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HomeMy WebLinkAbout9524-04 Authorizing to Issue its "Taxable Economic Development Revenue Bonds, Series 2004 (Erskine Common Project)"ORDINANCE No. 9524-04 Passed by the Common Council of the City of South Bend, Indiana August 23, Attest: 20 04 Attest: / City Clerk Vice President of Common Cou~:cil Presented by me to the Mayor of the City of South Bend, Indiana August 24, 20 04 City Clerk Approved and signed by me August 25, 20 04 f ~ ~ ~._---~' M ;, ORDINANCE NO. ~ ~ ~~ ~ D I AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE CITY OF SOUTH BEND, INDIANA, TO ISSUE ITS "TAXABLE ECONOMIC DEVELOPMENT REVENUE BONDS, SERIES 2004 (ERSHINE COMMONS 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 trust indenture between an issuer and a corporate trustee. Anchor South Bend, LLC, (the "Company") has proposed undertaking the development and construction of a retail and commercial center (the "Project") at or near the southwest corner of the intersection of Ireland and Michigan Streets in the City (the "Site"). In conjunction with the Project, the Company has further proposed that the City of South Bend, Indiana (the "City") issue and sell its taxable economic development revenue bonds under the Act in one (1) or more series in an aggregate principal amount not to exceed Three Million Eight Hundred Thousand and 00/100 Dollars ($3,800,000.00) (the "Bonds"), and that the City lend the proceeds of the Bonds to the Company (the "Loan") under a Loan Agreement by and between the City and the Company (the "Loan Agreement") in a form substantially similar to that presented to the Common Council of the City (the "Common Council") whereby the proceeds of the Bonds will be utilized for any or all of the following: (i) the relocation of power lines, petroleum pipelines and other utility structures, (ii) the demolition of existing structures, (iii) the filling and compaction of fill on the site, and (iv) such other improvements that will facilitate the completion of the Project at the Site (collectively, the "lmprovements"). The principal of, premium, if any, and interest on the Bonds shall be payable solely from tax increment revenues resulting from the increase in the assessed value of real property improvements resulting from the Project in the Area (as defined herein) (the "TIF Revenues") pledged by the Redevelopment Commission of the City (the "Redevelopment Commission"), and to the extent that such revenues are not sufficient or otherwise available, the Bonds will be payable to the extent necessary from payments made by the Company. The Project will be located in Allocation Area No. 2 (the "Area"), an allocation area designated for purpose of tax increment financing within the South Side Development Area, an SB IMANI 188921 v3 area of the City previously designated and declared by the Redevelopment Commission to be a redevelopment area within the meaning of Indiana Code § 36-7-14. An allocation fund (the "Allocation Fund") has been established for the purpose of receiving the tax increment revenues allocated for such purposes pursuant to the Act. The South Bend Economic Development Commission (the "Commission") has rendered its Report of the South Bend Economic Development Commission Concerning the Proposed Financing of a Commercial and Retail Development Project regarding the proposed financing of the costs of the Improvements. After a duly noticed public hearing conducted on August 20, 2004, 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 Improvements, 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. 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; a Trust Indenture for the purpose of securing the Bonds (the "Trust Indenture"); the Bond Purchase Agreement for the purpose of providing for the issuance and sale of the Bonds (the "Bond Purchase Agreement"); and the form of the City of South Bend, Indiana, Taxable Economic Development Revenue Bonds, Series 2004 (Erskine Commons Project) (collectively, the "Financing Documents"). Pursuant to and in accordance with the Act, the City desires to procure funds to finance the Improvements by issuing its taxable economic development revenue bonds in one (1) or more series in an aggregate principal amount not to exceed Three Million Eight Hundred Thousand and 00/100 Dollars ($3,800,000.00) (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 Improvements previously approved by the Commission and presented to this Common Council, the issuance and SBIMANI 188921v3 - 2 - sale of the Bonds, the Loan of the net proceeds thereof to the Company for the development and construction of the Improvements 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. SECTION IV. The City shall issue the Bonds in one (1) series in an aggregate principal amount not to exceed Three Million Eight Hundred Thousand and 00/100 Dollars ($3,800,000.00) designated as the "City of South Bend, Indiana, Taxable Economic Development Revenue Bonds, Series 2004 (Erskine Commons 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 from the TIF Revenues, and to the extent the TIF Revenues are not sufficient or otherwise available, from payments made by the Company to the extent necessary. The failure of the City to pay the principal of and interest on the Bonds due to the insufficiency of the TIF Revenues will not constitute an act of default with respect to the Bonds by the City and the City shall have no future obligations with respect to payments not made because of such insufficiency. 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 Bond Purchase Agreement. The Mayor and the Clerk are authorized and directed to sell the Bonds upon such terms as set forth in the Bond Purchase Agreement at a rate of interest on the Bonds which rate may be a variable 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 eight percent (8.0%) 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 twenty-five (25) 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 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 VI. 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 Loan Agreement, the Trust SBIMANI 188921 v3 - 3 - Indenture, the Bond Purchase Agreement, and the Bonds 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. SECTION VII. 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, payment of which will be made to the Trustee named in the Trust Indenture. SECTION VIII. 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 IX. 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 X. No recourse under or upon any obligation, covenant, acceptance or agreement contained in this Ordinance or in the Bonds, the Loan Agreement, the Trust Indenture, the Bond Purchase Agreement, 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, the Trust Indenture, or the Bond Purchase 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 an consideration for the execution of an delivery of the Loan Agreement, the Trust Indenture, or the Bond Purchase Agreement, and the issuance of the Bonds. SECTION XI. The provisions of this Ordinance, the Loan Agreement, and the Trust Indentures 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. SBIMANI 188921 v3 - 4 - SECTION XII. This Ordinance shall be in full force and effect from and after compliance with the procedures required by law. ATTEST: Ci Cler ~-- r ~~~ ' ~. Member of the Common Counci Presented by me to the Mayor of the City of South Bend, Indiana, on the ~'~day of , 2004, at E ~-`~.s o'clock ~.m. - ~' ~;~:~ City Clerk ri Approved and signed by me on the 3~ ~ day of ~~ ~ L~ °" u-~ ~ , 2004, at f/: ~ 5 o'clock ~~ .m. 1st READING ~-~'D~ PUBLIC HEARINGQ 2,3-~~i 0.S Subs-~•~~~ 3 rd READING p _~3~ py GCS ~ ~,4Si`"~`"~4_~~ NOT APPROVED 3 REFERRED ~~ S ~( S~_~~.;~ PASSED g -'L 3--0`{ 14 j L.l Mayor, City of SqutKBend, Indiana Filed !n Clerk's Qf~ice AU G ~ 8 2004 JOHN VOaRDE CP[Y CLERK, S0.8EtlD___ ~. SBIMANI 188921 v3 - 5 - TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 48-04 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE CITY OF SOUTH BEND, INDIANA, TO ISSUE ITS "TAXABLE ECONOMIC DEVELOPMENT REVENUE BONDS, SERIES 2004 (ERSKINE COMMONS 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 as substituted bythe borrower being Anchor South Bend, LLC and entity related to Anchor Acquisitions, Ltd. Sean Coleman Chairman BAKER~DANIELS Est. 1863 ' First Bank Building, 205 W. Jefferson Blvd., Suite 250 South Bend, Indiana 46601 574.234.4149 Fax 574.239.1900 www.bakerdaniels.com Randolph R. Rompola Indiana Attorney at Law Washington, D.C. Dir: 574.239.1926 randolph.rompola@bakerd.com Cnina August 18, 2004 VIA HAND DELIVERY John Voorde Clerk, City of South Bend County-City Building, 4"' Floor South Bend, IN 46601 Re: Substitute Ordinance for Consideration by the Common Council Authorizing the Issuance of Taxable Economic Development Revenue Bonds for the Erskine Commons Project Dear Mr. Voorde: Enclosed with this letter is a substitute form of ordinance for consideration by the Common Council in place of the form of ordinance previously filed with your office on August 4, 2004. We have also enclosed substantially final forms of the Trust Indenture, including a form of bond, the Loan Agreement, including a form of promissory note, and a Bond Purchase Agreement. These forms of these documents are to be approved by adoption of the ordinance. Ken Fedder, counsel for the Economic Development Commission, had asked us to assist with the filing of these documents with your office. With regards to the enclosed substitute ordinance, the only substantive change from the originally filed ordinance is that the borrower will be Anchor South Bend, LLC, an entity related to Anchor Acquisitions, Ltd., for the purpose of constructing and developing the improvements described in the substitute ordinance. The ordinance continues to provide that the principal amount of the bonds will not exceed $3.8 million and the interest rate may not exceed 8.0%, and that the City will bear no responsibility, financial or otherwise, with respect to the payment of the principal of and interest on the bonds or any other expenses associated with the bond issuance. Adoption of the ordinance by the Council at its meeting on August 23 will allow for the project to be timely completed. The Economic Development Commission is scheduled to meet on August 20th to consider the project. SBIMANI 190714v1 John Voorde - 2 - August 18, 2004 Should you have any questions regarding the enclosed documents or any of the above, please do not hesitate to call. Sincerely, BAKER & DA1vIELS ~~ Randolph . Romp`ola SEP/pap Enclosures cc: Kenneth P. Fedder, Esq. Aladean M. DeRose, Esq. Cheryl A. Greene, Esq. Alan B. Feldbaum, Esq. Filed In Cleriz's Ofifice I L _._.___..__.....__... _ _____ _ ~ ., ;:J. SBIMANl 190714v1