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HomeMy WebLinkAbout9593-05 Authorizing to issue its "Economic Development Revenue Bonds, Series 2005 (MDC South Bend, LLC Project)ORDINANCE No. Passed by the Common Council of the Ciry of South Bend, Indiana Mai 23, Attest: Attest: 05 20 City Clerk President of Common Council Presented by me to the Mayor of the Ciry of South Bend, Indiana May' 24, 05 20 _. JOHN May 2~F, 05 Approved and signed by me 20 ~~~.~ Ciry Clerk ~w-v`v---- M ~' JO. ORDINANCE NO. "~ S ~13-~.~ AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE CITY OF SOUTH BEND, INDIANA, TO ISSUE ITS "ECONOMIC DEVELOPMENT REVENUE BONDS, SERIES 2005 (MDC SOUTH BEND, LLC PROJECT)" AND APPROVING AND AUTHORIZING OTHER ACTIONS IN RESPECT THERETO STATEMENT OF PURPOSE AND INTENT: Indiana Code Title 36, Article 7, Chapter 11.9 and 12, as amended (the "Act"), declares that the financing of economic development facilities constitutes a public purpose. The Act provides that an issuer may, pursuant to the Act, issue revenue bonds and lend the proceeds thereof to a corporation, partnership, limited liability company or individual for the purpose of financing costs of acquisition or construction of facilities, including real and personal property, for diversification of economic development and promotion of job opportunities in or near such issuer. The Act further provides that such bonds may be secured by a financing agreement between an issuer and a developer. MDC South Bend, LLC (the "Company") has undertaken the acquisition, construction, installation and equipping of an approximately 48,750 square foot airfreight facility to be located at the Michiana Regional Airport in the City (the "Project"), which will be leased by the Company from the St. Joseph County Airport Authority and subleased by the Company to and operated by DHL/Airborne Express for use in its business of airfreight and logistics services. In conjunction with the Project, the Company has further proposed that the City of South Bend, Indiana (the "City") issue and sell its economic development revenue bonds under the Act in one (1) series in an aggregate principal amount not to exceed Two Million Two Hundred Thousand and 00/100 Dollars ($2,200,000.00) (the "Bonds"), and that the City lend the proceeds of the Bonds to the Company (the "Loan") under a Loan Agreement (the "Loan Agreement") by and among the City, the Company and GE Capital Public Finance, Inc., as purchaser of the Bonds (the "Purchaser"} and as collateral agent, in a form substantially similar to that presented to the Common Council of the City (the "Common Council") whereby the Bonds will be sold by the City to the Purchaser and the proceeds of the Bonds will be utilized for the Project. The principal of, premium, if any, and interest on the Bonds shall be payable solely from payments made by the Company and the collateral pledged therefor, shall not be a general obligation of the City, and shall not be payable in any manner by taxation. The South Bend Economic Development Commission (the "Commission") has rendered its Report of the South Bend Economic Development Commission Concerning the BDDBO 1 4046058v2 Proposed Financing of Economic Development Facilities for MDC South Bend, LLC regarding the proposed financing of the costs of the Project. After a duly noticed public hearing conducted on Apri129, 2005, the Commission adopted a resolution (the "Resolution"), which Resolution has been previously transmitted to the Clerk of the City, finding that the financing of the Project, as described in the application submitted by the Company to the Commission, complies with the purposes and provisions of the Act, and will be of benefit to the health and welfare of the City and its citizens, and will not have an adverse competitive impact on other facilities of the same or similar kind already construed or operating in the City. No public works or services not already existing or available, or for which provision has not been made, will be necessary or desirable on account of the Project as such facilities will be provided either by the Borrower, private utilities, or existing public facilities. Pursuant to the Resolution, the Commission has approved the proposed financing and has approved in substantially final form, subject to subsequent changes by the Mayor of the City (the "Mayor") and the Clerk of the City (the "Clerk"), the Loan Agreement and the form of the City of South Bend, Indiana, Economic Development Revenue Bonds, Series 2005 (MDC South Bend LLC Project) (collectively, the "Financing Documents"). Pursuant to and in accordance with the Act, the City desires to procure funds to finance the Project by issuing the Bonds. No member of the Council has any pecuniary interest in any employment, financing agreement or other contract made under the provisions of Indiana Code § 36-7-11.9 and Indiana Code § 36-7-12 and related to the Bonds authorized herein, which pecuniary interest has not been fully disclosed to the Council and no such member has voted on any such matter, all in accordance with the provisions of Indiana Code § 36-7-12-16. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: SECTION I. The Common Council hereby finds and determines that the Project will not have an adverse competitive impact on other facilities of the same or similar kind already constructed or operating in the City. SECTION II. It is hereby found that the financing of the Project previously approved by the Commission and presented to this Common Council, the issuance and sale of the Bonds, the Loan of the net proceeds thereof to the Company for the acquisition, construction, installation and equipping of the Project and the repayment of the Loan by the Company, will be of benefit to the health, prosperity, economic stability, general welfare and public interest of the City and its citizens and complies with the purposes and provisions of the Act. SECTION III. The proposed financing and the form of the Financing Documents approved by the Commission are hereby approved and all such documents shall be incorporated herein by reference and shall be inserted in the minutes of the Common Council and kept on file by the Clerk. BDDBOI 4046058v2 - 2 - SECTION IV. The City shall issue the Bonds in one (1) series in an aggregate principal amount not to exceed Two Million Two Hundred Thousand and 00/100 Dollars ($2,200,000.00) designated as the "City of South Bend, Indiana, Economic Development Revenue Bonds, Series 2005 (MDC South Bend, LLC Project)." The proceeds of the Bonds net of the expenses in connection with or on account of the issuance of the Bonds shall be made available to the Company pursuant to the Loan Agreement. The Bonds shall not constitute an obligation or indebtedness of the City or the Commission. The Bonds, together with interest thereon, shall be payable solely from the payments made by the Company and the collateral pledged therefor. The Bonds shall be issued as fully registered bonds and shall mature, be dated, be subject to redemption and be payable in the medium and at the place or places and in the manner as provided in the Financing Documents approved by this Ordinance and incorporated herein by reference. The Mayor is hereby authorized to negotiate, execute and deliver the Loan Agreement. The Mayor and the Clerk are authorized and directed to sell the Bonds upon such terms as set forth in the Loan Agreement at a rate of interest on the Bonds which rate may be a fixed rate as set forth in the Financing Documents and incorporated herein by reference, but in no event shall the interest rate on the Bonds exceed ten percent (10.0%) per annum, and at a price equal to not less than 98% of the principal amount thereof plus accrued interest to the date of delivery of the Bonds, if any. The term of the Bonds shall not exceed twelve (12) years. The Mayor is further authorized to carry out, on behalf of the City, the terms and conditions set forth therein, consistent with the provisions of this Ordinance. SECTION V. The Bonds shall not constitute a debt or pledge of the faith and credit of the City, the State or any political subdivision thereof, and the holders, or owners thereof shall have no right to have taxes levied by the City, the State or of any political subdivision, for the payment of the principal thereof or interest thereon. Moneys raised by taxation shall not be obligated or pledged for the payment of principal of or interest on the Bonds, and the Bonds shall be payable solely from payments made by the Company pursuant to the Loan Agreement and the collateral pledged therefor. SECTION VI. The Clerk is hereby authorized and directed to obtain a legal opinion as to the validity of the Bonds from Baker & Daniels, bond counsel, of South Bend, Indiana, and to furnish such opinion to the purchaser of the Bonds. The cost of said opinion shall be considered as part of the costs incidental to these proceedings and shall be paid out of the proceeds of the Bonds or by the Company. SECTION VII. The Mayor and the Clerk are authorized and directed to execute, attest, deliver, and affix or imprint by any means the City seal to, the Bonds and the Financing Documents approved herein on behalf of the City and, by their execution of such documents, they may approve any changes therein without further approval of the Common Council or the Commission excepting, however, such changes as must be approved pursuant to Indiana Code § 36-7-12-25 and Indiana Code § 36-7-12-27. BDDBOI 4046058v2 - 3 - SECTION VIII. The Mayor and the Clerk are authorized to execute any other documents and take such other action that may be necessary or desirable to consummate the issuance and sale of the Bonds and the Loan to the Company. The signatures of the Mayor and the Clerk on the Bonds may be manual or facsimile signatures. The Clerk is authorized to arrange for delivery of the Bonds to the purchaser thereof. SECTION IX. If any section, paragraph or provision of this Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Ordinance. SECTION X. All resolutions and orders, or parts thereof, in conflict with the provisions of this Ordinance are, to the extent of such conflict, hereby repealed, and this Ordinance shall be in immediate effect from and after its adoption. SECTION XI. No recourse under or upon any obligation, covenant, acceptance or agreement contained in this Ordinance or in the Bonds, the Financing Documents, or under any judgment obtained against the City or by the enforcement of any assessment or by any legal or equitable proceeding by virtue of any constitution or statute or otherwise, or under any circumstances, under or independent of the Loan Agreement shall be had against any member of the Common Council, or officer or attorney, as such, past, present or future, of the City either directly or through the City, or otherwise, for the payment for or to the City or any receiver thereof, or to any holder of the Bonds secured thereby, or otherwise, of any sum that may be due and unpaid by the City upon any of such Bonds. Any and all personal liability of every nature, whether at law or in equity, or by statute or by constitution, or otherwise, of any such member of the Common Council, or officer or attorney, as such, to respond by reason of any act or omission on his or her part, or otherwise, for, directly or indirectly, the payment for or to the Common Council or any receiver thereof, or for or to any owner or holder of the Bonds, or otherwise, of any sum that may remain due and unpaid upon the Bonds hereby secured or any of them, shall be expressly waived and released as a condition of and consideration for the execution of an delivery of the Financing Documents and the issuance of the Bonds. SECTION XII. The provisions of this Ordinance and the Loan Agreement shall constitute a contract binding between the City and the holders of the Bonds, and after the issuance of said Bonds, this Ordinance shall not be repealed or amended in any respect that would adversely affect the rights of such holders so long as the Bonds or the interest thereon remains unpaid. SECTION XIII. Passage of this Ordinance by the Mayor and the affixing by the Mayor of his signature hereto shall constitute and evidence the approval of the elected legislative body of the issuer of the Bonds authorized herein and the approval of the chief elected executive officer of the issuer of the Bonds authorized herein, respectively, as required by Section 103 of the Internal Revenue Code of 1986, as amended. BDDBOI 4046058v2 - 4 - SECTION XIV. This Ordinance shall be in full force and effect from and after compliance with the procedures required by law. ATTEST: Ci Cle r Member of the Common Cou it Presented by me to the Mayor of the City of South Bend, Indiana, on the ~`~~ day of , 2005, at Z`-moo o'clock ~.m. \ ~ aL~k-o-rm. ~'~'-~`~ City Clerk Approved and signed by me on the v~ `~ day of , 2005, at !3 o'clock ~.m. 1st RgADING ~- ~ ~~ PUBLIC HEARING s-Z3-~~ 3rd BEADING S_ L3- oS" NOT APPROVED REfERFED PASSED S-L3--~.5~ BDDBO 1 4046058v2 ~ ~~~~ Mayor, City of outh Bend, Indiana -5- F~I~d l~ C@ ~r~€'S ~f~~~~ J0~"'~ :''~ ~~CE CITY C(>=^~y ~:u. u~ t~0, ttd. TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 28-05 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE CITY OF SOUTH BEND, INDIANA, TO ISSUE ITS "ECONOMIC DEVELOPMENT REVENUE BONDS, SERIES 2005 (MDC SOUTH BEND, LLC PROJECT)" AND APPROVING AND AUTHORIZING OTHER ACTIONS IN RESPECT THERETO 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. Roland Kelly Chairman BAKER 8z DANIEI,S LLP EST. 1863 First Bank Building, 205 W. Jefferson Blvd., Suite 250 • South Bend, Indiana 46601 Tel. 574.234.4149 • Fax 574.239.1900 www.bakerdaniels.com May 4, 2005 VIA HAND DELIVERY Mr. John Voorde Clerk, City of South Bend County-City Building, 4th Floor South Bend, IN 46601 INDIANA WASHINGTON, D.C. CHINA Re: Ordinance for Consideration by the Common Council Authorizing the Issuance of Economic Development Revenue Bonds for the Proposed Air Freight Terminal Project Dear Mr. Voorde: Enclosed with this letter is a form of ordinance for consideration by the Common Council. The ordinance authorizes the issuance of Economic Development Revenue Bonds in conjunction with the Economic Development Commission under Indiana Code 36-7-12 for construction of an airfreight terminal for Airborne Express/DHL. Ken Fedder, counsel for the Economic Development Commission, has asked us to assist with the filing of this ordinance with your office. The borrower and developer, MDC South Bend, LLC (the "Company"), has engaged us as bond counsel. As indicated in the ordinance, the Company desires to finance the construction, installation and equipping of an approximately 48,750 square foot airfreight facility to be located at the Michiana Regional Airport in the City (the "Project"). The Project will be leased to Airborne/DHL for their airfreight and logistical operations. The Company has represented to the Economic Development Commission in its application that the Project will retain the 88 jobs presently at the airport and result in an increase of approximately 5 jobs. In order to facilitate the development and construction of the Project, the Company has requested that the City serve as the issuer of not to exceed $2,200,000 of tax-exempt economic development revenue bonds for the Project. The Project qualifies for tax-exempt financing because it is an airport-related facility. On May 21, 2004, the Common Council adopted a resolution preliminarily approving the Project and expressing the City's intent to issue bonds for the Project. The Company now desires to complete the financing of the Project. BDDBOI 4056607v1 Mr. John Voorde - 2 - May 4, 2005 As indicated in the ordinance, the principal amount of the bonds is not to exceed $2,200,000, the interest rate is not to exceed 10.0%, and the term of the bonds is not to exceed 12 years. As you may know, in serving as a conduit for the issuance of economic development bonds, the City bears no responsibility, financial or otherwise, with respect to the payment of, principal of and interest on the bonds. The ordinance specifies that in Section 4. The Company requests that the ordinance be considered on first and second reading at the May 9`h meeting of the Common Council. It is the hope of the Company that the ordinance will be adopted by the Council at it's May 23rd meeting. The Economic Development Commission is scheduled to meet on May 20, 2005 to conduct a public hearing and consider the financing. Should you have any questions regarding the enclosed ordinance or any of the above, please do not hesitate to call. Sincerely, BAKER c~ DAI~IIELS `/ ~~~Z~~G~ Randolph R. Rompola RRR/pap Enclosure cc: Kenneth P. Fedder, Esq. (via facsimile) Aladean DeRose, Esq. Kate McCahill Norman E. Gaar, Esq. (via a-mail) Jerry S. Dean (via a-mail) C1erl~'~ o~~ce Fled In ~,~ P~` _ c} ~n~, ,tot~ra DSO aa~~a, tN. ~ c~Er.~, BDDBOI 4056607v1 Mr. John Voorde - 3 - May 4, 2005 bcc: Richard L. Hill, Esq. Randolph R. Rompola, Esq. File in Clerk's Qfflce P," AY - 4 ~~ ~,~ JONlJ YOORDE CfTY CLERK, S0.3cND, IN. BDDBOI 4056607v1