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South Bend Redevelopment Commission <br />Regular Meeting - May 2, 1997 <br />6. NEW BUSINESS (Cont.) <br />a. continued.... <br />He noted that the two parties are the <br />Redevelopment Commission and the <br />Redevelopment Authority. The lease is <br />set to not exceed 20 years with respect to <br />the new project being presented today. <br />The existing Palais Royale lease, which <br />continues as part of the new lease, expires <br />in 2004 when the previous bond issue is <br />paid off. He noted that under the new <br />project, the new lease could continue up <br />to 20 years. The maximum lease term <br />and the maximum lease rental needs to be <br />set out for the public today. Later, the <br />expectation is, once the bonds are sold, <br />that the lease rental will be reduced to <br />match the principal and interest <br />requirements on the bonds. He noted that <br />$695,000 is the maximum semi - annual <br />lease rental amount. With today's <br />interest rates that amount would be <br />considerably less. He noted that the <br />existing lease rental for the Palais Royale <br />is $98,500 semi - annually and will <br />continue through 2004. At that time the <br />requirement will be released and what <br />would be left is the requirement for this <br />new project. <br />Ms. Kolata noted that the current Palais <br />Royale bond issue is being paid from tax <br />increment. The new bond issue will be <br />paid from the pledges and the County <br />Economic Development Income Tax. <br />There will be no property taxes used to <br />pay for the Morris bond issue. The bond <br />will include a provision for a general <br />-10- <br />