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HomeMy WebLinkAboutSM 09-27-79September 3 :30 P.M. Presiding SOUTH BEND REDEVELOPMENT COMMISSION SPECIAL MEETING 7, 1979 1200 County -City Bldg. 227 W. Jefferson Blvd. fficer: F. Jay Nitz, South Bend, IN. 46601 President The South Bend Redevelopment Commission of the City of South Bend, Department of Redevelopment met in special session duly called in accordance with law and the rules of the Redevelopment Commission at 3:30 P.M. at Room 1200, County-City Building, in the City of South Bend, Indiana. The meeting was called to order w th F. Jay Nimtz, President, presiding and the following members of the Redevelopm nt Commission present: 1. ROLL CALL Members Present: Members Absent: Legal Counsel: Redevelopment Sta f: . Communtity Development Sta{4: News Media : Guests Mr. F. Jay Nimtz, President Mr. Lloyd E. Robinson, Sr., Vice President Mr. A. Peter Donaldson, Secretary Ms. Paula N. Auburn, Member Mr. Robert J. Cira, Assistant Secretary Mr. Kevin J. Butler Mr. Carl Ellison, Director Ms . Ann Kol ata , Deputy Director Mr. Kevin C. Horton, Real Estate Officer Ms. Ann Bathon, Research Associate Mrs. Jane Zimmerman, Executive Secretary Ms. Denise Fleming, Secretary Ms. Shirley F. McCoy, Contract Compliance Officer Ms. Barbara Radican, Performance Standards Monitor Mr. Dave Anderson, Reporter, WNDU -TV Mr. Dick Nemeth, Photographer, WNDU -TV Mr. John McKnight, Reporter, WSBT -TV Ms. Betsy Ross, Reporter, WSJV -TV Mr. Bill Hentch, Photographer, WSJV -TV Mr. Marchmont Kovas, Reporter, South Bend Tribune Mr. Gene Cavanaugh, Vice President, First Bank Mr. Ronald Jaicomo, Attorney at Law The Secretary of the Redevelopment Commission reported that notice of this meeti g, in the form attached to these minutes, had been given not less than 48 hours p for to this meeting, as follows: 1. by delivering a copy of the notice to each member of the Redevelopment Commission; South Bend Redevelopment Commission Special Meeting - September 27, 1979 2. 3. The accordance 5- 14 -1.5 a ment Commi By posting a copy of the notice at the main entrance of the principal office of the Redevelopment Commission; and By depositing in the United States mail with postage prepaid or by delivery to all news media which have filed written requests for such notices with the Redevelopment Commission. President concluded that the meeting had been duly called in with the rules of the Redevelopment Commission and Indiana Code id ordered a copy of the notice filed with the records of the Redevelop- ;sign. 2. NEW BUISINESS a. Fair Market Rental Appraisal for Disposition FAIR MARKET RENTAL Parcels #4 -1, 4 -31, and 4 -32. APPRAISALS ESTAB- LISHED FOR PARCELS Mr. Butler: The Department has obtained 4 -1, 4 -31, AND 4 -32 market rental appraisals from Mr. Pence and Mr. Gettel (appraisers). What we will need with respect to the appraisals are motions to effect various actions. Mr. Donaldson made a motion to approve the fair market rental appraisals made by Mr. John Pence and Mr. Ronald Gettel, for the bank /office /hotel development ground leases for disposition parcels #4-1,4-31, and 4 -32, in IND. R -66 project, se onded by Ms. Auburn, and the motion was unanimously carried. MOTION PASSED APPROVING FAIR MARKET RENTAL APPRAI- SALS FOR DISPOSITION PARCELS 4 -1,4- 31,4 -32 Mr. Robinson made a motion to establish the fair MOTION PASSED market rental for the ground leases covering the APPROVING FAIR MARKET disposition parcels #4 -1, 4 -31, and 4 -32, in RENTAL FOR GROUND project Ind. R -66, at $.20 per square foot per LEASES FOR DISPOSITION ye r, seconded by Mr. Donaldson, and the motion PARCELS 4- 1,4- 31,4 -32 wad unanimously carried Ms. Auburn made a motion to authorize and direct the Executive Director, of the Department of Redevelopment, to proclaim the fair market rental of $.20 per square foot per year, for disposition parcels #4 -1, 4 -31, and 4 -32, in project Ind. R-66, seconded by Mr. Donaldson, and the motion was unanimously carried. -2- MOTION PASSED APPROVING EXECUTIVE DIRECTOR TO PROCLAIM FAIR MARKET RENTAL VALUE OF-DISPOSITION PARCELS 4 -1,4- 31,4 -32 South Bend Redevelopment Commission Special Me ting - September 27, 1979 2. NEW BU�INESS (continued) b. Rejolution #592 approving Rahn Property II mound Lease. Mr. Butler: We have prepared and discussed with representatives of Rahn Properties II, during negotiation process, the ground lease provisions. Basically, that is contained in HU Form Part II, which is a form established by HUD in 1969, which covers the general provisions with respect to the development project. Part I covers the specific lease provisions for the project. We are calling for a "good faith" de osit of $10,000, and we are establishing a to m of 50- years commencing May 1, 1980 or su h other date as the public improvements (g rage, etc.) are completed to such an ex ent to allow construction to begin by Rahn on the hotel. In addition, there is a provision for a 49 -year option to be exercised by the redeveloper, which is Rahn Properties, on the same terms and conditions. The annual rent will be $19,348.00, and that fi ure is arrived at by multiplying the $.20 per sq are foot figure times the square footage, and th square footage is 96,739.98 sq. ft. It is a ne lease, so it is an absolute rental payment which mu ;t be paid to the Department of Redevelopment du ing the term and the option period. Any taxes, as essments, utilities, etc. will have to be paid un er the terms of the agreement, by the developer. The improvements must be started on the effective date of the commencement of the term (May 1, 1980, or such other date) when the garage facilities are completed to such an extent that they can begin the hotel facility. It must be completed within tw my six (26) months after the commencement date. There are terms for time for submission of co struction plans, time for submission of evidence of equity, capital, financing, etc. The normal pr vision is that they must submit evidence satisfactory to the department with respect to su ficient equity capital and financing commit - me is to complete construction, and finance the st ucture. -3- RESOLUTION #592 APPROVED FOR RAHN PROPERTY II GROUND LEASE South Bend Redevelopment Commission Special Me ting - September 27, 1979 2. NEW BUSINESS b. MrJ Butler continues... In this case, when this agreement is executed, the developer will also be executing the bond sale documents so that financing will have been completed; so in lieu of the provision saying they must submit it, we are saying that it has been accepted, and this document will not be transferred to the redeveloper,' Rahn Properties, until the bond closing, so we are sure to have that completed. There is no option to purchase rurining in favor of the redeveloper, however, there is an option to purchase on the part of any mortgage holder of the property which fore- closes and obtains title at a purchase price to be established by two appraisals at the time that a mortgagee would ask to exercise that option. Liability insurance coverage is for a million dollars, injury or death to one person, five mi lion dollars for injury or death to two or more persons in any one occurrence, and $500,000 property damage in any one occurrence. Title to the improvements on termination of the lease will pass to the agency (Department of Redevelopment) or, of course, the successor. We are subordinating our rental payments to any financing mortgage debt service. We are not subordinating our fee interest to their mortgagee's interest. So, the first monies out of the project, must be used to pay mortgage debts, and then rentals. (This, of course, is a usual provision in this type of situation.) We don't subordinate to anything but th first mortgage debt. In referring to the conveyance agreement for the public improvements that the City is negotiating with the redeveloper, any default by the redeveloper under that agreement will constitute a default under out, lease agreement. Mr Donaldson made a motion to adopt Resolution #592, ap roving the ground lease for Rahn Property II, subject to changes which are approved by the Commission's attorney, and authorizing the lease to be executed on behalf of the Department of Redevelopment by the President and Secretary, seconded by Ms. Auburn, and the motion was unanimously ca ried. -4- South Bend Redevelopment Commission Special M eting - September 27, 1979 2. NEW BUSINESS (continued) c. Resolution #593 approving FBT Bancorp, Inc. qyJound lease. Mr. Butler: The same comments with respect to this particular document as to a ground lease with the property to be utilized by FBT Bancorp, Inc. The rental figure in this lease is $7,387.00 which again is the $.20 times the 36,932.58 sq. ft. The only other provision which is different from the other lease, is the time for submission of evidence of equity capital. We are saying that we have received satisfactory evidence as to sufficient equity capital and a commitment from Continental Illinois Bank & Trust from Chicago, which are necessary for the financing of the construction of the improvements. Because this bond issue will not be closed (the bonds will not be sold at the time that we are entering into this agreement), we are stating further that if the commitment is restructured, or amended, the redeveloper must notify the Department of Redevelopment, and if the commitment is with- drawn or terminated, then the redeveloper must submit to the agency satisfactory evidence of equity capital and other commitments for financing, prior to the commencement of con- struction. I believe that all the other provisions are similar to the Rahn Properties lease. I would like to point out that on the Rahn Properties lease and this lease, that I am not going to change any of the basic terms of the agreement. I cannot. If there were any further negotiations on those provisions, before an changes could be made, the Commission would have to act upon them. Ms. Auburn made a motion to adopt Resolution #593 approving the ground lease for FBT Bancorp., Inc. subject to changes which are approved by the Commission's attorney, and authorizing the lease to be executed on behalf of the Department of R development by the President and Secretary, seconded by Mr. Donaldson, and the motion was unanimously carried. 3. NEXT COMMISSION MEETING The nslxt regularly scheduled South Bend Redevelopment Commission Meeting is October 5, 1979, at 10 o'clock a.m. -5- RESOLUTION #593 APPROVED FOR FBT BANCORP, INC. GROUND LEASE NEXT COMMISSION MEETING South end Redevelopment Commission Special Meeting - September 27, 1979 4. ADJOURNMENT There being no further business to come before the Commission, Mr. Robinson made a motion that the meeting be adjourned, seconded by Mr. Donaldson, and the motion was unanimously carried. The meeting was adjourned at 3:51 p.m. e. mtz, President am ADJOURNMENT Carl Ellison, Executive Director