1988-04-14 Minutes - Laserfiche WebLink

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~. South Bend Redevelopment Authority Special Meeting - April 14, 1988 3. Continued... and costs will be finalized. The proposed form of lease sets an annual lease payment of $520,000. This, again, is based on conservative, worst case figures and is expected to decrease as financing costs are finalized. Mrs. Kolata noted that the timetable we are on would have the approvals through the state process by about July 1. The notice of the bond sale, the bidding on the bond and the .bond closing would take most of the month of July. We expect to be able to issue a notice to the contractor to begin construction about August 1. Mrs. Kolata also noted that the decision to make the bonds taxable or tax exempt has not .been made. There are restrictions if the bonds are tax exempt. The question is whether the lower interest rate on tax exempt bonds is worth the rental restrictions incurred by the tax exempt status. Mr. Varga asked what the Local Property Tax Control Board and the State Tax Board have to do. Mrs. Kolata responded that they have to approve the lease and the lease payment amount. Mr. Varga asked if the City would operate the garage. Mrs. Kolata responded that the Authority would not be operating the garage. The lease allows the Redeveloment Commission to enter into an agreement with the Parking Bureau to operate it. Mr. Varga asked what criteria the State Tax Board uses. Mrs. Kolata responded that they evaluate the security of the financing and whether revenue will be sufficient to pay off the bond. Springsted Inc., the Commission's financial advisor, has made certain that there would be enough revenue to pay for the bonds without levying taxes, even if the yearly payment is $520,000. Garage revenues, the One Michiana Square UDAG repayment and tax incremental financing revenues would be used to make the lease payment. There will be a general obligation backup so that, if those sources would not be enough to make the payment, taxes could be levied to make up the difference. But that general obligation backup is security to make the bonds more marketable and not expected to be used. Mrs. Kolata noted that in approving Resolution No. 2, the Authority would be approving the proposed form of lease and approving the preliminary cost estimates in the proposed form of lease. Mr. Varga asked about the bidding process. Mrs. .Kolata explained that the schedule calls for construction bids to be taken during the month of May. The Board of Public Works will take the bids and be responsible for construction management. Upon a motion by Mr. Davey, seconded by Mr. Wroblewski and unanimously carried, the Authority adopted Resolution No. 2.