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HomeMy WebLinkAbout11258-26 Ordinance Authorizing the City to Issue One or More Series of its Taxable Economic Development Tax Increment Revenue Bonds and Approving and Authorizing Other Actions in Respect Thereto in Connection With the Colfax Corner ML, LLC Project ORDINANCE No . 11258-26 Passed by the Common Council of the City of South Bend, Indiana February 9, 26 20 Attest: 1 City Clerk Bianca L. Tirado Attest: President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana February 10, 20 26 IMAAAA/d-) City Clerk Bianca L. Tirado 1 Approved and signed by me 1 �1t�r� I 1 20 26 Mayor ,, --A-;c4UT if 4 i 01' , ‘01171;171 ; .4:4,, ‘ A. ,.‘ " l'Atu,r,411/1P5' ' � i ,' a , . . Cat ( rt ,� fds ' v•V.: , , "', it,.%,/•L ' Vi , /865 ' BILL NO. 05-26 ORDINANCE NO. 11258-26 AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE CITY TO ISSUE ONE OR MORE SERIES OF ITS TAXABLE ECONOMIC DEVELOPMENT REVENUE BONDS AND APPROVING AND AUTHORIZING OTHER ACTIONS IN RESPECT THERETO IN CONNECTION WITH THE COLFAX CORNER ML, LLC PROJECT STATEMENT OF PURPOSE AND INTENT Indiana Code 36-7-11.9 and 12, as amended from time to time (collectively, the "Act"), declares that the financing and refinancing of economic development facilities constitutes a public purpose. Pursuant to the Act, the City of South Bend, Indiana (the "City") is authorized to issue revenue bonds for the purpose of financing, reimbursing or refinancing the costs of acquisition, construction,renovation, installation and equipping of economic development facilities in order to foster diversification of economic development and creation or retention of opportunities for gainful employment in or near the City. The South Bend Redevelopment Commission (the "Redevelopment Commission"), the governing body of the South Bend Department of Redevelopment and the Redevelopment District of the City (the "District"), exists and operates under the provisions of Indiana Code 36-7-14, as amended from time to time(the"Redevelopment Act"). The Redevelopment Commission has previously declared an area within the City as an economic development area and known as the "River West Development Area" (the "Area") and designated portions of the Area as allocation areas in accordance with Section 39 of the Redevelopment Act for the purposes of capturing ad valorem property taxes levied and collected on all taxable real property from the incremental assessed value in such Area. The City,the Redevelopment Commission and Colfax Corner ML,LLC(the"Developer"), have entered into an Economic Development Agreement, dated as of December 18, 2025 (the "Development Agreement"),whereby the Developer has agreed that the Developer will undertake the acquisition, development, construction, equipping, renovation, and/or reconstruction of space in the former South Bend Tribune building, along with new construction of an adjacent building along Main and Colfax in the City to include approximately 202,000 rentable square feet of flexible workspace and ground-floor retail, as more fully described in the Development Agreement (the "Project'). The Redevelopment Commission on December 18, 2025, approved and adopted its Resolution No. 3661 for the purpose of making certain amendments to the Area and its plan to designate an area, presently part of the Area, as a separate allocation area pursuant to Section 39 of the Redevelopment Act to be known as the"Lafayette North Allocation Area" (the "Lafayette North Allocation Area") for purposes of capturing ad valorem property taxes levied and collected on all taxable real property from the incremental assessed value located in the Lafayette North Allocation Area (such tax increment revenues, the "Lafayette North Allocation Area TIF Revenues"). Prior to the issuance of the Bonds (as hereinafter defined), the City and the Indiana Economic Development Corporation (the "IEDC") expect to enter into an agreement (the "IDD Agreement") that establishes an innovation development district within the City in accordance with Indiana Code 36-7-32.5, as amended from time to time (the "IDD Act"), to be known as the "South Bend Downtown IDD"(the"South Bend IDD"). The IDD Agreement will provide for the capturing of funds referred to as"net increment," as defined in Section 8 of the IDD Act, generated by business activity within the South Bend IDD (the "State IDD Funds"), which funds will be deposited in a local IDD fund established by the IEDC for the South Bend IDD in accordance with Sections 18 and 19 of the IDD Act. The Developer has consulted with the City, the South Bend Economic Development Commission (the "Economic Development Commission") and the Redevelopment Commission concerning the Project, and has requested that the City authorize and issue its taxable economic development revenue bonds under the Act, to be designated as the "City of South Bend, Indiana, Taxable Economic Development Revenue Bonds, Series 2026(Colfax Corner ML, LLC Project)" (with such further series, different series, or one or more subseries designation as determined to be necessary or appropriate) (the "Bonds"), a portion of the net proceeds of such Bonds to be used for the purpose of financing, refinancing or reimbursing a portion of the costs of the Project, capitalized interest on the Bonds, if necessary, a debt service reserve fund from proceeds of the Bonds or the cost of a reserve surety,if necessary, and costs relating to the issuance of the Bonds. Prior to the issuance of the Bonds,the Redevelopment Commission will pledge the portion of the Lafayette North Allocation Area TIF Revenues derived from the parcels comprising the Project Site (as defined in the Development Agreement) to the payment of debt service on the Bonds (the"Project TIF Revenues"). Prior to the issuance of the Bonds, pursuant to the terms of the IDD Agreement, the IEDC will take such actions and enter into such agreements necessary to pledge or otherwise obligate the State IDD Funds attributable to the Project to the payment of debt service on the Bonds (the "Project IDD Revenues"). The Economic Development Commission has rendered a report concerning the proposed financing or refinancing of economic development facilities for the Developer. Following a public hearing,pursuant to Section 24 of the Act,the Economic Development Commission found that the financing, refinancing or reimbursing of a portion of the costs of the Project complies with the purposes and provisions of the Act and that each such financing, refinancing or reimbursement of such costs will be of benefit to the health and public welfare of the City. The Economic Development Commission has considered whether the financing of the Project will have an adverse competitive effect or impact on any similar facility or facility of the same kind already constructed or operating in the corporate boundaries of the City. Pursuant to and in accordance with the Act, the City desires to provide funds necessary to finance, refinance or reimburse a portion of the costs of the Project by issuing the Bonds. The Act provides that such Bonds may be secured by a trust indenture between an issuer and a corporate trustee. The City intends to issue the Bonds consistent with the terms of this Ordinance, and pursuant to a Trust Indenture for the Bonds, to be dated as of the first day of the month in which the Bonds are issued (the "Indenture"), by and between the City and a corporate trustee to be selected by the City, in order to secure funds necessary to provide for the financing,refinancing or reimbursing of a portion of the costs of the Project in accordance with the terms of a Financing and Loan Agreement with the Developer, to be dated as of the first day of the month in which the Bonds are issued (the "Financing Agreement"), by and between the City and the Developer with respect to the use(or deemed use)of the proceeds of the Bonds and the completion of the Project. No member of the Common Council of the City (the "Common Council") has any pecuniary interest in any employment, financing agreement or other contract made under the provisions of the Act and related to the Bonds authorized herein, which pecuniary interest has not been fully disclosed to the Common Council, and no such member has voted on any such matter, all in accordance with the provisions of Section 16 of the Act. The forms of the Bonds, the Indenture and the Financing Agreement (collectively, the "Financing Documents"), and a form of this proposed Ordinance were submitted to, and approved by,the Economic Development Commission,which documents were incorporated by reference in 2 the resolution heretofore adopted by the Economic Development Commission, which resolution has been transmitted to the Common Council in accordance with the Act. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: SECTION I. Findings;Public Benefits. It is hereby found that the financing,refinancing or reimbursing of a portion of the costs of the economic development facilities constituting the Project referred to in the Financing Documents previously approved by the Economic Development Commission and presented to this Common Council, the issuance and sale of the Bonds, the use(or deemed use)of a portion of the proceeds of the Bonds by the Developer for the financing, refinancing or reimbursing of a portion of the costs of the Project, the payment of the Bonds from the Project TIF Revenues, the Project IDD Revenues, and other sources pursuant to the Financing Documents, and the securing of the Bonds under the Indenture comply with the purposes and provisions of the Act and will be of benefit to the health, prosperity, economic stability and general welfare of the City and its citizens. SECTION II. Approval of Financing. At the public hearing held before the Economic Development Commission, the Economic Development Commission considered whether the Project would have an adverse competitive effect on any similar facilities located in or near the City. This Common Council hereby confirms the findings set forth in the Economic Development Commission's resolution and concludes that the Project and the financing, refinancing or reimbursing of a portion of the costs of the Project will be of benefit to the health, prosperity, economic stability, and general welfare of the citizens of the City. SECTION III. Copies of Financing Documents on File. The substantially final forms of the Financing Documents shall be incorporated herein by reference and shall be inserted in the minutes of the Common Council and kept on file by the Clerk of the City (the "Clerk"). In accordance with the provisions of Indiana Code 36-1-5-4, two (2) copies of the Financing Documents are on file in the office of the Clerk for public inspection. SECTION IV. Authorization of the Bonds; Terms of the Bonds. The City shall issue the Bonds in one(1)or more series in the maximum aggregate principal amount not to exceed Thirty Million Eight Hundred Thousand Dollars($30,800,000),which Bonds shall mature not later than thirty (30) years from the date of the issuance of the Bonds, and shall bear interest at a per annum rate not exceeding eight percent (8.0%) per annum. The Bonds may be issued on a draw basis. Principal of and interest on the Bonds shall be payable on February 1 and August 1 of each year(or on such other dates as selected by the Controller of the City prior to the sale of the Bonds based upon the advice of the municipal advisor to the City), beginning not sooner than August 1, 2026. The Bonds may be issued as serial bonds and/or term bonds subject to mandatory sinking fund redemption. The Bonds may be subject to optional redemption prior to maturity and subject to redemption as otherwise provided in the Financing Documents. The Bonds shall be issued in minimum denominations of One Hundred Thousand Dollars ($100,000) and integral multiples of One Thousand Dollars ($1,000) in excess thereof. The Bonds are to be issued for the purpose of procuring funds to (a) pay all or a portion of the cost of acquisition, development, construction, equipping,renovation,and/or reconstruction,as the case may be,of the Project,(b)pay capitalized interest on the Bonds for a period not to exceed one (1) year following project completion (if necessary), (c) fund a debt service reserve fund (if necessary) or the costs of a reserve surety (if necessary), and(d)pay all costs relating to the issuance of the Bonds. The Bonds shall be lettered and numbered R-1 upward. The Bonds shall be special and limited obligations of the City,payable solely from the trust estate created and established under the Indenture(the"Trust Estate"), which Trust Estate shall consist of the funds and accounts created under the Indenture together with a pledge by the Redevelopment Commission of the Project TIF Revenues, subject to the terms and conditions of a pledge agreement between the Redevelopment Commission and the City(the"TIF Pledge Agreement"), a pledge by the IEDC of the Project IDD Revenues, subject to the terms and conditions of one or more agreements between the IEDC and the City to pledge or otherwise obligate the Project IDD Revenues (collectively, the "IDD Pledge Agreement"), and from such other sources pursuant to the final forms of the Financing Documents, and upon such terms and conditions as otherwise provided in the Financing Documents and this Ordinance. The Bonds and the interest thereon do not and shall never constitute an indebtedness of, or charge against the general credit of, or taxing power of the City, but shall be special and limited obligations of the City, payable solely from the sources as described in the Financing Documents. 3 The Mayor of the City(the"Mayor") and the Clerk(the"Clerk") are hereby authorized to approve with the advice of counsel, a Bond Purchase Agreement (the "Bond Purchase Agreement") with the Developer or the Developer's designee in a form and substance acceptable to the Mayor and the Clerk to provide for the initial sale of all or a portion of the Bonds. The Mayor and the Clerk are hereby authorized and directed to execute and deliver the Bond Purchase Agreement in a form and substance acceptable to them and consistent with the terms and conditions set forth in this Ordinance, with such acceptance of the form and substance thereof to be conclusively evidenced by their execution thereof. SECTION V. Execution and Delivery of Financing Documents. Each of the Mayor and the Clerk and any other officer of the City are authorized and directed to execute the Financing Documents, in such forms as are on file with the Clerk with such changes therein as shall be approved by the Mayor and the Clerk,with execution of those documents by the appropriate officer or representative of the City constituting conclusive evidence of such approval of any such changes, such other documents approved or authorized herein and any other document which may be necessary, appropriate or desirable to consummate the transaction contemplated by the Financing Documents, the Bond Purchase Agreement, and this Ordinance, and their execution is hereby confirmed on behalf of the City. The signatures of the Mayor, the Clerk and any other officer of the City on the Bonds which may be necessary or desirable to consummate the transaction, and their execution is hereby confirmed on behalf of the City. The signatures of the Mayor, the Clerk and any other officer of the City on the Bonds may be facsimile signatures or electronic signatures. The Mayor, the Clerk and any other officer of the City are authorized to arrange for the delivery of such Bonds to the purchaser thereof, payment for which will be made in the manner set forth in the Financing Documents. The Mayor, the Clerk and any other officer of the City may, by their execution of the Financing Documents requiring their signatures and imprinting of their facsimile signatures thereon, approve any and all such changes therein and also in those Financing Documents which do not require the signature of the Mayor, the Clerk or any other officer of the City and in any other documents contemplated to be executed or approved by the City in connection with the issuance of the Bonds or effecting the purposes of this Ordinance without further approval of this Common Council or the Economic Development Commission if such changes do not affect terms set forth in Sections 27(a)(1)through and including(a)(10)of the Act. SECTION VI. Binding Effect. The provisions of this Ordinance and the Financing Documents securing the Bonds of any series or subseries shall constitute a contract binding between the City and the holders of the Bonds of such series or subseries, and after the issuance of the Bonds, this Ordinance shall not be repealed or amended in any respect which would adversely affect the rights of such holders so long as the Bonds or the interest thereon remains unpaid. SECTION VII. Findings Relating to Project. The Common Council hereby finds that (a) the Project and the related financing assistance for the Project provided in the Financing Documents are consistent with the economic development plan for the Area and the Lafayette North Allocation Area; (b) the Developer would not undertake the Project without the financing assistance provided in Financing Documents; and (c) the Project furthers the economic development of the Lafayette North Allocation Area and the Area generally. SECTION VIII. Pledge of Project TIF Revenues. This Common Council does hereby acknowledge and approve the pledge of the Project TIF Revenues to the payment of the Bonds pursuant to the Indenture. Pursuant to Indiana Code 5-1-14-4,the pledge of the Project TIF Revenues pursuant to the Indenture is intended to be binding from the time the pledge is made, with such Project TIF Revenues so pledged and thereafter received by the City to be immediately subject to the lien of the pledge without any further act, and the lien of such pledge to be binding against all parties having claims of any kind, in tort, contract, or otherwise against the City, regardless of whether the parties have notice of any such lien. SECTION IX. Pledge of Project IDD Revenues. This Common Council does hereby acknowledge and approve the pledge of the Project IDD Revenues to the payment of the Bonds pursuant to the Indenture. Pursuant to Indiana Code 5-1-14-4, the pledge of the Project IDD Revenues pursuant to the Indenture is intended to be binding from the time the pledge is made, with such Project IDD Revenues so pledged and thereafter received by the City to be immediately subject to the lien of the pledge without any further act, and the lien of such pledge 4 to be binding against all parties having claims of any kind, in tort, contract, or otherwise against the City, regardless of whether the parties have notice of any such lien. SECTION X. No Liability. No stipulation, obligation or agreement herein contained or contained in the Financing Documents,the Bonds or in any other agreement or document executed on behalf of the City shall be deemed to be a stipulation, obligation or agreement of any member of the Common Council, or any officer, agent or employee of the City in his or her individual capacity, and no such member of the Common Council, officer, agent or employee shall be personally liable on the Bonds or be subject to personal liability or accountability by reason of the issuance thereof. SECTION XI. Severability. If any section, paragraph or provision of this Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Ordinance. SECTION XII. Open Meetings. It is hereby determined that all formal actions of the Common Council relating to the adoption of this Ordinance were taken in one or more open meetings of the Common Council, that all deliberations of the Common Council and of its committees, if any, which resulted in formal action, were in meetings open to the public, and that all such meetings were convened, held and conducted in compliance with applicable legal requirements, including Indiana Code 5-14-1.5, as amended. SECTION XIII. Further Authorizations. The Mayor, the Clerk, the Controller of the City and any other officer of the City are hereby authorized and directed, in the name and on behalf of the City, to execute, attest and deliver such further instruments and documents, and to take such further actions, in the name of the City as in their judgment shall be necessary or advisable in order fully to consummate the transactions described herein and carry out the purposes of this Ordinance, and any such documents heretofore executed and delivered and any such actions heretofore taken,be, and hereby are, ratified and approved. SECTION XIV. Ratification of Actions. All acts of the officers of the City which are in conformity with the purpose and intent of this Ordinance and in the furtherance of the issuance of the Bonds and the execution, delivery and performance of the documents and agreements authorized hereby are in all respects ratified, approved and confirmed. SECTION XV. No Conflict. Any ordinances,resolutions or orders or parts thereof in conflict with this Ordinance are to the extent of such conflict hereby repealed. SECTION XVI. Effectiveness. This Ordinance shall be in full force and effect upon adoption and compliance with Indiana Code 36-4-6. [Signature Page Follows] 5 Duly passed and adopted on this 9- day of February , 2026 by the Common Council of the City of South Bend, Indiana. Canneth J. Lee,'C ouncil President South Bend Common Council Attest: Bianca L. Tirado, C. Clerk Office of the City Clerk Presented by me, the undersigned Clerk of the City of South Bend, to the Mayor of the City of South Bend, Indiana on the 10th day of February , 2026, at 12 o'clock p.m. (40/41 Bianca L. Tirado, it lerk Office of the City Clerk Approved and signed by me on the /teaday of W/« , 2026, at / o'clock f.m. Ja Mueller, Mayor Ci of South Bend, Indiana 6