Loading...
86-1661 WHITE - CITY CLERK PINK - FINANCE G TY OF SA I NT PAU L Council CANARV - DEPARTMENT � Flle NO• BLUE - MAVOR � - uncil Resolution ,-� Presente y ' � �`�' Referred To L- Committee: Date � '- � Out of Committee By Date Wf�REA.S: 1. On December 3, 1986, he Port Authority of the City of Saint Paul ad pted Resolution No. 2753 gi ing pr iminary approval to the issuance of taxable re enue bonds in the initial princi amoun of $25,000,000 to finance the purehase of tvao office buildings with a total f 506, 35 square feet and 19.94 acres of land fran S ce Center Inc. The buildings ar locat at 444 and 520 Lafayette. Miller & Schroeder Financial has agreed to undenari the venue bond issue for a term of 30 years. 2. Laws of Minne ta 197 , Chapter 234, provides that any issue of reve ue bonds authorized by the Port uthori y of the City of Saint Paul, shall be issued o y with the oonsent of the City C cil of the City of Saint Paul, by resolution adopted n accordance with law; 3. The Port Aut ity of the City of Saint Paul has requested that the ity Council give its requisite oon nt pur uant to said law to facilitate the issuance of said revenue bonds by the Port Aut ity of the City of Saint Paul, subject to final appro al of the details of said issue the rt Authority of the City of Saint Paul. RESOLVED, by the 'ty Co cil of the City of Saint Paul, that in accorda ce with Laws of Minnesota 1976, Cha er 234 the City Council hereby oonsents to the iss ce of the aforesaid revenue bonds for th purposes described in the aforesaid Port Aut rity R�esolution No. 2753 th exact etails of which, including, but not limited to provisions relating to maturities, intere t rates, discount, recie�iption, and for the iss nce of additional bonds are t be det rmined by the Port Authority, pursuant to reso ution adopted by the Port Au rity, and the City Council hereby authorizes the iss nce of any additional bonds (incl ing re unding bonds) by the Port Authority, found by e Port Autharity to be necess for arrying out the purposes for which the aforesa d bonds are issuea. COUNCILMEN Requested by Department of: Yeas Drew Nays �� Nicosia [n Favor Rettman Scheibel Sonnen � __ Ag81IlSt BY Tedesco Wilson DE � 8 19�� Form Approved by City Attorney Adopted by Council: Date � r-� Certified Ya s d uncil Se t BY `-" By Appr by , avor: ��� Appro d y Mayor for Submiss' to o` cil By — By PU IISHED �� 1 01987 st. Paul port Author ty • DEPARTMENT ' � � ����� � _ OsOSS . J.A. Campobas'so, E.A Krau CONTACT PHONE December 3 1986 DAT� ��� ,Qi ASSIGN NUhBER FOR R0 ING 0 R C1 All Locations for Si nature : i Department Direct r � Director of Management yor Finance and Manag ment S rvices Director � 4 City Clerk Budget Director �, �TA��B�E ISSLIE 2 Clt,�/ At'�Ot"118„�/ SPACE CENTER INC. . HAT WILL BE ACHIEYED BY TA NG ACT ON ON THE ATTACHED MATERIaLS? {Purpose/ Rationale) : The purpose of the t xable evenue ond issue is to finance the purchase of two o ice buildings containing a tota of 50 ,635 square feet on 19.94 acres of land from S ce Center, Inc. The buiid�ngs re loc ted at 44 and 520 Lafayette. RECEIVE DEC 4 � OST BENEFIT BUDGETA Y AND ERSONN L IMPACTS ANTICIP TED: ` MAYOR'S OFFI The amount of the ta able b nd iss is $25,000,000 and,will be for a term of 30 ars. Primary tenants in t e buil ing ar the Department of Human Services and the Minne ota Poilu- tion Control Aqency. . F3NANCING SOURCE AND UDGET CTIVIT NUhBER CHARGED OR CREDITED: (Mayor's signa- ture not re- Total Amaunt of"Tr nsacti n; N quired if und�r , � �10,000) Funding Source: ; Activity Number: • ATTACHMENTS List and Numbe Al1 At achments : � 1. Staff Memorandum � 2. Draft City Council Reso tion , 3. Port Authority Re oluti No. 53 cc. J. Shoholm pEPARTMENT REVIEW CITY ATTORNEY REY�EW ,�Yes No Council Resolu ion Re uired? � Resolution Required? x es No Yes x No Insuran e Requ red? Insurance Sufficient? X es No Yes X No Insuran e Att hed: � (S •REVER E SIDE� FOR INSTRUCTIONS) Revised 12/84 � ' � �- ��a�� a � 541I �, Resolution No. �7� RESOLUTION OF THE RT AU HORITY OF THE CITY OF SAINT PAUL WHE S, t e purpose of Chapter 474, Minnesota Statutes, kn as t e Minnesota Municipal Industrial Develop ment Act (here'nafte called "Act") as found and determined b the legislatu is t promote the welfare of the state by the , active attract'on an encouragement and development of econom - cally sound i ustry and commerce to prevent so far as possib e the emergence f bli hted and marginal lands and areas of chronic unempl yment and to aid in the developznent of existin areas of bligh , mar inal land and persistent unemployment; a d � , f ctors necessitating the active promotion and deve opmen of e onomically sound industry and commerce a e the incr asing conce tration o£ population in the metropolita areas an the apidl rising increase in the amount and cost f governme tal s rvice required to meet the needs of the increase popu ation and the need for development of land use which wi�l pro ide a adequate tax base to finance these increased cost and ccess to employment opportunities for su h population; an WHE AS, T e Port Authority of the City of Saint Pa 1 (the "Authorit ") ha received from Space Center, Inc. (hereinafter r ferre to as "Company") a request that the Authority issu its axable revenue bonds to finance the acquisition by the P rt Authority of two buildings currently owned by the C mpany and located at 540 Lafayette and 444 Lafayett� in t e Cit of Saint Paul and the improvement of other fa�iliti s own d by the Company and identified as 444 Buil ing edney Building and Great i�Torthern Freight Hous (hereina ter c llect vely called the "Project") , all as is mo e fully de cribe in t e staff report on file; and � WHE AS, t e Authority desires to facilitate the selectiv deve opmen of the community, to retain and improve its tax ase a d to elp it provide the range of services and , Y ��.. ���/��/ employment op ortun' ties required by its population, and sai Project ,will ssist the City in achieving that objective. S id Project 'Iwill elp t increase the assessed valuation of the City an help maint in a positive relationship between asses ed valuati n and debt nd enhance the image and reputation of t e City; a d WHE EAS, he Project to be financed by revenue bon s will re ult i subs antial employment opportunities in the Project; WHE EAS, he Authority has been advised by repre- sentatives of the C mpany that conventional , commercial financing to ay th capital cost of the Project is availabl only on a lim ted b sis and at such high costs oF borrowing that the econ mic f asibility of operatinq the Project would be significantly reduc d, but the Company has also advised this Authority tha but or revenue bond financing, and its resulting low borro ing cost, the Project would not be • undertaken; , WHE EAS, e Authority, pursuant to Minnesota Statute , Sec ion 47 .01, Subdivision 7b did publish a notic , a copy of whi h with proof of publication is on file in the office of the Autho ity, of a public hearing on the proposal of the Comp ny t at the Authority finance the Project hereinbef re described by he is uance of its industrial revenue bonds; a d WHE EAS, e Authority did conduct a public hearin pursuant to s id no ice, at which hearing the recommendation containe in he Aut ority's staff inemorandum to the Commissiloners were eviewed, and all persons who appeared at the hear,ing w re giv n an opportunity to express their views with respect o the roposal. NOW� THERE ORE� BE IT RESOLVED by the Commissioner of the Port A thori of the City of Saint Paul, Minnesota a follows: 1. On th basis of information available to the Authority it ppear , and the Authority hereby finds, that s id Project ,const' tutes roperties, used or useful in connection with one',, or m re re nue producing enterprises engaged in an business within the eaning of Subdivision 1(a) of Section 474.02 of the Act; hat the Project furthers the purposes stated i Sec ion 47 .O1 of the Act and, but for the willingness o the uthority to furnish such financing, the Company ould not un ertake the Project , and that the effect of I 2 � � � �-���i the Project, if unde taken, will be to encourage the develop- ment of econo ically sound industry and commerce and assist i the prevention of th emergence of blighted and marginal land, and will help to pre ent chronic unemployment, and will help the City to retain a d improve its tax base and provide the range of services an employment opportunities required by it population, an will help to prevent the movement of talented and educated rsons out of the state and to areas within the state where th ir se vices may not be as effectively used and will result in more ntensive development and use of land within the Cit and ill eventually result in an increase in the City's tax base; and that it is in the best interests of the port distr' ct an the people of the City of Saint Paul an in furtherance of th general plan of development to assist t e Company in fin ncing the Project. 2. Subje t to the mutual agreement of the Authority, the Compa y and the purchaser of the revenue bonds as to the deta' ls of the lease or other revenue agreement as . defined in the Act, nd other documents necessary to evidence and effect the finan ing of the Project and the issuance of t e revenue bonds, the P oject is hereby approved and authorized and the issuan e of axable revenue bonds of the Authority in an amount not o exc ed approximately $25,000,000 (other than such additiona reve ue bonds as are needed to complete the Project) is au horiz d to finance the costs of the Project an the recommenda ions f the Authority' s staff, as set forth in the staff inemo andum to the Commissioners which was presented to the Commiss 'oners are incorporated herein by reference an approved. 3. There has heretofore been filed with the Authority a fo of reliminary Agreement between the Authori y and Company, r latin to the proposed construction and financing of t e Pro ect. The form of this aqreement has bee examined by th Comm ssioners. It is the purpose of the agreement to e idenc the commitment of the parties and their intentions wit resp ct to the proposed Project. Said Agreement is h reby pproved, and the President and Secretary of the Authori y are hereby authorized and directed to execut said Agreement 4. Upon xecution of the Preliminary Agreement by the Company, t e sta £ of the Authority is authorized and directed to co tinue negotiations with the Company so as to resolve the re ainin issues necessary to the preparation of the documents ecess ry to the adoption by the Authority of i s � final bond res lutio and the issuance and delivery of the 3 � � � �-/��/ revenue bonds; provi ed that the President (or Vice-Presiden if the Presid nt is absent) and the Secretary (or Assistant Secretary if he Secretary is absent) of the Authority, or i either f suc offi ers (and his alternative) are absent, th Treasur r of he Authority in lieu of such absent officers, re hereby uthor zed i accordance with the provisions of Minneso a Sta utes, ection 475 .06, Subdivision 1, to accept a final offer o the nderwriter made by the Underwriter to purchase said bonds nd to execute an Underwriting Agreement setting ,forth such ffer on behalf of the Authority. Such accepta ce sh 11 bin the Underwriter to said offer but shal be subj ct to appro al and ratification by the Port Authorit in a fo mal s ppleme tal bond resolution to be adopted prior to the delivery f said revenue bonds. 5. The r venue bonds (including any interim note or notes) a,nd in erest thereon shall not constitute an indebtedness f the uthority or the City of Saint Paul with' n the mea ing o any constitutional or statutory limitation an shall not con titute or give rise to a pecuniary liability o � the Auth!ority or the City or a charge against their general credit or tax' ng pow rs and neither the full faith and credi nor the taxin powe s of the Authority or the City is pledge for the i,payme t of t e bonds (and interim note or notes) or interest ther on. 6. In or er to facilitate completion of the reve ue bond financin herein contemplated� the City Council is here y requested to onsent, pursuant to Laws of Minnesota, 1976, Chapter 234, o the issuance of the revenue bonds ( including any interim n te or otes) herein contemplated and any additio al bo ds which the Authority may prior to issuance o from time to ime th reafter deem necessary to complete the Project or to refund such revenue bonds; and for such purpos the Executive ice P esident of the Authority is hereby authorized an directed to forward to the City Council copie of this resol tion a d said PreliminarX Agreement and any additional av ilable information the City Council may reques . i 4 � -/��/ - V � 7. The ctions of the Executive Vice-President o the Authority in ca sing public notice of the public hearing and in escri ing t e general nature of the Project and estimat 'ng th prin ipal amount of bonds to be issued to finance the P oject re in all respects ratified and confirm d. Adopted Decem er 3, 1986 Attest ' /s/ George W. Winter President The Port Authority of the City of Saint Paul s Arthur . Good an Secretary i II I I 5 ! PORT � � � . - ������ � AUTH RI Y OF THE CITY OF . PAUL Memorandum TO: BOARD F COMM SSIONE S DATE: DEC. 1, 1986 (MEETI G DECE BER 3, 1986) FROM: John A. Campo asso " , � SUBJECT: PUBLIC HEARIN - PRE IMINARY AND UNDERWRITING AGREEMENTS $25,000,000 T BLE VENUE BOND ISSUE SPACE CENTER, INC. - OFF-SITE RESOLU�ION NO 2753 PUBLIC SALE H ARING SALE OF LAND SPACE ENTER, INC. - UFF-SITE RESOLU ION NO 2754 1. Th Com a Sp ce Cen er, In . was established in 1916 at its present headqu rters in Lafaye te Par . For the past seventy years the Minnesota Corporati n has een primarily involved in real estate managemen with other act vities including warehousing, transportation, financia services nd co unications. The Company has invested over $20, 00,000 in the La ayette Park area with ownership of over 45 acres. The have developed three ffice buildings containing over b30,000 Sq. Ft. which are home o many State offices including the Department of Natur 1 Resources Pollu ion Control Agency and Department of Human Servi ces. They own large general warehouse facility totaling 240,000 Sq. Ft. and sever 1 othe buildings in the area that have potential for rehabilit tion. 2. The Pro e t St ff pro oses t e purchase of two office buildings from Space C nter, In . for 25,000 000 including 19.94 acres. Two appraisals have been co ducted one b Muske, Inc. indicating a value of $27,600,000 nd an ther b Ameri an Appraisal Associates, Inc. indicating a valu of $27,385,0 U. Mu e, Inc.'s appraisal is broken down as follows: I� Bui ding - 444 Lafayette Road $15,U90,000 ' Bui ding - 520 Lafayette Road $ 9,630,000 Lan $ 2,880,000 The appra sals w re based on existing leases in place, Space Cen er's guarantee to cov r any shortfalls and Port Authority financing. r — ��-�(OCO/ BOARD OF COMMI SIONER SPECIAL MEETI DECEM ER 3, 1986 SPACE CENTER, INC. PAGE 2 One of the buildi gs to be purchased is located at 444 Lafayette with gross Sq. t. of 23,635 and a total net leaseable space of 233, 00 Sq. Ft. The pr mary t nant is the Department of Human Services with 53,000 Sq. Ft. dition 1 tenants include the Department of Labor and Industry, inneso a Tax Court and Computer Service Company. The other uildin located at 520 Lafayette, has gross Sq. Ft. o 183,000 an tota net leaseable Sq. Ft. of 154,919 with the pri ary tenant bei g the ollution Control Agency with 75,000 Sq. Ft. , Additional tenant include the Department of Employee Relations, Office of Attorne Gener 1, and Office of Lawyers Professional Responsi ility. The two ma or ten nts in both of these buildings have recently s gned five year scalat ng leases which terminate in late 1991. The sale s prop sed in an effort to free Space Center, Inc.'s quity in the two buildi gs so they would be able to do additional proj cts in Lafayette ark. pace Center, Inc. has explored alternative fin ncing for the pr ject; owever, based on the five year term of the lea es they have ot bee able to secure adequate financing to proceed ith additional invest ent in the area. In addition the low fixed in erest rate and t e long term financing was necessary for the feasibili y of the projec and w s not available through other sources. Space Cent r, Inc is proposing to take $8,205,000 from the proc eds of the sale d inve t them in rehabilitation of buildings in Lafay tte Park. The propos l includes $5,000,000 for the renovation of th 444 Lafayette uildin , $1�,500,000 for the Great Northern Freight Ho se and $1,705,000 for th Kedney Building. The rehabilitation of the G eat Northern F eight ouse will allow Space Center, Inc. to move its headquarte s from the 444 building, allowing the Department of Hu an Services t expan its square footage in that building. Space Cent r, Inc proposes to enter into a Management Agreement with the Port thorit to manage the two properties. The management fee would be b sed on 4Y. of net revenues plus SO% of excess net oper ting income (N I) once the Port Authority has retained lOX of the ini ial excess NOI. The nagement fee will be subordinated to the debt service wi h any hortfall being carried forward and being recap ured when exces NOI i available. �-/�6/ I BOARD F COMM SSIONE S SPECI MEETI G NOVE BER 3, 1986 SPACE ENTER, INC. PAGE 3 3. Ba Ik r � oun The Port uthori y Commission at its October 14, 1983, Board Mee ing approved he cre tion of an industrial development district encompass ng the entire Enterprise Zone of which Lafayette Park as included. The P rt Authority in August of 1985 assumed the responsib lity o administering the Enterprise Zone program and n encoura�i capi al investment within the Zone. This project wi 1 meet the inten of th creation of the district and will have a signi icant impact on capita investment within the Enterprise Zone. . Bo 'h Dist icts 4 and 5 are supportive of the pro�ect. District , in pa ticula , woul like to see a continued development effort mov no thward toward illiams Hill while District 4 is interested in de elopme t alon Seventh Street. The City' Plann g and Economic Development Department is in th process o study ng the land use for the entire Lafayette Park/W lliams Hil�l area and is in support of the type of development Space Cen er, Incl. is p oposin . Space Center, Inc., the City and the Port Au hority have work d close y to insure that this project is within the sc pe of the City' Compr ensive Plan for the area and all parties agree that the proje t will nhance future development in the area. Space enter, Inc. has lso wo ed closely with the State of Minnesota and has reviewed he prop sed State Office Campus concept with the Depar ment of Admini tration and the Governor. Future de elopmen , beyond the scope of this project, includes o fice space for the Dep rtment of Public Safety and the Department of evenue for which equest for Proposals are anticipated to be out in the Spring or �ummer of 1987. The Department of Revenue's requirements for 70,000 Sq.� Ft. o one fl or (building foot print) makes Lafayette Park ne of the r mos viable locations. 4. Fin ncin The propo d fina cing would be done as a taxable revenue bond i sue bas d on thirty year amortization with a five year "put" provi ion. The "put" rovisi n allows the bonds to be refinanced at the end of fiv year as wel as provides Space Center, Inc. with an option to pur�hase that ime. The option price would be for the outsta ding principal on the onds, less debt service reserve including inte est earnings d the alance of the excess accumulated net operating income. e Port Authority would have the ability to sell the buildings to the tate with Space Center, Inc. maintaining its o tion to purchas . , �-��O�I� r BOAItD OF COMM SSIONE S SPECIAL MEETI G DECE BER 3, 1986 SPACE CENTER, INC. PAGE 4 The Port uthori would receive its customary 1'G fiscal and administr tive f es as well as lOX of any excess net operating i come from the roject. The Port Authority will also control the construct on fun and debt service reserve and will approve all dispersem nts fr these funds including interest earned. The p oceeds from the ale wi 1 be dispersed as follows: Pay ent of utstanding Debt $ 9,600,000 Deb Servi Reserve 2,620,000 • Con tructi Fund 8,205,000 Spa e Cent , Inc. 4,000,000 Bon Issua e 75,000 Bon Disco t 500,000 $25,000,000 Space Cen er, Inc. has agreed to guarantee any shortfall on the ebt service t t cann t be covered from interest earnings on the res rve and const uction unds. 5. Underwriti Miller & hroede Financial, Inc. has agreed to underwrite the hirty year bond issue a an interest rate to be set at the time the bo ds are sold. We nticip te the bonds will be sold at our regular Decem er, 1986, Boa Meeti g. 6. Recommenda ion Staff has ntervi wed officers of the corporation, reviewed thei financial tateme ts as well as existing leases on the two facil ties and recom nds ap roval of the above resolutions. sjs , _ . _ �' ���6i PORT AUTHO�IN OF T E CIN O SAINT PAUL TOLL FREE(800 328-8417 1900 AMHOI T TOWER • 34 ST. PEfER STREET • ST. PAUL, MN, 55102 • PHONE(612 224-5686 December 3, 1986 Mr. J�ne$ Bellu , Dire tor Planningland E nomic veloFment Department � � City of �t. Pau �� 14th Floor, Cit Hall ex St. Paul� Minne ota 5 102 �'� SUBJECT: � SPACE CEI�TrER INC. $25,0 0,000 AXABLE REVENUE BOND ISSUE Dear Jim� We sutmit herew th for your review and referral to the office of the yor, City Co cil an City ttorney's office details pertaining to the iss nce of $25,0�0,000 n taxa le revenue bonds to finance the purchase of t office building conta ning 506,635 square feet on 19.94 acres of lan fran Space Cer�ter, I c. T buildings are located at 444 and 520 Lafayett . In addit�on to e sta f inesr�orandi,an, w�e are attaching a draft copy of the proposed'City uncil esolution and a copy of Port Authority Resolut' n No. 2753 which uthori ed ttie sale of taxable revenue bonds in the unt of $25,OQ0,000. Your expeditiou handi ng of this matter will be appreciated. �ours truly, . gene A. Kraut EAK:ca Executive Vice President oc. Mayor Latun r EUGENE A KRAUT,C.I.D. D�NALD G.D NSHEE,C.I.D. CHARLES M.TpWLE CLIFFORD E.RAMSTED,P.E. PERRY K.FEDERS C.P.A. EXECUTIVE VICE PRESIDENT ASSL EXEC.VI E PRESIDENT DIRECTOR OF INDUSTRIAL DEVELOPMENT CHIEF ENGINEER DIRECTOR OF FiNANCE ASST.TREASURER RICHARD GIERDAL WILLIAM E.McGNERN �,I PROPERTY ANAGER DIRECTOR OF PUBLIC RELATIONS COMMISSIONERS GEORGE W.WINTER WIL AM WILSON ARTHUR N.GOODMAN VICTOR P.REIM RAYMOND E.LANGEVIN CHRIS N OSIA JEAN M.WEST PRESIDENT I VI E PRESIDENT SECREfARV TREASURER COMMISSIONER COMMI IONER COMMISSIONER C.I.D.Certified Industrial Developer . � �., � ���-� � °---- � � �� �� . �� CI Y OF SAINT PAUL :�ii�iii:`iu . O G'E OF TS� CITY COUDTCIL Cammittee Report F�i� ce l�ana eme�t � Persannel �ommittee. DEC�ER 11, 1986 ' 1. Approval or minu es fro meeting held November 26, 1986. a roved. 2 _ .<w• �; a� _ . . . . . . ,� .. . _ , ..•- - 4„ ; _.;,� .. '�'�.'�'� . .4�15, . . , . , 3. Resolution appro ing th issuance of Port Authority Revenue Bonds in t amount of $628,0 0 to f nance the construction of an office, manufactu ing and warehouse fa ility or S & S Partnership in Riverview Industrial P rk. approved , 4. Resolution amend ng the 1986 budget by adding $46,623 to the Financing Plan . � and to 'the Spend ng Pl� fo•r General Government Accounts = Housing Inf rmation • Office. a r ved � � ' __--_ � "5. Resolution amend ng the 1986 budget by adding $28,(s30- to �the Financing Plan -- - � and Co the Spend'ng Pla �or General Fund - Finance and Management Ser ices - Housing Informat'on Off ce. approved 6. Resolution amend'ng the 1986 budget by adding $4,000 to the Financing lan and to the Spend'ng Pla for City Attorney - Outside Services. a r ved 7. Resolution amend'ng the 1986 budget by adding $20,000 to the Financing Plan � and to the Spen "ng Pla for Parks and Recreation - Private Donations. � approved 8. Resolution amen ing the 1986 budget by adding $42,938 to the Financing Plan and to the Spen ing P1 - Police Accreditation. approved 9. Resolution amen ing th 1986 budget by adding $42,938 to the Financing Pl.an and to the Spen ing P1 for Special Projects - Police Accreditation. approved 10. Resolution amen ing th 1986 budget by adding $118,910 to the Financin Plan and to the Spen ing P1 n for Public Works - Engineering. a roved 11. Resolution appr ving t e 1986-1989 Maintenance Labor Agreement between 'Independent Sch ol Dis ri.ct 625 and Plasterers Local No. 20. a rov d 12. Resolution amen ing th 1986 budget by transferring $28,000 from Conti gent Reserve to Comm nity S rvices - Public Health for the Lead Study Progr m. approved C;I7' HAI-I- FLOOR SAL�i"C PAUL, OTA 55IO2 . �s __.....___ _ � ._�,..----.,..—..-_... ._._._......<.. .:_.._,.._......M,._._.....,.._,-.__.. . ._. _..<_...,. ..,,_�_.. �.--. ._._.,,�:.._.,__...___ •-.�....--...R�..,,,s,r�,.