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REGULAR MEETING DECEMBER 13, 2010 <br /> <br /> <br /> <br />have 2.6 million dollars on hand and are expecting a repayment of an additional 2.7 <br />million dollars over a number of years. So they are borrowing that 2.7 million dollars <br />from COIT to be repaid by the UDAG fund as monies come in. For the 6.5 million dollar <br />total purchase, again 1.2 million dollars is a direct investment from the COIT fund and <br />5.3 million dollars will be from UDAG funds both on hand and to be received over the <br />next several years. Mayor Luecke asked so why are we asking to purchase the garage <br />st <br />beneath the 1 Source Bank and Marriott Hotel and there is a second piece that the <br />Council will be asked to vote on later this evening in a resolution that approves that <br />purchase of the garage by the Redevelopment Commission. He stated they he is asking <br />st <br />to make this investment as a way to induce additional private investment at 1 Source <br />Bank and Host Hotel and Resorts which is the owner of the Marriott portion of the <br />st <br />building. He stated that they have had ongoing discussions with both 1 Source and Host <br />about reinvestment in their building and their commitments to staying in downtown <br />South Bend. Mayor Luecke stated that he is grateful to have both these fine businesses in <br />downtown as Brad Toothacker said so eloquently this afternoon that they really are the <br />anchor tenants in downtown South Bend. It is because of their location in downtown <br />South Bend that others can survive and thrive in downtown South Bend and allows us to <br />build additional investments in downtown South Bend to really bring up the activity and <br />st <br />thrive here. He stated that as they had begun discussions proactively with 1 Source and <br />understanding that their lease was coming to an end during that time period they <br />discovered that the Marriott Hotel was also coming to the end of their lease. Host Resort <br />Hotels and Properties perhaps would be looking at an alternative use of that facility rather <br />than a Marriott Hotel. That was distressing enough to the City of South Bend as well as <br />st <br />1 Source Bank who clearly wants to have a great neighbor in that wonderful facility in <br />downtown South Bend. So they worked very hard to create a three-party agreement that <br />will again induce additional private sector investment that more than matches the public <br />st <br />sector investment of this project that will received a commitment from 1 Source to stay <br />for ten (10) years in that facility and a commitment from Host that they will maintain an <br />upper up scale hotel in that facility for seven years that provides that city dollars would <br />be put in an escrow and will go into the project last. That private dollars committed <br />would be spent first and draw down on city dollars. If for some reason they do not meet <br />their commitments those City dollars will return to the City of South Bend, and there is <br />also a claw back provision agreement that if Host does not meet some further <br />commitments in its agreement that there would be a penalty of $750,000 in addition to <br />the City dollars that would not be expended. Mayor Luecke stated that he wanted to be <br />very clear that all city dollars used for the purchase of the garage are to be reinvested in <br />st <br />this facility in the case of 1 Source and a few other city facilities that they own. These <br />dollars are going into the project and will bring additional private investment in as they <br />st <br />move forward. In particular both 1 Source and Host are interested in improvements into <br />the Atrium and there is a commitment of at least 1.25 million dollars would be invested <br />in the Atrium to make improvements there and will probably be one of the first <br />improvements there moving forward. In addition, there has been some confusion about <br />stst <br />how much money 1 Source received and how much Host will receive. He stated that 1 <br />Source will receive 30% of the 6.5 million dollars because that is their share of ownership <br />of the garage that underlies the two properties. Host will receive 70% of that money, and <br />again all of that money is going back into the building. This is extremely important <br />st <br />because there are deadlines that need to be met. 1 Source had a deadline of the end of <br />the year to make it’s commitment on extended it’s lease on it’s property and wanted to <br />make sure it had a good neighbor in it’s facility before making that commitment and is <br />certainly understandable. So it is important for them to be able to close on the sale of the <br />garage by the end of this year. He stated that they all wish that they could have brought <br />this agreement to the Council earlier but it was protracted negotiations that all parties <br />have worked very hard on and are finally able to bring this before the Council with the <br />st <br />support Host, 1 Source and the City of South Bend and ask for the Council favorable <br />approval of this appropriation. Mayor Luecke invited Richard Nussbaum to say a few <br />words about this project. <br /> <br /> <br /> <br /> <br /> 11 <br /> <br />