276177 WHITE - CITY CLERK
PINK - FINANCE COUI1C11 '` 6� � � hr•�'
CANARY - DEPARTMENT C�I TY OF SA I NT PAU L ����� �
BLUE - MAYOR File N O.
o ncil Resolution
1
Presented By
Referred To Committee: Date
Out of Committee By Date
WHEREAS:
1 . On December 16, 1980, the Port Authority of the City of Saint Paul
adopted Resolution No. 1762 giving preliminary approval to the issuance of a
$450,000 tax exempt mortgage note to finance the construction of a contractors
and architects office building and storage yard for P & L Partnership, sublease
to Lovering Associates Inc. , northeast of the intersection of South Wabasha and
Plato Boulevard;
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 tax exempt mortgage note 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 note for the purposes described in the aforesaid Port
Authority Resolution No. 1762 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 necessary for carrying out the
purposes for which the aforesaid bonds are issued.
COUNCILMEN
Yeas Nays Request�d by Department of: '
Hunt
Levine [n Favor
Maddox
McMahon
sr,o,,,,ai�e� � __ Against BY
Tedesco
wison
JAN 13 1981 Form Ap r ed by City ttorn
Adopted b, ouncil Date — /� �� �
Certified Yass by Co .il ecrPyery BY �
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App v by :Vlayor: D 41f�N �.,.r1 ��� Approv Mayor for Sub si •to Council
By _ BY
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AUTHORITY
OF THE CITY OF ST. PAUL
Memoraedum
T�: BOARD OF COMMISSIONERS ��� December 12, 1980
(Meeting December 6, 1980)
��� Donald G. Dunshe
SUBJEGTs p & L PARTNERSHIP - SUBLEASE TO LOVERING ASSOCIATES INC.
$450,000 TAX EXEMPT MORTGAGE
RIVERVIEW INDUSTRIAL AREA WEST
PUBLIC HEARING - PRELIMINARY AND UNDERWRITING AGREEMENTS - RESOLUTION N0. 1762
PUBLIC SALE HEARING - SALE OF LAND - RESOLUTION N0. - 1763
PUBLIC SALE HEARING - LAND LEASE - PART OF PARCEL C - RESOLUTION N0. - 1764
1 . THE COMPANY
. Lovering Associates Inc. is a St. Paul based architect, contractor and
developer who has been headquartered in the City since 1920. At the
present time they are occupying 3,800 Sq. Ft. of space at 555 North
Wabasha and have determined that they wish to secure their own free __
standing facility to provide them with more growth opportunities. In - ----
addition to the offices on North Wabasha they have a storage facility
at York and Westminster which would remain if they were to construct a
new office.
2. THE PROJECT
The Company has asked the Port Authority Commission to consider the issuance
of a $450,000 tax exempt mortgage to finance the construction of a new
10,250 Sq. Ft. office building on South Wabasha Street just north of Plato
Boulevard. The site contains 92,628 Sq. Ft. ; however, it is divided by
water and utility easements which severly limits its development for large
facilities. The Company proposes a three building complex on the site
with their office to be constructed first and that of a major architecturalfirm
on the Plato portion of the site second and the third building to be constructed
behind the two structures. The proposed project would be done on the basis
of a lease with the owners of the Company, Walter Peterson and E. Leland
Lindberg and subleased to Lovering Associates, Inc. for the term of the
�tax exempt mortgage. The land lease for the parcel would be structured
so that the aortion of the site utilized by the Lovering building would
be handled by one land lease and a second land lease for the east portion
of the site fronting on Plato Boulevard.
Lovering proposes to construct an energy efficient building using passive
energy saving techniques such as berming to minimize the operational cost
of the structure and construct an extremely attractive building.
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BOARD OF COMMISSIONERS
P & L PARTNERSHIP - SUBLEASE TO LOVERING ASSOCIATES INC.
DECEMBER 12, 1980
PAGE 2 �
3. FINANCING
The Company has received a committment from the First National Bank
of St. Paul for a 20 year tax exempt mortgage at an interest rate of
. 11�. The monthly payments would be structured on the basis of a 20
year amortization with a 10 year takeout. In addition to the land
rent income the Port Authority would receive from the two land leases,
we would receive a fiscal and administrative fee of $300 per month
during the first 10 years and this would increase to $400 per month
the final 10 years of the tax exempt mortgage.
4. UNDERWRITING
Miller & Schroeder will serve as fiscal advisor for the Port Authority.
5. TERMS OF THE LEASE
� The tax exempt mortgage is for a period of 20 years with the land lease
for the portion of the property fronting on Wabasha to be leased on the
basis of a 20 year land lease at $1 .25 per Sq. Ft. plus 9% interest for an -
annual rent of $3,842.76 payable monthly in advance in the amount of �320.�,s. "�-
In addition to the land rent the Company would have an option to purchase
the property at the end of the tenth year for $34,691 .25 and at the end of the
lease for $17,345.63.
The remaining portion of the site contains 64,929 Sq. Ft. which would be leased
on the basis of $2.15 per Sq. Ft. plus 9q interest for $13,540.92 payable
monthly in advance in the amount of $1 ,128.41 . The partnership would have an
�option to purchase the land at the end of the lOth year for $139,597.35 and at
the end of the 20th and 30th year for appraised value. The Port Authority had
both parcels appraised by William Muske and based on the fact that the develop-
ment potential of both sites is severly restricted due to utility easements and
poor subsoil conditions, Mr. Muske has placed a market value of $1 .23 on the
Wabasha fronting portion of the site after adjustment for easement and subsoil
conditions. The Company has provided the Port Authority with an estimate for
the soil correction for the front portion of the site of $46,000. The market
value of the rear portion as appraised before adjustment was $2. 15 and that is
the price we propose in the land lease. The Port Authority in the past has
made adjustments in the land price for subsoil conditions at the time a company
wishes to proceed with construction. In view of the fact that the rear portion
of the site will not be built on at this time no adjustment in the land price
for soil conditions is proposed. When the architectural firm and the third
building are ready for construction next year amendments to the lease will be
proposed based on the actual cost for subsoil correction.
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BOARD OF COMMISSIONERS
P & L PARTNERSHIP - SUBLEASE TO LOVERING ASSOCIATES INC.
DECEMBER 12, 1980
Page 3
6. RECOMMENDATION
Staff has reviewed the project in detail , the financial statements
of the individua]s and corporation and recommends approval of
Resolutions No. 1762, 1763 and 1764.
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� Resolution No. 1762
RESOLUTION OF
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
" WHEREAS, the purpose of Chapter 474, P4innesota
Statutes, known as the Minnesota Munieipal Industrial Develop-
ment Act (hereinafter called "Act") as found and deternined b_y
the legislature is to promote the welfare of the state by the
active attraction and encouraqement and developMent of. economi-
cally sound industry and comr�erce to prevent so far as possible
• the er�ergence of bliqhted and r�arqinal lands and areas of
chronic unemployr;lent and to aid in the developr�ent of existing
areas of bliqht, r�arqinal land and persistent unemployMent; and
t�f-iEREAS, factors necessitating the active promotion
and developMent of econor�ically sound industry and cor�merce are
� the increasing concentration of population in the metropolitan
areas and the rapidly rising increase in the ar�ount and cost of
govern►:tental services required to meet the needs of the
increased population and the need for developr►ent of land use --..
which will provide an adequate tax base to finance these
increased costs and access to employnent opportunities for such
population; and
WHEREAS, The Port Authority of the City of Saint Paul
( the "Authority" ) has received fron a partnership comprised of
� Walter Peterson and E. Leland Lindberg (hereinafter referred to
as "Cornpany") a request that the Authority issue its revenue
bonds (which may be in the form of a single note) to finance
the acquisition, installation and construction of an energy
efficient office building in Riverview Industrial Area West
(hereinafter collectively called the "Project") in the City of
St. Paul, all as is more fully described in the staff report on
file; and .
wEIEREAS, the Authority desires to facilitate the
selective developr�ent of the cor�munity, to retain and improve
its tax base and to help it provide the range of services and
er►ployMent on�ortunities required bv its population, and said
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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 ir�age and reputation of the
City; and
WHEREAS, the Project to be financed by revenue bonds
will result in substantial er�nloyr�ent o�portunities in the
Project; �
WHEREAS, the Authority has been advised by repre-
. sentatives of the Cor�nany that conventional, comr►ercial
financing to pay the capital cost of the Project is available
only on a linited basis and at such high costs of borrowing
that the econor�ic 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
"Placement Agent") has nlade a proposal in an agreer�ent (the
"Placement Aareement" ) relating to the purchase of the revenue
. bonds to be issued to finance th,e Project;
WHEREAS, the Authority, pursuant to i�innesota
Statutes, Section 474.01, Subdivision 7b did publish a notice, _
a copy of which witli 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 bv the issuance of its industrial � revenue bonds ; and
WHEREAS, the Authority did conduct a public hearing
pursuant to said notice, at which hearinq the recor-u�endations
contained in the Authority' s staff inemoranduM to the
Cor�r�issioners were reviewed, and all persons who anpeared 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, Minnesota as
follows:
1. On the basis of inforr�ation 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
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Section 474.01 of the Act, that the availability of the
financing under the Act and willingness of the Authority to
furnish such financing w�ll 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
econonically sound industry and cor.irierce and assist in the
prevention of the emergence of blighted and marginal land, and
will help to prevent chronic unenployr�ent, and will help the
City to retain and ir�prove its tax� base and provide the range
of services and employnent 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 Citv' s tax base; and that it is in the best interests of
the port district and the people of the Cityo uf Saint Paul and
. in furtherance of the general plan of development to assist the
Company in financing the Project.
2. Subject to the r�utual aqreer�ent of the
Authoritv, the Com�any 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 docur�ents 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 (which may
be in the form of a single note) in an aMOUnt not to exceed --
approxiMately $450,000 (other than such additional revenue
bonds as are- needed to eomplete the Project) is authorized to
finance the costs of the Project and the recor.u�endations of the
Authority' s staff, as set forth in the .staff ineMOrandum to the
Comnissioners which was presented to the Cor.u�issioners, 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 l�ereb� authorized and directed to subr�it the
proposal for the above described Project to the Commissioner of
Securities, r�questing �iis approva3., arid other officers,
employees and agents of -the AUTI�ORITY are hereb� authorized to
provide the Cor�rtissioner with such prelir�inary information as
he rnay require.
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" 4. There has heretofore been filed with the
Authority a forr� of Prelininary Agreement between the Authority
and Company, relating to the proposed construction and
. financing of the Project and a form of the Placement Agreement.
The forr.► of said Agreements have been exar�ined 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 Cor�pany
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
ar�ended, 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 Project upon agreer�ent being reached as to the ultimate
details �f the Project and its financing. Said Agreer.►ents are
hereby approved, and the Presiclent and Secretary of the Auty
are hereby authorized and directed to execute said Agreements.
5. Upon execution of the Preliminary Agreer�ent by
the Company, the staff of the Authority are authorized and
directed to continue negotiations with the Cor�pany so as to
. resolve the remaining issues necessary to the preparation of
the revenue agreer�ent and other documents necessary to the
adoption by the Authority of its final bond resolution and the
issuance and delivery of the revenue bonds. _
6. The revenue bonds ( including any interi� note or
notes) and interest thereon shall not consti�ute an
indebtedness of the Authority or the City of Saint Paul within
the r�eaning of any constitutional or statutory lir�itation and
shall. not constitute or give rise to a pecuniary liability of
the Authoritv or the City or a charge aqainst their general
credit or taxing powers and neither the full faith and credit
nor the taxinq powers of the Authority or the Citv is pledqed
for the pa_yr�ent of the bonds ( and interim note or notes) or
interest thereon.
7. In order to facilitate cor�pletion of the revenue
� bond financing herein conter�plated, the City Council is hereby
requested to consent, pursuant to Laws of t4innesota, 1976,
Chapter 234, to the issuance of the revenue bonds ( including
any interim note or notes) herein conter-tplated 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 Prelir�inary Agreement and any
additional available inforr�ation the City Council r�ay request.
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• 8. The actions of the Executive �Vice-President of
the Authoritv in causing public notice of the public hearing
and in describing tlie general nature of the Project and
. estimating. the principal amount of bonds to be issued to
f�inance the Project and in preparing a draft of the proposed
application to the Comr.►issioner of Securities, 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 December 16, 1980
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Attest � � • � ��,. —
P' side
The Authority of the City .
of Sain Paul
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��• Secretarv , .
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� EXPLANATION OF AflMINISTRATIVf aRDERS, t �� �,. .
RESOLllTIONS, AND ORDINANCES � - � 'P ,}� � '� , ' �.°
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Date: December 16, 1980 �tECr!`�F.�
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T0: MAYOR QRGE LATIMER .
FR• � Eugene PLANNING & ECONOfvgIC
' pEV�LOPMENT _
�; P & L RTNERSHIP - SUBLEASE TO LOVERING ASSOCIATES, INC�:
$450,000 TAX EXEMPT NIORTGAGE
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 Lhe
issuance of a tax exempt mortgage note in the amount of approximately �450.@00 to .
finance the construction of a contractors and architects office building and
. storage yard for P & L Partnership northeast of the inter�ction o# South Wabasha
. and P]ato Boulevard.
PURPOSE AND RATIONALE FOR THIS ACTION: � �
The purpose of the tax exempt mortgage note is to finance the co�struction of a
contractors and architects office building and starage yard for P & L PartnersFt�p.
Approximately forty people would be employed as a resuit of this construction.
ATTACHMENTS:
Staff Memorandwn
Draft City Council Resolution
Port autMority Resolution NQ. 1762