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2005-10-19 SRA Special Meeting MinutesSRA Minutes October 19, 2005 Page 1 of 7 MINUTES OF THE BOARD MEETING OF THE SALEM REDEVELOPMENT AUTHORITY HELD ON OCTOBER 19, 2005 A Special Meeting of the Salem Redevelopment Authority (SRA) Board was held in the upper floor hall of Old Town Hall, Derby Square, on Wednesday, October 19, 2005 at 6:00 pm. Roll Call Chairman Michael Brennan called the meeting to order, and on roll call the following members were present: Michael Brennan, Conrad Baldini, Michael Connelly, Christine Sullivan, and Russell Vickers. Also present were Lynn Duncan, Executive Director, Tania Hartford, Economic Development Planner, Peter Smith, consultant, and Debra Tucker, Clerk. REDEVELOPMENT AUTHORITY PROJECTS 1. Old Salem Jail: Presentations and Interviews Presentations and interviews with two of the four finalists for the redevelopment of the Old Salem Jail Complex were held. Diamond/Sinacori, LLC Diamond/Sinacori, LLC made their presentation. In the presentation, Mr. Diamond stated that Altagracia Gomez, President of the Point Neighborhood Association, would be joining the development team to help with the affordable housing plan. Russell Vickers asked how the developers would work with the City to develop an affordable housing plan, how that process would work, what the timeframe was expected to be, and what the product that is being offered would look like. Merrill Diamond discussed to the Hope VI program. He said he met with Ms. Gomez and thought that there were two different societies in Salem. He hoped that the Hope VI program would be fully funded during the next administration and hoped that Salem could take advantage of that type of federal funding. Mr. Diamond referred to Steve Tise of his development team to discuss the project further. Mr. Tise stated that there were two parts to the proposal. The first would be the development of an affordable housing plan that includes a survey of the properties in the Point neighborhood. The second part is the commitment from the development team to offer a portion of the development profits to move the plan forward. Ms. Sullivan asked whether they would be willing to also look at other areas of the city to include in the affordable housing plan. Mr. Diamond said that he had heard that the focus should be on the Point neighborhood and that that was the reason that Ms. Gomez was on the team. They hoped to talk to the community, the neighbors, and the City to determine where the needs are for this service. Mr. Diamond said that plans change and they will be flexible to change, if necessary. Peter Smith asked how the projected sales of $408 per Net Square Foot (NSF) could be achieved at the Old Salem Jail versus the $328 NSF achieved at the Old Police Station project. SRA Minutes October 19, 2005 Page 2 of 7 Mr. Diamond answered that $400 per square foot is aggressive. He stated that they are committed to quality. They expect to achieve $400 per square foot and possibly go beyond that number. He continued by stating that they had never done a project that did not break records on sale price. Mr. Diamond added that they intend for 50% of the profits, above the 20 %, to be given back to the community. Peter Smith asked whether the costs in the budget included money for contingencies. Mr. Diamond answered that costs were based on the specific cost to build Stoneleigh in Dedham plus inflation and the fact that that project was done a few years ago. Mr. Smith asked whether they had a contractor on board. Mr. Diamond said that they have been using CB construction, although they do not have a formal contract yet. He added that they are interested in using youths from the Point neighborhood interested in an apprenticeship program and wants to make sure that the contractor that he hires is also committed to this program. Mr. Smith asked about the sell out period. Mr. Diamond said that based on the Stoneleigh project, he expected 50% sellout, by word of mouth, before the project is completed. He stated that they do their own marketing and have no doubt that it will be successful. Mr. Vickers stated that the proposal read that pre-sales are a condition of financing. Mr. Diamond answered that there was an internal target for some presales. He added that if there were no list of interested buyers, based on marketing efforts, then they would miss the target. He expected that if they hit the market right, pre-sales should not be an issue. Michael Brennan spoke about the proposed schedule and indicated that the SRA was interested in signing an agreement in December or January. He noted that the proposal was not clear concerning the pre-sale requirements and asked if that was a condition of the purchase. Mr. Diamond answered that they would move as fast as is reasonable and practical. He noted that the weakest part of the proposal was the schedule because his team is not as familiar with Salem. They believe that it must be a community process. He noted that there is a risk and benefit and said that there are zoning changes, variances, and special permits needed. They intend to work systematically, from start to finish, and proceed in an orderly fashion. He added that if they did not get the pre-sales, they could still go forward. He felt that an advantage is that they would have approximately 1.7 parking spaces per unit. Mr. Vickers asked about the $1 million budgeted for demolition. Mr. Diamond said that the structure at Stoneleigh is similar to the Salem Jail and he knows it is complicated to remove the cellblocks. He thought that they were conservative on the demolition aspect but based it on experience. Mr. Vickers questioned the educational and historic elements of the project. Mr. Diamond said that he intended to have a component on site to explain the history of the site. He noted that at Stoneleigh there had been a Sacco and Vanzetti connection to the site and they built a park that connected that piece of history to the project. He said that something similar would be planned for this development. Mr. Vickers noted that comments from the Massachusetts Historical Commission noted that the plan had limited details for historic preservation and there was concern about the planned roof dormers. He also questioned how the development would comply with the Secretary of the Interior’s Standards and the requirements of the historic restrictions on the site. SRA Minutes October 19, 2005 Page 3 of 7 Mr. Diamond answered that they intend to comply and are determined in every way possible to comply. He argued that the exterior dormers intended were appropriate and if found not to be that they would go to interior dormers and keep the roofline intact. He added that their firm had been doing historic preservation for a long time and had learned a lot. They try not to repeat mistakes. Mr. Vickers asked about the deposit money due the SRA at the time of the letter of intent and about whether they would want to use it for environmental clean up. He noted that it might not be available as requested. Mr. Diamond said that it was a request, not a requirement. The proposal is not contingent upon use of the deposit for environmental clean up. Ms. Sullivan said that they sounded committed to finishing the project and asked what would derail them. Mr. Diamond answered that he could not think of anything. He noted that they had done work through the economic cycle and have completed every project since 1978 and are adaptive and flexible. Mr. Connelly asked about their timeline and also why they were interested in Salem. Mr. Diamond answered that they need to get more familiar with the community and the permitting process. He stated that they will let the SRA set the benchmarks. He noted that it took approximately one year to develop Stoneleigh and they sold it out within a year. They estimate construction at 15 months and anticipate 6 months to a year for permitting and 6 to 9 months for the architect to develop construction drawings. He stated that he would adhere to any schedule that makes sense and added that there is no team being interviewed that will move faster. Ms. Duncan noted that the proposal indicated that it could take up to a year for financing. Mr. Diamond answered that financing would be moving concurrently with the process. He added that Salem is great and has benefited from preservation and recognized sooner its historic heritage. He noted that the other firms were fine and could do the project but that he said that his firm really wants to do the project. He stated that they intend to work on one side of the City and try to benefit the other side. He said that he is asking the SRA to take a financial risk in order to do something more significant. Mr. Baldini stated that he was impressed and noted that the developer had been doing this type of work since 1978 and have always finished their projects. New Boston Ventures, LLC New Boston Ventures, LLC made their presentation. In their presentation, Mr. Goldman and Mr. Kanin provided the SRA with a commitment letter for bank financing for the project from Boston Private Bank. They stated that this was a firm commitment to finance the project and not simply a letter of interest. Peter Smith asked for more background on the pricing. Mr. Kanin replied that they had been working with Betsy Merry, a Salem realtor, who had recommended the pricing and they thought that it was fairly conservative. Mr. Smith asked about the parking proposal. Mr. Kanin answered that there would be a space for every unit and noted that there was municipal lot availability for $30 per month. He estimated that 18 of the 29 units proposed would sell for less than $400,000 and three would be in the $600,000 range. SRA Minutes October 19, 2005 Page 4 of 7 Mr. Smith asked about the judgment not to go with underground parking. Mr. Kanin stated that the 37 above ground spaces would be adequate and noted that the cost for underground parking would be prohibitive. Mr. Smith asked what the construction costs were expected to be. Mr. Kanin answered that he was confident of the $190 square foot cost. The cost estimates were based on those at the Charles Street Jail project. He was comfortable with the costs and felt they were conservative with a healthy contingency. Mr. Goldman noted that $250,000 was earmarked for remediation. Ms. Duncan asked if there was a specific number for demolition. They replied that it was about $500,000. Mr. Smith asked about the financing commitment and if there were any assumptions on the pre-sales. Mr. Goldman answered that they had just gotten the final commitment. Mr. Goldman added that there are no pre-sales requirements attached to the commitment. He stated further that they never once had a pre-sales requirement or ever needed it. He stated that so far all of their units have sold before the project is complete. Mr. Smith asked what the impact would be of the restaurant on the condominiums. Mr. Goldman replied that it would be minimal and in fact would be an amenity to the residents. Jeffrey Gates, Aquaitaine owner, stated that sales increased when a restaurant goes in and that this restaurant would not be the kind of restaurant known for noise. He stated that it is aimed towards entertaining families, holding business meetings, and providing room service. Mr. Vickers asked whether the restaurant would be a condo owner or a tenant. Mr. Gates said that he looks forward to being a condo owner with a stake in the building as the residents do. Mr. Vickers asked about the plan for valet service. Mr. Gates explained the valet service at his Boston restaurant, which has been used for years. He felt that the suburbs are competing very well. He noted that the elderly like to use the service especially in inclement weather. Mr. Gates commented that there is public access to the train and nearby public lots. He felt that the valet service is important and there will be a moderate fee or none depending upon business. He hopes to make arrangements with nearby owners of lots. Ms. Duncan questioned the parking alternatives and asked if there would be contracts with lot owners. Mr. Gates answered that he would have runners for the parking and had seen empty lots nearby. He did not feel there would be a problem and noted that in Boston lots 3 and 4 blocks away are used. Ms. Duncan questioned access on the state bypass roadside and the curb cut needed. She noted that this required approval and could potentially be delayed. She asked how this would affect the project as a whole. Denise McClure stated that the developer intends to meet with Mass Highway and said that the developers would keep the situation flexible. Ms. Sullivan noted that on the original proposal the restaurant idea did not seem as firm. Mr. Goldman replied that they are planning on doing the restaurant. Ms. Sullivan asked about the relationship between the jail property and the downtown as it relates to the restaurant being located on the Bridge Street side of the property where there is not a lot of SRA Minutes October 19, 2005 Page 5 of 7 commercial activity. She asked what the reasoning of locating the restaurant there was. Mr. Goldman answered that there is a new courthouse planned and that they are near the train station as well as head on to the planned Bypass Road. He felt that pedestrian traffic would be exciting. Mr. Goldman thought people would go around the corner rather than into Boston. Mr. Gates said that he was not as dependent on walk by traffic and would instead be a destination. He envisioned outdoor dining as well. Peter Smith noted that down the road that restaurants change and asked what the condo situation and conversion might be. Mr. Gates answered that he thought that this was the right thing and that he is not expecting a problem. Mr. Goldman added that Mr. Gates has been in the business a long time and changes with the trends. However, he said that the condo would be a commercial condo and could become shops or a law office if the restaurant did not succeed. Mr. Vickers asked for specifics regarding the Jail Museum idea. Ms. Duncan asked how the museum would be open to the public and how it would be separate from the residential areas. Mr. Alexander said that there would be separate access to a vestibule area with posted hours. He noted that there were a lot of things to work out including public circulation. Mr. Vickers asked for further clarification. Mr. Alexander and Mr. Goldman thought that it would be more of an exhibit than a museum. Mr. Vickers asked what changes would be made to the jail building exterior. Mr. Alexande r said that there would be none. Mr. Vickers noted that they are sensitive to the preservation of the slate roof. Mr. Alexander said that they plan to put the slate back. Mr. Vickers asked about the layout and access to the planned center courtyard. Mr. Alexander explained that the courtyard would be for pedestrian use with a vehicular turnaround with no permanent parking allowed. Mr. Goldman noted that their plan does not rely on any other land. He said that there are more Salem residents as team members. He has worked closely with Feingold Alexander, who will be assigning a Salem resident as a team member. They are committed to the downtown revitalization. Mr. Kanin added that several years ago he had seen the Salem Jail site when touring the old Salem Police Station and was intrigued by the property. Ms. Duncan asked about the historic preservation aspect of the project. Mr. Goldman replied that they are committed to being a partner and Mr. Alexander added that they are open to changes. Ms. Duncan asked for clarification on how the Jailer’s House staircase would be used, as it appeared that 2 units would share the entry. Mr. Alexander answered that they weren’t necessarily using it as access and may just restore it but that they have not worked out the details yet. Ms. Duncan asked about the $100,000 purchase price and the fact that they were subtracting out the two $30,000 non-refundable deposits and leaving an actual purchase price of $40,000. Mr. Goldman said that that was subject to negotiation. Ms. Sullivan asked about the timetable. Mr. Goldman answered that it fits in nicely since another project is coming to a close. Peter Smith asked about the target market and questioned the empty nesters versus young professionals. Mr. Kanin answered that there would be a mix and that the units would be anywhere SRA Minutes October 19, 2005 Page 6 of 7 from 900 to 2,000 square feet and that there would be three townhouses, which would draw a mix of both young professionals and empty nesters. Mr. Goldman added that empty nesters would be looking to downsize and might be interested in living downtown. 2. Old Salem Jail: Discussion Discussion was held concerning the next steps on the designation of a developer for the redevelopment of the Old Salem Jail Complex. Ms. Duncan noted that the staff is performing reference checks and that Peter Smith is checking on the financials of the firms. She further noted that Steve Cecil is researching specific architectural issues raised concerning unit layout as it correlates to the actual structure as well as the feasibility of an underground parking structure. Peter Smith asked if there had been any boring samples taken. Ms. Duncan and Michael Brennan said that there had not. It was noted that there could be granite below the surface that would affect the parking issues. Ms. Duncan said that Peter Smith had recommended moving forward with the terms of the financial piece. The staff and Peter Smith and 1 or 2 representatives of the SRA board would meet with the firms’ partners next week. Michael Brennan asked if it is necessary to do due diligence on all 4 proposed developers. Ms. Duncan and Mr. Vickers answered no. Ms. Duncan said that they could not do a financial analysis on The Classic Group because they have no equity partner. Ms. Duncan added that the Classic Group stated in their interview that they needed 60-90 days to come up with investors and they failed to meet the requirements. She recommended moving forward with the three other proposals. Ms. Duncan proposed a special meeting be held during the day and that an Executive Session be held then to discuss confidential financial information. The meeting to discuss the financial findings will be held on Thursday, November 3, 2005 at 4:00 p.m. It was decided that the November 9th meeting would be cancelled and be rescheduled for Monday, November 14, 2004 at 6 p.m. This will also be the Annual Meeting when officers are elected. Ms. Duncan presented a request by the Cecil Group for additional services over and above the previously approved contract. She stated that the original contract was for $35,000.00 and with amendments is now at approximately $60,000.00. Michael Brennan noted that the Cecil Group is providing an invaluable service. Mr. Connelly moved to approve additional services by the Cecil Group not to exceed $7,500.00. Mr. Vickers seconded the motion, and the motion passed (5-0). 3. Old Salem Jail: Temporary Roof Repairs to the Jailer’s House Discussion was held for approval to authorize funds for temporary repairs to the roof of the jail building. SRA Minutes October 19, 2005 Page 7 of 7 Ms. Hartford noted that the Jail roof needs temporary repairs. The floor is warping and she received a quote from United Roofers for $6,000.00 to patch the holes, take the slate off, and repoint. She said that she could not get a second bid. Mr. Connelly asked about the condition of the barn. Ms. Hartford answered that that was a separate issue and that the jail was of concern right now. Mr. Vickers moved to authorize the release of $6,000.00 for temporary repairs to the Jail’s roof. Mr. Baldini seconded the motion, and the motion passed (5-0). Ms. Duncan thanked Ms. Hartford for moving forward on obtaining the quote during a very busy time in the office. Mr. Brennan noted that the SRA needs a solid attorney for the Land Disposition Agreement. Ms. Duncan replied that she has a call in to an attorney. Discussion was held on the deposit and some of the proposals calling for use of the deposit for development. Mr. Brennan stated that he would like some money to be made on the project. Ms. Sullivan added that proceeds could be used on research of another downtown project. MINUTES Minutes for the meetings held on September 14, 2005, September 28, 2005, and October 11, 2005 were presented for approval. Mr. Connelly moved to approve the minutes of the September 14, 2005 meeting as presented. Mr. Vickers seconded the motion, and the motion passed (5-0). Mr. Connelly moved to approve the minutes of the September 28, 2005 meeting as presented. Mr. Vickers seconded the motion, and the motion passed (5-0). Mr. Vickers moved to approve the minutes of the October 11, 2005 meeting as presented. Mr. Connelly seconded the motion, and the motion passed (5-0). ADJOURNMENT There being no further business, Mr. Baldini moved to adjourn the meeting. Mr. Connelly seconded the motion, and the motion passed (5-0). Meeting stands adjourned. Respectfully submitted, Debra Tucker Clerk