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HomeMy WebLinkAbout10057-10 Revenue Bond- Stanley Coveleski StaduimORDINANCE No. Passed by the Common Council of the City of SoutJt Bend, Indiana November 30, 20 10 Attest: Attest: City Clerk •esident of Common Council Presented by me to the Mayor of the Ciry of Sottth Bend, Indiana December 1, 20 10 City Clerk Approved and signed by me ~ ` 20 ~ ~ Mayer ORDINANCE NO. OdJ~ -~~ AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, APPROVING OF THE ISSUANCE OF REDEVELOPMENT DISTRICT REVENUE BONDS EXPECTED TO BE ISSUED FOR AND ON BEHALF OF THE CITY OF SOUTH BEND, INDIANA, REDEVELOPMENT DISTRICT AND PLEDGING CERTAIN REVENUES FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SUCH BONDS (STANLEY COVELESHI STADIUM) STATEMENT OF PURPOSE OF INTENT The South Bend Redevelopment District (the "District") has been established by the City of South Bend, Indiana (the "City"), which District is a special taxing district having the same boundaries as the City and governed by the South Bend Redevelopment Commission (the "Commission") under the provisions of the Redevelopment of Cities and Towns Act of 1953 which has been codified in I.C. 36-7-14 et seq., as amended from time to time (the "Redevelopment Act"). The Commission has previously designated and declared an area in the City known as the Central Development Area to be a redevelopment area and an allocation area pursuant to the Act for purposes of tax increment finance which area has been amended from time to time (the "Area"), and the Commission has previously adopted a redevelopment plan for the Area which has been amended from time to time. The City has also previously designated a Professional Sports and Convention Development Area pursuant to I.C. 36-7-31.3 et seq., as amended from time to time (the "PSCDA Act"), in an area of the City to include that portion of the City where Coveleski Stadium (the "Stadium") is located for the purpose of capturing "covered taxes" as such term is defined by Section 4 of the PSCDA Act (the "PSCDA Revenues"). The Commission is considering undertaking certain local public improvements in the Area, such local public improvements to include certain improvements to the Stadium, which is owned by the City by and through its Parks Department (collectively, the "Project"). In order to pay for a portion of the Project, the Commission is further considering the issuance of special revenue bonds of the District pursuant to Section 25.1 of the Redevelopment Act in an aggregate principal amount not to exceed Four Million Nine Hundred Eighty Thousand and 00/100 Dollars ($4,980,000.00) (the "Bonds"). The Commission has adopted a preliminary bond resolution at its meeting on November 2, 2010, authorizing the issuance of the Bonds. The Bonds, if and when issued, would be payable from the PSCDA Revenues and, to the extent that such revenues are ever insufficient to pay the principal of and interest on the Bonds, from County Option Income Tax Revenues ("COIT Revenues") received by the City to the extent pledged for such purpose by the Common Council of the City ("Common Council") pursuant to this Ordinance. BDDBOI 6401968v1 The American Recovery and Reinvestment Act of 2009 (the "Stimulus Act") added Sections 1400U-1 through and including 1400U-3 to the Internal Revenue Code of 1986, as amended (the "Code"), which authorized local governments to designate and issue Recovery Zone Economic Development Bonds pursuant to volume cap allocated among the various states and counties and large municipalities within the states based upon relative declines in unemployment in 2008 to finance certain capital expenditures paid or incurred with respect to property located in a designated recovery zone and certain other expenditures identified in Section 1400U-2 of the Code (each of such expenditures being referred to herein as a "Qualified Economic Development Purpose"). The City received an allocation for Recovery Zone Economic Development Bonds of Four Million Nine Hundred Eighty-three Thousand and 00/100 Dollars ($4,983,000) (the "Volume Cap"). The Common Council previously adopted Resolution No. 4019-10 on March 22, 2010, designating the entire geographic area of the City as a Recovery Zone for purposes of Section 1400U-1(b) of the Code, which would include the Area and the Stadium. The Project qualifies as a Qualified Economic Development Purpose. Issuance of the Bonds as Recovery Zone Economic Development Bonds will permit the District to receive a credit from the United States Treasury in an amount equal to 45% of the stated interest to be paid on such Bonds as provided by Sections 1400U-2 and 6431 of the Code. It is expected that the Bonds may be issued as Recovery Zone Economic Development Bonds if that designation provides the lowest net interest rate. The Common Council deems it in the best interest of the City and its citizens and of public utility and benefit: (a) that the District issue the Bonds, the source of payment for the principal of and interest on which shall be the PSCDA Revenues and if such PSCDA Revenues are insufficient then from the COIT Revenues and (b) to pledge the PSCDA Revenues received by the City for the payment of the principal of and interest on the Bonds and also pledge the COIT Revenues distributed to the City for such purpose in the event the PSCDA Revenues are insufficient, provided that such Bonds shall not be issued (i) in an aggregate principal amount that exceeds Four Million Nine Hundred Eighty Thousand and 00/100 Dollars ($4,980,000) and (ii) for a term that exceeds twenty (20) years. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: Section I. The Common Council does hereby authorize and approve the issuance of the Bonds by the Commission for and on behalf .of the District in an aggregate principal amount not to exceed Four Million Nine Hundred Eighty Thousand Dollars ($4,980,000.00) for a term not to exceed twenty (20) years, the source of payment for the principal of and interest on which shall be the PSCDA Revenues and if the PSCDA Revenues are not sufficient, the COIT Revenues. To provide for the issuance of the Bonds for or on behalf of the District for the purpose of financing a portion of the costs of the Project, the Common Council does hereby approve and irrevocably pledge the PSCDA Revenues received by the City for the payment of the principal of, premium, if any, and interest on the Bonds (the "PSCDA Pledge"). In the event the PSCDA Revenues are not sufficient, the Common Council does hereby approve and BDDBOI 6401968v1 -2- irrevocably pledge the COIT Revenues for the payment of the principal of and interest on the Bonds (the "COIT Pledge" and collectively with the PSCDA Pledge, the "Pledge"). Section III. The foregoing Pledge shall continue irrevocably during the period in which the Bonds remain outstanding. The provisions hereof shall be construed to create a trust in the PSCDA Revenues and the COIT Revenues described herein and the provisions hereof are made in accordance with Indiana Code 5-1-14-4. This Ordinance shall not be repealed or amended in any manner which would serve to adversely affect the Pledge made herein by the Common Council on behalf of the City. The Mayor, Controller, and the Clerk are hereby authorized to execute such documents as maybe necessary in connection with the issuance of the Bonds to evidence the Pledge. The Bonds shall not constitute a corporate obligation or indebtedness of the City but shall constitute an obligation of the District. Section IV. Only in the event the PSCDA Revenues. are not sufficient to pay the principal of and interest on the Bonds, the COIT Revenues shall then be used to pay the principal of and interest on the Bonds. The COIT Pledge shall be on a parity with any outstanding indebtedness or lease rental obligations payable from such COIT Revenues (the "Prior Obligations"). Section V. The City reserves the right to enter into additional leases or authorize and issue bonds, payable out of its COIT Revenues, ranking on a parity with the amounts payable under the Prior Obligations and the COIT Pledge described herein, for the purpose of financing the cost of additional projects (the "Parity Obligations"). The authorization and issuance of Parity Obligations shall be subject to the following conditions precedent: (a) Rental payments under all leases and the principal of and interest on all bonds, which are, respectively, in accordance with their terms, payable from COIT Revenues shall have been paid in accordance with their terms. (b) All required deposits into the COIT Obligations Fund and the COIT Reserve Fund shall have been made in accordance with the provisions of this Ordinance and the terms of the Prior Obligations. (c) Either: (1) the COIT Revenues distributed to the City in the fiscal year immediately preceding the entering into or issuance of any such Parity Obligations shall be not less than one hundred thirty-five percent (135%) of the maximum annual interest and principal requirements of all the then outstanding obligations, including without limitation the Prior Obligations, payable from amounts that the City receives from COIT Revenues and the additional Parity Obligations; or (2) the COIT Revenues distributed to the City pursuant to the Act for the first full fiscal year immediately succeeding the issuance of any such Parity Obligations shall be projected by a certified public accountant to be at least equal to one hundred thirty-five percent (135%) of the total of the maximum annual rentals or interest and principal requirements of all the then outstanding obligations including without limitation the Prior Obligations, payable from amounts that the City receives from COIT Revenues and the Parity Obligations proposed to be issued. BDDBOI 6401968v1 -3- For purposes of this subsection, the records of the City shall be analyzed and all showings prepared by a certified public accountant or independent financial adviser employed by the City for that purpose. (d) Lease rentals on any leases and the principal of and interest on any bonds which constitute Parity Obligations shall be payable semiannually on the fifteenth days of January and July in the years such amounts are payable. Except as otherwise provided in this Section V, so long as the City is obligated to make payments under any Prior Obligations, no Parity Obligations pledging any portion of the COIT Revenues distributed to the City shall be authorized, executed or issued by the City except such as shall be made subordinate and junior in all respects to the payments made under the Prior Obligations. Section VI. This Ordinance shall be in full force and effect from and after its passage by the Common Council and approval by the Mayor. Member, South Bend Common Council Attest: Cle Presented by me to the Mayor of the City of South Bend on the ~~f day of'~~ , 2010, at~~'~~o'clock p.m. - (~~~, City Cl ~ ~~ Approved and signed by me on the _~~day oaf I.ZP-cc-s-" , 2010, at / / : ~Z o'clock GL. .m. Mayor, City of S th Bend 1st READING l I-P-~a ~12'`~ ~~ ~~~;i`!:~~ ~~~{Ce PUBLIC HEARING <<-3J_~~ 3rd READING ~~- C~O-l0 I IQU - ~ Lt710 NOT APPROVED REFERRED ~ ~ , ~ ~ PASSED ~' ~~ ~ 3 -4- BDDBOl 6401968v1 J01~1! V04RGE G1TY CLr.s:,C, ~Q. E~.iCD, IN. - TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 74-10 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, APPROVING OF THE ISSUANCE OF REDEVELOPMENT DISTRICT REVENUE BONDS EXPECTED TO BE ISSUED FOR AND ON BEHALF OF THE CITY OF SOUTH BEND, INDIANA, REDEVELOPMENT DISTRICT AND PLEDGING CERTAIN REVENUES FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SUCH BONDS (STANLEY COVELESKI STADIUM) Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable recommendation. Ann Puzzello Chairperson, Committee of the Whole CITY OF SOUTH BEND STEPHEN J. LLTECICE, MAYOR DEPARTMENT OF ADMINISTRATION AND FINANCE GREGG D. ZIENTARA CONTROLLER November 3, 2010 Mr. Derek D. Dieter President of the Common Council of the City of South Bend 41h Floor, County-City Building South Bend, IN 46601 Re: Ordinance to Authorize Recovery Zone Economic Development Bonds and to Appropriate Funds Therefrom Dear President Dieter: The attached Ordinance for your consideration would allow for the issuance of Recovery Zone Economic Development Bonds of up to $4,980,000 for the improvement of Coveleski Stadium. The Ordinance also provides for the debt service on these bonds to be paid by revenues from the Professional Sports and Convention Development Area (PSCDA). In the event the PSCDA revenues are not sufficient, the Council is also approving a pledge of COIT revenues. These bonds would have a term not to exceed 20 years. Proceeds of the bond would provide part of the funding necessary to make the planned improvements at Coveleski Stadium. Total improvements are estimated to cost $9,575,445, plus issuance costs of $120,000 and a debt service reserve of $480,000, bring the total to $10,175,445. In addition to the bond proceeds, TIF resources of $1,989,445 have been committed by the South Bend Redevelopment Commission. The remaining funding for the project is proposed to come from COIT ($2,686,000) and EDIT ($520,000). Improvements planned for Coveleski Stadium are part of a larger plan for the mixed use development of the Coveleski Neighborhood, which was previously shared with the Council. These improvements will deal with maintenance needs of a facility built in 1987, create greater connectivity with the downtown, address needed facility improvements, and provide for significantly expanded use of the Stadium by the community. Mayor Stephen J. Luecke will present this bill to the Common Council at the Council assigned committee meeting and at the public hearing. COUNTY-CITY BUILDING 227 W JEFFERSON BOULEVARD SOUTH BEND, INDIANA 46601-1830 PHONE 574/235-9216 FAx 574/235-9928 TDD 574/235-5567 ~ President Dieter Page 2 November 3, 2010 City Administration requests Common Council a favorable consideration and passage of this spending ordinance bill. Respectfully submitted, Gregg • . ientara Controller cc: Stephen J. Luecke Jeff Gibney Don Inks ~;`r - 3 201 " t;. Gil { ~~~' ._... ~,r~~,:i7. ~~~.