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85-989 WHITE - C�TV CLERK PINK - FINANCE GITY OF SAINT PAUL Council /�/ CANARV - DEPARTMENT File NO• o`� �� BLUE - MAVOR City Attny/RSH . . u cil Resolution Presented By Referre To Committee: Date Out of Committee By Date RESOLUTION AUTHORIZING SUBMISSION OF APPLICATION FOR URBAN DEVELOPMENT ACTION GRANT FOR DALE/SELBY DEVELOPMENT WHEREAS , Dale/Selby Development Company, Inc. , has proposed a Capital City Center Development ("Project") , consisting of inedical/office and retail /office components for the northeast and southwest corners of Dale and Selby Streets, respectively; and WHEREAS , the Project financing includes propo5ed funding through an Urban Development Action Grant ("UDAG") in the amount of $580,375; and NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul, Minnesota, as follows: 1. The City is authorized to submit written application for UDAG financing in the amount of $580,375 for Capital City Center Development to be located at Dale and Selby Streets in Saint Paul, Minnesota. BE IT FINALLY RESOLVED, that the Mayor, or his designated representativ� is further authorized to execute and submit to the U.S. Department of Housing and Urban Development any assurances , certifications, or additional informatian that may be required by said Department during their review of the City's Urban Development Action Grant and Application for Federal Assistance. COU[VCILMEN Requested by Department of: Yeas Nays Drew P1 in and Economic Development tv�asanz In Favot �iicosia scr,e�bE� _�__ Against BY Sonnen �- Tedesco son JUL 3 0 1985 Form Approved by City Attorney Adopted by�ouncil: Date Certified a_ • Cou ci , cr BY-�l1�' L`G[ ��"'� By � l�lpprov �Navor; Date _ � Approved by Mayor for Submission to Council � BY - , "� BY PUBLISNED A�u 2 U 1985 Planning - PE�L DEPARTMENT ��Jr`�� N� 2631 ��e:�h�t CONTACT 298-4509 PHONE � ,lulv 26� 1985 DATE �eQi ,, Qi ASSIGN NUN�ER FOR ROUTING ORDER (Clip All Locations for Signature) : Department Di rector �,(�+i�h,�t,b�h/.ayF/ /Mayor Finance and Management Services Director City Clerk Budget Director 1 Reichert City Attorney WHAT WILL BE ACHIEVED BY TAKING ACTION ON THE ATTACHED MATERIALS? (Purpose/ Rationale) : Planning Contnission resolution forwarded to City Council in time for their � deliberations Tuesday, July 30, 1985. � �� o n � COST/BENEFIT, BUDGETARY AND PERSONNEL IMPACTS ANTICIPATED: � , - --- None 'r-��:.�, ��.�. C7� J U L 2 << iy3� (�i�t�'C��.� �a��(;t� FINANCING SOURCE AND BUDGET ACTIVITY NUMBER CHARGED OR CREDITED: (Mayor's signa- I�one ture not re- Total Amount of Transaction; quired if under $10,000) Funding Source: Activity Number: ATTACHMENTS (List and Number Al1 Attachments) : 1 . Memo to Ma,vor from Peggy Reichert 2. Draft letter from Mayor to City Council 3. 10 copies of Planning Commission resolution - 7 for City Council - 2 for Mayour's Office - 1 for City Clerk DEPARTMENT REVIEW CITY ATTORNEY REVIEW Yes No Council Resolution Required? Resolution Required? Yes No Yes No Insurance Required? Insurance Sufficient? Yes No Yes No Insurance Attached: (SEE REVERSE SIDE FOR INSTRUCTIONS) Revised 12/84 HOW TO USE THE GREEN S1iEET 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, attached. �Providing complete information under the listed headings enables reviewers to make decisions on the doctunents 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 bo�h 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 f'irst 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. Dutside Agency 4. Mayor 2. Initiating Department 5. Finance Dizector 3. City Attorney 6. Finance Accounting ADMINISTRATIVE ORDER (Budget Revision) ADMINISTRATIVE ORDERS (all others) 1. Activity Manager 1. Initiating Department 2. Department Accountant 2. City Attorney 3. Department Director 3. Director of Management/Mayor 4. Budget Director 4. City Clerk 5. City Clerk 6. Chief Accountant, F&M5 COUNCIL RESOLUTION (Amend. Bdgts./Accept. Grants) COUNCIL RESOLUTION (all others) 1. Department Director 1. Initiating 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 Sheet is well done, no letter of transmittal need be included (unless signinq 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 time 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. �� f �'J ,�"��'. , .��GtTY �F�, CITY OF SAINT PAUL ` ��;�� DEPARTMENT OF PLANNING AND ECONOMIC DEVELOPMENT m@ ,.d DIVISION OF PLANNING �aa+ 25 West Fourth Street,Saint Paul,Minnesota,55102 GEORGE LATIMER 612-292-1577 MAYOR MEMORANDUM DATE: July 26, 1985 T0: Mayor Latimer FROM: Peggy Reichert RE: Selby-Dale UDAG Application Attached is the Planning Commission's resolution reyarding the Selby-Dale UDAG application. The Commission adopted the resolution this morning at their regular meeting. The Commission is required to review the application for consistency with the City's Comprehensive Plan. The Commission found the proposed development consistent given that several conditions be met as outlined in the resolution. The Selby-Dale UDAG will be on the City Council 's agenda this Tuesday, July 30, 1985. Attached is a draft forwarding letter for your signature. Please let me know if you have any questions regarding the Commission's action. PR:ss l,�-�s q�� city of saint paul planning commission resolution file number _��-�� (�te July 26, 1985 WHEREAS, the Planning Commission has reviewed the Alexander proposal for Selby and Dale under federal requirements for a finding of consistency with the St. Paul Comprehensive Plan; and WHEREAS, the Commission is concerned about the chronic problem of seeking development for the Selby-Dale intersection; and WHEREAS, the Commission desires to encourage development at the intersection but is concerned that this proposal has a low equity contribution, a lack of solid market information and few committed tenants; and WHEREAS, the proposal 's concept fits well with development planning for Selby Avenue; BE IT NOW RESOLVED, that the St. Paul Planning Commission finds the Alexander proposal for Selby and Dale consistent with the Comprehensive Plan of the City of St. Paul with the following conditions: 1) The developer seek a greater mix of retail tenants which add to the variety of goods and services, not duplicate them, particularly convenience groceries which already exist in the neighborhood. 2) A higher equity contribution be considered in the final package. 3) Structures placed on both corners be built with zero setbacks to Selby and Dale Streets and be at least 2 stories in height. 4) That the developer be encouraged to apply for a variance of the zoning code parking requirements as outlined in the District 8 Element of the Comprehensive Plan. moved by VanHoef �i�a'�d �/ Horak in fav�or Voice Vote in Majority against 1 � ��q�� ARC, Incorpo��ated DEVELOPMENT * CONSTRUCTION * CONSULTING 875 Laurel Avenue Saint Pavi, MN. 55104 Phone: 612 - 291-0003 1�iE1�i0RANDUl2 'ln: h+embers of the St. Paul City Council From: Larry Alexander RE: Staff's Recarrnendations Regarding Selby Dale UDAG Da.te; July 3�, 1985 This developer finds no basis for the non-submission of the above referenced L?rban Pevelo�rnent Action Grant (UDAG) application and herein the concern k�olstered by staff are addressed. 1. Lack of Private Comnitment for ('redit Enhancement Developer has pravided for your considera.tion a copy of a letter fran the HUD regional office, concerning the issue of whether this appli- ca.tion can be subc�itted without a crectit enhancement. As the letter states, the July 31, dead�ine related to the submission of the appli- cation, however, the project will have another 45 da.ys to shore up any and all other requirements. Accordingly, this issue is erroneous. 2. Inability to Finalize Sources and L'ses and ?�ro-Forn1a Income Statements The developer plans to address the issue of a credit enhancement ��ith the °t. Fau2 Fort Authority and f3L'D. As this issue.relates to the item nwnber 1 on staff's list of concerns, this issue can b� resolved within the 45 daS�s fror.; the deadline date of July 31. 3, Insufficient Equity The developer has fror.� the on-set cor.mitted to inject �80,OQ0, This dollar amount a�as referenced in the initial proposal. Staff l�e�v all the time that the cn�ney a�ould be borroaed and no concern was raised early in the process. It seems to me it sY;ould be left up to HL� to determine the suff iciency of the equity. I'.UD is aarmitted to �orking with minority developers, in min- ority corrnn�nities and it is my feeling and opinion, that there wi.11 not be a equity concern from �I[7D. Fhrther, if there is a concern, a�e can syndi- cate a portion of the development and raise additional equity. ��s= �� '��embers of the St. Paul Cits� Council Pa.ge 2 4. Concerns with Ca.�h Flow The issue of cash flow based upon staff's interpretation of I�[lD's require- ments is sus�ect, �'e feel that an accannondation can be w�orked out with I?UD arid the issae of short falls can be addressed by restructuring the UDAG repayment. i.e, interest payments, amount of interest, repayment of princi- pal, etc. �rther, this matter can be aorked out within the 45 day dead- line. . 5. Developer Perfom�nce The reference to the Yianl�uptcy of Ca.pitol Crane and Construction is a�ith- out a legitimate ba.se. All documents �rere supplied to staff cvithin the timeline set-forth, noon, July 29, 19$5. All issues were answ�ered forth- rightly and documents provided. This issue is gut in inforn�ationally, not linked up and used to cast shadou�s. The issue of 1978 cam�ercial rehab loan is slanderous. First, it was eight years ago and I was 25 years old; tc�, the city of St. Paul and , hiidcvay �ational Eank were both paid in full; three, this ��as my first construction pro�ect and cannents like " several questions axose con- cerning the contractor's having the necessary and proper permits and eligible carmercial rehabilitation expenses'" �'e suggestive and inappro- Friate, four, the applicant, Dale Selby Developcnent Company, Inc. and me personally, r.ave not been involved in bankruptcy and have not defaul- teci on any bond or mortgage catmitment. Lastly, even if a�at the staff states is true, after seven years, all defaults and even banlauptcy is purged from one's credit file. If the issue of veracity or truthfulness is beinb raised, I stand by the docu- ment si�ned concernin� my past financial dealing. Not only that, I completely forgot about this situation. 6. Duplication of Carmunitv Services As staff has stated, there is no letter of intent from �rooks' �Zperette and i feel that addressiag the issue of another superette is moot. Staff's concern about F?UD reaction to the citizen concerns can be addressed �cith �iG�. As there is no superette for the development, then the issue of a market study is moot. ?. �uestions Concerning ?�4axketing Study Attached is a letter of intent from '�iodel Cities Health Clinic expressing an interest in leasing 8,000 square feet of es].inic space and 4,000 square feet of "earlp childho� development center", totaling 12,000 square feet, not 8,000. �"�hen R�e contracted with the firm to do the maxket analysis, we were, as staff suggest, close to securing a letter a-F intent from Erooks' . Ha�vever, staff suggested that we move the building to the front of the lot and build a second floor, affecting Brooks' decision to carmit to leasing ��J�q�'c r,'embers of the St. Faul City Council ^age 3 space at Selby and I�a.le. If an adjust.ment is required, this matter can be negotiated with HUD and they can determine the optimisn of the figures. 8. Low Private to Public Leverage �e are well awaxe of the law private to public ratio and I have joint ventured a 46 unit housing development at Da.yton and Dale. `1'e have visted �ith HUD and the priva.te dollaxs can be used to leverage the public dollars on the Selby/L�ale site. If this pro�ect gets through PID staff, then the ratio ��ill be nearlp ? to 1, rather than, 2.5 to 1. �e ha.ve already submitted a proposal to PID for its considera.tion, w�ich was endorsed by the ��mnit C'niversity caYmunity and �� are aa�aitin� PID staff's opinions. Your favorable review and urging will be greatly apprecia.ted. DEVELOPER's P(�.SITI�T �e staff report of July 26, 1985 is full of falsehoods, ha.lf-truths and �istortions concerning this development proposal. As this }�ody is a�ell aa�are, cor.mercial projects are difficult to do and Selhy and Dale is the most difficult deal to do in the city of St. Faul. Fran this writer's vantage, a decision was reached and a factual pattern vras framed ta support the thesis. Staff's recitation of IiUD policy is far off base, it creates a lot of questions for me. According me tentative developer's status of celby and Dale ��vas not a rlwn. �?ather, it «ras a major league test of my ability and tenacity. �!'e have cane a long r�ay in t��enty months and I am rappy «3th the accom- plishments of this development tean�. �"e u�ant the project to go to Slashington, I see no downside for the city of St. Faul moving this project through. f?[.TD has sho«�n a receptiveness to the developer's e�fort and «*e have nothin� to lose and everything to gain. '"his looks to be the last LTDAG ever and if I can persuade saneone to give $580,000 to �elhy/�ale, afiere- in those dollaxs are not caaing out of the city coffers, then I should be encouraged and supported. G`n September 26, 1984, when I was given tentative developer's status, the F.RA E?oard of Ganmissioners, used some lana age which I feel to be appro- priate; "?�f�:PEA,S, in order to assist minority developer groa�th within the City of St. Paul, v�hich is a r�a.jor City goal.". . . . we make ARC, tenatative . developer. Ghow that supgort and give me your vote of confidence. �e � recosm�nd the following; �� rtembers of the �'t. Paul City Council Page 4 1, that the L?DAG for the Selby jDa.le be subcnitted before the July 31, 1985 deadline; 2, tha.t this pro�ect Y�e referred to the St. Paul Port Authority for its revie�w concerning credit enhancement; 3. that the developer and his consultant(s) be responsible for negotiating the C'DAG with HUD; 4. that if a L'DAG is awarded, all recaptured dollars will be used to structure a city wide minority business development program, independent of PID; 5. that staff is directed to c,ome hefore the F�A Roard of C'.ocmlis- sioners within tao (2) a�eeks with a recatmendation for tenta- tive developer's status for parcels 107-A and 107-C, Suamit University, giving weight to this UDAG submission and enhan- cement; 6. that the City of St. Paul reaffirms its carmitment to "minority developer gro�vth a�ithin the City of St. Paul", refrenced in resolution 84-9/26-9. �"��r 9�� P�MENTa, U.S.Department of Housing and Urban Development � �W�,�� _� *�p Minneapolis-St Paul Office, Region V o �� ,}W 220 Second Street,South `��NDEVE�Q� Minneapolis, Minnesota 55401-2195 July 30, 1985 Mr. Larry Alexatider ARC, Inc. 875 Laurel Avenue St. Paul, MN. 55104 Dear Mr. Alexander: Recently you rern�sted an explanation of certain HUD policies on our review of Urban Development Action Grant applications. We hape the follawing discussion will answer your auestions. Applications are dwe in the Minneapolis HI1D office on July 31, November 30 and Maxch 31. Zt�e Minneapolis office revi�ws the application during the first month fo'llowing submission. It is expected that applications will be as com�lete as possible when submitted, th,augh additional ma.ter3als may be submitted after the application deadline. By the fifteenth day of August, Dece�ber or April, this office determines whether an applica.tion meets our mi.nimum threshold for completeness. To pass the threshold test, an applica.tion must contain at least the following: -fully completed applica.tion forms; -evi.dence of site control for the project; -a letter from a developer stating their intent to undertake the pro,ject; -a statement that '�but for" the UL�L�AG funds, the proposed project carnzot and will not proceed. -same level of financing cammitment and/or eauity commitment £rom a lender and/or the developer; -a five-year pro forma for the proposed project; -Ebidence that at lea.st two public hearings have been h�ld prior to submission of the application. Applications are forwardecl to our `aashington office for review only if the above-mentioned ?tems are received i.n this office bv the fifteenth o£ the first review m�nth. 'lhe application review process is not static; the specifics of a proposed project often cl�ange during the review period. Minneapolis and Washington HUD staff negotiate with the City and th�e developer to firm up details of a proposal, finali.ze f_inancial co�mitm�ents, analyze a proposal's need for UDAG funds, and strengthen an application's prospects for funding. ��9�1� 2 By the fifteenth day of the second revi.ew month (September, Jarniary, May) , all financial co�itments and related acceptances of all participating (public and private) parties, including the developer's equity, moust be received by Washington staff. If the necessary cammitments and details are not received by this date, the project will not be recommended for funding during that funding cycle. However, the earlier such cammitments are submitted, the more ti.me HI]D has to review the materials and work to strengthen the proposal. Regarding a developer's eQUity commitment, a developer is expected to contribute cash eQuity to the project. 'IY�ere is no statutorily set level of eciuity participation, as the requirements for each individual project differ. It is expected that the developer's eQUity participation in a project will equal the amount of UDAG funds requested. I�[JD freuuently negotiates to � increase equity irrvest�ment and decrease UDAG involve�ent in a project so as to improve a project's prospects for being funded. • While cities moust meet certain HIJD rectuirements in submitting a UDAG application, cities set their own economic develop�ent policies and are responsible for selecting projects and submitting applications reauesting funding for the�m. As the applicant, the City takes ultimate responsibility for submitting develapment proposals and implementing funded projects. We hape this satisfactorily addresses your ctuestions. If you ha.�e further questions, feel free to contact Steve Johnson at 349-3026. Sincer ly, 6��`i' � .G�-(�►"J s T. Feeney a��anager, S � :�;t� o U= �-9�'9 � ��'`� P= CITY OF SAiNT PAUL 9` � �' DEPARTNfENT OF PL.ANNlNG AND ECONOMIC DE`✓ELUPMENT p O ,� �' 11lIII;iEIiI ''�m ��-"� �'�� ' DIVISION OF HOUSING �� 25 West Fourth Street,Saint Naul,Minriesota,55102 �'�L�,. �ss• 612-252-1577 GEORGE U71MER MAYOR Mny 29, 1984 L. Kenneth Alexander President ARC, Incorporated 875 Laurei Avenue St. Paul, MN 55104 � RE: Selby/Daie Redeveiopment Dear Mr. Alexander: Pursuant to the direction given sta�'f by the HRA Board of Commissioners at their May 24, 1984 meeting on the above-referenced subject, I am beginning the initiai preparation of a preiiminary UDAG application. So that there wiil be no misunderstanding, 1 want to let you know that 1 will use the project description for the northeast corner development, as prepared and presented by you on Pages 3-9 in your Apt^ii 2, 1984 "Capitol City Ce.nter: Se1by/Dale Redevelopment" proposal. Please inform me if the descriptions contained on these pages are ro Ionger applicable. Also, because Lhe dimensions and other aspects of the development for the southwest corner have been refined, pursuant to your aqreerrients with Electricians and Associates, 1 wouid appreciate receiving from you, as soon as posstbie, a written project d�scripti�n for this developrnent. Please aiso be informed that 1 witi need front yau the failowii�r� information c�nd submissions by June 18, at the iatest: 1. Project Schedule ' Estirr�ated start dates and completion dates for the fottawing activities and otlier major activiti�s which you muy want to identify: (a) Bond Sale (if used) !b) Construction (c) New Perrnanent Jobs Created 2. Evidence of Deveioper, Private Investment, and other PuhIic Commitments. These are dated Ietters, addressed to Mayor George Latirner, written on the company's or organizatiort's stationery, to document the foilowing: (a) Developer's commitment to undertake the project; (b) Underwriter's cornmitment to purchase a bond issue; (c) HRA's or Port Authority's commitment to issue bands. 3. Evidence o�' Interest from Prospective Commerci�l Tenants. These are dated Ietters, addressed to you as deveIoper, u�ritten on the company's �r organization's stationery, to demonstrate interest in leasing/`nuying in your project as describEd. : ~ ,��,--��-�= 9� , Page Two - I would like to run a revised pro forma analysis this week in order to determine the amount of UDAG which the City should be requesting. Enclosed is the most recent estimated development cost which you supplied me. In order for a revised pro forma to be run, pledse separate aU estimated cost items for the northeast corner from ali estimated cost items for the southwest corner. In addition, you wili need to indicate your choice regarding the primary take-out financing. AIso, the analysis which we must prepare for the UDAG preIiminary upplication must identify whether the commercial space will be leased or sold as condorniniums. The proposed use o�' the UDAG wiil also dif f er, depending on these choices. The UDAG process and local policies require tlie appIicant (the City) to go through a review process, prior to the preliminary appIication submission, which inciudes a community public ilearing, as well as pubIic meetings before the City Planning Commission . and the Capital Improvement Budget Committee, and a pubiic hearing before the City Council. In order for these meetings and hearings to be properly coordinated during the month of Juiy, 1 suggest that we make every ef f ort to use the month of dune to compiete as many of the pieces of the project descriptions as possibie. From my perspective, the major pieces are: 1. Project Costs(breakdown for NE and SW corners) 2. Project Financings 3. Letters of Developer and Underwriter 4. Leasing Agreements 5. Market Feasibility Pursuant to our phone conversation yesterday morning, 1 will undertake this anaIysis and uil future work with this development by taking the northeast corner project and the southwest corner project as separate projects with respect to aII of the items Iisted ahove, as weli as any additionaI project specifics which may subsequently be identified. The projects will proceed on separate, but parailel channeis. You have stated that you have no problem with this procedure. 1 wouid be happy to discuss this letter with you at your earliest convenience. I Iook f orward to working with you on these projects. Sincerely, ; / � , Nancy West� Project Manager � N W/bkd cc: Jim Bellus Ken Johnson Tom Sanchez EncIos�.u�e ; � ��-�= �� ,�RC, Incorpora$ed DEVELOPMENT * CONSTRUCTION * CONSULTING 875 Laurel Avenue Soint Paul, MN. 55104 Phone: 612 - 291-0003 July 26, 1985 i I i � Dear Sir: This letter constitutes a continuing canpla.int a�ainst the City of St. Paul, Planning and Economic Developrnent department (PID) processing of my development proposal for Selby and Da.le, St. Paul, b'innesota. After my forn�al complaint of August 30, 1984 concerning ra.cial discri- minatory actions by FID� the City of St. Paul accorded me tentative developer's status of the northeast and southwest corners of Selby and Dale, on September 26, 1984. "he resolution was foeused to mp cc�laint for in the text of the resolution it set-out; "�'�7�ereas, in order to assist minority developer �rowth v��ithin the City of Saint Paul, �hich is a major City goal� and allaw sufficient time to obtain business interest that n�ill continue the positive �rov�th of this area and provide support for jobs for the camnmity, as n�ell as an increaseci tax base for the City, staff recomnends the follov�•ing chan�es be adopted under 1�F?C, Inc. tenta- tive developer designation." 'I'he purpose of this verbage is apparent, and since this date until July 16, 1985, my interactions w3th staff has heen productive and positive. It is my feeling that staff felt that I n�ould not get as far as I have and the actions of PID is a last ditch efforts to stop my development effort. There are three particular circ�stances wfiich I believes supports this basic tenet and I shall set''. ' it out for your consideration and review. The actions are subtle, ho�qever, have the culmative effect of denying me govern�nt assisted funds. Letter F'rom I?ain Bosuorth , (?n July 16, 1985 w�e su�xnitted a draft copq of a letter from Dain Eosaorth, a�ich was addressed to 9ir. Rilliam F.aum�er, Senior I'evelopcaent Director� U.S. Department of �iousing and LTrban Develognent, �rhich aclmav�led�ed that firm's �311ingness to buy the inciustrial revenue bonds, if the L�DAG was ��- ��-� y July 26, 1985 granted for the Capitol City Center pro�ect. This letter was a fium "hell or high-�ater" c,oemittment letter. Rhen we presented the draft letter to PID stafl, they were obviously taken aback� as they had not expected us to secure a coQmittment such as the Da.in Bosworth letter portrayed. We shared with the senior PID staff, that we planned to continue our efforts to secure a credit enhancenent if w�e might need that at the time of sale and that w�e w�ere hopeful, that a signed letter a�ould be forthcan3.ng within a da.y. I ssked staff not to contact Dain Bosarorth, until w�e had an exe- cuted letter i�smediately and theq agreed. On July 22, 1985, staff addres-. sed a letter to me setting forth its concerns about several itens, rnm�ber 2 was the Dain Bosw�rth letter. In the letter ot this da.y, which I recei- ved fram PID, it did not make merrtion of Jim Bellus' contact with the Dain Bosv�orth office of Julq 16, 1985 and the conversation wh�ich he had with FYancis Fallon of Dain Bosworth. �4hat I have been�able to piece to- gether, Bellus pushed Fallon on the issue of letter of credit and Fa11on ac�mawledged at that telephone conversation that a letter of credit or sa�c�ee type of credit enhancement aould be required. I� in fact, they, PID, knew tha.t the draft letter aroulcl be amended, then why in the letter o� July 22, 1985, six days after Bellus' conversation with Fallon, are they acting like the letter fran Dain was acceptable? ' Credit Eahancement In the letter of July 22, 1985, condition 2, last sentence, "Please keep in mind that if the final executed letter frcm Dain Bosworth requires any credit enhancement, this must be c:aunitted and in place for the UDAG application to be sent to �ashington, D.C." This oondition is not a.ccu- rate of HUD policy, an application has until "the 15th day of month tan of the funding round", and in this case September 15, 1985, to sutmit any additional financial informa.tion, not 3uly 31, 1985. '.?aising The Public to Private Ratio A basic problem associated with this pro�ect is the public to private ra- tio, it is at the minir,nim, 2.5 to 1. I ha.d �oined aTith a majority deve- loper, I�'elson Frothers Construction to redeveloprr.ent an adjacent piece of la.nd cvith 45 units of apart�nts, raisinp the public to priva,te ma.tch fran the minimurn to ? to 1, thus �iving the project more points, for L'DAG consideration. The project was reviewed by the canrnxnity and the comm�nity endorsed the progosal. Z'hen the p%ject went to the District Planning Council and the city submitted a nisleading letter to the District Plan- nin� Council, suggesting that our proposal had changed and if so, tha.t constitute an unfair advantage to the developer team. This letter was date the da.q of the District Planni.ng Council meeting, addressed to the Executive Director of the District Planning Council and no copy going to the developer or a telephone ca.11. 1Vhen the issue came up, after w�e had made our presentation, the District Planning Council deba.ted the issue 45 minutes and voted not to support our proposal 11 to 9.� As the basic premise of the letter was erroneous, and no adva.nce a�arning was given to us, I feel that it was a discriminatory a.ction to reduce our chances to secure an UDAG grant, if ae were lucky enou�h to get out of St. Paul. �� '��Q� � July 26, 1985 The actions hereinmentioned are subtle, but in a culmative perspective ___ are aver pav�eriag. It is the trademark of PID, to dise:ninate misinfor- mation, as they once set-forth tha.t my Public to Private ratio was 17 to 1, rather than 1 to 3. I need your timely intervention. � Zt you have any additional questions, my ntIInber is 612-291-0003. Sincerely Y s, � I,arry Ale der = Presiden LRA/alm Enclo: . � ��`Q�.I � '!�+ d�'k` W, �e {{ ;y 1 'tl1 << , ,�� _ . . -�►L.J 1 ' :� �' . � ,..�. . � . *� �� N�� July 16, 1985 Mr. William Hammer Senior Development Director U.S. Department of Housing and Urban Development 451 Seventh Street S.W. Room 7252 Washington, D. C. 20410 1 � Re: Revenue Bond Financing for � Commercial Development _ . Capitol City Center Project - � Saint Paul, Minnesota Dear-Mr. Hammer: This 'is to advise you that Dain Bosworth Incorporated intends to purchase the commercial development revenue bonds which are to be issued by the City of Saint Paul for the purpose of providing construction and long-term financing for the proposed coa�mercial project referred to above, which is being developed by the Dale Selby Development Company� Inc. � Our commitment to purchase these bonda is contingent upon the receipt of the Urban Development Action Grant (UDAG) funds which have been requested by the City of Saint Paul for this project, and which are critical to the financial viability of the project. Accordingly, but for the receipt of the requested UDAG funds, we would not be willing to purchase these bonds. The final terms of the bond issue will be .determined upon receipt of the UDAG funds. At the present time� it is anticipated that the total principal amount of the bond issue will be approximately $1,725�000� which will be used to fund a mortgage loan of approximately $1,500�000 and a debt service reserve fund of approximately $225,000. The monthly payments on the mortgage loan will be based on an amortization period of approximately 30 years following the completion of construction� with a mandatory prepayment scheduled for a specific date which will be determined by market conditions at the time of the ' bond offering period. The maturity schedule of the bond issue will be structured with a combination of serial and term bonds; the ongoing interest rate and credit aupport costs on the bond issue will be approximately 10.0$. �100 DAIN TOWER/P.O.BOX 1160/MINNEAPOLIS,MINNESOTA 55440/(612) 371-2711 ��.�-�� Mr. William 8ammer -2- July 16, 1985 In accordance with the foregoing� Dain Bosworth Incorporated will be Willing to execute appropriate legal documents to consummate this financing following approval of the Urban Development Action Grant being requested by the City. We are prepared to distribute the preliminary official statement within 90 days of receiving the UDAG approval. As of December 31� 1984, the "net capital° of Dain Bosworth Incorporated was $17,017,919, as calculated under applicable SEC guidelines. Our net capital is sufficient under applicable SEC regulations for us to underwrite on a firm basis the revenue bond issue referred to above. Please let us know if you have any questions or need any further information concerning the financing of this project. Very truly yours, � DAIN BOSWORTB INCORPORATED � BY James E. Dinerstein Yice President Dain Bosworth Incorporated JED:sh I acknowledge receipt of the terms and conditions contained herein. By Larry Alexander DAIN BOSWORTH INCORPORATED _ . �� d / PROJECT DESCRIPTFON The proposed project consists of the following ; � - the construction of a 16,000 sq. ft. office building, with 4 ,000 sq. ft. per floor, three stories , located on the northeast corner of Selby and Dale ; (Transaction I) - the construction of a 7, 800 sq. ft. retail/office build- ing, with 3 ,900 sq. ft. per floor, two stories , located on the southwest corner of Selby and Dale ; (Transaction I) S�i �l - the construction of forty-�ig,la,t one and two bedroom units with underground parking, with the average unit size of 850 sq . ft. , three stories , located on the northwest corner of Dayton and Dale; (Transaction II) The project will developed .using Industrial Revenue Bonds , pri- vate equity and an Urban Development Action Grant as sources of funds. SOURCES OF FUNDS Transaction I Transaction II Developer' s Equity 80 ,000 80 ,000 Industrial Revenue Bond 1 ,480 ,000 1 ,650,000 Urban Development Action Grant 455 ,000 - 0 - City of St. P aul Assistance - 0 - 131 ,300 T 0 T A L C 0 S T $ 2 ,015 ,000 $ 1, 861 , 300 _ � ��` q�� r''"'y� U.S.OEPARTMENT OF HOUSING AND UflBAN DEVELOPMENT ' t ' ~� WASHINGTON,D.C.20410 :s'��1� RfG�d -.�:,.• �co�CE=''—`a55i57�h:SECpE'�AVC�R �JMwUy'—•s:tww�r��ND?EVE:JpMENT MA�C ]. ._ :? *iE.�IOR.A.�'DtTMI FOR: �11 Regional Administrators aTTENTION: All Regional Directors for CPD ; .. Al1 CPD Division D e o� - r;• �� FRO�S: Alfred C. Moran, Assis cre ary-Designate, C SUBJECT: Receipt of Information on the Funding Round Deadline Date ° `• 1. Financial Commitments The 15th day of month two of the funding round is the deadline for submission of financial commitments for all funding rounds (see 4E6 for exceptions). All financial commitments and related acceptances of all parties, public and private, including evidence of developer's equity, who are participants in the funding of a project must be received in the HUD Central Office not later than six p.m. Washington, D. C. time of the 15th day of month two of the funding round. Telexes and faxes will be accepted. Telegrams will not be acceptable, as it is impossible to verify the sender. However the responsibility for the receipt by the deadline of all informa- tion relevant to financial commitment rests solely with the city and the developer. For example HUD will not be responsible for the failure of :iTJD transmission machines. After the deadline date and time, no further clarifications pertaining to financial commitments will be considered as � relevant to funding a project in that funding round. Applicants and private parties are to be encouraged to submit materials well in advance of the deadline, particularly if they expect a response from HUD regarding deficfencies in the commitments in time to remedy such deficiencies by the deadline. 2. Increase in Equity The only modification to a financial commitment which can be received after the deadline date and time is a commitment to increase the equity provided that sufficient evidence (e.g., net worth statements or letters of credit) that the equity providers have the ability to provide the � increase iher4financialbco:nmitmentsa six p.mCeWashingtonctime ofetheal5the for all ot day of month two of the funding round. _i: ;� y ' :y :;;_� . I-46 � r� . . . �� . ��_ �� , 3. Site Control As stated in my November 8, 1984 memo to the field there must be . some "evidence of site/location control through ownership, option, sale , agreement, lease, or the willingness by the applicant to use power of eminent domain" by the 15th day of month one of the funding round. • In reference to Central Office review, all information relevant to �he verification of the adequacy of the evidence of site/location control received by the field offices must be received in Central Office by the same deadline stated above for financial commitments. 4. Permits Approval of permits by agencies under the jurisdiction of the � Applicant will not be required prior to the Secretary's consideration of the application if such permits are routinely issued in the normal course of the construction process, e.g., demolition, building, and electrical permits. If permits or other approvals are required bq agencies outside the jurisdiction of the Applicant and/or are required by the applicant or other jurisdictions, and are not routinely issued in the normal course of the construction process, then evidence of all such approvals must be received in Central Office by the same deadline stated above for financial commitments. :� S. Clarifications Considered after the Deadline Date While no clarification relevant to financial commitments, site control, and permits will be accepted after the deadline date the following clarifications will be considered: the number and type of jobs; construction costs; specific activities funded by UDAG and private funds; pro forma assumptions. Further the amount, terms and condition of the UDAG grant and/or a loan may be received and negotiated after the deadline date. However, all information must be received and negotiations concluded and confirmed by six p.m. Washington time of the 22nd day of month two of the funding round (see it6 for exception). 6. Weekends and Federal Holidavs If, in a particular month a deadline falls on a weekend, the deadline is carried over to the following Monday. If the deadline falls on - _ a Fedezal holiday, it is cazried over to the next business day. J�._ .�� . ,�;�� .' cc: � � All Action Grant Central Office Staff � . :��.= ' I-47 �� :o �� _ . ��•�•� � oJ � V� � `�"O�.0 F�w►�'�'� J uly 23, 198 5 Mr. James J. Bellus� Director Department of Planning and Economic Development City Hall Annex, 14th Floor 25 West 4th Street Saint Paul, Minnesota 55102 Re: Revenue Bond Financing for Capital City Center Commercial Development Project Saint Paul, Minnesota Dear Mr. Bellus: This is to advise you that Dain Bosworth Incorporated intends to purchase the commercial development revenue bonds which are to be issued by the Saint Paul Housing and Redevelopment Authority for the purpose of providing construction and long-term financing for the proposed commercial project referrec] to above, which is being cleveloped by the Dale Selby Development Company� Inc. Our willingness to purchase these bonds assumes that a credit enhancement securing the bonds will be provided that is sufficient to provide a rating on the bonds of "A" or better. Our commitment to purchase these bonds is contingent upon the receipt of the Urban Development Action Grant (UDAG) funds which have been reguested by the City of Saint Paul for this project� and which are critical to the financial viability of the project. Accordingly, but for the receipt of the requested UDAG funds� we would not be willing to purchase these bonds. The final terms of the bond issue will be determined upon receipt of the UDAG funds. At the present time, it is anticipated that the total principal amount of the bond issue will be approximately $1�725,000� which will be used to fund a mortgage loan of approximately $1�500�000 and a debt service reserve fund of approximately $225,000. The monthly payments on the mortgage loan will be based on an amortization period of approximately 30 years following the completion of construction� with a mandatory prepayment scheduled for a specific date which will be determined by market conditions at the time of the bond offering period. The maturity schedule of the bond issue will be structured with a combination of serial and term bonds; the ongoing interest rate and credit support costs on the bond issue will be approximately 10.0$. 100 DAIN TOWER/P.O.BOX1�60/MINNEAPOLIS,MINNESOTA 55440/(612) 371-2711 � �d'.�9�I Mr. James J. Bellus -2- July 23, 1985 � In accordance with the foregoing� Dain Bosworth Incorporated will be willing to execute appropriate legal documents to consummate this financing following approval of the Urban Development Action Grant being requested by the City. We are prepared to distribute the preliminary official statement within 90 days of receiving the UDAG approval. As of December 31, 1984� the "net capital" of Dain Bosworth Incorporated was $17,017�919� as calculated under applicable SEC guidelines. Our net capital is sufficient under applicable SEC regulations for us to underwrite on a firm basis the revenue bond issue referred to above. Please let us know if you have any questions or need any further information concerning the financing of this project. Very truly yours� DAIN BOSWORTH INCORPORATED ��M,G'CA � � B � �r'rancis X. 11 n� Jr. --�Vice Presid and Senior Investment Banker � ! FXF:sh I I I acknowledge receipt of the terms and conditions containec7 j above. � DALE SELBY DEY OP �NT COMPANY� INC. � � , C',`, .--..�. / By�_ � � Larry Algxander .J` i I � I � i , � DAIN BOSWORTH INCORPORATED � ' ��-.�� . . a � o � en er "A Renaissance at Selb & Dale" y Shopping Center Office Complex Retail — Housing An ARC, Incorpor�ted Development � �: � � � , ,,,�� .�,. �� `� , �" , q� o °� � , o, , , � �S _ g� � � �� ' � , , �� e�� ,,;,. �...,. _ .. ' __._ �s� T.. • ;� ..�_ ...k:. i\ l,'� =i ` '� ""+v a —�—r�� f � �.� � � i � '��, `� 1 � ,J ` _ �� ' - rr I8. fl� �V � J ,�:�., 35e o �'p� 691 � � T .� � to� I 91 3�,� �..� t "-. -- �s�,t�.. , � ..t .,,�. .. _ ,.<a " •'-��'� - �, o � ..- �� t -- i5 I y ' ,� �\`7 _ 1� I •�i�. v PAUL ; . . � , . �.�. �. -_'"��.�. � io - ,wo .. .� ..�. �o, _ �� . .. .. . �. � ,. ..�. �� "� „ `� � . . .� .. , \ � . ._ � ,a rr_',.. , ��,�,��.�,., 91 �� 91 � , � MI� EAPOL(S - " " 194� � �__._ ��' �--r / ,. , � J .��o : _: � _-� �� ,� � ,.�. � � Capitol City Center � � � � . � •... _ t � �� , ; � , I � .�� _ ..,w .::.:�. __ v i ; � u °, - � � t;° 191�_ � I � F,o . ,+ �� ' —,� - — - _ � � � � .. . y�'��r�{n drs Ynn�� .. ��`� , ?�' x - � ./_ ��: \ �. e� �u '��'-i / � .��i ��) � "A Renaissance at Selb & Dale" y Location : '/2 mile south of I-94 at Dale Street Gross Leasable: Retail / 27,600 sq. ft. Office / 14,400 sq. ft. Trade Area: 2 mile population = 24,219 Average Home Value: $83,400 Occupancy: September 1985 An A RC, I ncorporated Development 875 Laurel Avenue Saint Paul, Minnesota 55104 Telephone (612) 291 -0003 ,,�l**�, GITY OF SAINT PAUL � �� y�9 . ,�` '� OFFICE OF THE MAYOR o w < iiiiiiil�n � �� e �,.. 34T CITY IiALL FILED SAINT PAUL, MINNESOTA 55102 GEORGE LAT7MER (612) 298-4323 �UL �� t"1 i�� - MAYOR ClTY Cl_'��;�'S OF�!CE � 5? f .., �!!;y. . July 26, 1985 Victor Tedesco, President and - - Members of the City Council City Hall - St. Paul , Minnesota Dear President Tedesco and Members of the Council : - I am e�closing with this letter the Planning Corranission's review of the Selby-Dale UDAG application. The Plannin� Commission is required by s federal regulations to review UDAG proposats for consistency with the City's Comprehensive Plan. The Commission finds the proposal consistent with the Comprehensive Plan �•, given certain conditions as outlined in their resolutiQn. I am forwarding`.; their comments to you for consideration in yaur decision of the UDAG on July 30, 1985. Sincerely, or atimer May , GL/SG/mb cc: Peggy Reichert .�,] :p�soa, �;�#t�► Cieck r , �<s _ � ��s �� city of saint paul �� -� � � � � pianning commission resolution. file number R5_�� . - . �te July 26, 1985 . . � - : WHEREAS, the Planning Comnission has reviewed the Alexander proposal for Selby and Dale under federal requirements for a finding of consistency with the St. Paul Comprehensive Plan; and � ' � WHEREAS, the Commission is concerned abo�t the chronic problem of seeking development for the Selby-Dale intersection; and WHEREAS, the Comnission desires to encourage development at the intersection but is concerned that this proposal has .a low equity contribution, a lack of. - solid market information and few.cort�nitted tenants; and WHEREAS, the proposal 's concept 'fits well-yr.i:th development planning for Sel�,� Avenue; � . � BE IT NOW RESOLVEO, that the �St. Paul Planning Comnission finds the Alexander proposal for Selby and Dale consistent with the Camprehensive Plan of the��City of St. Paul with the following conditions: - z 1) The developer seek a greater mix of retail tenants which add to the variety of goods and services, not duplicate them, particularly convenience groceries which already exist in the neighborhood. 2) A higher equ�ty contribution be considered in the final package. 3) Structures placed on both corners be built with zero setbacks to Selby and Dale Streets and be at least 2 stories in height. 4) That the developer be encouraged to apply for a variance of the zoning code parking requirements as outlined in the Distriet 8 . Element of the Comprehensive Plan. moved by VanHoef ��(�n(,�d �/ Horak ' - . in favor Voice Vote in Majo�rity � � , agatit'1St= r ',,4 �s_ 98 � CITY OP` S.AIN'^ P.A�UL �, - ��;�� OF'FICE OF THE CITY COIINCZL �!i!.�..n�c.� - D a t e : July 8., 1985 COMM (TTEE RE PORT TO = SQ�nt PQUI Cify Councit F R � M = C o rn m if r e� Q h C i ty Deve 1 opment ana Transportat i on CHAIR Wi 1 1 iam L. Wi 15on 1 . Resolution authorizing an agreement between th� City and th� kiverfront Redeveioprnent Corp. which wili authorize PED to provicte accounting, auditing and other financial administration services to the Redevelopment Corp. (Committee r-ecommends approval ) 2. f�esc�lu�tion authorizing issuance of Port Authority tax exempt mortgage note in the amoun�t of �7U0,000 to finance the acquisition and renabilitation of the old Van Waters anr� Rogers building at 23i3 Wycliff--� in St. Paul by Update Co. (Committee recommends approval - Jim Nart will review for possible amendment before Council meeting) 3• �el by�:i e l,t0!At;>• (Comm i ttee recommenr�s approva 1 ) 4. Lease� agreement with Jebco t'roperties for space on th� ninth floor of the Commerce B�ilding. (Committee recommends approval with an amendment directing the Mayor to appoint someone to do a long range space s�tudy �nd report back to the committee . in three months. ) CTT��I-I- SEVENTH FLOOR SAINT PAUL, MINNESOTA SSI02 ��„ w, . , .