HomeMy WebLinkAboutNo. 2679 appropriating TIF revenues from allocation area No. 2 fund for payment of certain obligations related to SSDA allocation area No. 2 and other related matters0 RESOLUTION NO. 2679
A RESOLUTION OF THE SOUTH BEND REDEVELOPMENT COMMISSION
APPROPRIATING TAX INCREMENT FINANCING REVENUES FROM
ALLOCATION AREA NO.2 FUND FOR THE PAYMENT OF CERTAIN
OBLIGATIONS RELATED TO THE SOUTH SIDE DEVELOPMENT AREA
ALLOCATION AREA NO.2 AND OTHER RELATED MATTERS
WHEREAS, the South Bend Redevelopment Commission (the "Commission "), the
governing body of the Department of Redevelopment of the City of South Bend, Indiana (the "City ")
and the City of South Bend, Indiana, Redevelopment District, exists and operates under the
provisions of Indiana Code § 36 -7 -14, as amended (the "Act "); and
WHEREAS, on November 1, 2002, the Commission adopted Resolution No. 1914 (the
"Declaratory Resolution ") declaring the South Side Development Area (the "Area ") to be an area
needing redevelopment within the meaning of the Act and designated the Area as the South Side
Development Area Allocation Area No. 1 ( "Allocation Area No. 1 ") for purposes of tax increment
financing pursuant to the Act; and
WHEREAS, on November 19, 2002, the Area Plan Commission of St. Joseph County ( "Plan
Commission") issued its written order approving the Declaratory Resolution by the adoption of Plan
• Commission Resolution 142 -02, in accordance with Indiana Code § 36 -7- 14-16; and
WHEREAS, on November 25, 2002, the Common Council of the City approved the order of
the Plan Commission through the adoption of Common Council Resolution No. 3136 -02; and
WHEREAS, on December 20, 2002, the Commission held a duly noticed public hearing, in
accordance with Indiana Code § 36 -7 -14-17 and Indiana Code § 5 -3 -1; and
WHEREAS, following said hearing, the Commission adopted Resolution No. 1928
confirming the Declaratory Resolution; and
WHEREAS, on July 27, 2004, the Commission adopted Resolution 2073 amending the
Declaratory Resolution to create a separate allocation area ( "Allocation Area No. 2 ") within the Area
to allow for certain improvements to occur at the intersection of Ireland and Michigan Streets and for
the purpose accounting for the tax increment revenues directly resulting from such improvements
( "Project Tax Increment Revenues "); and
WHEREAS, on July 27, 2004 and January 20, 2006, the Commission adopted Resolution No.
2074 and Resolution No. 2225, respectively (collectively, the "District Bond Resolution ")
authorizing the issuance of redevelopment district bonds (the "District Bonds ") in an amount not to
exceed Two Million Eight Hundred Eight Hundred Thousand and 00 /100 Dollars ($2,800,000.00)
payable solely from Project Tax Increment Revenues to provide for certain public improvements to
• the intersection of Ireland and Michigan Streets, as more particularly described in said resolutions;
and
• N 2 he "Pledge
WHEREAS, on August 20, 2004, the Commission adopted Resolution o. 087 (t g
Resolution ") pledging Project Tax Increment Revenues for the payment of taxable economic
development bonds originally issued in an aggregate principal amount of Three Million Five
Hundred Thousand and 00 /100 Dollars ($3,500,000.00) (the "EDC Bonds" and with the District
Bonds, the "Bonds "), which pledge ranks junior and subordinate the District Bonds, if and when
issued; and
WHEREAS, the District Bonds were issued on February 8, 2006 in an aggregate principal
amount of Two Million Four Hundred Forty Thousand and 00 /100 Dollars ($2,440,000) at a variable
interest rate, with a maximum rate of eight percent (8.0 %); and
WHEREAS, the District Bonds are secured by the Trust Indenture (the "District Bond
Indenture ") between the Commission and The Bank of New York Trust Company, N.A. (the
"District Bond Trustee ") dated February 1, 2006 and by a Letter of Credit issued pursuant to the
Reimbursement Agreement dated February 1, 2006 between Fifth Third Bank and Anchor South
Bend, LLC (collectively, the "Letter of Credit), which Letter of Credit requires the optional
redemption of the District Bonds as set forth in Exhibit A; and
WHEREAS, EDC Bonds were issued on July 13, 2005 at a fixed interest rate of eight percent
(8.0 %) with interest payable on February 1, 2006, and on each February 1 and August 1 thereafter
and maturing on February 1, 2025 with mandatory sinking fund payments due on February 1 in the
years 2009 through and including 2025, a schedule of which debt service payments is as set forth at
Exhibit B; and
WHEREAS, the Pledge Resolution requires that on January 15 and July 15 of each year all
Project Tax Increment Revenues, to the extent they are available, must be deposited in the Allocation
Area No. 2 Fund and further set aside and deposited into the Bond Principal and Interest Account of
the Allocation Area No. 2 in an amount necessary to pay (i) the principal of and interest on the
District Bonds currently or scheduled to be due and expected to be paid from the Project Tax
Increment Revenues for that bond year along with any shortfall from previous bond years with
respect to the District Bonds and (ii) the principal of and interest on the EDC Bonds currently or
scheduled to be due and expected to be paid from the Project Tax Increment Revenues for that bond
year along with any shortfall from previous bond years with respect to the EDC Bonds, and only
thereafter may excess Project Tax Increment Revenues be used for any other purpose set forth in
Section 39 of the Act; and
WHEREAS, a portion of the proceeds of the District Bonds have been deposited with the
District Bond Trustee to pay the debt service charges on the District Bonds through August 1, 2008;
and
WHEREAS, under the District Bond Indenture, Project Tax Increment Revenues sufficient to
pay the continued debt service payments on the District Bonds, to the extent such Project Tax
Increment Revenues are available for such purpose, must be deposited with the District Bond Trustee
approximately ten (10) business days prior to the subsequent Interest Payment Date (as defined in the
. District Bond Indenture), the first of which Interest Payment Date may be as early as September 1,
2008 if the District Bonds remain in a weekly reset mode; and
WHEREAS, the EDC Bonds are secured by a Trust Indenture dated June 1, 2005 (the "EDC
Bond Indenture ") between the Commission and The Bank of New York Trust Company, N.A., as
Trustee (the "EDC Bond Trustee "), and a portion of the EDC Bond proceeds have deposited with the
EDC Bond Trustee to pay the debt service charges on the EDC through the payment due February 1,
2008; and
WHEREAS, under Section 4.4 of the EDC Bond Indenture, Project Tax Increment Revenues
sufficient to pay the continued debt service payments on the EDC Bonds, to the extent such Project
Tax Increment Revenues are available for such purpose, must be deposited with the EDC Bond
Trustee by the January 15 or July 15 immediately preceding the February 1 or August 1 payment,
which first deposit date and first payment shall be July 15, 2008 and August 1, 2008, respectively;
and
WHEREAS, the Commission desires to authorize all funds received by the Commission for
Allocation Area No. 2 Fund be transferred to the Bond Principal and Interest Account; and
WHEREAS, the Commission further desires that all funds on deposit in the Bond Principal
and Interest Account be appropriated for the debt service payments on the Bonds and ancillary costs,
in accordance with the Pledge Resolution and Indiana Code § 36- 7- 14- 39(b)(2)(A); and
WHEREAS, the proposed appropriations from Allocation Area No. 2 Fund or the Bond
Principal and Interest Account are not for the operating expenses of the Commission; and
WHEREAS, such appropriations are subject to the provisions of Indiana Code § 6- 1.1 -18 -5;
and
WHEREAS, on January 15, 2010 the Commission adopted Resolution 2625 appropriating a
total amount estimated not to exceed Two Million Five Hundred Thousand and 00 /100 Dollars
($2,500,000.00); and
WHEREAS, on May 21, 2010 adopted Resolution 2678 setting a public hearing on an
amendment to said appropriations for 10:00am on June 18, 2010 authorizing the Secretary of the
Commission to duly publish notice of said hearing; and;
WHEREAS, the Secretary of the Commission has caused notice of said hearing on said
appropriations to be published in accordance with law; and
WHEREAS, such public hearing was held at the Commission's meeting at 10:00 a.m. on
June 18, 2010, at 1308 County -City Building, 227 West Jefferson Boulevard, South Bend, Indiana
46601, at which all taxpayers and interested persons had an opportunity to appear and express their
views as to such additional appropriations; and
iWHEREAS, the Commission now desires to approve additional appropriations in a total
amount estimated not to exceed Three Million and 00 /100 Dollars ($3,000,000.00);
NOW, THEREFORE, BE IT RESOLVED BY THE SOUTH BEND REDEVELOPMENT
COMMISSION AS FOLLOWS:
1. The Commission hereby finds that there are insufficient funds available or provided
for in the existing budget and tax levy which may be applied to debt service payments on the Bonds
and ancillary costs, in accordance with the Pledge Resolution and Indiana Code § 36-7-14 -
39(b)(2)(A).
2. The Commission hereby appropriates that all funds in Allocation Area No. 2 Fund
and /or the Principal and Interest Account for the debt service payments on the Bonds and ancillary
costs, in accordance with the Pledge Resolution and Indiana Code § 36- 7- 14- 39(b)(2)(A), which
amount is not expected to exceed the amount owed on the Bonds and required to be deposited with
the Trustee under the Pledge Resolution and the District Bond Indenture or the EDC Bond Indenture
and which amount is not anticipated to exceed Five Million Five Hundred Thousand and 00 /100
Dollars ($5,500,000.00) this year.
3. Such appropriations shall be in addition to all the appropriations provided for in the
existing budget and levy and shall continue in effect until the completion of the activities described
herein. Any surplus of such proceeds shall be credited to the proper fund as provided by law.
4. The President and /or the Secretary of the Commission are hereby authorized and
directed to certify a copy of this Resolution together with such other proceedings and actions as may
be necessary to the St. Joseph County Auditor for certification to the Indiana Department of Local
Government Finance for the purpose of obtaining its approval of the appropriations herein made.
ADOPTED at a regular meeting of the South Bend Redevelopment Commission held on June
18, 2010 at 1308 County -City Building, 227 W. Jefferson Boulevard, South Bend, Indiana 46601.
SOUTH BEND REDEVELOPMENT
COMMISSION
Signature
Marcia I. Jones, President
ATTEST' Printed Name and Title
David A. Varner, Vice President
Printed Name and Title
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EXHIBIT A
(ESTIMATED DISTRICT BOND PAYMENT SCHEDULE)
Use the Max Interest Rate of 8.0%
February 1, 2010
$105,000
February 1, 2011
$110,000
February 1, 2012
$115,000
February 1, 2013
$120,000
February 1, 2014
$125,000
February 1, 2015
$130,000
February 1, 2016
$1401000
February 1, 2017
$145,000
February 1, 2018
$150,000
February 1, 2019
$160,000
February 1, 2020
$165,000
February 1, 2021
$175,000
February 1, 2022
$185,000
February 1, 2023
$195,000
February 1, 2024
$205,000
February 1, 2025
$215,000
$ 3,500,000 $ 3.022,800
Exhibit B
Date
ED(; Fayments - 81%
IPrincipal
interest Total
1-Feb -06
.
1- Aug -06
1 -Feb -07
I- Aug{17
0
1 -Feb 08
i- Aug 08
$ 140,000
1- Feb -l19
S 105,000 140,000 $
385,000
. 1 Aug -09
135.800
1- Feb lU
110,000 135,800
381,600
1 -AugJ0
131,400
1.Feb -11;
120,000 131,400
382,800
1- Aug -1 i
126.600
1- Feb -12
130.000 126,600
383,200
1- Aug -12
121,400
1- Feb-13
140,000 121,400
382.800
1- Aug -13
115.800
1- Feb -14
155.000 115,800
386,600
I- Aug -14
109,600
1- Feb -15
165.000 109,600
384,200
1 Aug 15
103.000
i- Feb -16
180,000 103,000
386,000
1 _Aug -1
95.800
1- Feb -17 7
190,000 95.800
381,600
1- Aug -17
88,200
1- Feb -18
210,000 88,200
386.400
1 Aug 18
79,800
1 -Feb 19
225.000 79,800
384,600
I- Aug -19
70,800
1- Feb -20;
240,000 70,800
381,600
1- Aug -20{
61,200
1- Feb -31 i
260.000 61,200
382.400
1- Aug -21;
50,800
I- Feb -22'
280,000 50,800
381,600
I- Aug -22
39.600
1- Feb -23
305.000 39.600
384.200
' 1- Aug-23
27,400
1- Feb-24
330,000 27,400
384,800
1- Aug -24
14,200
I- Feb-35
355,000 14,200
383,400
$ 3,500,000 $ 3.022,800
•
Estimated Amounts:
TIF Revenue Bonds
Accrued Interest
Bond Principal
EDC Bonds
Accrued Interest
Bond Principal
EXHIBIT C
$ 131,400
2,248,807
131,400
2,973,393
Ancillary Costs (legal, financial, etc.) 15,000
TOTAL
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$5,500,000