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HomeMy WebLinkAboutApproving an Amendment - South Bend Central Development Area Dev PlanRES®LUTI®N 4071-10 Passed by the Common Council of the City of South Bend, Indiana December 13, 10 Attest: City Clerk President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana December 14, 20 10 Approved and signed by me 1~ ~ ~ 20 ~ ~ . City Clerk 20 RESOLUTION NO. ~~~ (`~ ~' Q A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, APPROVING AN ORDER OF THE ST. JOSEPH COUNTY AREA PLAN COMMISSION APPROVING A CERTAIN DECLARATORY RESOLUTION AND AN AMENDMENT TO THE SOUTH BEND CENTRAL DEVELOPMENT AREA DEVELOPMENT PLAN ADOPTED BY THE SOUTH BEND REDEVELOPMENT COMMISSION WHEREAS, the South Bend Redevelopment Commission (the "Commission"), the governing body of the South Bend Department of Redevelopment and the Redevelopment District of the City of South Bend, Indiana, pursuant to Indiana Code 36-7-14 (the "Act"), approved and adopted a resolution, a copy of which is attached hereto as Exhibit A, (the "Declaratory Resolution"), amending the acquisition list in the South Bend Central Development Area Development Plan (the "Plan") for the South Bend Central Development Area (the "Area") and amending the South Bend Central Development Area Development Plan (the "Plan Amendment"); and WHEREAS, the Plan Amendment calls for the addition of interests in various parcels located within the Area, to the Acquisition List contained within the Plan; and WHEREAS, the St. Joseph County Area Plan Commission (the "Plan Commission"), which is the duly designated and acting official planning body for the City of South Bend, Indiana (the "City"), approved and adopted a resolution, a copy of which is attached hereto as Exhibit B, determining that the Declaratory Resolution and the Plan Amendment conform to tl-~e plan of development for the City and approving, ratifying and confirming the Declaratory Resolution and the Plan Amendment, and designating such resolution as the written order of the Plan Commission approving the Declaratory Resolution and the Plan Amendment as required by Section 16 of the Act (the "Plan Commission Order"); and WHEREAS, Section 16 of the Act prohibits the Commission from proceeding until the P1an~Commission Order is approved by the municipal legislative body of the City; and WHEREAS, the Common Council of the City is the municipal legislative body of the City and now desires to approve the Plan Commission Order in order to permit the Commission tp proceed with the redevelopment of the Area; NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of South Bend. Indiana, as follows: 1. The Plan Commission Order attached hereto is in all respects hereby approved, ratified and confirmed. 2. This Resolution shall be in full force and effect from and after its adoption by the Common Council of the City and compliance with procedures required by law. PASSED. AND ADOPTED by the Common Council of the City of South Bend, Indiana, this day of December, 2010. COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA By: \ Member of the Common Council Attest: City Clerk \L-\3-1.0 ~'{~EJr ~,1-{ EU 1tiiJi. nr'f' OYE€~ ~DOPT~? l L-'l ~ -- ~ c~ 9 G i.a Z S 5 ~'/'oi - ~.. n ~I d.._M ~___.~.~,~ TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 10-68 A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, APPROVING AN ORDER OF THE ST. JOSEPH COUNTY AREA PLAN COMMISSION APPROVING A CERTAIN DECLARATORY RESOLUTION AND AN AMENDMENT TO THE SOUTH BEND CENTRAL DEVELOPMENT AREA DEVELOPMENT PLAN ADOPTED BY THE SOUTH BEND REDEVELOPMENT COMMISSION Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable recommendation. Ann Puzzello Chairperson, Committee of the Whole Exhibit A (Declaratory Resolution of the Redevelopment Commission) Exhibit B (Plan Commission Order) r~ RESOLUTION N0.213-10 RESOLUTION OF THE ST. JOSEPH COUNTY AREA PLAN COMMISSION APPROVING A RESOLUTION OF THE SOUTH BEND REDEVELOPMENT COMMISSION AMENDING THE DEVELOPMENT PLAN FOR THE SOUTH BEND CENTRAL DEVELOPMENT AREA AND ADDING AN INTEREST IN ONE OR MORE PARCELS TO THE LIST OF PARCELS. TO BE ACQUIRED WHEREAS, the St. Joseph County Area Plan Commission (the "Plan Commission"), is the body charged with the duty of developing a general plan of development for the City of South Bend, Indiana (the "City"); and WHEREAS, the South Bend Redevelopment Commission (the "Commission"), is the governing body of the South Bend Department of Redevelopment (the "Department"): and WHEREAS, on December 3, 2010, the Commission approved and adopted its Resolution No. 2812 entitled "A RESOLUTION OF THE SOUTH BEND REDEVELOPMENT COMMISSION AMENDING THE DEVELOPMENT PLAN FOR THE SOUTH BEND CENTRAL DEVELOPMENT AREA AND ADDING AN INTEREST IN ONE OR MORE PARCELS TO THE LIST OF PARCELS TO BE ACQUIRED" (the "Declaratory Resolution"); and WHEREAS, the Declaratory Resolution amends the acquisition list contained in the South Bend Central Development Area Development Plan (the "Plan") for the South Bend Central Development Area (the "Area"), identifies interests in parcels located within the Area as necessary for the implementation of the Plan and adopts an amendment to the Plan (Exhibit A to the Declaratory Resolution) (the "Plan Amendment"); and WHEREAS, the Commission has submitted the Declaratory Resolution to the Plan Commission for approval pursuant to the provisions of Indiana Code 36-7-14 (the "Act"); and WHEREAS, pursuant to the provisions to the Act, the Plan Commission desires to issue its written order approving the Declaratory Resolution and the Plan, as amended by the Declaratory Resolution; NOW, THEREFORE BE IT RESOLVED by the St. Joseph County Area Plan Commission, as follows: 1. The Declaratory Resolution and the Plan, as amended by the Declaratory Resolution, each conform to the plan of development for the City. 2. The Declaratory Resolution and Plan Amendment are in all respects approved, ratified and confirmed. 3. This Resolution is hereby designated as and constitutes the written order of the Area Plan Commission approving the Declaratory Resolution and the Plan, as amended by the Declaratory Resolution, pursuant to the requirements of Section 16 of the Act. 4. The Secretary of the Area Plan Commission is hereby directed to forward a copy of this Resolution together with the Declaratory Resolution to the South Bend City Common Council for its consideration. 5. The Secretary is hereby ,directed to file a copy of said Declaratory Resolution with the minutes of this meeting. APPROVED, ADOPTED AND ISSUED by the St. Joseph County Area Plan Commission this 7th day of December, 2010. ST. JOSEPH COUNTY AREA PLAN COMMISSION -~: ATTEST: ~. •etary -2- ~a r t ~ ,,~ ;.7 7 ,~. ~W Ali" N~ €~ ~,~'t~L~ ., ,asst ..~' -- ~, ^ ~~ RESOLUTION N0.2812 A RESOLUTION OF THE SOUTH BEND REDEVELOPMENT COMMISSION AMENDING THE DEVELOPMENT PLAN FOR THE SOUTH BEND CENTRAL DEVELOPMENT AREA AND ADDING AN INTEREST IN ONE OR MORE PARCELS TO THE LIST OF PARCELS TO BE ACQUIRED WHEREAS, the South Bend Redevelopment Commission ("Commission"), governing body of the City of South Bend Department of Redevelopment ("Department"), on May 10, 1985, adopted Resolution No. 737 declaring the South Bend Central Development Area ("Area") in the City of South Bend, Indiana ("City") to be a blighted area within the meaning of the Redevelopment of Cities and Towns Act of 1953, as amended, I.C. 36-7-14 ("Act"); and WHEREAS, Resolution No. 737 and the South Bend Central Development Area Development Plan ("Development Plan") adopted by Resolution No. 737 on May 10, 1985, were confirmed by Resolution No. 739 adopted on June 14, 1985; and WHEREAS, Resolution No. 737 was amended by Resolution No. 745, adopted on August 9, 1985 and confirmed by Resolution No. 750, adopted on September 30, 1985; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 751, adopted on November 8, 1985 and confirmed by Resolution No. 757, adopted December 20, 1985; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 795, adopted on February 27, 1987, and confirmed by Resolution No. 798, adopted on April 10, 1987; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 800, adopted on Apri124, 1987, and confirmed by Resolution No. 803, adopted on June 26, 1987; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 834, adopted on March 11, 1988 and confirmed by Resolution No. 836, adopted on April 15, 1988, and said resolutions expanded the South Bend Central Development Area by adding Expansion Area No. 1; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 867, adopted on February 10, 1989, and confirmed by Resolution No. 874, adopted on March 24, 1989; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 881, adopted on July 28, 1989; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 893, adopted on October 27, 1989 and said Resolution No. 893 expanded the South Bend Central Development Area by adding Expansion Area No. 2 and Expansion Area No. 3; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 921 adopted on March 23, 1990; and WHEREAS, Resolution No. 737 was further amended by Substitute Resolution No. 944 adopted on July 27, 1990; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 974 adopted on January 25, 1991; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1019 adopted on October 11, 1991; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1077 adopted on July 24, 1992; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1205 adopted on January 4, 1994; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1284 adopted on September 2, 1994; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1547 adopted on November 21, 1997; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1559 adopted on December 19, 1997; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1562 adopted on February 24, 1998; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1723 adopted on December 17, 1999; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1737 adopted on February 18, 2000 and said Resolution No. 1737 expanded the South Bend Central Development Area by adding Expansion Area No. 4; . WHEREAS, Resolution No. 737 was further amended by Resolution No. 1758 adopted on July 7, 2000: and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1783 adopted on August 4, 2000; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1843 adopted 2 on September 7, 2001; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1901 adopted on September 6, 2002; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1922 adopted on December 6, 2002; and WHEREAS, Resolution No. 737 -was further amended by Resolution No. 1952 adopted on March 7, 2003; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 1973 adopted on June 6, 2003; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2001 adopted on October 3, 2003; and said Resolution No. 2001 expanded the South Bend Central Development Area by adding Expansion Area No. 5; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2014 adopted on November 17, 2003; and said Resolution No. 2014 expanded the South Bend Central Development Area by adding Expansion Area No. 6; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2015 adopted on December 19, 2003; and said Resolution No. 2015 contracted the South Bend Central Development Area by removing Reduction Area No. 1; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2105 adopted on November 5, 2004; and said Resolution No. 2105 expanded the South Bend Central Development Area by adding Expansion Area No. 7; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2145 adopted on March 4, 2005; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2185 adopted on October 7, 2005; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2192 adopted on December 2, 2005; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2328 adopted on May 18, 2007; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2374 adopted on July 7, 2004; and 3 WHEREAS, Resolution No. 737 was further amended by Resolution No. 2385 adopted on November 2, 2007; and said Resolution No. 2385 expanded the South Bend Central Development Area by adding Expansion Area No. 8; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2425 adopted on January 18, 2008; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2441 adopted on March 28, 2008; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2467 adopted on July 18, 2008; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2595 adopted on August 21, 2009; and WHEREAS, Resolution No. 737 was further amended by Resolution No. 2666 adopted on April 9, 2010; and WHEREAS, the Development Plan includes a list of interests in parcels of property to be acquired; and WHEREAS, it is necessary to modify the list of interests in parcels of property to be acquired by adding additional interests in parcels of property to the acquisition list; and WHEREAS, the Commission previously adopted the Development Plan and now desires to amend the Development Plan to provide for the acquisition of interests in the parcels of property set forth in Exhibit A; and WHEREAS, on June 5, 2009, the Commission authorized the Department to conduct surveys, appraisals and investigations and to thoroughly study the South Bend Central Development Area within the City; and WHEREAS, pursuant to the Act, the Department has conducted surveys and investigations and has thoroughly studied the South Bend Central Development Area and the Development Plan; and WHEREAS, upon such surveys, appraisals, investigations and studies having been made, the Commission finds that the Plan Amendment cannot be achieved by regulatory processes or by the ordinary operations of private enterprise without resort to the powers allowed under the Act and that the public health and welfare will be benefited by the accomplishment of the Plan Amendment which shall include the acquisition of interests in the parcels identified in Exhibit A; and WHEREAS, the Plan Amendment conforms to other development and redevelopment 4 plans for the City, NOW, THEREFORE, BE IT RESOLVED BY THE SOUTH BEND REDEVELOPMENT COMMISSION, GOVERNING BODY OF THE CITY OF SOUTH BEND DEPARTMENT OF REDEVELOPMENT, AS FOLLOWS: 1. The Commission hereby determines that to accomplish the redevelopment of the Area, it is necessary to acquire additional interests in parcels of property within the Area, as shown on Exhibit A attached hereto and incorporated herein. 2. The Commission hereby determines that the public health and welfare will be benefited by the accomplishment of the Plan Amendment. 3. The Commission hereby determines that the accomplishment of the Plan Amendment will be of public utility and benefit as measured by: a) the attraction or retention of permanent jobs; b) an increase in the property base; c) improved diversity of the economic base; d) other similar public benefits. 4. The Commission hereby determines that the estimated cost of acquisition of the interests in parcels of property being added to the acquisition list is $ 6,500,000.00. 5. The Commission hereby determines that the Plan Amendment conforms to other development and redevelopment plans for the City. 6. The maps and plats of the South Bend Central Development Area, showing the boundaries, the location of the various parcels of property, streets, alleys and other features affecting the acquisition, clearance, replatting, replanning, rezoning or redevelopment of the Area, that are to be devoted to public ways, levees, sewerage, parks, playgrounds and other public purposes under the Plan, which maps and plats were previously adopted by the Commission, are hereby confirmed by the Commission. 7. The Secretary is hereby directed to file a certified copy of said Development Plan, as amended, with the minutes of this meeting. 8. The officers of the Commission are hereby directed to submit this Resolution, together with supporting data, to the Area Plan Commission and the South Bend City Common Council, as provided by Section 16 of the Act, for the approval of this Resolution and the Plan Amendment, and if approved by both bodies, the Resolution and the Plan Amendment shall be submitted to public hearing and remonstrance as provided by Section 17 and Section 17.5 of the Act and IC 5-3-1 and after all required filings have been made pursuant to Section 17(b) and (c) of the Act. 9. All orders or resolutions in conflict herewith are hereby rescinded, revoked and repealed in so far as such exist. 10. This Resolution does not affect any rights or liabilities accrued, penalties incurred, offenses committed or (except as otherwise provided herein) proceedings begun before the effective date of this Resolution. I1. All other findings, determinations and conclusions in Resolution No. 737, as amended, shall remain as stated therein. 12. The United States of America is hereby assured of full compliance by the South Bend Redevelopment Commission with regulations of the Department of Housing and Urban Development effectuating Title VI of the Civil Rights Act of 1964, as amended. (Balance of page intentionally left blank) 6 ADOPTED at a regular meeting of the South Bend Redevelopment Commission held on December 3, 2010, at 1308 County-City Building, 227 West Jefferson Boulevard, South Bend, IN 46601. ATTEST: ignature Nancy N. Kine. Secretary rime ame an it e South Bend Redevelopment Commission CITY OF SOUTH BEND, DEPARTMENT OF REDEVELOPMENT ignature Marcia I. Jones President rrnle ame an i! e South Bend Redevelopment Commission 7 EXHIBIT A AMENDMENT TO THE SOUTH BEND CENTRAL DEVELOPMENT AREA DEVELOPMENT PLAN ACQUISITION LIST AMENDMENT Interest in Parcel # Address Common Name Owner 18-3091-347401 .100 North Michigan Underground Parking i st Source Corporation and i 8-3091-347402 Street Garage Host Hotels & Resorts, L.P. ., ~: I U ~~~: ~~i;.~i 1200 CouN~rr-Crn~ Bui~o~Nc 227 W JEFFERSON BOULEVi1Rll SovrH BEND, INDIANA 4GG01-1830 PHONE574/235-9371 Fax 574/235-9021 TDD 574/ 235-55G7 CITY OF SOUTH BEND STEPHEN J. LUECKE, M.+.YOR COMMUNITY HL ECONOMIC DEVELOPMENT JEFFREY V. GIBNEY EXECUTIVE DIRECTOR December 8, 2010 South Bend Common Council Fourth Floor Council Chambers 400 County-City Building South Bend, IN 46601 Dear Council Member: The attached Ordinance for your consideration would allow for the amendment of the South Bend Central Development Area Development Plan to add two parcels to the Acquisition List. These two parcels represent the parking garage in the 1s1 Source/Marriott building. Under a Memorandum of Understanding previously supplied to the Common Council, Redevelopment's acquisition of the parking garage will result in retaining 1 SI Source Corporation and an upper upscale hotel in the downtown. These two businesses employ almost 700 people in South Bend. In addition, a total of $14 million (including the $6.5 million garage purchase price) will be invested in the bank, hotel and atrium. Please call me at 235-9339 if you have any questions. I will attend your December 13th meeting and be available to answer questions-then as well. Dick Nussbaum, an attorney representing the City, will make the presentation of this bill. Sin re y, ald E. Inks Director Economic Development cc: Jeff Gibney U r'~ G Lv~~ CITY CI~rG, S0, ~ri!D, h1. COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL HL PROGRAM PAl~1ELA C. METER DONALD E. INKS I1'IANAGEML•NT 574!235-9GG0 574!235-9371 LUZABETH LE6NARD FAx: 5741235-9G97 574f235-9371 MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding (the "Agreement"), effective as of December 2, 2010, is made and entered into by and among the City of South Bend, Indiana, a political subdivision and municipal corporation of the State of Indiana, by and through its Board of Public Works (the "City"), the South Bend Redevelopment Commission (the "Commission"), 1st Source Corporation ("1st Source"), and Host Hotels & Resorts, L.P. ("Host") (each individually, a "Party" and, collectively, the "Parties"). RF.(''TTAT.Q WHEREAS, 1st Source is the master tenant of a bank office building located at 100 North Michigan Street in South Bend, Indiana (the "Office Building"), and Host is the owner of a building adjacent to the Office Building and housing a Marriott Hotel located at 123 N. St. Joseph Street in South Bend, Indiana (the "Hotel"); and WHEREAS, Host owns a seventy percent (70%) interest in an underground parking garage (the "Garage"), related street and site improvements and an atrium (the "Atrium") (collectively, the "Public Improvements") which are used as common property for the Hotel and the Office Building, and 1st Source owns the remaining thirty percent (30%) interest in the Public Improvements; and WHEREAS, pursuant to that certain Agreement for Conveyance of Public Improvements between the City and 1st Source (f/k/a FBT Bancorp, Inc.) dated October 22, 1979 (the "1st Source Conveyance Agreement"), and that certain Agreement for Conveyance of Public Improvements by and between the City and Host (as successor to Rahn Properties II), dated October 22, 1979 (the "Host Conveyance Agreement" together with the 1st Source Conveyance Agreement, collectively, the "Conveyance Agreements"), 1st Source and Host pay annual fees to the City in accordance with the schedules set forth in the Conveyance Agreements; and WHEREAS, 1st Source is currently occupying all of the first through fourth floors and a portion of the fifth floor of the Office Building, totaling 84,696 square feet (the "1st Source Space"), and has entered into a lease for a term of ten (10) years for the 1st Source Space (the "1st Source Lease"), the terms of which allow 1st Source to terminate the 1st Source Lease if certain actions contemplated herein are not completed by December 31, 2010; and WHEREAS, Host is contemplating certain capital improvements to the Hotel, which are more particularly described in Exhibit A (the "Hotel Improvements"); and WHEREAS, it is in the best interests of the citizens of the City to prevent the termination of the 1st Source Lease, to maintain the presence of 1st Source and the Hotel, as an "upper upscale" or "upscale" hotel, at their current locations and to encourage the undertaking of the Atrium Improvements (as defined herein), the 1st Source Improvements (as defined herein) and the Hotel Improvements, as such improvements will provide for additional economic development of the downtown area of the City, retain employment and provide for new employment opportunities within the City; and Atrium Improvements. The Hotel Improvements Escrow funds will not be available to Host until Host has invested $2,800,000 of its own funds in the Hotel Improvements. The 1st Source Improvements Escrow funds will not be available to 1st Source until 1st Source has invested $3,450,000 of its own funds in the 1st Source Improvements. (c) At the time of the closing of the purchase of the Garage (the "Garage Closing") and as a condition to the obligations of the Parties, the existing Operation; Maintenance and Easement Agreement between 1st Source (f/k/a FBT Bancorp, Inc.) and Host (as successor to Rahn Properties II) dated October 22, 1979, as amended (the "Operation Agreement"), and that certain Common Facilities Management Agreement by and among Host (as successor to Rahn Properties II), 1st Source (f/k/a FBT Bancorp, Inc.) and Marriott International, Inc. (f/k/a Marriott Corporation) ("Marriott"), dated November 1, 1981, as amended (the "Common Facilities Agreement") shall each be amended to (i) include the Commission as a party to such agreements, and (ii) to provide an acknowledgement of the assignment of 1st Source's interest in such agreements to First Bank Center Limited Partnership, a Minnesota limited partnership (the "Office Building Owner''). In addition, as a condition to the obligations of the Parties, the Operation.Agreement will be amended to provide that (i) the Operation Agreement shall terminate on April 30, 2070; and (ii) the Commission shall convey, subject to any proceedings required by law, a seventy percent (70%) interest in the Garage to Host and a thirty percent (30%) interest in the Garage to the Office Building Owner no later than the time of the termination of the Operation Agreement (April 30, 2070). Other than such amendments, the Operation Agreement and the Common Facilities Agreement shall remain in full force and effect, and Host and the Office Building Owner will continue to retain all income and assume all maintenance and responsibilities in connection with the operation of the Garage, as well as the other Public Improvements. (d) The Commission shall grant an easement providing to Host and 1st Source or the Office Building Owner, as applicable, or their assignees all rights, privileges and easements for the use and full enjoyment of the Garage. (e) The City agrees that at the time of the Garage Closing, the City, 1st Source and Host shall terminate the Conveyance Agreements and all payments, rights and responsibilities thereunder. (f) The City and the Commission further agree to cooperate and act in good faith with 1st Source and Host in completing any definitive agreements contemplated hereunder on terms typically found in agreements of the kind contemplated by this Agreement, and any actions that are necessary to complete the transactions contemplated by this Agreement. (g) The City agrees that, prior to December 31, 2017 and so long as Host is not in breach of this Agreement as described in Section 3(e), it will not .provide any funding or other incentives to any other hotel in the downtown or Notre Dame area of the City in a manner that would provide an unfair market advantage to such hotel or in a greater amount proportionally than those incentives provided to Host under this -3- the actions contemplated by this Agreement. 1st Source acknowledges and understands that all such information, to the extent provided to a governmental agency, may be subject to the Indiana Access to Public Records Act. (g) In the event Marriott is terminated as manager under the Common Facilities Agreement by Host, 1st Source shall use commercially reasonable efforts to cause the Office Building Owner (as assignee of 1st Source under the Common Facilities Agreement) to approve the successor operator of the Hotel as the successor manager (the "Successor Manager") under the Common Facilities Agreement, so long as the Hotel continues to be operated as an "upper upscale" or "upscale" hotel and the Successor Manager agrees to enter into the current Common Facilities Agreement, or a modified Common Facilities Agreement, as requested by the Successor Manager and agreed to by the parties thereto. (h) Upon the completion of the Atrium Improvements and the 1st Source Improvements, the Commission shall convey to the Office Building Owner, subject to further proceedings required by law, the Commission's interest in the real property that is the subject of that certain ground lease between the Commission and 1st Source (f/k/a FBT Bancorp, Inc.), dated October 22, 1979, as amended. SECTION 3. Host Agreements. Host agrees with the City, the Commission and 1st Source as follows: (a) Pursuant to Section 1 and Section 2 of this Agreement, Host agrees to undertake the Atrium Improvements, with the assistance of 1st Source, at a total cost of at least $1,250,000. Host shall pay for seventy percent (70%) of such costs (at least $875,000). Subject to the conditions set forth in Section 1(b) hereof, Host shall be entitled to draw on the Atrium Improvements Escrow for the payment of such costs (up to $875,000). Atrium Improvements in excess of $1,250,000 will be paid seventy percent (70%) by Host and thirty percent (30%) by 1st Source. Host agrees that the Atrium Improvements shall be completed by December 31, 2013. The Atrium Improvements shall be considered completed for purposes of this Agreement when at least $1,250,000 has been spent on Atrium Improvements. (b) In addition to undertaking and contributing to the cost of the Atrium Improvements, Host shall make the Hotel Improvements in an amount of at least $7,350,000. Subject to the exception in the following sentence, Host shall complete the Hotel Improvements by December 31, 2013. If the Atrium Improvements are completed by December 31, 2013 but the Hotel Improvements have not been completed by December 31, 2013, the City will notify Host in writing of such incompletion and Host will have the opportunity to receive an extension to April 30, 2014 by providing the City with Hotel Improvements construction information reasonably satisfactory to the City showing that the Hotel Improvements will be completed by April 30, 2014. For purposes of determining whether Hotel Improvements are completed, the Hotel Improvements shall be considered completed when at least $7,350,000 has been spent on Hotel Improvements. -5- damages to the Commission. Host also agrees that it would be difficult, if not impossible, to determine or prove the specific amount of such damages that would be suffered as a result of such breach. Host and the Commission estimate that the Host Claw-back Amount and the Host Liquidated Damages Amount are the amounts which will be necessary to enable the Commission to be placed in the position it would have been in but for such breach and are not designed to penalize Host. (iv) The Commission ,and 1st Source agree that Host shall not be required to pay the Host Claw-back Amount or the Host Liquidated Damages Amount to the Commission, if, at any time prior to December 31, 2017, the Hotel suffers a Catastrophic Event. For purposes of this Agreement, the term "Catastrophic Event" shall mean an event that has a material adverse effect on the financial condition or operations of the Hotel resulting from (A) a natural or unnatural disaster that results in the complete destruction of the Hotel, the destruction of a substantial portion of the Hotel, or the inability of the Hotel to operate for a period of at least three (3) months, or (B) acts of war, sabotage, terrorist acts or similar events that materially and adversely affect the travel and tourism industry in the United States. (f) The Parties agree that Host shall be released from its obligation to refund the Host Claw-back Amount to the Commission under Section 3(e)(i) if the Adjusted Net Operating Income (as defined below) for the Hotel falls below $0 in 2011 or 2012, $250,000 in 2013 or 2014, or $500,000 in 2015, 2016, or 2017 (the "ANOI Exception"). Adjusted Net Operating Income shall mean the adjusted net operating income of the Hotel for a calendar year as determined in accordance with the Summary Operating Statement attached hereto as Exhibit E (the "Summary Operating Statement"), except that (i) "Management Fees" shall not exceed three percent (3%) of Total Revenue for such year as set forth in the Summary Operating Statement, (ii) "Replacement Reserves" shall not exceed five percent (5%) of Total Revenue for such year as set forth in the Summary Operating Statement, (iii) Total Revenue shall be ratably increased to account for any revenues that were not received because guest rooms and other facilities were not available for customer use as a result of the construction of the Hotel Improvements (determined after consideration of occupancy rates at the time of the Hotel Improvements and other relevant factors}, and (iv) any amounts expended or expenses incurred in connection with the Hotel Improvements or Atrium Improvements will not be counted for purposes of determining the Adjusted Net Operating Income; provided, however, that subsection (iii) above shall only apply if construction of the Hotel Improvements occurred during a portion of the applicable calendar year for purposes of applying the ANOI Exception in such year. Host shall not be relieved of its obligations under this Agreement as a result of the ANOI Exception unless (i) the Hotel Improvements and the Atrium Improvements (other than as a result of 1st Source's actions or inactions) are timely completed in accordance with the terms of this Agreement and (ii) Host has (A) provided the City with thirty (30) days prior written notice (together with the applicable Summary Operating Statement and supporting calculations) of its claim that the ANOI Exception applies and (B) allowed the -7- and contingent upon compliance with and completion of applicable statutory and administrative procedures, including, without limitation, applicable public notice and public hearing requirements, official actions by governing bodies, and any remonstrance and appeal rights; (iii) the representations of and performance of the covenants and agreements of 1st Source are subject to and contingent upon (A) approval of this Agreement by the Board of Directors of 1st Source and/or such other corporate approval as is required by the governing documents of 1st Source, and (B) the satisfaction of the conditions and contingencies set forth in this Agreement; and (iv) the representations of and performance of the covenants and agreements of Host are subject to and contingent upon (A) approval of this Agreement by the Board of Directors of Host and/or such other corporate approval as is required by the governing documents of Host, and (B) the satisfaction of the conditions and contingencies set forth in this Agreement. Each Party covenants that it shall use its best efforts to do all things lawfully within its power to take the necessary actions to effectuate the obligations contemplated hereby and otherwise implement this Agreement to the fullest extent possible in accordance with the time frames set forth herein, unless such dates are extended by mutual written consent of the Parties. SECTION 5. Existing Agreements. The Parties will pursue the amendment of any existing agreements or portions thereof that are inconsistent with the covenants and provisions set forth herein. SECTION 6. Closing Dates; Termination. (a) The Parties shall use commercially reasonable efforts to enter into the Garage Purchase Agreement and complete the sale of the Garage to the Commission by December 31, 2010. (b) The Parties agree to promptly execute and deliver such additional agreements, instruments and documents (including those specifically identified herein), provide such additional financial or technical information, hold and attend such public hearings or meetings relating to the projects contemplated herein and the additional actions required by this Agreement, and take such additional actions as may reasonably be required from time to time in order to effectuate the obligations contemplated by this Agreement. (c) The City, the Commission, 1st Source or Host may terminate this Agreement (and this Agreement shall have no force and effect and the Parties shall have no further obligations under this Agreement) immediately upon written notice to the other Parties if the actions required in this Section 6 have not been completed by December 31, 2010, unless such date is extended by mutual written consent of the Parties. SECTION 7. General. (a) The Parties agree that time is of the essence in the matters described herein. (b) The City, in good faith, shall expedite the review and approval of all required environmental, health, safety, construction and other permits, licenses, -9- (f) 1st Source and Host acknowledge that IND. CODE § 5-14-1.5 (the "Open Door Law") and IND. CODE § 5-14-3 (the "Access to Public Records Law") apply to governmental entities (including the City and the Commission), and the Open Door Law and the Access to Public Records Law may require disclosure of this Agreement and its Exhibits. Accordingly, 1st Source and Host agree and understand that any proprietary or confidential information should be withheld from a governmental entity unless specifically and reasonably requested by that governmental entity in order for that governmental entity to complete its commitments under this Agreement. (g) The Commission hereby acknowledges and agrees that any breach by Host of its obligations hereunder that would require Host to pay the Host Claw-back Amount to the Commission shall not affect 1st Source or in any way require 1st Source to make payment of the 1st Source Claw-back Amount to the Commission, and correspondingly, no breach by 1st Source of its obligations hereunder requiring 1st Source to pay the 1st Source Claw-back Amount to the Commission will affect Host or in any way require Host to make a payment of the Host Claw-back Amount to the Commission. (h) If any one or more of the covenants or agreements provided in this Agreement on the part of any Party should be determined by a court of competent jurisdiction to be contrary to law, such covenants and agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement. (i) This Agreement and all transactions contemplated hereby shall be governed by, construed in accordance with, and enforced under the laws of the State of Indiana, notwithstanding its choice of law rules to the contrary or any other state's choice of law rules. (j) This Agreement maybe executed (by facsimile, digital or other electronic means) in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. (k) This Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns. (1) This Agreement may be amended only by a written instrument executed by all of the Parties. Any condition precedent to any Party's obligations hereunder maybe waived only in writing by such Party. (m) All Exhibits attached hereto are incorporated herein by reference. (n) This Agreement and the Exhibits hereto contain the entire understanding of the Parties and this Agreement supersedes all prior agreements and understandings, oral and written, with respect to this subject matter. -I1- with a copy to: Philip J. Faccenda Barnes & Thornburg 600 1st Source Bank Center 100 North Michigan Street South Bend, Indiana 46601 Telephone: (574) 233-1171 Facsimile: (574) 237-1125 Host: Andy Lewis Host Hotels & Resorts 6903 Rockledge Drive, Ste. 1500 Bethesda, Maryland 20817 Telephone: (240) 744-5309 Facsimile: (240) 744-5125 with a copy to: Richard L. Hill Baker & Daniels LLP 202 S. Michigan Street, Suite 1400 South Bend, Indiana 46601 Telephone: (574) 23.4-1937 Facsimile: (574) 239-1955 -13- EXHIBIT A Hotel Improvements A minimum of $2,572,500 will be invested in improving hotel rooms, corridors, bathrooms and the concierge lounge. • A minimum of $300,000 will be invested in improving the Allie's American Grille space. • The remainder of the funds will be invested in the following items: (i) lobby and other first floor improvements, (ii) additional hotel room improvements, (iii) roof and mechanical systems, and (iv) such other improvements of the Hotel that Host deems appropriate. No funds will be utilized for any signage or brand identity items. RXTTTRTT f 1st Source Improvements • Building and related improvements at the 1st Source Bank Center, 100 North Michigan, South Bend, Indiana in the amount of approximately $2,444,831, including conference room renovations, office material upgrades and heating, ventilation and air conditioning upgrades. • Building and related improvements at the 1st Bank Building, 205 West Jefferson, South Bend, Indiana in the amount of approximately $2,295,359, including elevator and restroom upgrades, tenant improvements, and structural improvements. • Building and related improvements at 1st Source's Operations Center and adjoining facilities on Commerce Drive, South Bend, Indiana in the amount of approximately $200,000. • Investment in excess of $459,810on computer, network and related equipment upgrades within the facilities listed above. EXHIBIT E Summar~Operatin~ Statement Attached. SBDS02 PFACCENDA 406380v9 ~it~d !erlc'S C~i~ice DEC - 9 210 JINN VGCIRGL• CITY GtEFi~C, ~p• BrND, iN. _~ ~ 1~ Memorandum To: Members of the Redevelopment Commission From: Richard A. Nussbaum, Outside Counsel to the Commission Re: Memorandum of Understanding ("MOU") 1St Source/Host Resort Project The following represents a summary outline of the terms of the MOU presented for approval December 3, 2010. I apologize for the short notice but the final form was not developed and signed by 1St Source and Host until late last evening. I. Parties • 1St Source Corporation-Principal tenant of Office Building • Host Hotel & Resorts, LP-Owner of Hotel Building (Marriott is manager under agreement with Host) • Board of Public Works • Redevelopment Commission (Ground Lessor ) II. Purpose of Agreement • Prevent termination of 1St Source Lease • Maintain upper upscale/upscale status of Hotel III. Consideration Paid by City • 6.5 million (70 % to Host [ 4.55 m ] 30% to 1St Source [1.95 m] ) • Source :UDAG (4.6 m -portion borrowed from COIT but all to be repaid to COIT account ); COIT Reserves (1.9 m) (Gibney/Inks for details ) • NO LOIT DEDICATED TO PUCLIC SAFETY OR PROPERTY TAX RELIEF IV. Consideration Received by City • Parking Garage (owned 70% Host/30% 1St Source ) • 1St Source renew lease; make improvements with proceeds of sale and private funds • Host to operate Hotel as upper upscale and make improvements • Host & 1St Source to assume all maintenance and operational responsibilities of Garage (Maintain current operations agreements in place for last 30 years ) V. Improvements (All minimums) • Atrium -1.25 million (70 % Host-30 % 1St Source ) • Hotel Improvements - 7.35 (equally between Garage Proceeds & Host funds) (Total Host 7.35m + 875k = 8.225 m ) • Bank Improvements-5.4 million (spread among multiple locations in South Bend-Exhibit C) (Total 1St Source 5.4 m + 375k= 5.775m ) • Total Improvements 14 million VI. Use of Garage Proceeds by Host/1St Source • Escrowed and can not access until own funds used for Hotel/1St Source Improvements • Encourage Atrium Improvements-Still Escrow but can be reimbursed when full percentage of Atrium costs paid • Liquidated Damages if improvements not made by 12/31/13 • Clawbacks if do not meet operational standards-amortized over 7 years ~ ANOI exception-not applicable until improvements done VII. Additional Consideration to 1St Source/Host • Ground lease interests conveyed • Conveyance payments cease • Reconveyance of garage no later than 2041 IX. Economic Development • Important historic business maintained • Upper Upscale hotel for Century Center • 700 direct jobs retained downtown to support other business downtown • 300 indirect jobs (other tenants -Barnes & Thornburg/Merill Lynch • Construction -multi million dollar downtown project construction over 3 years ~~~~~1 ~~~ ~~~i''a' C~~$~~e -.-, U 1.1, I U 1_U~ JL~~:tl VOORQE CITY CLERf;, S0. BE~dD, IN.