90-1464 o�����a�. .
_____________________ ___________________________________________________________________
1 counc i l F i t e # �����
2
3 �reen sheet #
4 RESOLUTION
6 CITY OF SAINT PAUL, MI OTA a �
7 �, `- _��
�
g Presented By
9
1� Referred To Camii ttee: Date
11
12
14 =___________________�__________________________________________________________________
1
2 RES LUTION APPROVING CONTINUATTON OF
3 P TAX EXEMP'I'ION AND ASSUMP'I'ION
4 AG EEMENT, ZAIDAN HOLDINGS, INC.
5
6 WHEREAS, by it Resolution, Council File No. 84-198 adopted February 16, 1984, the
7 Council of the City of S 'nt Paul approved project plans and granted a partial tax exemption for
8 Jackson Apartments Re evelopment Company Limited Partnership ("Jackson") and Sibley
9 Apartments Redevelop ent Company Limited Partnership ("Sibley") for a term of twenty-five years
10 commencing from the d te on which the benefits of such exemption first became available in
11 accordance with Minnes ta Statutes Section 462.651 Subdivision 1 and the Plans for Tax Exemption
12 approved by said Resol tion; and
13
14 WHEREAS, the ity of Saint Paul ("City") and the Housing and Redevelopment Authority of
15 the City of Saint Paul, innesota ("HRA") entered into Redevelopment Company Contracts with
16 Jackson and Sibley unde date of March 22, 1984, amended as of February 1, 1987, which limited
17 investment return to 8% of equity and provided for payment in lieu of taxes to the extent of
18 available cash flow of amount equal to the abated taxes ("Pilot") which payments were secured
19 by mortgages dated as o February 1, 1987 in favor of the City ("Mortgages"); and
20
21 WHEREAS, the J ckson and Sibley projects were refinanced in 1987 by Rental Housing
22 Refunding Bonds issu d by the HRA and the Port Authority of the City of Saint Paul ("Port
23 Authority") pursuant to Joint Powers Bonding Agreement between the issuers dated as of
24 February 1, 1987, secure by financing leases date as of February 1, 1987 ("Leases") to which the
25 City Mortgages are subo dinated; and
26
27 W�IEREAS, an ev nt of default e�cists in the Sibley Lease and the Port Authority has agreed
28 to fortrear from the exer ise of remedies for a period ending August 31, 1990 to allow Sibley and
29 Jackson to work out an sumption agreement with Zaidan Holdings, Inc. ("Zaidan"), the City, HRA
30 and the Port Authority hereby Zaidan would assume all obligations of Sibley and Jackson under
31 the Leases and the Red elopment Company Contracts except for the Pilot payments; and
32
33 WHEREAS, the 1 year proforma cashflow analysis prepared by the Port Authority for Sibley
34 and Jackson projects ind cates operating difficulties for the projects and little prospect for cash flows
35 available for Pilot paym t, and it appears that the consolidation of management into Zaidan which
36 owns and manages the c mmercial, parking and residential condominiums portions of Galtier Plaza
37 of which the Sibley and ackson projects are components would have a positive effect; and
38
ORIGINAC. � 9� ,�`� �`
1 WHEREAS, the lans for Tax Exemption approved by Resolution 84-198 provided that
2 acquisition by a perso not a redevelopment company through foreclosure or deed in lieu thereof
3 would not work a te nation of the tax exemption granted by that resolution and Section 469.043
4 Subdivision 5 of Minn sota Statutes as amended by La.ws of Minnesota 1990, Chapter 604, Article
5 7, Section 2 provides t at a t� exemption granted under Section 462.651 Subdivision 1 may
6 continue in effect whet er or not the project is owned by a redevelopment company during any
7 period when annual e 'ngs of the owner from the project for interest, amortization and dividends
8 does not exceed 8% of invested capital or equity in the project; now therefor, be it
9
10 RESOLVED, by the Council of the City of Saint Paul that upon execution and delivery by
11 Zaidan of an Assumpti n Agreement to which the City is a party whereby Zaidan limits its eamings
12 from the Sibley and Ja kson projects in accordance with Minn. Stat. Section 469.043 Subdivision 5,
13 that the partial abate nt of and exemption from ad valorem property taxes granted by Resolution
14 84-198 shall continue ' effect for the term provided for in said Resolution.
15
16 RESOLVED F THER, that the payment of Pilot to the City may be partially waived and
17 the Mortgages may be eleased upon agreement by Zaidan to limit earning from the Jackson and
18 Sibley Projects to 8% f invested capital or equity, to pay an annual noncumulative pilot to the
19 extent of available cas flow, and to pay to the city 12.5% of the proceeds of sale of the Sibley
20 Project, all as in said sumption Agreement provided and the proper City officers are authorized
21 and directed on behalf of the City to conclude and execute such Assumption Agreement, Mortgage
22 Satisfactions and such ther documents as may be needed to accomplish the transaction, all in form
23 approved by the City ttorney.
24
25 RESOLVED ALLY, that staff will work with the Port Authority and Zaidan to determine
26 what actions can be ini iated to provide more accessible housing units in the Jackson and Sibley
27 Projects.
28
29
30
31
32
33
34
35
—__________________________________________________________________________________________
36 —_________________________________________
37 lfe Na s Absent Requested by Department of:
Dimon
38 cosw,t:
L ti
39 M8��8
40 Rettman �
41 Wl SOf1 v BYS
42 _________________�_ __-______-_________
43 A�Pted by Co�r�cil: ate AUG 2 8 1990 Form Approved by City Attorney
44
45 adoption certified by council secretary By.
BY= �� '�'-- A roved b Ma or for Submission to
PP Y Y
Approved by Mayor: ate ���7 `Z � N+�!! ����
�//.�-l��d�/� � BY'
�8ll��i�9 S t�P - 819 90
� � , . �"ya���
DEPARTM[NT/OFFICEICOUNqL DATE INITIATED
PED 8/14/90 GREEN SHEET No. 09�9
CONTACT PERSON 8 PHONE MIITIAU DATE INITIAUDATE
� ENT DIRECTOR �GTV COUNpL
Mary Tingerthal �� cmr n EY �pTY(XERK
MUBT BE�1 COUNqL AGENDA BY(GAT� ROUTNip �BUDOET DIRE �FIN.R MOT.SERYICES DIR.
August 31, 1990 �tiuvon� �rrn � "
TOTAL 1►OF SIONATURE PAGES (CLIP ALL LOCATIONS FOR 8K3NATUi�
ACTION REOUESTED:
Authorize the amendmen of a Redevelopment Company Contract grantin� a parti.al tax
exemption for the Jack n and Sibley Apartments through an anticipated Assumption Agreement
by Zaidan Holdings, In .
t�oo�teNOV►�S:Mr+►�(N a A.1�(� COUNCIL COMM11nrEFJRESEAWCH REPORT OPTION/1L
_PLANNINO COMMIS8�dN _qVIL RVICE OOMMISSION ��VBT PHONE NO.
_pB OOMMITTEE A
_STAFF _ COMMENTB:
_DI87AICT COURT _
SUPPORTB WFIIGi COUNpI OBJECTIVE?
INII'1ATINf3 PROBLEM�18�1E.OPPORTUNITY What,When�Whsro.1NhY):
The Port Authority is c rrently negotiating with Zaidan Holdings, Inc. for the purchase
of the Jackson and Sibl y Apartments. Approval of the proposed amendments to the
Redevelopment Company C ntract through an Assumption Agreement is critical to these
negotiations.
ADVANTA(3E8 IF APPROVED:
Sale of the properties o Zaidan Holdings, Inc. will place the properties on a sound
financial footing.
DIBADVMITAf:tES IF APPROVEO:
None
DISADVANTAOES IF NOT APPROVEO:
Sale of properties to Za dan Holdings, Inc. is unlikely to proceed.
I
TOTAL AMOUNT OF TRANSACTiON t�BT/REVENUE BUDOETED(qRCLE ONE) YES NO
FUNOINti SOURCE ACTIVITY NUMOER
FYNANGAL INFORMATION:(EXPWN)
� } � � - �yo-i�e�
; �
��ii'i i�'ii = CIT'Y OF SAINT P��JL
OFFICE OF THE CITY COIJNCIL
CITY�IALL-7th FLOOR-SAIIVT PAUL,MiNNESOTA 55102
-_ • 612-298-55at
TOM DIMOND
COUNCILMEMBER
Members:
Tom Dimond, Chair
Paula Maccabee
Dave Thune
Date: August 8, 19 0
COMMITTEE REPO T
HOUSING AND ECO OMIC DEVELOPMENT COMMITTEE
l. Approval of the July 25, 1990, Housing and Economic Development Committee
meeting.
COMMITTEE A PROVED, 3-0
2. Sibley Apar ments -- (Galtier Plaza) -- Redevelopment Company contract terms
(Property T x Abatement -- Laid Over in HED 7-25-90) .
COMMITTEE R OMMENDED APPROVAL WITH AMENDMENTS, 3-0 (HRA)
COMMITTEE RE OMMENDED APPROVAL OF RESOLUTION, 3-0
3. 730 North Fairview Avenue.
COMMITTEE RE OMMENDED APPROVAL, 3-0 (HRA)
4. Approval of unding to construct a parking lot on HRA parcel at 141-E, the
southwest co ner of Selby and Dale, Summit-University Planning Council ,
District 8 ( eferred from HRA 7-10-90; Laid Over in HED 7-25-90) .
THIS ITEM WI L BE LAID OVER TO THE AUGUST 29, 1990, HOUSING AND ECONOMIC
DEVELOPMENT OMMITTEE MEETING
5. Authorizatio to amend joint power agreement budget for North End Partnership
URAP, Indust ial Park, District 6 (Laid Over in HED 7-25-90) .
COMMITTEE RE OMMENDED APPROVAL AS AMENDED, 4-0 (HRA)
6. Resolution 9 -1344 -- Approving the Neighborhood Partnership Program
Fourteenth C cle projects (Referred from Council 8-7-90) .
COMMITTEE RE OMMENDED APPROVAL, 3-0, WITH STAFF TO REPORT BACK ON DIFFERENT
SOURCES OF R VENUE FOR FUTURE PROJECTS
Chair, Housing and Redevelopment Authority,
Committees: Public Works; Housing and Economic Development; Finance.
l00%Recyclea4lc ee s