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95-773ORIGINAL Presented By � Covncil File � � Green Sheet � .�0.38 � RESOLUTION CITY OF SAINT PAUL, MINNESOTA . Referred To Committee: Date i 2 3 G 5 6 7 8 9 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 G1 42 43 RESOLUTION AMENDING Tf� PRO7ECT SCOPE/ IMPLEMENTATION SCHEDULE FOR T`FIE DAYTON'S BLUFF PROJECT, DAYTON'S BLUFF DISTRICT 4 WHEREAS, on December 28, 1993, the Council of the City of Saint Paul by Resolution 93-1827 allocated $250,000 of the Community Development Block Grant (CDBG) funds to the Dayton's Bluff project; and WHEREAS, Resolution 93-1827 required that "prior to entering into agreements for the implementation of the idenfified projects, the Council shall approve a project scope and implementation schedule;" and WHEREAS, a project scope and implementation schedule has been prepazed in accordance with Resolution 93-1827; and WHEREAS, on August 10, 1994, the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (HI2A) by Resolution No. 94-8/10-1 approved the implementation of $235,000 of the $250,000 CDBG funds allocated to the Dayton's Bluff project by City Council Resolution 93-1827, which implementation included a$40,000 loan to Gayle E. Peterson for the renovation of 685 East Third Street; and WHEREAS, on September 14, 1994, the HRA by Resolution No. 94-9/14-9 approved the implementafion of $15,000 as additional loan funds to Gayle E. Peterson increasing her loan to $55,000 for the renovation of 685 East Third Street; and WHEREAS, the Council of the City of Saint Paul by Resolufion 94-1337 approved the implementation of the loan to Gayle E. Peterson for the renovation of 685 East Third Street along with loans in the amounts of $75,000 and $120,000 respectively for Ali Artoli's Phoenix Food Mazket and Paul Damico dba Paul's Lounge; and WHEREAS, on October 26, 1994, the HRA by Resolution No. 94-10/26-1 approved the use of UDAG Revolving Funds for the loan to Paul Damico instead of CDBG funds due to the numerous eligibility and other requirements imposed upon the project by the use of CDBG funds; and WHEREAS, Gayle E. Peterson has requested addifional funds to cover cost overruns related to the installation of a fire sprinkler in the building at 685 Fast Third Street; and WHEREAS, on 7une 28, 1995, the ERA Board of Commissioners reviewed and approved an amended statement of work/project scope of services related to Ms. Peterson's request. 44 45 46 47 48 49 50 51 52 53 ORIGINAL q� 7�3 NOW, THEREFORE, BE TT RESOLVED that upon recommendaflon of the Mayor, the Council of the City of Saint Paul does hereby approve the implementation of the activities described as "Amended Statement of Work/Project Scope of Services" in the attached Resolu6on No. 95-6/28- approved by the Housing and Redevelopment Authority of the Ciry of Saint Paul, Minnesota on 7une 28, 1995. BE TT FURT'HER RESOLVED, that the Council hereby authorizes the fIousing and Redevelopment Authority of the City of Saint Paul to implement the project activities inciuded in the attached Amended Statement of Work/Project Scope of Services on its behalf. Requested by Department of: Adopted by Council: Date Adoption Certified by Council �eCretary By: � . �--e�° Approved by a, or: D � BY: 6 k i_._- _..-- Pla n& Eco c Develo�ment By: Form Approved by City Attorney Approved By: Submission to �1� 7?3 � DEPARTMENT/OFFICFJCOUNCIL DATE INITIATED O PED - ECONOMIC DEVELOPMENT 6-22-95 GREEN SHEET �- 3 0 3 8 8 CONTACT PERSON & PHONE INITIAUDA INfT1AVDATE ODEPARTMENTDIRECTOR � �_ mqNCAUNdL DANIEL BAYERS 266-6685 p�ypgER FOR � qNATTORNE 7 � CITY CLERK MUST BE ON CAUNCIL AGENDA BY (DATE) pOUTING O BUDGET Dlfl O FIN. & MGT. SERVICES DIR. OqDER � MAYOR (OFi ASSISTANn � C.(� {p �b („p.�yy�yr- TOTAL # OF SIGNATURE PAGES � (CLIP ALL LOCATIONS FOR SIGNATURE) ��' � G ' n �� ACTION REQUESTEO: FOR: Consent Agenda Council approval of the project scope and implementation schedule for the Dayton's Bluff neighborhood URAI' project area. RECAMMENDATIONS: Approve (A) or iieject (RI PERSONAL SERVICE CONTRACTS MUST ANSWER TNE POLLOWING QUESTIONS: _ PIANNING CAMMISSION _ CIVIL S t CA n M�MI�SSION �� Has ihis person/firtn ever worked under a contract for this department? - _ CIB COMMITTEE �� NeacF w�m� YES "NO A STA — 2. Has this personrtrm ever been a ciry employee� ��– VES Ci0 _ DIS7aIC7 COUR7 _ 3. Does this personNirm possess a skill not normally possessed by any current city employee? SUPPORTS WHICH CqUNCIL 0&IECTIVE? VES NO Explain all yes answers on separate sheet antl attach to green sheet INITIATING PROBLEM, ISSUE, OPPORTUNITY (Who, What, When, Where, Why�: HRA and the City Council has approved by Resolutions 93-1827, 93-1337. 94/8-10-1, 94-9/14-9 the business loan for Gayle Peterson building renovations located at 683 East Third Street. The HRA and City Council has ` approved the disbursements of up to $55,000.00 for a renovarion loan at this address. The consiruction located at 683 East Third Street has taken longer then an'ticipated and Ms. Peterson has not been able to complete the construction. Their has been cost over runs that have put the project $24,000 over budget. Ms. Peterson is asking for $20,000 in assistance in the budget problem. This addition $20,000 loan has been approved by the PED Credit Committee. ADVANTAGESIFAPPRO�ED' Ms. Peterson will be unable to financial reestablish the neighborhood building which houses Mr. Artoli's grocery store. The burden of these cost over runs will have a negative financial impact on the own ' r�ew loan will help the owner pay for these addition cost overruns. �� JUL p� �gg� ��E�� P�� DISADVANTAGES IFAPPROVED There are no disadvantages if these documents aze signed. �`',�.�',� ��Y'�"> %�+."�t;? �� Jt�L 10 1955 ��1� �6 1995 -�_ � DISADVANTAGES IF NOTAPPROVED ' Ms. Peterson will not be able to pay her contractor for the work that has already been completed. TOTAL AMOUNT OF TRANSACTION $� � b OO COST/REVENUE BUDGETED (CIFCLE ONE) YES NO FUNDIfdG SOURCE �� ,(� � ACTIVITY NUMBER I � � -�7s� 2- os �r� -- 6 r S i G FINANCIAL INFORMATION. (EXPLAIN) qs ��3 Sponsor: � ` .��Lc,�,,..._, RESOLUTION N0.95-6/28- RESOLUTION AUTHORIZING APPROVAL OF THE AMENDED PRO7ECT SCOPE/IMPLEMENTATION SCHEDULE FOR THE DAYTON'S BLUFF PROJECT, DAYTON'S BLUFF DISTRICT 4 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 Wf�REAS, on December 28, 1993, the Council of the City of Saint Paul by Resolution 93- 1827 allocated $250,000 of the Community Development Block Grant (CDBG) funds to the Dayton's Bluff project; and WHEREAS, Resolution 93-1827 required that "prior to entering into agreements for the implementation of the identified projects, the Council shall approve a project scope and implementation schedule;" and WHEREAS, a project scope and implementation schedule has been prepared in accordance with Resolution 93-1827; and WHEREAS, on August 10, 1994, the F3ousing and Redevelopment Authority of the City of Saint Paul, Minnesota (HRA) by Resolution No. 94-8/10-1 approved the implementation of $235,000 of the $250,000 CDBG funds allocated to the Dayton's Bluff project by City Council Resolution 93-1827, which implementation included a$40,000 loan to Gayle E. Peterson for the renovafion of 685 East Third Street; and WHEREAS, on September 14, 1994, the HRA by Resolufion No. 94-9/14-9 approved the implementation of $15,000 as additional loan funds to Gayle E. Peterson increasing her loan to $55,000 for the renovation of 685 East Third Street; and WHEREAS, the Council of the City of Saint Paul by Resolution 94-1337 approved the implementation of the loan to Gayle E. Peterson for the renovation of 685 East Third Street along with loans in the amounts of $75,000 and $120,000 respecfively for Ali Artoli's Phoenix Food Mazket and Paul Damico dba Paul's Lounge; and WHEREAS, on October 26, 1994, the HRA by Resolution No. 94-10/26-1 approved the use of UDAG Revolving Funds for the loan to Paul Damico instead of CDBG funds due to the numerous eligibility and other requirements imposefl upon the project by the use of CDBG funds; and WHEREAS, Gayle E. Peterson has requested additional funds to cover cost overruns related to the installation of a fire sprinkier in the building at 685 East Third Street. 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 q ��3 NOW, TF�REFORE, BE TT RFSOLVED that the following is hereby approved: Amended Statement of Work/Project Scope of Work 1. An additional CDBG loan in the amount of $20,000 to Gayle E. Peterson to help cover the costs associated with the installation of a fire sprinkler into the building at 685 East Third Street. 2. That this loan be a no-interest loan due on sale of the building. BE TT FURTI�R RESOLVED, that the Executive Director is authorized to set the fmal terms and conditions and execute the necessary loan documents. BE TT FTNALLY RESOLVED, that a Resoludon be sent to the City Council consent agenda which authorizes the HRA to implement the project activities. �� HOUSING AND REDEVELOPMEN7 AUTHORITY OF THE CITY OF SAINT PAUL, MINNESOTA REPORT TO THE COMMISSIONERS DATE June 28, 1995 REGARDING Amendment ofi the Project Scope/implementation Schedule for the Dayton's Bluff Project Purpose The purpose of this repori is to obtain approval of an amendment of the project scope/implementation schedule for the Dayton's Bluff project relating to City Council Resolution 93-1827 (attached) regarding the businesses currently or formerly associated with 685 East Third Street. Specifically, this report requests approval of an additional $20,000 loan to Gayle E. Peterson for the renovation of the building at 685 East Third Street. Background/History Gayle E. Peterson owns the properry at 685 East Third Street. This property had been occupied by Paul Damico dba PauPs Lounge on the fust floor and included a number of upstairs apartments until it was burned by the fire which resulted from the natural gas explosion at East Third Street and Maria Avenue in July 1993. In December 1993, the Saint Paul City CouncIl by Resolution 93-1827 allocated $250,000 of 1993 Community Development Block Grant (CDBG) funds to assist East Third and Maria area businesses. This City Council resolution required that a project scope of services be approved prior to implementation of the identified projects. Subsequently, a strategy was put into place whereby Paul Damico's business would be relocated to 1045 Hudson Road and Ms. Peterson would remove the top floor of her buiiding and renovate the balance of it for lease to AIi Artoli whose grocery store business was destroyed in the 1993 e�cplosion. On August 10, 1994, HRA approved a project scope of services which included a$40,000 loan to Ms. Peterson for renovation of her building, a$75,000 loan to help Ali Artoli move his grocery store into this building, and a$120,000 loan to Paul Damico to relocate his business to 1045 Hudson Road. On September 14, 1994, HRA approved an amendment to the project scope g� �� which involved a$15,000 increase to Ms. Peterson's original $40,000 loan. On October 26, 1994, the IIRA Board appLOVed the use of UDAG Revolving Funds for the loan to Paui Damico instead of CDBG funds due to the numerous eligibility and other requirements imposed upon the project by the use of CDBG funds. Project Description Ms. Peterson has owned the building at 685 East Third Street for a number of years. At the time of the explosion, it was occupied by Paul's Lounge on the first floor and included a number of apartments on the second floor. After the e�losion, the building remained a vacant shell for over a year. In mid-1994, Ms. Peterson entered into a lease agreement with Ali Artoli for his Phoenix market. In addition it was decided that it would be most cost effective to remove the building's upper story and renovate it as a one-story building. Since the building is in a designated historic area, Heritage Preservation Commission approval was needed for this change along with other changes to the building's exterior. The project was originally e�ected to be completed in about December 1994, however, the project had been subjected to a number of delays. After project construction was underway, it was determined that a fire sprinkler needed to be installed in the buIlding. This added nearly $24,000 onto the cost of the building: over $16,000 for the sprinkler and nearly $7,000 for the appropriately sized water pipe into the building. Addiuonal cost overruns resulted from required e�cterior work. C�rrent uses and sources of funds are as follows: Uses of Funds: Construction (Ray Kreps Company) $165,565 Holding Costs 5,056 Other Building Costs (permits, NSP, water, etc.) 9�548 Total Uses $180,169 Sources of Funds: Premier Bank Loan Ciry CDBG Loan Additional City CDBG Loan (Requested in this HRA Report) Dayton's Bluff Neighborhood Housing Service Grant Equity Total Sources $ 40,000 55,000 20,000 10,000 55.169 $180,169 g ��3 Ms. Peterson has oniy one tenant in the building, Ali Artoli's Phoeniac Food Market which occupies the entire space. When the lease was negotiated between Mr. Peterson and Mr. Artoli, care was given to structure it in such a way that the rent payment would be affordable so that Mr. Artoli could pay his expenses and service his own debt to the City. In addition, the City's term and rate to Mr. Artoli were structured so that he could pay his rent and expenses. Ms. Peterson's insurance e�enses are very high because of the elcplosion and because of a fire that had occurred in the building at an earlier time. Her return on equity based on cash flow after all debt service, real estate tases, and insurance averages about five percent for the first siY years of operation. Transaction/Credit Information Previous loan ez�erience. In 1987, Ms. Peterson received a rental rehabilitation loan to assist with renovation of a residentiai property in downtown Saint Paul at 189-191 East Seventh Street. The original balance was $103,972. Ms. Peterson is current on that loan and the outstanding balance is about $13,111. Existin,g loan at 685 East Third Street. After an interest only period of three years, Ms. Peterson's existing $SS,OOO loan from the City for renovation of 685 East Third Street was to be amortized at two percent (2%) interest over a term of fifteen years with a balloon in year 2005. Interest only payments were to begin 7anuary 1, 1995. Because of the delay in completing the project Ms. Peterson has requested that these interest only payments begin July 1, 1995. The Credit Committee has agreed to Ms. Peterson's request. In addition to the City loan, Ms. Peterson has received a$40,�0� loan from Pcemier Bank amortized at market rate over 15 years. Current request. Although Ms. Peterson had requested a$24,000 grant to assist with cost overruns related to the installation of a fire sprinkler, she is agreeabie to accepting a$20,000 no interest loan which would be due at the time of building sale. To date, she has injected over $55,000 of her own cash into the project as equity. Because cash flow is thin after the City debt becomes fully amortizing and the property is fully tased, it is inadvisable to increase debt service on the project. This would further decrease her already slim return and prevent her from setting aside sufficient funds for reserve or unforeseen repairs or expenses. The Credit Committee has reviewed Ms. Peterson's request and recommended approval. The Credit Committee has risk rated both Ms. Peterson's existing loan and current loan request as 3, out of a scale of 1 to 5. qs��3 Budget Information On December 27, 1993, the City Council approved Resolution 93-1827 allocating $250,000 of CDBG funds to the Dayton's Bluff project. Budget information for the Dayton's Bluff project (Account number 100-37812-0547-61516) is as follows: Budget as of 12/31/93 $250,000 Committed/Encumbered (130,000) Available 120,000 Peterson Request ( 20,000) Balance 100,000 Public Purpose The main objective of the Dayton's Bluff project has been the re-establishment of neighborhood businesses in the East Third and Maria area. Overall, the project will add about six jobs to the neighborhood, strengthen the City's tas base, and provided needed goods and services to the immediate neighborhood which augments the area's recent housing development. Neighborhood Review The Dayton's Bluff project is consistent with the neighborhood's small area plan and the Urban Revitalization Action Program (URAP) redevelopment plan. Dayton's Bluff Center for Civic Life (District 4) and the Dayton's Bluff Neighborhood Housing Setvice have been informed about the Dayton's Bluff project. Recommendation Staff recommends approval of the amended project scope and implementation schedule outlined in this report and recommends that the Executive Director be authorized to finalize the terms and conditions and execute the necessary loan documents. Staff further recommends that the ARA forward this report and the attached City Council resolution to the City Council consent agenda which will authorize the I3RA to implement the activities inciuded in this report. Sponsor. Commissioner Dino Guerin Mara O'Neill, 266-6620 Business and Development Division Dan Bayers, 266-6685 Housing Division q��-� -� �� , � BAT�S �VENUE LFZ -�}- � $ � --� .�.. �--I 0 � � � 0 0 � � � ¢ O r N o L n d F- �� O I � I 0 cL ¢ a� OM O� .,� � 8 Z v� o �� O -O- 0 � w w L � V 1 p � �� O ¢ ¢ � � _ -0N � -o- o ,} � 3 � Z O a �v � �� 0 V V � N �❑ �____ MaRiA AVFNU� �82 O '" do � F � �� O -o- O � -a- O -o- O Sr,arE � LA ND ----�_ �,,1pUN� S BO Ul.6VARD „y� d v�,II M� Z � �a � � ;t'� j r _��z,� P,-esznted By. RESOLUTION SAINT PAUL, MINNESOTA Councii Fie n 'ti(tEP M�� ^ '2� Green Sheef # i� � 1hc�fl� (Il�',t/On) - -- 9� �� ReferrEd To: � CommiGee: Date � 2 3 4 5 RESOL4cD, that upon the recommendation of the Mayor, the Council of the b Gity of Saint Paul does hereby approve the following changes to the Com,�unity � Development B1ock Grant fun3: 8 9 Current Revised '� Budget Changes Budget it --------- -------- -------- 12 CDBG 73 Urban Revit. Action Prog. it P6-100-37801-0547-61290 $ 922,000.00 $ (922,000.00) $ 0.00 SS p6-100-378?2-0547-61290 1,520,000.00 (1,278,000.00) 242,000.00 16 17 �s ' Phalen Village Revital. � P6-:00-37801-0589-61513 $ 0.00 $ 150,000.00 $ 150,000.00 � P6-100-37804-0549-61513 0.00 50,000.00 50,000.00 2 � P6-100-37808-0581-61513 0.00 50,000.00 SO,OOO.GO � P6-100-37812-0584-61513 0.00 800,000.00 800,000.00 23 2s Phalen Boulevard Const. 25 P6 0.00 100,000.00 100,000.�0 26 -• 27 , North Enc' Housing 28 P6-100-37812-0547-61515 0.00 100,000.00 100,000.00 � 30 Dayton's B1uLf Zrct�oc.<�" �S�%cc�c.UO 31 ?6-100-37812-0547-61516 0.00 �00,�908-96 }88 32 � Comme�cial Vacant Bldg. � P6-100-37812-0583-61331 5?5,000.00 300,000.00 815,000.00 3S Headstart Program 37 P6-100-37803-0565-61517 0.00 200,000.00 200,000.00 33 39 4p . 4S 42 ' � � t5 :6 �7 :g :9 �0 • 51 �2 - 53 � - Z [° { � ` `'� �; ?tt�$�'"��.w- .. 3 4 5 6 7 S 0 10 1� 12 73 Lao Family Community �' P6-100-37812-0547-61518 75 �O Unspecified Contingency �� P6-100-37803-0558-61999 Current Budget � �� 141,862.45 ��°� q�-��3 Changes 200,000.00 Revised Budget 200.000.00 c7�� {i,861.ys ��-5<};809�-68- -�9�8-�'��-.-�r ` 78 ------------- ------------ ------------- � Totals $ 3,098,862.45 $ 0.00 $ 3,098,862.45 ro 21 and be it 22 23 FURTAER RESOLVED, that prior to entering into agreements for the 2� implementation o£ the above mentioned projects, Council shall approve a ?5 project scope and implementation schedule; and be it 26 27 FURTHER RESOLVED, that the adminstrative dollars for_the North End 29 Housin Initiative will be shared equall between the District 6 Plannine 29 _ Council and North End Area Revitalization iN.E.A.R.I. There will also be �p proerammatic concensus bv both N.E.A.R. and Distrcit 6 �rior to ex�enditures 37 being made: and be it 32 �' FURTHER FESOLVED. that funds budgeted for the Headstart Proa are not to be exoended for adminstrative costs but rather are to be used to assist in � the creation of activitv/�roeram soace: and be it 36 3 � FINALLY RESOLVED, that for any project not implemented by June 1, 1994, � the funding commitment shall teYminate, and the funds shall be placed into the � CDBG Unprogrammed Funds Account for subsequent reallocation. 40 41 42 Reque�;ed by Depzrtm2nt of_ by � Appraved by CityAttamey. BY• Approved by Mayef to� Submission to CounciL• BY- A1tAt P:D tIL92