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HomeMy WebLinkAbout25-28 Resolution Approving the Issuance of Tax Increment Revenue Bonds for Improvements that Support Residential Housing Developments and All Matters Related Thereto Filed in Clerk's Office ..,_� �`(-- MAY 06 2 rr w low�?' Bianca Tirado I I/� PEACE i City Clerk, South Bend, IN 1865 CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT May 7, 2025 Councilmember Canneth Lee Councilmember Troy Warner President Chairperson South Bend Common Council Community Investment Committee County-City Building, 4' Floor South Bend Common Council South Bend, Indiana 46601 County-City Building,4' Floor South Bend, Indiana 46601 RE: Resolution No. 25-28 —A Resolution of the Common Council of the City of South Bend, Indiana, Approving the Issuance of Tax Increment Revenue Bonds of the Redevelopment District of the City for the Purpose of Providing Funds for the Costs of Certain Local Public Improvements that Support Residential Housing Development and All Matters Related Thereto Dear President Lee and Councilmember Warner, Please find attached Resolution No. 25-28, which has been filed for the Common Council's consideration pursuant to Section 25.1 of Indiana Code 36-7-14. If adopted, the resolution would authorize the issuance of bonds with a principal amount not to exceed $2.57 million. Proceeds from the bonds would support infrastructure for a planned residential development at the former Drewrys Brewery site and adjacent Portage Elwood shopping plaza. The planned infrastructure, including but not limited to, utilities, streets, and sidewalks, will allow for the development of at least 110 mixed-income single-family and multi-family housing units. None of the currently existing infrastructure on the project site is suitable for residential development, and significant infrastructure investment is needed to enable redevelopment to move forward. In December 2024,the City of South Bend applied for a Residential Infrastructure Fund (RIF) loan in the amount of$2.57 million through the Indiana Finance 1400 COUNTY-CITY BUILDING•227 W.JEFFERSON BOULEVARD•SOUTH BEND,INDIANA 46601 PHONE 574/235-5898 • FAX 574/235-9892 • TTY 574/235-5567 Authority (IFA). On January 22, 2025,the City was informed by IFA that the loan application was approved. Through the RIF program,the funds provided by the IFA would be made available to the City through IFA's purchase of Redevelopment District Bonds issued by the South Bend Redevelopment Commission. RIF loan funds can be used to support the project such as continued environmental remediation and demolition of structures at the Drewrys site and Portage Elwood shopping plaza,the construction of new streets, curbs, sidewalks, and tree lawns, the construction of a storm sewer system,the installation of sanitary sewer lines, the installation of water main lines and a lateral connection system, and the installation of street lighting. On April 24, 2025, the Redevelopment Commission approved and adopted its resolution authorizing the issuance of tax increment revenue bonds for the purpose of financing the cost of certain local public improvements for the Drewrys site project. Indiana Code requires the Common Council to provide its authorization before the bonds can be issued. Adoption of Resolution No. 25-28 by the Common Council would enable the City to access the RIF loan funds provided by IFA. Debt service on the bonds would be paid through Tax Increment Financing revenues collected in the River West Development Area. The current interest rate as established by the IFA is 3.15 percent, and interest-only payments would begin six months after IFA purchases the bonds. Payments on principal would begin 12 months following substantial completion of the project. Final maturity of the bonds will be no later than 20 years from the date of issuance. The Drewrys site residential housing development will lead a transformation of a blighted area in the northwest part of the City into a vibrant residential area located near amenities such as the Coal Line Trail. We have made significant progress in the past few years to prepare the site for redevelopment: the City partnered with the Environment Protection Agency to remediate potential contamination, resulting in a site certified as clean by the agency in 2023. The City has been demolishing remaining buildings and removing debris in preparation for redevelopment of the site. Access to potential funding sources such as the RIF loan is key to ensuring this historic project can move forward as planned. Sincerely, Caleb Bauer Executive Director Department of Community Investment CC: South Bend Redevelopment Commission Sandra Kennedy, Corporation Counsel Filed in Clerk's Office BILL NO. 25-28 MAY 0 6 2025 RESOLUTION NO. Bianca Tirado City Clerk, South Bend, IN A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA,APPROVING THE ISSUANCE OF TAX INCREMENT REVENUE BONDS OF THE REDEVELOPMENT DISTRICT OF THE CITY FOR THE PURPOSE OF PROVIDING FUNDS FOR THE COSTS OF CERTAIN LOCAL PUBLIC IMPROVEMENTS THAT SUPPORT RESIDENTIAL HOUSING DEVELOPMENT AND ALL MATTERS RELATED THERETO WHEREAS, the South Bend Redevelopment Commission (the "Commission"), the governing body of the South Bend Department of Redevelopment and the Redevelopment District of the City of South Bend, Indiana (the "District"), exists and operates under the provisions of Indiana Code 36-7-14, as amended from time to time (the"Act"); and WHEREAS, with the approval of the Common Council (the "Common Council") of the City of South Bend, Indiana(the"City"), the Commission has previously designated and declared an area in the City known as the River West Development Area as an economic development area (the"Area") and designated portions of the Area from time to time as allocation areas pursuant to Section 39 of the Act (each such allocation area within the Area, excluding the Riverwalk Allocation Area designated by Resolution No. 3627 adopted by the Commission on January 9, 2025, an"Allocation Area" and collectively, the"Allocation Areas"); and WHEREAS, the Commission has previously created an allocation fund for each of the Allocation Areas (each an "Allocation Fund and collectively, the "Allocation Funds"), and has provided that tax increment revenues derived from each respective Allocation Area(collectively, the"Tax Increment') shall be deposited into the respective Allocation Fund; and WHEREAS, the Commission has adopted Resolution No. 3637 at a meeting held on April 24, 2025, (the "Bond Resolution"), determining to issue tax increment revenue bonds of the District (the "Bonds") for the purpose of financing the cost of certain local public improvements in or serving the Allocation Areas that support the redevelopment of the Drewrys Site located at 1408 Elwood Avenue in the City (the"Project Site") into a new residential housing development, including without limitation (i) continued environmental remediation of the Project Site, (ii) the construction of new streets, curbs, sidewalks and tree lawns, (iii)the construction of a storm sewer system, (iv) the installation of sanitary sewer lines, (v) the installation of water main lines and a lateral connection system and(vi)the installation of street lighting,(items(i)through and including (vi), collectively, the "Project") and to pay related and incidental expenses to be incurred in connection therewith and on account of the issuance of the Bonds; and WHEREAS, pursuant to the Bond Resolution, the Commission has determined that the principal of and interest on the Bonds shall be paid solely out of Tax Increment pledged therefor, on parity with the 2020 Obligation(as defined in the Bond Resolution) and senior to the payment of the Junior Obligations (as defined in the Bond Resolution), and any legally available revenues of the Commission; and WHEREAS, the Commission may enter into a Residential Housing Infrastructure Financial Assistance Agreement with the Indiana Finance Authority (the "IFA Program") as part of its residential housing infrastructure assistance program, established and existing pursuant to Indiana Code 5-1.2-15.5,which would then permit the Commission to sell the Bonds to the Indiana Finance Authority under the IFA Program; and WHEREAS, Section 25.1 of the Act requires the approval of the legislative body of the City before the Bonds may be issued and the Common Council as the legislative body of the City now desires to approve the issuance of the Bonds; and NOW,THEREFORE,BE IT RESOLVED by the Common Council of the City of South Bend, Indiana, as follows: SECTION 1. All of the stated"WHEREAS"clauses are incorporated herein by reference. SECTION 2. The Common Council hereby approves the issuance of the Bonds to apply to the costs of the Project,the funding of a debt service reserve to secure the payment of the Bonds, if necessary, and the incidental expenses in connection therewith and the issuance of the Bonds, upon the following conditions: (a) the maximum aggregate principal amount of the Bonds shall not exceed $2,570,000; (b)the final maturity of the Bonds shall not be later than twenty(20)years from the date of issuance; (c) the maximum interest rate on the Bonds shall not exceed five and one-half percent (5.5%) per annum; (d) the Bonds may be made redeemable at the option of the Commission,in whole or in part, in any order of maturities selected by the Commission and by lot within a maturity, on dates and with premiums, if any, and other terms as determined by the Commission with the advice of the Commission's municipal advisor, and (e) payment of interest on the Bonds will not be capitalized. The Bonds are, as to both principal thereof and interest thereon,obligations of the District, as a special taxing district,payable solely out of Tax Increment pledged therefor, on parity with the 2020 Obligation and senior to the payment of the Junior Obligations, and any legally available revenues of the Commission as described in the Bond Resolution. SECTION 3. The proper officers of the City are hereby authorized and directed, for and on behalf of the City, to execute and deliver any contract, agreement, certificate, instrument or other document and to take any action as such person determines to be necessary or appropriate to accomplish the purposes of this Resolution, such determination to be conclusively evidenced by such person's execution of such contract, agreement, certificate, instrument or other document or such person's taking of such action. SECTION 4. This Resolution shall be in full force and effect from and after its adoption by the Common Council and upon compliance with the procedures required by law. [SIGNATURE PAGE FOLLOWS] PASSED, by the Common Council of the City of South Bend, Indiana, this 12th day of May, 2025. Canneth J. Lee, Council President South Bend Common Council Attest: Bianca L. Tirado, City Clerk Office of the City Clerk Presented by me, the undersigned Clerk of the City of South Bend, to the Mayor of the City of South Bend, Indiana on the day of , 2025, at o'clock .m. Bianca L. Tirado, City Clerk Office of the City Clerk Approved and signed by me on the day of , 2025, at o'clock .m. James Mueller, Mayor City of South Bend, Indiana DMS 47136099v2