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HomeMy WebLinkAboutAuthorizing Submission of application for loan by the Indiana development finance authority relating to Bosch~. ~ ~ s ORDINANCE No. 9192-01 Passed by the Common Council of the City of South Bend, Indiana Attest: Attest: January 22, 01 20 Presented by me to the Mayor of the City of South Bend, Indiana .lama ~, 20 01 City Clerk President of Common Council Ciry Clerk Approved and signed by me January 23 , 20 0 l Mayor ORDINANCE NO. l ~ 12- - © l AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA AUTHORIZING THE SUBMISSION OF AN APPLICATION FOR A LOAN FROM THE ENVIRONMENTAL REMEDIATION REVOLVING LOAN FUND ADMINISTERED BY THE INDIANA DEVELOPMENT FINANCE AUTHORITY RELATING TO THE ROBERT BOSCH CORPORATION RETENTION PROJECT AND TO LOAN THE PROCEEDS THEREOF TO THE ROBERT BOSCH CORPORATION 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 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. C:\WINDOWS\TEMP\#99998-2. WPD The City has represented in Section 9 of the Agreement that it is eligible to borrow up to $1,300,000 from the Indiana Development Finance Authority ("IDFA") pursuant to the Environmental Remediation Revolving Loan Program (the "Program") established under Indiana Code 13-19-5, as amended (the "Program Act"), for the purpose of providing funding from the Environmental Remediation Loan Fund (the "Fund") administered by IDFA for the assessment and remediation of "brownfield sites" located throughout the State. Under the terms of the Agreement, the City has agreed to use its best efforts to borrow up to $1,300,000 from IDFA (the "Loan") and loan the proceeds thereof to Bosch for purposes of remediating environmental conditions at, on, under or emanating from the Property, including, but not limited to, demolition, asbestos and lead paint removal, and environmental testing and assessment ofthe Property (the "Program Activities"). Bosch has agreed pursuant to the Agreement to repay the Loan in accordance with the terms described therein. IDFA requires further assurance of the City to repay the Loan from funds available to the City in the unlikely event that Bosch does not make repayments as provided in the Agreement. The Redevelopment Commission (the "Commission") has adopted a resolution pledging available tax increment revenues as described in said resolution (the "TIF Revenues") from the Airport Economic Development Area to the repayment of the Loan in the unlikely event that Bosch does not make repayments as provided in the Agreement. 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 payments made by Bosch or (ii) if Bosch fails to make such payments, from the TIF Revenues. It is possible for the Loan to consist of a portion not to exceed twenty percent (20%) of the total amount of the Loan which is forgivable by the Authority (the "Forgivable Portion") if C:\WINDOWS\TEMP\#99498-2.WPD -2- the City achieves certain economic development goals to be set forth in the Loan, Servicing and Disbursement Agreement (the "Program Agreement") which evidences the Loan, all in accordance with the Program Act. 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 cause bonds of the City (the "Bonds") to be issued in the form of the Loan pursuant to I.C. 36-4-6-19 (the "Act") for,the purpose of loaning the proceeds thereof to Bosch pursuant to the Proj ect Documents. The Council hereby approves of and ratifies the execution and filing by the Mayor of an application with the Authority for the purpose of requesting that the Authority make the Loan from the Fund in accordance with the Program and pursuant to the Program Act and the Program Agreement. The City shall, in turn, loan the proceeds of the Loan to Bosch pursuant to the terms of the Agreement for the sole use by Bosch to pay for the Program Activities as set forth in the Agreement. Section 2. The Bonds to be issued by the City and evidenced by the Loan shall be secured by the payments to be made by Bosch to the City pursuant to the Agreement. The Bonds shall be further secured by the TIF Revenues in the unlikely event that Bosch defaults on its repayment obligation set forth in the Agreement. The repayment by Bosch and the TIF Revenues shall constitute the only sources of revenues for the repayment of the Loan. Section 3. The Common Council hereby authorizes the issuance ofthe Bonds in the form of the Loan in an aggregate principal amount not to exceed the amount of the Loan, all in accordance with the Act, the Program Act and the Program Agreement. The Bonds shall be C:\WINDOWS\TEMP\#99998-2.WPD -3- designated as the "City of South Bend, Indiana, Revenue Bonds, Series 200_ (Robert Bosch Corporation Project)" (with the blank to be completed with the year in which the Loan is issued). In the event that the Authority permits a portion of the Loan to be issued as a Forgivable Portion, the Bonds shall be issued in two (2) series with one series in an aggregate principal amount equal to the Forgivable Portion and the other series shall equal the remainder of the principal amount of the Loan. The Bonds will be acquired by the Authority pursuant to the Program Agreement. The Bonds shall be dated and have an original issuance date as of the date of the Loan. The Bonds (and each series if the Bonds are issued in two (2) series) shall mature on a date not later than thirty (30) 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 (and each series ifthe Bonds are issued in two (2) series) may be prepaid by the City at par on any date and shall be negotiable without registration. Section 4. The Mayor and the Clerk of the City are hereby authorized and directed to execute and deliver and the Clerk is hereby authorized to affix the seal on, when and if appropriate, the Program Agreement and the Bonds (and each series if the Bonds are issued in two (2) series), together with any documents, instruments, or certificates they deem necessary or appropriate upon the advice of counsel to complete the transactions contemplated herein. 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. COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA C:\WINDOWS\TEMP\#99998-2.WPD -~' Member of the Common ouncil 1 st READING 1 rg -0 I _ _ __.____.,._....___-__.~ .._...~..-...__~,~-. PUBL{C HEARWG \-ZZ~a~ __ ~^ b , _ ~ .~. _ ': A 3 rd READING "~s..r..~...'..,~ t ~- L1.-a1 NOT APPROVED J~~J ~ ~ ~~Q ~ _ ~ E REFERRED PASSED ~'Z-l'-~~ ~ t. , _ . ~ '~; ._.. __-- '~ ., C:\WINDOWS\TEMP\#99998-2.WPD _5_ ~ i.!"+ .. _.. ~ .:'- , TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 5-01 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE SUBMISSION OF AN APPLICATION FOR A LOAN FROM THE ENVIRONMENTAL REMEDIATION REVOLVING LOAN FUND~ADMINISTERED BY THE INDIANA DEVELOPMENT FINANCE AUTHORITY RELATING TO THE ROBERT BOSCH CORPORATION RETENTION PROJECT AND TO LOAN THE PROCEEDS THEREOF TO THE ROBERT BOSCH CORPORATION OTHER ACTIONS IN RESPECT THERETO 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 Udjak Chairperson, Committee of the Whole 1200 COUNTY-CITY BUILDING SOUTH BEND, INDIANA 46601-1830 PHONE 219/ 235-9371 FAx 219/235-9021 TDD 219/ 235-5567 CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR COMMUNITY ~L ECONOMIC DEVELOPMENT JON R. HUNT EXECUTIVE DIRECTOR Ms. Charlotte Pfeifer President, South Bend Common Council 435 County-City Building South Bend, Indiana 46601 Re: An Ordinance of the Common Council of the City of South Bend, Indiana Authorizing the Submission of an Application for a Loan from the Environmental Remediation Revolving Loan Fund Administered by the Indiana Development Finance Authority Relating to the Robert Bosch Corporation Retention Project and to Loan the Proceeds Thereof to the Robert Bosch Corporation Dear Ms. Pfeifer: Attached for filing please find the above-referenced Ordinance for first reading by the Common Council at its January 8, 2001 meeting. This Ordinance authorizes the submission of an application for a loan from the Indiana Development Finance Authority ("IDFA") which administers the Environmental Remediation Revolving Loan Program (the "Program") and Environmental Remediation Loan Fund (the "Fund") for the assessment and remediation of "brownfield sites" located throughout Indiana. The Ordinance further approves the loan of the proceeds to Robert Bosch Corporation ("Bosch") in accordance with the ternls of the Agreement for the Use and Rehabilitation of Real Property (the "Agreement") previously entered into by and between the City and Bosch. Pursuant to the terms of the Agreement, the City has agreed to use its best efforts to borrow up to $1,300,000 from IDFA (the "Loan")through the Program and Bosch has agreed to repay the Loan in accordance with the repayment schedule set forth in the Agreement subject to certain forgiveness provisions set forth in the Agreement as permitted by the Program. The terms of the Program and the Fund require that the Loan be secured by the payments to be made by Bosch to the City pursuant to the Agreement. In addition, IDFA requires additional security for the Loan in the event that Bosch does not make repayments as provided in the Agreement. Accordingly, the Redevelopment Commission (the "Commission") has adopted a resolution pledging available tax increment revenues (the "TIF Revenues") from the Airport Economic Development Area to the repayment of the Loan in the unlikely event that Bosch defaults on its repayment obligations under the Agreement. The City shall have no obligation with respect to the payment of principal of or interest on the Loan other than the payment to be made by Bosch under the Agreement or, if Bosch fails to make such payments, from the TIF Revenues: COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL LIL PROGRAM PAMELA C. MFYER DONALD E. INKS MANAGEb1ENT 219/235-9660 2191235-9371 ELIZABETH LEONARD FAX: 2191235-0607 219/235-9371 Your favorable consideration is requested. Please do not hesitate to contact me ifyou need additional information. Sincerely, d7~L on R. Hunt, Director Community and Economic Development ~~. - t _.. ., ., _ C_ .. .,.. .., J~~~ ~ ~ 2oo~i