277730 - - -
WNITE - CITY CLERK ��¢���n I
PINK - FINANCE / V
CANARY - DEPARTMENT COUIICII ��
BLUE - MAYOR G I�TY OF SA I NT PALT L File NO.
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uncil Resolution
Presented By
Referred To Committee: Date I
Out of Committee By Date
WHEREAS: i
1 . On November 3, 1981 , the Port Authority of the City of Saint Paul adopted �
Resolution No. 1921 giving preliminary approval to the issuance of approximately $10,000,0 0
in commercial revenue bonds to finance the construction of six floors of condominium offic
space in the St. Paul Hotel Parking Ramp project by the developer, Gene Rancone of Yorktow
Investment Company, Inc. This space would all be for rent at the outset.
2. Laws of Minnesota 1976, Chapter 234, prouides that any issue of revenue bonds
authorized by the Port Authority of the Gity of Saint Paul , shall be issued on1y with the �'
consent of the City Council of the City of Saint Paul , by resolution adopted in' accordancel
with law;
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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 issuan�e 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 Ci�ty Council of the City of Saint Pau1, that in accordance with Laws'.
of Minnesota 7976, Chapter 234, the City Council -hereby consents to the issuance of the '
aforesaid revenue bonds for the purposes described in the aforesaid Port Authority Resolut�on
No. 1921 the exact de�ails of which, including, but not 1imited.to, provisions relating
to maturities, in�erest rates, discount, redemption, and for the issuance of additional ,
bonds are to be determined by the Port Authority, pursuant to reso7ution adopted by the
Port Authority, and the City Council hereby authorizes the issuance of any additional bond�
(including refunding bonds) by the Port Authority, found by the Port Authority to be ',
necessary for carrying out the purposes for which the aforesaid bonds are issued.
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COUNC[LMEN
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Yeas Nays Requestgd by Department of:
Hunt '
Levine [n Favot ,
Maddox �
McMahon B
showa�ter A gai n s t Y
�sde�co
�Ison
HOV 2 4 19�1 Form Approv b i '
Adopted by Council: Date — �
Certified Y-s-e y Counci ec BY ,
By
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Ap v d by :Vlayor. V 2 � »g� Approve Mayor for Su mi si to Council I
By
PUBUSHED D E C 5198� j
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Resolution No. 1921 !
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. RESOLUTION OF ,�
THE PORT AUTHORITY OF THE CITY Or' SAINT PAUL I
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� WHEREAS, the purpose of Chapter 474, Minnesota
. Statutes, known as the Minnesota Municipal Indust�ial 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 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, through the cooperative efforts of the Port
Authority, the City of Saint Paul (tY►e "City") and the federal
government (specifically including funds made available to the
City under an Urban Development Action Grant) the existing
Saint Paul Hotel has been acquired and is being renovated by
the Saint Paul Hotel Limited� Partnership (the "Hotel Project")
and a parking ramp is being constructed on land adjacent to the
Hotel by the Saint Paul Parking Ramp Limited Partnership (the
� "Ramp Project") ; and
WHEREAS, at the time of the negotiation for financing
of the Hotel Project and Ramp Project the development of an
office tower in the air rights above the Ramp Project was �
contemplated; and
WHEREAS, by Resolution 19Ub, adopted on October 6,
1981, the Port Authority gave preliminary approval to the
issuance of approximately $20,000, 000 in its industrial
development revenue bonds to finance the development of a
condominium office tower in the air rights above the Ramp
Project; and
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WHEREAS, The Port Authority of the City of Saint Paul
(the "Authority") has received from Yorktown Investment
Company, Inc. (hereinafter referred to as "Company" ) a request
' that the Authority issue its revenue bonds to finance the
acquisition, installation and construction of a six floor
office facility (hereinafter called the "Office Project") above
the Ramp Project in the City of St. Paul, 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
Office Project will assist the City in achieving that
objective. Said Office 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 and reputation of the City; and
WHEREAS, the Office" Project to be financed by revenue
bonds will result in substantial employment opportunities in
• the Office Project;
WHEREAS, the Authority has been advised by repre-
sentatives of the Company that conventional, coirunercial
financing to pay the capital cost of the Office Project is
available only on a limited basis and at such high costs of
borrowing that the economic feasibility of operating the Office
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;
� WfiEREAS, the Authority did conduct a public hearing,
at which hearing the 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.
�TOW, THEREFORE, BE IT RE50LVED by the Commissioners
of the Port Authority of the City of Saint Paul, I�Iinnesota as
follows:
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1. On the basis of information available to the
Authority it appears, and the Authority hereby finds, that said �
Office 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 Office 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 Office Project, if undertaken, will be to
encourage the developnent of economically sound industry and
. commerce and assist in the prevention of the emergence of
blighted and marginal land, and will help to prevent chronic
unemployment, and will help the City to retain and i.mprove 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 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 (a) 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 Office Project and the issuance
of the revenue bonds and (b) the compliance with all provisions
of the Act relating to revenue bond financing, the Office
Project is hereby approved and authorized and the issuance of
revenue bonds of the Authority in an amount not to exceed
approximately $10,000, 000 is� authorized to finance the costs of
the Office 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. 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 Office Project and a fonn of the Underwriting
Agreement. The form of said Agreements have been exar.►ined by
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the Commissioners. It is the purpose of said Agreements to
evidence the commitment of the parties and their intentions
with respect to the proposed Office Project in order that the
� Company may proceed without delay with the commencement of the
acquisition, installation and construction of the �ffice
Project with the assurance that there has been sufficient
"official action” under Section lU3 (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 temporary financing thereof) ,
to finance the entire cost of the Office Project upon agreement
being reached as to the ulti.mate details of the Office Project
� and its financing. Said Agreements are hereby approved, and
the President and Secretary of the Authority are hereby
authorized and directed to execute said Agreements.
4. Upon execution of the Preliminary Agreement 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) i
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 such 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 formal supplemental bond resolution to
be adopted prior to the delivery of said revenue bonds. �
5. 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.
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6. 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
'n contem lated and an
im note or notes herei Y
� any inter ) P
additional bonds which the Authority may prior to issuance or
from time to time thereafter deem necessary to complete the
Office 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. '
7 . The Executive Vice-President of the Authority is
hereby authorized to cause public notice of the public hearing
to be published describing the general nature of the Office
Project and estimating the principal amount of bonds to be
issued to finance the Office Project and to prepare a draft of
the proposed application to the Commissioner of Securities,
State of Minnesota., for approval of the Office Project.
Adopted November 3, 1981 �
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Attest
Pr
The Port Authority of the City
of Sain Paul �
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��• ecretary
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x /�i /� �' �°�- �'¢ � -0210
` � ' - , . • . OM Ol : i 2/i 97�5
' . Rev. : 9/8/7�G+I I �
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� EXPLaNATION OF ADMINISTRATIVE ORDERS,
RESOLUTIONS, ANQ ORDINANCES -
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� RECEI�/E -
• NOV$ 19tl1
Date• Hovember 3, 1981
. III�YORS OFFIC
70: MA 0 GEOR6E LATIMER � -
�R• . E. , St. Paul Port Authority -
�� YORKTOWN INVESTMENT COMPANY, ING.., �PRINCIPAL OWI�ER GENE RANCONE)
$10,000,000 CONFIERCIAL REYENUE BOND ISSUE
AC7ION REQUESTED:
In accordance with the Laws of Minnesota, Chapter 234, it is requested thart the City Cou cil ,
by Resolution, a draft copy of which is attached hereto, approve the issuance of approxi
mately $10,000,400 in commercial .revenue bonds to finance the construction of six floors of
condominium office space in the St. Paul Hotel Parking Ramp project by the developer, Ge e ,
Rancone. This space would all be for rent at the outset.
PURPOSE AND RATIONALE FOR THIS ACTTQN: - �
The purpose of the bond issue is to finance the construction of six��loors of rental off. ce
space in the St. Paul Hotel Parking Ramp project by developer G�ne Rancone,�w?�icfi wou1d
permit them to fulfill ,their pledge to American Woist that two additiona1 fioars would b
available for their acquisition as their need ftir expansion occurs. American Hoist & De rick
would b� the Anchor tenant in the building arid they would be acquiring f�ve. floors at th
outset for the relocation of their corporate off.ice to downtown St. Paul . Mr. Rancone w ll
personally guarantee this portion of the project and wi11 act as managing-leasing agent or
this space, the towEr and the parking ramp. One floor containing 12,350 square feet wou d
be sold to Kueppers, Kueppers, Von Feldt & Salmen, a :local law firm currently occupying
spaee in the Northern Federal Building.
AT'TACHMENTS: �
Staff Memorandum - '
Draft City Council Resolution
Port Authority Resolution No. 1921
cc: R. Thorpe, ManpowerServices
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" AllTHOitITY '
OF THE CITY OF ST. PAUL
Memorandum
TO: Board of Commissioners DATE Nov. 2, 1981
E. r i
FROMI: ��
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SUBJECT: YORKTOWN INVESTMENT COMPANY, INC.
PRELIMINARY AGREEMENT - $10,000,000 COMMERCIAL REVENUE BOND ISSlJE
OFFICE BUILDING CONSTRUCTION - ST. PAUL HOTEL RAMP BLOCK
RESOLUTION N0. 1921
1 . THE COMPANY AND PROJECT
To fulfill the pledge to American Hoist that two additional floors would
be available for their acquisition as their need for expansion occurred,
Yorktown is projecting the construction of six floors, all of which will
be for rent at the outset. Negotiations are currenLly underway with a ',
Los Angeles firm for four floors equaling 50,000 square feet and with ,
other potential tenants. This additional space and amortization of the ,
$10,000,000 bond issue will be the responsibility of Yorktown.
The $10,000,000 includes the funding of the debt service reserve,
capitalized interest during construction, and the normal elements of 876
revenue bond financing. Mr. Rancone will personally guarantee this porti�n
of the project and will act as managing-leasing agent for this space, the
tower and the parking ramp.
Under the terms of the agreement he will be acquiring the air rights from�
Jefferson Company and Lincoln Hotels , and . be responsible for posting the�
letter of credit on the parking ramp which was a condition of the agreeme�ht
with the other partners and the Port Authority's limited partnership
position. Final details of the agreements will be presented to the Board'
before actual sale of bonds . N egotiations are underway with other firm�
for condominium sections of this building. '
Rancone`s development experience is, in our opinion, an asset to this
project and essential to construction .of the type of facility that has th�
� amenities and the elevation considered by American Hoist to be essential !
to their location in the new Amhoist building. I
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2. TERMS OF THE LEASE I
The term s of the lease would be for 30 years. The bonds would be issued
under Resolution 876 and the customary fiscal and administrative fees
will apply, and sinking fund earnings and debt ser�rice reserve earnings I
will inure to the benefit of the Port Authority.
The public hearing (Securities Commission ::nd Public Sale) will be held ,
on November 24.
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Board of Commissioners �
Nov. 2, 1981
Page -2- �
The bond issue will be made up as follows:
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Construction $ 6,603,000
Reserve 1 ,255,000
Capitalized Interest - 21 Months 2,100,000
Expenses 42,000
Underwriting 300,000
TOTAL $10,000,000
3. UNDERWRITING ,
Miller & Schroeder Plunicipals has agreed to underwrite the bonds. The
interest rate will be established at the date of sale.
4. RECOMMENDATION
Subject to additional ccmmitments to be on hand prior to the sale of
the bonds staff recommends adoption of Resolution No. 1921.
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