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Jon R. Hunt <br />Executive Director <br />CITY ®I SOUTH BEND <br />ROGER O. PARENT, Mayor <br />DEPARTMENT OF DEVELOPMENT <br />1200 COUNTY -CITY BUILDING • SOUTH BEND, INDIANA 46601 • (219) 284.9371 <br />South Bend Common Council <br />4th Floor County -City Building <br />South Bend, Indiana 46601 <br />Dear Members of the Council: <br />February 24, 1983 <br />The attached ordinance would appropriate $500,000 from the City's <br />1982 Community Development Block Grant to supplement the existing <br />Economic Development Capital Fund. <br />Several months ago we discussed the possibility of using temporary <br />balances in the City's CDBG letter of credit to make short -term or <br />construction loans for nine (9) to twelve (12) months. By using <br />our temporary balances, the City will be able to use CDBG funds twice <br />- -as part of an economic development incentive package; and secondly, <br />for the originally budgeted purposes, e.g., street improvements, <br />housing rehabilitation, and administration. <br />The proposed appropriation of $500,000 would be used by the South <br />Bend Development Corporation (SBDC) to make a short -term, lower <br />interest rate construction loan for South Bend Screw Products, Inc. <br />In addition to several other incentives this loan would enable the <br />firm to remain in South Bend, relocate to the Airport Industrial <br />Park, and expand its current operations. <br />Terms and conditions for the.loan agreement are being developed, <br />but certain basic conditions will be required: a lower interest <br />rate loan not to exceed $500,000 would be made to the parent com- <br />pany, Kawneer, Inc., for the purpose of constructing a manufacturing <br />facility in Phase IV of the Airport Industrial Park. The loan will <br />be a construction loan for a period not to exceed nine (9) months. <br />The loan will be secured by real property and certain fixed assets. <br />A firm financial takeout for the interim loan, satisfactory to the <br />SBDC, such as a letter of credit or legally binding commitment from <br />a commercial lending institution will have to be in place prior to <br />drawing on the construction loan. The funds will be drawn on an <br />as needed basis, i.e., construction draws according to HUD regula- <br />tions. <br />Redevelopment Community Development Economic Development <br />Ann Kolata Colleen Rosenfeld Kevin Horton <br />284 -9371 284 -9335 <br />284 -9371 <br />Housing <br />Kathryn Baumgartner <br />284 -9475 <br />