1989-11-16- Minutes - Laserfiche WebLink

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• South Bend Redevelopment Authority Special Meeting -November 16, 1989 6. NEW BUSIl~iESS (Cont. ) e. continued... Mrs. Kolata noted that the estimated bond issue is $4,895,000. We have used generous estimates for all cysts associated with the bond because the projected lease payments can be reduced but not increased once the process has been started. The lease provides for the Redevelopanerit Authority to acquire the Property and lease it to the Redevelopment Coanni.ssion. Sarre of the propexty will came froam the Park Department to the Authority and spine will came from the Board of Public Works. to the Authority. The Commission will use excess tax increment to make rental payments to the Authority. Giese rental payments will be used by the Authority to make the semi-annual bond payments, beginning in July 1991. The maxim~nn semi-annual lease payment is $295,500. She pointed out that these are proposed, maximum I~Y~nts• We expect that when the final rnunbers are plugged into the lease that the payments will be less than. that. We have used high construction costs and high interest rate figures and high lease payments in the document so that we can start the process. Once the process is begun, it is possible to lower costs and the semi-annual payment, but not raise them. Mrs. Kolata explained that the bonds will be paid back with tax increment that is currently in the incceme stream of our other projects. There are three revenue bonds and the parking garage that are currently being paid with tax increment. No taxes will be levied to pay for this. bond, but we will seek the ability to levy taxes if there is ever a shortfall. This fall back option allows us to have less coverage and to make better use of the tax increment. The next step in the process is for the Redevelopment Commission to approve the lease at a meeting on November 17th and to set a Public Hearing on the project for December 8th. Then the City Council will. consider the proposed lease. If the Council approves the proposed lease between the Ccarnnission and the Authority, the proposed lease will be considered by the State Tax Board, probably in late January. Also, after Conmion Council approval, the projects will be put out for bid with the Board of Public Works to get actual construction estimates. Ztie bond sale will probably not take place until MarcYi 1990. We expect the construction estimates, the bond size, the semi-annual lease payment, and other cysts related to the sale to be less than the projected figures listed in the form of lease. The term of the bond is proposed as twenty-two years. Mrs. Kolata noted that the staff has done some very detailed work on a tight timeline to have this ready for the Authority at this meeting, including writing scene of the legal descriptions. She noted that Martha Lantz, secretary for the Redevelopanerit staff, came in on Novembex 10, a holiday for the office, to type all of the legal descriptions for this lease. She did a very accurate job and the sacrifice of her holiday was . much appreciated. -6-