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South Bend Redevelopment Commission <br />Special Me ting - September 27, 1979 <br />2. NEW BUSINESS <br />b. MrJ Butler continues... <br />In this case, when this agreement is executed, <br />the developer will also be executing the bond <br />sale documents so that financing will have been <br />completed; so in lieu of the provision saying <br />they must submit it, we are saying that it has <br />been accepted, and this document will not be <br />transferred to the redeveloper,' Rahn Properties, <br />until the bond closing, so we are sure to have <br />that completed. There is no option to purchase <br />rurining in favor of the redeveloper, however, <br />there is an option to purchase on the part of <br />any mortgage holder of the property which fore- <br />closes and obtains title at a purchase price to <br />be established by two appraisals at the time that <br />a mortgagee would ask to exercise that option. <br />Liability insurance coverage is for a million <br />dollars, injury or death to one person, five <br />mi lion dollars for injury or death to two or <br />more persons in any one occurrence, and <br />$500,000 property damage in any one occurrence. <br />Title to the improvements on termination of <br />the lease will pass to the agency (Department of <br />Redevelopment) or, of course, the successor. We <br />are subordinating our rental payments to any <br />financing mortgage debt service. We are not <br />subordinating our fee interest to their mortgagee's <br />interest. So, the first monies out of the project, <br />must be used to pay mortgage debts, and then rentals. <br />(This, of course, is a usual provision in this type <br />of situation.) We don't subordinate to anything but <br />th first mortgage debt. <br />In referring to the conveyance agreement for <br />the public improvements that the City is negotiating <br />with the redeveloper, any default by the redeveloper <br />under that agreement will constitute a default under <br />out, lease agreement. <br />Mr Donaldson made a motion to adopt Resolution #592, <br />ap roving the ground lease for Rahn Property II, subject <br />to changes which are approved by the Commission's attorney, <br />and authorizing the lease to be executed on behalf of <br />the Department of Redevelopment by the President and Secretary, <br />seconded by Ms. Auburn, and the motion was unanimously <br />ca ried. <br />-4- <br />