9597-05 Approving and Authorizing the execution of a lease Addendum for the construction of an addition to O'Brien Recreation Center

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ORDINANCE NO. , ~ ~ ~ 7` ~S~ AN ORDINANCE OF THE CITY OF SOUTH BEND, INDIANA, COMMON COUNCIL APPROVING AND AUTHORIZING THE EXECUTION OF A LEASE ADDENDUM FOR THE CONSTRUCTION OF AN ADDITION TO O'BRIEN RECREATION CENTER AND REGARDING CERTAIN RELATED MATTERS STATEMENT OF PURPOSE AND INTENT: The City of South Bend, Indiana (the "City"), has previously investigated the necessity for certain improvements to the O'Brien Recreation Center located at 321 E. Walter Street in the City (the "Building"), including but not limited to, the construction of an addition to the Building to be used as a fitness center (the "Project"). The City has also previously investigated alternative methods for paying for the Project. There has been filed with the Common Council of the City (the "Common Council") a petition certified by the St. Joseph County Auditor, which petition has been signed by at least fifty (50) owners of real property subject to taxation by the City and addressed to the Common Council, requesting that the Common Council enter into an addendum to the Lease (as defined herein) whereby the Project will be completed with the assistance of anon-profit building corporation and leased to the City pursuant to the provisions of Indiana Code 36-1-10, as amended. The City of South Bend Building Corporation (the "Building Corporation") was previously organized as an Indiana non-profit corporation for the purpose of constructing and leasing public improvements to the City. The Building Corporation and the City entered into a Lease dated as of August 1, 1999, as amended by an Addendum to Lease by and between the Building Corporation and the City dated as of December 15, 1999 (collectively, the "Lease"), whereby the Building Corporation leases the Building to the City. A form of a lease addendum between the Building Corporation and the City (the "Lease Addendum") has been prepared and submitted to the Common Council for its consideration to amend the Lease to provide for the Project. The Lease Addendum, as presented to the Common Council, provides a term for the Building of not to exceed six (6) years. The semi-annual lease rentals payable under the Lease Addendum by the City with respect to the Project would be an amount not to exceed One Hundred Five Thousand Dollars ($105,000), payable on each May 28 and November 28, commencing on the later of the completion of the Project or May 28, 2006. Lease rentals payable under the Lease Addendum by the City for the Project would be payable on such dates from then current revenues of the City appropriated for the purpose of making such lease rental payments. As a result, the Project does not constitute a "controlled project" as such term is defined by Indiana Code 6-1.1-20-1.1 because such lease rentals would be payable from funds other than property taxes that are exempt from the levy limitations of Indiana Code 6-1.1-18.5. BDDBOI 4069475v3