1997-05-02 Redevelopment Authority Minutes

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South Bend Redevelopment Authority • Regular Meeting -May 2, 1997 There have been discussions about connections between the Palais Royale and the Morris Auditorium so that the buildings can operate as one center. She noted that there will also be construction in the basement of the Palais Royale as part of the kitchen's storage and. food preparation area. There's a service elevator between the basement and the ballroom that will be used to bring up prepared food. The heating equipment for the Palais and the Morris will also be located in the. basement of the Palais. The existing retail shops in this area will not be affected by the construction and reconstruction process. Ms. Kolata noted that there has been a lot of participation from members in the community. The project's construction cost was estimated to be approximately $12.9 million. Currently the~Entertainment District Board has about $5 million in pledges and they've collected about $1.6 million of that already. We expect that the size of the bond issue will be reduced by the amount of cash on hand at the time the bond is actually issued. Later contributions will be used to make bond payments. This resolution is similar to past resolutions that have been considered by the Redevelopment Commission and the Redevelopment Authority with respect to lease purchase financing. However it is different because it provides • for an amended and restated lease which continues the obligation under the existing lease used to purchase the Palais. There is a lease rental provision listed in this resolution that relates solely to the existing outstanding bond and there are provisions that list the new financing, new project and new project description. The two parties to the lease are the Redevelopment Commission and the Redevelopment Authority. The lease is set to not exceed 20 years with respect to the new project being presented today. The existing Palais Royale lease, which .continues as part of the new lease, expires in 2004 when the previous bond issue is paid off. Under the new project, the lease could continue up to 20 years. Once the bonds are sold, the lease rental will be reduced to match the principal and interest requirements on the bonds. He noted that $695,000 is the. maximum semi-annual lease rental amount. With today's interest rates that amount would be considerably less. He noted that the existing lease rental for the Palais Royale is $98,500 semi-annually and will continue through 2004. At that time the requirement will be released and what would be left is the requirement for this new project. Earlier today the Redevelopment Commission adopted a resolution approving the amended and restated lease and set a public hearing on the lease for 10:00 a.m. on June 6, 1997. Ms. Kolata noted that the current Palais Royale bond issue is being paid from tax increment. The new bond issue will be paid from the pledges and the County • 3