09-1398Council File # 4 �' 'f�g
Green 5heet # 3090776
RESOLUTION
Presented by
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� CITY OF SAINT PAUL, MINNESOTA
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WHEREAS, in 1997 the Ciry of Saint PauV ("City"), through its STAR program, entered into a STAR loan ("Loan") in the
amount of S( 54,500 with Frogtown Entrepreneur Center ("FEC") tq together with other funders providing a private match,
provide financing to acquire and renovate 501 N Dale Street to establish the Frogtown Entrepreneur Center, a business incubator
faciliry; and
WHEREAS, the FEC also acquired and renovated 625 University Avenue and combined it with 501 N Dale to operate a
business incu6ator Facility ([he "ProjecP') whose target is minority, women owned small businesses; and
WHEREAS, the FEC is currently home to approximately 15 business about 80%of which are minoriry owned, and
WHEREAS, the age of the buildings, the state of the economy, the fragile nature of the businessas served and the vacation of
the Project's largest tenant have all created cash flow difficulties for the project;
WHEREAS, the original terms of the Loan indicated that tepayment would be made only after ail operating expenses inciuding
debt service for other loans and an opera[ing r�serve of $1 Q000 was established and maintained and that all unpaid principal and
interest repayment would be due a balloon payment on the m iginal maturiry date of December 1, 2006; and
WHEREAS, previous amendments to the loan have extended the maturity and defen•ed repayment; and
WHEREAS FEC requested that the City defer payments on the Loan; and
WHERAS the City's Department of Planning and Economic Development ("PED") Credit Committee has reviewed the request,
determined that the loan is secured with a mortgage on the properry and recommends a) amending [he Loan terms to defer Loan
repayment from September 1, 2009 through December 1, 20I0 and resuming on January 1, 201 I, b) capi[alizing accrued inlerest
as of November 30, 2010 in the approximate amount of $40,1 19 c) amending the maturity date to August l, 20 ] 4.
NOW, THEREFORE, BE IT RESOLVED that the City of Saint Paul City Council hereby authorizes approves and directs:
L The City's Director of PGD or her designee to restructure and amend the Loan with FEC in the manner described in this
Resolution and that all required City signatories as se[ forth in the City's Administrative Code are hereby further
authori2ed and directed to execute any such amendment on behalf of the City.
Bostrom
Han�is
Absent
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✓
, Adopted by Council: Date
Adoption C�erti�fie by Go tncil Secretary
By: / �" /il�i i r .
Approv y a Date 1 �/v
By �..
Requested by De ment ofl Plaming and Economic
De�pm
�Y:
� Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet �
��'��7
� Departmentl�WCounciL• � Date Initiated:
� PE- Development� nomic � 07DEC2009 4 G reen She NO: 3 090776
i Contact Person 8 Phone � � Department Sent To Person InitiaVDafe I
Cteip O 'Brien i � i 0 Tlanuine & Ecouomic Develonmei Crai¢ OBrieu � �
I 266-6695 I j I �laonipe & Econo�c Developme� � Depar[ment Director �
� Assign � 2'CityAtturney I{ C}NAttorner �
! Must Be ort Council Agenda 6y (Uate): � Number � 3 nancial Services ASnancial Serv. D'u.
� 23-DEC-09 . Far I
Routing � 4 2Ylayor's Office �--�
I Doc. Type• RESOWTION Order I 5 ouncil (� I
E-DOCUment Required: Y
Document Contact: Bla Vang �
ConWd Phone: 266-6565
Total # of Signature Pages _(Clip All Locations for Signature)
Action Requested:
Authorizing the Deparhnent of Planning and Economic Development to execute a loan amendment to the STAR loan beriveen the
I City and Frogtown Entrepreneur Center (FEC).
Recommendatlons: Approve (A) or Rejed (R): Personal Service Contracts Must Answer the Following Questions:
Planning Commission 1. Has this personlfirm ever worked under a contract for this departmenl?
q6 Committee Yes No
Civil Service Commission 2. Has this person�rm ever been a city employee?
Yes No
3. Does this persoNfirm possess a skill not normally possessed by any
curreM city employee?
Yes No
Explain all yes answers on separate sheet and attach to green sheet
Initiating Problem, Issues, Opportuniry (Who, What, When, Where, Why): �
From 1997-1999 Frogtown Entrepreneur Center (FEC) entered into a$154,500 STAR loans for the purpose of upgrading the faciliry
located at 501 N Dale for the purpose of establishing a business incubator for small, minority and women owned star[ up businesses.
The facility is not cash flowing and FEC has requested a deferral of loan repayment and change of maturiry. There aze no new funds
involved.
Advantages If Approved:
The amendments will prevent potential loan default and give FEC some time to work on getting the project to cash flow. PED Credit
Committee has approved the amendment. There are no new funds involved.
Disadvantages If Approved:
None.
Disadvan W ges If Not Approved:
Loans will be in default requiring collection acrion and possible forecloswe. �
Total Amount of
Transaqion: CostlRevenue Budgeted:
Funding Source: Activity Number:
Financial Information:
(Expiain)
December 16, 2009 3:13 PM Page 1
�(12/15/2009) Ra cquel Nsyl - Re: Fwd G S 3090776 F rogtown Ame Resolution Page 1
V���3 /�
From: Craig O'Snen
To: Naylor, Racquel
Date: 12J15/2009 11:52 AM
Subject: Re: Fwd: GS 3090776 Frogtown Amendment Resolu4on
Hi Raquel,
We are requesting that the Council authorize the Director of PED and all required City signatories to execute the loan amendment to
the STAR loan between the City and Frogtown Entrepreneur Center (FEC).
Hopefully this ansvers your question. Please contact me at 6-6695 if you have any quesUOns or need any additional information.
( http•/lwww.stDaul aov/ )Craig O'Brien
Economic Development Specialist
Department of Planning & Economic Development
25 W 4th Street Suite 1300; Saint Paul, MN 55102
P: 651-266-6695
F: 651-228-3341
craia.obrienCo�ci.stpaul.mn. us
( htto•//www.facebook.com/oaaes/Saint-Paul-MN/Gtv-of-Saint-PauU79640426150?ref=ts ) ( htto:/lwww voutube.mm/stoaulaov )
( httos•//twitter.com/citvofsaintoaul )
Making Saint Paul the MosY Livable City in America
»> Bla Vang 12/15/2009 11:43 AM >»
»> Racquel Naylor 12/14/2009 4:07 PM »>
Please be more speafic in the "Actlon Requested" portion of the Green Sheet.
BrieFly, what is the action that you are requesting for the City Council�
-Racquel, 6-8573