273920 �NHITE - GTV CLERK
PINK - FINANCE G I TY OF SA I NT PAIT L Council +A➢y'y/
CANARV - DEPARTMENT File NO. �+ r �',���
BLUE - MAVOR
Council Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
WHEREAS:
1 . On October 9, 1979, the Port Authority of the City of Saint Paul adopted
Resolution No. 1562, giving preliminary approval to the issuance of revenue bonds in the
initial principal amount of approximately $7,000,000 to finance the acquisition of the
Radisson Parking Ramp located on B�ock A by Oxford Properties, Inc.
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. 1562, 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 P�ort Authority, found by the Port Authority to be
necessary for carrying out the purposes for which the aforesaid bonds are issued.
COUNCILMEN
Yeas Nays Requested by Department of:
� McMahon �_ �n Favor
Hozza
Hunt
I,evine _ � __ Against BY,a
Maddox
Showal
sco OCT 2 3 �979 Form Approv d by City Attorney
Ado by Counci Date
ertified _sed by ' Secretary BY `'
1�1p r v by iNavor: __p.�.+��; �� APproved by Mayor for Submi�n to Co ncil
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By _ -- $y � ��
Plk13LiSHED N OV 3 i979
;- P.O R T -
AUTHORITY
OF THE CITY OF ST. PNUL
�k����:�
Memorandum � • e�a °'' �
TO: Board of Commissioners ' DATE: October 5, t979
Speciai Meeting October 9, 1979
FROM: E, r
SUBJECT: pRELIMINARY AGREEMENT �
OXFORD PROPERTIES, INC.
SALE OF RADISSON PARKING RAMP--$7,000,000
RESOLUTION N0. 1561 AND 1562
�
The Port Authority financed the Radisson Parking Ramp in 1978 with the
issuance of a $5,500,000 revenue bond issue to cover construction casts.
The Port Authority also provided additional funds in the form of a $200,000
appropriation from Accumulated Net Revenues and fc�ded a portion of the debt
service reserve by appropriating $385,000. In addition, Resolution Na. 1270
required that a balance be maintained in the Operating fund to assure the
avaiiability of an operating fund which, together with other income dedicated
to operations, wauld be sufficient for a 3-year .period.
Staff has been in negotfation with several firms and individuals relative
to the sale of the Radisson Parking Ramp and have negotiated a sale with
Oxford Properties, Inc. at a price of $5,500,000.
The bond issue proposed, which is in the amount of $7,000,000, would pay
the Port Authority $5,500,000, provl�i� an additionai �5Q0,000 as ccnstruction
funds to Oxford for work on Block A, and a maximized reserve deposit of
approximately $1 ,000,000.
The financing would be for a 30-year term commencing November 1 , 1979, and
the rentals by Oxford would approximate the following:
11-1-79 through 12-31-81 $30,000 per month
1-1-82 through 12=31-86 34,733 per month -
1-1-87 through 12-31-07 45,601 per month
� and credit of the reserve fund to the last installments of rent on
October 1 , 2009.
The interest on the reserve fund would be credited to current installments
of rent and inure to the benefit of Oxford. _ _
.
Board of Conmissioners � �
Octob2r 5, 1979 ������
Page -2-
The proposal would defease the outstanding bond issue held by the First
National and Northwestern fVational Banks and relieve the Port Authority of
its current obligations under Resolution No, 1270, aitho.ugh it is not
reco►�nended that Resolution No. 1270 be canceled since we may find it
helpful for other projects in the future.
The financing would be handled by a Loan Agreement and a Mortgage rather
than a lease, and Oxford wouid be the owner through a Mortga�ge of the
property with the Port Authority acting as the lender. The bonds would
be issued under the Port Authority`s 876 Resolution and be 'A' rated.
In addition to the normal rental to retire the bond issue, Oxford wi11
pay monthly fiscal and administrative fees of $2,000, which in the aggregate
will total $668,000 during the term of these bonds.
The taxes payable on this ramp have been projected by the Tax Assessor
on the basis of the mill rate applicable for taxes payable in the 1980
at $241 per stall . Ramp taxes �s well as taxes on office space, hotel
rooms and apartments are difficult to project because they are evaluated
for assessment purposes on the basis of occupancy and profit or loss,
The ramp analysis indicates a substantial variable in each of the ramps
existent in downtown St. Paul and this substantial difference is occasioned
by the degree of occupancy and income.
In any case, there will be no taxes payable on this ramp in 1979 or 1980.
The tax assessment method that exists in Ramsey County and throughout
Minnesota is that taxes payable in 1980 are the taxes which were assessed
for the year 1979. Therefore, Oxford would pay taxes in 1981 according
to the percentage of completion of the total project on Block A, That means
that '�` the Radisson Hotei and those deveiopments �y the City and Oxford are
only 30� completed on January 2, 1980, the taxes payable in 198] would be
3�� of the total . If the project is totally completed in 1980, the first
year that taxes would be based on fu11 assessments would be 1982 notwith-
standing the fact that the Assessor must further consider occupancy and
income before he ca rr arrive at the definitive taxes.
We propose to incorporate in the documents an agreement that if taxes for
the years 1981 and 1982 exceed $150 and $170 per sta11 respectively that
the rental will be reduced accordingly.
Example: .
1981 Assessment - 503 stalls @ $241 $121 ,223
@ 150 75,450 $45,773
1982 Assessment - 503 stalls @ $241 $72i ,223
@ 170 85,51Q 35,713
Port Authority Guarantee $81 ,486
.
� ������
Board of Commissioners
October 5, 1979
Page -3-
Based on the known factors at this point and the millage rat� applicable
in 1980 that guarantee would require a maximum of $81 ,486. If the assess-
ment were less than $241 , it would have the effect of lowering the guarantee.
If it were greater, it would have the effect of increasing it. The taxes
based upon the projections by the Assessor would aggregate $3,750,000 during
the term of these bonds.
Because of the income that the Port Authority will generate on this
project from the original issuance date through January 1 , 1982, and as
an inducement to Oxford to acquire the ramp for $5,500,000, we �recommend
that this guarantee be made.
Oxford Development Ltd, and Oxford Properties, Inc. are heavily involved
in St. Paul and the Twin Cities, as we11 as projects throughout Canada,
the United States, and the world. Their current balance sheet reflects
assets of in excess of $1 billion and a net worth exceeding $100 million.
They are also proposing other developments for downtown St, Pau1 , including
other parking facilities. �
As conditions of the agreement and due to the fact that these bonds are
issued under an IRS exemption for public paricing ramps, this ramp must
be operated as a public ramp until the bonds are retired, An additional
condition of the loan agreement will provide tha� Oxford not discriminate
in its monthly parking rates whereby it would give to tenants of Oxford
lower rates. �
The Port Authority's role in this parking ramp was to expedite its
development to limit the City`s involvement in tax increment bonds in
this area and to construct the foundations for developments by both
Radisson Hotels and Oxf�rd. That role has been fulfiiTed and it �zems
prudent at this time that this property be put on the tax roles and owned
and operated by the private sector. Oxford's substantial stake in this
block and the total Town Square development make them a logical owner
- of the parking facility. �
Staff recommends approval of the sale of the property by Resolution No.
1561 and approval of the Preiimanary Agreement by Resolution No. 1562,
EAK:jmo
. . ������ .
, ' ,,� � ..p� +�� . '
Resoluti.on No. 1562
RESOLUTION OF �
� THE PORT AUTHORITY OF THE CITY OF SAINT PAUL - �
WHEREAS, the purpose of Chapter 474, Mi.nnesota�
Statutes, known as the Mi.nnesota Muni.ci.pal Industri.al Develop-
ment Act (herei.nafter called "Act") as found and determi.ned by
the legi.slature i.s to promote the welfare of the state by the �
acti.ve attracti,on and encouragement and development of economi.- �
cally sound i.ndustry and commerce� to prevent so far as possi.ble �
the emergence of bli.ghted and margi.nal lands and areas of
chroni.c unemployment and to ai:d i.n the development of exi.sti.ng � �
areas of bli.ght, margi.nal land and persi.stent unemployment; and. .
WHEREAS, factors necessi.tating the acti.ve promoti.on
and development of ecoriomi.cally sound i.ndustry and commerce are
the i.ncreasi.ng concentrati.on of populati.on i.n the metropoli.tan
- areas and �the rapi.dly ri.si.ng i.ncrease i.n •the amount and cost of
• governmental servi.ces requi.red to meet the needs of the �
i.ncreased populati.on and the need for. development of land use
whi.ch wi.11 provi.de an adequate tax base to fi_nance these
i.ncreased costs and access to employment opportuniti.es for such
� populati.on; and �
� WHEREAS, the Port Authori.ty of the Ci.ty of Sai.nt Paul � �
(herei.nafter the "Authori.ty") has previ.ously i.ssued i.ts revenue
� bonds to fi.nance the acqui.si.ti.on and constructi.on of a publi.c
parki.ng ramp (herei.nafter called the "Parki.ng Ramp") located
wi.thi.n the Ci.ty of Saint Paul; and
WHEREAS, the Parki.ng Ramp i.s currently owned by the
Authori.ty and leased to TMD, Inc. pursuant to a lease agreement
dated as of. November 1, 1977 (the "Lease" ) ; and � � :
. WHEREAS, the Authori.ty has recei.ved from Oxford �
Develop�ent P�li.nnesota, Inc. , a corporati,on organi.zed under the
laws of the State of t4i.nnesota (herei.nafter the "Company" ) a
request that the Authori.ty issue its revenue bonds to fi.nance
the Company's acqui.si.ti.on of the Parki.ng Ramp from the
Author�.ty and certai.n other related capi.tal costs i.nci.dent to :
the developrnent by the Company of certai.n commerci.al faci.li.ti.es
located i.n the Ci.ty of Sai.nt Paul, all as more speci.fi.cally
i.denti.f i_ed i.n the memor•andum to commi.ss i.oners preparec3 by staff
(herei.nafter the "Project" ) ; and �
. � � � n,t�c� „� . _
• . . . �+ w ���.,ti::,� .
WHEREAS, Sect�.on 2. 06 of the Lease provi.des for the �
termi.nati.on of the Lease upon the sale of the Parki.ng Ramp by
the Authori.t�►; and . _ . �
WHEREAS, the Authori.ty desi.res to faci.li.ta*e .the
selecti.ve development of the communi.ty, to retai.n and i.mprove .
i.ts tax base and to tielp i.t provi.de the range of servi.ces and �
employment opportuni.ti.es requi.red by i.ts populati.on, and the
Project wi.11 assi.st the Ci.ty i.n achi.evi.ng that objecti.ve, and
the conversi.on to pri.vate ownershi.p of the Parki.ng Ramp wil:l
help to i.ncrease the assessed valuation of the Ci.ty and help �
mai.ntai.n a positi.ve relati.onshi.p between assessed valuati.on and
debt and enhance the i.mage and reputati.on of the Ci.ty; and . �
WHEREAS, the Project to be financed by revenue bonds
wi.11 result i.n substanti.al employment opportuni.ti.es i.n the - �
� Ci.ty; �
WHEREAS, the Authori.ty has been advi.sed by repre-
� sentati.ves of the� Company that conventi,onal, commerci.al
fi.nanci.ng to pay the capital -cost of the Project i.s avai_lable '
only on a limi.ted basi.s and at such hi.gh costs of borrowi.ng .
that the economi.c feasi.bili.ty of operati.ng the Parki.ng Ramp .
would be� si.gni.fi.cantly reduced, but the Company has also
advised thi.s Authori.ty that wi.th the ai.d of revenue bond �
f i.nancing, and i.ts resulti.ng lo�a borrowi.ng cost, operati.on of
the Parki.ng Ramp i.s economi.cally more feasible; � �
WHEREAS, Mi.11er & Schroeder Muni.ci.pals, Inc. (the �
"Underwriter") has made a proposal i.n an agreement (the
"Underwri.ti.ng Agreement") relati.ng to the purchase of �the
revenue bonds to be i.ssued to fi.nance the Project;
WHEREAS, the Authori�ty, pursuant to Mi.nnesota �
Statutes; Secti.on 474. 01, Subdi.vi.si.on 7b di.d place a noti.ce, a
copy of whi.ch w�.th proof of publi.cati.on �s on fi_le i.n the
offi.ce of the Authori.ty, of a publi.c heari.ng on the proposal of
the Company that the Authori.ty fi.nance the Project,
herei.nbefore descri.bed, by the i.ssuance of i.ts i.ndustri.al
revenue bonds i.n the amount of $6,000,000 ; and �
WHEREAS, subsequent to� publzcation of the noti.ce of
publi.c hearing relati.ng to the i.ssuance of i.ndustri.al ,
development revenue bonds i.n the amount of $6, 000,000 the
Company requested that the bonds be -i.ssued pursuant to Basi.c
Resolution No. 876�of the Authori.ty and that bonc]s i.n the total
amount of $7,000,000 be i.ssued to allow the Company to fund the
reserve requi.red by that Resoluti.on; .
, � • �
� �
WHEREAS, the Authori.ty did conduct a publi.c hear�ng
pursuant to sa�d noti.ce at wh�ch hear�ng the recommendat�ons of
� the Authority's staff wi.th regard to the Company's proposal, as
� set forth i.n the Staff Memorandum to the Commi.ssi.oners, and
i.ncludi.ng the proposed i.ncrease i.n the amount of Bonds from �
$6,000,000 to $7,000,000, were revi.ewed and, further, at whi.ch
heari.ng all persons who appeared were gi.ven an opportuni.ty to .
express thei.r vi.ews wi.th respect to the proposal. :
NOW, THEREFORE, BE IT RESOLVED by the Commi.ssi.oners
of the Port Authori.ty of the Ci.ty of Sai.nt Paul, t4i.nnesota as .
follows: • �
1. On the basi.s of i.nformati.on ava�.lable to the
Authori.ty, i.ncludi.ng the staff inemorandum to the Commi.ssi.oners,
i.t appears, and the Authori.ty hereby fi.nds, that the Project
consti.tutes properti.es, used or useful i.n connecti.on wi.th one
or more revenue produci.ng enterpri.ses engaged i.n any bus�ness
wi.thi.n the meani.ng. of Subdi.vi.si.on la of Section 474.02 of the
Act; that the Project furthers the purposes stated �n Secti.on
474.01 of the Act, that the avai.labi.li.ty of the f�.nanci.ng under
� the Act and wi.11i.ngness of the Au*hori.ty to furni_sh such
f i.nanci.ng wi.11 be a substanti.al i.nducement to .the Company to
purchase the Parki.ng Ramp and complete i.ts porti.on of the
related commerci.al development i.n the Ci.ty of St. Paul, and
that the effect of the Project, i.f undertaken, wi.11 be to
encourage the development of economi.cally sound i.ndustry and
commerce and assi.st i.n the preventi�on of the emergence of
� bli.ghted and �margi.nal land, and wi.11 help to prevent chroni.c
unemployment, and wi.11 help the City to reta�.n and i.mprove i.ts
tax base and provi.de the range of servi.ces and. employment
opportuni.ti.es requi.red by i.ts populati.on, and wi.11 help to
prevent the movement of talented and educated persons out of
the state and to areas wi.thi.n the state where thei.r servi.ces �
may not be as effecti.vely used and wi.11 result i,n more
i.ntensi.ve development and use of land within the Ci.ty and wi.11 .
result i.n an i.ncrease i.n the Ci.ty's tax base; and that it i.s i.n
the best i.nterests of the port di.strict and the people of the
Ci.ty of Sai.nt Paul and i.n furtherance of .the general plan of
development to assi.st the Company i.n fi.nanci.ng the Project.
2. Subject to the mutual agreement of the Authori.ty,
the Company and the purchaser of tl�e revenue bonds as to the
detai.ls of the revenue agreement, as defi.ned i.n the Act, and
other documents necessary to evi.dence and effect the fi.nanci.ng
of the Project and the i.ssuance of the revenue bonds, the
Project is hereby approved and authori.zed and the i.ssuance of
revenue bonds of the Authori.ty i.n an amount not to exceed
approxi.mately $7,000,000 (other than such addi.ti.onal revenue
. � ���ri.�r,fy�1 . . - .
. � / k°^�@^ R
, . . ' . y�ro a 4°.p'a�C..!� � .
. bonds as are needed to complete the Project i.s authori.zed to �
� fi.nance the costs of the Project and the recommendati.ons of the
Authori.ty' s staff, as set forth i.n the staff inemorandum to the
Commi.ssi.oners whi.ch was presented to the Commi.ssi.oners, are
i.ncorporated herei.n by reference and approved.
3. In accordance wi.th Subdi.vi.si.on 7a of Secti.on
474.01, t4i.nnesota Statutes, the Executive Vi.ce-Presi.dent of the
AUTHORITY i.s hereby authori.zed and di.rected to submi.t the �
proposal for the above descri.bed purchase to the Commi.ssi.oner
of Securi.ti.es, requesti.ng hi.s approval, and other offi.cers,
employees and agents of the AUTHORITY are hereby authori.zed to
provi.de the Commi.ssi.oner wi.th such preli.mi.nary i.nformati.on as
he may requ•i.re. �
4. The"re has heretofore been f i.led -wi.th the � .
Authori.ty a form of Prel i.mi.nary Agreement between the Authori.ty
and Company, relati.ng to the proposed fi.nanci.ng of the Rroject,
a form of Contract for the Sale of Land, and a form of the
Underwri.ting Agreement (herei.nafter the "Agreements" ) . The
, form of sai.d Agreements have been exami.ned by the . •
Commissi.oners. It i.s the purpose of sai.d Agreements to
evi.dence the commi.tment of the parties and thei.r intenti.ons
, wi.th respect to the proposed Project i.n order that the Company .
may proceed wi.thout delay wi.th the Project wi.th the assurance
that there has been suffi.ci.ent "offi.cial acti.on" under Secti.on
103(b) of the Internal Revenue Code of 1954, as amended, to
allow for the. i.ssuance of i.ndustri.al revenue bonds to fi.nance
the enti.re cost of the Project upon agreement bei.ng reached as
to the ulti.mate detai.ls of the Project and i.ts fi.nanci.ng. Sai.d
Agreements are hereby approved, and the Presi.dent and Secretary
of the Author�.ty are hereby authori.zed and di.rected to execute
sai.d Agreements.
� 5. Upon executi.on of the Preli.mi.nary Agreement and
the Contract for the Sale of Land by the Company, the staff of
the Author�.ty are authori.zed and di.rectea to conti.nue
negoti,ati.ons wi.th the Company so as to resolve the remaini.ng
i.ssues necessary to the preparati.on of the revenue agreement
and other documents necessary to the adopti.on by the Authori.ty
of i.ts fi.nal bond resoluti.on and the i.ssuance and deli.very of
the revenue bonds; provi.ded that the President (or �
Vi.ce-Presi.dent if the Presi.dent i.s. absent) and the Secretary
(or Assi.stant Secretary i,f the Secretary i.s absent) of the
Author�.ty, or i.f ei.ther of such offi.cers (and hi.s alternati.ve)
are absent, the Treasurer of the Authority �n li.eu of such
. absent offi.cers, are hereby authori.zed in accordance wi.th the,
provi.si.ons of Mi.nnesota Statutes, Secti.on 475. 06, Subdi.v�.si.on '
1, to accept a fi.nal offer of the Underwri.ters made by the •
Underwri.ters to p'urchase sai.d bonds and to execute an .
, , ' ! . . . �f�1C��v,�}���
�
underwri.ti.ng agreement setti.ng forth such offer on behalf of
the Authori.ty. 'Such acceptance shal"l bi.nd the Underwri.ters to
sai.d offer but shall be subject to approval and rati.fi.cati.on by
the Port. Aui:hori.ty i,n a formal supplemental bond resoluti:on to
be adopted prior to the deli.very of sai.d revenue bonds.
6. The revenue bonds and �i.nterest thereon shall not
. constitute an i.ndebtedness .of the Authori.ty or the Ci.ty of � � .
Sai.nt Paul wi.thi.n the meani.ng of any consti.tutional or
statut,ory li.mi.tati,on and shall not consti.tute or gi.ve ri.se to a '
pecuni.ary li.abili.ty of the Authori.ty or the Ci.ty or a charge .
� agai.nst thei.r general credi.t or taxing powers and ne�i.ther the
full faith and. credi.t nor the taxi.ng powers of the Authori.ty or
the City i.s pledged for the payment of the bonds or i_nterest
. thereon. �
7. In order to faci.li.tate completi.on of the revenue �
bond financi.ng herei.n contemplated, the Ci�ty Council i.s hereby
requested to consent, pursuant to Laws of ?�iinnesota, 1976,
Chapter 234, to the i.ssuance of the revenue bonds herei.n
contemplated and any add�iti,onal bonds whi.ch the Authori.ty may .
pri.or to i.ssuance or from ti.me to ti.me thereafter deem ,
necessary to complete the. Project or to refund such revenue �
bonc3s; and for such purpose the Executive Vi.ce Presi.dent of the
Authori.ty i.s hereby authori.zed and di.rected to �forward to the �
Ci.ty Counci.l copi.es of thi.s resoluti�on and sai.a Preli.mi.nary
Agreement and any addi.ti.onal avai.lable informati.on the Ci.ty
Counci.l may request.
8. The acti.ons of �the Executi.ve Vi.ce-Presi.dent of
. the Authori.ty i.n causi.ng publi.c notice of the publi.c. heari.ng
. and i.n descri.bi.ng the general nature of the Project and '
esti.mati.ng the pri.nci.pal amount of bonds to be i.ssued to
fi.nance the Project, and i_n prepari.ng a draft of the proposed
appli.cati.on to the Commi.ssi.oner of Securi.ti.es, State of
Mi.nnesota, for approval of the Purchase, whi�ch has been
avai.lable for i.nspecti.on by the publi.c at the offi.ce of the �
Authority from and after the publi.cati.on of noti.ce of the .
heari.ng, are i.n all respects rati.fi.ed and confi.rmed. .
� , �
Adopted October 9, 1979' `�� � � =
i
� � � � � �L� � �'�i,
Attest . -
�► Pres�.dent
; The Port Authori.ty of the C�.ty
G,�� of Sai.nt Paul ' .
�
Se re�ary � . .
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