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HomeMy WebLinkAboutCreating an Industrial Development FundORDINANCE No. 6969 -81 Passed by the Common Council of the City of South Bend, Indiana October 9 19 81 IRENE K. GAMMON Presented by me to the Mayor of the City of South Bend, Indiana October 12, �9 81 4�4� K- City Clerk of Common Council IRENE K. GAMMON Approved and signed by me 1 1 -a, 19 C City Clerk ORDINANCE NO. t� � 9 - 2, 1 AN ORDINANCE CREATING AN INDUSTRIAL DEVELOPMENT FUND STATEMENT OF PURPOSE AND INTENT: The City of South Bend has entered into creative and affirmative partnership with St. Joseph County and with business and labor in the community to take action to encourage business and industry currently located in the South Bend area to maintain its facilities here and also to take all necessary and proper action to facilitate the location at underutilized sites in South Bend by business and industry which would significantly improve the economic climate of our area, increase the tax base, provide employment opportunities, and serve as a magnet for other business and industry to locate here. New Energy Company of Indiana has expressed a desire to choose South Bend as the location for construction of a One Hundred Fifty One Million Dollar ($151,000,000.00) ethanol plant. However, certain conditions present at the proposed site in southwest South Bend require additional initial expenditures which, if not remedied in an economical manner, will preclude New Energy's choice of South Bend for its facility. Members of the business and labor community desire to induce New Energy to locate in South Bend by pledging to donate funds to help offset New Energy's initial expenditures required to remedy con- ditions unique to the southwest South Bend site. These pledges by the South Bend business and labor community represent part of a co- ordinated effort by the public and private sectors of the South Bend - St. Joseph County Community to induce New Energy to locate here. In order to establish an initial vehicle to receive and disperse funds so pledged, the City of South Bend, as coordinator of the public and private community effort, needs to establish a separate and dedicated fund. The creation of an Industrial Development Fund for purposes associated with industrial development is permitted by Indiana Code 36 -7 -13. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, THAT: SECTION I: There is hereby established within the accounts administered by the City Controller a special revolving fund to be entitled the Industrial Development Fund. SECTION II: (a) For purposes of this Ordinance, "improve" shall mean to construct, reconstruct, or repair public ways, sidewalks, sewers, drains, fences, or buildings, and to do all other things that would enhance the value of real property and make it more suitable to industrial use. (b) This fund may be used by the City to acquire by purchase, gift, or devise, to own, improve, maintain, sell, lease, convey, contract for, or otherwise deal in, real property for the development of industrial parks or industrial sites. (c) This fund may be used by the City in its exercise of powers enumerated in this Section in areas within five (5) miles outside of its corporate boundaries. (d) Monies may be transferred into this fund from both public and private sources, and the Council hereby accepts for deposit for the uses and purposes indicated any and all current and future donations. SECTION III: Monies may not be expended from this fund without the written approval of a majority of the Advisory Commission on Industrial Development, to be appointed by the Mayor pursuant to I.C. 36- 7 -13 -5. SECTION IV: This revolving fund shall be a continuing fund and donations deposited therein shall not revert to the general fund until all purposes for which this fund was established have been accomplished, at which time the balance remaining in the fund shall revert to the general fund. The Controller may invest any monies on deposit in the fund in such manner as he may deem appropriate, consistent with the laws of the State of Indiana. Interest or income earned from such investment shall be added to principal and retained in the fund for uses with other monies accumulated therein. SECTION V: Any funds donated to the City by private persons or entities for the purpose of inducing the location in South Bend of a major ethanol production facility shall be deposited in this fund and shall be maintained within this fund in a separate program to be known as the Ethanol Industrial Development Program. SECTION VI: This ordinance shall be in full force and effect from and after its passage by the Council and signature by the Mayor. Ist READING PUBLIC HEARING 2nd READING NOT APPROVED REFERRED PASSED I C3 16-9. 81 JU ^q_z t ember of the -2- c FILED IN CLERK'S OFFICE OCT 91981 Irene Gain Mn CR CLERK, Sootff BEND, PN3. DEVELOPMENT AGREEMENT BETWEEN THE CITY OF SOUTH BEND AND NEW ENERGY CORPORATION OF INDIANA, INC. .This Development Agreement, made and entered into this 9th day of October, 1981, by the City of South Bend, Indiana, a municipal corporation duly organized and existing pursuant to the laws of the State of Indiana (hereinafter referred to as "City ") and New Energy Corporation of Indiana, Inc., an Indiana corporation duly organized and existing pursuant to the laws of the State of Indiana (here- inafter referred to as "New Energy "), for purposes of the develop- ment of an ethanol production facility in the City of South Bend, Indiana. W I T N E S S E T H: WHEREAS, New Energy desires to construct an ethanol production facility on a site within the City described as follows (hereinafter referred to as "site "): A parcel of property in Section 16, Township 37 North, Range 2 East including the east one -half of the northeast one - quarter of the southwest one - quarter of Section 16 and the north one -half of the southeast one - quarter of Section 16, EXCEPTING therefrom a certain tract of land de- scribed as beginning at the northeast corner of the southwest quarter of said Section 16; thence south 33 feet, thence west 16 feet; thence south parallel with the east line of said Section 16 367 feet, thence west parallel with the center- line of said Section 16, to the east line of the right -of -way of the New Jersey, Indiana and Illinois Railroad Company as the same has been and is now located; thence northeasterly along the easterly line of said right -of -way to the east and west centerline of said Section 16; ,.,thence-along said --centerline of said Section 16 to the east line thereof and the place of begin - ning containing 27.017 acres, more or less, and conveyed to the New Jersey, Indiana and Illinois Railroad Company by deeds recorded respectively in Deed Record 164, Page 140 and Deed Record 193, Page 191, of the records of St. Joseph County, Indiana; WHEREAS, the proposed ethanol production facility would provide for a minimum investment on behalf of New Energy in the amount of One Hundred Fifty -One Million ($151,000,000.00) dollars resulting in a substantial increase in the tax base for the City and St. Joseph County; and WHEREAS, in excess of one thousand (1,000) jobs would be created as a direct result of the operation of the proposed ethanol pro- duction facility and as a result of the indirect economic benefits of the project to the City and St. Joseph County; and WHEREAS, New Energy has obtained an option on an alternative parcel of property located outside of St. Joseph County; and WHEREAS, the above described site within the City requires off- site and on -site improvements to make the site usable by New Energy; and WHEREAS, New Energy has received a loan guarantee from the United States Department of Energy for the construction of the pro- posed ethanol production facility contingent on fulfillment of con- ditions precedent, one of which is New Energy's final selection of a site for the proposed project; and WHEREAS, New Energy desires to make a final selection of the site for its proposed ethanol production facility by October 9, 1981; and WHEREAS, the City desires that New Energy select the described site within the City for the above described beneficial purposes rather than selecting its alternative site; and WHEREAS, the parties desire to enter into a legally binding agreement relating to certain commitments made by the City to New -2- Energy to induce New Energy to construct its proposed ethanol pro- duction facility within the City of South Bend. NOW THEREFORE, for and in consideration of the sum of Twenty- Five ($25.00) dollars, paid by the City and New Energy unto each other the receipt of which is hereby acknowledged, and for other good and valuable consideration and the mutual covenants and promises herein contained, the parties hereto agree as follows: 1. The City shall construct the below described off -site im- provements in the described areas surrounding and adjoining the site: A. The City will provide water service to the described site through the installation of needed mains and pipes for the use of New Energy. Water service will be furnished through the con- struction of a twelve (12) inch main connecting to the sixteen (16) inch main that currently exists in Olive Street. A twelve (12) inch main will be constructed in the Calvert Street right -of -way to the point where Calvert Street intersects with that portion of Maple Road to be constructed as described herein. B. The City will provide sanitary sewers to the site through the provision of a twenty (20) inch ductile iron pipe constructed from the existing manhole at the intersection of Olive and Calvert Streets. In Calvert Street the twenty (20) inch dutile iron pipe will be constructed westerly to the Calvert Street right - of -way for a total of twenty -seven hundred (2,700) lineal feet to the site. In the course of the construction of the sanitary sewers as described herein, needed backfill will be provided and dewatering will take place as required. C. The City will construct a thirty -six (36) inch storm sewer in new Maple Road to collect water intercepted by or con- -3- tributed from new Maple Road. It will be constructed from State Road 23 northerly to the intersection of the new Maple Road and Calvert Street. A twenty -four (24) inch storm sewer will be con- structed under Calvert Street along with the necessary inlets to pick up any water falling on or intercepted by Calvert Street. This storm sewer will be constructed to drain westerly to the point of the Calvert Street intersection with new Maple Road.. A forty -eight (48) inch storm sewer will be constructed along the future Calvert Street right -of -way to and under the New Jersey, Indiana and Illinois railroad to a storm retention lagoon. The construction of an outlet structure associated with the retention lagoon will maintain a maximum rate of discharge equal to that which could be expected before the development was initiated. D. Upon the installation of all needed utilities, the City will reconstruct Calvert Street from Olive to the new Maple Road, a total length of approximately twenty -seven hundred (2,700) lineal feet. Calvert Street will be reconstructed to the standards of the City for collector streets, i.e., forty (40) feet back -to -back of curb with an integral curb and will be made of ten (10) inch plain concrete pavement. Demucking as needed to permit the construction will be accomplished. The City will apply for funds from the State of Indiana for the purpose of the reconstruction described herein. Should State funds not be made available to the City for this purpose or should the State make funds available to pay only ,a portion of the cost of reconstruction, the cost of reconstruction or, in the case of receipt of partial funding from the State, the difference between the amount received in State funds and the cost of reconstruction shall be paid by the City. The Common Council of the City shall pass a resolution on October 9, 1981 authorizing the City to apply for State funds. E. Traffic signals will be constructed at the intersection -4- of State Road 23 and new Maple Road and at the intersection of State Road 23 and Olive. The City will apply for State funds for the construction of the traffic signals. Should State funds not be made available to the City for this purpose or should the State make funds available to pay only a portion of the cost of construction, the cost of construction or, in the case of receipt of partial funding from the State, the difference between the amount received in State funds and the costs of construction shall be paid by the City. The Common Council of the City shall pass a resolution on October 9, 1981, authorizing the City to apply for State funds. F. The above described off -site improvements to be con- structed by the City shall be initiated and completed consistent with a schedule of construction to be mutually agreed to by the parties within sixty (60) days of the execution of this agreement by all parties. The agreement shall be in writing and shall be in- corporated herein as a part of this agreement. G. None of the construction activities to be conducted by the City as described above in paragraphs A through F, shall be in- itiated prior to the written certification to the City by New Energy of the receipt of its final United States Department of Energy loan guarantee commitment. 2. The City, by and through its Board of Public Works, shall pass the needed improvement resolution for the off -site construction activities described in paragraphs 1(A) through 1(E) herein no later than October 9, 1981. A copy of the improvement resolution is attached hereto and incorporated herein as a part of this agreement. 3. The City, by and through its Board of Public Works and Common Council, will enter into an agreement with St. Joseph County, Indiana, for the construction and maintenance of new Maple Road. The agreement, to be entered into under the provisions of I.C. 36 -1 -7 -9 and 36- 1 -7 -10, shall provide that a new Maple Road will be con- -5- structed by St. Joseph County from State Road 23 northerly to the Calvert Street extension, approximately thirty -five hundred (3,500) feet. The street, to be constructed in accord with detailed specifications to be agreed to by the City of South Bend and St. Joseph County, will be constructed so that a typical segment will be forty (40) feet back -to -back of curb with integral concrete curbs and ten (10) inch plain concrete pavement., The agreement will further provide that St. Joseph County will acquire any needed right -of -way for the construction and that the City of South Bend will provide for needed storm sewers. Under the terms of the agreement, the City will maintain the road for a period of four (4) years from the date of the execution of the agreement. St. Joseph County will begin acquisition procedures for the needed right -of -way for new Maple Road when the City provides to St. Joseph County a written notice to proceed with such acquisition. The City shall assure that the agreement is executed by all necessary parties no later than October 9, 1981. The agreement with St. Joseph County entitled, "Agreement Between the City of South Bend, Indiana, and St. Joseph County, Indiana, for Construction and Maintenance of Maple Road" shall be made a part of this agreement and incorporated herein. 4. The City will apply for State funds for purposes of relocating to the perimeter of the site the Indiana and Michigan electric utility lines currently transversing the site. The Common Council of the City shall pass a resolution on October 9, 1981 authorizing the City to apply for State funds. Should State funds not be made available to the City for this purpose or shall the State make funds available to pay only a portion of the cost of relocation, the City shall unconditionally pay all costs necessary to accomplish the relocation. The City shall take action to assure that pre- liminary engineering to accomplish such relocation shall commence within thirty (30) days of execution of this agreement. The City intends to accomplish this purpose through the enactment of an ordinance under the provisions of I.C. 36- 7 -13 -3 creating a special ME fund which can receive contributions and grants for purposes of assisting New Energy by partially defraying the costs of making the site more suitable for industrial use. The special fund shall be utilized by the City for relocation of the Indiana and Michigan electric utility lines at the site. New Energy will cooperate with the City to establish the requisite ownership of the site to permit full utilization of the special funds as provided in I.C. 36 -7 -13. The estimated cost of this relocation as of the date of execution of this agreement is Seven Hundred Fifty -Five Thousand ($755,000.00) dollars. The City's commitment herein to create a special fund to pay the costs of electric utility relocation should State funds not be available to the City, or available to pay only a portion of the cost of relocation, is based on commitments to contribute to the fund received by the City from private entities. 5. New Energy agrees as follows: A. New Energy shall exercise its option to purchase the site and shall construct an ethanol production facility on the site, the construction of which shall constitute an investment of at least One Hundred Fifty One Million ($151,000,000.00) dollars. Con- struction of the facility shall be initiated no later than thirty (30) days after receipt by New Energy of its final United States Department of Energy loan guarantee commitment. Within sixty (60) days of the date of the execution of this agreement, New Energy shall provide the City with a Critical Path Schedule for the construction of the project, which schedule shall provide for the mechanical completion of the ethanol production facility within thirty (30) months of initiation of construction. The Critical Path Schedule shall be made a part of this agreement and incorporated herein. B. New Energy will employ, at its South Bend location, approximately one hundred and forty (140) employees, including maintenance personnel, and will cooperate with the City and other -7- developers to assure the fullest utilization of its site and any potential by- products of its production facility which may attract other desirable industrial development. C. The construction of the production facility and improve- ments on the site shall comply with applicable zoning laws, building codes and other statutes and /or ordinances in effect at the time the construction of the facility commences. D. New Energy's commitments herein are subject to a final closing of its Department of Energy loan guarantee. Should New Energy for any reason abandon the construction of its ethanol production facility on the site subsequent to the receipt of the final United States Department of Energy loan guarantee commitment, New Energy shall be liable to the City for any and all expenses incurred by the City as a result of the City's complete or partial performance of the City's obligations pursuant to this agreement. Additionally, New Energy shall be liable to St. Joseph County for any and all expenses incurred by St. Joseph County as a result of St. Joseph County's complete or partial performance of St. Joseph County's obligations pursuant to the "Agreement Between the City of South Bend, Indiana, and St. Joseph County, Indiana, for Construction and Maintenance of Maple Road." Abandonment by New Energy of the construction of its ethanol plant on the South Bend site shall be defined as: the occurrence of events which will render it impossible to achieve mechanical completion of the plant within thirty -six (36) months from the start of construction. If the events are beyond the control of New Energy and caused by no fault of its own and New Energy has satisfactorily demonstrated to the City its ability to achieve mechanical completion within a reasonable period of time, thereafter, New Energy and the City shall mutually agree to a mod- ified completion schedule providing for mechanical completion beyond the thirty -six (36) month period. ME 6. Should tax incremental financing as provided under I.C. 36- 7 -14 -25 and 36- 7 -14 -39 become available to the City or its Department of Redevelopment for reimbursement of expenses.made as provided in this agreement or prior to the expenditure of funds as provided here- in, the City and New Energy will cooperate to use any ownership structure of the site authorized by law to permit the full util- ization of tax incremental financing for the construction of the improvements described herein or reimbursement to the City through its Department of Redevelopment for said construction. It is understood by the City that New Energy will not use an ownership structure which would jeopardize its financing of the project and that any modification in ownership structure of the site can only be undertaken with the express approval of the United States Department of Energy. 7. The parties acknowledge that the City will continue to pur- sue its Urban Development Action Grant application to pay the cost of improvements on and off the site. The expenditure of funds by the City to meet its commitments herein is based on the anticipation of eventual reimbursement with Urban Development Action Grant funds. 8. The Common Council of the City by the execution of this agreement indicates its approval of the agreement and its intent to comply with the provisions of Section 2 -50(g) of the South Bend Municipal Code by the passage of an ordinance approving this agree- ment and the agreement with St. Joseph County for the construction new Maple Road. 9. The parties hereto do mutually agree to cooperate in an attempt to resolve the remaining issues not addressed in this agreement which include but are not limited to the financing of other on -site improvements contained in the City's Urban Development Action Grant application. 10. This agreement, together with the schedule of construction incorporated herein under the provisions of paragraph 1(F), the Board. of Public Works Improvement Resolution incorporated herein under the provisions of paragraph 2, the "Agreement Between the City of South Bend, Indiana, and St. Joseph County, Indiana, for Construction and Maintenance of Maple Road," incorporated herein under the provisions of paragraph 3, and the Critical Path Schedule incorporated herein under the provisions of paragraph 5(A), contains the sole and entire agreement and understanding of the parties. There are no repre- sentations, agreements, arrangements or undertakings, oral or written, between the parties concerning this matter which are not fully expressed or incorporated herein. 11. The City and New Energy and their respective successors and assigns shall take any and all further actions and execute and deliver such additional documents as may be reasonably required to more fully assure and carry out the provisions of this agreement. 12. This agreement shall not be changed by subsequent City or Common Council action except by a written amendment entered into by all the parties. 13. In the event that either party hereto shall institute any action or proceedings against the other party relating to the pro- visions of this agreement or any default hereunder, the unsuccessful litigant in such action or proceedings shall reimburse the success- ful litigant for expenses and attorneys' fees, including those attributable to the services of the City of South Bend City Attorney's Office, incurred by the successful litigant. 14. This agreement shall be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances and rules and regulations. If any provisions of the agreement are invalid, the remainder shall not be affected. -10- 15. The laws of the State of Indiana shall govern validity, performance and enforcement of this agreement. 16. New Energy represents that it is a duly licensed Indiana Corporation and that its President has authority to execute this agreement. 17. This agreement shall be binding upon and inure to the benefit of the parties signatory hereto and their respective representatives, successors and assigns. CITY OF SOUTH BEND BOARD OF PUBLIC WORKS J N E. LESZC N ii RICHARD L. HILL PH E. KERNAN ATTEST: j. BAR AKA J .BYER, CLERl DATE: q� /q}?/ CITY OF SOUTH BEND ATTEST: IR NE GAMMON, CITY CLERK DATE: at--t ?, /-9,P/ CITY OF SOUTH BEND COMMON COUNCIL , r 1 11?4 � 1�e V- - z �'—' I e /.� - OND C ELINSKI NEW ENERGY CORPORATION OF TNDTANA TNr DATE: m lel -12- N ORDE ATTEST: IRENE GAMMON, CITY CLERK DATE: (41"- 9, ,9,.