Laserfiche WebLink
The South Bend Redevelopment Authority <br />June 5, 2008 Meeting Minutes <br />months. If we lengthen the insurance to five years we could almost guarantee a <br />garage could be rebuilt. Ms. Pfotenhauer asked the cost of the insurance. Mr. <br />Rampola said insurance for two years is a little over $3,000 and would be double <br />that for four years. He would have to ask the insurer what five years would cost. <br />Mr. Alvarez expressed concern that the Kite entity that. we would be working with <br />won't have any assets. Mr. Rampola said none of the Eddy Street Commons <br />project involves the Kite parent company. There are three or more separate Kite <br />entities. Mr. Rampola said the University of Notre Dame has similar agreements <br />with Kite, as do all of the lenders. There are a number of lenders who are all <br />making the same value judgments about the project. Mr. Rampola said the <br />responsibilities of the landlord are minimal under the lease. With the University <br />right there, Kite won't fail. The University would not let them fail. The University <br />seems to be very conservative in their agreements. The University did not sign <br />their agreement with Kite until Kite could bring in their hotel agreement. Ms. <br />Greene asked the status of the sublease. Mr. Rampola said the thought is to have <br />the sublease mirror the lease as much as possible so that all of the obligations <br />would just. flow down to the sublease. Ms. Greene said that as part of this project <br />the Board of Public Works has gone through the bidding process,. and is waiting to <br />award the bids when the lease has been approved by the Authority. <br />Ms. Pfotenhauer asked, since this project is more complicated than any other <br />projects we have done in the past, was Mr. Rampola aware of anything <br />substantially different in the lease at this point, that the Authority should be made <br />aware of. Mr. Rampola said the lease is a pretty typical real estate lease. The <br />interesting thing is that the Authority has no ability to carry out these obligations, <br />but this is probably no different than a commercial lease that has multiple parties <br />with a subleasee that is ultimately responsible. The most difficult situation is <br />where the bonds intersect with Kite's expectations. Kite wants to act like the <br />owner of the garage, and they should be responsible for the garage, but if there is a <br />casualty, who gets the casualty proceeds? The sub-sublease should be able to be <br />written quickly to mirror this lease as soon as it is done. The Authority- <br />Commission lease, which has already been signed, will need to be modified to <br />match this lease after the lease is finished. <br />Mr. Alvarez asked what would happen if the Kite entity that we are making the <br />lease with would choose to sublease the garage to another Kite entity. Mr. <br />Rampola said they would have to come back to the Authority because of the terms <br />of our lease. Mr. Alvarez stated that he did not think that they would be able to <br />transfer the lease to a non-Kite entity, and Mr. Rampola said that was correct. Ms. <br />Greene asked if there is protection in case Kite transfers the lease to an entity that <br />is not as cooperative as the Kite entity we enter into an agreement with. Mr. <br />H:\WPDATAWUTHORTY\060508. MIN.DOC <br />