06-418, r��°✓,��� ��/d�
RESOLUT{ON
CITY OF
Green Sheet # _
3o3o,�a3
PAUL, MINNESOTA
�L'J
Committee Date
City Council Resolution
[Regions Hospital Pazldng Ramp Project]
�/:1�1.7.I_F.`A
2 1. The Port Authority of the City Saint Paul (the "Port Authorit}�') has given its approval to the
3 issuance of its tax-exempt or taxable revenue bo (the `Bonds"), in an amount not to exceed $50,000,000 to
4 fmance the acquisition and construction by the Port thority or its affiliate Capital City Properties of hvo pazldng
5 ramps (the "ProjecY') located on real estate located in City of Saint Paul and part of, or adjacent to, the Reglons
6 Hospital campus, and leased to Regions Hospital ("Reg Hospital"); and
7 2. Minnesota Statutes, Section 469.084, Sub 11, provides that any issue of revenue Bonds
8 authorized by the Port Authority shall be issued only with the co ent of the City Council ofthe City of Saint Paul,
9 by resolution adopted in accordance with law; and
10 3. Approval of the issuance of the proposed Bonds by th City Council is also required by Section
11 147(fl ofthe Intemal Revenue Code of 1986, as amended; and
12 4. To meet the requirements of both state and federallaw, the rt Auffiority has requested ttiat the
13 City Council gives its requisite approval to the issuance of the proposed Bon y the Port Authority, subject to
14 final approval of the issuance and details of said Bonds by the Port Authority.
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NOW, THEREFORE, BE IT RESOLUED by the Council of the City of S t Paul d�at, in accoidance
with the requirements of SecUOn 147( fl of the Internal Revenue Code of 1986, as amen and in accordance with
Minnesota Statutes, Section 469.084, Subd. 11, the City Council hereby approves the is ce of the aforesaid
Bonds by the Port Authority for the purposes described in the Port Authority resolution adopt April 25, 2006, the
exact details of which, uicluding but not limited to, provisions relating to principal amount, turities, interest
rates, discount, redemption, and the issuance of additional Bonds aze to be determined by th ort Authoriry,
Regions Hospital and the purchaser of the Bonds, and the City Council hereby authorizes the i ance of any
additional Bonds (including iefunding Bonds) by the Port Authority foundby the Port Authority to be cessazy for
cairying out the purposes for which the aforedescribed Bonds aze issued.
24 Adopted: May 3, 2006
C�aG -�r�
Council File #
36308.v 1
Adopted:
Benanav
B osfrom
Harcis
Yeas
Absent Requeste by Dep ent of.
-----;�---- � -- ---- — -
�
Thune
Adopted by Council: Date
Adoption Certified by Council Secretary
By:
Approved by Mayor: Date
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Form Ap r ved by City Attomey
By:C/ c"—'� � �
�/— 6.6
Approved y M, or or Si sdssion uncil
r
By:
36308.vt
� Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet �
C�O�
, PA - PortAutliority
� Confact Person & Phone:
, Peter M Klein
� Must Be on Council Agenda by (Dafe):
03MAY-06
ContractType:
AR-RESOLUTION W/$ TRANSACTION
CosURevenue Budgeted:
Totai # of Signature Pages _(Clip All Location f or S ignaW re)
Action Requested:
Approval of the issuance of not more than $50,000,000 of conduit tax emempt lease revenue bonds for the Port Authority's
construction of two parking facilitites to service Regions Hospital.
idations: Appm�e (A) or Re�ect
Planning Commission
CIB Cammittee
CiHI Sen�ce Commission
Green Sheet NO: 3030503
rersonai 5ervice contracts rvws[answertne rouowmg Giuesnons:
1 Has this persoNfirtn e�er worked under a contract for this departmerR?
Yes No
2. Has this persoNfirtn e�er 6een a city employee?
Yes No
3. Dces this persoNfirtn possess a skill not nortnally possessed by any
curreM city employee?
Yes No
Explain all yes answers on separate sheet and attach to green sheet
Initiating Problem, Issues, Opportunity (Whq What, When, Where, Why):
HealthPar[ners is going to expand and refurbish Regions Hospital and has requested that the Port Authority conshuct two pazking
facilities that will service the hospital.
AdvantaAeslfApproved:
The issuance of ffie bonds will allow Regions Aospital to improve the medical services piovided to Saint Paul residents, cceate 400 new
jobs, and retain 4,000 jobs in Saint Paul.
Disadvantages MApproved:
None.
Disadvantages fl Not Approved:
The expansion of Regions Hospital might not occur.
rota�Amountof $50,OOQ000
Transaction:
Fundiny source: Port Authority conduit
Financiallnfortnation: taX
(Explain)
Apnl 24, 2006 1:34 PM
' � ueoarvnenc senc � o rerson mmaware �
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Number ,, 2 �FSnancialServices �Ofl"iceFtinancialServi �
For !
Routin 3 CiN Attomev I i
Order 9 �! 4 Mayor's Office Mavor/Assis�nt � !
� 5 :Council � CiN Counc� I
I 6 itv Clerk Ciro Clerk I
Activity Number:
Page 1
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1900 Landmark Towers
345 St. Peter Street
Saint Paul, Minnesota
5510Z-1667
pOR?
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April 18, 2006
Mr. Tony Schertfer, Acting Director
Planning & Economic Development Department
1300 City Haii Annex
25 West Fourth Street
Saint Paul, Minnesota 55102
RE: REGIONS HOSPITAL
Dear Mr.�i er:
�
Tel: 651-224-5686
Fax: 651-223-5195
Toll Free: 800-328-8477
wwwsppa.wm
Ct� D� - �/�
We submit for your review and referral to the office of the Mayor, City Council,
and City Attorney's ofFice, details pertaining to the issuance of conduit lease
revenue bonds in an amount not to exceed $50,000,000 to finance the Port
Authority's construction of two parking facilities. The City of Saint Paul's
entitlement aflocation wili not be afFected by this appiication.
In addition to the staff memorandum, we are attaching a draft copy of the
proposed City Council Resolution and a copy of the Resolution conducting the
required public hearing and authorizing the safe of the lease revenue bonds in an
amount not to exceed $50,000,000 that will be considered by the Port Authority's
Board on April 25, 2006. City Council action will be required after the Port
Authority's Board meeting of April 25, 2006.
Your expeditious handling of this matter wiii be appreciated.
Sincerely,
/�� '
Kenneth R. Johnson
President
KRJ:ah
Attachment
cc: Mayor Coleman
Pete Kiein
36212.v1
SAINT PAUL
PORT AUTHORITY
MEMO.RANDUM
--- - -- - -- -Tp: -_ __ _BEaard o��e��issioners _ _ __-- -- _
(Meeting of April 25, 2006)
FROM: PeterM.Klein�/
Laurie J. Hansen
Lorrie J. Louder
Kenneth R. John
C� D� - �i�
- DATE: - pn T9, 2006
SUSJECT: REGIONS HOSPITAL / HEALTHPARTNERS
PUBLIC HEARING
PRELIMINARY AUTHORIZATION FOR THE ISSUANCE OF CONDUIT
LEASE REVENUE BONDS AND THE EXECUTION OF RELATED
DOCUMENTS, INCLUDING GROUND LEASES AND LEASE AND
PURCHASE OPTION AGREEMENTS, AND THE SALE OF PROPER7tES
TO REGIONS
RESOLUTION NO. 4168
Action Requested:
Preliminary approvai for the Port Authority to:
• Issue conduit, taxable and/or tax-exempt lease revenue bonds in an amount not to
exceed $50,000,000 to finance the construction of two parking facilities and the
related costs of issuance.
• Either disburse Bond proceeds directly, or enter into a loan agreement with Capital
City Properties ("CCP"} by which CCP would borrow and disburse Bond proceeds to
finance the consfruction of the ramps and to work with Regions, IiealthPartners and
Ramsey County to facilitate the financing and construction of the ramps.
Public Purpose:
Approval of this transaction wil( strengthen Regions' financia4 positian and allow it to go forward
with a$157,000,000 expansion of its facility in downtown Saint Paul. The involvement of the
Port Authority will allow Regions to improve the medical care provided to the Saint Paul region
and add 400 health care jobs.
Business Subsidv:
Not applicable.
Backqround:
Last month, the Credit Committee gave its preliminary approval to issue approximately
$40,000,000 of tax-exempt bonds for the construction of parking facilities to be used in connection
with 12egions Hospital. Although we believe that the final costs of the project wiil be cfoser to
$40,000,000, the construction costs have not been finalized and we are now asking for the
approval for an amount not to exceed $50,OOO,DOQ.
Regions is a 501(c)(3) non-profit company that provides medical services primarily to residents of
Saint Paul and the East Metro.
363�6.v1
Board of Commissioners —April 25, 2006
Regions Hospital Parking Faalities
P2ge 2
Regions is planning a major expansion of ifs primary Saint Paul hospital. Th
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---- .---. ----ara.a-#cvaer t#�a�v�il}great�#�arid its bed capacityand iwo paPtiirig �amps: The parking facilities
would be owned by CCP/Port Authority and leased back to Regions. The first ramp will have
approximately 430 parking spaces and will be located on the Regions campus, beneath the new
patienf bed tower. The second ramp will have approximately 950 parking spaces, will be located
off-campus, and be utilized by Regions' employees.
Proposal:
1. Description of the Transaction:
The Port Authoritys involvement was requested by Regions so that the project financing could
be accompiished on a tax-exempt basis and without having a detrimental effect on Region's
credit ratings. The tax-exempt financing has a lower interest rate associated with it and a much
{onger amortization period, both of which translate into reduced annual expenditures. Although
there will are some differences, this transaction will be similar to the HealthEast Midway Campus
and the two State O�ce Building financings.
Fee title to the project land is expected to remain in Ramsey County and/or Regions. Regions
and the County will enter into a long-term ground leases with CCP(Port Authority which will, in
turn, enter into an operating lease with Regions providing for the construction and operation of
the ramps.
2. The Ground Lease
Lessor:
Lessee:
Lease Term:
Rentai Payments:
Regions / County
CCP ! Port Authority
32 years plus renewal options.
$1.00 per year — passed back to Regions as an operating cost.
3. The Operatinq Lease:
Lessor:
Lessee:
Lease Term:
CCP / Port Authority
Regions
Approximately 22 years
Rentai Payments: Regions will make payments sufficient to cover all debt service on the
bonds due during the 22 year term, and all other costs associated with
the occupancy of the property.
36306.v1
Board of Commissioners — April 25, 2006
Re9ions Hospitat Parking Faciiities
Page 3
C�=D�-yi$
Option to Purchase: At any time during the Lease Term, Regions may purchase the leasehoid
improvements from the CCP/Port Authority for the greater of fair market
value (as defined in the documenfs) or the outstanding debt on the bonds
plus related expenditures.
Lease End
.�_ _---- -_ - ravisier�s: ---- ---- RegieFlS may: --
- - ----- ---
1. Renew for eight-year term.
2. Purchase the facility at the greater of the fair market vaiue, as defined
in the documents, or the amount of the outstanding debt.
3. Vacate and surrender fhe property (including the underlying land of
the employee parking facilify) to CCP/Port Authority. If Regions
chose fo surrender the property, CCP/Port Authority (or Ramsey
County, if payments are made under the moral obligation pledge
described below) would retain ownership of the property for either
continued leasing or sale.
4. The Financinq:
Bond Issue: Not to exceed $50,000,000
Type of Bonds:
Rate:
The bonds wil� be conduit tax-exempt lease revenue bonds.
Approximately 6.25°/o for tax-exempt fixed.
Security: First mortgage in the facility(s).
Assignment of all operating lease and purchase option payments.
Debt Service Reserve — TBD.
A lease guarantee from HealthPartners
A proposed moral obVigation from Ramsey County under which Ramsey
County wiil agree to consider (on an annual basis) making payments
equal to any deficiency in Regions payments under the Operating Lease
and principal and interest due on the bonds (including the outstanding
principal at the end of the Operating Lease term).
Term:
Issuer:
Issuer Fee:
Underwriter:
Bond Counsel
Undenvriter's
Counsel:
Guarantor:
Trustee:
36306.v1
30 years
Saint Paul PoR Authority
Approximately $50,000 at inception and 1/8` of 1% annually on the
outstanding balance of the bonds.
Piper Jaffray
Leonard, Street and Deinard
Kennedy and Graven
HealthPartners Care System
S&P — BBB+
�r�.:
Board of Commissioners —April 25, 2006
Regions Hospifal Parking Facilities
Page 4
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Workforce Implications:
Approximately 400 new heafth care related jobs will be created by 2013 and 450 construction jobs
during the construction period of 3 years_ _Regions currentX_employs oxer_4,0.00-iAdivid�ats:—:-- ---
. _ .__.
---- — #ppraxm�atety 't;�IIOTive iri Sf� Paul and 1,500 in Ramsey County.
Disclosure:
The Port Authflrity Commissioners by SEC rufes are obligated to disclose any risks or facts you
may be aware of that would affect the probability of repayment of these bonds.
Recommendation:
We recommend the preliminary authorization of the issuance of conduit lease revenue bonds and
the execution of related documents, including ground leases and fease and purchase option
agreements, and the sale of properties to Regions.
PMK:ah
36306.v1
CI= 0�-�/�
Resolution No. 4 I 6 8
RESOLUTION OF
T`HE PORT AUTHORITY OF'Tf� CIT'Y_OF SAINT P.9UI,—_ __.__ __-
__ - _ -- -- --
-- (Regions Hospital Parlang Ramp Project]
WHEREAS, the Port Authority of the Gity of Saint Paul (the "Authority") has received a
request from Regions Hospital of Saint Paul (hereinafter refened to as the "Company") that the
Authority (a) consider the issuance of revenue bonds (which may be in the form of one or more
notes) to finance the acquisition and construction by the Authority or its affiliate Capital City
Properties ("CCP" and, together with the Authority, the "Authority") of the two parking ramps (the
"Project") to be located in the City of Saint Pav1 on or adjacent to the Regions Aospital Campus;
and �
WHEREAS, the Authority desires to facilitate the selective development of the City of Saint
Paul and the metro east community, to retain and improve its taY base and to help it provide the
range of services and employment opporiunities required by its population, and said Project will
assist in achieving that objective by increasing the assessed valuation of the metro east community;
helping to maintain a positive relationship between assessed valuation and debt; and enhancing the
image and reputation of the metro east community; and
WHEREAS, the Project to be financed by revenue bonds will support the proposed
expansion of Regions Hospital, providing needed health care services to the City of Saint Paul, and
will result in additional employment opportunities in the City of Saint Paul and the metro east
community; and
WAEREAS, the Authority has been advised by Regions that long term convenrional,
commercial financing to pay the capital cost of the Project is available only on a limited basis and at
such high costs of borrowing that the economic feasibility of operating the Project would be
significantly reduced, and would increase the costs of health care, and that it had been acting to date
in anticipation that t1�e Authority would favarably consider this financing proposal; and
WHEREAS, the Credit Committee has given its preliminary approval to the proposed
Project and the issuance of the requested revenue bonds, and together with staff recommends Board
approval.
NOW, THEREFORE, BE IT RESOLVED by the Port Authority of the City of Saint Paui,
as follows:
l. On the basis of information available to the Authority it appears, and the Authority
hereby finds, that: said Project constitutes properties, used or useful in connection with one or more
revenue producing enterprises engaged in any business within the meaning of Minnesota Statutes,
Sections 469152 to 469.165 (the "AcP'); the Project fiuthers the putposes stated in the Act; and it is
in the best interests of the port district and the people of the City of Saint Paul and in fiutherance of
the general plan of development to assist Regions in financing the Project.
36276.v1
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2. The Authority hereby indicates its intention to issue its tas-exempt and tasable
revenue bonds, in a principal amount of up to approximately $SO,OOQ000, to provide funds to
finance the Project, provided that the Authority, Regions and the purchaser of the revenue bonds aze
able to reach agreement as to the details of the documents necessary to evidence and effect the
financing of the Pr�ect_and_the, issuance of the, revenue__bonds_-__BAnd�iaceeds_�na3�-l�e-��s�d_-to-
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reimburse the Authority and Regions for costs incurred with regazd to the Project.
3. If issued, the revenue bonds and interest thereon shall not constitute an indebtedness
of the Authority or the City of Saint Paul within the meaning of any constitutional or statutory
limitarion and shall not consritute or give rise to a pecuniary liability of the Authority or the City of
Saint Paul or a charge against their general credit or taxing powers and neither the full faith and
credit nor the t�ing powers of the Authority or the City of Saint Paul is pledged far the payment of
the bonds ar interest thereon.
4. Approval of this resolution is not a commitment from the Authority, and final
approvai of ttris Project, and the issuance of revenue bonds to finance the Project, is subject to
fiuther review by the Credit Cominittee of the Authority and submission of a full application by
Regions and satisfaction of the conditions and approvals described in paragraph 2, above.
Adopted: Apri125, 2006.
PORT AUTHORITY OF THE CITY
OF SAINT PAUL
B�'v�- ' �-�- j ', ���
Its Chair
ATTES :
Secre ary
36276.v1