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~J <br />The South Bend Redevelopment Authority <br />October 17, 2007 Meeting Minutes <br />Local Government Finance authorizes that. Two additional steps that are <br />necessary are approval by the City Council; which will be scheduled for <br />November 26, and then going to the Department of Local Government Finance <br />(DLGF) December 13. After all of those are approvals are received then the lease <br />can be executed by the Redevelopment Authority and the Redevelopment. <br />Commission. <br />• <br />• <br />The Authority will be the .issuer of the bonds and once the improvements are. <br />.constructed the improvements will-be leased by the Redevelopment Commission. <br />The Redevelopment Commission will devote the Tax Increment Revenue (TIF) <br />-that. will be generated by the project to make principal interest payments on the <br />bonds. The Redevelopment Commission has previously approved a housing <br />program for the area so that for the first. time those portions that would be <br />constructed and developed by Kite that would be assessed as residential would <br />also be producing TIF that would be devoted to this financing. Mr. Alvarez asked <br />if there would be tax abatement in this project and Mr. Hill said there would not <br />be any:. Mr. Hill said we are contemplating a $36M bond issue that would be <br />mature in 25 years and we would have maximum annual lease payments that <br />would approximate $3.7M. These amounts are all high ends, and after we go <br />through the public hearing process we will not be able to increase. any of the <br />amounts but can decrease them. These are broad perimeters that have a higher <br />interest rate than the actual interest rate. This is to get the public process. started <br />and to move through the City-Council and the DLGF. Mr. Alvarez asked if we <br />were sure that the payments will be lower than the $3.7M. Mr. Hill said there has <br />been a substantial amount of work by the City and Kite to make .sure the assessed <br />value that is produced is more than sufficient to make the. principle lease payments <br />on the bond: Mr. Inks said that in addition to bond counsel we also have Crowe <br />Chizek working with us as financial counsel. While the City and Kite have been <br />working on assessed value,.we also have an independent third party that is <br />reviewing all of that work and computing what they believe will be the TIF <br />revenues. Mr. Hill said that is an important point because the State will also <br />independently look at the adequacy of the revenues to be able to make.-the lease <br />payments so that principle interest payments can be made. <br />Mr. Alvarez asked when the Authority conveys the. title to the Commission if the <br />Authority's rights will be protected. Mr. Hill said the only revenue being devoted <br />is the TIF revenue, although, for purposes of marketing the bonds if the DLGF <br />.approves them, they can be marketed with: a backup of property taxes. This project <br />is not viewed as a control project, meaning that if if were a controlled project, we <br />would have to go through a petition or remonstrance process. A controlled project <br />is one that anticipates the use of property tax revenue, but this is the. opposite, it <br />anticipates that TIF revenue will be adequate. Mr. Inks elaborated a bit and said <br />the initial estimates, which are still being reviewed,-show roughly $4.1M in <br />H:\WPDATA\AUTHORTY\ 101707.MIN.DOC <br />3 <br />