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HomeMy WebLinkAbout5A3 Resolution No. 3639 Authorizing Use TIF (Monreaux) - SignedSouth Bend Redevelopment Commission 227 West Jefferson Boulevard, Room 1308, South Bend, Indiana Redevelopment Commission Agenda Item D ATE : 5/19/25 FROM: Erik Glavich, Director, Growth and Opportunity SUBJECT: Resolution No. 3639: Authorizing Use of Increased TIF Revenues and First Amendment to Development Agreement for “The Monreaux” Funding Source* (circle) River West; River East; South Side; Douglas Road; West Washington; RDC General; Riv. East Res. * Funds are subject to the City Controller's determination of availability; if funds are unavailable, as solely determined by the City Controller, then the authorization of the expenditure of such funds shall be void and of no effect. PURPOSE OF REQUEST: Resolution authorizing the use of increased TIF Revenues and approving First Amendment to a Development Agreement for the Monreaux residential development. SPECIFICS: The Commission will consider Resolution No. 3639 which, if adopted, would: (1) authorize the increase in expenditure to up to $3,300,000 in River West TIF revenues in support of the Monreaux residential development; and (2) approve an amendment to the Development Agreement with The Monreaux LLC and Delta Ventures Ltd. (jointly the “Developer”) to recognize certain changes in the Project. Delta Ventures Ltd. is a non- profit entity created under common ownership with The Monreaux LLC. On November 20, 2023, the Commission entered into a Development Agreement with the Developer for the construction of the “Monreaux” affordable housing project at 505, 507, 511, and 513 S. Michigan Street, the former “Fat Daddy’s” site. The Commission also entered into a Purchase Agreement on July 14, 2022, for the sale of the property for the Monreaux project. The due diligence period established by the Purchase Agreement was amended 3 times—now set to expire on June 30, 2025—as the Developer has worked through design, engineering, and financing. The Development Agreement established a total funding amount of $2,300,000 and a private investment amount of $13,700,000. Cost increases and other challenges since the execution of the Development Agreement have necessitated consideration by the Commission to increase support to ensure successful completion of the project. The amendment to the Development Agreement would make the following changes to the conditions of the agreement: •Increase the funding amount to $3,300,000 (up from $2,300,000) •Increase the private investment commitment to $17,700,000 (up from $13,700,000) •Adjust the project plan (Exhibit B) to reflect changes in the project: o Decrease the total square footage of the building to 56,000 square feet from 65,000 square feet o Reduce the minimum number of residential units to 57 from 60 _________________________Pres/V-Pres ATTEST: __________________Secretary Date: ____________________ APPROVED Not Approved SOUTH BEND REDEVELOPMENT COMMISSION May 22, 2025  South Bend Redevelopment Commission 227 West Jefferson Boulevard, Room 1308, South Bend, Indiana o Change the minimum number of units dedicated to households at 50% or lower AMI to 24 units, with an additional 21 residential units dedicated to households at 80% or lower AMI (original agreement committed 23 units for 50% or lower AMI and an additional 23 units for 80% or lower AMI). As with the original agreement, the Commission support is provided through the Developer in the form of a forgivable loan. If the Amendment to Development Agreement is adopted, the Developer would no longer be required to incorporate masonry features preserved from the former buildings that once stood on the site. In alignment with the Real Estate Purchase Agreement, as amended, the Developer agrees to complete the project within 36 months of the Closing Date. Staff recommends approval of Resolution No. 3639. The Monreaux project is vital to the stabilization and continued growth of the southern end of downtown South Bend. In addition to providing needed affordable housing options, the project along with others in the area will be transformative. RESOLUTION NO. 3639 RESOLUTION OF THE SOUTH BEND REDEVELOPMENT COMMISSION AUTHORIZING USE OF INCREASED TIF REVENUES TO FUND LOAN AND APPROVING SUBSTANTIALLY FINAL FORM OF FIRST AMENDMENT TO DEVELOPMENT AGREEMENT WHEREAS, the South Bend ("City") Redevelopment Commission ("Commission") has established the River West Development Area ("Area") and the River West Development Allocation Area No. 1 ("Allocation Area") and adopted an economic development plan, as amended (collectively, as amended, "Plan") for the Area; WHEREAS, pursuant to IC 36-7-14-11(3) and (4), the Commission has the duty to promote the use of land in the manner that best serves the interests of the City and its citizens and the duty to cooperate with the City and all departments and agencies thereof in the manner that best serves the purposes of the redevelopment statute; WHEREAS, the Commission has entered into a development agreement ("Development Agreement") effective as of November 20, 2023, with Delta Ventures Ltd., an Indiana Nonprofit Corporation ("Delta" or "Borrower") and the Monreaux LLC for the construction of the Project (as defined in the Development Agreement); WHEREAS, certain circumstances have changed since the execution of the Development Agreement and the Commission desires to amend the Development Agreement to increase the forgivable loan amount and recognize certain changes in the Project; WHEREAS, the Commission will use the property tax proceeds on hand and to be on hand in the allocation fund for the Allocation Area from the assessed valuation of real property in the Allocation Area in excess of the assessed valuation described in IC 36-7-14-39(b)(1) as reduced by the credit provided for in IC 36-7-14-39.5 as such statutory provisions exist on the date of the issuance of the Series 2023 Note ("TIF Revenues"); WHEREAS, the Commission desires to increase the forgivable loan amount to be funded from TIF Revenues to an amount not to exceed Three Million Three Hundred Thousand Dollars ($3,300,000); and WHEREAS, a substantially final form of the First Amendment to Development Agreement to be entered into between the Commission and the Borrower is attached hereto and incorporated herein as Exhibit 1; NOW, THEREFORE, BE IT RESOLVED BY THE SOUTH BEND REDEVELOPMENT COMMISSION THAT: Section 1. Public Purpose. The Commission hereby finds and determines that: (a)promoting redevelopment and economic development in the Area is a valid corporate and public purpose for which the Commission may spend public funds; 2 (b)incentivizing the construction of the Project in the Area will increase the level and diversity of the tax base and enhance the Commission's efforts for revitalization of the Area, creating a vibrant and active residential and business community, all of which are of public utility and benefit to the citizens of the Area and the City; and (c)bringing residents to the Area will assist in stabilizing existing businesses in the Area, promote new investment in the Area and improve the overall quality of the Area and the City. Section 2. The Commission hereby finds that authorizing the use of TIF Revenues, on hand or to be on hand, junior and subordinate to any currently outstanding bonds, payable from TIF Revenues, and any bonds issued in the future on a parity with any currently outstanding bonds, in the maximum amount not to exceed $3,300,000 evidenced by the Series 2023 Note, will help accomplish the Plan for the Area and will promote redevelopment and economic development of the Allocation Area, the Area and the City. Section 3. The Commission hereby irrevocably authorizes the use of TIF Revenues to fund the Loan in an amount not to exceed $3,300,000. Section 4. The Commission hereby approves the substantially final form of the First Amendment to Development Agreement presented to this meeting and attached hereto as Exhibit A. The President or Vice President of the Commission is hereby authorized to execute and deliver the same and the Secretary is hereby authorized to attest and deliver the same, and to approve any changes in form or substance to the First Amendment to Development Agreement as determined necessary or appropriate by Corporation Counsel of the City and Ice Miller LLP, as special counsel, such changes to be conclusively evidenced by execution of the Development Agreement. The President, Vice President, or Secretary are further authorized to execute any other instruments as are necessary to carry out the transactions contemplated by this resolution, in such forms as such officer executing the same shall deem proper, to be conclusively evidenced by the execution thereof. Section 5. This resolution shall be effective upon passage. 3 Adopted __________, 2025. SOUTH BEND REDEVELOPMENT COMMISSION Troy Warner, President Attest: Eli Wax, Secretary May 22 4 EXHIBIT 1 SUBSTANTIALLY FINAL FORM OF FIRST AMENDMENT TO DEVELOPMENT AGREEMENT