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HomeMy WebLinkAboutAuthorizing $600,000 Economic Development Revenue Bonds - Jackel Inc ProjectORDINANCE No 6711 -79 Passed by the Common Council of the City of South Bend, Indiana_ ember 17 19 79 IRENE K. GAMMON -'1 Presented by me to the Mayor of the City of South Bend, Ind'ana December 18 �9 79 Clerk Of Common Council Clerk IRENE K. GAMMON Approved and signed by me /9 19-2-L Mayor 11/27/79 BILL NO. ORDINANCE NO. AN ORDINANCE AUTHORIZING THE ISSUANCE OF $600,000 ECONOMIC DEVELOPMENT REVENUE BONDS (JACKEL, INC. PROJECT) OF THE CITY OF SOUTH BEND, INDIANA FOR THE PURPOSE OF FUNDING A LOAN TO JACKEL, INC. IN ORDER TO FINANCE THE ACQUISITION AND INSTALLATION OF CERTAIN INDUSTRIAL MANUFACTURING EQUIPMENT FOR USE BY JACKEL, INC. IN ST. JOSEPH COUNTY, INDIANA: AUTHORIZING EXECUTION OF THE LOAN AGREEMENT AND TRUST INDENTURE AND SECURITY AGREEMENT AND AUTHORIZING THE TERMS AND SALE OF SAID BONDS. STATEMENT OF PURPOSE OF INTENT The City of South Bend, Indiana, (hereinafter called the "City ") is a municipal corporation and political subdivision of the State of Indiana and by virtue of I.C. 18- 6 -4.5 -1 through 18- 6- 4.5 -29, inclusive, as amended (hereinafter called the "Act ") is authorized and empowered to acquire economic development facilities as those words are defined in the Act and to make direct loans to Users for the acquisition and construction of the economic development facilities to overcome insufficient employment opportunities and in- sufficient diversification of industry in and near the City and to promote the general economic welfare of the area in and near the City and to issue its economic development revenue bonds to pay all costs of acquisition or construction of such economic development facilities, including engineering, legal fees, and all other expenses relating thereto, including the costs of issuing the bonds and to secure said bonds pursuant to a Loan Agreement; and, Jackel, Inc. (the "User ") is a corporation for profit organized and existing under the laws of the State of Indiana, with its principal office located in St. Joseph County, Indiana, and duly qualified to conduct business in the State of Indiana; and, The User has agreed to acquire and install economic development facilities within the limits of the County of St. Joseph in the State of Indiana and thereby create new employment opportunities and provide diversification of economic development in and near the area of the City, and make payments pursuant to the Loan Agreement evidencing its loan obligations in an amount or amounts sufficient to pay the principal of, premium, if any, and interest on the economic development revenue bonds hereinafter authorized; and, 11/27/79 The Common Council of the City, (the "Common Council "), has heretofore, by Ordinance No. 5240.70 and pursuant to I.C. 1971, 18 -6 -4 -1 through 18- 6 -4 -28, inclusive, created the South Bend Economic Development Commission (the "Commission ") and the members of the Commission have been duly appointed and qualified pursuant to law and the Commission has organized and undertaken the duties imposed upon it by the Act and has found by written resolution that because of existing insufficient employment opportunities and in- sufficient diversification of industry, the economic welfare of the City would be benefitied by financing the acquisition of economic development facilities for and on behalf of the User; and The Commission has, by such resolution, approved a report estimating the public services which would be made necessary or desirable, the expense thereof, the number of jobs, the estimated payroll on account of the acquisition of the economic development facilities and the cost of the economic development facilities and has submitted such report to the Area Plan Commission of St. Joseph County, Indiana; and, After giving notice in accordance with the Act, the Commission held a public hearing on the proposed financing and adopted a resolu- tion finding the proposed financing complies with the purposes and provisions of the Act, approving the financing and approving the final form and terms of the economic development revenue bonds proposed to be issued by the City for the purpose of funding a direct loan from the City to the User to finance the cost of acquir- ing and installing certain industrial manufacturing equipment, the Loan Agreement and Trust Indenture and Security Agreement, which resolution and other instruments and information pertaining to the proposed financing have been transmitted to the Common Council of the City by the Secretary of the Commission; and, Pursuant to the Act, this Common Council has adopted a resolution finding that the proposed financing of the acquisition of such economic development facilities by the User will be of bene- fit to the economic welfare of the City of South Bend and to the - 2 - 11/26/79 County of St. Joseph, approving the proposed financing and author- izing the issuance by the City of $600,000 principal amount of economic development revenue bonds, (Jackel, Inc. Project) (the "Bonds ") payable solely from the sources, having such terms and provisions and secured as provided by the Loan Agreement and Trust Indenture (hereinafter called "the "Loan Agreement ") between the City and the First Bank and Trust Company of South Bend, Indiana, (the "Trustee "). NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: Section 1. Public Benefits: The Common Council of the City hereby finds and determines that the industrial manufacturing equip- ment to be acquired and installed with the proceeds of the bonds herein authorized are "economic development facilities" as that phrase is used in the Act and that acquisition and construction of the Project will increase employment opportunities and increase diversification of economic development in and near the City, will improve and promote the economic stability, development and welfare of the area in and near the City and will encourage and promote the expansion of in- dustry, trade and commerce in the area in and near the City and the location of other new economic development facilities in such area. Section 2. Findings: The Common Council hereby finds that this Ordinance (the "Bond Ordinance ") is of public benefit to the economic welfare of the City and County by tending to overcome the deficiencies previously found to exist, to -wit: insufficient employ- ment opportunities and insufficient diversification of economic develop- ment, and that such benefit is greater than the cost of public facili- ties (as that phrase is defined in the Act) which will be required by the Project and further that the proposed financing will be of benefit to the welfare of the City and complies with the purposes and provisions of the Act. - 3 - 11/26/79 Section 3.. Authorization of $600,000 Economic Development Revenue Bonds: In order to pay the cost of acquiring and installing the industrial manufacturing equipment included in the Project, there are hereby authorized to be issued, sold and delivered $600,000 aggregate principal amount of the Bonds. It is hereby recognized that pursuant to the terms of the Agreement, any balance of the cost of the Project will be paid for by the User. Section 4. Definitions: In addition to the words and terms defined in this Bond Ordinance, the words and terms used in this Bond Ordinance shall have the meanings set forth in the Loan Agreement unless the context or use indicates another or different meaning or intent and the form of the Bonds and the form of the Loan Agreement, which forms are before the meeting, are hereby incorporated by reference in this Bond Ordinance and the Clerk is hereby directed to insert them into the minutes of the Common Council and to keep them on file. Section 5. Terms of the Bonds: The of the Bonds that may be issued is hereby $600,000. The terms of the Bonds will be Loan Agreement and such terms are adopted approval of the Loan Agreement. The Bonds are limited obligations of total principal amount expressly limited to such as set forth in the herein by reference and by the City, payable solely from payments of principal, premium, if any, and interest made by the User pursuant to the Loan Agreement, except to the extent that the principal of, premium, if any, and interest on the Bonds may be paid out of money attributable to Bond proceeds or from temporary investments, or from other moneys, if any, accruing to the Trustee for the benefit of the bondholders. The Loan Agreement shall equally and ratably secure all outstanding Bonds, except that so long as there is no event of default under the Agreement, payments by the User shall be used by the Trustee to make like payment of principal of, or premium or interest on, the Bonds. By the Loan Agreement, the City will assign to the Trustee the City's rights under the Agreement, including the right of the City to receive payments thereunder, all as security for the payment of - 4 - 11/26/79 the Bonds. The Bonds will be secured as provided in the Loan Agreement, and the terms of said instrument is adopted herein by reference and by approval of the instruments. The Loan Agreement and documents executed thereunder will con- stitute the sole security for the Bonds. The Bonds and the interest thereon shall be a valid claim of the respective holders only against the Bond Fund created under the Loan Agreement and other moneys held by the Trustee. The City will have no ownership interest in the Project. The Bonds do not and shall never constitute an indebtedness of, or a charge against the general credit or taxing power of the City. Section 6. Sale of the Bonds: The Mayor and the Clerk of the City are hereby authorized and directed to sell the Bonds to the First Bank and Trust Company of South Bend, Indiana, at a price of par, plus accrued interest from the date of the Bonds to the date of delivery and payment therefor. Section 7. Indenture: The form and terms of the Loan Agreement and the Security Agreement pertaining to Jackel, Inc. Project and the issuance of the industrial development revenue bonds pursuant thereto are hereby approved and adopted. Said forms of Loan Agreement and Security Agreement and Industrial Development Revenue Bond which are on file are hereby incorporated by reference into this Ordinance and said form shall be inserted into the minutes of the Common Council of the City of South Bend, Indiana and shall be kept on file by the City Clerk of South Bend, Indiana. Section 8. General: The Mayor and Clerk be, and they each hereby are, authorized and directed, in the name of and on behalf of the City to execute any and all instruments, perform any and all acts, approve any and all matters, and do any and all things deemed by them, or any of them, to be necessary or desirable in order to carry out the purposes of this Bond Ordinance (including the pre- ambles hereto), the acquisition and installation of the Project by the User, the issuance and sale of the Bonds, and the securing of the Bonds under the Loan Agreement. - 5 - 11/27/79 Section 9. Effective Date: This Bond Ordinance shall be in full force and effect from and after its passage and approval as provided by law. - 6 - 1st READ;'NG ;25;7 wUBLIC HEARING 169— / '7 -2 2nd READING NOT APPR0,VjW, REFERRER �� PASSED nc IN", iVl PRR N N N ti V 2 Irene. LReminTon :-Cv C. : - U'ERX, SOLI'M 8EPID' (NV, CITY of SOUTH BEND PETER I NEMETH, Mayor SOUTH BEND, INDIANA 46601 Economic Development Commission 230 West Jefferson Boulevard (219) 234 -0051 Jerry Hammes, President Frank Horvath, Vice- President Walter A. Mucha, Secretary Kenneth P. Fedder, Counsel Members of the South Bend Common Council County - City Building South Bend, Indiana 46601 RE: Revenue Bond Application JACKEL, INC., an Indiana Corporation, PROJECT Dear Councilmen: The South Bend Economic Development Commission has received an application from JACKEL, INC., an Indiana Corporation, for the issuance of a Revenue Bond issue in the amount of $600,000.00 for the acquisition and installation of industrial manufacturing equipment to be located in the facilities at 15314 Harrison Road, Penn Township, Mishawaka, St. Joseph County, Indiana. With the additional equipment in the existing facility, there will be created approximately 8 new jobs with an estimated payroll of approximately $108,000.00, annually. I am enclosing herewith a proposed form of Inducement Resolution, which I would ask that you place on your agenda under Resolutions for December 3, 1979, and a proposed form of Ordinance which I would ask that you schedule for first reading on December 3, 1979, with an anticipated public hearing on December 17, 1979. Hawq tiN9 F.ti?az �P� FILE KPF /mb Irene G'ron CITY CLERK, SN"R) BUNT J, INN. pectfully yours, P. FEDDER ATTORNEY FOR THE SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION