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Home My WebLink About1993-07-15 Resolution 7979 RESOLUTION NO. RESOLUTION OF THE SOUTH BEND REDEVELOPMENT AUTHORITY APPROVING AN OFFICIAL STATEMENT RELATING TO THE ISSUANCE OF THE SOUTH BEND REDEVELOPMENT AUTHORITY TAXABLE LEASE RENTAL ACQUISITION AND REFUNDING REVENUE BONDS OF 1993 (AIRPORT ECONOMIC DEVELOPMENT AREA PUBLIC IMPROVEMENT PROJECT) WHEREAS, the South Bend Redevelopment Authority (the "Authority") at a meeting on June 29, 1993, adopted Resolution No. 77 (the "Bond Resolution") authorizing the issuance and sale to City Securities Corporation (the "Underwriter") of bonds to be known as the "South Bend Redevelopment Authority Taxable Lease Rental Acquisition and Refunding Revenue Bonds of 1993 (Airport Economic Development Area Public Improvement Project)" (the "Taxable Bonds") pursuant to IC 36-7-14.5 et seq., in the aggregate principal amount not to exceed Five Million and 00/100 Dollars ($5,000,000), the proceeds of which are to be used to: (i) refund the South Bend Redevelopment Authority Taxable Lease Rental Revenue Bonds (Airport Economic Development area ruA11c 11Ll~JI V V C1LLG 114 Project) (the "Refunded Bonds").issued in 1991 to pay the costs of constructing and acquiring certain land and public improvements located in the Airport Economic Development Area (the "Area"); (ii) acquire additional land and construct certain public improvements in the Area; and (iii) pay the costs of issuance of the Bonds; and: WHEREAS, a Preliminary Official Statement relating to the issuance of the Bonds was approved by the Authority on June 29, 1993 in the form presented to the Authority; and WHEREAS, an Official Statement, dated as of July 9, 1993, ~ (the "Official Statement") relating to the issuance of the Bonds has bEen prepared and presented to the Authority; NOW, THEREFORE, BE IT RESOLVED, by this South Bend Redevelopment Authority as follows: Section 1. The Official Statement is hereby approved in the form presented to the Authority at this meeting and the Official Statement in the form presented at this meeting is hereby deemed final. The Underwriter is hereby authorized and directed to cause to be distributed such Official Statement in t'_ze form presented to this meeting to all parties who in its judgment may be interested in bidding on such .Bonds; and the Authority shall place a copy o.f such Official Statement as presented to this meeting with the minutes of this meeting. Section 2. This Resolution shall be in full force and effect after its adoption by the Authority. Adapted at a meeting of the Authority held on July 15, 1993, at 1308 County-City Building, 227 West Jefferson Boulevard, South Bend, Indiana 46601. CITY OF SOUTH BEND REDEVELOPMENT AUTHORITY By : ~ ~~ sep W. Wroblewski, resident ATT Z' Donald K. Fewell, Secretary-Treasurer rrrompola\sthbend\airpttax.ref\luapprov.os;7-13-93 a -2- South Bend Redevelopment Authority South Bend, Indiana Final Official Statement $4, 905, 000 TAXABLE Lease Rental Acquisition and Refunding Revenue Bonds of 1993 City Securities Corporation Refundinc Issue Ra~g~ Moody's Investors Service, Inc. "A" THIS FINAL OFFICIAL STATEMENT IS DATED NLY 9, 1993 INTEREST ON THE TAXABLE LEASE RENTAL ACQUISITION AND REFUNDING REVENUE BONDS OF 1993 IS NOT EXCLUDABLE FROM GROSS INCOME OF THE OWNERS THEREOF FOR FEDERAL INCOME TAX PURPOSES UNDER SECTION 103 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. In the opinion of Baker & Daniels, South Bend, Indiana, interest on the Taxable Lease Rental Acquisition and Refunding Revenue Bonds of 1993 is exempt from all present Indiana taxes, except the Indiana financial institutions tax and the Imiiana inheritance tax. See "TAX MATTERS" herein. $4,905,000 SOUTH BEND REDEVELOPMENT AUTHORITY SOUTH BEND, INDIANA TAXABLE LEASE RENTAL ACQUISITION AND REFUNDING REVENUE BONDS OF 1993 (Airport Economic Development Area Public Improvement Project) Original Date: July 1, 1993 Due: August 1st and February 1st as shown below The South Bend Redevelopment Authority (the "Authority") is issuing $4,905,000 of Taxable Lease Rental Acquisition and Refunding Revenue Bonds of 1993 (Airport Economic Development Area Public Improvement Project) (the "Taxable 1993 Bonds") to provide for the refunding and legal defeasance of $4,200,000 of Taxable Lease Rental Revenue Bonds (of 1991) (Airport Economic Development Area Public Improvement Project) (the "Taxable 1991 Bonds"), to pay costs incurred in connection with the issuance of the Taxable 1993 Bonds, and to pay the costs of acquiring certain land and constructing certain public improvements in the Airport Economic Development Area (hereinafter defined). The Taxable 1993 Bonds will be issued under a Bond Resolution adopted by the Authority on June 29, 1993, and pursuant to IC 5-1-5 and IC 36-7-14.5 and all the laws amendatory thereof and supplemental thereto. The Taxable 1993 Bonds are payable from semi-annual lease rental payments to be paid by the South Bend Redevelopment Commission (the "Commission") directly to Society National Bank, Indiana, located in South Bend, Indiana, as Trustee (ihe "Trustee"), under a Trust Agreement, dated as of July 1, 1993, between the Authority and the Trustee (the "Trust Agreement") and a Lease (as defined herein) between the Authority as Lessor and the Commission as Lessee. The lease rental payments will be paid from ad valorem property taxes levied on all taxable property in the South Bend Redevelopment District (an area with boundaries coterminous to the City of South Bend) in an amount which together with Taz Increment (as defined herein) will be equal to the lease payments due in the 12-month period beginning on July 1 of the following calendar year. The Taxable 1993 Bonds will be issued in fully registered form in the denomination of $5,000 or any integral multiple thereof. Interest payable February 1, 1994, and semi-annually thereafter on each August 1 and Febnrary 1, will be paid by check trailed by the Tnrstee to the registered owners at their addresses as shown on the registration books maintained by the Trustee. The Taxable 1993 Bonds are subject to optional redemption, prior to maturity, beginning August 1, 2003, as more fully described herein. The Term Bonds are subject to mandatory sinking fund redemption as described herein. MATURITY SCHEDULE Interest Interest Maturi PIlI1CIDal .Rate Price Maturi PtIIICIDaI Rate Price 8/1/94 $ 20,000 4.20% 100% 2/1101 $105,000 6.30% 100% 2/1/95 20,000 4.509'0 100% 8/1/01 110,000 6.40% 100% 8!1/95 20,000 4.703'0 100% 2/1/02 115,000 6.50% 100% 2/1/96 45,000 4.90% 100% 8/1/02 120,000 6.60% 100go 8/1/96 45,000 5.10% 100% 2/1/03 125,000 6.70% 1003'0 2/1/97 50,000 5.25% 100% 8/1/03 130,000 6.70% 100% 8/1/97 50,000 5.40% 100% 2/1/04 135,000 6.85% 100% 2/1/98 70,000 5.60% 100% 8/1/04 140,000 6.85% 100% 8/1/98 70,000 5.75 go 100% 2/1/05 145,000 7.00% 100% 2/1/99 85,000 5.903'0 100% 8/1/05 150,000 7.00% 1003'0 8/1/99 90,000 6.00% 100% 2/1/06 155,000 7.10% 100g'o 2/1/00 95,000 6.10% 100% 8/1/06 165,000 7.10% 100`90 8/1/00 100,000 6.20`90 100% $715,000 of Term Bonds 7.35% due August 1, 2008 Price 100% $1,835,000 of Term Bonds 7.40% due August 1, 2012 Price 98.994 % CITY SECURITIES CORPORATION This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. The Taxable 1993 Bonds aze being offered for delivery when, as and if issued and received by the Underwriter and subject to the approval of legality by Baker & Daniels, South Bend, Indiana, Bond Counsel. The Taxable 1993 Bonds aze expected to be available for delivery in Indianapolis, Indiana on July 27, 1993. IN CONNECTION WITH THIS OFFERING THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE TAXABLE 1993 BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET, AND SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. No dealer, broker, salesman or other person has been authorized by the Authority to give any information or to make any representations, other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the Authority. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities described herein by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the Authority, the City of South Bend, and other sources which aze believed to be reliable, but it is not guazanteed as to accuracy or completeness. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale of the securities described herein shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority since the date thereof. However, upon delivery of the securities, the Authority may, upon request, provide a certificate stating there have been no material changes in the information contained in the Final Official Statement since its delivery. TABLE OF CONTENTS Page Introduction to the Official Statement ........................................... 1-3 Securities Being Offered .................... .............................. 3-9 Procedures for Property Assessment, Tax Levy and Collection .......................... 9-10 Bond Rating ...........................................................10 Future Financing .... .................................................. 11 Litigation .............................................................11 Underwriting ............................................................11 CPA Verification ........................................................11 Certificate .............................................................11 Certain Legal Matters ..................................................... 12 Availability of Documents and Financial Information .................................. 12 Appendices as Tabbed: A General Information B Accounting Report C Bond Resolution D Lease E Excerpts from the Trust Agreement F Pledge Resolution G Legal Opinion and Tax Matters FINAL OFFICIAL STATEMENT $4,905,000 SOUTH BEND REDEVELOPMENT AUTHORITY TAXABLE LEASE RENTAL ACQUISTI'ION AND REFUNDING REVENUE BONDS OF 1993 (Airport Economic Development Area Public Improvement Project) INTRODUCTION TO THE OFFICIAL STATEMENT The South Bend Redevelopment Authority (the "Authority"), is issuing $4,905,000 of Taxable Lease Rental Acquisition and Refunding Revenue Bonds of 1993 (Airport Economic Development Area Public Improvement Project) (the "Taxable 1993 Bonds"). PURPOSE OF REFUNDING The proceeds from the sale of the Taxable 1993 Bonds, together with funds on hand, will be applied to the refunding and legal defeasance of $4,200,000 of Taxable Lease Rental Revenue Bonds (of 1991) (Airport Economic Development Area Public Improvement Project) (the "Taxable 1991 Bonds"), to the payment of costs incurred in connection with the issuance of the Taxable 1993 Bonds, and to the funding of certain land acquisition costs and the construction of certain public improvements relating to the Airport Economic Development Area Public ' Improvement Project. SECURITY AND SOURCES OF PAYMENT ' The Taxable 1993 Bonds shall constitute an indebtedness of the Authority payable in accordance with and secured by terms and pledges contained in the Trust Agreement to be executed between the Authority and Society National Bank, Indiana, located in South Bend, Indiana (the "Trustee" and the "Escrow Trustee") as of July 1, 1993. Funds for the payment of principal and interest on the Taxable 1993 Bonds shall be paid from fined, semi-annual lease rental payments (the "Lease Rental") from the City of South Bend Redevelopment Commission (the "Commission") directly to the Trustee in accordance with a Lease (as defined herein) executed between the Commission and the Authority under which Lease the Authority leases to the Commission certain land and public improvements (the Project ). ' The Lease Rental is payable from ad valorem property taxes. If the Commission annually determines that the Tax Increment (as hereinafter defined) will be insufficient to pay the Lease Rental, the Commission must annually levy a property tax on all taxable property in the South Bend Redevelopment District (the "District") in an amount which, ' together with Tax Increment, will be sufficient to pay the Lease Rental due in the 12-month period beginning on July 1 of the following calendaz year. The District is coterminous with the City of South Bend (the "City"). The Taxable 1993 Bonds do not constitute an indebtedness, liability or loan of the credit of the City or any political ' subdivision thereof. The Lease Rental is subject to certain conditions regazding abatement. See "Risks to Bondholders". DESCRIPTION OF THE TAXABLE 1993 BONDS Redemption: The Taxable 1993 Bonds aze subject to optional redemption. Bonds maturing on February 1, 2004 and thereafter aze redeemable at the option of the Authority beginning on August 1, 2003 as more fully described ' herein. The Taxable 1993 Bonds maturing August 1, 2008 and August 1, 2012 are subject to mandatory sinking fund redemption. DESCRIPTION OF THE TAXABLE 1993 BONDS (COIIt'd) Denomination: The Taxable 1993 Bonds are being issued in denominations of $5,000 or integral multiples thereof. Registration and Exchange Features: The Trustee shail keep at its principal corporate trust office, a record for the registratiot of the Taxable 1993 Bonds. Each registered bond shall be transferable only on such record at the principal corporate trust office of the Trustee at the written request of the registered owner thereof or by such owner's attorney duly authorized in writing upon surrender thereof, together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or duly authorized attorney. Provisions for Pavment: The principal of the Taxable 1993 Bonds shall be payable at the principal corporate trust office of the Trustee. All payments of interest on the Taxable 1993 Bonds shall be paid by check, mailed one business day prior to the interest payment date to the registered owners as the names appeaz as of the fifteenth day of the month preceding the interest payment date and at the addresses as they appeaz on the registration books kept by the Trustee or at such other address as is provided to the Trustee. Payments on the Taxable 1993 Bonds shall be made in any lawful money of the United States of America, which on the date of such payment, shall be legal tender. Notices: Notice of redemption shall be mailed by the Trustee to the registered owners of all bonds, not less than 30 days prior to the date fined for redemption. If the Trustee resigns, notice shall be given to the registered owners by mail at least 20 days prior to the date when such resignation shall take effect. For a more complete description of the Taxable 1993 Bonds, see "Securities Being Offered": "Description of the Taxable 1993 Bonds" or refer to the Bond Resolution in Appendix C. TAX MATTERS IN THE OPINION OF BAKER & DANIELS, BOND COUNSEL, INTEREST ON THE TAXABLE 1993 BONDS IS NOT EXCLUDABLE FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES. In the opinion of Baker & Daniels, interest on the Taxable 1993 Bonds is exempt from income taxation in the State of Indiana, for all purposes except the Indiana financial institutions tax and the Indiana inheritance tax. See Appendix G. PROFESSIONALS The following professionals have been retained by the Authority and the Commission to provide services for the issuance of the Taxable 1993 Bonds. Trustee, Registrar, Paying Agent and Escrow Trustee: Bond Counsel Financial Advisor: Society National Bank, Indiana, South Bend, Indiana Baker & Daniels, South Bend, Indiana H.J. Umbaugh & Associates, Certified Public Accountants, Indianapolis, Indiana IJ AUTHORITY FOR ISSUANCE The Taxable 1993 Bonds aze to be issued under the authority of Indiana law, including, without limitation, IC 5-1-5 and IC 36-7-14.5, and all the laws amendatory thereof and supplemental thereto (collectively "the Act") and pursuant to a Bond Resolution dated June 29, 1993, and pursuant to a Trust Agreement between the Authority and the Trustee dated as of July 1, 1993, and pursuant to a Lease dated as of August 1, 1990, as amended by an Addendum to Lease dated January 29, 1991, and as further amended by an Addendum to Lease following the bond sale (collectively referred to throughout this Official Statement as the "Lease") between the Authority and the Commission. (The Lease is provided in Appendix D.) OFFERING AND DELIVERY OF THE TAXABLE 1993 BONDS The Taxable 1993 Bonds aze being offered when, as and if issued, subject to approval as to their legality by Baker & Daniels and the satisfaction of certain other conditions. The Taxable 1993 Bonds are anticipated to be available for delivery in Indianapolis, Indiana on July 27, 1993. The refunding of the Taxable 1991 Bonds will be accomplished by creating an irrevocable escrow fund (the "Escrow Fund") and depositing therein certain cash and noncallable direct obligations of the Treasury of the United States of America, in an amount such that the principal and interest earned thereon, will be sufficient to redeem all the outstanding Taxable 1991 Bonds, with accrued interest and a redemption premium of 3% on or about September 1, 1993. MISCELLANEOUS The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents, and reference is directed to all such documents for full and complete statements of all matters of fact relating to the Taxable 1993 Bonds, the security for the payment of the Taxable 1993 Bonds and the rights and obligations of the owners thereof. The information contained in this Official Statement has been compiled from City officials and other sources deemed to be reliable, and while not guazanteed as to completeness or accuracy, it is believed to be correct as of this date. ' However, the Official Statement speaks only as of its date, and the information contained herein is subject to change. Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the owners of the Taxable 1993 Bonds. ' SECURITIES BEING OFFERED AUTHORIZATION ' The Taxable 1993 Bonds aze being issued under the authority of Indiana law, including without limitation, the Act; and pursuant to Bond Resolution No.77 (the "Bond Resolution")(Appendix C) adopted by the Authority on June 29, 1993. The South Bend Redevelopment District, a special taxing district of the City, is administered by the South Bend Redevelopment Commission, which is composed of five members appointed by the Mayor and the Common ' Council. The Commission established the Airport Economic Development Area (the "EDA"} (with the approval of the South Bend Common Council) and is responsible for implementing the plan for economic development of the EDA. The South Bend Redevelopment Authority, which is composed of three members appointed by the Mayor, is authorized to issue obligations payable from a special benefits tax, from Tax Increment, from project revenues, from other available revenue sources, or a combination of these sources. ~ , ES'TIIvtATED SOURCES AND USES OF FUNDS The proceeds from the sale of the Taxable 1993 Bonds will be applied to refunding the Taxable 1991 Bonds, to the payment of costs incurred in connection with the issuance of the Taxable 1993 Bonds, and to funding a portion of the costs of acquisition of certain land and the construction of public improvements (the "Improvements") relating to the Project. Approximately $124,516 of funds remaining in the Construction Account for the Taxable 1991 Bonds will be transferred to the Construction Fund for the Taxable 1993 Bonds to fund a portion of the Improvements. Approximately $35,000 of funds remaining in the Bond Interest Account of the Construction Fund for the Taxable 1991 Bonds, together with accrued interest, will be deposited in the Sinking Fund for the Taxable 1993 Bonds. The estimated sources and uses of funds aze summarized below. Sources of Funds Proposed Taxable 1993 Bonds Funds on hand in the Taxable Funds on hand in the Taxable Accrued interest 1991 Construction Account 1991 Bond Interest Account $4,905,000 124,516 35,000 24.523 Total Sources of Funds Uses of Funds Escrow - U.S. Government securities Escrow -cash Underwriter's discount Original issue discount Estimated bond issuance costs Estimated costs of the Improvements Deposit to the Sinking Fund of the Taxable 1993 Bonds Total Uses of Funds 5 089 039 $4,347,541 198,900 49,033 18,460 104,066 311,516 59.523 5 089 039 *As a separate transaction, apart from the Commission's Lease with the Authority, the Commission intends to use approximately $100,000 of surplus Taz Increment funds currently held in the Commission's EDA Taxable Improvement Principal and Interest Account to fund additional public improvements and land acquisition costs in the EDA in conjunction with completion of the Improvements by the Authority. THE REFUNDING PROGRAM Pursuant to the terms of an Escrow Agreement dated as of July 1, 1993, entered into between the Authority and Society National Bank, Indiana, South Bend, Indiana (the "Escrow Trustee"), the refunding of the Taxable 1991 Bonds will be accomplished by (a) creating an irrevocable escrow and trust account, the Escrow Fund (as previously defined) to be held by the Escrow Trustee for the holders of the Taxable 1991 Bonds and (b) depositing therein a sum of initial cash and certain noncallable direct obligations of the Treasury of the United States of America (the "Government Obligations") sufficient to redeem all outstanding Taxable 1991 Bonds on or about September 1, 1993. The funds needed to make the initial cash deposit to the Escrow Fund and to purchase the Government Obligations will be provided from the proceeds of the sale of the Taxable 1993 Bonds and from other funds of the Authority. Promptly following the closing of the issuance of the Taxable 1993 Bonds, the Trustee will send notice of redemption to all owners of outstanding Taxable 1991 Bonds, stating the intention of the Authority to redeem such bonds on or about September 1, 1993. The Trustee will also publish notice of the redemption in accordance with the terms of a trust agreement dated December 1, 1990 for the Taxable 1991 Bonds. -4- li ~~ 7 THE REFUNDWG PROGRAM (COIIt'd) The Government Obligations to be purchased and deposited with the Escrow Trustee will bear interest at such rates and will be scheduled to mature at such times and in such amounts so that, when paid according to their respective terms, sufficient moneys, together with the amount of cash then on deposit with the Escrow Trustee, will be available to make full and timely payment of all principal, interest and redemption premium due with respect to all outstanding Taxable 1991 Bonds on the date fixed for redemption. Mathematical calculations of the adequacy of the Escrow Fund Account to fully provide for the redemption of the Taxable 1991 Bonds will be verified by H.J. Umbaugh & Associates, Certified Public Accountants, at the time of delivery of the Taxable 1993 Bonds. See "CPA Verification" herein. All moneys and Governmental Obligations on deposit with the Escrow Trustee, including any earnings thereon, are pledged solely and irrevocably for the benefit of the holders of the Taxable 1991 Bonds. SECURITY FOR THE TAXABLE 1993 BONDS The Taxable 1993 Bonds shall constitute an indebtedness of the Authority payable in accordance with the terms of the Trust Agreement and secured by the pledge and assignment to the Trustee of the funds and accounts defined and described therein, including the Lease Rental and other funds as defined in the Trust Agreement (collectively the "Pledged Funds"). The Trust Agreement creates a continuing pledge by the Authority to the bondholders to pay principal and interest on the Taxable 1993 Bonds, until the principal sum shall be fully paid. Funds for the Lease Rental will be paid by the Commission directly to the Trustee (for the account of the Authority) pursuant to the terms of the Lease. The Lease Rental will be payable beginning on Januazy 28, 1994. Thereafter, Lease Rental is payable semi-annually on July 28th and January 28th. Following the bond sale, a schedule of Lease Rental payments will be provided with the first semi-annual Lease Rental beginning January 28, 1994. A Form of Addendum.to Lease is included in Appendix D. In accordance with the Lease, after the bond sale, each semi-annual Lease Rental is to be reduced to an amount which will equal the principal and interest payments due in each bond year, rounded upwazd to the next. $1,000 plus $2,000 for payment of fiscal agency chazges, divided by two. The Lease Rental to be paid by the Commission during the term of the Lease is required to be in amounts sufficient to pay the principal of and interest on the Taxable 1993 Bonds. Such annual rental is payable from a special benefits tax. The Lease Rentai is secured by a pledge of unlimited ad valorem property taxes levied on all taxable properties in the District which has the same taxing boundaries as the City. The Bonds do not constitute an indebtedness, liability or loan of the credit of the City or any political subdivision thereof. Each yeaz when the City prepazes its budget, the Redevelopment Commission shall levy a special tax upon all taxable property in the District in a total amount sufficient, together with all other funds (from sources other than special taxes) (including Tax Increment) deposited previously and anticipated to be deposited in the Airport Economic Development Area Taxable Public Improvement Project Principal and Interest Account (the "Principal and Interest Account"), to pay all Lease Rental due in the 12-month period beginning on July 1 of the following calendar yeaz (referred to herein as the "Lease Rental Requirement"). This pledge provides assurance that, at budget time, there must be sufficient funds on hand, or anticipated to be available, to meet the Lease Rental Requirement or the Commission must levy the special benefits tax in accordance with IC 36-7-14-27. (Refer to the "Pledge Resolution" in Appendix F of this Official Statement.) The Commission intends to reduce tax levies to the extent that Tax Increment is anticipated to be available in the Principal and Interest Account. Tax Increment consists of all real property tax proceeds attributable to the assessed valuation within the EDA as of the assessment date in excess of the base assessed value (as defined in IC 36-7-14-39 (a)), reduced by an additional credit (referred to throughout this Official Statement as the "Tax Increment".) The tax incremental assessed value is determined by subtracting the base assessed value from the current assessed value as of the assessment date. The incremental assessed value is then multiplied by the current property tax rate to determine the Tax Increment. IC 36-7-14-39.5 entitles taxpayers within an allocation area to a credit (the "Additional Credit")payable from Tax Increment equal to the State Property Tax Replacement Credit (the "PTRC"). -5- SECURITY FOR THE TAXABLE 1993 BONDS (Cont'd) (For additional information on Tax Increment as it relates to the Refunding Bonds, please refer to the "Accounting Report" in Appendix B, and to the "Airport Economic Development Area" section, and to the "Procedures for Property Assessment, Tax Levy and Collection" section of this Official Statement.) The repayment of the Taxable 1993 Bonds has been structured so that estimated Tax Increment would be sufficient to meet the semi-annual Lease Rental payments when due on both the Taxable 1993 Bonds and the outstanding $2,355,000 (Tax-Exempt) Lease Rental Revenue Bonds (of 1991) (the "Tax-Exempt 1991 Bonds") when due and to allow coverage of the semi-annual Lease Rental by the estimated semi-annual Tax Increment ranging from 129% to 212%, as shown in the "Analysis of Lease Payments on the Taxable 1993 Bonds and Existing Bonds and Estimated Tax Increment" schedule provided in the Accounting Report in Appendix B. This schedule also shows that estimated cumulative Tax Increment surplus is expected to be sufficient to meet the Lease Rental Requirement. The Commission's pledge to the payment of Lease Rental is effective only to the extent and for the term that the Commission is obligated to pay Lease Rental under the Lease. The term of the Lease will end on the date which is no more than twenty-two (22) yeazs following substantial completion of the Project. If the Project .(including the Improvements) should ever be substantially or totally destroyed, the Lease Rental will be abated during the period in which the Project (including the Improvements) aze unfit or unavailable for their intended use. In such a case, rental value insurance will be available to make Lease Rental payments due during this time for a period of up to two yeazs. Insurance proceeds will be used to repair the Project (including the Improvements) or in some cases, to redeem outstanding Taxable 1993 Bonds. (Please refer to the Lease in Appendix D, and also to the section entitled "Risks to Bondholders" contained in this Official Statement.) FUNDS AND ACCOUNTS The Escrow Agreement and the Trust Agreement establish certain funds and accounts and the flow of funds. (For greater detail, refer to the excerpts of the Trust Agreement provided in Appendix E. The complete Trust Agreement and Escrow Agreement may be obtained from Baker & Daniels. Refer to "Availability of Documents and Financial Information" section herein.) Concurrent with the delivery of the Taxable 1993 Bonds, the Escrow Trustee will acquire Government Obligations with proceeds of the Taxable 1993 Bonds and deposit such Government Obligations into the Escrow Fund, in accordance with an Escrow Agreement to be executed between the Authority and the Trustee. (Please also refer to the "Refunding Program" section of this Preliminary Official Statement). Approximately $187,000 of the Taxable 1993 Bond proceeds to be used to fund a portion of the Improvements, together with approximately $104,066 of Taxable 1993 Bond proceeds to be used to pay issuance costs, will be deposited in the Construction Fund held by the Trustee. Any remaining proceeds, together with accrued interest, will be deposited in the Sinking Fund. Approximately $124,516 of funds held in the Construction Account for the Taxable 1991 Bonds will be transferred to the Construction Fund for the Taxable 1993 Bonds to fund a portion of the Improvements. Approximately $35,000 of funds held in the Bond Interest Account of the Construction Fund for the Taxable 1991 Bonds will be transferred to the Sinking Fund for the Taxable 1993 Bonds. All Lease Rental payments from the Commission to the Trustee will be deposited into the Sinking Fund in the manner described in the Trust Agreement. 1 L 6 ~ ' AIRPORT ECONOMIC DEVELOPMENT AREA The Improvements will be located within the South Bend Airport Economic Development Area, an azea located ' within the City's northwest boundaries. The EDA currently encompasses existing industrial pazks and commercial businesses as well as hundreds of acres of developable land. Key transportation resources overlap or abound the EDA including the Indiana Toll Road, the U.S. 31 expressway, Michiana Regional Airport (the .State's second ' busiest airport) and the neazby South Shore Railroad. The EDA is a designated tax allocation area in which Tax Increment is already being generated and accumulated to make lease payments on bonds issued by the Authority to finance infrastructure improvements and land acquisition in the EDA. This infrastructure development is part ' of the City's overall master plan for economic development, known as the "Airport 2010 Project". The Airport 2010 Project is a major, long-term, multi-use economic development project for which plans include the further development of 2,300 acres of a 3,500-acre area around Michiana Regional Airport. Planned land use will include light industrial and wazehouse/distribution businesses; a golf course, clubhouse, hotel, and office park; additional office pazks for large corporate users and smaller users; commercial businesses including highway commercial, aviation-related, and service businesses; and residential areas. The City is projecting, over a 20-year period (using 1990 dollars) $680 million of private investment resulting in the creation and retention of over 27,000 jobs and approximately $16 million of additional annual property taxes. The overall goal is to strengthen North Central Indiana's economy over the next twenty yeazs. The master plan builds upon the existing transportation network and industrial base which includes 560 acres of the Airport and Toll Road Industrial Parks. According to the Industrial Foundation Inc., these existing Industrial Parks contain 90 structures which house 120 firms with 4,700 employees and generate an annual payroll of over $121 million. The Industrial Pazks have been developed over the last thirty yeazs and aze near capacity. Over the next several yeazs, the City of South Bend will receive millions of dollars in State funds for the expansion of the Toll Road interchange and fqr major road relocation work. ' In February and March of 1991, respectively, the Authority issued the Taxable 1991 Bonds and the Tax-Exempt 1991 Bonds to finance the Project which included sewer, water, and road extensions and land acquisition for the purpose of creating access to new development sites in the EDA. In October of 1992, the Authority issued $5,680,000 Lease Rental Revenue Bonds to finance the construction of a public golf course and clubhouse, named the "Blackthorn Golf Course" which the City and other area economic development professionals believe will provide the unique setting and recreational opportunities necessary to attract top-level, outside companies. The ' Project, together with the Blackthorn Golf Course project, are anticipated to catalyze private investment in the next phases of the Airport 2010 Project. REDEMPTION PROVISIONS Optional Redemption: ' The Taxable 1993 Bonds maturing on February 1, 2004 and thereafter, are redeemable at the option of the Authority on August 1, 2003, or any date thereafter, on 30 days' notice, in whole or in part, and by lot within a maturity, at face value, together with the following premiums: 2 % if redeemed on August 1, 2003, or thereafter on or before July 31, 2004; ' 1 % if redeemed on August 1, 2004, or thereafter on or before July 31, 2005 ; 0% if redeemed on August 1, 2005, or thereafter prior to maturity; ' plus accrued interest to the date fixed for redemption. REDE:~fPTION PROVISIONS tCont Q) Mandatory Sinking Fund Redemption: ' The Taxable 1993 Bonds maturing on August 1, 2008 and August 1, 2012 ("Term Bonds"), aze subject to ' mandatory sinking fund redemption prior to maturity at a redemption price equal to the principal plus accrued interest to date of redemption on August 1st and Februazy 1st in accordance with the following schedule: $715.000 Term Bonds due August 1. 2008 , Maturity Amount 2/1/07 $170,000 8/1/07 175,000 2/1/08 180,000 , The remaining $190,000 of Taxable 1993 Bonds aze payable at maturity on August 1, 2008. $1, 835.000 Term Bonds due August 1. 2012 ' Maturity Amount 2/1/09 $200,000 ' 8/1/09 205,000 2/1/10 215,000 8/1/10 225,000 ' 2/1/11 235,000 8/1/11 240,000 2/1/12 255,000 ' The remaining $260,000 of Taxable 1993 Bonds aze payable at maturity on August 1, 2012. . If less than all of the Taxable 1993 Bonds are called for redemption at one time, the Taxable 1993 Bonds shall be ' redeemed within a maturity or maturities selected by the Authority. The Trustee will select the particulaz Taxable 1993 Bonds or portion to be redeemed in principal amounts of whole multiples of $5,000. The Trustee will select the Taxable 1993 Bonds to be redeemed within a maturity by lot in such a manner as it deems fair and appropriate. ' If some Taxable 1993 Bonds aze to be redeemed by optional redemption and mandatory sinking fund redemption on the same date, the Trustee shall select by lot the Taxable 1993 Bonds for optional redemption before selecting the Taxable 1993 Bonds by lot for the mandatory sinking fund redemption. ' The Trustee shall credit against the mandatory sinking fund requirement for the Taxable 1993 Bonds maturing as term bonds, and corresponding mandatory redemption obligation, in the order determined by the Authority, any Taxable 1993 Bonds maturing as term bonds which have previously been redeemed (otherwise than as a result of , a previous mandatory redemption requirement) or delivered to the Trustee for cancellation or purchased for cancellation by the Authority and not theretofore applied as a credit against any redemption obligation. Each Taxable 1993 Bond maturing as a term bond so delivered or cancelled shall be credited by the Trustee at 100% of ' the principal amount thereof against the mandatory sinking fund obligation on such mandatory sinking fund date, and any excess of such amount shall be credited on future redemption obligations, and the principal amount of the Taxable 1993 Bonds to be redeemed by operation of the mandatory sinking fund requirement shall be accordingly reduced; provided, however, the Trustee shall only credit such Taxable 1993 Bonds maturing as term bonds to the ' extent received on or before 45 days preceding the applicable mandatory redemption date. Notice of Redemption: ' Notice of redemption shall be given at least 30 days prior to the date fixed for redemption by mail unless the notice is waived by the registered owner of a Taxable 1993 Bond. Such notice shall be mailed to the address of the registered owners as shown on the registration records of the Trustee. Interest on the Taxable 1993 Bonds so called ' for redemption shall cease on the redemption date fixed in such notice if sufficient funds are available at the principal office of the Trustee to pay the redemption price on the date so named. , See Section 3 and Section 4 of the Bond Resolution for a complete description of redemption provisions. -8- RISKS TO BONDHOLDERS (1) The principal of and interest on the Taxable 1993 Bonds aze payable only from the Pledged Funds including Lease Rental payments received by the Trustee on behalf of the Authority from the Commission pursuant to the Lease. The Authority has no taxing power. The Authority has no source of funds from which to pay debt service on the Taxable 1993 Bonds except moneys held in the Pledged Funds. If, for any reason, the Project (including the Improvements) is damaged or destroyed and unavailable for use, the Commission would no longer be able to pay Lease Rental. The Commission is required by the Lease to maintain rental value insurance in an amount equal to full rental value for a period up to two (2) yeazs. In addition, the proceeds of any property and/or casualty insurance claim for the Project (including the Improvements) would be used either to reconstruct the Project (including the Improvements) or to retire obligations issued to finance the Project (including the Improvements). To the extent that the damaged or destroyed Project (including the Improvements) is not replaced or repaired or is unavailable for use beyond the period covered by the rental value insurance, the Commission will be unable to pay the Lease Rental attributable to the damaged or destroyed Project (including the Improvements), and the Authority would have insufficient funds to pay debt service on its outstanding Taxable 1993 Bonds. (2) In the event of delayed billing, collection or distribution by the County Auditor of ad valorem property taxes levied in the District, sufficient funds may not be available to the Commission in time to pay Lease Rental when due. This risk is inherent in all property-tax supported obligations. PROCEDURES FOR PROPERTY ASSESSMENT. TAX LEVY AND COLLECTION Real property in the State of Indiana ("State") is assessed each year as of March 1st. On or before August 1st each year, the County Auditor must submit to each underlying taxing unit a statement of (i) the estimated assessed value of the taxing units as of March 1st of that year, and (ii) an estimate of the taxes to be distributed to the unit during the last six months of the current budget year. The estimated value is based on abstracts delivered to the Auditor by the township assessor or its designee on or before July 15. The estimated value is used when the governing body of a local taxing unit meets to establish its budget for the next fiscal yeaz (January 1 through December 31), and to set tax rates and levies. By statute, the budget, tax rate and levy must be established for second class cities no later than September 30th. The budget, tax levy and tax rate aze subject to review and revision by the State Board of Tax Commissioners which can lower, but not raise the tax levy or tax rate (with the exception of increasing any debt service or lease rental levy as may be required.) In order to levy an ad valorem property tax in the District, the Commission must, on or before July 15th, estimate the amount of Tax Increment it expects to collect in the subsequent calendar year. If this estimate is less than the amount needed to pay the Lease Rental due in the 12-month period beginning on July 1 of the following calendar year, the Commission must include a levy on all taxable property in the District in its budget for the subsequent calendaz year. The Commission is required by IC 36-7-14 and the Pledge Resolution to levy this tax. On or before December 31, the County Auditor prepares and delivers the final abstract of property taxes. The County Treasurer mails tax statements the following April (but mailing may be delayed due to reassessment or other factors). Property taxes aze due and payable to the County Treasurer in two installments on May 10 and November 10. If an installment of taxes is not completely paid on or before the due date, a penalty of 10 % of the amount delinquent is added to the amount due. On May 10 and November 10 of each yeaz thereafter, an additional penalty equal to 10% of any taxes remaining unpaid is added. The penalties are imposed only on the principal amount of the delinquency. Property becomes subject to tax sale procedures after 15 months of delinquency. Pursuant to State law, real property is valued for assessment purposes at its "True Tax Value" as defined in rules and regulations promulgated by the State Board of Tax Commissioners. "True Tax Vaiue" does not mean fair market value. Current regulations define the "True Tax Value", generally, as the reproduction value of property based on actual material and labor costs prevalent in the State of Indiana in 1985. The local assessor may subtract from the reproduction value, an amount for normal depreciation, as provided in the regulations, as well as amounts for functional or economic obsolescence, as the assessor deems appropriate in accordance with the regulations. The assessor is required to assess annually projects under construction to allow taxes to be levied on partial assessment. -9- PROCEDURES FOR PROPERTY ASSESSA~NT. TAR LEVY AND COLLECTION (Cont'd) "Gross Assessed Value" is equal to 33 1/3% of the "True Tax Value". "Net Assessed Value" represents the "Gross Assessed Value" less certain deductions for mortgages, veterans, the aged, the blind, economic revitalization, and tax-exempt property. The "Net Assessed Value" is the value used for fazing purposes in the determination of tax rates. If a change in assessed value occurs, a written notification is sent by either the township assessor or the County Boazd of Review to the affected property owner. Upon notification, if the owner wishes to appeal this action, the owner may file a petition requesting a review of the action. This petition must be filed with the County Auditor within 30 days after the written notification was received. While the appeal is pending, any taxes on real property which become due on the property in question must be paid in an amount based on the immediately preceding year's assessment. The next general reassessment of property in the State is scheduled to be effective Mazch 1, 1995 for taxes payable in 1996. Reassessments aze scheduled to occur every four years thereafter. The State Boazd of Tax Commissioners is required by law to make cone-time adjustment to neutralize the effect of a reassessment on property within tax increment allocation azeas so that owners of obligations secured by tax increment revenues will not be adversely affected. Indiana Code 6-1.1-12.1 provides a mechanism by which a governmental unit may authorize a property tax deduction for real property and for new manufacturing equipment within an economic revitalization area. The City may grant the tax abatement of real property for a period of (i) three, six or ten yeazs, if the petition is filed after January 1, 1986, or (ii) ten yeazs if filed after December 31, 1978 but before January 1, 1986. The City may grant the tax abatement of personal property for a period of five or ten yeazs. The deduction is equal to the increase in assessed value resulting from the rehabilitation or new development, or the assessed value of the eligible equipment, multiplied by certain prescribed percentages. Indiana Code 6-1.1-21-5 provides that each yeaz taxpayers will receive a credit for property tax replacement, known as the "property tax replacement credit" (PTRC), in the amount of approximately twenty percent (209'0) of their tax liability for taxes as defined under IC 6-1.1-22-9 which aze due and payable in May and November of that yeaz. The credit is applied to each installment of taxes. However, the tax liability of a taxpayer does not include the amount of any property tax owed by the taxpayer attributable to certain specified components of the tax levy. Among the tax levy components not receiving the PTRC aze the property taxes that will be used to pay for the principal and interest due on debt entered into after December 31, 1983. Although the State Boazd of Tax Commissioners has determined that the State's PTRC will not be allowed on gross Tax Increment, IC 36-7-14-39.5 allows a credit (the "Additional Credit") equal to the PTRC to be taken from the gross Tax Increment to compensate taxpayers in an allocation azea. Before July 15 of each yeaz, the Commission must determine and notify the County Auditor of the amount, if any, by which Tax Increment is expected to exceed the amount of property taxes necessary to meet the obligations which may be legally paid with Tax Increment, such as debt service on bonds or lease rental payments. Excess property taxes may be paid to other taxing units so long as it would not jeopazdize the interest of the owners of obligations payable from Tax Increment. Pursuant to the Pledge Resolution, the Commission cannot pass-through any excess Tax Increment to other taxing units until it annually satisfies the Lease Rental Requirement which assures that the Lease Rental due in the 12-months following the next July 1 will be paid. BOND RATING Moody's Investors Service, Inc. (Moody's) has assigned a bond rating of "A" to the Taxable 1993 Bonds. Such rating reflects only the view of Moody's and any explanation of the significance of such rating may only be obtained from Moody's. The rating is not a recommendation to buy, sell or hold the Taxable 1993 Bonds, and such rating may be subject to revision or withdrawal at any time by Moody's. Any downwazd revision or withdrawal of the rating may have an adverse effect upon the market price of the Taxable 1993 Bonds. The Authority did not apply to any other rating service for a rating on the Taxable 1993 Bonds. -10- FUTURE FINANCLtiG With the College Football Hall of Fame relocating to South Bend, the City is planning to construct a $14 million facility which will be financed in eazly 1994 with a bond issue to be repaid from private donations. Within the next six months, the Authority may issue approximately $6 million in bonds to finance public improvements and a pazking garage in the downtown in conjunction with new private investment involving renovation and new construction. LITIGATION To the knowledge of the Authority, the Commission, officials of the City of South Bend and the City Attorney, there is no litigation pending, or threatened, against the Authority, the Commission, or the City which in any way questions or affects the validity of the Taxable 1993 Bonds, or any proceedings or transactions relating to the issuance, sale or delivery thereof. The Authority will certify at the time of delivery of the Taxable 1993 Bonds that there is no litigation pending or in any way threatened questioning the validity of the Taxable 1993 Bonds, or any of the proceedings held relating to the authorization, issuance and sale of the Taxable 1993 Bonds or the Bond Resolution. UNDERWRITIIHG The Taxable 1993 Bonds aze being purchased for reoffering by the Underwriter, City Securities Corporation (the "Underwriter") at a purchase price of $4,837,507, which is shown net of $49,033 of Underwriter's discount and $18,460 of original issue discount plus accrued interest. The Purchase Agreement provides that all of the Taxable 1993 Bonds will be purchased by the Underwriter if any of such Taxable 1993 Bonds aze purchased. ' The Underwriter intends to offer the Taxable 1993 Bonds to the public at the offering prices set forth on the inside cover page of this Official Statement. The Underwriter may allow concessions to certain dealers (including dealers in a selling group of the Underwriter and other dealers depositing the Taxable 1993 Bonds into investment trusts), who may reallow concessions to other dealers. After the initial public offering, the public offering price tray be varied from time to time by the Underwriter. ' CPA VERIFICATION The accuracy of the mathematical computations of the adequacy of the principal amount of the Government Obligations, as defined in the Escrow Agreement, to be held in the Escrow Fund, together with certain other available amounts and uninvested cash, and interest income earned on such Government Obligations, to pay the principal of, interest, and redemption premium on the Taxable 1991 Bonds to and including September 1, 1993, and to redeem on that date all then outstanding Taxable 1991 Bonds will be verified by H.J. Umbaugh & Associates, Certified Public Accountants. Such computations will be based upon information, assumptions and calculations supplied by the Underwriter. CERTIFICATE ' At the time of payment for and delivery of the Taxable 1993 Bonds, upon request, the Underwriter will be furnished a certificate, .executed by proper officers, acting in their official capacity, to the effect that to the best of their ' knowledge and belief, (a) the description and statements of, or pertaining to, the issuer contained in this Official Statement and any addendum, supplement or amendment thereof, for the Taxable 1993 Bonds on the date ' of sale of said Bonds and on the date of the delivery were and aze true and correct in all material respects; (b) insofaz as the Authority and its affairs, including its financial affairs, aze concerned, such Official ' Statement did not and does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (c) insofaz as the description and statements, including financial data, of or pertaining to entities, other than the Authority, and their activities contained in such Official Statement are concerned, such statements and~data have been obtained from sources which the issuer believes to be reliable and that the issuer has no reason to believe that they aze untrue in any material respect. -11- CERTAIN LEGAL MATTERS Legal matters incident to the authorization and issuance of the Taxable 1993 Bonds are subject to the unqualified approving opinion of Baker & Daniels, South Bend, Indiana, Bond Counsel. Copies of such opinion will be available at the time of the delivery of the Taxable 1993 Bonds. Bond Counsel has not undertaken to review the accuracy or completeness of any representation contained in this Official Statement and expresses no opinion thereon nor assumes any responsibility in connection therewith. The form of legal opinion can be found in Appendix G of this Official Statement. AVAII,ABILITY OF DOCLTN~NTS AND FINANCIAL INFORMATION Copies of the complete Trust Agreement and any other legal documents are available from Baker & Daniels, Attn: Randolph R. Rompola, Esquire, First Bank Building, 205 West Jefferson, Suite 250, South Bend, Indiana 46601, Phone - (219) 234-4149. Financial statements aze available from the City of South Bend, Attn: Kevin Horton, City Controller, 1400 County-City Building, South Bend, Indiana 46601, Phone - (219) 235-9742. Requests for documents and payment for copying, mailing, and handling chazges should be directed and payable to the respective parties. This Official Statement and its execution aze duly authorized by the Authority. City of South Bend, Indiana, Redevelopment Authority By: /s/ Joseph W. Wroblewski President Attest: /s/ Donald K. Fewell Secretary-Treasurer -12- t r 1 t APPENDIX A r u TABLE OF CONTENTS Pa e s Project Personnel ......................... ..................... A-2 ~j General, Physical and Demographic Information .................... Location ..................... A-4 .......... History and General Characteristics ............. ..................... A-4 Population ............................ ..................... A-4 Government ........................... ..................... A-4 Transportation ....... i .. A-5 A-5 ................... on Police and Fire Protect ................... Education ............................ ..................... A-5 Communication ......................... Utilities .............................. ..................... A-5 ..................... A-6 Health Care ............................ ..................... A-6 ~ Recreation/Culture/Library .................. General Economic and Financial Information ................... A-6 - A-7 , Financial Institutions ...................... ..................... A-7 Industry and Economic Development ............ ................ e Employers Lar ................... A-8 - A-9 A-10 ............. ........ g Employment and Labor Force Data ............. ........ ............. A-11 Miscellaneous Economic Data ................ .................. A-11 - A-12 Building Activity ........................ ..................... A-13 Historical Net Assessed Valuations of the City of South Bend .................... ..................... A-14 `~ Detail of Net Assessed Valuation of the City of South Bend A-15 Property Taxes Assessed and Collected ......... ...................... A-16 ~~ Historical Detail of Corporation and Total Tax Rates : :::::::::::::: : ::::::: A-17 A-18 Large Taxpayers Schedule of Bonded Indebtedness ............. ...................... A-19 Notes to Bonded Indebtedness ::::::::::::::: Debt Ratios . ::::::::::::::::::: A-20 - A-22 A-22 Comparative Balance Sheet -All Funds Types and Account Groups .......................................... A-23 - A-25 Combined Statement of Revenues, Expenditures and Changes in Fund Balances -All Governmental Fund Types and Expendable Trust Funds ........ A-26 - A-27 ~ Pension Liabilities ........................ ...................... A-28 t r II PROJECT PERSONNEL Names and positions of officials of the City of South Bend and professionals who have taken part in the planning of this bond issue are as follows: Mayor Joseph E. Kernan Common Council Stephen Luecke, President Loretta Duda Sean C. Coleman Roland A. Kelly, Jr. Gene Ladewski Ann B. Puzzello Linus K. Slavinskas Cleophus Washington Thomas Zakrzewski Redevelopment Authority Joseph W. Wroblewski, President Andre B. Gammage, Vice President Donald K. Fewell, Secretary-Treasurer Bond Counsel Richard L. Hill Randolph R. Rompola Baker & Daniels 205 West Jefferson Boulevard South Bend, Indiana 46601 A-2 Redevelopment Commission Paula N. Auburn, President Roman J. Piasecki, Vice President Theo F. Sharp, Secretary Michael Donoho Philip J. Faccenda City Controller Kevin C. Horton Department of Economic Development Jon R. Hunt, Executive Director Ann E. Kolata, Deputy Executive Director Financial Advisor Myron H. Frasier, C.P.A. H. J. Umbaugh & Associates Certified Public Accountants Suite 100, 20 East 91st Street P.O. Box 40458 Indianapolis, Indiana 46240-0458 (This page intentionally left blank.) A-3 a a 1 GENERAL PHYSICAL AND DEMOGRAPHIC INFORMATION LOCATION The City of South Bend is located in St. Joseph County in north central Indiana, approximately 140 miles north of Indianapolis and 90 miles east of Chicago. The City borders on the State of Michigan and is in what is commonly known as the "Michiana" area. HISTORY AND GENERAL CHARACTERISTICS The City of South Bend was incorporated in 1865. In the 1800's Potawatomi Indians, trappers and missionaries traveled through sections of South Bend on the banks of the St. Joseph-Kankakee River. The Indians and Frenchmen settled in the area surrounding the southernmost tip of the St. Joseph River (to be known as "South Bend"). Through the years many businesses started in South Bend including the Studebaker Brothers Manufacturing Company which became the largest wagon maker in the world. In 1842 the Holy Cross Brothers founded the University of Notre Dame which has grown to over 1,200 acres and 10,000 students. Notre Dame is an integral part of South Bend's economy and community. The South Bend area has a mix of agriculture, manufacturing, commercial and tourism industries. This diversification provides the City with varied employment opportunities. POPULATION The population for the City of South Bend and St. Joseph County is provided by the U.S. Bureau of Census. City of South Bend St. Joseph County Percentage Percentage Increase/ Increase/ Year Population Decrease Population Decrease 1950 115,911 14.4 % 205,058 26.7 % 1960 132,445 14.3 % 238,614 16.4 % 1970 125,580 (5.2)% 244,827 2.6 1980 109,727 (12.6)% 241,617 (1.3)% 1990 105,511 (3.8)% 247,052 2.2% GOVERNMENT The City government of South Bend is composed of a Mayor, a nine member Common Council and a City Clerk all elected to four-year terms of office. The Common Council consists of six members elected from districts and three members at-large. Supplemental governing bodies include the Redevelopment Commission, Board of Public Works, Board of Safety, and Board of Parks and Recreation. A-4 1 TRANSPORTATION Transportation is easily accessible in South Bend with interstates I-80 and I-90 running east and west and U.S. 31, the main north/south route in the City which leads travelers to Michigan within minutes and Indianapolis in less than three hours. In addition, 45 truck lines provide carrier services. Five rail systems provide freight and passenger service and the Chicago South Shore Line connects with downtown Chicago. Amtrak provides service to major U.S. cities also. Bus transportation within the City is provided by the municipal bus service (Transpo) and STS for the elderly. Three major bus lines provide travel to many cities in the United States. The Michiaana Regional Airport serves the City with nine passenger lines providing flights to major cities. Commuter and freight service flights are also available. Chicago's O'Hare Airport is located approximately 120 miles from South Bend. POLICE AND FIRE PROTECTION The City of South Bend Police Department provides police protection for residents of South Bend and consists of 256 officers. The department includes K-9 patrols, a swat team, metro drug task force and bicycle and motorcycle patrols. The South Bend Fire Department includes 212 firefighters with equipment consisting of pumpers, river rescue boats, ambulances, ladder trucks and hazardous materials trucks.. EDUCATION The City of South Bend is served by the South Bend Community School Corporation. The Penn-Harris- Madison School Corporation provides public education for a small portion of the Ciry. The school systems provide a variety of academic and extracurricular activities. The South Bend School Corporation includes five high schools, five middle schools and 25 elementaries with a total enrollment of 21,374 for the 1992/93 school year. A staff of approximately 3,000 certified and non-certified are employed by the School Corporation. The Penn-Harris-Madison School Corporation reported an enrollment of 8,482 students for the 1992-93 school year with a certified staff of 466 and anon-certified staff of 321. South Bend has nine institutions of higher education and/or technical training including the University of Notre Dame, St. Mary's College, Indiana University at South Bend, Bethel College, Holy Cross College, a Purdue Program, Indiana Vocational Technical College, Michigana College and Davenport College. These educational institutions have a total enrollment of over 20,000 students. COMMUNICATION Communications are provided by the daily South Bend Tribune and the weekly Tri Coun , News. Several AM and FM radio stations within South Bend and Elkhart, as well as stations from Chicago, provide news and music to a variety of listeners. All major television networks are available to residents of the City with signals originating in South Bend, Elkhart, and Chicago. Cable television is also available throughout most of the City. 1 A-5 TILITIES The City of South Bend receives natural gas from Northern Indiana Public Service Company (NIPSCO), electric service from Indiana Michigan Power Company and telephone service from Indiana Bell Telephone Company. Water and sewage collection and treatment are provided by the City's municipal utilities. !~ HEALTH CARE The City of South Bend and the Michiana area aze served by four acute care hospitals: Memorial Hospital, Michiana Community Hospital, St. Joseph Medical Center in -South Bend and St. Joseph Hospital in Mishawaka. Memorial Hospital is a 526-bed hospital with approximately 2,450 employees. The hospital completed extensive growth in 1991 including a $9.5 million ambulatory care and outpatient surgery center. The center provides six surgical suites, two of which have laser equipment, and admitting and recovery azeas. The new 40,000 sq. ft. addition became the hospital's new main entrance. Additions and renovations also included the $1 million Leighton Center for Senior Health, a $1.8 million expansion of the open heart recovery areas, addition of the newest technology in the cardiac cath lab, and a renovation of the pediatric intensive Gaze center. Currently under construction is a $20 million outpatient wing and parking garage. The new four-story 80,000 sq. ft. addition will also house doctor's offices, the breast center and a pain clinic. These projects are expected to be complete by spring of 1994. The St. Joseph Medical Center employs 1,847 full and part-time employees and is licensed for 339 beds. An $8 million outpatient care facility opened in Januazy of 1989. The hospital is also undergoing several internal remodeling projects and additions. A third medical office building known as Pavilion III was occupied .in September, 1992. The $3.5 million 50,000 sq. ft. building connects to the hospital and houses the family practice medical program. The Michiana Community Hospital employs 420 and is a 107-bed hospital. The hospital has recently undergone a $4.5 million construction project which renovated the surgery unit, and expanded the radiology and the physical therapy units. Charter Hospital of South Bend is a psychiatric care facility with treatment programs for alcohol and drug abuse. In addition, there are 13 nursing homes in the City of South Bend. RECREATION/CULTURE/LIBRARY The City of South Bend has a wide variety of recreational facilities available to residents. The City has 71 public parks covering 1,400 total acres which provide swimming pools, softball and baseball diamonds, tennis courts, 35 supervised playgrounds and a recreational center. The Pazks Department also provides two 18-hole championship golf courses and one 9-hole course. The City, through its Redevelopment Authority, is currently constructing a 19-hole "championship" golf course and clubhouse, named "Blackthorn Golf Course", located within the South Bend Airport Economic Development Area. The City of South Bend is the home of the South Bend White Sox, a minor league team of the Chicago White Sox. Coveleski Regional Baseball Stadium, named after Hall of Famer, Stanley Coveleski, is a 5,000 seat facility which is rated as one of the best stadiums in minor league baseball and holds sold-out crowds during the White Sox's season. ~ Aa RECREATION/CULTURE/LIBRARY (COrit'd) The St. Joseph River flows through the City and provides scenic and boating pleasure. The Olympic-class _ East Race Waterway runs adjacent to the St. Joseph River and is a 2,000 yard man-made rafting and kayaking course. This waterway is the only man-made white water rapids in the, United States. In the summer, national and regional competitions are held on the course. The regional team trials for the 1992 U.S. Olympic team were held in South Bend. Other attractions include the Morris Civic Auditorium and the South Bend Symphony which offer cultural entertainment, the Studebaker Museum which houses a collection of carriages, wagons, cars and trucks, the Potawatomi Zoo and the Morris Conservatory. Century Center, located on the riverfront park, has 225,000 square feet of exhibit and convention space available as well as a recital hall, performance area and theater. The $14.2 million facility has experienced a steady 20 % increase in sales every five years since its opening in 1977. The Century Center currently books approximately 280,000 visitors. On July 13, 1992, the National Football Foundation announced the College Football Hall of Fame would be relocating to South Bend, Indiana. The $14 million, 50,000 sq. ft. facility will be connected to the existing Century Center in downtown South Bend. Construction is scheduled to begin in the spring of 1994 and the Hall of Fame is anticipated to open in the summer of 1995. Activities are also available at the many colleges and universities in the City, particularly St. Mary's "' College, University of Notre Dame, Bethel College and Indiana University at South Bend. The St. Joseph County Library, as well as the Indiana University at South Bend Library, and the - Mishawaka-Penn Library provide a wide range of library services to residents of the area. The St. Joseph County Library completed $8 million of renovations and additions to several branches in 1990 and 1991. GENERAL ECONOMIC AND FINANCIAL INFORMATION FINANCIAL INSTITUTIONS The following is a list of financial institutions in the City of South Bend. Total resources are reported as of March 31, 1993 as follows: Number of Number of Locations Reported Locations in South Bend Resources Standard Federal Bank (1) 119 4 $9,544,731,000 Society Bank, Indiana 35 11 2,828,000,000 Summit Bank of Fort Wayne (2) 23 1 1,584,668,000 1st Source Bank 31 10 1,421,586,000 Midwest Commerce Banking Co. 16 2 693,818,000 Valley American Bank & Trust Co. 19 6 640,838,000 Norwest Bank, Indiana, NA 7 6 233,425,000 Mishawaka Federal Savings & Loan Assn. 4 1 167,896,000 Sobieski Federal Savings & Loan Assoc. 4 4 72,418,000 (1) Branch of Troy, Michigan. (2) The reported assets represent Summit Bank of Fort Wayne. Effective April, 1993, Summit Bank ~' merged with National Bank of Detroit , Indiana. A-7 INDUSTRY AND ECONOMIC DEVELOPMENT The industries of South Bend manufacture a variety of products including ethanol, engine controls, plastic pipes, vinyl siding, and electrical switches. The Michiana azea provides varied employment opportunities. The attraction of new business and the development of four industrial parks has expanded the economic base during the last five years. St. Joseph County's manufacturing employment rose by 600 jobs during the twelve months ended April, 1993 as reported by the Indiana Department of Employment and Training Services. Bendix Aviation Corporation, initially an automotive brake factory is now a major part of Allied-Signal Inc., comprised of three major businesses: aerospace, automotive systems, and wheel and brake division. Today, Bendix carbon brakes aze used in a number of commercial and military aircraft. Bendix is a world leader in this field. Retail and shopping facilities also employ a large work force in the South Bend area. There aze two major enclosed malls, a discount mall, and several shopping centers throughout the County offering consumer goods to residents. The following are excerpts from the Chamber of Commerce of St. Joseph County reports on business expansion and new investment activity in St. Joseph County for the first quarter of 1993. ACCURIDE INTERNATIONAL INC. of Santa Fe Springs, California, is constructing a $6 million, 165,000 sq. ft. metal stamping plant in the Airport 2010 Landmark Industrial Park. When completed in August, the company will begin producing ball bearing drawer slides for sale to the many- office furniture manufacturers located in western Michigan. An estimated 250 people, most of whom will be hired locally, aze expected to be employed by the firm. As incentives, the City of South Bend granted aten-yeaz real property tax abatement and afive-yeaz personal property tax abatement, with the State of Indiana providing the firm with a $175,000 grant to help pay for infrastructure- improvements at the plant site. BENDIX WHEELS AND BRAKES completed the critical design review phase for components that will be used on the Boeing 777, the first of a new generation of big, long distance airliners. Production can now begin on the nose wheels, main wheel, and brakes, following three years of development, analysis, and prototype-testing activity. The plane, being built by Boeing Company in Seattle, Washington, is scheduled for its first flight in June, 1994. The contract will help maintain the current employment of 925 people in the declining defense mazket. CAPITAL TECHNOLOGIES. INC. will receive a tax abatement on $1.275 million of new equipment. The major new items being added aze computer-controlled milling machines and lathes. As a manufacturer of specialized industrial machinery, dies, and fixtures, the company experienced a 203'o growth last year and hopes to double the size of its operations in the next five yeass. Currently employing 124 workers, with a payroll of $5.2 million, the 35 year old firm expects to add 20 new jobs, paying about $40,000 each. COCA-COLA BOTTLING COMPANY, received the zoning necessary to relocate its distribution center to a 9.8 acre site in South Bend. Plans are to build an 80,000 sq. ft. warehouse estimated to cost $2 million. The new regional facility will service sites throughout St. Joseph, Elkhart, and Marshall Counties, utilizing 30 small trucks. Construction is expected to start soon. A-8 INDUSTRY AND ECONOMIC DEVELOPMENT (Cont'd) COLLEGE FOOTBALL HALL OF FAME plans reflect a 50,000 sq. ft., $14 million facility, most of which will be below ground. The Hall itself will occupy some 38,000 sq. ft. and will be connected to Century Center via a tunnel beneath St. Joseph Street. The 18,000 sq. ft. above- ground portion will contain a lobby, food court, and gift shop, with the outside facing Michigan Street resembling a football stadium. Verkler Construction of South Bend, will be managing construction of the project, which is currently scheduled to be completed by mid-1995. HOLY CROSS CARE SERVICES. INC., a subsidiary of Holy Cross Health System Corporation, is building a new 120 bed long-term care facility at the National Center for Senior Living in South Bend. To be called the Holy Cross Care & Rehabilitation Center (HCCRC), the $8 million state-of--the-art nursing home and rehabilitation center will replace two older, smaller nursing homes currently being operated by Holy Cross. Construction is scheduled to be completed by November, 1993. The Care Services division currently operates six nursing and retirement facilities in the local area. LOCK JOINT TUBE. INC., a steel tubing manufacturer, will complete a 33,000 sq. ft. addition to its building this spring. The $633,000 expansion follows last year's $1 million purchase of new finishing equipment to be located in the new section. Seventy new employees were added last year, in response to a 40% increase in business. Total company employment is now at 225 people. ~ MEIJER, INC., based in Grand Rapids, Michigan, is preparing 34 acres of ground for construction of a 200,000 sq. ft. retail store and a 15 acre parking lot with three retention basins. Included in the plans are ari adjoining garden center and a separate convenience store with gasoline pumps. The company has scheduled the building to start this spring. Each Meijer store encloses about the same square footage, employs about 600 to 700 people, carries full lines of fashion, general merchandise, and groceries, and is open 24 hours. O-T-D CORPORATION, based in Oakbrook, Illinois, is planning to open an aluminum shipping container manufacturing plant in the Airport Industrial Park. Plans are for Aledo Company to add a 10,000 sq. ft. warehouse addition to a recently purchased 20,000 sq. ft. site in South Bend, for leasing to O-T-D. Both personal and real property tax abatements were granted for the $900,000 project, which includes $600,000 in new production equipment. The expansion is expected to create 24 to 30 new jobs, averaging about $23,000 a year in wages, over the next year. O-T-D chose South Bend to be near its suppliers and reduce the cost of exporting to its international markets. THERMOPLASTICS. INC., in Mishawaka, is planning to invest a projected $3.2 million in capital improvements to meet new contracts and to improve product quality and efficiency. The auto parts manufacturer is now constructing a 30,860 sq. ft. addition onto an existing industrial building and is purchasing $1.5 million in new production machinery. Fifty new jobs are expected to be created over the next two years, adding $1 million to the company's annual payroll of $3.47 million. Along with an $80,000 Training 2000 grant received from IDOC to assist in upgrading new skills of new and current employees. A-9 LARGE EMPLOYERS Below is a list of South Bend's largest employers. Medical services, government and educational institutions reported employment includes full and part time employees. Reported employment was provided by company personnel or the Chamber of Commerce of St. Joseph County. Reported Name Type of Business Employment University of Notre Dame Higher education 3,500* South Bend Community School Corporation Public education 3,000 Memorial Health System Acute care health facility 2,450 Bendix/Allied Signal Divisions Airplane and auto parts 2,300* St. Joseph Care Group Acute care health facility 1,847 AM General Corp. Manufacturer of military vehicles 1,500*(1) City of South Bend City government 1,300 St. Joseph County County government 900 1st Source Bank Financial institution 821 Associates Bancorp. Inc. Computer information services 680 (2) RACO, Inc. Electrical switches and boxes 469 Michiana Community Hospital Acute care health facility 420 *Per Chamber of Commerce of St. Joseph County May, 1993 report of large employers. (1) Includes employees located in South Bend and Mishawaka. (2) Includes 126 employees on contract. A-10 ~ EMPLOYMENT AND LABOR FORCE DATA Unemployment percentages for St. Joseph County are reported as provided by the Indiana Employment Security Division and the Indiana Department of Employment and Training Services. Unemployment Rate St. Joseph County Year St. Joseph County Indiana Labor Force 1983 8.9% 11.1 % 120,500 1984 7.3 % 8.6 % 118,700 1985 6.9 % 7.9 % 125,000 1986 5.9 % 6.7 % 126,500 1987 5.5 % 6.4 % 127,240 1988 4.9 % 5.3 % 130,760 1989 4.6 % 4.8 % 132,090 1990 5.5 % 5.3 % 129,140 1991 5.7 % 5.9 % 126,160 1992, Dec* 5.9% 6.5% 128,870 1993, April* 5.5% 5.6% 128,790 *Is not annually adjusted. MISCELLANEOUS ECONOMIC DATA The following information concerning the City of South Bend, St. Joseph County and the State of Indiana has been obtained from Bureau of Census Reports and the Indiana State Library. South Bend St. Joseph County Indiana Per capita money income in 1989 $11,949 $13,277 $13,149 Median family income in 1990 $29,576 $34,206 $34,082 Average weekly earnings in manufacturing (3rd qtr. of 1992) N/A $568 $587 Population per square mile in 1990 2,897 540 155 Value added by manufacturing in 1987 $1,189,900,000 $39,270,000,000 Retail sales in 1987: Total retail sales N/A $1,686,866,000 $33,097,064,000 Sales per capita N/A $6,938 $5,985 Sales per establishment N/A $1,073,753 $1,000,425 A-11 ~ i 1 , , 1 MISCELLANEOUS ECONOMIC DATA (COrit'd) Earnings by major employment divisions in 1990 for St. Joseph County are as follows: Distribution Percent of of Industry Earnin¢s Earnings Labor Force (In 1,000's) Services $ 904,162 29.7 % 31.5 Manufacturing 715,003 23.5 % 16.0 Wholesale and retail trade 536,989 17.6 % 24.6 Government 289,251 9.5 % 9.5 Contract construction 205,834 6.8 % 5.7 Transportation, communication and public utilities 189,119 6.2 % 4.6 Finance, insurance and real estate 172,012 5.7% 6.6% Agriculture services, farming 27,154 .9 % 1.5 Mining 3.202 .1 % Total $3.042,726 100.0 % 100.0 A-I2 H F U Q z A C".. ed C _~ U .~ N .b .~ O a O 0 w 0 a~i U ., s.. w c~ b a C b w O y a! _ti 3 O N as •.• et o0 ~ a + O 6R F v; ~ ~ pp i O h M_ M M et N O p p h ~ 00 ~O O ri z ~ . . ~ N ...~ ~ ~ g rr ~p '~ O ~ O O O O N i~ `~ O ~ ~p M 00 M h h o0 ~ > ~ M N o0 O r-+ U y b O~ ~ M "-+ ~O N ~ 00 ~D O .O ~ ~ 6R a Vi , ~ ~ ~ ~ U a a~ N .~ M ...~ oo ~ ~~ ,~, N ~ ~ ~--~ N ~ p '" °' y O M M m 00 M N O ~ Q N ~ " "" p ~ ~ N N ~O ~ ~ , ~ bA ~ r7 N N ~O ^~ ~O ~-" d' ^' ~ ^' ('r1 ^' tr Vii O QQ O c ~ 69 w., 8 ~ ti 'b ~ O ° vi ' ~ 00 ' ' '~ ~ ° ~ o~ ~ ~ ~ ~ ~ o ~ M ~ h ~ ~c ~ ~ --~ ° ~ w ~O ~ b ~ C 69 g Q8 O 0 ~ +.+ .b O ~ ^O ~ ed ~U ~ M M ~ 00 eT ~0 ~ N ~ y .y V ~ y ~ ~ ~ N h ^~ N V1 O h h ~--~ O ~-+ ~ ~ ~ ~ ... + e~ V7 M ~ h M ~O ~D . O ~f'3. e~ :~ '~ ~ ~ ~ p ~ O h o0 N O~ o~ .y ~ ~ ~ U Lr y ~ ro ~ .~ ~ N M M y ~ W M M M N ~~~ ;~ O z .r ~~~~8 Q O ~ c~ ~ O Q ~ M O O ~~ v~,y w ~ Z'S ~ M o ,~ a 3 .b ~ .--~ ri .-: o N M et a e, ° o ~ x e~ ~ ~ ~ N ~ v~'l M ••y ~ ~ ~ ~ N h v1 ~ N V'i ~ +0+ ~ y ~ ~; w O v . ~ U ~ U ~" O O b ~ ~ ~ M d' V1 N 00 N ~-+ N M M "" ~ j U C ,^ p,'pA pg 'q~ y O ~ b ~ ~ ~ ~ O ~ ~ o z ~ ~ H fA $ ~ - .~ ~ $o~ p0., o ~ N ~ ~ O h O~ O 00 N w O ~ o 3 ~ N o 0 ~ ~ ~ O ~ ~ 8 h N Z ~ M N ~ ~ M po 00 L,' r ~ ~ M . ~ ~ ~ Q 6~9 ;-, 7 M N O~ M N ~ ~ ~--~ O M 00 h O~ [~ h N O ^" 'b ~ V'~ et! etS «S «s ed 6R w ~ ~ N~ N~ N~ ~ ~ b~b~bb .~ to 'a+ Cr ~ ~ ."~ .'~ C 'O ~ h ~ O~ 00 N ^d ~^ ~ ~ ~ ~ ~'" . i r .i ~NMet V'~~O z N ~O h 00 01 O ^'~ N '~ V VJ }+ ~. ~ ~ ~ ~ ~ z Q t 1 i ~~ HISTORICAL NET ASSESSED VALUATIONS OF THE CITY OF SOUTH BEND (Per St: Joseph County Auditor's Office) Year Real Personal Payable Estate Utilities Property Total 1984 $282,089,259 $20,873,970 $114,996,397 $417,959,626 1985 281,152,034 21,973,060 103,898,740 407,023,834 1986 284,893,744 20,967,360 127,172,176 433,033,280 1987 285,897,178 20,633,920 123,167,379 429,698,477 1988 290,297,209 20,850,010 122,907,516 434,054,735 1989 292,823,013 20,343,450 121,251,803 434,418,266 1990 494,756,776 20,268,470 131,705,499 646,730,745* 1991 450,489,492 23,934,710 140,156,562 614,580,764 1992 447,541,974 25,291,440 144,739,673 617,573,087 1993 451,886,055 24,673,830 146,769,523 623,329,408 NOTE: The real property assessment in Indiana that was effective March 1, 1979, was based upon 1975 costs of land, material and labor, and applied to 1979 taxes payable in 1980 through 1988 taxes payable in 1989. The real property reassessment effective March 1, 1989 is based upon 1985 costs of land, material and labor, and will apply to 1989 taxes payable in 1990 through 1994 taxes payable in 1995. For taxing purposes, assessments are made at 33 1/3 % of true tax value. Net assessed valuations represent the assessed value less certain deductions, such as deductions for mortgages, veterans, the aged, the blind and tax-exempt property. According to the St. Joseph County Auditor's office, the 1990 net assessed valuation was reduced by approximately $40,950,137 to $605,780,608 due to appeals following reassessment. A-14 DETAIL OF NET ASSESSED VALUATION OF THE CTTY OF SOUTH BEND (Per St. Joseph County Auditor's Office.) For the tax year 1992 payable 1993. Value of land and lots Value of improvements Total value of real estate Less: Mortgage, veterans', age 65 and other deductions Tax-exempt property Tax increment financing Net value of real estate Utilities Personal property 207,098,984 Less: Deductions (46,196,331) Tax increment financing (14,133,130) Net value of personal property Total net assessed valuation $ 94,177,024 548.842,600 643,019,624 (84,807,753) (81,470,840) !24.854.976) 451,886,055 24,673,830 146.769,523 $623.329.408 A-15 1 L~ c '~ .~ ~; c~ p ~ ,O vUv~~ O G .b a~ "~ `n U "d ~O ~--~ M M M `~ M I~ ~ CO ..~ ~O 00 t~ O~ -~ ~O t~ ~ 00 NOO~~OM ~ ~ cr,,, O .~ ~ ~ rn ~ ~ a~ ~ nN ~ '~ ° ~ ° ~ 3 ~ ~ a,' -+M o o oo~ o~o ~~oo ° a i N ^ ~` U ~ ~, ~ o W aq a O 6R ~; ri, ,~ ~ ai ~ ~ a~i U w ,~ ~Q ,r~ ~~~~~~~~~~ ao~o ~" U ~ ~ ~,~ y y U [~ N !f M Q~ N V'1 O~ O M O~ ~ ~ ~D o0 N N O~ N « t ~ ~ ^'r cC ~ p iU.. ~ 00 O~ 00 ~ 01 O~ N o0 00 O~ O ~ y A "" ~ N p O~O~C~O~O~O~OQ~~D\ "'r+ U O iJ Li ~ ~ O Q ~ "'~ U i••I • iii••••YYYY V ~ ~ ~ ~ ~O ~ ~ ~ ~ ~ ~ ~ ~ ~ oO ~, ~ .' ~ O h~~~r.,o O~~~~ .~ ~ ~. ~ l/') ~ ~O ~O ~O ~O ~D 00 00 y A ~ .~ . 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Net assessed valuations are for taxes payable in 1993. Percent of Total Net Assessed Net Assessed Name TXpe of Business Valuation Valuation Allied/Bendix Corporation Mfg. of airplane and auto parts $29,882,140 4.79 New Energy Company Ethanol plant 12,581,935 2.02% Indiana Michigan Power Co. Electric utility 10,748,700 1.72% Indiana Bell Telephone Co. Telephone utility 10,601,940 1.70% Edward Rose of Indiana Apartments and real estate 6,055,950 .97% AT&T Communications Telephone utility 5,638,370 .90% Marriott Hotel 5, 335,405 .86 Northern Indiana Public Gas utility 5,086,040 .82 Service Co. Ameritech Communications 4,657,740 .75 Massachusetts Mutual Life Insurance Co. Scottsdale Mall 4,521,230 .73% Total $95,109,450 15.26 The total net assessed valuation of the City of South Bend for the year payable 1993 is $623,329,408. The ten largest taxpayers represent 15.26 % of the total net assessed value. A-18 SCHEDULE OF BONDED INDEBTEDNESS The following schedule shows the outstanding bonded indebtedness of the City of South Bend and the taxing units overlapping its jurisdiction as of June 16, 1993 as reported by the respective taxing units. Pronertv Tax Supported Debt Total Debt Direct Debt: Redevelopment Authority $26,410,000 (1) Redevelopment District 4,800,000 (2) Civic Center Building Authority 3,385,000 (3) Total Direct Debt Overlapping Debt: St. Joseph County 2,300,000 (4) St. Joseph County Public Library 9,410,000 (5) South Bend Community Schools 30,105,654 (6) Penn-Harris-Madison Schools 68,294,623 (7) St. Joseph County Airport Authority See Note (8) Mishawaka Penn Township Public~Library 1,890,000 (9) South Bend-Portage Township 1,600,000 (10) Total Overlapping Debt Total Direct and Overlapping Indebtedness Revenue Supported Debt: City of South Bend $10,080,000 (11) Additional debt which is not an obligation of the City includes: South Bend Redevelopment Commission $ 7,635,000 (12) Percentage Amount Allocable Allocable to City of to City of South Bend South Bend 100.00% $26,410,000 100.00% 4,800,000 100.00 % 3.385.000 34 595 000 41.85 % 962,550 60.81 % 5,722,221 63.35% 19,071,932 2.90% 1,980,544 2.79 % 52,731 96.53 % 1.544.480 29.334,458 $63,929,458 100.00% $10,080,000 100.00% $ 7.635,000 A-19 NOTES TO BONDED INDEBTEDNESS ' (1) Taxable Lease Rental Acquisition and Refunding Revenue Bonds of 1993 (Airport Economic Development Area Public Improvement Project) $4,905,000 Lease Rental Revenue Bonds of 1992 5,680,000 1990 Tax-Exempt Lease Rental Revenue Bonds (Airport Economic Development Area Public Improvement Project) 2,355,000 ' 1990 Lease Rental Revenue Bonds (South Bend Central Development Area Public Improvement Project) 4,895,000 ' 1991 Taxable Lease Rental Revenue Bonds (Coveleski Stadium) Refunding 3,195,000 1992 Lease Rental Revenue Refunding Bonds (Parking Garage Facility) 4,005,000 1992 Taxable Lease Rental Revenue Bonds (Palais Royale Project) 1,375.000 Total $26.410,000 Note: The above does not include $4,200,000 outstanding of 1990 Taxable Lease Rental Revenue Bonds which are being refunded by the proposed issue. Although all the Redevelopment Authority Lease Rental Revenue bond issues are supported by a property tax pledge, the Coveleski Stadium Lease Rental Bonds are the only bonds intended to be, and actually being, paid from a property tax levy. The other lease rental revenue bond issues are intended to be paid (and those issued actually are being paid) primarily from tax increment revenues and other revenues such as parking garage revenues. (2) 1990 Redevelopment General Obligation Bonds (Studebaker Corridor Project) (3) 1977 Civic Center Building Authority Bonds Note: In addition, the City has entered into capital leases for various types of equipment, the Studebaker Museum, remodeling costs of the Municipal Services Facility, parking garage facilities and water and sewage facilities. ' Balance Balance January 1, 1992 at December 31. 1992 Obligations under Capital Leases: $3,737,032 $3,632,620 (4) St. Joseph County Capital Improvement Bonds ' Jail Renovation Bonds of 1979 Total $ 4.800,000 $ 3,385,000 $ 2,000,000 300.000 $2.300,000 Note: Officials of St. Joseph County anticipate issuing approximately $50 million of Lease Rental debt in late 1993 or early 1994 for a new jail and juvenile detention center. A-20 NOTES TO BONDED INDEBTEDNESS (Cont'd) (5) South Bend Library Leasing Corporation Bonds $1,770,000 Public Library General Obligation Refunding Bonds of 1992 7.640.000 Total 9 410 000 In addition, the Library has a $700,000 tax anticipation warrant. , (6) Edison Middle School Building Corporation Bonds of 1992 $15,750,000 General Obligation Bonds of 1988 1,200,000 ' South Bend Middle School Building Corporation $2,865,000 Less cash and investments (4.734) 2,860,266 Common School Fund Loans 1,045,388 ' Building Corporation First Mortgage Bonds of 1991 9.250.000 Total 30 105 654 The School Corporation anticipates receiving a common school fund loan this fall for approximately $500,000 and issuing approximately $55 million of lease rental debt for a high school in 1994. (7) Bittersweet School Building Corporation $ 1,585,000 Less cash and investments (584.467) $ 1,000,533 PHM School Building Corporation Refunding Bonds of 1992 8,730,000 Elm Road School Building Corporation Bond of 1986 4,095,000 Less cash and investments !3.503) 4,091,497 PHM Building Corporation First Mortgage Refunding Bonds, Series 1992 41,360,000 Brick Road School Building Corporation Bonds 5,162,831 Less cash and investments (42.624) 5,120,207 Common School Fund Loans 3,098,886 Veterans Memorial Loan 253,500 General Obligation Bonds of 1991 4.640.000 Total 68 294 623 , Note: The School Corporation anticipates receiving , a $205,000 common school fund loan this fall. (8) The St. Joseph County Airport Authority anticipates issuing approximately $ 7 million of general obligation debt later this summer. The majority of this debt will be paid from passenger facility charges. A-21 ' NOTES TO BONDED INDEBTEDNESS (Cont'd) (9) 1987 General Obligation Refunding Bonds $ 1,370,000 1982 General Obligation Bonds 520,000 Total 1 890 000 (10) Poor Relief Bonds of 1992 $ 1,600,000 (11) 1993 Sewage Works Refunding Revenue Bonds $10,080.000 (12) 1985 Tax Increment Revenue Bonds $ 750,000* 1986 Tax Increment Revenue Bonds 350,000* 1988 Tax Increment Revenue Bonds 1,775,000 1992 Tax Increment Refunding Revenue Bonds 4,760,000 Total 7 635 000 * Unrefunded portion In addition, the Redevelopment Commission has a $2.6 million BAN outstanding to finance certain costs associated with the planning of the College Football Hall of Fame. The City anticipates issuing approximately $14 million of debt to complete the project. Private donations are expected to help fund this project. DEBT RATIOS The following schedule presents the ratios relative to the property tax supported indebtedness of the City of South Bend and the taxing units overlapping its jurisdiction as of June 16, 1993. Allocable Total Direct Debt Portion of Direct and Including All Other Tax Overlapping Proposed Supported Supported Issue Debt Debt $34,595,000 $29,334,458 $63,929,458 Per capita (1) $327.88 $278.02 $605.90 Percent of net assessed valuation (2) 5.55 % 4.70 % 10.25 % Percent of assumed true tax value (3) 1.85 % 1.57 % 3.42 (1) Based upon 1990 census data, the population of the City of South Bend is estimated at 105,511. (2) The net assessed valuation of the City of South Bend for taxes payable in 1993 is $623,329,408 according to the St. Joseph County Auditor's office. (3) Assumes that the net assessed valuation is 33 1/3% of true tax value, which is not the equivalent of fair market value. True tax value is equal to the reproduction value of property based on material and labor costs in the State of Indiana in 1985. 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Provided below is a statement of unfunded accrued liability as reported by PERF computed on the. basis of amortized cost. At June 30, 1992, the City had 736 employees covered by PERF. The employer contributions for the twelve months ended December 31, 1992 were S954,194. ' Unfunded 1993 Accrued Employer Liability Percentage of ' 6/30/92 Contribution City of South Bend $ -0- (1) 5.00% (1) The City has a surplus of 51,505,382. The execution of this Official Statement has been duly authorized by the South Bend Redevelopment Authority. 1 C~. ~ ~-' elide ,Redevelopment Authority n ii ' A-28 (This page intentionally left blank.) IJ ii ii s u f n APPENDIX B t ii H.J. Umbaugh & Associates Certified Public Accountants Suite 100 9100 Meridian Square 20 East 91st Street PO Box 40458 Indianapolis, Indiana 46240-0458 Telephone 317 8447288 Telecopier 317 848-3604 July 9, 1993 South Bend Redevelopment Authority City of South Bend 1200 County-City Building South Bend, Indiana 46601 Members of the Redevelopment Authority: In connection with the issuance of $4,905,000 principal amount of Taxable Lease Rental Acquisition and Refunding Revenue Bonds of 1993 (Airport Economic Development Area Public Improvement Project) (the "Taxable 1993 Bonds"), we have, at your request, compiled this special purpose report and the following schedules for inclusion in the Final Official Statement dated July 9, 1993 for the Taxable 1993 Bonds: Pa e s 2 - 7 General Comments g Estimated Sources and Uses of Funds for the Taxable Lease Rental Acquisition and Refunding Revenue Bonds of 1993 9 Schedule of Amortization of $4,905,000 of Lease Rental Acquisition and Refunding Revenue Bonds of 1993 10 - 11 Analysis of Lease Payments on the Taxable 1993 Bonds and Existing Bonds and Estimated Tax Increment 12 - 13 Tax Increment Revenue Estimate In the preparation of these schedules, assumptions were made as noted regarding certain future events. As is the case with such assumptions regarding future events and transactions, some or all may not occur as expected and the resulting differences could be material. We have not examined the underlying assumptions nor have we audited the historical data. Consequently, we express no opinion thereon nor do we have a responsibility to prepare subsequent reports. Plymouth Office 219 935-5178 Myron H. Frasier, CPA Roger L. Umbaugh, CPA Edward W. Guntz, CPA Gerald G. Malone, CPA Charles A. Dalton, CPA David C. Frederick, CPA John D. Julien, CPA John M. Seever, CPA Hetschell J. Umbaugh, CPA (1915-1989) 0 I~'~ SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY GENERAL COMMENTS The Redevelopment Authority of the City of South Bend, Indiana (the "Authority") is issuing $4,905,000 of Taxable Lease Rental Acquisition and Refunding Revenue Bonds of 1993 (South Bend Airport Economic Development Area Public Improvement Project) (the "Taxable 1993 Bonds") to provide for the refunding of the $4,200,000 Taxable Lease Rental Revenue Bonds (of 1991) (Airport Economic Development Area Public Improvement Project) (the "Taxable 1991 Bonds"), to pay issuance costs, and to pay the cost of acquiring certain land and .constructing certain public improvements (the "Improvements") in the South Bend Airport Economic Development Area (the "EDA"). A Lease dated as of August 1, 1990, as amended by an Addendum to Lease dated January 29, 1991, and as further amended by an Addendum to Lease after the sale of the Taxable 1993 Bonds (collectively referred to as the "Lease"), between the Authority and the South Bend Redevelopment Commission (the "Commission"), provides, among other things, for the Commission to make semi-annual lease payments (the "Lease Rental") to the Authority in amounts that will enable the Authority to pay the principal, interest and fiscal agency fees on the Taxable 1993 Bonds. Funds for the Lease Rental will be provided from ad valorem property taxes levied on all taxable property in the South Bend Redevelopment District (the "District"), which has the same taxing boundaries as the City of South Bend. However, the Commission intends to use Tax Increment to the extent such revenue is available, (as further described in this Report) to pay the Lease Rental. Each year when the City prepares its budget, the Commission shall levy a special benefits tax on the District in a total amount sufficient, together with all other funds (from sources other than special taxes, ie. Tax Increment) deposited previously, or anticipated to be deposited, in the Commission's Airport Economic Development Area Taxable Public Improvement Project Principal and Interest Account (the "Principal and Interest Account"), to pay all Lease Rental due in the 12-month period beginning on July 1 of the following calendar year (the "Lease Rental Requirement"). Additional information concerning these matters is provided in the Final Official Statement dated July 9, 1993, and the Appendices included therein. Background Information Concerning the EDA Improvements and Financing The Commission designated the EDA to be an allocation area for the purpose of capturing incremental property tax revenues ("Tax Increment" as further described herein) to pay Lease Rental on bonds issued to finance certain improvements (the "Project") in or serving the EDA. The EDA encompasses existing industrial parks and commercial businesses as well as hundreds of acres of developable land surrounding the Michiana Regional Airport and the Indiana Toll Road. The Project, which includes land acquisition and infrastructure improvements, together with a public golf course, are intended to stimulate additional business development in the EDA. The Authority issued $4,200,000 of Taxable Lease Rental Revenue Bonds (defined previously as the "Taxable 1991 Bonds") (which are being refunded with the Taxable 1993 Bonds) and $2,355,000 of (Tax-Exempt) Lease Rental Revenue Bonds (the "Tax-Exempt 1991 Bonds") in February and March of 1991, respectively, to finance the Project; and the Authority issued $5,680,000 Lease Rental Bonds of 1992 (the "1992 Golf Bonds") in October of 1992 to finance the golf course project. Although all three bond issues are supported with the special benefits tax, the Commission intends to use Tax Increment as the primary source of revenue to pay Lease Rental on the Taxable 1993 Bonds and on the Tax-Exempt 1991 Bonds; and to use golf course revenues as the primary source of revenue for the 1992 Golf Bonds, with Tax Increment as aback-up (to avoid having to levy a special benefits tax) if golf revenues are insufficient. (Continued on next page) B-2 SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY (Cont'd) GENERAL COMMENTS Estimated Sources and Uses of Funds for the Taxable Lease Rental Acquisition and Refunding Revenue Bonds of 1993 -Paae B-8 ' The anticipated costs of refunding the outstanding Taxable 1991 Bonds and funding the Improvements are listed in this schedule as estimated by the Underwriter and other professionals involved in the ' refunding. The total expected costs of the refunding program amount to $5,089,039 and include $4,347,541 for the purchase of federal securities, $198,900 cash deposit to the escrow account, $171,559 in issuance and underwriting costs, and $311,516 for costs associated with the Improvements. The , accrued interest, estimated at $24,523, together with approximately $35,000 of funds on hand in the Bond Interest Account of the Construction Fund for the Taxable 1991 Bonds, will be deposited in the Sinking Fund of the Taxable 1993 Bonds at the time of closing. The expected costs of the refunding will be financed from the proceeds of $4,905,000 of Taxable 1993 Bonds and $124,516 of funds on hand ' currently remaining in the Construction Account for the Taxable 1991 Bonds which will be transferred into the Construction Fund for the Taxable 1993 Bonds to provide additional funds for Improvement costs. ~, As a separate transaction, apart from the Taxable 1993 Bonds and the Lease with the Authority, the Commission intends to use approximately $100,000 of Tax Increment surplus, currently held in its ~' Principal and Interest Account, to pay for public improvements and additional land acquisition costs in the EDA in conjunction with the Improvements by the Authority. _ i i h h T ill b h d i d , rustee w ear nterest at suc t rates an te w t e The federal securities to be purchased and depos o will be scheduled to mature at such times and in such amounts so as to provide for the scheduled principal and interest payments and redemption premium due on the outstanding Taxable 1991 Bonds to and including September 1, 1993, when the Taxable 1991 Bonds are expected to be redeemed. On September 1, 1993, the remaining principal of the Taxable 1991 Bonds will be redeemed by the Trustee at a o redemption price equal to 103 percent of the principal amount, plus accrued interest. Schedule of Amortization of $4.905.000 of Taxable Lease Rental Acquisition and Refunding_Revenue Bonds of 1993 -Page B-9 D , The amortization, as provided by the Underwriter, of the $4,905,000 of Taxable 1993 Bonds is presented in this schedule. The Taxable 1993 Bonds will mature serially over a,period of approximately nineteen years and one month ending August 1, 2012, at interest rates resulting from the negotiated sale to the Underwriter. A net effective interest rate of 7.252139 percent is shown. The interest and principal are scheduled to be payable semi-annually, with the first interest payment on February 1, 1994 and principal 1994 inning August 1 ayments be , . , p g Analysis of Lease Payments on the Taxable 1993 Bonds and Existing Bonds and Estimated Tax Increment -Paae B-10 , The Commission anticipates that Tax Increment will be sufficient to meet the Lease Rental Requirement on the Taxable 1993 Bonds during the time the Taxable 1993 Bonds are outstanding. In the event the , Tax Increment on deposit, or anticipated to be on deposit, in the Principal and Interest Account is estimated to be insufficient to meet the Lease Rental due in a 12 month period following July 1 of the next calendar year, the Commission must levy a debt service rate sufficient to meet the annual Lease , Rental. Based on the current net assessed value of $623,329,408 of the Redevelopment District, the Commission would need to levy a debt service rate of $0.0016 per $100 assessed value for every $10,000 of annual Lease Rental needed (disregarding the effect of excise tax). (Continued on next page) B-3 , Z Z 0 U U Q U J m 0 LL ~~ U '~ w U ' O m iii ~i ii ~i ~i ~i 1~ SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY GENERAL COMMENTS Analysis of Lease Payments on the Taxable 1993 Bonds and Existing Bonds and Estimated Tax Increment - Pa eg B-10 (Cont'd) (a) Term and Rate (Cont'd) The Taxable 1993 Bonds are dated July 1, 1993 and mature serially over a period of approximately 19 years and one month. The Taxable 1993 Bonds are amortized based on taxable interest rates resulting from the negotiated sale to the Underwriter. (b) Estimated Lease Rental f r the Taxable 1993 Bonds Estimated semi-annual Lease Rental payments based on $4,905,000 Taxable 1993 Bonds, are shown in this schedule. After the sale of the Taxable 1993 Bonds, each semi-annual Lease Rental amount is to be reduced to an amount which will be equal to the principal and interest payments in each bond year, rounded upward to the next $1,000, plus $2,000 for payment of fiscal agency charges, and divided by two, as provided in the Lease. The Lease Rental will be payable semi-annually on each January 28th and July 28th, beginning January 28, 1994. A final schedule of Lease Rental payments is shown in the Addendum to Lease to be adopted following the sale of the Taxable 1993 Bonds. (c) Lease Rental Pa,~ments for the Tax-Exempt 1991 Bonds The semi-annual Lease Rental payments due on the Tax-Exempt 1991 Bonds are also shown in this schedule because the Commission intends to use Tax Increment to pay the Lease Rental when due on both the Taxable 1993 Bonds and the Tax-Exempt 1991 Bonds. (d) Estimated Tax Increment As shown in the schedule, Tax Increment is estimated to be sufficient to cover the Lease Rental due on both the Taxable 1993 Bonds and the Tax-Exempt 1991 Bonds. (Refer also to the "Tax Increment Revenue Estimate" Section included in the "General Comments" contained in this Report.) (e) Coverage Estimated semi-annual Tax Increment will provide an estimated debt coverage ranging from 1.29 to 2.12 for the both the Taxable 1993 Bonds and the Tax-Exempt 1991 Bonds. (Continued on next page) B-4 SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY GENERAL COMMENTS Analysis of Lease Payments on the Taxable 1993 Bonds and Existing Bonds and Estimated Tax Increment - Pa e~ B=10 (Cont'd) (f) Estimated Cumulative Surplus and Lease Rental Requirement (Cont'd) The Cumulative Surplus column begins with an estimated balance of $583,463 which is based on the actual surplus balance of $415,000 Tax Increment on-hand in the Commission's Principal and Interest Account plus the June, 1993 Tax Increment revenue in the amount of $268,463 according to the County Auditor, less $100,000 of surplus funds that the Commission intends to use for additional land acquisition and public improvements in the EDA. The estimated semi- annual surplus Tax Increment is then added to this beginning balance to provide the estimated cumulative surplus shown. The Commission intends to accumulate this surplus Tax Increment in its Principal and Interest Account to meet the Lease Rental Requirement equal to the next two semi-annual Lease Rental payments due in the 12 months after the next July 1 (the lease rental payments due on the following July 28th and January 28th) on both the Taxable 1993 Bonds and the Tax-Exempt 1991 Bonds. If the Lease Rental Requirement is met with surplus Tax Increment (as shown in this schedule), then the Commission would not need to annually levy the special benefits tax. The Commission further intends to use any excess Tax Increment surplus available, after meeting the Lease Rental Requirement on the Taxable 1993 Bonds and on the Tax-Exempt 1991 Bonds, to. meet the Lease Rental Requirement on the 1992 Golf Bonds to the extent that golf course revenues are insufficient. Tax Increment Revenue Estimate - Pa eg B-11 The Lease Rental is payable from Tax Increment which consists of property tax proceeds from assessed valuation of real property within the EDA in excess of the base assessed valuation (as reduced by the Additional Credit as defined below). The Tax Increment is collected in the Commission's Principal and Interest Account pursuant to the Lease and the "Form of Pledge Resolution" (refer to Appendices D and F). The base assessed value means the net assessed value of all the property in the EDA as finally determined for the assessment date immediately preceding the effective date of a declaratory resolution adopted by the Commission when establishing the EDA. The base assessment date of the EDA is March 1, 1989. (Continued on next page) B-5 ~~ D C 2 ~, 0 D m ~r m 0 ~, D n n o c z z II '' ~i ~. ~, ~. i~ SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY GENERAL COMMENTS Tax Increment Revenue Estimate - Pa eg B-11 (Cont'd) (Cont'd) The tax incremental assessed value is determined by subtracting the Base Net Assessed Value from the current net assessed value as of the assessment date. The tax incremental assessed value is then multiplied by the aggregate of the current property tax rates of all taxing units overlapping the EDA to determine gross tax increment which is then reduced by the Additional Credit, which is equal to the State Property Tax Replacement Credit (the "PTRC"), to determine the annual Tax Increment. After property taxes are paid to the County Treasurer on or before each June 30 and December 31, such taxes are paid over to the County Auditor who, based on the previous year's certification, pays the portion of property tax receipts which represents Tax Increment to the Commission to deposit in the Principal and Interest Account. See "Procedures for Property Assessment, Tax Levy and Collection" in the Official Statement dated July 9, 1993. The "Tax Increment Revenue Estimate" is based in part on the estimated increased incremental assessed valuation which occurs as certain real property tax abatements are reduced on approximately thirty properties within the EDA. These improvements were completed and assessed primarily in the mid to late 1980's, but were granted real property tax abatements. The increased assessed value is produced as the property tax abatements are reduced according to percentages established by State statute. The estimates of increased assessed values rely on copies of actual abatement schedules on record in the St. Joseph County Auditor's office. The estimated Tax Increment to be generated from the reduction in these existing real property tax abatements is shown in the "Abatement Reduction" column of this schedule. These net figures are derived from the sum of estimated annual incremental assessed value from all the existing abatement reduction schedules multiplied by the 1993 property tax rate, less the Additional Credit equal to the PTRC. The "Tax Increment Revenue Estimate" schedule also includes estimated Tax Increment from new developments that were constructed in the EDA and were first assessed in 1992, but are not subject to tax abatement. The assessed values for these developments were obtained from property tax records from the St. Joseph County's Auditor's office. The net figures shown in the "Unabated 1992 Development" column of this schedule are derived from the sum of their estimated incremental assessed values multiplied by the 1993 property tax rate, less the Additional Credit. In making the calculations described in the foregoing paragraphs, the incremental assessed value was determined by subtracting the base net assessed value from the anticipated annual increased net assessed value. The current 1993 property tax rate of $14.0249 per $100 assessed valuation and the PTRC factor of .15848 for South Bend-German Township were used to calculate the estimated Tax Increment shown in this schedule. The "Adjusted Tax Increment" column represents the sum of the previous two columns, adds an estimated annual $27,000 Tax Increment to account for the increase in the value of developed land in the EDA, and assumes a 95% annual collection rate (beginning with the 1994 collection year). (Continued on next page) B-6 SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY GENERAL COMMENTS Tax Increment Revenue Estimate - Paae B-11 (Cont'd) Cont'd ' ( ) The "Estimated 1993 New Development" column represents estimated Tax Increment from new developments in the EDA that are currently under construction, or anticipated to begin construction in the near future, based on cost and timing information provided by the City of South Bend Department of Economic Development (the "City Staff"). These new developments primarily include light industrial buildings, an apartment complex, a $6 million Meijer's Department Store and a $6 million metal stamping plant for Accuride International Inc. True Tax Value was estimated at 50 % of investment cost for all metal buildings and 70 % for all other types of construction. Estimated assessed value is 33 % of True Tax Value. Tax abatements were assumed if indicated by City Staff. The current 1993 property tax rate and PTRC factor were assumed in calculating the estimated Tax Increment for the estimated 1993 new development. For each year of the "Tax Increment Revenue Estimate", the property tax rate was assumed to remain the same. Neither a decrease in tax rate nor an increase in assessed valuation was included for future general reassessment years. The next general reassessment is scheduled to be effective March 1, 1995 for taxes payable in 1996, and is scheduled to occur every four years thereafter. The State Board of Tax Commissioners is required by law to make an adjustment to the base assessed value to "neutralize" the effect of reassessment within tax allocation areas so that owners of bonds secured by tax increment will not be adversely affected. For each year of the "Tax Increment Revenue Estimate" the Tax Increment was assumed to be reduced by the Additional Credit equal to the 1993 PTRC. B-7 u 1 ' SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY ' ESTIMATED SOURCES AND USES OF FUNDS FOR THE TAXABLE LEASE RENTAL ACQUISITION AND REFUNDING REVENUE BONDS OF 1993 ' Sources of Funds Taxable 1993 Bonds Funds on hand in the Taxable 1991 Construction Account Funds on hand in the Taxable 1991 Bond Interest Account ' Accrued interest ~ Total Sources of Funds ' Z 0 U U U J m 7 ° LL Uses of Funds _ 2 W Escrow - U.S. Government securities o Escrow -cash Underwriter's discount Original issue discount Q Estimated bond issuance costs Estimated costs of the Improvements Deposit to the Sinking Fund of the Taxable 1993 Bonds ' Total Uses of Funds ' (Subject to the comments in the accompanying report dated July 9, 1993 of H.J. Umbaugh & Associates.) ' B-8 $4,905,000.00 124,516.00 35,000.00 24.522.69 $5,089.038.69 $4,347,540.80 198,900.00 49,032.70 18,460.10 104,066.40 311,516.00 59.522.69 $5,089,038.69 SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY SCHEDULE OF AMORTIZATION OF $4,905,000 OF TAXABLE LEASE RENTAL ACQ UISITION AND REFUNDING REVENUE BONDS OF 1993 Principal and interest payable semi-annually, February 1st and August 1st. Net effective interest rate 7.2521392 Dated July 1, 1993. Semi-annual Mon/Yr of Assumed Debt Bond Year Maturity Principal Rate Interest Service Total Feb-94 $ 198,067.92 $ 198,067.92 Aug-94 $ 20,000 4.20% 169,772.50 189,772.50 $ 387,840.42 Feb-95 20,000 4.50% 169,352.50 189,352.50 Aug-95 20,000 4.70% 168,902.50 188,902.50 378,255.00 Feb-96 45,000 4.90% 168,432.50 213,432.50 Aug-96 45,000 5.10% 167,330.00 212,330.00 425,762.50 Feb-97 50,000 5.25 % 166,182.50 216,182.50 Aug-97 50,000 5.40% 164,870.00 214,870.00 431,052.50 Feb-98 70,000 5.60% 163,520.00 233,520.00 Aug-98 70,000 5.75 % 161,560.00 231,560.00 465,080.00 Feb-99 85,000 5.90% 159,547.50 244,547.50 Aug-99 90,000 6.00% 157,040.00 247,040.00 491,587.50 Feb-00 95,000 6.10% 154,340.00 249,340.00 Aug-00 100,000 6.20% 151,442.50 251,442.50 500,782.50 Feb-O1 105,000 6.30% 148,342.50 253,342.50 Aug-Ol 110,000 6.40% 145,035.00 255,035.00 508,377.50 Feb-02 115,000 6.50% 141,515.00 256,515.00 Aug-02 120,000 6.60% 137,777.50 257,777.50 514,292.50 Feb-03 125,000 6.70% 133,817.50 258,817.50 Aug-03 130,000 6.70% 129,630.00 259,630.00 518,447.50 Feb-04 135,000 6.85 % 125,275.00 260,275.00 Aug-04 140,000 6.85 % 120,651.25 260,651.25 520,926.25 Feb-OS 145,000 7.00% 115,856.25 260,856.25 Aug-OS 150,000 7.00% 110,781.25 260,781.25 521,637.50 Feb-06 155,000 7.10% 105,531.25 260,531.25 Aug-06 165,000 7.10% 100,028.75 265,028.75 525,560.00 Feb-07 170,000* 7.35% 94,171.25 264,171.25 Aug-07 175,000* 7.35% 87,923.75 262,923.75 527,095.00 Feb-08 180,000* 7.35% 81,492.50 261,492.50 Aug-08 190,000* 7.35% 74,877.50 264,877.50 526,370.00 Feb-09 200,000** 7.40% 67,895.00 267,895.00 Aug-09 205,000** 7.40% 60,495.00 265,495.00 533,390.00 Feb-10 215,000** 7.40% 52,910.00 267,910.00 Aug-10 225,000** 7.40% 44,955.00 269,955.00 537,865.00 Feb-11 235,000** 7.40% 36,630.00 271,630.00 Aug-11 240,000** 7.40% 27,935.00 267,935.00 539,565.00 Feb-12 255,000** 7.40% 19,055.00 274,055.00 Aug-12 260,000** 7.40% 9.620.00 269.620.00 543.675.00 Totals 905 000 $4.492,561.67 9,397,561.67 9,397,561.67 *Represents $715,000 Term Bond due August 1, 2008 subject to mandatory sinking fund redemption in the above amounts and on the above dates. **Represents $1,835,000 Term Bond due August 1, 2012 subject to mandatory sinking fund redemption in the above amounts and on the above dates. 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O O '•~+ ~--~ N N M O .~ 0000000000~~1-+~-+~--~~~ ~ A ~ ~ ~ ~ ~ ~ ~ ON ONO ONO ON~NO ONO ON~NO No a U ~ V'1 Vo~~ooO~OOCl~tp~opoopo0~0oo~00~--~ ANN V ~I ~ N N N N O O O O N N O N O N O N O ~ CL •U ~~., O N Q i ~~ ~_ ~ ~ ~ •y,+ ~ rM ~~ ~ w O O U M N O\ o ~ ~-' ti O .b C/1 y ...~ ,., cd 'O APPENDIX C RESOLUTION NO. 77 RESOLUTION OF THE SOUTH BEND REDEVELOPMENT AUTHORITY AUTHORIZING THE ISSUANCE OF THE SOUTH BEND REDEVELOPMENT AUTHORITY TAXABLE LEASE RENTAL ACQUISITION AND REFUNDING REVENUE BONDS OF 1993 (AIRPORT ECONOMIC DEVELOPMENT AREA PUBLIC IMPROVEMENT PROJECT) AND OTHER RELATED MATTERS WHEREAS, the South Bend Redevelopment Authority (the "Authority") has been created pursuant to I.C. 36-7-14.5 as a separate body, corporate and politic, and as an instrumentality of the City of South Bend to finance local public improvements for ~ lease to the South Bend Redevelopment Commission (the "Commission"); and WHEREAS, the Authority intends to issue bonds in the aggregate amount not to exceed Five Million and 00/100 Dollars ($5,000,000.00) pursuant to I.C. 36-7-14.5-19 to be known as the "South Bend Redevelopment Authority Taxable Lease Rental ' Acquisition and Refunding Revenue Bonds of 1993 (Airport Economic Development Area Public Improvement Project)" (the "Bonds"), the proceeds of which are to be used to: (i) advance refund the South Bend Redevelopment Authority Taxable Lease Rental Revenue Bonds (Airport Economic Development Area Public Improvement Project) (the ' "Refunded Bonds") issued in 1991 to pay the costs of constructing and acquiring certain land and public improvements located in the Airport Economic Development Area (the "Area"); (ii) acquire additional land and construct certain public improvements in the Area; and (iii) pay the costs of issuance of the Bonds; and WHEREAS, the Authority intends to amend the currently existing lease of the Project with the Commission dated as of August 1, 1990, which was subsequently amended as of January 29, 1991, (collectively the "Lease"), which Lease was heretofore approved and executed by this Authority; and WHEREAS, there has been prepared and submitted to the Authority a form of Trust Agreement to be dated as of July 1, 1993, between the Authority and Society National Bank, Indiana, as Trustee (the "Trust Agreement") which Trust Agreement provides for, among other things, the issuance of such Bonds to finance the refunding of the Refunded Bonds; and WHEREAS, a Preliminary Official Statement of the Authority (the "Preliminary Official Statement") dated June 29, 1993, relating to the issuance of the Bonds has been prepared by H.J. Umbaugh & Associates, as financial advisor to the Authority, and presented to the Authority; and WHEREAS, there has been prepared and submitted to the Authority a form of Irrevocable Escrow Deposit Agreement to be dated as of July. 1, 1993, between the Authority and Society National Bank, Indiana, as Escrow Trustee (the "Escrow Agreement"), which Escrow Agreement provides for, among other things, the deposit of a portion of the proceeds of the Bonds with the Escrow Trustee in an amount, plus investment earnings thereon, that will be sufficient to pay all principal of and interest on the Refunded Bonds; C-2 NOW, THEREFORE, BE IT RESOLVED, by this South Bend Redevelopment Authority as follows: Section 1. In order to pay and finance the costs of the purposes described herein, and to pay costs of issuance, there is hereby authorized and there shall be executed, issued, and delivered by and on behalf of the Authority, pursuant to I.C. 36- 7-14.5 et sea., the Bonds in the aggregate principal amount not to exceed Five Million and 00/100 Dollars ($5,000,000.00). The Bonds shall be designated as taxable in their title. Section 2. The Bonds are hereby authorized to be issued under, pursuant to, and in accordance with the Trust Agreement with a final maturity date of not later than August 1, 2012, a maximum rate of interest for any maturity of eight and one-half percent (8.5%) per annum, a maximum underwriter's discount not to exceed one percent (1.000) and a maximum original issue discount not to exceed one-half percent (.50%) of such aggregate principal amount. Principal of and interest on the Bonds will be payable semiannually on February 1 and August 1. The proceeds of the Bonds shall be delivered to the Trustee and applied by the Trustee in accordance with the Trust Agreement. Section 3. The Bonds maturing on or after February 1, 2004, may be redeemed prior to maturity, at the option of the Authority in whole or in part, in whole multiples of $5,000, on any date not earlier than August 1, 2003, from any moneys made available for that purpose, at a redemption price expressed as a percentage of the principal amount of each Bond to be redeemed in C-3 wi with th f ll d h d l i , o ance o ng sc accor e e u e, plus nterest accrued on the Bonds so redeemed to the date fixed for redemption: ' Redemption Period Both Dates Inclusive) Redemption Price , August 1, 2003 to July 31, 2004 102% August 1, 2004 to July 31, 2005 101% August 1, 2005 to thereafter 100% ' Section 4. At the option of the Underwriter, the ' Underwriter may aggregate the Bonds into one or two term bonds payable from mandatory sinking fund redemption payments (the "Term ' Bonds") required to be made as set forth below. The Term Bonds shall have a stated maturity or maturities on February 1 and August ' 1. Such Term Bonds shall be subject to mandatory sinking fund d ti i re emp on pr or to maturity at a redemption price equal to 100% of the principal amount thereof, plus accrued interest to the ' redemption date, but without premium, on February 1 and August 1 in the years and in the principal amounts as selected by the , Underwriter. The Trustee shall credit against the mandatory sinking fund requirement for the Bonds aggregated into Term Bonds, ' and corresponding mandatory redemption obligation, in the order ' determined by the Authority, any of the Bonds aggregated into Term Bonds which have been previously been redeemed (otherwise than as , a result of a previous mandatory redemption requirement) or delivered to the Trustee for cancellation or purchased for ' cancellation by the Commission and not therefore applied as a ' a Term Bond so delivered or cancelled .shall be credited by the '. credit against any redemption obligation. Each Bond maturing as ~-0 ~ Trustee at one hundred (100%) percent of the principal amount thereof against the mandatory sinking fund obligation on such mandatory sinking fund date, and any excess of such amount shall be credited on future redemption obligations, and the principal amount of the Bonds to be redeemed by operation of the mandatory sinking fund requirement shall be accordingly reduced; provided, however, that the Trustee shall only credit the Bonds maturing as Term Bonds to the extent received on or before forty-five (45) days preceding the applicable mandatory redemption date. Section 5. Said Bonds shall be issued in accordance with and shall be secured by a trust agreement substantially in the form of the Trust Agreement submitted to this meeting, with such changes as the President and the Secretary of the Authority deem necessary or appropriate to effectuate this Resolution and to consummate the sale of the Bonds, said officers' execution and attestation thereof to be conclusive evidence of their approval of such changes. Section 6. The Authority shall enter into the Escrow ' Agreement substantially in the form of the Escrow Agreement submitted to this meeting, in order to effect the refunding of the ' Refunded Bonds in accordance with their terms. The Authority ' hereby authorizes the President and the Secretary to execute and attest, respectively, the Escro w Agreement substantially in the form submitted to this meeting together with such changes and modifications in form or substance as may be approved by the t b President and the Secretary o with any such approval e 7 I~] ' C-5 conclusively evidenced by such authorized execution and attestation of the Escrow Agreement. Section 7. The Secretary is authorized and directed to place copies of the Trust Agreement and the Escrow Agreement in the minute book immediately following the minutes of this meeting and said Trust Agreement and Escrow Agreement are made a part of this Resolution as if the same were fully set forth herein. Section 8. The Preliminary Official Statement is hereby approved in the form presented to the Authority at this meeting, and the Preliminary Official Statement in the form presented at this meeting is hereby deemed final for purposes of the provisions of Rule 15c2-12 of the Securities and Exchange Commission. The Underwriter, as such term is defined hereinbelow, is hereby authorized and directed to cause to be distributed such Preliminary Official Statement substantially in the form presented to this meeting, with such changes as may be required and which are approved by the Authority's legal counsel as H.J. Umbauqh & Associates may recommend, to describe adequately the Bonds and information related thereto, to all parties who in its judgment may be interested in bidding on such Bonds; and the Authority shall place a copy of such Preliminary Official Statement as presented to this meeting with the minutes of this meeting. Section 9. The Bonds shall be sold by private negotiated sale, as provided by IC 36-7-14.5-19, to City Securities Corporation (the "Underwriter"), at a price of not to exceed ninety-nine percent (99%) of the par value of the Bonds plus C-6 accrued interest to the date of delivery of"the Bonds in accordance with the Purchase Agreement. The President or Vice-President of the Authorit are hereby authorized to execute and deliver the Y ' Purchase Agreement substantially in the form attached hereto as Appendix A (the "Purchase Agreement"), together with such changes ' and modifications as may be approved by the President or Vice- President (with execution by the President or Vice-President to be ' conclusive evidence of such approval). The President or Vice- ~ President are further authorized to carry out, on behalf of the Authority, the terms and conditions set forth in the Purchase ' Agreement, consistent with the provisions of this Resolution. Section 10. Prior to the delivery of the Bonds the Secretary shall be authorized to obtain a legal opinion as to the validity of the Bonds from bond counsel for the Authority, and to furnish such opinion to the purchaser or purchasers of the Bonds. ' The cost of such opinion shall be considered as part of the costs incidental to the issuance of the Bonds and shall be paid out of ' proceeds of said Bonds. Section 11. If the President or the Secretary-Treasurer determine that market conditions at the time of the sale of the ' Bonds are such that the Authority is able to finance the refunding of the Refunded Bonds and acquisition of the additional property by issuing Bonds in an aggregate principal amount which is less than $5,000,000.00, then the Authority shall issue such lesser principal amount of Bonds. C-7 Section 12. After the sale of the Bonds, the President , and the Secretary-Treasurer are authorized to complete the Trust A reement and th E g e scrow Agreement and then to execute the same on behalf of the Authority. ' Section 13. The President, Vice President, and Secretary-Treasurer of this Authority and each of them is hereby ' authorized to take all such actions and to execute all such instruments as are desirable to carry out the transactions ' contemplated by this Resolution, in such forms as the President, , Vice President and Secretary-Treasurer executin the sam 9 e shall deem proper, to be evidenced by the execution thereof. ' Section 14. The provisions of this Resolution and the Trust Agreement shall constitute a contract between the Issuer and ' the holders of the Bonds, and, after the issuance of the Bonds, this Resolution shall not.be repealed or amended in any respect ' which would adversely affect the rights of such holders so long as , the Bonds or the interest thereon remains unpaid. C-8 Adopted at a meeting of the Authority held on June 29, 1993 at 1308 County-City Building, 227 West Jefferson Boulevard, South Bend, Indiana 46601. CITY OF SOUTH BEND REDEVELOPMENT AUTHORITY • By; /s/ Joseph W. Wroblewski, President Joseph W. Wroblewski, President ATTEST: /s/ Donald K. Fewell Donald K. Fewell, Secretary-Treasurer C-9 (This page intentionally left blank. ) C-10 '1 r 7 n n u f APPENDIX D AMENDED AND RESTATED LEASE Between SOUTH BEND REDEVELOPMENT AUTHORITY and SOUTH BEND REDEVELOPMENT COMMISSION DATED AS OF AUGUST 1, 1990 (AIRPORT ECONOMIC DEVELOPMENT AREA PUBLIC IMPROVEMENT PROJECT) .~ INDEX Section 1. Definitions Section 2. Lease of Project Section 3. Rental Payments Section 4. Rental Payment Dates Section 5. Abatement of Rent Section 6. Net Lease Section 7. Nonliability of Authority Section 8. Alterations Section 9. Insurance Section 10. Use of Insurance and Condemnation Proceeds Section 11. Liability Insurance Section 12. General Insurance Provisions Section 13. General Covenants Section 14. Option to Purchase Section 15. Defaults Section 16. Notices Section 17. Construction of Covenants Section 18. Successors or Assigns Exhibit A Permitted Encumbrances Exhibit B Taxable Project Description Exhibit C Tax-Exempt Project Description Exhibit D Lease Payment Schedule (Tax-Exempt Project) Exhibit E Lease Payment Schedule (Taxable Project} r 1 3 4 4 6 6 7 7 7 8 8 8 8 9 10 10 10 10 LEASE This Lease entered into as of the 1st day of August, 1990 between the SOUTH BEND REDEVELOPMENT AUTHORITY, a body corporate and politic organized and existing under Indiana Code 36-7-14.5 (the "Authority) and the SOUTH BEND REDEVELOPMENT COMMISSION, the governing body of the South Bend Department of Redevelopment and the Redevelopment District of the City of South Bend, Indiana (the "Lessee"), acting for and on behalf of the City of South Bend, Indiana. 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. "Airport Economic Development Area Public Improvement Project Principal and Interest Account" means the account by that name created in the Redevelopment District Bond Fund by the Lease Resolution. "Airport Economic Development Area Taxable Public Improvement Project Principal and Interest Account" means the account by that name created in the Redevelopment District Bond Fund by the Taxable Lease Resolution. "Authority" means the South Bend Redevelopment Authority, a body corporate and politic organized and existing under the Act, or if said Authority shall be abolished, the authority, board, body, instrumentality or agency succeeding to the principal functions thereof. "Bonds" means, collectively, the Tax-Exempt Bonds and the Taxable Bonds as defined herein. "Lease" means this Lease as the same may be amended, modified or supplemented by any amendments or modifications hereof or supplements hereto entered into in accordance with the provisions hereof. I "Lease Resolution" means the resolution of the Commission passed on December 21, 1990, establishing funds for the payment of lease rentals for the Tax-Exempt Project, as defined herein. "Lessee" means the South Bend Redevelopment Commission, the governing body of the South Bend Department of Redevelopment and the Redevelopment District of the City of South Bend, Indiana, or if said Commission shall be abolished, the commission, board, body or agency succeeding to the principal functions thereof. "Permitted Encumbrances" means those items listed in Exhibit A 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 Lessee certifies will not interfere with or impair the Projects, (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 do not, in the opinion of the Trustee, materially impair the Authority's title or Lessee's use of the Projects. "Projects" or "Project" mean, collectively, the Tax-Exempt Project and the Taxable Project as defined herein. "Redevelopment District Bond Fund" means the Redevelopment District Bond Fund of Lessee authorized by Indiana Code 36-7-14-27 and the Lease Resolution. "Taxable Bonds" means the South Bend Redevelopment Authority Taxable Lease Rental Revenue Bonds (Airport Economic Development Area Public Improvement Project). "Taxable Project" means the real estate (including all right-of-way easements contained therein) in St Joseph County, Indiana, and improvements to be made thereon by the Authority or its agent according to plans and specifications prepared by Cole Associates, Inc. and Clyde E. Williams and Associates, Inc., project engineers, all as described in Exhibit B hereto. The above mentioned plans and specifications may be changed and additional construction work may be performed and improvements may be purchased by the Authority, but only with the approval of the Lessee, and only if such changes or modifications or additional construction work or improvements do not alter the character of the Project or reduce the value thereof. Any such additional construction work or additional improvements shall be part of the property covered by this Lease. The above-mentioned plans and specifications have been filed with and approved by the Lessee. "Taxable Lease Resolution" means the resolution of the Commission passed on December 21, 1990, establishing funds for the payment of lease rentals for the Taxable Project, as defined herein. ,. "Tax-Exempt Bonds" means the South Bend Redevelopment , Authority Lease Rental Revenue Bonds (Airport Economic Development Area Public Improvement Project). , Tax-Exempt Project means the real estate (including all right-of-way easements contained therein) in St. Joseph County, r D-2 f Indiana, and improvements to be made thereon by the Authority or its agent according to plans and specifications prepared by Cole Associates, Inc. and Clyde E. Williams and Associates, Inc., project engineers, all as described in Exhibit C hereto. The above mentioned plans and specifications may be changed and additional construction work may be performed and improvements may be purchased by the Authority, but only with the approval of the Lessee, and only if such changes or modifications or additional construction work or improvements do not alter the character of the Project or reduce the value thereof. Any such additional construction work or additional improvements shall be part of the property covered by this Lease. The above-mentioned plans and specifications have been filed with and approved by the Lessee. "Trust Agreements" means, collectively, the Trust Agreement (Tax-Exempt Improvements) and the Trust Agreement (Taxable Improvements) as defined herein. "Trust Agreement (Taxable Improvements)" means the Trust Agreement da ted as of December 1, 1990, between the Authority and the Trustee, securing the Taxable Bonds, as defined herein. "Trust Agreement (Tax-Exempt Improvements)" means the Trust ~, Agreement da ted as of December 1, 1990, between the Authority and i the Trustee, securing n. the Tax-Exempt Bonds, as defined here "Trustee" means Society Bank, 202 South Michigan Street, South Bend, Indiana 46601, 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 Project. In consideration of the rentals and other terms and conditions herein specified the Authority does hereby lease, demise and let to the Lessee the Projects: TO HAVE AND TO HOLD the same with all rights, privileges, easements and appurtenances thereunto belonging, unto the Lessee for a term of twenty-two (22) years, each beginning on the dates the Tax-Exempt Project or the Taxable Project are complete and ready for use, and ending on the day prior to such dates twenty-two (22) years thereafter. However, the term of this Lease shall terminate as to either or both of the Projects at the earlier of (a) the exercise of the option to purchase by Lessee and payment of the option price, or (b) the payment or defeasance of all obligations of Lessor incurred (i) to finance the cost of the leased property, (ii) to refund such obligations, (iii) to refund such refunding obligations, or (iv) to improve the leased property. The dates the Tax-Exempt Project and the Taxable Project are complete and ready for use shall be endorsed on this Lease at the N D-3 end hereof by the parties hereto as soon as the same can be done after such completion dates and such endorsement shall be recorded as an addendum to this Lease. The Authority hereby represents that it is possessed of, or will acquire, a good and indefeasible estate in fee simple or an insurable right-of-way easement 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 as set forth in Section 4 hereof. Such rental shall be paid from the Airport Economic Development Area Public Improvement Project Principal and Interest Account (in the case of the Tax-Exempt Project) and the Airport Economic Development Area Taxable Public Improvement Project Principal and Interest Account (in the case of the Taxable Project) of the Redevelopment District Bond Fund. All rentals payable under the terms of this Lease shall be paid to the Trustee or to such other bank or trust company as may from time to time succeed the Trustee under the Trust Agreements. All payments so made shall be considered as payments to the Authority of the rentals payable hereunder. In the event rentals payable under the terms of this Lease shall discontinue for any reason in relation to either the Tax-Exempt Project or the Taxable Project, such discontinuation of rental payments shall not affect the obligation of the Lessee to continue to pay rentals on the individual Project not affected by such discontinuation. The Lessee shall receive credit for any Bonds 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 the Trustee as a part of 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 Agreements and all prudent charges and expenses of the Authority incurred in the performance of its obligations hereunder. Section 4. Rental Payment Dates and Amounts. (a) Tax- Exempt Project. The first semiannual rental installment in the amount of Ninety-Five Thousand Five Hundred Dollars ($95,500) shall be due on the day that the Tax-Exempt Project is completed and ready for use, or January 28, 1994, whichever is later. If completion is later than January 28, 1994, the first installment shall be in an amount which provides for rental at the rate specified in Exhibit D for the semiannual period in which the Tax- Exempt Project is completed and ready for use, prorated from the date of completion until the first July 28 or January 28 following such date of completion. Thereafter such rentals shall be payable in advance in semiannual installments on July 28 and January 28 of each year as provided for in the lease payment schedule attached hereto as Exhibit D. 1 D-4 u After the sale of the Tax-Exempt Bonds issued by the Authority to pay the cost of the Tax-Exempt Project, including the acquisition of the property therefor and other expenses incidental thereto, the sum of the first and second semiannual rental installments and the sum of the third and fourth semiannual rental installments, and so on, shall be reduced to an 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 Tax-Exempt Bond maturity date (Tax-Exempt Bond Year) on such Tax- Exempt Bonds plus Two Thousand Dollars ($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 Tax- Exempt Bonds, and such endorsement shall be recorded as an addendum to this Lease. (b) Taxable Project. The first semiannual rental installment in the amount of Two Hundred Thirty-Two Thousand Dollars ($232,000) shall be due on the day that the Taxable Project is completed and ready for use, or July 28, 1993, whichever is later. If completion is later than July 28, 1993, the first installment shall be in an amount which provides for rental at the rate specified in Exhibit E for the semiannual period in which the Taxable Project is completed and ready for use, prorated from the date of completion until the first January 28 or July 28 following such date of completion. Thereafter such rentals shall be payable in advance in semiannual installments on January 28 and July 28 of each year as provided for in the lease payment schedule attached hereto as Exhibit E. After the sale of the Taxable Bonds issued by the Authority to pay the cost of the Taxable Project, including the acquisition of the property therefor and other expenses incidental thereto, the sum of the first and second semiannual rental installment and the sum of the third and fourth semiannual rental installments, and so on, shall be reduced to an 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 Taxable bond maturity date (Taxable Bond Year) on such Taxable Bonds plus Two Thousand Dollars ($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 Taxable Bonds, and such endorsement shall be recorded as an addendum to this Lease. In the case of the Tax-Exempt Project, the Lessee will not take any action or fail to take any action that would result in the loss of the exclusion from gross income for federal tax purposes of interest on the Bonds pursuant to Section 103(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as in effect on the f D-5 date of d li f th e very o e Bonds, nor will the Lessee act in any manner which would adversely affect such exclusion. The Lessee further covenants that it will not make any investment or do any other act or thing during the period that any Bond is outstanding hereunder which would cause any Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code and the regulations thereunder as in effect on the date of delivery of the Bonds. All officers, members, employees and agents of the Lessee are authorized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the Lessee as of the date the Bonds are issued and to enter into covenants on behalf of the Lessee evidencing the Lessee's commitments made herein. _ Section 5. Abatement of Rent. In the event that all or ~ a portion of either of the Projects shall be damaged or destroyed so as to render the damaged or destroyed portion of the Projects unfit for its intended use, it shall then be the obligation of the Authority to restore and reconstruct the damaged or destroyed portion of the Projects 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 reconstruction 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 reconstruction 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. The rental shall be abated pro rata for the period during which the damaged or destroyed portion of the Projects is unfit for its intended use. 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 Projects 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, operation and use in connection with or relating to the Projects, including but not limited to all costs and expenses of all services, repair or replacement of all parts of the Projects or improvements of the Projects. t D-6 Section 7. Nonliability of Authority. The Authority shall not be liable for damage:caused by hidden defects or failure to keep the Projects in repair and shall not be liable for any damage done or occasioned by or from plumbing, gas, water, or other pipes or the bursting or leaking of plumbing or heating fixtures in connection with said premises, nor for damage occasioned by water, snow or ice.. 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 Projects 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 the Projects. 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 improvements it deems necessary or desirable to the Projects, which do not reduce the rental value of the Projects. Section 9. Insurance. The Lessee, at its own expense, will, during the full term of the Lease, keep the Projects insured against physical loss or damage, however caused, with such exceptions as are ordinarily required by insurers of properties 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 Projects as certified by a registered architect, a registered engineer, or professional appraisal engineer, selected by the Authority with the approval of the Trustee, 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 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 Projects. Such insurance may contain a provision for a deductible in an amount not exceeding $25,000. 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 Projects is not less than,the amount required by this Section, (b) the Lessee subordinates its claim for damage or destruction to other buildings or improvements to claims for damage or destruction of the Projects, and 1 D-7 1 (c) the insurance proceeds related to damage to or destruction of the Projects are payable to the 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 for the Projects specified in Section 4 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 Projects or proceeds of any condemnation of the Projects shall be paid to and held by the Trustee and used to pay for reconstruction or replacement of the Projects in accordance with plans approved by the Authority and the Lessee, unless the Lessee elects to exercise its option to purchase. 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, the Authority and the Trustee in amounts customarily carried for similar properties. Such insurance may be provided under the public liability self insurance program of the City of South Bend. Section 12. General Insurance Provisions. All insurance policies required by Sections 9 and 11, other than insurance provided under the public liability self insurance program of the City of South Bend, shall be with insurance companies rated B+ or better by A.M. Best Company (or a comparable rating service if A.M. Best company ceases to exist or rate insurance companies), 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, and the certificate of the architect or engineer referred 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. Section 13. General Covenants. The Lessee shall not assign this Lease or sublet any part of the Projects herein described without the prior written consent of the Authority; provided, however, that the Lessee shall in no event assign this Lease or i D-8 sublet any part of the Projects 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 Projects which is at the date of its issuance subject to such exclusion. The Lessee covenants that, except for Permitted Encumbrances, it will not encumber the Projects, or permit any encumbrance to exist thereon, and that it shall use and maintain the Projects 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 Projects, 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". ~' Section 14. Option to Purchase. The Authority hereby grants Lessee the right and option, on any rental payment date, upon thirty days' written notice to the Authority, to purchase either or both of the Projects at a price equal to the amount required to enable the Authority to provide for the redemption of all outstanding Tax-Exempt Bonds, in the case of the Tax-Exempt Project, and of the Taxable Bonds, in the case of the Taxable Project, 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, the 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 Projects 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 ail 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 the Lessee shall be under any obligation to purchase the Projects, or under any obligation in respect to any creditors or bondholders of the Authority. D-9 If the Lessee has not exercised its option to purchase the Projects 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, the Authority shall execute a deed of the Projects to the Lessee conveying good and merchantable title thereto, subject only to Permitted Encumbrances. Section 15. 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 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 16. 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 17. 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 18. Successors or Assictns. 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. i~ r Ci 1 1 D-10 1 i~ 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 I i /~ ~ ~~ ~ Y~ J sep ~ W. Wroblewski, President ATT T: .. __. .. -=-~=-r_ Donald K. Fewell, Vice President SOUTH BEND REDEVELOPMENT COMMISSION 7 Y= Paula N. Auburn, Vice President ATTEST: Roman`J. Pias ki, Secret~a y 4 ~~ .~ t i D-11 ~ STATE OF INDIANA ) SS: COUNTY OF ST. JOSEPH ) ~ Before me, the undersigned, a Notary Public in and for said State, personally appeared Joseph W. Wroblewski and Donald K. Fewell, personally known by me to be the President and Vice President, respectively, of the South Bend Redevelopment Authority, and acknowledged the execution of the foregoing Lease for and on behalf of said Authority. WITNESS my hand and Notarial Seal this _.__S2 day of ~i 1990. Written S' n ure ( ) ~~~QO.ei9rs' S ~ o c ,~ ~ (Printed Signature) (SEAL) My commission expires: I am a resident of St. Joseph County, Indiana ~~ D-12 t 1 i t i~ i~ i~ i i~ ~r t STATE OF INDIANA COUNTY OF ST. JOSEPH ) SS: Before me, the undersigned, a Notary Public in and for said State, personally appeared Paula N. Auburn and Roman J. Piasecki, personally known by me to be the Vice President and Secretary, respectively, of the South Bend Redevelopment Commission, and acknowledged the execution of the foregoing Lease for and on behalf of said Commission. WITNESS my hand and Notarial Seal this ~~ day of c~ l~',~C/L. _, 1990. (Written Sig ature} ~ ~~BUiPi9.y ~ , f~oc S/ (Printed Signature) (SEAL) My commission expires: I am a resident of St. Joseph County, Indiana. This instrument was prepared by Richard L. Hill, BAKER,& DANIELS, 205 West Jefferson Boulevard, South Bend, Indiana 46601. D-13 EXiiZIIZT "A" Permitted Encumbrances 1 D-14 EXHIBIT B TAXABLE PROJECT DESCRIPTION The project consists of the following: (1) The construction of Northwest Loop Improvements in the City of South Bend consisting of the construction of approximately 1,100 linear feet of U-shaped roadway separated by a 120 foot grassed median located along the new alignment of Old Cleveland Road,(the overall section width is 40' - 0" from back of curb to back of curb and the proposed curb and gutter section is 2' - 0" with a curb height of 6 inches), lighting, extension of water and sewer lines and appurtenant work, all of such construction and related improvements to be made on the following described .real estate acquired or to be acquired by the Authority: NORTHWEST I,oOP DESCRIPTION A parcel of land located in the Southwest Quarter (SW1/4) of Section Twenty (20), Township Thirty-Eight (38) North, Range Two (2) East and all being in German Township, St. Joseph County and ~' being more particularly described as follows: Commencing at the southeast corner of the Southwest Quarter (SW1/4) of said Section Twenty (20); thence north, along the north/south centerline of said Section Twenty (20) and also being along the centerline of a public road now known as Mayflower Road, a distance of 2160.0 feet; thence west, parallel with the south line of the Southwest Quarter (SW1/4) of said Section Twenty (20), a distance of 1135.0 feet to a point of curvature of a tangent curve; thence southwesterly, along a curve to the left, said curve having a radius of 800.00 feet and being subtended by a central angle of 43° 18' 35" and also being subtended by a long chord having a deflection angle of 21° 39' 16.5" to the left from the preceding described course and having a length of 590.42 feet, an arc distance of 604.71 feet to a point of curvature of a non-tangent curve; thence northwesterly, along a line having a deflection angle of 62' S2' 23" to the right from the preceding described course, a distance of 30.13 feet to a point on the northwesterly right of way line of a proposed street and also being the Point of Beginning of this description, said description being a strip of land 110.00 feet wide and being 30.0 feet on the right and 80.0 feet left of ~• the following described line; thence northwesterly, along a line having a deflection angle of 00° 15' 25" to the left from the preceding described course, a distance of 370.00 feet to a point of curvature of a tangent curve; thence west and southwesterly, along a curve to the left, said curve having a radius of 80.00 feet and being subtended by a central angle of 180° 00' 00", an arc length of 251.33 feet and also being subtended by a long chord having a deflection angle of 90° 00' 00" from the preceding described course and a length of 160.00 feet, to a point of D-15 tangency of a tangent curve; thence southeasterly, along a line having a deflection angle of 90° 00' 00" to the left from the preceding described long chord, a distance of 370.00 feet to a point on the northwesterly right of way line of a proposed street, said point being the Point of Terminus of this description, the sidelines of said 110.0 feet wide strip being extended or shortened to intersect the right of way line of said proposed street and containing 2.298 acres, more or less. (2) The acquisition by purchase or condemnation of parcels of real estate and any improvements thereon in St. Joseph County, Indiana needed in connection with local public improvements to be constructed in the Airport Economic Development Area, the payment of expenses that the Redevelopment Commission is required or permitted to pay under IC 8-13-18.5 and the clearance of said parcels of real estate, the location and legal descriptions of said parcels being as follows: (a) Twenty (20) acres taken off of and from the entire West end of the North One Hundred Nineteen (119) acres taken off of and from the entire North side of the following tracts: The Northwest Quarter (1/4) and the Northwest Quarter (1/4) of the Northeast Quarter (1/4) of Section Twenty-nine (29), Township Thirty-eight (38) North, Range (2) East. (b) All that portion of the North 119 acres of the Northwest quarter, and the Northwest quarter of the Northeast quarter of Section 29, which lies West of the West line of the Northeast quarter of Section 29, Township 38 North, Range 2 East which is located on the West side of Butternut Road ;. excepting the following parcels: 1} Twenty acres taken off of the West end of said 119 acres. 2) A part of the North 119 acre tract taken off of and from the entire North side of the Northwest quarter and the West half of the Northeast quarter of Section 29, Township 38 North, Range 2 East, which tract is bounded by a line running as follows, to-wit: Beginning in the center of what is known as Butternut Road at a point, which point is•165 feet North and twenty feet West of the Southeast corner of the Northwest quarter of the Northwest quarter of said Section 29 and running thence West a distance of 264 feet; thence South 165 feet; thence East a distance of 264 feet to the center of said Butternut Road, which point is 20 feet West of the .Southeast corner of the Northwest quarter of the D-16 1 t r it ~ 1 t 1 t t Northwest quarter of said Section 29 and thence running North along the centerline of said Butternut Road 165 feet to the place of beginning. As recorded in Deed Record 385 Page 129. 3) A lot or parcel of land in the Northwest quarter of Section No. 29, Township No. 38 North, Range No. 2 East, described as follows: vis: Beginning on the centerline of the Butternut Road at a point 165 feet due North of the South line of a 119 acre tract of land taken off of and from the entire length of the North side of the West three-fourths of the North half of the North half of said Section No. 29; thence West parallel with the South line of said 119 acre tract a distance of 264 feet; thence Northerly ^ parallel with the centerline of said Butternut Road a distance of 140 feet; thence Easterly 263.55 feet to a point in the centerline of said Butternut Road 145 feet Northerly from the place of beginning; thence Southerly along the centerline of said .Butternut Road, 145 feet to the place of beginning; together with the right to use a road 30 feet in width, North and South, lying North of and adjoining the above described tract for ingress and egress. Containing 57.47 acres more or less, subject to all legal highways. All subject to easements and rights of way, and current real estate taxes. (c) Part of the Northwest Quarter (1/4) of Section Twenty-nine (29), Township Thirty-eight (38) North, Range Two (2) East, described as follows, to wit: Beginning at a point in the center of the public road running Northerly and Southerly across said Quarter Section, Six Hundred Sixty (660) feet South of the North boundary line of the land formerly owned by William C. Jackson, which point, measured along the center line of said public road, is Six Hundred Seventy-two (672) feet South of said North boundary line, thence West Seven Hundred (700) feet; thence North Two Hundred Eighty and Five Tenths (280.5) feet; thence East Three Hundred Thirty-five (335) feet to the West boundary line of the land now owned by Charles Barwig; thence Southeasterly, parallel, with said public road, One Hundred Thirty-Two (132) feet to the ~~ Southwest corner of the land of said Charles Barwig; thence East Three Hundred Thirty (330) feet to the center of said public road; thence Southerly along the center line of said road, One Hundred Forty-four (144) feet to the place of beginning, in St. Joseph County, Indiana. ~~ D-17 (d) A l t l f o or parce o land in the Northwest Quarter of Section Twenty-nine (29) in Township Thirty-eight (38) North of Range Two (2) East, Beginning at a point in the center of the public road running North and South through said Quarter Section, Sixteen (16) rods, South of the North Boundary line of the land owned by W.C. Jackson . , thence South along the center of said road, Sixteen (16) rods; thence East Twenty (20) rods; thence Northerly parallel with said road, Sixteen (16) rods; thence West Twenty (20) rods to the place of beginning, known as Lots Twenty-seven (27) and Twenty-eight (28) in W.C. Jackson's proposed Sub-division. (e) A lot or parcel of land containing Three (3) acres taken off of and from the entire length of the West side of the West Half (1/2) of the Southeast Quarter (1/4} of the Southeast Quarter (1/4) of Section Number Nineteen (19), Township Number Thirty-eight (38) North, Range Two (2) East, excepting therefrom that portion of said premises conveyed to the State of Indiana by a Warranty Deed dated January 11, 1980 and recorded March 20, 1980 as Instrument No. 8004813. That portion of the West Half (1/2) of the Southeast Quarter of Section Nineteen (19), Township Thirty-eight (38) North, Range Two (2) East, lying East of the South Bend Bypass and lying South of the lands conveyed to the State of Indiana by a Warranty Deed dated January 11, 1980 and recorded March , 1980 as Instrument No. 8004813 and lying North of Cleveland Road. ~ (f) The West half (1/2) of the South East Quarter (1/4) of ~ the South East Quarter (1/4) of Section Number Nineteen (19), Township Number Thirty-eight (38) North, Range Number Two (2) East, excepting therefrom the West Three (3) acres thereof. (g) The East one-half of the North East quarter of Section No. 30, Township No. 38, North, Range No. 2 East. The East one-half of the South East quarter of the South East quarter of Section No. 19, Township No. 38 North, Range No. 2 East. The West one-half of the South West quarter of the North West Quarter of Section No. 29, To~tnship No. 38 North, Range No. 2 East. Also a parcel of land containing 1/6 of an acre in the East one-half of the North West quarter of the North West quarter of Section No. 29, Township P7o. 38 North, Range No.2 East described as follows: Beginning at the North West corner of the West one-half of the South West quarter of the North West quarter of Said Section No. 29; running thence East 40 rods to the Northeast corner of said West one-half of D-18 e the South West quarter of the North West quarter of said Section No. 29; thence North 11 feet; thence West 40 rods to the West line of the North West quarter of said Section No. 29; thence South 11 feet to the place of beginning, excepting, however, 5.533 acres, more or less, sold to the State of Indiana for road purposes. (h) The West Half (1/2) of the Southwest Quarter (1/4) of -eight (38) North Thirt hi , y p Section Twenty (20), Towns Range Two (2) East, excepting therefrom eight (8) acres, more or less, in the Southeast corner thereof, the same being more fully described by metes and bounds as follows: Beginning at the Southeast corner of the West Half (1/2) of the Southwest Quarter (1/4) of said Section, thence running West Thirty (30) rods; thence d one-half (13 North Forty-two (42) rods and Thirteen an 1/2) links; thence East Thirty (30) rods; thence South Forty-two (42) rods and Thirteen and one-half (13 1/2) id links to the place of beginning, containing after sa exception Seventy-two (72) acres, more or less and, A part of the Northeast Quarter of the Southeast Quarter St i t . n , of Section 19, Township 38 North, Range 2 Eas Joseph County, Indiana, described as follows: Commencing at the Northeast corner of the Southeast Quarter of said 00 feet along 4' 14" East 170 ° . 1 Section; thence South 00 the East line of the Southeast Quarter of said Section to the True Point of Beginning; thence continuing South 00° 14' 14" East 1126.02 feet along said Southeast Quarter's East line to a point on the South line of the Northeast Quarter of said Southeast Quarter; thence South " ° 14' 14 89° 46' 45" West 100.12 feet; thence North 00 West 1009.74 feet; thence North 40° 29' S5" East 153.42 feet to the Point of Beginning. (i) The East One-half (1/2) of the Southwest Quarter (1/4); and A tract out of the Southeast corner of a i as bed descr (1/2) of the Southwest Quarter (1/4) Thirty-four (34) rods North and South by Fourteen (14) rods East and West; and South Thirty (30) acres off of and from the East One Northwest Quarter th e Hundred Twenty (120) acres of (1/4); and r ~' A part of the Southwest Quarter (1/4) of the Southwest the Quarter (1/4) described as commencing at a point on f the t o South section line Fourteen (14) rods Wes Southeast corner of the Southwest Quarter (1/4) of the rods; 16 ) Southwest Quarter (1/4), thence West Sixteen ( thence North Forty-two (42) rods Thirteen and One-Third D-19 t (13 1/3) links; thence East Thirty (30) rods; thence South Eight (8) rods Thirteen and One-third (13 1/3) links; thence West Fourteen (14) rods; thence South Thirty-four (34) rods to the place of beginning; all of which described lands are located in Section Twenty (20) Township Thirty-eight (38) North, Range Two (2) East. Excepting therefrom 35.4 acres described as follows: A ~~ part of Section 20, Township 38 North, Range 2 East, bounded and described as follows: Tract No. 1: Beginning at the center point of said section, the same being the center of the Mayflower Road; thence Southerly along the East line of the Southwest Quarter of said Section 427 feet, to a point 650 feet Southerly measured at right angles from the Center line of the Indiana East-West Toll Road (A Centerline Survey Map of which is on file in the office of the Recorder of St. Joseph County, Indiana); thence North 89 degrees 52 minutes 23.3 seconds West distant 605.99 feet to a point 650 feet southerly measured at right angles from Centerline Station 4049+62 of said Toll Road; thence North 0 degrees 07 minutes 36.7 seconds East distant 428.80 feet to the North line of the Southwest Quarter of said section; thence Easterly along the North line of the Southwest Quarter of said section to the place of beginning. Tract No 2: The South 30 acres of th E t 120 f e as acres o the Northwest Quarter of said section Leaving a balance of 82.6 acres. (Parcel No. A-6 (XL) "' A part of the Southwest Quarter of the Northwest Quarter of Section 20, Township 38 North, Range 2 East, in St. Joseph County, Indiana, described as follows: Commencing at the Southwest corner of the Northwest ' Quarter of said Section 20; thence South 89°-51'-58" East 1305.71 feet along the South line of the Northwest Quarter of said section to the true point of beginning; thence continuing South 89°-51'-58" East 671.7 feet, more or less along said Northwest Quarter south .line to a point on the west property line of Service Area #4 South which point is 220 feet south of and at right angles to Station 4049+62 of the Indiana East-West Toll Road (a Centerline Survey Map of which is on file in the office of the Recorder of St. Joseph County, Indiana); thence North 0° -07' -36.7" East a distance of 40 feet to the south right-of-way line of the Indiana East-West Toll i D-20 t Road; thence North 89° -52'-23" West 412 feet along said south right-of-way line said point being 180 feet south of and at right angles to Station 4045+50 on the Indiana East-West Toll Road centerline; thence North 0° -07' -36.7" East a distance of 30 feet to a point which said point is 150 feet south of said Station 4045+50; thence North 89' -52'-23" West along said south right-of-way line a distance of 259.7 feet, more or less to a point; thence South 0' -07' -36.7" West a distance of 70.16 feet to point of beginning, containing 0.8 acres, more or ~ less, and which is a part of Parcel 62-A-3 (XL). This tract is subject to a pipeline easement in favor of the Standard Oil Division of Amoco Oil Company; said pipeline was to be built within 50 feet of the south line of the Northwest Quarter of said Section 20. (j) Part of the South East quarter of the South East quarter of Section No. 28, Township No. 38 North, Range No. 2 East, bounded by a line running as follows, viz: Beginning at a point on the East line of said Section, which point is 895 feet North of the Southeast corner thereof; running thence North on said East line 16 rods (264 feet); thence West parallel with the North line of said Section 10 rods (165 feet); thence South parallel with said East line 16 rods (264 feet); thence East 10 rods (165 feet), to the place of beginning, containing ~ one acre, more or less. J D-21 EXHIBIT C TAX EXEMPT PROJECT DESCRIPTION The project consists of the following: (1) The construction of Mayflower Road Improvements in the City of South Bend consisting of the widening and resurfa d cing of the roa way and appurtenant work, all of such construction and related improvements to be made on the following described acquired or to be acquired b th A th real estate y e u ority: MAYFLOWER ROAD NORTH OF OLD CLEVELAND ROAD DESCRIPTION A part of Section Twenty (20), Township Thirty Eight Range Two (2) East and it (38) North, s uated in the County of St. State of Indiana, more particularl desc ib d Joseph and ' y r e as follo ws: Commencing at the Northwest Corner of the Southeast One-Quarter (1/4) of Section Twenty (20) Townshi Thi t p r y-Eight (T 38 N) North Range Two (R 2 E) East, and running in a southerly direction alon th g e North-South centerline of Section Twenty (20) a distance of four hundred twenty-seven (427) f t t ee o the Point of Beginning; thence in a southerly direction along the North-South centerline of Section Twenty (20), a distance of two thousand two hundred nineteen (2219) feet thence ru i i , nn ng n an easterly direction, along the South Line of said One Quarter (1/4) Section a dist ance of thirty (30) feet, thence running in a northerly direction on a line thirty (30) feet E t " as of and parallel to the North-South centerline of Section twenty (20) a distance f o one thousand eight hundred sixty nine (1869) feet, thence running North four degrees t wenty-nine minutes fifty-three and seven-tenths seconds (N 04° 29' 53 7" E) E t . as a distance of three hundred fifty one and twenty-eight hundredths (351.28) feet thence i , runn ng North eighty-nine degrees fifty-two minutes twenty-three and three-tenths seconds (N 89° 52' 23.3" W) West a distance of sixty (60) feet to the Point of Beginnin exc ti g, ep ng therefrom that portion thereof lying within the bounds of Mayflower Road a s now established. The above description referenced to Book 538, Page 317 of the St . Joseph County Recorder; and MAYFLOWER ROAD NORTH OF OLD CLEVELAND ROAD DESCRIPTION A part of Section Twenty (20), Township Thirty Eight (38) North, Range Two (2) East and situated in the County of St. Joseph and State of Indiana, more particularly described as follows: Beginning at the intersection of the centerline of M and a line drawn parallel to and distant 650 feet Southerly ooa D-22 ~~ measured on a line normal to the centerline of the Indiana East-West Toll Road as shown by plat recorded in the St. Joseph County Map Records; thence Southerly along said centerline to the intersection of the Northerly right of way line of Cleveland Road; thence Westerly along said Northerly right of way line, distant 30 feet; thence Northerly in a straight line to a point distant 30 feet Westerly measured at right angles to said centerline from a point thereon, distant 1000 feet Southerly, measured along said centerline from its intersection with the aforesaid Toll Road centerline; thence Northwesterly in a straight line to the intersection of the aforesaid parallel line, said point of intersection 60 feet Westerly, measured at right angles to said centerline of Mayflower Road; thence Easterly along said parallel line to the Place of Beginning. The above description referenced to Book 538, Page 504 of the St. Joseph County Recorder. (2) The construction of Brick/New Cleveland Road Improvements in the City of south Bend consisting of extension of water and sewer lines, installation of a sanitary sewer lift station, widening and .repaving of Brick Road from New Cleveland Road east for approximately 900 feet and appurtenant work, all of such construction and related improvements to be made on the following described real estate acquired or to be acquired by the Authority: BRICK/NEW CLEVELAND DESCRIPTION That part of the Southwest quarter of Section 17 and the Northwest quarter of Section 20, T. 38 N. R. 2 E. German Township, St. Joseph County, Indiana which is described as: Beginning at the Southwest corner of said Section 17; thence North 00 deg. 04 min. 03 sec. East along said line, 20.00 ft.; thence South 89 deg. 39 min. 06 sec. East, 329.03 ft.; thence North 00 deg. 22 min. 38 sec. East, 20.00 ft.; thence South 89 deg. 39 min. 06 sec. East, 60.00 ft.; thence South 00 deg. 22 min. 38 sec. West 20.00 ft.; thence South 89 deg. 39 min. 06 sec. East, 138.00 ft.; thence North 00 deg. 22 min. 38 sec. East, 20.00 ft; thence South 89 deg. 39 min. 06 sec. East, 375.53 ft.; thence South 00 deg. 09 min. 31 sec. West, 60.00 ft.; thence North 89 deg. 39 min. 06 sec. West, 542.40 ft.; thence South 00 deg. 35 min. 00 sec. East, 158.02 ft.; thence North 89 deg. 39 min. 06 sec. West, 361.78 ft.; thence North 00 deg. 00 min. 30 sec. East along the West line of Section 20, 178.00 ft. to the Point of Beginning. ~~ (3) The construction of Point Viridian Improvements in the City of South Bend consisting of the extension of the existing Viridian Drive for approximately 550 linear feet including curbs, lighting, i D-23 signage, landscaping, drainage, striping; all of such construction and related improvements to be made on the following described real estate acquired or to be acquired by the Authority: VIRIDIAN DRIVE A part of the Southeast Quarter of Section 28, Township 38 North, Range 2 East, St. Joseph County, Indiana, described as follows: Commencing at the southeast corner of said quarter section; thence West 40.00 feet to the west boundary of Bendix Drive; thence North 00 degrees 02 minutes 06 seconds West and parallel with the east line of said quarter section 588.12 feet; thence northwesterly 90.13 feet along an arc to the left and having a radius of 65.00 feet and subtended by a long chord having a bearing of North 39 degrees 45 minutes 35 seconds West and a length of 83.08 feet; thence northwesterly 123.15 feet along an arc to the right and having a radius of 290.00 feet and subtended by a long chord having a bearing of North 67 degrees 19 minutes 08 seconds West and a length of 122.23 feet; thence northwesterly 308.34 feet along an arc to the left and having a radius of 506.97 feet and subtended by a long chord having a bearing of North 72 degrees 34 minutes 35 seconds West and a length of 303.61 feet; thence West 457.01 feet to the point of beginning; thence northwesterly 376.93 feet along an arc to the right and having a radius of 480.00 feet and subtended by a long chord having a bearing of North 67 degrees 32 minutes 20 seconds West and a length of 367.32 feet; thence North 45 degrees 02 minutes 33 seconds West 65.14 feet; thence North 00 degrees 21 minutes 33 seconds East 226.80 feet; thence South 51 degrees 11 seconds 07 minutes East 51.08 feet; thence South 00 degrees 21 minutes 33 seconds West 34.28 feet; thence Southeasterly 166.44 feet along an arc to the left and having a radius of 210.00 feet and subtended by a long chord having a bearing of South 22 degrees 20 minutes 47 seconds East and a length of 162.12 feet; thence southeasterly 314.04 feet along an arc to the left and having a radius of 400.00 feet and subtended by a long chord having a bearing South 67 degrees 32 minutes 42 seconds East and a length of 306.11 feet; thence South 80 feet to the point of beginning , containing 0.951 acres more or less. Said tract of land is subject to sanitary sewer and storm drainage easements of record. (4) The engineering design work for Realigned Old Cleveland Road, Phase I (Section 3) consisting of preliminary engineering design, final construction drawings, preparation of specifications and bid packets and appurtenant work, all of such engineering work for public improvements to be made on the following described real estate acquired or to be acquired by the Authority: D-24 t REALIGNED OLD CLEVELAND ROAD, PHASE I (SECTION 3) DESCRIPTION An 80 foot wide parcel of land located in the Southeast Quarter (SE1/4) of Section Nineteen (19), the Southwest Quarter (SW1/4) of Section Twenty (20), the Northwest Quarter (NW1/4) of Section Twenty Nine (29), and the Northeast Quarter (NE1/4) of Section Thirty (30) all in Township Thirty Eight (38) North, Range Two (2) East and all being in German Township, St. Joseph County, the centerline of which is described as follows: Commencing at the southeast corner of the Southwest Quarter (SW1/4) of said Section Twenty (20); thence West, along the south line of said Southwest Quarter (SW1/4), also being the approximate centerline of a public road, known as Old Cleveland Road, a distance of 3000.00 feet to the Point of Beginning of the centerline of this description; thence East alon id t i , g sa sou h l ne of the Southwest Quarter (SW1/4) also known as the approximate centerline of Old Cleveland Road, a distance of 270.00 feet to the point of curvature of a tangent curve to the left, said curve having a radius of 800.00 feet and an internal angle of 90° 00' 00"; thence along said curve, Easterly, Northeasterly and Northerly an arc length of 1256.64 feet to the point of tangency of said curve; thence North, parallel with the east line of said Southwest Quarter (SW1/4) a distance of 560.00 feet to the point of curvature of a tangent curve to the right, said curve having a radius of 800.00 feet and an internal angle of 90° 00' 00"; thence along said curve, Northerly, Portheasterly and Easterly an arc length of 1256.64 feet to the point of tangency of said curve, thence East, parallel with the south line of said Southwest Quarter (SW1/4) a distance of 1130.00 feet to the intersection with the centerline of a public road, known as Mayflower Road, said intersection being the Point of Terminus of the centerline of said 80 foot wide parcel. Said parcel description excepting out an existi bli y ng pu c rights of way and being subject to all existing easements and leases of public record. (5) The engineering design work for Realigned Old Cleveland Road, Phase II (Section 4) consisting of preliminary engineering design, final construction drawings, preparation of specifications and bid packets and appurtenant work, all of such engineering work for ~ public improvements to be made on the following described real estate acquired or to be ac uired b the Auth it , q y or y: D-25 4 ~~ `~ REALIGNED OLD CLEVELAND ROAD, PHASE II (SECTION 4) DESCRIPTION An 80-foot wide parcel of land located in the Southeast Quarter (SE1/4) of Section Twenty (20), the Southwest Quarter (SW1/4) of Section Twenty One (21), and the Northwest Quarter (NW1/4) of Section Twenty Eight (28) all in Township Thirty Eight (38) North, Range Two (2) East and all being in German Township, St. Joseph County, the centerline of which is described as follows: Commencing at the Southwest corner of the Southeast Quarter (SE1/4) of said Section Twenty (20); thence North, along the east line of said Southwest Quarter (SW1/4), also being the approximate centerline of a public road, known as Mayflower Road, a distance of 2160.00 feet to the Point of Beginning of the centerline of this description; thence East, parallel with the south line of said Southeast Quarter (SE1/4), a distance of 1580.47 feet to the point of curvature of a tangent curve to the right, said curve having a radius of 800.00 feet and an internal angle of 66° 00' 00"; thence Easterly and Southeasterly along a curve an arc length of 921.53 feet to the point of tangency of said curve; thence Southeasterly along the projected forward tangent of the previously described curve a distance of 1325.35 feet to the point of curvature of a tangent curve to the left, said curve having a radius of 800.00 feet and an internal angle of 66° 00' 00"; thence along said curve Southeasterly and Easterly an arc length of 921.53 feet to the point of tangency of said curve also being the Point of Terminus of the centerline of said 80-foot wide parcel. Said parcel description excepting out any existing public rights of way and being subject to all existing easements and leases of public record. (6) The engineering design work for Old Cleveland Road From Mayflower Road To The Industrial Park (Section 5) consisting of preliminary engineering design, final construction drawings, preparation of specifications and bid packets and appurtenant work, all of such engineering work for public improvements to be made on the following described real estate acquired or to be acquired by the Authority: ,- OLD CLEVELAND ROAD FROM MAYFLOWER ROAD TO THE INDUSTRIAL PARK (SECTION 5) DESCRIPTION An 80-foot wide parcel of land located in the South Half (S1/2) of D-26 t Section Twenty One (21) and the North Half (N1/2) of Section Twenty Eight (28) all in Township Thirty-Eight (38) North, Range Two (2) East and all being in German Township, St. Joseph County, the centerline of which is described as follows: Commencing at the southwest corner of-the Southeast Quarter (SE1/4) of Section Twenty (20), Township Thirty Eight (38) North, Range Two (2) East, also being the approximate intersection of a north-south public road, known as Mayflower Road and an east-west public road known as Old Cleveland Road; thence East along the south line of said South Half (S1/2) of Section Twenty (20) and the south line of said South Half (S1/2) of Section Twenty One (21), also being the approximate centerline of said Old Cleveland Road a distance of 3681.22 feet to the Point of Beginning of the centerline of this description; thence continuing along said approximate centerline of Old Cleveland Road, also being the south line of said South Half (S1/2) of Section Twenty One (21), a distance of 2130.00 feet to the Point of Terminus of the centerline of said 80-foot wide parcel. Said parcel description excepting out any existing public rights of way and being subject to all existing easements and leases of public record. ^ ~ 1 ~~ D-27 EXHIBIT D Maximum Lease Payment Schedule for Tax-Exempt Project Payment Date Amount Payment Date Amount 1-28-94 $ 95,500 1-28-03 $ 139,000 7-28-94 95,500 7-28-03 139,000 1-28-95 95,500 1-28-04 136,000 7-28-95 95,500 7-28-04 136,000 1-28-96 95,500 1-28-05 138,000 7-28-96 95,500 7-28-05 138,000 1-28-97 120,500 1-28-06 137,000 7-28-97 120,500 7-28-06 137,000 1-28-98 128,500 1-28-07 136,000 7-28-98 128,500 7-28-07 136,000 1-28-99 135,500 1-28-08 136,500 7-28-99 135,500 7-28-08 136,500 1-28-00 137,000 1-28-09 136,500 7-28-00 137,000 7-28-09 136,500 1-28-01 138,000 1-28-10 133,500 7-28-01 138,000 7-28-10 133,500 1-28-02 138,500 1-28-11 135,000 7-28-02 138,500 7-28-11 135,000 1-28-12 133,500 7-28-12 133,500 y D-28 EXHIBIT E Maximum Lease Payment Schedule for Taxable Project payment Date Amount Payment Date Amount 7-28-93 232,000 $ 1-28-04 $ 291,500 500 291 1-28-94 232,000 7-28-04 1-28-05 , 291,500 7-28-94 232,000 000 232 7-28-05 291,500 1-28-95 , 000 232 1-28-06 289,500 7-28-95 , 000 252 7-28-06 289,500 1-28-96 , 000 252 1-28-07 289,500 7-28-96 , 000 255 7-28-07 289,500 1-28-97 , 000 255 1-28-08 287,500 7-28-97 , 500 272 7-28-08 287,500 1-28-98 , 500 272 1-28-09 288,500 7-28-98 , 000 285 7-28-09 288,500 1-28-99 , 000 285 1-28-10 287,500 7-28-99 , 000 288 7-28-10 287,500 1-28-00 , 000 288 1-28-11 284,500 7-28-00 , 000 290 7-28-11 284,500 1-28-01 , 000 290 1-28-12 284,500 7-28-O1 , 500 293 7-28-12 284,500 1-28-02 , 7-28-02 293,500 1-28-03 293,000 7-28-03 293,000 D-29 T1 ~i ~ CJ r. ADDENDUM TO LEASE ~ -~ - - '- ~- ~~ - - SOUTH BEND REDEVELOPMENT AUTHORITY TO __ SOUTH BEND REDEVELOPMENT COMMISSION y (Airport Economic Development Area Public Improvement~ProjeC,t) =' `" ~ L~ ~ ~j THIS ADDENDUM, made and entered into as of this `~ )~i-day of January, 1991, by and between the South Bend Redevelopment Authority, a body corporate and politic organized and existing under Indiana Code 36-7-14.5 (hereinafter with its successors and assigns referred to as the "Authority"), and the South Bend Redevelopment Commission, the governing body of the South Bend Department of Redevelopment and the Redevelopment District of South Bend, Indiana (hereinafter called the "Lessee"), WITNESSETH: In consideration of the mutual covenants herein contained, it is agreed that the lease (Airport Economic Development Area Public Improvement Project) previously entered into between said parties as of the first day of August, 1990, as further amended by an Amended and Restated Lease, dated as of the first day of August, 1990 (the "Lease") shall be amended as follows: 1. The following definitions in Section 1 of the Lease are amended to read as follows: y "Lease Resolution" means Resolution No. 968 of the Commission passed on December 21, 1990, as amended by Resolution No. 973 of the Commission passed on January 11, 1991, establishing funds for the payment of lease rentals for the Tax-Exempt Project, as defined herein. "Permitted Encumbrances" means those items listed in Exhibit A 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 D-30 1 ~ ~ e t rights-of-way, restrictions and exceptions that Lessee certifies will not interfere with or impair the Projects, (d) any mechanics', laborers', materialmen's, suppliers' or vendors' lien or right t due and t i ye s no in respect thereof if payment payable and (e) such minor defects, irregularities, encumbrances, easements, rights-of-way and clouds on title as do not, in the opinion of the Trustee, materially impair the Authority's interest in or Lessee's use of the Projects. tate l " es means the rea "Taxable Project (including all right-of-way easements contained therein) in St Joseph County, Indiana, and improvements to be made thereon by the Authority or its agent according to plans and specifications prepared by Cole Associates, Inc. and Clyde E. Williams and Associates, Inc., project engineers, all as described in Exhibit B hereto. The above mentioned plans and specifications may be changed and additional construction work may be performed and improvements may be purchased by the Authority, but only with the approval of the Lessee (which approval shall not be withheld by the Lessee in the event of the inability of the Authority to acquire timely and at a reasonable price all of those real property interests constituting part of the Taxable Project which must be obtained by eminent domain, difications if any), and only if such changes or mo or additional construction work or improvements do not alter the character of the Project or reduce the value thereof. Any such additional construction work or additional improvements shall be part of the property covered by this Lease. The above-mentioned plans and specifications have been filed with and approved by the Lessee. "Taxable Lease Resolution" means Resolution No. 967 of the Commission passed on December 21, 1990, as amended by Resolution No. 972 of the Commission passed on January 11, 1991, establishing funds for the payment of lease rentals for the Taxable Project, as defined herein. "Tax-Exempt Project" means the real estate (including all right-of-way easements contained therein) in St. Joseph County, Indiana, and improvements to be made thereon by the Authority or its agent according to plans and specifications prepared by Cole Associates, Inc. and Clyde E. Williams and Associates, Inc., project engineers, all as described in Exhibit C hereto. The above mentioned plans and specifications may be changed and additional construction work may be performed r~ ~~ D-31 follows: and improvements may be purchased b the Authbri Y ty, but only with the approval of the Lessee (which approval shall not be withheld by the Lessee in the event of the inability of the Authority to acquire timely and at a reasonable price all of those real property interests constituting part of the Tax- Exempt Project which must be obtained by eminent domain, if any), and only if such changes or modifications or additional construction work or improvements do not alter the character of the ' Project or reduce the value thereof. Any such additional construction work or additional improvements shall be part of the property covered by this Lease. The above-mentioned plans and specifications have been filed with and approved by the Lessee. 2. Section 4 of the Lease is amended to read as Section 4. Rental Payment .Dates and Amounts. (a) Tax-Exempt Project. The first semiannual rental installment in the amount of Eighty-Two Thousand Dollars ($82,000) shall be due on the day that the Tax-Exempt Project is completed and ready for use, or January 28, 1994, whichever is later. If completion is later than January 28 , 1994, the first installment shall be in an amount which provides for rental at the rate specified in Exhibit D for the semiannual period in which the Tax-Exempt Project is completed and ready for use, prorated from the date of completion until the first July 28 or January 28 following such date of completion. Thereafter such rentals shall be payable in advance in semiannual installments on July 28 and January 28 of each year as provided for in the lease payment schedule attached hereto as Exhibit D. (b) Taxable Project. The first semiannual rental installment in the amount of One Hundred Ninety-Nine Thousand Dollars ($199,000) shall be due on the day that the Taxable Project is completed and ready for use, or July 28, 1993, whichever is 3~~ater. If completion is later than July 28, 1993, the first installment shall be in an amount which provides for rental at the rate specified in Exhibit E for the semiannual period in which the Taxable Project is completed and ready for use, prorated from the date of completion until the first January 28 or July 28 following such date of completion. Thereafter such rentals shall be payable in advance in semiannual installments on January 28 and July 28 of each year as provided for in the lease payment schedule attached hereto as Exhibit E. D-32 L In the case of the Tax-Exempt Project, the Lessee will not take any action or fail to take any action that would result in the loss of the exclusion from gross income for federal tax purposes of interest on the Bonds pursuant to Section 103(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as in effect on the date of delivery of the Bonds, nor will the Lessee act in any manner which would adversely affect such exclusion. The Lessee further covenants that it will not make any investment or do any other act or thing during the period that any Bond is outstanding hereunder which ' would cause any Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code and the regulations thereunder as in effect on the date of delivery of the Bonds. All officers, members, employees and agents of the Lessee are authorized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the Lessee as of the date the Bonds are issued and to enter into covenants on behalf of the Lessee evidencing the Lessee's commitments made herein. 3. The last paragraph of Section 14 of the Lease shall be amended to read as follows: If the Lessee has not exercised its option to purchase the Projects 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, the Authority shall execute a deed of the Projects to the Lessee conveying all of its interest thereto, subject only to Permitted Encumbrances. 4. Exhibit A of the Lease shall be amended to read as follows: ~; Permitted Encumbrances All encumbrances identified in the Title Commitment originally issued by Chicago `Title Insurance Company on November 20, 1990, Commitment No. 85239H-61, in favor of the South Bend Redevelopment Authority, as amended and in effect from time to time during the term of the Lease. I! D-33 follows: 5. Exhibit D of the Lease shall be amended to read as EXHIBIT D Lease Payment Schedule for Tax-Exempt Project Payment Date Amount Payment Date Amount 1-28-94 $ 82,000 1-28-03 $ 129,500 7-28-94 82,000 7-28-03 129,500 1-28-95 82,000 1-28-04 127,500 7-28-95 82,000 7-28-04 127,500 1-28-96 82,000 1-28-05 130,500 7-28-96 82,000 7-28-05 130,500 1-28-97 107,000 1-28-06 130,000 7-28-97 107,000 7-28-06 130,000 1-28-98 115,500 1-28-07 129,500 7-28-98 115,500 7-28-07 129,500 1-28-99 123,500 1-28-08 131,000 7-28-99 123,500 7-28-08 131,000 1-28-00 125,500 1-28-09 132,000 7-28-00 125,500 7-28-09 132,000 1-28-01 127,000 1-28-10 130,000 7-28-01 127,000 7-28-10 130,000 1-28-02 128,500 1-28-11 133,000 7-28-02 128,500 7-28-11 133,000 1-28-12 132,500 7-28-12 132,500 D-34 6. Exhibit E of the Lease shall be amended to read as follows: EXHIBIT E Lease Payment Schedule for Taxable Project Payment Date Amount Payment Date Amount 7-28-93 $199,000 1-28-04 $ 268,500 1-28-94 199,000 7-28-04 268,500 7-28-94 199,000 1-28-05 270,500 1-28-95 199,000 7-28-05 270,500 7-28-95 199,000 1-28-06 271,000 1-28-96 219,000 7-28-06 271,000 7-28-96 219,000 1-28-07 272,500 1-28-97 222,500 7-28-07 272,500 7-28-97 222,500 1-28-08 273,000 1-28-98 240,500 7-28-08 273,000 7-28-98 240,500 1-28-09 276,500 1-28-99 254,000 7-28-09 276,500 7-2g-9g 254,000 1-28-10 278,000 1-28-00 258,500 7-28-10 278,000 7-28-00 258,500 1-28-11 278,000 1-28-01 262,000 7-28-11 278,000 7-28-01 262,000 1-28-12 281,000 1-28-02 267,.000 7-28-12 281,000 7-28-02 267,000 1-28-03 268,500 7-28-03 268,500 D-35 7. The parties hereto acknowledge that all remaining , terms, covenants and conditions as set forth in the Lease between the parties hereto and executed as of the first day of August, 1990 shall remain in full force and effect. , IN WITNESS WHEREOF, the parties hereto have caused this Addendum to Lease to be executed for and on their behalf on the day and year first hereinabove written. SOUTH BEND REDEVELOPMENT AUTHORITY ' Jo eph~ Wroblewski, President , AT EST: ~ ~~ Donald K. Fewell, Secretary-Treasurer , SOUTH BEND REDEVELOPMENT COMMISSION ~ ;/ ~ ~ ~ /i l ~C~~,~-f ct ~~ LGC~,~.~c2 ~c.J By: Paula N. Auburn, President ATTEST: Michael Donoho, Secretary , D-36 ' STATE OF INDIANA ) SS: COUNTY OF ST. JOSEPH ) Before me, the undersigned, a Notary Public in and for said State, personally appeared Joseph W. Wroblewski and Donald K. Fewell, personally known by me to be the President and Secretary- Treasurer, respectively, of the South Bend Redevelopment Authority, and acknowledged the execution of the foregoing Addendum to Lease for and on behalf of said Authority. WITNESS my hand and Notarial Seal this 29th day of ~a n u~ ~.y , 19 91 . ~ , ~ ~ ~// (Written Signature) Cheryl K. Phipps {SEAL) (Printed Signature) rIy commission expires: January 7, 1995 I am a resident of St. Joseph County, Indiana. STATE OF INDIANA ) y ) S~S COUNTY OF ST. JOSEPH ) Before me, the undersigned, a Notary Public in and for said State, personally appeared Paula N. Auburn and Michael Donoho, personally known by me to be the President .and Secretary, respectively, of the South Bend Redevelopment Commission, and acknowledged the execution of the foregoing Addendum to Lease for and on behalf of said Commission. WITNESS my hand and Notarial Seal this 25th day of January , 1991. ('SEAL) Ply coin;mission expires: ' I am a resident of (Written Signatu e) Cheryl K. Phipps (Printed Signature) January 7, 1995 St. Joseph County, Indiana. This instrument was prepared by Richard C. Starkey, Baker & Daniels, 300 North Meridian Street, Indianapolis, Indiana, 46204. 1 D-37 ADDENDUM TO LEASE Addendum to Lease Between South Bend Redevelopment Authority, as Lessor, and South Bend Redevelopment Commission, as Lessee (Airport Economic Development ' Area Public Improvement Project) THIS ADDENDUM, entered into as of the 9th day of July, 1993 (the "Addendum"), between the South Bend Redevelopment Authority, a body corporate and politic organized and existing under IC 36-7-14.5 (the "Authority"), and the South Bend ' Redevelopment Commission (the "Lessee"), WITNESSETH• ' In consideration of the mutual covenants herein contained, it is agreed that the lease previously entered into between the Authority and the Lessee dated as of August 1, 1990, and as amended by the Addendum to Lease entered into between the ' Authority and Lessee dated as of January 29, 1991, both of which were recorded in the office of the Recorder of St. Joseph County, Indiana, (recording numbers 9102772 and 9102773 respectively) (hereinafter collectively referred to as the "Lease"), shall be amended as follows: i 1. Section 4(b) of the Lease is amended to read as follows: ' (b) Taxable Project. The first semiannual rental installment in the amount of One Hundred Forty-Two Thousand and 00/100, Dollars ($142,000) shall be due on January 28, 1994. , Thereafter such rentals shall be payable in advance in semiannual installments on January 28 and July 28 of each year as provided for in the lease payment schedule attached hereto as Exhibit E. In the case of the Tax-Exempt Project, the Lessee will not take any action or fail to take any action that would result in the loss of the exclusion from gross income for federal tax , purposes of interest on the Bonds pursuant to Section 103(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as in effect on the date of delivery of the Bonds, nor will the Lessee act in any manner which would adversely affect such exclusion. The Lessee further covenants that it will not make any investment or do any other act or thing during the period that any Bond is ' outstanding hereunder which would cause any Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code and the regulations thereunder as in effect on the date of delivery of the Bonds. All officers, members, employees and agents of the Lessee are authorized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the Lessee as of the date the Bonds are issued and ' D-38 , i~ i~ i~ i~ i~ ii G G C i! to enter into covenants on behalf of the Lessee evidencing the Lessee's commitments made herein. 2. The Lease is amended to replace Exhibit E with the following: EXHIBIT E LEASE PAYMENT SCHEDULE FOR TAXABLE PROJECT Payment Date 01/28/94 07/28/94 01/28/95 07/28/95 01/28/96 07/28/96 01/28/97 07/28/97 01/28/98 07/28/98 01/28/99 07/28/99 01/28/00 07/28/00 01/28/01 07/28/01 01/28/02 07/28/02 01/28/03 07/28/03 01/28/04 07/28/04 01/28/05 07/28/05 01/28/06 07/28/06 01/28/07 07/28/07 01/28/08 07/28/08 01/28/09 07/28/09 01/28/10 07/28/10 01/28/11 07/28/11 01/28/12 07/28/12 Amount $142,000 $192,000 $190,500 $190,500 $2.14,000 $214,000 $217,000 $217,000 $234,000 $234,000 $247,000 $247,000 $251,500 $251,500 $255,500 $255,500 $258,500 $258,500 $260,500 $260,500 $261,500 $261,500 $262,000 $262,000 $264,000 $264,000 $265,000 $265,000 $264,500 $264,500 $268,000 $268,000 $270,000 $270,000 $271,000 $271,000 $273,000 $273,000 - D-39 3. The parties hereto acknowledge that all remaining ' terms, covenants and conditions as set forth in the Lease between the parties hereto shall remain in full force and effect. 4 This Add d h ll . en um s a take effect as of the date (the "Deposit Date") when the Authority deposits or causes to be deposited proceeds derived from the sale of its South Bend Redevelopment Authority Taxable Lease Rental Acquisition and ' Refunding Revenue Bonds of 1993 (Airport Economic Development Area Public Improvement Project) into an escrow fund established pursuant to an Irrevocable Escrow Deposit Agreement, such Agreement to be dated as of July 1, 1993, between the Authority and Society National Bank, Indiana, for the purpose of "refunding the South Bend Redevelopment Authority Taxable Lease Rental Revenue Bonds (Airport Economic Development Area Public Improvement Project), dated ' January 1, 1991. Such Deposit Date shall be endorsed on this Addendum at the end hereof by the parties hereto as soon as the same can be done after the deposit into the Escrow Fund and the ' Addendum shall be recorded as so endorsed. IN WITNESS WHEREOF, the undersigned have caused this ' Addendum to be executed for and on their behalf on the day and year first hereinabove written. SOUTH BEND REDEVELOPMENT AUTHORITY, as Lessor By. Joseph W. Wroblewski, President ATTEST• Donald K. Fewell, Secretary-Treasurer ' SOUTH BEND REDEVELOPMENT COMMISSION, as Lessee ' By: Paula N. Auburn, President ATTEST: Theo F. Sharp, Secretary , ~i D-40 ' STATE OF INDIANA ) SS: COUNTY OF ST. JOSEPH ) Before me, the undersigned, a Notary Public in and for said State, personally appeared Joseph W. Wroblewski and Donald K. Fewell personally known by me to be the President and Secretary, respectively, of the South Bend Redevelopment Authority and acknowledged the execution of the foregoing Addendum to Lease for and on behalf of said Redevelopment Authority. WITNESS my hand and Notarial Seal this day of July, 1993. (SEAL) My Commission Expires: Notary Public Residing in County, Indiana D-41 STATE OF INDIANA ) COUNTY OF ST. JOSEPH ) SS: Before me, the undersigned, a Notary Public in and for said State, personally appeared Paula N. Auburn and Theo F. Sharp personally known by me to be the President and Secretary, respectively, of the South Bend Redevelopment Commission and acknowledged the execution of the foregoing Addendum to Lease for and on behalf of such Redevelopment Commission. WITNESS my hand and Notarial Seal this day of July, 1993. (SEAL) My Commission Expires: Notary Public Residing in County, Indiana This instrument was prepared by Randolph R. Rompola, BARER & DANIEL3, 205 West Jefferson Boulevard, south Bend, Indiana 46601. D=42 ENDORSEMENT TO ADDENDUM TO LEASE BETWEEN SOUTH BEND REDEVELOPMENT AUTHORITY, AS LESSOR, AND SOUTH BEND REDEVELOPMENT COMMISSION, AS LESSEE (AIRPORT ECONOMIC DEVELOPMENT AREA PUBLIC IMPROVEMENT PROJECT) Pursuant to Section 4 of the Addendum to Lease, entered into as of the day of July, 1993 (the "Addendum"), the Addendum is hereby deemed effective as of the Deposit Date, said Deposit Date being , 1993. IN WITNESS WHEREOF, the undersigned have caused this Endorsement to be executed for and on their behalf as of the day and year first hereinabove written. SOUTH BEND REDEVELOPMENT AUTHORITY, as Lessor By: Joseph W. Wroblewski, President ATTEST: Donald K. Fewell, Secretary-Treasurer SOUTH BEND REDEVELOPMENT COMMISSION, as Lessee Bv: Paula N. Auburn, President ATTEST: Theo F. Sharp, Secretary D-43 STATE OF INDIANA ) SS: COUNTY OF ST. JOSEPH ) Before me, the undersigned, a Notary Public in and for said State, personally appeared Joseph W. Wroblewski and Donald K. Fewell personally known by me to be the President and Secretary- Treasurer, respectively, of the South Bend Redevelopment Authority and acknowledged the execution of the foregoing Endorsement for and on behalf of said Redevelopment Authority. WITNESS my hand and Notarial Seal this day of July, 1993. (SEAL) My Commission Expires: Notary Public Residing in County, Indiana D-44 STATE OF INDIANA ) SS: COUNTY OF ST. JOSEPH ) Before me, the undersigned, a Notary Public in and for said State, personally appeared Paula N. Auburn and Theo F. Sharp personally known by me to be the President and Secretary, respectively, of the South Bend Redevelopment Commission and acknowledged the execution of the foregoing Endorsement for and on behalf of such Redevelopment Commission. WITNESS my hand and Notarial Seal this day of July, 1993. (SEAL) My Commission Expires: Residing in County, Indiana This instrument was prepared by Randolph R. Rompola, BAKER & DANIELS, 205 West Jefferson Boulevard, South Bend, Indiana 46601. Notary Public D-45 i C (This page intentionally left blank. ) J D-46 ' NOTE: THE FOLLOWING INFORMATION CONSISTS OF EXCERPTS FROM THE TRUST AGREEMENT. A COPY OF THE COMPLETE TRUST AGREEMENT WILL BE PROVIDED UPON REQUEST TO THE FINANCIAL ADVISOR. J L t 1 APPENDIX E EXCERPTS OF TRUST AGREEMENT Between SOUTH BEND REDEVELOPMENT AUTHORITY AND SOCIETY NATIONAL BANK, INDIANA South Bend, Indiana, Trustee Dated as of July 1, 1993 (Lease Rental Acquisition and Refunding Revenue Bonds) i~ i~ i~ i~ i~ v INDEX Pa e i~ i~ u i~ i~ ARTICLE I. ARTICLE II. ARTICLE III. ARTICLE IV. ARTICLE V. ARTICLE VI. ARTICLE VII. ARTICLE VIII. ARTICLE IX. ARTICLE X. ARTICLE XI. Definitions .............................. Maturities, Form, Issuance, Delivery and Registration of Bonds .................... Funds .................................... Redemption of Bonds ...................... Covenants of the Authority ............... Insurance ................................ Remedies in Case of Default .............. Defeasance, Payment, Release ............. Concerning the Trustee ................... Supplemental Agreements .................. Miscellaneous Provisions ................. n TRUST AGREEMENT THIS AGREEMENT (the "Agreement"), executed and dated as of the 1st day of July, 1993, made and entered into between SOUTH BEND REDEVELOPMENT AUTHORITY, a public body corporate and politic, organized and existing under Indiana Code 36-7-14.5, as amended (hereinafter called the "Authority"), and Society Bank, Indiana, having its principal office in the City of South Bend, Indiana (hereinafter called the "Trustee"), W I T N E S S E T H: WHEREAS, the Authority was created under and pursuant to the provisions of Indiana Code 36-7-14.5 (hereinafter referred to as the "Act"), for the purpose of financing local public ' improvements for lease to the South Bend Redevelopment Commission (hereinafter referred to as the "Commission"); and WHEREAS, the Authority issued its taxable lease rental revenue bonds in 1991 (the "Prior Bonds"), the proceeds of which were used to pay the cost of the Project (as hereinafter defined} and to pay the costs of issuance of those bonds; and WHEREAS, the Authority entered into a Lease (as hereinafter defined) of the Project with the Commission dated as of August 1, ' 1990, and as amended by an Addendum to Lease entered into by the Authority and the Commission as of January 29, 1991; and WHEREAS, the Authority has determined to borrow the sum of ' Four Million Nine Hundred Five Thousand and 00/100 Dollars ($4,905,000.00) for the purpose of procuring funds to pay: (i) the cost of advance refunding the Prior Bonds issued in 1991 and ' (ii) the cost of acquiring land and constructing public improvements which will be subject to the Lease and to execute and issue its Taxable Lease Acquisition and Refunding Rental Revenue Bonds of 1993 in the form and upon the terms hereinafter provided; and WHEREAS, the Authority intends to amend the Lease with the ' Commission for said Project to reduce the rental paid thereunder by the Commission following the advance refunding of the Bonds issued in 1991; and WHEREAS, in order to secure the principal of and premium, if any, and interest on all of said Bonds and the performance of the ' covenants herein contained, the Authority has in like manner determined to execute and deliver this Agreement; and WHEREAS, all acts, proceedings and things necessary and required by law to make said Bonds, when executed by the Authority and authenticated by the Trustee, the valid, binding and legal obligations of the Authority and to constitute and make this Agreement a valid agreement to secure the payment of the principal of and premium, if any, and interest on the Bonds, have been done, taken and performed, and the issuance, execution and delivery of said Bonds, and the execution, acknowledgment and delivery of this Agreement have, in all respects, been duly authorized by the Authority in the manner provided and required by law; now therefore, SOUTH BEND REDEVELOPMENT AUTHORITY, in consideration of the premises and the acceptance of such Bonds by the holders thereof, and the sum of One and 00/100 Dollars ($1.00) in hand paid by the Trustee, receipt of which is hereby acknowledged, and especially in order to secure the punctual payment of the principal of, premium, if any, and interest on the Bonds to be issued and at any time outstanding hereunder as the same shall become due, according to the tenor hereof and thereof, and the faithful performance of all the covenants and agreements contained in said Bonds and in this Agreement, and in performance of the authority of every kind and nature which said Authority has or may have, has executed and delivered this Agreement and has pledged and assigned and by these presents does hereby pledge and assign unto Society Bank, Indiana, as Trustee and to its successors in said trust and to its assigns, the Lease (as hereinafter defined) and the Pledged Funds (as hereinafter defined) subject to the provisions of this Agreement requiring or permitting the application thereof for the purposes and on the terms set forth in this Agreement. The pledge herein made is and shall be subject to the provisions of this Agreement for the equal and proportionate benefit, security and protection of all holders of the Bonds issued or to be issued under and secured by this Agreement, without preference, priority or distinction as to lien or otherwise by reason of the date of maturity thereof, or for any other reason whatsoever, subject to the provisions of this Agreement. PROVIDED, HOWEVER, that if the Authority, its successors or its assigns, shall well and truly pay, or cause to be paid, the principal of the Bonds and the premium, if any, and the interest due or to become due thereon, at the times and in the manner as set forth in said Bonds in accordance with the terms hereof, and shall well and truly keep, perform and observe all covenants and conditions pursuant to the terms of this Agreement to be kept, performed and observed by the Authority, and shall pay to the Trustee all sums of money due, or to become due to it, in accordance with the terms and provisions hereof, then this Agreement and the rights hereby granted shall cease, determine and be void, but otherwise, this Agreement shall remain in full force and effect . All Bonds issued and secured hereunder are to be issued, E-2 authenticated and delivered, and all property hereby pledged is to be dealt with and disposed of under, upon and subject to the ' terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed; and the Authority has agreed and covenanted, and does hereby agree and covenant, with the Trustee and with the respective owners, from time to time, of ' the said Bonds or any part thereof, as follows: ARTICLE I. ' Definitions Sec. 1.01. The terms defined in this Article I shall, for ' all purposes of this Agreement, and any agreement supplemental hereto, have the meanings herein specified, unless the context otherwise requires: ' (a) "Agreement" or "this Agreement" means this instrument, either as originally executed or as it may from ' time to time be supplemented, modified or amended by any supplemental agreement entered into pursuant to the provisions of this Agreement. ' (b) "Authority" means the South Bend Redevelopment Authority, a body corporate and politic, or any successor entity. (c) "Bond" or "Bonds" (unless the context shall otherwise require) means any Bond or Bonds, or all the Bonds, as the case may be, authenticated and delivered under this Agreement. (d) "Board" means the Board of Directors of the Authority. (e) "Bondholder," "holder," "owner" and "registered owner" means the registered owner of a Bond. (f) "Code" means the Internal Revenue Code of 1986, as amended. (g) "Commission" 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. (h) "Construction Fund" means the Construction Fund created and established by Section 3.02. (i) "Costs of Issuance" shall mean any and all costs and expenses relating to the issuance, sale and delivery of E-3 the Bonds, including but not limited to, premiums for municipal bond insurance, all fees and expenses of legal counsel, financial feasibility or other consultants, trustees, underwriters and accountants, the preparation and printing of this Agreement, the preliminary and final official statement and such Bonds. (j) "Government Obligations" means bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the timely payment of the principal of and the interest on which are fully and unconditionally guaranteed by, the United States of America or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States of America. (k) "Improvements" means the real estate (including all right of way easements contained therein) and public improvements to be acquired and constructed by the Authority as described in Exhibit A hereto. (1) "Lease" means the lease by the Authority to the Commission, dated as of August 1, 1990, as amended by an Addendum to Lease by the Authority and Commission and dated as of January 29, 1991, as the same may be further amended or supplemented. (m) "Operation and Reserve Fund" means the Operation and Reserve Fund created and established by Section 3.04. (n) "Pledged Funds" means (i) the proceeds from the sale of the Bonds; (ii) the rentals to be received under the Lease; and (.iii) all moneys and securities from time to time held by the Trustee under the terms of this Agreement (except moneys or securities held in accounts to pay for Bonds called for redemption or with respect to which irrevocable instructions to redeem have been given to the Trustee), including without limitation the moneys held in trust funds. (o) "Project" means the real estate (including all right of way easements contained therein) in South Bend, Indiana, and improvements made thereon by the Authority or its agent as described in Exhibit A hereto, the acquisition of a portion of which is to be financed with the proceeds of the Bonds and all of which is to be leased to the Commission, pursuant to the Lease. (p) "Qualified Securities" means investments in: (i) Government Obligations; (ii) certificates of deposit issued by banks and mutual savings banks incorporated under E~ the laws of the State of Indiana and in national banking associations having their principal banking offices in the State of Indiana, including the Trustee, provided such certificates of deposit do not exceed in the aggregate ten percent (10%) of the combined capital, surplus and undivided profits of any such bank or association and that each such bank or association has a combined capital and surplus of at least $25,000,000; and provided further that such certificates of deposit are insured by the Federal Deposit Insurance Authority or the Federal Savings and Loan Insurance Authority or, to the extent not so insured, collateralized by interest-bearing obligations described in clause (i) above in which the Trustee has a perfected security interest; or (iii) repurchase agreements, entered into with banks and mutual savings banks incorporated under the laws of the State of Indiana and in national banking associations having their principal banking offices in the State of Indiana, including the Trustee, that are fully collateralized by interest-bearing obligations described in clause (i) above based upon the market value of such obligations on the day such agreement becomes effective, in which the Trustee has a perfected security interest. (q) "Redemption price," with respect to the Bonds outstanding under this Agreement, means the price at which the Bonds are redeemable as set forth in Article IV of this Agreement. (r) "Sinking Fund" means the Sinking Fund created and established by Section 3.03. (s) "Trustee" means and includes not only the Trustee but also its successor or successors in trust. ~''~ (t) Unless the context shall clearly otherwise indicate, words importing the singular number shall include the plural number in each case, and vice versa, and words importing persons shall include firms and corporations, and terms employed in the disjunctive form shall be deemed to be employed also in the conjunctive form and vice versa. ARTICLE III. Funds Sec. 3.01. The sum of Four Million Five Hundred Forty-Six Thousand Four Hundred Forty and 80/100 Dollars ($4,546,440.80) of the proceeds received from the sale of such Bonds by the Trustee shall be deposited into the Escrow Fund established and created by an "Irrevocable Escrow Deposit Agreement" entered into between E-5 the Authority and Society National Bank, Indiana, dated as of July 1, 1993, and applied on behalf of the Authority to the redemption of the Prior Bonds. Sec. 3.02. There is hereby established and created a fund designated as the "South Bend Redevelopment Authority Airport Economic Development Area Taxable Lease Rental Acquisition and Refunding Construction Fund." The Trustee shall deposit in the Construction Fund an amount equal to One Hundred Eighty-Seven Thousand and 00/100 Dollars ($187,000.00) of Bond proceeds plus an amount, equalling One Hundred Twenty-Four Thousand Five Hundred Sixteen and 00/100 Dollars ($124,516.00) available from the funds established by the Trust Agreement governing the Prior Bonds. The Trustee shall pay the Costs of Issuance of the Bonds from such account upon the presentation of an affidavit executed by any two officers of the Authority, stating the character of the expenditure, the amount thereof, and to whom due, together with a statement of the creditor as to the amount owing. The Trustee shall also pay obligations incurred for acquiring the Improvements, the fees and expenses of architects and engineers and any costs of land acquisition and any other incidental costs incurred in connection with the cost of acquiring the Improvements, including the audit referred to in Section 5.07(c). Such shall be made on presentation of an affidavit executed by any two officers of the Authority (or, alternatively, by any two members of the Board of Public Works, of the City of South Bend, Indiana (the "Board of Public Works"), so long as the Agency Agreement (the "Agency Agreement") dated December 17, 1990, between the Authority and the Board of Public Works is in effect; the Authority has provided the Trustee with a copy of such Agency Agreement and hereby covenants to provide the Trustee copies of any amendments to such Agency Agreement), stating the character of the expenditure, the amount thereof, and to whom due, together with the statement of the creditor as to the amount owing. Following acquisition of the Improvements, an affidavit indicating completion of such Improvements shall be filed with the Trustee, which affidavit will be executed by any two officers of the Authority (or, alternatively, by any two members of the Board of Public Works, as set forth above) (the "Affadavit of Completion"). After the filing of said Affidavit, the Trustee shall hold in the Construction Fund an amount equal to one hundred fifty percent (150%) of the amount of any disputed claims, as identified in writing by the Authority to the Trustee, and transfer the unobligated balance of the Construction Fund, if any, to the Sinking Fund referred to in Section 3.03 hereof. Any balance remaining in the Construction Fund after payment of all disputed claims, and obligations authorized by Subsection (Third) of Section 5.11 shall be transferred to the Sinking Fund within E-6 ten (10) days after the last payment of such obligations. The Trustee shall have no responsibility to see that the Construction Fund is properly applied, except as herein specifically provided. Sec. 3.03. There is hereby established and created a fund designated as the "South Bend Redevelopment Authority Airport Economic Development Area Taxable Lease Rental Acquisition and Refunding Sinking Fund." The Trustee shall deposit in such Sinking Fund the accrued interest equalling Twenty-Four Thousand Five Hundred Twenty-Two and 69/100 Dollars ($24,522.69) paid by the purchaser of the Bonds, any unused discount plus an amount equalling and 00/100 Dollars ($ ) available from the funds established by the Trust Agreement governing the Prior Bonds. The Trustee shall also deposit in such Sinking Fund from each rental payment received by the Trustee pursuant to the Lease, an amount equal to the following whichever is less: (a) All of such rental payment; or (b) An amount which, when added to the amount in the ' Sinking Fund on the deposit date equals the sum of the following amounts: (i) Unpaid interest on the Bonds due on, before or within thirty (30) days after the date such rental payment becomes due; and ' (ii) Unpaid principal on the Bonds due on, before or within seven (7) months from the date such rental payment becomes due. ' Any portion of a rental payment remaining after such deposit shall be deposited by the Trustee in the Operation and Reserve Fund provided for in Sec. 3.04. The Trustee shall from time to time withdraw from such Sinking Fund, or if the Sinking Fund is not sufficient, then from the Operation and Reserve Fund created below, and shall deposit in a special trust fund and make available to itself, sufficient moneys for paying the principal of the Bonds at maturity and to-pay the interest on the Bonds as the same falls due. ' Sec. 3.04. There is hereby established and created a fund designated as the "South Bend Redevelopment Authority Airport Economic Development Area Acquisition and Refunding Operation and Reserve Fund." -The Operation and Reserve Fund shall be used only to pay necessary incidental expenses of the Authority (e.g. required audits, appraisals, meetings and reports), the payment t of principal, interest and redemption premiums of the Bonds herein described upon redemption as authorized by Article IV hereof or the purchase price of Bonds purchased as authorized by ' Sec. 3.07, and if the amount in the Sinking Fund at any time is E-7 less than the required amount, the Trustee shall, without any further authorization, transfer funds from the Operation and Reserve Fund to the Sinking Fund in an amount sufficient to raise the amount in the Sinking Fund to the required amount. Such action by the Trustee shall not constitute a waiver of any other right or remedy the Trustee may have under this Agreement. Incidental expenses shall be paid by the Trustee upon the presentation of an affidavit executed by any two (2) officers of the Authority, stating the character of the expenditure, the amount thereof, and to whom due, together with the statement of the creditor as to the amount owing. Sec. 3.05. The Trustee shall, at the written direction of the Authority invest all or so much of the funds as is practicable in Qualified Securities, to the extent and in the manner permitted by law. Investment earnings shall be credited to the fund from which the investments were made. The Trustee is authorized to sell any securities so acquired from time to time in order to make the payments authorized in this Agreement. Investment of the Sinking Fund shall mature prior to the time the funds invested will be needed for payment of principal of and interest on the Bonds. Sec. 3.06. Whenever the amounts contained in the Sinking Fund and the Operation and Reserve Fund are sufficient, together with any other funds deposited with the Trustee by the Authority, to redeem, upon the next redemption date, all Bonds secured hereby then outstanding, the Trustee shall apply the amounts in such Funds to the redemption of such Bonds pursuant to Article IV hereof . Sec. 3.07. At the request of the Authority, expressed by a resolution of the Board of Directors, or a copy thereof certified by the Secretary-Treasurer and delivered to the Trustee, the Trustee may remove funds from the Operation and Reserve Fund and the Sinking Fund to be used for the redemption of Bonds, or for the purchase of Bonds if the Authority and Trustee agree that the purchase of Bonds would be advantageous to the Authority. Sec. 3.08. A pledge of all moneys paid or deposited into the Sinking Fund, and of all rentals paid pursuant to the Lease other .than pursuant to Section 3(b) thereof, is hereby made, and the same are hereby pledged to the Trustee to secure the payment of the principal and redemption price of and interest on the Bonds, all to the extent herein provided. The rentals so pledged and hereafter received by the Trustee or Authority, shall immediately be subject to the lien of such pledge without any E-8 physical delivery thereof or further act; and the lien of such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Authority, irrespective of whether such parties have notice thereof . s w E-9 1 l i (This page intentionally left blank. ) i w E-10 f 1 ~~ ii n APPENDIX F FORM OF PLEDGE RESOLUTION RESOLUTION NO. RESOLUTION OF THE SOUTH BEND REDEVELOPMENT COMMISSION ESTABLISHING CERTAIN FUNDS AND ACCOUNTS IN CONNECTION WITH THE LEASE DATED AS OF AUGUST 1, 1990, AND AS AMENDED BY AN ADDENDUM THERETO DATED AS OF JANUARY 29, 1991, AND AS FURTHER AMENDED BY AN ADDENDUM TO LEASE BETWEEN THE SOUTH BEND REDEVELOPMENT COMMISSION AND THE SOUTH BEND REDEVELOPMENT AUTHORITY LI u WHEREAS, the South Bend Redevelopment Authority (the "Authority") has been created pursuant to IC 36-7-14.5 as a separate body, corporate and politic, and as an instrumentality of the City of South Bend to finance local public improvements for lease to the South Bend Redevelopment Commission (the "Commission"); and WHEREAS, the Authority intends to issue bonds in an aggregate principal amount not to exceed Five Million and 00/100 Dollars ($5,000,000) pursuant to IC 36-7-14.5-19 to be known as the "South Bend Redevelopment Authority Lease Rental Acquisition and Refunding Revenue Bonds of 1993 (Airport Economic Development Area Public Improvement Project)" (the "Bonds"), the proceeds of which are to be used to: (i) refund the South Bend Redevelopment Authority Taxable Lease Rental Revenue Bonds (Airport Economic Development Area Public Improvement Project) issued by the Authority in 1991, (ii) acquire additional land in the Airport Economic Development Area; and (iii) pay the costs of issuance of the Bonds; and WHEREAS, the Authority previously entered into a lease i between the Authority and the Commission dated as of August 1, 1990, which lease was amended by the Addendum to Lease entered into between the Authority and the Commission and dated as of January 29, 1991, (collectively, the "Lease"), which Lease was heretofore approved by this Commission, and pursuant to which the Authority leases to the Commission certain land and public improvements (the "Taxable Project"); and WHEREAS, the Commission has approved and authorized the execution of an addendum to the Lease (the "Addendum") to reflect lower rental payments under the Lease; and WHEREAS, the Commission, by Resolution No. 967, adopted at a meeting of the Commission held on December 21, 1990, established certain funds and accounts for the payment of the rentals owed by the Commission pursuant to said Lease which resolution was subsequently amended by the Commission with the adoption of Resolution No. 972, adopted at a meeting of the Commission held on January 11, 1991, (collectively the "Pledge Resolution"); NOW, THEREFORE, BE IT RESOLVED, by this South Bend Redevelopment Commission as follows: Section 1. The Commission hereby covenants and agrees to keep and maintain those funds and accounts created by the Pledge Resolution, such funds and accounts consisting of a Redevelopment District Bond Fund (the "Bond Fund") and an Airport Economic Development Area Taxable Public Improvement Project Principal and Interest Account (the "Principal .and Interest Account") and such F-2 u L !~ u i~ i~ i~ i~ i~ II n [I ~i u other accounts as the Commission may from time to time establish to pay the rentals owed by the Commission pursuant to the Lease as amended by the Addendum. Section 2. The Commission hereby acknowledges and restates its obligation pursuant to the Pledge Resolution to levy in each calendar year a special tax upon all of the taxable property in the City of South Bend Redevelopment District in a total amount sufficient, together with all other funds in the Principal and Interest Account deposited into such account from any other sources (other than such special taxes) or anticipated to be deposited into such account from any other sources (other than such special taxes) through the end of the following calendar year, to pay all lease rental payments for the Taxable Project payable in the twelve (12) month period beginning on July 1 of the following calendar year pursuant to Section 4 of the Lease. Such taxes shall be deposited in the Principal and Interest Account and such taxes and any other funds in the Principal and Interest Account shall be irrevocably pledged for the purposes set forth in this Resolution. Section 4. This Resolution shall be in full force and effect after its adoption by the Commission. F-3 Commission held on July _, 1993, at 1308 County-City Building, 227 West Jefferson Boulevard, South Bend, Indiana 46601. SOUTH BEND REDEVELOPMENT COMMISSION By: Paula N. Auburn, President ATTEST: Theo F. Sharp, Secretary F-4 1 ~I ~'~ 0 APPENDIX G ' FORM OF LEGAL OPINION 1993 City Securities Corporation 135 North Pennsylvania Street Indianapolis, IN 46204 Re: South Bend Redevelopment Authority Taxable Lease Rental Acquisition and Refunding Revenue Bonds ' of 1993 (Airport Economic Development Area Public Improvement Project) ' tl emen: Gen We have acted as bond counsel in connection with the ' issuance by the South Bend Redevelopment Authority (the "Issuer"), d 00/100 Dollars d an of Four Million Nine Hundred Five Thousan 000.00) aggregate principal amount of South Bend 905 ($4 , , Redevelopment Authority Taxable Lease Rental Acquisition and blic P u Refunding Revenue Bonds (Airport Economic Development Area 1993 (the "Bonds") 1 , , Improvement Project) originally dated July Trust Agreement (the "Trust Agreement").between the t ' o a pursuant Issuer and Society National Bank, Indiana, as Trustee (the dated as of July 1, 1993. We have examined a certified "Trustee") , transcript of proceedings and such other certificates and documents and have reviewed such other proceedings and such questions of law for this opinion. i b s as as we have deemed necessary as a It is understood that the rights of the holders of the ' the Issuer and the Trustee and the enforceability of the Bonds , Bonds, the Trust Agreement and the Lease (as defined below), may moratorium reorganization l i ' , vency, nso be subject to bankruptcy, and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable, and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. As to questions of fact material to our opinion, we have relied, without undertaking to verify the same by independent tifications d ' cer investigation, upon representations, covenants an uer and public officials contained in the Trust Agreement I h ss e of t and in the certified transcript of proceedings and other ' certificates furnished to us. We have not been engaged or of fficienc y undertaken to review the accuracy, completeness or su any offering materials relating to the Bonds, and we express no ' opinion relating thereto. City Securities Corporation 1993 ' Based upon the foregoing, we are of the opinion, under ' existing law, as follows: 1. The Issuer is duly created and validly existing as ' a separate body corporate and politic and as an instrumentality of the City of South Bend, Indiana, with the power to enter into the Trust Agreement and the Lease described below, perform the ' agreements on its part contained therein and issue the Bonds. 2. The lease between the Issuer, as lessor, and the South Bend Redevelopment Commission (the "Commission"), as lessee, ' dated as of August 1, 1990, and as amended by the Addendum to Lease between the Issuer and the Commission dated as of January 29, 1991, and as further amended by the Addendum to Lease between the Issuer and the Commission dated as of July 9, 1993 (the lease as so , amended shall be referred to herein as the "Lease"), has been duly entered into in accordance with the provisions of Indiana Code 36- 7-14 (the "Act") and is a valid and binding Lease. All taxable ' property in the City of South Bend Redevelopment District (the "District") is subject to ad valorem taxation without limitation as to rate or amount to pay the Lease rental. The Commission is , required by the Act and the Lease annually to levy and appropriate an amount sufficient to pay the Lease rentals during the term of the Lease. ' 3. The Issuer has duly authorized, sold, executed and delivered the Bonds and has duly authorized and executed the Trust Agreement. The Bonds are the valid and binding obligations of the ' Issuer secured by the Trust Agreement. 4. The interest on the Bonds is exempt from taxation in the State of Indiana for all purposes except the Indiana ' financial institutions tax and the Indiana inheritance tax. Very truly yours, , ~z ~ TA% MATTERS In the opinion of Baker & Daniels, South Bend, Indiana, Bond Counsel, interest on the South Bend Redevelopment Authority Taxable Lease Rental Acquisition and Refunding Revenue Bonds of 1993 (Airport Economic Development Area Public Improvement Project) (the "Bonds") is exempt from taxation in the State of Indiana for all purposes except the Indiana financial institutions tax and the Indiana inheritance tax. INTEREST ON THE BONDS IS NOT EXCLUDABLE FROM GROSS INCOME OF THE OWNERS THEREOF FOR FEDERAL INCOME TAX PURPOSES UNDER SECTION 103 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. For federal income tax purposes, the Bonds maturing on August 1 and February 1, beginning on February 1, 2009 through August 1, 2012, (the "Discount Bonds") will be considered to have "original issue discount" equal to the difference between their respective original issue price and the amount payable upon their respective maturities. The original issue price of each Discount Bond will be the initial offering price to the public at which a substantial amount of such Discount Bonds are sold, and the issue date will be the date on which such Discount Bonds are first issued to the public. The original issue discount on a Discount Bond accrued in the hands of a holder is treated for federal income tax purposes as interest which is not excludable pursuant to Section 103 of the Code from gross income. The holder's basis for determining gain or loss on a sale, maturity or other disposition of a Discount Bond generally will be equal to the holder's cost, increased by the original issue discount that is accrued during the period that the Discount Bond is held by such holder. Generally, any gain or loss recognized by a holder on a sale, exchange or payment at maturity of a Discount Bond (based on the holder's basis) will be taxable as capital gain or loss (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 on the difference between the holder's basis and the call price of the Discount Bond. Owners of the Discount Bonds should consult their own tax advisors with respect to the computation for federal income tax purposes of the amounts of original issue discount which accrue during the period in which such Discount Bonds are held. Owners of the Discount Bonds should also consult their own tax advisors with respect to the state and local tax consequences arising from the original issue discount of the Discount Bonds. The foregoing does not purport to be a comprehensive discussion of the tax consequences of owning the Bonds. Prospective owners of the Bonds should consult their own tax advisors with respect to the foregoing and other tax consequences of owning the Bonds. G-3 (This page intentionally left blank. ) G-4