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HomeMy WebLinkAbout1997-05-02 Redevelopment Authority Minutesa~ ~^ SOUTH BEND REDEVELOPMENT AUTHORITY • REGULAR MEETING May 2, 1997 1308 County -City Building 3:30 p.m. 227 W. Jefferson Boulevard Presiding: Andre B. Gammage South Bend, Indiana 46601 President The May 2, 1997 Regular Meeting of the Redevelopment Authority was called to order at 3:30 p.m. by its President, Andre Gammage. There was a quorum present. 1. ROLL CALL Members Present: Mr. Andre B. Gammage, President Mr. Eugene Ladewski, Secretary Redevelopment Staff: Mrs. Ann Kolata, Director Ms. Vangelean Binion, Recording Secretary Members Absent: Ms. Carolyn Pfotenhauer, Vice President • Others Mr. Randy Rompola, Baker & Daniels 2. APPROVAL OF MINUTES a. Approval of Minutes of the Regular Meeting of Friday, April 18, 1997. Upon a motion by Mr. Gammage, seconded by Mr. Ladewski and carried, the Authority approved the Minutes of the Regular Meeting of Friday, April 18, 1997. 3. OLD BUSINESS a. Authority approval requested for Utility Easement in favor of Indiana Bell Telephone Company. Ms. Kolata noted that this is for a Utility Easement located out by Blackthorn Golf Course and it is on land at the very edge of the Blackthorn golf course property. The interchange being constructed between the U.S. 31 by-pass and Nimtz Parkway requires that some of their fiber optic lines and equipment be moved. This action will cancel out the old easement and list the new easement location. Upon a motion by Mr. Ladewski, seconded by Mr. Gammage and carried, the a Authority approved the Utility Easement in favor of Indiana Bell Telephone Company. ': South Bend Redevelopment Authority • Regular Meeting -May 2, 1997 4. NEW BUSINESS a. Authority approval requested for Resolution No. 113, a Resolution of the South Bend Redevelopment Authority establishing its intent to issue Redevelopment Authority lease rental revenue bonds and that certain preliminary costs be reimbursed from the proceeds of said bonds. Ms. Kolata noted that this resolution is related to the transformation of the Morris Civic Auditorium to the Morris Performing Arts Center. This action will begin the bond process. Ms. Kolata noted that there are three major components to the project, the stage house, the auditorium and the Palais Royale Ballroom. The first phase includes the demolition of the current stage at the Morris. The stage is very narrow, it is only 27 feet from the curtain to the back wall with very little space on either side of it. She noted that the plan is to totally demolish the old stage and build a new stage house. The new stage house will be - approximately 50 feet in depth. The new stage house will be larger, taller and deeper in depth. There will be two loading docks for semi-trucks and a van access • drive-up. This will be a multi-story structure with dressing rooms, rehearsal space, storage areas and support spaces. This also includes theatrical rigging and equipment. The next phase is the auditorium itself. The heating and cooling system in the auditorium will be restructured in its entirety. The rest of the auditorium will have cosmetic changes which will include architectural painting, historical painting, improvements to lighting and new seating. There will be improved concession areas and restrooms. All public areas will be upgraded and improved. The third phase is the Palais Royale Ballroom. She noted that the Redevelopment Commission is currently leasing the Palais Royale from the Redevelopment Authority and there is an existing bond issue on the building itself. This resolution won't replace the existing lease but will allow remodeling of the ballroom, as part of the new project. The project includes renovation of the grand stairway entrance to the ballroom, located on Colfax Street. Elevator access will be provided to the ballroom from Colfax Street, and the marquee on Colfax Street will be installed. The ballroom's heating system, electrical fixtures and lighting fixtures and the floors will be reconstructed. The entire ballroom will be repainted. The kitchen will be designed to operate as a catering facility to give the Morris Performing Arts Center the ability to operate as an events center to hold receptions, conferences and other events of this nature. The balcony area in the • Palais Royale, will become office space with at least one conference room. 2 South Bend Redevelopment Authority • Regular Meeting -May 2, 1997 There have been discussions about connections between the Palais Royale and the Morris Auditorium so that the buildings can operate as one center. She noted that there will also be construction in the basement of the Palais Royale as part of the kitchen's storage and. food preparation area. There's a service elevator between the basement and the ballroom that will be used to bring up prepared food. The heating equipment for the Palais and the Morris will also be located in the. basement of the Palais. The existing retail shops in this area will not be affected by the construction and reconstruction process. Ms. Kolata noted that there has been a lot of participation from members in the community. The project's construction cost was estimated to be approximately $12.9 million. Currently the~Entertainment District Board has about $5 million in pledges and they've collected about $1.6 million of that already. We expect that the size of the bond issue will be reduced by the amount of cash on hand at the time the bond is actually issued. Later contributions will be used to make bond payments. This resolution is similar to past resolutions that have been considered by the Redevelopment Commission and the Redevelopment Authority with respect to lease purchase financing. However it is different because it provides • for an amended and restated lease which continues the obligation under the existing lease used to purchase the Palais. There is a lease rental provision listed in this resolution that relates solely to the existing outstanding bond and there are provisions that list the new financing, new project and new project description. The two parties to the lease are the Redevelopment Commission and the Redevelopment Authority. The lease is set to not exceed 20 years with respect to the new project being presented today. The existing Palais Royale lease, which .continues as part of the new lease, expires in 2004 when the previous bond issue is paid off. Under the new project, the lease could continue up to 20 years. Once the bonds are sold, the lease rental will be reduced to match the principal and interest requirements on the bonds. He noted that $695,000 is the. maximum semi-annual lease rental amount. With today's interest rates that amount would be considerably less. He noted that the existing lease rental for the Palais Royale is $98,500 semi-annually and will continue through 2004. At that time the requirement will be released and what would be left is the requirement for this new project. Earlier today the Redevelopment Commission adopted a resolution approving the amended and restated lease and set a public hearing on the lease for 10:00 a.m. on June 6, 1997. Ms. Kolata noted that the current Palais Royale bond issue is being paid from tax increment. The new bond issue will be paid from the pledges and the County • 3 South Bend Redevelopment Authority • Regular Meeting -May 2, 1997 Economic Development Income Tax. There will be no property taxes used to pay for the new bond issue. The bond will include a provision for a general obligation backup but that is for marketing purposes only, there will be sufficient funds from the EDIT tax to pay for the bond issue without levying a tax. It's anticipated that the bond won't be sold until. late 1997 or early 1998 to allow for receipt of the construction bids. Randy Rompola stated that with respect to the source of funds for the bonds, the financial advisor shows that it is possible to pay for the bond solely from EDIT taxes if pledges come in less than what is expected. The coverage is about 170% without the pledges; but the intention of Redevelopment is to use the pledges for lease payments and to make-up the balance with EDIT. Mrs. Kolata noted that cash-on-hand will be used to reduce the bond size when the bond is finally structured. Upon a motion by Mr. Ladewski, seconded by Mr. Gammage and carried, the Authority adopted Resolution No. 113, a Resolution of the South Bend Redevelopment Authority establishing .its intent to issue Redevelopment Authority lease rental revenue bonds and that certain preliminary costs be reimbursed from the proceeds of said bonds. • b. Authority approval requested for Resolution No. 114, a Resolution of the South Bend Redevelopment Authority approving an amended and restated lease for certain land and public improvements between the South Bend Redevelopment Authority, as lessor, and the South Bend Redevelopment Commission, as lessee, approving preliminary plans, specifications and cost estimates for the project and other related matters. Randy Rompola of Baker & Daniels stated that Resolution No. 113 established the intent of the Redevelopment Authority to issue tax exempt bonds. The Resolution No. 114 approves an amended and restated lease. This is an amended and restated lease because there was a financing in 1992, whereby the Redevelopment Authority acquired titled to the Palais Royale building. Due to that fact, there is currently a lease financing with respect to the Palais Royale. The Morris Civic, the real estate and all the improvements to the Morris Civic and to part of the Palais Royale which becomes the Morris Performing Arts Center are added to that existing lease. He noted that the lease terms and the maximum lease rental are set at twenty years with semi-annual lease payments of $695,000. Once the bonds are issued a lease addendum will be presented to reduce the term of the lease to match the term of the bonds and the maximum lease rental will be reduced to match the debt service on the bonds. He noted that the Palais Royale lease is listed in the amended and 4 South Bend Redevelopment Authority • Regular Meeting -May 2, 1997 restated lease and will expire in 2004. Upon a motion by Mr. Gammage ,seconded by Mr. Ladewski and carried, the Authority adopted Resolution No. 114, a Resolution of the South Bend Redevelopment Authority approving an amended and restated lease for certain land and public improvements between the South Bend Redevelopment Authority, as lessor, and the South Bend Redevelopment Commission, as lessee, approving preliminary plans, specifications and cost estimated for the project and other related matters. c. Authority approval requested for Agreement and Partial Release of Easement with Amoco Oil Company. Ms. Kolata noted that there is an Amoco gas pipeline that runs throughout the Blackthorn area. Amoco Oil Company proposes to release a blanket easement in favor of a specific 50 foot wide easement. Upon a motion by Mr. Ladewski, seconded by Mr. Gammage and carried, the Authority approved the Agreement and Partial Release of Easement with Amoco • Oil Company. d. Authority approval requested for proposal from Baker & Daniels to serve as bond counsel on the Morris Performing Arts Center project. Ms. Kolata stated that the staff recommends hiring Baker & Daniels to serve as bond counsel on the Morris Performing Arts Center project. She noted that they will bill on the actual time and expenses spent. The proposal has a not to exceed amount of $35,000 although they reserve the right to reexamine this fee if an objecting petition is filed. The staff recommends accepting the proposal. Upon a motion by Mr. Gammage, seconded by Mr. Ladewski and carried, the Authority approved the proposal from Baker & Daniels to serve as bond counsel on the Morris Performing Arts Center project. e. Authority approval requested for proposal from Crowe Chizek to serve as financial consultant on the Morris Performing Arts Center project. Ms. Kolata stated that the proposal from Crowe Chizek has a not to exceed amount of $17,500 to serve as financial consultant on the Morris Performing Arts Center project. The staff recommends accepting the proposal. • 5 South Bend Redevelopment Authority Regular Meeting -May 2, 1997 Upon a motion by Mr. Gammage, seconded by Mr. Ladewski and carried, the Authority approved the proposal from Crowe Chizek to serve as financial consultant on the Morris Performing Arts Center project. 5. APPROVAL OF CLAIMS Claim submitted for approval on May 2, 1997 HALL OF FAME PROJECT Crowe Chizek Operation & Reserve Fund $ 25,136.25 Upon a motion by Mr. Ladewski, seconded by Mr. Gammage and carried, the Authority approved the Claim submitted for approval. 7. NEXT MEETING DATE: The next meeting of the Redevelopment Authority is scheduled for Friday, May 16, 1997 at 3:30 p.m. 8. ADJOURNMENT There being no further business to come before the Redevelopment Authority, Mr. Ladewski made a motion that the meeting be adjourned. Mr. Gammage seconded the motion and the meeting was adjourned at 4:05 p.m. Andre B. Gammage, Presi ent Arm E. Kolata, Director •