HomeMy WebLinkAboutAuthorizing the Insurance & Sale of $20,000,000.00 Economic Development Revenue Bonds Pertaining to Mill Race ORDINANCE No. 7567-85
Passed by the Common Council of the City of South Bend, Indiana
_ December 16, 19 85
Attest: City Clerk
IRENE K. GAMMON
Attest: ,-f President o
�-- f Common Council
Presented by me to the Mayor of the City of South Bend, Indiana
December 17, 19 85
-zc_e_
City Clerk
IRENE K. GAMMON
Approved and signed by me 0.2-,,4m-
i
Mayor
ORDINANCE NO. 7,5-47-2,r
AN ORDINANCE 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 CON-
STRUCTION 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 IC 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 Elkhart City Economic Development Commission (the "Comm-
ission") 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 City Council the forms of (1) Indenture
of Trust (the "Indenture") dated as of December 15, 1985, between
the City 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 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 (4) this Bond Ordinance;
and
The City is authorized and empowered to acquire economic
development facilities as those words are defined in the Act
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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 j
connection therewith (the "Financing Documents") , all of which
are on file for public inspection; and
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
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and the Loan Agreement; and
There have been presented to this meeting thefollowing
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 abovereferred 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 ELKHART CITY COUNCIL
AS FOLLOWS:
Section 1. Findings; Public Benefits. The City 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
(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 i
principal amount of City of Elkhart, Indiana, Multifamily Housing
Economic Development Revenue Bonds, Series 1985 (Mill Race Project)
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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 leat $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
(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
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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
moneys 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
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 Elkhart
City Council and to keep them on file. The Bond shall contain
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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 City 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 to or upon the order of Midwest Commerce Banking Company
of Elkhart, Indiana 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 City
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 Elkhart
City Council, which is hereby approved in all respects, pursuant
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
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execute, acknowledge and deliver in the name and on behalf of
the City a Loan Agreement in substantially the form submitted
to this City 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
as Exhibit B 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
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 obigations
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
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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. ,
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Member of Commd /Council
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' vTx � CITY of SOUTH ;END
fo4 , 4 ROGER O. PARENT, Mayor
® v \PEACE� ;d / COUNTY-CITY BUILDING SOUTH BEND, INDIANA 46601
0
\s' 2866-•
Economic Development Commission
Jerry Hammes,President Staff Administration
Al E.Paszek,Vice President 401 East Colfax Avenue
Walter A.Mucha,Secretary December 16, 1985 P.O.Box 1677
Kenneth P.Fedder,Counsel South Bend, Indiana
Suzanne M.Rhadigan,Asst.Sec. 46634-1677
219/234-0051
Members of the South Bend
Common Council
County-City Building
South Bend, IN 46601
Re : Mill Race, an Indiana Limited Partnership - Proposed Ordinance
Dear Councilmen:
Mill. Raze, an Indiana Limited Partnership , has filed an application
with the South Bend Economic Development Commission for a proposed
Industrial Revenue Bond in an amount not to exceed $20, 000, 000. This
is to underwrite the cost of the purchase of certain real estate
located in the East Bank Development Area and the construction thereon
of a 357 , 988 square foot facility which may, when completed, have
208 rental units .
In addition to the construction jobs involved over the next several
years , approximately 84 new pemanent jobs are anticipated with an
approximate payroll of $840,000 per year.
The Economic Development Co>_itutission has given its approval by
resolution, and we would appreciate your favorable action on the
proposed Ordinance .
Respectful],y;---.,..
KENNETH P . FEDDER
Attorney for the South Bend
Ecoic Development Commission
KPF:ram
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