87-326 WMITE - CITV CLERK
BLUE - MA.,oR E GITY ,'OF SAINT PAUL Council /J
CANARV DEPARTMENT File NO. ��av �v
u�cil Resoluti�on
, ��
Presented By
Referre o Committe�e: Date
Out of Committee By Date
WHERFAS:
1. On Feb 24, 1987 th� Port Authority of the City of Saint Paul adopted
Resolution No. 2800 iving preli�minary approval to the issuance of revenue bonds in the
initial principal unt of $475,000 to finance the construction of a 5,400 square foot
addition to the Center on S�ith Avenue and Kellogg Boulevard for John M. Prest.
Miller and Shroeder Financial ha� agreed to imdeLwrite the revenue bond issue for a term
of 30 years.
2. Laws of esota 1976, Chapter 234, provides that any issue of revenue bonds
authorized by the rt Authority; of the City of Saint Paul, shall be issued only with the
cansent of the City Council of the City of Saint Paul, by resolution adopted in accordance
with law;
3. The Port thority of �he City of Saint Paul has requested that the City Council
give its requisite nsent pursi�ant to said law to facilitate the issuance of said revenue
bonds by the Port thority of �he City of Saint Pau]., subject to final ap�roval of the
details of said is e by the Po1rt Authority of the City of Saint Paul.
RESOLVID, by e City Coun�il of the City of Saint Paul, that in accordance with Laws
of Minnesota 1976, Chapter 234, �the City Council her�by consents to the issuance of the
aforesaid revenue nds for the�purposes described im the aforesaid Port Authority
Resolution No. 280 the e�.ct details of which, incl�iding, but not limited to, provisions
relating to maturi ies, interes� rates, disaount, r�e� mption, and for the issuance of
additional bonds e to be dete�mined by the Port Au�hority, pursuant to resolutian
adopted by the Po Authority, and the City Council �ereby authorizes the issuance of any
additional bonds ( cluding ref,'unding bonds) by the �ort Authority, found by the Port
Authority to be n ssary for darrying out the purpq�ses for which the aforesaid bonds are
issued. ��
COUNCILMEN Requeste� De rtment of:
Yeas prew NaYs /� � �
Nicosia ��7J �,��
Rettman [n Favor
Scheibel Q� '
Sonnen _ 1�1ga1nSt BY
T�eda.w,
;
Wilson
Adopted by Council: Da r�R 1 �� 19$7 Form r d by City Attorn�e`
Certified Pas•e ouncil S cr y B � �
By�
App ed Mavor: Date _ � � 3 1�7 F►PProve b Mayor fo u ission o Council K
- – — BY �Ql��}
PUB1{SHED ,'��1�; 2 1 198�
� ��3��V'° 06065
'St. Paul Port Auth�ri P RTMENT • _ _
J. E. R�errell, E.A. Kraut ON ACT
224-5686 HO E
2-24-87 AT
�� ee
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ASSIGN NUh�ER FOR RDUTING DER Cli All Locations- for Si n ure :
� Department Director � �rector of Management/Mayor '
Finance and Management ervices D r ctor - 4 ity Clerk
Budget Director � ��'
2 City Attorney 475,000 Resolutian 876 Taxable
R�v+enue Issue - Site
WHAT WILL BE ACHIEVED BY T KING ACTI N THE ATTACHED:�fATER ALS? (Purpose/
Rationale) :
'It�e purpose of the�b�d is is to f' ce the constnxction f a�5,400 square foot addi�Eibn to
F�po CentPx an 9ni.th Avenue and Kell evard for J M. Prest. The addition, c�sist�ng of
catering kitchens ax�d offi s, wauld ublet by Mr. P�st a new corporation which waul.d resul
fresn ocsnbining the food and beverage s ess of the Qu�lity with the Pran Catering b�usiness.
'It�e sublease wnula be wi bond isswe. , RECEn/ •
ED
COST BENEFIT BUDGETARY PERSONNE MPACTS ANTICIPATED: ��8 2 '� �a�7
MAYOR'S��
�he amaunt of the revenu�e d issue s $475,000 and wi11 be for a term of 30 years.
�4ie ne�w corporation will ic�e app tely 150 jobs and ing ttbe Pran Catexing Business to �
Dawnt�aan St. Paul, rather out of St. Paul area.
FINANCING SOURCE AND BUDG T ACTIVIT N {�ER CHARGED OR CRED TED: (Mayor's signa-
ture not re-
Total, Amou�t of."Transa tion: quired if under.
$10,000)
Funding Source:
Activity Number: •
ATTACHMENTS List and Nu ber Al1 At a hments :
1. Staff Me�rr�ranchun �
2. Draft City Cauncil 1� lution -
3. Port Authority 12��01 '
cc: Jacqui Slv�holm �
DEPARTMENT REVIEW CI Y ATTORNEY REVIEW
x Yes No Council R olution R q ired? ' R solution Requixed? X Yes No
- Yes X No Insurance equired? I' surance Suffici�nt? ' X Yes No
Yes x No Insurance Attached:
(SEE •RE�E S SIDE FOR INSTRUCTIO S) _ , �
Revised 12/84
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PORT �r ��- 3a�
� AUTHORI Y � ' .
OF THE CITY OF ST. PAU
Memo�ondum
TO: BQP,Rp OF SSIONER.S , DATE:�g, 20, 1987
(N�rING FESR Y 24, 1987�)
FROM: J. E. Terre
SUBJECT:pUgLIC - pREI,IMINP�RY AND UNDERWRITING AIGR�TITS
JOHN M. PRFS (PROM/'F�0 CENTII2) �
$475,000 ION 876 T�,BLE REVIIV[JE �O1�ID IS1SUE - OFF-SITE
RESOLUTION . 2800 '
PUBLIC - CREATION OF IDIDUSTRIAL DEVIIA� DISTRIGT
RESOLUTION 2801
1. The Deve o
John M. est is president and 100$ awner of Prest Holdinq Corporation which
awns and operates Pre$t Nbtors Inns, Inc., Quality Inn, Inc. and Prest
EcNiFmen CanpanY• ,
The ssion has approved two previous bcmd issues for Mr. Prest. On
Septembe 19, 1978, by Resolution No. 1389 the Coa�mission approved the
issuance of $3,085,OOb in industrial develoFment revenue bonds to Mr. Prest
to finan the construction of 'The Inn at the corner of Seventh and Kellogg
Streets. On June 13, 1980, by Resolution �673 the Cannission approved the
issuance of $1,890,000 in industrial develo�ent revenue l�onds to finance
the r elinq of The' Inn and to aaTuire the Civic Center Motor site, the
Expo Cen er, for future expansion.
2. The Pro'
Mr. Pres has request'ed the Port Authority to finance the oonstruction of a
5400 Sq. Ft. additior� to the Expo Center an 5lnith Avenue and Kellogq
Bouleva The addition, c�onsisting of caterinq kitchens and offices, urould
be subl �by Mr. Prest to a new corporation which w�ould result fran
canbini the food arid beverage business of the Quality Inn with the Pro�n
Caterin business. �'he sublease woould be ooterminous with the bond issue.
The new corporation will provide ap�pro�simately 150 jobs and bring the Prcen
Caterin business to Dvwntawn St. Paul rather than out of the St. Paul area.
�
. . � � G���-�a�
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BQARD OF CONIl�IISS ONIIZS
NN1EE'rING F'ESRi7AR 24, 1987 i
JOHN M. PREST ( �)
PAGE 2
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3. Financing i
The propos financing would be done as an 87 ta�ble inciustrial
developnent revenue bond issue for a 30 year erm. Proc.�eeds fran the bond
issue will as follavs;
Building I$375,000
Debt Servi�e Reserve 52,000
Constructibn �nd Irrterest 23,500
Hond Issuance 15,000
Bond Discount 9,500
� $475,000
The Port Au ority w�ould receive earninqs on �the deb�t service reserve as
well as its cuto�nary 1$ fiscal and administra�tive fees. Mr. Prest will
personally rantee the lease payments.
4. Undezwritin
Miller & S oeder Financial, Inc. has aqreed to underwrite the 30 year bond
issue at a ate to be set at the time the bonds are sold. We anticipate the
bonds will sold at tHe regular March, 1987, Port Authority Co�mission
meeting.
5. Terms of e Lease
The term o the lease would be for 30 years �I�ith the Mr. Prest havinq an
option to urchase the building for 10$ of e original bond issue plus
retirement of outstandi�q honds at 10 years�nd at 20 years and for 10$ of
the origi 1 bond issue� at the end of the te$m.
5. Rec�nda ion
Staff has iscussed the project with repres tatives fran District 9 and the
District d no neqatives on the project and did nat require a meeting.
Staff has nterviewed Mr. Prest, revi�wed hi financial statements and
rec�mends approval of ,the above resolution .
sjs
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►
540T
Resolution No. ��GC�
RESOLUTIO OF THE PQRT AUTHORITY OF TI�E CITY OF SAINT PAUL
' EREAS, the purpose of Minne�ota Statutes, Chapter
474, known as the Minr�esota Municipal Ihdustrial Development
Act (herei after called "Act" ) as found and determined by the
legislatur is to promote the welfare of the state by the
active att action and ; encouragement and; development of
economical y sound industry and commer e to prevent so far as
possible t e emergenc� of blighted and marginal lands and
areas of c ronic unem�loyment and to a 'd in the developmen�t. of
existing a eas of blight, marginal lan and persistent
unemployme t; and
HEREAS, fa�ctors necessitati g the active promotion
and develo ment of ec'onomically sound ndustry and commerce
are the in reasing co�ncentration of po ulation in the
metropolit n areas an�d the rapidly ris ng increase in the
amount and cost of gqvernmental servic s required to meet the
needs of t e increased population and he need for development
of land us which will provide an adeq�ate tax base to finance
these incr ased costs and access to employment opportunities
for such pulation; and
HEREAS, the Port Authority of the City of Saint
Paul (the "Authority'" ) has received fr�om Expo Center, Inc. , a
Minnesota corporation (hereinafter ref�erred to as "Company" ) a
request t at the Autlnority issue its revenue bonds to finance
the acqui ition and �onstruction of a 5,400 square foot
addition o the Expo Center on Sixth Avenue and Kellogg
Boulevard consisting of catering kitGhens and offices
(hereinaf er called the "Project" ) in the City of St. Paul,
all as is more fully described in the staff report on file;
and
WHEREAS, the Authority desi�es to facilitate the
selective developmen't of the community�, to retain and improve
its tax b se and to ;help it provide tlhe range of services and
employmen opportunities required by �.ts population, and said
Project w' ll assist 'the City in achie ing that objeCtive.
Said Proj ct will help to increase th� assessed valuation of
, � �� ��- 3a�
the City an help main�tain a positive relationship between
assessed va uation and� debt and enhance the image and
reputation f the City'; and
W EREAS, the Project to be fir�anced by revenue bonds
will result in substantial employment o�portunities in the
Project;
EREAS, the Authority has be�n advised by repre-
sentatives of the Company that conventional, commercial
financing o pay the �apital cost of th�e Project is available
only on a imited basis and at such higlh costs of borrowing
that the e onomic fea�ibility of operatling the Project would
be signifi antly reduced, but the Comp ny has also advised
this Autho ity that but for revenue bo�d financing, and its
resulting ow borrowing cost, the Projekct would not be
undertaken
HEREAS, Mi'ller & Schroeder B'inancial, Inc. (the
"Underwrit r" ) has ma'de a proposal in a�n agreement (the
"Underwrit'ng Agreement" ) relating to tthe purchase of the
revenue bo ds to be i,ssued to finance the Project;
HEREAS, the Authority, purs�aant to Minnesota
Statutes, ection 474 . 01, Subdivision '7b did publish a notice,
a copy of hich with �proof of publication is on file in the
office of the Authority, of a public hearing on the proposal
of the Co pany that �he Authority finance the Project
hereinbef re described by the issuance of its industrial
revenue b nds; and
WHEREAS, the Authority did aonduct a public hearing
pursuant o said not2ce, at which hearing the recommendations
contained in the Authority' s staff inemorandum to the
Commissio ers were reviewed, and all persons who appeared at
the heari g were given an opportunity to express their views
with resp ct to the proposal.
NOW, THEREFORE, BE IT RESOLWED by the Commissioners
of the Po t Authority of the City of Saint Paul, Minnesota as
follows:
1. On the basis of information available to the
Authorit it appears, and the Authori�ty hereby finds, that
said Project constitiutes properties, �ased or useful in
connecti n with one ; or more revenue producing enterprises
engaged 'n any business within the meaning of Subdivision 1 of
Section 74 .02 of t�e Act; that the Project furthers the
purposes stated in Section 474.01 of ,the Act and, but for the
willingn ss of the Authority to furn sh such financing, the
Company ould not uhdertake the Proj�ct, and that the effect
2
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of the Proj ct, if undertaken, will be �o encourage the
development of economi�cally sound industiry and commerce and
assist in t e preventipn of the emergenc�e of blighted and
marginal la d, and wil,l help to prevent �chronic unemployment,
and will he p the City, to retain and im�rove its tax base and
provide the range of �ervices and emplo ment opportunities
required by its population, and will he�p to prevent the
movement of talented and educated persons out of the state and
to areas wi hin the state where their services may not be as
effectivel used and will result in more intensive development
and use of land withim the City and will eventually result in
an increas in the Ci�y' s tax base; and that it is in the best
interests f the port � district and the people of the City of
Saint Paul and in furtherance of the general plan of
developmen to assist the Company in financing the Project.
Subject to the mutual ac�reement of the
Authority, the Company and the purchas 'r of the revenue bonds
as to the etails of the lease or othe revenue agreement as
defined in the Act, and other document nece��ary to evidence
and effect the financ�ing of the Projec and the issuance of
the revenu bonds, th�e Project is here y approved and
authorized and the is'suance of either axable or tax exempt
revenue bo ds of the 'Authority in an a ount not to exceed
approximat ly $475,Oa0 (other than suc additional revenue
bonds as a e needed �o complete the Prpject) is authorized to
finance th costs of 'the Project and t�e recommendations of
the Authority' s staff , as set forth injthe staff inemorandum to
the Commi sioners which was pre�sented Ito the Commissioners,
are incor orated herein by reference and approved.
3 . There� has heretofore been filed with the
Authority a form of �reliminary Agreement between the
Authority and Company, relating to the proposed construction
and finan ing of the Project and a form of the Underwriting
Agreement Said Agreements are hereby approved, and the
President and Secretary of the Authority are hereby authorized
and direc ed to exec,ute said Agreemen�s.
4 . Upon execution of the �reliminary Agreement by
the Compa y, the st�ff of the Authority is authorized and
directed o continue negotiations witl� the Company so as to
resolve t e remainir►g issues necessary to the preparation of
the leas and other ,documents necessary to the adoption by the
Authorit of its fir�al �bond resolution and the issuance and
delivery of the revenue bonds; provided that the President (or
Vice-Pre ident if the President is ab�ent) and the Secretary
(or Assi tant Secretary if the Secretary is absent) of the
Authorit , or if either of such offic�ers (and his alternative)
are abse t, the Treasurer of the Authiority in lieu of such
absent o ficers, are hereby authorizeid in accordance with the
3
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provisions f Minnesot,a Statutes, Secti�n 475. 06, Subdivision
1, to accep a final a'ffer of the Under riter made by the
Underwriter to purchase said bonds and to execute an
Underwritin Agreement' setting forth such offer on behalf of
the Authori y. Such a,cceptance shall bind the Underwriter to
said offer ut shall b'e subject to appr val and ratification
by the Port Authority in a formal suppl�mental bond resolu-
tion t�o be dopted prior to the deliver� of said revenue
� bonds. '
5 . The revenue bonds ( inclu�ing any interim note
or notes) a d interest thereon shall no constitute an
indebtednes of the Authority or the Ci y of Saint Paul within
the meaning of any constitutional or st tutory limitation and
shall not c nstitute or give rise to a ecuniary liability of
the Authori y or the City or a charge a ainst their general
credit or t xing powers and neither the full faith and credit
nor the tax'ng powers of the Authority br the City is pledged
for the pay ent of the bonds (and inter�m note or notes) or
interest th reon.
6. In order to facilitate completion of the
revenue bon financing herein contemplated, the City Council
is hereby r quested to consent, pursuant to Laws of Minnesota,
1976, Chapt r 234, to the issuance of the revenue bonds
(including ny interim note or notes) herein contemplated and
any additio al bonds which the Authority may prior to issuance
or from ti to time thereafter deem necessary -to complete the
Project or o refund such revenue bond�; and for such purpose
the Executi e Vice President of the Authority is hereby
authorized nd directed to forward to the City Council copies
of this re lution anc� said Preliminary Agreement and any
additional available information the City Council may request.
The actions of the Executive Vice-President of
the Author ' ty in caus�ng public notice of the public hearing
and in des ribing the general nature of the Project and
estimating the princiRal amount of bonds to be issued to
finance th are in all respects ratif� and confirmed.
Adopted F bruary 24, � 1987 ,' � � " �
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Attest �
Presid��
The Port uthoirity of the City
• , � of Sain Paul
�� -
� Secretary
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��7- 3alo
PORT AUTHORIN O THE CIN OF SAINT PAUL TOLL FREE(800)328-8417
1900 AMHOIST TOW R • 345 ST, f?ETER STREET • ST. PAUL, MN..55102 • ' PHONE(612)224-5686
Fe I ry 24, 1987
Mr. James Bel us, Directo�`
Planning and nanic vevcloFcnent Department RECEf VED
City of St. ul ' ,
14th Floor, •ty �ii �� F E 8 2 '' •
� St. Paul, esota 55102 � ,���
SUB.7EC.T: MAYU17".��•►rr�ti�
Dear Jim: �
We submit he ewith for your review and referral to the office of the Mayor,
City Council and City Attorney's office detail� pertaining to the issuance
of $475,000 n revenue bonds to finance the eonstruction of a 5,400 square
foot additio to the Expo Center on 9mith Avenue and Kellogg Boulevard for
John M. Pres .
The Port Au rity staff has conducted a thorough evaluation of the firnns
and/or indiv duals that are inv�olved in this project or in which the
principals h ve an interest. This investigation has included detailed
credit analy is, Dun and Bradstreet reports, direct ccmmmication with
representati s of financial institutions with whan the participants have
done busines and data base checks to determin�e if any principal(s) have
been in any y involved ,in legal proceedings as a result of securities
fraud, exto ion, embezzl,eqne.nt or financial misrepresentation.
In addition o the staff inemorandimn, we are a�taching a draft vopy of the
proposed Ci Council resolution and a copy ot Port Authority Resolution
No. 2800 whi authorized the sale of revenue bonds in the amount of
$475,000.
Your expedi 'ous handling of this matter will be appreciated.
f urs truly,
Eugene A. Kraut
EAK:ca �ecutive Vice President
cc. Mayor timer
EUGENE A KRAUT,C.I.D. DONAL G.DUNSHEE,C.I.D. CHARLES M.TOWLE CLIFFORD E.RAMSIED P.E. PERRY K.FEDERS C.P.A
EXECUTIVE VICE PRESIDENT ASSL E EC.VICE PRESIDENT ' DIRECTOR OF INDUSTRIAL DEVELOPMEM CHIEF ENGINEER DIRECTOR Of FINANCE
. AS$T.TRFASURER
RICHARD A GIERDAL WILLIAM E.McGNERN
PROPERN MANF�ER DIRECTOR OF PUBUC RELATIONS
COMMISSIONERS GEORGE W.WINTER WILLIAM WILSON ARTHUR N.GOODMAN VICTOR P.R�IM RAYMOND E.LANGEVIN CHRIS NICOSIA JEAN M.WEST
PRESIOENT �VICE PRESIDENT �� SECRETARV TREASURER COMMISSIONER COMMISSIONER COMMISSIONER
/h 1 1'1 /�...i:�:....1 Iw..l....4.:.�1 1'1....wlww�..
vv1'L'1111Lt1 ilt.rVl\t � � � � �
FINANCE, MANAGEMENT & PERS NNEL COMMITTEE �� �-�- �oZ(�o
Ma�ch 5; 1987
Page 2 .
13. Resolution authori ing an agreement with the City of Saint Paul Park whereby
the city of Saint aul's Police Department wi11 perform police radio
services. a r ed
14. Resolution authori ing agreement between the city and Como Park Conservatory
Horticultural Soci ty to install and maintain colle�tion boxes at the
Conservatory. a roved
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16. Resolution approv g Port Authririty issuance of $10�5 million in revenue bonds
€or Park Centre I estors, Ltd. for the acquisition� and renovation of two
historic building in Lowertowne. avvroved
17. Resolution approv'ng Fort Authority issuance of $91b,000 in revenue bonds for
3N Properties for the construction of a 24,OOQ squapre foot manufacturing
facility in Empir Builder Industrial Park. a roved
HEARD UNDER SUSPENSION
18. Resolution author zing the release of �city's UDAG �artgage on the Saint Paul
Hotel and the exe ution of a repayment agreement w'i'th the Port Authority of
the City of Saint Paul. approved •�
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