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HomeMy WebLinkAbout2013-03-20 Redev Authority MinutesSOUTH BEND REDEVELOPMENT AUTHORITY REGULAR MEETING March 20, 2013 1400 County -City Building 10:30 a.m. 227 West Jefferson Boulevard Presiding: Carolyn Pfotenhauer South Bend, IN 46601 The March 20, 2013 Regular Meeting of the Redevelopment Authority was called to order at 10:30 a.m. by its Vice - President, Carolyn Pfotenhauer. There was a quorum present. 1. ROLL CALL Members Present: Ms. Carolyn V. Pfotenhauer, Vice President Mr. Jose Alvarez, Secretary Member Absent: Mr. Ray Thomas, President Redevelopment Staff: Mr. Don Inks, Director of Economic Development Mrs. Jenny Hullinger, Recording Secretary David Relos Lawrence Meteiver, Legal Council Others: Randy Rampola, Faegre Baker Daniels 2. APPROVAL OF MINUTES a. Approval of the minutes of the Annual Organization meeting of January 16, 2013 and the minutes of the Special meeting of January 16, 2013 Upon a motion by Jose Alvarez, and seconded by Carolyn Pfotenhauer, the Authority approved the minutes of the Annual Organizational and Special meeting minutes of January 16, 2013. 3. NEW BUSINESS a. Authority approval of Resolution No. 181 authorizing the transfer of real property to the Redevelopment Commission Mr. Inks said the Authority purchases bonds so that property can be purchased and then leased to the Redevelopment Commission. The Commission uses resources that are available to them to make the lease payment which make the bond payments. At the end of the leases with the Redevelopment Commission the property is then transferred from the Redevelopment Authority to the Commission. We had issued bonds for the Blackthorn Golf Course and other improvements in the area. The Corporate Office Park and the Blackthorn Golf Course were properties that were being leased to the Redevelopment Commission. The Redevelopment Authority March 20, 2013 Meeting Minutes David Relos said we researched the area at Blackthorn to determine which properties were still in the Redevelopment Authority's name that should be transferred to the Redevelopment Commission. Resolution No. 181 transfers those properties to the Redevelopment Commission. There is a matching resolution for the Commission to accept the properties. Larry Meteiver will prepare deeds for the properties. Title work has been done on all the properties to make sure everything is correct. The properties will then be ready to be developed. Upon a motion by Mr. Alvarez, seconded by Ms. Pfotenhauer the Authority approved Resolution No. 181 authorizing the transfer of real property to the Redevelopment Commission. b. Authority approval of Resolution No. 182 authorizing the issuance of the South Bend Redevelopment Authority Lease Rental Revenue Refunding Bonds, Series 2013 (Century Center 2008 Project) Mr. Inks said because of the availability of lower interest rates we have the opportunity to save money on our bond. The term will remain the same, maturity is still May I, 2028. The payments will go down about $25,000 annually. The total cash savings over the remaining term of the bond is about $346,000. The net present value of that cash savings is about $284,000. The City Controller has been working on this and has authorized proceedings. Mr. Rampola said Resolution No. 182 authorizes the refunding of the bonds and approval of all of the officers of the Authority entering into all document to do the refunding. The Trust Indenture is in place with U.S. Bank as trustee. We will simply do an amendment to the trust indenture, have the bank sign it, the bonds will be sold in the market. The purchase agreement will need to be signed and then a lease addendum will be prepared after the bond sale after we know exactly what the debt service schedule is we will reduce the lease rental so that will reflect the savings. This resolution authorizes the lease addendum that you sign once it is finalized. The interest rates have been low for 6 -8 years, but when these bonds were sold in 2008 rates were around 4.5 to 5.625 percent. Rates now are 2.74, so about 1.5 to 3.5% lower. The savings are net after the cost of the refinancing. When we look at refunding we want to save 3 %. These bonds were secured, in part, by a cash reserve. The financial advisor and the underwriter are looking at replacing the cash reserve with a surety bond. The bond insurance companies are coming back into the market after they all went bankrupt. If we can get that surety we won't have to use the cash, so the savings will actually be greater. Mr. Alvarez asked if there are any fees. Mr. Rampola said there is an assigned counsel fee for his work, a financial advisor fee for the work Crowe Horvath does, and the underwriter will receive a fee for selling the bonds. All of those fees are 2 HAW PDATA AUTHORTY\032013.MIN.DOC The Redevelopment Authority March 20, 2013 Meeting Minutes locked in and the net savings is determined after that. There is around $90,000 in costs. The other cost issuance would be the rating agency, which around $15,000 to 18,000. Mr. Alvarez asked what the City's rating is, Mr. Rampola said the City is rated AA. The bonds are payable solely from an allocation from the Hotel - Motel tax. They are not payable from TIF or property tax levy. The Hotel -Motel Tax Board in 2008 pledged annually up to $600,000 to pay these bonds. We would anticipate that pledge to continue. The savings would be every year, so they are pledging enough to exceed the amount so we would only use what is needed to pay the debt service. The rest is the coverage. We anticipate the Hotel -Motel Tax Board to pass a resolution to continue the pledge that they had in 2008. C. Upon a motion by Ms. Pfotenhauer, seconded by Mr. Alvarez, the Authority approved Authority approval of Resolution No. 182 authorizing the issuance of the South Bend Redevelopment Authority Lease Rental Revenue Refunding Bonds, Series 2013 (Century Center 2008 Project). 4. NEXT MEETING DATE: April 3, 2013 5. ADJOURNMENT There being no further business to come before the Redevelopment Authority the meeting was adjourned at 10:42 a.m. Carolyn Pfoten uer,Vi - dent H9WPDATA AAUTIIORTI'V032013.MIN.DOC d -I�s,= ectvr Scott Ford, Executive Director