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HomeMy WebLinkAboutAn Inducement Resolution authorizing the execution of an agreement with Steel Warehouse of Indiana, Inc.RESOLUTION NO. 734 -79 Passed by the Common Council of the City of South Bend, Ind Attest: November 15 19 79 Presented by me to the Mayor of the City of South Bend, I City Clerk ident of Common Council November 16 �9 79 City Clerk Approved and signed by me -'= /9 , 19 RESOLUTION NO.' AN INDUCEMENT RESOLUTION OF THE SOUTH BEND COMMON COUNCIL AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH STEEL WAREHOUSE OF INDIANA, INC. RELATING TO THE CONSTRUCTION AND INSTALLATION OF ECONOMIC DEVELOPMENT FACILITIES TO BE USED IN THE BUSINESS OF PROCESSING STEEL, WITHIN THE BOUNDARIES OF THE CITY OF SOUTH BEND, INDIANA WHEREAS, the City of South Bend, Indiana (the "Issuer ", by virtue of the laws of the State of Indiana, including the Municipal Economic Development Act of 1965, as amended, Indiana Code of 1971, Title 18, Article 6, Chapter 4.5 (the "Act "), is authorized and empowered, among other things, (a) to provide funds to pay costs of economic development facilities within the boundaries of the Issuer, to be owned and used by Steel Warehouse of Indiana, Inc., or any subsidiary thereof (the "Company "), (b) to issue economic development revenue bonds for the purpose of paying for the costs of such construction and financing costs, (c) to secure such economic development revenue bonds by an indenture, including the pledge and assignment of title to the real estate, application of revenues derived from such economic development facilities to the payment of said revenue bonds and the granting of a mortgage on such facilities for the benefit of the bondholders; and WHEREAS, the Company is a corporation duly organized under the laws of the State of Indiana and desires to construct economic development facilities within the Issuer to be used in the business of processing steel (the "Facility "); and WHEREAS, it is the desire of the members of the Common Council of the Issuer that the additional jobs and employment oppor- tunities resulting from the Facility be provided at the earliest possible moment and that the economic improvement produced by the operation of the Facility within the Issue occur at the earliest possible time; and WHEREAS, under the provisions of the Act it will be necessary for the South Bend Economic Development Commission (the "Commission ") -1- and the Common Council of the Issuer to undertake certain proceed- ings and adopt certain legislation prior to the issuance of any economic development revenue bonds to provide funds for the construction and installation of such Facility and prior to the execution of any Lease and Trust Indenture therefor; and WHEREAS, this Common Council desires to initiate certain formal steps necessary to secure the commitment of the Company to construct and use the Facility and to provide for other matters incidental thereto; NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of South Bend, Indiana that: SECTION 1. It does hereby approve a finding and deter- mination by the Commission that: a. The real and personal property to be included in the Facility will be an "economic development facility" within the meaning of those terms in the Act. b. That the utilization of such real and personal property in the creation and location of the Facility would be economically sound and will benefit the health, prosperity, economic stability and general welfare of the Issuer and that because of existing insufficient employment opportunities and insufficient diversifi- cation of industry within the Issuer, the economic welfare of the Issuer would be benefited by the construction and use of the Facility by the Company. SECTION 2. In order to overcome insufficient employment opportunities and insufficient diversification of industry which the Common Council of the Issuer has heretofore found to exist in the Issuer, this Common Council determines to commence negotia- tions with the Company concerning the terms of a bond issue and desires to initiate certain formal steps to secure the commitment of the Company to construct and use the Facility and to provide for -2- other matters incidental thereto. SECTION 3. Upon the approval and execution by the Commission of an agreement containing substantially the same terms and condi- tions as Exhibit A attached hereto, the Mayor is authorized and directed to execute the Agreement in the form attached hereto as Exhibit A, and such Agreement as attached hereto is hereby in all respects approved. SECTION 4. This resolution shall be in full force and effect from and after its passage by the Common Council, signed by the President of the Common Council and approved by the Mayor. Member of Com" Council PASSED by the Common Council on the -day Qf Ngvermber, 1979, and approved by the Mayor on the "day of November, 1979. NOT APPROVED '?TED //- /,5-- 7 / -3- CityclTmIftku� '0' "' . AGREEMENT THIS AGREEMENT, entered into as of the day of November, 1979, between the City of South Bend, in the County of St. Joseph and State of Indiana, a municipality and political subdivision of the State of Indiana, organized and existing under the Constitution and laws of the State of Indiana (the "Issuer "), acting pursuant to resolution of the South Bend Economic Development Commission (the "Commission "), a department of development duly established by ordinance of the Common Council of the City of South Bend, Indiana, pursuant to the Municipal Economic Development Act of 1965, as amended, Indiana Code of 1971, Title 18, Article 6, Chapter 4.5 (the "Act "), and acting pursuant to resolution of the Issuer's Common Council and Steel Warehouse of Indiana, Inc., a corporation for profit organized under the laws of the State of Indiana, or any subsidiary thereof (the "Company "), for the purpose of assist- ing in the reduction of insufficient employment opportunities and insufficient diversification of industry, thereby improving the economic welfare of the City of South Bend, Indiana; WHEREAS, the Company desires to construct and install certain property (herein called the "Facility ") constituting an Economic Development Facility, as those terms are defined in the Act, within the boundaries of the City of South Bend, to be used in the business of processing steel; and WHEREAS, the Company has evidenced a desire to finance such construction and installation from the proceeds of Economic Development Revenue Bonds (the "Bonds ") issued pursuant to the authority of the Act; and WHEREAS, such construction and installation will provdie additional employment and job opportunities within the Issuer together with diversification of industry and improve the economic welfare in the area of the Issuer and its people; and WHEREAS, it will be necessary under the provisions of the EXHIBIT A -1- Act for the Common Council of the Issuer to conduct certain pro- ceedings and adopt certain legislation prior to the issuance of such Economic Development Revenue Bonds; and WHEREAS, it is the desire of the Issuer that the increased number of jobs and employment opportunity and diversification of industry resulting from the Facility be provided at the earliest date possible and that the benefit to the economic welfare in the area of the Issuer produced by such construction and installation occur at the earliest possible time; W I T N E S S E T H: 1. The Company shall immediately commence the construc- tion and installation of the Facility, which will improve the economic welfare of the Issuer and State of Indiana, as well as provide additional jobs and employment opportunities and diversi- fication of industry and the Company will provide, or cause to be provided, at its own expense, the necessary interim financing to permit such construction and installation to commence immediately. Upon the issuance of the Bonds, the Issuer will enter into an agreement (the "Financing Agreement ") with respect to the Project and the financing therefor with the Company. The Financing Agree- ment shall contain such terms and conditions as provided or permitted under the Act and desired by the purchaser of the Bonds; provided, however, that the Financing Agreement shall require payments sufficient to pay the principal of and premium, if any, and interest on the Bonds. In order to secure the payment of the principal of, and premium, if any, and interest on the Bonds, the parties hereto agree that the real estate interest to the Facility will be conveyed to the City of South Bend and will be subject to a mortgage in favor of the holder of the Bonds with such terms and conditions as may be proivded or permitted under the Act. The Issue shall not have any financial responsibility with respect to the Bonds or the Project except from the revenues and receipts derived by the Issuer with respect to the Bonds, the Financing -2- Agreement and the Facility. The parties hereto understand and agree that the Company will utilize the Facility to further the purposes of the Act. 2. Upon receipt of a request from the Company, the Issuer will promptly issue the Bonds, maturing in such amount not exceed- ing Six Hundred Forty -eight Thousand ($648,000.00) Dollars and at such times, bearing interest at such rate or rates, payable on such dates and containing such optional and mandatory redemption features and prices as are requested by the Company, and will deliver the Bonds to the purchaser thereof and cooperate to its fullest extent in consummating the transaction. 3. That, subject to the requirements and provisions of the Act, the Common Council of the Issuer will adopt the legislation necessary to authorize the issuance of the aforesaid Bonds, and the execution of such Financing Agreement on behalf of the Issuer. 4. In order to induce the Issuer to execute and deliver this Agreement and ultimately to issue the Bonds, the Company hereby agrees to defend, indemnify and hold the Issuer and any and all officials thereof harmless against any and all loss, cost, expense, claims or actions arising out of or connected with the extension of this Agreement and the preparation of the proceedings for, and the issuance, sale or delivery of, the Bonds. IN WITNESS WHEREOF, the Issuer, pursuant to resolution passed on November , 1979, has caused this Agreement to be executed by the Mayor and the Company has caused this Agreement to be executed by its Vice President as of the day and year first above written. ATTEST: Irene K. Gammon, City Clerk STEEL WAREHOUSE OF INDIANA, INC. By Gerald Lerman, Vice President CITY OF SOUTH BEND, INDIANA By -3- Peter J. Nemeth, Mayor Economic Development Commission Jerry Hammes, President Frank Horvath, Vice - President Walter A. Mucha, Secretary Kenneth P. Fedder, Counsel CITY of SOUTH BEND PETER J. NEMETH, Mayor SOUTH BEND, INDIANA 46601 Members of the South County -City Building South Bend., Indiana Bend Common Council 46601 RE: Revenue Bond Application STEEL WAREHOUSE OF INDIANA, INC. Dear Councilmen: 230 West Jefferson Boulevard (219) 234 -0051 We are enclosing a proposed form of an Inducement Resolution relating to the STEEL WAREHOUSE OF INDIANA, INC., PROJECT. It would be appreciated if you could have this placed on your November 15, 1979, meeting under Resolutions. The South Bend Economic Development Commission has accepted the application of STEEL WAREHOUSE OF INDIANA, INC., for an Industrial Develoient Revenue Bond in the amount of $648,000.00. Respectfully, i t KENNETH Is. FEDDER ATTORNEY FOR THE SOUTH ECONOMIC DEVELOPMENT COMMISSION KPF /mb Enclosure BEND F � i..i. 2�94 4 N0',1 71979; �ne' e. Gannrn0F1 C.Ty 'I [n K, SutiT:: Ecti9, I.No.