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269427 WHITE - CITV CLERK PINK - FINANCE C I TY OF SA I NT PA U L Council ��:`� °� . CANARV - OEPARTMENS � � BLUE - MAVOR � Flle NO. . C ncil Resolution Presented By I � Referred To Committee: Date Out of Committee By Date _ • �, WHEREAS, the City Council did approve the allocation of $400,000 in Community Development Year II funds for the Rice-Marion Redevelopment project, specifically Block 90, in the Thomas-Dale area; and WHEREAS, there is an immediate need for additional funds to cover the cost of site preparations in Phase I of the Rice-Marion project (106 units of multi-family housing by Bar-Ett Construction); and . WHEREAS, the federal Department of Housing and Urban Development has approved the use of funds for such purposes; now, therefore, be it RESOLVED, that upon the recommendation of the Mayor, the Council does hereby approve the use of $42,400 for site preparation costs for the Rice- Marion Phase I project in the Thomas-Dale area. Said $42,400 being identified as the amount remaining in the Community Development Year II Special Acquisition and Relocation Fund. APPROVED AS TO FUNDING: � , P�PPROVED: � Bernard J. rlson, Director l�Department o Finance and � Management Services �Ri . hard E. Sc roeder, udget Director COUNCILMEN Requested by Department of: Yeas Nays Bucier � Commun i ty Devel opm Hozza [n Favor Hunt CQ� Levine � __ Against BY �'�' Roedler Sylvester AdoptedTed Council: Date _ T`�UL � � 19TT Form Approv by City A torney C fied Yas y Co cil Secretary BY Appr e A7ayor: a �E Appr ved b Mayo r Subm' io 0 � gy By � PUBLISHED �U� 3 0 19� HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL, MINNESOTA _ C , �� L7 � A G E N D A RECEIVED SPECIAL MEETING JUL 1 � 1977 DATE: 3ULY 19, 1977 PLACE: COUNCIL CHAMBERS TIME: 10:00 - OFFICE OF ROSALIE l.. BUTLER I. ROLL CALL ' II. ADOPTION OF RE DEVELOPMENT PLAN FOR COMMZZJPTITY DEVELOPMENT PROGFAM . YEAR III _�,...,. .. � ° `�� III. APPROVAL OF FZNAL CO��ITRACT AND LOAN DOCLTMENT APPROVAL, RICE-MARION `� PROJECT, DISTRICT 7 ,,,,� ""'_�"",�„---�� „�...�..,�� ---»....,�..,� �..F.,�,.. ,�..�,..,�,,,��,.v.,_;.�.,,.�,,..-.....,,,...m._.,.w.�,-..� _ IV. ADJOURNMENT " � H0�1SfNG AND REDEVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL, MINNESOTA _..r..�,. � � . L.-�� / , � �� REPORT TO THE COMMlSSIONERS DATE July 19 , 1977 R EG A R D I NG FINAL CONTRACT AND LOAN DOCUMENT APPROVAL: RICE-MARION PROJECT The closing of the Rice-Marion site purchase and MHFA construction mortgage is tentatively scheduled for Monday or Tuesday of next week. The basic information on the 106 uriit market rent project is set forth in Schedule A attached. Public participation in the project is detailed in the attached June 21, 1976 Report To The Commissioners. The $144,000 City grant was approved August 26, 1976, C.F. i1o. 267770 , and the $225,000 loan was approved by the . HRA Board June 23, 1976. The disposition Contract and Deed to Rice-Marion Partnership, as Redeveloper, were approved January 26, 1977, by the Council as the HRA Board, Resolution No. 77-1/26-5. Since this last approval, the attached Loan Agreement and Subordinated Note on the $225, 000 loan have been finalized with certain Contract revisions conforming to the Loan Agreement terms. Loan, principal and interest . payment terms are $5, 200 on closing, one-half Redeveloper return on the project and one-half of surplus cash flow (MHFA Residual Receipts) , all sources projected at $14,927 annually at full rent up. Mandatory prepayment on the loan is required in the event of sale of partnership interests (syndication) , of one-half of all sale praceeds in excess of $132,000; full repayment upon sale of the project or partnership entity; and all MHFA distributions to the partnership on prepayment or— maturity of the MHFA loan. Approval of the revised Contract, Loan Agreement and Subordinated Note is reque sted. cc: Mayor George Latimer LEGAL:JTH :� _ � . .�.__. . ..:._�.�. _. ° �'�,,,� � �,�� . . �� . . _ ,. � � � .�.� �-- � ='��Y ....u�'�� ,.,.� :,��,...,. ......aaiL ._ ., ._.,:..._..._......,«.....i�� RwbWNiYIlnY. _,..._..,_.�..�.�..o..._.. . " � ._.,,.nu�..�._�:... . . CCG�Y U f �J�II ' . • . •' � �i4 202 - FIt�ti'�CIR� l,t;;LYSIS �. (�/ r:hcre appropriate) � SCIt�DULE A: Q/1SIC It1FOnt�11TI0,1 X Feasibility ____Cor,nitr�ent . _ Initial Closing � � __,_Pre-Occupar�cy BAR-ET7 P�ame of Oeveloper . RICE-h1ARI0t! DEVELOP;4E�;T • -. . tlame of lfousing Developmznt • t�HFA �lo. . � LOC,ITED kT Intersection of Rice St., Cono Ave., & Edmund /ive., St. Paul, Ramsey Address -- � 19unicipality and County � • � 7YPE OF DEVElOP;•1ENT • . � (X ) New Construction ' - _ _ __•. _ � � ( ) Nort-Profit . ; (XX} Section 8 20 � � , • ( ) Refiabilitation (X ) Linited Profit �( ) Elderly � '�,. - Zor!ing Classification RP7-3 ( td A Units Per Acre) X Existing Propose . `��.__ _ . tt�, of Qti:eliing Units: 106 7ota1 Land Area 253,936 S Ft. , 9• (5.83 acres + Total Parking 16� � Land Coverage 36.343 • Sq. Ft. ( 14.31 � " P.atio of Parking to D.U.'s 1.51:1 Density 18.18 Units per acre Number Humber tlumber Grass � •TYPE OF S7RUCTURES of '� of of Square • . Buildinqs� Stories Units** Fee ** " Residential A t e :�'(G) 4 ` 3 106 g7,g42 ' r Residential Q t e •* • ' � . • Comrr,ercial/Professional � : - - : . Gara e 4 1 12,680 - Recreation Room/Sauna - 5,250 sq. ft. � � . Coi�rruni� Lobb - 3 3?5 � , ft. 8,605 , � � � � TOTALS 4 .� _3 � 1 GG 2?.7 � • � . . . . * Garden A�artments (G), Townhouses (TN), htid-Rise - 4-8 stories (hfR), �� - � High-Rise (NR), etc. . _ �- . _._. � ' " *''� Total far structure type -- not per building. -_ . --_- _. . � ,� . � - . APAR7t��EhT QISTRIBUTION � . . . � xot rv�mb�, Projected i�'�nthly ' 7ota1 ot S�z¢ Rental Roems number of kOUSIfl EXD°��5� UNITTYPE D.U.'s D.U�'s (�letRent�/A�eaJ P.U.. 7otal B:ICOnies .COI1tP�Ct Ui,l . ?dl � � BR '��" ' 40 �i2 ( 660 s , ft. 3.� ��7 Rent by Occu . � , . �210 S12 .. � � . , � ¢. 2 BR "B" 27 29 870 s . ft. �4.5 �130.5 255 �14 c. ?. QR "C" 33 35 S45 s . ft. 4.5 •157.5 �25Q � �1R f . . o ( , �. . • � . �, � i�rnc too�s 106 , 435 �� - - - -- -�_ ; �:�er•age ru. o� t-c�rns per D.U. 4.1 ' . , ;i '.':ili*_ies to bc pai� b�� occupant (except tLiephor.e): . . ' • ; ` X Nousehol�i electric . X Air Cu��ditioning Other i ""�lieat `—�lot �;ater � I . • _ � - - -- • _ � _, y ::� . , ..,..;.. . . . ,.,;.,. . �. .._.�,.....�....,.. , , . . , s' • ____ . _ -- � .M~` � � . � '.� � � . � 1;TCf: .'t~��t?;:[ON SIZE -- '1';IU1�.AS . - 2 - • � 3Ut�i;i 22, I9?b txal?y redece cosCs Uy paying certzin items such as SAC Char�es or the funds raay sa.mply be ce�osited in our Ta:c T evy iurid �,�i.ti� tlie ��reernent that we �se the nioney for this p�ajec�. ihe rcco�sry ot the $225,OOJ 4�ould Ue based on tt�e erformance o= T P _ the project, t�e would share in the casii flo�o in a pro?ortionate manner iCo ttie developers cash inves*:�ewt up to a 6% interest rate on ;i2.��'s investmettt. In ot�cr words, if. you assurae a tc�o ta one r��ia of � cash investment,� cL^.!1 Evou13 receive Z/3 of the cash� flow and the cievelo?er 2/3, up te the poinC �ohere ��7e have received 6% on our $225,00�. If 2/3 oi tlle cash f1o.a i,s gteater than . 6% of $225,000, it would be applied toward reduction of principa�.. tis� the pr�jec� rents u�, a�d otner proper�ies in Ctle area are .redeveloped, it slzould be possi.ille �o incxease ren�s an�.I thus increase cash .��-Io��, �Iiereby a_cce�erafinv the repaynent of princi�a;. Thc: $225,0�0, �or whatever por�ioi�z renains as a '�a7.ancc�' ou��taa�Tire�, wouZd 'necoze fLj ly du� and paylbl F �11ten tn2 psoperty is sold or refina:iced, ��hich is n�t exp,�cLe3 �o oceur €or sonte - i3_C:.n_. Tti� developer zs e:ci�ected to keep the pro�e:ty for its Ion�-rer� cavi*aI 2=�,�xeciatxon an�� ma�agecnent fces a;�d not se?I tne p;,ope-r�� n the iixst years of its existenc�. � . - . � T:1e :•ti�tnesv�a I�ousing I'i.nance� �'�gencJ has co:�i�leted its i��rl:et- study and has a��_o��e:? this sa.te fo:. Linanczn�. This: is a very signif:ca�� step in. tiiat there had been a question oi the f3.naace ability of `thzs s�te_because of L-he surroun3ing area. ` [:h�t the develo�ers cash - ,A . . -: conntitiaent aiid t'ne H� and City1's equity co�.iitment to this�project t�ill mean is .that financ-- xng can procee3,and taith. coo�eration on everyone's part, the.Project will g�t un3er construc- . , . tio.i dt�rin� I975: Obviausly the c�ev�Toper is coavince3 Liiat the project is a o003 one on c� ��ou?c; noL- a;ree to pu� •in th� necessary cas,i 1RJCSi.iCt2tlt. It s�ioccl.d a;.so be nated that the capabi_lity of the City aau H:tA to cor��i.t that this projec� �ailZ pracen_d satisiies the co�diL-ion estab?ished by t}ie Si-.ate oi I2innesota tor xelease of $S0�,0�� o'� StaL-e funds to proceed �aitli addiCional redevel_�pi�znt in the area. Recamm�n:.lritzons � . - 1. The I{�'A F,oard of Co��tnissi��!ers �pprove a $2?_5,000 xr�nL' end equity co;:emitrten� to . t;,is projec� on L-he Cerris and couditions outlined abovc�. , � +55 East Fifth Street, Saint Paul, Minnesota 551 01. Donald W. Cosgrove, executive director. phone 298 52 18 DATE July 15, i97� �''"� �� , ��'�� NOUSING AND REDE.VELOPMENT AUTHORITY OF THE CITY OF SAINT PAUI, MINNESOTA rQ Mayor and o �1 Members �� FROM es T. xart SUBJECT Final Contract, Deed and Loan Document Execution Rice-Marion Market Rent Housing Project The disposition documents, HRA loan and City grant approvals for the Rice- Marion Project have been previously given as noted in the Report To The Commissioners. The writer has reviewed the final documents' terms in respect to the scope and intent of these prior app�rovals. Your attention is directed to the June 21, 1976 Report To The Commissioners relating to the HRA loan approval. The Report states that loan repayment would be from distribu- table cash flow in proportion to developer' s cash investment and HRA investment (loan) and assumes a $120, 000 developer equity to a $225, 000 loan and one-third, two-thirds proration. The equity investment in fact will be $344, 000 to public loan and grant of $369,000 for a 50-50$ proration as noted in the Loan Agreement and Note. The Loan Agreement and Note further provide for Note repayment from construction mortgage surplus or other monies distributable to the developer other than from cash flow, and syndication proceeds, in addition to prepayment in the event of project sale noted in the June 21 Report. The City has budgeted $50, 000 under CDBG as site preparation costs for removal of unsuitable subgrade materials at structure locations on the projec�t site. This work has been bid at $34,739, and under the Contract will be performed as a part of the project construction contract with reimbursement in the bid amount. The CDBG line item� was included in a recent Council action transferring $800, 000 to the Rice-Marion Area Block 90. The project site is Block 87. � A corrective resolution is being submitted to the Council by the Community Development Coordinator. I am of the opinion that the terms of the documents are consistent with the scope and intent of the prior Council and HRA Board approvals. Under existing HRA by-law, the Contract, Deeds , Loan Agreement and Subordinated Note are to be executed by two Commissioners of the HRA. 0 �� 0 '' � '�O�USIf�'G AND fiEDEVELO<<�NT �1UTNORITY QF•THE C{T�f- SAII�!'f �PAU�, 1:41(`NI:SO1��' . ;J �. . . . . . . . :- . . �' %: -REPORT TO THE C011111�ISSIQNERS , � DA'fE � Jw� 2z, i��6 � . : R E G A R D I N G RrcE r��,r.IOiv S ITE -- �irorr�s n:��.i � .. � . : . . . . . : On I'ebruary 4, 197G, FIRA 13oard of Cor:unissioners designated BA:-ETT Constructi.on a� tentativ� develo�er for this site for a. period of 120 days. � Since. that time, the develoger }�as net many tines �with the Minnesota Housing Finance A�ecicy in an atCe�s�nt to firm up the mor�ga�e. . anount and the other details of thc iirianc�no pacl:age. It apflears tliat tota.I pro3ec� co�ts � . ��i].1 be $2,315,0�0 and the ma:cimn« mortgage c.�ill b� $1,650,000-- leaving a equity requirc�ezi o� $665,000. Ot this $665,000, appro:timately $.4$5,�00 is cas�l equity requirement. and the xenaincl�-r tne norr,i�lly �tllo�aed builders and dev�lopers ris[c alloc.znce. This cash equitS• re- quire,:i�nt is propos ed to be p;.oviued in the �ol lowin� nanner: - . � - 1. .$120,00� casn equ�ty by t��e cievelo�er. � . . _ _ � . . -2. . $?_25,000 eqni�y contri.bution fros�a the H32r'�. Tax Levy run1. - , • . � . - ' • _ �. . $1�f3,��J grdnL from City �of St. P�ul out ox its original �apital Ap�rvach`Funds. . • �' �� . . --.. . . _ -_ . . . . . . _�_.,, . .. . . � . --�- . - - . -- . - -- . ,--- --- - •: An �.dditional funding require�ent not included in �he above cos,ts results from the extrer�ely poor soil on a porti.on of the site. 2hese costs, .for rernovino bad soil an3 fi�Il and replaci� ' i.t wi.th comp�cted fi11, are expected to be betc��eea $35,000 and $50,00�, and such costs are conside-reJ to be eligib7.e site preparsti.on cos�s un�le•r the C�J :'rogxam. Therefore, it is expecte� Chzt City Couiici? will Le requested to a�prove the use o£ CD Funds for tlii.s puxpose, H�.1 Stuff has ag,sin examined. tlie financial s,L-ate��ents oL the developer ancl believe thaC the . � .,r dev�loper has the abil�.l:y to cone up with $120,(�QO xn cash and that £t wo«td be econu��ic�Il�• fcasiUl.e 'foz the� devcloper to do this. • � � ' � IirJ', St�t;; h1s consultecl wiL-h the C�ty and it has the �143,000, but L'he i;sechanics o� ho�� tFt� £unas i.�o;�lcl £7.o�a into Llte project �e�� noi- yct ca�,'.;ed uul-. Thc f«�sts inay be put i.n Ca p:�r- T.IC[: .1•U1?:ZOI� SITE -- �':lUi•IL1S �^•. ' •-• . � �_' . . . , i . . ' 2 ` . ,, r JUlZ;s 21, 1976 ti.al?y .reduce costs by p.�y3ng certain iteuis such as S�1C Chsr�es or the funds r.�y si.mpzy be deaosited in our Ta:c Levy iund t.•i.tli tlie s�recrnen� tliat we use the money �'or this pro�ec�. �he recover� oi the $225,000 �rould be ba�ecl on the erfo�msnce ot T : p the pro�ect. ��e woul.d 'shaLe in the cash flow in a pro7ox�ionate rt:anner Y'o th� devclopers cash investne�C up to a -� 6% interest rate on t�iil►'s investm�nt. In other worcis, if you assurae a two L•o one rutia of cash i�ivest'ment,� 7r�'.�1 i�ould rece�ve 2/3 oi the casli� flo:a and the deveLo�er. i/3, up �o the poinl: �shcre we have received 6% on our $225,000. If 2/3 of tlie cash flot� is great�r than ' 6% of $225,000, it would be applie3 to�aard recluction of� principal. t,s� the pzoject rents � � up, a1d othe;, properties i.n �the area are r.edeveloped, it Si10U1C� �C possi.Ule to increase . rents �nd L-I�us increase cash f1ocJ, �tiereby a_ccelerati:ng L-tie repayrlenC of principa;.. Thc. � $?.25,��0, �or whatc�ver par�ioi� ren�ins as a 'ualacice'outstandin�;, �rould beco;ae �uS ISr dun �nd : payabte wlien tii2 property is sold or refina:iced, c•�hich is n�t expzcL-e3 L-o occur For so�z:e � - . . . . � ; �. - �ti.r:te. Tt�� developer is ext�ected to keep the propert; for its lon�-tern capztai ��,zPCi.�it�on�. �n�9 n��a�,ement. fr_es a�d not� se?I the p;,oper�y �n the first years o� i,ts existeace. . , . • . :' . . : . . . . . . � Tlie :•Ii:��iesoLa Iiousing I'i.nance: AgencJ has co:a2leted its r;�..��I:et study and has ap�rove;? this si.te f:or :f�n�nci.n�. Thi.s: is a very significan� step in that there had been a question oi � .•.� the f�n��ce ability of �this s.f.te _because of L-he surrounding are�. ` [s'hat thQ develo�er: casl� . � . . . • . - .,� . . . . . . : . . _ conniit�ae�.t aiid �t'ne Fi:ZA and City's equity co�.iit�*.ent to this�'project c�ill mean is ,that f�,nanc--. ing can procee3 ,aad taith coo�eration on everyone's part, the project wil�l get an3er construc- tio:i di�,:in� 1975:: Obviously the developer is co�vince3 tliat the px�ject is a good one on c� . . r . . ' . F�oulu no� 1�ree �o pu� •in th� neces�ary cas,i inves�ment. ' . � _ � , _ . _ \. . . . It s�toutd a�.so be natect t-har the capabi_Iity o` ttee City a:�u H:tA to cor°�ai.t that this projec� wi1l t�ra�eed satisiies t1e co:�dit-ion estab7 ishecl by the StaCe of 24innesora for release of ., $��,0�0 u� Sta;:e tunas to procecd caitti aciclitional redevel.opcnent in Che ar.ea. '^ , . . . . . , - . . . Recomr��it�l:itions � . � - : w 1. The it:?�! �o�rd of Cor�tnissxociers approve a $2�5,000 £ronL- enrl equit}* co:.Lmitrien� tu tZiis projcct oci L-hc tcrris .:nd condit•i.ons outli.ned �t�ovc�. � � ' . ;. ._,...�«.:.A....,..-..rz.��.e,.�.�..,.�._ ------------ . , � � . � ___. . . . _._._.__...._ . _ ..�.� ..__.....__..�._._ , � __._.. . __ _ .__�....,.,._...__ __ .�_. __�,. _ __._..._� - -_...___._ , , , . � . . � . . • ' - � . . �. ' .�_. � .. �_._ . . . .: . . . .. ._Y.�_ ..�:: . .�br_ wf , • . .. . _ a.: � .. ��__. , � . � .�. --------- ItTCI'r 1�:iZIOi�' SITI:--TItG:-l�►S Dt � Z � � � � • � ,. , JUhF, 21, I9%G ' � � .� �..�� .). ' �2. The II^v\ 13oard of Commissioncrs r_xtends the devexop�rs tentative develo��er st�ti�s . � until Decenber 32, 1976. � . . . �. . � . : . •• . . . . . � . . _ . � - . . . . , , . . _ � . . : . . � . ' . . : • :. .� : - ' • _ . . . . ' . . � � . , • - . . . ' . : .� , . . � . . _ � � . � . � �� ' �- �_ .• . . . . . . . • . • �. r . .. . . . • . . 'i .� � . . . . ; . - � � : . ; : � . - � ' . ____ •. --. • • �.. __ ,;, ' � -. - -- � • . � : - . � . • . , � � . - . • . . •- ' � . . . � �_ . � . . . . ' :� . � ,. � � . . . , : . . . * • ` . . � . . . .. . _ � . . . . . • -