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HomeMy WebLinkAboutAuthorizing the execution and delivery of a memorandum of agreement between the City and Diversified Group, and Indiana PartnershipRESOLUTION N0. 718 -79 Passed by the Common Council of the City of South Bend, Attest: Attest: September 10 Presented by me to the Mayor of the City of South Bend, 1 Approved and signed by September 11 79 rq City Clerk _President of Common Council r 9 79 ig ? 91 City Clerk Mayor RESOLUTION NO. 7 7fi A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A MEMORANDUM OF AGREEMENT BETWEEN THE CITY OF SOUTH BEND, INDIANA, AND DIVERSIFIED GROUP, AN INDIANA PARTNERSHIP, PROVIDING FOR THE ISSUANCE BY SAID CITY OF ECONOMIC DEVELOPMENT REVENUE BONDS PURSUANT TO THE PROVISIONS OF THE INDIANA CODE OF 1971, TITLE 18, CHAPTER 6, ARTICLE 4, 5, AS AMENDED. The City still has insufficient employment opportunities and insufficient diversification of industries, which conditions are harmful to the economic stability and general welfare of the area, and if not remedied, will be detrimental to the development of such area; and The City is authorized under the provisions of Indiana Code of 1971, Title 18, Chapter 6, Article 4, 5, as amended (the "Act ") to acquire, construct and finance economic development projects, for the user thereof and to provide for the issuance of revenue bonds in conjunction therewith; and The City in order to implement the public purposes enumerated in the Act and in furtherance thereof to induce Diversified Group, an Indiana partnership (hereinafter called "Diversified "), to construct an industrial building, including all necessary land, machinery, equipment, fixtures and furnishings (hereinafter collectively called the "Project "), within the corporate limits of the City, has indicated its intent to issue its revenue bonds under and pursuant to the provisions of the Act and to apply the proceeds therefrom to the payment of the costs of financing the acquisition and construction of the Project; and Diversified after considering a number of possible locations within and outside of the State of Indiana, and in reliance upon the intent of the City to finance the acquisition and construction of the Project through the issuance of revenue bonds under the pro- visions of the Act, has determined to construct the Project within the corporate limits of the City; and It is now deemed advisable to authorize the execution and delivery by the City of a Memorandum of Agreement expressing formally and in writing the understanding heretofore informally agreed upon by the City and Diversified: NOW, THEREFORE, be it resolved by the Common Council of the City of South Bend, Indiana, as follows: SECTION 1. The Mayor is hereby authorized and directed to execute a Memorandum of Agreement by and between the City and Diversified and the City Clerk is hereby authorized and directed to affix the seal of the City thereto and to attest the same; and said Mayor and City Clerk are hereby authorized and directed to cause said Memorandum of Agreement to be delivered to, accepted and executed by Diversified, said Memorandum of Agreement which is hereby approved and incorporated by reference and made a part of this authorizing resolution, to be in substantially the form attached hereto as Exhibit A. SECTION 2. All resolutions and orders, or parts thereof, in conflict with the provisions of this resolution, are, to the extent of such conflict, hereby repealed and this resolution shall be in immediate effect from and after its adoption. Member f the Common Council PRESENTEQ , 1 -4 - -;? y 110T APPPONM ADOPTER .7 SWEENEY BUTLER & SIMERI CHARLES A. SWEENEY, JR. JOSEPH V. SIMERI KEVIN J. BUTLER DANIEL H. PFEIFER September 5, 1979 ATTORNEYS AT LAW ST. JOSEPH BANK BUILDING SOUTH BEND, INDIANA 46601 219 233-3303 Common Council City of South Bend 4th Floor, County -City Building South Bend, Indiana 46601 Gentlemen: 417 SOUTH SECOND STREET ELKHART, INDIANA 48514 219 295 -3783 219 874-8470 (OSCEOLA) Enclosed is a draft inducement resolution for South Bend Economic Development Revenue Bonds (Diversified Group Project) for the construction of an industrial building, including all necessary land, machinery, equipment, fixtures and furnishings to be located in the Airport Industrial Park. The developer, Diversified Group, an Indiana partnership, wishes to commence with the Project as quickly as possible, and we therefore ask that the Common Council act upon this Resolution at its meeting on September 10, 1979. Thank you for your consideration of this matter. Sincerely, Kevin J. Butler KJB /tfs Encls. MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT, made and entered into on September , 1979, by and between the CITY OF SOUTH BEND, INDIANA, a municipality in St. Joseph County, Indiana (herein- after called the "City "), and DIVERSIFIED GROUP, an Indiana partnership (hereinafter called "Diversified "); W I T N E S S E T H: WHEREAS, the City recognizes that it has insufficient em- ployment opportunities and insufficient diversification of industries, which conditions are harmful to the economic stability and general welfare of the area and, if not remedied, will be detrimental to the development of such area; and WHEREAS, the City is authorized under the provisions of Indiana Code of 1971, Title 18, Chapter 6, Article 4.5, as amended (the "Act "), to acquire, construct and finance economic development projects for the user thereof, and to provide for the issuance of revenue bonds in conjunction therewith; and WHEREAS, the City, in order to implement the public purposes enumerated in the Act and in furtherance thereof to induce Diversi- fied to construct an industrial building, including all necessary land, machinery, equipment, fixtures and furnishings (hereinafter collectively called the "Project "), within the corporate limits of the City, has indicated its intent to issue its revenue bonds under and pursuant to the provisions of the Act and to apply the proceeds therefrom to the payment of the costs of acquiring and constructing the Project; and WHEREAS, Diversified, after considering a number of possible locations within and outside the State of Indiana, and in reliance upon the intent of the City to finance the acquisition and con - stuction of the Project through the issuance of its revenue bonds under the provisions of the Act, has determined to locate the Project within the corporate limits of the City; and WHEREAS, it is now deemed advisable to express formally and in writing the understanding heretofore informally dis- cussed by the parties hereto, NOW THEREFORE, in consideration of the premises and of the mutual undertakings herein expressed, the parties herto recognize and intend as follows: A. The City represents and intends: 1. That the City is authorized by the provisions of the Act to finance the acquisition and construction of the Project and for the purpose of paying the cost of such ac- quisition and construction, including expenses incidental thereto, is authorized as aforesaid to issue its revenue bonds payable from the revenues and income derived by the City from the Project. 2. That the City intends, subject in all respects to the provisions and requirements of the Act and to a sale of the bonds on terms satisfactory to Diversified, to authorize, issue, sell and deliver its revenue bonds, to be issued in one or more series (in an aggregate prin- cipal amount of approximately $350,000, which amount will be fixed by ordinance of the City at a later date and agreed to by Diversified, but not to exceed the cost of acquiring and constructing the Project and expenses inci- dental thereto as estimated at the time of the issuance of the bonds) and apply the proceeds therefrom to the payment of the cost of acquiring and constructing the Project, provided that prior to the issuance and delivery of such revenue bonds there shall have been entered into between Diversified and the City appropriate financing agreements upon terms which will comply with the provisions of the Act and which will provide for the payment by Diver- sified of amounts which will be sufficient to enable the City to pay the principal of and interest on such revenue bonds. - 2 - 3. That the financing of the acquisition and con- struction of the Project by the City is for a proper public corporate purpose and that the financing thereof for Diver- sified is necessary to implement the public purposes enumerated in the Act. B. Diversified represents and intends: 1. That the acquisition and construction of the Project will result in increased employment in the City. 2. That if the proposed revenue bonds (including the rate of interest thereon) of the City are satisfactory to Diversified, it will enter into financing agreements with the City upon terms which will be sufficient to pay the cost of acquiring and constructing the Project as evidenced by such revenue bonds to be issued for the account of the Project, and will enter into such appropriate financing agreements with the City with regard to the fore- going prior to the issuance and delivery of any such revenue bonds by the City. 3. That Diversified intends during the term of any such financing agreements to cause the Project to be used or occupied primarily for use as an industrial building. C. It is further recognized and intended between the parties ties hereto as follows: 1. That the revenue bonds to be issued by the City shall never constitute an indebtedness of the City or a loan of the credit thereof within the meaning of any con- stitutional or statutory provision, and such fact shall be plainly stated on the face of each of said bonds. No holder of any of said bonds shall ever have the right to compel any exercise of the taxing power of the City to pay said bonds or the interest thereon. The principal, or premium, if any, and interest on such revenue bonds to be issued to finance the cost of acquiring and constructing the Project shall be secured by a pledge to a trustee acting under an indenture - 3 - of trust for the benefit of the holders of said bonds or by a pledge directly to the holders of said bonds of the revenues and income derived by the City from the Project and may be further secured by a mortgage on the Project, and shall be additionally secured by a pledge to said trustee or the holders of said bonds of the aforesaid financing agreements between the City and Diversified. 2. That a primary inducement to Diversified in locating the Project within the City is the intent of the City to finance the cost of acquiring and construct- ing the Project through the issuance of its revenue bonds pursuant to the provisions of the Act. 3. That it is desirable that Diversified rather than the City arrange for the construction of the Pro- ject in order to insure that the Project will conform to the requirements of Diversified for whose use the Project is designed. 4. That this Agreement shall inure to the benefit of the parties hereto and their respective successors and as- signs; provided, however, that in the event the bonds are not issued or sold as contemplated herein, there shall be no liability on the part of the City or of Diversified or of any of their officers or employees for such non - issuance or non - delivery. 5. That this Agreement may be executed in separate counterparts, all of which shall be deemed a single instru- ment. IN WITNESS WHEREOF, the CITY OF SOUTH BEND, INDIANA, by and through its Common Council, has caused its corporate name to be hereunto subscribed by Peter J. Nemeth, its duly authorized Mayor, and attested under its official seal by Irene K. Gammon, its City - 4 - Clerk, and DIVERSIFIED GROUP has caused its name to be hereunto subscribed by its duly authorized partner, all being done as of the year and date first above written. (S E A L) Attest: Irene K. Gammon, City Clerk CITY OF SOUTH BEND, INDIANA By: Peter J. Nemeth, Mayor DIVERSIFIED GROUP Im - 5 - General Partner