12-19-11 Council Agenda & Packet

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H; ;41 PFA- G �CSi CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR DEPARTMENT OF ADMINISTRATION & FINANCE GREGG D.ZIENTARA CONTROLLER December 7, 2011 Mr. Derek Dieter President, South Bend Common Council 4''Floor, County-City Building South Bend, IN 46601 re: Ordinance of the Common Council Appropriating Monies to Assist in the Chase Tower Building Rehabilitation Project Dear President Dieter: The Chase Tower building ("Chase Tower") is located in the heart of downtown South Bend across from the County-City Building at 211-213 West Washington Street. It is the tallest building in South Bend and contains a bank, business offices, a hotel, restaurants and a parking garage. Presently, Chase Tower is in foreclosure proceedings, and is in urgent need of repair and rehabilitation. An entity known as Care Hotels Indiana, LLC, an Indiana limited liability company ("Care Hotels") and affiliate of Care Hotels plans to purchase the Chase Tower at sheriff foreclosure sale, thereby satisfying the judgment of foreclosure acquired by the lender Huntington National Bank, However, once released from foreclosure, Chase Tower requires substantial Capital improvements to retain and attract tenants, attract guests to the hotel portion of the building, and otherwise become a viable commercial enterprise. The total cost to make these repairs is not financially feasible for a developer. In order to rehabilitate Chase Tower and assure it will increase in assessed value subject to payment of property tax, that it will retain and create new jobs in downtown South Bend, and that it will remain a vital commercial enterprise in the heart of South Bend, it is necessary for the City of South Bend to assist in the Chase Tower rehabilitation by appropriating funds for this purpose. The City will thereby acquire a long term interest in the garage portion of Chase Tower which will assist in the general rehabilitation of Chase Tower, City Administration requests Council approval to invest up to $5.7 million for the purpose of acquiring a long term interest in the parking garage thereby providing financial assistance to the developer, to affect the repairs, maintenance rehabilitation necessary in the structure. The Raining Day Fund # 142 will provide the cash funds for this appropriation. The monies appropriated under this Ordinance shall be reimbursed to the Rainy Day Fund (#102) in annual payments from Tax Increment Finance-South Bend Central Development Area Fund (TIF-SBCDA) No. 420 out of the incremental increase in tax revenues resulting from the differential in assessed valuation of Chase Tower at this time and after rehabilitation is undertaken under this development plan. County-City Building 227 West Jefferson Boulevard South Bend, Indiana 46601-1830 Phone: 574/235-9216 Fax: 5741235-9928 TDD: 5741235-5567 I