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HomeMy WebLinkAboutIssuance of $650,000.00 Economic Development Revenue Bonds (East Race Housing Project) ORDINANCE No. 7542-85 Passed by the Common Council of the City of South Bend, Indiana November 18, 19 85 Attest: K; 1 Z„'"'e°x' City Clerk IRENE K. GAMMON Al‘ / Attest: P -/... ■ ,_ , r�% President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana Nozz mba1 r 9,19 R 5 i `'''`°'-�' City Clerk IRENE K. GAMMON Approved and signed by me L17) U.A,Le'vvi l 9 X963 / 4 / Mayor CITY OF SOUTH BEND, INDIANA ORDINANCE NO. 7 ' AN ORDINANCE AUTHORIZING THE ISSUANCE OF $650 ,000 . 00 ECONOMIC DEVELOPMENT REVENUE BONDS (EAST RACE HOUSING PROJECT) OF THE CITY OF SOUTH BEND, INDIANA, FOR THE PURPOSE OF FUNDING A LOAN TO THE MADISON, AN INDIANA LIMITED PARTNERSHIP, OF WHICH T. BROOKS BRADEMAS IS THE GENERAL PARTNER, IN ORDER TO FINANCE THE ACQUISITION AND CONSTRUCTION OF CERTAIN REAL ESTATE AND ECONOMIC DEVELOP- MENT FACILITIES LOCATED WITHIN ST. JOSEPH COUNTY, INDIANA, FOR USE BY THE MADISON: 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 . The Madison, an Indiana Limited Partnership (the "User") is a limited partnership organized and existing under the laws of the State of Indiana, with its principal office located in St. Joseph County, Indiana, and duly qualified to conduct business in the State of Indiana. 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 Loan Agreement evidencing its loan obligations in an amount or amounts sufficient to pay the principal of, premium, if 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 Housing Project and the Area Plan Commission has com- mented favorably thereon. The Commission, after a public hearing held on November 15 , 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) approving the economic develop- ment revenue bond financing of such facilities , including the form and terms of the Loan Agreement between the user and the City, the Promissory Note from the user to the City, the registered City of South Bend, Indiana, Economic Development Revenue Bonds , Series 1985 (East Race Housing Project) from the City to the bondholders , The Trust Indenture between the City and Midwest Commerce Banking Company (the "Trustee") , 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. The proposed economic development facilities are located in an economic development target area. 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 Section 3. Authorization of $650 ,000 Economic Develop- ment Revenue Bonds : This Council hereby approves the proposed economic development revenue bond financing of the East Race Housing Project and in order to pay the cost of acquiring and constructing the Project, there are hereby authorized to be issued, sold and delivered $650 ,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 the User 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 $650 ,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 the User pursuant to the Loan Agreement , except to the extent that the principal of, premium, if any, 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 the User 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 an appropriate resolution or resolutions and ordinance or 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 serverability 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 the User of an amount sufficient 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 Agree- ment herein identified as and called the "Agreement" , in the final form submitted to this 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 ninri r----41 Ordinance and identified herein as the "Agreement" and to keep such Agreement on file. Said Agreement contains pro- visions 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 the User, 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 aformentioned 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 affect the rights of said holders so long as any of the principal of said Economic Development Revenue Bonds or the interest thereon remains unpaid. All ordinances or parts of ordinances in conflict herewith are hereby repealed. i Counc' an KRAMER & MURPHY PROFESSIONAL CORPORATION ATTORNEYS AT LAW SUITE 200 F. RICHARD KRAMER 205 W.JEFFERSON BLVD. MICHAEL C. MURPHY SOUTH BEND, INDIANA 46601 219-233-8275 DEAN A.COLVIN November 13 , 1985 Members South Bend Common Council County-City Building South Bend, Indiana 46601 Re: T. Brooks Brademas or His Assigns - East Race Housing Project - $650 , 000 . 00 Economic Development Revenue Bond Dear Council Members : T. Brooks Brademas , or The Madison, an Indiana limited partnership of which T. Brooks Brademas is the general partner, has requested the passage of an Ordinance authorizing the issuance of $650 ,000 . 00 Economic Development Revenue Bonds for the East Race Housing Project. The project will be developed as part of a major historic restoration project in the Old South Bend Lathe Works on Niles Avenue in South Bend, Indiana. The project will consist of 25 one bedroom apartments which will be leased to Madison Center for use by chronically mentally ill persons . The Indiana State Housing Board will, on behalf of the Federal Department of Housing and Urban Development , enter into a fifteen year contract with T. Brooks Brademas or The Madison to make rental payments on behalf of the tenants in the housing units . A copy of the proposal to the Indiana State Housing Board which was submitted by Madison Center is attached for your review. The project, during construction, will generate approxi- mately 50 jobs with an estimated payroll of $400 ,000 . 00 . After completion, there will be four permanent jobs created with a payroll of approximately $60 ,000. 00 per year. Please put this item on the agenda for the meeting of the Common Council scheduled for November 18 , 1985 . Your favorable treatment on this matter will be greatly appreciated. Very; i y yours �y /. �( lit ae C. Mur P y Attorney for T. Brofik- :r_demas and The Madison MCM:mm Enclosure