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HomeMy WebLinkAboutAuthorizing the Issuance & Sale $2,400,000 Allied Products CorpORDINANCE No. 7317 -84 Passed by the Common Council of the City of South Bend, Indiana March 26, 19 84 TRFNF K r.AMMnW Presented by me to the Mayor of the City of South Bend, Indiana Clerk of Common Council March 27, ig 84 `-�- jx IRENE K. GAMMON Approved and signed Ny me C �off Clerk ORDINANCE NO.7317— i 5/ AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $2,400,000 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 AND AN AMENDMENT TO AN EXISTING LEASE AGREEMENT; PROVIDING FOR THE PLEDGE OF REVENUES AND RENTAL INCOME FOR THE PAYMENT OF THE BONDS; AUTHORIZING AN INDENTURE OF TRUST APPROPRIATE FOR THE PROTECTION AND DISPOSITION OF SUCH REVENUES; AUTHORIZING A MORTGAGE AND SECURITY AGREEMENT TO SECURE PAYMENT OF THE BONDS; 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 B 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) An Amendment dated as of March 1, 1984 to Parcel A Lease Agreement (the "Parcel A Lease Amendment ") dated as of February 1, 1984, between the City and the Company, (3) Parcel B Lease Agreement (the "Parcel B Lease Agreement ") dated as of February 1, 1984, between the City and the Company, (4) Series B Mortgage, Security Agreement and Assignment of Rents (the "Series B Mortgage ") dated as of February 1, 1984 between the City and the Company, as mortgagors, and First Source Bank, as issuer of a letter of credit securing the Bonds, and the Trustee, as joint mortgagees, and (5) 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 r economic development facilities" as that phrase is used in the Act; that acquisition, improvement and construction of the Project and the lease of the Series B Project (the second phase of the Project as described in the Amendment to the Parcel A Lease Agreement) to the Company pursuant to the Parcel B Lease Agreement and the Parcel A Lease Agreement, as amended, 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 B Project. Section 2. Authorization of Economic Development Revenue 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 $2,400,000 aggregate principal amount of Economic Development Revenue Bonds, Series B (Allied Products Corporation Project) of the City (the "Series B Bonds "). Initial costs of the Project (referred to in the Indenture of Trust dated as of February 1, 1984 from the City to 1st Source Bank, as Trustee and Parcel A Lease Agreement as the "Series A Project ") have already been paid out of the proceeds of Series A Bonds which were issued on March 2, 1984 pursuant to Ordinance No. 7308 -84 and the terms of the Series A Indenture and the Parcel A Lease Agreement referred to therein. The balance of the costs of the Project (referred to in the Indenture and the Parcel B Lease Agreement as the "Series B Project ") are to be paid with the proceeds of the Series B Bonds which are additional bonds authorized under the Parcel A Lease Agreement and Section 210 of the Series A Indenture. Section 3. Terms for the Series B Bonds. The total principal amount of Series B Bonds that may be issued is hereby expressly limited to $2,400,000. The Series B Bonds shall be designated "Economic Development Revenue Bonds, Series B (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 B Bonds shall be dated as of the date of issuance thereof. Principal on the Series B Bonds shall be due and payable in consecutive monthly installments in the amount of $20,000 each on the first day of each month -2- commencing May 1, 1984 to and including March 1, 1994, with a final payment of all unpaid principal being due and payable on April 1, 1994, the date of maturity of the Series B Bonds. The Series B Bonds shall bear interest on the principal balance from time to time unpaid at the fluctuating rate hereinafter specified in consecutive monthly installments on the first day of each month commencing on May 1, 1984, to and including April 1, 1994. The interest rate per annum for each calendar month occurring prior to April 1, 1985, shall be equal to the sum of one percent (1 %) plus 75% of the Prime Rate in effect for such month and the interest rate per annum for each calendar month commencing on or after April 1, 1985 shall be equal to 75% of the Prime Rate in effect for such month. The Prime Rate in effect for any month shall be the Prime Rate in effect as of 10:00 A.M. Chicago, Illinois time on the first day of such month (except that for the month of March, 1983, on the day of issue of the Series B Bonds) and the interest rate then in effect shall be the interest rate for the remainder of the calendar month in which such day occurs with the interest rate to be automatically adjusted on the first day of the next calendar month pursuant to the foregoing provisions of this sentence. Interest on the Series B Bonds will be computed on the basis of a 360 -day calendar year consisting of 12 30 -day months. The Series B Bonds shall bear interest, payable on demand, on any overdue principal and premium and (to the extent that such interest shall be legally enforceable) on any overdue installment of interest at the rate per annum equal to the sum of the Prime Rate determined to be in effect pursuant to the foregoing provisions plus one percent (1 %), on each day such principal, premium or interest shall be overdue and unpaid. Principal and interest and premium, if any, shall be payable at the principal office of the Trustee in South Bend, Indiana. The Series B 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 B 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 B Project under the Parcel A 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 the Parcel B Lease Agreement and shall be secured as provided in the Indenture and the Series B Mortgage. Pursuant to IC 36- 7- 12 -25, two complete forms of the Parcel B Lease Agreement, the Amendment to Parcel A Lease Agreement, the Series B Mortgage 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 B Bonds. The Mayor and City Clerk of the City are hereby authorized and directed to sell the Series B Bonds to or upon the order of the purchaser thereof, namely River Forest State Bank and Trust Company, of River Forest, Illinois, at a price of $2,400,000, plus accrued interest (if any) to the date of delivery and payment. Receipt by the Trustee of payment for the Series B Bonds shall constitute payment to the City of the purchase price for the Series B Bonds. -3- Section 5. Indenture. In order to secure the payment of the principal of, premium (if any) and interest on the Series B 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. Parcel B Lease Agreement and Amendment to Parcel A Lease Agreement. In order to provide for the leasing of the Series B 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 B Bonds, the Mayor and City Clerk shall execute, acknowledge and deliver in the name and on behalf of the City a Parcel B Lease Agreement and an Amendment to Parcel A Lease Agreement in substantially the form submitted to this Common Council, which are hereby approved in all respects. Section 7. Series B Mortgage. In order to further secure the payment of the principal of, premium (if any) and interest on the Series B Bonds, the Mayor and City Clerk of the City shall execute, acknowledge and deliver in the name of and on behalf of the City a Series B Mortgage in substantially the form submitted to this Common Council, which is hereby approved in all respects. Section 8. 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 B Bonds, and the Mayor and City Clerk shall execute such certificate and take such action as is required to evidence such election. Section 9. No- Arbitrage. The proceeds of issuance and delivery of the Series B Bonds shall be deposited in the Series B Bond Fund and the Series B 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 B Bonds hereby authorized shall be devoted to and used with due diligence for the acquisition, improvement and construction of the Project. The Mayor and City Clerk are hereby authorized and directed to execute such certificate with respect to the use of the proceeds of the Series B 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 contravention of the expectations prescribed by such certificate. Section 10. 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 B Project, the issuance and sale of the Series B Bonds, and the securing of the Series B Bonds under the Indenture and under the Series B Mortgage. 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. Me Section 11. 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. Member of Comm o ouncil lit READING 3 -a (o - & y 2nd READING 3 _ a 6- 8'14 NOT APPROVED REFERRED PASSED -,g -5- AA CITY of SOUTH BEND ROGER O. PARENT, Mayor Economic Development Commission Jerry Hammes, President Walter Szymkowiak, Vice President Walter A. Mucha, Secretary Kenneth P. Fedder, Councel Alice Neddo, Asst. Sec. Alice Neddo Staff Administrator March 21, 1984 230 W. Jefferson Boulevard P.O. Box 1677 South Bend, Indiana 46634 -1677 (2 19) 234 -0051 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 - Phase II Dear Councilmen: As you are aware, the South Bend Economic Development Commission approved an application from Allied Products Corporation for $6,500,000.00 of economic development revenue bonds to purchase, renovate and equip certain economic development facilities in South Bend, Indiana. On March 2, 1984, your Council, at a special meeting, passed Ordinance No. 7308 -84, approving the financing arrangements for Phase I of the project in the amount of $850,000.00. Attached is the proposed Ordinance authorizing the issuance and sale of $2,400,000.00 of revenue bonds for further completion of the project. As we advised on March 2, 1984, we anticipate filing with this Ordinance the supplemental financing documents, and would respectfully request that at the March 26, 1984 meeting this Ordinance receive first reading, a suspension of your rules to permit second reading and public hearing, and a favorable vote thereon. As I outlined before, we are looking at upwards to 75 total new jobs be created when the entire project is finally finished throgh the various phases. t FILED IR U' qal'S GFICE ttfrney H PY. FENEKT ' F for the South Bend Economic Development Commission KPF :ram Irene Gammon CITY CLERK, SOUTH BEND, IND;