04-92Council File # Q�_ /�
Pzesented By
Green Sheet # 1�39 ag
RESOLUTION
CITY OF SAINT PAUL, MINNESOTA }2
Referred To Committee: Date
i RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAINT PAUL,IVIINNESOTA
2 ADOPTING FINDINGS OF FACT RELATED TO DEMOLITION OF BUII,DINGS LOCATED
s IN PROPOSED FUTURE WESTIVIINSTER JUNCTION BUSIlVESS
a CENTER
5 WHEREAS, the City of Saint Paul (the "City") has been advised that the Port Authority of the
� City of Saint Paul (the "Port Authority") intends to establish a redevelopment tax increment financing
a district including the area generally bounded by Westminster Street to the west, Whitall Street to the
9 north, Payne Avenue to the east and the proposed future Phalen Boulevard to the south to be lmown as
10 the Weshninster Junction Business Center outlined on the aerial photograph attached hereto as E�ibit A
1i (the "DistricY'); and
12
13 WI3EREAS, prior to certification of the District, the City Council of the City of Saint Paul (the
i4 "City Council") is required to make the findings required by Minnesota Statutes Section 469.175, Subd.
Zs 3, including the reasons and facts supporting the deternunation that the District meets the statutory
15 requirements for a redevelopment dish and
17
1 s WHEREAS, the City has been further advised that, prior to certification of the District, and for
19 health and safety reasons, the Port Authority intends to demolish certain residential buildings currently
2 0 located on the parcels to be included in the District; and
21
22 WFIEREAS, the Port Authority and the City have previously determined that structures located
23 in the District are "shucturally substandard" within the meaning of Minnesota Statutes, Section 469.174,
ze Subd. 10; and
25
z 5 WHEREAS, as set forth in a resolution adopted by the Port Authority on January 27, 2004, a
z � copy of which is attached hereto as Eachibit B(the "Port Authority Resolution"), the Port Authority has
z s determined that three buildings located on the "Cascade Stone" lot and at 359 Whitall Street, as described
z 9 in the SEH Report referred to below (the "Substandard Buildings"), are "structurally substandard" within
3 o the meaning of Minnesota Statutes, Secrion 469.174, subdivision 10, all as described in greater detail in
3 i the Port Authority Resolufion; and
32
33 WHEREAS, the City made its own independent investigation of the condition of the Substandud
34 Buildings and a staff report dated January 16, 2004, sets forth the findings of the investigation ("City
3s Report"); and
36
3 � WHEREAS, the City Council, in reliance on the information provided to it by the Port Authority,
3 s including but not limited to the Redevelopment Eligibility Assessment prepared by Short Elliot
39 Hendrickson, Inc. dated December 22, 2003 (the "SEH Report"), and its own investigation and the City
4 o Report concurs with the Port Authority's determination that the Substandard Buildings are "structurally
41 substandard" within the meaning of Minnesota Statutes, Section 469.174, subdivision 10; and
42
43 WHEREAS, the purpose of this action is to set forth the factual findings of the City Council
29352.1.
D�f- 9�
a4 before the Substandazd Buildings are demolished, which factual finding may then be relied on by the
45 City Council at such time as the City Council considers whether the proposed District, as a whole, meets
46 the statutory requirements of a redevelopment district;
47
4 e NOW, THEI2EFORE, BE TT RESOLVED, by the City Council of the City of 5aint Paul that, on
4 9 the basis of informarion provided to it by the Port Authority, including the SEH Report, and the City
s o Report, the City Council finds that the Substandazd Buildings aze "sh substandazd" within the
s i meaning of Minnesota Statutes, Section 469174, subdivision 10, for the reasons set forth in the City
s z Report, SEH Report and the Port Authority Resolution.
29352.1.
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Form Ap
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Approve
By:
29352.I.
Adopted by Council: Date �/� �
Adoprion Certified by Council SecLetary
...,...:.,�
4, 2004
�/f.P�c� �,9a�
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TOTAL # OF SIGNATURE PAGES
GREEN SHEET
Gray Grabko, 651/266-6709
O�f - 9"1
/0.� 9�s�
No
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❑ ��� 1 �� ❑
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(CLIP ALL LOCATIONS FOR SIGNATURE)
,..._ I
Resolution adopting �ndings of fact related to demolition of buildings located in proposed
future Westminster Junction Business Center tax increment financing district.
w
PLANNING CAMMISSION
CIB CAMMITTEE
CIVIL SERVICE COMMISSION
Hes this perswJfirtn evM rorked under a conhact for this departmeM']
VES NO
Has thie pefeorJfifin ever been a ciry empbyee7
YES No
Does this peisdVfirtn poscess a sldll not namalNP� M' any wrteM city empbyee9
YES NO
k thie pereoNfirtn a�argetad veMaR .
YES NO
VITIATING PROBLEM ISSUE, OPPORTUNITY (Wtw, What When, Where, Why)
In -order for the Port Authority to establish a redevelopment t� increment financing district
for the Westminster Junetion Business Center, the City Couneil is required by State law to
make findings that support that the TIF district meets the statutory requirments-. City staff
has condueted its own analysis and has determined that the proposed TIF district doe.s meet
the statutory requirements.
IF APPROVED
The Westminster Junction Business Center will,be developed.
None
iISAOVANTA6ESIFNOTAPPROVEO
The project will not move forward.
WUNT OF TRANSACTION I
SOURCE
INFORMATON (FXPWN)
COSTIREVENUE BUDfSETED (CIRCLE ON�
ACTMTY NUMBER
YES NO
1900 landmark Towers
345 St. Peter Street
Saint Paul, Minnesota
55702-1667
Q � R T
� 9
J (�
Q � a
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b s T
January 27, 2004
�is. Martha Fuller, Director
Planning & Economic Development Department
1300 City Hall Annex
25 West Fourth Street
Saint Paul, Minnesota 55102
o�{- 9a
Tel: 651-224-5686
Fax�651-223-5198
Toll Free.800-328-8477
www.zppa.com
RE: Pindings for Tax Increment Finance District for Westminster Junction Business Center
Dear Ms. Fuller:
We submit for your review and referral to the o�ce of the Niayor, City Gouncif, and City Attorney's o�ce,
Findings for Tax Increment Finance District for Westminster Junction Business Center.
In atldition to the staff memorandum, we are attaching a draft copy of the proposed City Council Resolution
and a copy of the tax increment findings that were approved by the Port Authority's Board on January 27,
2004. City Counci{ action is requested at its meeting on February 4, 20Q4.
Your expeditious handling of this matter will be appreciated.
Attachment
cc: Mayor Kelly
29341.1.
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Exhibit B
1. Port Authority Board Report (including attachments).
2. Port Authority Board Resolution Number 4060.
3. City Report.
SAINT PAUL
PORT AUTHORITY
��vrolz�vDUNr
TO: BOARD OF COMMISSIONERS
(Meeting of January 27, 2004)
DATE:
o �f -9�
January 21, 2004
FROM: John W. Young
Lorrie J. Louder �,
Kenneth R. John ,���
SUBJEC'T: Findings for Tax Increment Finance District for Westminster Junction Business Center
Resolution No. 4oso
Action Repuested:
That the Port Authoriry Board of Commissioners find the properties at 359 Whitall and 850 and 854
Westminster Streets meet the requirements of Section 469.174, Subd.10 of Minnesota Statutes for inclusion
in a Redevelopment Tax Increment District based on the report of Short, Elliot, Hendrickson and opinion of
legal counsel.
Public Purpose:
Phalen Boulevard construction and redevelopment of the Westminster Junction Business Center will create a
minimum of 300 permanentjobs using the PortAuthority's onejob per 1,000 square feet of building space
criteria. Actual results at Williams Hill, Crosby Lake, and Adington Jackson Business Centers suggest that the
total number of jobs at this business center could reach 500. Construction jobs createtl by the boulevard and
business center construction are estimated at 200. The new business center will generate private investment
and new plant and equipment and additional property taxes for the City of Saint Paul. The business center
will provide employment oppodunities for Saint Paul and Eastside residents, and generally will eliminate blight
and the under utilization of industrial land.
Business Subsidv:
NIA
Backqround:
The Saint Paul Port Authority is acquiring lantl fior Phaien Boulevard construction and redevelopment of the
Westminster Junction Business Center. We have acquired all of the land necessary for construction of
Phalen Boulevard. These parcels include Twin City Auto and Military Supply, Waste Management, Lovering
Johnson (JBC Development), and FEO Properties.
In November 2002, February 2003, August 2003, and November 2003 the Port Authority Board of
Commissioners reviewed reports of Short, Elliot, Hendrickson and opinion of legal counsel, regarding
properties we have acquired and found they meet the requirements of Section 469.174, Subd. 70 of
Minnesota Statutes for inclusion in a Redevelopment Tax increment District.
Zs�sz.�.
o�f- 9�
Page 2
#29246 vt - CcCmt Memo TIF Westrnirister359 Whilatl
SEH has inspected three additionai commercial properties and found them to be substandard as that term is
defined in state statute.
Specifically, that the property is 70% improved and the buildings are substandard as defined in State law.
Making these findings will qualify this property for a 25-year Redevelopment Tax Increment District, which
yields the most funds to pay project costs. The Port Board by making findings described above is not
approving a TIF District, but oniy making findings now so this properry can be induded in the TIF District
which we will ask the Board to set up in the future.
The requirements as contained in Chapter469, subdivision 10, of a Redevelopment District are briefly:
Parcels consisting of 70°/a of the area of the district are occupied by buildings, streets, utilities, paved or
graveled parking lots, or other similar structures, and more than 50% of the buildings, not including
outbuiidings, are structurally sub-standard requiring substantial renovation or clearance. To find that the
buildings are structurally substandard the buiidings must contain "defects in structural elements or a
combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection
including adequate egress, layout and condition of interior partitions, or similar factors, which defects or
deficiencies are of sufficient total significance to justify substantiai renovation or clearance." In addition,
a building is not substandard if it can be modified to meet the buiiding code applicable to new buildings
at a cost of {ess than 15°!0 of the cost of constructing a new structure of the same square footage and
type on the site.
In order to make these findings, the Port Authority has retained Short, Elliot, Hendrickson, a reputable
architectural and engineering firm who specializes in, among other things, the inspection of buildings and
property in order to meet tax increment finance guidelines. The person doing the work is a registered
architect with significant experience in this regard. Several other municipalities provided positive references
for the consultant, as did the Briggs and Morgan law firm.
The consultant made a thorough interior inspection of the commercial prope�ies. A significant amount of
notations and photographs were generated during this inspection. The consultant inspected the buildings
and determined where there were building code deficiencies. These building code deficiencies were then
assigned a dollar value. The buildings new construction cost was then estimated and the deficiency amount
was compared to the new construction cost of the building to determine if the deficiencies equal 15% or
more of the new construction costs.
With regard to these properties, specifically, the consultanYs findings are as follows:
• 359 Whitall and 850 and 854 Westminster meet the definition of substandard by using the methodology
described above.
• A report on both of these findings is attached to this memo.
zszas.�.
o�f - 9a
Page 3
#29246 vi -CcCmt Memo TIF WEStrninster 359 Whihall
• A letter from our legal counsei of Leonard, Street, and Deinard supporting these findings is also
attached.
The acquisition of these parcels is complete and the Port Authority owns fee-simple interest in the property.
The demolifion is being paid for with proceeds from the HUD 108 loan from the City of Saint Paul.
When combined, the reports for the Twin City Auto and Military Supply parcel, Lovering Johnson (JBC
Development), Waste Management, FEO Properties parcels and residences at 538, 516, 506, and 442
Whitail, and 837 Desoto, and commercial properties at 359 Whitall and 850 and 854 Westminster
demonstrate that these parcels meet the requirements outlined in Chapter 469, Subd.10 for a Tax Increment
Redevelopment District. Parcels consisting of more than 70% of the area of the District are occupied by
buildings, streets, utilities, paved or gravel parking lots or other similar structures, and more than 50% of the
buildings (15 of 19, not including outbuiidings) are structurally substandard as it relates to Minnesota State
Statutes.
Recommendation
The Port Authority Board of Commissioners finds that the commercial properties at 359 Whitall and 850 and
854 Westminster meet the requirements of Section 469.174, Subd.10 of Minnesota Statutes for inclusion in a
Redevelopment Tax Increment District based on the report of Short, Elliot, Hendrickson and opinion of legal
counsel.
IRd
Attachments
29246.1.
b�f 9�-
Resolution N"o. 4060
PORT AUT`HORTI'Y OF TE� CITY OF SAINT PAUL
[Westminster Junction Business Center]
WHEREAS, ffie Port Authority of the City of Saint Paul (the "Port Authority'� is
proposing to create a Redevelopment T� Increment Districf pursuant to Section 469.174, Subd.
10 of Minnesota Statutes, to be comprised of 31 separate conriguous tax pazcels generally
bounded by Westminster Street to the west, Whitall 5ireet to the north, Payne Avenue to the east
and fhe proposed future Phalen Boulevard to the south (the "DistricY�; and
WHEREAS, for safety reasons, the Port Authority intends to, prior to final certification of
the Dishict, demolish certain of the structures located on land to be included in the District; and
WHEREAS, it has been proposed that, prior to demolition of the buildings, the Port
Authority make certain factual findings supporting inclusion of the land in the Dishict; and
WHEREAS, Section 469.174, Subd. 10 states that, when establishing a Redevelopment
District, a parcel of land may be h as thou� it is improved with a structurally substandard
building if (among other thinjs) (a) the parcel was occupied by a structurally substandard
building within 3 years of the request for certification of the Redevelopment District, (b) the
substaudazd buildin� was demolished or removed by the Port Authority or the demolition or
removal was financed by the Port Authority or was done by a developer under a development
agreement with the Port Authority, and (c) the Port Authority fmds by resolution beiore the
demolition or removal that the pazcel was occupied by a structurally substandazd building and
that after demolition and clearance the Port Authority intendeds to include the parcel within a
Redevelopment District;
WHEREAS, the Port Authority Board has reviewed the Redevelopment Eligibility
Assessment dated December 22, 2003, prepazed by Short Elliot Hendrickson, Inc. ("SEH"} and
attached as E�ibit A(the "Assessment") related to the 2 parcels of land described therein
(the "Parcels"); and
WHEREAS, the Port Authority Boazd has also reviewed the opinion of Leonard Street
and Deinard attached hereto as E�ibit B to the effect that the findings made in the Assessment
are hased on a conect interpretation of applicable law; and
WHEREAS, the Credit Committee has reviewed and approved this resolution.
NOW, THEREFORE, BE IT RESOLVED by the Boazd of Commissioners of the Port
Authority of the City of Saint Paul as follows:
1. The Port Authority hereby finds that:
2435175v1
o�{- 9�
(a) on the basis of visual inspections by Port Authority personnel and the
Assessment, both Pazceis are "occupied" by buildings and other improvements within the
meaning of Minnesota Statutes, Secfion 469.174, Subd. 10, which requires that at least
15% of each taY parcel be occupied by buildings or other improvements; and
(b) that, on the basis of visual inspections by Port Authority personnel and the
Assessment, a three buildings located on the Parcels (the "Buiidings") aze "structuraily
substandazd" as defined by Section 469.174, Subdivision 10 of Minnesota Staiutes.
2. The Port Authority hereby finds that all three of Yhe Buildings constitute a public
nuisance and danger and should be demolished.
3. The Port Authoriry hereby declazes its intention to include the Parcels in the
Dishict after demolition of the Buildin�s.
4. Port Authority management, together with its advisors and legal counsel, are
hereby authorized to proceed with the preparation of the proposed District, and to negotiate,
draft, prepare and present to this Boazd for its considerafion all further plans, resolutions,
documents and contracts necessary for this purpose.
5. Port Authority management together with its advisors and legal counsel, aze
authorized to make arrangements for and proceed with the demolition of the Buildings.
Adopted: sc�zt � , 2004
PORT AUTHORTTY OF THE CTTY
OF SAINT PAUL
ATTEST:
_���
Se etary
By ��� ""'"' �` �,� �i'� " I
Its Chair —�—
za3si�s�� 2
CITY OF SAINT PAUL
Randy C. Kelly. Mayor
oy- 9a
HOUSINGANDIZEDEVELOPMENTAUTHORITY �
Martha G Fuller, ExecuHve Dvector
25WestFourthStreet Telephone:6�1-266-66.5.5
SaintPaul,MN5�102 Facsimile 657-228-326[
Jan. 16, 2004
To: Pete McCall �
From: Gary Grabko �
Re: Review of TIF District Eligibility Report for Westrninster Junction Business Center,
Parcels 1-1, 1-45, 7-11 prepazed by Short, Elliot Hendrickson, Inc.
I have reviewed this report and find that the procedures used to determine eligibility for a TIF
district at this site are conect and comply with the requirements established by State Law.
The conditions identified at these parcels by Short, Elliot, Hendrickson and described in their
12/22/03 report are building code related deficiencies and are necessary to bring the buildings up
to Code.
I agree with their assessment of the deficiencies identified at the site. The cost to repair/replace
are conservative but the same reference guide is used for both repairheplace so that the ratio
between repair/replace is conect.
In regard to the Cascade Stone Factory Structure (854 Westminster, parcel 1-1) the percentage of
Code Deficiency to Replacement Cost at 15.99% is too low. The metal siding is beyond repair
and the cost to rebuild exterior walls and to replace the siding would be significantly mare than
the estimate in this report.
cc: John Young, Port Authority
AA-ADA-EFA Empfoytr
o'-�- 9�
EXHIBTI' A
Short Elliott Hendrickson, Inc. Report
zasst�s�i A-1
� ',
City of St. Paul Port Authority
Westminster Junction TIF District — Phase 5
December 22, 2003
PURPOSE
Short Elliott Hendrickson, Inc. (SEH) was hired by the St Paul Port Authority, St Paul,
Minnesota, to survey and evaluate the properties within the proposed WesUninster
Junction Tas Increment Financing District. The proposed district is generally bounded
by Westminster Street to the west, Whitall Street to the north, Payne Avenue to the east,
and the proposed future Phalen Boulevazd to the south. The purpose of our work was to
independenfly ascertain whether the qualification tests for tax increment eligibility, as
required under Minnesota Statute, could be met. Note that the subject properties in this
report constimte a portion of the greater proposed Westminster Junction District — the
subject properties and findings will eventually be combined with previous and future
findings to determine tas increment eligibility for the entire District.
The findings and conclusions drawn herein are solely for the purpose of tas increment
eligibility and are not intended to be used outside the scope of trus assessment.
SCOPE OF WORK
The subject area in this report consists of 2 parcels comprised of the foilowing types of
improvements: 3 commercial structures.
EVALUATIONS
Of the 3 buildings in the proposed district, both interior and exterior areas were available
for evaluation.
FINDINGS
Coverage Test — 2 of the 2 pmperties met the coverage test resulting in 100% total azea
coverage. (Note that the Coverage Test for the entire project azea must exceed 70%).
Condition of Buildings Test — lOd percent of che buiidings (3 of 3) were found to be
"structurally substandard" when considering code deficiencies and other deficiencies of
sufficient total significance to justify substantial renovation or ciearance (see definition of
"structuraliy substandard" as follows). (Note that the Condition of Buildings Test for the
entire project azea must exceed 50%).
SUPPORTING DOCUMENTS ATTACHED
- Site OccupiedBuilding Substandard Detemunation table
- TIF Assessment maps: Buildings Assessment, Occupied Surfaces, Percent
Occupied by Parcel
- Report on Building Condition (one per building)
- Individual Building Summary Report (one per building)
Report on Buiiding Condition
Building IDBusiness Name/Address:
Structivally Substandard Building (Y/i�:
Conditions Test
11
Under the tax increment ]aw, specifically, Minnesota Stamtes, Section 469.174, Subdivision 10, a building
is structurally sabstandard if it contains "defects in structural elemenu or a combinauon of deficiencies
in essential utilities and facilifies, light and ventilation, fire protection including adequate egess, layout and
condition of interior partitions, or similaz facrors, which defecu or deficiencies are of sufficient total
signiFicance to justify substantial renovation or clearance °
The above building, based upon acmal interior and exterior inspection and review of building permit
records, exhibits the following deficiencies that contribute to justifying substantial renovation or cleazance:
Swcnual Elements
• Defects in exterior building shell: step-cracking exists in exterior wall at windows on east and
west sides — daylight is visibie through wail crack on east side (above and below window)
Essential Utilities & Faciliues
. Deficient in facilities for disabled: no disability pazking available; ]ack of accessible hardware
atentrance
. Installation of a toilet room and drinking fountain required due to occupancy
Light & Ventilation
. Deficient in meeting Mechanical code: for building construction prior to 1989, mechanical
systems do not provide sufficient number of air exchanges
Fire ProtecUOn/Egress
. Deficient exterior door: deficient threshold height
. Deficient interior stairway: insufficient clear stairway width; deficient rise/run dimensions;
deFcienf handrail height and extensions; deficient guardrail construction
Similaz Factors
. Defects in exterior building shell: roof shingles appeaz extremely worn; exterior block, wood
gable-end siding, and gutters 9n need of paint; garage doors aze not weather-tight (two are
warped out of shape); windows aze broken; bottom portion of second floor exterior door is
extremely weathered and is delaminating
Code Test
Notwithstanding the foregoing, the tazc increment law also provides that a building may not be considered
structurally substandard if it is in compliance with the building code applicable to new buildings or could
be modified to satisfy the current building code at a cost of less [han 15% of the cosi of conswcung a new
building of the same squaze footage and type on the same site.
Estimated cost of new building of same size and type (Total Replacement Cost):
Estimated cost oF correctio� of code deficiencies (Total Deficiency Cost):
Percentage of Code Deficiency to Replacement Cost:
359 Wlvtall Street 7-11
$221,675.91
$45,253.12
20.41%
Refer to Individual Building Summary Report for documentation of specific code deficiencies.
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Report on Structurally Substandard Building
Building IDBusiness NamelAddress: Cascade Stone — Retail 1-45
Structurally Svbstandard Building (Y/I�: I'
Step One
Under the taac increment law, specifically, Minnesota Statutes, Section 469.174, Subdivision 1 Q a building
is stractnratty substandard if it wntains "defects in swctwal elements or a combinauon of deficiencies
in essenUal utiliries and facilities, light and ventilation, fire protection including adequate egress, layout and
condi6on of interior partitions, or similar factors, which defects or deficiencies are of sufficient total
significance to justify substantial renovation or cleazance."
The above building, based upon acmal interior inspection and review of building pertnit records, meets the
above-referenced definition of swcturally sobstandard for the following reasons:
Structural Elements
• Deficiencies in exterior building shelt: major step cracking and wall displacement xcurring at
southwest corner of building and at south wall of original building storage area (corresponds
with failure of inezzanine swcture); building setUement cracking also occurs at southeast
comer, east wall, and north wall below windows
• Mezzanine savcture in original building storage azea failing at south exterior wall due to wall
se[Uemen[
Essential Utilities & Facilities
• Installation of elevator required due to second floor retail space
• Deficient in facilities for disabled: no disability pazking available•, lack of accessible hazdware
at entrance; lack of maneuvering cleazance and accessible hazdware at interior doors; lack of
maneuvering cleazance and accessible features at toilet rooms
• Toilet fixtures lack adjacent non-absorbent wall surfaces
Light & Venti]ation
• De£cient in meeting Mechanical code: for building construction prior to 1989, mechanical
systems do not provide sufficient number of air exchanges
Fire Protection/Egress
• Deficient exterior stairway: deficient rise/rvn dimensions; additional handrail required;
deficient handrail height, terminations, and extensions
• Deficient exterior door: deficient threshold height
• Deficient interior stairway: deficient rise/run dimensions; insufficient landing dimensions;
deficient cleaz headroom heighr, additional handrails required; deficient handrail height,
terminations, a�d extensions; deficient guardrail conswcUOn
LayouUCondition of Interior Partitions
• General condition of walls and ceilings is poor: mold and water damage exists on wall
surFaces at furnace room on main floor; mold and ceiling damage exists due to roof leaks in
envance of retail area; all finished walls in basement have mold up to 3'-0" above the floor
Similaz Fac[ors
• Deficiencies in exterior building shell: wood fascia and metal soffit are missing on west side;
wood gablecnd siding warped due to moisture on north and south sides; two overhead door
openings have been fitled in wi[h plywood and framing — doors are not wea[her tight or
insulated
• F7oor drainage system requires flammable waste Vap prior [o discharge to city sewer
oy- 9z
Step Two
Notwithstanding the foregoing, the tax increment law also provides that a building may not be considered
shucturally substandazd if it is in compliance with the building code applicable to new buildings or could
be modified to satisfy ihe current building code at a cost of less than IS% of the cost of consavcdng a new
building of tBe same squue footage and type on the same site.
Fstimated cost of new building of same size and type (1'otal Replacement Cos[)c $621,93264
Fstimated cost of correction of code deficiencies (Total Deficiency Cost): $197,668.00
Percentage of Code Deficiency ro Replacement Cost:
31.78%
Refer to Individual Building Summary Report for documentation of specific code de8ciencies.
oy-92
Report on Structurally Substandard Building
Building IDBusiness NamelAddress:
Struchaally Substandard Building (Y!N):
Cascade Stone — FaMorv
1-1
Y
Step One
Under the tax increment law, specifically, Minnesota Stamtes, Section 469.174, Subdivision 10, a buIlding
is structnrally substandard if it contains "defects in strucmral elements or a combination of deficiencies
in essential utilities and facilities, light and ven[ilation, fire protection including adequate egress, layout and
condition of interior partitions, or similaz factors, which defects or deficiencies are of sufficient total
significance to justify subsiantial renovation or clearance."
The above building, based upon actual interior inspection and review of building permit rewrds, meets the
above-referenced definition of siructwally substandard for the following reasons:
Structural Elemen[s
• North wall (concrete masonry uniu) acts as a retaining wall and is deflected into the building
due to the load of the earth on the exterior of the building
Essential Utilities & FaciliGes
• Deficient in facilities for disabled: lack of accessible hazdwaze at entrance
Light & Ventilation
• Deficieni in meeting Mechanical code: for building construcdon prior to 1989, mechanical
systems do not provide sufficient number of air exchanges
Fire Protection/Egress
• Deficient exterior door: deficien[ threshold height
• Deficient interior stairway: deficient rise/rvn dimensions; insufficient headroom height;
additional handrails required; lack of guardrails at elevated work areas and stairway
LayouUCondition of Interior Partitions
• Majority of finished ceiling damaged, falling down, or is missing — uninsulated attic space
exposed and daylight visible through roof deck in some locations
Similaz Factors
• Deficiencies in exterior building shell: building is not weather-tight due to misfit exterior wall
panels and wail openings; sliding gazage doors aze in poor condition and do not close tigh8y
(a�d do not appeaz as if they would operate properly)
• Retaining wall a[ northwest corner of site is failing
Step Two
Notwithstanding the foregoing, the tax increment law also provides that a building may not be considered
swcturally substa�dard if it is in compliance with the building code applicable to new buildings or could
be modified to satisfy [he current building code at a cost of less than 15% of the cost of construcring a new
building of the same squaze footage and type on the same site.
Estimated cost of new building of same size and type (Total Replacement Cost):
Fstimated cost of correction of code deficiencies (1'otal Deficiency Cost):
Percentage of Code Deficiency to Replacement Cost:
$429,733.92
$68,700.80
15.99%
Refer to Individual Building Summary Report for documentation of specific code deficiencies.
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Leonard, Street and Deinazd Opinion
2435175v1 B-1
�-9 �
LEONARD, STREET AND DEINARD
PAOFESSIONAL ASSOGATSO'.�
Steven B. Mayeron
612-335-1502
steve.mayeron@leonard. com
January 8, 2004
Port Authority of the City of Saint Paul
1900 Landmark Towers
345 St. Peter Street
Saint Paul, MN 55102-1661
Re: Proposed Westminster 7unction Redevelopment District
The Port Authority of the City of Saint Paul (the "Port Authority") is proposing to
create a Redevelopment Tax Increment Districf pursuant to Section 469.174, Subd. 10 of
Minnesota Statutes. The proposed district is to be generally bounded by Westminster Street to
the west, Whitali Street to the north, Payne Avenue to the east and the proposed future Phalen
Boulevard to the south (the "Distr►ct").
With the help of Short Elliot Hendrickson, Ina ("SEH"), which has prepared its
December 22, 2003 Redevelopment Eligibility Assessment (the "AssessmenY'), the Port
Authority has recently examined the two buildings located on the lot referred to in the
Assessment as "Cascade Stone" and one building located at 359 Whitall Street to determine
whether the buildings are "structurally substandard" for purposes of ineeting the requirements for
establishing the District. The buildings examined are described in detail in the Assessment and
are refen to herein as the "Current Buildings."
To be structurally substandard a building must contain "defects in structural elements or a
combination of deficiencies in essential utilities and facilities, light and ventilation, fire
protection including adequate egress, layout and condition of interior partitions, or similar
factors, which defects or deficiencies are of sufficient total significance to justify substantial
renovation or clearance." Minn. Stat. § 469.174, Subd. 10(b). In addition, no building can be
considered stnxcturally substandard if it is in compliance with the building code applicable to
new buildings or can be modified to satisfy such building code at a cost of less than 15% of the
cost of constructing a new structure of the same square footage and type on the site. Minn. Stat.
� 469.174, Subd. 10(c).
In its Assessment, SEH concludes all three of the Current Buildings are structurally
substandazd in that they contain shuctural deficiencies and other deficiencies of the kind outlined
in the statute which, in total, justify substantial renovation or clearance of each building. In
addition, SEH determined that none of the Current Buildings comply with the building code
150 $OUTH FIFiH $1'AEES $UITE 2j00 l�'tINNEAPOLIS� IV(INN£SOiA $$Q02 TEL 612-jj$'I$00 FAX 612-jj5-16f7
Z4J4�ZZVI LAW OFFICES IN MINNEAPOLIS�SAINi PAUL� MANRATO� SAINT CLOUD AND WASHINGiON� D.C.
W W W.LEONARD.COM
C7`-9 a-
Yort Authority of the City of Saint Paul
November 5, 2003
Page 2
applicable to new buildings and that in the case of each building, the cost of modifying the
building to comply with code requirements would exceed 15% of the cost of constructing a new
building. In reaching these conclusions SEH has conectly stated the statutory requirements as
interpreted by recent case law.
We believe the Assessment unambiguously supports the conclusion that the Current
Buildings aze structurally substandazd. We therefore believe that, based on the Assessment, the
Port Authority has a sound basis for finding that those buildings are structurally substandazd to a
degree requiring substantial renovation or cleazance.
Please let us know if we can be of any further assistance.
Very truly yours,
LEONARD, STREET AND DEINARD
�i��ifivf/ i�(/ / G �v�'.�
/
Steven B. Mayeron
cc: 7ason Zemke
Robyn Hansen
2434922v1