95-10081dNI�I�O
Presented
Green Sheet # 3 3444
RESOLUTION
OF SAINT PAUL,1bIINNESOTA
Referred To
(A)
(B)
7
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
Council File # � ��
Committee: Date
RFSOLUTION OF TfiE CTTY OF SAINT PAUL, MINNESOTA
GIVING FINAL APPROVAL TO THE EXECUTION OF DOCiJMENTS
NECESSARY: TO THE ACQUISTTION AND RENOVATION OF
TFIE TOWN SQUARE HOTEL FACILITY and
APPROVING TI� ISSUANCE OF TA%-E%EMP'P REVENUE BONDS
BY THE PORT AUT�ORITY FOR SUCH PROJECTS
�
WHEREAS, it is a specifically stated goal of the City of Saint Paul (the "City") to increase ovemight
visitar activity to downtown Saint Paul in support of the retail, food service and entertainment facilities
cunently located in downtown Saint Paul, and to encourage additional development of such facilifles; and
WHEREAS, in support of this goal, the City Council of the City and The Housing and Redevelopment
Authority of the City of Saint Paul, Minnesota (the "HRA") have previously adopted resolutions and entered
into contracts (i) undertaking the $65,000,000 expansion and remodeling of the Saint Paul Civic Center
complex; (ii) approving Laws of Minnesota for 1993, Chapter 375, Article 9, Section 46 (authorizing the
City to impose an additional salesitaY of up to one-half of one percent on taxable sales transactions occurring
within the City (the "Sales Ta�c")); and (iu) pledging the Sales Tar to the payment of debt service on bonds
issued by the HRA to finance a portion of the capital expenses of construction, equipment and acquisition
incurred in connection with the Civic Center expansion and remodeling; and
WHEREAS, in further support of the goal of increasing overnight visitors to the City, the City believes
that it is important to provide for the re-opening of the hotel facility located in the downtown complex known
as Town Square (the "Town Squaze Hotel"), which facility is cunenUy owned by Carlson Real Estate
Companies; and
WHEREAS, on 7une 27, 1995, after a public hearing, the Port Authority of the Ciry of Saint Paul (the
"Port Authority") adopted its Resolution No. 3526 giving its preliminary approval to the issuance of
approximately $13,000,000 of taY-exempt revenue bonds, consisting of (a) a$6,000,000 tas-exempt note (the
"Note") to provide for the acquisition of the Town Square Hotel and (b) approximately $5,900,000 of talc-
exempt revenue bonds (the "Bonds") to finance the renovation of the Town Square Hotel; and
WHEREAS, on July 12, 1995, the HRA adopted its Resolufion No. 95-7/12-7 giving its preliminary
approval to (a) the acquisirion, zenovafion and financing of the Town Square Hotel, and (b) the loan of
$3,500,000 to the Pori Authorit}i to fmance the construction of a ballroom facility (the "Ballroom") in the
air rights above the garden terrace azea at the hotel facility located at 11 East Kellogg Boulevard in the City
of Saint Paui (the "Radisson Kellogg") which is owned by the Port Authority; and
WHEREAS, payment of principal and interest on the Bonds will be further secured by a pledge of the
41 moral obiigation of the City of Saint Paul (the "City") for which the HRA wiil receive, as a credit
42 enhancement fee: (a) an annual amount equal to 1/2 of 1% of the outstanding principal amount of the Bonds
43 and (b) 25 % of the Port Authority's share of net revenues from the operation and sale of the Town Squaze
� R5-loog
44 ' WHEREAS, payment of principal and interest on the Bonds will be further secured by a pledge
45 of the moral obiigation of the City of Saint Paul (the "City") for which the HRA will receive, as a credit
46 enhancement fee: (a) an annual amount equal to 1/2 of 1% of the outstanding principal amount of the
47 Bonds and (b) 25% of the Port Authorit}�s share of net revenues from the operation and sale of the
48 Town Square Hotel (wllectively the "HRA Fees") which will be credited against the outstanding
49 principal balance of the loan made by the HRA in connection with construction of the Ballroom, but
50 which will othenvise be available to the HRA for use at its sole discretion, and will additionally receive
51 for its use 50% of the excess sale proceeds received from a sale of the Radisson Kellogg (after payment
52 of sale expenses, prior debt and any principal balance remaining unpaid on the Ballroom loan)
53 attributable to the Ballroom, based only on food and beverage revenue generated by the Ballroom; and
54
55 WI�EREAS, it has been further proposed that the City's moral obligation pledge be supported
56 by (a) talc increment revenues budgeted by the HRA in an initial amount equal to one year's debt
57 service on the Bonds; (b) excess HotelJMote1 tas revenues, generated by the re-opening of the Town
58 Square Hotel, from both the Town Squaze Hotel and the Radisson Kellogg which are either (i)
59 dedicated to the general use of the City or (ii) pursuant to an agreement with the Convention and
60 Visitors Bureau, available for the promotion of tbe City as a tourist or convention center and (c) an
61 annual appropriation by tbe Port Authority of $100,000 under its discretionary levy authority, up to the
62 limits, and as more fully provided in the Town Square Hotel Moral Obligation Agreement to be
63 executed by the �1RA, the City and the Port Authority in connection with the issuance of the Bonds;
64
65 WHEREAS, the reimbursement of any amounts which are paid by the City pursuant to its moral
66 obligation pledge will be secured by a subordinate Mortgage, Security Agreement and Fixture Financing
67 Statement (the "CYty Mortgage"); and
68
69 WI-lEREAS, in connection with transactions described above, the City and the HRA haue also
70 been asked to covenant not to subsidize another class A convention hotel in the CiTy for a period of five
71 years from the opening of the Town Square Hotel; and
72
73 WHEREAS, it is necessary and desirable, and in the best interest of the City, to support the
74 proposals and transactions described above.
75
76 NOW TI�EREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul,
77 Minnesota, as follows:
78
79 1. Neither the Note or Bonds, nor the interest thereon, shall constitute an indebtedness of
80 the City within the meaning of any constitutional or statutory debt limitation and shall not constitute
81 or give rise to a pecuniary liability of the City or a charge against its general talcing powers and neither
82 the full faith and credit nor the general taxing powers of the City is pledged to the payment of the
83 Bonds or Notes or interest thereon.
84
85 2. The transactions outlined herein and in the HRA's Resolution No. 95-7/12-8 are hereby
86 approved.
87
88 3. Forms of the following documents ha�e been submitted to the City for review and/or
89 approval in connection with the approval given in paragraph 2 above and in connection with the sa1e,
90 issuance and delivery of the Note and the Bonds:
91
92 (a) the Town Square Hotel Moral Obligation Agreement to be entered into among the
93 Port Authority, Capital City Properties, the City and the HRA and containing, among other things,
2 �!��r�� �
��~.. ,`s���
. � �S-104$'
94' 'a covenant not to subsidize a competing Class A convention hotei for a period of five years
95 following the opening of the Town Square Hotel; and
96
97 (b) the Mortgage, Security Agreement and Fixture Financing Statement between Capital
98 City Properties, as Mortgagor, and the City and the HRA, as Mortgagees; and
99
100 (c) the Intercreditor Agreement anticipated to be entered into among the Port
101 Autt�ority, Capital City Properties, the Ciry, the HRA, Carlson Real Estate Companies and the
102 Trustee, with respect to their vazious interests in the Town Square Hotel;
103 (collectively the "Documents")
104
105 4, It is hereby found, determined and declared that:
106
107 (a) The execution and delivery by the City of the Documents and the performance of
108 all covenants and agreements of the City contained therein, and of ail other acts and things
109 required under the Constitution and laws of the State of Minnesota to make the Documents valid
110 and binding obligations of the City in accordance with their terms, are authorized by Minnesota
lll Statutes, Sections 469.041;
112
113 (b) It is desirable that the Note and Bonds be issued by the Port Authority upon the
114 general terms set forth in the Indenture and the Documents, as applicable;
115
116 (c) Under the provisions of and as provided in the Indenture and the Documents,
117 neither the Note nor the Bonds are to be payable from or a charge upon any fu�ds other than
ll8 the revenues pledged to the payment thereof; the City is not subject to any liability thereon; no
119 holder of the Note or any Bonds shall ever have the right to compel any exercise by the City of
120 its taxing powers to pay the Note or the Bonds or the interest or premium thereon, or to enforce
121 payment thereof against any property oF the City; neither the Note nor the Bonds shall constitute
122 a charge, lien or encumbrance, legal or equitable, upon any property of the City; the Note and
123 Bonds shall recite that the Note and the Bonds are issued without moral obligation on the part
124 of the State or its political subdivisions (except for the moral obligation pledge of the City set
125 forth in the Town Square Hotel Moral Obligation Agreement), and that the Note and the Bonds,
126 including interest thereon, are payable solely from the revenues pledged to the payment thereof;
127 and the Bonds shali not constitute a debt of the City within the meaning of any constitutional or
128 statutory limitation.
129
130 5. The forms of the Documents are approved substantially in the form submitted and on file
131 in the offices of the City, with such subsequent changes as may be approved by the City staff, counsel
132 to the City and I.eonard, Street & Deinard as Bond Counsel as contemplated by paragraph 7. The
133 Mayor and Director of Department of Finance and Management Services of the City, or such other
134 officers as may be appropriate in their absence, are hereby authorized and directed to execute the
135 Documents in substantially the form submitted, as modified pursuant to paragraph 7, and any other
136 documents and certificates which in the opinion of the City Attorney and Bond Counsel are necessary
137 to the transaction herein described. The execution of any instrument by the appropriate officer or
138 officers of the City herein authorized shall be conclusive evidence of the approval of such documents
139 in accordance with the terms hereof. Copies of all of the documents necessary to the transaction
140 described sha11 be delivered, filed and recorded as provided herein and in the Indenture.
141
142 6. The appropriate officers of the City are authorized and directed to prepare and furnish to
143 the initial purchaser of the Bonds and Bond Counsel certified copies of proceedings and records of the
144 City relating to the transactions herein contemplated, and such other affidavits and certificates as may
3 O���INAL
' 9S -' I00$
145 be re�uired to show the facts relating to the legality of the transactions herein contemplated as such
146 facts appear from the books and records in the officers' custody and controi or as otherwise known to
147 them; and all such certified copies, certificates and affidavits, including any heretofore fumished, shall
148 constitute representations of the City as to the truth of all statements contained therein.
149
150 7. The approval hereby given to the Documents referred to above inciudes approval of such
151 additional details therein as may be necessary and appropriate, and such modifications thereo£, deletions
152 therefrom and additions thereto as may be necessary and appropriate and approved by the Cit}�s
153 D'uector of Finance and Management Services.
154
155 8. The authority to approve, execute and deliver future amendments to documents entered
156 into by the City in connection with the transactions herein contemplated, is hereby delegated to the
157 Director of Finance and Management Services subject to the following conditions: (a) such amendments
158 do not materialiy adversely affect the interests of the City or the HRA; (b) such amendments do not
159 contravene or violate any policy of the City or the HRA; and (c) such amendments are acceptable in
160 form and substance to the Director of Finance and Management Services, the CiTy Attorney and Bond
161 Counsel. The execution of any instrument by the Director of Finance and Management Services shall
162 be conclusive evidence of the approval of such instruments in accordance with the terms hereof.
163
164 9. No covenant, stipulation, obligation or agreement contained herein or in the Documents
165 shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the City
166 Council, or any officer, agent or employee of the City in that persons individual capacity, and neither
167 the CYty Council nor any officer executing the Documents shall be liable personally thereunder or be
168 subject to any personal liability or accountability by reason thereof.
169
170 10. In accordance with the Laws of Minnesota 1976, Chapter 234, and for the purpose of
171 providing the public approval required by Section 147 of the Internal Revenue Code of 1986, as
172 amended, the City Council hereby consents to the issuance by the Port Authority of the Note and the
173 Bonds for the purposes described herein and in the Port Authority resolutions. The exact details of the
174 Note and the Bonds, including but not limited to provisions relating to maturities, interest rates,
175 discount, redemption, and for the issuance of additional bonds are to be determined by the Port
176 Authority. The CiTy Council hereby authorizes the issuance of any refunding bonds by the Port
177 Authority, found by the Port Authority to be necessary for carrying out the purposes for which the Note
178 and/or Bonds are issued, orovided that (a) the moral obligation of the City shall not apply to any
179 refunding bonds without the eapress subsequent approval of the City Council and (b) any interests of
180 the HRA which are to continue foliowing such refunding have been, in the opinion of the City Attorney,
18 adeauatelv secured
y council: Date R„�.. a�i �`�qS
Certified by Council Secretary
Requested by Department of:
Plan & Econo ^ Deve �ment
By:
Form Approved by City
ay:
for .SUbm,�seion, to Counciil
By:
� � � � � � � . � �
i }
R E
`ts - tocg
DEPARTMENT/OFFICE/COUNCIL DATE INITIATED N� 3 3 4� 4
Planning & Economic Dev. 8/17/95 GREEN SHEET _.___ .-
CONTACT PERSON & PHONE INITIAVDATE INITIAL/DATE
� DEPARTMEN7 DIAECSOA � CRY CAUNCIL
Larr Bll0 10T ASSIGN O CINATTORNEV O CITV CLERK
MUST BE ON COUNCIL AGENDA BY (DATE) NUNBEF FOR O BUDGET �IREGTOR � FIN. & MGT. SERVICES DIR.
POU7ING
ORDEP � MAYOR (OFi ASSISTANn ❑
TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE)
ACTION RE�UESTED:
Giving final approval to the execution of documents necessary to the acquisition and
renovation of the Town Square Hotel, and approving the issuance of tax-exempt revenue
bonds by the port Authority for such projects.
RECAMMENDaTIONS: qopmva (A) or Reject (R) pERSONAL SERVICE CONTRACTS MUST ANSWER THE FOLLOWING �UESTIONS:
_ PLANNING COMMISSION _ CIVIL SERVICE COMMISSION 1. Has this personttirm ever worked untler a contrect for this department? -
_ CI8 COMMITTEE _ YES NO
_ STAFF 2. Has this personHirm ever been a ciry employee?
— YES NO
_ DISTFiICT CAUFT _ 3. Does this person/Firm possess a skill not normally possessed by any current city employee?
SUPPOflTS WHICH COUNqL OBJECTIVE? VES NO
Ezplain all yes answe�s on saparete sheet anA ettach to green aheet
INITIATING PROBLEM, ISSUE, OPPOFTUNITY(Who, What, When, Where, Why):
ADVANTAGES IF APPpOVED:
DISADVANTAGES IF APPiiOVED'
DISADVANTAGES IF NOTAPPROVED.
� �;'�� ��i�
AUG 17 1995
TO7AL AMOUNT OF TRANSACTION $ COST/REVENUE BUDGETED (CIRCLE ONE) YES NO
FUNDIIJG SOURCE ACTIVITY NUMBEFi
FINANCIAL INFOPMATION: (EXPLAIN)