you're walking your dog,

00:42:31.972 --> 00:42:39.116
- look up. Yeah. Anyway, some of the, it's going to cause stress on some of these properties. Yeah. And

00:42:39.116 --> 00:42:46.120
- we're going to have to deal with it as a community. And this, to have a plan for that many units is

00:42:46.120 --> 00:42:53.193
- a good start. To keep them alive. It's a good outcome of having probably more luxury student housing

00:42:53.193 --> 00:42:54.174
- than we need.

00:42:54.306 --> 00:43:02.087
- Yeah, I agree with that. More than they can be afforded to. So opportunity zone update. So just a few.

00:43:02.087 --> 00:43:10.245
- Sorry, back to the agenda. So there's one meaty item for discussion. That's the strategic sites discussion.

00:43:10.245 --> 00:43:17.950
- So maybe I'll just zip through the opportunity zones and SB 89. Those should just be a few sentences.

00:43:18.370 --> 00:43:25.573
- So Opportunity Zones are a federal program that was made permanent by the Trump administration. So this

00:43:25.573 --> 00:43:32.638
- is known as OZ 2.0 or Opportunity Zones 2.0. And it's really a benefit that the program has been made

00:43:32.638 --> 00:43:39.633
- permanent because one of the barriers to using this in the previous iteration was that it was capped

00:43:39.633 --> 00:43:47.390
- at 10 years and the legal costs of setting up a zone or a fund were really burdensome. So the Opportunity Zone,

00:43:48.162 --> 00:43:55.130
- They are established in distressed census tracts. And those are, what do I want to say, named by the

00:43:55.130 --> 00:44:02.029
- governor as opportunity zones. So all across the state of Indiana, municipalities and counties will

00:44:02.029 --> 00:44:08.996
- be putting our hands up and saying, here are the three or four census tracts that we think should be

00:44:08.996 --> 00:44:16.033
- named opportunity zones. And so we want to make sure that we're nominating tracts that have potential

00:44:16.033 --> 00:44:17.758
- pipeline and opportunity

00:44:17.954 --> 00:44:25.664
- And then once they have that designation, it kind of is supposed to act as a magnet to the private sector

00:44:25.664 --> 00:44:33.082
- to make investments in these areas because those investors can then get a 10-year shield from capital

00:44:33.082 --> 00:44:40.428
- gains taxes. And then the structure of it facilitates reinvestment in those zones or other zones. So

00:44:40.428 --> 00:44:47.774
- we're at the very early stages of this. The IEDC will allow applications to start coming in in July.

00:44:47.970 --> 00:44:54.379
- We've got really great support through RJL consultants who are at lobbyists based out of Terre Haute,

00:44:54.379 --> 00:45:00.850
- but they've been so awesome in helping us evaluate census tracts. So I don't know what the role of the

00:45:00.850 --> 00:45:07.133
- EDC is. We could potentially come to you guys to have the census tracts that we want to nominate be

00:45:07.133 --> 00:45:13.604
- blessed, and that would be a nice opportunity. There's not a statutory requirement there, but it could

00:45:13.604 --> 00:45:17.374
- be just a nice way to loop you guys in and show that we are

00:45:18.946 --> 00:45:25.567
- you know, making good choices for Bloomington. Yeah. Okay. So that's opportunity zones. So the first

00:45:25.567 --> 00:45:32.451
- part is the application. And then the second part is, should there be a community fund? The municipality

00:45:32.451 --> 00:45:38.679
- doesn't have any role with that, but there are ways that we can make our areas look attractive

00:45:38.679 --> 00:45:45.366
- for investment. So that then attracting the investment is the whole other ball of wax that we have to

00:45:45.366 --> 00:45:47.070
- get into. And then SB 89,

00:45:47.266 --> 00:45:56.398
- That's the next item, Senate Bill 89. The full title was, sorry. Anyway, I guess I'm not going to read

00:45:56.398 --> 00:46:05.264
- the full title. Three-way permits, maybe is all that it's called. It provides new three-way alcohol

00:46:05.264 --> 00:46:14.750
- permits to certain municipalities in the state. This is a tool that the legislature has applied for years.

00:46:15.522 --> 00:46:22.751
- The state has a quota system for three ways. And then there's a bidding process for those, or typically.

00:46:22.751 --> 00:46:30.049
- And then above and beyond the quota system, there have been a number of times that the state just assigns

00:46:30.049 --> 00:46:37.003
- additional three-way permits to different municipalities, mostly going to Fishers and Carmel. But in

00:46:37.003 --> 00:46:44.990
- the last session, they assigned two additional ones to Bloomington. This is really important to Bloomington because

00:46:45.122 --> 00:46:53.320
- we have a large population when the kids are here, but our quotas are based on our lower permanent

00:46:53.320 --> 00:47:01.850
- population. So we actually have a market that's much larger than what it reads by population data. And

00:47:01.850 --> 00:47:10.794
- so as a result, demand for three-way licenses has driven the cost up exponentially. So these costs $250,000

00:47:10.794 --> 00:47:13.278
- for whoever the purchaser is.

00:47:13.378 --> 00:47:21.527
- That's that's an estimate there on the private market so they can fluctuate. So what we think Sorry

00:47:21.527 --> 00:47:29.920
- going into process so the process for this it's actually a council Process they will have to establish

00:47:29.920 --> 00:47:38.313
- Legislation that kind of formally accepts these and creates the program and so then there will be some

00:47:38.313 --> 00:47:39.454
- criteria that

00:47:39.586 --> 00:47:44.694
- that evaluate the applicants. We've had a ton of interest from parties and that's partly why I wanted

00:47:44.694 --> 00:47:49.753
- to talk about this on the public record. So council is in the process of developing that legislation

00:47:49.753 --> 00:47:51.806
- and they've been communicating about it.

00:47:52.194 --> 00:47:58.165
- And so that will be the next step. And Esau, would you like to say anything further about that piece?

00:47:58.165 --> 00:48:04.077
- Could we just speak about, I think, in our past meeting, just really briefly. So the three of us are

00:48:04.077 --> 00:48:10.224
- working, and also with Councilmember Zulek, on first establishing the criteria to make it really, really

00:48:10.224 --> 00:48:16.253
- clear to people. Because there's a lot of different programs that, in the future, might be interesting

00:48:16.253 --> 00:48:20.702
- to us as a city. So riverfront districts, historical downtowns, but I think

00:48:20.930 --> 00:48:26.338
- The reason to start this obviously is because of these two additional ones, which as Jane said, I think

00:48:26.338 --> 00:48:31.798
- a lot of people, just the knowledge that they exist, a lot of people are already reaching out basically.

00:48:31.798 --> 00:48:37.362
- And this has been something that I think Jane and I have talked about for the last couple of years because

00:48:37.362 --> 00:48:39.806
- it is a huge pain point right now for a lot of

00:48:39.906 --> 00:48:45.449
- want to be businesses. So you can think about like Galen Cassidy, for example, you know, they're starting

00:48:45.449 --> 00:48:50.731
- their new business. I mean, in order for that restaurant to succeed, you know, it sort of hinges and

00:48:50.731 --> 00:48:55.961
- falls on their ability to sell wicker in many ways, or changes their whole model. And so we're just

00:48:55.961 --> 00:49:01.400
- trying to think about, you know, how do we then make sure that we're protecting the assets that already

00:49:01.400 --> 00:49:06.786
- exist in town while opening up new avenues for more people, you know, to start the type of restaurants

00:49:06.786 --> 00:49:09.872
- that we want to see. I'm particularly really interested in

00:49:09.872 --> 00:49:15.260
- sure that there's also similarly these things we're about to talk about that there's some buy-in into

00:49:15.260 --> 00:49:20.700
- the community like we don't want all of these chains coming through we don't want you know 27 new bars

00:49:20.700 --> 00:49:26.140
- or something like that but you want to really think about you know using this in a way that's relevant

00:49:26.140 --> 00:49:31.528
- to economic development and then we sort of think about where these things go and so on and so forth.

00:49:31.528 --> 00:49:34.750
- So through the eligibility criteria the council will attract

00:49:35.650 --> 00:49:44.077
- the types of businesses that will be truly good for the community. So we won't be supporting more, sorry,

00:49:44.077 --> 00:49:52.424
- but like student bars, for example. That's not what we're trying to foster in our community. So I think,

00:49:52.424 --> 00:50:00.374
- again, there's no statutory or legislative role for EDC, but I think it would be great to keep this

00:50:00.374 --> 00:50:01.566
- group apprised

00:50:01.922 --> 00:50:08.149
- And once we have the whole criteria, which we would send around, because we love all of your comments

00:50:08.149 --> 00:50:14.254
- on it. So also then, when we put it before council, it would be great to have a recommendation from

00:50:14.254 --> 00:50:20.724
- us of some sort. So if you want to put that on an agenda when it's ready, yeah, it would be great. What's

00:50:20.724 --> 00:50:26.524
- the timeline? I was actually hoping to get this first piece of legislation on before we break,

00:50:26.524 --> 00:50:31.774
- so on June 10. But yeah, we'll see how successful we are in clearing our backlog. OK.

00:50:32.578 --> 00:50:41.150
- That's exciting. And then the next item, if I can move to that, Kurt. OK. So there's a memo. And I apologize.

00:50:41.150 --> 00:50:49.255
- There wasn't a ton of time for you all to read it. It's been just guns blazing and ESD. But I view this

00:50:49.255 --> 00:50:57.203
- as our first conversation on this topic. And we can come back to it a number of times to iron it out.

00:50:57.203 --> 00:51:01.022
- So big picture. The current state has been that.

00:51:01.762 --> 00:51:08.425
- Our community has really been locked in terms of the types of development and economic development that

00:51:08.425 --> 00:51:15.151
- can happen. We've all been locked by this annexation battle for decades now. So our municipal boundaries

00:51:15.151 --> 00:51:21.622
- have been locked. And then when the lawsuit was going on, we were really restricted in what we could

00:51:21.622 --> 00:51:28.541
- do because we didn't want to extend sewer service to one parcel and then have that compromise the potential

00:51:28.541 --> 00:51:29.630
- outcome of that.

00:51:30.114 --> 00:51:38.512
- that lawsuit. And so really moving to the other side of that has given us the ability to think about

00:51:38.512 --> 00:51:46.827
- expansion again. And it may sound funny, but CBU was really front and center during this annexation

00:51:46.827 --> 00:51:55.309
- battle because they were the ones who were fielding all of the requests for extension and growth. And

00:51:55.309 --> 00:51:58.718
- there was a perception that the city was

00:51:59.010 --> 00:52:07.029
- prohibiting development when really we want to facilitate that. So CBU is super sensitive to the need

00:52:07.029 --> 00:52:14.890
- to be able to extend service to employers. And as a result, they added, so I think it's section 24,

00:52:14.890 --> 00:52:23.144
- a clause to their rules and regulations that allow for extension of sewer service outside of city limits

00:52:23.144 --> 00:52:28.254
- for strategic economic development sites. So this is a huge win.

00:52:29.250 --> 00:52:38.238
- And now we get to have a conversation about how we want to shape that extension of service. So the mechanisms

00:52:38.238 --> 00:52:46.735
- that are identified in those rules and regs, they say that ESD can just name a site as being strategic.

00:52:46.735 --> 00:52:54.987
- And that's fine, but we need to have a rubric in order to do that. And we would like for EDC to help

00:52:54.987 --> 00:52:58.174
- us do that. And I think, I don't know.

00:52:58.306 --> 00:53:06.008
- We can talk about what you want the process to be, but sorry. And so yeah, the first step is just naming

00:53:06.008 --> 00:53:13.564
- a site as being strategic. And then the second part is really a formal process, like a pilot. So there

00:53:13.564 --> 00:53:20.972
- would be a formal application like we've had with other projects. And so that would come to EDC, and

00:53:20.972 --> 00:53:27.134
- then EDC would make a recommendation to council. So it would be a two-step process.

00:53:29.730 --> 00:53:38.458
- I think I'll move on to think a little bit about the criteria. What I described in this memo is that

00:53:38.458 --> 00:53:47.273
- the state. So when we think about the moving pieces, what do we want to look at as the criteria? It's

00:53:47.273 --> 00:53:54.014
- really capital investment, job creation, and wages. But wage growth is a key.

00:53:55.554 --> 00:54:02.033
- you know, goal for our economic development strategy at the city. We know that our wages are extremely

00:54:02.033 --> 00:54:08.574
- low. And so wage growth is maybe a top priority. So I would look at wage growth as being more important

00:54:08.574 --> 00:54:15.053
- than number of jobs, because we know that we're already receiving 16,000 commuters from outside of our

00:54:15.053 --> 00:54:21.469
- community every day. So we don't necessarily need to attract a huge number, but we really want to see

00:54:21.469 --> 00:54:25.054
- those wages improve. And so I pointed out that the state

00:54:25.218 --> 00:54:31.293
- has a new standard that they've expressed that is 125% of county average wages. So for the state,

00:54:31.293 --> 00:54:37.740
- the IEDC, to extend an economic development incentive, they're looking at 125. This is a major increase

00:54:37.740 --> 00:54:44.063
- for them, and this has actually caused a lot of reaction in the economic development community across

00:54:44.063 --> 00:54:50.387
- the state. They hadn't expressed a blanket number in the past. I haven't seen this in press releases,

00:54:50.387 --> 00:54:53.982
- but it's been discussed at meetings. And so I really like

00:54:54.882 --> 00:55:07.629
- 125% of county average wages as a starting point for the wage discussion. The way that shakes out locally

00:55:07.629 --> 00:55:20.016
- is the state looks at 25, 26 as our average wage. That's a 20, 25 number. And then that shakes, sorry,

00:55:20.016 --> 00:55:22.782
- that shakes out to 65.

00:55:23.746 --> 00:55:31.603
- 676 annually. So 2526 was the base average wage for 2025. And then if you increase that by 25%, it goes

00:55:31.603 --> 00:55:39.309
- to 3175 per hour or 65,676 annually. How tough is that number? For people to hit? Yeah. I think Clark

00:55:39.309 --> 00:55:47.015
- Greiner might still be on the call. Or is he not here anymore? He was prepping for a meeting. Clark's

00:55:47.015 --> 00:55:52.606
- still on. Yeah. Clark, could you talk to us about that? The question was,

00:55:52.994 --> 00:55:59.492
- How hard is it for employers to hit that $3175 average wage? I think it depends on the trade sector

00:55:59.492 --> 00:56:06.381
- industry that you're in. Certainly on the life sciences side, as we've seen before in the past, certainly

00:56:06.381 --> 00:56:13.074
- in the county, and I get with some of our other city life sciences groups, we've been able to hit that

00:56:13.074 --> 00:56:19.833
- number, started that number, and they're able to do it. But I think on maybe some of the emerging small

00:56:19.833 --> 00:56:22.302
- things that we want to be mindful of,

00:56:22.594 --> 00:56:33.361
- And this is not a proposal. This is just a starting point for your discussion, to be clear. This is

00:56:33.361 --> 00:56:44.450
- very superficial, high level. We want to get EDC's feedback. And so Clark, to summarize what you said,

00:56:44.450 --> 00:56:49.726
- you're seeing it in certain areas, but you think

00:56:49.922 --> 00:56:57.683
- younger companies in certain sectors might be challenged to hit that 125. Yeah, and I think the other

00:56:57.683 --> 00:57:05.521
- thing you have to be a little mindful of, for instance, if you have some crisis maybe been identified,

00:57:05.521 --> 00:57:13.358
- let's just use an example of the Brown Pike. There's a few parcels there that if somebody were to come

00:57:13.358 --> 00:57:16.478
- in and develop something on speculation,

00:57:16.994 --> 00:57:23.023
- that might create a little bit of a problem, because they may not have the exact employment number.

00:57:23.023 --> 00:57:29.173
- So if somebody wanted to develop a location, that might create a little bit of a problem. But I think

00:57:29.173 --> 00:57:35.323
- what I hear Jane saying, what we talked about before in the past, is that I think this is kind of the

00:57:35.323 --> 00:57:40.810
- starting point to say, how does this work? And I think that we don't want things like that

00:57:40.810 --> 00:57:45.694
- in that conversation. That's great. Thanks, Clark. And then moving through this,

00:57:45.826 --> 00:57:52.717
- You know, the other key is looking at that capital investment. You know, what are they contributing?

00:57:52.717 --> 00:57:59.814
- Because that would be the foundation for whatever in lieu of payment they might be making. But I didn't

00:57:59.814 --> 00:58:06.773
- include information on the revenue side in this packet. I sort of just wanted to introduce the topic.

00:58:06.773 --> 00:58:13.597
- And then we can add a framework for what that would look like if it's pilot payments, which is what

00:58:13.597 --> 00:58:15.166
- the CBU rules and recs

00:58:15.330 --> 00:58:23.181
- site as the mechanism. So I'll park that there and just say I'm happy to go into more detail in any

00:58:23.181 --> 00:58:31.739
- of it. And Big Picture just interested to learn your feedback on how you think we should frame the extension

00:58:31.739 --> 00:58:38.334
- of utility service outside of city limits for strategic economic development sites.

00:58:44.578 --> 00:58:54.683
- And I love that we have a rep from the county council here for this discussion. Just to be clear, we're

00:58:54.683 --> 00:59:04.497
- talking about a new policy that's been, or an updated policy by the utility service board, which now

00:59:04.497 --> 00:59:13.630
- will allow extension of sewer to strategic locations. And they're going to let the EDC decide

00:59:14.114 --> 00:59:23.323
- what a strategic location is. The rules and regs say that ESD, our economic and sustainable development,

00:59:23.323 --> 00:59:32.269
- at a staff level, we can say what sites are strategic. And you're going to ask us to provide guidance

00:59:32.269 --> 00:59:41.303
- to you, OK? And that makes sense to me. I mean, I think that makes a whole bunch of sense. I mean, I'm

00:59:41.303 --> 00:59:43.934
- ready to get into the metrics

00:59:44.034 --> 00:59:50.658
- Yeah. May I ask a question? Sure. Sure. I don't understand how pilot fits in. Would you explain that?

00:59:50.658 --> 00:59:57.151
- Oh, yeah. So. Payments in lieu of taxes. Right. In lieu of property taxes. I understand that. Yeah.

00:59:57.151 --> 01:00:03.645
- In lieu of city property taxes? Yeah. Right. So because. Because they wouldn't be in the city. They

01:00:03.645 --> 01:00:10.203
- won't be in the city. But then they'll be receiving those benefits. And so there's an upside for us,

01:00:10.203 --> 01:00:12.606
- for the city, to extend service. So.

01:00:13.186 --> 01:00:19.258
- I just don't understand how pilot works. Does it become a pilot property, and they're taxed for the

01:00:19.258 --> 01:00:25.452
- city, and it goes into the pilot. I know you know John. Yeah, John can come to the table. But there's

01:00:25.452 --> 01:00:31.706
- just an agreement that's made, a payment in lieu of agreement. This is the contract. Yep, and a number

01:00:31.706 --> 01:00:37.960
- is reached and named. My understanding is the university does that right now for fire protection. They

01:00:37.960 --> 01:00:41.118
- have a pilot agreement. And historically, we've had

01:00:42.658 --> 01:00:52.715
- west side, the industries you bring us. That's exactly what that is. And then you all approved two pilots

01:00:52.715 --> 01:01:02.298
- last year for Glick properties. And it would be very similar where you use some type of logic to get

01:01:02.298 --> 01:01:10.078
- at a number that is reasonable. And then that's the number that is paid annually.

01:01:11.426 --> 01:01:19.953
- Yeah, go for it. Yeah, just a little bit more color behind this is a Clark, you know, weighing on this

01:01:19.953 --> 01:01:28.729
- as well. But one of the biggest challenges we have from a economic development perspective is uncertainty

01:01:28.729 --> 01:01:37.588
- across the board. Everything's uncertain. And especially as it relates to some of these big infrastructure

01:01:37.588 --> 01:01:40.734
- items like sewer service, not knowing

01:01:41.218 --> 01:01:48.593
- whether you're going to be served or not, you just might as well not even submit the site. Because we

01:01:48.593 --> 01:01:56.112
- can't move quick enough. So the idea was to say that this isn't a blanket policy for everything outside

01:01:56.112 --> 01:02:03.487
- the city. But are there some really strategic sites that are prime economic development opportunities

01:02:03.487 --> 01:02:09.054
- for the community at large, the county and the city, that we could designate

01:02:10.146 --> 01:02:17.413
- pre-designated, these are strategic sites that we've agreed based on criteria in a very transparent

01:02:17.413 --> 01:02:24.316
- way. You have objective criteria that if you are meeting these criteria, you will get service.

01:02:24.316 --> 01:02:31.583
- And that way, whether it's me or Clark or the university or anybody that's talking to a prospective

01:02:31.583 --> 01:02:39.358
- employer that's interested in these sites, they know that yes, meet this criteria and you will get served.

01:02:39.586 --> 01:02:46.799
- And I think it's an opportunity for the city of Bloomington and Monroe County to work together and present

01:02:46.799 --> 01:02:53.742
- a united front to the broader world that we do want these kinds of high-quality job projects here. And

01:02:53.742 --> 01:03:00.550
- so we just modeled it after the West Side Agreement in terms of the mechanism, because we think that

01:03:00.550 --> 01:03:07.426
- works. And then it's just, you know, it's not every side. I mean, there's only a handful of them that

01:03:07.426 --> 01:03:09.246
- really rise to this level.

01:03:09.410 --> 01:03:15.294
- that we would want to have the certainty around. And I don't know if you talked about what those sites

01:03:15.294 --> 01:03:21.065
- are, but I mean, Clark mentioned the Vernal Pike, but it's really the airport. The art. And it looks

01:03:21.065 --> 01:03:26.378
- like I'm here. This report that on May 17th, they issued a blanket will serve letter, right?

01:03:26.378 --> 01:03:32.319
- To the airport. Yeah, that was separate, but related. Yeah, I agree. Yeah, and so, and that was because

01:03:32.319 --> 01:03:37.918
- we ran into all that uncertainty over the project that Clark was working. The art is another one.

01:03:38.402 --> 01:03:46.225
- where that could be a potentially significant source of some very high paying jobs in the future. But

01:03:46.225 --> 01:03:54.048
- they're going to need to know that they're going to have. John, just to clarify a little bit what you

01:03:54.048 --> 01:04:02.332
- said. I mean, the way I'm reading this is the site must be named as strategic by the department of economic

01:04:02.332 --> 01:04:05.246
- and sustainable development, and then

01:04:06.114 --> 01:04:13.282
- the department would communicate to CBU. And CBU would do its due diligence to decide whether it can

01:04:13.282 --> 01:04:19.954
- actually provide that service and make sense for it. And then it will do, if that's the case,

01:04:19.954 --> 01:04:27.051
- it will serve. So you sort of said if they met the metrics, they would automatically get hooked up,

01:04:27.051 --> 01:04:31.806
- but it's not quite that. They could meet the metrics that we have.

01:04:32.002 --> 01:04:39.104
- I don't think your memo goes into all the detail, but there's other ways that you could bake that in

01:04:39.104 --> 01:04:46.276
- where there's, you know, who pays for what is part of the agreement, too. No, I just want to clarify,

01:04:46.276 --> 01:04:53.448
- though, that the metrics could be met, and you could sell that to them and say, you know, if you meet

01:04:53.448 --> 01:05:01.182
- the metrics, then it's going to get a recommendation from the ESD, and then the CBU will do its due diligence

01:05:01.730 --> 01:05:08.506
- And so there's a high probability, but there's not 100% certain. I think it's always trying to say.

01:05:08.506 --> 01:05:15.622
- I assume part of this is the sites that we're selecting as strategic, we would already know that they're

01:05:15.622 --> 01:05:22.534
- serviceable by CBU. So what would make them strategic is that we can extend. So then in your formula,

01:05:22.534 --> 01:05:28.158
- you could look at a combination of things that are part of the payment in lieu of.

01:05:28.962 --> 01:05:36.560
- And some of that is the payment for the capital expansion, extension of the service onto the property.

01:05:36.560 --> 01:05:43.936
- I think all of these. These would vary by site then. Yes. So there could be negotiation between CBU

01:05:43.936 --> 01:05:51.312
- and then back with ESD to decide what the pilot ought to do. Yes. And I think that that makes a lot

01:05:51.312 --> 01:05:58.910
- of sense. And then just further, I can't remember what your words were, but probable, but not certain.

01:05:59.330 --> 01:06:07.869
- Because CBU will have to do all of their engineering evaluation. And so I think there's a lot to it.

01:06:07.869 --> 01:06:16.324
- But just to be really clear about what, so the process has two legislative constraints. One is what

01:06:16.324 --> 01:06:25.032
- the CBU utility rules and regs say. And one is the state statute for pilots and how they function. And

01:06:25.032 --> 01:06:27.230
- so everything in between,

01:06:27.458 --> 01:06:35.368
- I think we have control over how it works. But we start with those rules and regs. And so we start with

01:06:35.368 --> 01:06:43.505
- the naming of the site. And I think that we have to decide if we want to bless certain sites, pre-identify

01:06:43.505 --> 01:06:51.187
- certain sites, which is effectively, Liz, what we did with the airport. So I'll just unpack this for

01:06:51.187 --> 01:06:55.902
- the public record a little bit. Liz mentioned that there was,

01:06:56.162 --> 01:07:03.866
- a will serve issue to the Monroe County Airport. We did name them a strategic site for two parcels,

01:07:03.866 --> 01:07:11.647
- knowing that whatever potential employers wish to go out there, they would ultimately come back with

01:07:11.647 --> 01:07:19.659
- a proposal and go through the evaluative process that this body is getting ready to identify. So that's

01:07:19.659 --> 01:07:23.742
- a blanket will serve communicating CBU's willingness

01:07:24.130 --> 01:07:32.044
- to extend service to a qualified employer at the airport. So that's really critical, especially for

01:07:32.044 --> 01:07:40.117
- Clark, as he's working with the team at the airport to try to attract aerospace aeronautics employers

01:07:40.117 --> 01:07:48.268
- there. Sorry, did I get through all the points that I wanted to make there? I think I did, yeah. Good.

01:07:48.268 --> 01:07:52.542
- So I was a little interested in maybe this is sort of

01:07:53.602 --> 01:08:01.277
- optimistic, optimism clouding clear question. But there's an opportunity cost when one person builds,

01:08:01.277 --> 01:08:08.877
- there's somebody else can't. And so I'm interested, like one of the thoughts that was percolating my

01:08:08.877 --> 01:08:12.414
- mind was like, as we start to say that we want

01:08:12.610 --> 01:08:19.904
- things to develop in certain sites that ideally raises some competition for those sites. And how might

01:08:19.904 --> 01:08:27.127
- we leverage this process to either sweeten the deal if it's something we really, really want? Or have

01:08:27.127 --> 01:08:34.280
- we thought about that mechanism? Yeah, or this is a Clark question regularly. What do we want? Yeah,

01:08:34.280 --> 01:08:39.166
- exactly. What do we actually want? And one thing we know we want are

01:08:39.714 --> 01:08:47.321
- operations that are not water-intensive and that are not wastewater-intensive. So John's doing employer

01:08:47.321 --> 01:08:54.855
- attraction really within the city and within the trades district and is operating in kind of a certain

01:08:54.855 --> 01:09:02.608
- domain and then Clark is really in the county doing these kind of larger manufacturing. We're all working

01:09:02.608 --> 01:09:05.534
- together but that's just to say I think

01:09:08.802 --> 01:09:15.786
- Sorry, I'm losing track of it. So yeah, so we've already pre-identified that we just don't want to create

01:09:15.786 --> 01:09:22.506
- more demand on water than we have to, and we know that we can say yes if there's light demand. And so

01:09:22.506 --> 01:09:29.161
- what I think has been entertained at the airport are really cool operations that are doing primarily

01:09:29.161 --> 01:09:35.749
- assembly, and that hasn't worked out as to John's point about the uncertainty. Clark, you have your

01:09:35.749 --> 01:09:36.606
- hand raised.

01:09:38.050 --> 01:09:44.040
- Yeah. I think one of the things that I also want to point out is that, you know, kind of this strategic

01:09:44.040 --> 01:09:49.856
- site identification stuff is really kind of a shift up to recently through the annexation challenges

01:09:49.856 --> 01:09:56.019
- that the community is confronted on. And I think this is a really good way to kind of start that dialogue,

01:09:56.019 --> 01:10:01.778
- start working back together, really getting out there. Because if it's outside of the city, there's

01:10:01.778 --> 01:10:06.846
- a good chance that I'll lead on that. Most likely some of those leads will come into me

01:10:07.010 --> 01:10:12.469
- And then just through the natural defined process, I'll be contacting Jane and John to take it on the

01:10:12.469 --> 01:10:18.035
- sites and locations, and we'll start that dialogue. I think the other positive thing is that, you know,

01:10:18.035 --> 01:10:23.441
- what I hear on these different programs is that I think it's something we can kind of take a look at

01:10:23.441 --> 01:10:29.007
- as far as the types of industries and stuff that come in. You know, we talked about how they were named

01:10:29.007 --> 01:10:33.182
- on the matrix that Jane has identified. I think that's a good place to start.

01:10:33.410 --> 01:10:38.909
- So I think the one thing we have to be really mindful of now is that there's a lot of different emerging

01:10:38.909 --> 01:10:44.145
- industries that are out there. We've got a lot of things that some of our other stakeholders in the

01:10:44.145 --> 01:10:49.696
- community are leaning into, certainly the ARC, as John mentioned. But there may be things that are coming

01:10:49.696 --> 01:10:54.985
- from a national defense or national security perspective that maybe is going to be in a new emerging

01:10:54.985 --> 01:11:00.327
- industry that we need to be mindful of. But from my perspective, I will certainly not leave any stone

01:11:00.327 --> 01:11:01.950
- unturned, and I will certainly

01:11:02.082 --> 01:11:08.490
- I worked with Jane and John on that to say, well, this is a possibility, and here's the good side of

01:11:08.490 --> 01:11:14.961
- that. And certainly, there'll be things that we can screen and maybe even reject. But I think, to me,

01:11:14.961 --> 01:11:21.876
- this is a real good start on saying, hey, look, there's a possibility to do this. Whereas up until recently,

01:11:21.876 --> 01:11:28.347
- there wasn't as much flexibility built into that. So I see this as a real good starting point. And we

01:11:28.347 --> 01:11:31.646
- get something figured out there. So I applaud them.

01:11:35.778 --> 01:11:45.611
- I think to your question, Isaac, it's a good one, because in some of the scenarios that we played around

01:11:45.611 --> 01:11:55.162
- with, the utility has to do the capacity analysis. And then if there's an extension of the lines into

01:11:55.162 --> 01:12:05.182
- the property, that could be 100% developer paid. It could be a cost share. And that's where you're kind of

01:12:05.986 --> 01:12:13.061
- get a little bit of an opportunity to play the incentive game if there's somebody you really want. That's

01:12:13.061 --> 01:12:19.802
- great. And also just thinking about the, because I know Kurt wanted to get at this, and this is what

01:12:19.802 --> 01:12:23.806
- I also jumped out at. And I think it's a draft to react to.

01:12:24.354 --> 01:12:28.877
- You know, I like the categories. I think they're like way too broad, right? I think it would be better

01:12:28.877 --> 01:12:33.444
- to have like, I mean, I think it's good within the toolkit to have broad. I think it's useful then with

01:12:33.444 --> 01:12:38.142
- the sites to be like, and very specifically, we're looking for, you know, drone manufacturers or whatever,

01:12:38.142 --> 01:12:42.445
- you know, to be, you know, very, I mean, at the arc, for example, you know, generally, there's a,

01:12:42.445 --> 01:12:44.158
- you know, you don't, you don't want to

01:12:44.482 --> 01:12:50.859
- bio thing there, necessarily you want reasonable things next to it. So I think that would be helpful.

01:12:50.859 --> 01:12:57.361
- And then my only other thought. Sorry, can you just, so that's under B, priority sectors. You want that

01:12:57.361 --> 01:13:03.676
- to be more specific. Well, I'm just reacting out loud. I think it may be useful to think about using

01:13:03.676 --> 01:13:09.928
- those differently. You might say at the ARC, if that's a priority center, that it's not all five of

01:13:09.928 --> 01:13:13.054
- these categories. But it's really just, you know,

01:13:13.282 --> 01:13:20.066
- whatever category, like we want advanced manufacturing and technology there as an example that maybe

01:13:20.066 --> 01:13:26.918
- you don't want life sciences there and that you would have the ESD and EDC would have the opportunity

01:13:26.918 --> 01:13:29.470
- to play around with that as relevant.

01:13:30.306 --> 01:13:35.651
- Yeah, but then even then, it's like lots of things fall under the categories of life science and health

01:13:35.651 --> 01:13:40.893
- care services, right? And so that's where I get to that opportunity cost part and really building off

01:13:40.893 --> 01:13:46.186
- of what Clark was saying, that it's not just the opportunity immediately now with who else is in line,

01:13:46.186 --> 01:13:51.377
- but it's the opportunity of who could be there in five years or something like that. And again, it's

01:13:51.377 --> 01:13:56.670
- overly optimistic to think that way. I mean, it'd be better to have people at these sites to be clear.

01:13:56.866 --> 01:14:08.326
- I would probably position myself the opposite of that opinion. Because more like Clark said, we don't

01:14:08.326 --> 01:14:16.190
- know what we don't know. And my experience with well-meaning intended

01:14:16.450 --> 01:14:25.469
- things like regulations and zoning codes and so on. You start layering them on and you box yourself

01:14:25.469 --> 01:14:34.668
- out about things. If somebody makes the wage hurdle, we'd be foolish not to consider whatever they're

01:14:34.668 --> 01:14:38.366
- doing. They're a hula hoop manufacturer.

01:14:38.690 --> 01:14:46.144
- But my point is more about co-location, right? So with the ARC, if we're doing defense-related stuff

01:14:46.144 --> 01:14:49.022
- and then a life science place wants to

01:14:49.122 --> 01:14:55.112
- Jeff, just because the site works, wants to be next to the Ark, do we want to say, well, actually, our

01:14:55.112 --> 01:15:01.334
- strategy here is to develop things that make sense to co-locate? That's more what I meant. But I certainly

01:15:01.334 --> 01:15:07.383
- agree with you. You don't want to create all these rules. It should just be a tool that is usable, i.e.

01:15:07.383 --> 01:15:13.256
- give clear clarity. People want to come here. We're open for business. We will extend sewer in these

01:15:13.256 --> 01:15:16.222
- sites. So look at them. The Ark is kind of a tool.

01:15:16.706 --> 01:15:23.295
- Probably not the example you want to use, because they'll have a very clear vision. Exactly. Exactly.

01:15:23.295 --> 01:15:29.755
- Exactly. And control on that recruiting there. Right. Some of these other sites. Yeah. Your point's

01:15:29.755 --> 01:15:36.408
- well taken. Right. Right. Compatibility. Yeah. Yeah. And just give it, yeah, like in. I do like, I do,

01:15:36.408 --> 01:15:42.932
- I'm sorry, go ahead, Liz. Oh, I was just going to say, but would co-location build competition? Like

01:15:42.932 --> 01:15:43.966
- you'd have one.

01:15:44.322 --> 01:15:49.262
- type of business here and another type, the same type of business here. You know what I mean? It might,

01:15:49.262 --> 01:15:54.155
- but I think that you might think the edge. Would that be good? Would that be what the business is one?

01:15:54.155 --> 01:15:59.285
- Yeah, it could. I mean, maybe it's not an apples to oranges. Maybe it isn't an apples to apples comparison.

01:15:59.285 --> 01:16:04.036
- Maybe if somebody just wants to come and pay people a lot of money to be anywhere, maybe we're just

01:16:04.036 --> 01:16:08.833
- really happy with that. But I'm just saying, how do we tie this to the broader strategy? I wonder if

01:16:08.833 --> 01:16:13.726
- people are trying to come into the room. We do have a 530 in here. Oh, I see. OK. Sorry, so I'll stop.

01:16:14.114 --> 01:16:20.352
- I just want to weigh in. I like the general approach that you've given us something to start with, the

01:16:20.352 --> 01:16:26.651
- tier one, tier two. And I think we can do a lot of work to answer some of the things that we're saying.

01:16:26.651 --> 01:16:32.768
- Because I'm saying I think we may be able to do some of the tier, some of the stuff you were talking

01:16:32.768 --> 01:16:39.006
- about under B and tier two. And there's some things in tier one now after listening to a comment about

01:16:39.362 --> 01:16:46.295
- some concern about the 125 being too much. Maybe we can figure out a way to be a little bit flexible

01:16:46.295 --> 01:16:53.158
- with that. So I'm just throwing that. I think we have a lot of room within the structure to come up

01:16:53.158 --> 01:17:00.366
- with a pretty good metric. Yeah, it's a pretty good start. Yeah, it really is. And maybe more incentives

01:17:00.366 --> 01:17:07.710
- could be added to the 125 and less for the 120 or 110. Agreed. And I guess I'm walking away with kind of a

01:17:08.194 --> 01:17:16.337
- big framing question, which is do we, so with the airport, it was beneficial for us to request a blanket

01:17:16.337 --> 01:17:24.248
- wheelser from CBU. So that's like a signaling tool, but it's not legally going to extend service. But

01:17:24.248 --> 01:17:32.081
- it was really important for them to have, to be able to attract employers. And so I'm just wondering

01:17:32.081 --> 01:17:36.734
- now whether it would be better for us to pre-identify sites

01:17:37.474 --> 01:17:43.393
- And then also have our criteria, if other sites become available. But can we just name where we think

01:17:43.393 --> 01:17:49.660
- the important? I kind of like that approach. There may be some that are so obvious we just want to identify

01:17:49.660 --> 01:17:55.579
- those. Just want to call them out. Right. Right. OK. OK. We probably ought to have a meeting where we

01:17:55.579 --> 01:18:01.498
- can just sit down and roll up the sleeves. It would be good to have somebody with a utility now. That

01:18:01.498 --> 01:18:06.430
- would be helpful. That would be very helpful. Because we know. I mean, we know that.

01:18:07.138 --> 01:18:13.900
- The sewers are at the airport. You know that they're across the street from ARC. I don't know the rest

01:18:13.900 --> 01:18:20.662
- of the map. So you're saying a meeting just to discuss strategic sites and dig into what? I think sort

01:18:20.662 --> 01:18:27.556
- of a working session. I would imagine somebody like Clark would probably bring a lot to that, too. Yeah,

01:18:27.556 --> 01:18:34.515
- I think so, too. OK, it's cool. I would open it to all those. I mean, John, of course, and Clark. Anybody

01:18:34.515 --> 01:18:36.222
- else, you think? You bet.

01:18:36.514 --> 01:18:42.922
- I will just note, because I get the idea around adding the overweighting the university partnership.

01:18:42.922 --> 01:18:49.330
- I think that's also very cool. I think it puts IU at sort of this center of gravity, which is great.

01:18:49.330 --> 01:18:55.992
- But I think in practice, it might be problematic, because it means that a modest project with university

01:18:55.992 --> 01:19:02.400
- partnership could pete out another type of project. So if you're in the context of competing, how we

01:19:02.400 --> 01:19:06.334
- weight things might matter a little bit. But maybe that's OK.

01:19:07.650 --> 01:19:16.901
- Well, we're excited. Thanks for being here. Thanks, Clark. Thanks, Clark. See you tomorrow.

01:19:16.901 --> 01:19:27.560
- Anything else? Because we want to be polite for the next group. This is awesome. We'll have tax abatement

01:19:27.560 --> 01:19:36.510
- fun. Are we still shooting for the second? On June 2nd. So we will stand, sit adjourned.

01:19:36.994 --> 01:19:39.646
- Thank you very much.