276607 WHITE - CITY CLERK !'�
PINK - FINANCE �,f���
CANARY - DEPARTMENT G I T Y O F S A I N T PA U L COUtICll ���vtir
BLUE - MAYOR
File N .
cil Resolution
Presented By �
Referred To Committee: Date
Out of Committee By Date
WHEREAS:
1. On March 5, 1981 , the Port Authority of the City of Saint Paul adopted
Resolution No. 1784 giving preliminary approval to the issuance of revenue bonds in the
amount of approximately $2,666,000 to finance the construction of a 25,000 square foot office
building by the Shepard Park Partnership at the junction of Youngman Avenue and Rankin Street.
The partnership is comprised of Ronald L. Harris, Sheldon Stewart, Stuart Nolan, and Herbert
Goldenberg.
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. 1784, 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 CounciJ 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 Requestgd by Depa nt of:
i�� �
Levine [n Favor
Maddox .�i
McMahon () B
snowa�ter - __ Against Y
Tedesco
Wilso
' MAR 3 1 1981 Form Ap by City Att rney
Adopted-�y Coun 1: � Date — �
: �
Ce�fied Pa- d by ouncil Secretary BY
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Ap ro e by ;Nayor: D APR 2 (�ir_ Appr d by Mayor for Su iss on�to Council
sy Bv
PUB�tsHEO APR 1 1 1981
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' Resolution '10. 1784
RFSnLUTION OF
THF PORT Ai1THORITY OF THE CITY OF SRINT PAiJL
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 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
Z�iEREAS, 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
Z�iEREAS, The Port Authority of the City of Saint Paul
(the "Atithority") has received from the Shepard ?ark Partner-
ship, a Minnesota general partnership (hereinafter referred to
as "Company" ) whose partners are Ronald L. Harris, Sheldon
Stewart, Stuart Nolan and Herbert Goldenberg, a request that
the Authority issue its revenue bonds to finance the
acquisition, installation and construction of a 25 ,000 square
foot o£fice building (hereinafter referred to as the "Project")
in the City of St. Paul, all as is more fully described in the
staff report on file; and
WFiEREAS, 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
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 image and reputation of the
City; and
� �. � ��660'7
' WfiEREAS, the Project to be financed by revenue bonds
will result in substantial employment opportunities in the
Project; �
cVHEREAS, 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 the
Authority that witYi 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;
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;
SaHEREAS, the Authority did conduct a public hearing
pursuant to said notice, 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 ekpress their views
with respect to the proposal; and
� jafiEREAS, the Authority has been notified that
residents living in the vicinity of the proposed Project are
concerned that their homes or homes surrounding the Project
will be taken by the Authority through the exercise of eminent
domain, to accomodate additional projects or the expansion of
the Project proposed herein, all as more specificially set
forth in the staff inemorandum to the Commissioners.
NOW, THEREFORE, BE IT RESOLVED by the Commissioners
of the Port Authority of the City of Saint Paul, Minnesota as
follows:
_ � , �l660'7�
1. nn the basis of information available to tl�e
Authority it appears, and the Autnority hereby finds, that said
Project constitutes properties, used or useful in connection
with ane 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, wi13 be to encourage the development of
economically sound industry and co.�erce 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 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 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 £inancing the Project.
2. The industrial develop:�►ent district created by
Resolution No. 1785, also adopted to3ay, is to be limited to
. the precise site on which the Project is to be located. The
Authority does not have any currer�t intention of expanding that
district. The Authority does not nave any current intention of
exercising its powers of eminent coT�ain to remove any of the
residences in the vicinity of the Project and, to the extent
perniitted by law, covenants that it will not exercise its
powers of eminent domain with regard to residential property
adjoining the Project site, nor will it issue its revenue bonds
to finance any expansion of the Project beyond the size and
scope contemplated in the staff :ne^�orandum that was discussed
at the public hearing held today.
3. Subject to the mut�al agreement of the Authority,
the Company and the purchaser of tze 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 Project and the issuance of the revenue
bonds, the Project is hereby approved and authorized and the
issuance of revenue bonds of the Authority in an amount not to
exceed approximately $2,666,000 (other than such additional
revenue bonds as are needed to c��plete 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 reference and
approved.
4. In accordance with Subdivision 7a of Section
47�4.01, Minnesota Statutes, the Executive Vice-President of the
Authority is hereby authorized and directed to submit the
proposal for the above described Project to the Commissioner of
Securities, requesting 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.
5. There has heretofore been filed with the
Authority a fornn of Preliminary Agreement between the Authority
and Company, relating to the proposed construction and
financing of the Project and a form of the Underwriting �
Agreement. The form of said Agreements have been examined 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 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
(including, 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 tne 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.
, 6. Upon execution of the Preliminary Agreement by
the Company, the staff of the Autnority 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 docunents 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)
^r •• ����
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 o£fer 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 Undenariters 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.
7. 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 statutozy 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.
8. In order to facilitate completion of the revenue
bond financing herein contemplated, the City Council is hereby
requested to consent, pursuant to Laws of i�tinnesota, 1976,
Chapter 234, to the issuance of the revenue bonds ( including
any interim note or notes) herein contemplated 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 Preliminary Agreement and any
additional available information the City Council may request.
9. 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
application to the Commissioner 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 March 5, 1981 ,
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Attest ' -
s' nt
The ort Authority of the City
of Saint Paul
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� EXPLANATIDN �OF At�IINISTRATIYE ORDERS,
RESOLUTIONS, AND ORDINANCE� � �` �+
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Qate: March 5, 1981
��������
T0: R GE LATIMER I��"� g C ��8�,
�R: � E. A. K w . Paul Port Authority ����
RE: SHEPARD PARK PARTNERSHIP-OFEICE BUIlDIN6
�2,666,Q00 REVENUE BOND ISSUE
RCTION REQUESTED:
In accordance with the Laws of Minnesata, Chapter 234, it is requested that t�e C1ty Council,
by Resolution, a draft copy af which is attach�d h�reto. approve the issuance o# revcnue
bo.nds in the amount of approximately $2,666,Q00 to finance the constraction. of a 25,000
square foat affice building by the Shepard Park Partnership at the junction of Youngman ;
Avenue and Rartkin Street.
PURPUSf AND RATIONALE FOR THIS AGTION: � �
The purpose of the hand issue is to finance the constructi�n of a 25,000 square'f�ot office
buildtng by the Shepard Park Partnership at the junction of Youngman Avenu� and t�inkin
Stre�t. The partnership is cc�mmp�^ised of Ronald L. Har.ris, Sheldon Stewart, S�uar+t Nolan,
and Herbert Goldenberg. The facfllty would contain 30 underground parking sp�ces and 70
surface �spaces whtch are adequate to comply witfi the City�s zoning ordinar�ce. Tha Shepard
Park Qevelopiaent presently contains buildings with 370 apartment units and 112 cond�miniums.
The overall plan of development, which was originally approved by the City Planping Board
artd �the City Council , provided for rezoning and additional facilities ta inclwde an offfce
building and more apartments and condominiums than presently a�e contained ir� the`developinent.
ATTACHMENTS:
�ff Memorandum
��aft City Cauncil Resolution
Port Authori�y Resol.ution No. 1784
P � RT � ��6�!'�
AUTHORITY
OF THE CITY OF ST. PAUL
Memorondum
TO: Board of Commissioners DAT� March 2, 1981
Meeting March 5, 1981
.;
i
f
FROM: . E. A: a
� •
SUBJECT: SHEPARD PARK PARTNERSHIP-OFFICE BUILDING
PRELIMINARY AND UNDERWRITING AGREEMENT - $2,666,000 REVENUE BOND ISSUE
RESOLUTION N0. 1784
CREATION OF INDUSTRIAL DEVELOPMENT DISTRICT - RESOLUTION N0. 1785
PUBLIC SALE HEARING - SALE OF LAND - RESOLUTION N0. 1786
l . THE COMPANY
The Shepard Park Development presently contains buildings with 370
apartment units and 112 condominiums. The overall plan of development,
which was originally approved by the City Planning Board and the City
Council , provided for rezoning and additional facilities to include an
office building and more apartments and condominiums than presently
are contained in the development.
A joint meeting of the City Council and the Port Authority Board resulted
in a decision by the Board of Comnissioners to finance housing in Shepard
Park and elsewhere throughout the City when requested to do so by the
City of St. Paul. No application for housing financing was presented
following that meeting.
This proposed project is for a 25,000 square foot office building to
be built by the Shepard Park Partnership at the junction of Youngman
Avenue and Rankin Street. Youngman is the frontage road for Shepard
Road in this area. The facility would contain 30 underground parking
spaces and 70 surface spaces which are adequate to comply with the
City's zoning ordinance.
The partnership would be comprised of Ronald L. Harris, Sheldon Stewart,
Stuart Nolan, and Herbert Goldenberg, who are involved in numerous St.
Paul companies including the Stuart Corporation, Shepard Park Plaza,
Harris Stewart Companies, Inc. , Riverview Development Company, Prudent
Supply Inc. , and many other developments.
2. THE PROJECT
The partnership currently owns a site of 35,800 square feet zoned for
office construction on which a 25,000 square foot building costing
$2,025,000 is proposed to be constructed.
Board of Comnissioners
Page -2-
March 2, 1981
Committed tenants are:
1 . Rosen & Ballenthin, a legal firm - 4,000 square feet
2. Stuart Corporation, construction and building management firm -
5,000 square feet
3. Prospective tenants subject to approval -
l . Crown Builders - 2,000 square. feet
2. Regional real estate office - 5,000 square feet
3. Brokerage office - 1 ,500 square feet
4. Convenience retail to serve 482 dwelling units - 6,000 square feet
Construction is expected to siart in April 1981 and be completed in
approximately nine months.
3. FINANCING
The Shepard Park Partnership members previously mentioned above have a
combined net worth in excess of $13 million. It is proposed that the
Port Authority issue a bond issue of approximately $2,666,000 under
Resolution 876. Said bond issue to be personally guaranteed by the four
individuais.
The bond issue would be for a term of 30 years and the partnership equity
would be transfer of title to the land valued at $227,000 by appraisal
io the Port Authority.
The bond issue would be comprised of the following:
Construction �2,025,000
Reserve 311 ,000
Capitalized interest 220,000
Expenses 30,000
Underwriter's discount 80,000
TOTAL 2,666,000
4. Ui�DERWRITING AGREEMENT
Miller & Schroeder Municipals will underwrite the agreement based upon
an 876 issue with the rate of interest to be based upon the market rate
for 876 bond issues at the time of closing.
5. TERMS OF THE LEASE
The term of the agreement will be for 30 years from the nominal date of
the bonds and the terms do contain an option to purchase the bui7dings
and land at the end of the term for $1 .00.
� ��ssa�
Board of Commissioners
Page -3-
March 2, 1981
In addition, the Port Authority will earn all interest on the sinking
funds and interest on the reserve fund for the full term. The reserve
fund, as is customary under 876 bond issues where it is capitalized in
the issue, will be repaid to the company or used to pay the last pay-
. ments of rent if th�e facility or the bond issue is not prepaid in advance.
The fiscal and administrative fees will be as `follows:
.36� per million per year for the first 10 years $ 9,598.00
.48% per million per year for the second 10 years 12,797.00
.60% per million per year for the final 10 years 16,000.00
The Port Authority will also retain all earnings on the sinking fund and
the debt service reserve fund for the full term of the issue.
6. RECOMMENDATION
In accordance with Board policy, an early notification of impending
action on this project was mailed on January 17. To date, no formal
response has been received from District 15, although a Ms. Kaufer has
indicated she would be present at the meeting.
Staff has reviewed the financial statements of the partnership, evaluated
credit and Dun & Bradstreet reparts on the companies in which the indi-
viduals are financially involved, and based upon this evaluation,
recommend the adoption of the following resolutions. It is also recom-
mended that the Port Authoriiy go on record by adoption of Resolution
No. 1784 expressly covenanting that it will not now or in the future
condemn any residences in the vicinity of the Shepard Park project.
Resolution No. 1784 - Approving Preliminary and Underwriting Agreements
and Sale of Bonds
Resolution No. 1785 - Approving Creation of Industrial Oevelopnent
District
Resolution No. 1786 - Approving the Public Sale Hearing - Sale of Land.
EAK:jmo
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.At its mee�ing of March 19, 1981 , the Finance Corr�nittee recommended. approval
._ of the following: . __ .
1 . Reso]ution approving issuance of approximately $2,666,000 of revenue bonds �
. by the Port Authority.to finance construction of office building by th�
Shepard Park Partnership. (11799-Gf�i)
^irY i►.�1LL SEVr.N"�i FLOOP� S_,I:tiT PATJL, ►'.�EI\\��JT_�. S�1Q:.
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