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South Bend Redevelopment Commission <br />Regular Meeting –October 15, 2010 <br /> <br /> <br />7. PROGRESS REPORTS <br /> <br />PR <br />Mr. Inks noted that there is a project to update the Chase <br />ROGRESS EPORTS <br />Tower and convert part of it to senior living. The <br />proposal anticipates a request to the Redevelopment <br />Commission for a pledge of TIF to support the project. <br />At an Economic Development Commission (EDC) <br />meeting to immediately follow the Commission <br />meeting, the EDC will consider starting a Recovery <br />Zone Bond (Private Activity Bond) process that needs to <br />be completed by the end of 2010. We have asked the <br />developer to attend the Commission meeting to provide <br />an overview of the project. No action will be taken <br />today. <br /> <br />Mr. Shanahan, bond counsel for Dillingham Hill RE <br />LLC, said that since 1986 the law for Private Activity <br />Bonds limited their use to manufacturing facilities. As <br />part of the Recovery Act, Congress extended the <br />program to what it was before 1986 when you could use <br />them for most anything. The bonds are tax exempt, so <br />the developer can borrow at a lower cost, making the <br />project more affordable and encouraging developers to <br />do things they might not otherwise do if they had to pay <br />the going rate on a taxable basis. The city has no <br />liability for the bonds. They will be paid by the <br />developer. The city is offering tax increment to <br />encourage the project which will make the sale of the <br />bonds more attractive and easier to sell. The Recovery <br />Act limited the amount of bonds that can be sold in 2009 <br />and 2010. Indiana had some $460,000,000; South Bend <br />had over $7,000,000; St. Joseph County had <br />$13,000,000 or so. Very little has been done with that <br />availability because no one can sell the bonds: investors <br />are nervous. No one wants to lend money for a project <br />that’s not there. This project has the advantage of <br />having a building that’s already there, already worth <br />something. <br /> <br />With the city’s pledge of incremental tax revenues, plus <br />the company’s revenues from operating the facility, that <br />makes this project attractive enough we think we can <br /> 34 <br /> <br />