02-526Council File # O � .
L 1\� V ��� L
Presented By
Green Sheet # I V � g1�0-6
Resolution #
RESOLUTION
PAUL, MINNESOTA
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Referred To Committee: Date
RESOLUTION AUTHORIZING RAMSEY COTJNTY TO iJNDERTAKE A Mi_TLTI-FAMILY RENTAL
HOUSING DEVELOPMENT IN THE CITY OF SA1NT PAUL,
(GATEWAY WEST PROJECT)
WHEREAS,
DISTRICT 15
8 (a) Minnesota Statutes, Chapter 462C (the "AcY') authorizes cities, or housing and redevelopment
9 authorities or port authorities authorized by ordinance to exercise on behalf of a city the powers conferred by
10 the Act, or a county housing and redevelopment authority created by special law or authorized by its county to
11 exercise its powers pursuant to Minnesota Statutes, Section 469.004, the power to issue revenue bonds to
12 finance a program for the purpose of planning, administering, making or purchasing loans with respect to one
13 or more multi-family housing developments within its boundaries of the city;
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(b) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "St. Paul
HRA") has been designated, by ordinance, to exercise, on behalf of fhe City of Saint Paul, Minnesota (the
"City") the powers conferred by Minnesota Statutes, Section 462C.01 to 462C.08;
(c) The Ramsey County Housing & Redevelopment Authority (the "County HRA") has scheduled
for consideration on June 25, 2002, a resolution authorizing an application to the Minnesota Department of
Finance for an allocation of volume limit to issue private activity bonds "bonding authority";
(d) The City and the County HRA have received from Dominiuxn Development and Acquisition,
LLC, (to be assigned to a successor when formed), (the "Developer") a proposal that the City and County
I3RA undertake a program to finance the Project hereinafter described, through the issuance of revenue bonds
or other obligations (which may be issued in one or more series) (the "Bonds") pursuant to the Act;
28 (e) The City and County HRA desire to: facilitate the development of rental housing within the
29 community; encourage the development of affardable housing opportwuties for residents of the City and the
30 County; encourage the development of housing facilities designed for occupancy by persons of low or
31 moderate income; and prevent the emergence of blighted or underutilized land and shuctures within the `
32 boundaries of the City and the County; and the Project will assist the City and County HRA in achieving
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these objectives;
(fl The proposal is far the Ramsey County HRA to issue up to thirty-five million dollars
($35,000,000) of bonds of which bonding authority is provided by Ramsey County I1RA from the unified
housing pool established pursuant to Minnesota Statutes, Chapter 474A;
(g) The Developer is currently engaged in the business of real estate development. The project to
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be financed by the Bonds will consist of the acquisition, renovation and equipping of a residential rental
project for tenants, twenty percent of tenants will have incomes at 30% and 50% of area median income.
project will be located north of Norfolk between Davern Street and Edgcumbe Avenue, in Saint Paul (the
"ProjecY').
n�.•s�b
The
(h) The City and the County HRA haue been advised by representatives of the Developer that
conventional, commercial financing to pay the capital costs 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 Developer has also advised the City and the County that with the aid of
municipal financing, and resulting low borrowing costs, the Project is economically more feasible; and
(i) No public official of the City or the County has either a direct or indirect financial interest in
the Project nor will any public official either directly or indirectly benefit financially from the Project:
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul,
Minnesota, that pursuant to Minn. Stat., Section 469.004, subd. la, the City hereby authorizes Ramsey
County, acting through the Ramsey County HRA, to undertake the Project and financing therefor, jointly with
the 5t. Paul HRA, subject to the following limitations:
a. this authorization relates only to the Project and the financing program for the Project; and
b. nothing in this resolution or in the financing program, or in any agreement, indenture, contract
or instrument relating to the Project ar the Bonds shall authorize ar permit the Ramsey County HRA to levy a
taac on any taxable property within the city limits of the City of Saint Paul, and
c. nothing in this resolution obligates the City to give its approval to the Project and the program
of financing therefor, and
d. nothing in this resolution authorizes the expenditure of any City funds on the Project.
By:
Approved by May�r� � Date
By:
Form Approve
Approved by
By:
Adopted by Council: nate � �o O'�,�
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adoption Certified�b� Conncil ecretary
Requested by Department of:
��t t
DEPnKTMENT/OFFICE/COUNC[L: DATE INITIATED GREEN SHEET No.•101886
PED/West Team 5/29l02 ' O�-5�.6
CONTACT PERSON & PAONE: � INl'l'tni✓uATE �� llv117ai✓DA1'E
Joan Trulsen 66694 1 DEPARTMENT DIR. 5 CITY COUNC[L
MUST BE ON COUNCII. AGENDA BY (DATE) �SI '�T ? CiTY ATTORNEY� _ CITY CLERK
NUMBER 3 FINANCIAL SERV DIIL FINANCIAL SERV/ACCTG
Jll110 12.� ZOOZ FOR 4 MAYOR (OR ASS'I.) _ CNIL SERVICE COMMISSION
ROUT[NG
consent agenda ��ER
TOTAL # OF SIGNATORE PAGES I_(CLIP ALL LOCATIONS FOR SIGNATORE)
ACTIOV REQUESTED:
RECOMMENDATIONS: Approve (A) or Reject (R) PERSONAI. SERVICE CONTRACI'S MI1ST ANSWER TfIE FOLLOWING
QUESTIONS:
PLANN]NG COMMISSION 1. Has this person/firm ever worked under a contract for this department?
CB COMMITTEE Yes No
CNIL SERVICE COMMISSION 2. Has this person/firm ever been a ciTy employee?
Yes No
3 Does this person/firm possess a skill not nom�ally possessed by any current ciTy employee?
Yes No I
Explain alI yes answers on separate sheet and'attach to green sheet
INTTIATING PROBLEM, ISSUE, OPPORTUN[TY (Who, What, When, Where, Why):
Request for City Council Approval of a Resolution Authorizing Ramsey County Participation in the Gateway West
Project by Applying to the State Department of Finance for Taac Exempt Multifamily Housing Revenue Bonds
ADVANTAGESIEAPPROVED:
The application for a revenue bond allocation can be submitted to the County for consideration.
DISADVANTAGESIFAPPROVED:
None
DISADVANTAGES IF NOT APPROVED�
Other gap funds will need to be found for the project.
TOTAL AMOUNT OF TRANSACTION: $ COST/REVENUE BUDGETED: � ty�yZ�^z�,?'W}'1 '�+�'��'`�°
4"
FUNDING SOURCE: ACTIVITY NUMBER:
FINANCIAL INFORMATION: (EXPLAIN) j��;C� 'i4 `�
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DEPARTMENTOFPLANNING
& ECONOMIC DEVEIAPMENT
Tony Scherfler, Inierim Direc[or
CTTY OF SAINT PAUL
Rnndy C. Ke[ly, Mayar
June 3, 2002
To: Council President Bostrom
Councilmember Benanav
Councilmember Slakey
Counciimember Coleman
Councilmember Harris
Councilmember Lantry
Councilmember Reiter
Fr: Tony Schertler
25 West Founh Street
Saent Pau[, MN55102
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Te7ephone: b51-?66-6565
Facsimi[e: 6il-228-3261
Re: Request for City Council Approval of a Resolution Authorizing Ramsey County
Participation in the Gateway West Project by Applying to the State Department of
Finance for Tax Exempt Multifamily Housing Revenue Bonds
PURPOSE
The City does not have sufficient tax exempt revenue bond authority available for years 2002 or
2003 to undertake the financing of the Gateway West (Shepard/Davern) Project, a request of
approximately $32,QOQ,000. The City's tax exempt revenue bond authority will be used to fund
$10.3M for the senior portion of the Gateway West Project (160 units). Bonding authority will
also be used for the Osceola Project, the Strauss Project, Franklin Emeraid Project, and
possibly the Selby Grotto project and Johnson Liquor project. The participation by Ramsey
County would be in their application to the Minnesota Department of Finance, pursuant to Minn.
Stat., Ch. 474A, for an allocation of up to $35,000,000 in revenue bond authority from a limited
pool of revenue bonds. The application would occur on August of 2002 and if only a portion of
the request is filled, an application would be made again in January of 2003. The City as a
suballocator cannot submit an application for revenue bonds from this pool. This action by
Ramsey County would be project specific and would not occur if the City had sufficient
tax exempt revenue bond authority. If the County is successful in obtaining a revenue bond
allocation, then the County would be the Issuer of the bonds. (Note: A similar request for
Ramsey County participation was approved by the City Councii for the Emerald Project
financing.)
The City Council will be asked at their June 12, 2002, meeting to consider a resolution,
pursuant to Minn. Stat., Secs. 462C.01 and 496.004, that would authorize:
Ramsey County to undertake and finance the project through the issuance of tax
exempt revenue bonds, if a successful applicant from the pool of revenue bonds
Letter to City Council Members
Re: Gateway West Project
aliocated by the Minnesota Department of Finance.
This authorization by the City Council must occur prior to the Ramsey County Board's
consideration of an application to the Minnesota Department of Finance.
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The proposed tau exempt revenue bonds are not nor can be an obligation of the City or
County for payment, project revenues are the sole source of payment.
Project Background
Gateway Village is a proposed mixed-use project, located on a 15-acre site east of Davern
Street between West Seventh Street and Norfolk Avenue. The proposal is fior construction of
314 units of high quality rental apartments, 160 units of senior housing including 64 assisted
living units, a 106 unit hotel and restaurant, and 17,000 square feet of commercial/retail space.
Market value of the completed project will be approximately $58,000,000. The concept for the
Project follows the redevelopment vision for this area laid out in the recently adopted Shepard
Davern Gateway Small Area Plan ("Plan").
The Development Property is currently occupied by approximately 37 single family homes
and/or duplexes, along with two commercial businesses (Casey's and the Manor), and vacant
MDOT-owned property. The Devetoper will, to the greatest extent possible, acquire the
properties directly through private negotiation. The Shepard Davern Implementation Task
Force was formed to review proposals for the area. This community partnership passed a
resolution endorsing the project concept on July 19, 2001.
City staff have been working with the Gateway West developers for the past 2 years and have
determined that mortgage revenue bonds are the best source of funds to use for the project.
The project exceeds the Gity Councit goal of 20% of the units being affordabfe. Project
information for the 314 unit apartments is described below:
Project: New construction of market rate apartments- 4 floors with underground parking.
Developer: Dominium Acquisition and Development, LLC
Units: 314 units (15-36rtownhouse, 80-26rtownhouse, 15-3Br, 101-26r, 103-1Br)
TDC: $47,022,618 (Tax exempt revenue bonds and syndication proceeds, Taxable
Bonds, Letter of Credit, Equity)
Costs: Acquisition -$4,237,270, Hard Construction costs -$31,267,607, Soft Costs
11,517,741.
Gap: Use of mortgage revenue bonds allows the sale of 4% tax credits ($3,179,150)
which will fill the gap on the project. Approval of the City Council resolution
allowing Ramsey County to submit an application to the Department of Finance
does not approve City funds for this project.
Attached is a resolution for the City Council's consideration at their June 12, 2002, meeting.
cc: Mayor Keliy
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