275363 M�HITE — C�TV CLERK COUIICII !_ Aa ■���
PINK � FINANCE G I TY O F SA I NT PA LT L
. CANARV — DEPARTMENT nwY �,r �„rL�
BLUE — MAVOR File NO.
Cou ci Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
1 . On September 19, 1978, the Port Authority of the City of Saint Paul adopted
Resolution No. 1389, giving preliminary approval to the issuance of revenue bonds in the
initial principal amount of approximately $3,085,000 to finance a five story facility
plus a basement and 120 rental un�its for John Prest d.b.a. : Budget Inn.
2. The City Council of the City of Saint Paul adopted Resolution No. 271849 on
September 28, 1978 giving preliminary approval to the issuance of revenue bonds in an
amount of approximately $3,085,000.00 to finance the five story facility plus a basement
and 120 rental units for John Prest d.b.a. : Budget Inn.
3. On July 15, 1980, the Port Authority of the City of Saint Paul adopted Resolution
No. 1678, giving preliminary approval to the issuance of revenue bonds in the initial
principal amount of approximately $1 ,370,000 to finance the construction of two additional
floors to The Inn representing a 60 room addition which would bring the total n unber of
rooms to 208.
4. 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:
5. 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. 1678, 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 authorized the issuance of any additional bonds
includin refundi g bonds) by the Port Authority, found by the Port Authorit to be necessar
�ssue .
COUNCILMEN Requested b De artment of:
Yeas Nays �
tl Hunt In Favor
Z Levine b,/
H n Maddox �� ,
Le � ,e __ Against BY —
Ma dox McMahon
Sh alter Showalter ��� 2 g 1980
Te e co Tedesco Form Approv by City Atto y
Adopted b C uncil: WilsonDate — .( ( l�t,
Certified . �e y Council retar BY � � �
By 1- t
1 _����� '; � ,A by Mayor for ub ' s' o ouncil
Appr y Mavor: Da ,�-ua�-•■-
BY - �� B
Mle�.tSNED AU G 9 1980 �
• PORT
��lT .HORlTY �
OF THE CITY OF ST. PAUL
_ �'r'�`�"'�'�('
Memorondum �� d�������
TO: Board of Corr�nissioners OATE: July 11, 1980
Meeting July .15, 1
FROM: Donald G. Dunshe
SUB.tECT: JOHN PREST, dba THE INN
$1 ,370,000 REVENUE BOND ISSUE
PUBLIC HEARING, SALE OF BONDS - RESOLUTION N0. 1673
PRELIMINARY AND UNDERWRITING AGREEMENTS - RESOLUTION N0. 1678
LEASE AMENDMENT
1. THE COMPANY �
On September 19, 1978, the Port Authority Commission by Resolution
No. 1389 approved .$3,085,000 in industrial development revenue bonds
to finance the construction of The Inn at the corner of Seventh and
Kellogg Streets. As part of the cost of the project John Prest
provided the Port Authority with a security interest in the furnishings
of the motel and .the equipment which cost approximately $333,000.00
and represented an investment in excess of 10� of the bond issue.
At the time the project was originally approved by the Port Authority,
John Prest was contemplating the construction of a five-story building,
however, he constructed a six-story building which pravided an extra
30 rooms and represented an additional investment on his part of approx-
imately $500,OOO.QO.
The Inn has been open since the Spring of 1979 and presently is showing
a profit both in the motel operations as well as the restaurant.
2. THE PROJECT
The Inn has asked that the Port Authority consider the issuance of
$1 ,370,000 in industrial development revenue bonds to finance the
construction of two additional floors to The Inn representing a 60
room addition which would bring the total number of rooms to 208.
Bond issue proceeds would also be used to acquire the Joy Brothers
building on Smith Avenue adjacent to The Inn parking lot. The building
would be used as a construction storage facility and following com-
pletion of the addition would be used for conference and meeting room
functions associated with the operation of The Inn. Mr. Prest will
invest approximately $100,000 in furnishings and fixtures as his equity
contribution to the project.
Board of Commissioners
The Inn -
July 11 , 1980
Page Z
3. FINANCING
The proposed financing of the facility under Resolution No. 876
provides for the bond issue to be used as follows:
Construction $1 ,105,000
Bond Issue Expense 20,000
Capitalized interest - 6 Months 6Z,525
Debt Service Reserve � 136,375
Discount 41 ,100
, 0, 00
In .addition to the monthly rent the Company will �pay a fiscal and
administrative fee as follows:
First l0 Years $300 per month per million issued
Second �l0 Years $400 per month per million issued
Ffnal 8 Years $500 per month per million issued
The present option on The Inn would continue and include the additional
land being acquired adjacent to the present Inn parking lot.
4. UNDERWRITING
Miller & Schroeder Municipals has agreed to underwrite a bond issue
for a term of 28 years. In addition to the fiscal and.administrative
fees the Port Authority wou7d receive ir�terest earr�ings on the debt
service reserve and sinking fund for the term of the issue.
5. RECOMMENDATION
Under amendments to Chapter 474 the Port Authority published notices
in the Legal Ledger and St. Pau1 Dispatch/Pioneer Press on June 7 and
9 respectively that the proposed project would be considered by the
Port Auth�rity Commission on Tuesday, June 17 and on that date the
heari;�g was continued to a Special Meeting on July 1 , 1980. On July
1 , 1980, it was decided the project would be considered at the July 15,
1980 meeting. If the project is approved by the Commission on 7uesday,
July 15, a formal application will be submitted to the Commissioner of
Securities before the bond issue is closed.
Board of Commissioners
The Inn
July 11 , 1980
Page 3
Mr. Prest and Port Authority Staff inet with the West 7th Street
Federation (District 9) on July 2 to review The Inn expansion.
The Federation indicated support for the project. The Civic
Center Authority by Resolution No. 2044 unanimously supported
the expansion and acquisition.
Staff has reviewed the financial statements of the Company as well
as the personal financial statements of John Prest and Mr. Prest
has agreed to personally guarantee the issue which he also did in
the original agreement in 1978. Staff recommends approval of
Resolutions 1673 and 1678 authorizing the issuance of $1 ,370,000.
sjs
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. _ . __ _ _ _ __ FJ � s���..=;sa;�
. . . . .. Resolution No. 16�8 .
RESOLUTION OF
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
WHEREAS, the purpose of Chapter 458, Minnesota
Statutes, as found and determined by the legislature is to .
provide the means by which marginal area pronerties may be
developed or redeveloped to help cure the problems incident to .
the existence of such properties as set forth in P�Iinnesota
Statutes, Section 458 .191, Subd. 3; and
WHEREAS, the purpose of Chapter 474, Minneso�a
Statutes, known as the Minnesota tiunicinal Industr.ial Develop-
ment Act {which together with Chapter 458, T4innesota Statutes
is 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 indsstry and commerce to prevent so far as possible
the emerger_ce 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 oi 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
governmen�al services required to meet the needs of the
increased population and the need for development of land use
which wili provicle an adequate tax base to finance these
inereased costs and access to employment opportunities for such
population; and
'v�HEREAS, The Port Authority of the City of Saint Paul
(the "AUTHORITY" } pursuant to Supplemental Bond Resolution No. _
1403 adopted October 12, 1978 issued $3, 085 , 000 in Industrial •
Development Revenue Bonds, Series X to John M. Prest d/b/a
Budget Inn (ti:e "Applicant" ) to finance the acquisition of land
and the construction of a 148 room hotel and restaurant
facility in the City of Saint Paul; and
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. - - WHEREAS, The Authority -has received from the :
�Appl�icant a request that the Authority issue additional revenue
bonds to finance the construction of a two story addition to
the existing hotel facility and the acquisition of property
_ adjacent to that facility which is to be used to provide
parking space for the hotel (hereinafter aollectively called
the "Project" ) , all within the economic development district
- which has been established p�rsuant to Seetion. 458.19I of the
Act within 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 lielp it� provide the range of services ana
employment opportunities required by its population, and said
Project will assist the City in achieving that objective. Said
ProjecL 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; and
Wf�iEREAS, the Authority has been advised by the �
Applicant that conventional, commercial financing to pay the
capital cost of the Project is available only on a limited
basis and at sucn high costs of borrowing that the economic
feasibility of operating the Project would be �significantly
reduced, but the Applicant 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; and
'v,THEREAS, 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; and
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 th�e ;
office of the Authority, of a public hearing on the proposal of �
the Applicant that the Authority finance the Project
hereinbefore described by the issuance of its industrial
revenue bonds; and
. WHEREAS, the Autharity 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 reviewea, and all persons who appeared 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. The finding of the Authority contained in
Supplemental Bond Resolution No. 1403 adoptecl on October 12,
1978 are incornorated herein by reference as they apply �to the �
Project.
2. On the basis of information available to the
Authority it appears, and the Authority hereby finds, that the
Project constitutes a redevelopment project under Chapter 458
. of the Act; that the Project furthers the purposes of Ghapter-
458 of the Act; �hat the availability of the financing under
the Act and' willingness of the Authority to furnish such
financing will be a substantial inducement to the Applicant to
undertake the Project; and that the effect of the Project, if
unc3ertaken, will b� to encourage the development of
economically sour.d industry an3 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 improve its tax base and provide the range
of services and employment oppo-rtunities required by its
population, a:�d will help to prevent the movement of talented
and educate� persons out of the state and to areas within the•
state where their services may not be as effectively used and
will result in rn�re 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.
3 . Subject to the mutual agreement of the Authority,
the Applicant 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 not to
f` i •
exceed approximately $1,370, 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.
4 . There has heretofore been filed with the
Authority a form of Preliminary Agreement between the Authority
and Appl�icant, 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 Co:nmissioners. 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
Applicant 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" und2r 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
reacned as to the ultimate details of the Project and its
financing. Saia Agreements a.re hereby approved, and the �
President and Secretary 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 revenue agreement 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 t�e
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 Jnderwriters 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.
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' 6. 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 r 'ise to a pecuniary lia.bility of
the Authority or the City or a charc3e 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 plec3ged
for the payment of �be bonds (and interim note or notes) or
interest thereon.
� 7. In order to facilitate completion of the revenue
bond financing herein contemplated, the City Council is hereby -
requested to conse7t� pursuant to Laws oi A2innesota, 1976 ,�
Chapter 234 , to the issuance of the revenue bonds (including
any interim note or notes) herein contemplated and any
addit?onal bonds w'r�ich the Authority may prior to issuance or
from time to -time .��e�eafter deem necessary to complete the
Projects or to refund suc`� revenue bonds ; and for such purpose
the Exec�,:�ive V�ce Presiaent of the Author,ity is hereby
authorizeu� ar:d d_rected �o forward to the City Council copies
of this resalution and said Preliminary Agreement �and any
additicna? avai=able information �he City Council may request.
8 . The act�ons of the Executive Vice-President of
� the �;uth�rity ;1-� ca�5�nq public notice of the public hearing , �
and in CesCribir.c L:�e general nature of the Project and
estimating �ne �rinci�al amount oi bonds to be issued to
finance �he �r�jec� are in all respects ratified and confirmed.
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/ //Adopted July 15, 1980 `�/
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Attest � r ` � �
esident
The Por'� Authority of the City
of Sa'in� Paul
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�� ecretary (
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PORT AUTHORITY OF THE CITY OF SAINT PAUL
25 WEST FOURTH STREET • SU►TE 1305 • ST. PAUL, MINN. 55102 • PHONE (612) 224-5686
July 15, 1980
Mr. Gary Stout
Director
Planning and Economic Development
Department
City of St. Paul
14th Floor, City Hal1 Annex �
St. Paul�, Minnesota : 55102
SUBJECT: THE INN
$1 ,370,000 REVENUE BOND ISSUE
Dear Gary:
We submit herewith for your review and referral to the office of the
Mayor, City Council and the City Attorney's office details pertaining
to the issuance of revenue bonds to finance the construction of two
additional floors to The Inn representing a 60 room addition which would
bring the total .number of rooms to 208.
In addition to the staff inemorandum, we are attaching a draft copy of the
proposed City Council Resolution and a copy of Port Authority Resolution
No. 1678 which authorized the sale of bonds in the amount of $1 ,370,000.
Your expeditious handling of this matter will be appreciated.
`.Yours truly,
. /� ,^ � � � �,;
� - �:;�� l "`�`�_:` I
r %��,.�, �:�,
Eugene`�A. Kraut `�.
Assistant Executive
Vice President
EAK:�s
cc: R. Broeker �
?OisER1 F.SPRA'rKA EUGENE A.KRAI.R,C.I.D. DONALD G.DUNSHEE,C.I.D. CUFFORD E.RAMSTED RONALD O.SCHETTLE
xECUiiVE ViCE PREgDENI !;.`,S'SiF.^71 EXcCUi�c ViCE�7ES�DENi pi^,ECTO�.CvGH.���c,�,.�:t��p�NENT CHiEF ENGivEER Cr!iEF ACCOU�d:F�M
�OtJ�MiSSIONERS �GEORGE W.WINTER RUBY HUNT ARTHUR N.GOODMAN G RICHARD Si�,DE DAVID HOZZA LOUIS H. MEYERS WILUAM J. SBFERT
w�es��G�aT vrce v�ESioEn�i sec«enFV ^ausuaeR . .
'�z
• C.I.D. Cerfified !ndustrial DevelnnPr
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` Rev. : 9/$/�6 ,
' . EXPLANATION Of AQMINISTRATIYE ORDERS, � ������
: RE50LUTIONS, AND ORDINANCES _
. F' S::
Oate: July 15, T9� ,� E C � � � E � ,::
JU�� 1 � g��a �
: T0: MAYQR RGE LATIMER MAYCNt'S OF�K�E
;FR; Eugen aut � � ,
:J�; JOHN P EST, dba THE INN
$1 ,370,�00 f�YENUE BOND ISSUE
;ACTI�1 REQUESTED: • .. .
In accordance with the Laws of Minnesota, Chapter 234, it is requested that the
City Co�cil. by Resolution, a draft copy o:f which is attached her�ta, approve
the issuanc� �of approximately �1,�70,000 in rev�nue bonds for the purpose of
financftfg the canstruction of two additional floors to The Inn rapresenting a '
60 room a�ddition which would bri.ng the total nwnber of rooms to 2(�. The inn �
is located at the corner of Seventh and K�11Qgg Streets.
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` Pt1RPQSE AND RAt I t�Vl�E FQR TM IS ACT I ON: .
The purpose of the bond issue is to finance the construction of two additt�nal floor�
to Tfie Inn located at the corner of Seventh and Kellogg Streets. Funds would also
be used to acquire the Joy Brothers bui]ding on S�ti�th Avenu� ad3a�ent to The Inn
park#ng lot. The building would be used as a ccrnstruct1on stara��t fa�ility and
fo�lawing c�mpletion of the addition would be used far canferehce and meeting room
functions associated wfth the operation of The Inn. The initi�l pro�ect wculd
iqcrease e�loyment by 10 people.
ATTACHN�NTS•
Staff inemorartd�n
Draft City Council Resolution
Port Authori ty�'���ti on No. 1678
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