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HomeMy WebLinkAboutRepealing Ordinance 7501-85 Economic Development Revenue Bonds (Gem Partnership Project) ORDINANCE NO. 7507-85 Passed by the Common Council of the City of South Bend, Indiana August 19 . ig 85 �_ w �� Attest:. City Clerk IRENE K. GAMMON / Attest: President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana August 20 , ig 85 City Clerk IRENE K. GAMMON Approved and signed by me e./_ 19 / Mayor ORDINANCE NO. 7.50 7-$'S AN ORDINANCE REPEALING ORDINANCE 7501-85 AND 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) 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 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 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 among the City, the Partnership, and American Fletcher National Bank and Trust Company, Indianapolis, Indiana ("AFNB") ("Loan Agreement") and Mortgage, Collateral Assignment of Rent, and Security Agreement ("Mortgage") between Partnership and the AFNB, the registered 1985 City of South Bend, Indiana Economic Development Revenue Bond ("Bond") (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 -1- held on August 2, 1985 recommended that 2920 West 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, and the Common Council has by ordinance so designated 2920 West Sample Street. The inclusion of additional terms in the Bond documents at the request of the Bond purchaser, AFNB, necessitates the passage of this new ordinance and repeal of Ordinance No. 89-85, passed by the Common Council on August 5, 1985. 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 and Mortgage 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, Promissory Note, 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 Bond; (iii) the loan of the net proceeds of said 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 and Mortgage and said Promissory Note; and (v) the securing of said Bond by said Loan Agreement and Mortgage and said Bond Purchase Agreement. Section 5. The City shall issue its Bond in the aggregate principal amount of One Million Dollars ($1, 000, 000) 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 and Mortgage, which 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) which will be executed and delivered by the Partnership to evidence said loan, from -2- other sources under said Loan Agreement and Mortgage and as otherwise provided in said Bond Purchase Agreement. Said Bond shall never constitue 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 21, 1985. Said Bond 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 Bond is purchased; shall be dated as of the date on which the Bond is purchased; shall be in the form of a 1985 Bond in the principal amount of One Million Dollars ($1, 000, 000) , payable over twenty (20) years callable at the option of the bondholder at the end of year ten (10) at a rate based on the prime rate of American Fletcher National Bank and Trust Company, 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, or in the case of certain changes in the Corporate Tax Rate specified by the Internal Revenue Code of 1954, as amended, and supplemented, in which cases borrower shall pay such amounts, 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 provided 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 21, 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 Clerk of the City are authorized and directed to sell said Bond to American Fletcher National Bank and Trust Company 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 West 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 job opportunities. 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 Bond, and after the -3- issuance of said Bond, 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 Bond or the interest thereon remains unpaid. Section 10. All ordinances or parts of ordinances in conflict herewith, including specifically Ordinance No. 7501-85, 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 ' IP 46'. ember FILED IN CLERK'S OFFICE AUG 1 4 1985 1st READING 5 •/9—i>.S— IRENE GAMMON PUBLIC HEARING 8- /9- rf- CITY CLERK, SO. BEND, IN 2nd READING g- j q_ �+3' NOT APPROVED -4- REFERRED PASSED ' - j Q 213 a a��Q,., j � VI"?-4-6v.1 4,,,,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 (2191 234-4149 JOHN C.HAMILTON TIMOTHY J.HARTZER August 14, 1985 Irene Gammon, Clerk City of South Bend County-City Building South Bend, IN 46601 Re: GEM Partnership Industrial Revenue Bonds Dear Mrs. Gammon: The enclosed ordinance references additional terms which have been required by the prospective purchaser of the GEM Partnership industrial revenue bonds, American Fletcher National Bank, since the passage of Ordinance No. 7501-85 on August 5 , 1985. These addi- tional terms further clarify the interest rate and the redemption provisions of these bonds. The clarifications in question are significant enough to require their approval by the Common Council before the bonds in question are sold. The proposed use of the bonds and their anticipated positive impact on the local economy remains unchanged. 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 operation 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: 15,000 square feet 5. Parking space: 200 cars (estimated) It is estimated that 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 per year. Irene Gammon, Clerk City of South Bend August 14, 1985 Page - 2 GEM Partnership respectfully requests your favorable considera- tion of this ordinance. Thank you. Very ruly our // / / Thomas J. ,,run • r, J TJB:mb enc. cc: Kenneth F. Fedder, Esq. (w/encls) Ronald J. Jaicomo, Esq. (w/encls) Mark C. Kremaric, Esq. (w/encls)