HomeMy WebLinkAboutAuthorzing Issuance of $2,500,000 Economic Development Revenue Bonds East Race Commercial ORDINANCE No. 7581-85
Passed by the Common Council of the City of South Bend, Indiana
December 16, tq 85
Attest: ( "" �-- City Clerk
IRENE K. GAMMON
Attest _ _ t � ' _ President of Common Council
Presented by me to the Mayor of the City of South Bend, Indiana.
December 17 , ig 85
City Clerk
IRENE K. GAMMON
Approved and signed by me
,
Pr/ak Mayor
CITY OF SOUTH BEND, INDIANA
ORDINANCE NO. 75-81-Q's-
AN ORDINANCE AUTHORIZING THE ISSUANCE OF $2 ,500 ,000 .00
ECONOMIC DEVELOPMENT REVENUE BONDS (EAST RACE COMMERCIAL
PROJECT) OF THE CITY OF SOUTH BEND, INDIANA, FOR THE
PURPOSE OF FUNDING A LOAN TO T. BROOKS BRADEMAS OR HIS
ASSIGNS ("BRADEMAS") , IN ORDER TO FINANCE THE ACQUISI-
TION AND CONSTRUCTION OF CERTAIN REAL ESTATE AND ECONOMIC
DEVELOPMENT FACILITIES LOCATED WITHIN ST. JOSEPH COUNTY,
INDIANA, FOR USE BY BRADEMAS: AUTHORIZING EXECUTION OF
THE LOAN AGREEMENT, AN INDENTURE OF TRUST APPROPRIATE
FOR THE PROTECTION AND DISPOSITION OF THE REVENUES FROM
THE FINANCING AGREEMENT: AND AUTHORIZING THE TERMS AND
SALE OF SAID BONDS
STATEMENT OF PURPOSE AND INTENT:
The City of South Bend, Indiana, (hereinafter called the
"City") is a municipal corporation and political subdivision
of the State of Indiana and by virtue of Indiana Code , Title
36 , Article 7 , Chapter 12 (hereinafter called the "Act") is
authorized and empowered to acquire economic development
facilities as those words are defined in the Act and to make
direct loans to Users for the acquisition and construction of
economic development facilities to overcome insufficient
employment opportunities and insufficient diversification of
industry in and near the City and to promote the general
economic welfare of the area in and near the City and to
issue its economic development revenue bonds to pay all costs
of acquisition or construction of such economic development
facilities , including engineering, legal fees , and all other
expenses relating thereto during construction, including the
costs of issuing the bonds and to secure said bonds pursuant
to a Loan Agreement and Trust Indenture.
Brademas has agreed to acquire and construct economic
development facilities within the limits of the County of St .
Joseph in the State of Indiana and thereby create new employ-
ment opportunities and provide diversification of economic
development in the City, and make payments pursuant to the
„t.1 ; nnrinnc in an amount
any, and interest on the economic development revenue bonds
hereinafter authorized.
The South Bend Economic Development Commission (the
"Commission") has rendered its report concerning the proposed
financing of economic development facilities for the East
Race Commercial Project and the Area Plan Commission has com-
mented favorably thereon.
The Commission, after a public hearing held on December
6 , 1985 , has adopted a Resolution, which has been transmitted
to this Council, (i) finding that the acquisition and reha-
bilitation by the user of the proposed economic development
facilities described in said Report will not have an adverse
competitive effect on any similar facilities already con-
structed 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 citizens , (iii) further
finding that the proposed economic development revenue bond
financing of such facilities complies with the purposes and
provisions of the Act, (iv) further finding that the proposed
economic development facilities are within an Economic
Development Target Area as defined by Indiana Code §
36-7-11 .9-4 , (v) approving the economic development revenue
bond financing of such facilities , including the form and
terms of the Loan Agreement between Brademas and the City,
the Promissory Note from Brademas to the City, the registered
City of South Bend, Indiana, Economic Development Revenue
Bonds , Series 1985 (East Race Commercial Project) from the
City to the bondholders , The Trust Indenture between the City
and Midwest Commerce Banking Company (the "Trustee") , and
this Ordinance , presented to the Commission , and (vi) recom-
mending that this Council find that the proposed economic
n,,,.i, cni•-1 41-4 will be
•
•
the Act , and that this Council adopt an Ordinance approving
such financing.
The proposed economic development facilities are located
in an economic development target area as defined by Indiana
Code § 36-7-11 . 9-4 .
NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF
THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS :
Section 1 . Public Benefits : The Common Council of the
City hereby finds and determines that the real estate,
interests in real estate , other improvements thereon and
other machinery and equipment , to be acquired and constructed
with the proceeds of the bonds herein authorized are "economic
development facilities" as that phrase is used in the Act and
that acquisition and construction of the Project will in-
crease employment opportunities and increase diversification
of economic development in the City, will improve and promote
the economic stability, development and welfare of the City,
will encourage and promote the expansion of industry, trade
and commerce in the City and the location of other new
economic development facilities in such area and will not
have an adverse competitive effect on any similar facilities
already constructed or operating in or about the City.
Section 2 . Findings : The Common Council hereby finds
that this Ordinance (the "Bond Ordinance") is of public
benefit to the economic welfare of the City and County by
tending to overcome the deficiencies previously found to
exist, to-wit: insufficient employment opportunities and
insufficient diversification of economic development, and
that such benefit is greater than the cost of public facili-
ties (as that phrase is defined in the Act) which will be
required by the Project and further that the proposed financ-
- rha city and com-
Section 3. Authorization of $2 ,500 ,000 Economic Develop-
ment Revenue Bonds : This Council hereby approves the
proposed economic development revenue bond financing of the
East Race Commercial Project and in order to pay the cost of
acquiring and constructing the Project , there are hereby
authorized to be issued, sold and delivered $2,500 ,000
aggregate principal amounts of the Bonds . It is hereby
recognized that pursuant to the terms of the Agreement , any
balance of the cost of the Project will be paid for by
Brademas unless paid for out of the proceeds of additional
parity bonds (the "Additional Bonds") as identified in the
Indenture.
Section 4 . Definitions : In addition to the words and
terms defined in this Bond Ordinance , the words and terms
used in this Bond Ordinance shall have the meanings set forth
in the Indenture and Agreement unless the context or use
indicates another or different meaning or intent and the form
of the Bonds and the forms of the Agreement and Indenture ,
which forms are before the meeting, are hereby incorporated
by reference in this Bond Ordinance and the Clerk is hereby
directed to insert them into the minutes of the Common
Council and to keep them on file.
Section 5 . Terms of the Bonds : The total principal
amount of the Bonds that may be issued is hereby expressly
limited to $2 ,500 ,000 provided, however, that Additional
Bonds may be issued as hereinafter provided. The terms of
the Bonds will be such as are set forth in the Indenture and
such terms are adopted herein by reference and by approval of
the Indenture.
The Bonds are limited obligations of the City, payable
solely from payments of principal , premium, if any, and
interest made by Brademas pursuant to the Loan Agreement ,
„f „remium. if any,
V ,
moneys , if any, accruing to the Trustee for the benefit of
the bondholders . The Loan Agreement shall equally and
ratably secure all outstanding Bonds , except that so long as
there is no event of default under the Agreement , payments by
Brademas shall be used by the Trustee to make like payment of
principal of, or premium or interest on, the Bonds .
By the Indenture , the City will assign to the Trustee
the City' s rights under the Agreement , including the right of
the City to receive payments thereunder, all as security for
the payment of the Bonds . The Bonds will be secured as
provided in the Agreement and Indenture and the terms of said
instruments are adopted herein by reference and by approval
of the instruments .
The Loan Agreement and documents executed thereunder
will constitute the sole security for the Bonds . The Bonds
and the interest thereon shall be a valid claim of the
respective holders only against the Bond Fund created under
the Indenture and other moneys held by the Trustee. The City
will have no ownership interest in the Project.
The Bonds do not and shall never constitute an indebted-
ness of, or a charge against the general credit or taxing
power of the City.
Section 6 . Additional Bonds : The City may authorize
the issuance of Additional Bonds upon the terms and con-
ditions provided in the Indenture and the Agreement. All
Additional Bonds shall be of the same rank as the original
Bonds , but shall bear such date or dates , bear such interest
rate or rates , have such maturity dates , redemption dates and
redemption premiums , and be issued at such prices as shall be
approved in writing by the City and the User.
Prior to the issuance , sale or delivery of any such
Additional Bonds , the Common Council shall adopt and approve
nrainance or
to the Agreement and a Supplemental Indenture and the issu-
ance of such additional Bonds .
Section 7 . Sale of the Bond: The Mayor and the Clerk
of the City are hereby authorized and directed to sell the
Bonds at a price of par, plus accrued interest from the date
of the bonds to the date of delivery and payment therefore.
Section 8 . Indenture: In order to secure the payment
of the principal of and interest on the Bonds , the Mayor and
Clerk shall execute , acknowledge and deliver in the name and
on behalf of the City, an Indenture of Trust , herein identi-
fied as and called the "Indenture" , in the final form submit-
ted to the Common Council, which is hereby approved in all
respects ; and the Clerk is hereby directed to insert a copy
thereof in the form submitted to this meeting and approved
hereby, in the minutes of this Common Council and to certify
thereon that the same is the form of Indenture so submitted
to this Common Council and approved by this Bond Ordinance
and identified herein as the Indenture and to keep such
Indenture on file. Said Indenture contains provisions
authorized and permitted by the Act , and this Bond Ordinance
shall constitute a part thereof as therein provided and for
all purposes of said Indenture , including the provisions
thereof relating to amendments and the severability of
provisions of the Indenture.
Section 9 . Loan Agreement: In order to provide for the
loaning of the proceeds of the Bonds to acquire and construct
the Project and the payment by Brademas of an amount suffi-
cient to pay the principal of and premium, if any, and
interest on the Bonds , the Mayor and Clerk shall execute ,
acknowledge and deliver in the name and on behalf of the City
a Loan Agreement herein identified as and called the "Agree-
ment" , in the final form submitted to this Common Council ,
__ _„ Y�rlreAnt0 . and rho Clerk is
Common Council and to certify thereon that the same is the
form of Agreement submitted to this Common Council and
approved by the Bond Ordinance and identified herein as the
"Agreement" and to keep such Agreement on file. Said Agree-
ment contains provisions authorized and permitted by the Act.
Section 10 . General: The Mayor and Clerk be , and they
each hereby are , authorized and directed, in the name of and
on behalf of the City to execute any and all instruments ,
perform any and all acts , approve any and all matters , and do
any and all things deemed by them, or any of them, to be
necessary or desirable in order to carry out the purposes of
this Bond Ordinance (including the preambles hereto) , the
acquisition and construction of the Project by Brademas , the
issuance and sale of the Bonds , and the securing of the Bonds
under the Indenture.
Section 11 . Copies: Two copies of each of the above
described Loan Agreement and Indenture of Trust are on file
in the office of the City Clerk for Public Inspection.
Section 12. Effective Date: This Bond Ordinance shall
be in full force and effect from and after its passage and
approval as provided by law.
Section 13 . Binding Contract: 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 Development Revenue Bonds this Ordinance shall
not be repealed or amended in any respect which would ad-
versely rights of said holders so long as any of
y affect g
the P rinci F al of said Economic Development Revenue Bonds or
the interest thereon remains unpaid. All ordinances or parts
of ordinances in conflict herewith are hereby repealed.
a —_
KRAMER & MURPHY
PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
SUITE 200
205 W.JEFFERSON BLVD.
F. RICHARD KRAMER `�
MICHAEL C. MURPHY SOUTH BEND, INDIANA 46601
DEAN A.COLVIN
December 11 , 1985
Members South Bend Common Council
County-City Building
South Bend, Indiana 46601
Re: T. Brooks Brademas or His Assigns - East Race
Commercial Project - $2 ,500 ,000.00 Economic
Development Revenue Bond
Dear Council Members:
T. Brooks Brademas , or his assigns , has requested the
passage of an Ordinance authorizing the issuance of
$2,500 ,000 . 00 Economic Development Revenue Bonds for the East
Race Commercial Project. The Project will be developed as
part of a major historic restoration project in the Old Lathe
Works at 475 Niles Avenue , South Bend, Indiana.
The Project will consist of a 60 unit motel, a restau-
rant and a marina. A copy of the preliminary site plan is
attached for your review.
The Project, during construction, will generate approxi-
mately 100 jobs with an estimated payroll of $1,000 ,000 . 00 .
After completion, there will be 137 permanent jobs created
with a payroll of approximately $1 ,250 ,000 . 00 per year.
The Trustee of the bonds will be the Midwest Commerce
Banking Company. The term of the bonds will be twelve years
with an interest rate of 10% . The bonds will be purchased by
several local banks including Midwest Commerce Banking
Company and St. Joseph Bank and Trust Company.
Please put this item on the agenda for the meeting of Your
the Common Council scheduled December
belgreatly. appreciated.
favorable treatment on this matter
Very + u yours
Michael C. Murphy
Attorney for T. Brooks Brademas
MCM:mm
Enclosure
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