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HomeMy WebLinkAbout2A Redevelopment Authority Meeting Minutes 7.22.2026 - SignedSouth Bend Redevelopment Authority x`+H1 . 215 S. Dr. Martin Luther King, Jr. Blvd., Room 301, South Bend, Indiana Minutes Scheduled Meeting July 22, 2026 - 1 p.m. City Hall Council Chambers 3rd Floor or via: httos://tinyuri.com/RDA-July-2026 Meeting Recording Link: htt s://tin url.com/RDA-Meetin-Recordin s The South Bend Redevelopment Authority was called to order at 1:08 p.m. President Anthony Fitts presiding. 1. Roll Call Members Present: Anthony Fitts, President Erin Hanig, Secretary Members Absent: Richard Klee, Jr., Vice -President Redevelopment Staff: Joseph Molnar, Deputy Director, DCI Erik Glavich, Director Growth & Opportunity, DCI April Canahuati, Assistant Dir. of Growth and Opp., DCI Laura Hensley, Board Secretary Legal Counsel: Danielle Campbell -Weiss, Senior Asst. City Attorney Thomas Everett, Barnes & Thornburg 2. Election of Officers A. Nominations were made by Anthony Fitts for Richard Klee, Jr. to be the President, Erin Hanig to be the Vice -President and Anthony Fitts to be the Secretary. Upon a motion by Anthony Fitts and seconded by Erin Hanig, the motion carried unanimously, the Authority approved the 2026 Officers on July 22, 2026. 3. Approval of Minutes A. Approval of the Minutes of March 10, 2025 Upon a motion by Erin Hanig and seconded by Anthony Fitts, the motion carried unanimously, the Authority approved the Minutes of the Meeting of March 10, 2025. CITY OF SOUTH BEND I REDEVELOPMENT AUTHORITY MEETING- July 22, 2026 4. New Business A. Resolution No. 220 (A Resolution of the South Bend Redevelopment Authority Establishing its Intent to Issue Redevelopment Authority Lease Rental Revenue Bonds, Approving a Proposed Lease with the South Bend Redevelopment Commission, and all Matters Related Thereto) Joseph Molnar, Deputy Director of Community Investment, introduced Thomas Everett with Barnes & Thornburg to give an overview of the documents before the Commission. Mr. Everett states that this initial resolution represents the Authority's first action toward a proposed lease - backed bond issuance that will fund various projects within the River West Development Area. The financing structure involves a lease agreement between the Redevelopment Authority and the Redevelopment Commission, similar to previous lease financing. The lease, which was approved by the Redevelopment Commission earlier this month, authorizes the Authority to issue bonds secured by lease rental payments made by the Commission. The leased assets consist of portions of Chapin Street, Sample Street, Colfax Avenue, and other streets identified in the lease. River West TIF revenues will be used by the Redevelopment Commission to make lease rental payments to the Authority, which will then use those funds to pay debt service on the bonds. As with prior lease financings, streets and roadways are being leased because this is a well -established and commonly used financing structure in Indiana. It is viewed favorably by rating agencies and is generally more efficient than leasing a building, which would require rental interruption insurance throughout the bond term. The lease provides for a maximum annual rental payment of $5 million and a term of up to 19 years. Actual lease payments will be structured to match bond debt service requirements. While the bond authorization allows for up to $33 million in principle, current projections estimate a bond issuance of approximately $27 million. Baker Tilly, serving as the City's municipal advisor, has prepared financial projections indicating that River West TIF revenues will be sufficient to cover the lease payments throughout the life of the bonds. The lease rentals will also be supported by a tax backup pledge, included solely to enhance credit quality and secure the most favorable interest rates. The expectation remains that all debt service will be paid from River West TIF revenues. Today's action is the Authority's initial approval of the lease. The Common Council is expected to consider approval of both the lease and the bonds Page 12 CITY OF SOUTH BEND I REDEVELOPMENT AUTHORITY MEETING- July 22, 2026 next week. If approved, the Authority will return in August to consider the bond resolution and other final financing approvals. Following all required approvals, the bond sale is anticipated in September, with closing expected in early October. Vice President Hanig asked is there anything about this lease structure that differs from prior lease financings or warrants special attention? Mr. Everett responded that there are no significant differences that were identified. While the Authority's most recent financing for Four Winds Field used a different structure, leasing the stadium itself and relying on PSCDA revenues for lease payments, this financing is much more comparable to the Authority's 2023 lease financing. It follows the familiar approach of leasing street assets and funding lease payments through TIF revenues. Overall, nothing unusual or noteworthy stands out in the structure. Secretary Fitts asked if the lease references assets the Authority has acquired or will acquire. Can you explain how the project area will be phased and how future acquisitions fit within the overall financing, particularly given the maximum bond amount of $33 million? It would be helpful to understand what assets are already under control and what may be added later. Mr. Everett responded that the leased assets include portions of Chapin Street, Sample Street, Colfax Avenue, and other designated streets. At its next meeting, the Authority will consider approving the transfer of these streets from the City to the Redevelopment Authority, with the Board of Works expected to approve a corresponding resolution. The transfer will occur by deed at bond closing, after which the Authority will lease the assets back to the Redevelopment Commission. The bond authorization is capped at $33 million; however, current projections from Baker Tilly estimate an issuance of approximately $27 million. The higher authorization provides flexibility to accommodate any changes before the bonds are sold without requiring additional approvals. Vice President Hanig asked is the October closing date firm or just an estimate? Mr. Everett responded that the current schedule anticipates a bond sale in September and closing in early October. At this time, there are no known issues that would require delaying or modifying that timeline. Secretary Fitts inquired about what interest rate is being projected for the bonds? Mr. Everett stated that the final interest rate has not yet been determined. Based on current market conditions, the tax-exempt bond series is expected to be in the 4% range. The financing is anticipated to include both taxable and tax-exempt bond series, with the taxable bonds funding projects that must be financed on a taxable basis under IRS Page 13 CITY OF SOUTH BEND 1 REDEVELOPMENT AUTHORITY MEETING- July 22, 2026 regulations. Because taxable bonds generally carry higher interest rates, overall borrowing costs will vary between the two series. Staff will provide the maximum allowable interest rate once those figures are confirmed. Joseph Molnar, Deputy Director of Community Investment provided an overview of the projects proposed for funding through the River West bond issue and highlighted the City's track record of using prior bond proceeds for neighborhood improvements. The most recent neighborhood bond was approved in 2022 and closed in 2023. Projects funded through that financing included improvements at Kennedy Park, the Martin Luther King Jr. Dream Center, Linden Avenue streetscape enhancements, Southeast Park upgrades, the east -west Connector Pedestrian Bridge north of LaSalle Avenue, Walker Field improvements, the Rum Village trail connection, and the Madison Lifestyle parking garage. Most projects are complete or under construction. Remaining funds originally designated for the Portage -Elwood intersection will still be invested in that area, though plans are being reevaluated following the City's acquisition of nearby property. The proposed bond would fund several new capital projects, including: • Coal Line Trail Phase III, extending the trail from Lincoln Way West to the Martin Luther King Jr. Dream Center. The project is expected to receive federal funding covering approximately 80% of construction costs, with bond proceeds providing the local match. • College Street improvements. • Rum Village Neighborhood Center. • Drewrys/Portage Elwood site improvements. • Infrastructure improvements at Ignition Park/Drewrys development areas, leveraging approximately $6 million in state grants and loans already secured. • Muessel Grove Park improvements. • Old Cleveland Infrastructure improvements. • A parking garage adjacent to the Morris Performing Arts Center and Raclin Murphy Encore Center. The Morris garage project has been planned for several years and would provide ADA-accessible, weather -protected access between the garage, the Encore Center, and the Morris. Community fundraising efforts have already generated significant private donations toward the project, and bond proceeds would provide matching funds. Preliminary cost estimates place the total project package within the anticipated bond capacity, though final costs will depend on bid results and project development. Page 14 CITY OF SOUTH BEND I REDEVELOPMENT AUTHORITY MEETING- July 22, 2026 Mr. Molnar also outlined the approval process, noting that the Redevelopment Commission has already completed its required actions. Following consideration by the Redevelopment Authority, approval will be required from the Common Council, the Authority again in August, and final public approval before the bonds can be issued. If all approvals are secured, bond issuance and closing are anticipated in October. Secretary Fitts asked do we have sufficient capacity within the proposed bond funding to account for interest rate fluctuations and ensure these projects can continue moving forward without delays? Specifically, will key projects like the Drewrys redevelopment have enough funding to begin implementation and leverage other available funding sources? Mr. Molnar answered Yes. The projections include contingency funding to help manage potential interest rate fluctuations and other market changes, allowing projects to continue moving forward as planned. In several cases, bond proceeds are not intended to fully fund a project but rather provide a significant portion of the funding needed to unlock additional resources. For example, the Drewrys redevelopment requires local matching funds to access state READI dollars that have already been awarded. The bond funding would provide enough support to begin Phase 1 of the project and make meaningful progress on the site. As development gains momentum — through improvements such as retail activation, housing development, and other visible investments —it can help attract additional funding for future phases and associated infrastructure improvements. Commission members noted the importance of the Drewrys project in reconnecting neighborhoods, activating a long -vacant site, and leveraging its proximity to the Coal Line Trail to create broader community benefits. Upon a motion by Erin Hanig and seconded by Anthony Fitts, the motion carried unanimously, the Authority approved Resolution No. 220 on July 22, 2026. 5. Adjournment The Authority adjourned the meeting at 1:36 p.m. s - - - - - - - - - - - - Richard Klee, Jr., President _ ------------z ------ Anthony Fitts, Secretary _-_ .- __--____ lanigg, Vice resi ent Page 15