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HomeMy WebLinkAboutAppropriating $500,000 Community Development Block Grant FundsORDINANCE No. 7174 -83 Passed by the Common Council of the City of South Bend, Indiana Attest: W- ■ ' • City Clerk IRENE K. GAMMON Presented by me to the Mayor of the City of South Bend, Indiana March 15, 19 83 Approved and signed by me--1 of Common Council IRENE K. GAMMON in 0 3 c A�6-�-1 1-1�� Clerk BILL NO. ORDINANCE NO. 717V -S_l AN ORDINANCE APPROPRIATING $500,000 FROM COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS TO SUPPLEMENT THE ECONOMIC DEVELOPMENT CAPITAL FUND FOR PURPOSES OF SHORT -TERM CONSTRUCTION LOANS TO BE ADMINISTERED BY THE CITY OF SOUTH BEND, INDIANA, THROUGH ITS DIVISION OF COMMUNITY DEVELOPMENT STATEMENT OF PURPOSE AND INTENT: The government of the City of South Bend, Indiana, in creative' and affirmative partnership with its residents, private enterprise and the Federal Government, is committed to the goal of expanding economic opportunities. To further this goal, the Community Development Block Grant Program contains the specific objective of alleviating physical and economic distress through the stimulation of private investment. The City believes that scarce federal funds should be used whenever possible to encourage private investment in the development and expansion of local economic enterprises; in the retention and ex- pansion of existing local economic enterprises; and in the creation of new economic enterprises. Therefore, the Division of Community Devel- opment intends to supplement the Economic Development Capital Fund which will assist economic enterprises through a variety of mechanisms, including, but not limited to, direct loans, equity investments, work- ing capital, loan guarantees, interest subsidies, and injection of seed funds. The funds will be used city -wide with an emphasis placed on the core area of the City, including NSA's, NCA's Studebaker Corridor, the Central Business District (CBD) and fringe, inner city industrial complexes, and inner city neighborhood commercial strips. NOW, THEREFORE, BE IT ORDAINED by the Common Council of the City of South Bend, Indiana, as follows: SECTION I. The sum of $500,000 is hereby appropriated for program year starting July 7, 1982 (Program Year 1982), to be admin- istered by the Division of Community Development, as set forth below: PROGRAM YEAR CD83-1007 COMMUNITY DEVELOPMENT PROGRAM Purpose Economic Development Capital Fund Amount $500,000 SECTION II. The City, through its Board of Public Works, may contract with the South Bend Development Corporation for use of the funds appropriated above only in connection with a project which assists in the retention, relocation, and expansion of a manufacturing firm located in the East Bank Development Area known currently as South Bend Screw Products, Inc. The contract shall provide that any of the above funds not obligated or involved in any negotiations by the South Bend Development Corporation for such purposes on April 1, 1983, shall be immediately repaid to the City, pursuant to the terms of the contract. SECTION III. This appropriation is subject to the follow- ing conditions: that a lower interest rate loan in the amount of $500,000 to be used for the construction of a facility in Phase IV of the Airport Industrial Park will be made to Kawneer, Inc. The loan -2- will be an interim or construction loan for a period not to exceed nine (9) months. The loan will be secured by real property and cer- tain fixed assets; and, a firm takeout of the interim loan, satis- factory to the South Bend Development Corporation, such as a letter of credit or legally binding commitment from a commercial lending institution, shall be in place prior to drawing from the interim loan. SECTION IV. This ordinance shall be in full force and effect from and after its passage by the Common Council and approval by the Mayor. ��_ �� - . - . - `.? TED 19 CL[611 OFFICE 1st READING PUBLIC HEARINGS' /y -9-3 Irene Gammon 2nd READING -4- 1Y -f-3 CITY CLERK, SOUTH BEND, IND. NOT APPROVED REFERRED PASSED 3 -/ '�� �� j d'o Jon R. Hunt Executive Director CITY ®I SOUTH BEND ROGER O. PARENT, Mayor DEPARTMENT OF DEVELOPMENT 1200 COUNTY -CITY BUILDING • SOUTH BEND, INDIANA 46601 • (219) 284.9371 South Bend Common Council 4th Floor County -City Building South Bend, Indiana 46601 Dear Members of the Council: February 24, 1983 The attached ordinance would appropriate $500,000 from the City's 1982 Community Development Block Grant to supplement the existing Economic Development Capital Fund. Several months ago we discussed the possibility of using temporary balances in the City's CDBG letter of credit to make short -term or construction loans for nine (9) to twelve (12) months. By using our temporary balances, the City will be able to use CDBG funds twice - -as part of an economic development incentive package; and secondly, for the originally budgeted purposes, e.g., street improvements, housing rehabilitation, and administration. The proposed appropriation of $500,000 would be used by the South Bend Development Corporation (SBDC) to make a short -term, lower interest rate construction loan for South Bend Screw Products, Inc. In addition to several other incentives this loan would enable the firm to remain in South Bend, relocate to the Airport Industrial Park, and expand its current operations. Terms and conditions for the.loan agreement are being developed, but certain basic conditions will be required: a lower interest rate loan not to exceed $500,000 would be made to the parent com- pany, Kawneer, Inc., for the purpose of constructing a manufacturing facility in Phase IV of the Airport Industrial Park. The loan will be a construction loan for a period not to exceed nine (9) months. The loan will be secured by real property and certain fixed assets. A firm financial takeout for the interim loan, satisfactory to the SBDC, such as a letter of credit or legally binding commitment from a commercial lending institution will have to be in place prior to drawing on the construction loan. The funds will be drawn on an as needed basis, i.e., construction draws according to HUD regula- tions. Redevelopment Community Development Economic Development Ann Kolata Colleen Rosenfeld Kevin Horton 284 -9371 284 -9335 284 -9371 Housing Kathryn Baumgartner 284 -9475 Tommitln Irvurt Xv t4t Tommon (10undt of tot Ttly of #out# Nrud: Your Committee OF THE WHOLE to whom was referred BILL NO. 19 -83 A BILL APPROPRIATING $500,000 FROM THE COMMUNITY DEVELOPMENT BLOCK GRANT FUND TO SUPPLEMENT THE ECONOMIC DEVELOPMENT CAPITAL FUND FOR PURPOSES OF SHORT —TERM CONSTRUCTION LOANS TO BE ADMINISTERED BY THE CITY OF SOUTH BEND, INDIANA, THROUGH ITS DIVISION OF COMMUNITY DEVELOPMENT. Respectfully report that they have examined the matter and that in their opinion THIS BILL SHOULD BE RECOMMENDED TO THE COUNCIL FAVORABLE, AS AMENDED: Change Program Year from 82 -1005 to 83 -1007 RAYMOND ZIELINSKI Chairman FREE PRESS PUBLISHING CO.