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04-1058Council File # �� Resolution # Green Sheet #� �2��3, RESOLUTION 2 �! 6 8 9 10 11 12 13 14 15 16 17 18 19 2� 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 i9 OF SAINT PAUL, MINNESOTA Presented By Referred To �5 Committee: Date RESOLUTION RECITING A PROPOSAL FOR A FINANCING PROGRAM FOR A IvIC7LTI-FAMILY RENTAL HOUSING DEVELOPMENT, GIVTNG PRELIMINARY APPROVAL TO THE PROJECT AND THE PROGRAM PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C, AUTHORIZING THE HOUSING AND REDEVELOPMENT AUTHORITY TO ISSUE HOUSING REVENiJE BONDS AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS AND MATERIALS IN CONNECTION WITH THE SAID PROJECT AND PKOGRAM (PIIAI,EN SEIVIOR LOFTS PROJECT) (a) Minnesota Statutes, Chapter 462C (the "Act") confers upon cities, ox housing and redevelopment authorities or port authorities authorized by ordinance to exercise on behalf of a city the powers conferred by the Act, the power to issue revenue bonds to finance a program for the purposes of planning, administering, making or purchasing loans with respect to one or more multi-family housing pro}ect developments within the boundaries of the city; (b) The Housing and Redevelopment Authority oF the City of Saint Paul, Minnesota (the "HRA") has been designated, by ordinance, to exercise, on behalf of the City of Saint Paul, Minnesota (the "City") the powers confened by Minnesota Statutes, Section 462C.01 to 462C.081; (c) The Housing and Redevelopment Authority of the Ciry of Saint Paul, Minnesota (the "F3RA"), has received a proposal from Phalen Parkway Lofts Limited Partnership, a limited partnership organized under the laws of Minnesota (the "Partnership"), that the HRA undertake a program (the "Housing Program") to finance a Project hereinafier described, through the issuance of revenue bonds (the "Bonds") pursuant to the Acf; (d) The Project to be financed by the Bonds is the acquisirion, construction and equipping of an independent senior rental housing facility containing approximately 73 housing units and approximately 46 underground parking stalls located at 837 Payne Avenue in the City of Saint Paul, Minnesota (the "Project"); (e} The proposal calls for the HRA to loan the proceeds realized upon the sale of the Bonds to the Parinership pursuant to a revenue agreement or agreements wherein the Partnership will be obligated to make payments at the times and in amounts sufficient to provide far the prompt payment of principal of, premium, if any, and interest on the Bonds and all costs and expenses of the IIRA and the City incident to the issuance and sale of the Bonds; Dy-JDS� 40 ( fl 41 42 The City desires to facilitate the acquisition and consmxction of a multifamily housing facility within the City; and the Project will assist the City in achieving these objectives; 43 (�) A public hearing on the Housing Program and the Project was held on this date following duly 44 pubiished norice, at which time ali persons that desired to sgeak were heard; 45 46 (h) No public official of the City has either a direct or indirect financial interest in the Project nor 47 will any public official either directly or indirectly benefit financially from the Project; and 48 49 (i) A form of Memorandum of Understanding has been prepazed between the F3R.A and the 50 Par[nership, which sets forth certain understandings by and between the IIRA and the Partnership pertanvng 51 to the Project, and the financing therefor. 52 53 NOW THEREFOAE, BE IT RESOLVED by the City Council of the City of Saint Paul, 54 Minnesota, as foilows: 55 56 57 58 59 60 61 62 63 64 65 6b 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 38 39 )0 �1 1. The City hereby gives preliminary approval to the proposal of the Partnership that the City undertake the Project, described above, and the program of financing therefor, pursuant to Minnesota Statutes, Chapter 462C, consisting of the acquisition, consriuction and equipping of a multi-family rental housing facility within the City pursuant to the Partnership's specifications and to a revenue agreement between the HRA and the Partnership on such terms and conditions with provisions for revision from time to time as necessary so as to produce income and revenues sufficient to pay, when due, the principal and interest on the Bonds in the total principal amount of approximately $6,OOQ000 to be issued pursuant to the Act to finance the acquisition and construction of the Project; and said agreement may also provide for the entire interest of the Partnership therein to be mortgaged to the purchasers of the Bonds, ar a hustee far the holder(s) of the Bonds; and the City, acting by and through the FIRA hereby undertakes preliminarily to issue its revenue bonds in accordance with such terms and conditions; 2. On the basis of information available to the City it appears, and the City hereby finds, that the Project constitutes a multi-family housing development within the meaning of subdivision 5 of Section 462C.02 of the Act; that the availability of the financing under the Act and the willingness of the City to fiunish such financing will be a substantial inducement to the Partnership to undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the provision of multi-family rental housing opportunities to residents of the City, and to promote more intensive development and use of land within the City; 3. The Project, and the program to finance the Project by the issuance of the Bonds, is hereby given preliminary approval by the City subject to final approval by the HRA, the Partnership and the purchasers of the Bonds as to ultimate details of the financing of the Project, 4. Pursuant to Chapter 72, Saint Paul, Minnesota Administrative Code, the Ciry hereby authorizes and direcfs the Housing and Redevelopment Authority of the Ciry of Saint Paul, Minnesota (the "HRA") to issue the Bonds to fmance the Project and to take all actions necessary or desirable in connection therewith, and no further approval or authorization of the City shall be required; provided that the IIRA may, in its discretion, authorize the Board to issue the Bonds and to implement the program approved hereby, and the City hereby consents thereto; 5. The Partnership has agreed and it is hereby determined that any and all costs incurred by the City or the F�RA in connection with the financing of the Project whether or not the Project is carried to completion and whether or not approved by HRA will be paid by the Parinership: o�f-- �os� 92 ` 6. Briggs and Morgan, Professional Association, acting as bond counsel, and such 93 investment bankers as may be selected by Partnership, with the consent of the HIZA, are authorized to assist 94 in the preparation and review of necessary documents relating to the Project and the financing program 95 therefor, to consult with the City Attorney, Parinerslup and the purchaser of the Bonds as to the maturities, 96 interest rates and other terms and provisions of the Bonds and as to the covenants and other provisions of the 97 necessary documents and submit such documents to the HRA for finai approval; 98 99 100 101 102 103 104 105 106 107 108 109 110 111 ll2 113 114 115 Nothing in this Resolufion or the documents prepazed pursuant hereto sha11 authorize the expendihue of any municipal funds on the Project other than the revenues derived from the Project or otherwise granted to the City or the HRA. The Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the City or the FII2A except the revenue and proceeds pledged to the payment thereof, nor shall the City or the I�2A be subject to any liability thereon. The holders of the Bonds shall never have the right to compel any exercise of the taxing power of the City or I3RA to pay the outstanding principal on the Bonds or the interest thereon, or to enforce payment thereon against any property of the City or the I3RA. The Bonds shall recite in substance that Bonds, including tYte interest thereon, are payable solely from the revenue and proceeds pledged to the payment thereof. The Bonds shall not constitute a debt of the City or HRA within the meaning of any constitutional or statutory limitation. 8. In anticipation of the issuance of the Bonds to finance all or a portion of the Project, and in order that completion of the Project will not be unduly delayed when approved, the Partnership is hereby authorized to make such expenditures and advances toward payment of that portion of the costs of the Project to be financed from the proceeds of the Bonds, as the Partnership considers necessary, including the use of interim, short-term financing, subject to reimbursement fronn the proceeds of the Bonds if any when delivered but otherwise without liability on the part of the City or the IIRA o�- rosg Reaues[ed by Department of Planning & Economic Development By: P_pproved by By: Form Approve Adoption Cez By: Approved by Hy: Adopted by Council: Date,/y ONC7VLb2( �, oZC7U^j + 1 4 � � Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet � PE �iano�8 � �oomic Devetopment CoMact Person & Phone: Sheri Pemberton 266-6615 Must Be on Council Aqen Tofal # of Signature Pages Date Initiat 26-OCT-04 � Assign Number For Routing Order Green Sheet NO; 3024031 1 lannin & couomic Develo e ent Dir ctar 2 a roe MeCa 11 3 a or's ffice � Ma orJAs 'staut 4 ouncil 5 ' C erk C" G7erk (Clip All Locations for Signature� Public Hearing for Housing Bonds. Signatures for City Counsil Resolurion (inducement reso]ution) giving prelimivary approval for a praposal foz a Financing Program far Multi-Fazpily Rental Housing Development us9ng taY exempt housing revenue bonds, for HItA Boazd considerntion, for the Payne-Phalen Senior Lofts Project, District 5. ��dations: Approve (A) or R Planning Commission CIB Committee Civil Service Commission A Staff A FfRA aooroved 5-26-09 Resolution 04-OS/26-2 rersona� service conttacu rmust 1. Has this person/firm ever worked under a contract for this department7 Yes No 2. Has this person/£rm ever been a city employee? Yes No 3. Does this person/firtn possess a skill not normally possessed by any current ciry employee� Yes No Explain all yes answers on separate sheet and attach to green sheet Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why): With the construction of New Phalen Boulevazd creating new neighborhood gateway at Payne Avenue. The neighborhood has gone through a tUree yeaz process idenrifying redevelopment activifies for the prime comers of Payne and Phalen creating an attsacfive gateway that will make a positive statement for Payne Avenue. Advantapes If Approved: � The project will result in construction of a four-story, mised use building providing 73 new affordable senioz rental housing units with retail space for both services for housing and open retail space. Total development cost is $11,626,OAQ.�i� and materiai make a positive statement of vitality to the neighborhood. ��� Disadvantapes If Approved: None ���' 2 7 t��,i'�R'S QFFlC� DisadvanWyes If Not Approved: Will not be able to carry out the overall development objectives approved by the neighborhood to revitalize this azea and create a new gateway to Payne Avenue Main Street azea. Underutilized land and deteriorated buildings will continue to be the visible component along New Phalen Bivd " '^,,,""""" 56�000,000 Ho�sing Bonc�osURevenueBudgeted: Transaction: Fundinp Source: Activity Number: Financial Infortnation: �b C� c.L,Vi� / ��( -y �n0'�" � R� l f�e��fa.�'C"1�,� (Explain) AlloCation of Housing Revenue Bonds provided directly to City/HI2A d`f-loS� CITY COUNCIL OF TF� CITY OF SAINT PAUL, MINNESOTA REPORT TO THE CITY COUNCII, DATE: October 25, 2�04 REGARDING: PUSLIC 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 Housing Revenue Bonds and Authorizing the Prepazation of Necessary Documents and Materials in Connection with the said Project and Program. The Housing and Redevelopment Authority of the City of Saint Paul (HI2A) has received a request from Phalen Parkway Lofts Limited Partnership, a Minnesota limited partnership (the " Borrower") comprised of Sherman Associates, Inc. and PNC Multi-Capital, requesting the HRA to issue up to $6,000,000, of Tax Exempt Multifamily Revenue Bonds ("Bonds") for the purpose of constructing the Payne-Phalen Parkway Senior Lofts , a 73 unit affordable rental housing project with retail and service space on part of first floor ("ProjecY') located in District 5. On May 26, 2004, HRA approved the execution of a Development Agreement with Sherman Associates, Inc. and approved funding to carry out development of the first three phases of the Payne- Phalen Boulevard Main Street Redevelopment Project Area, which included housing bonds, tax increment financing and HOME funds. The purpose of this report is to request the City Council to consider adopting the attached preliminary (inducement) tesolution which would approve the following: 1. Authorize City staff to prepare a Housing Prograna for financing the Project prepared in accordance with the provisions ofMinnesota Statutes, section 462C.03; and 2. Authorize I3RA to issue up to $6,000,000 of ta�c exempt, multifamily rental revenue bonds for the Project;and Retain Briggs & Morgan as bond counsel for said Bonds and authorize them to assist in the preparation and review of necessary documents relating to the Project and Housing Program and consult with the HRA, City Attorney, Owner, and purchasers of the proposed Bonds. Nothing in this Resolution or the documents prepared shall authorize the expenditure of any municipal funds on the Project other than the revenues derived from tLe Project or otherwise granted to the Citv or the HRA. Bonds shall not constitute a charge lien or encumbrance legal or eguitable u on n any�ropertv or funds of the CiTy or the HRA except the revenne and proceeds pledged to the payment thereof, nor shall the Citv or the HRA be subiect to anv liabili . 1 o�-�os�` With respect to multifanuly housing bonds, Section 72.04 of Chapter 72 of the City's Adminisirative Code provides that the I3RA be designated to exercise on behalf of the City the powers confened 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 IIRA. PROJECT The Project consists of a four story apartment building containing 73 affordable rental senior housing units with some miYed use on the first floor, including services for the seniors and outside public retail. Amenities include: structured parking, elevator, laundry facility and common gathering space. The Project will comply with the City's rental affordability requirement of 10% of the units affordable at 30°/o of inedian income and 10% of the units affordable at 50% of inedian income. FINANCING The Project will be funded by a combination of multifamily taac exempt bonds, federal Low Income Housing Tax Credit Program (4°l0), Tax Increment Financing and HI2A approved HOME Funds. The tax credits aze not from the City's annual allocation but are 4% credits eligible for use with taY exempt bonds (the maximum rents must be affordable at no more than 60 percent of area median income.) The Department of Housing and Urban Development is processing an application £or FlUD insurance to enhance the bonds. The IIRA took certain action on May 26, 2004 to provide gap financing of approximately $3,091,651 from the sale of taxable bonds for the Scattered Site Tax Increment Financing District No.lA and $900,000 of Community Development Block Grant fixnds. The HRA's gap financing may be lessened if additional funds are approved in October by the Minnesota Housing Finance Agency. The Total Development Cost is $11,165,000. Summary of Preliminary Sources and Uses for the Payne-Phalen Boulevard Senior Lofts Project. 5ources Housing Revenue Bonds 4°lo Tax Credits (Equity) HRA HOME Funds Defened Dev. Fee $5,800,000* 3,200,000 1,65Q000 515,000 Uses Land Conshucrion Constr Loan Int. Real Estate Closing Costs Legal ArchitecUSoiUAppiaisal, etc. fI[JD Costs Bond Costs $ 1,475,000 6,441,000 223,000 55,000 172,500 356,000 243,951 172,150 358,000 250,759 439,640 978,000 $11,165,000 Project Reserves Negarive ALbitrage Contingency Developer Fee Total $11,165,000 * the bonds inciude a$925,00 pay-as-you-go TIF note o�1-�asg Tax Exempt Bonds The bonds will be issued in Series A. The Series A bond (HCJD insured) will be the first position secured long term debt and will be repaid from project cash. TIR Loan The Payne-Phalen Parkway Senior Lofts is located in the Payne-Phalen Tax Increment Financing Dishict. This loan will come from the sale of taacable revenue bonds and is to be repaid from the revenue generated from the development TIF district. The annual payments of the district will amortize approxunately $925,000 in bonds through the term which is a 25 year housing district. HOME Fund Loan The HRA approved $1,650,00 of HOME funds that will be used in the acquisition and construction of this development. The HOME funds aze being provided as a deferred loan with an accruing 1% per annum interest rate and will be due and payable at time of first mortgage pay-off. HOME funds also require long term affordability for a restricted period of tune (30 years) which restrictions are insured by filing a Declaration of Covenants, Conditions and Restrictions on title. The loan would be secured by a note, mortgage, assignment of leases and rents and a UCC. Of the 73 units, 35 units have been designated as HOME units of which 21 units are below 60%, 7 units are below 50%, and 7 units are below 30%. The development is monitared yearly to insure the compliance the affordability requirements. FEES The Developer has submitted a non-refundable application fee of $2,000 for the 4% tax credits and $5,000 for the Housing Bond application. Should the Bonds be issued, the HRA will receive an administrative fee at closing equal to one percent of the principal balance of the Bonds. Every year thereafter that the Bonds remain outstanding the I�A will receive an annual administrative fee equal to one -tenth of one percent of the outstanding principal balance of the Bonds. SUPPORT The project received support from the District 5 Planning Council. PUBLIC PURPOSE The following public purposes will be met: * Project will provide affordable housing opportunities for persons at 60%, 50% and 30% of median incomes. * Project meets objectives of The Housing Plan, adopted as part of the City's Comprehensive Plan, Section 6.0, Strategy 3: Ensure Availability of Affordable Housing. * Develop under-used land and weak land use mix to productive, tax producing property becoming an asset to the neighborhood and City * stimulate private investment and reinvestment oy- �as8 BOND AUTHORITY; ALLOCATION PROCESS For the past several yeazs, the entitlement has been used for housing projects and mort�age revenue bonds or mortgage credit certificates to finance the Ciry's single family mortgage program. Because the Payne- Phalen Parkway Senior Lofts will be owned by a for-pro&t entity, the proposed bonds witl count as part of the City's entitlement bond carryover allocation from Year 2004. However, staff believes that the single family mortgage program is amply funded for 2004. Therefore, issuance of rental revenue bonds would not diminish the City's single family mortgage program. Upon adoption of the inducement 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 and sell revenue bonds to finance the project. Attachments: City Council Resolution Multi-Family Rental Housing Program for Phalen Senior Lofts Public Heazing Notice IIRA Resolution 04-OS/26-2 Prepared by: Sheri Pemberton-Hoiby PED Project Manager 266-6615 o �f- �osg Mi JLTI-FAMILY RENTAL AOUSII3G PROGRAM OF THE CITY OF SAIIVT PAUL, MINNESOTA, ANB TI�, HOUSING AND REDBVELOPMENT AUTHORITY OF THE CITY OF SAINT PAUL, MINNESOTA (PF3AI,EN SENIOR LOFTS HOUSING DEVELOPMENT) November 3, 2004 Proposal; Authoritv. The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "HRA"), proposes to issue revenue bonds and to take other actions in furtherance of the objective of financing the acquisition, construction, and equipping of the multi-family rental housing project described herein (this "Program") pursuant to applicable authority conferred upon the FIRA by the laws of the State of Minnesota, including without limitation Minnesota 5tatutes, Chapter 462C, as the same may be amended from time to time (collectively, the "Act"). Pur�oses. In cxeating this Program, the City o£ Saint Paul, Minnesota (the "City"), and fIRA are acting in fitrtlierance of their findings that the preservation of the quality of life in the City is in part dependent upon the maintenance and provision of adequate, decent, safe, sanitary, and affardable housing stock; that accomplishing the goals of this Program is a public purpose and will benefit the residents of the City; that the need exists within the City to provide in a timely fashion addirional affordable rental housing to and for the benefit of elderly persons residing and expected to reside within the City; that there exist or are expected to exist persons within the City who are and will be able to benefit from and are in need of the Program; that the Program is necessary in view of the limited resources that may be available to such persons relative to the expenses involved in accomplishing the type of objectives outlined in this Program in the absence of one or more of the forms of assistance described herein ar otherwise available pursuant to the Act; and that the City and HRA hereby find that such forms of assistance are often necessary for the benefit of such persons, families, and goals and that, furthermore, the successful implementation of the objectives of the kind described in this Program has been found to provide impetus for the development of other housing in the City, as well as the general development of the City, by other persons who are not the beneficiaries of such governmentally sponsored or assisted activities. Rental HousingPurposes. More particularly, tbe City and IIItA find tbat there exists a need for senior rental housing, alone due to a variety of factors, including that the cost of new construction of multi-family rental units may in many cases prove economically unfeasible, given the lugh costs of construction and prevailing area rental levels, and that therefore appropriate levels of public assistance may be helpful and necessary in bridging that gap. General Descri�tion of the Pro�ram. This Program consists of the financing of the acquisition, construction, and equipping of a senior, independent living rental housing project consisting of an approximately 73 unit residential rental project and approximately 46 underground parking stalls (the "ProjecY'). The initial owner of the Project will be Phalen Parkway Lofts Limited Partnership, a Minnesota limited partnership, (the "Company"). The Act does not impose any income limits on the tenants for an elderly housing development. Under federal law, at least 20 percent of units must be occupied by persons or families whose family incomes do not exceed 50 percent of area median gross income or 40 percent of the units must be occupied by persons or families whose family incomes do not exceed 60 percent of azea median gross income. The expected base monthly rents will be approximately as follows: ie�s�os�t o�-roSS One Bedroom $359 - $670 Two Bedroom $905 - $923 Location. This Program is limited to the Project. The Project is located at 837 Payne Avenue in Saint Paul, Minnesota. Revenue Bonds. The amount of revenue bonds required to finance this Program is approximately $6,000,000. The proceeds will finance the acquisition, construction, and equipping of the Pzoject and pay costs of issuing the bonds, and may be used to establish a reserve. The Project will be operated as an elderly mulrifamily rental housing development within the meaning of Minnesota Statutes, Section 462C.02, Subd. 5. The HRA will issue multifamily housing revenue bonds (the "Bonds") pursuant to Minnesota Statutes, Chapter 462C.07, Subd. 1, and loan the proceeds of the Bonds to the Company to finance the Proj ect. The HRA will loan the proceeds from the sale of the Bonds to the Company pursuant to a revenue agreement (the "Loan Agreement") by and between the F3RA and the Company. The Company will be required, pursuant to the Loan Agreement, to make payments sufficient to pay when due the principal of, premium, if any, and interest on the Bonds. The Bonds may be siructured so as to take advantage of whatever means are available or necessary and are permitted by law to enhance the security for and marketability of the Bonds. Substantially all of the net proceeds of the Bonds (the initial principal amount thereof, less any amounts deposited in a reasonably required reserve or paid out as costs of issuance of the Bonds) will be used to pay the costs of the Proj ect, including any functionally related and subordinate facilities. The HRA has adequate existing capacity to administer, monitor and supervise the Project in order to insure that the Project will be consistent with the IIRA's Housing Plan. The Company will construct the Project in compliance with all applicable development restrictions, and all new construction and rehabilitation of the existing buildings is subject to applicable state and local building codes. The Company will be required to operate the Project in accordance with state and local anti-discrimination laws and ordinances. The costs of the Project and the Program undertaken to finance the Project, including specifically the costs to the HRA, will be paid or reimbursed by the Company. Housine Plan. The City and HRA hereby adopt the Comprehensive Housing Plan of the City of Saint Paul as the housing plan relating to the Project. Monitorin�. The Program will be monitored by the HRA. The HRA expects to enter into or continue suitable agreements with necessary parties to ensure consistent compliance with the objectives of this Program, as well as with the requirements of applicable law. Meetin¢ Needs, Methods. The Program will help meet the need far rental housing for elderly persons. The City and HRA believe that this Progam will help meet the identified needs under this Program. The specific methods anticipated to be used include the issuance of revenue bonds under the Act to provide feasible fmancing for various aspects of the Program so undertaken. The HRA will monitor the implementation of this Program pursuant to its loan agreement for the Project. I698908v1 o`� /osg Authorization. The Program is undertaken pursuant to Minnesota Statutes, Chapter 462C and is consistent with the III2A's Program. 1698908v1 o �f- coSg NOTICE OF PUBLIC HEARING ON A HOUSING PROGRAM FOR A MTJLTLFAMILY AOUSING PROJECT Notice is hereby given that the City Council of the City of Saint Paul, Minnesota (the "City"), will meet at the Council Chambers on the Third Floor of the City Hall, 15 West Kellogg Boulevard, at 5:30 p.m. on Wednesday, November 3, 2004, to consider the proposal of Phalen Parkway Lofts Limited Partnership, a Miiuiesota limited partnership (the "Borrower") that the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "Authority"), finance a project hereinafter described, pursuant to Minnesota Statutes, Chapter 462C, by the issuance of revenue obligations of the Authority, and the adoption of a housing program for such bonds. Description of Housing Program and Project The Project consists of the acquisition, construcrion and equipping of a senior rental housing project. The Project will contain approximately 70 senior rental units and will be located at 837 Payne Avenue in the City of Saint Paul. The Project will be owned by the Borrower. The maafnnum aggregate estimated principal amount of bonds or other obligations to be issued to finance this project is $6,000,000. The bonds or other obligations if and when issued will not constitute a charge, lien or encumbrance upon any property of the Authority or the City, and will be payable solely from revenues of the project, and will not be backed by the full faith and credit of the Authority or the City. At the time and place fixed for the Public Hearing, the City Council will give all persons who appear at the hearing an opporiunity to express their views with respect to the proposal. In addition, interested persons may file written comments respecting the proposal with the Deparhnent of Planning and Economic Development, to the attention of Sheri Pemberton- Hoiby at (651) 266-6615, at or prior to said public hearing. 1698880v1 o�(- �osg Sponsor: RESOLUTION NO. 04-OS/26-� Resolution Authorizing the Execution of a Development Agreement wifh Sherman Associates, inc. and Approval of Funding fo carry out Qeve4opment of Phases 1a, 1b and 1d of the Payne-Phalen Boulevard Mainstreet Redevelopment Project in Payne-Phalen District 5 1 WHEREAS, the Phalen Corridor Development Strategy was adopted by the City Council on 2 Apnl 4, 2001 breaking down the corridor development into three sections as it moves from William's 3 Hill east to connect to the New Phalen Boulevazd already constructed in Phalen Village; and 4 S WHEREAS, with the construction of New Phalen Boulevard to Payne Avenue, the Phalen 6 Corridor Initiative, District 5 and neighborhood residents were concemed that a planning process needed 7 to get started to insure that development at Payne and New Phalen Boulevard would become major hubs 8 of development interest which should enhance and be an impetus to Payne Avenue and the residential 9 neighborhood overall; and 10 ll 12 13 14 15 16 17 18 19 zo zi 22 23 24 25 26 27 28 29 30 31 32 33 34 35 WHEREAS, the Payne-Phalen Middle Corridor Section (Edgerton to Earl) group was brought together to establish goals and objectives to steer the development opportunities and has been recognized by the Planning Commission to bring forwazd an Amendment for the Phalen Boulevazd Middle Corridor Section to be presented to the Planning Commission and on to the City Council for approval as part of the Phalen Corridor Development Strategy; and VJFIEREAS, the task force, including property owners in the proposed development aieas, met for several inonths and on November 18, 2002 finalized general standards/obj echves for the area and potential development alternatives for the four corners at Payne and Phalen Boulevard; and WHEREAS, on December 11, 2002 FIRA approved the issuance of a Request for Qualifications (RFQ) for the Payne/Phalen Boulevazd Middle Corridor Section to identify a potential qualified party/developer or parties/developers who are willing to work on determining feasible development opporiuniries including design, construction and financing, etc, in addition to considering the input provided by the community; and I WHEREAS, on May 14, 2003 HR11 approved Sherman Associates, Inc. as preferred to developer to work with PED staff and the community to determine the potential far a feasible development plan; and WHEREAS, the Housing and Redevelopment Authority of the Ciry of Saint Paul, Mumesota (the "FII2A") has the power to engage in development or redevelopment activiries under Minnesota law and the Authority is authorized to engage in activities relating to (a) housing projects and deveiopment, (b) removal and prevention of the spread of conditions of blight or deterioration, (c) bringing substandasd buildings and improvements into compliance with public standards, (d) disposition of land for private o �- raS 3b 3"! 38 �9 �0 41 42 43 44 45 46 47 4$ 44 50 S1 52 53 54 SS 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 redevelopment, and (e) improving the tax base and the financial stability of the community, and to engage in the aforementioned acti�itles when these needs cannot be met through rehance solely upon pncate initiative and which can also be undertaken in targeted neighborhoods; and WHEREAS, a Memorandum of Understanding between HRA and the Developez was approved by the HRA Board on January 28 2004 which set forth the preliminary a�eements of the Authority and the Developer with respect to the Project, and which provided a framework for a final decelopment ao eement to be submitted at a later date to the HRA Board of Commissioners for consideration and approval; and W�REAS, the HRA wishes to proceed with Phases la, lb and ld of the Payne7Phalen Mainstreet Redevelopment Project subject to execution of a Development Agreement and establishment of the Payne-Phalen Tax Increment Financing Redevelopment Dislrict Plan and plans to budget up to $3 3 million ($1.4 million of HOME funds and $1.4 million of TIF). NOW THEREFORE BE IT RESOLVED BY THE Housmg and Redevelopment Authority of the City of Saint Paul, Minnesota, Board of Commissioners as follows: 1. The Board of Commissioners hereby authorizes the Executive D'uector, HRA Chairperson, tke Assistant Secretary of HRA and the Director, Office of Financial Services (the "Authorized Officers") to execute the Development Agreement with Sherman Associates, Inc. for Phases 1a, 1 b and 1 d of the Payne/Phalen Mainstreet Redevelopment Project. The approval hereby given to the Development Agreement includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the City Attorney, the apnropriafe staff person or by the Authorized Officers; and said Authorized Officers or staff inembers are hereby authorized to approve said changes on behalf of HRA. The execution of the Development Agreement by the Authorized Officers of HRA shall be conclusive evidence of the approval in accordance with the terxns hereof. 2. That the proposed Development Agreement describing the proposed transaction by and 6etween HRA and Sherman Associates, Inc. far Phases ia, lb and ld in the Payne/Phalen Mainstreet Redevelopment Project is satisfactory in form and complies with the requirements of state and federal law and includes the total and also idenrifies future stages of PaynelPhalen Mainstreet Redevelopment Project, that will need to be brought back to HRA for final approval. 4. That amendments and authority to approve, execute and deliver future amendments to the Aevelopment Agreement in connection with the h contemplated by the overall approval by the HRA on May 26, 2004 by Resolution 04-05/26- for the Payne/Pha2en Mainstreet Redevelopment Project Fhases la,lb and ld is hereby delegated to the Executive L?irector, provided that such amendments do not materially adversely affect the interest of the HRA and are acceptable in form and substance to the Saint Paul City Attomey, or other counsel retained by the HRA to review such documents. That the �IRA authorized staff to create a Tas Increment Financing Plan on January 28, 2004, and authorizes staff to continue to complete the fmal plan and bring back to HRA for final budget approval. O�!` (0.� ss 86 87 88 89 90 91 92 93 44 95 96 97 98 99 100 101 102 103 104 105 106 107 108 That $1.9 million of HOME funds is hereby approved ior use as assistance in meeting the 20% of HRA's affordability guidelines, meering the gap in value created by redevelopment costs and construcrion costs for undero ound parking, staff will continue to evaluate the projects as they move fonaard to closing to siruc[ure wherever possibie deiened loans and snared participation in the ow�ership portion to have funds paid back where feasible. 6. That HRA supports the submission of applications for these projects to the Met Council Livable Commuiries Proe am in June, 2004 and to Minnesota Housing Finance A�ency in July, 2004 requesting funding for these projects. Any awazd would help to zeduce the amount of HRA funds needed to be provided. That HRA understands that Edgerton Family Lofts wi11 be submitted to the HRA for Low Income Tax Credits in 20�4-05. 8. That FIRA hereby approves the budget amendment to the Year 2004 F�2A Budget attached to this Resolution as Attachment A and made a part hereof. (This part of page left biank) D�F- IDS� BUDGET AMENDMENT ATTACHMENT A The HRA Board of Commissioners approve the budget amendment to the Year 2004 HRA budget. HRA HOME FUND # 103 SPENDING PLAN FINANCING PLAN HOMEGrant-PriorYear 10337001-3099-00000 103-37003-3099-00000 HOME Grant-Current Year 103-370013099-00000 (From June 1, 04) Total Financing SPENDING PLAN HOME Projects-Unspecified 103-37001-0547-63523 Payne/Phalen Mainstreet Redevelopment pro�ect 103-37001-0547-63607 CHDO Projects-Unspecified 10337003-�547-63523 PED Adminstration Fee 103-37004-0299-63502 Total Spending Netlncrease Funds for 2004 New Grant will be available effective June 1, 2004. Current Budget 14.000 145,859 2,500,000 2,659,859 2,514,000 145,859 2,659,859 Change 39, 044 39,044 (2,131,760) 1,900,000 17,500 253,304 39,044 39,044 Amended Budget 14,000 145,859 2,539,044 2,698,903 382,240 1,900,000 163,359 253,304 2,698,903 5/18/2004 103.xiw Prepared by PED Accounting � - N � . � 0 A ° ,� . A � 0 ; w m : 0 �NISf10H ';� i ' � LY"r �� "d <; c ;11 �+w ' ` ;1:1 �±� . r �; � ,;:�� ;,,. �IOIN�S �rn:� �� � � � ._.;� `�e��� R_:��� � .�� N�1`dHd �i i ,'.iM �„ �t.y � (� 'I ,� r. i � G x �'.Il�^!�Ix1