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11-26-18 Community Investment
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11-26-18 Community Investment
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City Council - City Clerk
City Council - Document Type
Committee Mtg Minutes
City Counci - Date
11/26/2018
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•CITY OF SOUTH BEND I OFFICE OF THE CLERK <br /> programming space. That component of the project will cost, roughly, $18 million to $19 million. <br /> In the Memorandum of Understanding, the City would obligate $4 million of net proceeds from <br /> the River West TIF Fund for that component of the project. It is also looking for approval from all <br /> the bodies by December 2018.The bonds wouldn't be issued for roughly three(3)years.We expect <br /> to do it sometime in 2021 but the MOU states that they must be issued by quarter one(1) of 2022. <br /> So in roughly three (3) years from now we would be looking to issue the bonds. From the Public <br /> Library's view, they are obligating $20 million of bond proceeds. So, as Phil had just mentioned, <br /> $5 million now and another $15 million early next year. Then they would also look at $2 million <br /> of furnishings for the Main Library from other funds. There is an agreement that there will be a <br /> consultation on the design and plans for the new construction and renovation, and there is an <br /> explicit commitment to maintaining an entrance on Main Street. One (1) of the earlier proposals <br /> for the renovation had the door to our new investment in Smart Streets going away and so that is <br /> explicitly captured in this MOU. <br /> He went on,The other piece of the commitments is they have consented to developing the parking <br /> lot just south of the Library. There are certain criteria on that and those criteria include that parking <br /> is satisfied. The same number of parking must be met within that block as long as it doesn't <br /> contradict the mission of the Library or have adverse effects on the Library. Finally, the <br /> Community Foundation's obligations are $10 million for the Community Education Center and <br /> then they would also cover up to $4 million of financing for the City's contribution until the City <br /> issues the bonds in about three (3) years. This (referencing a slide in the presentation)just shows <br /> historic previous terms.As you can see,this was given in a presentation in September and it shows <br /> that the debt issuance by this Council is well in line with previous Councils. This is not even <br /> adjusted for inflation. If you did real dollars, it would be adjusted even more favorably. Here is a <br /> list of the River West obligations that are ending by 2025. These are most of the obligations in the <br /> River West TIF. The two (2) notable ones that are not on here that end later would be the Parks <br /> TIF Bond that was approved last year and that ends in 2032 and then the Smart Streets Bond which <br /> was used to extend the life of the TIF to 2037. <br /> Committeemember Sharon L. McBride arrived at the meeting at 4:10 p.m. Committee Chair Ferlic <br /> recognized a quorum. <br /> Dr. Mueller continued, So all of these other obligations will end by 2025 and many of them end in <br /> the next two (2) to three (3) years. As you can see, we can go through the specific obligations if <br /> you would like but if you see on the next slide, this opens up a lot of annual debt service capacity <br /> to be able to support what is proposed here from the Library proposal. So these(referencing a slide <br /> in the presentation) are numbers from Umbaugh, our financial advisor on this project. If this is <br /> assuming a fifteen (15) year bond, when we get to issuing the bonds in three (3) years, it may be <br /> shorter term. But this is a reasonable assumption of a fifteen (15) year bond with the interest rate <br /> a point above what it is today as we don't know what the interest rate will be exactly in three (3) <br /> years. These are all reasonable assumptions. If you shorten the time or interest rates change, we <br /> will still be well within the debt service capacity. This will also not preclude other priorities that <br /> we may need over the next three(3)years for other debt. <br /> He went on,With regards to community impacts,the South Bend Regional Chamber of Commerce <br /> has done the input into their model and found the construction phase would lead to sixty-five(65) <br /> direct jobs and support one hundred and fifty(150) indirect and induced jobs. The total economic <br /> output from the construction phase will be $64 million. The operations phase, which is what the <br /> EXCELLENCE j ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT <br /> 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f574.235.9173 TTD574.235.5567,www.southbendin.gov <br /> 3 <br />
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