12-19-11 Council Agenda & Packet

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ORDINANCE NO. AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, APPROPRIATING UP TO FIVE MILLION SEVEN HUNDRED THOUSAND DOLLARS ($5,700,000.00) FOR A GARAGE INTEREST IN THE CHASE TOWER BUILDING TO ASSIST REHABILITATION. STATEMENT OF PURPOSE AND INTENT 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. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA as follows: Section 1. The sum of Five Million Seven Hundred Dollars ($5,700.000.00) be and hereby is set aside within Rainy Day Fund No. 102 for the purpose of acquiring a long term interest in the garage portion of Chase Tower which will assist with general rehabilitation of Chase Tower. Section 11. The monies appropriated under this Ordinance shall be reimbursed to the Rainy Day Fund (4102) 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