HomeMy WebLinkAbout1991-03-08 Resolution 36.. ,.
RESOLUTION NO. 36
• RESOLUTION RELATING TO ACQUISITION OF PROPERTY WITHIN THE
AIRPORT ECONOMIC DEVELOPMENT AREA BY EMINENT DOMAIN
WHEREAS, pursuant to Resolution No. 965 and Resolution
No. 971, the South Bend Redevelopment Commission ("Commission"), in
furtherance of the Airport Economic Development Area Development
Plan, deemed necessary the acquisition of the real estate
identified on Attachment "A" (Real Estate) in the Airport Economic
Development Area in the City of South Bend, Indiana.
NOW THEREFORE, BE IT RESOLVED, by the South Bend
Redevelopment Authority, as follows:
1. That the Real Estate is hereby found to be necessary or
considered useful in connection with the Airport Economic
Development Area Development Plan, and that the same
should be acquired by the Redevelopment Authority in
furtherance of that Plan.
2. That the appointment by the Commission of appraisers, as
identified on Attachment "A" hereto, to appraise the Real
Estate is hereby ratified by the Authority and the
respective appraisals shall be and hereby are ratified
and accepted by the Authority for its own purposes,
• including their use in the establishment of an offering
price for the Real Estate under the procedures governing
the purchase of such real estate by the Authority.
3. That the Executive Director is authorized and directed to
cause a notice and final offer. in writing to be made to
the owner(s) identified on Attachment "A" at the
respective concurred-in price, which final offer shall
include an invitation to discuss the acquisition of
owner's property with the Department of Redevelopment
within thirty (30) days from mailing and notification
that eminent domain proceedings will be instituted
immediately after said thirty (30) day period if
agreement is not reached on the purchase price.
4. That in the event an agreement cannot be reached on the
purchase of the property within thirty (30) days after
notice of final offer, the Authority hereby determines
that it is necessary to proceed to acquire the Real
Estate under the power of eminent domain in order to
carry out the Airport Economic Development-Area
Development Plan and that the use for which the Real
Estate is to be acquired is for the public benefit.
5. The Authority's attorney is authorized and directed to
• file a complaint, after the thirty (30) day period
described herein, in the name of the South Bend
Redevelopment Authority in the appropriate court of St.
Joseph County, Indiana, in order that appraisers be
appointed to establish the value of said real estate, and
all other necessary and proper actions be taken to
accomplish the taking by eminent domain pursuant to law.
Adopted at the Special Meeting of the South Bend
Redevelopment Authority held on March 8, 1991 in the office of the
Authority, 1200 County-City Building, 227 West Jefferson Boulevard,
South Bend, Indiana 46601.
SOUTH BEND REDEVELOPMENT AUTHORITY
B . ~ a ~ ~-
Y'
J sep W. Wroblewski, President
AT ST:
0--1-~ ~~
Donald K. Fewell, Secretary-Treasurer
•
ATI'ACi~'dV'I' "A"
RESOLUTION NO. 36
AIRPORT ECONOMIC DEVEIAPI'~NT AREA
AUTHORITY
APPROVED APPRAISER'S DATE OF
PARCEL OWNER'S NAME PRICE NAME APPRAISAL
B Lynda K. Corbridge $163,100 Jerome E. Michaels, MAI 11/8/90
& Dawn L. Grayckowski Thomas G. Horka, MAI 11/7/90
D Amos J. Francoeur, Jr. $ 75,500 Ralph D. Lauver, MAI 11/16/90
& Shirley Ann Francoeur Richard E. McCloskey, MAI,RM 11/16/90
E John Wendt & Sons $ 86,000 Ralph D. Lauver, MAI 12/21/90
Richard E. McCloskey, MAI,RM 12/26/90
U
• w
•
TO
FINAL OFrICIAL STATEMENT DATED JP.NUARI' 25, 3991.
52,355,000
CITY OF SOUTH BEND, INDIANA REDEVELOPMENY' AUTHORITY
LEASR .RENTAL REVENUE $ONBS
R:e;.ing: Moody's
Cond'i "R'
• To k'horn It May Concern:
Due ro the L'ndarwritsr r6offering certain I.esee Rental Bonds, at less than
pa.r, it has hecoa~e necessary to provide disclosure languhge regarding
"oziginal issue dieovunt".
This informntian can ve found in the at[ached Appendix E which replaces
the same es found in the Final. Official Statement-dated January 25,.1991,
Sau*_h band RedavQlopment Autho;i~y
~~ ~ ~~.
Josegh W. Wroblewski
•
•
APPE21DI7, E
U
.~
In the opinion of Baker & Daniels, South Bend, Indiana, Bond Counsel. under law
existing and in effect on the date of such opinion, and assuming continuing
^ com~.~liance by the Authority with its Tax Covenants (as hereinafter defined), the
interest on the Bonds is excludable from grass income far purposes of Federal
income taxation pursuant to Section 103 of the Goda as in afftaet on thQ data of
delivery of the Bonds. In the opinion of Bond Counsel, undax exiting law,
interest on the Bonds is exempt from taxation in the State of Indiana for all
pur.poees except .the Indiana fine+ncial inytitutione tax and the Indiana
inhcritnncc tax,
As amended by the Tax Reform Act of 1586, the Code prescribes a number of
qual.ificati.ons and conditions, including continuing issuer compliance, for the
interest an state and local govern,~ent obligations to be and remain excludable
from .gross income for federal inco~:e tax purposes. Under the Trust Agreement,
the Authority nos made certain covenants (the "Tar. Covenants.'`) not to take any
action or to fail to take any gc.tion with respect ro the procaAds of the Bonds
ar any investment earnings thereon which would result in constituting the Bonds
as ''arbitrage bonds" under the Code or would otherwise oeuee the interest on the
Bonds to cease to be excludable from gross income fur purposes of Federal income
taxation. .The Authority sboll comply with the arbitrage rebate requirements
under Section 148 of the Code to the extent applicable. Noncompliance with the
£orcgoing Tar. Covenants may cause the interest an the Bonds to be includable in
gross income for federal income tax purposes retroactively to the data of
issuance of the Bands.
• Further, even assuming campiignca by the .Authority with its 'pax Covenants,
certain provisions of the Go de may affect certain owners of the Bonds. Tho Cade
imposes alternative ~ainimurn taxation on corporstien6 (as defined for Fader8l
income tax purposes) and individuals,. The 8onda are not "private activity bonds"
for the purpose of treatment of interest thereon as a dixcct prefercnca item 1n
calculating the alternative minimum cox. However, for corporations {aa dcfincd
£or fcdcral incvmc tax purposes) the alternative minimus tax is determined under
the code at 20t of each corparatian's alternative minimum taxable income. Such
alternatiive minimum taxable income includes 75~ of the amount by which "adjusted
current earnings" exceed "alternative minimum taxable income." Interest on a
Bond would be includable in the "ad~usted current earnings" of a corporation for
purpaeas of such alternative mini.RUm tax. Fn addition, the Code imposes an
environmental tax. on corporations for the years beginning after 1986 and before
199b .equal to 0.128 of the excess of "modified alternative minimum taxable
income" aver a specified amount, generally $2 million. In~erest on a Bond would
be taken into account. in computing such er~virorunental tax. FlxrttieY, the Cade
imposes a branch profits tax on U.S, branches of foreign corporations equal to
30is of the adjusted earnings and profits of such earpararions attributable to
income that is effectively connected, or treated as such, with the conduct cf
trade or business in the United States. Interest on the Bonds would be
includable in such earnings and profits.
•
Under the Code, ownership of tax-exempt obligations may ulna result in colMikhout
• federal income tax consequences to certain taxpaycrs including,
limitation, S .corporations, financial .institutions, property and casualty
insutance companies, indivl0u81 recipients of Social Security yr Railroad
Retirement banefitr and taxpayers who may be deetaed to hacionscurred (or
' continued) indebtadnars to purchase or carry tax-exempt oblig
No provision has been made for redemption of tie Bonds, or for an increase in the
interest rate on the Bondb, in th4 avant that interact on the Bonds becomes
subject to income taxation.
The foregoing dues nvt purport to be a compreheneivc diBCUeaion of the tax
Consequences of owning the Bonds. Proapcrti•ae owners of the Bonds should conaulr
their own L8x advisors with respect to the foregoing and other tax conscquoncen
of o~+ning the Bonds.
ORIGINAL 'SctT~ DISCOUNT
~'or Federal income tsx purpocpc, the LQaue l2antttl aondz maturing on August 1,
2007 through and .including August 1, 2012 (the. "Discount Rands°) will be
considered to have "original issue discount' aquai to thn diffsr6nca between
their respective original issue price end tY~e arnaun~ payable upon their
respective maturities. Th= original issue pYicc of each Discount Sond will ba
the initial offering price to the public at whic?~ a substantial ansount of such
Discount $opds are sold, and the issue date will be the date on which such
Discount Bonds arE first issued to the public. Under exisCing law, the original
issue discount on a Discount Bone accrued In the hands of a holder is treated fvr
Federal income tax purposes as interest which is excludable pursuant to Section;
• 103 of the Coda fYv~n groan incona, arsuming compliance by the Issuer with its .Tax
Covenants. Tha holder's basic for determining gain ar lots an a sale, maturity
or other diepotition of a Discount Bond generally ,dill equal the hcldQr's: cost,
incrtased by thm original issue discount that is accrued during the period that
the Discvurrt Bond is held by such holder. Gt»ernlly, any gain or lose rocognizac
by a holder on a sale, exchange or payment at maturity of a Discount Bond (beaed
on the holder's basis) will be taxable as capital gain or leas (assuming the
Discount Bond is held as a capital asset). A holder will recognize a taxable
gain or loss on a Discount Bond called prior to maturity en the difference
batwaon rho herder's basis and the call price of the Discount Bond, Owners of
the Discount Bonds should consult their own tax advisers with respect to the
vomputation for Fadaral income tax purposes of the amounts of original issue
discount which accrue during the period in which such Discount-Bonds are held.
Occners v£ tht Discount Bonds should also eon$ult shalt own tax advitorc with
respect to the state and local tax consequences arising from the original issue
dlscount of she Discount Honda.
19.91
Merrjll Lynch & company
world financial Center
New York, New York 10.281-1309
Re: South Berid Redevelopment Authority Lease Rental
Revenue Bonds (Airport Economic Development Area
ublic Im~*-OVement Projectl
Gentlemen:
We have acted as bond counsel in connection with the
issuance by the South Bcnd Redevelopment Authority {the "Sosuer"),
of_ Two Million Thzee Hundred. Fifty-Five Thousand Dollars
{S2,355,000) aggregate principal amount of Soutr.~Send Redevelopment
Authority Lease Rental Revenue Bonds {Aixport Economic Development
Area Public lmpravement Project) originally dated .March 1,
1991 (the "Bonds"), pursuant to a Trust Agreement jthe "Trust
Agreement") betw4en the Issuer and Society sank, Zndiana, as
TrusteQ jtha "Trustee"), dated ac of December 1, 199.0. We have
• examined a aertified tranccript of proceedings and such othex'
oextificates and documents. and w4 ha~~a reviewed auah athnr
proceedings and such questions cf law ac ~:e have dee:ngd neaQStary
as a bnsis for this opinion.
Zt is understood that the rights of the holdtrs of the
Bonds, the Issuer and the .Trustee and the tnforce~ability of the
Bonds, the Trust Agreement and the Lease {as defined belo~r}, inay
be subject to bankruptcy, insolvency, reorganization, moratorium
and .ether cimilar laws affecting creditors' rights heretofore ar
hereafter enacted to the extent constitutionally applicable, and
that their enfoxaemcnt may also be subject to the exercise of
judicial fliscretion in appropriate cases.
As to questions of fact material to our opinion, we have
relied, without undertaking tv verify the same by independent
invest~.gation, upon representations, covenants and certifications
of the Issuer and public officials contAined in the Trust Agreement
and in the certified transcript of proceedings and other
certificates furnished to us, including the YssueT's tax covena:,ts
and reprQSantations. we have nom been engaged er undertaken to
reV1QW the accuracy, camplQteness ar sufficient ai a-ty offering
•
_2_ , 2991
•
~r,aterials relating to the &onds, and we express nn opinion relating
thereto.
Based upon the Loregoing, we are of the opinion, under
existing taw, xs follows:
1, Tha Issuer is duly created and validly existing as
e separate body eorporate and politic and as an instrumentality of
the City of 6outh Bend, Indiana, with the power to enter into the
Trust Agreement and the Lease d~ceribad below, perform the
agz~eerr.ents on its part contained therein and issue the Bonds.
2. The lease between the Itscucr, as leeeor, and tha
South Bend Reflevelapment Commission (the ''Commission"), as lessee
dated as of August 1, 1990, as restated rind,araended on Deoembcr 21,
1990, and as further amended by .the Addendum to Lease between the
Is~uar and thg Commission on January Z9, 1991 (the lease as so
amended shall be xeferred tc her.en as the '°Lease"), has been duly
entered into in accardanaa with the px'btrfsions or Yndiana Code 35-
7-14 (the ''Act") and is a valid and binding. Lease. All taxable
property in the City of south Band Redevalopmant District (the
"District°') is subject to ad valorem taxation without limitation
as to rate or amount to pay tho Lease rental. .The Cornmicaian is
required by the Act and the lease annually to levy and apprapxiate
an amount sufficient to pay the Lease rtntalm commencing With the
. date the Project (as defined in the Lease) is campiete and ready
far use or February 1, 1994, whichever is later.
;, The Issuer has Buly authorized, sold, executed and
delivered tha Bonds and has duly authorized and executed the Trust
Rgregmant. The $onds are the valid and binding obligations o2 the
yseuer secured by tha Trust Agronmant.
4. The interESt an the fonds is axcludQd from grass
income for federal income tax purposes, and the Bonds arQ not
"private activity bonds" under Secticn 141 of the Internal Revenues
Code of 1986, as aTnanded {the "Code"}; however, it should be noted
that wit*, respect to corporations (as defined for federal income
tax purposes), interest orf the Bonds is taken into account in
dc~tarYairr;.ng adjusted current earnings for the purpose of computing
the alternative minimum tax imposed on such corporations.
Further, the difference between the initial public
offering price of the Bands dues on August i, 2007 through and
including August 1, 2012 (the "Discount- Bands") and the amounts
payable on the Diacount Bonds at maturity. is original issue
discount which, in our .opinion, constitutes interest that is
excludable pursuant to section 103 of the Code from gross income
for federal income tax purposes, conditioned upon camplzance with
c8rtain covenants described herein.
•
_3_ ~ 2991
The opinions set farL2t in this paragraph a are subject
to tho condition that the Issuer comply vS.th 811 requirements OL
the Code that must be satisfied subsequent to the issuance at the
Bonds in order that intorASt thQrecn be, ax oontinuQ to Vie,
excludable from gross income far federal incatne tax purposes.. The
Issuer has covenanted to comply with eaoh such requiromant.
Failure to comply with ceztain of such requirements ray cause the
interest on the Bonds to oec-se to be excludable fron gross income
for federal income tax purposes, retroactive to the date of
issuance of the Sonds. We express nv apinian regarding other
federal tax consequences arising with respect to the Bands.
5. The interest on the Bonds is exempt from taxation
i.n the State of Indiana for all pt1±•poses except the Indiana
financial institutions tax $nd tho Indiana inheritanr_e tax_
'.7ery truly yours;
\scatarktl~ODC(101oylnlit~1i~/6j P:
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