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RESOLUTION
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Presented By
Referred To
Committee: Date
0
RESOLUTION AUTHOffiZING RENEGOTIATING THE $1 MILLION STAR LOAN TO THE
MINNESOTA BUSINESS ACADEMY
4 WHEREAS, the Saint Paul City Council on November 3, 1999, by Resolution Number 99-1070, approved a
5 $1 million STAR loan to the Minnesota Business Academy (MBA); and
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7 WHEREAS, the Saint Paul City Council on May 16, 2001, by Resolution Number O1-489, approved
8 deferring payments on that loan for another yeaz and accruing the interest; and
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10 WHEREAS, the MBA continues to face financial difficulty and has requested 2 yeazs additional deferral of
11 payments on its loan to April 1, 2004, and an extension of the term from 15 to 20 years; and
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WHEREAS, the Minnesota Business Academy thereafter proposes to fully amortize the $1,000,000 STAR
loan and $157,625 in additional accrued interest over a 20 year term at a five (5) percent interest rate; and
WHEREAS, the PED Credit Committee has reviewed this proposal and recommended it at its meeting on
August 5, 2002;
19 NOW THEREFORE, BE IT RESOLVED that the Saint Paul City Council approves restructuring the
20 STAR loan to the Minnesota Business Academy to defer payments for an additional two years, to accrue the
21 interest, and to amortize the original principal and accrued interest over a 20 year terxn.
By:
Approved by
By:
Council File # ��
Resolution #
Green Sheet # 111274
CITY PAUL MINNESOTA
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Requested by Department of:
Plannin & Economic Dev o ment
By:
Approved by Financial S ices
By:
Adopted by C " - ' � '� c �. .. _ _
Adoption Cer
n��-")la.l i
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DEPARTMENT/OFFICE/COUNCIL: DATE INYfIATED GREEN SHEET No.: 111274 �
_ = PED � August 5, 2002
, CONTACT PERSON & PHONE: INI'riai✓DnTe mn"r7ai✓DATE
` Craig Blakely, 66697 p
MIJST BE ON COUNCII. AGENDA BY (DATE) � 2 DEPARTMENT D �/ 5 CITY COUNCIL
August 21 n Consent Agenda � Ex �,
ROi11'ING
o�xnEx 3 CTi'Y ATTORNEY CTI'Y CLERK
(John Kelly)
FIN. SERVICES DII2. FIN. SERVICES ACCTG.
4 MAYOR OR ASSLSTAN'i' 1 ACTIVITY MANAGER
TOTAL # OF SIGNATIJRE PAGES _(CLIP ALL LOGTIONS FOR SIGNATORE)
ncnox xx�QuES�n: Resolution granting City Council approval far restructuring the STAR loan to the Minnesota
Business Academy to defer payments for 2 years, accrue the interest, and amortize the loan over a longer term.
RECOMN4ENDATIONS. Approve (A) or Re�ect (R) PERSONAI. SERVICE CONTRACTS MiJST ANSWER THE FOLLOWING
QUESTIONS:
PLANNING COMbIISSION I. Hu this person/fim� ever worked under a conhact for this depaztrnent?
CIH WMMITTEE Yes No
� CIVIL SERViCE COMbIISSION 2. Has this person/ficm ever been a ciTy employee�
Yes No
3. Does this perso�/fitm possess a skill not nolmally possessed by any current ciTy employee?
' � Yes No �
, , Explain all yes answers on separate sheet and attach to greeu sheet
"� INI'CIATING PROBLEM, ISSUE, OPPO$TUNIIT (Who, What, Wheu, Where, Why)
In November of 1999, the City Council approved approved a$1 miliion STAR loan to the Minnesota Business
Academy (Resolution 99-1070). In May, 2001, because expenses where higher and revenues lower than
'. anticipated, the City Council approved amending that loan to defer payments for another year and accrue the
,` interest (Resolution O1-489), Because the MBA is still facing a cash flowproblem, they have asked for two
, additional years of defered payments during whidh the interest would Ue accrued, and an extention from 15 to 20
yeus on the term of the loan.
�� ADVANTAGESIFAPPROVED:
The Minnesota Business Academy will be more likely to repay the loan in the future� �� �' ���
� DISADVAN'I'AGES IF APPAOVED: � uo �
None. ��� �a
DISADVANTAGES IF NOT APPROVED:
The school will be forced to close, and the City will lose its $1 million loan.
- TOTALAMOIINTOFTRANSACTION:WST/AEVENUEBUDGETED: NoiApplicable. ^-'v-
FONDING SOURCE: ACTIVI'I'Y NUMBERS: "'""`""��fl C���
FINANCIAL INFORMATION: (EXPLAIIV) ' � p� ��
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