Loading...
HomeMy WebLinkAbout1988-03-10 Minutes March 10, 1988 10:00 a.m. ROLL CALL Members Present: Legal Counsel: Redevelopment Staff: News Media: Others: SOUTH BEND RIDEVELOPMENT AUTHORITY ORGANIZATIONAL MEETING 1200 County-City Building 227 W. Jefferson Boulevard South Bend, Indiana 46601 Mr. Thomas J. Varga Mr. Chris Davey Mr. Joseph Wroblewski Mr. Richard Nussbaum Mrs, Ann Kolata, Acting Executive Director Mrs. Cheryl Phipps, Office Manager Ms. Jeanne Derbeck, South Bend Tribune Mayor Joseph E. Kernan Mayor Kernan thanked the members of the Authority for their willingness to serve 'n this capacity and said he was looking forward to working with them on this d other issues. In the absence of officers, Mrs. Kolata opened the meeting. 1. ELECTION OF OFFICERS Mr. Richard Nussbaum, City Attorney and Counsel for the Authority conducted the election of officers. PRESIDENT Mr D vea y nominated Mr. Thomas J. Varga to serve as President of the South Bend Redevelopment Authority. Mr. Wroblewski seconded the nomination. Upon a motion by Mr. Davosedsand Mra Varga.wasoelect d Pres dentt ofsthecarried, nominations .were cl Authority. VICE-PRESIDENT Mr. Davey nominated Mr. Joseph Wroblewski to serve as Vice-President of the South Bend Redevelopment Authority. Mr. Varga seconded the nomination. Upon a motion by Mr. Davey, seconded by Mr. Varga and unanimously carried, nominations were closed and Mr. Wroblewski was elected Vice-President of the Authority. SECRE'T'ARY TREASURER Mr. Wroblewski nominated t Authorityey Nir.sVargaaseconded the nominationf the South Bend Redevelop outh Bend Redevelopment Authority pecial Meeting - March 10 , 1988 1, FT.FCTION OF OFFICERS (Cont.) Upon a motion by Mr. Varga, seconded by Mr. Wroblewski and unanimously carried, nominations were closed and Mr. Davey was elected Secretary/Treasurer of the Authority. After the election of officers, Mr. Varga assumed the Chair. Mrs. Kolata explained the difference between the Redevelopment Co~nission and the Redevelopment Authority. She noted that they are separate bodies. The 1987 State legislature passed legislation allowing for the creation of a Redevelopment Authority. It may be created to finance and construct local public improvements which it will lease to the Redevelopment Commission. The local Authority was established by the Cotrnnon Council on December 21, 1987, through a City Ordinance. It provides for three members to be appointed by the Mayor. The Redevelopment Authority is a financing mechanism for financing public improvements in conjunction with the Redevelopment Commission. The Authority does not have the authority to issue general obligation bonds, only revenue bonds, which will be paid off through the lease payments that come from the Redevelopment Commission. Any lease between the Authority and the Commission is subject to Common Council approval. Ms. Derbeck asked if they would meet on a regular basis. Mr. Varga responded that they would meet on an as-needed basis, as often as necessary throughout the staditun refinancing and the financing of the parking garage. 2. NEW BUSINESS Ado tion of Resolution No. 1 indicating the Redevelo ment Authorit 's intent to issue Redevelopment Authority Bonds, ratifying and confirming an en ineering contract and indicating its intent to be reimbursed for ..r~, ;.,~,; nar~~ nr~;ect costs from proceeds of bonds to be issued. Mrs. Kolata noted that this resolution deals with both the St. Joseph/Wayne Street parking garage and the stadium. She brought the members up to date on the status of the parking garage. It will be a six story concrete structure with a brick facade. There will be 4,000 s.f. of first floor retail space along Wayne Street. It will accomodate 436 cars at 90° turn-in parking with two-way traffic on the ramps. There will be two elevator/stairway towers at opposite corners of the garage. One elevator. will accomodate skywalks to the Penney's Building and the IBM Building although the skywalks are not part of the project at this time. Mr. Davey asked what the construction/completion schedule is. Mrs. Kolata responded that the bid specifications should be ready in early May, after which bids will be taken for construction. The bids must be in before the bonds are sold. The garage should be under construction in July and completed approximately eight months later. r outh Bend Redevelopment Authority pecial Meeting - March 10, 1988 2. NEW BUSINESS (Cont.) Mr. Davey noted Center City Associates' support for this facility in light of the current parking shortage in the downtown and the importance potential developers put on this factor when considering South Bend as a possible development location. Mrs. Kolata noted that the existing City garages are booked above capacity. The proposed office building to be constructed on one of the surface parking lots, as well as the major renovation of the Sherland Building which will begin soon, will increase the downtown parking problems. This garage will help relieve that situation. Mrs. Kolata also noted that this garage would be operated under the same rate. structure as the other City garages and would be run by City personnel. Operating revenue will not entirely pay for this garage. Funds for repayment will come from three sources: (1) net operating revenue, (2) One Michiana Square UDAG repayment pledged for this purpose, (3) excess tax increment revenues which may be available. Mr. Nussbaum offered to answer any questions regarding the stadium refinancing.. Mr. Varga asked him to review the structure of the lease obligation and how the refinancing will work. Mr. Nussbaum responded that the present structure is that Security Pacific is the lessor. The Park Board is the lessee. Security Pacific financed the construction of the stadium. The Park Board pays semi-annual payments for 10 years to pay for that construction. At the end of the 10-year period, the Park Board has an option to purchase the stadium. The interest rate of the current lease is 13.420. At the time the agreement was negotiated, there was a question as to whether the interest payment would be taxable or non-taxable for Security Pacific. Decisions made in Washington have rendered it taxable. The lease provides that Security Pacific's after-tax income be guaranteed, regardless of the decision. So the interest rate escalated from 9.25% to 13.42%. All projections indicate that a savings of at least $200,000 over the life of the bond could be realized by refinancing. If the financing is determined to be a non-taxable transaction, the savings would be $900,000. The refinancing will have a term of approximately eight years so that the payments will not extend longer than the existing term of the Security Pacific lease. Upon a motion by Mr. Wroblewski, seconded by Mr. Davey, and unanimously carried, the Authority approved Resolution No. 1. 3 . O't'f~R Mrs. Kolata noted that the Authority would be proceeding with both financings concurrently. The garage will require a meeting in late March or early April. The stadium will require a meeting in mid-April. 'outh Bend Redevelopment Authority pecial Meeting - March 10, 1988 4. ADJOU~;I~T Upon a motion by Mr. Wroblewski which was seconded by Mr. Davey and unanimously carried, the. meeting was adjourned at 10:45 a.m. I ~J ~ / / ~~~~ ~ f ~' Thomas J. arga, P esident Ann Kolata, Acting Executive Director J