HomeMy WebLinkAboutAuthorizing issuances of bonds to evidence a loan from the business development corporation - relating to BoschORDINANCE No.
9264-01
Passed by the Common Co[urcil of the Ciry of South Bend, Indiana
September 24, 01
20
Attest:
City Clerk
Attest: ~•~ J President of Common Coicncil
Presented by me to the Mayor of the City of Soutlr Bend, Indiana
Sp..p#Pm Pr ~~,, 2p 01
City Clerk
Approved and signed by me September 26, 20 O1
Mayor
ORDINANCE NO. ~ 2- ~ 1
AN ORDINANCE OF THE COMMON COUNCIL OF THE
CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE
ISSUANCE OF REVENUE BONDS TO EVIDENCE A LOAN
FROM THE BUSINESS DEVELOPMENT CORPORATION
OF SOUTH BEND, MISHAWAKA, ST. JOSEPH COUNTY,
INDIANA, RELATING TO THE ROBERT BOSCH
CORPORATION RETENTION PROJECT
(CITY OF SOUTH BEND, INDIANA, REVENUE BONDS,
SERIES 2001C)
STATEMENT OF PURPOSE AND INTENT:
The City of South Bend, Indiana (the "City") has previously determined to offer
certain assistance to Robert Bosch Corporation ("Bosch") in order to induce Bosch to retain and
expand its facility in the Ciry. Accordingly, the City and Bosch have agreed to undertake certain
activities in connection with the acquisition, demolition, construction, rehabilitation, and
environmental remediation of certain property (the "Property") which Bosch formerly leased from
Honeywell (formerly known as Allied Signal), including infrastructure and other site improvements
(the "Project") and have memorialized their intentions in an Agreement for the Use and
Rehabilitation of Real Property (the "Agreement")and Real Property Lease Agreement (the "Lease")
(the "Agreement" and the "Lease" sometimes collectively referred to herein as the "Project
Documents"). The Agreement provides that the City and Bosch will undertake the Project in return
for Bosch's commitment to meet certain levels of employment. In addition, the City has acquired
the Property and the City and Bosch have entered into the Lease pursuant to which Bosch will lease
the Property from the City.
In order to fund the rehabilitation of the Property, the City proposes to borrow the
aggregate principal amount not to exceed of Five Hundred Ten Thousand Dollars ($510,000) (the
"Loan")from the Business Development Corporation of South Bend, Mishawaka, St. Joseph County,
Indiana, an Indiana nonprofit corporation (the "BDC")and issue revenue bonds (the "Bonds") of the
Ciry to evidence the Loan. Pursuant to the terms of the agreement which shall evidence the Loan
(the "Loan Agreement"), the BDC requires that the City execute and deliver a mortgage granting to
the BDC a security interest in the Property (the "Mortgage") and a collateral assignment of the City's
interest in the Agreement (the "Collateral Assignment").
To repay the Loan, the City will use certain sums payable by Bosch to the City
pursuant to the terms of the Agreement (the "Bosch Funds"). In addition, the Redevelopment
Commission (the "Commission")has adopted a resolution agreeing to consider the use of available
tax increment revenues from the Airport Economic Development Area (the "TIF Revenues") to repay
the Loan in the event that the Bosch Funds are insufficient for such purpose. It is intended that the
City shall have no other obligation with respect to the payment of principal of or interest on the Loan
other than (i) the Bosch Funds or (ii) if Bosch fails to make such payments or if such funds are
insufficient to repay the Bonds, from the TIF Revenues. The Bonds which shall evidence the Loan
shall constitute a limited obligation of the City payable solely from the Bosch Funds. Neither the
full faith and credit nor the taxing power of the Ciry is pledged to the payment of the principal of and
the interest on the Bonds.
NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE
CITY OF SOUTH BEND AS FOLLOWS:
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Section 1. The Common Council of the City (the "Common Council") hereby
determines to issue the Bonds to evidence the Loan pursuant to I.C. 36-4-6-19 (the "Act") for the
purpose of rehabilitating the Property in accordance with the Agreement. The Council hereby
approves of and ratifies the execution and filing by the City of an application with the BDC for the
purpose of requesting that the BDC make the Loan. The City shall use the proceeds of the Loan
solely to carry out the rehabilitation activities as set forth in the Agreement.
Section 2. The Common Council hereby authorizes the issuance of the Bonds in
the form of the Loan in an aggregate principal amount not to exceed Five Hundred Ten Thousand
Dollars ($510,000). The Bonds shall be designated as the "City of South Bend, Indiana, Revenue
Bonds, Series 2001C (Robert Bosch Corporation Project)." The Bonds shall be issued in fully
registered form in the denomination of $1.00 or integral multiples thereof not exceeding the
aggregate principal amount of the Bonds to be issued. Principal of and interest on the Bonds shall
be paid pursuant to the schedule set forth as an exhibit to the Bonds. Interest shall be calculated on
the basis of a 360-day year. The Bonds shall be sold by private, negotiated sale at a price of par to
the BDC pursuant to the Loan Agreement. The Bonds shall be dated and have an original issuance
date as of the date of the Loan. The Bonds 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 not to exceed four percent
(4.0%) per annum. The Bonds maybe redeemed by the City in whole and not in part on any date
at par plus accrued interest to the redemption date. The Bonds shall be issued on parity with the
City's Revenue Bonds, Series 2001 D (Robert Bosch Corporation Project) (the "Parity Bonds") and
senior to the City's Revenue Bonds, Series 2001E (the "Junior Bonds") to be issued on even date
::ODMA\MI-IODMA\SBIMAN1;102939;3 -3-
with the Bonds with respect to the pledge of the Bosch Funds and the Mortgage and Collateral
Assignment (as set forth herein).
The Clerk of the City is hereby appointed as registrar (the "Registrar") for the Bonds
and is hereby charged with the responsibility of authenticating the Bonds. The Registrar shall keep
and maintain at its principal office books for the registration of the Bonds. The Bonds shall be
transferrable 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 Bond 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 Bond in the same
aggregate principal amount and of the same maturity shall be executed and delivered in the name of
the transferee or transferees or the registered owner, as the case maybe, and in exchange therefor.
Section 3. The Bonds to be issued by the City to evidence the Loan shall be
secured by the Mortgage and the Collateral Assignment. The City hereby pledges the Mortgage and
the Collateral Assignment to secure the payment of the principal of and interest on the Bonds. Such
pledge is on a parity with the pledge made of the Mortgage and Collateral Assignment with respect
to the Parity Bonds and senior to the pledge made with respect to the Junior Bonds. The City further
pledges the Bosch Funds, which pledge is on a parity with the pledge of the Bosch funds for the
Parity Bonds and senior to the pledge of the Bosch Funds for the Junior Bonds for the purpose of
paying the principal of and interest on the Bonds.
Section 4. 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 Loan Agreement, the Mortgage, and the Collateral Assignment together with
:ODMA~MI-IODMA~SBIMAN1;102939;3 '4'
any documents, instruments, or certificates they deem necessary or appropriate upon the advice of
counsel to complete the transactions contemplated herein. The Bonds 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 Bonds. Subject to the provisions for
registration, the Bonds shall be negotiable under the laws of the State of Indiana.
Section 5. This Ordinance shall be in full force and effect from and after its
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 Loan or the funds identified herein which
shall serve to repay the Loan.
i st READING ~-\rJ `~~ q S S ~bS'~-~ ~' ~
PUBLIC HEARING l-Z`~ a~
3rd READING q_ Z`~-O~ cC S S c~~S~s-~ ~u~.~~,
NOT APPROVED
REFERRED t
PASSED ~-LH-~1 q s Sins Y-~-~.~.~~
COMMON COUNCIL OF THE CITY OF
SOUTH BEND, INDIANA
Member of the Common uncil
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IOR~TTA J. D41Z31+
c~rv ct.~a~;, ao. al:ta~, tri.
COMMITTEE REPORT
TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND:
Your Committee of the Whole, to whom was referred:
BILL NO.
86-01 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND,
INDIANA, AUTHORIZING THE ISSUANCE OF REVENUE BONDS TO
EVIDENCE A LOAN FROM THE BUSINESS DEVELOPMENT
CORPORATION OF SOUTH BEND, MISHAWAKA, ST. JOSEPH COUNTY,
INDIANA, RELATING TO THE ROBERT BOSCH CORPORATION
RETENTION PROJECT, CITY OF SOUTH BEND, INDIANA, REVENUE
BONDS, SERIES 2001C
Respectfully report that they have examined the matter and that in their opinion, this bill is being
recommended to the full Council with a favorable recommendation as substituted.
Andrew Udjak
Chairman
BAKER & DAl~II~I,S
EST. 1863
FIRST BANK BUILDING • 205 W. JEFFERSON BOULEVARD, SUITE 250 • SOUTH BEND, INDIANA 46601 • (219) 234-4149 • FAX (219) 239.1900 • www.bakerdaniels.com
RANDOLPH R. ROMPOLA
DIRECT (219) 239-1926
e-mail: rrrompolv~bakerd.com
September 20, 2001
Ms. Charlotte Pfeifer
President, South Bend Common Council
435 County-City Building
South Bend, Indiana 46601
Re:
Dear Ms. Pfeifer:
Substitute Ordinances
INDIANAPOLIS
FORT WAYNE
SOUTH BEND
ELKHART
WASHINGTON, D.C.
QINGDAO, P. R. CHINA
via Hand Delivery
Attached please find substitute ordinances for filing to replace those previously filed
in connection with the Bosch Project which are titled as follows:
An Ordinance of the Common Council of the City of South Bend, Indiana
Authorizing the Issuance of Revenue Bonds to Evidence a Loan from the Business
Development Corporation of South Bend, Mishawaka, St. Joseph County, Indiana,
Relating to the Robert Bosch Corporation Retention Project(the "BDC Ordinance");
An Ordinance of the Common Council of the City of South Bend, Indiana
Authorizing the Issuance of Revenue Bonds to Evidence a Loan from the Industrial
Development Fund of the State of Indiana Relating to the Robert Bosch Corporation
Retention Project (the "IDLF Ordinance"); and
An Ordinance of the Common Council of the City of South Bend, Indiana
Authorizing the Issuance of Revenue Bonds to Evidence a Loan from the Industrial
Revolving Fund of South Bend, Indiana, Relating to the Robert Bosch Corporation
Retention Project(the "IRF Ordinance").
The IDLF Ordinance was changed to make clear that the pledge of the revenues to
be received from the Bosch Corporation is junior to the pledge made in connection with the BDC
Loan and the IRF Loan (which are to be on parity with each other). The BDC Ordinance and the IRF
Ordinance have been changed to make a more specific reference to the action taken by the South
Bend Redevelopment Commission to indicate its agreement to consider in the future, if necessary,
::ODMA~MI-IODMA~.SBIMAN 1;104953;1
Ms. Charlotte Pfeifer - 2 - September 20, 2001
the use of TIF Revenues to repay the loans if Bosch does not make the payments. The versions of
the ordinances previously filed made only a generic reference to the action of the Commission.
Please do not hesitate to contact me if you need additional information.
Sincerely,
BAKER & DANIELS
/` ~~
Randolph R. Rompola
cc: Kathleen E. Cekanski-Farrand, Esq.
Cheryl Greene, Esq.
~Iled ~~ ~I~r~ °~ ~~~~~~
S~~ 2 0 ?.001
LOii~.TTA J. CCC~3
CITY CtER~, IIO. Elst~, B'.J.
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