07/01/85 Board of Public Works Minutes

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REGULAR MEETING JULY 1, 1985 Mr. Hill submitted to the Board today for approval the First . Amendment to that Development Agreement acknowledging that the City has received $231,000.00 in donations from private . individuals and trust funds for the Palais Royale Project for the first stage of the expansion program. It was noted that the City will grant that amount to the South Bend Heritage Foundation to be used as a loan to the Palais Royale owners for making renovations in the space for the Morris Civic. The owners will use the $231,000.00 loan and $185,250.00 of their own funds to renovate the areas leased for the Morris Civic according to specifications agreed by the City and owners. While the entire 21,000 square feet cannot be renovated for this amount, a substantial beginning can be made which should inspire follow-up support for funding of the balance of the leased space. Upon a motion made by Mr. Vance, seconded by.Mr. Leszczynski and carried, the First Amendment to the Development Agreement was approved and executed. 1 APPROVE LEASE FOR MORRIS CIVIC AUDITORIUM EXPANSION INTO PALAIS ROYALE AND CONSENT AND ACKNOWLEDGEMENT TO ASSIGNMENT OF LEASE City Attorney Richard L. Hill submitted to the Board for approval the above referred.to documents. He advised that the City will , lease for Morris Civic expansion approximately 20,850 square feet within the Palais Royale building, for a term of nineteen (19) years, with the initial minimum rental of $113,260.00 per year. The loan repayment from the $231,000.00 renovation loan will . decrease cost to the City for the initial rent to $85,000.00 per year. Additionally, the City will pay expenses for maintenance and utilities for its leased space and will share proportionally in any increases in insurance costs and any applicable real estate tax increases over the base costs in 1986. The owners will pay for building insurance. It was noted that the lease for the Morris Civic expansion provides for an initial rental rate equivalent -to $5.43 per square foot per year. The City's income from the Palais Royale owners' repayments of the $231,000.00 loan will be used to decrease the annual square foot cost to the City of the Morris Civic leased space, so that the effective initial rental,rate will be $4.08 per square foot. The Consent and Acknowledgement to Assignment of Lease consents to the assignment of the Lease to The National Bank and Trust Company of South Bend and the City agrees to make all payments due under said Lease to said Bank until instructed to the contrary. The City acknowledges that the provisions of the Lease remain in Trust 30560 with said bank having no responsibility whatsoever for performance of any of the terms and conditions of the lease. Upon a motion made by Mr. Vance, seconded by Mr. Leszczynski and carried, the above two (2) documents were approved and executed. APPROVE AND ACCEPT FACADE EASEMENT - PALAIS ROYALE City Attorney Richard L. Hill submitted to the Board for approval a Facade Easement between Trust No.. 305.60,_having 1st Source Bank as its Trustee, and the Civil City of South Bend for and in consideration of the payment of $25._00.which Mr. Hill presented to Mr. Bruce R. Bancroft, owner, for the property known as the Palais Royale building located at the northwest corner of West Colfax and North Michigan Streets, immediately adjacent to the south of the Morris Civic Auditorium. The Easement states that the City agrees to renovate the facade of the Palais Royale building and to then lease the Facade Easement to the owner for a term of nineteen (19) years. The.owners convey.,to the City an interest in the building consisting of an easement over the exterior facade of the building. Mr. Hill advised that the City has appropriated up to I 1