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South Bend Redevelopment Commission Regular Meeting – December 8, 2022 <br />Commissioner Wax clarified that we can speed up the process by a couple of <br />years versus waiting. <br />Mr. Bauer states at least a couple of years. <br />Mr. Bauer presented the taxable lease rental revenue bond Series B. This bond <br />would specifically fund $28.9M in improvement to support the broader Beacon <br />integrative health and lifestyle district. A development agreement has not been <br />brought before you as we are in negotiations. Tentatively it will fund two <br />structured parking garages to provide more than 900 parking spaces, and site <br />preparation work across the whole site. This is the two blocks south of Memorial <br />Hospital that are currently surface parking lots and a potential skyway bridge. This <br />connects employees and visitors to the hospital where they can cross the street on <br />the 2nd floor. The district as a whole will include more than $140M in private <br />investment. This would support the $232M investment by Beacon Health System <br />in their new tower project. The project will add 550 new full-time employees at <br />Memorial Hospital. Completion of this project would be in the late 20’s (four or five <br />years). <br />The improvements would include nearly one-hundred fifty market rate apartments, <br />ninety-two income qualified workforce housing apartments. A one-hundred-five- <br />bed hotel and a fifty thousand square foot fitness center. Thirty-five thousand feet <br />of medical office space and the 927 structured parking spaces and eight-thousand <br />five-hundred square feet of retail space. <br />We will come before you two more times as part of the issuance process. One for <br />the public hearing on this lease and then one to consider the resolution for backup <br />of the lease payment. <br />Commissioner Wax asked to simplify why the bond isn’t against the TIF revenues <br />itself but rather having the lease structure. <br />Mr. Rampola stated that the lease revenues goes to the security and rating. The <br />bond market will view a pure TIF revenue bond at a certain model. There is an <br />additional element of risk that appears TIF revenue bond brings to the table. If a <br />pure TIF revenue bond didn’t yield the assessed value of TIF revenue in theory, <br />the governmental unit would look at that and say we don’t have to make payment <br />because we didn’t pledge anything other than the TIF revenue. The bond market <br />will look at that with a more negative view. They will look at a pure TIF revenue <br />bond at a lower interest rate. They would look at a utility revenue bond payable <br />solely from Water Works revenues or sewage works revenues in a similar fashion <br />compared to a city general obligation bond with the city. The tax back up will <br />provide additional security which allows the bond to get closer to the city’s AA <br />rating because of the tax backup. We need to do this as a lease asset, but we can <br />easily use the streets. So, we have language in the bond that we can substitute <br />another street if the issued street were to go away.