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South Bend Redevelopment Commission <br />Regular Meeting - February 5, 1999 <br />6. NEW BUSINESS (CONT.) <br />a. continued.... <br />The other legal consideration includes the <br />release of Lease obligations. Teachers <br />Credit Union will release the City of South <br />Bend from its contractual obligations <br />under a certain Lease dated October 12, <br />1984, and amended on November 17, <br />1986. Teachers Credit Union will release <br />the City from its obligation under the <br />Parking Lot Lease to construct a 109 -space <br />parking garage for the benefit of Teachers <br />Credit Union. The City's bid <br />specifications sets the cost of this <br />obligation at no less than $1 million. <br />In 1984, the Parking Lot Lease called for <br />the construction of the 109 space, two - <br />level parking garage. The 1984 project <br />cost was $912,000. This cost was used to <br />set the annual rent at $28,740 per year <br />over the 40 -year term beginning after the <br />construction of the garage. Today the cost <br />of building this garage is much higher. <br />Teachers Credit Union has been provided <br />information that it would now cost $1.8 <br />million to construct the parking <br />garage —an additional cost to the City of at <br />least $800,000. Therefore, Teachers <br />Credit Union's release of the City's <br />contractual obligation to construct the <br />parking garage, net of the fixed annual <br />rental from Teachers Credit Union, is <br />worth approximately $800,000 to the City. <br />As additional consideration of Parcel C4- <br />42, Teachers Credit Union will release all <br />rights to the north, 28 feet of Lot 27 <br />H: \WPDATA \COMMSN\020599.MIN -5- <br />