05-512Council File # c'h— 5�2
AMENDED - JUNE 8, 2005
Resolution #
Green Sheet # t�Z
RESOLUTION
PAUL, MINNESOTA
�
Presented By
Referred To
Committee: Date
RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SAINT PAUL, MINNESOTA
AUTHORIZING TI�E AMENDMENT OF THE STAR LOAN MADE
IN CONNECTION WITH TAE MINNESOTA BUSINESS ACADEMY PROJECT
1 WHEREAS, in November 1999, the City Council of the City of Saint Paul, Minnesota (the "Cit}�')
2 adopted its Resolution No. 99-1070 and 99-1071 approving the loan of funds from its STAR Program in the
3 principal amount of $1,000,000 (the "STAR Loan") to Charter School Building Corporation (the `Borrower")
4 in connection with the acquisition and renovation of the building located at 505 Wabasha Street North by the
5 Borrower for use by Minnesota Business Academy (the "Schooi") as a charter school (the "ProjecY'); and
WHEREAS, the STAR Loan was made pursuant to a PromissoryNote dated the 14"' day ofMarch, 2000,
as amended by the First Amended STAR Promissory Note dated September 5, 2002 and fiirther amending by the
Second Amended STAR Promissory Note dated September 8, 2003 ("the Note")
9 WHEREAS, the STAR Loan and Note are secured by a Mortgage and executed by the Borrower in favor
10 of the City (the "Mortgage"); and
ll WHEREAS, the City has previously, by its Resolution No. O1-489, approved the deferral ofpayments to
12 be made under the Note; and
13 WHEREAS, notwithstanding the previous deferral, the Borrower has not been able to make payments
14 when due on the Note, certain lease revenue bonds issued by the Housing and Redevelopment Authority of the
15 City of Saint Paul, Minnesota (the "HRA") and certain unsecured obligations; and
16 WHEREAS, as part of a proposal made by the Borrower to refund and restructure its outstanding debt,
17 the HRA has considered and approved the issuance of its Lease Revenue Bonds in the approximate principal
18 amount of $7,000,000, and the loan of the proceeds of those bonds to the Borrower to provide for the partial
19 repayment and satisfaction of the outstanding senior lien bonds, the STAR Loan and other obligations of the
20 Borrower and the School, all as more fully set forth in the Memorandum of Understanding dated May 16, 2005
21 and described in a presentation to the City at this meeting, and has asked that the City participate in the
22 refinancing by accepting a partial payment of the STAR I,oan and Note in full sarisfaction ofthat obligation; and
23 WHEREAS,sincethecontinuedoperationoftheProjectisinthebestinterestsoftheCity,theCitywishes
24 to accommodate the proposed refinancing and restructuring; and
25 WHEREAS, the City has determined that it is in the best interests of the City to accommodate the
26 proposed refinancing by accepting, in full satisfaction of amounts due on the STAR Loan, the payment of a pro
27 rata portion of the proceeds oF the Bonds, as more fully described in the Memoranduxn of Understanding�_ ���
28 NOW, THEREFORE, BE TI' RESOLVED by the City Council of the City of Saint Paul as follows:
29 1. The City hereby reaffums its continuing approval of the Project, in general, but no future City
30 funding, and its support of the HRA's participation in the Project through the issuance of the refinancing bonds,
31 as outlined by the presentation made to the City at this meeting.
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2. The City hereby authorizes and directs the Director, Office of Financial Services of the City and
appropriate Plamiing and Economic Department staff to accept, in full and complete satisfaction of the STAR
Loan, the payment of a pro rata portion of the proceeds of the Bonds, as more fixlly described in the Memorandum
ofUnderstanding, and to execute any and all documents that are necessary to reflect the satisfaction ofthe STAR
Loan, including the cancellation of the Note and a satisfaction of the related Mortgage.
. Funds deposited in the Neighborhood Investment Program to be
spread out among Council wards.
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Aequested by Department of:
Plannin & �� onomic Develo ment �J
By: �%i!l/Yl� L��
Approved by Financial Services
Adoption Certified b Counci Secretary
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Form Approve
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Adopted by Council: Date JL(.� �y?�-V�S
From: Mary Erickson
To: Dunn, Jennifer
Date: 6/9/2005 10:2129 AM
Subject: Fwd: Amendment to MBA repayment
I was not looking for the amendment; Vicki maybe? Thanks!
»> Jennifer Dunn 6/9/2005 9:3138 AM »>
Mary - I understand you are looking for the amendment to the MBA resolution. Lee didn't have specific
language with him at the meeting, but I think this is how it would go. PED folks - please feel free to correct
it if the language isn't correct, particularly if fund 930 is different that the NIIP fund.
CF 05-512, page 2, line 37: (STAR), and deposited in the Neiqhborhood Investment Initiative Proqram
funds.
Please let me know if you have questions. Thanks!
CC: Sheffer, Vicki
� Green Sheet Green Sheet
„�_. .. _ . _ _
PE — P��nmg & Econotmc
� Contact Person 8 Phone:
Bob Geurs
! 6-6653
� Must Be on Couneil qgenda by (Date):
I OS-JUN-0S
OS'',S�Z.
o�e�nw��. I Green Sheet NO: 3026673
02-JUN-0S
� De�rhnefH SeMToPerson InitiaVDate
0 lanni & Economic Develo
/155ign 1 lanuin & Economic Dev_el� Depar�ent DirecMr
�Number 2 �ryAttornev JohnKeilv � _6�_Lt�
For
Routing 3 ioanciaiServices � MattSmith
O�def 4 a r's OfSm Ma oNAssistant
I 5 ouncil Dave Thune
6 ity Clerk Citv Clerk
Tofal # of Signature Pages _(Clip All Loptions for Signature)
Action Requested:
City Council resolution for restructuring of Minuesota Business Academy Project including write off of City STAR Loan of $1M, at
5% for 15 yeazs.
itlatlons: Approve (A) or R
Planning Commission
CIB Committee
Civil Service Commission
Following Questions:
?. Has this person/firm ever worked under a contract for this departmenY?
Yes No
2. Has this person/firm ever been a city employee?
Yes No
3. Does this person/firm possess a skill not normally passessed by any
current city employee?
Yes No
Explain all yes aoswers on separate sheet and attach to green sheet
Green Sheet Green Sheet Green Sheet Green Sheet �
' Initiating Problem, Issues, Opportunity (Who, What, When, Vllhere, Why):
Minnesota Business Academy Project has too much debt for cuirent enrollment. Requires IIRA issuance of $6.SM of Conduit
Refunding Bonds and restructuring the City STAR Loan. The STAR settlement amount of $1M loan will be approximately $189,400.
Advantapes If Approved:
Minnesota Business Academy project has the right amount of debt to support the projected 315 studerns. City collects over the life of
the loan approxixnately $451,000.
DisadvantageslfApproved:
Write off approximately $750,000.
Disadvantapes If Not Approved:
Senior lender American Express will foreclose, Minnesota Business Academy closes and the City recovers $0.
Total Amount of
� Trensaction:
Funding Source:
CosURevenue Budgeted:
Activity Number:
Financial I nformation:
(Explain)