278224 WHITE - CITY CLERK
PINK - FINANCE COUflC1I
CANARY - DEPARTMENT G I T Y O F S A I N T ��U L �� ��
BLUE - MAYOR File N O.
Council 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. 1979 giving preliminary approval to the issuance of approximately $6,535,000 in revenue
bonds i:o finance i:he construction of 60,000 square feet of office space and 18,000 square feet
of cinema area in the Block 40 Development by Mears Park West 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 Pau1 , by resolution adopted in accordance
wi th 1 aw;
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 issvance of the
aforesaid revenue bonds for the purposes described in the aforesaid Port.Authority Resolution
No. 1979, 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 Department of•
Hunt
Levine In Favor
Maddox
sn��� �__ Against BY
Tedesco
Wilson
FEB 9 1982 Form Approved by City Attorney
Adopted by Council: Date — �
c� �
Certified s-e b Counci , c y BY
Ap d by :Navor: rLB � O 19 App d by Mayor for m � n to Council
By _ — B
}�UBUSHED FE B 2 0 1982
. ' ,� ��'�'��
� .�.� ., e.'.. _
Resolution tlo. 1979
RESOLUTION OF
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
WHEREAS, tY►e pi�rpose 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 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 developr�ent 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 nee�s 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 its revenue bonds in the
ap�roximate �rincipal 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 �Iears
Park Office Associates, the Mears Park P.etail Associates and
the Mears 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
Commissioner of . Securities pursuant to tne Act; and
WHEREAS, The Port Authority of the City of Saint Paul
(the "Authority") has received from ��Iears Park �Vest Limited
Partnership (hereinafter referred to as "Company" ) a request
that the Authority amend said Resolution No. 1801 by modifying
, the name of the company therein named as developer of the
project approved therein from "Mears Park Office Associates" to
"Mears Park West Limited Partnership", by modifying the general
description of the project therein described fror� an office
building to an approximately 60,000 square foot office and
theater cinema facility and related facilities (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 $6,535,000 and that
the Authority approve and authorize said modifications; and
WHEREAS, the Authority has received from i�iears Park
Central Limited Partnership a request that the Authority amend
said Resolution No. 1805 by modifying the narae of the company
therein named as developer of the project approved therein from
"Mears Park Ramp Associates" to "tiiears Park Central Limited
Partnership", by modifying the general description of the
project therein described from a 650 stall parking ra�-np and
related equip�nent facility to an approximately 25,320 square
foot retail/commercial and approximately 270 stall parking ramp
and related equip�nent facility, and by r,�odifying the authorized
principal amount of the issue therein authorized froin the
approximate principal amount of up to $10,000,000 to the
approximate principal arnount of up to $6,440,000, and tk�at the
Authority approve and authorize said modifications; and
WHEREAS, the Authority h3s received from Mears Park
East Limited Partnership, a Minnesota 2imited }�artners'nip a
request that the Authority amend said Resolution No. 1803 by
modifying the name of the company therein named as develo�er oi
the project approved therein from "t�lears 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/cocnmercial and
approximately 380 stall parking ramp and rela�ed equi�ment
facility and by modifying the authorized principal arnount of
the issue therein authorized from t'ne approximate princinal
amount of up to $10,000,000 to the aLonroximate principal amount
of u�� to $7,960,000; and that the Authority approve and
authorize said modifications; and
. � ������
�9:�iEREAS, the Authority desires to facilitate the
selective develop�ent of the cor;lmunity, to retain and improve
its tax base and to help it provide t'ne range of services and
, employnent 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 em�loyment opportunities in the
Proj ect; and
WHEREAS, the Authority has been advised by repre-
sentatives of the Company that conventional, coitu�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 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 'AOrrowing cost, the Project is economically more
feasible; ar�d
WHEREAS, Miller & Schroeder i�iunicipals, 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
TnhiEREAS, the Authority, pursuant to i�iinnesota
Statutes, Section 474.O1,� 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 nearing 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 nublic hearing
pursuant to said notice, at whicn hearing th� recorunendations
contained in the Authority' s staf f rnemorandurn to the
Commissioners were reviewed, and all persons who appeare3 at
the hearing �vere given an opportunity to express their views
with respect to the proposal.
NOW, THEREr,ORE, BE IT rZESULVED by the Commissioners
of the Port Authority of the City of Saint Paul, Minnesota as
follows:
' :�;�����
1 . On the basis of infor�nation available to the
Authority it appears, and the AuLhority hereby finds, that said
Project constitutes pronerties, used or useful in connection
with one or more revenue producing enterprises enyaged in any
• business within 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 availability of the
financing under the Act and willingness of the Authority to
furnis'n 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 com-�erce and assist in the
prevention of the �Tnergence 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 tneir 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 in�.erests of
the port district and the peonle of the �ity 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 hereby finds, that the
Project, the project authorized by Resolution No. 1803, with
the aforeraentioned modifications, and the project authorized by
Resolution No. 1805, with the aforer�entioned modifications, in
the aggregate constitute development which is of the same sub-
stantial nature as tne development cornprised 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. 1801, adopte3 April 21, 1981 , is
hereby amended in part as follows:
(a) Substitute "Mears Park West Limited
Partnership" in lieu of "tdears Park Office
Associates" in the third Whereas clause thereof;
(b) Substitute "an approximately 60,000
square foot office an3 theater cinema facility and
related facilities" in lieu of "an office
building" in the third 47Y�ereas clause thereof; and
' � . ����?���
(c) Substitute "$6, 535,000" in lieu of
"$10,000,000" in the second numbered paragrapli
thereor.
• 4. The Authority here'oy approves and authorizes the
substitution of references to "i�iears Park 'vVest Limited
Partnership" for references to "Mears Par;c Office Associates"
and approves and authorizes the assumption by the Company of
the rights and obligation of i�iears Park Office Associates under
said Resolution No. 1801 .
5. Resolution No. 1801 , 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 purchaser oi the revenue bonds as to the
details of the lease or other revenue agreem�nt as defined in
the Act, and other documents necessary to evidence and effect
the financing of the Project and the issuance oi tlie revenue
bonds, the Project, as modified, is hereby approved and
auth�rized and the issuance of revenue bonds of the Authority
in an amount not to exceed approximately $7,960,000 (other than
such additional revenue bonds as are neede3 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 Com*nissioners which was presented
to the Commissioners, are incor�oorated herein by reierence and
` approved.
7. In accordance with Subdivision 7a of Section
474.01, Minnesota Statutes, the Executive Vice-President of the
AUTHORITY is hereby authorized and directed to sub:nit the
proposal for the above described Project to the Commissioner of
Energy, Planning and Develo�ment, requesting his approval, and
other officers, employees and agents of the AUTHORITY are
here'ay authorized to provid� the Co?mnissioner witn such
preliminary information as he may require.
8. There has heretofore been filed wit'n the
Authority a form of Agreement of Undertaking between tl�ie
Authority, the Underwriter, Mears Park Development Company,
Mears Park Central Limited Partn�rship, idears Park East Limited
Partnership and Company (the "Agree:nent of Undertaking" ) ,
relating to the proposed construction and financing of the
Project. The form of said Agree:nent has b�en examined by the
Commissioners. It is t'ne purnose of said Agree��ent ( including
the agreements referred to therein) to evidence tlze cormnitment
. . . � � �
�''���.a<��
of the parties and their intentions with resp�ct to the
proposed Project in order that the Company may proceed without
delay with the corcunencement 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 (including, if deemed
appropriate, any interim note or notes to provide temporar�
financing thereof) to finance the entire cost of the Project
upon agreement being reached as to the ulti.-nate details of the
Project and its financing. Said Agreement is hereby approved,
and the President and Secretary of the Authority are hereby
authorized and directed to execute said Agreernent.
9. Upon exeeution of the Agreement of Undertaking
by the Company, the staff of the Authority are authorized and
directed to continue negotiations with the Company so as to
resolve the remaining issues necessary to the preparation of
the lease and other documents necessary to the adoption by the
Authority of its final bond resolution and the issuance and
delivery of the revenue bonds; provided that the President (or
Vice-President if the President is absent) and the Secretary
(or Assistant Secretary if the Secretary is absent) of the
Authority, or if either of such officers (and his alternative)
are absent, the Treasurer of the Authority in lieu of sucli
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 sai3 bonds and to execute an
underwriting agreement setting forth such offer on Uehalf of
the Authority. Such accentance shall bind the Underwriters to
said offer but shall be subject to approval and ratification by
the Port Authority in a formal supplemental bond resolution to
be adopted prior to the deliv�ry o= said revenue bonds.
10. Tne revenue bonds (i.ncluding any interin 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 fuli faith and credit
nor the taxing powers of the Authority or the City is pledged
for the pay�ent of the bonds (and interim note or notes) or
interest thereon.
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11 . The actions of the Executive Vice-Presi3ent of
the Authority in causing public notice of the public hearing
and in describing the general nature of the Project and
estimating tiie principal amount of bonds to b° issued to
. finance the Project and in preparing a 3raft of tlze proposed
application 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 frorn and after the publication of
notice of the hearing, are in all resnects ratiFied and
confirmed.
,
Adopted �����%-c �7�d L_--
� /��� _ � �
Attest ��` �`"
P�e-si e
The Po t Authority of the City
of Sa�nt Paul
Secretary •
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OM 0 : 12/1975
Rev. 9/8/76
EXPLANATIO.N OF ADMINISTRATIVE ORDERS,
. RESOLUTIONS� AND ORDINANCES
Date: February 5, 1982 ' ��C�� �
FEB 5 - 982 _
T0: MAYOR GEORGE LATIMER �AYORS FFiCE
FR: E. ���3'"t, �t. Paul Authori ty . �
RE: MEARS PARK WEST 1�SSOCIATES
$6,535,000 REVENUE BOND ISSUE ,
ACTION REQUESTEO: �
In accordance with the Laws of Minnesota, Chapter 234, it is requested tha the City Council ,
by Resolution, a draft copy of which is attached hereto, approve �he issua ce of approximately
. $6,535,000 in revenue bonds to fir�ance the construction of 60,000 square f et of office space
and �000 square feet of cin�na area in the B1ock 40 development by Mears Park West
Assoc .
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PURPOSE AND RATIONALE FOR THIS ACTION:
The purpose of the bond issue is to construct 60,000 square feet of office pace
and 18,000 square feet of cinema area in :the 61ock 40 development by Mears ark Wes�
Associates. The Block 4Q development project also incorporates a City tax ncr�ent of
$4,425,823 over a period commencing in 1984 and ending in; 1988.
.
A7TACHMENTS:
Staff Memorandum
Draft City Council Resolution
Port Authority Resolution No. 1979
cc: R. Thorpe, Manp�ve�^ Services
� � � �
� ��► ui � o � � TY
OF THE CITY OF ST. PAUL .
Memorandum
TO: Board of Commissioners pAj� Jan. 21 , 1982
Meeting January 26, 1982
FROM: E. A. Kraut
SUBJECT: 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,OOQ sq. ft.
Total Bond �6,535,000
Reserve-Letter of Credit $923,000
` Board of Commi ssi oners �' !'�=r���
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
poi nts
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,�38,�70 $3,524,256 $4,360,363
* Replaced at the end of the 5th year by interest 2arned from reserve from
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.
I
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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 of 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 a1tered.
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 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