|REGULAR MEETING OF THE COUNCIL OF THE CITY OF NOVI
MONDAY, MARCH 3, 1997 AT 7:30 PM
COUNCIL CHAMBERS - NOVI CIVIC CENTER - 45175 W. TEN MILE ROAD
Mayor ProTem Crawford called the meeting to order at 7:40 PM.
PLEDGE OF ALLEGIANCE
ROLL CALL: Mayor McLallen (absent/excused), Mayor ProTem Crawford, Council Members Clark, Kramer (absent/excused), Mitzel, Mutch, Schmid
ALSO PRESENT: Assistant City Manager Craig Klaver, Director of Public Services Tony Nowicki, City Attorney David Fried, Finance Director Les Gibson, Director of Parks and Recreation Dan Davis, Superintendent of Public Works Bruce Jerome, City Clerk Tonni Bartholomew
1. Report on Mandatory Public Water Supply Connection presented by Bruce Jerome
Mr. Jerome reported they implemented the moratorium in July or August of 1990 because of pressure problems on the Novi system and on the systems of thirteen other communities who are customers of the City of Detroit. Mr. Jerome reported after the City of Detroit completed capital improvement projects, the State Health Department rescinded the moratorium on January 29, 1997. Novi mailed letters to approximately 682 residents whom the moratorium impacted. Mr. Jerome met with representatives from Walden Woods I and Walden Woods II. They had three issues with the ordinance as written. Those issues are; 1) Not every perspective buyer in every subdivision felt they were properly informed by their builder of the mandatory requirements., 2) The ordinance contains a provision that requires connection within 120-days of the rescinding of the moratorium. Residents felt they should expand the time so they could budget and work into compliance with the ordinance. and 3) The ordinance currently requires that the $1,100.00 connection fee be paid immediately. Mr. Jerome explained that residents believe this amount directly affects their personal budgets since they were not aware of the mandatory connections.
Mr. Jerome researched the covenants and deed restrictions pertaining to a number of the subdivisions that the moratorium impacted. He found that some covenants and deed restrictions included language that required mandatory connection once they rescinded the water moratorium. However, he noted Walden Woods I was one that did not have the mandatory language. Mr. Jerome stated they had discussions with the Michigan Department of Environmental Quality (DEQ) which regulated Novi’s Type 1 Community Water System and the Oakland County Health Department which regulated private individual wells. Mr. Jerome reported three of the subdivisions in question are on Type 3 community wells and they are regulated by the DEQ. Mr. Jerome reported there are issues that need to be addressed with these outside agencies.
Mr. Jerome said a resolution had been proposed to direct the city attorney to prepare amendments to the current ordinance in conjunction with input from the DEQ and the Oakland County Health Department in order to address the issue of the mandatory connections. Mr. Jerome advised there are mandatory provisions to connect for the three subdivisions on Type 3 wells which were only permitted by the DEQ as temporary in nature.
Lynn Kocan - indicated that she was very pleased with Council’s Saturday meeting. She asked that Consent Agenda Item 2 be removed and placed on the agenda as an Action Item at the next regular meeting to allow for final ordinance language to be submitted to Council.
Diane Chippewa - spoke about the road conditions on Nine Mile Road and asked that there be some attention given to their problems. Mayor ProTem Crawford asked Mr. Klaver to address the issue and report back to Council.
Scott Pitcher - Director Elect of Walden Woods Homeowners Association Advisory Committee, spoke against a mandatory water hook up. He advised Council that residents objected to a mandatory water hook up because they believe their wells are safe and fully functional. Also, they were unaware of the requirement to tap into city water when they lifted the moratorium and they believe well-managed growth is more favorable then unmanaged growth. Mr. Pitcher said the residents of Walden Woods ask that Council amend the current ordinance to allow those homeowners with safe and functional wells the right to choose whether to tap into the city water supply immediately or not.
Matt Quinn - asked for permission to speak to the Council during the City Initiated Rezoning issue. There was Council consensus to allow Mr. Quinn to speak at that time.
Joe Sutika - member of Walden Woods II, spoke against a mandatory water hook up.
Steve Schuster - spoke against the vacation of Erma Street. He presented Council with a poll taken of 37 homes in the subdivision. Mr. Schuster reported they obtained 39 signatures from residents against the vacation of Erma Street. He stated they were on high ground and if there was a flood, the only exit would be from Erma Street.
Mayor ProTem Crawford noted that Council has initiated a 120-day trial period. He added they would look at the concerns Mr. Schuster expressed
Jim Utley - spoke in opposition to mandatory water hook-up.
APPROVAL OF AGENDA
Councilman Mitzel requested they add, Schedule a Special Meeting for a Zoning Ordinance Study Session as Item 9.
CM-97-03-067: Moved by Schmid, Seconded by Clark, MOTION CARRIED UNANIMOUSLY: To approve agenda as amended
Vote on CM-97-03-067: Yeas: Crawford, Clark, Mitzel, Mutch, Schmid
Councilman Clark removed Item 2. Councilwoman Mutch removed Item 1.
CM-97-03-068: Moved by Clark, Seconded by Mitzel, MOTION CARRIED UNANIMOUSLY: To approve Items 3, 4, 5 and 6.
Vote on CM-97-03-068: Yeas: Crawford, Clark, Mitzel, Mutch, Schmid
3. Approval of Amendment to Ordinance No. 97-159 - Tree Nuisance Ordinance -
4. Award bid for Softball Bids to Dee’s Sport Shop in the amount of $3,701.70
5. Approval of Claims and Accounts - Warrant No. 483
6. Approval of Novi Youth Assistance General Citizens Committee proposed
MATTERS FOR COUNCIL ACTION - PART I
1. Approval of Resolution, Mandatory Public Water Hook up
Tony Nowicki, Department of Public Services, advised Council the resolution authorized the City Attorney to work with the Michigan Department of Environmental Quality and the Oakland County Health Department. They would review the ordinances and the mandatory connection provisions to see if there were ways to lessen the impact on the homeowners and protect the drinking water. He stated the DEQ had some concerns about the long term impacts and effects of using a well. He stated they were looking for authorization to meet with the attorneys and the outside regulatory agencies to determine how they could modify the ordinance to protect the interest of all.
Mayor ProTem Crawford asked if the homeowner’s president could be involved so they could address the letters and the concerns expressed. Mr. Nowicki thought that was possible, but he was concerned that they could not function if they had a large committee. However, if homeowners association presidents wanted to be involved, he thought it would work. Mr. Nowicki said before they bring this back to Council, they would meet with everyone affected to explain the various methodologies and logic behind the ideas generated through the meeting.
Councilman Schmid stated when they allowed the City of Novi to continue to build, he assumed there was a definite agreement under the water moratorium between the developer and the City. He believed that when they lifted the moratorium, the homeowners had to hook up. He asked if the homeowners had an agreement with the City or with the various developers. Mr. Nowicki replied it was an agreement between the various developers and the regulatory agencies, and the City of Novi had no part in it. He noted the only agreement the City was involved with was the Walden Woods development and that occurred early in the process.
Councilman Schmid asked if Walden Woods knew they had to hook up. Mr. Nowicki replied at that time there was no provision in the City of Novi ordinances mandating that.
Councilman Schmid said he did not mean the city ordinances and he knows they can waive them without much of a problem. Mr. Nowicki said they had no documentation indicating that the residents in Walden Woods would have to connect by any of the regulatory agencies. However, he added they were still researching this.
Councilman Schmid asked if the others were committed. Mr. Nowicki replied they appeared to be committed and they included those provisions in their covenants and deed restrictions.
Councilman Schmid asked if Walden Woods was the only one not in the covenants. Mr. Nowicki replied according to their research to date, that is correct and it applies only to Walden Woods I.
Councilman Schmid asked if they were addressing the issue as a total package. Mr. Nowicki explained they would look at the total package and talk to the residents of Walden Woods I. They would further advise them about the health department’s concerns and that it is possible that this development might have slipped by the regulatory agencies. Mr. Nowicki believes it would be an attorney’s opinion as to the legal requirement to connect.
Councilman Schmid asked if he would come back with a recommendation for a number of subdivisions or Walden Woods. Mr. Nowicki thought they would have to look at everybody.
Councilman Schmid believes if they looked at everyone, they would tell them to hook up. Mr. Nowicki said that is right. He had subsequent conversations with the people from both health department agencies and they indicated a willingness to work with the City on this issue.
Mr. Fried, City Attorney, stated he would have to research this, but did not believe there was any representation made to them that they had to hook up or not hook up. He said they would treat each problem independently as the facts and problems occur.
Councilman Schmid said if other developers had a clear understanding that they had to hook up and did not advise the individuals who bought the homes, then he thought they would have to pay for the hook up.
Councilman Clark noted attached to the approval of a resolution directing Mr. Fried to prepare amendments to Ordinance 94-45.17, there is a memorandum from Mr. Jerome to Mr. Nowicki which specifically indicated on Page 3 that, "Should the connection to the public water system be mandatory, I feel that with the exception of those developments which are on Type 3 community wells the answer is no. My opinion is based on the following facts . . . " They then stated the facts and noted that the three developments on the Type 3 community well system appear to be Lochmoor Village with 84 occupied homes, Creek Crossing with 12 occupied homes and Vistas of Novi with 75 occupied homes. A notation stated it represented approximately 25% of the 682 homes which the moratorium impacted.
Councilman Schmid asked when this item was coming back before Council. Mr. Nowicki replied as soon as possible. However, he added they have 90-days and any hookup would be on a voluntary basis.
CM-97-03-069: Moved by Schmid, Seconded by Clark, MOTION CARRIED UNANIMOUSLY: To approve the Resolution directing the City Attorneys to prepare amendments to Ordinance 94-45.17 and return to Council with their findings
Mayor ProTem Crawford asked if there was a way to involve a limited number of concerned homeowners.
Mr. Nowicki said definitely and he thought they could put together a good package. Additionally, they recommended as part of this to bring in people from both of the health departments for public informational meetings to update anybody on a well in the community who has questions regarding their well, well maintenance, etc. The health departments have indicated a willingness to do this and Mr. Nowicki believes it will take after the 90 days.
Councilwoman Mutch asked if people with wells were required to have inspections. Mr. Nowicki thought they would have some sort of bacterial test. However, he understood that an official well inspection policy was not implemented by Oakland County until December
Councilwoman Mutch asked if the county was obligated to notify the residents of their policy. She further asked if the homeowner is required to do anything once the well is in place. Mr. Nowicki said the policy is for new wells and once the well is in place, they do not require that the owner do anything.
Councilwoman Mutch asked if am owner is not interested, does it mean they are on their own. Mr. Nowicki replied that this would be one issue for discussion. Another issue would be if the individual homeowner wanted an inspection of their well, how would they do it and what would they get.
Vote on CM-97-03-069: Yeas: Crawford, Clark, Mitzel, Mutch, Schmid
2. Approval of Zoning Map Amendment 18.597 - City Initiated Rezoning from
OS-1 and Districts to RC District or any other appropriate zoning district -
Property located south of 12 Mile Road and west of Donelson Drive.
Brandon Rogers, Planning Consultant, advised they referred this to the Planning Commission to reappraise the merits of rezoning the property. This was done through authorization by the Master Plan and Zoning Committee to examine a larger area than what they previously knew as the Decker property. Mr. Rogers had prepared four maps of the property in question and reviewed them with Council. He advised Council there were two background reports in their packets; he did one and Rod Arroyo did the other. Mr. Rogers stated it was the recommendation of his office to approve this site both for a Master Plan Amendment to Non Center Commercial with a PD-3 overlay and to rezone the subject 30 acres to RC zoning. He stated the Planning Commission considered both issues and recommended postponement of amending the Master Plan for six months. To amend the Master Plan six affirmative votes were needed and the vote was 4 -3. Consequently, they postponed the matter. On the question of the zoning map amendment the Planning Commission considered the merits of the city initiated rezoning and voted 4-3 to recommend a rezoning to the City Council.
Councilman Schmid stated he was concerned about traffic. He had read the Planning Commission minutes and thought Laura Lorenzo raised some good points about traffic and she also noted some advantages of not rezoning it until Council saw a plan.
Mr. Fried stated that rezoning was one thing and the approval of a site plan was another.
Councilman Schmid asked it the Council had a hammer there. Mr. Fried replied Council most certainly did. He advised that there were two supplements regarding square footage
attached to his report.
Rod Arroyo, Traffic Consultant, reviewed his report, Donelson Drive Area Study Traffic Overview.
Councilman Mitzel asked if Table A was just new trips. Mr. Arroyo said yes.
Matthew Quinn spoke on behalf of DEKA Associates and Emerald Oaks, who own part of the property. He reminded Council that this was a city initiated rezoning and their private rezoning for a portion of the property was still sitting in the background and would come to Council at a later date. Mr. Quinn stated when their rezoning was before Council they decided that it was something that city professionals should study. Consequently, they sent it back to the Planning Commission, and to Mr. Rogers and Mr. Arroyo to offer their professional opinions about what Council should do as they consider the possible rezoning of the area. They also sent possible Master Plan changes to the Planning Commission. Mr. Rogers did an extremely thorough job in looking at the information and he recommended the rezoning of the property. Mr. Arroyo also performed a traffic analysis and he determined that depending upon the type of office versus the type of commercial, it was almost a wash in this area.
Mr. Quinn disagreed with the 400,000 plus square foot figure given by Mr. Rogers for possible retail use. He said he had about 20 acres of the 30 under their control and the site plan they proposed had about 177,000 square feet of retail on 20 acres. He did not know how Mr. Rogers got 180,000 square feet on an additional ten acres with the wetlands and woodlands that are there.
Mr. Quinn said with the 4-3 action of the Planning Commission to recommend to Council that this be rezoned to commercial use, he believes Council had to look at the reasons given for this rezoning. Mr. Quinn stated if they rezoned it to RC, they would respectfully request that Council refer it to the Planning Commission to consider the Master Plan change to PD-3. Mr. Quinn said this zoning would give Council further control because an RC with a PD-3 Option requires that they submit a development plan to Council. He further stated the property owners he represents already discussed the possibility of donating the right of way for the West Oaks extension.
Mr. Quinn said if it appeared there are not enough Councilpersons for a favorable vote,
he requested that Council table this item until their next meeting.
In response to Mr. Quinn’s question regarding the square footage and a three-story configuration, Mr. Rogers reported his numbers were maximums if built to the full stories allowed under that district.
Councilman Schmid said for years they have zoned this other then commercial. He thought it was time that Council moved and got the land developed. He hoped that, despite DEKA’s plan, this property be combined to create a much larger development that would be a credit to the community and one of extreme quality. He thought it was exciting and hoped a major developer would take over the whole project and come in with an outstanding project.
CM-97-03-070: Motion by Schmid, Seconded by Mutch, MOTION CARRIED: To
approve city initiated Zoning Map Amendment 18.597 from OS-1 and RA Districts to RC Districts
Councilman Mitzel asked if DEKA approved the action, would Council have to take action on the former petition and if denied would Council have to take action. Mr. Fried replied this action would subsume DEKA’s and no action would have to be taken by Council and if denied it would be the same situation.
Councilman Mitzel asked if DEKA’s petition was mute, does this one supersedes in both cases. Mr. Fried said that was correct.
Councilman Mitzel said it was suggested that the site plan should address the traffic generation on the public roads. He understands that Council is limited on what they can require on a site plan in process. Mr. Fried said his understanding was correct.
Councilman Mitzel asked what tools does Council have to address traffic issues on the public roads. Mr. Fried said they only have the zoning ordinance.
Councilman Mitzel asked if traffic could be addressed if there were a PUD on the books.
Mr. Fried replied it could.
Councilman Mitzel noted to Council and Administration that when they referred this back for study to the Planning Commission, he was under the impression it was going to come back as a recommendation about what type of uses would be possible. He did not realize they would go as far as an actual city initiated rezoning request and public hearing. After rereading the minutes, he saw that some Council Members did mention that maybe it could be packaged as a whole, cleaned up and brought back to Council for appropriate action. Before the City’s staff recommends a city initiated rezoning, Councilman Mitzel believes Administration should give Council an indication that they were thinking about it. If Council had no interest in city initiated rezoning, it would waste city resources, time, money, etc.
Councilman Mitzel thought the two options talked about the last time it was before Council were OST and RC zoning. Councilman Mitzel added there are considerable differences in the development issues between the OST and RC and he did not believe there was a strong case made for Regional Center Commercial on the site.
Mr. Fried said DEKA asked if they did not adopt this amendment that it be tabled until there was a full Council. Since they have a great concern in this matter, Council should give that consideration also.
Mayor ProTem Crawford asked what the requirement was for adoption. Mr. Fried said it requires that a majority be present.
Councilman Clark said if they took a vote on this proposal tonight, it would not preclude it from being brought up as long as it was done at the next meeting. Mr. Fried said Councilman Clark is correct.
Councilman Clark added it would be a motion to reconsider.
Councilman Schmid said in terms of traffic, he believes there is a time when Council has to move forward and get development. He believes the development would cause traffic to be taken care of and he encouraged Council to vote on the motion.
Councilwoman Mutch stated she has a concern with simple majority and would rather see a full Council vote. However, since they made the motion and she seconded the motion she would vote in support of it.
Mayor ProTem Crawford concurred with Councilman Schmid and believes it is time to act on this parcel because it has been there for 20 years. He stated the consultants and the Planning Commission recommend it and he believes Council will have ample control over this when it comes back. He added that he hopes it will come back as a PD-3. He reported that he would support the motion.
Councilman Mitzel said he somewhat based his concerns about the rezoning on the traffic projections Mr. Arroyo made. Since Councilman Mitzel was focusing on Mr. Arroyo’s table where the absolute numbers of the new trips were significantly different between some of the scenarios, he questioned Mr. Arroyo’s statement in terms that it may be a wash from a traffic perspective.
Mr. Arroyo said when comparing retail with office, he did say that. He explained when they compare the past by new trips versus total trips, the total trip number in the text for example, is the 450,000 square feet of retail. The total peek hour trips are roughly 1,700 versus the 1,250 which are the total new trips. The difference between the two represents those that are already on the road network that are going to turn in and out. There will be 1,700 vehicles turning in and out of the project during the peek hour but that represents that there are approximately 500 of those that would already be on the road network.
Councilman Mitzel said he was interested in the level of service for the road. Are they talking about 5,000 to 13,000 new trips on a road that already has 50,000 or are they talking about 5,000 to 13,000 on a road that only has 13,000. What is the impact to someone traveling on 12 Mile Road.
Mr. Arroyo said they should look at the comparison of new trips because that is where he would see how much new traffic would be added to 12 Mile Road. He explained he could not relate that to an exact level of service because it would depend upon how much other traffic occurred from other developments between now and the time that one of these developments comes on line at the subject site.
Councilman Mitzel asked if the motorists going through that area on a daily basis would notice a difference. Mr. Arroyo said it depended on the level of development.
Councilman Mitzel asked Mr. Arroyo if his conclusion was that traffic was not a major factor in this decision. Mr. Arroyo said yes. When he wrote that conclusion, it was based on the comparison of office to retail and the OST comparison came as a supplement after they wrote this report. He said if Councilman Mitzel was seriously considering OST, he would not make the same conclusion.
Councilman Mitzel said then that part of the report did not include the consideration of OST. Mr. Arroyo said that is correct.
Vote on CM-97-03-070: Yeas: Crawford, Mutch, Schmid
Nay: Clark, Mitzel
3. Request for Approval of Class C Liquor License - Breaktime Billiards - Property located south of Pontiac Trail and east of Beck Road
John Carlin, representing the applicant, introduced Mr. Zaia who is the President and stockholder of the corporate applicant. Mr. Carlin said the applicant intended to operate a billiard club and full service restaurant at the corner of Beck Road and Pontiac Trail. It would be located in a shopping center which Mr. Zaia’s family owns. There is plenty of parking and Mr. Zaia has a commitment to the city. He also has a BA degree in Business Administration, owns a business in Novi and several others and has been in the retail business since 1991. Mr. Zaia would be an active full time owner/operator at the restaurant. He has more than a million dollars invested in the center with the land, building and improvements and would be investing approximately an additional $300,000 in renovations to the interior. There would be no renovations to the exterior except the signage to meet the city requirements. Mr. Carlin said one advantage for this location is there are no restaurants in this vicinity and there are no billiard clubs in the City of Novi.
Councilman Schmid stated he did not see how this met the ordinance as unique other than being a pool hall. Councilman Schmid noted that the restaurant is limited in size, no design or decor was presented and it appeared to be a request for a license that would service pool players and the restaurant seemed to be a secondary use to the facility. He thought the city had to be careful in using its license’s because there are many developments coming that they are aware of that will be of substantially larger size and dynamics. He stated he did not believe the criterion that they have established had been met and he would not support a downsized restaurant with a large pool area.
Councilman Clark agreed with Councilman Schmid.
Councilwoman Mutch said she agrees with Councilman Schmid. It sounded like they needed a liquor license to service the pool players rather than the community. She agreed that a billiard bar and grill was something Novi did not have and could be an attraction, particularly in that area. She did not think it was unique and she would need a more compelling presentation to be convinced. She added a liquor license is a valuable commodity and she could not support this project at this time.
Councilman Mitzel said upon reading Mr. Carlin’s letter of January 27 it was emphasized that they needed a restaurant use in the center to draw crowds. He thought they should look at a family type restaurant instead. The restaurant presented had very limited seating and he did not think it was the kind Council was looking for in a development area.
Mayor ProTem Crawford concurred with the other Council Members. He asked if a 200-person capacity in that facility would have sufficient parking. Mr. Rogers said he had not reviewed the plan and could not comment.
Mr. Carlin said there were 100 seats in the middle of the dining area but there was additional seating throughout the restaurant. In total, it would approach a 200 seating capacity. He stated this was not a family restaurant; it was a restaurant intended to entertain adults. This is a restaurant that a young couple could go out and have a nice time without spending a lot of money, be entertained, play pool, watch sports games, etc. He believes they need to present alternatives to the restaurant community of Novi. Mr. Carlin argued this is unique and there is nothing like it in the city. Mr. Zaia is very committed to the city. Further he and his family are trying to present something unique to the city. It will be a nice restaurant, not a fancy one but that is not what their intent is. The intent is to give the residents an alternative instead of going to some more expensive places or some casual places. Mr. Carlin believes this is unique and is a worthwhile project.
Councilwoman Mutch does not think the applicant has to have a family restaurant, but as presented she did not know whether they were trying to be a family restaurant or not. Despite what Mr. Carlin said, the menu did include a children’s menu. She agreed that having previous restaurant experience was not necessary, but it would have been another plus.
Mr. Zaia said he did not think that having 100% working knowledge of the business was necessary. Further, most people hire the best managers they can get and put them in charge of the business. He had done that on several ventures and his managers know more than he does. He supervises and learns from them once the business is running. He did not think he needed to be a restaurant owner in order to open another.
Mr. Zaia added they built the shopping center five years ago and it has been listed with several agents. He advised there has been a lot of hard cash invested into it and they have difficulty in occupying the space there. Further, major tenants and chains do not want to come there. If he had a tenant that would occupy that space, he would not have come here five years after he built the center because he would have preferred to lease it. However, the other tenants are complaining. They want activity, they want to survive and so far about three tenants have moved out because there is no anchor tenant. They want a stimulus and he cannot offer them anything. Now, he would invest more of his money into his center and Council is denying him that. He wants to stabilize it, see everyone happy, and the empty space occupied. All these people are going to be paying taxes to the city and they offer employment. He further stated he has been at this location for five years, contributed to city activities and when people from the subdivision ask for help he donates to them. Mr. Zaia just wants something in return.
Mr. Zaia said they need a liquor license to operate an establishment like this. He stated they originally wanted a resort license, but were informed by the Liquor Control Commission that because of the latest census figures they issued more licenses to the City of Novi. He said he was here because he needed the liquor license to open his business.
Mr. Zaia thought, just like everybody else that is going to apply for a license, that he has every right to one of the licenses. He said he has a $3M center and it is sitting vacant and he is trying to fill it. He thought Council should reconsider their decision. He said since he started this project, three people have approached him with similar plans to put in their centers.
CM-97-03-071: Motion by Clark, Seconded by Schmid. MOTION CARRIED UNANIMOUSLY: To deny the request of Breaktime Billiards, Inc., for a request for conditional approval of quota Class C Liquor License pursuant to Section 3-14(j) of the Novi Code of Ordinances
Vote on CM-97-03-071: Yeas: Crawford, Clark, Mitzel, Mutch, Schmid
4. Request from Man Sik Han/Golden Touch Spa and Therapeutic Massage, Inc., 30720 Beck Road, for approval of Massage Parlor License
Joseph Mariniello, of the Law Offices of Sullivan and Leavitt, P.C. stated they are now before Council about an application they submitted in November under the City’s ordinances for a massage license. At the time they submitted it, Mr. Mariniello attempted on behalf of Golden Touch to get input from all of the requisite departments of the City and work in conjunction with them to make sure that the applicant met the ordinance. Mr. Mariniello reported their architect had been working with the Building Department to draw a plan for their location at the Beck Village Plaza that conforms to the ordinance. Mr. Mariniello advised that the ordinance is very complete about the facilities and what they must maintain as far as the hygienic necessities of a massage parlor as well as the policing activities. Mr. Mariniello advised they are now at a standstill in terms of building until they can be certain they will receive a license. In addition, Mr. Mariniello accompanied Mr. Man Sik Han to the Novi Police Department to interview with Detective Jelley in early December in an attempt to facilitate an expedient investigation into his client as required under the ordinance. Mr. Mariniello explained there are fingerprinting and background history requirements that they must satisfy for every license applicant who comes before the City. In addition to those requirements, Mr. Mariniello stated there are also City certification requirements that each person who chooses to work at a massage parlor must comply with. Consequently, not only does the Mr. Han have to be licensed, but so do each individual who is actually doing the massaging.
Mr. Mariniello reported they are at the beginning of the process in terms of opening the business. He advised they have a lease, but they have not yet been able to build the inside because they are waiting for permits. Further, they have not hired anyone because they do not have a license to move forward. Mr. Mariniello is not certain whether the City will require that they come before Council for a hearing or whether it will occur during an administrative procedure, but the City must license them as well. Mr. Mariniello believed they have complied with every facet of the ordinance. He reported that Section 2029 of the ordinance contains the grounds for denial which are: failure to pay the fee; failure to provide or to comply with the applicable laws including building, zoning and health; that the applicant or majority owner has been convicted of an offense involving the use of force, sexual misconduct involving narcotics, dangerous drugs or dangerous weapons that amount to a felony, that the applicant has made knowing, false, misleading or fraudulent statements or the applicant has been denied or revoked a similar license in another city. Mr. Mariniello reported none of these apply to his client. Mr. Mariniello added he has discussed this matter with one of Mr. Fried’s partners and with Lieutenant Butler and Detectives Jelley and April. To his knowledge, the discussions have led to the conclusion that his client should be granted the application for a license.
Mr. Mariniello restated Councilman Schmid’s comments on another matter about having a hammer or a vice for a particular matter. (Councilman Schmid interjected, he was kidding.) Mr. Mariniello continued by stating that in this instance the ordinance as written provides for strict policing of these establishments. He added Mr. Han is a permanent resident of the United States and is originally from Korea. Further, he has spoken frankly with Mr. Han about the problems other cities have had with these establishments and reported to Council that this is not the same type of institution. Mr. Mariniello explained that Mr. Han knows very well what the requirements of the ordinance are, what the City of Novi Police Department is allowed to do in terms of accessing the establishment and what licensing requirements are required of his employees. Mr. Mariniello does not foresee any future problems nor does he see any reason based on the ordinance for a denial.
Mayor ProTem Crawford asked if a staff member would like to comment on the request because it appeared to be incomplete.
Chief Shaeffer reported there are substantial absences of information that they specifically require under the ordinance. One requirement is that two immediate previous addresses prior to the present applicant’s address be provided. Chief Shaeffer stated they gave only one as residing in Lakeland, Florida with no specific address nor do they have a second address. Further, they have asked that they provide the address and name of each massagist they will employ. Chief Shaeffer reported the applicant has provided none. They have also asked for the names, current addresses and written statements from bonafide permanent residents of the United States about the applicant’s moral character. He added the references must be persons other than relatives or business applicants. The Chief reported they have not yet received any written statements but did receive some names of individuals. However, he added two had difficulty recalling who Mr. Han was. Based upon this, Chief Shaeffer recommended denial of the application.
For the record, Councilman Clark believed the location in the Beck Village Plaza is also the location of the last applicant who was before Council seeking a liquor license for Breaktime Billiards. It is also Councilman Clark’s understanding they are proposing that the massage persons are women.
Mr. Mariniello replied they would be both men and women. In addition, Mr. Mariniello believed it would not be practical to hire employees for a place he is not certain of having a license for. Consequently, the only employee is the applicant.
Mr. Fried asked what business the applicant had been engaged in before making this application. Mr. Mariniello replied to the extent that it is even relevant, Mr. Han only moved to the United States in the early 1990's and had been living with his sisters in Michigan and North Carolina. He worked with some friends designing T-shirts and selling them at different flea markets in Florida, but he had not owned a business as such in the United States.
Mr. Fried asked if the applicant had any idea about the cost of constructing a facility as required by the ordinance. Mr. Mariniello replied that he did. Mr. Fried asked Mr. Mariniello if he knew what that was. Mr. Mariniello stated he knew that the applicant had looked into it. Mr. Fried asked Mr. Mariniello to estimate the cost. Mr. Mariniello replied he was certain it would be several thousand dollars and with all due respect, he did not believe the questioning was relevant to the discussion.
Mr. Fried advised that the application stated that the applicant is Man Sik Han and the corporation address is an address on Beck Road which is also the address for the proposed facility. Further, there are no officers of the corporation or directors. Mr. Mariniello explained Mr. Han is the President of the Corporation.
Mr. Fried asked if there are other stockholders involved. Mr. Mariniello replied that Mr. Han was the only one. Mr. Fried asked where the money was coming from to operate and build the facility. Mr. Mariniello replied this was a corporation that just got started and as of this moment, it had no assets. Mr. Mariniello stated Mr. Han would worry about the financing when he got the license.
Mr. Fried stated that was Council’s concern. Further, they drafted the ordinance so that Council would know who was putting money into the establishment, who was going to operate the establishment and how it was going to be operated.
Mr. Mariniello respected what Mr. Fried was saying except the fact that if those specific concerns were the concerns of the City when they drafted the ordinance, then they could have drafted an ordinance similar to the one required for liquor licenses and required financial information. Mr. Mariniello reminded Council that the City did not require someone who opened a flower shop to come forward with financial information, nor did it require someone who opened a gymnasium to come forward with financial information and it did not require a man who wants to open a massage parlor to provide financial information.
Mr. Fried stated it does require that the City know all persons who have an interest in the company. From the information supplied on the application that information is not available to Council. Mr. Fried further reported that the ordinance stated that the City can require any information to know the truth of the allegations made in the applicant’s petition. Mr. Fried did not believe the applicant had touched on that and he believed it critical to know where the money is coming from that would allow him to build a facility that Mr. Mariniello admits will take several hundred thousand dollars. Mr. Fried asked if there is another partner or if there are other shareholders involved. If there is, the City should know in advance. Mr. Mariniello agreed and reported there will be no other shareholders, Mr. Han is the only one. Mr. Fried asked where the money was coming from. Mr. Mariniello replied Mr. Han was willing and able to borrow money from whomever he wished. Mr. Mariniello stated he was not trying to be evasive, but he is stating it is not a part of the ordinance. The fact is, the grounds for denial are within the code and Mr. Han has substantially complied with the terms of the ordinance.
Mr. Fried felt the Chief had made a consorted effort to contact the persons the applicant submitted as character references to find out what they knew about him. Mr. Fried stated they have been unable to get any information about the applicant. Mr. Fried said one critical piece of information lacking is employment information as a part of the employment application. Mr. Fried stated the applicant had listed bartender and did not complete the rest of the information in terms of the name of the employer or period they employed him.
Mr. Mariniello replied Mr. Han was a bartender in Korea in an establishment that is now closed.
Mr. Mariniello stated he has tried from the very beginning to be as up front as possible with Detective Jelley. He explained he had weekly contact with him about his concerns and what he would need to know further about Mr. Han. Each time, Detective Jelley advised they were progressing with their investigation. Mr. Mariniello stated he did not know about any problems until after they scheduled the matter for a hearing and after Detective Jelley assured him that he had submitted a report that was favorable on behalf of the applicant. Mr. Mariniello reported that Detective Jelley had told him that he personally spoke with each person they submitted. However, Detective Jelley did state there was a language problem with a couple of them. Mr. Mariniello stated the ordinance required three references, they submitted five and Detective Jelley spoke to them all. Further, Mr. Mariniello stated except the two he had a language barrier with, Detective Jelley suggested that the others gave favorable comments concerning Mr. Han. Mr. Mariniello has tried to move this along because his client has been paying rent since January. It was not until after Detective Jelley told Mr. Mariniello that he submitted his report to the City that suddenly and inexplicably, other members of the Police Department decided to continue the investigation after Detective Jelley had finished. Mr. Mariniello stated even with regard to those members, specifically with Detective April and Lieutenant Butler, he tried to do whatever he could to help move the investigation along. In addition, he tried to ask them if there was any other information they needed and they told him no each time. Mr. Mariniello said he had tried to contact Lieutenant Butler for the last four days and he had not received a return phone call. He was beginning to realize why.
With all due respect to Council and the approval process, Mr. Mariniello stated the City lists the grounds for denial in the ordinance. Mr. Mariniello agreed and is fully aware as is his client that there are other establishments that happen to be operated by people of the same race as his client that have not been operated well and have had illegal activities. Mr. Mariniello reiterated that the ordinance provides for a hammer that can knock out every masseuse, every building permit and do whatever they want. Further, the City can have police officers in there every day with no probable cause under the ordinance. Consequently, Mr. Mariniello believes the City is fully protected.
Councilman Clark asked if the applicant’s attorney had ever seen a copy of the Articles of Incorporation for the corporation. Mr. Mariniello replied he has and his office incorporated the corporation.
Councilman Clark asked if they have provided that to the Police Department. Mr. Mariniello said they provided the things they required and he did not believe they required it.
Councilman Clark asked why the applicant had been paying rent since January for a business that he was not sure he would get a license for. Mr. Mariniello replied at the time they applied in mid-November, the ordinance provided that they must take Council action within ninety days. Mr. Mariniello hoped that with the efforts he was making to contact all of the requisite authorities within the City that he would be able to push this through quickly enough and have them up and running some time in January or early February. He said there would be some over run, but he could plan for the license to come on a certain day and tell the landlord the applicant would begin to pay rent on a certain day. Mr. Mariniello explained he attempted to have all the questions finished by early January so they could move forward.
Councilman Schmid stated the Chief presented many questions that the applicant had not complied with. Councilman Schmid said it was his understanding that the applicant had not met the requirement of the two previous addresses, business occupation or employment of the applicant for the last three years immediately preceding the date of the application. Further, Councilman Schmid stated Mr. Mariniello had stated that the type of business they are applying for has had a great deal of trouble in many communities. Therefore, it is common for the City to look carefully about who is requesting the license, what their background is, what their financial situation is and what their experience is. Councilman Schmid stated they had answered none of these questions as far as he could tell. Further, Mr. Han has no experience in massage parlors and he has no idea what they are about based upon the information before them. In addition, the City has no indication of the financial backing of this facility and the applicant has not complied with the requests of the Police Department. Consequently, Councilman Schmid would not consider the approval of a license while all those questions remain unanswered. Before he would approve a license for a massage parlor, Councilman Schmid said he would be very sure that they were dealing with a reputable corporation with financial backing and experience. Further, if they come before Council again, he suggested that the applicant have this information. If the ordinance is not complete enough, Councilman Schmid said they would get one that is more thorough. Councilman Schmid believed these were basics that Mr. Mariniello would agree upon having in his own community. Instead, Mr. Mariniello brought forth an applicant who refuses to give his financial background and one that has no experience or work record.
CM-97-03-072: Moved by Schmid, Seconded by Clark, MOTION CARRIED UNANIMOUSLY: To deny request from Man Sik Han/Golden Touch Spa and Therapeutic Massage, Inc., 30720 Beck Road for approval of Massage Parlor License for reasons on the record and documentation received of the Police Department
Councilwoman Mutch stated that the applicant reported that the application process began in November and noted that the application indicates that the address of the corporation is the site that they hope to use as the business. However, she further noted that they did not have a lease until January for the site. Councilwoman Mutch said if the applicant was applying for a license at the very least, the City would have gotten a home address, another office address or another place of employment. She can see the Beck Road address being the address for the location, but not the address for the corporation. It is not a matter of looking at the specifics of the ordinance because Councilwoman Mutch does not believe the petitioner has even gotten through completing the license application. She did not know why they were on the agenda when it was incomplete to begin with. Further, they had pointed out that the missing items are required by the ordinance. Therefore, it is a matter of an application that was never completed despite what Detective Jelley may have led them to believe. She stated Detective Jelley has superiors within the department and as far as she knew, they can over rule his judgment in terms of the completeness or appropriateness of his recommendation to Council.
Councilman Mitzel supported the motion based upon what Councilwoman Mutch stated. Councilman Mitzel also cited the two memos of February 25 received from the Police Department which state they had received an incomplete application and tonight’s discussion. Councilman Mitzel echoed Councilwoman Mutch’s concern that the item was not ready for the agenda.
Mr. Fried respectfully responded that it is on tonight’s agenda because Administration had to bring the item before Council in ninety days.
Vote on CM-97-03-072: Yeas: Crawford, Clark, Mitzel, Mutch, Schmid
5. Presentation by Tom Curran-Go Kart Fundraiser for Motorsports Museum
Councilman Mitzel stated the applicant asked that this be postponed to a later meeting.
CM-97-03-073: Motion by Clark, Seconded by Mitzel, MOTION CARRIED UNANIMOUSLY: Postpone item until the meeting of March 17, 1997
Vote on CM-97-03-073: Yeas: Crawford, Clark, Mitzel, Mutch, Schmid
6. Approval of Temporary Sewer Agreement - Mark Churella, 21075 Cambridge Dr.
Mark Churella asked Council to review a temporary sewer agreement and reminded Council that is an amendment to a sewer agreement that he brought before them a few weeks ago. He stated they had to consider different options and this option allowed them to connect to an existing sanitary sewer line at Prestwick Court in Turnberry Estates Subdivision which is in the sanitary sewer district where his property is located. The agreement is needed because they are requesting a temporary line which is the same kind of line that they asked for to connect to the other sanitary sewer lead at Llewelyn Court and it cannot be done administratively. He had contacted his neighbor Mrs. Ciampa and the developer of Turnberry Subdivision, John Shekerjian, and they both agreed to the connection. He also contacted Ms. DIG to stake the site and the surveyor will be out on March 3 to set the lines so the legal description for the easements can be done. At this point, Mr. Churella is asking Council to let him amend the agreement to attach to that sewer stub as opposed to the other one.
CM-97-03-074: Moved by Clark, Seconded by Mitzel, MOTION CARRIED UNANIMOUSLY: To approve the Temporary Sanitary Sewer Agreement Amendment as requested by Mark Churella
Vote on CM-97-03-074: Yeas: Crawford, Clark, Mitzel, Mutch, Schmid
7. Approval of Resolution Approving Building Authority Contract for the City Council
Craig Klaver, Assistant City Manager, stated this project dates back to 1992 when they created the original Citizens Committee. Mr. Klaver reported that a number of groups have studied it and the Community Clubs of Novi most recently studied it. It was recently reported to Council that they deemed that the original proposed funding was not feasible. Consequently, a recommendation was made to Council that the authority of the Building Authority that was previously created exclusively for senior citizens housing be expanded to accommodate this project. Mr. Klaver advised they have made and approved those revisions. He further advised that he met with the Building Authority twice and commended them for their thorough work. Mr. Klaver said the Building Authority acted on the two resolutions submitted to them, so they have approved the issuance of the bonds and the contract.
Dennis Neiman, Bonding Consultant, said Council had before them the resolution which authorized and approved the Building Authority Contract between the City and the Novi Building Authority with respect to the ice arena. He said when he was before Council the last time, Council adopted a Notice of Intent and he indicated to Council that he would not be preparing the resolution or the contract until he and Mr. Bendzinski had reviewed the documents and received approval from Administration to proceed. Also, they had to be satisfied that the project was both feasible from a financial standpoint. Mr. Neiman reported Plante & Moran reviewed the feasibility report and submitted it to the Building Authority. After talking to Administration, they reviewed the numbers in the feasibility study via Farmington Hills, a similar facility, and were comfortable that the numbers set forth in the feasibility study are achievable. Based on Mr. Bendzinski’s bond specifications, they prepared bond documents which the Building Authority has approved. The Building Authority intends to issue $8.5M in bonds to finance the cost of the facility plus capitalized interest for eleven months which they anticipate to be five or six months beyond the construction date.
Councilman Schmid said this might be the absolute worst information for a major project of $8.5 Million that he had ever seen. Councilman Schmid stated they have never had a feasibility study from Plante & Moran to suggest that this program is feasible under which the City would be obligated to pay more than $800,000 a year to pay off the bonds and that money would come from fees generated from the ice arena. He said there was nothing in the packet to suggest that had even been looked at, studied or considered.
Councilman Schmid felt this was very serious in that the community would be committed for 20 years to pay off the bonds. He said this could happen if by chance the revenues did not generate sufficient dollars. He felt Mr. Klaver was asking Council to make a decision on no information. He stated he understood the urgency of this and the desire to put this in the community, but Councilman Schmid believes there is not a citizen in the community that would want this moved forward without additional information to have some assurance that this would pay for itself. Councilman Schmid asked if the insurance policy on this project would cover not only the yearly obligation of the bonds, but also restore the building in case of fire.
Mr. Neiman understood that the Building Authority would get business interruption insurance for the facility. He said they would fully insure it from a casualty standpoint, but it would not take care of the rental income while they are restoring it. Mr. Neiman believes they would recommend that as an operating expense of the facility.
Councilman Schmid stated Mr. Neiman has sold many bonds for the Novi. Further, Councilman Schmid assumes Mr. Neiman has reviewed the Plante & Moran report by which he is recommending that the City sell $8M in bonds which will be paid off yearly by the citizens of Novi. However, if the revenue of that establishment is not able to make the dollars that it is supposed to and it fails, there would have to be a tax against the community to pay it off.
Mr. Neiman indicated at the last meeting that they raised many questions. He believed it was their job to be skeptical as opposed to being a cheerleader. The Plante & Moran report that he referred to is not a feasibility study. There is a feasibility study conducted by Center Ice Management which the City and Community Clubs of Novi contracted for as part of their contractual arrangement. It is a detailed and lengthy analysis of feasibility, the need, economics, operation, maintenance, etc. The last revision was in late December or early January. Mr. Neiman and Mr. Bendzinski had suggested to the City and thought that Administration agreed that it made sense that Plante & Moran or an independent third party review it to make certain of the feasibility, need and building. He said there are industry standards and materials that one uses to make sure that the numbers are in conformity. In addition, Administration has independently talked with other community’s, specifically Farmington Hills. He said when talking about the industry for ice arenas there are many single surface arenas and there are many old facilities. Farmington Hills built a facility that is smaller than this and not quite as finished as this. Further, the socioeconomics of the area are similar. He thought there was constructive data to be gathered from Farmington Hills. Their numbers based on their operations would suggest that the numbers in the feasibility study are consistent with Farmington Hills experience for the last couple of years. He stated he got more comfort from that than from Plante & Moran’s report which is looking at the internal consistency of the study.
Councilman Schmid asked what they generate. Mr. Neiman stated about $2 Million gross revenues and $.75M in net revenues a year.
Councilman Schmid asked if that was close to what Novi would have to generate to pay the bonds. Mr. Neiman said yes and Mr. Davis believes there are some economics that they can achieve towards operation in the Novi facility that are not present in the Farmington Hills facility’s operations. Mr. Neiman said Mr. Davis believes that they could make the numbers work comfortably for the debt service on this facility. Mr. Davis concurred.
Councilman Schmid said he had not seen anything to substantiate this. He asked Mr. Klaver if he had a report on this. Mr. Klaver said he does and apologized that the report was not in Council’s packets.
Councilman Schmid said the Farmington Hills experience suggested that Novi could barely accomplish this if Novi were as successful as Farmington Hills. He is extremely concerned that year after year Novi’s ice arena revenues will not be enough to support the arena and the City will have to add money to run the ice arena.
Mr. Neiman said neither he nor Mr. Bendzinski disagreed with that concern and it is a concern one should have before going through the analysis. They have raised this concern to the Administration and they are comfortable that the numbers are there to make this work.
Councilman Schmid said he read the Limited Tax Full Faith Agreement and he had faith that it would meet the requirements, and that Mr. Neiman is comfortable with all the provisions that the authority and the city must follow.
Mr. Fried stated he reviewed the documents and they rely on the expertise of the bond attorney. He said the bond attorneys are the real experts.
Mr. Shaw, Parks and Recreation Commissioner, stated Act 31 of the Building Authority Act specifies what goes into the contractive lease. He said there was a lot of information that the Act required and upon reviewing the contract, it is straight forward in terms of the City’s obligation, the Building Authority’s obligation and what should be accomplished by that and what the security behind the bonds is.
Councilman Schmid said in some of the agreements there is an indication of insurance, but he did not know what kind of insurance they would buy. He asked if that bothered them.
Mr. Shaw said the document did not contain anything about business interruption, but it did require casualty insurance. In their meeting Thursday one point raised was the suggestion that business interruption insurance should be secured and they agreed that it was a good idea. He noted this was not a facility like City Hall where it would take a long time to rebuild it.
Councilman Schmid said the next document is a resolution authorizing issuance of the Novi Building Authority 1997 Building Authority Bonds. Mr. Shaw stated the Building Authority approved that.
Councilman Schmid asked if Mr. Shaw was involved in the resolution for approving the Building Authority Contract and a resolution approving Contract Novi Building Authority. Mr. Shaw said he was.
Councilman Schmid said another issue that greatly disturbs him was that he had no idea what they were building, no idea what they were bonding since being told by Mr. Shaw that cutbacks had to be done. Councilman Schmid is concerned about the aesthetics of the building, whether there was still going to be a restaurant there, whether seating capacity was sufficient and added that they have changed many things. Councilman Schmid added that they could not make a decision on this until they made a decision about the mid-decade census budget and until there was a decision on the building of the road.
Mr. Klaver interjected it is on the agenda under Mayor and Council Issues, as Item 1 Mid-Decade Census Budget Discussion.
Councilman Schmid said there are many uses for the mid-decade census money other than building an $850,000 road. He said the frustrating thing here is the time table and he has trouble with the great rush in that it has to be done tonight without all the information they need to make a decision. Councilman Schmid stated he would not vote on this until he saw some plans, location, what the cuts are, what it is going to look like, will there be a restaurant, seating, and so forth.
Councilman Clark said he shared a lot of the same concerns that Councilman Schmid had. He realized there was much concern because they wanted to move this project along and they thought it would be good for the community. He added that Council had the document by Plante & Moran, but thought this presentation was premature by a week or two at the most. Councilman Clark reported a meeting is scheduled with Plante & Moran and Council could advise them that that they would like to talk about this and answer some questions. He agreed with Mr. Schmid and believes anytime they are going to put the full faith and credit of the City on the line in the amount of $8.5M, he becomes really concerned. Further, he believes everyone should be concerned because everyone may potentially foot the bill in taxes. Councilman Clark stated he will not vote on this.
Mr. Davis reported this can be done in a variety of ways. Community Clubs has been meeting very consistently either through the full board of Community Clubs of Novi or through the Buildings and Grounds Sub-Committee. They have been handling the negotiations of the adjustments in the building sculpt project, the envelope of the building, and the seating issues. Mr. Davis explained they have been working under the format of the $8.5M bond issue in that they have a guaranteed maximum price for construction that would meet all of the requirements of a double ice rink facility.
Mr. Davis explained the facility that they are moving forward is a 78,000 square foot facility with seating capacity in the main rink of more than 500 seats and added that the secondary rink has 220 seats. Obviously, the parking requirements, building facade, landscaping and all the interior issues that are required will meet the City’s ordinance as a part of the guaranteed maximum price which is set at $7,039,000.00. On top of the bond costs, Mr. Davis reported they have furnishings, equipment and fixtures that cost approximately $315,000. He explained that cost will include all the items for the interior of the structure including the purchase of two Zamboni Ice Resurfacers, all the carpentry, carpet, office areas, etc. Mr. Davis said they were currently modifying it, but there is an 18 page sculpt of work that breaks down each of those items. Again, this has been a very fluent document under the guaranteed maximum price for the last two weeks and they are moving to have it finalized this week. Mr. Davis added that there is a Community Clubs meeting Thursday about all these issues and noted that it is the Community Clubs that has taken charge to address the same issues Councilman Schmid raised tonight. One question is whether they are going to get a facility that is second class. Mr. Davis explained they do not want that and they had gone back and forth with the Rudolph Libbey Company to address those things and make sure it is a top quality facility yet still fall under the obligations of the $8.5 million bond issue cap. Mr. Davis stated they believe and as concurred by the Plante & Moran review, that it is possible to meet the obligation in terms of a principle and interest debt payment and also meet the operation payment.
Mr. Davis said there has been extensive dialogue with the Farmington Hills personnel about their operations and they have had on site meetings with them and reviewed their operation. Mr. Davis added that they also reviewed other facilities in the Metro Detroit area. Obviously, since Farmington Hills is so close demographically, from an economy standpoint and being fairly new, they serve as a very good learning tool from which Novi can learn. Mr. Davis believes all the information in the feasibility study that Plante & Moran reviewed and that Administration reviewed is right on target to what they are projecting from a building construction standpoint and from an operational and debt retirement standpoint.
Mr. Davis believes the ice arena is a project that they researched adequately to substantiate that it is worth doing and that the margin of completion or error is not to the extent that he would stand before Council and say it should not be done. He believes it is achievable and they have the confidence that they can complete the project as spelled out in all the documents that are before Council.
Councilman Schmid said Mr. Shaw had said they have had to down size the original plan because of the cost of the project and he would like to know what had to be cut back. Mr. Shaw explained they were able to reduce square footage and move some square footage around to make it more efficient in the redesign. He reported they were able to remove nearly 10,000 square feet of floor area out of the building but by moving things around to put the programming requirements back in. He added that there was also space in the building that was not fully utilized. For example, the lobby became smaller upstairs, but it is still large enough for upstairs and added that it is larger than Farmington Hills. Further, lobby space was moved downstairs for open skating to accommodate needs there. The size of the facility for the figure skating program was down scaled, but it is still more area when compared with other rinks in the area except for the Detroit Skate Club. Mr. Shaw said they went from roughly 88,000 square feet to 78,000 square feet. They also reduced the size of the area on the far side of the large rink that was reserved for future seating for special events. He said they did not cheapen the mechanical units, boards or any of the furnishings or fixtures.
Councilman Schmid asked if they would meet the facade ordinance requirements. Mr. Shaw said the facade meets the I-1 Ordinance which is the masonry below, split faced block, plain CMU unit and above that is a flush metal panel with accent strip in the block portion and there will be a standing seam roof. The front of the building is architecturally detailed in that it has the slope of the roof and articulation in the front where there is the build out area for the entrance and the pro shop. That area has the masonry, flush metal panels and the drive it adds additional interest.
Mr. Shaw said Community Clubs decided that they did not want to go into the restaurant business and a concession stand area with some enhancements to give additional opportunities would be adequate. Further, they did not feel it made good business sense in terms of the restaurant where people would go there on a regular basis without having to go specifically to the rink. Mr. Shaw added that as a 501C3 they were also concerned about the unrelated business income.
Councilman Schmid asked whether that would be no space or open space. Mr. Shaw said it would be upstairs and would be an open lobby with concession stands, meeting rooms at the back and office space. The restaurant is gone and it has been replaced with restaurant style seating, but not with a restaurant type operation.
Councilman Schmid said it is a fact that they have to talk about the returned money from the census and this money will not fly without the City of Novi contributing another $850,000 to build the road. Mr. Klaver said that was correct, but there are a couple other options. One is the census money and the other is either to advance or contribute the cost of this road out of the road fund or a combination of those two.
Councilman Schmid asked when that discussion would take place. Mr. Klaver advised it was on the agenda later this evening.
Councilman Schmid said then they cannot act on this until they act on that. The letter of February 27 said they absolutely had to make a decision this evening or the whole project will collapse. What is the time table on this project. Mr. Klaver said it involved issues on issuing the bonds that Mr. Neiman would have to answer.
Mr. Neiman said his understanding was that everything had to be done by the end of this month because they need lead time to order steel and other construction items. Mr. Neiman thought it would be preferable but not essential if it waited to weeks to be adopted. If it went beyond that, then they imperil the time frames.
Mr. Bendzinski said the contract must remain on file with the Clerk. Further, they had been before Council a month ago indicating they would be back with a contract within 30-days. Mr. Bendzinski stated in order to comply with the 45-day referendum that they published, that contract must be on file in the Clerk’s office.
Mr. Neiman said it had two purposes, it approved the contract and authorizes various city officials to file with the Michigan Department of Treasury. Mr. Neiman added that they were planning to file this week.
Councilwoman Mutch felt the Plante & Moran study was not very critical because of what they looked at. She was concerned that the City never conducted an independent feasibility study and all they have is Center Ice Management’s proposal.
CM-97-03-075: Moved by Clark, Seconded by Schmid, MOTION CARRIED: To postpone for two weeks
Councilman Schmid stated his concern was having read the Plante & Moran report very rapidly, it is his impression that they did very little other than read the feasibility study of Center Ice Management.
Mr. Davis stated that one of the requirements that Community Clubs reviewed was that they wanted more insurance that it was not Center Ice telling them how they were going to perform when they were the actual ones going to do the performing. That is when they came back to Council and asked that Plante & Moran review it. As part of that, Plante & Moran not only looked at it, but made corrections and suggestions to the feasibility study that was prepared. It went back and forth from Center Ice to Plante & Moran so it was not a quick review. There was dialogue back and forth between the parties addressing issues that Plante & Moran found and had questions about. Those items were revisited and narrative was revisited within the entire document. As Mr. Neiman pointed out, it was not a full-blown feasibility study in and of itself performed by Plante & Moran.
Councilman Schmid said nowhere in the report did it suggest there was any discussion between Center Ice and Plante & Moran. All it said was they looked at the figures of Center Ice Feasibility Study and agreed they were mathematically accurate. Mr. Davis said that was correct.
Councilman Schmid asked if they can provide additional information. Mr. Davis thought they could expand upon that as far as what type of dialogue they had, any concerns and how they were corrected.
Councilman Schmid asked if they looked far enough into this to justify the figures that Center Ice brought forward. Mr. Davis thought it was a dual component of looking at the numbers that Center Ice provided. One side was performed by Plante & Moran which included the analysis within the feasibility study, the mathematical accuracies and industry standards within the ice arena markets. They also included the comparisons that were done Administratively by looking at the Farmington Hills operations and the detail provided in comparison to the feasibility study there.
Councilman Schmid asked if there was a report that reflected Farmington Hills’ operation.
Mr. Davis said no, but they had the report of Farmington Hills and would be happy to bring a full-blown presentation with the current renderings, and detail analysis of the scope of work that they would provide under the term of the guaranteed maximum price. He said most of the information could be available Thursday and most definitely in two weeks.
Councilman Schmid stated he assumed the Building Authority closely reviewed the Center Ice projections. He said Center Ice has no real interest, because they have no financial responsibility whatever to this project.
Councilman Schmid asked if anyone reviewed this other than Community Clubs. Mr. Davis said Mr. Shaw reviewed it.
Mr. Shaw said the entire Board of Trustees received a copy of the feasibility study last November. They reviewed Part 5 of the study which included the financial numbers and they went through it in detail. Mr. Shaw reported they did make changes in some of the proposed operations such as removing the restaurants component and a couple of other details. They required that he go through and revise the feasibility study according to what Community Clubs felt the operation should be. Mr. Davis and Mr. Shaw went through the numbers that they changed to make sure that the financial feasibility was still there and reported that everything was fine. The tables that Plante & Moran are referring to are tables that say for example that they are looking to sell these hours of ice at a certain rate during this part of the season and so forth, and they will sell them at this rate. Those numbers that were in the tables in the study were then further documented based upon the text that went along with the feasibility study. After comparing the numbers with Farmington Hills, they felt that the end result was the same and they were able to determine that the Center Ice numbers were still legitimate.
Councilman Schmid asked what is Mr. Shaw’s estimate of the net gross conservatively speaking. In other words, what dollars could be taken away and pay off bonds. Mr. Shaw said the profits from the operation would be entirely adequate to cover the debt service and they also base that upon an average rate of debt service throughout the life of the project. They structure the debt service payments so they are lower at the beginning and higher later in the project. That serves two functions; one is that they have a more cushion at the beginning and secondly, they can make those debt payments later when the ice rates are higher.
Councilman Schmid said Mr. Neiman suggested that the Farmington Hills’ rink generated $.75M which is an amount that would pay barely off Novi’s bonds and he asked what Mr. Shaw’s figures were. Mr. Shaw said basically they are the same numbers based upon the even bond payment. However, he believed during the first year that the bond payments did not amount to $750,000 and that the second year was below that.
Mr. Neiman said the average was 6½% and if it sells below that, it is probably another $150,000.
Mr. Shaw said it sounded like there would be a cushion of $150,000 the first year. He added if the interest rates are such that they can sell bonds where they think they will sell, there will be another $50,000 on top of that.
Councilman Schmid asked if these were conservative estimates. Mr. Shaw said they thought that they put together the feasibility study on a conservative basis. He stated they did not assume full ice sales during the first year at off peak. Further, they assumed there would be some growth in ice sales in subsequent years that would give them surplus above and beyond the debt service of up to $200,000 to $300,000 a year.
Councilman Schmid asked what could Plante & Moran add to this. Mr. Shaw said he did not believe Mr. Heffernan could add much more other than confirming the dialogue or narrative changes they made. Mr. Shaw does not believe Mr. Heffernan or his firm will say they will stand behind the numbers and that it is a full-blown feasibility study performed by them and that they are going to insure the success of an ice arena in Novi.
Mayor ProTem Crawford asked if Council was ready to vote on the postponement.
Councilman Schmid said he knows this disturbs Mayor ProTem Crawford.
Mayor ProTem Crawford said it does bother him and reminded Councilman Schmid that Council discussed many questions tonight that had been previously answered or could have been answered before this meeting.
Councilman Schmid suggested that someone from Plante & Moran should have been present to discuss the feasibility and that the current floor plans of the building should have been available this evening.
Vote on CM-97-03-075: Yeas: Clark, Mutch, Schmid
Nays: Crawford, Mitzel
8. Schedule an Executive Session to follow the meeting, Re: Pending Litigation
CM-97-03-076: Moved by Clark, Seconded by Mutch, MOTION CARRIED UNANIMOUSLY: To schedule an Executive Session to follow the meeting regarding pending litigation
Vote on CM-97-03-076: Yeas: Crawford, Clark, Mitzel, Mutch, Schmid
9. Schedule Special Meeting for the Purpose of Zoning Ordinance Study Session
Mrs. Bartholomew, City Clerk, stated Council asked her to confirm the 8:00 a.m., Saturday, March 15 work session and she reported that date appeared to be fine.
CM-97-03-077: Moved by Clark, Seconded by Mutch, MOTION CARRIED UNANIMOUSLY: To schedule a Special Work Study Session for the purpose of Review of Zoning Ordinance Rewrite for Saturday, March 15, at 8:00 A.M. in the Activities Room of the Civic Center
Vote on CM-97-03-077: Yeas: Crawford, Clark, Mitzel, Mutch, Schmid
Ruth Hamilton - asked if Mayor and Council Issues were strictly discussion. Mayor ProTem Crawford said sometimes yes and sometimes no and that there could also be action taken. Ms. Hamilton wanted to address Issue 2, Mail Addressed to City Council Members, and asked that the Clerk’s Office be directed to open Council mail and to treat Council mail as a City document.
Chuck Young - stated he was present at the Council meeting of March 1, 1997 and echoed concern about the road conditions.
Mark Robbins - went door to door in his neighborhood over the weekend and secured names on petitions opposing the vacation of Erma Street. He asked Council to repeal their decision to temporarily close Erma Street for 120-day trial period.
Mr. Fried suggested that they should give their concerns to Administration and Administration should respond to those concerns. He further advised that if the residents believe they should bring the matter back before Council, the resolution authorizes it to be brought back within the 120 days. Mr. Fried stated that any Council Member can bring this up whether in attendance at the meeting or not. Further, they need a written request to return it to the agenda.
CONSENT AGENDA REMOVALS FOR COUNCIL ACTION:
1. Approval of Minutes of Regular City Council Meeting of February 24, 1997
Removed by Councilman Clark
Mayor ProTem Crawford noted the incorrect spelling in the name of Providence Hospital’s CEO, Michael Slubowski on Page 1. Further, he requested they add the following on Page 22 in regard to Mr. Andris’ letter, "The Mayor with the consensus of Council said they appreciated Mr. Andris’ interest, but he was to follow the proper channels."
CM-97-03-078: Motion by Clark, Seconded by Mitzel, MOTION CARRIED UNANIMOUSLY: To approve the minutes of February 24, 1997 as corrected
Vote on CM-97-03-078: Yeas: Crawford, Clark, Mitzel, Mutch, Schmid
2. Approval of Proposed Zoning Ordinance Text Amendment No. 97-18
Councilman Clark stated he removed this item because of the discussion at the March 1, 1997 work session about the proposed changes in the Zoning Ordinance. He stated there was to be some further refinements and study after which it was to be brought back before Council.
CM-97-03-079: Moved by Clark, Seconded by Schmid; MOTION CARRIEDUNANIMOUSLY: That this matter be adjourned until the next meeting as a regular action item
Vote on CM-97-03-079: Yeas: Crawford, Clark, Mitzel, Mutch, Schmid
Councilman Mitzel stated he thought the reason they brought it forward separately was that it was critical for the ice arena development. He stated the actual language they are talking about tonight is only for I-1 and it still maintains the Special Land Use requirements if it abuts Single Family Residential. The amendment Council talked about tonight was specifically for the I-1 District and they gave the City Administration Saturday the direction to give more definition to those terms throughout the entire Zoning Ordinance which would then affect this one later when they adopted the entire Zoning Ordinance.
Mr. Fried said he discussed this with Dennis Watson and he understood it to mean that the Clerk has started to work on it. However, he understands Councilman Mitzel’s point as it related to this problem.
Councilman Mitzel said he was not at the last meeting, but thought that was why Council unanimously approved that language that had the safeguard for Special Land Use abutting Single Family. It also allowed the use in the Light Industrial when it did not abut Single Family as a principal use. Consequently, the site planning for the ice arena could move forward.
Mr. Fried said the ice rink will also come back in two weeks.
Councilman Mitzel said meanwhile, they could submit for a site plan. He asked Mr. Klaver if they were planning on submitting and beginning the review process. Mr. Klaver said they submitted the site plan last Monday.
Councilman Mitzel said there is also a 15-day time frame before the ordinance is effective.
Mr. Fried stated an emergency effectiveness was initiated so it would be effective immediately.
Councilman Mitzel asked if it would be ready March 17, 1997. Mr. Fried said they would be sure it was ready by March 17.
Mayor ProTem Crawford asked if the site plan issue would be before the Planning Commission before they adopt this. Mr. Klaver said no.
Mr. Fried said the earliest date would be the March 19 meeting. He said he had a list of some shortcomings in the site plan and that he would meet with Mr. Davis Thursday to bring the plan up to speed.
Councilman Mitzel said that would then allow Council to adopt the revised language on March 17 as Mr. Fried corrected it, have immediate effect and would allow the site plan to go before the Planning Commission March 19. Mr. Fried said that was correct.
Councilman Mitzel said he could support the motion with that information.
Councilwoman Mutch asked Councilman Clark if this did not include more than just the definitions and asked if it included the issue about public versus private. Councilman Clark replied they are going to refine and redraft that section in order to clarify that. He said they would address the whole thing.
Councilwoman Mutch asked what the inadvisability would be of going ahead with this so that the ice arena was in place. Mr. Fried stated he understood exactly what Mr. Mitzel said and it is an issue for Council. Mr. Fried advised Council could adopt it tonight and revise the language later.
Councilwoman Mutch asked what the negatives of doing that were. Councilman Mitzel suggested on March 15 there would be another study session of the Zoning Ordinance. He stated discussion can take place on what language they brought forward and they can either make changes in time for action at the regular meeting on March 17 or if not acceptable, then it could go back for adoption on March 17 also. That would still provide for the timing Mr. Rogers and Mr. Fried mentioned.
Mr. Klaver reminded Council that the Consultant Review meeting is Wednesday evening if anyone has any concerns.
MAYOR AND COUNCIL ISSUES
1. Mid-Decade Census Budget Discussion
Mr. Klaver acknowledged Councilman Schmid’s comments about the road issue. He stated it was a chicken and egg situation with the road issue and is why they were so pointed in their memo. They wanted to remind Council that this project did not include the cost of the road. Mr. Klaver explained they originally intended this project to be on City property so there was not a significant road cost. Consequently, both of those costs were added midstream to this project and is one reason alternative funding for the road was necessary. Mr. Klaver reported the project absorbed the $232,000 land cost which was not a part of the original budget and was one thing they cut back on. Mr. Klaver said the land is in, but the road is out. Further, there was a memo explaining some costs and Mr. Gibson is present to answer any additional questions about the mid-decade census money. Mr. Klaver stated in the event that they can get some significant funding for the traffic signal, there might be some funds left over. He noted that the preliminary estimates of the road costs actually exceed the mid-decade census money.
Mr. Klaver stated their recommendation is if Council continues to support the ice arena project, they think it is an appropriate use. It is a one time use of these funds and they recommend that Council allocate all of the money for the construction of the road for the ice arena. Mr. Klaver said a second solution would be to share the funding between mid-decade and take half the cost, perhaps $450,000, from the road bond either as an advancement or as a gift toward the project. That would leave half to be allocated for the other projects. However, Mr. Klaver recommends the first scenario, where all the money is dedicated. He stated in the event that they would want to alter it, it would be possible to go back and reallocate some of the road fund. He reiterated that they recommend that Council allocate the entire $800,000 at this time.
Mr. Klaver said the Community Sports Club is farther behind in terms of a development project, but this road would service this project as well. Further, there are two major potential building sites that the road would also service. Mr. Klaver explained this was a consideration when they acquired the land and that the $232,000 land cost for the 16 acres reflects the City’s agreement to build the road.
Councilman Mitzel asked when would Council action be needed and would it be concurrent with the approval of the contract. Mr. Klaver replied it should probably precede that. He said what Administration really needed was a conceptual approval of providing the road somehow in another fashion either through mid-decade or the combination of mid-decade and the road fund.
Councilman Schmid asked Mr. Klaver to explain the $800,000 fund and how they could get it.
Mr. Klaver said $500,000 was a deferred payment from last year because the State did not budget sufficient funds to pay out the monies for all communities due that year. He thought they paid 20% of that and this is the remaining 80% which is $500,000. The additional $300,000 is the additional money attributable to the population increase reported in the mid-decade census.
Mr. Les Gibson added that much of the $500,000 was retroactive until last year which they received this year. The additional $300,000 is a reflection of the increased population as it affects the current year’s collection of State Shared Revenues based on population.
Councilman Schmid asked if Novi would get $800,000 more next year. Mr. Gibson said no; he thought it stabilize at $600,000 a year.
Councilman Schmid asked Mr. Gibson to explain the $500,000 again. Mr. Gibson reiterated his earlier explanation.
Councilman Schmid stated this money was a result of the special Mid-Decade Census. Mr. Gibson said that was correct. Some of it was catch up and some of it was the norm from this point on.
Councilman Schmid asked if that was retroactive back a number of years. Mr. Gibson said no and that it went back only one year.
Councilman Schmid asked why it would not be picked up next year. Mr. Gibson said it would continue from this point on.
Councilman Schmid asked if it would be $800,000. Mr. Gibson reiterated that it would stabilize at $600,000. He explained the State’s fiscal period was about the same as ours and that is why it is $500,000.
Councilman Schmid said he would be interested in determining other alternatives such as the Road Fund.
Mayor ProTem Crawford asked if it was something that should come back in two weeks. Councilman Schmid said he thought so.
Mr. Klaver reminded Council that they gave them a list of possible uses of that at the last meeting. Councilman Schmid said he was suggesting that Administration provide Council with something on how road money could be used on this project other than just saying we can use road money. What are the perimeters, rules and regulations and so forth.
Mr. Klaver said the 5-year road plan would have to be prioritized. Councilman Schmid stated he thought they were talking about the half mill.
Mr. Gibson said they folded the special voted street millage into the 5-year road program.
Councilman Mitzel said it was the road bond that they passed in November that Mr. Schmid was referring to.
Mr. Gibson said he wanted to clarify that because Mr. Klaver referred to the road bond and that cannot be touch for this project. The only money that could be used is the one mill road fund. When the Department of Public Services presents the 5-year road program to Council, that will include the planned use for the one mill road fund and it would have to be rearranged to work this project in.
Councilman Schmid asked if that was the bonding that they passed for roads the last time because he did not know they included that as it was more of a maintenance fund and so forth. Mr. Gibson said they had provided Council special reports on how the bond monies would be used and that is a separate issue. In addition, every year Council had been provided the 5-year road program and that program includes any gas and weight taxes as well as the one mill fund.
Mr. Klaver said if Council wanted half the cost of the road to come out of the road fund , would Council like to see what priorities Mr. Nowicki would set in terms of changing that to accommodate that expenditure. Councilman Schmid said when they look at the needs of other departments, he thought Council should at least explore other possibilities.
Mr. Klaver said Mr. Shaw indicated he had mixed feelings. He explained Mr. Shaw stated if all the money went to the ice arena it was great for that project, but would leave other projects lacking.
Mayor ProTem Crawford said the report on the mid-decade census money and alternatives to fund the road could be part mid-decade and part road funds.
Mr. Klaver asked if would Council want to assume that they are going to pay for half the road and then reprogram the others in terms of the mid-decade because they never prioritized those.
2. Mail addressed to City Council Members
Councilwoman Mutch asked Mr. Fried to address this matter.
Mr. Fried stated if Council Members received mail addressed to Councilwoman Mutch and she takes it home and destroys it or destroys it at City Hall, that is the end of her obligation. She does not have to maintain mail that they address to her. However, if she has it and there is a Freedom of Information Request, she is under a duty to turn it over to the City Clerk or whoever has the responsibility for responding to Freedom of Information Requests.
Mayor ProTem Crawford asked if it is the same for mail that is addressed to their homes. Mr. Fried said they may dispose of it as they would their normal mail.
Mayor ProTem Crawford asked if Mr. Fried was saying that if they receive mail at their homes and it was still in their possession, it qualifies under the Freedom of Information Act. Mr. Fried said yes, if it involved City business.
Councilwoman Mutch asked where one drew the line on what city business is. Mr. Fried said if it is a petition asking for something to be done by the City, it is City business. If it is asking about their health or children it is not.
Councilwoman Mutch asked what about commenting on Council action, commenting on Council comments or offering opinions. Mr. Fried said that would all be City business. Anything that petitions a member to do anything in regard to the City is City business.
Councilwoman Mutch asked if she received a letter at home would she be obligated to share that with the rest of Council. Mr. Fried said no; she could destroy it or do whatever she wanted with it. However, if it is maintained and a request is made for that information and Council knows she had it, then Council would request that she turn it over to them. Mr. Fried said a Council Member would have no obligation to maintain it.
Mr. Fried thought the question Councilwoman Mutch raised was so serious that he said he would review it again to make sure the answer he had given was correct.
Councilman Schmid stated that he does not understand why they activated the traffic light at Main Street and Novi Road when there is not sufficient traffic to warrant it.
Mayor ProTem Crawford added that they have same situation on Grand River at the Fire Station.
Mr. Klaver said he would report back.
Councilwoman Mutch said the same people who submitted petitions to Council tonight about the vacation of Erma Street are as concerned about their roads as the gentleman is who spoke about Nine Mile tonight in terms of the conditions of the road itself. She stated that these people reported to her that when they call the City they have been told that a spokesperson for that neighborhood had already requested that the City not drive those heavy trucks down the road. She asked if the City Manager could check on what the road conditions are and if they warrant attention by the DPW.
Mr. Klaver said he would.
ATTORNEY’S REPORT - NONE
1. Letter from Robert Spisich to City Council, Re: Opposition to rezoning of the
Northwest Corner of 10 Mile and Beck Roads
2. Letter from Carol Spisich to City Council, Re: Opposition to rezoning of the
Northwest Corner of 10 Mile and Beck Roads
3. Letter from Greg Berry to Mayor McLallen, Re: Proposed Location of Community
4. Letter from Mike Bethune to City Council, Re: Opposition to Mandatory Water
5. Memo from Douglas Shaeffer to Edward Kriewall, Re: Computer Project
6. Letter from residents of Walden Woods I to City Council, Re: Opposition to
Mandatory Water Hook-up
7. Letter from Kenneth & Julie Kiepert, Re: Opposition to rezoning of Northwest
Corner of 10 Mile and Beck Roads
AUDIENCE PARTICIPATION - NONE
There being no further business before City Council, the meeting was adjourned at 12:20 A.M.
Mayor City Clerk
Transcribed by Charlene McLean
Date Approved: March 17, 1997