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<br />South Bend Redevelopment Authority <br />Special Meeting - March 26, 1992 <br />4. NEW BUSINESS (Cont.) <br />a. continued... <br />bond trustee, approving a resolution indicating intent to <br />sell bonds, and approving a Proposed Lease. <br />We have come town unofficial agreement with-the owners <br />of the Palais Royale concerning its purchase. The City <br />presently 12 yrs remaining on its lease of the property, <br />after which the property will still belong to the present <br />owners. We want to bring the Palais under public <br />ownership in order to renovate it along with the Morris <br />Civic Auditorium. Through this Lease-Purchase the City <br />will be able to convert its lease payment to the <br />equivalent of a mortgage payment so that at the end of <br />the term, the Authority will own it. <br />The size of the bond is approximately $1.4 million, which <br />includes the purchase price, issuance costs, and a <br />contingency factor. The documents have been written to <br />make the term 13 years, but it is our intent to pay it <br />off in 12 years. We have also included a higher <br />semi-annual payment than is currently being paid in <br />rent. We expect that payment to be reduced when the <br />actual interest rate is set. <br />Following action today, the Redevelopment Commission will <br />also approve the lease and a bond sale will take place in <br />July. The Authority will send a purchase offer and the <br />owners will respond to the offer, placing a deed in <br />escrow until the bond closing when we have funds to make. <br />the purchase. <br />Mrs. Kolata also noted that the Entertainment District <br />Board has been working with the architect for the <br />renovation of the Palais and Morris and is nearing <br />completion of the schematic drawings. They are about <br />ready to enter into fundraising for the project and about <br />to begin drawing the construction documents. <br />Mr. Gammage asked if any bond money would be used for <br />renovation of the .building. Mrs. Kolata responded that <br />bond money would not be used for renovation. The City's <br />contribution to the project includes the improvements <br />already done to the plaza in front of the Morris Civic, <br />hiring of the architect, and acquisition of the <br />building. The rehab will be paid for from private <br />fundraising. <br />• Mrs. Kolata noted that Baker & Daniels has proposed to <br />charge an hourly rate up to a maximum of $35,000. <br />-3- <br />