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HomeMy WebLinkAboutAuthorizing $10,000,000 Revenue Obligations Rahn Proeprties IIORDINANCE No 6605 -79 Passed by the Common Council of the City of South Bend, Indiana_ July 9 1979 IRENE K. GAMMON Presented by me to the Mayor of the City of South Bend, Indiana Approved and signed by City Clerk July 10 �9 79 of Common Council IRENE K. GAMMON 19-n Clerk ORDINANCE N0. (,0 .> AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $10,000,000 REVENUE OBLIGATIONS OF THE CITY OF SOUTH BEND, INDIANA, FOR THE PURPOSE OF MAKING A LOAN TO RAHN PROPERTIES II IN ORDER TO FINANCE THE ACQUISITION AND CONSTRUCTION OF CERTAIN ECONOMIC DEVELOPMENT FACILITIES; AUTHORIZING EXECUTION OF A LOAN AGREEMENT, INDENTURE OF TRUST, BOND PURCHASE AGREEMENT AND OTHER DOCUMENTS IN CONNECTION THERE- WITH. BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: Section 1. Preliminary Statement. The following recitals establish the background for the financing authorized hereby: (a) The City of South Bend Indiana (hereinafter called the "City "), by virtue of Indiana Code 18- 6 -4.5, as amended (herein- after called the "Act "), is authorized and empowered to make direct loans to users for the acquisition and construction of economic development facilities as defined in the Act to overcome insufficient employment opportunities and insufficient diversification of business, commerce and 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 revenue obligations to obtain funds to make such loan and to secure said revenue obligations pursuant to a trust indenture by the pledge of one or more notes of the user. (b) Rahn Properties II (the "Partnership "), of partnership organized and existing under and by virtue of the laws of Indiana, has agreed to acquire and construct a hotel and related facilities (the "Project ") which is an "economic development facility" as defined in the Act. (c) The Project is located in the City and will create new employment opportunities and provide expansion and diversification of business, commerce and industry in and near the City. (d) The City proposes to loan to the Partnership the proceeds of sale of the revenue obligations hereinafter authorized, and the Partnership has agreed to make payments on its notes evidencing its loan obligations in amounts sufficient to pay the principal of and interest and premium, if any, on such revenue obligations. (e) The South Bend Economic Development Commission (the "Commission"), which is functioning and operating under the Act, (1) has found by written resolution that because of existing insuf- ficient employment opportunities and insufficient diversification of business, commerce and industry, the economic welfare of the City would be benefited by financing costs of acquisition and construction of the Project; (2) has 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 and construction of the Project and the cost thereof, (3) has submitted such report to the plan commission and school corporation having jurisdiction over such facilities, and (4) has, after giving notice in accordance with the Act, held a public hearing on the proposed financing and adopted resolutions finding the proposed financing benefits the economic welfare of the City and complies with';the_ purposes and provisions of the Act and approving the financing and the proposed form and terms of such revenue obligations and other financing instruments herein identified, which resolution and other instruments and information pertaining to the proposed financing have been transmitted to the Common Council of the City.. Section 2. Public Benefits and Findings. The Common Council of the City hereby finds and determines that the Project as described in Exhibit A to the Loan Agreement between the City and the Partnership (the 11Loan Agreement ") to be acquired and constructed in part with the proceeds of $10,000,000 principal amount Economic Development Revenue Bonds, Series A (Rahn Properties II Project) (the "Series A Bonds "), in part with the proceeds of an Urban Development Action Grant received by the City pursuant to Section 119 of the Housing and Community Development Act of 1974 and in part from funds of the Partnership are "economic development facilities" as that phrase is used in the Act; that acquisition and construction of the Project will increase employment opportuni- ties and increase diversification of business, commerce and industry 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 industry, trade and commerce in the area in and near the City and the location of other new commercial and business facilities in such area;. and that this Ordinance complies with the purposes and provisions of the.A-et -.:and is of public benefit to the economic welfare of the City by tending to overcome the deficiencies previously found to exist, to wit:. insufficient employment opportunities and insufficient diversifica- tion of business, commerce and industry, and that such benefit is greater than the cost of public facilities (as that phrase is defined in the Act) which will be required by the Project. Section 3. Authorization of Series A Bonds. In order to pay costs of acquiring and constructing the Project, including interest on the Series A Bonds during the period of construction, there are hereby authorized to be issued, sold and delivered $10,000,000 aggregate principal amount of the Series A Bonds. Pursuant to the terms of the Loan Agreement, any balance of the cost of the Project not paid for out of the proceeds of the Series A Bonds or Urban Development Action Grant Funds will be paid for by the Partnership.. Section 4. Terms for the Series A Bonds. The Series A Bonds shall bear interest at the rate of -1/2% per annum payable on the first day of each _month until completion of the Project and thereafter shall be payable as to both principal and interest in the monthly amount of $76,750 until 30 years from the first day of the month in which initially issued and delivered when the entire unpaid balance will mature. The Series A Bonds shall be dated, shall be in such form, shall be in such denominations, shall be payable in such medium of MPAS payment and at such place or places, tion at the times and in the manner, higher rates and shall contain such vided in the Indenture of Trust (the and a state or national bank located the purchaser of the Series A Bonds. shall be subject to redemp- shall bear interest at such other provisions as are pro - "Indenture ") between the City in Indiana and approved by The Series A Bonds shall be executed on behalf of the City with the official manual or facsimile signature of the Mayor and attested with the official manual or facsimile signature of the City Clerk and the corporate seal of the City or a facsimile thereof shall be impressed or imprinted thereon. The Series A Bonds are limited obligations of the City payable solely from payments of principal, premium, if any, and interest made by the Partnership on the Series A Note in the form attached as Exhibit B to the Loan Agreement, except to the extent that the principal of, premium, if any, and interest on the Series A Bonds may be paid out of money attributable to Series A Bond proceeds or from temporary investments, or from other moneys, if any, accruing to the Bond Trustee for the benefit of the bondholders. The Series A Bonds do not and shall newer constitute an indebtedness of, or a charge against the general credit or taxing power of, the City. By the Indenture, the City will assign or pledge to the Trustee the City's rights under the Loan Agreement, including the right of the City to receive payments under the Series A Note, all as security for the payment of the Series A Bonds. Section 5. Indenture. In order to secure payment of the principal of and interest on the Series A Bonds, the Mayor and City Clerk shall execute, acknowledge and deliver in the name and on behalf of the City the Indenture to be dated as of the first day of the month in which the Series A Bonds are issued and in substantially the form submitted to the Common Council and before the meeting at which this Ordinance is adopted,, which is hereby approved in all respects.. Section 6. Loan Agreement. In order to provide for the loan of the proceeds of sale of the Series A Bonds to the Partner- ship and to provide for the payment by the Partnership of an amount sufficient to pay the principal of and premium, if any, and interest on the Series A Bonds, the Mayor and City Clerk shall execute, acknowledge and deliver in the name and on behalf of the City the Loan Agreement to be dated as of the first day of the month in which the Series A Bonds are issued and in substantially the form submitted to this Common Council and before the meeting at which this Ordinance is adopted, which is hereby approved in all respects. Section 7. Acceptance of Series A Note of Partnership. In connection with the Series A Bonds, the City accepts as security for such Series A Bonds the Series A Note in substantially the form attached as Exhibit B to the Loan Agreement. Section 8. Sale. The Series A Bonds shall be sold to the Aetna Casualty and Surety Company, Hartford, Connecticut, pur- suant to a Bond Purchase Agreement in substantially the form before the meeting of the Common Council at which this Ordinance is adopted at a price of 100% of the principal amount thereof plus accrued in- terest, if any. The Mayor and City Clerk are authorized to execute and deliver such Bond Purchase Agreement in substantially the form before the meeting at which this Ordinance is adopted. -3- Section 10. Tax Election. The City elects to have the provisions of Section 103 b D of the Internal Revenue Code of 1954, as amended, apply to the Series A Bonds and the Mayor and City Clerk, or either of them, are authorized and directed to make such election prior to the issuance and delivery of the Series A Bonds in accordance with the applicable regulations or procedures of the Internal Revenue Code.. Section 11. General. The Mayor, City Clerk and City Controller be and they are each hereby 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 Ordinance. Section 12. Effective Date. This Ordinance shall be in full force and effect from and after its passage and approval as provided by law. ATTEST: w Pres ng fficer of the Common Council F1I signed only to provide an opportunity for public discussion City Clerk and Council action on the issue. 1979. Presented to the Mayor this day of ATTEST: Approved this day of City Clerk City Clerk 1979• . .. ....... .......... Mayor, City of South Bend, Indiana -4- JUL 3 1079 1st READING �` 9 Irene Ciauj PUBLIC HEARING Aq -i c CITY CLERK, SOU TN I�N� trod READING �� 7 NOT APPROVED REFERRED PASSED ;2_ S � � �! • �w#.ep Economic Development Commission Jerry Hammes, President Frank Horvath, Vice- President Walter A. Mucha, Secretary Kenneth P. Fedder, Counsel CITY of SOUTH BEND PETER J. NEMETH, Mayor SOUTH BEND, INDIANA 46601 Common Council of the City of South Bend County -City Building South Bend, Indiana July 3, 1979 JUL 3 119 Irene Gammon CITY CLERK, SoLiT +j Re: City of South Bend, Indiana $10,000.00 Economic Development Revenue Bonds, Series A (Rahn Properties II Project) Gentlemen: 230 West Jefferson Boulevard (219) 234 -0051 Pursuant to the provisions of Indiana Code 18- 6- 4.5 -17, there are enclosed: 1. Resolution adopted on June 18, 1979 by the South Bend Economic Development Commission which includes a re- port on the proposed financing of economic development facilities, which report has been submitted to the plan commission and school corporation having jurisdiction where the facilities are to be located. 2. Resolution adopted on June 29, 1979 by the South Bend Economic Development Commission after a public hearing on the proposed financing of such economic development facilities approving the proposed financing and approving the form and terms of Economic Development Revenue Bonds, Loan Agreement, Indenture of Trust, Bond Purchase Agreement and Bond Ordinance. 3. Copies of each of the financing documents re- ferred to in the preceding paragraph. The South Bend Economic Development Commission requests that you consider these enclosures and the proposed financing con- templated thereby and take such additional action as is necessary to complete such financing. SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION By ) Secret ry