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HomeMy WebLinkAboutIssue Economic Development Revenue Bonds (B & R Investments) ORDINANCE No. 7576-85 Passed by the Common Council of the City of South Bend, Indiana December 16 , 19 85 Attest. -�-� c-�. City Clerk IRENE K. GAMMON Attest: '`�`/�'� President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana December 17 85 85 City Clerk IRENE K. GAMMON L /7� Approved and signed by me �/�--� �"( ig //' �' 1 Mayor • ORDINANCE NO. 7s 7(e -PSG AN ORDINANCE AUTHORIZING THE CITY OF SOUTH BEND, INDIANA (THE "CITY" ) , TO ISSUE ITS "ECONOMIC DEVELOPMENT REVENUE BONDS, SERIES 1985 (B & R INVESTMENTS, AN INDIANA PARTNERSHIP PROJECT) , IN THE AGGREGATE PRINCIPAL AMOUNT OF THREE HUNDRED TWENTY-FIVE THOUSAND EIGHT HUNDRED DOLLARS ($325, 800 . 00) AND APPROVING AND AUTHORIZING CERTAIN ACTIONS WITH RESPECT THERETO. STATEMENT OF PURPOSE AND INTENT: The City is a municipal corporation and political sub- division of the State of Indiana, and by virtue of Title 35, Article 7, Chapter 12, of the Indiana Code, as amended (the "Act" ) , is authorized and empowerd to adopt this Ordinance and to carry out its provisions . The South Bend Economic Development Commission (the "Commission" ) has rendered its report concerning the proposed financing of economic development facilities for B & R Invest- ments and the Area Plan Commission has commented favorably thereon. The Commission, after a public hearing held on Decem- ber 16, 1985, has adopted a Resolution, which has been trans- mitted to this Council, (i) finding that the acquisition and construction by B & R Investments (the "Company") of the proposed economic development facilities described in said Report will not have an adverse competitive effect on any similar facilities already constructed or operating in or about the City, (ii) further finding that the proposed economic development revenue bond financing of such facilities will be �_ _ = of benefit to the health and welfare of the City and its citi- zens, (iii) further finding that the proposed economic develop- ment revenue bond financing of such facilities complies with the purposes and provisions of the Act, (iv) approving the economic development revenue bond financing of such facilities, including the form and terms of the Loan Agreement, Mortgage and Security Agreement between the Company and the City, the Promissory Note from the Company to the City, the registered City of South Bend, Indiana, Economic Development Revenue Bonds, Series 1985 (B & R Investments, an Indiana Partnership Project) from the City to the bondholders, The Bond Purchase Agreement between the City and Rehnberg-Jacobson Mfg. Co. (the "Purchaser" ) , and this Ordinance, presented to the Commission, and (v) recommending that this Council find that the proposed economic development revenue bond financing of such facilities will be of benefit to the health and welfare of the City and its citizens , and complies with the purposes and provisions of the Act, and that this Council adopt an ordinance approving such financing . IT IS HEREBY ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, THAT: Section 1. This Council finds that the facilities described in said report and in the attached Loan Agreement, Mortgage and Security Agreement are "economic development facilities" within the meaning of the Act and that such facili- ties will not have an adverse competitive effect on any similar -2- facilities already constructed or operating in or about the City. Section 2 . This Council further finds that the pro- posed economic development revenue bond financing of such facilities will be of benefit to the health and welfare of the City and its citizens . Section 3 . This Council further finds that the pro- posed economic development revenue bond financing of such facilities complies with the purposes and provisions of the Act . Section 4 . This Council hereby approves the proposed economic development revenue bond financing of such facilities, including (i) the form and terms of the aforementioned Loan Agreement, Mortgage and Security Agreement, Promissory Note, Economic Development Revenue Bonds and the Bond Purchase Agree- ment attached hereto and incorporated herein by reference (two (2) copies of which are on file in the Office of the Clerk of the City for public inspection) , (ii) the issuance and sale of said Economic Development Revenue Bonds, (iii) the loan of the net proceeds of said Economic Development Revenue Bonds to the Company for the acquisition and construction of such facili- ties, such loan to be evidenced by said Promissory Note, (iv) the repayment of said loan by the Company pursuant to said Loan Agreement, Mortgage and Security Agreement, and said Promissory Note, and (v) the securing of said Economic Development Revenue Bonds by said Loan Agreement, Mortgage and Security Agreement and said Bond Purchase Agreement. -3- Section 5. The City shall issue its Economic Develop- ment Revenue Bonds, Series 1985 (B & R Investments, an Indiana Partnership Project) , in the aggregate principal amount of Three Hundred Twenty-Five Thousand Eight Hundred Dollars ($325,800 . 00) in order to finance the acquisition of such facilities, as more particularly set out in said Loan Agree- ment, Mortgage and Security Agreement, which Economic Develop- ment Revenue Bonds shall be payable as to principal and inter- est solely from the payments made by the Company on its afore- said Promissory Note in the principal amount of Three Hundred Twenty-Five Thousand Eight Hundred Dollars ($325, 800 . 00) which will be executed and delivered by the Company, from other sources under said Loan Agreement, Mortgage and Security Agree- ment, and as otherwise provided in said Bond Purchase Agree- ment . Said Economic Development Revenue Bonds shall never con- stitute general obligations of, indebtednesses of, or charges against the general credit of the City. Said Economic Develop- ment Revenue Bonds shall be executed by the manual or facsimile signatures of the Mayor and the Clerk of the City; shall be executed and delivered on or about December 19 , 1985; shall be dated as of the date of closing; shall have a final payment date of January 1, 1996 with principal and interest paid in equal monthly installments beginning on February 1, 1986; shall bear interest at a per annum rate of nine percent (9%) except in the case of an Event of Taxability as defined in the Loan Agreement, in which case the higher interest rate specified in the Loan Agreement, Mortgage and Security Agreement as the tax- -4- able rate shall be charged, until the Series 1985 Bonds are paid; shall be issued in registered form; shall be registrable as provided therein; shall be payable in the medium and at the place or places provided therein; and shall be amortized over fifteen (15) years with a balloon payment of all remaining principal on January 1, 1996 . Section 6 . The Mayor and/or the Clerk of the City are authorized and directed to sell said Economic Development Reve- nue Bonds to Rehnberg-Jacobson Mfg. Co. in satisfaction of $325, 800 of the purchase price of 1916 South Main Street, South Bend, Indiana . Section 7. The Mayor and the Clerk of the City are authorized and directed to execute and deliver the aforemen- tioned documents for and on behalf of the City after making therein such changes permitted by the Act as they deem neces- sary or proper, as evidenced by their execution of such docu- ments, and are further authorized and directed to execute and deliver such other documents for and on behalf of the City, and to take such other actions for and on behalf of the City, as they deem necessary or proper in connection with the consumma- tion of such financing. The Mayor and the Clerk of the City are authorized to arrange for the delivery of said Economic Development Revenue Bonds to Rehnberg-Jacobson Mfg. Co. Section 8 . The provisions of this ordinance and the aforementioned documents shall constitute a contract binding between the City and the holders of said Economic Development Revenue Bonds, and after the issuance of said Economic Develop- -5- - _ ment Revenue Bonds this Ordinance shall not be repealed or amended in any respect which would adversely affect the rights of said holders so long as any of the principal of said Eco- nomic Development Revenue Bonds or the interest thereon remains unpaid. Section 9 . All ordinances or parts of ordinances in conflict herewith are hereby repealed. Section 10 . This Ordinance shall be in full force and effect from and after its passage by this Council and its sig- nature by the Mayor of the City. SOUTH :END COMMON COUNCIL ":"-` A- i, ,-/ - e--/ / Member ,____ __)._ tt. IN CLERK'S OFFICE 1st READING i.V_ -c?..s- NOV 2 51985 PUBLIC HEARING 1 ►-% (o' SI , � � � GAMMON ��: 2nd READING Mo. , 4 S� NOT APPROVED '71°Y C FRK, So, BRoD. q\J REFERRED PASSED l Z -14_gu.. -6- ---pr:µ_ I. - _ - _ -- --- _-----_-- ��_ _ BARNES & THORNBURG 600 1ST SOURCE BANK CENTER FEDERAL BAR BUILDING 1313 MERCHANTS BANK BUILDING II SOUTH MERIDIAN STREET IOO NORTH MICHIGAN 1815 H STREET, N.W. WASHINGTON,D.0.20006 INDIANAPOLIS, INDIANA 46204 13171 638-1313 SOUTH BEND, INDIANA 46601 12021955-4500 (219) 233-1171 305 FIRST NATIONAL BANK BUILDING 301 SOUTH MAIN STREET ELKHAR7,INDIANA 46516 TWX 810-341-3427 B&T LAW IND 12191 293-0681 TELECOPIER (219) 237-1125 ERNEST J. RK 12191 237-17-1193 193 21,November 21 1985 - HAND DELIVERED Ms. Irene Gammon City Clerk 4th Floor County-City Building South Bend, Indiana 46601 Dear Ms. Gammon: Please find enclosed herein a form of Ordinance by which the City of South Bend, Indiana, would approve the issuance of its Economic Development Revenue Bonds in the original principal amount of $325,800.00 in connection with the B & R Investments, an Indiana Partnership Project. The proceeds of the bond would be used to enable the partnership to purchase facilities at 1916 South Main Street, South Bend, Indiana, which it would then substantially rehabilitate and use as an industrial manufacturing facility. We would request that you place this on the agenda for a first hearing on December 2, 1985, and a second hearing on December 16, 1985. The South Bend Economic Development Commission will consider this at its December 16, 1985, meeting. We are taking the unusual step of requesting a first reading on this Ordinance prior to approval by the South Bend Economic Development Commission in order that we may obtain two hearings as required by Council rules prior to the end of 1985. The project will save 105 existing jobs with an annual payroll of approximately $1. 1 million and is anticipated to create 45 new jobs with an annual payroll increase of $490, 000. The bonds would be amortized over 15 years with a balloon payment at the end of the 10th year, and would be payable at a fixed rate of 9 percent per annum. The purchaser of the bonds will be Rehnberg-Jacobson Mfg. Co. In • conclusion, we wish to thank you for your kind cooperation and assistance. Sincerely ours, Ernest J. Szarwark EJS:kav Enclosure cc: Kenneth Fedder, Esq. Richard W. Morgan, Esq. • flnmmWttrr &part On the (Common Mounril of tt r Titn of*oath Virtu): of the Whole Your Committee to whom was referred BILL NO. 167-85 A BILL AUTHORIZING THE CITY OF SOUTH BEND, INDIANA (THE "CITY" ) TO ISSUE ITS ECONOMIC DEVELOPMENT REVENUE BONDS, SERIES 1985 (B & R INVESTMENTS, AN INDIANA PARTNERSHIP PROJECT) , IN THE AGGREGATE PRINCIPAL AMOUNT OF THREE HUNDRED TWENTY-FIVE THOUSAND EIGHT HUNDRED DOLLARS ($325,800. 00 ) AND APPROVING AND AUTHORIZING CERTAIN ACTIONS WITH RESPECT THERETO. Respectfully report that they have examined the matter and that in their opinion This bill should be recommended to the Council favorable Joseph T. Serge Chairman FREE PRESS GSfaR PUBLISHING CO.