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HomeMy WebLinkAbout11109-24-TIF-EDC Forgivable Loan (Real America) Ordinance ORDINANCE No . 11109-24 Passed by the Common Council of the City of South Bend, Indiana February 12, 24 20 Attest: 4,1,j AitotoCity Clerk Bianca L. Tirado Attest: \r'�1 Cyr / V\t jAle t, President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana 20 pieja .-)j City Clerk Bianca L. Tira 19 Approved and signed by me FebruaryX20 24 /7111 - Mayor BILL NO. 09-24 ORDINANCE NO. 11109-24 AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA AUTHORIZING THE CITY OF SOUTH BEND,INDIANA TO FUND ITS TAXABLE ECONOMIC DEVELOPMENT REVENUE NOTE, SERIES 2024 (REALAMERICA PROJECT) AND APPROVING AND AUTHORIZING OTHER ACTIONS IN RESPECT THERETO STATEMENT OF PURPOSE AND INTENT This ordinance authorizes the funding of the City of South Bend, Indiana("City")Taxable Economic Development Revenue Note, Series 2024 (RealAmerica Project) ("Series 2024 Note") in an amount not to exceed Three Million Eight Hundred Thousand Dollars ($3,800,000.00) ("Loan") and further approves and authorizes other actions in respect thereto. Indiana Code 36-7-11.9 and 12 (collectively, "Act") declares that the financing and refinancing of economic development facilities constitutes a public purpose and pursuant to the Act, the City is authorized to make loans for the purpose of financing,reimbursing or refinancing all or a portion of the costs of acquisition, construction, renovation, installation and equipping of economic development facilities in order to foster diversification of economic development and creation or retention of opportunities for gainful employment in or near the City. Legacy25, Inc., an Indiana Nonprofit Corporation ("Legacy25" or "Borrower") and RealAmerica Development, LLC, common entities desiring to share the rights and obligations under the development agreement, have proposed the development, construction and equipping of: (i) a new residential apartment building containing at least seventy thousand (70,000) square feet, which shall include a minimum of sixty (60) total apartment units, of which all sixty (60) apartment units will be exclusively available for tenants at eighty percent (80%) or lower of the area median income; (ii) a second new residential apartment building containing at least fifty thousand(50,000)square feet, which shall include a minimum of forty-five(45)total market-rate apartment units; and(iii)a third new residential apartment building containing at least fifty thousand (50,000) square feet, which shall include a minimum of forty-five (45) total market-rate apartment units on certain real estate acquired by the Developer with an investment of approximately $21,500,000 (collectively, "Development"), and to induce the Developer to construct the Development, the Commission has 4871-7797-5184.1 determined to fund a loan to the Borrower, as evidenced by the Series 2024 Note, to fund the construction of site work and infrastructure improvements needed to serve the Development ("Local Public Improvements"), all in or physically connected to the River West Development Area and the River West Development Area Allocation Area No. 1 as established by the South Bend Redevelopment Commission ("Redevelopment Commission"). The South Bend Economic Development Commission ("Commission") has rendered its Project Report regarding the issuance and funding of the Series 2024 Note from the City to the Borrower to finance a portion of the Local Public Improvements and the Project Report has been or will be submitted to the South Bend Area Plan Commission. The Commission conducted a public hearing and adopted a resolution and Project Report, which resolution and Project Report have been transmitted hereto, finding that the financing of a portion of the Local Public Improvements complies with the purposes and provisions of the Act and that such financing will be of benefit to the health and welfare of the City, its residents, and its visitors. The Commission has approved and recommended the adoption of this form of ordinance by this Common Council, has considered the issue of adverse competitive effect and has approved the forms of and has transmitted for approval by the Common Council the forgivable loan agreement between the City and the Borrower (including the form of the Series 2024 Note), dated as of the first day of the month the Series 2024 Note is issued("Loan Agreement"). The Redevelopment Commission has pledged TIF Revenues (as defined in the Loan Agreement), junior and subordinate to any outstanding bonds payable from TIF Revenues and any bonds issued in the future on a parity with any outstanding bonds on hand to the funding of the Series 2024 Note pursuant to and in accordance with the Loan Agreement. The form of the Series 2024 Note, the Loan Agreement and a form of this proposed ordinance have been submitted to the Commission for its approval, which are incorporated by reference in the Commission's resolution following the Commission's public hearing, which resolution has been transmitted to the Common Council. Based upon the resolution adopted by the Commission pertaining to the Local Public Improvements, the Common Council hereby finds and determines that the funding approved by the Commission for the Local Public Improvements will be of benefit to the health and general welfare of the citizens of the City, complies with the provisions of the Act and the amount necessary to fund a portion of the costs of the Local Public Improvements will require making the Loan and delivering the Series 2024 Note. - 2 - 4871-7797-5184.1 NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, THAT: Section 1. It is hereby found,determined,ratified and confirmed that the financing and reimbursement of the Local Public Improvements, the making of the Loan to the Borrower to be evidenced by the Borrower's Series 2024 Note complies with the purposes and provisions of the Act and: (i) will result in the diversification of the tax base, the creation of job opportunities and the construction of housing and affordable housing within the jurisdiction of the City, (ii) will serve a public purpose, and will be of benefit to the health and general welfare of the City, (iii) complies with the purposes and provisions of the Act and it is in the public interest that the City take such lawful actions as determined to be necessary or desirable to encourage the diversification of the tax base, the creation of job opportunities, and the construction of housing and affordable housing within the jurisdiction of the City, and (iv) will not have a material adverse competitive effect on any similar facilities already constructed or operating in or near the City. Section 2. The substantially final form of the Loan Agreement shall be incorporated herein by reference and shall be inserted in the minutes of the Common Council and kept on file by the Clerk. In accordance with the provisions of IC 36-1-5-4, two (2) copies of the Loan Agreement are on file in the office of the Clerk for public inspection. Section 3. The costs of the Local Public Improvements will be funded to the Borrower from the Loan upon closing of the Loan. The City shall fund the Loan from TIF Revenues on hand,junior and subordinate to any outstanding bonds payable from TIF Revenues and any bonds issued in the future on a parity with any outstanding bonds, pledged by the Redevelopment Commission to the Borrower in the maximum amount not to exceed Three Million Eight Hundred Thousand Dollars ($3,800,000), payable upon closing of the Loan. To the extent the representations in Section 2.2 of the Loan Agreement are met, payments on the series of the Loan shall be forgiven. If certain representations in Section 2.2 are not met, the Loan shall not be forgiven. The Series 2024 Note shall accrue interest at a rate not in excess of five percent (5.0%) per annum. The Series 2024 Note shall never constitute a general obligation of, an indebtedness of, or charge against the general credit of the City. The Series 2024 Note shall not be subject to optional redemption prior to maturity. Section 4. The Mayor, Controller and the Clerk are authorized and directed to execute the Loan Agreement, and such other documents approved or authorized herein and any other - 3 - 4871-7797-5184.1 document which may be necessary, appropriate or desirable to consummate the transactions contemplated by the Loan Agreement and this ordinance, and their execution is hereby confirmed on behalf of the City. The Mayor, Controller and Clerk are authorized to arrange for the delivery of such Series 2024 Note to the Borrower,payment for which will be made in the manner set forth in the Loan Agreement. The Mayor, Controller and Clerk may, by their execution of the Loan Agreement and any other documents requiring their signatures and imprinting of their facsimile signatures thereon, approve any and all such changes therein and also in the Loan Agreement and any other documents without further approval of this Common Council or the Commission if such changes do not affect terms set forth in Sections 27(a)(1)through and including(a)(10) of the Act. Section 5. The provisions of this ordinance and the Loan Agreement shall constitute a contract binding between the City and the Borrower. Section 6. The Mayor, Controller or Clerk, or any other officer having responsibility with respect to the making of the Loan, evidenced by the Series 2024 Note, are authorized and directed, alone or in conjunction with any of the foregoing, or with any other officer, employee, consultant or agent of the City,to deliver a certificate for inclusion in the transcript of proceedings for the Series 2024 Note, setting forth the facts, estimates and circumstances and reasonable expectations pertaining to the use of the Loan as of the funding date thereof. Section 7. No recourse under or upon any obligation, covenant, acceptance or agreement contained in this ordinance, the Loan Agreement or under any judgment obtained against the City, including without limitation the Commission or Redevelopment Commission, or by the enforcement of any assessment or by any legal or equitable proceeding by virtue of any constitution or statute or otherwise, or under any circumstances,under or independent of the Loan Agreement, shall be had against any member,director,or officer or attorney,as such,past,present, or future, of the City, including without limitation the Commission or Redevelopment Commission, either directly or through the City, or otherwise, for the payment for or to the City of any sum that may remain due and unpaid by the City upon any of such Series 2024 Note. Any and all personal liability of every nature, whether at common law or in equity, or by statute or by constitution or otherwise, of any such member, director, or officer or attorney, as such, to respond by reason of any act or omission on his or her part or otherwise for, directly or indirectly, the payment for or to the City or any receiver thereof, or for or to any owner or holder of any sum that may remain due and unpaid upon the Series 2024 Note hereby secured shall be expressly waived - 4 - 4871-7797-5184.1 and released as a condition of and consideration for the execution and delivery of the Loan Agreement and the issuance and funding of the Series 2024 Note. Section 8. If any section, paragraph or provision of this ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this ordinance. Section 9. All ordinances, resolutions and orders, or parts thereof, in conflict with the provisions of this ordinance are, to the extent of such conflict, hereby repealed. Section 10. It is hereby determined that all formal actions of the Common Council relating to the adoption of this ordinance were taken in one or more open meetings of the Common Council,that all deliberations of the Common Council and of its committees,if any,which resulted in formal action, were in meetings open to the public, and that all such meetings were convened, held and conducted in compliance with applicable legal requirements, including IC 5-14-1.5, as amended. Section 11. The Mayor, Controller, and Clerk, and any other officer of the City are hereby authorized and directed, in the name and on behalf of the City,to execute and deliver such further documents and to take such further actions as such person(s)deem(s)necessary or desirable to effect the purposes of this ordinance, and any such documents heretofore executed and delivered and any such actions heretofore taken, be, and hereby are, ratified and approved. Section 12. This ordinance shall be in full force and effect from and after its passage by the Common Council and approval by the Mayor. Passed and adopted by the South Bend Common Council this 12th day of February, 2024. Sharon McBride, Council President South Bend Common Council Attest: Bianca Tirado, C. y lerk Office of the Cit erk Presented by me, the undersi d Clerk of the City of South Bens to the Mayor of the City of South Bend, Indiana on the day of February, 2024, at o'clock 72. p.m. % 4/ Bianca irado, City 410 Office of the City C - - 5 - 4871-7797-5184.1 t� Approved and signed by me on the 1 ' day of February, 2024, at 11 o'clock p.m of Mueller, Mayor 1111 -- Ci of South Bend, Indiana - 6 - 4871-7797-5184.1