Finance & Asset Management Committee Meeting Agenda

Transcription

1 Finance & Asset Management Committee Meeting Agenda Date: Tuesday, January 19, 2016 Time: 4:00p.m. 6:00p.m. Location: The Classroom Committee Members: Gloria Skouge (Chair), Ann Magnano, Patrice Barrentine, Jim Savitt, David Ghoddousi, John Finke, Betty Halfon and Ray Ishii 4:00pm I. Administrative: A. Approval of Agenda B. Approval of the Finance & Asset Management November 10, 2015 Committee Meeting Minutes Chair 4:05pm II. Announcements and/or Community Comments 4:10pm III. Reports and Discussion Items A. Review of the Preliminary Financial Statements for December 2015 I. Checking Account Activity Report B. Review of PC-1 South Elevator Signage 4:40pm IV. Action Items A. Action Item: Proposed Resolution 16-03: Authorization for Contract Authority Installation of Garage LED Lighting Fixtures Beach Electric B. Action Item: Proposed Resolution 16-04: Authorization for Contract Authority North Arcade Storage Project Harkness Construction LLC C. Action Item: Proposed Resolution 16-05:Authorization for Contract Authority Trial Installation of Harvester Wiserg Corporation Sabina Proto Tamra Nisly Bob Beckstrom Tamra Nisly Tamra Nisly 5:00pm V. Property Management Report A. Residential Property Management Report John Turnbull 5:10pm VI. Public Comment Chair 5:20pm VII. Closed Session I. Property Management Report - RCW [c] II. Review of Lease Proposals New Lease Sea Breeze Farm 94A Pike Street Lease Renewal Animal Gifts 1501 Pike Place #431 III. Review of Delinquency Report a. Vacancy Report b. Current Lease Negotiations Chair Jennifer Maietta Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

2 5:45pm VIII. Open Session A. Action Item: Proposed Resolution 16-06: Lease Proposals - January 2016 Chair Jennifer Maietta 5:50pm IX. Resolutions to be added to the Consent Agenda Chair 5:55pm X. Concerns of Committee Members Chair 6:00pm XI. Adjournment Chair Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

3 z Finance & Asset Management Committee Meeting Minutes Tuesday, November 10 th, : 00p.m. to 6:00 p.m. The Classroom Committee Members Present: Gloria Skouge, David Ghoddousi, Ann Magnano, John Finke, Ray Ishii, Betty Halfon, Jim Savitt Other Council Members Present: Staff/ Consultants Present: Ben Franz-Knight, Sabina Proto, Jay Schalow, Tamra Nisly, Jennifer Maietta, John Turnbull, Jessica Carlson, Brian Lloyd, Mark Kantor, Dianna Goodsell Others Present: Howard Aller, Joan Paulson, Chris Scott, Sharon Mukai, David Kenagy The meeting was called to order at 4:01 p.m. by Gloria Skouge, Chair. I. Administration A. Approval of the Agenda The agenda was approved by Acclamation B. Approval of the Finance & Asset Management Committee October 20 th, 2015 Finance & Asset Management meeting minutes. The October 20 th, 2015 Finance & Asset Management Committee meeting minutes were approved by Acclamation. Betty Halfon entered into the meeting at 4:03p.m. II. Announcements and Community Comments None Jim Savitt entered into the meeting 4:07p.m III. Reports & Discussion Items Section III, Items A. Preview of MarketFront Housing Resolution and B. Review of the Financial Statements for October 2015 were switched in order of business. A. Review of the Financial Statements for October 2015 Sabina Proto, PDA Director of Finance presented a review of the Preliminary Financial Statements for October Sabina Proto discussed the PDA Balance Sheet with the Committee. She reported that there was a slight decrease from the prior month under Current Assets. Designated cash showed an increase from the prior month due to monthly Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

4 Page 2 contribution to Capitol Reserves Replacement Fund. Restricted cash had reported a very small change. Fixed Assets had increased due to the work completed under Capital Projects. Current Liabilities had increased in categories including accrued payroll and other liabilities. Long Term Debt had decreased due to payment on 2009 bond. Our Net Position for the current year operating result was $3,776,060. Lastly, under the Accounts Receivable Report, the accounts receivable indicated a slight decrease compared to August. Under the PDA Operating Statement, the Total Revenue for the end of October 2015 was $13,659,763, over budget by $739,514. The Total Operating Expense year-to-date was $9,535,626, under budget by $79,104. The Net Operating Result YTD for the end of September was $4,124,137, over budget by $818,618. The Net Result after Debt Service & Reserves that was included in the following Annual Budget was $2,055,516. The Net Result after Debt Service & Reserves for the end of October 2015 year-to-date was $2,424,618. Lastly, Sabina Proto reported on the footnotes for the Operating Statements. Commercial Revenue was over budget mainly in percent rent by $411,126 for the January to October period. Residential Revenue was over budget $32,935. Daystall Revenue was under budget with lower attendance seen overall. Surface and Garage Revenue was over budget with Garage Revenue over budget by $266,672. Operating Expenses were under budget in most departments besides the parking, surface parking management fee, garage expenses and utilities. B. Preview of MarketFront Housing Financing Resolution Low Income Housing Tax Credits Mark Kantor, Counsel from Kantor and Taylor and Brian Lloyd, Development Director of Beacon Development Group presented a preview of the initial draft regarding the Western Avenue Senior Housing Financing resolution. Mark provided a detailed explanation of the proposed action including a background on the MarketFront Housing ownership structure of the transaction. Primary goals for the Low-Income Housing Tax Credit transaction included the protection of the Markets assets as well as remaining on schedule for the project. There was a discussion that followed after the preview of the draft MarketFront Housing Financing resolution. Jim Savitt commented on the proposed transaction inquiring how long would the lease be in comparison to the previous LaSalle financing transaction. Mark Kantor responded that the lease would be 75 to 99 years. Jim Savitt said that he understood that we are going to lease the building that is 99.9% owned by the investor in which we are the managing member of that entity. He noted that if the investor decided that we were not managing the building consistent with our

5 Page 3 IV. fiduciary obligations to them, in essence as the full owner of that entity, they could conceivably have us removed as the managing member. He further noted that the investors would essentially be left holding the lease for 99 years of our property with someone else as the managing member. John Finke asked Mark if there was possibility of us returning the stakeholders investment and not having them take us over. John Finke noted that it would be useful to have a less formal workshop educating the PDA Council and public on the Low Income Housing Tax Credit and New Markets Tax Credit transactions like what had been done in the past with the LaSalle Senior Housing transaction. Mark Kantor noted that he would be happy to host a workshop regarding the Low- Income Housing Tax Credit transaction. Ann Magnano noted her support of the proposed resolution. Ben Franz-Knight stated that the good or bad news depending on perspective is that it is likely we would go through a refresher on the New Markets Tax Credit Transaction for the MarketFront housing. He separately noted that some of the things we would bring back is clear explanation within that managing member structure including what the notices of default are and what the opportunities to cure are. Jim Savitt responded to Ben s comments regarding the risks for the LIHTC transaction. He mentioned that his work is the world of conflict. He said that the obligations of the managing member may not be the same as it is 20 years as it is today; he was concerned about the future relationship between investors, members and managers of legal entities. He lastly noted that he wanted the Council to review all the final applicable documents as part of the lease signing before it is officially approved and signed. I. Checking Account Activity Report The Checking Account Activity Report for the month of October 2015 was distributed to Dianna Goodsell, Executive Administrator. Action Items A. Action Item: Proposed Resolution 15-76: Adoption of the 2016 PDA Operating and Capital Projects Budgets Ben Franz-Knight provided a brief overview of the written summary that was included with the proposed 2016 Budget. He noted that the resolution to approve the 2016 Budget would come back to the Full Council for final approval at the end of the month. He discussed a few overarching priorities for the budget including maintaining a conservative approach in He stated that this is a budget that does not include any significant new initiatives. He explained the reasoning for the conservative approach to the 2016 Budget noting that it is not because we are not aggressive or not pursuing every opportunity but fundamentally because of us opening a new building in He noted

6 Page 4 that now is not the time to take upon any significant new work until this building is operational; we would continue to refine all of our operations and support all of our programs while maintaining a high level of performance of existing work. Ben Franz-Knight introduced Proposed Resolution which states that the PDA is a public corporation responsible for the efficient development and operation of the Market and for the effective provision of services designed to preserve and promote the economic health of the Market and its tenants consistent with the Urban Renewal Plan, the Historic District Ordinance and Guidelines, the PDA Charter, deed restrictions, and other City and State ordinances and laws; and, whereas, as a public corporation, the PDA operates on a non-profit basis, where any excess of revenues over expenditures is reinvested in the Market; and, whereas, the PDA desires to communicate to the Market community and the public the bases for its financial, operational and other policy and program decisions; whereas, except for HUD contract rents, the PDA s operations are not subsidized by public funds and rely on rental and miscellaneous income for its total operating and capital revenues; and, whereas, the Budget schedule and summary were made available to tenants; the PDA Council's Finance & Asset Management Committee conducted working sessions, considered public testimony, and suggested amendments to the 2016 Proposed Budget; and has recommended adoption of the 2016 Budgets; and whereas, the 2016 Operating and Capital budgets are approved as a whole, with the exception of the Employee Pension contribution which will be determined in February 2016 based on the 2015 Final Operating Statements. Now, therefore be it resolved, that the PDA Council does hereby adopt the 2016 PDA Operating and Capital Budgets as outlined in the 2016 Budget Document attached hereto as Exhibit A, And be it further resolved, that the PDA Council affirms its established budget, revenue and operating policies as follows: (1) All tenant sectors of the Market bear a responsibility for PDA costs incurred to serve the Market's operating and capital needs as a whole, and to fulfill the public interest purposes of the PDA, to preserve and promote the traditional character of the Market; (2) The PDA Council recognizes that external economic conditions and competitive pressures affect Market businesses and residents and attempts to prudently and sensitively take these factors and their potential effects into account in setting revenue estimates and requirements and in conducting its property management responsibilities in the course of the year; (3) The Market is operated as an integrated whole with services distributed in accordance with ongoing maintenance and operations requirements, current and future capital needs, and needs for response to critical or emergency demands. The flexibility created by operating the Market as a whole, instead of as independent and exclusive separate and individual buildings or tenant groups, enables the PDA to maximize

7 Page 5 efficiency and responsiveness to community-wide and Market-wide needs, while still providing attention to individual tenant needs. This operating mode, combined with the PDA's fulfillment of Charter-mandated public interest and preservation objectives, does not lend itself to a strict relationship between costs and revenues from individual buildings or between costs and revenues from individuals or groups of tenants. While costs and revenues can be estimated for subgroups of Market facilities and tenants, it is not appropriate from a policy or operational standpoint to develop the budget and operate the Market on a strict cost center basis. Betty Halfon moved the proposed resolution, Ann Magnano seconded the motion. For: Gloria Skouge, David Ghoddousi, Ann Magnano, John Finke, Ray Ishii, Betty Halfon, Jim Savitt Against: 0 Abstained: 0 Resolution 15-76: Adoption of the 2016 PDA Operating and Capital Projects Budgets had passed unanimously by the Committee by a vote of V. Property Management A. Residential Property Management Report John Turnbull presented the Residential Property Management Report for the month of October He reported that the residential vacancy rate at the Market was near 2%. He reported good news regarding the recent REAC inspection noting an end result of 99% percent compliance. He briefly spoke of the work of the Residential Portfolio Manager, Elsie Janson for implementation of new house rules for the Market s Residential Buildings; guidelines would address after hours activities in hallways, housekeeping and pest control issues. There would also be updated criteria for residency which was revised to account for many changes in non-discrimination, fair housing and reasonable accommodation of City, State and Government laws. He lastly provided an overview of the upcoming holiday gatherings for the Market residential community. VI. Public Comment Joan Paulson commented on the proposed budget for She said at the recent Finance meeting briefing that she he had brought up the issue that the budget is one step in evaluating your goals and responsibilities. She noted that updated information included in the budget packet was a good presentation overall but does not measure the PDA s ordinance obligations, whether not the performance is doing better in year s past. She said there is not enough measurement to evaluate the overall budget in relationship to what it required for the PDA S ordinance obligations; this is how a budget should be presented, evaluated and understood by all board members. She noted that the other aspect that was not presented or reviewed was the reserves study and whether the PDA was on target or off target; this includes accounting for the increase of 25% square footage of the Market with PC1N and acquiring Heritage House. She said that Heritage House was originally a Seattle Housing Authority building and was the second building

8 Page 6 that the PDA purchased from SHA. She noted that there was a decrease of maintenance done for the Heritage House for many years, which the PDA is now responsible to pay for out of its reserves. She lastly concluded that the budget process is not comprehensive, does not include a balance approach and does not provide enough information to look at the financial obligations and fiduciary responsibility. David Kenagy noted his appreciation on the comments regarding the financing for the Low-Income housing. He noted that if there was a workshop scheduled, he would hope the public would be invited. Howard Aller stated that we are lucky to have Mr. Savitt s third eye to detect us from ourselves, because nobody can be perfect but Jim sees to it that we are as close to perfect. VII. Closed Session The Committee Chair stated that the Committee would go into Closed Session at 5:16pm to discuss the Property Management Report and return in to Open Session at approximately 5:45pm. The Committee entered into Closed Session at 5:16pm. I. Property Management Report - Closed Session (RCW [c]) II. III. Review of Lease Proposals Lease Renewal Bella Umbrella, 1535 First Ave #8 New Lease Choukette, 1500 Western Ave Review of Delinquency Report a. Vacancy Report b. Current Lease Negotiations The Committee entered into Open Session at 5:35pm The Committee discussed the property management report which included the delinquency and vacancy report along with the current commercial lease negotiations during the Closed Session. VIII. Open Session A. Action Item: Proposed Resolution 15-77: Lease Proposals November 2015 Jennifer Maietta introduced the lease proposals for November 2015 which included the following businesses: Tenant Term Start Date Bella Umbrella Two (2) Years December 1, 2015 Jodell Egbert

9 Page 7 Choukette, Inc. Five (5) Years December 1, 2015 Elizabeth Bastoni & Ludovic Guillaume David Ghoddousi moved the proposed resolution, John Finke seconded the motion For: Gloria Skouge, David Ghoddousi, Ann Magnano, John Finke, Ray Ishii, Betty Halfon, Jim Savitt Against: 0 Abstained: 0 Resolution 15-77: Lease Proposals- November 2015 had passed unanimously by the Committee by a vote of IX. Resolutions to be added to the Consent Agenda Resolution 15-77: Lease Proposals for November 2015 was added to the November 19 th PDA Council meeting Consent Agenda. Resolution 15-76: Adoption of the 2016 PDA Operating and Capital Projects Budget would be placed under new business for the November 19 th PDA Council agenda. X. Concerns of Committee Members None XI. Adjournment The meeting was adjourned at 5:39p.m by Gloria Skouge, Chair Meeting minutes submitted by: Dianna Goodsell, Executive Administrator

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19 PROPOSED RESOLUTION Authorization for Contract Authority Installation of Garage LED Lighting Fixtures Beach Electric January 2016 WHEREAS, WHEREAS, WHEREAS, WHEREAS, the Pike Place Market Preservation and Development Authority (PPMPDA) was chartered by the City of Seattle pursuant to RCW et. Seq with the mission of promoting enterprises essential to the functioning of the Pike Place Market, including the preservation and expansion of the low-income residential community, the promotion and survival of small businesses, and the expansion of services to the public market and community; and, in order to maintain the viability of the Pike Place Market buildings the PPMPDA had determined that the light fixtures in the Garage were in need of replacement; and, the PPMPDA Adopted Resolution approving the purchase of energy saving LED s as part of a project eligible for Seattle City Light (SCL) Energy Conservation Incentive rebates; and, the PPMPDA has executed a bid process to install the LED Light Fixtures that were purchased as part of Adopted Resolution 15-86; and, NOW, THEREFORE, BE IT RESOLVED that the PPMPDA Council authorizes the PPMPDA Executive Director or his designee to enter into a contract with Beach Electric in an amount not to exceed $50, for the installation of 312 Led Fixtures in the Parking Garage located at 1531 Western Ave. The funds for this project will be drawn from the Garage Reserve GL Gloria Skouge, Secretary/Treasurer Date Date Approved by Council: For: Against: Abstained: Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

20 PROPOSED RESOLUTION Lease Proposals January 2016 Tenant Term Start Date Sea Breeze Farm One (1) Year February 1, 2016 Sea Breeze Farm, LLC / George Page Animal Gifts Five (5) Years February 1, 2016 Najeeb & Adiba Osman Gloria Skouge, Secretary/Treasurer Date Date Approved by Council: For: Against: Abstained: Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

21 Lease Summary Date: January 19, 2016 Business Name/Owner: Address/Building/Square feet: Tenant Since: Primary Term: Options: Use Description: Sea Breeze Farm / Sea Breeze Farm, LLC (George Page) 94A Pike Street / Corner Market / 731 sf New Tenant One (1) Year Two (2) Years Retail butcher/meat market, charcuterie, dairy, wine and pantry items from Sea Breeze Farm. Business Name/Owner: Animal Gifts / Najeeb & Adiba Osman Address/Building/Square feet: 1501 Pike Place #431 / Fairley / 370 sf Tenant Since: Since 1995 Primary Term: Five (5) Years Options: N/A Use Description: Retail business specializing in the sale of animal related items. Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101