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South Bend Redevelopment Commission <br />Regular Meeting -September 4, 2009 <br />purchase and move of Studebaker Auto Parts <br />inventory, the Redevelopment Connnission <br />took a note fi-om SASCO in the amount of <br />$150,000. TCU is now offering to buy the <br />debt instrument, security and risk guarantee <br />and related documents for the amount of <br />$10,000. That same $10,000 is being made <br />to other subordinated lenders, including the <br />Industrial Revolving Fund and Mr. Geoff <br />Newman. The IRF made an initial loan of <br />$200,000; Mr. Newman had a $100,000 loan. <br />The cun-ent balance on the Redevelopment <br />Commission's loan is $141.741. The first <br />few payments were made on the loan; then <br />payments became erratic and ceased after <br />September 2001. Currently, only the senior <br />lender (TCU) is receiving payments and has <br />a balance of $977,352. TCU has been <br />receiving interest-only payments and that at a <br />reduced interest rate. <br />TCU has notified the Redevelopment <br />Commission of its intent to sell the collateral <br />to the highest qualified bidder, in public, on <br />September 15, 2009. The Commission has a <br />right to an accounting of the unpaid <br />indebtedness secured by the property for a <br />charge of $150. Staff believes that the value <br />of the inventory is less t11an the amount owed <br />TCU. The inventory was originally <br />purchased for $850,000. Relocation costs <br />going back to that time period were in the <br />$1.SM range. It was a self move. SASCO <br />moved across the street from the jail site to <br />the cun-ent location. We have received recent <br />estimates to move the inventory in the $.7M <br />to $ l M dollar range. We just believe there is <br />no value in the inventory. <br />Some would probably argue that the <br />collection of Studebaker Auto Parts is <br />in-eplaceable, but its real economic value is <br />5 <br />