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274694 M�H17E - CiTV CIERK ��UnCl� 2'�4694 PINK - - FINANCE G I TY OF SA I NT PAU L CANARV - DEPARTMENT BLUE - MAVOR File NO. Council Resolution Presented By Referred To � Committee: Date Out of Committee,By Date WHEREAS: 1 . On March 25, 1980, the Port Authority of the City of Saint Paul adopted Resolution No. 1622, giving preliminary approval . to the issuance of revenue bonds in the initial principal amount of approximately $5,255,000 to finance the construction of a 392-car parking ramp on Block 40 by the Block 40 Development Associates, a general partnership comprised of James and David Carley. 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 , tiy 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. �622,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 t�e Port Authority to be necessary for carrying out the purposes for which the aforesaid bonds are issued. COUNCILMEN Requested by Department of: Yeas ���aN Nays Hozza �— In Favor Hunt d �� Levine __ Against BY � Maddox Showalter Te o APR 8 19�0 Form Ap r ved by City Attorn Adopt y Goun ' . D te Jr/� t r BY/ . � oZyld V rtified P• .ed by Co n ecEe a y I� � A�ppr by Mavor: Da e PD�� Appr ed Mayor for Sub ' si ' to Council .� By BY `�� �USH�D A P R 1 9 i980 , I . � . 2'7��9� � Resolution No. 1622 RESOLUTION OF THE PORT AUTHORITY OF THE CITY OF SAINT PA�JL 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 4dHEREAS, factors necessi�ating 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, The Port Authority of the City of Sai:nt Paul (the "Authority") has received from the Carley Capital Group (hereinafter referred to as "Applicant" ) a request that the Authority issue �its revenue bonds to finance the acquisition, installation and construction of a public parking facility and related eguipment (hereinafter collectively called the "Froject" ) to be leased by the Authority to the Applicant or a partnership in which the Applicant (or its partners) shall be a general partner (or partners) .(hereinafter collectively referred to as "Company") to serve the members of the general �SUblic including the occupants and users of the commercial, retail and residential facilities which are to be constructed on Block �40 in the City of St. Paul, all as is more fully described in the staff report on file; and y . � ' p� / `���"� WHEREAS, the Project is to be constructed as part of a construction program for which the City of Saint Paul is seeking an Urban Development Action Grant ("UDAG") ; 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 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 WHEREAS, the Project to be financed by revenue bonds will result in substantial employment opportunities in the Project; WHEREAS, 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 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; � 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; and WHEREAS, 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 express their views with respect to the proposal. �. . F�i�`X�^.�r'� NOW, THEREFORE, BE IT RESOLVED by the Commissioners of the Port Authority of the City of Saint Paul, Minnesota as fol lows: 1. On the 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 within the meaning of Subdivision 1 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, will be to encourage the development 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 ��ill help the City to retain and improve its tax base and provide the range of services and employment opportunities requirec3 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 w�thin 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 ot development to assist the Company in financing the Project. 2. Subject to 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 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 nat to exceed approximately $5,000,000 (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 reference and approved. 3. In accordance with Subdivision 7a of Section 474.01, Minnesota Statutes, the Executive Vice-President of the AUTHORITY is hereby authorized and directed to submit the ,. _ . . .. ... � .__.. . . . . . , , 2"����� � 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. 4 . There has heretofore been filed with the Authority a form of Preliminary Agreement between the Authority and Applicant, 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 the Project and its financing. Said Agreements are hereby approved, and the President and Secret�ry of the Authority are hereby authorized and directed to execute said Agreements. 5. Upon execution of the Preliminary Agreement by the Applicant, the staff of the Authority are authorized and directed to continue negotiations with the Applicant 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 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. .�r • ' ' ,, • ' � . � '�����as� , � 6. The revenue bonds ( including any interim note or � ' , - notes) and interest thereon shall not constitute an indebtedness of the �,uthority 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 pavment of the bonds (and interim note or notes) or . interest thereon. � 7. In order to� facilitate completion of the revenue . bond financing herein contemplatec7, the City Council is •hereby requested to consent, pursuan� to Laws of P�innesota, 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 deer� necessary to cor�plete the Project or to refund such revenue bonds; and for such purpose the Executive Vice President o� the Authority is hereby authorized and directed to iorward to the City Council copies of this resolution and said Preliminary Agreement and any additional available information the City Council may request. 8. The actions of the Fxecutive 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 oi 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 resnects ratified and confirried. Adopted: ?•iarch 25, 1980 i , G" // /__ . -� ' ' _ . Attes � �C��� �:L-r� � , President � , The Port l�uthority of the Citv ����� �„, /�_�'��i of Saint Paul � � , Secretary - . . . � 2'�46�►� : . � 4M Ol : 12/1975 . ` Rev.: 9/8/76 EXPLANATION 4F ADMTNISTRATIVE ORDERS, RESOLUTIQNS, AND ORDINANCES � � , Da�.e: March 26, 1980 • T0: MAYOR GE GE LATIMER � E C E Q V E D : MAP 2 � 1980 FR: E. A. Kr u Paul Port Authority � � MAYOR S O�CE - RE: BLOCK 4�0 DEVELOPMENT ASSOCIATES JAMES aND DAVID CARLEY, GENERAL PARTNERS $5,255,000 REVENUE BOND ISSUE ACTION REQUESTED: • In accordance with the Laws of Minnesota, Chapter 234, it is requested that the Gity Council , by Resolution, a draft copy� of which is attached hereto, approve the issuance of revenue bonds in the amount of approximately $5,255,000 to finance the construction of a 392-car parking ramp on Block 40 by the Bla�k 40 Develop�nt Associates, a general 4 partnership comprised of James and David Carley. � . :� PURPOSE AND RATIONALE FOR THIS ACTION: The purpose of the bond issue is to finance the construction of a 342-car parking ramp on Block 40 by the Block 40 Development Associates. Block 40 is comprised of real estate bQUnded by Sibley, Jackson and 5tfi and 6th Streets, and contains the McGoll building, �he Sibley Company building, First National Bar�k Auto Bank, the Aslesen building, and the General�Office Products building. The partnership will contribute �$500,000 tn equity into th±e project. The financing of the parking ramp is also contingent upon receipt of a UDA6 Grant in the amount of $500,000. Lowertown Redevelopment Corporatio� will also be a�n equity participant in the project. When the Block 40 development pro3ect is completed it wili contain 148 rental units, office and reta�il spac�, a new YMCA, and a parking garage underlying most of the proper�ty. . ATTaCHMENTS: - Staff Memorandum Draft City Council Resolution .� Port Authority Resolution No. 1622 � E . � i j �PORT� . � AUTHORITY OF THE CITY OF ST. PAUL � � ` Memorandum TO: Board of Comnissioners DAT� March 21 , 1980 Meeting March 25, 1980 FROM: E. A. � SUBJECT: BLOCK 40 DEVELOPMENT ASSOCIATES - JAMES AND DAVID CARLEY, GENERAL PARTNERS PUBLIC HEARING - SALE OF LAND AND BUILDING PUBLIC HEARING - SALE OF BONDS - PRELIMINARY AND UNDERWRITING AGREEMENT RESOLUTION N�'S 1621 AND 1622 1 . THE PARTNERSHIP � The Block 40 Development Associates is a limited Minnesota partnership in which the Carley Capital Group and James and David Carley will be the general partners. . The Carley's are involved in numerous developments throughout the Midwest and are the owners and developers of the Mears Park Apartment project, which is in the immediate vicinity of this facility. The Lowertown Redevelopment Corporation, created by the McKnight Founda- tion, will also be an equity participant in this project, as will the City of St. Paul through its obtaining an Urban Development Action Grant, which monies will be used to fund equity for the project. 2. THE PROJECT Block 40 is comprised of real estate bounded by Sibley, Jackson and 5th and 6th Streets, and contains the McColl building, the Sibley Company building, First National Bank Auto Bank, the Aslesen building, and the General Office Products buil:ding. All of these buildings will be inte- grated into this project which when it is completed will contain 148 rental units, office and retail space, a new YMCA, and a parking garage underlying most of the property. Lowertown Redevelopment, the City of St. Paul , and the Carley Capital Group have requested that the Port Authority consider financing the construction of a 392 space parking ramp with a bond issue to produce net proceeds of $3,525,000 for con- struction. The overall project with all of the elements outlined will cost in excess of $33,000,000. Revenue bonds will be issued for the office and retail space for the YMCA and Minnesota Housing Finance Agency or targeted tandem funds will be used to finance the rental housing units. . � � Board of Commissioners March 21 , �980 . Page -2- In addition to the 392 spaces proposed to be financed by the Port Authority, an additional 125 spaces will be financed by the Farm Credit Bank group. The Port Authority`s portion of the parking ramp will require construction funds of $3,525,263 with $500,000 in equity contributed by the Carley group and �500,000 of UDAG funds. The project was one of the primary developments approved for federal funding under St. Paul 's Negotiated Investment Strategy plan. 3. FINANCING The financing of the Port Authority's portion is proposed to be a revenue bond issue comprised as follows: Construction $3,525,263 Capitalized Interest - 18 Months 748,837 Reserve Fund 788,250 Expenses 35,000 Underwriting . 157,650 $5,255,000 . This bond issue is projected at a 9.5�o coupon rate and would result in an annual debt service of approximately $482,000. The attached pro forma illustrates the economics of the parking ramp and with the general partnership's guaranty is in our opinion, if all other facets of this project are funded, needed to serve the facility, and viable once the facility is occupied. To produce the lowest possible debt service we are proposing to maximize the reserve fund to the allowable 15%, whereby the reserve amortizes itself and spins off the excess of the coupon rate to the Port Authority at the rate of �pproximately �20,000 a year, and has� the effect of reducing t�he debt service to Block 40 by �6,240 per month. These pro- jections are based on the current market and the current reinvestment rates and may be altered by the time this issue closes. Under the projection the taxes generated by the parking ramp are esti- mated to equal during the term of the bonds �2,500,000. The Port Authority fiscal and administrative fees will be the excess earnings on the maxi- mized reserve plus $459 per month for the second 10 years of the agreement and $985 per month for the last 10 years of the agreement. The financial data .furnished by the Carley Group indicates a net worth on a cost basis of in excess of �4,000,000 and on an estimated value basis a net worth in excess of $17,500,000. •' Board of Commissioners . ��larch 21 , 1980 . Page -3- 4. UNDERWRITING Miller & Schroeder Municipals in syndication with Allison-Williams; Dain, Boswell ; Piper, Jaffray & Hopwood; Payne, Webber; Juran & Moody; and Robert S. C. Peterson, have agreed to underwrite the issue. The coupon rates will be set at closting. Such underwriting is subject to obtaining a Standard & Poor's 'A' rating as is customary on Resolution 876 bond issues. 5. TERMS OF THE LEASE The terms of the lease are for 30 years from the nominal date of the bonds and the lease agreement will contain an option to purchase the facility at the time the bonds are amortized for �1 .00. The parking facility will be operated as a public parking facility. The Port Authority will fund from bond proceeds necessary legal and bond issuance expenses and will obtain monthly payments in advance throughout the term of the bonds, which will generate additional income through the earnings on the sinking fund. � 6. RECOMMENDATION Staff has discussed this matter with representatives of the City of St. Paul , with the Lowertown Redevelopment Corporation, has reviewed the finances and reputation of the Carley Capital Group. It is our opinion that this significant Lowertown development will give impetus to additional developments , that the developer is able and competent to carry the project to completion and successful operation, and staff accordingly recommends approval of the finance of the parking ramp provided the UDAG funds are forthcoming and the equity participation is as has been represented to be. It is recommended that Resolution No. 1621 providing for an option to purchase the property at the end of the term be adopted 'and that Resolution No. 1622 authorizing the issuance of bonds in the amount of approximately �5,255,000 also be adopted. The option to purchase fee is $1 . The Port Authority followed its adopted Early Notification System plan and no objections have been received. EAK:jmo -