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HomeMy WebLinkAboutMultifamily Housing Revenue Bonds (Raintree Point Associates LTD Project) ORDINANCE No. 7857-88 Passed by the Common Council of the City of South Bend,Indiana_ March 14, x9 88 Attest: City Clerk IRENE K. GAMMON Attest: ct1 President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana _ March 15, zg 88 City Clerk IRENE K. GAMMON Approved and signed by me I9 eft Mayor ORDINANCE NO. 7857-88 ORDINANCE OF THE CITY OF SOUTH BEND, INDIANA, RE: $11,000,000 CITY OF SOUTH BEND, INDIANA MULTIFAMILY HOUSING REVENUE BONDS (RAINTREE POINT ASSOCIATES LTD. PROJECT) THIS ORDINANCE AUTHORIZES : 1. THE PURCHASE AND REMARKETING OF MULTIFAMILY HOUSING REVENUE BONDS IN THE PRINCIPAL AMOUNT OF ELEVEN MILLION DOLLARS ( $11, 000, 000) ORIGINALLY ISSUED PURSUANT TO ORDINANCE NO. 7568-85 TO FINANCE THE ACQUISITION AND CONSTRUCTION OF A RESIDENTIAL RENTAL MULTIFAMILY HOUSING PROJECT TO BE LOCATED IN THE CITY OF SOUTH BEND, INDIANA; AND 2 . THE EXTENSION OF THE REDEMPTION DATE OF THE BONDS FOR A PERIOD OF NOT TO EXCEED SIX (6) MONTHS; AND 3 . THE EXECUTION AND DELIVERY OF A FIRST SUPPLEMENTAL INDENTURE OF TRUST, FIRST AMENDMENT TO LOAN AGREEMENT AND SECOND AMENDMENT TO CONTRACT FOR SALE FOR PRIVATE DEVELOPMENT; AND 4 . OTHER MATTERS RELEVANT TO THE PURCHASE AND REMARKETING OF THE BONDS. STATEMENT OF PURPOSES OF INTENT PREMISES The City of South Bend, Indiana (the "City" ) is empowered under 36-7-12-1 et seq. of the State Statutes, as amended (the "Act" ) , to assist in the financing of economic development facilities through the issuance of its revenue bonds. By Ordi- nance No. 7568-85, the City has heretofore issued its Multifamily Housing Revenue Bonds (Raintree Point Associates Ltd. Project) (the "Bonds" ) for the purpose of loaning the proceeds thereof to Raintree Point Associates, Ltd. , an Indiana limited partnership (the "Sponsor" ) for the purpose of acquiring and constructing a 204 unit multifamily residential rental housing project to be located in the City (the "Project" ) , to be occupied in part by persons of low and moderate income in accordance with Section 103 (b) (4) (A) of the Internal Revenue Code of 1954, as amended (the "Code" ) . The Bonds are scheduled for redemption on March 15, 1988 in accordance with the terms of the Trust Indenture dated December 15, 1985 by and between the City and the National Bank of Commerce, Memphis, Tennessee (the "Trustee" ) (the "Indenture" ) , executed in connection with the issuance of the Bonds . The • Sponsor has informed the City that it intends to assign its (i) rights, duties and obligations in and to the Loan Agreement dated as of December 15, 1985 by and between the Issuer and the Sponsor (the "Loan Agreement" ) and (ii) obligations under the Regulatory Agreement dated December 15, 1985 executed by the Sponsor (the "Regulatory Agreement" ) to Can-American South Bend Limited Partnership, a Minnesota limited partnership (the "Developer" ) , which intends to assume all of the rights, duties and obligations of the Sponsor under the Loan Agreement and Regulatory Agreement in order to acquire, install and construct the Project in furtherance of the Act' s objectives. In order to facilitate the described assumption and assignment for the purpose of constructing the Project, it is necessary to supplement and amend the Indenture and Loan Agreement to provide, among other things, for the extension of the redemption date of the Bonds from March 15, 1988 for a period of not to exceed six ( 6) months and for the purchase and remarketing of the Bonds on March 15, 1988 (the "Initial Conversion Date" ) . The Sponsor and its proposed assignee have advised the City that in their estimation, the cost of the Project will be not less than $11, 000, 000. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, THAT: SECTION 1. Determination of Necessity. The amendment of the Indenture and Loan Agreement to extend the redemption date and permit the purchase and remarketing of the Bonds on the Initial Conversion Date to assist in financing of the Project complies with the purposes and provisions of the Act and will be a benefit to the health and welfare of the citizens of the City. The Project constitutes an "economic development facility" under the Act and will consist of the acquisition and construction of an approximately 204-unit multifamily residential housing complex located on 7 . 5 acres, more or less, Parcel "A" in the East Bank Development Area. The extension of the redemption date and purchase and remarketing of the Bonds on the Initial Conversion Date is necessary to provide for the construction of the Project in the City. SECTION 2 . Remarketing of Bonds . The Bonds shall be remarketed in the aggregate principal amount of Eleven Million Dollars ( $11, 000, 000) on the Initial Conversion Date (or such lesser amount) to the extent that proceeds from remarketing are available for the purchase of the Bonds on the Initial Conversion Date. The Bonds shall be in fully registered form in denomina- tions of $5, 000 and whole multiples thereof. On and after the Initial Conversion Date, the Bonds shall bear interest at a rate to be determined upon the sale thereof on the Initial Conversion Date, but in no event shall the interest rate on the Bonds after the Initial Conversion Date and prior to the Second Conversion Date (as defined in the Indenture) exceed ten percent (10%) per annum. From and after the Second Conversion Date, the Bonds - 2 - shall bear interest at such rates as shall be determined in • accordance with the applicable provisions of the Indenture, as amended, which provisions are hereby specifically approved by the City. The Bonds shall mature as provided in the Indenture, as amended. The Bonds shall be subject to redemption or prepayment prior to maturity as provided in the Indenture, as amended. The Bonds shall be a limited obligation of the City in accordance with the Indenture and shall not constitue a general obligation of the City. SECTION 3 . Approval of Supplemental Indenture and Amendment to Loan Agreement . The forms of the First Supplemental Trust Indenture (the "Supplemental Indenture" ) and First Amendment to Loan Agreement (the "Amendment to Loan Agreement" ) and Second Amendment to Contract for Sale for Private Placement ( "Sale Amendment" ) on file with the Clerk of the Council (the "Clerk" ) are hereby approved. National Bank of Commerce shall signify its acceptance of such documents by executing and delivering the Supplemental Indenture . Two copies of the Supplemental Indenture, Amendment to Loan Agreement and Sale Amendment are on file in the office of the Clerk for public inspection. SECTION 4 . Execution and Delivery of Documents and Changes Therein. The Mayor of the City (the "Mayor" ) and the Clerk are hereby authorized to execute and deliver the Supplemental Inden- ture, Amendment to Loan Agreement, and Sale Amendment in substan- tially the form approved, with such changes and insertions in such documents as may be necessary or desirable, permitted by the Act and otherwise by law, and not materially adverse to the City. SECTION 5. Remarketing and Purchase of Bonds. On the Initial Conversion Date, the Bonds shall be remarketed and purchased by or on behalf of the City and the Sponsor. To the extent that proceeds of the remarketing of the Bonds are insufficient to purchase all Bonds on the Initial Conversion Date, all Bonds shall be redeemed on the Initial Conversion Date. The Mayor and Clerk shall execute, seal and deliver the Bonds in substantially the form set forth as an Exhibit to the Supple- mental Indenture upon the receipt by the Trustee of proceeds sufficient to purchase all or a portion of the Bonds on the Initial Conversion Date. The signatures of the Mayor and Clerk on the Bonds may be manual or facsimile signatures . SECTION 6. Approval of Filings and Submissions With Other Governmental Agencies . The Mayor and the Clerk, members, staff and counsel for the City, or any of them, are authorized on behalf of the City to apply for such rulings, orders and approvals and file or submit such elections or other documents to any governmental agency, in order that the Bonds may be validly remarketed and purchased on the Initial Conversion Date and so that the interest thereon shall be excludable from the calcula- tion of gross income of the holders thereof for federal income tax purposes, and execute such powers of attorney as may be appropriate in connection with the foregoing. - 3 - i SECTION 7 . Authorization of Other Documents . The Mayor and the Clerk, members, staff and counsel for the City, or any of them, are hereby authorized to execute and deliver such other certificates, documents, instruments and opinions and other papers as may be required by the Supplemental Indenture or Amend- ment to Loan Agreement, or as may be necessary or convenient to effectuate the extension of the redemption date, purchase and remarketing and delivery of the Bonds in accordance with the terms of the aforementioned documents . SECTION 8. Conflict and Effectiveness . All ordinances and parts of ordinances or other proceedings of the Common Council in conflict herewith are repealed to the extent of such conflict. This Ordinance shall become effective upon adoption. SECTION 9 . Definitions . The words used herein and in the premises shall have, where not otherwise indicated, those mean- ings established in the Indenture or Supplemental Indenture. SECTION 10 . Ordinance. This Ordinance shall be in full force and effect from and after its passage by the Common Council and approval by the Mayor. ember of the Common Council 3-/1- ' :An\IC 3- Pi- F S- s�, ao • - 4 -