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84-1615 WH17E - CITV CLERK PINK - FINANCE G I TY OF SA I NT PAU L Council /�`�' CANARV - DEPARTMENT BLUE - MAYOR � Flle N�O. � � � ' Cou c 'l Resolution Presented By '�Referre To �l l�� Committee: Date 1(�b��"�' Out of Committee By Date [�'HEREAS: 1. On October 23, 1934 the Port Authority of the City of Saint Paul adopted Resoluton T1o. 2364 giving preliminary approval to the issuance of taxable revenue bonds in the initia.l principal amount of $1,750,U00 to finance the construction of approximately 30,OOU square feet of net rentable space in the Health Club by I�ealth Club Partners, AHW Corporation General Partners, in Energy The bonds will be underwritten by Miller t� Schroecier t•;un.icipals, Tnc. 2. Laws of 1'linnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Port Authority of the City of Saint Paul, shall be issued only with the consent of the City Council o.f. the City of Saint Paul, by resolution adopted in accordance with law; 3. The Port Authority of the City vf Saint Paul has rec�uested that the City Council give its requisite consent pursuant to said law to facilitate the issuance of said revenue bonds by the Port Authority of the City of Saint Paul, subject to final approval of the details of said issue by the Port Authority of the City of Saint Paul. 1 RESOLVED, by the City Council of the City of Saint Paul, that in accordance with ' Laws of Minnesota 1976, the City Council hereby consents to the issuan.ce of the aforesaid revenue bonds for the nurposes described in the aforesaid Port Authority F�esc�lution No. 2364 the exact details of which, incluciin�, but not limited to, provisions relating to maturities, interest rates, discount, redemption, and for the issuance of. additional bonds are to be determined by the Part Autb.ority, pursuant to resolution adopted by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including, refunciing bonds) by the Port Authority, found by the Port Authority to be ne.cessary for carrying out the purposes for which the aforesaic� bonds are issued. COU[VCILMEfV Requested by Department of: Yeas Nays � -��soNN�J � Drew In Favor Masanz Nicosia � -� � � ' Scheibel __ Against BY ` ' � '� �, Tedesco YYiFsvrr Adopted by Council: Date NOV 2 9 1984 Form Approved by City Attorney "� �_. Certified a unc' Se y By ��.�d�ti`' "'� - G �"'T� By, 1d4��$� , .. � � �lppro by 14avor: D t _ Ap by Mayor for Submi ' n o Council By B PU6115fiED U L C �; 1984 9 ^ ry s �� T* ��F;{'i�� f . , 'C, . :� t�� ? .:� � �, F S;� � � � � . �p o �� ` .�e: y�A�'�V �� ; x Y � �Yi t �� '" � i �s.. �—�"�`�`�3 �; �, � � ¥ � �. Hw � f, �y r � M .� �' �� i� #t � ; � �u� �� t � � ��ye x�'� t:� � r�r - " ' . � ., . ' .. i � �� ,�C�. : •,� s� � ,a+ �. 4 Q y; � t �' x� 1 �.� j � � Y•:��, 37' 0 / Yt t" ,-�� .i t� t�� - � � � � ..€� . � � �f �` at� �f � .�4 � :t'� �"t� f t � �'. I . ��R�; ` y � � � '` } � �, r� z � � r� t�, � �',�:�� E�` 1�� z'k r . �.. ` ' � � �T:�� t qz��fi '"` c s':` � ; . � z�� r � � �. � . ', t . � , � �.. � : : . .: E � �� y � - � ', . �. 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'��'�+� �3; `g� jc � `l� �� #F�.�ii��i�f� ��A�� •��• �� k�� 3ry��r t4 � }:r,i."'" �..�w�.,.+ : €: � �: 7?��s� "� Y��.. .#� �d�tis�tnee At'��t�f? ' ;' �, ��} .s'�:�;,.... ,:«�:,.--_ °}�`: � ''` - , � �� V`�'��1T: i�� '��, � � �� _. .`` . : � .. , � � ., x t�� T �.:�. � � `3 y f fii�`�lt�v+��;,fi-��► �'�'� �� ` ��_�y. ,..- _ � , �� , _. _ x_ . »�. __ . . . , _ _ , � , � � . _ . ��i� �s� � Resolution No.o�(o y RESOLUTION OF THE PORT AUTHORITY OF THE CITY OF SAINT PAUL WHEREAS, the purpose of Chapter 474, Minnesota Statutes, known as the Minnesota Municipal Industrial Develop- ment Act (hereinafter calle,d "Act" ) as found and 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 development of existing areas of blight, marginal land and persistent unemployment; and WHEREAS, factors necessitating the active promotion and development of economically sour�d 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 WHEREAS, The Port Authority of the City of Saint Paul • (the "Authority" ) has received from Health Club Partners (hereinafter referred to as "Company" ) a request that the Authority issue its taxable revenue bonds (which may be in the form of a single note) to finance the renovation of a portion of the existing Cruciform Building into an approximately 30,000 square foot health club facility (hereinafter collectively called the "Project" ) at Energy Park in the City of St. Paul, all as is more fully described in the staff report on file; and WHEREAS, the Authority desires to facilitate the selective development of the community, to retain and improve its tax base and to help it provide the range of services and employment opportunities required by its population, and said Project will assist the City in achieving that objective. 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 r��l�i� WHEREAS, the Project to be financed by revenue bonds will result in substantial employment opportunities in the Project; WHEREAS, the Authority has been advised by repre- sentatives of the Company that conventional, commercial financing to pay the capital cost of the Project is available 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 Company has also advised this Authority that but for revenue bond financing, and its resulting low borrowing cost, the Project would not be undertaken; WHEREAS, Miller & Schroeder Municipals, Inc. (the "Underwriter" ) has made a proposal in an agreement (the "Underwriting Agreement" ) relating to the purchase of the revenue bonds to be issued to finance the Project; 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 hearing on the proposal of the Company that the Authority finance 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 recommendations contained in the Authority' s staff inemorandum to the Commissioners were reviewed, and all persons who appeared at the hearing were given an opportunity to express their views with respect to the proposal. NOW, THEREFORE, BE IT RESOLVED by the Commissioners 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 Company would not undertake 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 • �. �: ��/l�r�� 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 employment 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 financing 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 documents necessary to evidence and effect the financing of the Project and the issuance of the revenue bonds, the Project is hereby approved and authorized and the issuance of taxable revenue bonds of the Authority in an amount not to exceed approximately $�, 750,000 (other than such additional revenue bonds as are needed to complete the Project) is authorized to finance the costs� of the Project and the recommendations of the Authority's staff, as set forth in the staff inemorandum to the Commissioners 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 above described Project to the Commissioner of Energy and Economic Development, requesting his approval, and other officers, employees and agents of the AUTHORITY are hereby authorized to provide the Commissioner 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 construction and financing of the Project and a form of the Underwriting Agreement. The form of said Agreements have been examined by the Commissioners. It is the purpose of said Agreements to evidence the commitment of the parties and their intentions with respect to the proposed Project in order that the Company may proceed without delay with the commencement of the acquisition, installation and construction of the Project with 3 , ; � �� -i�� , the assurance that there has been sufficient "official action" under Section 103(b) of the Internal Revenue Code of 1954, as amended, to allow for the issuance of industrial revenue bonds (including, if deemed appropriate, any interim note or notes to provide temporary financing thereof) to finance the entire cost of the Project upon agreement being reached as to the ultimate details of the Project and its financing. Said Agreements are hereby approved, and the President and Secretary of the Authority are hereby authorized and directed to execute said Agreements. 5. Upon execution of the Preliminary Agreement by the Company, 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 lease and other documents necessary to the adoption by the Authority of its final bond resolution and the issuance and delivery of the revenue bonds; provided that the President (or Vice-President if the President is absent) and the Secretary (or Assistant Secretary if the Secretary is absent) of the Authority, or if either of such officers (and his alternative) are absent, the Treasurer of the Authority in lieu of such absent officers, are hereby authorized in accordance with the provisions of Minnesota Statutes, Section• 475.06, ' Subdivision 1, to accept a final offer of the Underwriters made by the Underwriters to purchase sacid bonds and to execute an underwriting agreement setting forth such offer on behalf of the Authority. Such acceptance shall bind the Underwriters to said offer but shall be subject to approval and ratification by the Port Authority in a formal supplemental bond resolution to be adopted prior to the delivery of said revenue bonds. 6. The revenue bonds (including any interim note or notes) and interest thereon shall not constitute 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 pawers 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. 7. In order to facilitate completion of the revenue bond financing herein contemplated, the City Council is hereby requested to consent, pursuant to Laws of Minnesota, 1976, Chapter 234, to the issuance of the revenue bonds (including 4 . . �� i�r-� � 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 Executive 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 Project and in preparing a draft of the proposed application to the Commissioner 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 afte= the publication of notice of the hearing, are in all respects ratified and confirmed. Adopted October 23, 1984 • Attest President The Port Authority of the City � of Saint Paul Secretary 5 R O R T . �. �`��-��o�s � AUTHORITY � OF THE CITY OF ST. PAUL Memora�dunt TO: Board of Commissioners �AT� Oct. 19, 1984 FROM: E. A. u SUBJECT: PL'BLIC HEARING - PRELIMIIv'ARY AND iJNDERWRITING AGREEMENT - $4,500,000 REVENtTE BOND ISSUE - ATRIUM OFFICE PAR.TNERS, AHW CORPORATION GENERAL PARTI�E.RS - E1�TERGY PARK RESOLUTION N0. 2363 PRELIMINARY AND ONDERWRITING AGREEMF:NT - $1-,�50_,_0.00 TAXABLE BOND ISSUE - HEALTH CLUB PARTT?ERS, AHL7 CORPORATION GENFRAL PARTIvTERS - ENERGY PARK RESOLUTION N0. 2364 The historic district in Energy Park contains a building commonly referred to as the Cruciform Building. It is proposed by AHW Corporation that tb.is facility be converted to an office building containing SI,000 square feet of net rentable office space and approximately 30,000 square feet of net rentable space in the Health Club which would include additional construction to incorporate the swimming pool. Each portion of the building will be separately described and separately owned and financed but are in essence one structure within the historic district. The AHW Corporation is a subsidiary of the Amherst H. Wilder Foundation with whom the Port Authority entered into a land sale and development agreement in the early stages of the Energy Park planning. AHW has to date constructed 35h housing units and will be constructing a total of 741 units. They have remodeled a portion of the Shop building commonly called Bandana West which is - leased to SHARE Inc. , and are the developers of Bandana Square East which is the East Shop building which is being developed in two phases. Phase 1 is currently 68X leased and Phase 2 which is scheduled to open in December 19R4 is 49Y leased. The activity in Energy Park in office facilities owned by others has resulted in current occupancy of the Energy Technology Center, which is 240,0(10 sauare feet of off ice space, of approximately 85y, and the Energy Park Business Center comprised of 150,000 square feet of office/warehouse/industrial is 90y leased. AHW in its proposal to us have indicated they have prefinancing commitments in the Atrium Office building of 22,000 square feet. , , � �`�i�i� Board of Commissioners Oct. 19, 1984 Page -2- The project will be syndicated to take advantage of the historic credits. Financing in addition to the proceeds of the tax exempt bond issue of $4,500,000 will involve approximately 52,045,000 in syndication proceeds. The Iron Horse Club which will be financed with taxable bonds is leased to Club Corporation of America, who will make all of the necessary facility improvements with working capital derived from other sources. AHW will be responsible as the master lease guarantor for the taxable bonds. The two bond issues will be made up as follows: Atrium Office Building Construction $ 3,305,725 Reserve 515,525 Capitalized Interest - 12 months 483,750 Expenses 60,000 Underwriting 135,000 $ 4,500,000 Heal.th Club Partners Construction $ 1,189,437 Reserve 249,937 Capitalized Interest - 12 months 240,625 Expenses 35,000 Underwriting 35,000 $ 1,750,000 In addition to the normal financing costs, the rental from the office building to the Port Authority will be $61,200 per year, and from the Health Club the rental will be $30,000 per year. These costs are in addition to other fees. � Subsequent to the last financing that [he Port Authority authorized for AHW Corporation, we have been provided with a new Arthur Andersen Certified audit which reflects a current net worth of S6,098,263 after a capital contribution by the Wilder Foundation of S5,895,000 subsequent to June 30, 1984 (Note 5). The September 30 balance sheet indicates that Wilder's contributed capital to date equals $16,090,622. The $4.5 million Atrium Office financing would be Resolution 876 with the Debt Service funded in the Reserve. Sinking Funds, interest on the Debt Service, and fiscal and administrative fees would flow to the Port Authority. ; . � � �y I�!` Board of Commissioners Oct. 19, 1984 � Page —3— The Health Club which will be a taxable bond issue will be marketed separately and every effort will be made to place the issue without the 876 guaranty. However, since it is a vital element in the overall income structure of the total project, we are recommending that we be authorized to structure it under $76 with a master lease guaranty from the AHW Corporation in the event marketing the taxable bonds is not possible without the 'A' rating. As a part of this development AHW and the Wilder Foundation are currently remodeling at a cost of S1.2 million the blacksmith shop which will become the Childrens Museum. The estimated tax increment from projects being recommended today is as follows: Est. Market Assessed Estimated Project Cost Value Value Taxes Housing Parking $ 500,000 $ 425,000 $ 182,750 $ 21,565 Parking Ramp 1,500,000 1,275,000 548,750 64,694 Sunwood tnn 5,500,000 4,b75,000 2,010,250 237,210 Childrens Museum 1,200,000 1,020,000 438,600 51,755 Office 4,500,000 3,825,000 1,644,750 194,081 Health Club 1,500,000 1,275,000 548,250 64,694 514,700,000 S12,495,000 $5,372,850 S633,996 and totals when the housing is included an annual flow when taxed of $763,996. By having the Port Authority contribute $500,000 for the housing parking, AHW will do an additional 100 units of housing. The added housing will generate about 5130,000 in taxes per year. Pro�ects not included in this memorandum are covered under separate memorandums. Staff recommends approval of Resolution No. 2363 approving the 87b financing of the Atrium Office Partners and the taxable financing of the Health Club Partners by adoption of Resolution No. 2364 . EAK:j mo . ; ,; ,..; . ��y;-�s�::'�`l,'%� . 0��+1:C.Y'+� 0�� r.l��I7�� CI7.'X CO171C,E]".� ' n(�' ��/.�G' ••.-�� ?:- �;,•;.�yr. -�.1 �� Vi �( �;;� :.:'.r`��:t_�; •� ,• , �;:;�.�\"� .' f j D ct i`e ; November 15, 1984 � ��;.�r�,�--�'; . . ",'.:�.. - CO (V� � IE�'� � �l� E PO � �' �"O = �t�t�ti Pat� l Ce�y Co�.�� . �R � M = C O�'�J j'y��t�'�� a� FINANCE; MANAGEMENT $ PERSONNEL � - � - C H A i R James Scheibel • � _. Approval of minutes from meeting held Novembex 8, 1984�� ? Resolution consenting to �the issuance of Port Au�hoxity Revenue Bonds in the amount of $l,,750,OOQ to finance the construction of approx. 30,000 sq. ft. of net ren�able space in the Health Club b Nealth Club Partners, AHt9 Corp_ General Partners. in Energy Par�. (Port Authority) .�. Resolution consenting to the .issuance a� Port Authority Revenue Bonds in the amount of $13,000,000 to finance the parti cipation equivalent to the amouict oxigin�,j, �Ied to be put into the jVorld Trade Center proj ect by UDAG. (Por� �Authority)'�� >. ResolUtion consenting to the issuance. of Poz-t Authority Revenue Bonds in the a�ount of. $985,OOQ to finance the construction of a 45U stall parking ramp itnmediatel �o€ the Childrens b:useum in St. Paul Energy Park by AHtV Corp. (Pox�t Authority� , � �. Resolution consenting to the issuance of Port Authority Revenue Bonds in the amow�t of $5,500,000 to finance ths construction of up to a 100 room Sum�ood Tnn at the south ha1= of Bandana 19est in St_._,,P�ul Energy Park by AHiV Corp_ and the Brutger Companies. (Pcrt Authority} . �.��U�..,.. ... P.esolution consenting to the issuance of Port Authority Revenue Bonds in the amount of $4,500,000 to finance�the conversion of the Cruciforn Buildin� into a 51,000 sc�uare foot of�ice bui.lding in Enexg Park by Atri.um Office Partners, AI-ItQ Corp_ General Partners. (Port Authority). - �`"-� _ _,� . Reso�ution amending the SaZary Plan and Rates of Compensation Resolution regarding accounting for the earning of fl.oating holidays. (Personnel� -- ' S. Resolution anending the 1984 budget by adding $93 000 to the Financino Plan and Spending Plan for Town Square Park. (Comrr.unifiy Services) �:�' ;. Resolu�ion amending the 1984 budget by adding �26,393 to the Financi � ati ancl Spending Plan £or the Housemovers Deposit Trust Fund. (Co;n.;�unity Services) � G. Discussien of a resolution �rom the �-Iuman Rights Commission xec�uesting tliat the City Cot��c� reconsider action on the Human Ri.b�ts Dept. budge� and ather �e-d�*��Llman Righ�_ �.. 11. f:eso2ution granting prel.iminary approval £or issuance of �eneral Obligatzon Bonds and T�x Anticipation Certificates in 1985 £or the pux-pose o:f ftznding the C�.pital Ir,pr�j,z r.:�nt Budget fox 1985, of fundino the Z'fater Pollution Abate�nent Program, of fundireg : redevelopment project activities, and of ineeting general fund cash flo�a req�irements_ � � ��.:s i�ITY H:�LL . S�VENT�I 1 LOOIL SAINT PAUL, Df111hESOT�1 55J03 ��.�� _ _ ._.. _----� . .__- ---- - . .----�• - --� -- � • - - _ _._. _ --.�._____---�-w---------�-