Loading...
HomeMy WebLinkAboutApproving Industrial Development Revenue Bonds MMOB LTDPassed by the Common Council of the City of South Bend, Indiana June 12, rq 7 8 IRENE K. GAMMON Presented by me to the Mayor of the City of South Bend, Ind*ana June 13, z9-L8— Approved and signed by me / U fi E l ,� Clerk of Common Council IRENE K. GAMMON Clerk ORDINANCE NO. ? AN ORDINANCE APPROVING THE FORM AND TERMS OF LEASE AND TRUST INDENTURE AND INDUSTRIAL DEVELOPMENT REVENUE BONDS, AND AUTHORIZING THE EXECUTION THEREOF PERTAINING TO MMOB, LTD. STATEMENT OF PURPOSE OF INTENT: The City of South Bend, Indiana, (.hereinafter called the "City ") by virtue of Indiana Code 18- 6 -4.5, as amended (the "Act "), is authorized and empowered to make direct loans to "developers" or "users" for the acquisition and construction of "economic development facilities" as those words are defined in the Act to overcome insufficient employment opportunities and insufficient diversification of business, commerce and industry in and.near the City and to promote the general economic welfare of the area in and near the City and to issue its economic development revenue bonds to obtain funds to make such loan for payment of costs of acquisition or construction of such economic development facilities, including engineering, legal fees and all other expenses related thereto during construction, including the costs of issuing the bonds and to secure said bonds pursuant to a trust indenture by the pledge of one or more notes of the developer or user; and MMOB, LTD. (the "Partnership ") is a limited partnership organized pursuant to the Indiana Uniform Limited Partnership Act having as its general partners Ray H. Riddle of Oklahoma City, Oklahoma, Robert R. Nelson, M.D. of South Bend, Indiana, and Traub & Company Equities, Inc. an Indiana Corporation; and the Partnership has agreed to acquire and construct a medical office building on a parcel of land in the City adjacent to and leased from Memorial Hospital of South Bend and thereby create new employment opportunities and provide diversification of business commerce and industry in and near the City, and make payments on the note or notes evidencing its loan obligations in an amount or amounts sufficient to pay the principal of and interest and premium, if any, on the economic development revenue bonds hereinafter authorized; and the South Bend Economic Development Commission (the "Commission ")., functioning and operating under the Act, has found by written resolution that because of insufficient employment opportunities and insufficient diversification of business, commerce and industry, the economic welfare of the City would be benefited by financing the acquisition and construction of economic development facilities for the Partnership; and the Commission has by such resolution approved a report estimating the public services which would be made necessary or desirable, the expense thereof, the number of jobs, the estimated payroll on account of the acquisition and construction of the economic development facilities and the cost of the economic development facilities and has submitted such report to the plan commission having jurisdiction over such facilities; and after giving notice in accordance with the Act, the Commission held a public hearing on the proposed financing and adopted a resolution finding the proposed financing benefits the economic welfare of the City and complies with the purposes and provisions of the Act and approving the financing and the proposed form and terms of the economic development revenue bonds, loan agreement and indenture of trust, which resolution and other instruments and information pertaining to the proposed financing have been transmitted to the Common Council of the City by the Commission; NOW, THEREFORE, BE IT ORDIANED by the Common Council of the City of South Bend, Indiana, that: Section 1. Public Benefits. The Common Council of the City hereby finds and determines that the medical office building (the "Project ") as described in Exhibit A to the Loan Agreement dated as of June 1, 1978 (the "Loan Agreement ") between the City and the Company to be acquired and constructed with the proceeds of $2,500,000.00 principal amount Economic Development Revenue Bonds, Series A (MMOB, LTD. PROJECT) (the "Series A Bonds ") herein authorized are "economic development facilities" as defined in the Act and that acquisition and construction of the Project will increase employment opportunities and increase diversification of business, commerce and industry in the City, will improve and promote the economic stability, development, health and welfare of the area in the City and will encourage and promote the expansion of industry, trade and commerce in the City and the location of other new commercial and business facilities in such area. Section 2. Findings. The Common Council hereby finds that this ordinance (the "Bond Ordinance ") complies with the purposes and provisions of the Act and is public benefit to the health and welfare of the City by tending to overcome the deficiencies previously found to exist, to -wit: insufficient employment opportunities and insufficient diversification of business, commerce and industry, and that such benefit is greater than the cost of public facilities (as that phrase is defined in the Act) which will be required by the Project. Section 3. Authorization of $2,500,000.00 Series A Bonds. In order to obtain funds to loan to the Partnership to finance costs of acquiring and constructing the Project, including interest on the Series A Bonds during the anticipated construction period, there are hereby authorized to be issued, sold and delivered $2,500,000.00 aggregate principal amount of Series A Bonds. It is hereby recognized that pursuant to the terms of the Loan Agreement any balance of the cost of the Project will be paid for by the Partnership unless paid for out of the proceeds of additional parity bonds (the "Additional Bonds ") as identified in the Indenture of Trust dated as of June 1, 1978, (the "Indenture ")between the City and the National Bank and Trust Company of South Bend, Indiana, as Trustee (the "Trustee "). Section 4. Terms for the Series A Bonds. The total principal amount of Series A Bonds that may be issued is hereby expressly limited to $2,500,000.00, provided, however, that Additional Bonds may be issued as hereinafter provided. The Series A Bonds shall bear interest until paid at the respective rates per annum set forth below payable on June 1 and December 1 of each year and shall mature on June 1 of each of the years set forth in and in the principal amount set opposite each year, as follows: PRINCIPAL PRINCIPAL YEAR AMOUNT RATE YEAR AMOUNT RATE 1981 $70,000 6% 1989 $115,000 7% 1982 75,000 6 1/8% 1990 120,000 7 1/8% 1983 75,000 6 1/4% 1991 130,000 7 1/4% 1984 80,000 6 3/8% 1992 140,000 7 3/8% 1985 85,000 6 1/2% 1993 150,000 7 1/2% 1986 95,000 6 5/8% 1994 160,000 7 5/8% 1987 100,000 6 3/4% 1999 1,000,000 7 3/4% 1988 105,000 6 7/8% The Series A Bonds shall be in such form, shall be in such denominations, shall be payable in such medium of payment and at such place or places, shall be subject to redemption at the times and under the conditions, shall be executed in such manner and shall contain such other terms and provisions as are provided for in the Indenture. The Series A Bonds are limited obligations of the City payable solely from payments of principal, premium, if any, and interest made by the Partnership pursuant to the Loan Agreement and the Series A Note in the form attached to the Loan Agreement, except to the extent that the principal of, premium, if any, and interest on the Series A Bonds may be paid out of money attributable to Series A Bond proceeds or from temporary investments, or from other moneys if any, accruing to the trustee for the benefit of the bondholders. -2- By the Indenture, the City will assign and pledge to the Trustee the City's rights under the Loan Agreement, including the right of the City to receive payments under the Series A Note, all as security for the payment of the Series A Bonds. The Series A Note and the assignment and pledge to the Trustee will constitute the sole security for the Series A Bonds. The Series A Bonds and the interest thereon shall be a valid claim of the respective holders only against the Bond. Fund created under the Indenture and other moneys held by the Trustee. The City will have no ownership interest in the Project, and the Series A Bonds will not be secured by any mortgage or other security interest in the Project or in any other property of the Partnership, provided, however, the Loan Agreement and Series A Note shall be secured by a mortgage on the Project from the Company to the Trustee as provided in the Loan Agreement. The Series A Bonds do not and shall never constitute an indebtedness of, or a charge against the general credit or taxing power of the City. Section 5. Additional Bonds. The City may authorize the issuance of Additional Bonds upon the terms and conditions provided in the Indenture and the Loan Agreement. Section 6. Sale of the Series A Bonds. The Mayor, City Controller and City Clerk of the City are hereby authorized and directed to deliver the Series A Bonds at a price of par plus accrued interest to the date of delivery and payment therefor to the respective purchasers who have executed an investment letter directed to the City and Traub & Company, Inc., Indianapolis, Indiana, in the form prepared by said Traub & Company, Inc. which has prepared at the request of the Partnership a placement memorandum describing the Series A Bonds. The proceeds of sale shall be deposited with the Trustee pursuant to the Indenture. Section 7. Indenture. In order to secure the payment of the principal of and interest on the Series A Bonds, the Mayor and City Clerk shall execute, acknowledge and deliver in the name and on behalf of the City, the Indenture in substantially the form submitted to the Common Council, which is hereby approved in all respects. Section 8. Loan Agreement. In order to provide for the loaning of the proceeds of the Series A Bonds to the Partnership to provide for acquisition and construction of the Project and the payment by the Partnership of amounts sufficient to pay the principal of, premium, if any, and interest on the Series A Bonds, the Mayor and City Clerk shall execute, acknowledge and deliver in the name and on behalf of the City the Loan Agreement in substantially the form submitted to this Common Council, which is hereby approved in all respects. Section 9. Acceptance of Series A Note. In connection with the Series A Bonds, the City accepts as security for such Series A Bonds the Series A Note of the Partnership. The Series A Note shall be in substantially the form attached to the Loan Agreement and shall be secured by a mortgage on the project from the Company to the Trustee in substantially the form also attached to the Loan Agreement, but the Series A Note shall not constitute an obligation of any partner or partners of the Partnership. Section 10. Approval of Leases. The City recognizes that the Partnership is a developer as defined in the Act and will be leasing space in the Project to doctors and other.health care users, which leasing is hereby approved. Section 11. Election. The City elects to have the provisions of Section 103(b)(6)(D) of the Internal Revenue Code apply to the Series A Bonds and the Mayor or City Clerk is authorized and directed to make such election prior to the issuance and delivery of the Series A Bonds in accordance with the applicable regulations or procedures of the Internal Revenue Code. -3- Section 12. General. The Mayor, City Controller and City Clerk be and they are each hereby authorized and directed, in the name of and on behalf of the City to execute any and all instruments, perform any and all acts, approve any and all matters, and do any and all things deemed by them, or any of them, to be necessary or desirable in order to carry out the purposes of this Bond Ordinance (including the preambles hereto), the acquisition and construction of the Project by the Partnership, the issuance, sale and delivery of the Series A Bonds, and the securing of the Series A Bonds under the Indenture. Section 13. Effective Date. This Bond Ordinance shall be in full force and effect from and after its passage and approval as provided by law. This ordinance was adopted by the Common Council of the City of South Bend, Indiana, on the day of , 1978. 1st READING ro —/ 9 - i PUBLIC HEARING 2nd READING NOT APPROVED 8 REFERRED PASSED Ir -4- FILED IN CLERK'S OFFICE JUN 71978 Irene Gammon +� MM Wa TTT MEMBER OF THE COMMON COUNCIL -4- FILED IN CLERK'S OFFICE JUN 71978 Irene Gammon +� MM Wa WILLIAM E.VOOR GUY H.McMICHAEL LLOYD M. ALLEN KENNETH P. FEDDER GEORGE E.HERENDEEN MICHAEL P. BARNES JOHN B. RAMMING ANTHONY D. KOWALS BRIAN J. MAY VOOR, McMICHAEL, ALLEN, FEDDER 8 HERENDEEN ATTORNEYS 8 COUNSELORS AT LAW 300 FIRST BANK BUILDING SOUTH BEND, INDIANA 46601 June 7, 1978 Members of the South Bend Common Council County -City Building South Bend, Indiana 46601 RE: Revenue Bond Application MMOB, LTD. PROTECT Dear Gentlemen: AREA CODE 219 234 -6061 OF COUNSEL: WILLIAM O. JACK50N Application of a Revenue Bond Issue for $2,500,000.00 for and on behalf of MMOB, LTD., has been made for the acquisition and construction of a medical office building located at 629 North Michigan Street, South Bend, Indiana. This expansion will mean an increase in employment. It is estimated that this new facility will result in the employment of approximately ten (10) new jobs and bring an annual payroll increase of $60,000.00 to $310,000.00. It is properly zoned and it will be a further expansion in our South Bend area. KPF /gwo Verb truly yours, ETH P—. FED`DE`2 " RNEY FOR THE ECONOMIC LOPMENT COMMISSION FRED IN R CE ��t! • r.