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HomeMy WebLinkAboutAuthorizing the Issuance & Sale $850,000 Economic Development Revenue Bonds Allied Products CorpORDINANCE No 7308 -84 Passed by the Common Council of the City of South Bend, Indiana _March 2. �9 84 4""— /-�- City Clerk IRENE K. GAMMON of Common Council Presented by me to the Mayor of the City of South Bend, Indiana ch 2, —19,84 IRENE K. GAMMON Approved and signed by me �� Z �9je—i4 Clerk ORDINANCE NO. 7308-84 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $850,000 ECONOMIC DEVELOPMENT REVENUE BONDS OF THE CITY OF SOUTH BEND, INDIANA, FOR THE PURPOSE OF ACQUIRING LAND, IMPROVEMENTS THEREON AND RELATED PROPERTY COMPRISING ECONOMIC DEVELOPMENT FACILITIES LOCATED IN THE CITY FOR LEASE AND SALE TO ALLIED PRODUCTS CORPORATION; AUTHORIZING EXECUTION OF A LEASE AGREEMENT; PROVIDING FOR THE PLEDGE OF REVENUES AND RENTAL INCOME FOR THE PAYMENT OF THE BONDS; AUTHORIZING A MORTGAGE AND INDENTURE OF TRUST APPROPRIATE FOR THE PROTECTION AND DISPOSITION OF SUCH REVENUES; AND AUTHORIZING THE TERMS AND SALE OF SAID BONDS. The City of South Bend, Indiana (hereinafter called the "City ") is a municipal corporation and political subdivision of the State of Indiana and by virtue of IC 36 -7 -12, as supplemented and amended (hereinafter called the "Act ") is authorized and empowered to adopt this ordinance (the "Bond Ordinance ") and to carry out its provisions; and Allied Products Corporation (the "Company ") is a corporation duly organized and existing under and by virtue of the laws of the State of Delaware with its principal office in Chicago, Illinois, and duly qualified to conduct business in the State of Indiana; and The Company has agreed to lease certain economic development facilities located in the City if the City will finance a portion of the cost of acquisition and construction and equipping of such economic development facilities; and The South Bend Economic Development Commission has performed all action required of it by the Act preliminary to the adoption of this Bond Ordinance and has approved and forwarded to this Common Council the forms of (1) Series A First Mortgage and Indenture of Trust (the "Indenture ") dated as of February 1, 1984, between the City and 1st Source Bank, South Bend, Indiana (the "Trustee "), containing a form of economic development revenue bond, (2) Parcel Project A Lease Agreement (the "Lease Agreement ") dated as of February 1, 1984, between the City and the Company, and (3) this Bond Ordinance; NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: Section 1. Findings; Public Benefits. The Common Council of the City hereby finds and determines that the land, buildings, equipment and facilities in connection therewith (the "Project ") to be acquired, constructed, renovated and equipped with the proceeds of the Economic Development Revenue Bonds herein authorized are "economic development facilities" as that phrase is used in the Act; that acquisition and construction of the Project and the lease of the Series A Project (the first phase of the Project as described in the Lease Agreement) to the Company pursuant to the Lease Agreement will increase employment opportunities and increase diversification of economic development facilities in and near the City, will improve and promote the economic stability, development and welfare of the area in and near the City and will encourage and promote the expansion of industry, trade and commerce in the area in and near the City and the location of other new industries in such area; and that the public benefits to be accomplished by this Bond Ordinance, in tending to overcome insufficient employment opportunities and insufficient diversification of industry, are greater than the cost of public services (as that phrase is used in the Act) which will be required by the Series A Project. Section 2. Authorization of Economic Development Revenue Bonds; Additional Bonds. In order to pay a portion of the costs of acquiring, constructing, renovating and equipping the Project, there are hereby authorized to be issued, sold and delivered $850,000 aggregate principal amount of Economic Development Revenue Bonds, Series A (Allied Products Corporation Project) of the City (the "Series A Bonds "). The balance of the costs of the Project (referred to in the Indenture and Lease Agreement as the "Series B Project ") not paid for out of the proceeds of the Series A Bonds will be paid for by the Company unless paid for with the proceeds of additional bonds (the "Series B Bonds ") as provided in Section 2.10 of the Indenture and in the Lease Agreement. Section 3. Terms for the Series A Bonds. The total principal amount of Series A Bonds that may be issued is hereby expressly limited to $850,000; provided that Series B Bonds may be issued upon the terms and conditions and for the purposes provided in the Indenture and in the Lease Agreement. The Series A Bonds shall be designated "Economic Development Revenue Bonds, Series A (Allied Products Corporation Project), shall be represented by one or more Bonds in fully registered form without coupons and shall be lettered and numbered R -1 and upward. The Series A Bonds shall be dated as of the date of issuance thereof and shall bear interest from such date on the principal balance from time to time unpaid at the rate per annum of eight per cent (8%), computed on the basis of a calendar year consisting of twelve 30 -day months. Interest shall be payable quarterly on January 1, April 1, July 1, and October 1 of each year commencing April 1, 1984. Principal of the Series A Bonds shall be payable in quarterly installments on January 1, April 1, July 1 and October 1 of each year commencing on April 1, 1984, in the aggregate amount $14,166.67 on each such date to and including October 1, 1998, with all remaining unpaid principal due and payable on January 1, 1999, the date of final maturity of the Series A Bonds. The Series A Bonds shall bear interest in addition to that hereinabove specified, payable on demand, on overdue principal, premium, if any, and (to the extent permitted by applicable law) on overdue interest at the rate per annum of one percent (1%). -2- Principal and interest and premium, if any, shall be payable at the principal office of the Trustee in South Bend, Indiana. The Series A Bonds shall be executed, shall be in such form, shall have such redemption provisions, shall bear interest at such other rates and shall be subject to such other terms and conditions as set forth in the Indenture. The Series A Bonds and the interest thereon do not and shall never constitute an indebtedness of or a charge against the general credit or taxing power of the City, but are limited obligations of the City payable solely from revenues and other amounts derived from the leasing or sale of the Series A Project under the Lease Agreement (except to the extent paid out of moneys attributable to the proceeds of the Series A Bonds or the income from the temporary investment thereof) and shall be secured as provided in the Indenture. Pursuant to IC 36- 7- 12 -25, two complete forms of the Lease Agreement and Indenture are before this meeting and are by this reference incorporated in this Bond Ordinance, and the City Clerk is hereby directed to insert them into the minutes of the Common Council and to keep them on file. Section 4. Sale of the Series A Bonds. The Mayor and City Clerk of the City are hereby authorized and directed to sell the Series A Bonds to or upon the order of the purchaser thereof, namely C. J. Wood, Inc., of South Bend, Indiana, at a price of $850,000, plus accrued interest (if any) to the date of delivery and payment. Receipt by the Trustee of payment for the Series A Bonds shall constitute payment to the City of the purchase price for the Series A Bonds. Section 5. Indenture. In order to secure the payment of the principal of and premium (if any) and interest on the Series A Bonds, the Mayor and City Clerk of the City shall execute, acknowledge and deliver, in the name and on behalf of the City, the Indenture in substantially the form submitted to this Common Council, which is hereby approved in all respects. Section 6. Lease Agreement. In order to provide for the leasing of the Series A Project and the payment by the Company of rentals in an amount sufficient to pay the principal of and premium, if any, and interest on the Series A Bonds, the Mayor and City Clerk shall execute, acknowledge and deliver in the name and on behalf of the City a Lease Agreement in substantially the form submitted to this Common Council, which is hereby approved in all respects. Section 7. Election Pursuant to Internal Revenue Code. The City hereby elects to have the provisions of Section 103(b) (6)(D) of the Internal Revenue Code of 1954, as amended, apply to the Series A Bonds, and the Mayor and City Clerk shall execute such certificate and take such action as is required to evidence such election. Section 8. No- Arbitrage. The proceeds of issuance and delivery of the Series A Bonds shall be deposited in the Series A Bond Fund and the Series A Construction Fund as provided in Article VI of the Indenture and used for the purposes for which said Bonds are authorized. The principal proceeds of the Series A Bonds hereby authorized shall be devoted to and used with due diligence for the acquisition and construction of the Project. The Mayor and City Clerk are hereby authorized and directed to execute such -3- certificate with respect to the use of the proceeds of the Series A Bonds as may be necessary or desirable pursuant to the provisions of Section 103(c) of the Internal Revenue Code of 1954, as amended, and regulations thereunder, including Sections 1.103 -13 and 1.103 -14 of the Federal Income Tax Regulations. Such certificate shall constitute a certification and representation of the City, and the City will take no action in contraven- tion of the expectations prescribed by such certificate. Section 9. General. The Mayor and City Clerk be and they are each hereby authorized and directed, in the name and on behalf of the City, to execute any and all instruments, perform any and all acts, approve any and all matters, and do any and all things deemed by them, or either of them, to be necessary or desirable in order to carry out the purposes of this Bond Ordinance (including the preambles hereto), the acquisition, construction and leasing of the Series A Project, the issuance and sale of the Series A Bonds, and the securing of the Series A Bonds under the Indenture. Such execution shall constitute approval by the City of any and all charges or variations from the forms of documents submitted to the Common Council. Section 10. Effective Date. This Bond Ordinance shall be in full force and effect immediately upon its adoption by the Common Council and approval by the Mayor. -4- 1,t READING 2—,2- 8-/ PUBLIC HEARING 3',.9 -1- y zed READIING 3 -62 NOT APPROVEQ /�� REFERRED /�� ✓,4 PASSED - o% s7 / (1�- U Member of Commo ce, t FILED IN CLE J i'S URCE Irene Gammon CITY CLERK, SOUTH BEND, IND. CITY of SOUTH BEND ROGER 0. PARENT, Mayor Economic Deveiopment Commission Alice Neuuo SYdtf Huministratur Jerry Hammes, President 230 W. Jettersun 5uuievmrd Walter Szymkowiak, Vice President P.O. box 1877 Walter A. Mucha, Secretary South Bend, Inoiana Kenneth P. Fedder, Counsel 4o634.1677 Alice Neddo, Asst. Sec. (219) 234 -OU51 February 29, 1984 Members of the Common Council of the City of South Bend County -City Building South Bend, IN 46601 Re: Proposed Ordinance Authorizing the Issuance of Revenue Bonds for Allied Products Corporation Project Dear Councilemen: The South Bend Economic Development Commission has received an application from Allied Products Corporation for the issuance of $6,500,000 of Economic Revenue Bonds to purchase a portion of the leased complex of the Allied Products Corporation; to renovate the leased complex; to purchase additional equipment for existing operations and to renovate a portion of the properties already owned by the Corporation. The South Bend Economic Development Commission, on March 2, 1984, will be asked to approve the form of Ordinance and the financing documents being filed herewith. As you are probably all aware, Allied Products Corporation has operated an extensive manufacturing facility in South Bend, Indiana, which is engaged in stamping body parts for the automobile industry,since 1964. The enclosed Ordinance is for $850,000 of revenue bonds for the initial purchase of the leased complex, and we anticipate 25 additional employees when the initial operation is in full production,with the new equipment to be purchased and placed in opera ion at that location at an estimated gross annual payroll of $W' 000. 93757.9 _1 KFVN P . FEDDEI"" A torn y for the South Bend E�ono c Development Commission KPF:ram enc .