85-981 WNITE - CITV CLERK
PINK - FINANCE G I TY O F SA I NT PA LT L Council yyy///���`/� /�
CANARV - DEPARTMENT File NO.- //v / �/
BLUE - MAVOR
, C u Gil Resolution
Presented By �
�
Referre o �/ N.f��C� Committee: Date � ��'��5
Out of Committee By Date
WfiEREAS:
1. On November 30, 1982, the Port Authority of the City of St. Paul adopted
Resolution No. 2082 giving preliminary approval of the issuance of $1,900,000 in
industrial development revenue bonds to finance the purchase and remodeling of the Cardozo
Warehouse at Fifth and Broadway for Ma.rketHouse Limited Partnership. This was approved by
the City Council on December 21, 1982, by Resolution No. 279599. On May 21, 1985 the Port
Authority of the City of Saint Paul adopted Resolution No. 2461 giving preliminary
approval to the issuance of industrial development revenue bonds in the initial principal
amount of $900,000 to finance remodeling and the completion of leasehold improvements to
the above facility for MarketHouse Limited Partnership. Brian R. Nelson, President of
Asset Development Services Inc. will be coming in as an additional general partner in the
project to take over the leasing and operation of the building. Miller & Schroeder
Municipals, Inc. has agreed to underwrite a private placement of the issue.
2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds
authorized by the Port Authority of the City of Saint Paul, shall be issued only with the
consent of the City Council of the City of Saint Paul, by resolution adopted in accordance
with law;
3. The Port Authority of the City of Saint Paul has requested that the City Council
give its requisite consent pursuant to said law to facilitate the issuance of said revenue
bonds by the Port Authority of the City of Saint Paul, subject to final approval of the
details of said issue by the Port Authority of the City of Saint Paul.
RESOLVED, by the City Council of the City of Saint Paul, that in accordance with Laws
of Minnesota 1976, Chapter 234, the City Council hereby consents to the issuance of the
aforesaid revenue bonds for the purposes described in the aforesaid Port Authority
Resolution No. 2461 the exact details of which, including, but not limited to, provisions
relating to maturities, interest rates, discount, redemption, and for the issuance of
additional bonds are to be determined by the Port Authority, pursuant to resolution
adopted by the Port Authority, and the City Council hereby authorizes the issuance of any
additional bonds (including refunding bonds) by the Port Authority, found by the Port
Authority to be necessary for carrying out the purposes for which the aforesaid bonds are
issued.
COUNCILMEN Requested by Department of:
Yeas � Nays � <�
Masanz In Favor �
�
Nicosia �
Scne�be� __ Against BY
Sonnen
Tedesco
� JUL 2 5 1955 Form Approved by City Attorney
Adopted by Council: Date ^ �-�
Certified Pass ouncil Secretary B�
g , � • c
App by 1�lavor: Dat _ ` JUL � I ��5 App d by Mayor for S o Council
B
PUBLISHED RU G 3 1985
St. Paul Port Authority DE PARTMENT ����0 � N� 2 2 2 7
Donald G. Dunshee or �CON7ACT •
Eugene A. Kraut (612)224-5686 pHONE
May 21, 1985 DATE " �e�� ,, �i
ASSIGN NUh�ER FOR ROUTING ORDER (Clip All Locations for Signature) :
1 Department Director 3 Director of Management/Mayor
Finance and Management Services Director � City Clerk
Budget Director
2 City Attorney �
WHAT WILL BE ACHIEVED BY TAKING ACTION ON THE ATTACHED MATERIALS? (Purpose/
Rationale) :
The purpose of the bond issue in the amount of apProximately $900,000 is to permit MarketHouse
Limited Partnership to complete leasehold improvements in the former Cardozo Warehouse at
Fifth and Broadway, St. Paul. Brian R. Nelson, President of Asset Development Services Inc.
would come in as an additional partner in the pro�ect and take over the leasing and operation
of the building. The non 876 revenue bond issue would run cotezminus with the current lease
which terminates December 31, 2012. Miller & Schroeder Municipals, Inc. has agreed to under-
write a private placement of the issue. Employment from the project should result in up to
25 new employees.
COST/BENEFIT, BUDGETARY AND PERSONNEL IMPACTS ANTICIPATED:
FINANCING SOURCE AND BUDGET ACTIVITY NUMBER CHARGED OR CREDITED: (Mayor's signa-
ture not re-
Total Amount of Transaction: quired if under
$10,000)
Funding Source:
Activity Number:
ATTACHMENTS (List and Number All Attachments) : �'�Ct�L��
Staff Memorandum MAY
Draft City Council Resolution 2 3 �985
Port Authority Resolution No. 2461
MAY��'��pFFiCE
DEPARTMENT REVIEW CITY ATTORNEY REVIEW
�Yes No Council Resolution Required? Resolution Required? x Yes No
Yes x No Insurance Required? Insurance Sufficient? x Yes No
Yes x D{o Insurance Attached:
(SEE REVERSE SIDE FOR INSTRUCTIONS)
Revised 12/84
HOW TO USE THE GI�E�N �iEET
The GREEN SHEET has several PURPOSES: �
1. to assist in routing documents and in securing required signatures
2. to brief the reviewers of documents on the impacts of approval
3. to help ensure,- that necessary supporting materials are prepared, and, if
required, at�ached.
Providing complete information under the listed headings enables reviewers to make
decisions on the doc�ments and eliminates follow-up contacts that may delay execution.
; The COST/BENEFIT, BUDGETARY AND PERSONNEL IMPACTS heading provides space to explain
the cost/benefit aspects of the decision. Costs and benefits related both to City
budget (General Fund and/or Special Funds) and to broader financial impacts (cost
to users, homeowners or other groups affected by the action) . The personnel impact
is a description of change or shift of Full-Time Equivalent (FTE) positions.
If a CONTRACT amount is less than $10,000, the Mayor's signature is not required,
if the department director signs. A contract must always be first signed by the
outside agency before routing through City offices. °
Below is the preferred ROUTING for the five most frequent types of documents:
CONTRACTS (assumes authorized budget exists)
1. Outside Agency 4. Mayor
2. Initiating Department 5. Finance Director
3. City Attorney 6. Finance Accounting
ADMINISTRATIVE ORDER (Budget Revision) ADMINISTRATIVE ORDERS (all others)
1. Activity Manager l. Initiating Department
2. Department Accountant 2. City Attorney
3. Department Director 3. Director of P2anagement/Mayor
4. Budget Director 4. City Clerk
5. City Clerk
6. Chief Accountant, F&MS
COUNCIL RESOLUTION (Amend. Bdgts./Accept. Grants) COUNCIL. RESOLUTION {all others)
1. Department Director 1. Znitiating Department
2. Budget Director 2. City Attorney
3. City Attorney 3. Director of Management/Mayor
4. Director of Management/Mayor 4. City Clerk
5. Chair, Finance, Mngmt. & Personnel Com. 5. City Council
6. City Clerk
7. City Council
8. Chief Accountant, F&MS
SUPPORTING MATERIALS. In the ATTACHMENTS section, identify all attachments. If the
Green 5heet is well done, no letter of transmittal need be included (unless signing
such a letter is one of the requested actions) .
Note: If an agreement requires evidence of insurance/co-insurance, a Certificate of
Insurance should be one of the attachments at ti.me of routing.
Note: Actions which require City Council Resolutions include:
1. Contractual relationship with another governmental unit.
2. Collective bargaining contracts.
3. Purchase, sale or lease of land.
4. Issuance of bonds by City.
5. Eminent domain.
6. Assumption of liability by City, or granting by City of indemnification.
7. Agreements with State or Federal Government under which they are providing
funding.
8. Budget amendments.
� O R T .- � , � _ ��--��- r��
`i AUTHORITY �
OF THE CITY OF ST. PAUL
Memoraedum
To: BOARD OF COMMISSIONERS DATE: �y 17, 1985
(Meeting May 21 , 1985)
FROM: Donald G. Dunshee
SUBJECT: PUBLIC HEARING — PRELIMINARY AND UNDERWRITING AGREEMENT
MARKETHOUSE LIMITED PARTNERSHIP
$900,000 REVENUE BOND ISSUE (NON 876)
OFF—SITE
RESOLUTION N0. 2461
1. Partnership and Project
The Port Authority Commission on November 30, 1982, approved by
Resolution No. 2082 the issuance of $1,900,000 in 876 industrial
development revenue bonds to finance the acquisition of the first and
second floors and basement of the Cardozo Warehouse at Fifth and
Broadway for retail and office use. In addition to bond proceeds, a .
limited partnership was formed that provided an additional $940,000 in
equity for the project. Since the basic finishing was completed in
late 1983, the building has not leased as rapidly as originally
projected. The lease up situation has changed dramatically in the past
90 days with now more than 90� of the second floor office space, 40� of
the first floor and 52� of the basement leased. They currently are in
the final stages of negotiations with three other tenants who would be
leasing 7,000 Sq. Ft. of space.
Because of the slowness in lease up activity, the General Partnership
consisting of Leonard P. and Carol Lilyholm, Roger Swardson, and Dr. P.
C. Roy, Jr. has been unable to pay all of their past due bills for
leasehold improvements and operating expenses. The General Partnership
has _reached an agreement with Brian R. Nelson, President of Asset
Development Services Inc. to come in as an additional general partner
in the project and take over the leasing and operation of the building.
Mr. Nelson is the developer of the Union Depot and has recently
purchased the Hill Building at 4th and Broadway from the Burlington
Northern Railroad plus additional property in Lowertown for
development.
Under terms of the original agreement, the General Partners have a
$600,000 recourse liability on the bond issue and Mr. Nelson will be
assuming the first $100,00U of that obligation.
• . � � - C���� ��'i
t . '
,,
BOARD OF COMMISSIONERS
MEETING MAY 21, 1985
MARKETHOUSE
PAGE 2
2. Financing
The proposed $900,000 industrial development revenue bond issue would
be done as a non 876 issue which would be privately placed with a bank
on a term of 27 1//2 years with a 10 year balloon. The 21 Limited
Partners would personally guarantee their proportional share of the
issue. This would amount to a personal guarantee of $42,858.00.
Proceeds from the bond issue would be as follows:
Leasehold Improvements $871 000
�
Bond Issue Expense 20,000
Discount 9,000
$900,000
The proceeds from the bond issue will be used to pay approximately
$200-250,000 in outstanding bills from previous leasehold improvements
and some past due operating expenses. The rest of the proceeds will be
used to provide for final leasehold improvements.
The Port Authority would receive sinking fund earnings as well as
fiscal and administrative fees based on the formula of .42% per million
per year for the first ten years, .54X per million per year for the
second ten years and .66% per million per year for the final 7 1/2
years of the lease.
3. Underwriting
Miller & Schroeder Municipals, Inc. has agreed to underwrite a private
placement of the issue.
4. Terms of the Lease
The issue would be coterminus with the current lease which terminates
December 31, 2012.
5. Recommendation
Staff has interviewed members of the current General Partners as well
as the new General Partner and reco�ends approval of the above
resolution.
sjs
- � C��'s' 9�i
55 4S
Resolution No.a.?ylo�
ftE SOLUTI ON OF
THE PORT AUZ430RITY OF THE CITY OF SAINT PAUL
WHEREAS, the purpose of Chapter 474, Minnesota
Statutes, known as the Minnesota Municipal Industrial Develop-
ment Act (hereinafter called "Act") as found ar�d determined by
the legislature is to promote the welfare of the state by the
active attraction and encouragement and development of economi-
cally sound industry and commerce to prevent so far as possible
the emergence of blighted and marginal lands and areas of
chronic unemployment and to aid in the develoFxnent of existing
areas of blight, marginal land and persistent unemployment; and
WHEREAS, factors necessitating the active promotion
and development of economically sound industry and commerce are
the increasing concentration of population in the metropolitan
areas and the rapidly rising increase in the amount and cost of
governmental services required to meet the needs of the
increased population and the need for development of land use
which will provide an adequate tax base to finance these
increased costs and access to employment opportunities for such
population; and
WI�REAS, The� Port Authority has previously issued
$1,900,000 of •its industrial development revenue bonds to
provide financing to Markethouse Limited Partnership ( the
"Coanpany") for the renovation of the basement and first and
second floors of the former Cardozo Warehouse ( the "Project")
at FiftYi Street and Broadway Street in the City of Saint Paul;
and
WHEREAS, The Port Authority of the City of Saint Paul
(the "Authority") has received from the Company a request that
the Authority issue its revenue bonds (which may be in the form
of a single note) to finance the completion of the renovation
of the Project, the basement, first and second floors of the
Cardozo Warehouse, all as is more fully described in the staff
report on file; and
� � :� � � � � ��_ y�i
WHEREAS, the Authority desires to facilitate the
selective developnent of the community, to retain and improve
its tax base and to help it provide the range of services and
�mployment opportunities required by its population, and said
Project will assist the City in achieving that objective. The '
cotnpletion of said Project will help to increase the assessed
valuation of the City and help maintain a positive relationship
between assessed valuation and debt and enhance the image and
reputation of the City; and
WHEREAS, the Authority has been advised by repre-
sentatives of the Canpany that� conventional, commercial
f inancing to pay the capital cost of the completion of the
Project is availab3.e only on a limited basis and at such high
costs of borrowing that the economic feasibility of operating
the Project would be significantly reduced, but the Co�pany has
also advised this Authority that but for revenue bond
financing, and its resulting low borrowing cost, the Project
would not have been undertaken;
WHEREAS, the Authority, pursuant to Minnesota
Statutes, Section 474.01, Subdivision 7b did publish a notice,
a copy of which with proof of publication is on file in the
office of the Authority, of a public hea ring on the proposal of
the Company that the Authority finance the completion of the
Project hereinbefore described by the issuance of its
industrial revenue bonds; and
WHEREAS, the Authority did conduct a public hearing
pursuant to said notice, at which hearing the recamnendations
contained in the Authority' s staff inemorandum to the
Co�mnissioners were reviewed, and all persons who appeared at
the hearing were given an opportunity to express their views
with respect to the proposal.
N(7W, THEREFORE, BE IT RESOLVED by the Com�nissioners
of the Port Authority of the City of Saint Paul, Minnesota as
follows:
1 . On the basis of information available to the
Authority it appears, and the Authority hereby finds, that said
Project constitutes properties, used or useful in connection
with one or more revenue producing enterprises engaged in any
business within the meaning of Subdivision la of Section 474.02
of the Act; that the Project furthers the purposes stated in
Section 474.01 of the Act and, but for the willingness of the
Authority to furnish such financing, the Coanpany would not have
undertaken the Project, and that the effect of the Project, if
undertaken, will be to encourage the development of
economically sound industry and commerce and assist in the
2
� ' ,- � � :� � �y.�� ���
prevention of the emergence of blighted and marginal land, and
will help to prevent chronic unemployment, and will help the
City to retain and improve its tax base and provide the range
of services and eznployment opportunities required by its
population, and will help to prevent the movement of talented
and educated persons out of the state and to areas within the
state where their services may not be as effectively used and
will result in more intensive development and use of land
within the City and will eventually result in an increase in
the City' s tax base; and that it is in the best interests of
the port district and the people of the City of Saint Paul and
in furtherance of the general plan of development to assist the
Company in completing the Project.
2. Subject to the mutual agreement of the
Authority, the Company and the purchaser of the revenue bonds
as to the details of the lease or other revenue agreement as
defined in the Act, and other docLUnents necessary to evidence
and effect the financing of the Project ar�d the issuance of the
revenue bonds, the issuance of revenue bonds of the Authority
(which may be in the form of a single note) in an amount not to
exceed approximately $900, 000 (other than such additional
revenue bonds as are needed to camplete the Project) is
authorized to finance the completion of the Project and the
recanmendations of the Authority' s staff, as set forth in the
staff inemorandum to the Com�nissioners which was presented to
the Commissioners, are incorporated herein by reference and
approved.
3 . In accordance with Subdivision 7a of Section
474.01, Minnesota Statutes, the Executive Vice-President of the
AUTHORITY is hereby authorized and directed to submit the
proposal for the completion of the above described Project to
the Com�nissioner of Energy and Economic Developsnent, requesting
� h is approval, and other officers, employees and agents of the
AUTHORITY are hereby authorized to provide the Co�nissioner
with such preliminary information as he may require.
4. There has heretofore been filed with the
Authority a form of Preliminary Agreement between the Authority
and Company, relating to the proposed financing of the Project.
The form of said Agreement has been examined by the
Conenissioners and said Agreement is hereby approved, and the
President and Secretary of the Authority are hereb� authorized
and directed to execute said Agreement.
3
. , . ., . . ��=������
5. Upon execution of the Preliminary Agreement by
the Canpany, the staff of the Authority are authorized and
directed to continue negotiations with the Company so as to
resolve the remaining issues necessary to the preparation of
the revenue agreement and other documents necessary to the
adoption by the Authority of its final bond resolution and the ,,
issuance and delivery of the revenue bonds.
6. The revenue bonds ( including any interim note or
notes) and interest thereon shall not con�titute an
indebtedness of the Authority or the City of Saint Paul within
the meaning of any constitutional or statutory limitation and
shall not constitute or give rise to a pecuniary liability of
the Authority or the City or a charge against their general
credit or taxing powers and neither the full faith and credit
nor the taxing powers of the Authority or the City is pledged
for the payment of the bonds (and interim note or notes) or
interest thereon.
?. In order to facilitate completion of the revenue
bond financing herein cont�nplated, the City Council is hereby
requested to consent, pursuant to Laws of Minnesota, 1976,
Chapter 234, to the issuance of the revenue bonds ( including
any interim note or notes) herein contemplated and any
additional bonds which the Authority may prior to issuance or
from time to time thereafter deem necessary to complete the '
Project or to refund such revenue bonds; and for such purpose
the Facecuti�e Vice President of the Authority is hereby
authorized and directed to forward to the City Council copies
of this resolution and said Preliminary Agreement and any
additional available information the City Council may request.
8. The actions of the Executive Vice-President of
the Authority in causing public notice of the public hearing
and in describing the general nature of the Project and
estimating the principal amount of bonds to be issued to
finance the completion of the Project and in preparing a draft
of the proposed application to the Catunissioner of Energy and
Economic Development, State of Minnesota, for approval of the
Project, which has been available for inspection by the public
at the office of the Authority from and after the publication
of notice of the hearing, are in all respects ratified and
confirmed.
Adopt ed May 21, 19 8 5 .
, .
r - ,
Attest � � �
Pres idertt
' The Port Authority of the City
� of Saint Paul
� � :'
l � f
� i �/ .
�.��.-'�%/�j/ ,j�' V���y//�`�,�
� Secretary
4
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F
I
PORT AUTHORITY OF THE CITY OF SAINT PAUL TOLL FREE(800) 328-8417
� 25 WEST FOURTH STREET • SUITE 1305 • ST. PAUL, MINN. 55102 • PHONE (612) 224-5686
May 21 , 1985
Mr. James Bellus, Director
Planning and Economic Development Department
City of St. Paul �"�
14th Floor, City Hall Annex ,�� � � �,
St. Paul, Minnesota 55102 � �--
SUBJECT: MarketHouse Limited Partnership
$900,000 Industrial Development Revenue Bond Issue
Dear Jim:
We submit herewith for your review and referral to the office of the Mayor,
City Council and City Attorney's office details pertaining to the issuance
of a non 876 $900,000 revenue bond issue for MarketHouse Limited
Partnership to do remodeling and complete leasehold improvements in the
former Cardozo Warehouse at Fifth and Broadway, St. Paul, Minnesota. Brian
R. Nelson, President of Asset Development Services Inc. would come in as an
additional partner in the project and take over the leasing and operation
of the building.
The Port Authority staff has conducted a thorough evaluation of the firms
and/or individuals that are involved in this project or in which the
principals have an interest. This investigation has included detailed
credit analysis, Dun and Bradstreet reports, direct communication with
representatives of financial institutions with whom the participants have
done business and data base checks to determine if any principal(s) have
been in Sriy W8y involved in legal proceedings as a result of securities
fraud, extortion, embezzlement or financial misrepresentation.
In addition to the staff inemorandum, we are attaching a draft copy of the
proposed City Council resolution and a copy of Port Authority Resolution
No. 2461 which authorized the sale of industrial development revenue bonds
in the amount of $900,000.
Your expeditious handling of this matter will be appreciated.
Yours truly,
:
i
s
E gene A. Kraut
Executive Vice President
EAK:DGD:sjs
cc: Mayor Latimer
:UGENE A KRAUT,C.I.D. DONALD G.DUNSHEE,C.I.D. CHARLES M.TOWLE CLIfFORD E.RAMSTED PERRY K.FEDERS
EXECUiNE VICE PRESIDENT ASST.EXEC.VICE PRESIDEM DIRECTOR OF INDUSTRIAL DEVELOPMENT CHIEF ENGINEER DIRECTOR OF FINANCE
C.E.O.
RICHARD A GIERDAL WILLIAM E.MCGNERN
PROPERN MANAGER DIRECTOR OF PUBLIC REtATIONS
�OMMISSIONERS GEORGE W.WINTER WILLIAM WILSON ARTHUR N.GOODMAN VICTOR P.REIM RAYMOND E.LANGEVIN CHRIS NICOSIA JEAN M.WEST
PRESIDENT V10E PRESIDENT SECRETARV TRE4SURER COMMISSIONER COMMISSIONER COMMISSIONER
C.I.D. Certified Industrial Developer
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CO (V! (�ll�TEE I� E PO � T
i O = Sasnr P�u I Ci�� Coun��I . .
F P � �'� ' C�M� �i i�? Q j? FINANCE, MANAGEMENT & PERSONNEL
� � C�A! R JAMES SCHEIBEL
1 . Reso 1 ut-iti�'��r►�t i ng to the i s suance of Port Author i ty I ndustr i a 1 Reve-
nue BonCs in the amount of $900,000 to finance remodeling to the former
Cardozo Warehouse at Fift � Broadway f MarketHouse Limited Partner-
ship. (Port Authority) ����
2. Resolution amending the 1985 budget and adding $97,012 to the Financing
Plan and to the Spending Plan for Community Se vices Dep rtment-Parks
and Recreat i on D i v i son. (Commun i ty Serv i ces? ' rD��
P
3. Ordinance amending Section 32.01 of the Administrative Code perta' ing
to the sa 1 ar i es of e t ectea off i c i a 1 s. (Personne 1 ) �y��
. . ���
4. Ordinance replacing the titles of Administrative Aide to the Mayor,
Administrative Aide I , Administrative Aide II , an Adminis=rative Aide
III with new titles. (Personnel ) ��r--O/J
(/
5. Ord�nance establisning the titles of Assistant to Mayor V and Assis-
� tant to the Mayor VI . (Personnel ) � C�
�/ v�
: • 6. Ordinance abolishing the titles of R search Aide and Communications and �
Program Director in the office of he Mayor. (Pe sonnel ) �
7. Reso 1 ut i on amend i n the Sa 1 ar 1 a 'and/ Ra��; d� i 1 ' n
g y Compensat on Reso ut�o
regarding the titles of Administrative Aide to the Mayor, Administrative
. Aide I , Administrative Ai�te II, a Administra ve Aide III. (Personnei )
� . p���'�
S. Resolution amending the Salary 1 n and Rates of Compensation Resolution
regarding titles of As�sistant to the Mayor V and Assistant to the Mayor
V? . (Personnel ) �l)/p�
/(Jf �O�
9. Resolution amending the Salary lan and Rates of Compensation Resolution
regarding the tit]es of Research Ai e, Communica�s and Proaram Direc-
tor of Manage�*i?�t. (Per=onne! ) ����
10. Resolution amenaing the 1985 Sperial Fund Budget by adding $65,000 to
the Financing Plan a�d to the Spending Plan f Job Training Partnership
8T. �locat i ona l Educat i on. (PED) ,/�U�
���v
CI'i Y HALL SLVENT'Fi FLOOI: , , .,
SAINT PAUL. rii\\ESOT:I 5510_
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