2008-02-06 Redevelopment Authority Minutes

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• The South Bend Redevelopment Authority February 6, 2008 Meeting Minutes will be issued with a call provision where the funds will sit idle in an account. If the University of Notre Dame and Kite are not able to complete their agreement, then we will have the ability to pay off the bonds. Kite is agreeing to indemnify for any costs related to that transaction, such as the issuance costs, any interest or other costs incurred with paying off the bonds. On the funding amount, the City is agreeing to supply $35M for the development of the Eddy Street Commons site. Also, $1.7M will be reserved for the Triangle development; the total amount of the City's investment will be $36.7M. The $35M will be funded from the proceeds of bonds, which are expected to net $30M, and from cash resources from Major Moves and sewer capital, which would be $SM. It is important to understand that when we issue these bonds, if we have a debt service reserve requirement we may not achieve a full $30M in net bond proceeds. The City's obligation is to supply whatever amount comes out of that transaction, so if it is less than $30M we will only supply that plus the $SM cash. The City's obligation is to supply whatever bond proceeds come out of that transaction and not more. If we receive more that $30M from the bonds, then the City will reduce its cash commitment so that the total is•no more than $35M. The term of the agreement: this agreement will be effective until either the total private investment of $169,300 has been invested into the project or the assessed value reaches $157M. The term is achieved when the first of these is met. There are reporting obligations for the developer. As contracts are let, as work proceeds, there are regular updates during construction. After the project is complete there is a five year reporting period. We will then be able to see what the economic impact of the project really is. There are development delay fees in the event that certain aspects of the project fall behind schedule. There is a mechanism in place so that we will receive a delay fee, the maximum amount to be collected under this is $1 M. The developer is also agreeing to supply the City with a letter of intent for the hotel development so that before the bonds are sold we will have a letter of intent outlining that transaction. The Redevelopment Authority has an obligation to complete the financing of the public infrastructure projects and finish the acquisition right-of--way for Napoleon Boulevard. The City will be contracting through the Board of Public Works with Kite Realty Construction as a Construction Manager for the project. The first parking garage lease has already been entered into with the Redevelopment Commission. The second parking garage lease would run from the Redevelopment Commission to the developer, and be accomplished under the 2 H:\WPDATAW UTHORTY\020608.MIN.DOC