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HomeMy WebLinkAboutIssurance and Sale $20,000,000.00 Economic Development Revenue Bonds Purpose of Making a Loan to Mill Race ORDINANCE No. 7589-85 Passed by the Common Council of the City of South Bend, Indiana December 30, /9_15_ Attest: '" ^ City Clerk IRENE K. GAMMON Attestr% ` c President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana December 30, 19 85 City Clerk IRENE K. GAMMON Approved and signed by me t`j �/'i,� (� Ig (J ,E- - •A! Mayor • ORDINANCE NO. 79- .r AN ORDINANCE AMENDING ORDINANCE NO. 7567-85 AUTHORIZING THE ISSUANCE AND SALE OF $20,000,000. 00 ECONOMIC DEVELOPMENT REVENUE BONDS OF THE CITY OF SOUTH BEND, INDIANA, FOR THE PURPOSE OF MAKING A LOAN TO FINANCE THE ACQUISITION AND CONSTRUCTION OF CERTAIN ECONOMIC DEVELOPMENT FACILITIES LOCATED IN THE CITY PERTAINING TO MILL RACE, AN INDIANA LIMITED PARTNERSHIP; AUTHORIZING THE EXECUTION OF A LOAN AGREEMENT: PROVIDING FOR THE DELIVERY OF A NOTE AND ASSIGNMENT THEREOF AS SECURITY FOR SAID BOND: AUTHORIZING AN INDENTURE OF TRUST APPROPRIATE FOR THE PROTECTION AND DISPOSITION OF THE REVENUES FROM SUCH NOTE: AND AUTHORIZING THE TERMS AND SALE OF SAID BOND. STATEMENT OF PURPOSE OF INTENT: The City of South Bend, Indiana (hereinafter called the "City") is a political subdivision of the State of Indiana and by virtue of I.C. 36-7-11.9 and 12 as amended (hereinafter called the "Act") is authorized and empowered to adopt this Ordinance (the "Bond Ordinance") and to carry out its provisions; and The Common Council of South Bend, Indiana, on December 16, 1985, passed Ordinance No. 7567-85, which Ordinance was approved and signed on December 17 , 1985, by the Mayor of the City of South Bend, which Ordinance, when passed, contained references to certain activities of the Elkhart City Economic Development Commission and the Elkhart City Council, whereas it should have referred to certain activities of the South Bend Economic Development Commission and the Common Council of South Bend, Indiana, and that this Ordinance is to correct those references; and, The South Bend City Economic Development Commission (the "Commission") has performed all actions required of it by the Act preliminary to the adoption of this Bond Ordinance and has approved and forwarded to this Common Council the forms of: (1) Indenture of Trust (the "Indenture") dated as of December 15, 1985, between theCity and Midwest Commerce Banking Company, of Elkhart, Indiana (the "Trustee") , containing a form of economic development revenue bond (the "Bond") , (2) Loan Agreement dated as of December 15, 1985, between the City and Mill Race, an Indiana Limited Partnership (the "Company") , containing a form 1 MRAMORD of Series 1985 Note from the Company to the City; (3) form of Regulatory Agreement; (4) form of Investment Agreement; (5) form of Preliminary Official Statement; (6) form of Mortgage and Security Agreement; (7) form of Bond Purchase Agreement; and (8) the Bond Ordinance; and The City is authorized and empowered to acquire economic development facilities as those words are defined in the Act and to make direct loans to companies for the cost of acquis- ition, construction and equipping of economic development facilities to promote the general welfare of the area in and near the City and to issue its economic development revenue bonds to pay all costs of acquisition or renovation 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 the Loan Agreement and the Trust Indenture; and The Company has agreed to acquire, construct, install and equip a facility consisting of units of multi-family residential rental housing, together with functionally related and subordinate facilities (the "Project") within the City and thereby assist in providing for the increased general economic welfare in and near the area of the City and has agreed to make payments pursuant to the Loan Agreement evidencing its loan obligations in an amount or amounts designed to be sufficient to pay the principal of, premium, if any, and interest on the Bond; and The Commission has approved a report estimating the public services which would be made necessary or desirable, the expense thereof, the number of residential units developed for use on account of the acquisition of the Project and the cost of the Project and has submitted such report to the Plan Commission, and, if required by the Act, to the Superintendent of the school corporation where the facilities will be located; and After giving notice in accordance with the Act, the Commission held on December 16, 1985 a public hearing on the =proposed financing and adopted a resolution finding the proposed financing complies with the purposes and provisions of the Act, approving the financing and approving the form and terms of the Bond proposed to be issued by the City for the purpose of funding a loan from the City to the Company to fund the cost of acquisition, construction and equipping of the Project, to pay certain costs of issuance, and approving drafts of the forms of financing documents in connection therewith (the "Financing Documents") , all of which are on file for public inspection; and 2 MRAMORD _:.. 1 Pursuant to the Act, the Council adopted a resolution finding that the proposed financing of the acquisition and construction of such economic development facilities by the Company will be of benefit to the general welfare of the City, approving the proposed financing and authorizing the issuance by the City of its bonds, upon adoption by the City of a Bond Ordinance, payable solely from the sources, having such terms and provisions and secured as provided by the Indenture and the Loan Agreement; and There have been presented to this meeting the following documents which the City proposes to enter into or accept to effectuate the proposed issuance of the Bonds: 1. The form of Loan Agreement; 2 . The form of Indenture which sets forth the terms of the Bonds (including, without limitation, the maturity dates, rates of interest and redemption provisions) and the conditions and security for the Bonds; 3 . The form of the Bond, as set forth in the Indenture; and 4. The form of Regulatory Agreement; 5. The form of Mortgage and Security Agreement; 6. The form of Investment Agreement; 7. The form of Bond Purchase Agreement; and 8. The form of Preliminary Official Statement. It appears that each of the instruments above-referred to, which are now before the City, is in appropriate form and is an appropriate instrument for the purposes intended; NOW, THEREFORE, BE IT ORDAINED BY THE SOUTH BEND COMMON COUNCIL AS FOLLOWS: Section 1. Findings; Public Benefits. The Common Council hereby finds and determines that the Project to be acquired and constructed with the proceeds of the Economic Development Revenue Bond herein authorized are "economic development facilities" as that phrase is used in the Act; that acquisition and construction of the Project will increase employment opportunities and increase diversification of industry in the City, will improve and promote the economic stability, development and welfare of the area in the City and will encourage and promote the expansion of industry, trade and commerce in the City and the location of other new industries in such area, and that the public benefits to be accomplished by this Bond Ordinance, in tending to overcome insufficient employment opportunities and insufficient diversifi- cation of industry, are greater than the cost of public facilities 3 MRAMORD -Iq f.II 1 _ - _ - - - -- --- i (as that phrase is defined in the Act) which will be required by the Project. Section 2 . Authorization of Economic Development Revenue Bond. In order to pay a portion of the cost of acquiring, reha- bilitating and constructing the Project, there is hereby authorized to be issued, sold and delivered not to exceed $20, 000, 000. 00 principal amount of City of South Bend, Indiana, Multifamily Housing Economic Development Revenue Bonds, Series 1985 (Mill Race Project) of the City (the "Series 1985 Bond") . Any additional costs of the Project will be paid for by the Company unless paid for out of the proceeds of additional parity bonds (the "Additional Bonds") as identified in the Indenture. Section 3 . Terms of the Series 1985 Bond. The total prin- cipal amount of Series 1985 Bond that may be issued is hereby expressly limited to not to exceed $20, 000,000. 00, provided, however, that Additional Bonds may be issued as hereinafter provided. The interest rate on the Bonds shall not exceed fifteen percent (15%) per annum. The Bonds will bear interest at the Initial Interest Rate until December 15, 1988, payable on June 15 and December 15 of each year, commencing June 15, 1986. From and after December 15, 1988 (the "Adjustment Date") , the Bonds will bear interest at the Adjustable Interest Rate (unless converted to a Fixed Interest Rate) , payable on the fifteenth day of each month commencing January 15, 1989. Upon conversion to the Fixed Interest Rate (the "Conversion Date") , the Bonds will bear interest at the Fixed Interest Rate, payable semiannually on June 15 and December 15 of each year. Each outstanding Bond will be purchased on the Adjustment Date and the Conversion Date unless the holder thereof elects to keep his Bond and gives written notice thereof to the Trustee or the Tender Agent. The Adjustable Interest Rate and the Fixed Interest Rate will be determined by the Remarketing Agent. Interest will be payable by check or draft of the Trustee mailed to the registered owners of the Bonds, or, upon the request of any owner of at least $1, 000, 000 in principal amount of Bonds, by wire transfer in immediately available funds. Payment of the principal and premium, if any, on the Bonds is payable at the principal corporate trust office of the Trustee upon surrender of the Bonds. The Bonds will be issued in fully registered form in the denominations of $5, 000 or any integral multiple thereof, and in any event will mature on or before December 15, 1999. On the Adjustment Date and at any time thereafter during which the Bonds bear interest at an Adjustable Interest Rate, any Bond will be purchased on any Business Day at the demand of the Bondholder, upon seven (7) days notice, at a purchase price equal to one hundred percent 4 MRAMORD (100%) of the principal amount of the Bond plus accrued interest, if any, to the date set for purchase. Subject to certain conditions, on and after December 15, 1988, either the Company or the Financial Institution issuing the Credit Facility may elect at any time that Bonds are Outstanding to have the Bonds bear interest at the Fixed Interest Rate. The Bondholders will be sent notice of the conversion to the Fixed Interest Rate, and each Bond will be purchased on the Conversion Date unless the holder thereof elects to keep his Bond. The Bonds are not subject to mandatory tender or redemption prior to December 15, 1988, except upon the failure of the Investment Agent to make payments under the Investment Agreement. The Bonds are subject to mandatory redemption in whole on the Adjustment Date, at par plus accrued interest, if the Credit Facility has not been delivered to the Trustee fifteen (15) days prior to the Adjustment Date. In addition, after the Adjustment Date, the Bonds are subject to redemption (i) in whole, at par plus accrued interest to the date of redemption, on the first day for which notice of redemption can be given after an Event of Default under the Indenture or the Loan Agreement and the Trustee has accelerated amounts due under the Loan Agreement; (ii) in whole, at par plus accrued interest to the date of redemption, on the first day for which notice of redemption can be given after the occurrence of certain events involving the enforcement or validity of the Credit Facility and the Company has not supplied an Alternate Credit Facility; (iii) in whole, at par plus accrued interest to the date of redemption, on a day not more than fifteen (15) days after the Trustee has received notice from the Financial Institution of a default under the Credit Facility Agreement; (iv) in whole, at par plus accrued interest to the date of redemp- tion, on the first day for which notice can be given after the Trustee has received notice of a Determination of Taxability; (v) in whole or in part, on the first day for which notice can be given on which prepayments are made on the Project Loan from monies remaining on deposit in the Construction Fund on or after December 15, 1988, or from Net Proceeds of insurance or condemnation; (vi) in whole or in part, at par plus accrued interest to the date of redemption on any Interest Payment on or after the seventh anniversary of the Conversion Date, in the event and to the extent the Project Loan is voluntarily prepaid, with a redemption premium. The Series 1985 Bond shall be executed, shall be in such form, shall have such additional redemption provisions, and shall be subject to such other terms and conditions as set forth 5 MRAMORD in the Indenture. The Series 1985 Bond and the interest thereon do not and shall never constitute an indebtedness of or a charge against the general credit or taxing power of the City, but are limited obligations of the City payable solely from revenue and other amounts derived from the Loan Agreement and shall be secured as provided in the Indenture. Forms of the Loan Agreement and Indenture are before this meeting and are by this reference incorporated in this Bond Ordinance, and the Clerk is hereby directed to insert them into the minutes of the South Bend Common Council and to keep them on file. The Bond shall contain thereon a statement substantially as follows: The Bond is issued pursuant to and in full compliance with the Constitution and laws of the State of Indiana, particularly Indiana Code Section 36-7-11.9 and 12, as amended and pursuant to an ordinance adopted by the City which authorizes the execution and delivery of the Indenture. The Bond and the interest thereon are limited obligations of the City and are payable solely from , payments and other amounts due pursuant to the Loan Agreement. The Bond is not in any respect a general obligation of the City and is not payable in any manner from revenues raised by taxation. The Bond shall never constitute an indebtedness of the City or the State of Indiana or within the meaning of any constitutional or statutory provision but shall be payable solely from the revenues pledged therefor. Neither the Common Council of the City or the Commission (including the members of either or both) nor any person executing the Bond shall be liable personally on the Bond or be subject to any personal liability or accountability by reason of the issuance of the Bond. Section 4. Additional Bonds. The City may authorize the issuance of Additional Bonds upon the terms and conditions and for the purposes provided in the Indenture and in the Loan Agreement. Section 5. Sale of the Series 1985 Bond. The Mayor and City Clerk are hereby authorized and directed to sell the Series 1985 Bond at a price of not to exceed $20, 000,000. 00, plus accrued interest to the date of delivery and payment, with such changes, omissions and insertions as the Mayor may approve which= changes may be made without further approval of the Common Council or the Commission if such changes do not affect terms set forth in I.C. 36-7-12-27 (a) (1) through (a) (11) inclusively. Section 6. Indenture. In order to secure the payment of the principal of and interest on the Series 1985 Bond and Additional Bonds, the Mayor and City Clerk shall execute, acknowledge and deliver, in the name and on behalf of the City, an Indenture of Trust in substantially the form submitted to the South Bend Common Council, which is hereby approved in all respects, pursuant 6 MRAMORD • , to the terms of which the City assigns all of its right, title, and interest in the Loan Agreement and the Series 1985 Note to the Trustee. Section 7. Loan Agreement. In order to provide for the loan of the proceeds of the Series 1985 Bond to acquire and construct the Project and the payment by the Company of an amount sufficient to pay the principal of and premium, if any, and interest on the Series 1985 Bond, the Mayor and City Clerk shall execute, acknowledge and deliver in the name and on behalf of the City a Loan Agreement in substantially the form submitted to this Common Council, which is hereby approved in all respects. Section 8. Acceptance of Series 1985 Note. In connection with the Series 1985 Bond, the City accepts as security for such Series 1985 Bond the Series 1985 Note of the Company. The Series 1985 Note shall be in substantially the form attached to the Loan Agreement and shall be secured as provided in the Loan Agreement. Section 9. Effect of Agreements. The Mayor and City Clerk be and they are each hereby authorized and directed, in the _ name 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 the Company the issuance and sale of the Series 1985 Bond, and the securing of the Series 1985 Bond under the Indenture, including, without limitation, execution of the certificates to evidence the Bond is not an arbitrage bond within the meaning of Section 103 (c) of the Internal Revenue Code and execution of closing certificates. All covenants, stipulations, obligations and agreements of the City contained in this Bond Ordinance and contained in each of the agreements or other documents authorized by this Bond Ordinance shall be deemed to be the covenants, stipulations, obligations and agreements of the City to the full extent authorized or permitted by law, and such covenants, stipulations, obligations and agreements shall be binding upon the City and its successors from time to time and upon any body to which any powers or duties affecting such covenants, stipulations, obligations and agreements shall be transferred by or in accordance with law. Except as otherwise provided in this Bond Ordinance, all rights, powers and privileges conferred and duties and liabilities imposed upon the City by the provisions of this Bond Ordinance, and by each of the agreements or other documents authorized by this 7 MRAMORD ■■ ■■■■IMIMMIT 1- Bond Ordinance shall be exercised or performed by the City or by such officers, board or body as may be required by law to exercise such powers and to perform such duties. All covenants, stipulations, promises, agreements and obli- gations of the City contained herein and in each of the agreements and other documents authorized by this Bond Ordinance shall be deemed to be covenants, stipulations, promises, agreements and obligations of the City and not of any member, officer or employee of the City in his individual capacity. Section 10. Repeal, Amendment and Modification of this Bond Ordinance. This Bond Ordinance shall be part of the contract with the owners from time to time of the Bond and from and after the delivery of the Bond shall not be repealed, amended or modified except to the extent and in the manner permitted for supplemental agreements to the Indenture. Section 11. Effective Date and Repeal of Conflicting Ordinances or Resolutions. This Bond Ordinance shall take effect and be in full force and effect immediately upon adoption and compliance with IC 36-3-4-14. All ordinances or resolutions inconsistent with this Bond Ordinance are hereby repealed to the extent of such inconsistency. Section 12 . Severability. If any provision of this Bond Ordinance shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative or unenforceable to any extent whatever; provided however, that if the limitation on the source of revenues to pay principal, interest and premium, if any, on the Bond is held invalid, the Issuer shall have no obligation to pay the Bond from other sources;, Member of Col 'o Council= 1st REA?NG ► `3 c3 PUBLIC HEARING 1 Z-3 o., S 2nd READING NOT APPROVED REFERRED PASSED 3 0 ,_ Ca(--,-42-- U 8 MRAMORD i I