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12/10/07 Council Meeting Minutes
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12/10/07 Council Meeting Minutes
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REGULAR MEETING <br />DECEMBER 10, 2007 <br />Of those, 30% will be affordable. Affordable homes are expected to range between 900 <br />and 1,300 square feet and be priced between $100,000 and $150,000. Market homes are <br />expected to range between 1,500 and 2,300 square feet and be priced between $170,000 <br />and $250,000. <br />This being the time heretofore set for Public Hearing on the above bill, proponents and <br />opponents were given an opportunity to be heard. <br />Councilmember Varner questioned what kind of fall back plan is in place if the TIF <br />revenues are not available. He stated that he does not want the City in the position of <br />having to use general obligation money. <br />Mr. Inks advised that the bond has been structured so it contains capitalized interest, <br />recognizes the fact that development even while it is being built, almost as soon as the <br />bond is issued, that it will take almost eighteen months to get those first phases completed <br />and then assessed and then on the tax rolls. The first two years of payments are already <br />built into the bond itself. And subsequent to that, through the development agreement <br />there will be some clauses in there that tie the developer to the development by the dates <br />that the construction is supposed to be completed to help insure that revenue stream is <br />available when it is needed to pay the bonds. <br />Councilmember Dieter asked if there have been builders selected in the construction of <br />the sixty-one (61) homes. <br />David Compton, Kite Realty Group, advised that they have been working with the South <br />Bend Heritage Foundation and selected through the RFP process and as a part of that <br />process have committed to work with local builders. He stated that he is State President <br />of the Indiana Builders Association. He noted that Mr. Andy Place is on his Executive <br />Committee, and stated that he along with many other builders have contacted his office <br />and are interested in this development. He stated that they are compiling a list and once <br />they are through the TIF process and the DLGF, and have a firm construction time table, <br />they will set up the builder program. <br />Councilmember Rouse asked what kind of reassurances are going to be put in place in the <br />agreement. <br />Council Attorney Kathleen Cekanski-Farrand stated that questions that have been asked <br />in both Committee Meetings that have been held on this bill were answered by Mr. Gilot, <br />Director, Public Works. Mr. Gilot advised that there would be a document in place. She <br />stated that tonight the Council is approving the lease between the Redevelopment <br />Authority and the Redevelopment Commission. She stated that as a part of the <br />committee hearing this afternoon, Mr. Rich Hill, Attorney at Law, Baker & Daniels <br />stated that he is going to make comments tonight dealing specifically with regard to the <br />total assessment, which again goes towards the financing mechanism. She reiterated that <br />as far as what the Council is doing tonight is being followed to the letter of the law. <br />Richard Hill, Attorney at Law, Baker & Daniels, 205 W. Jefferson Blvd., South Bend, <br />Indiana, stated that the financing structure does make certain assumptions about the <br />assessed values and certain representations about those assessed values as being <br />acceptable to Kite as the developer and acceptable to the City from the stand point of the <br />funds that would be necessary to handle the financing. Within those numbers there are <br />really only three things that are handled. One is as suggested this afternoon in Committee <br />is the debt service on the bonds. The second thing is excess coverage. There is an excess <br />amount over and above the coverage that would be needed for principal interest. The <br />third element that is built in is the repayment schedule back to the City. So from the <br />standpoint of a developers acceptance a certain level of assessed value, it is assumed that <br />within that level of assessed value that would be accepted by the developer, those three <br />things are handled. The City's repayment schedule with the interest would be handled <br />within that and that only after those things are met would there be any ability to perhaps <br />challenge an assessment over that level. Mr. Hill added to keep in mind that with an <br />agreement to repay, the mechanics and the collection of the tax increment, would <br />11 <br />
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