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HomeMy WebLinkAboutAuthorizing issuance of revenue bonds to evidence a loan from the industrial development fund of the state for BoschORDINANCE No. Passed by the Common Council of the City of South Bend, Indiana September 24, 01 20 Attest: Attest: ~~~ Presented by me to the Mayor of the City of Soutlz Bend, Indiana SPntPmber 5, 20 01 City Clerk President of Common Council City Clerk Approved and signed by me September 26, Z0 01 Mayor ORDINANCE NO. l ~ ~~ ' ~` 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 (CITY OF SOUTH BEND, INDIANA, REVENUE BONDS, SERIES 2001E) 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 City. 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 Properly 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. ::ODMA\MI-IODMA\SBIMAN 1;103506;3 In order to finance the costs associated with the Project, the City has previously submitted an application (the "Application") in order to borrow the aggregate principal amount of One Million Dollars ($1,000,000) (the "Loan") from the Industrial Development Loan Fund administered by the Indiana Department of Commerce (the "IDLF") and proposes to issue revenue bonds (the "Bonds") of the City to evidence the Loan. Pursuant to the terms of the agreement which shall evidence the Loan (the "Loan Agreement"), the IDLF requires that the City execute and deliver a mortgage granting to the IDLF a security interest in the Property (the "Mortgage"). This Common Council has previously approved the submission of the Application for the Loan as well as the pledge of certain revenues payable by Bosch to the repayment thereof. The Common Council desires to modify such pledge in order to provide for the pledge of such revenues for the Prior Bonds (as defined herein). 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 City is pledged to the payment of the principal of and the interest on the Bonds. ::ODMA~MIiODMA~SBIMAN1;103506;3 '2' NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND AS FOLLOWS: 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 purposes set forth in the Application. The Common Council hereby approves of and ratifies the execution and filing by the City of an application with the IDLF for the purpose of requesting that the IDLF make the Loan. The City shall use the proceeds of the Loan solely for the purpose of reimbursing a portion of the purchase price for the Property as set forth above. 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 One Million Dollars ($1,000,000). The Bonds shall be designated as the "City of South Bend, Indiana, Revenue Bonds, Series 2001E (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 IDLF 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 fifteen (15) years from the date of original issuance thereof and shall bear interest at a rate not to exceed three percent (3.0%) 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 junior to the City's Revenue Bonds, Series 2001 C and Series 2001 D (Robert Bosch Corporation Project) (the "Prior Bonds") ::ODMA~II-IODMA~SBIMAN1;t03506;3 -3- to be issued on even date with the Bonds with respect to the pledge of the Bosch Funds and the Mortgage (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, subject to the prior lien of the Prior Bonds. The City hereby pledges the Mortgage subject to the senior lien of the Prior Bonds to secure the payment of the principal of and interest on the Bonds when due. The City further pledges the Bosch Funds subject to the senior lien of the Prior 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 and the Mortgage together with 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 ::ODMA\MI IODMA\SBIMAN1;103506;3 '4' 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. Ordinance No.9154-00, passed by this Common Council on October 23, 2000, is repealed to the extent that the pledge of Bosch Funds, as defined therein, is inconsistent with the pledge of Bosch Funds and the junior position of the IDLF with respect thereto, all as set forth herein. Section 6. 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 RFAp~, ~ -(6 -D PUBLtC HEARINf q-Z`~-~1 ~S Jt~,~otjy~~ 3rd READING A_zy-d\ 0..s .lil~,bt-~.t,-~f~ NOT APpROV~6 REFERRED PASSED of-Zy - o~ 0.s .~ u_~1~-.~'t-c~: ~-c~ COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA By: Member of the Common Co ci ::ODMA\MI-IODMA\SBIMAN1;103506;3 -5- Filed 6n C6~~'e:'~ ~f~@c~ LORFlTTA J. OU-~A ClTlf CLEFll~, ~lO. E3EPE0,lty. COMMITTEE REPORT TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 89-01 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, APPROPRIATING THE PROCEEDS DERIVED FROM THE ISSUANCE OF BONDS HERETOFORE AUTHORIZED TO BE ISSUED AND DESIGNATED AS "CITY OF SOUTH BEND, INDIANA, REVENUE BONDS, SERIES 2001D," FOR THE PURPOSE OF FINANCING THE COSTS OF REHABILITATION OF PROPERTY IN CONNECTION WITH THE ROBERT BOSCH CORPORATION RETENTION PR03ECT, TOGETHER WITH EXPENSES INCIDENTAL THERETO, INCLUDING EXPENSES IN CONNECTION WITH THE ISSUANCE OF THE BOND 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. Andrew Udj ak Chairman