HomeMy WebLinkAbout6E(1) Staff Report and Resolution No. 2722Redevelopment Commission
Staff Report
Redemption of 2006 TIF Revenue Bonds for Erskine Commons Project
7/1/10
In April 2004 the Redevelopment Commission entered into a Development Agreement
with Anchor Acquisitions, Ltd. That Agreement anticipated two bonds being issued for
the development of Erskine Commons, and EDC bond in the amount of $3.5 million, and
a TIF Revenue bond in the amount of $2.44 million. The EDC bond was issued in 2005
for on -site improvements related to capping an old landfill, demolition of small structures
on the site, relocation of electric utility lines and relocation of an underground pipeline.
In 2006 the TIF Revenue bonds were issued for improvements to Ireland Road and the
intersection with Michigan Street. Both bond issues have maturity dates in 2025.
Development of Erskine Commons has progressed beyond expectations and is generating
annual TIF of $3.1 million compared to the original projection of $.75 million.
Consequently, we are in a position to pay off the TIF Revenue bonds now with cash on
hand. Currently we have cash of about $4.8 million, while we need only about $2.3
million to redeem these bonds.
With the remaining cash balance of about $2.5 million, plus the anticipated December
TIF settlement of $1.4 to 1.5 million, we expect to be able to pay off the 2005 EDC
bonds in the first quarter of 2011. A worksheet is attached showing our cash availability
and the amounts required to pay off both the TIF Revenue and EDC bonds. Also
attached is an aerial of the Erskine Commons development.
The Resolution for your consideration today only seeks authorization to pay off the 2006
TIF Revenue bonds and staff recommends approval.
RESOLUTION NO. 2722
A RESOLUTION OF THE SOUTH BEND REDEVELOPMENT
COMMISSION DETERMINING TO PROCEED WITH THE
REDEMPTION OF THE PRESENTLY OUTSTANDING ADJUSTABLE
RATE DEMAND TAX INCREMENT REVENUE BONDS, SERIES 2006
(ERSKINE COMMONS PROJECT)
WHEREAS, the South Bend Redevelopment Commission (the "Commission "),
the governing body of the City of South Bend Redevelopment District (the "District ") and the
City of South Bend, Indiana, Department of Redevelopment (the "Department "), exists and
operates under the provisions of Indiana Code 36 -7 -14, as amended from time to time (the
"Act "); and
WHEREAS, the Commission adopted Resolution No. 1914 on November 1,
2002, which resolution was later confirmed by the Commission at a meeting on December 20,
2002, and which resolution declared the Southside Development Area (the "Area ") to be a
blighted area within the meaning of the Act and approved a Redevelopment Plan for the Area
pursuant to the Act; and
WHEREAS, the Commission adopted, after a public hearing, Resolution No.
2073, which resolution amended the Area by creating within the Area a separate allocation area
to provide for the allocation distribution of the proceeds of taxes levied on properties situated in
such allocation area ( "Allocation Area No. 2 ") to separately account for taxes expected to be
generated from a project developed by Anchor Acquisitions Limited which involved the
construction of a significant commercial and retail center near the southwest corner of the
intersection of Ireland and Michigan Streets in the Area (the "Project "); and
WHEREAS, pursuant to Resolution No. 2225 adopted by the Commission on
January 20, 2006, and pursuant to a trust indenture between the Commission and The Bank of
New York Trust Company, N.A., as trustee (the "Trustee "), the Commission has previously
issued its Adjustable Rate Demand Tax Increment Revenue Bonds, Series 2006, in the aggregate
principal amount of $2,440,000 (the "Bonds "), which Bonds presently remain outstanding, the
proceeds of which Bonds were used to pay for the costs of certain local public located in the
Area; and
WHEREAS, the Project has developed to an extent that it has generated
additional TIF Revenues for Allocation Area No. 2 which now permit the Commission to
consider redemption of the outstanding Bonds from the available TIF Revenues prior to their
maturity;
NOW, THEREFORE, BE IT RESOLVED by the South Bend Redevelopment
Commission, as follows:
BDDB01 6225081v1
Section 1. The Commission hereby authorizes and approves of all necessary
actions to provide for the redemption of the outstanding Bonds.
Section 2. The Commission hereby approves of and ratifies the action taken
to provide direction to the Trustee to provide notice of the redemption of the Bonds to the
Bondholders. Each of the President, Vice - President and Secretary is hereby authorized to enter
into any agreement or execute any document on behalf of the Commission to provide for the
redemption of the outstanding Bonds at the earliest opportunity.
Section 3. This resolution shall be in full force and effect after its adoption by
the Commission.
-2-
BDDBOI 6225081 vl
ADOPTED AND APPROVED at a meeting of the South Bend Redevelopment
Commission held on July , 2010, at Room 1308, County -City Building, 227 W. Jefferson
Boulevard, South Bend, Indiana.
SOUTH BEND REDEVELOPMENT COMMISSION
ATTEST:
Nancy King, Secretary
Marcia I. Jones, President
-3-
BDDB01 6225081v1
Erskine Commons
Outstanding EDC & TIF Bonds
Early Repayment Worksheet
Prepared 5/26/10
Outstanding EDC Bonds at 8/1/10:
Outstanding TIF Bonds at 8/1/10:
Cash Balance at 4/30/10
Cash Balance at 4/30/10
July TIF Settlement for Pay'10
Cash Available for Early Repayment
Less:
EDC Bond Interest Payment Due 8/1/10
TIF Bond Payoff (Principal) @ 8/1/10
TIF Bond Accrued Interest Due (5/1 to 8/1/10)
Financial Consultant Fees
Bond Counsel Fees
Other Fees
Balance after 8/1/10 TIF Bond Payoff
Add:
Dec TIF Settlement for Pay'10
Cash Available for D/S at 2/1/11
Less:
EDC Bond Payoff (Principal) @ 2/1/11
EDC Bond Accrued Interest Due (8/1/10 to 2/1/11)
Financial Consultant Fees
Bond Counsel Fees
Other Fees
Balance after 2/1/11 EDC Bond Payoff
Principal
Rate
Maturity
3,285,000
0.08
2025
2,335,000
Variable
2025
Cash on
Capitalized
Totals
Hand
Interest
3,254,914
3,254,914
99,193
99,193
1,574,778
1,574,778
4,829,692
99,193
4,928,885
(131,400)
(2,238,807)
(96,193)
(2,335,000)
(3,000)
(3,000)
0
0
0
2,459,485
0
2,590,885
1,422,000
1,422,000
3,881,485
0
3,881,485
(3,285,000) (3,285,000)
(131,400) (131,400)
0
0
0
465,085 0 465,085
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CPW
AP
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k 141
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0
0
3
3
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