1992-06-18 Resolution 56 - Laserfiche WebLink

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Security The Bonds are payable from lease rental payments of the Commission paid to the Trusteefor the account of Authority as provided in the Lease Agreement and secured by the Trust Agreement. The Authority. has no taxing power. The Trust Agreement creates a continuing pledge by the Authority to the bondholders to pay the debt service on all Bonds, until the principal sum shall be fully paid, from Pledged Funds (as defined in the Trust Agreement) in accordance with the provisions of the -Trust Agreement. (Refer to the "Trust Agreement" section of this Official Statement). The Bonds do not constitute a corporate obligation of the City of South Bend for which the full faith and credit or taxing powers of the City are pledged. However, funds for the payment of the lease rental will be generated by the .Commission from unlimited ad valorem yr~ertx taxes assessed .throughout the District. Each August, the Commission will levy a tax on the District equal to the lease payments due in the following year. The Commission reserves the right to reduce the levy by funds on hand available at the time of certification of the levy. The Commission intends to reduce tax levies to the. extent funds are available from surplus tax increment revenues of the South Bend Central Development Area. Sufficient funds are projected to be available from these primary sources to make all lease rental payments.. However, the Commission s taxing power will be required to make any lease rental payments in the event the primary revenues are insufficient to meet required lease payments. Summary of Selected Provisions of the Lease Agreement The Lease Agreement entered into as of March 1, 1992, between the Authority and the Commission (the "Lease") sets forth the terms and provisions under which the Authority .will lease .the Project to the Commission. The term of the Lease is 13 years beginning on the date the Project is acquired. The term of the Lease may terminate at the earlier of (a) the exercise of the purchase option and payment of the option price, or (b) the payment or defeasance of all obligations of the Authority incurred to finance the Project, to refund .such obligations or refunding obligations, or to improve the ProjecK. The first semiannual lease rental payment of $110,000 will be due on the day the Project is complete or January 28, 1993,. whichever is later. Thereafter, the rentals will be payable in advance in semiannual installments of $110,000 on January 28 and July 28 of each year. After the sale of the. Bonds, the lease rentals will be reduced as provided in the Lease. The Lease will be what is known as a Net Lease meaning the rent shall be absolutely net to the Authority and all other expenses in connection with the Project shall be those of the Commission. The Commission shall be obligated to pay as its expenses, without reimbursement from the Authority, all costs of taxes and assessments, if any, and maintenance and use in connection with the ProjecK. The Commission, at its own expense, will carry. insurance for physical loss or damage in an amount equal to the greater of the purchase option price or 100% of the full replacement cost of the Project, insurance for public liability and property damage, and rental value insurance which is equal to the full rental for two years. The Authority grants the Commission the right and option, on any rental payment date, upon 30 days written notice, to purchase the Project at a price that will enable the Authority to redeem all outstanding Bonds, all premiums payable at the time of redemption, and accrued and unpaid interest. At the end of the term of the Lease and the full discharge of all obligations pertaining thereto, the Authority will convey title to the Project to the Commission. For greater detail please refer to the actual Lease Agreement provided in Appendix B of this Official Statement. 4