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279402 WHITE - CITY CLERK PINK - FINANCE COUt1C1I . g,(�� CANARY - DEPARTMENT G I TY OF SA I NT PA U L �jj��?�� BLUE - MAYOR File N O._ __ Cou cil Resolution 4 Presented By • Referred To Committee: Date Out of Committee By Date WHEREAS: 1 . On October 19, 1982, the Port Authority of the City of Saint Paul adopted Reesolution No. 2058 giving preliminary approval to the issuance of appro�imately $2,935,OOO.in revenue bonds to finance the remodeling of the 98-room Capp Towers htotel and the restaurant facilities by Lavearl 's Inc. dba Capp Towers Motel . 2. Laws o� Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Port Authority of the City of Saint Paul , shall be issued only with the consent of the City Council of the City of Saint Paul, by resolution adopted in accordance with law, 3. The Port Authority of the City of Saint Paul has requested tha� the City Council give its requis��e consent pursuant to said law to faci1itate the issuance of said revenuz bonds by the Port Authority of �he City of Saint Paul , subject to fina1 approval of the details of said issue by the Port Authority of the City of Saint Paul . RESOLVED, by the City Council of the City of Saint Paul �-�that in accordance with Laws of Nl�,�,��s�ta]976, Chapter 234.'�he Ci ty Counci 7 hereby consents to the i ssuance of the aforesaid revenue bonds for �he purposes described in the aforesaid PorL Aui.hority Resolu�iion No, 2058, the exact deLails of which,'inc1uding,'but not limited to, provisions relating to maturities;'intzrest rates,'discount,'redemption,'and for the issuance of addi�tional bonds are �o be determined by the Pori Authority'pursuant to resolution adop�ed by -che Port A�a�hority, and the City Covncil hereby authorizes the issuance of any additional bonds (including refunding bonds) by the Port Authority, found by the Por�t Authority ��o b� neces- sary for carrying out the purposes for which the aforesaid bonds are issued. COUNCILMEN Yeas Nays Requestgd by Department of: Hunt Levine In Favor Maddox McMahon � B . showa�ter __ Against Y Tedesco Wilson QCT `Z fj �9a� Form Approved by City Attorney Adopted by Council: Date — �� Certified P•_•s Co cil ret BY — � �o - ao- ga By� _ Ap e by .Nayor: a _ � � O ,�v Appro d ayor for Su ' n to ouncil B � _ � Y �'UBLiSHED N(�V � 1982 .'� � � ��`� Resolution No. ?c�-S.� RESOLUTION OF THE PORT AUTHORITY OF THE CITY OF SAINT PAUL WHEREAS, the purpose of Chapter 474, P�iinnesota Statutes, known as the riinnesota Municipal Industrial Develop- ment Act (hereinafter called "Act" ) as found and dete�-mined 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 sound industry and commerce are the increasing concentration of population in the metropolitan areas and the rapidly rising increase in the amount and cost of governmental services required to meet the needs of the increased population and �.he 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 Lavearl' s Incorporated d/b/a Capp Towers Hotel (hereinafter referred to as "Company" ) a request that the Authority issue its revenue bonds to finance the acquisition and renovation of existing Capp Towers Motel (hereinafter collectiv�ly called the "Project" ) in the City of St. Paul as part of the redevelopment of t'ne block in the City of St. Paul bounded by 9th, Cedar, lOth and Minnesota Streets, 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 an3 reputation of the City; and � � R� �' . �*u'��.��,k- WHEREAS, the Project to be financed Uy revenue bonds will result in substantial employment opportunities in the Project and will further result in increased usage of the "City Walk" parking ramp previously financed through the issuance of revenue bonds by the Authority; 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 with the aid of revenue bond financing, and its resulting low borrowing cost, the Project is economically more feasible; 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 Froject 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 recom�:iendations 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, P�innesota 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 the promotion of tourism in the state of Minnesota within the meaning of Subdivision lb of Section 474.02 of the Act; that the Project furthers the purposes stated in Section 474.01 of the Act, that .the availability of t'ne financing under the Act and willingness of the Authority to furnish such financing will be a substantial inducement to the Company to undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the development of economically sound industry and conunerce and assist in the prevention of the 2 � ' Y • 3�'�� ev M� ��..d �` n... � �_'��- 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 nort 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 revenue bonds of the Authority in an amount not to exceed approximately $2,885,000 (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, Planning and 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 inten�tions 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 the assurance that there has bzen 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 3 I � *� ., w ' 1 . . ��r�� 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 �nd 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 �vith 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 rinal offer of the Underwriters made by the Underwriters to purchase said bonds and to execute an underwriting agreement setting forth sucn offer on behalf of the Authority. Such acceptance s'nall 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 thereo� 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 t'neir general credit or taxing powers and neither t'ne 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 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. 4 �� r�: . 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 o� Energy, Planning and Development, State of Minnesota, for approval of the Project, which has been available for inspection by the public at the office of the Authority from and after the publication of notice of the hearing, are in all respects ratified and confirmed. Adopted October 19, 1982 ,i � ) f /// / , / Attest � � lLJ .j ,� ll ,.� -- � Presrde�it TY}e Pox`t Authority of the City — � ' of Saint Paul ; ,,i �� /�s%�� !�J'l��j/� =i� �i "'�Secretary 5 ! ./ -F � - . � � � � . � . - � �N�,.. -'�''� . - . . .. � . ... � . . �. . . � . . - , ' � � .. . . . � � ��. �� .� .. � OM Ol : 1�i 975 � Rev. : 9/8/76 �- EXPLANATIO.N OF ADMINISTRATIVE ORDERS, - RESOLUTIONS, AND ORDINANCES � Date: October 20, 1982 � �� T0: MAY GEORGE LATIMER FR: • t, St. Paul Port Authority ��,'1��.� OCT�2u1982 RE: LAV ARL'S INC. dba CAPP TQWERS MOTEL $2,885,000 IMDUSTRIRL REVENUE BOND ISSUE MAY`OFcS OFFiC� ACTION REQUESTED: In acco�^dance with the Laws of Minnesota, Chapter 234� it �s requested that the City_Council, by ResoTution, a draft copy of which is attached fiereto, �pprove the issuance of approxima�eiy � $2,885,t�0 in revenue bonds to finance the remod�ling of the 98-room Capp Towers hbtel and restaurant facilities by Lavearl 's Inc. dba Capp Towers Motel . - PURPOSE AND RATIONALf FOR THIS ACTION: � The purpose of the bond issue is to finance the remodeling of the 98-room Capp Towers Motel and the restaurant facilities by Lavearl 's Inc. �dba Capp Towers Motel . The Capp Towers Motel has been owned by Martin Capp and it is �proposed to be acquired by Earl Scott, who has operated. the motel and owned the restaurant facilities for a nunber of years. This deveiopme'rt ` is part af an overall plan by �the Central Presbyterian Church to completely redevelop the block bounded by 9th, Cedar. lOth, and Minnesota Streets, which contains the Hanover building, the Central Presbyterian Church, the Church of St, Louis, and the Capp Towers Motel: The development inc]udes construction of an office building called Association Center Buildinq, a common athletic facility, and a proposed r�sidential condomini�n development and a high rise r�sidential tower and other amenities. ATTACHMENtS: Staff Memorandun Draft City Council Resolution Port Authority Resolution No. 2058 cc: R. Thorpe, Manpower Services �� RT Y AUTHORITY � � a� � �� OF THE CITY OF ST. P/1UL AAemo�andum TO: Board of Commissioners DATE: Oct. 18, 1982 FR01A: E. A. Kraut SUBJECT: LAVEARL'S INC dba CAPP TOWERS MOTEL PUBLIC HEARI�IG - PRELIMINARY AND UNDERWRITING AGREEMENT $2,885,000 INDUSTRIAL REUENUE BOND ISSUE RESOLUTION N0. 2058 PUBLIC SALE HEARING - SALE OF LAND RESOLUTION N0. 2059 1 . THE DEVELOPMENT The Central Presbyterian Church is the originator of a plan to completely redevelop the block bounded by 9th, Cedar, lOth, and Minnesota Streets , currently containing the Hanover building, the Central Presbyterian Church, the Church of St. Louis,� and the Capp Towers Motel . The development plans incorporate the acquisition of the Capp Towers Motel and the sale to Earl Scott, the construction of an office building called Association Center Building, development of a common athletic facility in conjunction with the Capp Towers, and a proposed residential condominium deve1opment and a high rise residential tower and other amenities, such as a day care center and a sufficient amount of open space to create a park- 1 i ke atmosphere. 2. THE CAPP TOWERS The Capp Towers has been owned by Martin Capp and is currently under option to Earl Scott, who has operated the mote1 and the restaurant facilities which he has owned directly for a number of years. Mr. Scott is an experienced hotel man and has two sons also experienced in the hotel operation who are workinq with him in this facility. 3. FINANCING Subsequent to preparation of the initial memorandum on October 15, additional negetiations instituted by staff with Martin Capp have reduced the purchase price of the hotel from $2.5 million to $2.25 million. Therefore, it is proposed �hat the Port Authority finance this project and the remodeling of the restaurant faci1ities by the issuance of a bond issue equal to $2,885,000 comprised as follows : Acquisition $2;250,000 Construction 200,000 Debt Service Reserve 321 ,425 Expenses 27,025 Underwriting 86,550 TOTAL $2,885,000 •r • Board of Commissioners October 18, 1982 Page -2- The Port Authority will recieve fiscal and administrative fees as follows : $1 ,009,75 per month, or $12,117.00 per year, for the first 10 years ; $1 ,2g8.25 per month, or $15 579.00 per year, for the second 10 years; and $1 ,586.75 per month, or $19,041 .00 per year, for the final 10 years. In addition, the Port Authority will also receive interest on the debt service reserve fund. The facility has a current appraisPd value by William Muske of $2,900,000. Negotiations with Mr. Scott have resulted in an aareement whereby he will provide equity in the form of a First hlortqage on a 5.05 acre parcel of land at Highway 110 and Babcock Trail which he owns free and clear. This property was appraised by William Muske at $275,000. In addition, Mr. Scott will assiqn the value of the equipment lease to the debt that he currently owns in the Capp Towers restaurants. The agreement will provide that as any parcels of the property in Dakota County are sold to the Highway Department or others, the proceeds of those sales will be paid directly to the Port Authority and an escrow account will be established to equal the equity requirement until such time as an amount equal to the equity has been retired from the bond issue. Therefore, the transaction from a value and a coverage standpoint would reflect the following figures : Bond issue $2,885,000 Less Land ( 275,000) Less Equipment Equity ( 150,000) Less Debt Service Reserve ( 321 ,425) TOTAL $2,138,575 The Capp Towers is an existing 98-room motel that has operated successfully for many years and its cash flow and pro forma attached hereto indicat? that the project is feasible and that the debt to income ratio makes the project viable. In addition to the equity requirement, the debt service will be personally guaranteed by Earl and Lave;�ne Scott. Other developments in this block that have oc�urred recently which are related to the overall facility is the acquisition by the Century Captial Corporation of Houston, Texas of the Hanover building, which is currently undergoing extensive remodelinq and rehabilitation. The cc�mbined projects wi11 create skyway connections to downtown and will permit ultimate skyway connections to North Wabasha Street. In the plan of development the current parking areas used by Capp Towers wi11 be eliminated for construction. The Port Authority owns the 500 car City Walk Parking Ramp which will become the garage for the hote1 as well as the additional office space to be built. The current proforma on the parking ramp at City Walk would indicate that the Port Authority will be subsidizing that facility in an amount in excess of $200,000 annua1ly until other facilities commencing using the parking ramp. , . . Board of Commissioners October 18, 1982 Paqe -3- 3. UNDERW RITING 41e have obtained an underwriting agreement from Miller and Schroeder Municipals a�d it is proposed that the facility be 1eased for 30 years with the interest rate to be determined at bond sale. It would appear at this point with an expedited closing the interest rate would be 10-1 /2% or less. 4. RECOMMENDATION Staff recommends approval of Resolution No. 2058 and 2059 which approve the prelimi��ary and underwriting agreements and the sale of land. EAK:jmo . � C� . d �� :� PORT AUTHORITY OF THE CITY OF SAINT PAUL � 25 WEST FOURTH STREET • SUITE 1305 • ST, PAUL, MINN, 55102 • PHONE (612) 224-5686 October 20, 1982 Mr. James Bellus Director Planning and Economic Development Department City of St. Paul 14th Floor, City Hall Annex St. Paul , Minnesota 55102 SUBJECT: LAVEARL'S INC. dba CAPP TOWERS MOTEL $2,885,000 REVENUE BOND ISSUE Dear Jim: We submit herewith for your review and referral to the office of the Mayor, City Counci1 , and the1Cit_v Attorney's office details pertaining to the issuance of a $2,885,fl00 revenue bond issue to finance the remodeling of the 98--room Capp Towers Motel and restaurant facilities by Lavearl ' s Inc. dba Capp Towers Motel . In addition to the staff inemorandum, we are attachinq a draft copy of the proposed City Council Resolution and a copy of Port Authority Resolution No. 2058 which authorized the sale of revenue bonds in the amount of $2,885,000. Your expeditious handling of this matter wi11 be appreciated. ' Y.ours truly, `'__.�`—t,��J Euaene A. Kraut General Manager EAK:jmo cc: R. Broeker �OBERT F. SPRAFKA EUGENE A. KRAUT,C.I.D. DONALD G, DUNSHEE, C.I.D. CLIFFORD E. RAMSTED RONALD O. SCHETfI :xECUTNE VICE PRESIDEM GENERAIMANAGERANO DIRECTOR,INDUSTRIAL DEVELOPMENT CHIEF ENGMEER CHIEF ACCOUNTANT h55T.EXEC.ViCE PRESiDENT �OMMISSIONERS GEORGE W. WINTER WILLIAM WILSON ARTHUR N. GOODMAN VICTOR P. REIM JEAN M. WEST CHRIS NICOSIA WILLIAM J. SEIFEf. PRESIDEN7 VICEPRESIDENT SECREfARV iREPSURER C.I.D. Certified Industrial Developer OM O1 : 12/1975 Rev. : 9/8/76 EXPLANATION OF ADMINISTRATIVE ORDERS, RESOLUTIONS, AND ORDINANCES Date: October 20, 1982 T0: MAY GEORGE LATIMER FR: E. t, St. Paul Port Authority . RE: LAV ARL'S INC. dba CAPP TOWERS MOTEL $2,885,000 I�lDUSTRIAL REVENUE BOND ISSUE ACTION REQUESTED: In accordance with the Laws of Minnesota, Chapter 234� it is requested that the City Council , by Resolution, a draft copy of which is attached hereto, approve the issuance of approximately $2,885,000 in revenue bonds to finance the remodeling of the 98�room Capp Towers Motel and restaurant facilities by Lavearl 's Inc. dba Capp Towers Motel . � PURPOSE AND RATIONALE FOR THIS ACTION: The purpose of the bond issue is to finance the remodeling of the 98-room Capp Towers Motel and the restaurant facilities by Lavearl 's Inc. dba Capp Towers Motel . The Capp Towers Motel has been owned by Martin Capp and it is proposed to be acquired by Earl Scott, who has operated. the motel and owned the restaurant facilities for a number of years. This developme �:t is part of an overall plan by �he Central Presbyterian Church to completely redevelop the block bounded by 9th, Cedar, lOth, and Minnesota Streets, which contains the Hanover building, the Central Presbyterian Church, the Church of St. Louis , and the Capp Towers Motel . The development includes construction of an office building called Association Center Building, a common athletic facility, and a proposed r�sidential condominium development and a high rise residential tower and other amenities. ATTACHMENTS: Staff Memorandum Draft City Council Resolution Port Authority Resolution No. 2058 cc: R. Thorpe, Manpower Services � O R T � ��q�� . . � � �.. �_� AUTHORITY � OF THE CITY OF ST. PAUL A�lemorandurn TO: Board of Commissioners DATE: Oct. 18, 1982 FRO�d: E. A. Kr a ut SUBJEC7: LAVEARL'S INC dba CAPP TOWERS MOTEL PUBLIC HEARING - PRELIMINARY AND UNDERWRITING AGREEMENT $2;885,000 INDUSTRIAL REVENUE BOND ISSUE RESOLUTION N0. 2058 PUBLIC SALE HEARING - SALE OF LAND RESOLUTION N0. 2059 1 . THE DEVELOPMENT Th� Central Presbyterian Church is the originator of a plan to completely redevelop the block hounded by 9th, Cedar, lOth, and Minnesota Streets . current1y containing the Hanover building, the Central Presbyterian Church, the Church of St. Louis,� and the Capp Towers Motel . The development plans incorporate the acquisition of the Capp Towers Motel and the sale to Earl Scott, the construction of an office buildinq called Association Center Building, development of a common athletic facility in conjunction with the Capp Towers, and a proposed residential condominium development and a high rise residential tower and other amenities, such as a day care center and a sufficient amount of open space to create a park- li ke atmosphere. 2. THE CAPP TOW ERS The Capp Towers has been owned by Martin Capp and is currently under option to Earl Scott, who has ooerated the motel and the restaurant facilities which he has owned directly for a number of years. Mr. Scott is an experienced hotel man and has two sons also experienced in the hotel operation who are workinq with him in this facility. 3. FINANCING Subsequent to preparation of the initial memorandum on October 15 , additional negotiations instituted by staff with Martin Capp have reduced the purchase price of the hotel from $2.5 million to $2.25 million. Therefore, it is proposed that the Port Authority finance this project and the remodeling of the restaurant facilities by the issuance of a bond issue equal to $2,885,000 comprised as follows : Acquisition $2,250;000 Construction 200,000 Debt Service Reserve 321 ,425 Expenses 27,025 Underwriting 86,550 TOTAL $2,885,000 Board of Commissioners October 18, 1982 Page -2- The Port Authority will recieve fiscal and administrative fees as follows : $1 ,009,75 per month, or $12,117.00 per year, for the first 10 years; $1 ,298.25 per month, or $15 579.00 per year, for the second 10 years; and $1 ,586.75 per month, or $19,041 .00 per year, for the final 10 years. In addition, the Port Authority will also receive interest on the debt service reserve fund. The facility has a current apprais?d value by William Muske of $2,900,000. Negotiations with Mr. Scott have resulted in an aareement whereby he will provide equity in the form of a First hlortqage on a 5.05 acre parcel of land at Highway 110 and Babcock Trail which he owns free and clear. This property was appraised by William Muske at $275,000. In addition, Mr. Scott will assian the value of the equipment lease to the debt that he currently owns in the Capp Towers restaurants. The agreement will provide that as any parcels of the property in Dakota County are sold to the Highway Department or others, the proceeds of those sales will be paid directly to the Port Authority and an escrow account will be established to equal the equity requirement until such time as an amount equal to the equity has been retired from the bond issue. Therefore, the transaction from a value and a coveraae standooint would reflect the following figures : Bond issue $2,885,000 Less Land ( 275,000) Less Equipment Equity ( 150,000) Less Debt Service Reserve ( 321 ,425) TOTAL $2,138,575 The Capp Towers is an existinq 98-room motel that has operated successfully for many years and its cash flow and pro forma attached hereto indicat? that the project is feasible and that the debt to income ratio makes the project viable. In addition to the equity requirement, the debt service will be personally guaranteed by Earl and Laver�ne Scott. Other developments in this block that have occurred recently which are related to the overall facility is the acquisition by the Century Captial Corporation of Houston, Texas of the Hanover building, which is currently undergoing extensive remodelinq and rehabilitation. The combined projects wi11 create skyway connections to downtown and will permit ultimate skyway connections to North Wabasha Street. In the plan of development the current parking areas used by Capp Towers will be eliminated for construction. The Port Authority owns the 500 car City Walk Parking Ramp which will become the garage for the hote1 as well as the additional office space to be built. The c�rrent proforma on the parking ramp at City Walk would indicate that the Port Authority will be subsidizing that facility in an amount in excess of $200,000 annually until other facilities commencing using the parking ramp. Board of Commissioners October 18, 1982 Paqe -3- 3. UNDERWRITING bJe have obtained an underwriting agreement from P�iller and Schroeder Municipals a~�d it is proposed that the facilii:y be leased for 30 years with the interest rate to be determined at bond sale. It would appear at this point with an expedited closing the interest ra�e would be 10-1 /2% or less. 4. RECOMMENDATION Staff recommends approval of Resolution No. 2058 and 2059 which approv� the prelimi��ary and underwriting agreements and the sale of land. EAK:jmo - � - � _ _ _ _ - - - _ 7 � ��.2J WHITH - CITV CLERK � PINK - FINANCE n COl1I1C1I CANARY - DEPARTMENT G I T Y O F S A I N T 1 A U L BLUE - MAYOR File N O. Council Resolution Presented By Referred To Committee: Date Out of Committee By Date WHEREAS: 1 . On October 19, "1982, the Port Authority of the City of Saint Paul adopted Reesolution No. 2058 giving preliminary approval to the issuance of appro�imately $2,885,000 in revenue bonds to finance the remodeling of the 98-room Capp Towers hlotel and the restaurant facilities by Lavearl 's Inc. dba Capp Towers Motel . 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Port Authority of the City of Saint Paul , shall be issued only with the consent of the City Counci1 of the City of Saint Paul, 5y resolution adopted in accordance wi th 1 aw; 3. The Port Authority of the City of Saint Pau1 has requested that the City Council give its requis�ite consent pursuant to said law to faci7itate the issuance of said revenuz bonds by the Port Authority of the City of Saint Paul , subject to final approval of the deiails of said issue by the Port Authority of the City of Saint Paul . RESOLVED, by the City Counci"1 of the City of Saint Paul !that in accordance with Laws of Mi�n�sota7976,� Chapter 234,'"�he City Counci7 hereby consents to the issuance of the aforesaid revenue bonds for the purposes described in the aforesaid Port Authority Resolution No, 2058, the exact details of which,'inc"lvding,'but not limited to, provisions relating to maturities�'intzrest rates,'discount, 'redemption;and for the issuance of additional bonds are to be determined by the Pori: Authority,'pursuant to resolution adopted by the Port Authority, and the City Counci1 hereby authorizes the issuance of any additiona1 bonds �including refunding bonds) by the Port Authority, found by the Port Authority �co be neces- sary for carrying out the purposes for which the aforesaid bonds are issued. COU[VCILMEN Requestgd by Depactment of: Yeas Nays Hunt Levine In Favor Maddox McMahon g Showalter _ Against Y — Tedesco Wilson Form Approved by City Attorney Adopted by Councii: Date Certified Passed by Council Secretary BY sy� Approved by :Navor: Date _ Approved by Mayor for Submission to Council WHEREAS, the Project to be financed Uy revenue bonds will result in substantial employment opportunities in the Project and will further result in increas�d usage of the "City Walk" parking ramp previously financed through the issuance of ' revenue bonds by the Authority; 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 t�at tha Pennnmic feasihilitv of_ oneratina the ProieCt would be . ��:'� . vtiaE �. Resolution No. �cks� RESOLUTION OF THE PORT AUTHORITY OF THE CITY OF SAILVT PAUL WHEREAS, the purpose of Chapter 474, P9innesota Statutes, known as the blinnesota Municipal Industrial Develop- ment Act (hereinafter called "Act" ) as found and dete�-mined 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 sound industxy 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 �he need for development of lan3 use - which will provide an adeq�:ate tax base to finance these inereased 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 Lavearl' s Incorporated d/b/a Capp Towers Hotel (hereinafter referred to as "Company" ) a request that the Authority issue its revenue bonds to finance the acquisition and renovation of existing Capp Towers Motel (hereinafter collectively called the "Project" ) in the City of St. Paul as part of the redevelopment of t'ne block in the City of St. Paul bounded by 9th, Cedar, lOth and Minnesota Streets, all as is more fully described in tYie 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 em�loyment ooportunities 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 an3 reputation of the City; and 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 8evelopment 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 necessazy 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 revenue bonds of the Authority in an amount not to exceed approximately $2,885,000 (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 Ener�y, Planning and 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 the assurance that there has b�en 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 3 � - �`��4�A� 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 �.nd directed to execute said Agreements. 5. Upon execution of the Preliminary Agreement by the Company, the staff of tRe 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 neeessary 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 said bonds and to execute an underwriting agreement setting forth sucn 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 for,nal 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 powers and neither the full faith and credit nor the taxing powers of the Authority or the City is pledged for the payment of the bonds (and interim note or notes) or interest thereon. 7. In order to facilitate completion of the revenue bond financing herein contemplated, the City Council is hereby requested to consen�t, pursuant to Laws of Minnesota, 1976, Chapter 234, to the issuance of the revenue bonds (including any interim note or notes) herein contemplated and any additional bands 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. 4 . .� 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 o� Energy, Planning and Development, State of Minnesota, for approval of the Project, which has been available for inspection by the publi.c at the office of the Authority from and after the publication of notice of the hearing, are in all respects ratified and confirmed. Adopted Octo'iler 19, 1982 ,, � ) , /i / / Attest ��1• \L L.'-:,� r�� l J Presrde�'t � TY}e �Po,rt Authority of the City — � of Saint Paul . � ,/ ;� ;� :%/� � ��=-%-�'%si�.. i,, � � --��/ri� "' Secretary 5 „ '� '",C.� �ITY OF S�..IN�` P�1UL ��J�� :' J::� . �� OF'FIC� OF Z FII� CITY COIINCIL E.- ' ��,•` D a t e ; October 21, 1982 �- �.- COMMIT"T � E R E PO RT � TO = Sa�nt Pau I City Councii FROt�J! = Comt�r�iftee oh FINANCE C H A I R James Scheibel 1. Approval of minutes f7rom tfie meetings held October 12 and 14, 198��._,_,� 2, Resolution approving and authorizing the filing of an application for an Urban Development Action Grant for the Energy Park UDAG. ►Jo R��J 'T�KE� 3. Resolution approving and authorizing the filing of an application for an Urban Development Action Grant for the Rossmor Rehabilitation UDAG. 1JO �-�o'J T�F'� 4. Discussion of the reinstatement of ,7oseph Vruno as a fire inspector. 5. Resolution to make necessary adjustments to appropriations for Retiree . Insurance and Employee Insurance, R��K-;'=�3`�.-� � � 6. Resolution to approve the issuance of app roximately $2, 885,000 in revenue bonds to finance the remodeling of the Capp Towers Motel and restaurant facilities. rd�.--�=--�” � . �az�,.�-� 7. Resolution transferring items in the 1982 General Revenue Fund Budget for city-wide data processing, r4�3�--C3-:° - �i��s.�.=a��, ,,,�,_ - —- CITY I-iALL SEVENTH FLOOR SAINT PAUL, Mli`1NESOTA SS102 ..�„ . �c _ ,� . 1 s t_ �(D U O� 2nd �l � — �a 3rd_ �� — 7 -- �.� Adopted�J 6 _8'a : ' Yeas Nays • FLETCHER LEVINE /�p �� MASANZ NICOS IA ��"�� SCHEIBEL , , WILSON . MR. PRESIDENT TIDESCO � , . _ - �. r . . �