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HomeMy WebLinkAboutEconomic Development Revenue Bond P.A.I. Properties $722,000 ORDINANCE No. 7708-86 Passed by the Common Council of the City of South Bend, Indiana December 8, 19 86 Attest: City Clerk IRENE K. GAMMON Attest: ' � / r ' esident of Common Council Presented by me to the Mayor of the City of South Bend, Indiana December 9, 19 86 City Clerk IRENE K. GAMMON Approved and signed by me I\J Q<it/� ,� 9 I g 2 Lv Mayor ORDINANCE NO. 77 ' 4 AN ORDINANCE AUTHORIZING THE CITY OF SOUTH BEND, INDIANA (THE "CITY") , TO ISSUE ITS "ECONOMIC DEVELOPMENT REVENUE BOND, (P.A. I . PROPERTIES, AN INDIANA PARTNERSHIP PROJECT, SERIES 1986) , IN THE AGGREGATE PRINCIPAL AMOUNT OF SEVEN HUNDRED TWENTY-TWO THOUSAND DOLLARS ($722, 000 . 00) AND APPROVING AND AUTHORIZING CERTAIN ACTIONS WITH RESPECT THERETO. WHEREAS, the City is a municipal corporation and poli- tical subdivision of the State of Indiana, and by virtue of Title 36, Article 7, Chapter 12, of the Indiana Code, as amended (the "Act") , is authorized and empowerd to adopt this Ordinance and to carry out its provisions; and WHEREAS, the South Bend Economic Development Commis- sion (the "Commission") has rendered its report concerning the proposed financing of economic development facilities for P.A. I . Properties, an Indiana partnership, and the Area Plan Commis- sion has commented favorably thereon; and WHEREAS, the Commission, after a public hearing held on December 5, 1986, has adopted a Resolution, which has been transmitted to this Council, (i) finding that the construction by P.A. I . Properties, an Indiana partnership (the "Company") of the proposed economic development facilities described in said Report will not have an adverse competitive effect on any simi- lar facilities already constructed or operating in or about the City, (ii) further finding that the proposed economic develop- ment revenue bond financing of such facilities will be of bene- fit to the health and welfare of the City and its citizens, (iii) further finding that the proposed economic development revenue bond financing of such facilities complies with the purposes and provisions of the Act, (iv) approving the economic development revenue bond financing of such facilities, includ- ing the form and terms of the Loan Agreement and Security Agreement between the Company and the City, the Promissory Note from the Company to the City, the registered City of South Bend, Indiana, Economic Development Revenue Bond, Series 1986 (P.A. I . Properties, an Indiana Partnership Project) from the City to the bondholders, The Trust Indenture between the City and 1st Source Bank (the "Trustee") , and this Ordinance, pre- sented to the Commission, and (v) recommending that this Coun- cil find that the proposed economic development revenue bond financing of such facilities will be of benefit to the health and welfare of the City and its citizens, and complies with the purposes and proisions of the Act, and that this Council adopt an ordinance approving such financing, WHEREAS, the City previously issued its economic development revenue bonds in the original principal amount of $310, 000, dated June 15, 1982, for the benefit of P.A. I . Prop- erties (the "1982 Bonds") , which bonds bear interest at 14% per annum and the Commission at its meeting of December 5, 1986 approved a reduction in the interest on the 1982 Bonds to 10% per annum. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, THAT: -2- Section 1. This Council finds that the facilities described in said report and in the attached Loan Agreement and Security Agreement are "economic development facilities" within the meaning of the Act and that such facilities will not have an adverse competitive effect on any similar facilities already constructed or operating in or about the City. Section 2 . This Council further finds that the pro- posed economic development revenue bond financing of such fa- cilities will be of benefit to the health and welfare of the City and its citizens. Section 3 . This Council further finds that the pro- posed economic development revenue bond financing of such fa- cilities complies with the purposes and provisions of the Act. Section 4 . This Council hereby approves the proposed economic development revenue bond financing of such facilities, including (i) the form and terms of the aforementioned Loan Agreement and Security Agreement, Promissory Note, Economic Development Revenue Bond and Trust Indenture attached hereto and incorporated herein by reference (two (2) copies of which are on file in the Office of the Clerk of the City for public inspection) , (ii) the issuance and sale of said Economic Devel- opment Revenue Bond, (iii) the loan of the net proceeds of said Economic Development Revenue Bond to the Company for the con- struction of such facilities, such loan to be evidenced by said Promissory Note, (iv) the repayment of said loan by the Company pursuant to said Loan Agreement and Security Agreement, and -3- said Promissory Note, and (v) the securing of said Economic Development Revenue Bond by said Loan Agreement and Security Agreement and said Trust Indenture. Section 5. The City shall issue its Economic Develop- ment Revenue Bond, Series 1986 (P.A. I . Properties, an Indiana Partnership Project) , in the aggregate principal amount of Seven Hundred Twenty-two Thousand Dollars ($722, 000 . 00) for the purpose of procuring funds to loan to the Company in order to finance the acquisition and rehabilitation of such facilities, for lease to North American Signs, Inc. , as more particularly set out in said Loan Agreement and Security Agreement, which Economic Development Revenue Bond shall be payable as to prin- cipal and interest solely from the payments made by the Company on its aforesaid Promissory Note in the principal amount of Seven Hundred Twenty-two Thousand Dollars ($722, 000. 00) which will be executed and delivered by the Company to evidence said loan, from other sources under said Loan Agreement and Security Agreement, and as otherwise provided in said Trust Indenture. Said Economic Development Revenue Bond shall never constitute a general obligation of, indebtednesses of, or charge against the general credit of the City. Said Economic Development Revenue Bond shall be executed by the manual or facsimile signatures of the Mayor and the Clerk of the City; shall be executed and delivered on or about December 15, 1986; shall be dated as of said date of execution and delivery; shall have a final matur- ity date on or about January 15, 1999 with principal reduced -4- monthly, beginning on January 15, 1987; shall bear interest at a variable rate per annum equal to the Prime Rate of interest charged by Citibank, New York, New York, adjusted quarterly, except in the case of an Event of Taxability as defined in the Loan Agreement, in which case the per annum interest rate shall be a variable rate, adjusted quarterly, equal to four percent (4%) in excess of said Prime Rate; shall be in the denomina- tions of Five Thousand Dollars ($5,000 . 00) or integral multi- ples thereof; shall be issued in registered form; shall be registrable as provided therein; shall be payable in the medium and at the place or places provided therein; and shall be sub- ject to optional and mandatory prepayment as provided therein. Section 6. The Mayor and/or the Clerk of the City are authorized and directed to sell said Economic Development Reve- nue Bond to the Bond Purchasers at a price not less than one hundred percent (100%) of the principal amount thereof, plus accrued interest. Section 7. The Mayor and the Clerk of the City are authorized and directed to execute and deliver the aforemen- tioned documents for and on behalf of the City after making therein such changes permitted by the Act as they deem neces- sary or proper, as evidenced by their execution of such docu- ments, and are further authorized and directed to execute and deliver such other documents for and on behalf of the City, and -5- y to take such other actions for and on behalf of the City, as they deem necessary or proper in connection with the consumma- tion of such financing including, but not limited to making the $10 million election pursuant to the requirements of the Inter- nal Revenue Code. The Mayor and the Clerk of the City are authorized to arrange for the delivery of said Economic Devel- opment Revenue Bond to Valley American Bank and Trust Company, payment for which will be made to the Trustee for the account of the City. Section 8 . The City approves the reduction in the in- terest rate of the 1982 Bonds to 10% per annum and the Mayor and City Clerk are hereby authorized to execute all requisite documents to facilitate said interest reduction. Section 9 . The provisions of this ordinance and the aforementioned documents shall constitute a contract binding between the City and the holders of said Economic Development Revenue Bond, and after the issuance of said Economic Develop- ment Revenue Bond this Ordinance shall not be repealed or amended in any respect which would adversely affect the rights of said holders so long as any of the principal of said Eco- nomic Development Revenue Bond or the interest thereon remains unpaid. Section 10 . All ordinances or parts of ordinances in conflict herewith are hereby repealed. -6- Section 11. This Ordinance shall be in full force and effect from and after its passage by this Council and its sig- nature by the Mayor of the City. SOUTH ;END COMMON COUNCIL ( M-mber cc-6 8 - 2nd R7At.';,:i3 la— e NOT APPROVED REFERRED PASSED / 13- BARNES a THORNBURG 600 1ST SOURCE BANK CENTER 1313 MERCHANTS BANK BUILDING 100 NORTH MICHIGAN 305 FIRST NATIONAL BANK BUILDING II SOUTH MERIDIAN STREET 301 SOUTH MAIN STREET INDIANAPOLIS,INDIANA 46204 SOUTH BEND INDIANA 46601 ELKHART,INDIANA 46516 (3171 638-1313 1219)293-0681 (219) 233-1171 SUITE 800 FEDERAL BAR BUILDING ONE SUMMIT SQUARE TWX 810-341-3427 B&T LAW IND 1815 H STREET,N.W. FORT WAYNE,INDIANA 46802 WASHINGTON,D.C.20006 (2191 423-9440 TELECOPI ER(219)237-1125 1202)955-4500 TO CALL WRITER November 21, 1986 HAND DELIVERED Mrs . Irene K. Gammon, City Clerk City Clerk' s Office 4th Floor, County-City Building South Bend, IN 46601 Re: P.A. I . Properties Bond Issue Dear Mrs . Gammon: This is to request that you place the bond ordinance for the P.A. I . Properties bond issue on the November 24 agenda of the Common Council for a first reading. This bond issue is presently scheduled to close on December 15, 1986 which would be compatible with a December 8, 1986 public hearing before the Council . The City of South Bend Economic Development Revenue Bonds for the P.A. I . Properties 1986 Project will be used to finance the construction of a manufacturing facility at 360 West Lathrop in the Airport Industrial Park to be leased to North American Signs, Inc. It is estimated that this project will result in the creation of 30 new permanent jobs increasing North American Signs annual payroll by approximately $450,000 . The facility will be used to manufacture electric signs and related advertising signage. The Economic Development Commission has scheduled a public hearing on this matter for December 5, 1986 at which time we anticipate receiving a resolution approving the transaction. Thank you for your cooperation in assisting with this request . Very truly yours, BARNES & THORNBURG Richard W. Mo an RWM: jj cc: Kenneth P. Fedder, Esq. Mrs . Beverlie Beck QJ nntmttur ;Wort coo #fie Tolman &until of tip Oli#g of'ou#il end: Your Committee of the Whole to whom was referred BILL NO. 123-86 A BILL AUTHORIZING THE CITY OF SOUTH BEND, INDIANA (THE "CITY" ) , TO ISSUE ITS ECONOMIC DEVELOPMENT REVENUE BOND, (PAI PROPERTIES, AN INDIANA PARTNERSHIP PROJECT, SERIES 1986) , IN THE AGGREGATE PRINCIPAL AMOUNT OF SEVEN HUNDRED FIFTY THOUSAND DOLLARS (750 ,000 .00) AND APPROVING AND AUTHORIZING CERTAIN ACTIONS WITH RESPECT THERETO. Respectfully report that they have examined the matter and that in their opinion This bill should be recommended to the Council favorable; Ann B. Puzzello Chairman FREE PRESS PUBLISHING CO.