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CITY OF SOUTH BEND REDEVELOPMENT AUTHORITY MEETING– July 22, 2026 <br /> <br /> <br /> <br />Page | 2 <br />4. New Business <br />A. Resolution No. 220 (A Resolution of the South Bend Redevelopment <br />Authority Establishing its Intent to Issue Redevelopment Authority Lease <br />Rental Revenue Bonds, Approving a Proposed Lease with the South Bend <br />Redevelopment Commission, and all Matters Related Thereto) <br /> <br />Joseph Molnar, Deputy Director of Community Investment, introduced <br />Thomas Everett with Barnes & Thornburg to give an overview of the <br />documents before the Commission. Mr. Everett states that this initial <br />resolution represents the Authority’s first action toward a proposed lease- <br />backed bond issuance that will fund various projects within the River West <br />Development Area. <br /> <br />The financing structure involves a lease agreement between the <br />Redevelopment Authority and the Redevelopment Commission, similar to <br />previous lease financing. The lease, which was approved by the <br />Redevelopment Commission earlier this month, authorizes the Authority to <br />issue bonds secured by lease rental payments made by the Commission. <br />The leased assets consist of portions of Chapin Street, Sample Street, <br />Colfax Avenue, and other streets identified in the lease. River West TIF <br />revenues will be used by the Redevelopment Commission to make lease <br />rental payments to the Authority, which will then use those funds to pay <br />debt service on the bonds. <br /> <br />As with prior lease financings, streets and roadways are being leased <br />because this is a well-established and commonly used financing structure <br />in Indiana. It is viewed favorably by rating agencies and is generally more <br />efficient than leasing a building, which would require rental interruption <br />insurance throughout the bond term. <br /> <br />The lease provides for a maximum annual rental payment of $5 million and <br />a term of up to 19 years. Actual lease payments will be structured to match <br />bond debt service requirements. While the bond authorization allows for <br />up to $33 million in principle, current projections estimate a bond issuance <br />of approximately $27 million. <br /> <br />Baker Tilly, serving as the City’s municipal advisor, has prepared financial <br />projections indicating that River West TIF revenues will be sufficient to <br />cover the lease payments throughout the life of the bonds. The lease <br />rentals will also be supported by a tax backup pledge, included solely to <br />enhance credit quality and secure the most favorable interest rates. The <br />expectation remains that all debt service will be paid from River West TIF <br />revenues. <br /> <br />Today’s action is the Authority’s initial approval of the lease. The Common <br />Council is expected to consider approval of both the lease and the bonds