278222 WHITE - CITY CLERK
PtNK - FINANCE
F�J• (�('�
CANARY - DEPARTMENT G I T Y O F S A I N T PA U L COUflC1I � ! J�J
BLUE - MAYOR �� F112 N O. ���� r �'+�"
Cou cil Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
WHEREAS:
1 . On February 4, 1982, the Port Authority of the City of Saint Paul adopted Resolution
No. 1977 giving preliminary approval to the issuance of approximately $7,960,000 in revenue
bonds to finance �he construction of 42,000 square feet of retail space and 280 parking stalls
in the Block 40 Development by Mears Park East Associates.
2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds
authorized by the Port Authority of the City of Saint Paul , shall be issued only with the
consent of the City Council of the City of Saint Paul , by resolution adopted in accordance
with law;
3. The Port Authority of the City of Saint Paul has requested that the City Council
give i�s requisite consent pursuant to said law to facilitate the issuance of said revenue
bonds by the Port Authority of the City of Saint Paul, subject to final approval of the
details of said issue by the Port Authority of the City of Saint Paul .
RESOLVED, by the City Council of the City of Saint Pau1 , that in accordance with Laws
of Minnesota 1976, Chapter 234, "the City Counci1 hereby consents to the issuance of the
aforesaid revenue bonds for the purposes described in the aforesaid Port.Authority Resolution
No. 1977, the ex�ct details of which, including, but not limited to, provis�ons relating to
maturities, interest rates, discount, redemption, and for the issuance of additional bonds
are to be determined by the Port Authority, pursuant to resolution adopted by the Port
Authority, and the City Council hereby authorizes the issuance of any additional bonds
(including refunding bonds) by the Port Authority, found by the Port Authority to be neces-
sary for carrying out the purposes for which the aforesaid bonds are issued.
COUNCILMEN
Yeas Nays � Requestgd b e art n f:
Hunt
���r,e In Favor
Maddox
1M�O�ahou..
snoweite► --�-- Against BY
Tedesco
wlson
C 9 ��2 Form Approved by City Attorney �
Adopted by Council: Date FC� �
.��--`� � "
Certified •Ssed by Counci ec BY
r
y C
App v b :Navor. Date FE�i O � App v d by Mayor for i to Council
BY - — BY
,, �J LISHED FEB 2 0 1982
9
�~����3
Resolution No. 1977
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 called "Act" ) as found and determined by
the legislature is to promote the welfare of the state by the
active a�traction 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 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, on April 21 , 1981 the Authority adopted
Resolution Nos. 1801, 1803 and 1805, ( i) giving its preliminary
approval to the issuance of it5 revenue bonds in the
approximate principal amount of up to $10, 000,000 for each of
said resolutions to finance the construction of an office
building facility, a 106,667 square foot retail facility and a
650 stall parking ramp facility, respectively, in the City of
Saint Paul (the "Initial Projects" ) and (ii) authorizing the
staff of the Authority to complete negotiations with the Mears
Park Office Associates, the I�lears Park Retail Associates and
the i�ears Park Ramp Associates, respectively (the "Initial
Companies" ) , to resolve the issues necessary to the preparation
of the respective revenue agreements and other documents
required for the issuance and delivery of tre respective
revenue bonds needed to finance the respective Initial
Projects; and said Initial Projects were approved by the
Commissioner of Securities pursuant to the Act; and
� � � � �!����,�
WHEREAS, The Port Authority of t'ne City of Saint Paul
(the "Authority") has received from �Sears Park East Limited
Partnership, a Minnesota limited �artnership (hereinafter
referred to as "Company") a request that the Authority amend
said Resolution No. 1803 by modifying the name of the corapany
therein named as developer of the project approved therein from
"Mears Park Retail Associates" to "Mears Park East Limited
Partnership", by modifying the general description of the
project therein described from a 106,667 square foot retail
facility to an approximately 42,000 square foot
retail/commercial and approximately 380 stall parking ramp and
related equipment facility (hereinafter collectively called the
"Project") , and by modifying the authorized principal amount of
the issue therein authorized from the approximate principal
amount of up to $10,000,000 to the approximate principal amount
of up to $7,960,000; and that the Authority approve and
' autnorize said modifications; and
WHEREAS, the Authority has received from �Iears Park
Central Limited Partnership a request that the Authority amend
said Resolution No. 1805 by inodifying the name of the company
therein named as developer of the project approved therein from
"Mears Park �Ramp Associates" to "Mears Park Central Limited
Partnership", by modifying the general description of the
project therein described from a 650 stall parking ramp and
related equipment facility to an approximately 25,320 square
- foot retail/com�ercial and approximately 270 stall parking ramp
and related equipment f�acility, and by modifying the authorized
principal amount of the issue therein authorized from the
approximate principal al-nount of up to $10,000, 000 to the
approximate principal amount of up to $6,440,000, and that the
Authority approve and authorize said modifications; and
WHEREAS, the Authority has received £ron Mears Park
West Limited Partnership a request that the Authority amend
said Resolution No. 1801 by modifying the nane of the company
therein named as developer of the project approved therein frorrt
"Mears Park Office Associates" to "Mears Park V7est. Limited
Partnership", by modifying the general description of the
project therein described from an office building to an
approximately 60,000 square foot office and theater cinema
facility and related facilities, and by modifying the .
authorized principal amount of the issue therein authorized
fron the approximate principal amount of up to $10,000,000 to
the approximate principal amount of up to $6,535,000 and that
the Authority approve and authorize said modifications; and
. . � 7 �� � �
�VHEREAS, the Authority desires to facilitate the
selective develop;nent 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 of Saint Paul (the "City" ) and help maintain a positive
relationship between assessed valuation and debt and enhance
the image and reputation of the City; and
WHEREAS, the Project to be financed by revenue bonds
will result in substantial employment opportunities in the
Project; and
WFiEREAS, 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 tnis
Authority that with the aid of revenue bond financing, and its
resulting low borrowing cost, the Project is economi.cally more
feasible; a�d
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; and
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 tlle 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, THEREFOtZE, J3E IT RESOLVED by the Co_mmissioners
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, that the availability of the
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 comnerce and assist in tYie
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 employ,nent opportunities required by its
. population, and will help to prevent the move�-aent 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. On the basis of information available to the
Authority it appears, and the Authority hereUy finds, that the
Project, the project authorized by Resolution No. 1801, with
the aforementioned modifications, and the project authorized by
Resolution No. 1805, with the aforementioned modifications, in
the aggregate constitute development which is of the same sub-
stantial nature as the development comprised o� tne aggregate
of the project authorized by Resolution No. 1801, the project
authorized by Resolution No. 1803, and the project authorized
by Resolution No. 1805.
3 . Resolution No. 1803, adopted April 21, 1981, is
hereby amended in part as follows:
(a) Substitute "Mears Park East Limited
Partnership" in lieu of "Mears Park. Retail
Associates" in the third T��IYiereas clause thereof;
(b) Substitute "an approximately 42,000
square foot retail/commercial and approximately
380 stall parking ramp and related equipment
facility" in lieu of "facilities for lOG,667
square feet of retail space" in the third V�'ci�reas
clause thereof; and
• . . ��'C�;�`�
. _,�
(c) Substitute "$7,960,00�" in lieu of
"$10,000,000" in the second numbered paragraph
thereof.
4. The Authority hereby approves and authorizes the
substitution of references to "�Sears Park East Limited
Partnership" for references to "Mears Park Retail Associates"
and approves and authorizes the assunption by the Company of
the rights and obligation of Mears Park Retail Associates under
said Resolution No. 1803.
5. Resolutior� No. 1803, as anended in part herein,
shall remain in full force and effect.
6. 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 agreeFU�nt as defined in
. the Act, and other documents necessary to evidence and effect
the financing of the Project and the issuanee of the revenue
bonds, the Project, as modified, is hereby approved and
authorized and the issuance of revenue bonds orf the Authority
in an amount not to exceed approximately $7,960,000 (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 t'ne 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.
7. In accordance with Sub3ivision 7a of Section
474.01, Minnesota Statutes, the E�:ecutivz Vice-Prssident of the
AUTHORITY is hereby authorized and directed to submit the
proposal for the above described Project ta the Commissioner of
Energy, Planning and Development, requesti�g 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.
8. There has heretofore been filed with the
Authority a form of Agreement of Undertaking between the
Authority, the Underwriter, Mears Park Development Company,
Mears Park Central Limited Partnership, t•Sears Par}; West Limited
Partnership and Company (the "Agreeraent Qf Undertaking" ) ,
relating to the proposed construction and financing of the
Project. The form of said Agreement has been e�amined by the
Commissioners. It is the purpose of said Agreement (including
the agreements referred to therein) to evidence the cor�u�nitment
< < � � ������
�-.�� .,,
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 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 (incTuding, 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 Agreenent is hereby approved,
and the President and Secretary of the Authority are hereb�
authorized and directed to execute said Agreement.
9. 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 an3 credit
nor the taxing powers oi the Authority or the City is pledged
for the payment of the bonds (and interim note or notes) or
interest thereon.
10. 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
ap�lication to the Commissioner of 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 � ��c�t-�..���� � �i,Y?� _
. � ..� � {� .� �J
Attest
Presid t
The P rt Authority of the �ity
of Saint Paul
Secretary
, �r
� � '
i ^y
r....._.- �i �y . f ' � . . . ..�� �(� ..�.a!i� ��
rrv n .�
�' •
. OM Ol : 12/1915
- Re . : 9/8/76
EXPLANATION Of ADMINISTRATIVE ORDERS,
RESOLUTIONS, AND �RDINANGES
t
Date: February 5, 1982 � �E EI�p
.
T0: MAYOR RGE LATIMER FEB — �
FR: E. A. a , St. Paul Authority �IAAYO S OFFiCE
RE: MEARS PARK EAST ASSOCIATES
� $7,960,000 REVENUE BOND ISSUE
i _
ACTION REQUESTED•
'; In accordance with the Laws of Minnesota, Chapter 234, it is requested th t the City Council ,
by.Resolution, a draft copy of whi�h is attached hereto, approve the issu nce of approximately
$7,96U,000 in revenue bonds to finance the construction of 42,000 square ee� of re�ail space
and 280 parking stalls in the Block 40 development by Mears Park East Ass cia�t�s.
�
PtiRPOSE AND RATIONALE FOR THIS ACTION:
The purpose of the bond issue is to construct 42,OQO square feet of retail p�ce
and 280 parking stalls in the Block 40 development by Mears Park East Assoc'ates. ' The Block
40 development project also i_ncorporates a City tax increment contribution f $4,425,823
� over a period camnencing in 1984 and ending in 1988.
ATTACHMENtS; �
Staff Memorandt�n
Draft City Council Resolution
Port Authority Resolution No. 1977
cc: R. �Thoope, ,Manpower Services � �
� P �� R T
� � UTHORITY
OF THE CITY OF 5T. PAUL .
Memorcndum
TO: Board of Commissioners DATE: �an. 21 , 1982
Nieeting January 26, 1982
FROM: E. A. Kraut
SUBJEG"f: MEARS PARK EAST ASSOCIATES
MEARS PARK CENTRAL ASSOCIATES
MEARS PARK WEST ASSOCIATES
AMENDING BLOCK 40 BOND ISSUES MAKE-UP AND PARTNERSHIP EQUITY AND
TAX INCREMENT PARTICIPATION
� RESOLUTION N0. 1973
The attached details of the financing program outline each of the segments
as they are presently organized under the Mears Park Associates proposal .
The economic data and the independent feasibility studies have also been
provided as required by the Port Authority' s authorizing resolution on the
preliminary agreements and, thus, are submitted for your perusal . The make-up
of the bond issues and the equity participation are outlined on page 4.
The basic restructuring reduces �he scale of the project significantly and
takes into consideration a larger equity participation on the part of the
partnerships. It also incorporates a City tax increment contribution of
$4,425,823 over a period commencing in 1984 and ending in 1988. The bond
issues will be as follows:
MEARS PARK EAST
Retail 42,000 sq. ft.
Parking 280 stalls
Total Bond $7,960,000
Reserve - Equity �1 ,241 ,500 �
MEARS PARK CENTRAL
Retail 25,320 sq. ft.
Parking 270 stalls
Total Bond $6,440,000
Reserve - Letter of Credit $909,725
MEARS PARK WEST
Office 60,000 sq. ft.
Cinema 18,000 sq. ft.
Total Bond �6,535,000
Reserve-Letter of Credit $923,000
. �
� ' ������ .
� Board of Commissioners
Jan. 21 , 1982
Page -2- �
Originally the Commission approved bond issues totaling $30,000,000. These
now total $20,936,000. The direct equity participation in cash or letters of
credit has been substantially increased. The following would be the cost,
source of funds, and equity contribution on each of the projects:
MEARS PARK MEARS PARK MEARS PARK
EAST CENTRAL WEST
Bond Total $7,960,000 $6,440,000 $6,535,000
Construction Proceeds 5,522,000 4,432,350 4,550,150
Capitalized Interest - 2,149,200 1 ,764,450 1 ,738,800
24 months 13.5%
Bond Counsel 50,000 50,000 50,000
� Underw riter' s Fee - 3 238,800 193,200 196,050
points
Reserves:
Equity 1 ,124,150
Letter of Credit 909,725* 923,000**
Total Development Cost 9,960,370 7,956,606 8,910,513
Ratio to Debt 2.24 2,26 2,04
Equity
UDAG ] ,776,000 1 ,040,000 1 ,984,000
LRC 740,000 600,000 660,000
Equity 1 ,050,340 1 ,006,547 818,962
Arbitrage (construction 872,030 877,709 897,401
proceeds
TOTAL $4,�38,370 $3,524,256 $4,360,363
* Replaced at the end of the 5th year by interest zarned from reserve f rom
East' s partnership reserve.
** Replaced at the end of the 5th yea�� by interest from syndication payment.
The principal changes in addition to the downsizing of the various facilities
is that the parking facility does not now stand alone but becomes an integral
part of the other facilities. The company will also be acquiring the Mears
building (now Cochrane-Bresnahan) for cash and demolishing the building so
that the parking garage can encompass the entire block, and will reconstruct
the entire foundation to hold an additional facility atop that space which
will not be financed by the Port Authority.
. �� ������
. , .
Board of Commissioners
Jan. 21 , 1982 _
Page -3-
In addition to these changes, the City's tax increment commi.tment for debt
service permits the project to be financed at an average net effective
interest rate of 13. 5%, whereas,' initial feasibility indicated a maximum of
11%.
Because of the changes in the size cf the bond issues and the alteration of
the various components, an additional public hearing under the State statute
for the issuance of bonds is required and has been scheduled for February 4.
No additional public sale hearing is needed because the options that were
originally approved are not being altered.
Staff recommends adoption of Resolution No. 1973 which will have the effect
. of ratifying the restructuring.
In staff`s evaluation we believe that the size, changes and the incorporation
of the parking facility into two of the segments make the project considerably
more viable and we recommend approval of the ratifying resolution.
Because of the UDAG requirements we request this ratification in advance
of the hearing on the 4th so that immediately after the required hearings
we can sell the first issue of the bonds and sequence the bonds a week apart
on the 4th, 9th and 16th of February.
jmo