07-21Council File # jJ7 oj/
Green Sheet # 3035704
OF ��L, MINNESOTA �O
Presented
1 1ZESULUTI AUTHO ZING SUBORDINATING THE CITY'S STAR LOAN TO $600,000 OF
2 ADDITIONAL DEBT � IMPROVEMENTS TO THE MCNALLY-SNII1'H MUSIC COLLEGE, WARD 2,
3 DISTRICT 17.
5 WHEREAS, on September 26, 2001, The City of Saint Paul made a$500,000 STAR Loan to the McNa11y
6 Smith Music College (at the time lmown as Music Tech), secured by a Mortgage, Security Agreement, and
� Fixture Financing Statement; and
8
9 WHEREAS, at that time the STAR loan was subordinated to more than $2 miilion in other debt including
io loans made by Wells Fargo Bank (in first position) and the United States Small Business Administrafion
i l(in second position); and
12
13 WHEREAS, the McNally-Smith Music College is and has been current on its loan payments since the first
14 payment became due, and now has a loan balance of approximately $442,000; and
15
16 WHEREAS, the McNa11y-Smith Music College plans to make some improvements to the building,
17 including replacing the roof, for which Wells Fargo has approved a$600,000 loan provided the SBA and
18 the City subordinate their exisring loans to this new debt ; and
19
20 WHEREAS, an appraisal indicates there would be mare than sufficient collateral value to secure the City
21 STAR loan in the event of default, and the operafing statement indicates there would be more than
22 sufficient income to service the new debt; and
23 .
24 WHEREAS, the PED Credit Committee, at its meeting on December 18, 2006, approved the subordination
25 of the STAR loan subject to the approval of the PED Director and the City Council;
26
27 NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Saint Paul, Minnesota
28 hereby approves the subordination of its existing STAR loan to $600,000 in new debt from Wells Fargo
29 Bank; and
30
31 BE IT FURTHER RESOLVED that the Director of the Deparhnent of Planning and Economic
3z Development of the City of Saint Paul is hereby authorized to execute such,agreements as are necessary to
33 implement this subordination.
G 7�a i
34
Resolution #
Requested by Department o£
Adopted by Council: Date �-��-��
Adoption 'fiedby ou ilSecr
By:
Approved b a o• Date ��S P 7
By:
Planniug and Economic Development
By: � A "_-�
Form Appro ed b fi
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B t
Form Ap ove b Mayor for S bmi, s'on to Council
By:
_ _ __
07 a/
� Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet �
__ � -..w. ...._...
PE -P��o���oo,��������� � 27-DEGO6 � Green Sheet NO: 3035704
, ;
� Contact Person & Phone:
�� Craig Blakely
� 266£697
, Must Be on Council Agen
! 03-JAN-07
Doc. Type: RESOLUTION
EAOCUment Required: Y
Document Contact: Samantha Krankka
Contact Phone: 266-6658
Total # of Signature Pages _(Clip All Locations for Signature)
Resolurion approving subordination of the STAR loan to $600,000 in additional debt for improvements to the McNally Smith Music
College.
ida4ons: Approve (A) or Reject
Planning Commission
CIB Commlttee
Civil Service Commission
7. Has this person/firm everworked under a contract for this department?
Yes No
2. Has this persoNfirm ever been a city employee?
Yes No
3. Does this personlfirm possess a skill not normally possessed by any
current city employee?
Yes No
Explain atl yes answers on separete sheet and attach to green sheet
Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why):
The McNally Smith Music College wants to make improvements to their building, and Wells Fazgo Bank has approved making a
$600,000 loan provided the Ciry subordinates its loan.
Advantages If ApproVed:
The MeNally Smith Music College will be able to make improvements to [heir building, including replacing the roof, which will
maintain the value of the building, which is the collatetal for the Cityis loan.
Disadvantages If Approved:
None.
r !
Disadva�tages If Not Approved:
The improvements to the building will not be made and the Ciry�s collateral will decline. MAYOR OFFICE
� oiai Nmoun[ or
Transaction: $
Funding Source: N/A
Fi nancial Information:
(Explain)
Activity Num6er. N/A
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December 27, 2006 2:31 PM Page 1