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HomeMy WebLinkAbout1998-01-21 Redevelopment Authority Minutes• • SOUTH BEND REDEVELOPMENT AUTHORITY SPECIAL MEETING January 21, 1998 1308 County-City Building 1:00 p.m. 227 W. Jefferson Boulevard Presiding: Mr. Eugene Ladewski South Bend, IN 46601 President Prior to the start of the meeting, Mrs. Loretta Duda, City Clerk, administered the oath of office to the members. The January 21, 1998 Special Meeting of the Redevelopment Authority was called to order at 1:14 p.m. by its 1997 President, Andre Gammage. There was a quorum present. 1. ROLL CALL Members Present: Mr. Andre Gammage Ms. Carolyn Pfotenhauer Mr. Eugene Ladewski Redevelopment Staff: Others: 2. ELECTION OF OFFICERS Mrs. Ann Kolata, Director Mrs. Jennifer Hollinger, Recording Secretary Mr. Randy Rompola, Baker & Daniels Mrs. Kolata conducted the Election of Officers. PRESIDENT Mr. Gammage nominated Eugene Ladewski to serve as President of the Redevelopment Authority. Carolyn Pfotenhauer seconded the nomination.. There were no additional nominations. The vote being unanimous, Mr. Ladewski was elected President for 1998. Vice-President Mr. Gammage nominated Carolyn Pfotenhauer to serve as Vice-President of the Redevelopment Authority. Eugene Ladewski seconded the nomination. There were no additional nominations. The vote being unanimous, Ms. Pfotenhauer was elected Vice- President for 1998. • H:\WPDATA\AUTHORTY~012198.NIlN • The South Bend Redevelopment Authority Special Meeting January 21, 1998 Secretar~Treasurer Carolyn Pfotenhauer nominated Andre Gammage to serve as Secretary-Treasurer of the Redevelopment Authority. Eugene Ladewski seconded the nomination. There were no additional nominations. The vote being unanimous, Mr. Gammage was elected Secretary-Treasurer for 1998. Mr. Ladewski assumed the chair. 3. APPROVAL OF MINUTES Upon a motion by Mr. Gammage, seconded by Ms. Pfotenhauer and unanimously carried, the Authority approved the Minutes of the Special Meeting of November 14, 1997. 4. NEW BUSINESS a. Authority approval requested for Resolution No. 117 authorizing the • issuance of the South Bend Redevelopment Authority lease rental revenue bonds (the Morris Performing Arts Center Project) and other related matters. Mrs. Kolata explained that the State Tax Board approved the bond issue for the Morris Performing Arts Center in July. The Authority has been waiting to issue the bond until closer to the start of construction. The first construction bids will come in March, so the bond sale will take place inmid-February. Mr. Randy Rompola explained Resolution No. 117 and 118. Resolution No. 117 authorizes the issuance of the bonds. This Resolution sets the final bond structure with the principal maturity amount listed in the bond resolution and the maximum amount of the bond to be issued. Since the exact amount of the bond will not be known until later, a maximum bond principal amount of $15 million, has been established. The bond is expected to be issued for approximately: $13,700,000. The resolution delegates authority to the President or Vice- President to sign off on the exact size of the bond. The resolution sets a maximum interest rate of 6.5%. Section 3. of the resolution contains the redemption terms. Section 4. is there because of the 1992 taxable bond issue for the purchase of the • H:\WPDATA\ALTTHORTY\012198.MIN 2 • The South Bend Redevelopment Authority Special Meeting January 21, 1998 Palais Royale. The 1992 Palais Royale Lease has been amended and restated. Norwest Bank will get two lease payments. The first will be for the 1992 issue and the second will be for this 1998 issue. Section 7. approves the draft version of the Official Statement for the bond. There will be changes and revisions to the Statement, mostly resulting from establishing the actual bond principal amount. Section 8. authorizes the publication that will advertise the bond sale. Resolution No.117 provides for the President orVice-President to execute an issuance certificate that will lay out the actual bond size and the bond maturities, on or before the time of the bond sale. Mrs. Kolata further explained the project costs. The bond size will be approximately $13,710,000, and may be a little less than that. Within the $13,710,000. there is $969,000 set aside for capitalized interest: $270,000 for issuance costs and $1,200,000 for a debt service reserve. Project costs provided for in the bond are $13,800,000, but there is $2,250,000 of contributions in the bank which will also be used for project costs related to the Morris Performing • Arts Center. The Entertainment District Board has raised pledges of $5 Million and have increased their goal to $6 Million. Anew architect has been hired and some of his project costs are different. Because of the higher projected costs, the orchestra pit lift will not be completed at this time, but the foundations will be put into place so that it can be added later. Mr. Ladewski asked when the projected completion date would be. Mrs. Kolata stated that they are projecting a February 1999 completion date. The steel would start going up in July. The stage house itself is precast concrete. Mr. Ladewski asked about the total cost of the project. Page 23 seems to state that the cost of the project cannot exceed $400,000. Mr. Rompola explained that the $400,000 is the limitation on construction change orders. Anything over $400,00 must be approved by the Authority and Commission. Mr. Ladewski asked who selects an insurance company for the project. Mr. Rompola stated that the Redevelopment Commission is responsible for the insurance coverage. Liability insurance is provided through the City during the construction period. Mr. Ladewski asked how frequently the Bank sends statements on the project. Mrs. Kolata responded that the construction statements are sent monthly. The • H:\WPDATA~?,UTHORTY\012198.MIN 3 • The South Bend Redevelopment Authority Special Meeting January 21, 1998 statements for the other accounts are sent quarterly. When the project is complete, a professional audit will be done. The State Board of Accounts also does an audit. Mr. Ladewski asked if the fund raising had already been completed. Mrs. Kolata stated that $2,250,000 was already in the Entertainment District's account and is earning interest. Some of the interest has been used for fund raising for the project. This money will be held until bond closing and will be added to bond proceeds and used for construction costs. Billing for pledges is on asemi-annual basis. $5.1 Million has been pledged. A copy of the pledges and how they are being payed has been made available to Mrs. Kolata. The Entertainment District Board is looking for foundation money and grants, as well as individual donations, and will continue to raise funds until the opening of the Theater. Ms. Pfotenhauer asked if the fees paid to Norwest are comparable to fees paid. in the past. Mr. Rompola stated that the fees paid are comparable to those paid in the past. Mr. Rompola stated that the bonds will be paid by the Commission Lease Rental • primarily through the Economic Development Income Tax. Pledges that come in after the issuance of the bonds will also be used to pay off the bonds. The City's income from the Economic Development Income Tax (EDIT) is sufficient to pay the bonds off if necessary. Pledges will offset the EDIT. Norwest will be the bond Trustee. They have been very cooperative and easy to work with on other bonds. The proposal from Norwest covers only this bond. The bond that is currently on the Palais has a low interest rate so that it would not be profitable to refinance it. Norwest's initial fee is $4,000 and $2,500 fee per issue (assuming there are more than one bond), and then an annual trustee paying agent and registrar fee based on $3,250 for handling. There are no additional fees. Mrs. Kolata noted that the notice of intent to sell bonds for the Morris Performing Arts Center should be published January 30 and February 6, 1998. Official statements, with the exhibits, will be distributed to underwriters. Upon a motion by Ms. Pfotenhauer, seconded by Mr. Gammage and unanimously carried, the Authority approved Resolution No. 117. b. Authority approval requested for Resolution No. 118 approving a modification to the Lease for the Morris Performing Arts Center Project and • 4 H:\WPDATA\AUTHORTY\012198.MIN • The South Bend Redevelopment Authority Special Meeting January 21, 1998 approving the execution of an Addendum to the Lease. Mr. Rompola explained that Resolution No.118 modifies the lease for the Palais Royale/Morris Civic Center Project that was approved last Spring. The Addendum to the Lease provides three definitional terms. The Three Payment Test is a test made each year to see if there are sufficient monies to make the lease payments the following year; if not, then a tax needs to be levied. The Reserve Fund will be funded out of the bond proceeds, which will be accumulating investment earnings. These funds will be put back into the Sinking Fund to pay the Debt Service on the bonds. If funds are left after construction they will be used to reduce the amount the Redevelopment Commission pays on the lease. Upon a motion by Ms. Pfotenhauer, seconded by Mr. Gammage and unanimously carried, the Authority approved Resolution. No. 11.8. c. Authority approval requested for the Trust Agreement between the South Bend Redevelopment Authority and Norwest Bank Indiana, N.A. Upon a motion by Mr. Gammage, seconded by Ms. Pfotenhauer and unanimously carried, the Authority approved the Trust Agreement between the South Bend • Redevelopment Authority and Norwest Bank Indiana, N.A. 5. CLAIMS Claim submitted for approval for January 21, 1998. HALL OF FAME -OPERATION AND RESERVE ACCOUNT Landesbank Hessen-Thuringen, New York - $20,572.18 Upon a motion by Ms. Pfotenhauer, seconded by Mr. Gammage and unanimously carried, the Authority approved the Claim submitted January 21, 1998. 6. REGULAR MEETING DATE The first. and third Mondays of each month at 1:30 p.m. were established as the regular meeting times beginning March 2, 1998. A special meeting was also scheduled for Monday, February 23 at 1:30 p.m. 7. PROGRESS REPORT Mrs. Kolata informed the Redevelopment Authority that 19 acres of rolling land • 5 H:\WPDATA\AUTHORTY\012198.MIN • The South Bend Redevelopment Authority Special Meeting January 21, 1998 just west of the 31-Bypass and south of the Toll Road had been purchased with Airport bond proceeds. The covenants for this land need to be established, and are scheduled to come before the South Bend Redevelopment Commission on February 6th. The Authority will consider the Covenants after the Commission does. Mrs. Kolata distributed copies of the Draft Covenants and asked for any comments from the Authority members before the Commission votes on the covenants on February 6, 1998. The Covenants are similar to the Toll Road Industrial Park covenants. The differences are: buildings are to be made of masonry rather than metal, and no new billboards are to be put up. There are currently two billboards on the property which are owned by Burkhart. 7. ADJOURNMENT There being no further business to come before the Redevelopment Authority, Mr. Lade ski adj ourned t ,m~~ eeting at 2:15 p.m. -% ~ ~2 Eugene a ws i, President Ann E. Kolata, Director • • H:\WPDATAWUTHORTY\012198.MIN 6