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Home My WebLink About54-26 Authorizing the City to Enter Into and Accept a Section 108 Loan in Support of the Western Avenue Transformation DistrictSouth Bend City Hall 215 S. Dr. Martin Luther King Jr. Blvd. Suite 500 South Bend, IN 46601 James Mueller, Mayor City of South Bend Department of Community Investment Phone 311 inside City limits Email 311@southbendin.gov Website Southbendin.gov Filed in Clerk's Office Aug 4, 2026 Bianca Tirado City Clerk, South Bend, IN August 4, 2026 Council Member Canneth Lee President South Bend Common Council South Bend City Hall, 3`d Floor South Bend, Indiana 46601 RE: An Ordinance of the Common Council of the City of South Bend, Indiana, Authorizing the City to Enter into and Accept a Section 108 Loan in support of the Western Avenue Transformation District Dear President Lee, Please find attached bill for first reading, which has been filed for the Common Council's consideration. 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. On June 22, 2026 the Common Council approved a payment in lieu of taxes (PILOT) to support the development of affordable housing. Significant infrastructure work is required in order for the project be constructed including new utilities, road improvements, and other infrastructure improvements. On September 3, 2025 the Department of Community Investment submitted an application through the United States Department of Housing and Urban Development ("HUD") Section 108 Loan Guarantee Program to fund the infrastructure improvements. a► City of South Bend Community Investment The City has determined to make loan payments for the Section 108 Loan from future Community Development Block Grant ("CBDG") funds received by the City pursuant to Section 106 of the HUD Act. A portion of the City's annual HUD provided CBDG funds will be the primary source of repayment of the loan. In the unlikely event that the City's CBDG funds are insufficient to make loan payments, the attached bill authorizes the use of River West TIF Revenues generated within the River West Development Area Allocation Area to make loan payments. The South Bend Redevelopment Commission will vote on a resolution at its Thursday, August 13, 2026 meeting to pledge the T1F revenues in payment of the Section 108 loan. The property — where the former Rabbi Shulman Housing Apartment building once stood - is in the River West Development Area and the River West Development Allocation Area. The Council's adoption of the attached bill are actions necessary to ensure the success of the Western Ave Transformation District development and address the need of affordable housing in South Bend. The Department of Community Investment thanks the Council for past support of the Western Ave Transformation District and kindly requests support of the attached bill. Sincerely, Atde oseph Molnar Deputy Director of Community Investment BILL NO. 54-26 ORDINANCE NO. Filed in Clerk's Office Aug 4, 2026 Bianca Tirado City Clerk, South Bend, IN AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE CITY TO ENTER INTO AND ACCEPT A SECTION 108 LOAN FROM THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, PLEDGING CERTAIN REVENUES FOR THE REPAYMENT OF SAID LOAN, AND APPROVING OTHER MATTERS IN CONNECTION THEREWITH STATEMENT OF PURPOSE AND INTENT The City of South Bend, Indiana (the "City"), is a municipal corporation and political subdivision of the State of Indiana and by virtue of I.C. 36-4-6 (the "Act"), is authorized and empowered to adopt this ordinance (the "Ordinance") and to carry out its provisions. On September 3, 2025, the Department of Community Investment of the City submitted the City's 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 Westem Avenue Transformation District Project, as further described in the Application (the "Project"). In accordance with the Housing and Community Development Act of 1974, 42 U.S.C. 5301 et seq., as amended (the "HUD Act") and HUD policy, the City must provide security for the repayment of the notes issued to evidence the Section 108 Loan. The City has determined to make loan payments for the Section 108 Loan from future Community Development Block Grant funds received by the City pursuant to Section 106 of the HUD Act (the "CDBG Funds"), and, to the extent CDBG Funds are insufficient for such purpose, tax increment revenues generated within the River West Development Area Allocation Area in the City (the "TIF Revenues"). The South Bend Redevelopment Commission (the "Redevelopment Commission") adopted a resolution at its meeting on Thursday, August 13, 2026, pledging the TIF Revenues to the payment of the Section 108 Loan. The term of the City's Section 108 Loan is up to twenty (20) years with repayments by the City currently estimated to range from a low of approximately $427,000 in 2026 to a high of $580,000 in 2045. The Project will be located in or physically connected to, and will directly serve and benefit, the River West Development Area and the River West Development Area Allocation Area. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: SECTION I. The Common Council hereby determines to issue obligations of the City to evidence the Section 108 Loan pursuant to Section 19 of the Act for the purposes set forth in the Application. The City shall use the proceeds of the Section 108 Loan solely for the purposes described in the Application. SECTION II. The Common Council hereby authorizes the issuance of an obligation of the City for purposes of evidencing the Section 108 Loan in an aggregate principal amount not to exceed $10,000,000 (the "Obligation"). The Obligation shall be designated as the "City of South Bend, Indiana, Section 108 Loan Guarantee Program Variable/Fixed Rate Note." The Obligation shall be issued in fully registered form in the denomination of $1.00 or any integral multiples thereof not exceeding the aggregate principal amount of the Obligation to be issued. Principal of and interest on the Obligation shall be paid pursuant to the terms of the Application and as set forth in the schedule attached to the Obligation. The Obligation shall be sold by private, negotiated sale at a price at par to HUD or its nominee pursuant to the terms of the Application and the Obligation. The Obligation shall be dated as of the date of its issuance. The Obligation shall mature on a date not later than twenty (20) years from the date of original issuance thereof and shall bear interest at a rate or rates not to exceed such rates as may be determined by the terms of the Application and of the Obligation. The Obligation may be redeemed by the City in whole or in part, upon not less than fourteen (14) days' notice as provided in the Obligation at the purchase price of 100% of the outstanding principal amount to be redeemed, plus accrued interest thereon to the date of redemption and without premium. SECTION III. The Clerk of the City is hereby appointed as Registrar (the "Registrar") for the Obligation and is hereby charged with the responsibility for authenticating the Obligation. The Registrar shall keep and maintain at his principal office books for the registration of the Obligation. The Obligation shall be transferable or exchangeable only upon the bond register by the registered owner thereof in person, or by his attorney duly authorized in writing, upon surrender of such Obligation together with a written statement of transfer or exchange satisfactory to the Registrar duly executed by the registered owner, or his attorney duly authorized in writing, and thereupon a new fully registered Obligation in the same aggregate principal amount and of the same maturity shall be executed and delivered in the name of the transferee or transferees to the registered owner, as the case may be, and in exchange therefor. SECTION IV. The Obligation to be issued by the City to evidence the Section 108 Loan shall be secured by the pledge of the CDBG Funds received by the City and the TIF Revenues as set forth in the TIF Pledge, Assignment, and Security Agreement between the City and HUD (the "TIF Pledge Agreement"). On behalf of the City, the Common Council hereby pledges the CDBG Funds to the payment of the principal of and interest on the Obligation when due, and if the CDBG Funds are insufficient for such purpose, agrees to apply the TIF Revenues pledged by the Redevelopment Commission pursuant to the TIF Pledge Agreement to the payment of the principal of and interest on the Obligation when due. 2 In accordance with the Contract for Loan Guarantee Assistance Under Section 108 of the Housing and Community Development Act of 1974, as Amended, 42 U.S.C. §5308 between the City and HUD (the "HUD Contract") and applicable HUD requirements, the City shall establish and maintain such Deposit Accounts, Investment Accounts, and a Debt Service Reserve Account as may be required under the terms of the HUD Contract for the deposit and investment of Guaranteed Loan Funds and Loan Repayment Funds. SECTION V. The Mayor and the Clerk of the City are hereby authorized and directed to execute, attest and deliver and the Clerk is hereby authorized to affix the seal on, when and if appropriate, the Obligation together with the HUD Contract, the TIF Pledge Agreement, any required Deposit Account Control Agreement, any required Letter Agreements for Deposit Accounts or Investment Accounts, and any other documents, instruments or certificates they deem necessary or appropriate upon the advice of counsel to complete the transactions contemplated herein and as required by the HUD Contract. The Obligation shall be executed in the name of the City by the manual or facsimile signature of the Mayor of the City and attested by the manual or facsimile signature of the Clerk of the City, who shall cause the official seal of the City to be impressed or a facsimile thereof to be printed on the Obligation. Subject to the provisions for registration, the Obligation shall be negotiable under the laws of the State of Indiana. SECTION VI. This Ordinance shall be in full force and effect from and after passage by the Common Council and approval by the Mayor and shall not be repealed or amended in any manner which would serve to adversely affect the Section 108 Loan, the HUD Contract, the issuance of the Obligation or the funds identified herein which have been pledged for the payment of principal of and interest on the Section 108 Loan. [Signature Page Follows] 3 Duly passed and adopted on this day of . 2026 by the Common Council of the City of South Bend, Indiana. Canneth J. Lee, Council President South Bend Common Council Attest: Bianca L. Tirado, City 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 day of , 2026, at o'clock .m. Bianca L. Tirado, City Clerk Office of the City Clerk Approved and signed by me on the day of , 2026, at _ o'clock .m. DMS 54130369v2 James Mueller, Mayor City of South Bend, Indiana 4