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HomeMy WebLinkAbout1990-12-17 Minutes., ~- SOUTH BEND REDEVELOPMENT AUTHORITY . SPECIAL MEETING December 17, 1990 1200 County-City Building 10:00 a.m. 227 W. Jefferson Boulevard Presiding: Joseph .Wroblewski South Bend, Indiana 46601 President The December 17, 1990, Special Meeting of the Redevelopment Authority was called to order at 10:06 a.m. by its President, Joseph Wroblewski. There was a quorum present. 1. Roll Call Members Present: Mr. Joseph Wroblewski, President Mr. Don Fewell, Vice President Legal Counsel: Mr. Richard a. Nussbaum, II Redevelopment Staff: Mrs. Ann Kolata, Director Mrs. Cheryl Phipps, Office Manager Mr. Jon Hunt, Executive Director Media: Mr. Thom Howell,- U-93 Mr. Don Porter, South Bend Tribune Mr. Bill Ruminski, Michiana Business Magazine Others: Mr. Richard E. Bradford Mrs. Helen M. Bradford Mr. John Pendl Mrs. Betty Pendl Mr. Steve Cooreman Mr. Richard Hill, Baker & Daniels Ms. Debbie Locsi, Baker & Daniels 2. Approval of Minutes Upon a motion by Mr. Fewell, seconded by Mr. Wroblewski and unanimously carried, the Authority approved the Minutes of the Special Meeting of Thursday, November 8, 1990. 3. New Business a. Staff report on selection of__Bond Trustee and ratification thereof. Mrs. Kolata explained that we submitted a Request for Proposals to banks in the South Bend and Indianapolis area to serve as trustee, registrar and paying agent for the Airport Economic Development Area bond issue. We received proposals from the following six banks: Society -1- ,~ :, South Bend Redevelopment Authority . Special Meeting - December 17, 1990 3. NEW BUSINESS (Cont.) a. continued... Bank, Peoples Bank and Trust, Bank One, First Interstate, Midwest Commerce, and Merchants National Bank. We sent a form with the Request for Proposals so that we would receive comparable information from each bank. H. J. Umbaugh and Associates has reviewed the proposals. Merchants National Bank of Indianapolis' proposal offered the lowest first year cost. Society Bank of South Bend's proposal was the lowest local bank. Both Society Bank and Merchants National proposed to charge $2.50 for each principal payment for an average annual cost of under $200 over .the life of the bond. Society Bank's fee includes $100 per month during the construction period .(estimated to be one year). After that, Society Bank's fee structure is very similar to Merchants National's. Society Bank's fee is not subject to change over the life of the bond issue and Merchants National's is subject to change, although the criteria for change was not given. Based on this information and the fact that it is much more convenient. to submit claims for payment to a local • bank, we have selected Society Bank as trustee and paying agent. Upon a motion by Mr. Fewell, seconded by Mr. Wroblewski and unanimously carried, the Authority ratified the selection of Society Bank as Trustee, Registrar, and Paying Agent for the Airport Economic Development Area bond issue. b. Authority approval rectuested for Resolution No. 26 authorizing the Issuance of the South Bend Redevelopment Authority Taxable Lease Rental Revenue Bonds (Airport Economic Development Area Public Improvement Proiect) and Regarding Other Related Matters.. Mrs. Kolata explained items b. and c. together since they are identical except that the project has been divided into two parts. Resolution No. 26 authorizes a $4,200,000 taxable bond with an interest rate not exceeding 11% per year. The bonds shall mature on August 1st of each year, beginning in 1996 and continue to the year 2012. They are redeemable in part in multiples of $5,000 at the option of the Authority. The resolution authorizes publication of a Notice of Intent to Sell Bonds in the South Bend Tribune, the Tri-County News, and the. Indianapolis Commercial on December 21st and December 28th. The date of sale for the bonds will not be set in the Notice of Intent to Sell Bonds. Prospective bidders -2- - ~, South Bend Redevelopment Authority • Special Meeting - December 17, 1990 3. NEW BUSINESS (Cont.) b. continued... will register with us and we will contact them no less than 24 hours from the time of sale. That allows us the most flexibility to evaluate the bond market. We anticipate a sale date of approximately January 15th. The resolution states that the award will be made to the bidder offering the lowest net interest, but. no less than 98 °s of the face value of the bond. The resolution also designates the Board of Public Works as the agency who will handle the construction of the improvements to be built with the bond funds. Mrs. Kolata noted that through the issuance of these two bonds we expect to fully redeem the $950,000 bond that the Redevelopment Commission sold earlier this year. Mrs. Kolata noted that the bonds will be bid separately and bidders may bid on one bond or both. Mrs. Kolata noted that the $4,200,000 taxable bond will • finance two improvements: the .northwest loop and the acquisition, relocation and clearance of property. The IRS has determined those uses to be non tax-exempt. Mr. Pendl asked if the Authority can lease something it doesn't own. Mrs. Kolata responded that the Lease doesn't go into effect until August 1992, allowing for a construction period. Mr. Pendl asked if he made improvements to his property now, such as adding a room addition, would they be considered in the value of property. Mrs. Kolata indicated that the appraisers would re-appraise the property if he made substantial changes. Mr. Pendl inquired about how much of the bond actually goes toward project costs. Mrs. Kolata responded that issuance costs pay for financial advisors, bond counsel, printing of the bond, printing of the Official Statement, and the bond rating. We also set aside a portion of the bond as capitalized interest to make the first couple of bond payments. Mr. Pendl's point was that others stand to make money from the sale of this bond while the property owners stand to lose money. Mrs. Kolata responded that until . the appraisers place a value on the property we can not -3- . y ., South Bend Redevelopment Authority Special Meeting - December 17, 1990 3. NEW BUSINESS (Cont.) b. continued... tell what the property owners will receive. The people who Mr. Pendl asked about who will make money on the sale of the bond are people who are providing services to us. Mr. Nussbaum noted that none of the bond funds go to pay for City Attorney or staff expenses. Mr. Pendl's question also concerned an article that he read where a portion of a bond was set aside for capitalized interest, but the bond holders were not paid. The bond was in default and he wondered if property owners who were bought out with the bond would be held partially liable. Mrs. Kolata explained that these bonds are structured so that if there is-not money in the account by a certain date to make the bond payment, the Redevelopment Commission must levy taxes to make the payment. The former property owner has no liability for these bonds. • Mr. Pendl and Mr. Bradford expressed displeasure that a public body is assisting private developers in the acquisition of land from private owners, thereby making the deal more lucrative for the developers and cheating the present owners. Mrs. Kolata noted that the public agency has the ability to assemble the land, reconfigure the parcels, and change the land use. That is the purpose of the public agency's intervention, and that is how the public interest is served. Mr. Pendl asked for assurances that they would not lose money on this transaction. Mrs. Kolata stated, that, although she could make no guarantee that the property owners would not lose money on the sale of their land, the staff will work very hard to see that they are compensated adequately to replace what they. presently have. Mrs. Pendl expressed frustration over the law which allows government to take land from private owners so that no one can ever feel that their property is secure. She asked if the law had ever been challenged. Mr. Hill, bond counsel for this bond issue, responded that the Hawley case, from South Bend, is considered a landmark case on this issue. Mr. Bradford asked if there were cases challenging the acquisition by eminent domain of uncharted green space. Mrs. Kolata responded that she did not know of any. -4- • South Bend Redevelopment Authority Special Meeting - December 17, 1990 3. NEW BUSINESS (Cont.) b. continued... Mr. Cooreman asked if the law allowed us to acquire only the portions of land necessary to construct the roads. Mrs. Kolata responded that the law allows that, but the staff has made the determination that that could be as costly to us as acquiring all of the land and it would not serve the objectives of the plan. Mr. Bradford asked about the inconsistency of comments regarding relocation of residents of the area. In June the staff indicated that no residents would be relocated. In August the Tribune carried an article that stated that they would all be relocated. Mr. Hunt responded that at a German Township meeting with approximately 70 people in attendance, several people asked if they would be relocated. Those people live outside the project area. They were told that they would not be relocated. Mr. Pendl questioned the need for a golf course that the average person could not afford to use. Mr. Hunt responded that this golf course is not intended to compete with the public golf courses. He also noted that the golf course is only a small part of the proposed development and certainly not the most significant part. This area is the future of South Bend business and industry. This project will move ahead with or without the golf course development. Mr. Bradford noticed that on a recent drawing of the project layout, realigned Old Cleveland Road was drawn through his home. He inquired about how long before he would need to be moved. Mrs. Kolata responded that she expects construction to begin late spring or early summer. Upon a motion by Mr. Fewell, seconded by Mr. Wroblewski and unanimously carried, the Authority approved Resolution No. 26 authorizing the Issuance of the South Bend Redevelopment Authority Taxable Lease Rental Revenue Bonds (Airport Economic Development Area Public Improvement Project) and Regarding Other Related Matters. c. Authority at~»roval requested for Resolution No 27 • Economic Development Area Public Improvement Project) and Recrardina Other Related Matters. -5- South Bend Redevelopment Authority • Special Meeting - December 17, 1990 3. NEW BUSINESS (Cont.) c. continued... Mrs. Kolata noted that the tax exempt bond amount is $2,355,000. The maximum interest rate is 8%. The improvements to be funded through the tax exempt bond are: the extension of Mayflower Road, the engineering work for realigning Old Cleveland Road, improvements to Viridian Drive, construction of the Brick/Cleveland intersection, and miscellaneous related costs. Upon a motion by Mr. Fewell, seconded by Mr. Wroblewski and unanimously carried, the Authority approved Resolution No. 27 authorizing the issuance of the South Bend Redevelopment Authority Tax-Exempt Lease Rental Revenue Bonds (Airport Economic Development Area Public Improvement Project). 4. Next Meeting Mrs. Kolata noted that an Authority meeting was needed later in the week to amend the Lease to provide for two lease • payments instead of one and to approve the preliminary Official Statements for the two bond issues. That meeting will be held on December 21, 1990 at 2:00 p.m. 5. Adjournment There being no further business to come before the Redevelopment Authority, Mr. Fewell made a motion that the meeting be adjourned. Mr. Wroblewski seconded the motion and the meeting was adjourned at 11:15 a.m. if c o ep Wroblewski, President A E. Kolata, Director -6-