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Home My WebLink About5B2 Resolution No. 3677 (Western Ave. Transformation District HUD Loan) - SignedSouth Bend Redevelopment Commission 215 S. Dr. Martin Luther King, Jr. Blvd., Room 301, South Bend, Indiana Redevelopment Commission Agenda Item D ATE : 8/7/2026 FROM: Joseph Molnar Deputy Director Department of Community Investment SUBJECT: Section 108 HUD Loan Collateral Funding Source* (circle) River West; River East; South Side; Douglas Road; West Washington; RDC General; Riv. East Res. *Funds are subject to the City Controller's determination of availability; if funds are unavailable, as solely determined by the City Controller, then the authorization of the expenditure of such funds shall be void and of no effect. PURPOSE OF REQUEST: Resolution Pledging River West TIF Revenues as Backup Repayment for Section 108 HUD Loan to support Western Ave Transformation District SPECIFICS: The Western Ave Transformation District is a planned 156-mixed income housing development co-developed by The Michaels Organization and the Housing Authority of South Bend. The project was awarded low-income housing tax credits by the Indiana Housing and Community Development Authority. 110 of the units for the new project will be reserved for households earning at or below 60 percent of the area median income. The City has submitted an application and received an award for a $10,000,000 loan through the United States Department of Housing and Urban Development (“HUD”) Section 108 Loan Guarantee Program (the “Section 108 Loan”) to fund the infrastructure improvements for the Western Ave Transformation District including new utilities, a new road, and other public improvements. The City has determined to make loan payments for the Section 108 Loan from future Community Development Block Grant funds received by the City annually from HUD. It is the anticipation of the City that CDBG funding will more than cover the estimated loan payments on the Section 108 Loan. Currently, the estimated loan payment would be approximately 21% of the City’s recent annual CDBG allotment. In the unlikely event that during the course of repayment the CDBG funds are insufficient for such purpose, the tax increment revenues generated within the River West allocation area would serve as backup for the loan payments. The attached resolution authorizes the use of River West TIF funds for this purpose. The Common Council will need to also authorize this use of River West TIF funds and will consider the request at their August 24, 2026 meeting. Staff recommends approval. ______________ ___________Pres/V-Pres ATTEST: __________ _______ _ Date: _____________ _______ APPROVED Not Approved SOUTH BEND REDEVELOPMENT COMMISSION August 13, 2026 ✓ RESOLUTION NO. 3677 A RESOLUTION OF THE SOUTH BEND REDEVELOPMENT COMMISSION PLEDGING CERTAIN TAX INCREMENT REVENUES TO THE REPAYMENT OF A SECTION 108 LOAN FROM THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (WESTERN AVENUE TRANSFORMATION DISTRICT PROJECT) WHEREAS, the South Bend Redevelopment Commission (the “Commission”), the governing body of the South Bend Department of Redevelopment and the Redevelopment District of the City of South Bend, Indiana (the “District”), exists and operates under the provisions of Indiana Code 36-7-14, as amended from time to time (the “Act”); and WHEREAS, the Commission has previously designated and declared an area in the City of South Bend, Indiana (the “City”) known as the River West Development Area as an economic development area (the “Area”) and designated portions of the Area from time to time as allocation areas pursuant to Section 39 of the Act (each such allocation area within the Area, excluding (i) the Riverwalk Allocation Area designated by Resolution No. 3627 adopted by the Commission on January 9, 2025, (ii) the Lincoln and Kennedy Park Residential Housing Development Program Area Allocation Area designated by Resolution No. 3644 adopted by the Commission on July 24, 2025, and (iii) the allocation areas designated by Resolution No. 3661 adopted by the Commission on December 18, 2025, an “Allocation Area” and collectively, the “Allocation Areas”); and WHEREAS, the City has submitted an application (the “Application”) to borrow $10,000,000 through the United States Department of Housing and Urban Development (“HUD”) Section 108 Loan Guarantee Program (the “Section 108 Loan”) to fund a portion of the Western Avenue Transformation District Project, as further described in the Application (the “Project”); and WHEREAS, the City has determined to make loan payments for the Section 108 Loan from future Community Development Block Grant funds received by the City (the “CDBG Funds”) and, to the extent CDBG Funds are insufficient for such purpose, tax increment revenues generated within the Allocation Areas in the City (the “Tax Increment Revenues”); and WHEREAS, the District has previously pledged the Tax Increment Revenues to pay the principal of and interest on the (i) City of South Bend, Indiana Taxable Economic Development Tax Increment Revenue Bonds, Series 2020 (Community Education Center Project) (the “2020 Obligation”) and (ii) City of South Bend, Indiana Redevelopment District Taxable Tax Increment Revenue Bonds, Series 2025 (Residential Infrastructure Fund Loan) (the “2025 Obligation” and together with the 2020 Obligation, collectively, the “Prior Obligations”); and WHEREAS, the Commission anticipates that sufficient Tax Increment Revenues will be available to pay the principal of and interest on the Section 108 Loan, to the extent CDBG Funds are insufficient for such purpose, and the Prior Obligations; and 2 WHEREAS, the Commission desires to pledge such Tax Increment Revenues to the City for its use in order to pay the principal of and interest on the Section 108 Loan to the extent CDBG Funds are insufficient for such purpose; and WHEREAS, the Commission shall have no other obligation with respect to the payment of principal of or interest on the Section 108 Loan other than the payment of the Tax Increment Revenues which may be generated in the Allocation Areas; NOW, THEREFORE, BE IT RESOLVED, BY THIS SOUTH BEND REDEVELOPMENT COMMISSION AS FOLLOWS: SECTION 1. To the extent CDBG Funds are insufficient to pay the principal of and interest on the Section 108 Loan when due, the Commission hereby irrevocably pledges the Tax Increment Revenues generated in the Allocation Areas (being those Tax Increment Revenues available after the payment of all indebtedness payable from such Tax Increment Revenues and such lease rentals the Commission may determine from time to time to pay from such Tax Increment Revenues) to the City for its use in order to pay the principal of and interest on the Section 108 Loan for a period up to but not exceeding twenty (20) years from the date of the origination of the Section 108 Loan. Such pledge shall terminate at the earliest of the (i) final payment on the Section 108 Loan, (ii) the conclusion of the twenty (20) year period, or (iii) expiration of the Allocation Areas. SECTION 2. There is hereby created and established within the Redevelopment District Bond Fund, a Western Avenue Transformation District Project Principal and Interest Account (the “Principal and Interest Account”). SECTION 3. To the extent CDBG Funds are insufficient to pay the principal of and interest on the Section 108 Loan when due, Tax Increment Revenues received by the Commission and not otherwise needed as set forth in Section 1 for the payment of indebtedness or lease rentals shall be deposited into the Principal and Interest Account and appropriated for payment to the City for its use in order to pay the principal of and interest on the Section 108 Loan. Tax Increment Revenues received in any year in excess of the amount necessary to pay the principal of and interest on the Section 108 Loan in said year do not remain pledged, may be transferred to any other account permitted by law, and may be used by the Commission for any purpose set forth in I.C. 36-7-14-39. Notwithstanding anything in this Resolution to the contrary, the pledge of the Tax Increment Revenues to the Section 108 Loan described herein shall be junior and subordinate to the Prior Obligations as long as the Prior Obligations remain outstanding. SECTION 4. For the avoidance of doubt, tax increment revenues derived from the Riverwalk Allocation Area, Lincoln and Kennedy Park Residential Housing Development Program Area Allocation Area, Lafayette North Allocation Area, Lafayette South Allocation Area, Ignition Park Allocation Area, Downtown North Allocation Area, Michigan Street Corridor Allocation Area, Studebaker Campus Allocation Area, Riverfront West Allocation Area and 3 Downtown South Allocation Area, each designated within the Area, are not pledged to the payment of principal of and interest on the Section 108 Loan. SECTION 5. The President and Secretary of the Commission are hereby authorized to enter into a pledge agreement on behalf of the Commission (the “Pledge Agreement”) providing that the Tax Increment Revenues are pledged as described herein and containing such other terms consistent with this Resolution to evidence the intent of the Commission to secure the Section 108 Loan with the Tax Increment Revenues to the extent CDBG Funds are insufficient to pay the principal of and interest on the Section 108 Loan when due. Any officer of the Commission is hereby authorized to take such further actions and execute on behalf of the Commission such further documents or agreements as any such officer deems necessary or appropriate to effectuate the purposes of this Resolution. SECTION 6. This Resolution shall be in full force and effect after its adoption by the Commission and shall not be repealed or amended in any manner which would serve to adversely affect the pledge of the Tax Increment Revenues contained herein. ADOPTED at a meeting of the South Bend Redevelopment Commission held on August 13, 2026, in the City Hall Council Chambers, 3rd Floor, 215 S. Dr. Martin Luther King, Jr., Boulevard, South Bend, Indiana, 46601. SOUTH BEND REDEVELOPMENT COMMISSION By: David Relos, President ATTEST: Eli Wax, Secretary DMS 54482387v2