03-818Presented By
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Council File # �✓' u r �
Green Sheet # ��`� ��2
RESOLL3TI01�
CITY OF SAINT PAUL, MIlVNESOTA
��� yy
Committee: Date
RESOLUTION RECITING A PROPOSAL FOR A
FINANCNG PROGRAM FOR A MULTI-FAMILY RENTAL
HOtiSiNG DEVELOPMENT, GIVING PRELIlVIINARY
APPROVAL TO THE PROJECT AND THE PROGRAM
PURSUAl�TT TO MINNESOTA STATUTES, CHAPTER 462C,
AUTHORIZING THE HOUSING AND REDEVELOPMENT
AUTF30RITY TO ISSUE TAX INCREMENT REVENLJE BOND5
AND AUTHORIZING THE PREPARATION OF NECESSARY
DOCUMENTS AND MATERIALS IN CONNECTION
WITH THE SAID PROJECT AND PROGRAM
(GATEWAY RENTAL PROJECT)
12 (a) Minnesota Statutes, Chapter 462C (the "Act) confers upon cities, or housing and
13 redevelopment authorities or port authorifies authorized by ordinance to exercise on behalf of a
14 city the powers confened by the Act, the power to issue revenue bonds to finance a program for
15 the putposes of planning, administering, making ar purchasing loans with respect to one or more
16 multi-family housing proj ect developments within the boundaries of the city;
17 (b) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota
18 (the "HRA") has been desi�nated, by ordinance, to exercise, on behalf of the City of Saint Paul,
19 Minnesota (the "Ciry") the powers conferred by Minnesota Statutes, Section 462C.01 to
20 462C.081;
21 (c) The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota
22 (the "HRA"), has received a proposal from Gateway Apartments Limited Partnership, a
23 Minnesota limited partnership (the "Bo�rower"), that the HRA undertake a program (the
24 "Housing Program") to finance a Project hereinafter described, through the issuance of taY
25 increment revenue bonds in the approximate principal amount of $4,900,000 pursuant to
26 Minnesota Statutes, Section 469.178, subd. 4(the "Bonds");
27 (d) The Project to be financed by the Bonds are a portion of the public redevelopment
28 costs of the acquisition, construction and equipping of a multifamily rental housing project
29 consisting of approximately 320 units located south of West Seventh Street between Munster and
30 Norfolk Avenues in the City of Saint Paul (the "ProjecY');
31 (e) The proposal calls for the HRA to grant the proceeds realized upon the sale of the
32 Bonds to the Borrower pursuant to a development agreement wherein the Borrower will be
33 obligated to pay all costs aud expenses of the HRA and the City incident to the issuance and sale
34 of the Bonds;
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D 3 - g��
36 ( fl The City desires to facilitate the acquisition and construction of a multifamily
37 housing facility within tl�e City; and the Project will assist the City in achieving these objectives;
38 (g) A public hearing on the Housing Program and the Project was held on this date
39 following duly published notice, at which time all persons that desired to speak were heard; and
40 (h) No public official of the City has either a direct or indirect financial interest in the
41 Project nor will any public official either directly or indirecfly benefit financially from the
42 Project.
43 NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Saint
44 Paul, Minnesota, as follows:
45 L The City hereby gives preluninary approval to the proposal of the
46 Borrower that the City undertake the Project, described above, and the program of financing
47 therefor, pursuant to Minnesota Statutes, Chapter 462C and Minnesota Statutes, Secrions
48 469.174 to 469.1741 (the "Tax Increment Act"), consisting of the acquisiYion, construction and
49 equipping of a multifainily rental housing project within the City pursuant to the Borrower's
50 specifications.
51 2. On the basis of information available to the City it appears, and the City
52 hereby finds, that the Project constitutes a multifamily housing development within the meaning
53 of subdivision 5 of Section 462C.02 of the Act; that the availability of the financing under the
54 Act and the willingness of the City to fumish such financing will be a substantial inducement to
55 the Borrower to undertake the Project, and that the effect of the Project, if undertaken, will be to
56 encourage the provision of multifamily rental housing opportunities to residents of the City, and
57 to promote more intensive development and use of land within the Ciry.
58 3. The Project, and the program to finance the Project by the issuance of the
59 Bonds, is hereby given preliminary approval by the City subject to final approval by the HI2.4,
60 the Borrower and the purchasers of the Bonds as to ultimate details of the financing of the
61 Project, all subject to the availability of an allocation of tax exempt bonding authority for the
62 Bonds.
63 4. Pursuant to Chapter 72, Saint Paul, Minnesota Administrative Code, the
64 City hereby authorizes and directs the Housing and Redevelopment Authority of the City of Saint
65 Paul, Minnesota (the "HRA") to issue the Bonds to finance the Project and to take all actions
66 necessary or desirable in connection therewith, and no further approval or authorization of the
67 City sha116e required; provided that the HRA may, in its discretion, authorize the Board to issue
68 the Bonds and to implemeut the program approved hereby, and the City hereby consents thereto;
69 5. Tl�e Bonower has agreed and it is hereby determined that any and all costs
70 incurred by the City or tl�e HRA in connection with the financing of the Project whether or not
71 the Project is carried to completion and whether or not approved by HI2A will be paid by the
72 Borrower:
73 6. Briggs and Morgan, Professional Association, acting as bond counsel, and
74 such investment banlcers as may be selected by Borrower, with the consent of the I3RA, are
75 authorized to assist in the preparation and review of necessary documents relating to the Project
76 and the financing progratn therefor, to consult with the City Attorney, Borrower and the
77 purchaser of the Bonds as to the maturities, interest rates and other terms and provisions of the
78 Bonds and as to the covenants and other provisions of the necessary documents and submit such
79 documents to the IIRA for final approval;
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81 7. \otlung in this Resolution or the documents prepazed pursuant hereto
82 shall authorize the expenciiture of any municipal funds on the Project other than the revenues
83 derived from the Proj ect or otherwise granted to the City or the HRA. The Bonds shall not
84 constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the
85 City or the IIRA except the revenue and proceeds pledged to the payment thereof, nor shall the
86 City or the IIRA be subj ect to any liability thereon. The holders of the Bonds shall never have
87 the right to compel any exercise of the taYing power of the City or F3RA to pay the outstanding
88 principal on the Bonds or the interest thereon, or to enforce payment thereon against any property
89 of the City or the HRA. The Bonds shall recite in substance that Bonds, including the interest
90 thereon, are payable solely from the revenue and proceeds pledged to the payment hereof. The
91 Bonds shall not constitute a debt of the City or HRA within the meaning of any constitutional or
92 statutory limitation.
93 8. In anticipation of the issuance of the Bonds to finance all or a portion of
94 the Project, and in order that completion of the Project will not be unduly delayed when
95 approved, tl�e Borrower is hereby authorized to make such expenditures and advances toward
96 payment of that portion o f the costs of the Project to be financed from the proceeds of the Bonds,
97 as the Borrower considers necessary, including the use of interim, short-term financing, subject
98 to reimbursement from the proceeds of the Bonds if any when delivered but otherwise without
99 liability on the part of the City or the HRA.
Adopted by the City Council of the City of Saint Paul, Minnesota this 3rd day of
September, 2003.
Requested by Department of:
P1aiulin Economic D � e me
By:
Adopted by Council:
Adoption Certified�b}� Council Sec_etary
Hy:
Approved by
By:
Approved by
By:
Form Approve
By:
App ov d by
r
By:
Financial Se ices�
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� Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet �
DepartmenUo�celcouncii: Date Initiated: �
I PE — Planning&EconomicDevelopment 1�-AUG-03 Green Sheet NO: 3004042 -
Conqd Person 8 Phone• Department Sent To Person Initi
Joan Trulsen � 0 lannin & Economic evelo
6-6694 pu�gn 1 lanniu &EwnomicDevelo De artmentDirecWr ���
Must Be on Council Agenda by (Date): Number 2 � Atto e �
-�-:�w-o-:.- p_3_ G? For !+�
� Routing a or's �ce Ma or/Assistant
Order S $� ouncil
, (p � iN Clerk Citv Clerk I
��e t� C� 3± t r�un.e�`till Se.rvi c�S �i�^er�5�
Total # of Signature Pages (Clip All Locations for Signature) �
Action Requested:
S� ���
Recommendations: Approve (A) or Reject (R): Personal Service Contrects Must Answer the Following Questions:
Planning Commission 1. Has this person/firm ever worked under a contract for this departmenY?
CIB Committee Yes No
Civil Service Commission 2. Has this person/firm ever been a city employee?
Yes No
3. Does ihis personffirtn possess a skill not normally passessed by any
current city employee?
Yes No
Explain all yes answers on separate sheet and attach to green sheet
Initiating Problem, Issues, Opportunity (Who, What, Whe�, Where, Why):
Shepazd Davem (Gateway) Project -(312 UniY General Occupancy Rental Aputments) - Resolution Reciting a Proposal for a Financing
Progam for a Multi-Family Rental Housing Development, Criving Pxeliminary Approval to the Pxoject and Piogam Putsuant to
Minnesota Statutes, 462C, Authorizing the Housing and Redevelopment t�uthority of the City of Saint Paul, Miunesota to Issue Ta:c
Increment Revenue Bonds and Authorizing the Preparation of Necessary Documents and Materials in Connection with the sai
AdvanWaes If APProved:
The applicarion for a Ta7c Increment Revenue Bond allocation can be submitted to ffie EiRA for consideration
Disadvanpqes If Approved: � ���,:� g?�oams��'- " ,
None •
��� 15 2��
Disadvantages If Not Approved:
Other gap funds will need to be found for the project.
Total Amount oE � CosURevenue Budgeted:
Transaction: ( / j'L [�
FundinA Source: s ppp pp �j C�g{-��,. Number: � j(� g ���7P6 •�. L � - � �< � Q O D f7
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Financial Information: ���� �
(Explain) .
DEPARTN�.IVT OF PLANNING
& ECONOMIC DEVELOPMENT
Martha G. Fuller, Director
03 �8(4
CITY OF SAINT PAUL
Raru(y C Ke1[y. Mnyar
September 3, 2003
Memo to:
From:
City Council Members
t=I
25 Wut Founh Street Telephone: 65l-266-6565
SaintPau(,MNSS102 Facsimile:6�1-228-3261
Martha Fuller, Department of Planning and Economic Development Director
REPORT TO THE CITY COUNCIL REGARDING: Shepard Davern Project Public Hearing
- Resolution Reciting a Proposal for a Financing Program for a Multi-Family Rental
Housing Development, Giving Preliminary Approval to the Project and Program
Pursuant to Minnesota Statutes, 462C, Authorizing the Housing and Redevelopment
Authority of the City of Saint Paul to Issue Tax Increment Revenue Bonds and
Authorizing the Preparation of Necessary Documents and Materials in Connection with
the said Project and Program. District 15
PURPOSE
The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota has received a
proposal from Gateway Apartments Limited Partnership, a Minnesota limited partnership that
the HRA undertake a program (the "Housing Program") to finance the Shepard Davern
(Gateway) Project through the issuance of tax increment revenue bonds in the approximate
principal amount of $4,900,000.
The component of the project to be financed by the Bonds are a portion of the public
redevelopment costs of the acquisition, construction and equipping of a multifamily rental
housing project consisting of approximately 312 units located south of West Seventh Street
between Muns±er and Norfolk Avenues in the City of Saint Paul.
The proposal calls for the HRA to grant the proceeds realized upon the sale of the Bonds to the
Borrower pursuant to a development agreement wherein the Borrower will be obligated to pay
ali costs and expenses of the HRA and the City incident to the issuance and sale of the Bonds;
PUBLIC PURPOSE
The following public purposes will be met:
Project will provide housing opportunities for a variety of incomes.
Project meets objectives of TheHousingPlan, adopted as part of the City's
Comprehensive Plan, Section 6.0, Strategy 3: Ensure Availability of Affordable Housing.
/ . �
AFFORDABILITY:
The project meets the affordability goats of the City Council. Ten percent of the units wili be
affordable to persons with incomes at 30% of area median income. Fifteen percent of the units
will be affordabie to person with incomes at 50% of area median income.
FINANCING
The Sources and Uses for construction of the muiti-family project is attached.
BOND AUTHORITY; ALLOCATION PROCESS
The proposed bonds will count as part of the City's entitlement bond allocation. However, there
is su�cient allocation to fund this priority project along with other multi-family projects.
Upon adoption of the resolution staff will proceed to prepare a housing program to finance the
proposed project. Furthermore, staff will present to the HRA a report detailing the financing of
the Project and request the HRA to consider adoption of a resolution to issue Tax Increment
Revenue bonds to finance the project.
Apqroval of the resolution does not require or obliqate the Citv or HRA to issue bonds or cause
anv action aqainst the Citv or HRA arisinq from anv failure or refusal bv the City or HRA to
approve the proiect or issuance of the Bonds.
With respect to multifamily housing bonds, Section 72.04 of Chapter 72 of the City's
Administrative Code provides that the HRA be designated to exercise on behalf of the City the
powers conferred by Minnesota Statutes 462C (housing programs and revenue bonds) but only
unless directed and authorized to do so by resolution adopted by the City Council. Thus the
reason, this proposal is initiated before the City Council rather than the HRA.
Attachments:
City Councii Resolution
Sources and Uses
Prepared by: Joan Trulsen, PED Project Manager- Southwest Team, 266-6694
M:�SHEPDAV�BOnds\City Council iIF rev bond Rptwpd AA-ADA-E�O Employer
Joan Trulsen
August 8, 2003
Page 1
August 8, 2003
Joan Trulsen
City of Saint Pau]
Depariment of Plarming and Economic Developmrnt
2S West Fourth Street
St. Pa�l, MN 55102
RE: Proposed TIF Bond Structure for Gateway Project
Deaz Ioan:
a3 - ���
Norman L. Jones III
(612) 6046605
njones@winthrop.w
m
On behalf of Wally Johnson, we would like to explai� followmg proposed structure for the issuance of tar-exempt bonds, to be
supported by tax increment rights awuded to the Gateway Project.
Bonds aze proposed to be issued in a sepazate series and matunTy which will be roughly equivalent to the duration and amount of the taY
increment assistance- The sole sewrity for these bonds will be an irrevocable direct-pay ]etter of credit from Bremer Bank, National
Association, the payment of which will be supported by an inevocable standby letter of credit fmm the Federal Home Loan Bank of Des
Moines (the "Confirming Letter of CrediP'). Bremer Bank, being a member bank of the Federal Home Loan Bank of Des Moines, is able
to obtam such Confirming Letter of Credit for a reasonable fee. W ith this arrangement, the Bonds aze effectively backed by the credit of
the Federal Home Loan Bank of Des Moines, an insritution wh�ch has been rated "Aaa" by Moody's. Therefore, the Bonds will beaz this
same rating, and can beaz a weekly float�ng rate.
Bremer Bank in turn will look to the taz mcrement paymen[s as securiry, as well as other negotiated secunty or collateral from the
borrower or guarantors, all of which will be pledged only to Bremer Bank, and will not be additional security for the Bonds.
We have used this structure on prior transactions and have found that it is a cost-effective way to convert tax increment rights into a low-
cost loan. If you have any questions, please call me at 612-604-6605.
Very truly yours,
WINTHROP 8c WEINSTINE, P.A.
Norman L. Jones III
IMANAGE2052136 1
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