86-1630 WHITE - CITV CLERK �
PINK - FINANCE G TY OF SA I NT PA U L Council _/�3�
C4NARV - DEPARTMENT File NO.
BLUE - MAVOR
, ncil Resolution
Presented By !
Referred To Committee: Date
Out of Committ e By Date
Wf�REA.S:
1. � ember 6, 198 , the Port Authority of the City of Saint Paul dopted
Resolution No. 2763 g ving p eliminary approval to the issuance of revenue ds in the
initial principal amo nt of 4,875,000 to refund Co�nercial Developnent Reve ue Bonds,
Series 1982, i sued b the H using and Redevelopnent Authority of the City o Saint Paul,
to construct t e Hill Plaza roject located at 400 Selby Avenue in St. Paul, Minnesota.
2. On Dec r 1 , 1986 the Port Authority of the City of Saint Paul a so adopted
Resolution No. 2764 g ving p eliminary approval to the issuance of taxable r venue bonds
in the initial princi 1 amn� nt of $2,425,000 to provide additional funds n ed by Hill
Plaza Associat s in nnecti n with the refinancing of the Hill Plaza projec . Miller &
Schroeder Fi cial s agr d to underwrite the above tw�o bond issues each or a tern� of
30 years.
3. Laws o Minne ota 19 6, Chapter 234, provides that any issue of reve ue bonds
autt�rized by e Per Autho �ty of the City of Saint Paul, shall be issued nly with the
consent of the City uncil f the City of Saint Paul, by resolution adopted in accordance
with law; �
4. The P rt Aut rity f the City of Saint Paul has requested that the City Council
give its requisite oo sent p rsuant to said law to faeilitate the issuance o said revenue
bonds by the P rt Aut rity f the City of Saint Paul, subject to final appr val of the
details of sai issue by the Port Autt�rity of the City of Saint Paul.
RESOLVED, by the City ncil of the City of Saint Paul, that in accord nce with Laws
of Minnesota 1 76, C pter 2 4, the City Council hereby consents to the iss ve of the
aforesaid reve ue bon s for e purposes described in the aforesaid Port Aut rity
Resolution Nos 2763 nd 276 the exact details of which, including, but not limited to,
provisions relating t matur ties, interest rates, discount, redemption, and for the
issuance of ad itiona bonds are to be determined by the Port Authority, pur uant to
resolution ado ted by the Po Authority, and the City Council hereby author'zes the
issuance of an addit onal nds (including refunding bonds) by the Fort Aut rity, found
by the Port Au�hority to be ecessary for carrying out the purposes for whic the
aforesaid bond are i sued.
COUIVCILMEN Requested by Department of:
Yeas DfeW Nays
N'°os'e [n Favor
Rettman
Scheibel �/
Sonnen __ Ag3inst gY
Tedesco
Wilson
Adopted by Council: Date
DE � 6 p�1U Form Approved by City Attorney
Certified Pas• b uncil Secr BY
By� �+
Appr e Vlavor. Date y , 8 Approved by Mayoc for Submission to Co ncil
Bv - — BY
P BUSHED D E C 2 7 198`6
• � • l�.i 7�.� tC� �
t
.:.�-=
� -� . ; , � � ��/(�36
R-► CI Y OF SgINT P�.UL
..1�� . .
:s» c�t.t� O CE OF THE CITY COIIYCIL
�
Cammittee �epart
�ance l�an eme�t ersannel Committe�.
�
' DECEMBER 11, 1986
1. Approval of minu es fro meeting held November 26, 1986. a roved
2. Resolution conse ting t the issuance of Port Authority Revenue Bonds
in the amount of $25,00 ,000 to finance the purchase of two office bui dings ,,
from Space Cente Inc. approved �
3. Resolutio appro ing th issuance of Port Authority Revenue Bonds in t e
amount of $628,0 0 to f nance the construction of an office, manufactu ing
and wareh use fa ility or S & S Partnership in Riverview Industrial P rk.
a rove
4. Resolutio amend ng the 1986 budget by adding $46,623 to the Financing Plan
. • and to �tti Spen 'ng P1� .fo•r General Government Accounts = Housing Inf rmation -
Office, a r ved � � ' �
_
- - --
5. ResoTutio amen 'ng the 1986 budget by adding $28,6�30--to the Financing Plan - -
� and to th Spen 'ng P1 for General Fund - Finance and Management Se ices -
Housing Ii�forma "on Off ce. approved
6. Resolution amen ing th 1186 budget by adding $4,000 to the Financing lan
and to the Spen ing P1 for City Attorney � Outside Servi�es. a oved
7. Resolution amen ing th 1986 budget by adding $20,000 to the Financing Plan
' and to the Spen ing P1 for Parks and Recreation - Private Danations. "
approved�
8. Resolutio amen �ng th 1986 budget by adding $42,938 to the Financing Plan
and to t Spen ing P1 n - Police Accreditation, approved
}. Resolutio amen ing th 1986 budget by adding $42,938 to the Financing Plan
and to t e Spen ing P1 n for Special Projects - Police Accreditation. approved
I0. Resoluti n amen ing th 1986 budget by adding $118,910 to the Financi Plan
and to t e S.pen ing P1 n for Public Works - Engineering. a roved
11. Resoluti n appr ving t e 1986-1989 Maintenance T.abor Agreement betwee
'Independ nt Sch ol Dis rict 625 and Plasterers Local No. 20. a rov d
12. Aesolution amen ing th 1986 budget by transferring $28,000 from Cont' gent
Reserve zo Co� nity S rvices - Public Health for the Lead Study Prog m.
approved
C'T`� �� ; FLOOR Sc�INT PAUL,b ► OTA SSIOZ
; ,
�'�°
_ ,^.-----° �....��_-_._...._ .__.�.. �._..-- __.___ ,_. ,_ ._. --- _.._. _._.__ _.______. .___._.____.___ .._-_.-.tY------..�..,�,,,_-
- , ..r � ��-/f3d
.,GEMENT & PERSO EL CO ITTEE
�
- � _, 1986
13. Resolution autho izing a agreement between the city of Saint Paul, Div sion
of Public ealth and the Ramsey Courity Public Health Department whereby the
County wil prov'de publ"c health nursing and interpreter services to a sist
the city in cond cting i s Lead Screening Program. avvroved
14. Resolution�appro ing the 1986 Memorandum of Agreement between Independe t
School Dis rict o. 625 nd Tri-Council General Drivers Local No. 120.
a roved
15. Resolution�accep ing th donation of $11,227.39 and depositing same in rust
Fund for o erati n of t e Como Zoo for the maintenance and operation of
Como Zoo.
HEARD UNDER SUSPENSIO OF RU ES
16. Resolution appro ing th issuance of Port Authority Revenue Bonds in t e
amount of $3,950 000 to finance the acquisition and rehabilitation of he
Saint Pau Build ng for the Lancer-Saint Paul Building Partnership. pa sed out w/o
re o�nendation
1T:"""'l�eso�utio app� '' . �f��ace- �f Port ,�rt�ority^�itefutfiiing 'Bond`s+.`to re`Yu�b;:.
' +r'a�» v
the ��,.�. o �I Deve2d�f�nt Revenue Bonds'; Series, � ;."�+br .
the,�: <# Ass.oci ��s,,��.qJect. pa�ec� ��t �ei�s���q�.ac�
18.. Resol.ution appro ing th issuance of__Port Authority_Revenue Bonds_in_ t e
amount of $975,0 0 to r place a direct Port Authority loan to District
Heating D velopm nt Com any to extend District Heating lines to serve
business n Empi e Buil er Industrial Park (Economics Labs) . a ro ed
f-
st. Paul Po t Autho it ' DEPARTMENT � �!/ N� OsO�O
C.M. Towle, E.A. xraut CONTACT
224-56s6 PHONE � ��
Dec. 9, 1986 DATE e Q
�
ASSIGN NUh�ER FOR RO TING 0 DER C i All Locations for Si nature :
1 Department Direc or 3 Director of Managemen /Mayor
Finance and Mana ement ervice Director �_ City Clerk
Budget Director xE: 4 850 000 TAX EXEMP REFUNDIN
2 City Attorney soND rssuE
$2,450,000 TAXABLE B ND ISSUE
WHAT WILL BE ACHIEVE BY TA ING AC ION ON THE ATTACHEO MATERIALS? (Purpose/ HIL PLAZA
Rationale) :
The purpose of thes bond 'ssues 's to refund the $5.8 million HRA Commercial De elopment
Revenue Bonds, Series 1982, for t e Hill Plaza & Associates project in the Selby Western
area. The partners ip is eing r structured and the new general partner is Greg Hayes.
The above bond issu s wil be con idered by the Port Authority Board of Commissi ners on
Tuesday, Dec. 16, 1 86. tached is a draft "Memorandum of Understanding" which will be
considered at an HRA meeti g on W dnesday, Dec. 10, 1986 at 11 a.m.
COST/BENEFIT BUDGET RY AND PERSON EL IMPACTS ANTICIPATED:
The refunding bond ssues ill re uce the current debt service on the existing b nds and will
generate an additio�al $75 ,000 ich will be invested in the project. _
FINANCING SOURCE AND BUDGET ACTIVI Y NUNIBER CHARGED OR CREDITED: (Mayor's signa-
ture not re-
Total Amount of �T ansact on; N A quired if under
� �10,000)
Funding Source:
Activity Number: •
ATTACHMENTS List and Numbe Al1 A tachments :
1. Draft Memorand of U erstan ing
DEPARTMENT REVIEW ' CITY ATTORNEY REVIEW
Yes No Counci Resol tion R quired? � Resolution Required? Yes No
Yes No Insura ce Req ired? Insurance Sufficient? Yes No
Yes No Insura ce Att ched:
(S E •REVE SE SIDE FOR INSTRUCTIONS)
Revised 12/84
. .'. .. ... . . � .. . . . . . .. . . . . .. � . . . , ... � ..... .•....... ....... �...... ...i..J..:f��J:.�+�_JU' J:1.�..:�c.tir{w � . .
` C�'J �6 -/�3Q
, � ,6� �k - � ��� � eopy n
�� � :
��
ME ORANDUM OF UNDBRSTANDING
The purpoae of t is Mem randum of Understanding is to set forth the resent
understanding of �1 P Associates, A Minnesota L�aited Partnership ("Hill
Plaza"), the Cit of S . Paul, Minnesota (the "City"). the Hous and
Redevelopment A hority of the City of Saint Paul, Minnesota ("HRA" , and
the Port Authorit of th City of Saint Paul ("Port Authority"). with espect
to the refinancing of the debt and equity for the Hill Plaza project ("P ject")
and the develop ent f the area surrounding Selby/Western, in uding
development and aintena ce of parking for such area.
I. REFINANCIN : Wit respect to the debt and equity financing f r the
Project. it is the prese understanding that the following financing ill be
arranged for the roject:
A. TAX-EX MPT ONDS: Tax-exempt refunding bonds will be ' sued
by the Port utho y in the approximate amount of ;4.394.000 (pl s the
amount of an requ' ed reserve fund) ("Refunding Bonds"), the p ceeds
of which Ref nding onds will only be used to pay in full the outst nding
�5,800,000 C merc' Development Revenue Bonds. Series 1982 (H Plaza
Associates P ject) ated September 1, 1982, previously issued y the
HRA (the "E isting onds"). The Refunding Bonds will (1) be iss ed by
the Port Aut ority ursuant to its "876" program, thereby obt ' ing a
Standard � r's " " rating, (2) be amortized over a period of thirty
(30) years ( ith n puts or mandatory purchases, but with o tional
redempti�ons fter t yeara at 102$ and reducing thereafter), a d (3)
bear interest paya le semi-annually, at an approximate rate of .0$ -
7.5$. A re erve f nd for the Refunding Bonds would be fund by
transferring portio of the existing reserve fund for the Existing Bonds
to the Port Author ty. Any earnings on the reserve fund f r the
Refundfng Bo ds w' inure to the benefit of Hill Plaza. The Ref nding
Bonds will e sec ed by a first lien on both the residenti and
commercial rti�ons of the Project and the cash flows to be d rived
therefrom bu prima ily treated as a residential project so as to ermit
Standard � P r's t rate the Refunding Bonds as a residential, a d not
a commercial, financ' g. To further secure the Tax-Exempt Bond . Hill
Plaza will al fund n additional reserve from equity in an initial ount
equal to S13 .000, educing to =70.000 after the first year fo owing
closing and 30,000 after the second year following closing, and being
eliminated u n exp ration of the letter of credit referred to i I.C.
below. Vari,�o s fees w�l be paid to the Port Authority by Hill plaz with
respect to th Ref ing Bonds as described below. The obligat ns of
� the Partners p wit respect to the Refunding Bonds will be non-
recourse.
B. TAXAB 8 BO DS: Tauable bonds ("Taxable Bonds") i the
appro�am�ate ount o 52,189,000 will also be issued by the Port
Authority. e Ta ble Bonds will be full faith and credit obligat ns of
the Port Aut rity. The Taxable Bonds ai11 be amortized over a riod
of thirty (30) years with an 8 to 10 year "put" as necessary to a hieve
an acc�eptable inter t rate and a remarketing agreement with th Port
Authority) an will ear interest at an estimated rate of 9.0$ - 9.5�.
' � � � �����o
�L�I ���
' The Ta�cable Bon will be secured by a seoond lien on bo h the
commercial a d resi enti8l port�ons of the Praject. The Taxable Bonds
will al be ecured by a reserve fund. Any earnings on such r erve
fund ill in e to t e benefit of the Partnership. Various fees ill be
paid t the Port A thority by Hill Plaza with respect to the T xable
Bonds as d scribe� below. The obligati�ons of the Partnershi with
respect to th Taxa e Bonds will be non-reoourse.
C. E3�50,000 LOAN: The Port Authority will make a 5350,000 loan to the
Partne ship, the p eds of which will be used to partially q the
City's second mortg ge loan/contract for deed (the "City Loan"). Such
5350,0 0 loan will ar interest at the Port Authority's borrowing rate,
will be paya e as t principal on September 1, 1989, and semi-a nually
as to 'intere t. S ch �350.000 laen will be non-reaourse but ill be
secured by ;350 000 unoonditional and irrevocable letter of credit
provid d by he Pa nership. Such letter of credit will have a ter equal
to the term o the 1 n.
D. E UITY: Add tional equity in the approumate amount of 37 0,000
will b rais d fro the existing or new limited partners f the
Partne ship. The 'ghts of such limited partners to receive cas flow
and residual rela ionship to payment of the various luans and es to
the Po t Aut ority a d the HRA are outlined below.
The parties heret ackn ledge that the Tax-Exempt Bonds and the T xable
Bonds may e iss d pur uant to a single set of documents, including a single
lease agree ent an bond resolution.
Hill Plaza agrees t estab ish and maintain a reserve in 1988 for major epairs
and replace ents. Such reserve will be funded in the amount of �40,0 0 per
year oomme cing i 1988, which amount will increase annually thereafter based
upon the _i flatio rate. subject to maximum annual increase of 5$. Any
earnings on such und w' 1 inure to the benefit of Hill Plaza.
II. FEES/CASH F OW/RE IDUAL: .
In oonnecti n with the re inancing of the debt and equity for the Proje t, the
following fe s will be pa able to the HRA .and the Port Authority, an cash
flow and re idual erived from the Project w�11 be divided as follows, yable
in the follo ing or er:
A. CASH LOW: revenues derived from the Project minus a ounts
necess ry to y o rating expenses (including a management fee e ual to
5$ of ross evenu payable to the general partner or its desig ee to
the ex ent n t paid to a third party management oompany, with up to
515.00 of s ch m nagement fee subject to forfeiture to the xtent
neces ry to ' creas cash flow to pay the H8A and the lunited ners
the amounts referr to in (2) and (3) below). capital replace ents,
reasonable r erves, debt service. and Port Authority, HRA, le er of
credit nd ot er fe ):
1. In co nectio with the refinancing, the Port Authority will ive
an annu fee o ;36,000, payable monthly. ;10,000 of such f e will
be' assig ed by the Port Authority to the HRA, ;7,242 of which
-2-
...•.`��.•�)����.����::. ..�:�.�.�.��:�.•.K..:•.iV:...�.�........ .�...,.. �.� 'K�.��t ..i�.
.�... . .� ..�. �:� : ...•...:::.�...:.....:..... ... . ........i.... . ........ .. ............ ............. _... .
. .. , � �-/�3�
�� � ��
an�ount y represent ent to the HR.A of its 1/1 of 1
Pa PgYm $
fee whic it re ives on all Port Authority bonds and the b nce of
w ich re resent a papment with respect to the City Loan. S ch fee
w' be yable regardless of the amount of cash floti► derive fran
th Proj .
2. The RA reoeive an additional fee of up to i15,000 pe year,
to�be ap lied t the City Loan. However, after 1988. such ee will
o y be yable out of cash flow derived from the Project, wit cash
flow en nced if necessary bq the general partner's fo eiture
( ithout accr ) of up to �15.000 of the management fee, which
fo eitur will f st inure to the benefit of the HRA and there ter to
th limit part ers. To the extent such HRA fee is not paid in any
yeiar, s h un id portion will accrue without interest and ill be
pe able sub quent years with the same priority as the 15,000
H A fee would have for such subsequent year, i.e., such ccrued
b t unpa d fee hall be paid before payment of the amounts p rsuant
to II.A.3 and II A.4 below, in any given year.
3. The imited partners will be entitled to receive a 10$ cu ative
co poun ed ret rn on their investment, payable out of cas flow,
wi h cas flow enhanced if necessary by the general pa ner's
fo feitur (with ut accrual) of up to 515,000 of the manageme t fee.
T the e tent s ch return is not received by the limited part ers in
an give year. such amount will be accrued and oompounded at the
ra e of 1 $ per ear.
4. Any remain g cash flow in any given year will be divi ed as
fo ows:
a. $ of ch excess cash flow will be payable to the H A, up
to a maxun m of ;30,000 per year, to be applied to th City
Loan.
b. 0$ of uch excess cash flow will be payable to the imited
part rs an the general partner. to be divided 99:1 accor ing to
the t rms of the Limited Partnership Agreement.
c. o the xtent that any cash flow remains after the H has
been paid t maximum amount of 530,000 pursuant to (a) bove,
such excess will be paid to the lunited partners and the eneral
part r, to divided 99:1 in acoordance with the terms of the
Limit Part ership Agreement.
B. R SIDUA :
In oon ectip Writh uch refinancing, the "residual" of the Project (after
payme t of debts of the Partnerahip and selling expenses) upon a sale
(wheth r or t the purchaser assumes the Tax-Baempt Bonds and/ r the
Taasbl Bon s or rchases the Project subject thereto) or refi ncing
(but not incl ding a remarketing or ref3nancing of the Taxable Bo ds at
or a t the time t e Taxable Bonds can be "put" by the bond alders
unless sueh a ref' ancing is in an amount in excess of the axable
Bonds, in hich se such excess shall be treated as resid al for
-3-
. .. ... .,,. .......,........,
... ......... ..... ...... ..... ........... ... _
. U`" O(-P—/�D�
;�rlJn� U
�lal1U� �
purpo es of (2), 3) and (4) below, but such refinancing s not
trigge pay ent of he "option" fee pursuant to (1) below) of the roject
will dist ' uted s falloNrs in the following order:
�
1. The Port A thority will receive its "option" fee in the am unt of
5660,000 The ort Authority will assign such fee to the HRA to be
applied t the ty Loan.
2. The RA ' then receive any accrued but unpaid portion of the
S1 ,000 nnual ee referred to in II.A.2 above, to be applied to the
Ci y Loa .
3. The limited partners will then be entitled to receive an mount
equal to their capital contributions plus any accrued but npaid
re urn t ereon a 10$ cumulative compounded return as provi ed for
in II.A.3 above.
� 4. Any emain' g residual will be divided as follows:
a. he H will be entitled to receive 10$ of such re aining
resid al. up to a maximum of $215,000, to be applied to t City
Loa.n.
b. he luni ed partners and the general partner wi11 recei e 90$
of s ch ex ss residual. to be divided 99:1 according o the
terms of the Limited Partnership Agreement.
' c. ny re aining residual will be paid to the limited pa ners
and t e gen ral partner to be divided 99:1 according to the terms
of th Limit Partnership Agreement.
III. WITHDEZAWAL RELE SE OF GENEftAL PARTNERS:
In addition to the refina 'ng of the debt and equity as outlined above it is
contemplate that he exi ing general partners of the Partnership (How d B.
Bergerud a d Hay s Ente prises) will withdraw and Gregory J. Hayes ill be
substituted. U n su h withdrawal, Howard B. Bergerud and ayes
Enterprises (and ' s part ers and their s}�ouses) and their affiliates ill be
released fr liab' 'ty by the Partnership. the City. the HRA and the t ustee
for any guaranty r othe claims or obligations (including, without luni tion.
any claims r obli ations for indemnification or otherwise with respect t any
suit commen d or claim ade by any holder(s) of the Existing Bonds). and
Howard B. erger d, Ha es Enterprises (and its partners and their s uses)
and their af iliates will r ease the Partnership from any debts or other aims
owing by t Part ership to any of such parties. As part of such r ease,
Howard B. 'Berge ud an Hayes Enterprises (and its partners) and their
aff�liates will spec' ically elease their clauns against the Partnership f (a)
cash oontri 'utipns previo ly made to the Partnership in the appro 'mate
amount of 1,250. 00 to er operating shortfalls of the Partnership (b)
oonstruction payab s in t e approumate amount of =330.000 and miscella eous
payables in he ap roxima e amount of ;13,000 payable to the general pa ners
and their ffiliat , and (c) earned but unpaid mana.gement fees ' the
approximate amoun of S 30,000 payable to the general partners and their
affiliates.
-4- ,
' .... . ...... . ... . .. . .. _ .... ... . .. . .. .... .. .._ ��--���
. ° � �
op
�
�
IV. PARKIt�IG:
The parties� heret reoo 'ze that adequate parldng for the Selby/W tern
area is ritical to t succesa of such area, including the P ject.
Aeoordinglq, the ity, he HRA. the Port Authority and the Partn rship
commit to use the best fforts to provide 60 to T5 parking spaces (or such
number of s�ces s are easonably equivalent to the number of spaces hich
would have been ted on the McQuillan I Site) on a surface park' g lot
located on a' locat' rea bly close to the Project which is acceptable o the
HRA and th devel pers Cathedral Hill. Blair House and the Projeet, . .,
the McQuilla I Sit , the cQuillan II Site (located by the Curling Club) r on
the southwe t oorn r of t intersection of Western and Dayton. Such s rface
parking will be p vided t the cost and expense of the City, althoug the
other partie� here revo nize that the City may defray all or a port' n of
such oosts nd ea enses hrough a repayment agreement with Hill Plaz and
such other evelop rs. �11 Plaza agrees to participate in such a repa ment
agreement o a pm rti�on and equitable basis. Such surface parking ould
be maintaine unt� such t' e as a parldng ramp is built on one of such ites,
which the p rties ereto oognize will not occur until the businesses i the
Selby/Wester area eed a d can support such a parking ramp.
V. GENERA�. DEV LOPME T OF SELBY/WESTERN ARBA
The parties ereto eoogni e that the success of the Project will depend to a
significant d gree pon t e general development of the Selby/Western rea,
particularly the no h side of Selby across from the Project. Aecordingly the
City and th HRA commi to use their best efforts to develop such area
(including th nort side o Selby) as soon as practicable and to 000perat and
take such st ps as are n ssary to select a developer(s) for such a and
facilitate the develo ment o such area by such developer(s). /�
-5-
_ _ . . � ��-/���
� �� ��
. �:.Juti�
IN WITNES WH$ OF, he parties hereto have executed and deliver this
Memorandum of Un erstan ing as of the daq of December, 1986.
HILL PLAZA ASSOCIATES. A
MINNESOTA LIMITED PARTNE SHIP
' By: Hayes Enterprises
A General Partner
By:
Gregory d. Hayes
A Partner
By:
Douglas d. Hayes
A Partner
BY:
Howard B. Bergerud
A General Partner
HOUSING AND REDEVELOPMEN
AUTHORITY OF THE CITY OF
SAINT PAUL, MINNESOTA
By:
Its:
. , By:
Its:
PORT AUTHORITY OF THE CIT OF
SAINT PAUL
By:
Its:
By:
, Its:
-6-
� �o-/6�3 �
��, � �
�, ��
�
CITY OF ST. PAUL. MINNSSO A
I
By:
Mayor
BY=
Its:
-7-