1999-03-01 Redevelopment Authority Minutes

Home Browse Search

• The South Bend Redevelopment Authority March 1, 1999 Regular Meeting Minutes The one property is an L-shaped parking lot just north of the Studebaker Museum on the corner of Lafayette and Monroe, extending over to Main Street. The other property to be purchased is at Jefferson and Main. It includes Hardee's, Hardee's parking lot, Barb's restaurant and the former C.E. Lee building. The Common Council approved an arrangement for the City to borrow $1.8 million from HUD for the two projects. HUD would like the loan secured by the Tax Increment Revenues and Economic Development Income Tax Revenues, which will be used to pay back the loan. HUD guarantees the repayment of the loans, which come from institutional investors. This resolution provides the security that HUD will be repaid. In order to use the EDIT revenues to repay the loan, a lease arrangement is required. This lease provides for immediate lease payments for the Studebaker property, which corresponds with the interest requirements on the notes. Principal payments begin in 2003 or 2004, which is when the lease rental would begin for the downtown properties. The loans will mature in 12 years. The Redevelopment Commission has already approved the lease. Following Authority approval of Resolution No. 132, the Lease will go to the City Council for its approval on March 22. • Ms. Pfotenhauer asked about the relimina lan p ry p sand cost estimates included m Resolution No. 132. Mrs. Kolata replied that the cost estimates are $1.825 million. The intent is to reimburse the monies spent on the Studebaker lot. The interest rate on the loan cannot exceed 8% without starting the process over. After the sale of the notes on April 14, 1999, an amended lease will be submitted with the actual interest rate of the notes. Mr. Rompola stated that the interest rate is based on U.S. Treasury notes with individual maturities. Ms. Pfotenhauer asked about the timetable for the loan. Mrs. Kolata stated that Resolution No. 132 will go to a public hearing before the Redevelopment Commission on March 19, and then to the City Council March 22 for approval of the lease between the Authority and the Commission. The sale of notes is expected on April 14. Money should be available on April 15. The Studebaker Museum property has already been purchased, two of the other properties have purchase offers on them. The City cannot send purchase offers on the other two properties until we have the loan money. The purchase offers are out on the Barb's restaurant and the former C.E. Lee building. We moved forward on the C.E. Lee building because a tenant in the building, Cyberlink, was about to make a major capital investment in the building. We are finalizing the terms of Cyberlink's relocation and they will be moving shortly. City Chapel owns the • 5