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HomeMy WebLinkAbout1991-10-18 Minutes-- ~ SOUTH BEND REDEVELOPMENT AUTHORITY SPECIAL MEETING October 18, 1991 1200 County-City Building 8.30 a.m. 227 W. Jefferson Boulevard Presiding: Joseph Wroblewski South Bend, Indiana 46601 President The October 18, 1991, Special Meeting of the Redevelopment Authority was called to order at 8:37 a.m. by its President, Joseph Wroblewski. There was a quorum present. 1. ROLL CALL Members Present: Legal Counsel: Redevelopment Staff: Others: 2. APPROVAL OF MINUTES Mr. Joseph Wroblewski, President Mr. Andre Gammage, Vice President Mr. Donald Fewell, Secretary Mr. Richard A. Nussbaum, III Mrs. Ann Kolata, Director Mrs. Cheryl Phipps, Office Manager Mr. James Wensits, South Bend Tribune Mr. Thom Howell, U-93 Mr. Brian Johnson Mr. Mark Peterson, WNDU-TV Mr. Kirk Barnett, WNDU-TV Mr. John Curtis, WNDU Mr. Norm Stangland, WSBT-TV Mr.~~Eugene Ladewski, South Bend Common Council Ms. Judy Peters, WSBT-TV Mayor Joseph E. Kernan a. Approval of Minutes of the Special Meeting of Wednesday, October 2, 1991. Upon a motion by Mr. Gammage, seconded by Mr. Fewell and unanimously carried, the Authority approved the Minutes of the Special Meeting of Wednesday, October 2, 1991. _. 3. NEW BUSINESS a. Authority approval requested for Resolution No. 42, a resolution of the South Bend Redevelopment Authority indicatingr its intent to issue Redevelopment Authority Lease Rental Revenue Bonds and indicating its intent to be reimbursed for preliminary project costs and expenses from proceeds of bonds to be issued. -1- • South Bend Redevelopment Authority Special Meeting - October 18, 1991 3. NEW BUSINESS (Cont.) a. continued... Mr. Wroblewski recognized Mayor Kernan and asked if he would like to make a few comments regarding the refinancing. Mayor Kernan noted that the first piece of business the Authority addressed when it came into existence was the refinancing of the Coveleski Stadium. As a result of those efforts in 1988, the City was able to reduce the net interest costs from 13.42% to 9.51%, saving $390,000 over the life of the bond, while keeping the term of the bond the same. Because the interest rates in today's market are significantly lower than the 9.51%, we expect to be able to refinance the bond to save an additional $250,000 over the life of the bond. Banc One, who bought the bond in the previous refinancing, will handle this refinancing. The term will remain the same. The rate of interest will be established on November 13, when the Purchase Agreement is signed by the Authority. We will only proceed with the refinancing of the bond if the net savings to be realized are at least $250,000. Mr. Ladewski, representing the South Bend Common Council, noted that the Council, watchdog of the tax dollars, commends the Mayor and financial staff for their foresight in this matter. Mrs. Kolata noted that Baker & Daniels has agreed to provide bond counsel "at risk", meaning that if the interest rate is not low enough to justify refinancing, there will be no cost to the City for services to that point, except reimbursement for out of pocket expenses. Mrs. Kolata noted that Banc One Capital Corporation will be the underwriter on the refinancing and will be going entirely "at risk." Mr. Wensits asked how much debt remains on the bond. Mrs. Kolata responded that the outstanding principal is $4,155,000. Mr. Wensits asked if the Authority is uncertain whether they will go ahead with the refinancing. Mrs. Kolata responded that the Authority fully expects to refinance. Only a significant upward move of interest rates would prevent it. -2- • South Bend Redevelopment Authority Special Meeting - October 18, 1991 3. NEW BUSINESS (Cont.) a. continued... Mr. Wensits asked what the break-even point is on the interest rate. Mrs. Kolata responded that the rule of thumb that applies to private mortgages applies here also. It will be necessary to refinance at 20 below the present rate before it would be profitable to refinance, so we would have to have a rate of 7.51 or less. Mrs. Kolata noted that the par amount of the bonds would be $4,305,000, including bond redemption, issuance costs, some interest to current bond holders, etc. Mrs. Kolata noted that the last payment on the bonds was made on September 1. Therefore, we will owe the current bondholders interest for the period between September 1 and the date of closing for the refinancing. Mr. Nussbaum noted that at the original refinancing, the City tried to keep its options open for another refinancing if Congress would find that a correction should be made to allow the South Bend project to be tax . exempt. This does not appear to be a possibility in the near future. This refinancing assumes that we are abandoning the possibility of .refinancing with tax exempt status. The interest rate we can realize now is approximately what we could have realized with a tax exempt status in 1988. This is a very good opportunity. Upon a motion by Mr. Fewell, seconded by Mr. Gammage and unanimously carried, the Authority approved Resolution No. 42, a resolution of the South Bend Redevelopment Authority indicating its intent to issue Redevelopment Authority Lease Rental Revenue Bonds and indicating its intent to be reimbursed for preliminary project costs and expenses from proceeds of bonds to be issued. b. Authority approval requested for professional services with Baker & Daniels related to Coveleski Stadium Refinancin4. Mrs. Kolata noted that we have an engagement letter from Baker & Daniels in which they propose to act as bond counsel for the refinancing. They will work on an hourly basis, but in no event will the fee exceed $25,000. If the financing should not close for any reason, they will not seek reimbursement, except for out of pocket • expenses. Mrs. Kolata noted that this is a very favorable proposal and the staff recommends accepting the proposal. -3- • South Bend Redevelopment Authority Special Meeting - October 18, 1991 3. NEW BUSINESS (Cont.) b. contunued... Upon a motion by Mr. Gammage, seconded by Mr. Fewell and unanimously carried, the Authority approved the proposal with Baker and Daniels for professional services related to the refinancing of the Coveleski Regional Stadium. c. Authority approval requested for investment banking services with Banc One Capital Corporation related to Coveleski Stadium Refinancing. Mrs. Kolata noted that Banc One Capital Corporation will proceed with the refinancing provided the Authority realizes a minimum net savings of $250,000. If closing fails to occur, the Authority is under no obligation to reimburse any expenses related to the refinancing. If the refinancing does occur, they commit to a fee of $7.50 per thousand dollars of bond issue. This is conditioned on Banc One Capital Corporation being the underwriter of this negotiated sale. Mrs. Kolata noted that this is a reasonable fee and the staff recommends accepting the . proposal. Upon a motion by Mr. Fewell, seconded by Mr. Gammage and unanimously carried, the Authority approved the proposal for investment banking services with Banc One Capital Corporation related to the Coveleski Stadium Refinancing. d. the City of South Bend, Indiana, to the Housing Development Corporation of St. Joseph County, Inc. Mrs. Kolata explained that in the Authority's 1990 bond issue for the South Bend Central Development Area there was money set aside for buying properties in Monroe Park. Those properties are part of the lease-purchase with the Redevelopment Commission. The Redevelopment Commission has indirectly leased them, first to the Board of Public Works, which has then leased them to the Housing Development Corporation. .The purpose of the lease is for the Housing Development Corporation to rehab the properties and to rent them out as rental properties. The terms of the master lease between the Authority and the Commission requires that the Authority approve any subleases. Upon a motion by Mr. Gammage, seconded by Mr. Fewell and unanimously carried, the Authority approved Resolution -4- South Bend Redevelopment Authority • Special Meeting - October 18, 1991 3. NEW BUSINESS (Cont.) d. continued... No. 43 approving and consenting to the Sublease of Properties by the City of South Bend, Indiana, to the Housing Development Corporation of St. Joseph County, Inc. e. Authority ratification of request to National Endowment for the Arts. Mrs. Kolata explained that Center City Associates has submitted an application to the National Endowment for the Arts for a grant to do rehabilitation work on a sculpture entitled the "Continuous You." At one time the sculpture was on display in the downtown area, but has more recently been in storage and is in need of repair. The sculptor is John David Mooney, a well-known sculptor. As part of the grant application, the Authority, as owner of the property, had to give permission for the sculpture to be located on the site. When the Morris Civic Plaza was redesigned, a location • was identified for the sculpture and a piece of granite was placed there for the sculpture to be mounted on. Mr. Wroblewski sent a letter granting permission for the ,sculpture to be displayed there and we would like the Authority to ratify that at this time. We hope this grant application will be funded and we will be able to make the repair and put the sculpture on display. Upon a motion by Mr. Fewell, seconded by Mr. Gammage and unanimously carried, the Authority ratified the letter to the National Endowment for the Arts. f. Staff report on acquisition of property in the Airport Economic Development Area. There was no report at this time.. g. Authority approval requested for request from Airport Authority regarding the Airport Economic Development Area. Mrs. Kolata explained that the Airport Authority is posting the Airport land as a "no hunting area." Since the Redevelopment Authority owns a lot of land contiguous to Airport land, they have offered to post and patrol our • land also. The staff recommends accepting their offer. -5- • South Bend Redevelopment Authority Special Meeting - October 18, 1991 3. NEW BUSINESS (Cont.) Upon a motion by Mr. Gammage, seconded by Mr. Fewell and unanimously carried, the Authority approved the request from the Airport Authority to post and patrol the Authority's land in the Airport Economic Development Area. U 4. 5. e. continued... APPROVAL OF CLAIMS 1990 SBCDA PUBLIC IMPROVEMENT PROJECT South Bend Water Works $ Indiana Michigan Power Abstract & Title Corp. Northern Indiana Public Service Co. TOTAL 1990 SBCDA PUBLIC IMPROVEMENT PROJECT $ 1991 AIRPORT TAXABLE BOND 19.74 29.16 40.00 79.86 168.76 Abstract & Title Corp. $ 135.00 Federal Express Corp. 16.50 John March - Petty Cash 10.00 Mike's Fencing Unlimited, Inc. and John & Betty Pendl 3,924.00 TOTAL 1991 AIRPORT TAXABLE BOND $ 4,085.50 Upon a motion by Mr. Fewell, seconded by Mr. Gammage and unanimously carried, the Authority approved the Claims submitted October 18, 1991. ADJOURNMENT come before the made a motion that the seconded the motion and the ~~~~ There being no further business to Redevelopment Authority, Mr. Fewell meeting be adjourned. Mr. Gammage meeting was adjourned at 9:10 a.m. ,L~ ose W. Wroblewski, President n F. Kolata, Director -6-