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HomeMy WebLinkAboutInducement Resolution relating to the authorizing of a memorandum of intent between the City of South Bend and Claeys RealtyAttest: RESOLUTION NO. 817 -80 Passed by the Common Council of the City of South Bend, Indiana, September 15, 19 80 . W ity Clerk Attest: President of Common Council. Presented by me to the Mayor of the City of South Bend, Indiana September 16, 19 80 Approved and signed by me (J 19 �U City Clerk Mayor INDUCEMENT RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA RESOLUTION NO. A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A MEMO- RANDUM OF INTENT BETWEEN THE CITY OF SOUTH BEND, INDIANA AND CLAEYS REALTY, AN INDIANA PARTNERSHIP, PROVIDING FOR THE ISSUANCE BY SAID CITY OF ITS ECONOMIC DEVELOPMENT REVENUE BONDS PURSUANT TO THE PROVISIONS OF INDIANA CODE, TITLE 18, ARTICLE 6, CHAPTER 4.5, AS AMENDED The area still has insufficient employment opportunities and insufficient diversification of industries, which conditions are harmful to the economic stability and general welfare of the area, and if not remedied, will be detrimental to the develop- ment of such area. The City of South Bend, Indiana (the "City ") is autho- rized under the provisions of Indiana Code, Title 18, Article 6, Chapter 4.5, as amended (the "Act ") to acquire, construct and finance economic development projects for the users thereof and to provide for the issuance of revenue bonds in conjunction therewith. The City, in order to implement the public purposes enumerated in the Act and in furtherance thereto to induce Claeys Realty, an Indiana partnership (the "Borrower ") to add on to, increase facilities and build a structure at 525 South Taylor Street, South Bend, Indiana, hereinafter collectively called (the "Project ") within the limits of the City of South Bend, has indicated its intent to issue its revenue bonds under and pursuant to the provisions of the Act and to apply the proceeds therefrom to the payment of the costs of the Project. The Borrower, after considering a number of possible locations within and outside of the State of Indiana, and in reliance upon the intent of the City to finance the Project through the issuance of revenue bonds under the provisions of the Act, has determined to construct the Project within the limits of the City of South Bend, Indiana. It is now deemed advisable to authorize the execution and delivery by the City of a Memorandum of Intent expressing formally and in writing the understanding heretofore formally agreed upon by the City and Claeys Realty, an Indiana partner- ship, the Borrower. NOW, THEREFORE, be it resolved by the Common Council of the City of South Bend, Indiana, as follows: SECTION 1. The Mayor is hereby authorized and directed to execute a Memorandum of Intent by and between the City and Claeys Realty, an Indiana partnership, the Borrower, and the City Clerk is hereby authorized and directed to affix the seal of the City thereto and to attest the same; and said Mayor and City Clerk are hereby authorized and directed to cause said Memorandum of Intent to be delivered to, accepted, and executed by Claeys Realty, an Indiana partnership, said Memorandum of Intent, which is hereby approved and incorporated by reference and made a part of this authorizing resolution, to be in sub- stantially the form attached hereto. SECTION 2. All resolutions and orders, or parts there- of, in conflict with the provisions of this resolution are, to the extent of such conflicts, hereby repealed and this resolu- tion shall be in immediate effect from and after its adoption. This Inducement Resolution shall be in full force and effect from and after its adoption by the Common Council and approval by the Mayor. PRESENTED 9-/-57_ &/ NOT APPROVED Irene Gcmmion ADOPTED P_ / CITY CLERK, SOU-ill. orND, IND. 414* A�L - Member of the Common Council -2- MEMORANDUM OF INTENT THIS MEMORANDUM OF INTENT, made and entered into this day of 1980, by and between the CITY OF SOUTH BEND, INDIANA, a municipality, in St. Joseph County, State of Indiana (hereinafter called "City ") and CLAEYS REALTY, an Indiana partnership, of South Bend, Indiana (hereinafter called "Developer "). W I T N E S S E T H: WHEREAS, the City recognizes that it is necessary for the general welfare and economy of the area that the City en- deavor to provide sufficient employment opportunities, an in- crease in the tax base, and a diversification of industries; and WHEREAS, the City is authorized under the provisions of Indiana Code, Title 18, Chapter 6, Article 4.5, as amended (the "Act "), to acquire, construct and finance economic develop- ment projects for the user thereof, and to provide for the is- suance of revenue bonds in conjunction therewith; and WHEREAS, the City, in order to implement the public purposes enumerated in the Act and in furtherance thereof to induce Claeys Realty, an Indiana partnership, to add on to, build and increase the premises at 525 South Taylor Street, South Bend, Indiana, hereinafter called the "Project ", within the limits of the City of South Bend, has indicated its intent to issue its revenue bonds under and pursuant to the provisions of the Act and to apply the proceeds therefrom to the payment of the costs of the project and expenses incidental thereto; and WHEREAS, the Developer, after considering a number of possible locations within and outside the State of Indiana, and in reliance upon the intent of the City to finance the acquisi- tion and construction of the Project through the issuance of its revenue bonds under the provisions of the Act, has determined to locate the Project within the limits of the City of South Bend, Indiana; and WHEREAS, it is now deemed advisable to express for- mally and in writing the understanding heretofore informally discussed by the parties hereto. NOW, THEREFORE, in consideration of the premises and of the mutual undertakings herein expressed, the parties hereto recognize and intend as follows: A. The City represents and intends: 1. That the City is authorized by the pro- visions of the Act to finance the Project and for the purposes of paying the costs of the Project, including expenses incidental thereto, is authorized as afore- said to issue its revenue bonds payable from the revenues and income derived by the City from the Project. 2. That the City intends, subject in all respects to the provisions and requirements of the Act and to a sale of the bonds on terms satisfactory to the Developer, to authorize, issue, sell and deliver its revenue bonds to be issued in one or more series (in an aggregate principal amount of approximately Four Hundred Fifty Thousand ($450,000.00) Dollars, which amount will be fixed by ordinance of the City at a later date and agreed to by the Developer, but not to exceed the cost of the Project and expenses incidental thereto as estimated at the time of the issuance of the bonds) and apply the proceeds there- from to the payment of the cost of the Project, pro- vided that prior to the issuance and delivery of such revenue bonds there shall have been entered into be- tween the Developer and the City of South Bend ap- -2- propriate financing agreements upon terms which will comply with the provisions of the Act and which will provide for the payment by the Developer of amounts which will be sufficient to enable the City to pay the principal of and interest on such revenue bonds. 3. That the financing of the Project by the City is for a proper public corporate purpose and that the financing thereof for the Developer is neces- sary to implement the public purposes enumerated in the Act. B. The Developer represents and intends: 1. That the Project will result in in- creased employment in the City. 2. That if the proposed revenue bonds (in- cluding the rate of interest thereon) of the City are satisfactory to the Developer, it will enter into financing agreements with the City upon terms which will be sufficient to pay the cost of the Project and expenses incidental thereto, as evidenced by such revenue bonds to be issued for the account of the Project, and will enter into such appropriate financing agreements with the City with regard to the foregoing prior to the issuance and delivery of any such reve- nue bonds by the City. 3. That the Developer intends during the term of any such financing agreements to cause the Project to be used or occupied primarily for use as a commercial development and expansion for the in- creasing of employment. C. It is further recognized and intended between the parties hereto as follows: 1. That the revenue bonds to be issued by -3- the City will never constitute an indebtedness of the City or a loan of the credit thereof within the meaning of any constitutional or statutory provisions, and such fact shall be plainly stated on the face of each of said bonds. No holder of any of said bonds shall ever have the right to compel any exercise of the taking power of the City to pay said bonds or the in- terest thereon. The principal of, and the premium, if any, and interest on, such revenue bonds to be issued to finance the cost of the Project shall be secured by a pledge to a trustee acting under an indenture of trust for the benefit of the holders of said bonds, or by a pledge directly to the holders of said bonds, of the revenues and income derived by the City from the Project and may be further secured by a lien on the Project, and shall be additionally secured by a pledge to said trustee or the holders of said bonds of the aforesaid financing agreements between the City and the Developer. 2. That a primary inducement to the De- veloper in locating the Project within the limits of the City of South Bend, Indiana, is the intent of the City to finance the cost of the Project through the issuance of its revenue bonds pursuant to the provi- sions of the Act. 3. That it is desirable that the Developer rather than the City arrange for the acquisition and construction of the Project in order to insure that the Project will conform to the requirements of the De- veloper, for whose use the Project is designed. 4. That this Agreement shall inure to the benefit of the parties hereto and their respective -4- successors and assigns; provided, however, that in the event the bonds are not issued or sold as contemplated herein, there shall be no liability on the part of the City or of the Developer or of any of their officers or employees for such non - issuance or non - delivery. 5. That this Agreement may be executed in separate counterparts, all of which shall be deemed a single instrument. IN WITNESS WHEREOF, the City of South Bend, Indiana, by and through its Common Council, has caused its corporate name to be hereunto subscribed by Roger Parent, its duly authorized Mayor, and attested under its official seal by Irene Gammon, its City Clerk, and Claeys Realty, an Indiana partnership, the Developer, has caused its name to be hereunto subscribed, and all being done as of the year and date first above written. ATTEST: Irene Gammon, City Clerk CITY OF SOUTH BEND, INDIANA, By: Roger Parent, Mayor CLAEYS REALTY, an Indiana Partnership, By: -5-