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279572 WHITE - CITV CLERK C�unC11 �('�JU ' PINK - FINANCE � CANARV - DEPARTMENT GITY OF SA.INT PAUL 0 BLUE - MAVOR File NO. Co�ncil sQlution Presented By �+� Referred To Committee: Date Out of Committee By Date WHEREAS, the Legislation Committee of the City Council has studied and considered a number of legislative proposals submitted by the Saint Paul Port Authority, and recommends the adoption of the attached goals and policies as part of the City's 1983 Legislative Program; Now, Therefore, Be It RESOLVED, that the Council of the City of Saint Paul does hereby suppa t and adopt the legislative goals and policies attached to this resolution, supported by the Saint Paul Port Authority and to be included in the City' 1953 Legislative Program, for consideration by the 1983 Minnesota Legislat re. COU[VCILMEN Yeas Nays � Requested by Department of: Fletcher � �evine In Favor Masanz Nicosia scheibe� _ __ Against BY — Tedesco Wilson Adopted by Council: Date DEC 1 4 1982 Form Approved by City Attorney Certified Y s e uncil e BY � DEC 17 198Z Approved by Mayor for Submission to Coun il t�pp o e. by Mavor• D e — BY , _ �j — — BY ' fiuRi ieHFD D E C 2 � 1982 ' �,��tJ � '� $c�7�.�'�t�._P_Q�t Author� tv Legislation Intr2c�tl��ion � The Port Authority of Saint Paul was created in 1929 to develop and improve Mississippi River commerce. Tn 1957, because of its success in developing river-oriented industries, the Port Authority was authorized to acquire and develop sites throughout the city and to finance construction with revenue bonds. In 1981, the Port commissioned the Midwest Institute' s Center for Economic Studies to do a study of its impact on the city's economy. The center fot�nd that from 1965 through 1980 the Port was responsible for 63 percent of the city's job growth and 19 percent of all Saint Paul retail sales; 24 percent of the capital expenditures of all Saint Paul manufacturing firms came from Port projects and one of every 10 real estate tax dollars paid by all Saint Paul firms came from Port Authority companies. At the end of 1981, the Port assets had grown from 265 million clollar in 1980 to 413 million dollars, a 64 percent increase. Port projects during 1981 included the Mears Park (Block 40) Development, a 70 million dollar office, retail and parking ramp complex to be complete in 1984 which is at the heart of the Lowertown Redevelopment; the Granada Royale Hometel; the redevelopment of Park Square Court and th Nalpak Building (333-On Sibley) ; the Amhoist Tower and the Hotel Sain Paul . During 1981, the J. L. Sheily Company also committed to building its headquarters in Energy Park. During the 1983 legislative session the Port Authority is requesting several changes in Minnesota Statutes, Chapter 458, which governs Por activities; these have been incorporated into one draft bill. The Port is also requesting that two special bills be passed. This package was approved by the Port Authority Board at its meeting of November 16, 1982 . The three Port Authority bills include: 1) This bill makes four main substantive changes in Minnesota Statutes, Section 458, which governs Port Authority activities. a. The bill amends Minnesata Statutes 458.192, Subdivision 4 to permit the Port Authority to enter into partnership agreements under which it would serve as a limited partne only. The Port Authority wishes to have this ability so that it can create more flexible financing arrangements. The Por , as a limited partner, would not take any tax benefits; th y would go to the general partners. With this ability, the Port Authority could step in to help in cases where the private sector company cannot put the project together al ne because of financial constraints or limitations on industrial revenue bonding capacity. It would have been �...�_ . _, . . _ _ � �� 1�,�, . extremely helpful in the case of Control Data's Energy Technology Center in Energy Park. Because of the partnership provisions under revenue bond regulations, capital expenditures by any major corporation are affected by the 10 million dollar or 20 million dollar UDAG exempti n limitation. Under a partnership between Control Data and the Port Authority, for example, the capital expenditures committed by the parent corporation in Saint Paul during t e affected period would not be counted against the capital expenditures being made on a 50/50 partnership basis in � Energy Park. The general partner would be responsible for servicing the debt on all bonds issued. The Port would serve as a limited partner during the period of the amortization of the bonds. The Port Authority acted as a limited partner in structuring the Amhoist Tower Project, but the law does not currently allow it to remain as a limited partner throughout the amortization period. T'his legislation would provide that flexibility and would make the Port better able to help structure development project and encourage growth in the Port District. b. The bill adds a subdivision to Minnesota Statutes Section 458.19, to permit the Port Authority to operate and maint 'n any public parking facility or other public facility for e purpose of promoting development in a development distric . Often the development of a facility such as a parking ram is crucial to bring about a major project. City Walk and the Radisson Plaza ramp are examples. The Port finances e ramp and becomes responsible for the debt service. It cannot now manage the ramp and having that authority woul make it much easier to protect its investment in the ramp . The ramg at City Walk is of particular concern. That ram was financed for ZGA, Inc., which sublet it to the city which contracts out to an operator to manage it. The Por would like to avoid all these steps and manage it directl , probably by contracting it out itself. Once again, this legislation woulc7 provide additional flexibility for the Port in putting together a variety of development project . It would also improve the Port's ability to protect its investments. c. The bill amends Minnesota Statutes Section 458.194, Subdivision 4, to eliminate the 8 percent maximum interes rate on bonds sold under this section and to permit the s le of bonds at a private sale. It also adds language to clarify that the requirements of Minnesota Statutes 474 not apply when taxable bonds are being sold, rather than tax-free industrial revenue bonds. This would bring Section 458 into conformity with Sectio 474, which has no interest ceiling and permits the priva sale of revenue bonds. The Port Authority is now sellin tax-free revenue bonds under Minnesota Statutes 474. If he { a `7 �� , tax-free bond provisions are limited or even eliminated, th Port will need to use Section 458 and this legislation help to make that possible by permitting the private sale and removing the interest rate limitations. The exemption from 474 requirements for taxable bonds would eliminate the need for state approval and public hearings. If the Port begins selling taxable bonds without the tax-free status, the need tor governmental and citizen involvement in approving the sale is eliminated since no tax exemption, the public subsidy, is involved. d. The bill amends Minnesota Statutes Section 458.195, to permit the Port Authority to sell multiple-project bond issues. Currently, the Port Authority can only sell bonds for a specific project and it needs to know in advance what that project is. Soft costs on small issues, under $400,OOU, ar prohibitive unless the company can provide security in �he form of letters of credit or cash. Many small companies ar unable to meet these requirements. To permit the Port to sell a bond issue and finance a variety of projects, some which may not be known at the time of the sale, from the proceeds, will enable it to encourage small business development in a much more effective fashion. 2) This special bill would make it clear that the Port Authority h the authority not only to own and build a utility but also to operate it within the industrial development district of Saint Paul known as "Energy Park." The bill also permits the Port Authority to extend the services of its highly sophisticated, - computerized Energy Park utility system to serve the energy nee s of users within the entire Port District of the City of Saint Paul and to provide ancillary services such as sensing anc3 monitoring services for supervision of life safety and building security systems within the Port District of the City of Saint Paul . This legislation would make clearly permissible what may alread be legal. It would give the Port Authority maximum flexibility to utilize the new District Heating energy system which is at e heart of the Energy Park Development Project. This system has many capabilities which may not be fully utilized without this type of legislation. The grant of authority is limited to the Energy Park Utility. 3) This bill contains three parts: a. It permits the Port Authority to finance parking and othe facilities for the Civic Center to be operated by or on behalf of the City of Saint Paul . � � Current statutes require that the city hold a referendum before entering into a debt obligation which is basically long-term obligation to pay. This inhibits the city's ability to enter into a financing agreement with the Port Authority which would require the city to make long-term payments resulting from a contractual relation with the Po to do Civic Center repairs. The proposed legislation make that long-term arrangement feasible and legal. b. It permits the Port Authority to participate with other public or private corporations or entities to provide venture capital to small businesses located within the Por District. - - This legislation would allow the Port Authority to take an active role in encouraging small lausiness development whic cannot be supported by more conventional methods. The Por Authority would join with other corporations or entities, both profit and nonprofit, to form a venture capital corporation. The Port would coimnit no more than 10 percen of its annual available net income to acquire and invest i the securities of such venture capital coporations and its participation would not exceed 25 percent of the total fun s providea to the corporation in any one year. Both of thos limitations are contained within the statutory language. This is very much an economic growth stimulation measure d marks a different kind of effort by the Port to encourage development within the Port District. The Port believes that current economy makes these efforts crucial . c. It amends Laws of 1976, Chapter 234, to make sure that th City Council will continue to approve each project for wh ch _ the Port Authority sells bonc3s. If legislation to permit the Port Authority to sell bonds for multiple projects, some of which may not be identifie at the time oE the sale, is passed, this legislation will ensure that the Council continues to have the right to approve each project before the Port provides bond money. (See 1 (d) above) ` ' • �c � � � a7 r '� � , ' A bill for a� act relating to port authorities; authoriz�.ng revenue bond financing of certain -acilities; eli�:�,inating the interest rate li.:�i.t on re.'?nue bonds anu authorizing private sale; c2arifying contractual - and_ operational. authority or port authorities; ar.nending Lii.nnesota Statut°s , Section. �5$ .191, . � Subdivisions Z, 4, and by adding�a �subdivision; - - 458.194, Su'r�divisions 2, 3, anc3 i�y adding a ' subdivision; and 458.195, �y adding a st:bdivision. -- • � 3 Br. IT £i1�,CT�D BY lI3E LEGISL�TURE OF �:E STAT� 0'.�.' 23IiJ:d�SOTA z • ~ =- - Sec. 1. riinnesota Statutes, Secl�:ion 458.�92�, S:ibdivisi n ]�, is amended to rea3: . �� . : . - Subdivision l. In addition to all pocaz�s cor�ferred on uc;i � port authority under section 458.09 to 458.I9 , such port au ori•ty, or any city authorized�by any general. or spec_=I Iaw to exe cise the powers of a port aut�ority, to acco�?ish the purposes set ort�� . - _ in section 458.191, subdivision l, s:zall have such additi.an 1 � powers as provided in su�divisions 2 to �� I6_ _ -� � � �.- - Sec. 2. iiinnesota Statutes, Sec-�ion 458.192, Subdivisi n 4, - . is anended to read: . - , � -- � � - _-- - . �. -:. -. Su�d.. 4. It may contract and be cont�acted with any tter � - . connecte3 caith the pur�ose of indas�ial development wi.thi the � � . powers of the port autiiority herein given , including enteri g into a �artnership agreement with one or rore ot�zer persons und . wlzich the port authority �voul3 servz as a li:nited partner ly. � - Sec. 3. 2•linnesota Statutes , Section 458.192 , is a�r,end � by adding a su�division to read: " ' ti Subd. 16 . It :nay opera�e an3 na.intain any public parkin facility or other pu'�lic faciliry for purposes of promoting _ ------»--------------_�-------------------------------_--____-- development in a development district. - ' , Sec. 4. ±Zinnesota Statutes, Sec tion 45 8.19 4 , Subdiv5.si 2, is amended to read: - �. � Subd. 2. The bonds of each series issued by the port a hority - undzr the provisions of this section shall bear interest at xate � , or rates rrvt e�eee��ng e�e�I°��• ge�ee��- g��- a��t� papa��e 3e.�� r��a��p arzd, shall mature �t such tine or tines within 30 years from the date of issuance; and shall be in suc�z form, w�ether payable to bearer, registrable as to principal , or fully regist=able, a nay �. be determined by tne port autnority. The prov;sions. of sec on 45 8.19 3, subdi.vision 6 �hall apply to all bon3s issued Yie�°e� ele� . �: -_ _ _ . _ _ under this secti.on, and s�ek the bon3s and an� their coupons . --------------------- --- -�__ . _____ - - a��a�tena:�� xe�e�e; w�en payable to bearer, _shall be nego ' ' I.e � instruments. � . �:=: �. _ -.� " -- _- __ �,.� -- - . .- �:�-- - . _ , _ - t � - -- . 4i' ' ..' ' "" Sec. 5. :Iinnesota Statntes, Section 458.194, Subdivisi n 3, . � - is arc�endel to rea3: " . '. _ =- -�. - Sui�d. 3. The sale of st�e� revenue bonds issued by the orfi ��_ � au�hority shall be at public or priva�e sale g��st�a�� e •a� �erz � � ��.-69,- 9� �� zeee��arree •:��rt:�r �!�e g�s°°��es set �artk zrr s etio�s = - -- 4�4.-61 �e �r��--3. &�e� The bonds :,iay be sold in the manner and for the price that the port authority de�ermines to be for t'�e est interest of the port aut;�ority,- k�� r:� s�e:-� sa�e� s�a�� e r� c�e a� ' v:a�. i t s ' l� . ; a p�3ee ss �ee�a as te �eqt��e tne �a1..._:�.. e_ ix�eres� ei°r �E..�°c� � , �eee3�e� the�e�e� at �ere tkan e��::� �e�een� ger arz��; ee��t� ed H�tl°� �e�a��er� �.a �ke abse��e �a��}°1 e� �ke �e��s �:� aeea� r�ee ��tk 9�ar��a�d tab�es e� ber��i �a��es; e::e?��:�g =�'a� snei� ea�_ - • �at3ar� tke a�ta�� e= ai°cp ��t� �a �e gaw� e�e �e�er3��e:� er �� _ bar��s g��e� te ��e��p= S�e?c The bonds may be raade callabl , and�' � if so issued may be refunded. �" � Sec. 6. i2innesota Statut�s, Sec�?on �58.194, is amende by adding a subdivision to read: _ _ Subd. 7. If revenue bonds are to be issued under the p ovisions ----- -- -----�----------------------------------_.._--- ---___-_ - of this section and P2innesota Statutes Cnapter 474, the prov sions _ ---------�--------------------,--------------------�---____--._ ---- of :�iinnesota Statutes, Section 474.01, SubcLv=sions 7a, 7b a d 8 '� and_Sec+ionr474�02, Subdivision_ld, s�all no�z_ply if the ter.est _ ' on the revenue bonds, �.s su'aject to :both stat� �z� federal in ome . ---------------------- -- --�- ----�-------- --------------- -- . - - . . - taxation or if the revenue bond proczeds -are r_o� loaned•b� e port . authority �to a private person through a finar_c_zg lease, 1 � � -----___�-�___---=-- -------- --------------------------------�- -- � agree.ment or o-therwise. � - - - � - " _` ----------- ------ - . itiy=' : - - . . " - - - �- - � . . . r.:;- -. Sec.. 7. Mi.nnesota Statutes; Section 458.195, is a�end �y _ � adding a subdivision to read: � . . - - -� -- � .-.� �, �� Sulad. 8. The groceeds of obligations issued by a port'authority. ----- --• --------�---------- ----------- ----------- -_....,�._ under section 458.194 and temporary Ioans o�tained under th s � . . section in connection therewith may be used to make or pur ase. � --------------------- ---------------- ------- -----,_.�� _ loans for any �ort, industrial or economic facilities which the autnority estinates will require sucn financing, and, for e1 purpose of rlaking o� purc:zasing sucn Ioans , the port author ty sha11 _ . _. _ _ . ._ _ . ._._ _ . _ . . _ _ :_ . .. ___. . .__ .�.._ ��,�=- .� -- . � � - �ave tne power to enter into loan ag=ee�ents and other relate -' agreerients , both before aad after the issuance of tize obligat ons, with such`persons , firms , public or private corporations, fe ral or state agencies, and govern..-►��ntal i!�its and under such ter ' and conditions as theyport authority deems a�propriate; and y � --------------------------------------------------M._,..�___---- _ _ - - governmental unit in the state shall have the power to appl�T � - ------------------------------------------ contract for and receive the loans, and the provisions of i�ii esota Statutes , Chapter 475 shall not app3y to the loans. - '� �_ _ Sec. 8. This act shall taice effect the day following f al ---------_..____------=---------____�_....------- -- - - enactment. - � , _ . -- _ : . - _ _ _ _ _ _ . . _ : ,. _ . . _ . . _ _. _ . _ - . ; . _ - _ � � � • . . _ - . ' . . � - • . . . . - � � , . . . ' ' -' � . , . y ,r . . _ � . -•� • . . __ _ _ - . .__. . _ . :�:�: _ : -__ _ _ - _ _ - . � . , �;-r=.r . . . . - � - - -- _ .- . . - . . . ' . r.�%t . . - . _ _ _ ' _ . .. - . . . _ . . � ..�� . � .� . � - _ - - ._'_ . .. . . �t,i.l�� . .. . " -- -- • � � . � . . . �y .- _ �- � _ "_ _._. '- . . .. . � _- ....- ' a � ' •. .- . � � - ' . �'-' � . � , . " � � � � . �'at�. ' - . . � . -• � . - -�-� _ - . . . .. :. _ " - '.. . ' , . . {� - _ _ .. _ ._ .. . ' .� � .' . . . . . . ' .. _ - .. w� . - _ .. . - - " _ - _- .. . - � . . _ . . - - '- -� - � . i._:_ - � -.." _' _ - ' • ' � . 3.. . _ . . _ _ - --. -- - - - _ . . . �. ._ - = : . �i� - . . .. _- _ -- - . . _ . '� ' . ' - _ - , •.= . � - - _ - �_ . .Y3R. .. . � _ ` _ _ ___-_ _ • r1 - -'-- - _ ' . �- � p7+ • A bill for aa act �� C1 ��.. / relating to the acquisition and operation of district heating .• � . systems by the port authority of • the city of St. Paul and other . powers with resp�:ct thereto � . � . _ - . � - Section 1. Notwithstanding any ather law ta th � - . contrary, the port authority of the city of St. � Paul� m y � acquire, own, construct and operate a district heating � � system or systems to provide he�ting and cooling servi es and other energy services wa.thin the industrial develo ,ent . district in the city of St. Paul known as "Energy Park . Sec. 2. Notwithstanding any other statute to e . contrary, the 'port authority of the citv qf St. Paul y, . . in conjunction with a district heating s_��ter�e, acquire own��-- - construct and operate an energy managerue�� and con�troZ � _ � . system for monitoring and controlling users energy dette nd - � � within the port district of the city of St. Paul as a . � • related ancillary function of the di.strict heating sys em. _ . � � � � � Sec. 3. Notwithstanding any othzr law to the - - - -�- � - - � contrary, the port authority of the city of St_ Paul m y � in conjunction. with a district heating system, acqui.re own, � construct and, operate related ancillary services to an -- •� -� �� energy management and control system incZuding but not - limited to, sensing and monitoring services for superv sion . of fire and �life safety systems and building security -- � systems withi.n the port district of the city of St. Pa 1. • :y � . - `795;� �, . . , - ^ Sec. 4. This act shall becom� effective only a ter approval by the board of the porz authority of the ci of St. Paul and by the governing body of the city of St. aul and upon compliance with the provi.sions af M�nnesota : � Statutes, Section 645.021. - - - - - •� . � . _ - _ _ _ � . . -. - - - - . . - = . . ."-`� _ - . . � _ . -; _ . : _ , ' . ,-. _ - . - _ ' ' _- -_<: . . - _ - - __ . -�:. -_ - _ . . . � . . - _ ._ - _ �� :� � , � A bill for an act ` ° • � � , relating to the acquisition and better- • ment of certain facilities by the city of St. Paul and the port authority of the` city of St. Paul and p�oviding bonding. and other powers wit�;respect thereto; authorizing certain investments by the port authority ot the city of St. Paul; providing for approval of certain projects; . amending La�as 1976, Chapter 234, Sectiort 3P , _ _ . - - Subdivision 1 . �. . _ . _.. ;• ..,�. _ ._ ___ . ' � Secticn l. yotwithstandinq any prcvi.sion of law r ------------------------------------------ ___ __ - charter to the contrary, the port authority of the cit of .� . -------�---.-----------------------------------------..�__ __ St. Paul, under the provisions of i3innesota Statutes r � . ' Sections 458.09 to. 458.1991 and Section 7 to 9 of x.aW o� I2i.nnesota I971, Extra Session, C'riapter 35, may issue r enue � bonds to finance parking faci2ities and facilities for " e . -----------�-------------------------------------�-�__---_ __ . - . civic center complex, or any part thereof, to be opera d by � . --------------�----------------------_---------------- ----- - - or on �ehalf of .the city 'of St. Pa-al, and for such pu se �. - ' - �.�. , ,�. .��.��.�...��^��.�...��.��.�.. �...`�....�.��.��........��...�..��..��.�� .�.rr w�,. � . � -�the port autho'rity of t:ne city of St. Paul ac:ay �enter �xn o a ----------------------------------------------- -------...,_ ,__ . 3ease or ot?ier financing agree;nent with the city r incl i.ng ' _ ' the civic center authority, under the provisions of iit esota ---------- -------- -------------------------_______-�----- _-- Statutes, Section 458.09 to 458_1931 and Section ? to g a� - �. �. . ----------------------- -------------------- ---- --------- -_ - : I,aws of ,�linnesota 1571, � :xtra Session, �apter 35, exce t� • . • . � -. that the interest rate on the revenue �onds is without imit, " . ��w��r�"��rawlrA��^��ti��r��wn��r�� , � • _ an3 e�:cept that _an econo.�i.c 3evelo�inent ai_trict need1� t�3� : .•t : _ ,.. . _ . createc'i under the provisions of *�iinnes_ota Statutes, ^Sec ion - ' _. . . _ ... . . �__,_ . 458^191,_and _the _lease or ot�ier _,finariciny agreement rr�a;ir - . _ �ut i� not required to, neet the re 1uireu�ents of biinnes ta. - � • �Statutes_ Secti:on 474.03(4) ; aad t�ze ci�� c�t .��t.. Pat;I ri - � � - ------ ---------------- --------------- ------------ - '`_ _ without an election and without regarr3 to_�tiie provision of � . . . . . • ' 1 `� �5��- , � ' „ ' riinnesota Statutes, Chapter 475, acquire and operate th � facilities under the lease or other financing arrangeme t -------------------------------------------___----------- - with the port authority and may pledge in whole or in p r t ------------------------------------ - • -- . the revenues derived from the facilities and proceeds o any special tax imposed under the provisions of Article -------------------------------------------------------- XXV, Section l of Laws of Minnesota 1982, Lhapter 523_ = : - Sec. 2. Notwith'standing any provi.sion of law ta he� - ---�------------------------------------ -- contrary, the port authority o•_` the city of St. Paul ma � - ------- -------------------------------------------- � participate with any public or private corporatians, pr it . - or ncn-profit, or other entities, whose purpose is to � --------------- -�------------------------ ---------- p=ovi.de venture capital to small businesses with � facilities located or to be located in the port distric and for such puzpose the port autho'xity may use not to � exceed ten percent of available annual net income to - . acquire or invest in securities of, and enter into finan a.ng arrangements and related agreements ��ith such corporatia s or - � , entities, pzovided that the participation by filze p�rt au ority shall not exceed in any year 25 percent� of the total nt � � � �.�� r�� n��T��w�� • of funds provided for �ventu=e'capital purposes by aII of . -------------------------------------------------------- the participants. As used in this section; the term ' � "small business" shall have the meaning ascxi:bed to it i ' � Minnesota Statutes, Section 545. 455, Subdivision 2_ �- • Sec. 3. Laws 1976, Chapter 234, Section 1, Subdivision l, .is amended to read: Subdivision l. Notwithstanding any provision of law or the charter of the city of St. Paul to the contrary, any issue of revenue bonds authorized by the port authority of the city of St. Paul shall be issued oz� y � . � �- with the consent of the city council of the city of �- . � 95�2 St. Paul by a resolution adopted in accordance with � law. Notwithstanding any proviszon of law or the chart r . ---------------------------------------------=--- - of the city of St. Paul to the contrary, any project �to be financed by the port authority of the city of St. Paul by proceeds of revenue bonds sha31 be financed . . . ��.��.��..��w�r��.��..��^^�.�...��.�...��.��.�.� . � only with the consent of the city council of the city o � �� .��r�.� . . . St. Paul by a resolution adopted in accordance with law - -------- -------------------------------------------�_..-- Sec. 4. This act shall become effective only after approval by the board of the port authority of th city of St. Paul and by the governing body of the city St. Paul and upon compliance with the provisions of Minnesota Statutes, Section 645.021. _�---------- -,- ------------------- , � ti,., � I� lst �� " ' �' 2nd �p� ' p� ' 3rd j� 'v(� Adopted J,� �j� '— �v� Yeas Nays FLETCHER LEVINE �S�Z 2`795;3 NICOSIA . ; U �� SCHEIBEL � Y � WILSON MR. PRESIDENT TIDESCO