Loading...
HomeMy WebLinkAboutPreliminary Approval of the Issuance of Bonds for Noble Americas South Bend Ethanol, LLCAttest. RESOLUTION 4451 -15 Passed by the Common Council of the City of South Bend, Indiana May 26, 15 2Q_. Presented by me to the Mayor of the City of South Bend, Indiana May 27, 20 15 City Clerk President of Common Council Approved and signed by me p�'i 2r 604i 112 9 SZW 2025— . City Clerk L:'�ii RESOLUTION NO. I S A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AMENDING RESOLUTION NO. 4339-14 WHICH PROVIDED PRELIMINARY APPROVAL OF THE ISSUANCE OF BONDS FOR THE PURPOSE OF PROVIDING CERTAIN ECONOMIC DEVELOPMENT FACILITIES FOR NOBLE AMERICAS SOUTH BEND ETHANOL, LLC WHEREAS, the City of South Bend, Indiana (the "City ") is authorized by Indiana Code 36 -7 -11.9 and 12, as supplemented and amended (the "Act "), to issue revenue bonds for the financing of economic development facilities, the funds for said financing to be used for the acquisition, construction, installation and equipping of said facilities; and WHEREAS, Noble Americas Corp., on behalf of its subsidiary Noble Americas South Bend Ethanol, LLC, (the "Applicant ") has previously advised the South Bend Economic Development Commission (the "Commission "), Common Council of the City (the "Common Council ") and the City that it proposes that the City issue economic development revenue bonds for the purpose of providing financing for certain economic development facilities consisting of the acquisition, construction, installation and equipping of, including, but not limited to, grain drying systems, process technology upgrades, boilers, cooling towers, water treatment, tanks, piping systems, CIP system and any other facilities and equipment which may be financed through the issuance of economic development revenue bonds (the "Project ") in conjunction with the Applicant's renovation of the ethanol production facility located at 3201 West Calvert Street in the City; and WHEREAS, on April 14, 2014 the Common Council adopted Resolution 4339 -14 entitled "A Resolution of the Common Council of the City of South Bend, Indiana, Providing Preliminary Approval of the Issuance of Bonds for the Purpose of Providing Certain Economic Development Facilities for Noble Americas South Bend Ethanol, LLC" (the "Inducement Resolution "), which resolution provided preliminary approval for the issuance of economic development revenue bonds of the City in the aggregate principal amount not to exceed $25,000,000 under the Act to finance the acquisition and installation of the Project under a financing agreement whereby the proceeds of such bonds would be utilized to acquire, construct and install the Project and the Applicant would make payments sufficient to pay the principal of, premium, if any, and interest on said bonds; and WHEREAS, since the adoption of the Inducement Resolution, the cost of the Project has increased and the Applicant has determined the need exists to increase the expected aggregate principal amount of the bonds to be issued for the Project as set forth in the Inducement Resolution to an amount not to exceed $50,000,000; and WHEREAS, The South Bend Economic Development Commission at its meeting held May 8, 2015 adopted Resolution No. 2015 -01, a copy of which is attached hereto, recommending that the Common Council amend its Inducement Resolution No. 4439 -14 to increase the aggregate principal amount of economic development revenue bonds which may be issued for the Project to an amount not to exceed $50,000,000; US.56412924.01 WHEREAS, the Common Council desires to amend the Inducement Resolution to increase the aggregate principal amount of economic development revenue bonds which may be issued for the Project to an amount not to exceed $50,000,000; NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of South Bend, Indiana, as follows: SECTION I. The Common Council confirms its findings, determinations, ratifications and confirmations in the Inducement Resolution that the creation and retention of opportunities for gainful employment and the creation of business opportunities to be achieved by the Project in the City will be of benefit to the health and general welfare of the citizens of the City; and that it is in the public interest that this Common Council take such action as it lawfully may to encourage diversification of industry and promotion of job opportunities in the City. SECTION II. The Common Council further finds, determines, ratifies and confirms that the Inducement Resolution (No. 4339 -14) is amended to increase the aggregate principal amount of economic development revenue bonds which may be issued by the City under the Act for the Project to an amount not to exceed $50,000,000.00 and that the loan of the proceeds of such economic development revenue bonds to the Applicant will serve the public purposes referred to above, in accordance with the Act. SECTION III. This Resolution does not constitute a binding obligation of the Commission or the City to issue the bonds, but instead, is a commitment by the City to proceed with negotiations for the financing described herein with the Applicant and is subject to the adoption of a bond ordinance by this Common Council in accordance with the provision of the Act. SECTION IV. The Common Council hereby acknowledges that the remaining terms and provisions of the Inducement Resolution (No. 4339 -14) remain in full force and effect. SECTION V. This Resolution shall be in full force and effect upon adoption by the Common Council and compliance with the procedures required by Indiana Code 36 -4 -6. BEINT E D APPROY €t tr,D � -Le -lS US.56412924.01 COMMON COUNCIL OF THE CITY 777!5 NA Member of the Common Council -2- Filed in a- Office :y 2 Q 211;15 JC1ti �s CITY CLERK, SOUTH BEND,IN TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 15 -41 A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AMENDING RESOLUTION NO. 4339 -14 WHICH PROVIDED PRELIMINARY APPROVAL OF THE ISSUANCE OF BONDS FOR THE PURPOSE OF PROVIDING CERTAIN ECONOMIC DEVELOPMENT FACILITIES FOR NOBLE AMERICAS SOUTH BEND ETHANOL, LLC 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. This bill was heard by the Community Investment Committee. Karen L. White Chairperson, Committee of the Whole 227 W. JEFFERSON BOULEVARD SMITE 1400 S. SOUTH BEND, IN 46601 -1830 CITY OF SOUTH BEND PETE BUTTIGIEG, MAYOR COMMUNITY INVESTMENT SCOTT FORD, EXECUTIVE DIRECTOR May 20, 2015 Mr. Tim Scott, President South Bend Common Council 4111 Floor County -City Building South Bend IN 46601 Dear President Scott: PHONE: 574/235.9371 FAX: 574/235 -9021 Attached are the forms of Inducement Resolution for consideration by the Economic Development Commission and the Common Council relating to the Noble Americas Project. This resolution constitutes the initial action that the EDC and the Council will be required to take with respect to the proposed financing by Noble Americas. This resolution indicates that the Company is going to request that the EDC and the Council give preliminary approval to increase the issuance of revenue bonds. Previously, the EDC and Common Council approved an aggregate principal amount not to exceed $25,000,000. This resolution would allow the Company to increase a revenue bond issuance to an aggregate principal amount not to exceed $50,000,000. The proceeds would be used for the improvements as described in the resolution and are applicable to portions of the project at the Ethanol Plant that would qualify for tax - exempt pollution control facility bond financing. In order for the Company to qualify for tax - exempt financing, the governmental issuer must issue revenue bonds and loan the proceeds from the sale of the bonds to the Company. The City, through Indiana Code 36 -7 -12, would serve as the conduit issuer of the bonds and loan the proceeds following the issuance thereof to the Company for expenditure on qualifying project costs. The Company would have sole responsibility for paying the debt service on the bonds. As evidenced in the resolutions, the City's credit rating would not be affected by the issuance of these bonds, the City would bear no responsibility to pay the debt service on the bonds, and in the event of a default by the Company, and only the Company would bear the risk of that default. Once the issuance process has been completed, the City would have no involvement with the bonds or the payment of the debt service on the bonds. Typically, these bonds are secured by a bank letter of credit in which the bank would make payments on the bonds in the event the Company failed to do so. At such time, the bank would then seek reimbursement from the Company under the letter of credit reimbursement agreement. Alternatively, it is possible these bonds may be purchased directly by a bank which would take security interests in the Company and/or the project financed. PLANNING NEIGHBORIIOOD ENGAGEMENT BUSINESS DEVELOPMENT ECONOMIC RESOURCES JITIN KAIN PAMELA C. MEYER CHRIS FIELDING BROCK ZEEB �I' Should you have any questions regarding the resolution, please do not hesitate to contact me at 574- 235 -9339. Bond Counsel Faegre Baker Daniels will be present to answer additional questions at the Council Committee meeting on 5/26/2015. Sincerely, 7? C Brock Zeeb Director of Economic Resources City of South Bend Department of Community Investment. Filed in CIP° c-t office f L-.-.Y _. . ..j e�&;N' vu-Q;' CITY CLERK, SOUTH kND, IN RESOLUTION NO. 2015-01 A RESOLUTION OF THE SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION AMENDING RESOLUTION NO. 2014-3 WHICH PROVIDED PRELIMINARY APPROVAL OF THE ISSUANCE OF BONDS FOR THE PURPOSE OF FINANCING CERTAIN ECONOMIC DEVELOPMENT FACILITIES FOR NOBLE AMERICAS SOUTH BEND ETHANOL, LLC WHEREAS, the South Bend Economic Development Commission (the "Commission ") is a commission operating and existing under and pursuant to the authority of Indiana Code 36 -7 -11.9 and 12, as supplemented and amended (the "Act "); and WHEREAS, the Commission is authorized by the Act to investigate, study, and survey the need for job opportunities, industrial diversification, water services and pollution control facilities in the City of South Bend, Indiana (the "City.), and to recommend action to improve or promote job opportunities, industrial diversification, water services and the availability of pollution control facilities in the City; and WHEREAS, the City may issue revenue bonds pursuant to the Act for the financing of "economic development facilities" or "pollution control facilities" as each are defined by the Act, the funds from said financing to be used for the acquisition, renovation, construction, installation and equipping of said facilities, and said facilities to be either leased to another person or directly owned by another person; and WHEREAS, Noble Americas Corp:, on behalf of its subsidiary Noble Americas South Bend Ethanol, LLC, (the "Applicant ") previously requested that the Commission give preliminary approval to the issuance of economic development revenue bonds under the Act in an aggregate principal amount not to exceed $25,000,000 which request includes the financing by the Applicant of certain economic development facilities consisting of the acquisition, construction, installation and equipping of, including, but not limited to, grain drying systems, process technology upgrades, boilers, cooling towers, water treatment, tanks, piping systems, CIP system, and any other facilities and equipment which may be financed through the issuance of economic development revenue bonds (the "Project ") in conjunction with the Applicant's renovation of the ethanol production facility located at 3201 West Calvert Street in the City; and WHEREAS, on March 21, 2014, the Commission adopted Resolution 2014 -3 entitled "A Resolution of the South Bend Economic Development Commission Providing Preliminary Approval of the Issuance of Bonds for the Purpose of Financing Certain Economic Development Facilities for Noble Americas South Bend Ethanol, LLC" (the "Inducement Resolution "), which resolution provided preliminary approval for the issuance of economic development revenue bonds of the City in the aggregate principal amount not to exceed $25,000,000 under the Act to finance the acquisition and installation of the Project under a financing agreement whereby the proceeds of such bonds would be utilized to acquire, construct EXHIBIT A US.56424951.01 and install the Project and the Applicant would make payments sufficient to pay the principal of, premium, if any, and interest on said bonds; and WHEREAS, since the adoption of the Inducement Resolution, the cost of the Project has increased and the Applicant has determined the need exists to increase the expected aggregate principal amount of the bonds to be issued for the Project as set forth in the Inducement Resolution to an amount not to exceed $50,000,000; and WHEREAS, the Commission desires to amend the Inducement Resolution to increase the aggregate principal amount of economic development revenue bonds which may be issued for the Project to an amount not to exceed $50,000,000; and WHEREAS, the Commission has considered a form of amending resolution with respect to the Project (the "Common Council Amending Resolution ") and has considered recommending that the Common Council of the City (the "Common Council ") adopt a resolution in substantially such form; NOW, THEREFORE BE IT RESOLVED, by the South Bend Economic Development Commission, based upon the evidence submitted and representations made by the Applicant, as required by the Act, that; 1. The Commission confirms the creation of opportunities for gainful employment and the creation of business opportunities to be achieved by the Project in the City will be of benefit to the health and general welfare of the citizens of the City, and it is in the public interest that this Commission take such action as it lawfully may to encourage diversification of industry and promotion of job opportunities in the City. 2. The Commission amends the Inducement Resolution to increase the amount of economic development revenue bonds which may be issued by the City under the Act for the Project to an amount not to exceed $50,000,000 and that the loan of the proceeds of the economic development revenue bonds to the Applicant will serve the public purposes referred to above, in accordance with the Act. 3. This resolution does not constitute a binding obligation of the Commission or the City to issue the bonds, but instead, is a commitment by the Commission to proceed with negotiations for the financing described herein with the Applicant and is subject to the adoption of a bond ordinance by the fiscal body of the City in accordance with the provisions of the Act. 4. The Commission hereby approves the fonn of the Common Council Amending Resolution and recommends that it be adopted by the Common Council in substantially the same form as a resolution, and the Commission hereby directs that copies of this resolution, and the form of the Common Council Amending Resolution be transmitted to the Clerk of the City for presentation to the Common Council with the recommendation that the Common Council Amending Resolution be adopted as a resolution. -2- US.56424951.01 5. This Resolution shall be in full force and effect from and after the time it has been adopted by the Commission, and otherwise executed and delivered in accordance with any and all laws pertaining thereto. ADOPTED this Sth day of May, 2015. SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION M b , o Bend Economic DGreg yurgond ,, Welsident Member, South Bend Economic Development Commission Scott Ford, Secretary Member, Soud Bend E nomic Development Commission Consuella Hopkins, Vice President Member, South Bend Economic Development Commission Member, South Bend Economic Development Commission -3 - US.56424951.01