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HomeMy WebLinkAboutApproving a Lease for the Stanley Coveleski Regional Stadium ORDINANCE No. 7873-88 Passed by the Common Council of the City of South Bend, Indiana. May 9, ig 88 Attest: . City Clerk IRENE K. GAMMON Attest: -A,1/4-X..._ President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana May 10, 19 88 City Clerk IRENE K. GAMMON Approved and signed by me May 10 , i9 88 `'`f C Mayor • ORDINANCE NO. 7873-88 AN ORDINANCE OF THE CITY OF SOUTH BEND, INDIANA, APPROVING A LEASE FOR THE STANLEY COVELESKI REGIONAL STADIUM BETWEEN THE SOUTH BEND REDEVELOPMENT AUTHORITY AND THE SOUTH BEND REDEVELOPMENT COMMISSION STATEMENT OF PURPOSE AND INTENT: WHEREAS , the South Bend Redevelopment Authority (the "Authority") at a special meeting on April 14, 1988, adopted Reso- lution No. 3, which, among other things, approved a proposed Lease between the Authority and the South Bend Redevelopment Commission (the "Commission") to be dated as of June 1, 1988, for the Stanley Coveleski Regional Stadium (the "Stadium") and directed the Secretary of the Authority to file a copy of said Lease, as approved, with the Commission; and WHEREAS, the Commission, at a meeting on April 15, 1988, adopted Resolution No. 840 approving said Lease, scheduling a public hearing on said Lease to be held on April 29, 1988, pursuant to IC 36-7-14-25.2, and authorizing the publication of a notice of public hearing on said Lease pursuant to IC 5-3-1; and WHEREAS, on April 29, 1988, said public hearing was held and all interested parties were provided the opportunity to be heard at the hearing; and WHEREAS, the Commission, at a meeting on April 29, 1988, adopted Resolution No. 842 finding, pursuant to IC 36-7-14.5-14, that the Rental Payments to be paid by the Commission to the Autho- rity pursuant to the Lease, at a rate not to exceed One Million Dollars ($1, 000,000. 00) per year in semi-annual installments through expiration of the Lease, are fair and reasonable, and finding, pur- suant to IC 36-7-14-25.2, that the use of the Stadium throughout the term of the Lease will serve the public purpose of the City of South Bend and is in the best interests of its residents; and WHEREAS, said Resolution No. 842 further directed the Secretary of the Commission to file with the Common Council of the City of South Bend (the "Common Council") an approving ordinance for the purposes of said Council 's finding, prior to execution of the Lease, that the Rental Payments are fair and reasonable and that the use of the Stadium throughout the term of the Lease will serve the public purpose of the City of South Bend and is in the best interests of its residents, and for purposes of approving the Lease; and WHEREAS, the Common Council desires to approve said Lease, pursuant to IC 36-7-14- 25.2, which provides that any lease approved by a resolution of the Redevelopment Commission must be approved by an ordinance of the fiscal body of the unit; NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Section 1. That the Common Council finds that the Rental Payments, as approved by the Commission, are fair and reasonable, and further finds that the use of the Stadium throughout the term of the Section 2. The Common Council hereby approves said Lease, as approved by the Commission, pursuant to IC 36-7-14-25.2. Section 3. This Ordinance shall be in full force and effect from and after passage and signing by the Mayor. COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA By: 4 ' Member of the Common Council 1st READING 5~ g ( RPM HEARING - - 2nd READING 3- q` NOT APPROVER' REFERRED • 64 --"VA-660 PASSED ,. i�^ a _ =_ i ri ` 045°"Trx �� CITY of SOUTH BEND 77 1 JOSEPH E. KERNAN, MAYOR 1 � 4+ COUNTY CITY BUILDING SOUTH BEND. INDIANA 45601 \ • 1866 � City attorney May 3, 1988 219/284-9241 Members of the Common Council 4th Floor, County-City Building South Bend, Indiana 46601 Dear Council Members: The attached ordinance approves a lease between the South Bend Redevelopment Authority and the South Bend Redevelopment Commission in conjunction with the refinance of the Stanley Coveleski Regional Stadium. The lease establishes a maximum annual rental of $1, 000, 000. This rental payment is a conservative estimate of the amount that will be required to retire a taxable bond issue over the eight and a half (8 1/2 ) year term of the bond. The commission will use three sources of funds to make the lease payments: revenue generated from the Stanley Coveleski Regional Stadium, cable television franchise fees, and property tax revenue. The amount of rent necessary to be paid in order to retire the bonds is contingent upon legislation pending in Washington, and market rates at the time the bond issue is bid. It is our hope that we can lower the annual rental payment with favorable legislation and favorable rates. In any event, the current annual payment under the lease purchase agreement in effect is $30, 000 per year greater than the annual rental payment set out in the ordinance. I will be happy to answer any questions you have regarding the refinance of the Stanley Coveleski Regional Stadium, and ask that you give serious consideration to the approval of this ordinance. Sincerely, f),44.1 11 Ve Richard A. Nussbaum, II City Attorney RANII:kls THE STANLEY COVELESKI REGIONAL STADIUM LEASE Between SOUTH BEND REDEVELOPMENT AUTHORITY and SOUTH BEND REDEVELOPMENT COMMISSION Dated as of June 1, 1988 I N D E X • Page Section 1. Definitions 1 Section 2. Lease of Facility 2 Section 3 . Rental Payments 2 Section 4. Rental Payment Dates 3 Section 5. Abateipent of Rent 3 Section 6. Net Lease 3 Section 7. Nonliability of Authority 4 Section 8. Alteration and Repairs 4 Section 9. Insurance 4 Section 10. Use of Insurance and Condemnation Proceeds 5 Section 11. Liability Insurance 5 Section 12. General Insurance Provisions 5 Section 13 . General Covenants 6 Section 14. Option to Purchase 6 Section 15.' Utility Service 7 Section 16. Defaults 7 Section 17. Notices 7 Section 18. Construction of Covenants 7 Section 19. Successors or Assigns 8 Exhibit A Real Estate Description Exhibit B Permitted Encumbrances • LEASE This Lease entered into as of the first day of June, 1988 between SOUTH BEND REDEVELOPMENT AUTHORITY, a body corporate and politic organized and existing under Indiana Code 36-7-14.5 (the "Authority") and SOUTH BEND REDEVELOPMENT COMMISSION (the "Lessee") . WITNESSETH: Section 1. Definitions. The terms defined in this Section 1 shall for all purposes of this Lease have the meanings herein specified unless the context otherwise requires. "Act" means Indiana Code 36-7-14.5, as the same from time to time may be amended or supplemented. "Authority" means the South Bend Redevelopment Authority, a body corporate and politic organized and existing under Indiana Code 36-7-14.5. "Bonds" means South Bend Redevelopment Authority Lease Rental Revenue Bonds (Stadium Facility) . "Facility" means the real estate in South Bend, Indiana described in Exhibit A hereto and the stadium thereon more commonly known as the Stanley Coveleski Regional Stadium. "Lease" means this Lease as the same may be amended, modified or supplemented by any amendments or modifications hereof and supplements hereto entered into in accordance with the provisions hereof. "Lessee" means the South Bend Redevelopment Commission or if said commission shall be abolished the commission, board, body or agency succeeding to the principal functions thereof. "Lease Resolution" means the resolution of the Authority passed on , 1988, authorizing the execution of the Lease. "Permitted Encumbrances" means those items listed in Exhibit B hereto and any future (a) liens for taxes not then delinquent, (b) this Lease and the Trust Agreement, leases, subleases and other agreements permitted pursuant to Section 13 hereof, (c) utility; access and other easements and rights-of- way, restrictions and exceptions that the Lessee certifies will not interfere with or impair the Facility, (d) any mechanics' , laborers' , materialmen's, suppliers' or vendors' lien or right in respect thereof if payment is not yet due and payable and (e) such minor defects, irregularities, encumbrances, easements, rights-of-way and clouds on title as normally exist with respect • to property similar in character to the Facility and as do not, in the opinion of counsel satisfactory to Trustee, materially impair the Authority's title or Lessee's use of the Facility. "Redevelopment District Bond Fund" means the Redevelopment District Bond Fund of Lessee. "Stadium Principal and Interest Account" means the account by that name created in the Redevelopment District Bond Fund by the Lease Resolution. "Trust Agreement" means the Trust Agreement dated as of June 1, 1988 between the Authority and as Trustee securing the Bonds. "Trustee" means , as Trustee pursuant to the Trust Agreement, and any successor trustee. Any term not defined herein, which is defined in the Lease Resolution or in the Trust Agreement, shall have the meaning as defined in such resolution or agreement. Section 2. Lease of Facility. In consideration of the rentals and other terms and conditions herein specified the Authority does hereby lease, demise and let to the Lessee the Facility: TO HAVE AND TO HOLD the same with all rights, privileges, easements and appurtenances thereunto belonging unto the Lessee for a term of nine and one-half (9-1/2) years beginning on , being the date of the acquisition of the Facility by the Authority, and ending on The Authority hereby represents that it is possessed of, or will acquire, a good and indefeasible estate in fee simple subject only to Permitted Encumbrances, to the above-described real estate, and the Authority warrants and will defend the same against all claims whatsoever not suffered or caused by the acts or omissions of the Lessee. Section 3 . Rental Payments. (a) During the term of this Lease, the Lessee agrees to pay rental for said premises at the rate of One Million Dollars ($1, 000, 000) per year. Such Rental shall be paid from the Stadium Principal and Interest Account of the Redevelopment District Bond Fund. All rentals payable under the terms of this Lease shall be paid to Trustee or to such other bank or trust company as may from time to time succeed Trustee under the Trust Agreement. All payments so made shall be considered as payments to the Authority of the rentals payable hereunder. The Lessee shall receive a credit on such rental payment in an amount equal to the amount then in the South Bend Redevelopment Authority Stadium Facility Sinking Fund created by Section 3. 01 of the Trust Agreement. The Lessee shall also receive credit for any Bond maturing within seven (7) days of the date of the lease rental payment, at the face value thereof, which the Lessee acquires and delivers to Trustee as a part of -2- • its lease rental payment; (b) As additional rental the Lessee agrees to pay all fees, charges and reimbursement of expenses of the Trustee under the Trust Agreement and all prudent charges and expenses of the Authority incurred in the performance of its obligations hereunder. Section 4. Rental Payment Dates. The first rental installment shall be due on , in an amount which provides for rental at the yearly rate specified in Section 3 from the date the Facility is acquired by the Authority until . Thereafter such rentals shall be payable in advance in semiannual installments of Dollars ($ ) on and of each year. The last semiannual rental payment due before the expiration of this Lease shall be adjusted to provide for rental at the yearly rate specified above from the date such installment is due to the date of the expiration of this Lease. After the sale of the Bonds issued by the Authority to pay the cost of the Facility, including the acquisition of the site thereof and other expenses incidental thereto, the annual rental shall be reduced town amount equal to the multiple of One Thousand Dollars ($1,000) next highest to the highest sum of principal and interest due in any year ending on a bond maturity date (bond year) on such Bonds plus $2,000, payable in equal semiannual installments. Such amount of reduced annual rental shall be endorsed on this Lease at the end hereof by the parties hereto as soon as the same can be done after the sale of said Bonds, and such endorsement shall be recorded as an addendum to this Lease. Section 5. Abatement of Rent. In the event the Facility shall be damaged or destroyed so as to render the same unfit for use as a stadium, it shall then be the obligation of the Authority to restore and rebuild the Facility as promptly as may be done, unavoidable strikes and other causes beyond the control of the Authority excepted, if, in the opinion of an independent registered architect, registered engineer, construction manager or contractor selected by the Lessee and acceptable to the Trustee, (i) the cost of such restoration or rebuilding does not exceed the amount of the proceeds received by the Authority from the insurance provided for in Section 9 hereof plus other moneys available therefor and (ii) such restoration or rebuilding can be completed within the period of time covered by the rental value insurance provided for in Section 9 hereof. If either or both conditions shall not exist, the proceeds received from' the insurance provided for in Section 9 hereof shall be applied to the option to purchase price provided for in Section 14 hereof. If there is in force on the date of such damage or destruction insurance on the Facility and the rental value thereof, in accordance with the provisions of Section 9 hereof, the rental shall be abated for the period during which the -3- Facility is unfit for use as a stadium facility. If the rental value insurance required by the provisions of Section 9 is not in force on the date of such damage or destruction, rent shall not be abated. Section 6. Net Lease. It is expressly understood and agreed that this Lease shall be what is known as a net lease (i.e. , the rent being absolutely net to the Authority and that all other expenses in connection with the Facility of any nature whatsoever shall be those of the Lessee) and that during the lease term the Lessee shall be obligated to pay as its expenses without reimbursement from the Authority all costs of taxes and assessments, if any, and maintenance and use in connection with or relating to the Facility, including but not limited to, all costs and expenses of decoration, maintenance, utility, janitorial and all other services, repair or replacement of all parts of the Facility or improvements of the Facility. Section 7.. Nonliabilitv of Authority. The Authority shall not be liable for damage caused by hidden defects or failure to keep the premises in repair and shall not be liable for any damage done or occasioned by or from plumbing, gas, water, boilers, steam or other pipes or sewage or the bursting or leaking of plumbing or heating fixtures or waste or soil pipe in connection with said premises, nor for damage occasioned by water, snow or ice being upon sidewalks or coming through the roof, skylight, trapdoor or otherwise. The Authority shall not be liable for any injury to the Lessee or any sublessee of the Lessee or any other person which injury occurs on, in or about the Facility howsoever arising. The Authority shall not be liable for damage to the Lessee's property or to the property of any sublessee of the Lessee or of any other person which may be located in,• upon or about said premises. Section 8. Alterations. Lessee shall have the right, without the consent of the Authority, to make all alterations, modifications and additions and to do all remodelings and improvements it deems necessary or desirable to the Facility, which do not reduce the rental value of the Facility. Section 9. Insurance. The Lessee, at its own expense, will, during the full term of the Lease, keep the Facility insured against physical loss or damage, however caused, with such exceptions as are ordinarily required by insurers of buildings or facilities of a similar type, in good and responsible insurance companies acceptable to the Authority. Such insurance shall be in an amount at least equal to the greater of (i) the option to purchase price or (ii) one hundred percent (100%) of the full replacement cost of such Facility as certified by a registered architect, a registered engineer, or professional appraisal engineer, selected by the Authority, on the effective date of this Lease and on or before the first day of April of each year thereafter; provided that such certification shall not be -4- required so long as the amount of such insurance shall be in an amount at least equal to the option to purchase price. Such appraisal may be based upon a recognized index of conversion factors. In no event shall the insurance be in an amount which causes the Lessee to be a co-insurer for the Facility. Such insurance may contain a provision for a deductible in an amount not exceeding $100,000. Lessee agrees to pay the deductible amount of any loss to the Authority. A blanket public institutional property insurance form may be used if: (a) the insurance on the Facility is not less than the amount required by this Section, (b) Lessee subordinates its claim for damage or destruction to other buildings to claims for damage or destruction of the Facility,o. and. (c) the insurance proceeds related to damage to or destruction of the Facility are payable to Trustee. During the full term of this Lease, the Lessee will also, at its own expense, maintain rental or rental value insurance in an amount at least equal to the full rental specified in Section 3 for a period of two (2) years against physical loss or damage of the type insured against pursuant to the preceding requirements of this Section. Such policies shall be for the benefit of and shall be made payable to the Trustee. Section 10. Use of Insurance and Condemnation Proceeds. Proceeds of insurance against damage to or destruction of the Facility or proceeds of any condemnation of the Facility shall be paid to and held by Trustee and used to pay for reconstruction or replacement of the Facility in accordance with plans approved by Authority and Lessee, unless Lessee elects to exercise its option to purchase and such proceeds shall be sufficient to pay the option price. Section 11. Liability Insurance. The Lessee shall, at all times during the full term of ,this Lease, keep in effect, public liability and property damage insurance, insuring the Lessee and the Authority in amounts customarily carried by similar facilities. Section 12. General Insurance Provisions. All insurance policies required by Sections 9 and 11 shall be with good and responsible insurance companies acceptable to the Authority and the Trustee, and shall be countersigned by an agent of the insurer who is a resident of the State of Indiana, and such policies, or copies thereof, together with a certificate of the insurance commissioner certifying that the persons countersigning such policies are duly qualified in the State of Indiana as resident agents of the insurers on whose behalf they may have signed, and the certificate of the architect or engineer referred -5- • to in Section 9 shall be deposited with the Authority and the Trustee. If, at any time, the Lessee fails to maintain insurance in accordance with Sections 9 and 11, such insurance may be obtained by the Authority, or may be obtained by the Trustee, and the amount paid for such insurance shall be added to the amount of rental payable by the Lessee under this Lease; provided, however, that neither the Authority nor the Trustee shall be under any obligation to obtain such insurance, and any action or non-action of the Authority or Trustee in this regard shall not relieve the Lessee of any consequences of a default in failing to obtain such insurance, including the obligation to continue the rental payments in case of damage or destruction of the Facility as provided in Section 4 hereof. Section 13 . General Covenants. It is understood and agreed that the Lessee, without the consent of the Authority, shall be permitted in its sole and absolute discretion to enter into separate subleases and other agreements (on any terms and conditions including but not limited to length of term the Lessee, in its sole discretion, deems appropriate) with respect to use of the Facility; provided, however, that the Lessee shall in no event assign or sublet the Facility if such assignment or sublease will result in the loss of the exclusion from gross income for federal tax purposes of interest on any obligation issued by the Authority to finance the Facility. The Authority hereby acknowledges the rights of parties as lessees and licensees of the Facility under the terms of agreements both prior to, as well as prospective from, execution of this Lease. The Authority hereby agrees that any sublessee will have quiet enjoyment of the premises subleased in the event of a default by Lessee hereunder, so long as those parties with whom the Lessee has contracted are not in default under the terms of their respective agreements. The Lessee covenants that, except for Permitted Encumbrances, it will not encumber the Facility, or permit any encumbrance to exist thereon, and that it shall use and maintain the Facility in accordance with the laws and ordinances of the United States of America,' the State of Indiana, and all other proper governmental authorities. The Authority agrees that it will, at the request of the Lessee, execute and deliver to or upon the order of the Lessee such instrument or instruments as may be reasonably required by the Lessee in order to subject the Facility, or the Authority's interest therein, to such encumbrances as shall be specified in such request and as shall be permitted by the provisions of this Section 13 or otherwise by the definition of "Permitted Encumbrances. " Lessee further covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest on any obligation issued by the Authority to finance the Facility. Section 14. Option to Purchase. Authority hereby grants the Lessee the right and option, on any rental payment date, upon -6- • thirty days' written notice to the Authority, to purchase the Facility at a price equal to the amount required to enable the Authority to provide for the redemption of all outstanding Bonds, all premiums payable on the redemption thereof, and accrued and unpaid interest, and to pay the cost of redeeming the Bonds and liquidating the Authority if it is to be liquidated. Upon request of the Lessee, Authority agrees to furnish an itemized statement setting forth the amounts required to be paid by the Lessee on the next rental payment date in order to purchase the Facility in accordance with the preceding paragraph. If the Lessee exercises its option to purchase, the Lessee shall pay to the Trustee that portion of the purchase price which is required to provide for the payment of all the Bonds, including all premiums payable on the redemption thereof, accrued and unpaid interest thereon and the costs of redemption thereof. Such payment shall not be made until the Trustee gives to the Lessee a written statement that such amount will be sufficient to retire all Bonds including all premiums payable on the redemption thereof and accrued and unpaid interest. The remainder of such purchase price, if any, shall be paid by the Lessee to the Authority. Nothing herein contained shall be construed to provide that Lessee shall be under any obligation to purchase the Facility, or under any obligation in respect to any creditors or bondholders of Authority. If the Lessee has not exercised its option to purchase the Facility at the expiration of the term of the Lease and upon the full discharge and performance by the Lessee of its obligations under this Lease, Authority shall execute a deed of the Facility to the Lessee conveying good and merchantable title thereto, subject only to Permitted Encumbrances. Section 15. Utility Service. The Lessee agrees to pay or cause to be paid all charges for sewer, gas, water, electricity, light, heat or power, telephone or other utility service used, rendered or supplied upon or in connection with the Facility throughout the term of this Lease, and to indemnify the Authority and save it harmless against any liability or damages on such account. Lessee shall also at its sole cost and expense procure any and all necessary permits, licenses, or other authorizations required for the lawful and proper installation and maintenance upon the Facility of wires, pipes, conduits, tubes, and other equipment and appliances for use in supplying any such service to and in the Facility. Section 16. Defaults. If the Lessee shall (a) default in the payment of any rentals or other sums payable to the Authority hereunder, or in the payment of any other sum herein required to be paid for the Authority, (b) fail to comply with the terms set forth in the Lease Resolution, or (c) default in the observance -7- of any other covenant, agreement or condition hereof, and such default under (c) shall continue for ninety (90) days after written notice to correct the same, then, in any of such events, the Authority may proceed to protect and enforce its rights, either at law or in equity, by suit, action, mandamus or other proceedings, whether for specific performance of any covenant or agreement contained herein or for the enforcement of any other appropriate legal or equitable remedy. Section 17. Notices. Whenever either party shall be required to give notice to the other under this Lease, it shall be sufficient service of such notice to deposit the same in the United States mail, in an envelope duly stamped, registered and addressed to the other party at its last known place of business. A copy of any notice shall be mailed by first-class mail to the Trustee at its last known place of business. Section 18. Construction of Covenants. All provisions contained herein shall be construed in accordance with the provisions of the Act and to the extent of inconsistencies, if any, between the covenants and agreements in this Lease and the provisions of the Act, the provisions of said Act shall be deemed to be controlling and binding upon the parties. Section 19. Successors or Assigns. All covenants of this Lease, whether by the Authority or the Lessee, shall be binding upon the successors and assigns of the respective parties hereto. IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed for and on their behalf as of the day and year first hereinabove written. SOUTH BEND REDEVELOPMENT AUTHORITY By , President ATTEST: Secretary-Treasurer SOUTH BEND REDEVELOPMENT COMMISSION By ATTEST: , Secretary -8- STATE OF INDIANA ) SS: COUNTY OF ST. JOSEPH ) Before me, the undersigned, a Notary Public in and for said County and State, personally appeared and , personally known by me to be the President and Secretary-Treasurer, respectively, of South Bend Revelopment Authority, and acknowledged the execution of the foregoing Lease for and on behalf of said Authority. WITNESS my hand and Notarial Seal this day of , 1988. (Written Signature) (Printed Signature) (SEAL) My commission expires: I am a resident of County, Indiana. • STATE OF INDIANA ) SS: COUNTY OF ST. JOSEPH ) Before me, the undersigned, a Notary Public in and for said County and State, personally appeared and , personally known by me to be the President and Secretary, respectively, of South Bend Revelopment Commission, and acknowledged the execution of the foregoing Lease for and on behalf of said Commission. -9- WITNESS my hand and Notarial Seal this day of , 1988. (Written Signature) (Printed Signature) (SEAL) My commission expires: I am a resident of County, Indiana. • This instrument was prepared by Thomas A. Pitman, 810 Fletcher Trust Building, Indianapolis, Indiana 46204 . -10-