Loading...
HomeMy WebLinkAbout1998-11-16 Redevelopment Authority MinutesSOUTH BEND REDEVELOPMENT AUTHORITY • REGULAR MEETING November 16, 1998 1308 County-City Building 1:30 p.m. 227 West Jefferson Boulevard Presiding: Ms. Carolyn Pfotenhauer South Bend, IN 46601 The November 16, 1998 Regular Meeting of the Redevelopment Authority was called to order at 1:37 p.m. by its President, Carolyn Pfotenhauer. There was a quorum present. 1. ROLL CALL Members Present: Ms. Carolyn Pfotenhauer, President Mr. Matthew Kahn, Vice-President Mr. Jose Alvarez, Secretary Redevelopment Staff: Mrs. Ann Kolata Mrs. Jenny Hullinger, Recording Secretary Mr. Owen Rock Mrs. Michele Bush Z. APPROVAL OF MINUTES • Mr. Alvarez recommended that the first sentence in section 3a be rewritten to state: "Mrs. Kolata stated that the Redevelopment staff recommends refinancing the Blackthorn Golf Course bond". Mr. Alvarez also noted two misspellings. Upon a motion by Mr. Kahn, seconded by Ms. Pfotenhauer and unanimously carried, the Authority approved the Minutes of the Regular Meeting of October 19, 1998 with the recommended changes from Mr. Alvarez. 3. New Business a. Authority approval requested for Resolution No. 131 of the South Bend Redevelopment Authority approving the Award of the South Bend Redevelopment Authority Lease Rental Revenue Refunding Bonds of 1998 (Blackthorn Golf Course Project) and approving the execution of an Addendum to the Lease between the Authority and the South Bend Redevelopment Commission and other related matters. Mr. Rompola reported that the bond sale occurred last week for the Blackthorn Golf Course bond refinancing, with a cumulative savings of about $471,727, which has a net present value of $340,000. The bonds were sold to City Securities Corporation through a public sale. Three bids came in from Nat City, Prudential Securities and • H:\ W PDATA\AUTHORTY\ 111698. MIN • The South Bend Redevelopment Authority November 16, 1998 Meeting Minutes City Securities Corporation. The net interest rate, including the discount, is 4.703%, and is a very good rate. Since rates are low more U.S. Treasuries needed to be purchased to pay off the 1992 bonds, but low interest rates also mean lower bond rates. Crowe Chizek tentatively signed a purchase agreement to buy the U.S. Treasuries the day of the bond sale, but if the rate of the treasuries improves, Crowe Chizek will amend the purchase agreement in order to increase the savings. Crowe Chizek will determine that the end of this week. The financing is scheduled to close on November 24, 1998. Resolution No: 131 authorizes the execution of the Addendum to the Lease and approves the award of the bonds. Page three of Resolution No. 131 shows the final bond maturities schedule of the $6,135,000 along with interest rates. The Lease Addendum contains the new lease rental schedule which reflects the new, lower interest rates on the bonds. $6,000,000 of the bond proceeds will be used to acquire U.S. Treasury Securities deposited with Norwest. The principal from the bonds, along with interest earned, will be used to pay off the 1992 bonds until the year 2001, at which time the 1992 bonds will be redeemed. Mr. Alvarez asked if the $471,000 had any relation to a treasury rate. Mr. Rompola • stated the two components to savings are: the reduction in the interest rate on the new bonds, and the rates on the Treasuries. Because the Treasury rates are lower, more must be purchased, so the savings is smaller, but because the interest rates on the refunding bonds are equally low approximately $471,000 will be saved. Mrs. Kolata stated that she asked Crowe Chizek how we would know if we were saving enough money on refinancing to make the refinancing worth it. Crowe Chizek replied that a 3% or more savings was worth refinancing. Our actual savings is 5.5% of the current issue, which is a good savings. Mr. Alvarez asked if the rate of savings could drop or rise. Mr. Rompola stated that the savings could not go down but could go up. If U.S. Treasury rates go down, we are locked in, but if the rates go up, we could increase our' savings. The purchase agreement can be amended to allow for more savings. Mr. Alvarez asked if there was a fee for locking in the treasury rate. Mr. Rompola stated there was no fee that he was aware of. Upon a motion by Mr. Kahn, seconded by Mr. Alvarez and unanimously carried, the Authority approved Resolution 131 approving the Award of the South Bend Redevelopment Authority Lease Rental Revenue Refunding Bonds of 1998 (Blackthorn Golf Course Project) and approving the execution of an Addendum to the Lease between the Authority and the South Bend Redevelopment Commission and other related matters. H:\WPDATA\AUTHORTY\111698.MIN 2 The South Bend Redevelopment Authority • November 16, 1998 Meeting Minutes b. Authority approval requested for Letter Agreement Regarding Application of Moneys Received by South Bend Entertainment, Inc., for the Morris Performing Arts Center Renovation and Construction. Mrs. Kolata stated that the bond issue for the Morris Performing Arts Center was sized based on cash already raised by South Bend Entertainment, which was approximately $2,250,000. South Bend Entertainment was also anticipating receiving additional gifts over the next several years that would bring the total of private donations to between $5,000,000 and $6,000,000. This agreement has been worked on since Apri12, and commits South Bend Entertainment to make deposits to the Redevelopment Authority account. The money comes in throughout the year and is transferred to the Redevelopment Authority account twice a year. Cleo Hickey stated that 4% of the fund raising goal of $6 million can be kept back for fund raising expenses and operating expenses by South Bend Entertainment. In addition to the 4%, any donations that are given specifically for operating expenses can be held back by South Bend Entertainment. Approximately $38,000 has been given for operating expenses, and combined with the $240,000 the cap that South Bend Entertainment can hold back is about $278,000. To date, $180,000 has been used for fund raising activities. The $2,250,000 has already been deposited with the bond trustee and has been invested. • Mr. Alvarez asked if the investment CDS were in a good interest bearing account. Ms. Hickey stated that the treasurer of South Bend Entertainment checks for the best rates before investing. Upon a motion by Mr. Alvarez, seconded by Mr. Kahn, and unanimously carried, the Redevelopment Authority approved the Letter Agreement Regarding Application of Moneys Received by South Bend Entertainment, Inc., for the Morris Performing Arts Center Renovation and Construction. 4. CLAIMS Blackthorn Refunding Bonds of 1998 Fitch IBCA, Bond Rating $5,000.00 Crowe Chizek, Professional Services $20,000.00 Mrs. Kolata recommended that the claims be approved subject to the bond closing and added that other claims will be coming in related to the bonds. Mr. Kahn asked about the revised letter that Crowe Chizek was to send that clarified their proposal. H:\WPDATA\AUTHORTI~ 111698.MIN • The South Bend Redevelopment Authority November 16, 1998 Meeting Minutes Mrs. Kolata replied that the revised proposal had been received and Ms. Pfotenhauer was to sign it today. Upon a motion by Mr. Kahn, seconded by Ms. Pfotenhauer, and unanimously carried, the Authority approved the claims submitted November 16, 1998. C~ 5. PROGRESS REPORT Cleo Hickey reported that the stage of the Morris Civic was removed in July. The Morris renovation has six bid packages: the first bid package concerns environmental issues, and has been completed. It included removal of the asbestos and the covering of plaster, horsehair and asbestos. The second bid package is the structural steel for the new stage house, which will arrive after the concrete footings are finished. The third bid package was for demolition, excavation and concrete footings. The north and south perimeter walls are poured, the orchestra pit is underpinned so it won't collapse, and the site has been dewatered. One of the footings will hold the weight of the footing bridge for the stage house. Bid package four is precast panels, which will go on the structural steel. The precast panels have been approved for color and texture. A large sample will be arriving before the final approval is made for the prefabrication. Bid package five came in for pricing about three weeks ago, and held the components for architectural, electrical, plumbing, decorative paint, roofing, and additional demolition in the Palais basement, including the removal of the huge boilers. Some of the bids are favorable, and some are high and will be rebid. Some scopes are being revised. The rebids will come back December 16 to the Board of Public Works, which will allow a better estimation to be made of the actual costs that will be incurred. Some of the bids included everything and some showed alternate plans, as well. The rebids should clarify what they are looking for. Bid package six has the orchestra shell, stage equipment, lighting, some exterior work, and some signage. This bid package will go out after bid package five comes back in. 6. NEXT MEETING DATE: December 7, 1998 at 1:30 p.m. 7. ADJOURNMENT There being no further business to come before the Redevelopment Authority, the meeting was adjourned at 2:02 p.m. • i~~ _ C`~o~~i/.~'#~f~i~blal ar/, X'~~~ifik~it' Matthew M. Kahn, Vice-President H:\WPDATA~AUTHORTY~ 1 11698.MIN 4 G~ Ann Kolata, Director