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HomeMy WebLinkAboutAuthorizing $1,100,000.00 Economic Development Revenue Bonds - Laidig Silo Unloaders IncORDINANCE No. 6602 -79 Passed by the Common Council of the City of South Bend, Indiana_ Attest: July 9 IN 19 79 IRENE K. GAMMON Presented by me to the Mayor of the City of South Bend, Indiana July 10 19 79 Approved and signed by me �t".e /a , City Clerk of Common Council IRENE K. GAMMON 19,T Clerk CITY OF SOUTH BEND, INDIANA ORDINANCE NO. `L 0 Q • 7 9 AN ORDINANCE AUTHORIZING THE ISSUANCE OF $1,100,000.00 ECONOMIC DEVELOPMENT REVENUE BONDS ( LAIDIG SILO UNLOADERS, INC. PROJECT) OF THE CITY OF SOUTH BEND, INDIANA FOR THE PURPOSE OF FUNDING A LOAN TO LAIDIG SILO UNLOADERS, INC. IN ORDER TO FINANCE THE ACQUISITION AND CONSTRUCTION OF CERTAIN REAL ESTATE AND ECONOMIC DEVELOPMENT FACILITIES LOCATED WITHIN ST. JOSEPH COUNTY, INDIANA, FOR USE BY LAIDIG SILO UNLOADERS, INC.: AUTHORIZING EXECUTION OF THE LOAN AGREEMENT, MORTGAGE AND SECURITY AGREEMENT: AUTHORIZING AN INDENTURE OF TRUST APPROPRIATE FOR THE PROTECTION AND DISPOSITION OF THE REVENUES FROM THE LOAN AGREEMENT: AND AUTHORIZING THE TERMS AND SALE OF SAID BONDS WHEREAS, 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 facil- ities to overcome insufficient employment opportunities and insuffi- cient 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 acquis- ition or construction of such economic development facilities, in- cluding engineering, legal fees, and all other expenses relating thereto during construction, including the costs of issuing the bonds and to secure said bonds pursuant to a Loan Agreement and Trust In- denture; and, WHEREAS, Laidig Silo Unloaders, Inc. (the "User ") is a cor- poration for profit organized and existing under the laws of the State of Delaware, with its principal office located in St. Joseph County, Indiana, and duly qualified to conduct business in the State of Indiana; and, WHEREAS, the User has agreed to acquire and construct economic development facilities within the limits of the County of St. Joseph in the State of Indiana and thereby create new employ- ment opportunities and provide diversification of economic develop- ment 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 in- terest on the economic development revenue bonds hereinafter author- ized; and, WHEREAS, 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 mem- bers of the Commission have been duly appointed and qualified pursu- ant 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 insuff- icient diversification of industry, the economic welfare of the City would be benefited by financing the acquisition of ecomomic develop- ment facilities for and on behalf of the User; and WHEREAS, 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 to the Superintendent of the school corporation where the facilities will be located; and, WHEREAS, after giving notice in accordance with the Act, the Commission held a public hearing on the proposed financing and adopted a resolution finding the proposed financing complies with the purposes and provisions of the Act, approving the financing and -2- 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 acquisition of such facilities, the Loan Agreement, Mortgage, Security Agreement and Indenture of Trust, which resolution and other instruments and information pertaining to the proposed financing have been transmitted to the Common Council of the City by the Secre- tary of the Commission; and, WHEREAS, 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 County of St. Joseph, approving the proposed financing and author- izing the issuance by the City of $1,100,000 principal amount of economic development revenue bonds, (Laidig Silo Unloaders, Inc. Project) (the "Bonds ") payable solely from the sources, having such terms and provisions and secured as provided by an Indenture of Trust (hereinafter called the "Indenture ") between the City and American Fletcher National Bank of Indianapolis, Indiana, (the "Trustee "), and a Loan Agreement, Mortgage and Security Agreement, 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 real estate, interests in real estate, other improvements thereon and other machinery and equipment, to be acquired and constructed 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 -3- 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. Section 3. Authorization of $1,100,000 Ecomomic Develop- ment Revenue Bonds: In order to pay the cost of acquiring and con- structing the Project, there are hereby authorized to be issued, sold and delivered $1,100,000 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 unless paid for out of the proceeds of additional parity bonds (the "Additional Bonds ") as identified in the Indenture. 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 Inden- ture and Agreement unless the context or use indicates another or different meaning or intent and the form of the Bonds and the forms of the Agreement and Indenture, 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 total principal amount of the Bonds that may be issued is hereby expressly limited to $1,100,000 provided, however, that Additional Bonds may be issued as hereinafter provided. The terms of the Bonds will be such as are set forth in the Indenture and particularly as set forth in Articles II and III of the Indenture, and such terms are adopted herein by reference and by approval of the Indenture. -4- The Bonds are limited obligations of 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 Indenture, 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 the Bonds. The Bonds will be secured as provided in the Agreement, Indenture and Guaranty and the terms of said instruments are 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 Indenture 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. Additional Bonds: The City may authorize the issuance of Additional Bonds upon the terms and conditions provided in the Indenture and the Agreement. All Additional Bonds shall be of the same rank as the original Bonds, but shall bear such date or dates, bear such interest rate or rates, have such maturity dates, redemption dates and redemption premiums, and be issued at such prices as shall be approved in writing by the City and the User. -5- Prior to the issuance, sale or delivery of any such Addi- tional Bonds, the Common Council shall adopt and approve an appro- priate resolution or resolutions and ordinance or ordinances author- izing execution and delivery of a supplement to the Agreement and a Supplemental Indenture and the issuance of such additional Bonds. Section 7. Sale of the Bonds: The Mayor and the Clerk of the City are hereby authorized and directed to sell the Bonds to the American Pletcher National Bank and Trust Company of Indianapolis, Indiana, at a price of par, plus accrued interest from the date of the bonds to the date of delivery and payment therefor. Section 8. Indenture: In order to secure the payment of the principal of and interest on the Bonds, the Mayor and Clerk shall execute, acknowledge and deliver in the name and on behalf of the City, an Indenture of Trust, herein identified as and called the "Indenture ", in the final form submitted to the Common Council, which is hereby approved in all respects; and the Clerk is hereby directed to insert a copy thereof in the form submitted to this meeting and approved hereby, in the minutes of this Common Council and to certify thereon that the same is the form of Indenture so submitted to this Common Council and approved by this Bond Ordinance and identified herein as the Indenture and to keep such Indenture on file. Said Indenture contains provisions authorized and per- mitted by the Act, and this Bond Ordinance shall constitute a part thereof as therein provided and for all purposes of said Indenture, including the provisions thereof relating to amendments and the serverability of provisions of the Indenture. Section 9. Loan Agreement, Mortgage and Security Agreement: In order to provide for the loaning of the proceeds of the Bonds to acquire and construct the Project and the payment by the User of an amount sufficient to pay the principal of and premium, if any, and interest on the Bonds, the Mayor and Clerk shall execute, acknow- ledge and deliver in the name and on behalf of the City a Loan Agree- ment, Mortgage and Security Agreement, herein identified as and called the "Agreement ", in the final form submitted to this Common Council, which is hereby approved in all respects; and the Clerk is hereby directed to insert a copy thereof, in the form submitted to this meeting and approved hereby, in the minutes of this Common Council and to certify thereon that the same is the form of Agree- ment submitted to this Common Council and approved by the Bond Ordi- nance and identified herein as the "Agreement" and to keep such Agreement on file. Said Agreement contains provisions authorized and permitted by the Act. Section 10. Guaranty: In order to further secure the pay- ment of the principal of, premium, if any, and interest on the Bonds, the City shall require that Chromalloy American Corporation guarantee payment of the principal of, premium, if any, and interest on the Bonds pursuant to a Guaranty Agreement, herein identified as and called the "Guaranty ", in the final form submitted to the Common Council, which is hereby approved in all respects; and the Clerk is hereby directed to insert a copy thereof in the form sub- mitted to this meeting and approved hereby, in the minutes of this Common Council and to certify thereon that the same is the form of Guaranty so submitted to this Common Council and approved by this Bond Ordinance and identified herein as the Guaranty and to keep such Guaranty on file. Said Guaranty contains provisions author- ized and permitted by the Act. Section 11. 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 construction of the Project by the User, the issuance and sale of the Bonds, and the securing -7- of the Bonds under the Indenture. Section '12. Effective Date: This Bond Ordinance shall be in full force and effect from and after its passage and approval as provided by law. // .` / �, . PASSED by the Common Counci,Y off'/ the City of South Bend, Indiana, on this day of , 1979 at o'clock M. ATTEST: City Clerk PRESENTED by me to the Mayor this day of 1979, at o'clock M. .... ............................... City Clerk APPROVED by me this day of , 1979, at o'clock M. .... ............................... Mayor WR 10 READING 6 PUBLIC HEARING 2nd READING 16-AS--2y ;� -- g >- JUN 6 1979 NOT APPROVED REFERRED Enna Gammon PASSED %" 7��' 7 Cf CITY CLERK, SOM FIEND, IND. F. RICHARD KRAMER ATTORNEY AT LAW 1205 ST. JOSEPH BANK BUILDING SOUTH BEND, INDIANA 46601 June 6, 1979 F. RICHARD KRAMER NANCY W. PROUDFIT Mrs. Irene K. Gammon City Clerk City of South Bend County -City Building South Bend, IN 46601 Re: South Bend Economic Development Commission - Laidig Silo Unloaders, Inc. Project Dear Mrs. Gammon TELEPHONE 233 -8275 AREA CODE 219 I am enclosing herewith a copy of the Inducement Reso- lution which was adopted by the South Bend Economic Development Commission with respect to the Laidig Silo Unloaders, Inc. Project on the llth day of May, 1979. Also enclosed are an Inducement Resolution and pro- posed farm of Ordinance with reference to the Laidig Silo Unloaders, Inc. Project which we would request be placed on the agenda of the South Bend Common Council for its meeting to be held on the 11th day of June, 1979. The Laidig company, a subsidiary of Chromalloy Amer- ican Corporation, is presently located in leased facilities at 1320 South Merrifield Avenue. It presently employs 45 persons and has an annual payroll in excess of $495,000.00. The new facil- ity, to be located on Dragoon Trail, approximately 1/4 mile west of Elm Road, would have an area of approximately 50,000 square feet, including factory and offices, and will enable the company, in the near term, to increase employment by no fewer than ten per- sons and to increase its annual payroll by not less than $150,000.00. The American Fletcher National Bank of Indianapolis, Indiana, has issued to the Laidig company its commitment to purchase the bonds. FRK /mj Encls. erely yo s, i 4t Richar Kramer