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HomeMy WebLinkAboutAuthorizing Issue its Economic Development Revenue Bonds (GEM Partnership Project) $1,000,000.00 ORDINANCE No. 7501-85 Passed by the Common Council of the City of South Bend, Indiana August 5, ig 85 Attest: `"` ^� City Clerk IRENE K. GAMMON Attest: � �� 7��A „_______President esident of Common Council Presented by me to the Mayor of the City of South Bend, Indiana August 6, ig 85 4-J,--Le City Clerk IRENE K. GAMMON Approved and signed by me ig �-S fzi9y/ Mayor ORDINANCE NO. 7S0 / - 83- AN ORDINANCE AUTHORIZING THE CITY OF SOUTH BEND, INDIANA (THE "CITY") , TO ISSUE ITS "ECONOMIC DEVELOPMENT REVENUE BONDS, SERIES 1985 (GEM PARTNERSHIP, PROJECT) , IN THE AGGREGATE PRINCIPAL AMOUNT OF ONE MILLION DOLLARS ($1 ,000,000.00) AND APPROVING AND AUTHORIZING CERTAIN ACTIONS WITH RESPECT THERETO. STATEMENT OF PURPOSE AND INTENT: The City is a municipal corporation and political subdivision of the State of Indiana, and by virtue of Title 36, Article 7 , Chapter 12 , of the Indiana Code, as amended (the "Act") , is authorized and empowered to adopt this Ordinance and to carry out its provisions; and The South Bend Economic Development Commission (the "Commission") has rendered its report concerning the proposed financing of economic development facilities for GEM Partnership, and the Area Plan Commission has commented favorably thereon; and The Commission, after a public hearing held on August 2 , 1985, has adopted a Resolution, which has been transmitted to this Council , (i) finding that the acquisition and construction by GEM Partnership (the "Partnership") of the proposed economic development facilitiies 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 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 development revenue bond financing of such facilities, including the form and terms of the Loan Agreement, Mortgage and Security Agreement between the Partnership and the City, the Promissory Note from the Partnership to the City, the registered City of South Bend, Indiana, Economic Development Revenue Bond, Series 1985 (GEM Partnership, Project) from the City to the bondholders, the Bond Purchase Agreement, a form of lease and this Ordinance, presented to the Commission, 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 provisions of the Act, and that this Council adopt an ordinance approving such financing. The Commission has by separate resolution after a public hearing held on August 2 , 1985 recommended that 2920 W. Sample Street be designated an Economic Development Target Area since the project area has suffered from a lack of development, cessation of growth, and other factors that have made it undesirable for normal development, impaired values, or prevented a normal development or use of the property. NOW, THEREFORE, BE IT 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 facilities will not have an adverse competitive effect on any similar facilities already constructed or operating in or about the City. Section 2 . This Council further finds 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. Section 3 . This Council further finds that the proposed 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 Bond, Bond Purchase Agreement and a form of Lease 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 Bond, (iii) the loan of the net proceeds of said Economic Development Revenue Bond to the Partnership 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 Partnership pursuant to said Loan Agreement, Mortgage and Security Agreement, and said Promissory Note, and (v) the securing of said Economic Development Revenue Bond by said Loan Agreement, Mortgage and Security Agreement and said Bond Purchase Agreement. Section 5. . The City shall issue its Economic Development Revenue Bond, Series 1985 (GEM Partnership, Project) , in the aggregate principal amount of One Million Dollars ($1 ,000,000.00) for the purpose of procuring funds to loan to the Partnership in order to finance the acquisition and construction of such facilities, as more particularly set out in said Loan Agreement, Mortgage and Security Agreement, which 2 . Economic Development Revenue Bond shall be payable as to principal and interest solely from the payments made by the Partnership on its aforesaid Promissory Note in the Aggregate principal amount of One Million Dollars ($1,000 ,000 .00) which will be executed and delivered by the Partnership to evidence said loan, from other sources under said Loan Agreement, Mortgage and Security Agreement, and as otherwise provided in said Bond Purchase Agreement. Said Economic Development Revenue Bonds shall never constitute general obligations of , indebtedness of, or charges against the general credit of the City. The delivery date and date of the bond shall be on or about August 14, 1985. 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 the date on which the Bonds are purchased; shall be dated as of the date on which the Bonds are purchased; shall be in the form of a series 1985 Bond in the principal amount of $1 ,000,000.00, payable over 20 years callable at the option of the bondholder at the end of year 10 at a rate based on the prime rate of American Fletcher National Bank, Indianapolis, Indiana which rate shall not exceed fifteen percent (15%) per annum except in the case of an Event of Taxability as defined in the Loan Agreement, in which case borrower shall reimburse bondholder for any amount expended relative to determination of , or payment of, a tax levied by any taxing authority and imposed as a result of the receipt of interest payments under this bond issue all as more particularly described in the Loan Agreement and Bond Purchase Agreement; shall be issued in registered form; shall be registrable as provided herein; shall be payable in the medium and at the place or places pro- vided therein; and shall be subject to optional and mandatory prepayment as provided therein. In the event the Purchaser and the Bank shall in their discretion agree in writing that the Purchase Date may occur later than August 14, 1985 , then the maturity date of this Bond set forth in the Bond may be extended (with interest accruing to such extended maturity date at the rate set forth in the Bond and payable monthly on the first day of each month) , and the payment dates of the installments payable as set forth in the Bond may be extended, all as set forth in such agreement, provided any such extension shall not exceed twelve (12) months. Section 6. The Mayor and/or the Clerk of the City are authorized and directed to sell said Economic Development Revenue Bonds to American Fletcher National Bank at a price not less than one hundred percent (100%) of the principal amount thereof, plus accrued interest, if any. Section 7. The GEM Partnership facility to be located at 2920 W. Sample Street will not have an adverse competitive impact on other facilities of the same kind already operating in the same market area and will contribute significantly to the creation of permanent new job opportunities. 3 . Section 8. The Mayor and Clerk of the City are authorized and directed to execute and deliver the aforementioned documents for and on behalf of the City after making therein such changes permitted by the Act as they deem necessary or proper, as evidenced by their execution of such documents, 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 consummation 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 American Fletcher National Bank, payment for which will be made to the Trustee for the account of the City. Section 9. 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 adversely 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. Section 10 . All ordinances or parts of ordinances in conflict herewith are hereby repealed. Section 11. This ordinance shall be in full force and effect from and after its passage by this Council and its signature by the Mayor of the City. SOUTH BEND COMMON COUNCIL °1 �q , -m•er 1st READING 7'.•?• —a'J� PUBLIC HEARING Xe—S- 2nd READING t¢-s rex" NOT APPROVED 4. REFERRED PASSED &—S- 8s, u.0 a,,, .,, PARKER, BRUNNER & HAMILTON ATTORNEYS AT LAW 1100 HAZLITT BUILDING ROBERT M.PARKER 120 WEST LASALLE AVENUE TELEPHONE THOMAS J.BRUNNER,JR. SOUTH BEND, INDIANA 46601 (219)234-4149 JOHN C.HAMILTON TIMOTHY J.HARTZER July 17, 1985 Members of the South Bend Common Council 4th Floor County-City Building South Bend, IN 46601 Re: GEM Partnership Dear Council Members: GEM Partnership, an Indiana partnership, wishes to acquire and rehabilitate the Sears warehouse building located at 2920 W. Sample Street, South Bend, Indiana for use as a distribution and operations center by General Microcomputer, Inc. Members of the partnership are Christopher J. Murphy, III, Edwin S. Ehlers and Van E. Gates. An inducement resolution was filed with the Common Council on behalf of the partnership and approved on June 2, 1985. The enclosed ordinance indicates the intention of the partnership to seek industrial development revenue bonds issued by the City of South Bend in the aggregate principal amount of approximately $1,000,000.00. The proceeds of the bond issue will be used to purchase the Sears warehouse building and associated property and to carry out such construction as is required to convert the building into a distribution and operations center for General Microcomputer as follows: 1. Warehouse space: 40,000 square feet. 2. Service space: 5,000 square feet. 3 . Manufacturing space: 10,000 square feet. 4. Office space: 30,000 square feet. (two levels of 15,000 square feet each) . 5. Parking space: 200 cars (estimated) . Members of South Bend Common Council July 17, 1985 Page 2 It is estimated this project will result in the creation of approximately 25 new jobs within one year of General Microcomputer's occupancy of the facility. It is further estimated that these new jobs will generate an annual payroll of approximately $300,000. 00 per year. GEM Partnership respectfully requests your favorable consideration of this ordinance. Very rul y•, , •'/s . : unne , Jr. TJB:cce Encl. cc: Kenneth P. Fedder, Esq. (w/encl) Christopher J. Murphy, III (w/encl) Ronald Jaicomo, Esq. (w/encl) fanmmtttu Report au the Town= faouncil of the fair of fbuu#h Brad: Your Committee of the Whole to whom was referred BILL NO. 89-85 A BILL AUTHORIZING THE CITY OF SOUTH BEND, INDIANA (THE "CITY" ) , TO ISSUE ITS ECONOMIC DEVELOPMENT REVENUE BONDS, SERIES 1985 (GEM PARTNERSHIP, PROJECT) , IN THE AGGREGATE PRINCIPAL AMOUNT OF ONE MILLION DOLLARS ($1,000 , 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 , as amended by substitution of a new bill. and the substitute was amended on page 3 to read 20 years callable at the option of the bondholder at the end of year 10 at a rate based on the prime rate of American Fletcher National Bank, Indianapolis, Indiana, which rate shall not exceed Joseph T. Serge Chairman FREE PRESS akea. PUBLISHING CO.