2 Minutes 11/29/12 meeting - Laserfiche WebLink

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South Bend Redevelopment Commission Regular Meeting—November 29, 2012 also requires any prospective purchaser to locate in Ignition Park and use the equipment to create at least 13 new jobs related to the technology or biotechnology areas, and make new capital investment of at least $2.6 million in the Airport Economic Development Area. Since the disposition process is expected to run into late January or early February of 2013, a Temporary Use Agreement is being proposed so F Cubed may take possession and use of the equipment while the disposition process is being completed. F Cubed has an immediate need for the equipment and is the anticipated end user in accordance with the MOU. Staff recommends approval of Resolution No. 3109. Mr. Inks noted that this is the first time that the Redevelopment Commission has disposed of personal property. The requirements under state law seem to be less clear in this area than for real property. Mr. Randy Rompola of Faegre Baker Daniels noted that the disposition process of personal property is not specified in the statutes. There is a process in the general Indiana code for personal property disposition,but it says specifically it doesn't apply to Redevelopment Commissions. In the powers that are generally available to Redevelopment Commissions it says Commissions may acquire and dispose of personal property,but there is never any indication later in the statute of how to dispose of personal property. What Faegre Baker Daniels is suggesting is that the Commission follow as nearly as possible the process for real property disposition,which is specified very clearly in this statute. Faegre Baker Daniels has been involved in a number of projects that have had both personal and real property. They've always combined the two and used the real property disposition process. This is one of those unique cases where it is only personal property. Mr. Varner asked the reason Redevelopment needed to acquire the personal property. Mr. Rompola responded that the State of Illinois can simply write a check to a company which can use the cash. Indiana statute doesn't allow that. They allow you to invest in local public improvements. Equipment can be classified as a public improvement because it provides the economic development opportunity for that area. As such, the Commission doesn't have the ability to hand the money over to the private company for them to buy the equipment. The Commission must acquire the equipment and use the disposition process to convey it to the company. Mr. Downes noted that the MOU states that if F Cubed does not live up to its agreement to create jobs and make the capital investment to move into Ignition Park,there is a clawback requirement that they would have to repay the Redevelopment Commission 150%of the equipment cost. Mr. Downes asked if that requirement is included in Resolution No. 3109. Mr. Rompola responded that it is not. All that Resolution No. 3109 does is offer the equipment for disposition. At some point F Cubed will come back into the picture. That requirement is part of the MOU. The equipment lease will provide for them a seven year lease. The Commission will continue to (technically) own the equipment. The disposition is by lease,not by sale, so if they don't live up to their promises, the Commission has the ability to reclaim the equipment and have F Cubed pay the 150%. 9