HomeMy WebLinkAbout9597-05 Approving and Authorizing the execution of a lease Addendum for the construction of an addition to O'Brien Recreation CenterORDINANCE No. s s
Passed by the Common Council of the City of South Bend, Indiana
June 13,
Attest:
20 05
Attest: ~---
City Clerk
President of Common Council
Presented by me to the Mayor of the Ciry of South Bend, Indiana
June 14, 2005
City Clerk
Approved and signed by me June 15 , 20 0 5
Mayer
ORDINANCE NO. , ~ ~ ~ 7` ~S~
AN ORDINANCE OF THE CITY OF SOUTH BEND, INDIANA,
COMMON COUNCIL APPROVING AND AUTHORIZING THE
EXECUTION OF A LEASE ADDENDUM FOR THE CONSTRUCTION
OF AN ADDITION TO O'BRIEN RECREATION CENTER AND
REGARDING CERTAIN RELATED MATTERS
STATEMENT OF PURPOSE AND INTENT:
The City of South Bend, Indiana (the "City"), has previously investigated the
necessity for certain improvements to the O'Brien Recreation Center located at 321 E. Walter
Street in the City (the "Building"), including but not limited to, the construction of an addition to
the Building to be used as a fitness center (the "Project"). The City has also previously
investigated alternative methods for paying for the Project. There has been filed with the
Common Council of the City (the "Common Council") a petition certified by the St. Joseph
County Auditor, which petition has been signed by at least fifty (50) owners of real property
subject to taxation by the City and addressed to the Common Council, requesting that the
Common Council enter into an addendum to the Lease (as defined herein) whereby the Project
will be completed with the assistance of anon-profit building corporation and leased to the City
pursuant to the provisions of Indiana Code 36-1-10, as amended.
The City of South Bend Building Corporation (the "Building Corporation") was
previously organized as an Indiana non-profit corporation for the purpose of constructing and
leasing public improvements to the City. The Building Corporation and the City entered into a
Lease dated as of August 1, 1999, as amended by an Addendum to Lease by and between the
Building Corporation and the City dated as of December 15, 1999 (collectively, the "Lease"),
whereby the Building Corporation leases the Building to the City. A form of a lease addendum
between the Building Corporation and the City (the "Lease Addendum") has been prepared and
submitted to the Common Council for its consideration to amend the Lease to provide for the
Project. The Lease Addendum, as presented to the Common Council, provides a term for the
Building of not to exceed six (6) years. The semi-annual lease rentals payable under the Lease
Addendum by the City with respect to the Project would be an amount not to exceed One
Hundred Five Thousand Dollars ($105,000), payable on each May 28 and November 28,
commencing on the later of the completion of the Project or May 28, 2006. Lease rentals
payable under the Lease Addendum by the City for the Project would be payable on such dates
from then current revenues of the City appropriated for the purpose of making such lease rental
payments. As a result, the Project does not constitute a "controlled project" as such term is
defined by Indiana Code 6-1.1-20-1.1 because such lease rentals would be payable from funds
other than property taxes that are exempt from the levy limitations of Indiana Code 6-1.1-18.5.
BDDBOI 4069475v3
The Building Corporation desires to finance a portion of the costs related to the
construction of the Project through the sale and issuance of its lease rental revenue bonds in one
or more series in an aggregate principal amount not to exceed $950,000.00.
NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL
OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS:
SECTION I. The petition of taxpayers of the City filed with the Common
Council at this meeting is hereby approved.
SECTION II. The Common Council hereby determines that a need exists for the
completion of the Project and the funds needed therefor exceed the funds presently available to
the City.
SECTION III. Having held a public hearing regarding the Lease Addendum for
which notice was provided in accordance with Indiana Code 5-1-3, the Common Council hereby
approves the Lease Addendum in the form presented to this meeting. The Lease Addendum with
the Building Corporation as lessor provides for a fair and reasonable rental, and further, the
execution of the proposed Lease Addendum is necessary and wise. The Mayor and Clerk of the
City are hereby authorized to execute and attest, respectively, the Lease Addendum in the form
presented to this meeting with such changes as may be necessary or appropriate on the advice of
counsel with such execution and attestation to evidence approval of such changes; provided,
however, that any such changes may not (i) increase the term of the Lease Addendum with
respect to the Project or increase the rentals payable by the City under the Lease Addendum with
respect to the Project or (ii) alter the scope and nature of the Project described in the Lease
Addendum.
SECTION IV. The Clerk of the City shall cause to be published a notice of
execution of the Lease Addendum according to law following such execution.
SECTION V. All actions taken to publish the notice of the public hearing
regarding the Lease Addendum are hereby approved and ratified.
SECTION VI. The Common Council hereby approves of the sale and issuance
by the Building Corporation of its lease rental revenue bonds in one or more series in an
aggregate principal amount not to exceed $950,000.00 (the "Bonds"). Following the sale of the
Bonds, the Common Council authorizes the Mayor and Clerk of the City to enter into a further
addendum if necessary to reduce the amount of the rentals payable with respect to the Project to
an amount equal to the principal of and interest on the Bonds plus any expenses to be paid by the
City pursuant to the terms of the Lease as additional rental.
BDDBOl 4069475v3 - 2 -
SECTION VII. This Ordinance shall be in full force and effect from and after its
passage by the Common Council and approval by the Mayor.
~Q/ r
Member of the Common C un it
_ Presented by me to the Mayor of the City of South Bend, Indiana, on the ' y~
day of ..~ c a v~ , 2005, at I `~ ~ o'clock ~.m.
u,~~ ^ n ~
City Cler
Approved and signed by me on the ./~ ~ ~~ day of ~ ~~~-"--~ , 2005, at
o'clock ~.m.
1 sF READING S - 23 ~~ 1 c~ ~}•,
PUBLlC NEARWG C~-\3 -Or 4~ S S ~~ _ ~ ` ~
3 rd READi~~G ~O~13-Or a-S S v.bS~ ~~~
NOT APPROVED
REFERRED t ~.~.~
PASSED (p-\ 3 "~~ ~ S ~ u S~ ,
Mayor, City of th Bend, Indiana
Filed to Clerk's ~fflce
Jtlil -` 6 c~
dOtiN YOORQE
CtiY CLERK, S0. HEN'Q, tti.
BDDBOI 4069475v3 - 3 -
TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND:
Your Committee of the Whole, to whom was referred:
BILL NO.
31-05 A BILL OF THE CITY OF SOUTH BEND, INDIANA,
COMMON COUNCIL APPROVING AND AUTHORIZING T
HE EXECUTION OF A LEASE ADDENDUM FOR THE
CONSTRUCTION OF AN ADDITION TO THE O'BRIEN
RECREATION CENTER AND REGARDING CERTAIN
RELATED MATTERS
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 as
substituted with the specific information concerning the semiannual lease payment
amount that was missing in the first copy filed.
Roland Kelly
Chairman
Second Addendum to Lease Between the City of
South Bend Building Corporation, as Lessor,
and the City of South Bend, as Lessee
(O'Brien School Project)
THIS SECOND ADDENDUM, made and entered into this 1st day of June, 2005
(the "Second Addendum"), between City of South Bend Building Corporation, an Indiana non-
profit corporation (the "Building Corporation"), and the City of South Bend, a municipal
corporation organized and existing under the laws of the State of Indiana (the "Lessee"):
WITNESSETH:
WHEREAS, the Building Corporation and Lessee have entered into a lease dated
as of August 1, 1999, as subsequently amended by an addendum to lease dated as of December
15, 1999, which were recorded in the office of the Recorder of St. Joseph County, Indiana, as
Document Number 9962556 and Document Number 9962557, respectively (collectively, the
"Lease") by which the Building Corporation leases the O'Brien Recreation Center, located at 321
E. Walter Street in the City and the real estate on which is located (collectively, the "Building")
to the Lessee to provide for the Building's renovation, including (i) the replacement of its
windows and doors, (ii) the installation and replacement of its heating and cooling system, and
(iii) the installation and replacement of its electrical mainpower feed and telephone and computer
wiring (collectively, the "1999 Project"); and
WHEREAS, the Lease provides for maximum semi-annual lease rental payments
of $52,196.00 and for a maximum term of seven (7) years, which is set to expire no later than
May 27, 2007; and
WHEREAS, the Building Corporation and the Lessee desire to amend the lease to
provide for certain improvements to the Building, including but not limited to, the construction
BDDBOl 4069489v1
of an addition to the Building on the Land (as defined in the Lease) to be used as a fitness center
(the "2005 Project"); and
WHEREAS, the Building Corporation and the Lessee desire to enter into this
Second Addendum for the purpose of providing for the 2005 Project with a term related to the
2005 Project of not to exceed six (6) years and with a maximum semi-annual lease rental rate for
the 2005 Project of $105,000 payable semiannually on May 28 and November 28;
NOW, THEREFORE, IT IS HEREBY AGREED, CERTIFIED, AND
STIPULATED by the undersigned that:
1. The project description as contained at Exhibit A to the Lease is hereby
amended and restated in its entirety as follows:
The Project consists of (a)(i) the replacement of its windows and doors,
(ii) the installation and replacement of its heating and cooling system, and (iii) the
installation and replacement of its electrical mainpower feed and telephone and
computer wiring, all in the building located on the aforementioned real estate and
knows as the O'Brien Recreation Center (the "Building") (the "1999 Project") and
(b) certain other improvements to the Building, including but not limited to, the
construction of an addition to the Building on a portion of the aforementioned real
estate to be used as a fitness center (the "2005 Project").
2. Section 2 of the Lease is hereby amended and restated in its entirety as
follows:
Semiannual Rental Payment for the Project. (a) The first semiannual
rental installment for the 1999 Project (as defined herein) in the amount of
Forty-nine Thousand Six Hundred fifty-five and 14/100 Dollars ($49,655.14), or
such lesser amount as shall be permitted by Section 3.03 of the Mortgage and
Trust Indenture dated November 1, 1999 (the "Trust Indenture"), by and between
the City of South Bend Building Corporation and WeIIs Fargo Bank, N.A.,
successor in interest to Norwest Bank Indiana, N.A. (the "Trustee") as a result of
funds remaining on deposit, shall be due on the day that the 1999 Project is
complete and ready for use and occupancy or May 28, 2000, whichever is later. If
completion is later than May 28, 2000, the first installment shall be in an amount
which provides for rental at the rate specified in Exhibit B hereto for the
semiannual period in which the 1999 Project is completed and ready for use,
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BDDBOI 4069489v1
prorated from the date of completion until the first May 28 or November 28
following such date of completion, or such lesser amount as may be permitted by
Section 3.3 of the Trust Indenture as a result of funds remaining on deposit.
Thereafter, such rentals for the 1999 Project shall be payable in advance in
semiannual installments on May 28 and November 28 of each year as provided
for in the lease payment schedule attached hereto as Exhibit B, or such lesser
amount as may be permitted by Section 3.3 of the Trust Indenture as a result of
funds remaining on deposit.
(b) The first semiannual rental installment for the 2005 Project (as
defined herein) shall be at the rate specified in Exhibit C or such lesser amount as
shall be permitted by Section 3.03 of the Trust Indenture as a result of funds
remaining on deposit, and shall be due on the day that the 2005 Project is
complete and ready for use and occupancy or May 28, 2006, whichever is later. If
completion is later than May 28, 2006, the first installment shall be in an amount
which provides for rental at the rate specified in Exhibit C hereto for the
semiannual period in which the 2005 Project is completed and ready for use,
prorated from the date of completion until the first May 28 or November 28
following such date of completion, or such lesser amount as may be permitted by
Section 3.3 of the Trust Indenture as a result of funds remaining on deposit.
Thereafter, such rentals for the 2005 Project shall be payable in advance in
semiannual installments on May 28 and November 28 of each year as provided
for in the lease payment schedule attached hereto as Exhibit C, or such lesser
amount as may be permitted by Section 3.3 of the Trust Indenture as a result of
funds remaining on deposit.
(c) All rentals payable under the terms of this Lease shall be paid by
the Lessee to the Trustee, or to such other bank or trust company as may from
time to time succeed said Trustee under the Trust Indenture securing the Bonds
(as such term in defined in the Trust Indenture) issued or to be issued by the
Lessor.
(d) All payments so made by the Lessee shall be considered as
payment to the Lessor of the rentals payable hereunder. Such payments shall be
made from available funds of the Lessor. The obligation of Lessee to make such
rental payments is a current expense and not to be construed as a debt of Lessee.
Nothing herein shall be interpreted as constituting a pledge of the Lessee to levy
or collect a tax to provide funds for the payment of the rentals payable hereunder.
If the Lessee fails to appropriate sufficient funds to pay the lease rentals for the
Project, equal or like facilities cannot be substituted for the Project. Upon a
failure of the Lessee to appropriate such funds for payment of Project, (i) this
Lease will terminate with respect to the Project, (ii) Lessee will take all action to
peaceably transfer possession of the demised premises to Lessor, and (iii) Lessee
shall have no further claim to said demised premises.
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BDDBOI 4069489v1
3.
follows:
Exhibit B of the Lease is hereby amended and restated in its entirety as
EXHIBIT B
City of South Bend
Parks and Recreation Department
Nominal Annual Rate - 5.53°Io
# Date Pa.~ Interest Principal
1 28-May-00 49,655.14 15,760.50 33,894.64
2 28-Nov-00 49,655.14 14,823.31 34,831.83
3 28-May-O1 49,655.14 13,860.21 35,794.93
4 28-Nov-O1 49,655.14 12,870.48 36,784.66
5 28-May-02 49,655.14 11,853.39 37,801.75
6 28-Nov-02 49,655.14 10,808.17 38,846.97
7 28-May-03 49,655.14 9,734.05 39,921.09
8 28-Nov-03 49,655.14 8,630.23 41,024.91
9 28-May-04 49,655.14 7,495.89 42,159.25
10 28-Nov-04 49,655.14 6,330.19 43,324.95
11 28-May-OS 49,655.14 5,132.26 44,522.88
12 28-Nov-OS 49,655.14 3,901.20 45,753.94
13 28-May-06 49,655.14 2,636.10 47,019.04
14 28-Nov-06 49,655.14 1.335.98 48,319.16
Grand Totals 695,171.96 125,171.96 570,000.00
Purchase
O tion
546, 827.47
511,299.00
474,788.17
437,267.82
398,710.03
359,086.12
318,366.61
276,521.20
233,518.77
189,327.32
143,913.98
97,244.96
49,285.54
4. Exhibit C of the Lease is hereby amended and restated in its entirety as
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BDDB01 4069489v1
follows:
EXI~IT C
Lease Pa ment Schedule
Payment Date Amount
05/28/2006 $105,000.00
11/25/2006 105,000.00
05/28/2007 105,000.00
11/28/2007 105,000.00
05/28/2008 105,000.00
11/28/2008 105,000.00
05/28/2009 105,000.00
11/28/2009 105,000.00
05/28/2010 105,000.00
11/28/2010 105,000.00
5. The amendments to the Lease as set forth in this Second Addendum to
Lease shall be effective as of the date of this Second Addendum to Lease and all remaining
terms, covenants, and conditions set forth in the Lease shall remain in full force and effect.
*~*~*
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BDDBOI 4069489v1
IN WITNESS WHEREOF, the undersigned have caused this Second Addendum
to be executed for and on their behalf on the day and year first hereinabove written.
CITY OF SOUTH BEND
BUII.DING CORPORATION,
as Lessor
By:
President
ATTEST:
Secretary
B y:
ATTEST:
John Voorde, City Clerk
CITY OF SOUTH BEND,
as Lessee
Stephen J. Luecke, Mayor
BDDBOl 4069489v1
STATE OF INDIANA )
SS:
COUNTY OF ST. JOSEPH )
Before me, the undersigned, a Notary Public in and for said State, personally
appeared and ,personally known by me to be the
President and Secretary, respectively, of the City of South Bend Building Corporation, and
acknowledged the execution of the foregoing Second Addendum to Lease for and on behalf of
said Corporation.
WITNESS my hand and Notarial Seal this day of
My Commission Expires:
STATE OF IlVDIANA )
SS:
COUNTY OF ST. JOSEPH )
Before me, the undersigned, a Notary Public in and for said State, personally
appeared Stephen J. Luecke and John Voorde, personally known by me to be the Mayor and City
Clerk, respectively, of the City of South Bend, Indiana, and acknowledged the execution of the
foregoing Addendum to Lease for and on behalf of said City.
WITNESS my hand and Notarial Seal this day of , 2005.
Residing in
2005.
_, Notary Public
County, Indiana
My Commission Expires:
Residing in
_, Notary Public
County, Indiana
This instrument was prepared by Shawn E. Peterson, BAxER & DANIELS, 250 First Bank Building, 205 W. Jefferson,
South Bend, Indiana 46601.
BDDBOl 4069489v1
1400 COUNTY-CITY BUILDING
227 W. JEFFERSON BOULEVARD
SOUTH BEND, INDIANA 46601-1830
PHONE 574/235-9241
FAx 574/235-9892
TDD 574/ 235-5567
CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR
DEPARTMENT OF LAW
CHARLES $. LEONE
CFIYATTORNEY June 1, 2005
Ms. Charlotte Pfeifer
President, South Bend Common Council
4`I' Floor, County-City Building
South Bend, IN 46601
Re: Bill No. 31-OS
O'Brien Recreation Center Lease Addendum
Substitute Version
Dear Ms. Pfeifer:
ALADEAN M. DEROSE
CHIEF ASSISTANT CITYATTORNEY
Attached for filing with the South Bend Common Council is a substitute Bill No. 31-05.
When initially presented for filing, this Bill was missing specific information concerning the
semiannual lease payment amount and other details. All of the missing information and detail is now
contained in the ordinance. A copy of Bi1131-05 highlighting the changes between the original and
substitute version is enclosed to assist Council members identify the changes.
Also enclosed for the benefit of Council members is a complete copy of the Second
Addendum to Lease between the City of South Bend and the South Bend Building Corporation
concerning the O'Brien Recreation Center.
Thank you for your understanding.
Sincerely,
(//-r ~~~c'~~~~LC
Aladean M. DeRose
Chief Assistant City Attorney
AMD/cw
Enclosure
cc: Catherine Fanello
Randy Rompola
THOMAS L. BODNAR CHERYL A. GREENE ANN-CAROL NASH
JEFFREY M. JANKOWSKI JOHN R. LMNGSTON ,JEFFREY L. SANFORD JOHN E. BRODEN