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HomeMy WebLinkAbout3bii Funding and Reimbursement Agreement FUNDING AND REIMBURSEMENT AGREEMENT between CITY OF SOUTH BEND, INDIANA and CITY OF SOUTH BEND, INDIANA, REDEVELOPMENT DISTRICT Re: CITY OF SOUTH BEND, INDIANA (BEACON HEIGHTS PROJECT) Dated as of July 1, 2026 FUNDING AND REIMBURSEMENT AGREEMENT This FUNDING AND REIMBURSEMENT AGREEMENT, is made and entered into as of July 1, 2026 (the “Agreement”) by and between the CITY OF SOUTH BEND, INDIANA (the “City”), a municipal corporation duly organized and validly existing under the laws of the State of Indiana (the “State”), and the SOUTH BEND REDEVELOPMENT COMMISSION (the “Redevelopment Commission”), as governing body of the CITY OF SOUTH BEND REDEVELOPMENT DISTRICT, a special taxing district duly organized and validly existing under the laws of the State of Indiana (the “District”). WHEREAS, Indiana Code 36-7-11.9 and 36-7-12, as supplemented and amended (collectively, the “Act”), authorizes and empowers the City to make direct loans to users or developers (each as defined under the Act) for the cost of acquisition, construction, or installation of economic development facilities, with such loans to be secured by the pledge of one or more taxable or tax-exempt debt obligations of the users or developers, for diversification of economic development and promotion of job opportunities in or near such City and vests the City with powers that may be necessary to enable it to accomplish such purposes; and WHEREAS, the City, upon finding that the Project (as hereinafter defined) and the proposed financing of the construction thereof will create additional employment opportunities in the City; will benefit the health, safety, morals, and general welfare of the citizens of the City and the State; and will comply with the purposes and provisions of the Act, adopted an ordinance approving a loan to Beacon Apartments Preservation LLC, an Indiana limited liability company (the “Borrower”); and WHEREAS, the City intends to make a direct loan to the Borrower, pursuant to the provisions of the Act, this Agreement, and the Financing and Loan Agreement, dated as of July 1, 2026, between the City and the Borrower (the “Loan Agreement”), all for the purpose of financing a portion of the Project; and WHEREAS, pursuant to Indiana Code 36-7-14-39(b)(4), the Redevelopment Commission may use certain incremental property taxes to reimburse the City for expenditures (including loans) made for local public improvements (which include buildings and all expenses reasonably incurred in connection with the acquisition and redevelopment of property) that are physically located in or physically connected to the Allocation Area (as defined herein); and WHEREAS, pursuant to Resolution No. 3672, adopted by the Redevelopment Commission on June 11, 2026, a copy of which is attached hereto as Exhibit A (the “Authorizing Resolution”), the Commission has authorized the use of Tax Increment Revenues (as defined herein), in the total amount of not to exceed One Million Two Hundred Fifty Thousand Dollars ($1,250,000) from moneys then currently on deposit in the Allocation Fund (as defined herein), in order to reimburse the City for expenditures made, or to be made, to finance a portion of the Project costs. NOW THEREFORE, in consideration of the premises, the covenants and agreements hereinafter contained, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and the District hereby agree and covenant. (End of Recitals) 2 ARTICLE I. DEFINITIONS AND EXHIBITS Section 1.1. Terms Defined. As used in this Agreement, the following terms shall have the following meanings unless the context clearly otherwise requires: “Act” means, collectively, Indiana Code 36-7-11.9, Indiana Code 36-7-12, Indiana Code 36-7-14, and Indiana Code 36-7-25, each as amended. “Allocation Area” means the River West Development Area Allocation Area previously established by the Redevelopment Commission within the River West Development Area in accordance with Indiana Code 36-7-14-39 for the purposes of capturing incremental ad valorem real property taxes levied and collected on all taxable property in such allocation area. “Allocation Fund” means the River West Development Area Allocation Area Allocation Fund established under Indiana Code 36-7-14 for the Tax Increment Revenues collected in the Allocation Area. “Authorizing Resolution” shall have the meaning set forth in the recitals hereof. “Borrower” means Beacon Apartments Preservation LLC, an Indiana limited liability company, duly organized and validly existing under the laws of the State of Indiana and qualified to do business in the State of Indiana, or any successors thereto. “City” means the City of South Bend, Indiana, a municipal corporation duly organized and validly existing under the laws of the State. “Costs of Construction” means the costs of providing for an “economic development facility” as defined and set forth in the Act, including any legal, accounting, management, program or consulting fees and expenses of the Borrower, the City or the District, and any other costs permitted under the Act related thereto. “Development Agreement” means the Development Agreement, dated as of July 1, 2026, by and between the Borrower, the City and the Redevelopment Commission. “District” means the Redevelopment District of the City. “Loan” means the loan from the City to the Borrower in the original aggregate principal amount of not to exceed $1,250,000, which will be made under the terms of the Loan Agreement, the proceeds of which will be used by the Borrower to pay a portion of the Costs of Construction for the Project. “Loan Agreement” means the Financing and Loan Agreement, dated as of July 1, 2026, between the City and the Borrower. “Project” means the construction, renovation and/or rehabilitation of up to one hundred seventy-four (174) affordable housing rental units in the existing Beacon Heights development in the River West Development Area in the City, with an approximate total redevelopment cost of Forty-Seven Million Dollars ($47,000,000) including a private investment of no less than Forty- Seven Million Dollars ($47,000,000) to be expended by the Borrower. 3 “Project Fund” means the Project Fund established and held by the City or by a financial institution or custodian selected by the City for such purpose, as the case may be, for purposes of paying Costs of Construction of the Project. “Redevelopment Commission” means the South Bend Redevelopment Commission, governing body of the District. “River West Development Area” means the economic development area within the District previously established by the Redevelopment Commission in accordance with Indiana Code 36- 7-14. “State” means the State of Indiana. “Tax Increment Revenues” means the property tax proceeds received by the Redevelopment Commission which are derived from the assessed valuation of real property in the Allocation Area in excess of the assessed valuation described in Indiana Code 36-7-14-39(b)(1) and Indiana Code 36-7-14-39(b)(2), as such statutory provision exists on the date of execution of this Agreement. Section 1.2. Exhibits. The following Exhibits are attached to and by reference made a part of this Agreement. Exhibit A. Copy of Authorizing Resolution. (End of Article I) 4 ARTICLE II. REPRESENTATIONS; LOAN TO BORROWER Section 2.1. Representations by City. The City represents and warrants that: (a) The City is a municipal corporation organized and existing under the laws of the State of Indiana. Under the provisions of the Act, the City is authorized to enter into the transactions contemplated by this Agreement and to carry out its obligations hereunder. City has been duly authorized to execute and deliver this Agreement. City agrees that it will do or cause to be done all things within its control and necessary to preserve and keep in full force and effect its existence. (b) Concurrently with the execution and delivery of the Loan Agreement and this Agreement, the City agrees to make the Loan to the Borrower (upon the District making funds available to simultaneously reimburse the City for such purpose in accordance with the terms of this Agreement) for the purpose of financing a portion of the Costs of Construction for the Project, in order to create additional employment opportunities in the City and to benefit the health, safety, morals and general welfare of the citizens of the City and the State. Section 2.2. Representations by Redevelopment District. The Redevelopment Commission, governing body for the District, represents and warrants that: (a) The Redevelopment Commission is the governing body of the District, which is a special taxing district organized and existing under the laws of the State of Indiana. Under the provisions of the Act, the Redevelopment Commission is authorized to enter into the transactions contemplated by this Agreement and to carry out its obligations hereunder. The Redevelopment Commission has been duly authorized to execute and deliver this Agreement. The Redevelopment Commission agrees that it will do or cause to be done all things within its control and necessary to preserve and keep in full force and effect its existence. (b) In order to simultaneously reimburse the City for its costs incurred, or to be incurred, in providing the Loan pursuant to Section 2.3 of the Loan Agreement to finance a portion of the Costs of Construction for the Project, the Redevelopment Commission agrees that it will consider appropriations from the Tax Increment Revenues then currently on deposit in the Allocation Fund for the purpose of paying to, or upon the order of, the City for depositing into the Project Fund, with the sum of such appropriations not to exceed an aggregate principal amount equal to One Million Two Hundred Fifty Thousand Dollars ($1,250,000). (c) The Redevelopment Commission acknowledges and agrees that the Loan being made by the City to the Borrower is subject to forgiveness in the sole discretion of the City and upon the Borrower’s satisfaction of certain conditions set forth in Section 4.3 of the Loan Agreement. (End of Article II) 5 ARTICLE III. MISCELLANEOUS PROVISIONS Section 3.1. Supplements and Amendments to this Agreement. The Borrower, the City and the District may from time to time, upon the written agreement of all parties hereto, enter into such supplements and amendments to this Agreement as to them may seem necessary or desirable to effectuate the purposes or intent hereof, which consent and agreement to such supplement or amendment hereto may be withheld in the sole discretion of any party. Section 3.2. Agreement for Benefit of Parties Hereto. Nothing in this Agreement, express or implied, is intended or shall be construed to confer upon, or to give to, any person other than the parties hereto, and their successors and assigns, any right, remedy or claim under or by reason of this Agreement or any covenant, condition or stipulation hereof; and the covenants, stipulations and agreements in this Agreement contained are and shall be for the sole and exclusive benefit of the parties hereto, and their successors and assigns. Section 3.3. Severability. In case any one or more of the provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. Section 3.4. Counterparts. This Agreement is being executed in any number of counterparts, each of which is an original and all of which are identical. Each counterpart of this Agreement is to be deemed an original hereof and all counterparts collectively are to be deemed but one instrument. Section 3.5. Governing Law. It is the intention of the parties hereto that this Agreement and the rights and obligations of the parties hereunder shall be governed by and construed and enforced in accordance with, the laws of the State of Indiana. (End of Article III) IN WITNESS WHEREOF, the City and the Redevelopment Commission, acting for and on behalf of the District, have caused this Agreement to be executed in their respective names, and the City and the Redevelopment Commission, acting for and on behalf of the District, have caused their corporate seals to be hereunto affixed and attested by their duly authorized officers, all as of the date first above written. (SEAL) CITY OF SOUTH BEND, INDIANA By: Mayor Attest: Clerk CITY OF SOUTH BEND REDEVELOPMENT DISTRICT, acting by and through the SOUTH BEND REDEVELOPMENT COMMISSION President Attest: Secretary Signature Page to the Funding and Reimbursement Agreement, dated as of July 1, 2026, between the City of South Bend, Indiana and the City of South Bend, Indiana, Redevelopment District DMS 52744203.2 A-1 EXHIBIT A Copy of Authorizing Resolution