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HomeMy WebLinkAboutAuthorizing the Issurance $7,800,000 Economic development Revenue NotesORDINANCE NO. 7222 -83 Passed by the Common Council of the City of South Bend, Indiana July 25, 1983 Attest: Attest: IRENE K. GAMMON Presented by me to the Mayor of the City of South Bend, Ind'ana Approved and signed by July 26, 19 83 Clerk of Common Council ,j � City Clerk IRENE K. GAMMON % 2- // Tn O 3 ORDINANCE NO. AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $7,800,000 ECONOMIC DEVELOPMENT REVENUE NOTES OF THE CITY OF SOUTH BEND, INDIANA, FOR THE PURPOSE OF MAKING A LOAN TO BRETHREN CARE OF SOUTH BEND, INC. IN ORDER TO FINANCE CERTAIN COSTS OF ACQUISITION AND CONSTRUCTION OF CERTAIN ECONOMIC DEVELOPMENT FACILITIES; IN ORDER TO PARTIALLY REFUND CERTAIN OUTSTANDING REVENUE BONDS OF THE CITY OF SOUTH BEND, INDIANA; AUTHORIZING EXECUTION OF A LOAN AGREEMENT; PROVIDING FOR THE DELIVERY OF.A PROMISSORY NOTE AND THE ASSIGNMENT THEREOF AS SECURITY FOR SAID NOTES; AND AUTHORIZING AN INDENTURE OF TRUST. BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: Section 1. Preliminary Statement. The following recitals establish the background for the financing authorized hereby: (a) The City of South Bend, Indiana (hereinafter called the "City "), by virtue of Indiana Code 36 -7 -12, as amended (hereinafter called the "Act "), is authorized and empowered to make direct loans to users for the purpose of financing economic development facilities as defined in the Act to overcome insufficient employment opportunities and insufficient diversification of business, commerce and industry in and near the City and to issue its economic development revenue bonds to obtain funds to make such loan and to secure said bonds pursuant to an indenture of trust by the pledge of a mortgage of the user. (b) The City by virtue of the Act is authorized and enpowered to issue its revenue bonds to refund all or any part of outstanding revenue bonds issued under the Act. (c) Brethren Care of South Bend, Inc. (the "Company "), a nonprofit corporation organized and existing under and by virtue of the laws of Indiana, has incurred certain indebtedness, with respect to which it is in default, to pay a portion of the cost of acquisition and construction of a residential retirement community (the "Project ") which is a health facility licensed and regulated by the Indiana Health Facilities Council under Indiana Code 16 -10 -4 and by virtue thereof an "economic development facility" as defined in the Act. (d) To finance a portion of the cost of acquisition of the Project the City issued $8,000,000 of its Economic Development Revenue Bonds, Series A (Brethren Care of South Bend, Inc. Project), dated October 1, 1978 (the "Series A Bonds ") and there currently exist defaults in the payment of principal of and interest on the Series A Bonds. (e) The Project is located in the City and will further the purposes and policies of the Act by maintaining employment opportunities and diversification of business, commerce and trade in and near the City. (f) The City proposes to loan to the Company the proceeds of sale of the revenue notes hereinafter authorized pursuant to the loan payment approved in Section 6 hereof (the "Loan Agreement "), and the Company has agreed to make payments on its promissory note (the "Promissory Note ") evidencing its loan obligation in an amount sufficient to pay the principal of and interest and premium, if any, on such revenue notes. (g) The South Bend Economic Development Commission (the "Commission "), which is functioning and operating under the Act, (1) has found by written resolution that because of existing insufficient employment opportunities and insufficient diversification of business, commerce and industry, the economic welfare of the City would be benefited by financing a portion of the indebtedness incurred in the acquisition and construction of the Project; (2) has approved a report estimating the public services which would be made necessary or desirable, the expense thereof, the number of jobs, the estimated payroll on account of the acquisition and construction of the Project and the cost thereof, (3) has submitted such report to the plan commission(s) and school corporation(s) having jurisdiction over such facilities, and (4) has, after giving notice in accordance with the Act, held a public hearing on the proposed financing and adopted a resolution finding the proposed financing benefits the economic welfare of the City and complies with the purposes and provisions of the Act and approving the financing and the proposed form and terms of such revenue bonds, loan agreement and indenture of trust, which resolution and other instruments and information pertaining to the proposed financing have been transmitted to the Common Council of the City by the Secretary of the Commission. Section 2. Public Benefits and Findings. The Common Council of the City hereby finds and determines that the Project as described in Exhibit A to the Loan Agreement dated as of July 15, 1983 between the City and the Company (the "Loan Agreement ") which has been acquired and constructed in part with the proceeds of Economic Development Revenue Notes, Series 1983 (Brethren Care of South Bend, Inc. - St. Paul's Retirement Village Project) (the "Series 1983 Notes ") in aggregate principal amount not to exceed $7,800,000 herein authorized is an "economic development facility" as that phrase is used in the Act; that the Project will maintain increased employment opportunities and increased diversification of business, commerce and industry in and near the City, will continue the improvement and promotion of the economic stability, development and welfare of the area in and near the City and will continue to encourage and promote the expansion of industry, trade and commerce in the area in and near the City and the location of other new commercial and business facilities in such area; and that this ordinance (the "Note Ordinance ") complies with the purposes and provisions of the Act and is of public benefit to the economic welfare of the City by tending to overcome the deficiencies previously found to exist, to wit: insufficient employment opportunities and insufficient diversification of business, commerce and industry, and that such benefit is greater than the cost of public facilities (as that phrase is defined in the Act) which will be required by the Project. Section 3. Authorization of Series 1983 Notes. In order to finance certain costs of construction of the Project which were financed with temporary loans, funding of a debt service reserve fund related to the Series 1983 Notes, payment of principal of and interest on the City of South Bend, Indiana Economic Development Revenue Bonds, Series A (Brethren Care of South Bend, Inc. Project) (the "Series A Bonds ") in connection with a partial refunding of the Series A Bonds, and certain costs of issuance of the Series 1983 Notes, the Series 1983 Notes in an aggregate principal amount not to exceed $7,800,000 are hereby authorized to be issued, sold and delivered. Section 4. Terms for the Series 1983 Notes. The Series 1983 Notes shall be dated July 15, 1983, shall be issuable as fully registered notes, shall bear interest at eleven percent (11 %) per annum, payable on the fifteenth (15th) day of each month commencing September 15, 1983 and shall mature on July 15, 1988. The Series 1983 Notes shall be payable with respect to principal, premium, if any, and interest in any coin or currency of the United States of American which at the time of payment is legal tender for the payment of public and private debts. Interest on the Series 1983 Notes shall be payable by check or draft of American National Bank and Trust Company, South Bend, Indiana, as trustee (the "Trustee ") and principal and premium, if any, shall be payable only upon presentation and surrender of each Series 1983 Note at the principal office of the Trustee. -2- The Series 1983 Notes are issuable as fully registered notes without coupons in the denominataion of $3,000 and any larger denomination which is an integral of $1,000. Subject to the limitations and upon payment of the charges provided in the Indenture of Trust approved in Section 5 hereof (the "Indenture ") registered Series 1983 Notes may be exchanged for like aggregate principal amount of registered Series 1983 Notes of other authorized denominations. The Series 1983 Notes are callable for redemption in the event (a) the Company shall exercise its option to prepay the Promissory Note pursuant to the Loan Agreement, (b) in the event of damage to or destruction of the Project or condemnation of the Project, or (c) the Company becomes obligated to prepay the Promissory Note pursuant to the Loan Agreement upon a Determination of Taxability (as defined in the Loan Agreement). If called for redemption as a result of the event referred to in clause (a) above, the Series 1983 Notes shall be subject to redemption by the Issuer on any Note Payment Date (as defined in the Loan Agreement) in whole or in part in integral multiples of $1,000 (less than all of the Series 1983 Notes to be selected by lot in such manner as the Trustee may designate) at a redemption price of 101% of the principal amount thereof plus accrued interest to the redemption date. If called for redemption as a result of the events described in clause (b) above, the Series 1983 Notes outstanding on the date of the occurrence of such damage to, destruction or condemnation of the Project shall be subject to redemption on the earliest practicable date thereafter selected by the Issuer. The redemption price for each such Series 1983 Note in such event shall be 100% of the principal amount thereof plus accrued interest to the date of redemption. If called for redemption due to the event described in clause (c) above, the Series 1983 Notes outstanding on the date of the occurrence of the Determination of Taxability shall be called for redemption on the earliest practicable date thereafter selected by the Trustee. The redemption price for each such Series 1983 Note in such event shall be 100% of the principal amount thereof plus accrued interest to the date of redemption plus a premium equal to one (1) year's interest borne by such Series 1983 Note for each twelve (12) month period or part thereof elapsed between the date of the occurrence of the Event of Taxability (as defined in the Loan Agreement) and the date of redemption. In addition, the Company shall deposit with the Trustee an amount equal to one (1) year's interest borne by each Series 1983 Note not outstanding at the time of redemption due to the occurrence of a Determination of Taxability but which was Outstanding at the time of the Event of Taxability for each twelve (12) month period or part thereof elapsed between the Event of Taxability and the date such Series 1983 Notes were paid or redeemed. Anyone who was an owner of a Series 1983 Note both at or after the time of the Event of Taxability and at or before the maturity or redemption thereof prior to the aforesaid redemption date shall, upon presentation to the Trustee in writing of proof satisfactory to the Trustee that he was a holder of such Series 1983 Note at such times, be entitled to a pro rata amount, based upon the period he was an owner of such Series 1983 Note, of the premium so deposited. Any moneys deposited and held by the Trustee for the benefit of claimants, if any, for five years after the date upon which so deposited shall be repaid to the Company, and thereupon and thereafter no claimant shall have any rights to or in respect of such moneys. The Series 1983 Notes shall be executed on behalf of the City with the facsimile signature of the Mayor and attested with the facsimile signature of the City Clerk and the corporate seal -3- of the City or a facsimile thereof shall be impressed or imprinted thereon. All such facsimile signatures and the reproduction of the official seal of the City on the Series 1983 Notes shall have the same force and effect as if said officials had manually signed the Series 1983 Notes and the official seal of the City had been impressed on the Series 1983 Notes. In case any officer of the City whose signature shall appear on any Series 1983 Note shall cease to be such officer before such Series 1983 Note is issued and delivered, such signature shall nevertheless be valid and sufficient for all purposes, and the Series 1983 Note may be issued and delivered as though such officer had remained in office until such issuance and delivery. The Series 1983 Notes will be executed and delivered on or before August 31, 1983. The Series 1983 Notes are limited obligations of the City payable solely from payments of principal, premium, if any, and interest made by the Company on the Promissory Note dated June 15, 1983 executed and delivered by the Company to the Issuer concurrently with the sale and delivery, by the Issuer, of the Series 1983 Notes, except to the extent that the principal of, premium, if any, and interest on the Series 1983 Notes may be paid out of money attributable to Series 1983 Note proceeds or from temporary investments, or from other moneys, if any, accruing to the Trustee for the benefit of the noteholders. The Series 1983 Notes do not and shall never constitute an indebtedness of, or a charge against the general credit or taxing power of the City. By the Indenture the City will assign or pledge to the Trustee the City's rights under the Loan Agreement, including the right of the City to receive payments under the Promissory Note, all as security for the payment of the Series 1983 Notes. Section 5. Indenture. In order to secure the payment of the principal of and interest on the Series 1983 Notes, the Mayor and City Clerk shall execute, acknowledge and deliver in the name and on behalf of the City, an Indenture of Trust, from the City to the Trustee, dated as of July 15, 1983, herein identified as and called the Indenture, in substantially the form submitted to the Common Council and before the meeting at which this Note Ordinance is adopted, which is hereby approved in all respects. Section 6. Loan Agreement. In order to provide for the loan of the proceeds of sale of the Series 1983 Notes to the Company and to provide for the payment by the Company of an amount sufficient to pay the principal of, premium, if any, and interest on the Series 1983 Notes, the Mayor and City Clerk shall execute, acknowledge and deliver in the name and on behalf of the City the Loan Agreement, between the City and the Company, dated as of July 15, 1983, in substantially the form submitted to this Common Council and before the meeting at which this Note Ordinance is adopted, which is hereby approved in all respects. Section 7. Acceptance of Promissory Note. In connection with the Series 1983 Notes, the City accepts as security for such Series 1983 Notes, the Promissory Note of the Company. The Promissory Note shall be in substantially the form before the meeting at which this Note Ordinance is adopted and shall be secured by a mortgage on the Project from the Company to the Trustee which mortgage shall be in substantially the form before the meeting at which this Note Ordinance is adopted. Section 8. The Series 1983 Notes shall be sold to I. M. Simon & Company, Clayton, Missouri, pursuant to a Purchase Contract to be dated the date of issuance of the Series 1983 Notes, in the form before the meeting of the Common Council at which this Note Ordinance is adopted at a price of not less than 950 of the principal amount thereof. The Mayor and City Clerk -4- are authorized to execute and deliver such Purchase Contract in substantially the form before the meeting at which this Note Ordinance is adopted. Section 9. The distribution of a Preliminary Official Statement in the form presented to the meeting at which this Note Ordinance is adopted and the distribution of a final Official Statement in substantially the form of the Preliminary Official Statement, with such changes and modifications therein, as shall be approved by the Mayor, with an appendix containing information furnished by the Company, is hereby approved, and the Mayor is hereby authorized to execute such final Official Statement. Section 10. General. The Mayor and City Clerk by this execution of this Loan Agreement, Indenture and Series 1983 Notes may approve any changes therein without further approval of the Commission or the Common Council so long as such changes do not affect the terms of the Series 1983 Notes as set forth in Section 4 hereof. The Mayor, City Clerk and City Controller be and they are each hereby authorized and directed, in the name of 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 any of them, to be necessary or desirable in order to carry out the purposes of this Note Ordinance. Section 11. The Mayor, City Clerk or City Controller is authorized on behalf of the City to execute and deliver a certificate as to the reasonable expectations of the City regarding the amount and use of the proceeds of the Series 1983 Notes, such certificate to be based upon representations of the Company. Section 12. Effective Date. in full force and effect from and as provided by law. 1s1 READING 7 — //— e3 PUBLIC HEARING ;7- 423"- 2nd READING NOT APPROVED 3 —5 REFERRED PASSED This Note Ordinance shall be after its passage and approval Me er Officer he Common Council Toutmittu Irpnrt con toe Tummun floundt of t4t Ttv of 6um4 Arnd: Your Committee OF THE WHOLE to whom was referred 71 -83 A BILL AUTHORIZING THE ISSUANCE AND SALE OF ECONOMIC DEVELOPMENT REVENUE NOTES OF THE CITY OF SOUTH BEND, INDIANA, FOR THE PURPOSE OF MAKING A LOAN TO BRETHREN CARE OF SOUTH BEND, INC., IN ORDER TO FINANCE CERTAIN COSTS OF ACQUISITION AND CONSTRUCTION OF CERTAIN ECONOMIC DEVELOPMENT FACILITIES; AUTHORIZING EXECUTION OF A LOAN AGREEMENT; PROVIDING FOR THE DELIVERY OF A PROMISSORY NOTE AND THE ASSIGNMENT THEREOF AS SECURITY FOR SAID NOTES; AND AUTHORIZING AN INDENTURE OF TRUST. Respectfully. report that they have examined the matter and that in their opinion THIS BILL SHOULD BE RECOMMENDED TO THE COUNCIL FAVORABLE., AS AMENDED: BY SUBSTITUTION OF A NEW BILL RAY ZIELINSKI Chairman FREN PRESS PUBLISHING CO. Economic Development Commission Jerry Hammes, President Walter Szymkowiak, Vice President Walter A. Mucha, Secretary Kenneth P. Fedder, Counsel Alice Neddo, Asst. Sec. July 6, 1983 CITY of SOUTH BEND ROGER O. PARENT, Mayor Members of the South Bend Common Council County -City Building South Bend, IN 4 -601 Alice Neddo Staff Administrator 230 W. Jefferson Boulevard P.O. Box 1677 South Bend, Indiana 46634 -1677 Re: Brethren Care of South Bend, Inc. - Proposed Ordinance Dear Councilmen: (219) 234 -0051 The South Bend Economic Development Commission, on July 1, 1983, by resolution, approved the proposed financing of the application of Brethren Care of South Bend, Inc. to refinance the construction indebtedness to fund a debt service reserve fund, to pay certain principal of and interest on the original issued bonds. The original issued Industrial Revenue Bond is presently in a default situation and, to improve and alleviate the financial deficiencies, the existing bond application was approved by the Economic Development Commission. The bond application is for a principal amount not to exceed $7,800,000.00. By issuing and approving this bond, it would permit the revitalization of the project, preserve the existing job opportunities and continue to be a benefit to the welfare of the City 94 South Bend. The present facility consists of 254 apartment unit /and an 80 -bed health care facility. Res46ctful DDE R FILEU I In V161 S OFFICE KPF : ram -' U!_ ' CReMRK,��mm0o