04-1058Council File # ��
Resolution #
Green Sheet #� �2��3,
RESOLUTION
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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�
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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;
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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
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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.
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53 NOW THEREFOAE, BE IT RESOLVED by the City Council of the City of Saint Paul,
54 Minnesota, as foilows:
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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;
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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
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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:
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C� c.L,Vi� / ��( -y �n0'�" � R�
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(Explain) AlloCation of Housing Revenue Bonds provided directly to City/HI2A
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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
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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
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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
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Authorization. The Program is undertaken pursuant to Minnesota Statutes, Chapter 462C
and is consistent with the III2A's Program.
1698908v1
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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
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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
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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
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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.
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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
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