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CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – April 24, 2025 <br /> <br />4 <br /> <br />Joseph Molnar, Assistant Director of Growth and Opportunity, <br />presented agenda items 5.A.2-4. Resolution Nos. 3637 & 3638 are <br />related to the authorization of bonds for the RAF loan. Just to provide <br />some background again, the Residential Infrastructure Fund Program, <br />managed by the Indiana Finance Authority (IFA), is specifically <br />designed to support residential housing infrastructure construction and <br />assist municipalities in encouraging new residential development. <br />The program primarily targets smaller municipalities, but 30% of the <br />funds are allocated for cities and municipalities with populations <br />greater than 50,000, including South Bend. Essentially, the program <br />offers a 20-year term low-interest loan, with the interest rate <br />determined at closing. The interest rate will not exceed 5.5%, and we <br />hope it will be a couple of points lower. Funds are provided through the <br />IFA's purchase of redevelopment district bonds, which are then issued <br />by the RDC. This funding is mainly set aside for site preparation and <br />infrastructure work to incentivize residential housing. In December <br />2024, the city applied for $2.57 million and was approved by the IFA in <br />January. We committed to 110 housing units at the Drewry’s/Portage <br />Elwood sites, with two-thirds being single-family homes and one-third <br />multi-family units. The RIF loan will fund environmental remediation, <br />public utilities installation, demolition, and infrastructure support. <br />Interest payments start within six months of closing, estimated at <br />$100,000 annually, with principal payments beginning within 12 <br />months after project completion. Tax revenue from the new housing <br />will help repay the loan from River West TIF. The Drewry’s/Portage <br />Elwood project is big and has taken years to get to this point. It'll take <br />more years to finish. Right now, we're cleaning up the environment and <br />demolishing old buildings to prepare for new development. This area <br />has great potential for the northwest side of the city. We need to build <br />public utilities, which will cost about $6 million. To fund this large <br />project, we're using multiple sources to reduce the city's financial <br />burden. The EPA has already spent $2 million on demolition, which <br />helped a lot. We've applied for a $3.5 million grant from READI 2.0, <br />which is tentatively approved. The city must match this amount, and <br />the RIF loan will count towards that match. We're using various <br />programs to fund this project, not just relying on River West TIF. <br /> <br />Resolution No. 3637 allows us to issue bonds up to $2.57 million to <br />cover project costs. These bonds will be paid back with tax increment <br />from the River West Development area and authorize the city to enter <br />into a financial assistance agreement with the IFA. Resolution No. <br />3838 allocates the bond sale proceeds to fund the project costs, <br />including related expenses and the cost of issuing the bonds. If the <br />RDC approves both resolutions today, RDC staff will present a <br />resolution to the Common Council on May 12th to approve the