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HomeMy WebLinkAboutPreliminary Approval of the Issuance of Bonds for the Purpose of Providing certain Economic Development Facilities for Noble Americas South Bend Ethanol LLCAttest. RESOLUTION 4339 -14 Passed by the Common Council of the City of South Bend, Indiana April 14, 14 20 Presented by me to the Mayor of the City of South Bend, Indiana April 15, 14 City Clerk President of Common Council Approved and signed by me APR I L is- 20—L�. City Clerk I)Q?--),rA MW RESOLUTION NO. 3 3 � ` / q A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, PROVIDING PRELIMINARY APPROVAL OF THE ISSUANCE OF BONDS FOR THE PURPOSE OF PROVIDING CERTAIN ECONOMIC DEVELOPMENT FACILITIES FOR NOBLE AMERICAS SOUTH BEND ETHANOL, LLC WHEREAS, the City of South Bend, Indiana (the "City ") is authorized by I.C. 36 -7- 11.9 and 12, as supplemented and amended (the "Act "), to issue revenue bonds for the financing of economic development facilities, the funds for said financing to be used for the acquisition, construction, installation and equipping of said facilities; and WHEREAS, Noble Americas Corp., on behalf of its subsidiary Noble Americas South Bend Ethanol, LLC, (the "Applicant ") has advised the South Bend Economic Development Commission (the "Commission ") and the City that it proposes that the City issue economic development revenue bonds for the purpose of providing financing for certain economic development facilities consisting of the acquisition, construction, installation and equipping of, including, but not limited to, grain drying systems, process technology upgrades, boilers, cooling towers, water treatment, tanks, piping systems, CIP system and any other facilities and equipment which may be financed through the issuance of economic development revenue bonds (the "Project") in conjunction with the Applicant's renovation of the ethanol production facility located at 3201 West Calvert Street in the City; and WHEREAS, the Applicant has proposed that the City issue its revenue bonds under the Act to finance the acquisition and installation of the Project under a financing agreement whereby the proceeds of such bonds would be utilized to acquire, construct and install the Project and the Applicant would make payments sufficient to pay the principal of, premium, if any, and interest on said bonds; and WHEREAS, the Applicant has further advised the City that the determination by the City preliminarily to accept such a proposal for financing the Project will constitute a substantial inducement to the Applicant to proceed with the Project; and WHEREAS, it is estimated that the Project will result in the creation of approximately fifty (50) new permanent jobs; and WHEREAS, the Commission has given its approval to such financing of the Project; and WHEREAS, the issuance and sale of said revenue bonds will not reduce the legal bonding capacity of the City; and WHEREAS, the City shall bear no expense in connection with the issuance and sale of said revenue bonds and all expenses in connection thereto which are incurred by the City shall be reimbursed to the City by the Applicant; and dms.us.53706150.01 WHEREAS, the principal and interest payable on said bonds are not payable from funds raised by taxation by the City; and WHEREAS, the issuance of said bonds shall not obligate the full faith and credit for the taxing power of the City; and WHEREAS, subject to required approvals, it appears from the application submitted to the Commission by the Applicant that the financing of the Project would be a public benefit to the health, prosperity, economic stability and general welfare of the City and its inhabitants; NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of South Bend, Indiana, as follows: SECTION 1. The Common Council finds, determines, ratifies and confirms that the creation and retention of opportunities for gainful employment and the creation of business opportunities to be achieved by the Project in the City will be of benefit to the health and general welfare of the citizens of the City; and that it is in the public interest that this Common Council take such action as it lawfully may to encourage diversification of industry and promotion of job opportunities in the City. SECTION II. The Common Council further finds, determines, ratifies and confirms that the issuance and sale of economic development revenue bonds of the City under the Act in an aggregate principal amount not to exceed $25,000,000.00 for the Project and the loan of the proceeds of the revenue bonds to the Applicant will serve the public purposes referred to above, in accordance with the Act. SECTION III. In order to induce the Applicant to proceed with the Project, the Common Council hereby finds, determines, ratifies and confirms that: i) It will take or cause to be taken such actions pursuant to the Act as may be reasonably required to implement the aforesaid financing, or as it may deem reasonably appropriate in pursuance thereof; provided that all of the foregoing shall be mutually acceptable to the City and the Applicant; and ii) It will adopt such ordinances and resolution and authorize the execution and delivery of such instruments and the taking of such action as may be reasonably necessary and advisable for the authorization, issuance and sale of said economic development bonds. SECTION IV. All costs of the Project incurred for planning, engineering, interest paid during construction, underwriting expenses, attorney and bond counsel fees, acquisition, construction and equipping of the Project, including reimbursement or repayment to the Applicant of moneys expended prior to the adoption by the City of this resolution would be permitted to be included as part of the Project costs to be financed out of the loan of the proceeds from the sale of the bonds to the extent permitted by the Act and the Internal Revenue Code of 1986, as amended, and applicable regulations promulgated thereunder. SECTION V. All action taken and approvals given by the City with regard to the Applicant, are based upon the evidence submitted and representations made by the Applicant, its -2- dms.us.53706150.01 agents or counsel, to the Commission and the City. No independent examination, appraisal or inspection of the Project was made, requested, or is contemplated by the City. SECTION VI. The City does not, by this or any other approval or funding, guarantee, warrant or even suggest that the bonds, coupons or series thereof will be a reasonable investment for any person, firm or corporation. SECTION VII. The City shall not be obligated, directly or indirectly, to see to the application or use of the proceeds from the sale of the bonds or to see that the contemplated improvements, if any, are constructed. The City is in no way responsible to the holders of any bonds for any payment obligation created by the bonds. SECTION VIII. The City does not warrant, guarantee or even suggest that interest to be paid to or income to be received by the holders of any bond, coupon, or series thereof is exempt from taxation by any local, state or federal government. SECTION IX. The bonds shall be limited, special obligations of the City payable solely from the funds provided therefor as described in the indenture authorizing the bonds, and shall not constitute an indebtedness of the Commission or the City or a loan of the credit thereof within the meaning of any constitutional or statutory provisions. SECTION X. This resolution does not constitute a binding obligation of the Commission or the City to issue the bonds, but instead, is a commitment by the City to proceed with negotiations for the financing described herein with the Applicant and is subject to the adoption of a bond ordinance by this Common Council in accordance with the provision of the Act. SECTION XI. This resolution shall be in full force and effect upon adoption by the Common Council and compliance with the procedures required by Indiana Code 36 -4 -6. FXLt 'NiW 1-(J( � —(� NOT APPRO.VM ` l/ dms.us.53706150.01 COMMON COUNCIL OF THE CITY OF SOUTH BEND, NA e3&a�j Au� Miiemo& of the Common Council -3- - -- f ..- h s f CLERK, R6tj n, .rt :: TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 14 -32 A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, PROVIDING PRELIMINARY APPROVAL OF THE ISSUANCE OF BONDS FOR THE PURPOSE OF PROVIDING CERTAIN ECONOMIC DEVELOPMENT FACILITIES FOR NOBLE AMERICAS SOUTH BEND ETHANOL, LLC Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable recommendation. This bill was heard by the Community Investment Committee. Valerie Schey Chairperson, Committee of the Whole RESOLUTION NO. �1 0 / A(— 3 A%9/� A RESOLUTION OF THE SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION PROVIDING PRELIMINARY APPROVAL OF THE ISSUANCE OF BONDS FOR THE PURPOSE OF FINANCING CERTAIN ECONOMIC DEVELOPMENT FACILITIES FOR NOBLE AMERICAS SOUTH BEND ETHANOL, LLC WHEREAS, the South Bend Economic Development Commission (the "Commission ") is a commission operating and existing under and pursuant to the authority of Indiana Code 36 -7 -11.9 and 12, as supplemented and amended (the "Act "); and WHEREAS, the Commission is authorized by the Act to investigate, study, and survey the need for job opportunities, industrial diversification, water services and pollution control facilities in the City of South Bend, Indiana (the "City "), and to recommend action to improve or promote job opportunities, industrial diversification, water services and the availability of pollution control facilities in the City; and WHEREAS, the City may issue revenue bonds pursuant to the Act for the financing of "economic development facilities" or "pollution control facilities" as each are defined by the Act, the funds from said financing to be used for the acquisition, renovation, construction, installation and equipping of said facilities, and said facilities to be either leased to another person or directly owned by another person; and WHEREAS, Noble Americas Corp., on behalf of its subsidiary Noble Americas South Bend Ethanol, LLC, (the "Applicant") has requested that the Commission give preliminary approval to the issuance of economic development revenue bonds under the Act in an aggregate principal amount not to exceed $25,000,000 which request includes the financing by the Applicant of certain economic development facilities consisting of the acquisition, construction, installation and equipping of, including, but not limited to, grain drying systems, process technology upgrades, boilers, cooling towers, water treatment, tanks, piping systems, CIP system, and any other facilities and equipment which may be financed through the issuance of economic development revenue bonds (the "Project ") in conjunction with the Applicant's renovation of the ethanol production facility located at 3201 West Calvert Street in the City; and WHEREAS, such economic development revenue bonds would be issued pursuant to a financing agreement whereby the proceeds of such bonds would be utilized to acquire, construct and install the Project, and the Applicant would make payments sufficient to pay the principal of, premium, if any, and interest on such bonds; WHEREAS, the issuance and sale of said revenue bonds will not reduce the legal bonding capacity of the City, and the City shall bear no expense in connection with the issuance and sale of said revenue bonds with all expenses in connection therewith which are incurred by the City to be reimbursed to the City by the Applicant; and dms.us.53705739.01 WHEREAS, the principal of and interest payable on said revenue bonds shall not be payable from any revenues of the City and shall not obligate the full faith and credit of the City but shall be payable solely from funds of the Applicant; and WHEREAS, the Applicant has further advised the City that the determination by the City to agree preliminarily to accept such a request for financing the Project will constitute a substantial inducement to the Applicant to proceed with the Project; and WHEREAS, it appears from the application submitted to the Commission that the creation of opportunities for gainful employment and the creation of business opportunities to be achieved by the Project will serve a public purpose and will be of benefit to the health and general welfare of the City; and WHEREAS, the Commission has considered a form of inducement resolution with respect to the Project (the "Common Council Resolution ") and has considered recommending that the Common Council of the City (the "Common Council ") adopt a resolution in substantially such form; NOW, THEREFORE BE IT RESOLVED, by the South Bend Economic Development Commission, based upon the evidence submitted and representations made by the Applicant, as required by the Act, that; 1. The creation of opportunities for gainful employment and the creation of business opportunities to be achieved by the Project in the City will be of benefit to the health and general welfare of the citizens of the City, and it is in the public interest that this Commission take such action as it lawfully may to encourage diversification of industry and promotion of job opportunities in the City. 2. The issuance and sale of economic development revenue bonds of the City under the Act in an amount not to exceed $25,000,000 for the Project and the loan of the proceeds of the economic development revenue bonds to the Applicant will serve the public purposes referred to above, in accordance with the Act. 3. In order to induce the Applicant to proceed with negotiations for the Project, the Commission hereby determines that: (i) It will take or cause to be taken such actions pursuant to the Act as may be reasonably required to implement the aforesaid financing, or as it may deem reasonably appropriate in pursuance thereof, provided that all of the foregoing shall be as authorized by law and is mutually acceptable to the City and the Applicant; and (ii) It will adopt such resolutions and authorize the execution and delivery of such instruments and the taking of such action as may be reasonably necessary and advisable for the authorization, issuance and sale of said economic development revenue bonds; provided that all of the foregoing shall be as authorized by law and is mutually acceptable to the City and the Applicant. -2- dms.us.53705739.01 4. All costs of the Project incurred for planning, engineering, interest paid during constructing, underwriting expenses, attorney and bond counsel fees, and acquisition, installation and equipping of the Project will be permitted to be included as part of the costs of the Project to be financed out of the loan of the proceeds from the sale of the bonds to the extent permitted by the Act and applicable regulations promulgated under the Internal Revenue Code of 1986, as amended. 5. All action taken and approvals given by the Commission with regard to the Applicant are based upon the evidence submitted and representations made by the Applicant. No independent examination, appraisal or inspection of the Project was made, requested, or is contemplated by the Commission or the City. 6. The Commission does not, by this or any other approval or finding, guarantee, warrant or even suggest that the bonds, coupons or series thereof will be a reasonable investment for any person, firm or corporation. 7. The Commission shall not be obligated, directly or indirectly, to see to the application or use of the proceeds from the sale of the bonds or to see that the contemplated improvements, if any, are constructed. The Commission is in no way responsible to the holders of any bonds for any payment obligation created by the bonds. 8. The Commission does not warrant, guarantee or even suggest that interest to be paid to or income to be received by the holders of any bond, coupon, or series thereof is exempt from taxation by any local, state or federal government. 9. The bonds shall be special, limited obligations of the City payable solely from the funds provided therefor as described in the indenture authorizing the bonds, and shall not constitute an indebtedness of the Commission or the City or a loan of the credit thereof within the meaning of any constitutional or statutory provisions. 10. This resolution does not constitute a binding obligation of the Commission or the City to issue the bonds, but instead, is a commitment by the Commission to proceed with negotiations for the financing described herein with the Applicant and is subject to the adoption of a bond ordinance by the fiscal body of the City in accordance with the provisions of the Act. 11. The Commission hereby approves the form of the Common Council Resolution and recommends that it be adopted by the Common Council in substantially the same form as a resolution, and the Commission hereby directs that copies of this resolution, and the form of the Common Council Resolution be transmitted to the Clerk of the City for presentation to the Common Council with the recommendation that the Common Council Resolution be adopted as a resolution. s + + ** -3- dms.us.53705739.01 dms.us.53705739.01 ADOPTED this 21" day of March, 2014. SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION Ker ' SoA Bend Economic Development Commission ember, South end Eco Development Commission M b o t Bend Economic De op ent Commission Member, South Bend Economic Development Commission Member, South Bend Economic Development Commission Filed -In Clerk �Vf l�l 29 Re+Y`�i1 i q4 4 p I qC ER - 4 - S LV Q� GpU�9�.9 f H G! � E ND, i [p3 227 W. JEFFERSON BOULEVARD SUITE 1400 S. SOUTH BEND, IN 46601 -1830 PHONE: 574/235 -9371 FAX: 574/23$ -9021 CITY OF SOUTH BEND PETE BUTTIGIEG, MAYOR COMMUNITY INVESTMENT SCOTT FORD, EXECUTIVE DIRECTOR South Bend Common Council Council President Oliver Davis *' ?0 Dear President Davis: Attached are the forms of Inducement Resolutions for consideration by the Economic Development Commission and the Common Council relating to the proposed Noble Americas Project. These resolutions constitute the initial actions that the EDC and the Council would be asked to take with respect to the proposed financing by Noble Americas of those portions of the project at the Ethanol Plant that would qualify for tax - exempt pollution control facility bond financing. The resolutions indicate that the Company is requesting that the EDC and the Council give preliminary approval to the issuance of revenue bonds in an aggregate principal amount not to exceed $25,000,000. The proceeds would be used for the improvements as described in the resolutions. In order for the Company to qualify for tax - exempt financing, the governmental issuer must issue revenue bonds and loan the proceeds from the sale of the bonds to the Company. The City, through Indiana Code 36 -7 -12, would serve as'the conduit issuer of the bonds and loan the proceeds following the issuance thereof to the Company for expenditure on qualifying project costs. The Company would have sole responsibility for paying the debt service on the bonds. As evidenced in the resolutions, the City's credit rating would not be affected by the issuance of these bonds, the City would bear no responsibility to pay the debt service on the bonds, and in the event of a default by the Company, only the Company would bear the risk of that default. Once the issuance process has been completed, the City would have no involvement with the bonds or the payment of the debt service on the bonds. Typically, these bonds are secured by a bank letter of credit in which the bank would make payments on the bonds in the event the Company failed to do so. At such time, the bank would then seek reimbursement from the Company under the letter of credit reimbursement agreement. Alternatively, it is possible these bonds may be purchased directly by a bank which would take security interests in the Company and /or the project financed. PLANNING NEIGHBORHOOD ENGAGEMENT BUSINESS DEVELOPMENT ECONOMIC RESOURCES JmN KAIN PAMELAC.MEYER CHRIS FIELDING BROCK ZEEB Should you have any questions regarding the forms of the resolutions, please do not hesitate to call. Bond Counsel Faegre Baker Daniels will be present to answer additional questions at the Council Committee meeting on 4/14/2014. ;Sincerely, ZK Brock Zeeb Director of Economic Resources City of South Bend Department of Community Investment. Filed in Clerk`s f JOHN VOOR 1E CITY CLERK, SOUTH BEND, iR,� 3'