278223 WHITE - CITY CLERK � d j�,/��
PINK - FINANCE V dfni
CANARY - DEPARTMENT G I TY O F SA I NT PA U L COUIICII
BLUE - MAYOR File N O.
Counci 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. 1978 giving preliminary approval to the issuance of approximately $6,440,000 in revenue
bonds to finance the construction of 25,320 square feet of retail space and 270 parking stalls
in the Block 40 Development by Mears Park Central 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 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 .
RESOLVED, by the City Council of the City of Saint Paul, that in accordance with Laws
of Minnesota. 1976, Chapter 234, the City Council hereby consents to the issuance of the
aforesaid revenue bonds for the purposes described in the aforesaid Port.Authority Resolution
No. 1978, the exact details of which, including, 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 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 by Dep ment
Hunt
Levine In Favor
Maddox
�°�°� __�_ Against BY
Showalter
Tedesco
�Ison _..
FrD n ��? ' Form Approved by City Attorney
Adopted by Council: Date C� y �
Certified P s e Cou ci S ta
g+� c /
t:�'.'--�
1
App o by :Vlavor: D e Appr by Mayor fo u i'S�sion to Council
g _ Y
�
� B�;SHED FEB 2 0 198�
� � . ?'���`��
Resolution No. 1978
RESOLUTION OF
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
� WHEREAS, the purpose of Chapter 474, Minnesota
Statutes, known as the P4innesota 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 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
taHEREAS, factors necessitating the active promotion
and developrqent of economically sound industry and commerce are
the increasirig 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 emnloyment opportunities for such
population; and
WHFREAS, on April 21, 1981 the Authority adopted
Resolution Nos. 1801, 1803 and 1805, (i) giving its preliminary
approval to the issuance of its 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 sauare foot retail facility and a
650 stall parking ramp facility, respectively, in the City oi
Saint Paul (the "Initial Projects" ) and (ii) authorizing the
staff of the Authority to complete negotiations with the i�iears
Park Office Associates, the I�7ears Park Retail Associates and
the P4ears 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 the respective
revenue bonds needed to finance the respective Initial
Projects; and said Initial Projects were approved by the
Corrunissioner of Securities pursuant to the Act; and
WHEREAS, The Port Authority of the City of Saint Paul
(the "Authority") has received from tdears Park Central Limited
Partnership (hereinafter referred to as "Company") a request
that the Authority amend said Resolution No. 1805 by modifying
the name of the company therein named as developer of the
. project approved therein from "i�iears 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/comnercial and
approximately 270 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
$6,440,000, and that the Authority approve and authorize said
modifications; and
WHEREAS, the Authority has received from i�Iears Park
East Limited Partnership, a Pdinnesota limited partnership a
request that the Authority amend said Resolution No. 1803 by
modifying the name of the company therein named as develoner of
the project approved therein from "P4ears Park Retail
Associates" to "Mears Park East Limited Partnership", by
modifying the general descrintion of the project tllerein
described from a 106,667 square foot retail facility to an
approximately 42,000 square foot retail/commercial and
approximately 380 stall parking ranp and related equipment
facility and by modifying the authorized principal amount of
the issue therein authoYized from the approximate principal
amount of up to $10,000,000 to the approximate princinal amount
of up to $7,960,000; and that the Authority approve and
authorize said modifications; and
�VHEREAS, the Authority has received from idears Park
West Limited Partnership a request that the Authority amend
said Resolution No. 1801 by modifying the name of the conpany
therein named as developer of the project approved therein from
"Mears Park Office Associates" to "�iears Park tiJest Limited
Partnership", by modifying the general description of the
project therein described from an office building to an
approximately 60,000 sguare foot office and theater cinema
facility and related facilities, 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 anproximate principal amount oi up to $6,535,000 and tliat
the Authority approve and authorize said modifications; and
� WHEREAS, the Authority desires to facilitate the
selective development of the com,�unity, to retain and imorove
its tax base and to help it provide the range of services and
employment opportunities required by its popuZatio�, 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 posi�ive
relationship between assessed valu3tion and debt and enhance
the image and reputat.ion of the City; and
WHEREAS, the Project to be financed by revenue bonds
will result in substantial �mployment onportunities in the
Project; and
WfiEREAS, the Authority has been a3vised by repre-
sentatives of the Company that conventional, coi�nercial
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 feasibilitl of o�erating t�ie 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 �ore
feasible; and
WHEREAS, Miller & Schroeder t�iunicinals, Inc. (the
"Underwriter") has made a proposal in an agreement (the
"Underwriting Agreement") relating to the purchase of tlle
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 tlle Project hereinbefore
described by t'ne issuance of its industrial revenue bonds; and
WfiEREAS, the Authority did conduct a public hearing
pursuant to said notice, at w'nich hearing tne recommendations
contained in the Authority' s staff inemorandum to the
Commissionezs were reviewed, and all �ersons who appeared at
the hearing were giv�n an opportunity to express their views
with respect to the proposal.
NOW, THEREFORE, J3E IT RESOLV�D by the Co.nrnissioners
of the Port Authority of the City of Saint Paul, Min�iesota as
follows :
�
.
. ������
1 . On tlle 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 caithin the meaning of Subdivision la of Section 474.02.
. of the Act; that the Project furthers tne purposes stated in
Section 474.01 of the Act, that the availabiTity 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 tne effect of the
Project, if undertaken, will be to encourage the development of
economically sound industry and corcli-nerce and assist in the
prevention of the eriergence 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 moveinent 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 �inanciny the Project.
2. On the basis of information available to the
Authority it appears, and the Authority hereby finds, that the
Project, the project authorized by Resolution No. 1801, with
the aforementioned modifications, and the project authorized by
Resolution No. 1803, with the aforementioned modifications, in
the aggregate constitute development which is of the same sub-
stantial nature as the development comprised of the 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. 1805, adopted April 21, 1981, is
hereby amended in part as follo�as:
(a) Substitute "Mears Park Central Limited
Partnership" in lieu of "t�tears Park Rainp
Associates" in the third Whereas clause thereof;
(b) Substitute "an approximately 25,320
square foot retail/conunercial and approximately
270 stall parking ramp and related equipment
facility" in lieu of "a 650 stall parking rarnp and
related equipment" in the third t�Thereas clause
thereof; and
' (c) Substitute "$6,440;000" in lieu oF
"$10,000,000" in t'ne second numbered paragrapZi •
thereof.
4. Tne Authority hereby approves and authorizes the
substitution of references to "i•iears Park Central Limited
' Partnership" for references to "�tears Park Ramp Associates" and
approves and authorizes the assum�ntion by the Company of the
rights and oUligation of A4ears Park Ramp Associates under said
Resolution No. 1805.
5. Resolution No. 1805, as amended in part herein,
shall remain in full force and effect.
6. Subject to the mutual agreement of the Authority,
the Company and the purcnaser of the revenue bonds as to tne
details of the lease or other revenue agreement as deiined 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, as modified, is hereby approved and
authorized and the issuance of revenue bonds of the Authority
in an amount not to exceed approximately $6,44Q,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 re:Eerence and
approved.
7. In accordance with Subdivision 7a of Section
474.01, Minnesota Statutes, the Es:ecutive 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 Develo�nent, requesting his approval, and
other officers, employees and ag�nts of the AUTHORITY are
hereby authorized to provide the Co_mr;�issioner with suck�
preliminary information as he may require.
8. There has heretofore been filed with the
Authority a form of Agreement of Undertaking b�tween the
Authority, the Underwriter, Mears Par'r. Developrnent Company,
Mears Park East Limited Partn�rship, tdears Park t�Vest Limited
Partnership and Company (the "Agree�nent of Undertakin�" ) ,
relating to the proposed construction and financing o� the
Project. The forr� of said Agreement has bQen examined by the
Commissioners. It is the purpose of said Agreement (includiiig
the agreements referred to therein) to evidence tize commiLment
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f
of the parties and their intentions wit'n 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 tnat there
has been sufficient "official action" under Section 103 (b) of �
the Internal Revenue Code of 1954, as ariended, 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 tne entire cost of the Project
upon agreement being reached as to the ultimate details of the
Project and its financing. Said Agreement is here�iy approved,
and the President and Secretary of the Authority are hereby
authorized and directed to execute said Agreetnent.
9. Upon execution of the Agreement of Undertaking
by the Company, the staff of the Authority are authori�sd and
directed to continue negotiations wit'n the Company so as to
resolve the reinaining issues neces�ary to the preparation of
the lease and other documents necessary to tne adoption by the
Authority of its final bond resolution and the issuance and
delivery of th� revenue bonds; provided that the President (or
Vice-President if the President is absent) and the Secretary
(or Assistant Secretary if the Secretary i.s absent) of the
Authority, or if either oi suciz 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 'Jnderwriters made by the
Underwriters to purchase said bonds and to execute an
underwriting agreement setting forth such of�er on Uehalf 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 supplenental bond resolution to
be adopted prior to the deliv�ry of said revenue bonds.
10. 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 c'r►arge 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 interi:,i not� or notes) or
interest thereon.
` � 11 . The actions oi the Executive Vice-President of.
the Authority in causing public notice of the puUlic hearing
and in describing the general nature of the Project and
esti�ating the principal amount of bonds to be issued to
finance the Project and in preparing a draft of the proposed
application to the Com��issioner 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 frorn and after t�ie publication of
notice of the hearing, are in all respects ratified and
confirmed.
Adopted ��''� � /�e��- �
�_.cfi� �- �
�/� t
Attest `� ��.
Pre e
The Port uthority of the City
of Saint Paul
Secretary
_ F.e!'t.,� -���
OM Ol : 12/1975 :
Rev. : 9I8/76
EXPLANATIO.N OF ADMINISTRATIVE ORDERS,
RESOLUTIONS, AND ORDINANCES
� �
� �
Date: February 5, 1982
�T0: RGE LATIMER ��CEIVED
FEB5 - 198�
FR: E. A. t, St. Paul Authority
RE: MEARS PARK CENTRAL ASSOCIATES
MAYORS OFFiCE
$6,440,000 REVENUE BOND ISSUE
ACTION REQUESTED: �I
In accordance with thQ Laws of Minnesota, Chapter 234, it is requested that he City Council ,
by Resolution, a draft copy of which is attached hereto, approve the issuanc of approximately
. $6,440,000 in revenue bonds to finance the construction of 25,320 square fee of retail space
and 270 parking stalls in the Block 40 development by Mears Park Central Ass ciates.
�
�
PURPQSE AND RATIONALE FOR THIS ACTION:
The purpose of the bond issue is to construct 25,320 square feet of retail s�ace
and 270 parking stalls in the Block 40 development by Mears Park �entral As_�o _� The Block
40 developrnent project also incorporates a City tax incremerrt contribution o $4,425,823
over a.period comnencing in 1984 and ending in 1988.
ATTACHMENtS:
Staff Memorandum
Draft City Council Resolution
Port Authority Resolution No. 1978 �
cc: R. THORPE, MAf�POWER SERVICES
P O R �' � �''����'�
�9► UTHORITY
` OF THE CITY OF ST. PhUL
Memorancfum
Tp; Board of Commissioners DATE: �an. 21 , 1982
Meeting January 26, 1982
FROM: E. A. Kraut
SUBJEGT: 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
take` 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
Consiruction 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
Underwriter' 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 1 ,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 $4,�3$,370 $3,524,256 $4,360,363
* Replaced at the end of the 5th year by interest 2arned 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.
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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 effecti.ve
interest rate of 13. 5%, whereas,' initia1 feasibility indicated a maximum of
11%.
Because of the changes in the size c�f 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 faci1ity into two of the segments make the project considerably
more viable and we recommend approval of the ratifying reso1ution.
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