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HomeMy WebLinkAboutIssue its Economic Development Revenue Bonds (Stanz Realty Co) $1,500,000.00 ORDINANCE No. 7546-85 Passed by the Common Council of the City of South Bend, Indiana December 2, 19 85 Attest: ' ;3x--,-,-,—,._.,_, City Clerk IRENE K. GAMMON i 11 Attest: �L. A President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana December 3, 19 85 ,..12--- /5T %fit�„�,,e 0,4-/ Ci ty Clerk IRENE K. GAMMON Approved and signed by me Aerin he/Q...) 1, 19125_ 7 f2-( ,)` , , Mayor ORDINANCE NO. 7 rq 6, - b J' AN ORDINANCE AUTHORIZING THE CITY OF SOUTH BEND, INDIANA (THE "CITY") , TO ISSUE ITS "ECONOMIC DEVELOPMENT REVENUE BONDS, SERIES 1985 (STANZ REALTY COMPANY, AN INDIANA PARTNERSHIP PROJECT) , IN THE AGGREGATE PRINCIPAL AMOUNT OF ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1, 500, 000 . 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 Stanz Realty Company and the Area Plan Commission has commented favorably thereon. The Commission, after a public hearing held on Novem- ber 15, 1985, has adopted a Resolution, which has been trans- mitted to this Council, (i) finding that the acquisition and construction by Stanz Realty Company (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 (Stanz Realty Company, an Indiana Partner- ship Project) from the City to the bondholders, The Trust Indenture between the City and St . Joseph Bank and Trust Com- pany (the "Trustee") , and this Ordinance, presented to the Com- mission, 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 pro- visions 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 facilities already constructed or operating in or about the City. -2- 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 Trust Indenture 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 facilities, 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 Trust Indenture. Section 5 . The City shall issue its Economic Develop- ment Revenue Bonds, Series 1985 (Stanz Realty Company, an Indiana Partnership Project) , in the aggregate principal amount -3- of One Million Five Hundred Thousand Dollars ($1, 500,000 . 00) for the purpose of procuring funds to loan to the Company in order to finance the acquisition and construction 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 One Million Five Hundred Thousand Dollars ($1, 500, 000 . 00) which will be executed and delivered by the Company to evidence said loan, from other sources under said Loan Agreement, Mortgage and Security Agreement, and as otherwise provided in said Trust Indenture. Said Economic Development Revenue Bonds shall never constitute general obligations of, indebtednesses of, or charges against the general credit of the City. Said Economic Development 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 12, 1985; shall be dated as of the date of closing; shall have a final payment date of January 1, 2001 with principal paid quarterly, beginning on April 1, 1986; shall bear interest at a variable per annum rate equal to 75% of the national prime rate of interest as reported by "The Wall Street Journal, " except in the case of an Event of Taxability as defined in the Loan Agreement, in which case the per annum interest rate shall equal one percent (1%) above the national prime rate of inter- est and except that Company shall have a right to convert the -4- interest to a fixed rate equal to 87% of the rate on five-year U.S. Government obligations for the periods January 1, 1991 through December 31, 1996, and January 1, 1996, until the Series 1985 Bonds are paid, respectively; shall be originally issued in the denominations of Twenty-Five Thousand Dollars ($25, 000 . 00) ; 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 sub- ject to optional and mandatory prepayment as provided therein. Section 6 . The Mayor and/or the Clerk of the City are authorized and directed to sell said Economic Development Reve- nue Bonds to St . Joseph Bank and Trust Company at a price not less than one hundred percent (100%) of the principal amount thereof, plus accrued interest . 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 1st Source Bank, payment for which will be made to the Trustee for the account of the City. -5- 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- 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 BEND COMMON COUNCIL ember 1st READING /% ��' ��� FILED IN CLERK'S OFFICE PUBLIC HEARING / — ?- 2 n d READING /.,?_ g _ NOT APPROVED NOV 1 3 1985 REFERRED PASSED / _ _ IRENE GAMMON CITY CLERK, SO. BEND, IN -6- BARNES a THORNBURG 1313 MERCHANTS BANK BUILDING 600 1ST SOURCE BANK CENTER FEDERAL BAR BUILDING II SOUTH MERIDIAN STREET 100 NORTH MICHIGAN 1815 H STREET, N.W. INDIANAPOLIS, INDIANA 46204 WASHINGTON,D.C.20006 13171638-1313 SOUTH BEND, INDIANA 46601 12021955-4500 (219) 233-1171 305 FIRST NATIONAL BANK BUILDING 301 SOUTH MAIN STREET ELKHART,INDIANA 46516 TWX 810-341-3427 B&T LAW IND 12191 293-0681 TELECOPIER (219) 237-1125 ERNEST J. SZARWARK 12191 237-1193 November 12, 1985 Ms . Irene Gammon City Clerk 4th Floor County-City Building South Bend, Indiana 46601 Dear Ms. Gammon: Please find enclosed herein: 1. An Ordinance for adoption by the South Bend City Council approving the issuance of City of South Bend, Indiana, Economic Development Revenue Bonds (Stanz Realty Company, an Indiana partnership Project) ; in the original principal amount of $1,500,000. 00; 2. An Indenture of Trust; and 3. A Loan Agreement, Mortgage and Security Agreement. We request that you put this on the agenda for a first reading on November 18, 1985, and a second reading during the first meeting in December of 1985: Stanz Realty Company, an Indiana partnership, respectfully requests the issuance of a $1,500,000. 00 economic development revenue bond by the City of South Bend, Indiana, to finance the expansion of its current facility at 1840 North Commerce Drive, South Bend, Indiana. These funds would be used to purchase refrigeration units, lift trucks, and equipment in connection with a 20,000 square feet expansion of its existing facility. It is anticipated that this project will create 10 new jobs with an annual payroll increase of $250;000 per year, and will save 12 _to 15 existing jobs with an annual payroll of approximately $300,000 per year. The bonds will be issued for a period of 15 years, with a 10 year call provision. The bonds will bear interest at 75 percent of the National Prime Rate, adjusted monthly, with a Ms. Irene Gammon November 12, 1985 Page 2 provision allowing Stanz Realty Company to adjust the interest rate to a fixed rate equal to 87 percent of the rate on 5 year treasury obligations during the second and third 5 year periods during which the bonds are outstanding. It is believed that this project is in the best interests of the City of South Bend, Indiana, and we respectfully request your kind consideration of our petition. Sincerely yours, //A Ernest J. Szarwark EJS:kav Enclosures cc: Ms. Shirley S. Geraghty Kenneth P. Fedder, Esq. Richard W. Morgan, Esq. BARNES 8c THORNBURG ttnmmttur loud au the Comm (IIounrii of the (ititg of Oootii iii : Your Committee of the Whole to whom was referred BILL NO. 133-85 A BILL AUTHORIZING THE CITY OF SOUTH BEND, INDIANA (THE "CITY" ) , TO ISSUE ITS ECONOMIC DEVELOPMENT REVENUE BONDS, SERIES 1985 (STANZ REALTY COMPANY, AN INDIANA PARTNERSHIP PROJECT) , IN THE AGGREGATE PRINCIPAL AMOUNT OF ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500, 000. 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 FRESRL, PUBLISHING CO.