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97-1232Council File # �0�3 �. Green Sheet # _� �. � � � �,; � `�° ` ��` �' u,:<<�N��t;=,z Presented By CITY �F' SA�[VT PAUL, Referred To � \ Committee: Date �q , � 4 WFIEREAS, at the request of the City, in 1981 the St. Paul Port Authority (the "Authority") financed the 5 acquisition and renovation of the St. Paul Hotel (the "ProjecP') for an enfity known as St. Paul Hotel Limited 6 Partnership (the "Parinership"); and 10 11 12 13 14 15 16 ]7 ]8 19 20 21 22 23 24 25 26 27 �g ?9 30 �1 2 0 WFIEREAS, in connection with said financing the Authority issued in excess of $10,000,000 in industrial development revenue bonds for the Project, and entered into a lease of the project, as lessor, with the Partnership as tenant; and WHEREAS, in addition to the Authority's fuiancing, the City provided the Partnership with a Loan in the principal amount of $2,600,000, which Loan was funded by the Ciry from the proceeds of a United States Deparhnent of Urban Development Ac6on Grant (UDAG) No. B-80-AA-27-0018 (the "UDAG Loan"); and WHEREAS, the City entered into a loan agreement with the Partnership dated March 30, 1981 relating to the UDAG Loan, which loan agreement was secured by a mortgage on the Partnerslvp's leasehold interest in the Project; and WHEREAS, as of February 28, 1986 the Partnership defaulted in its obligations to the Authority and to the Ciry, surrendered possession of the Project to the Authority, and did not make further payments under the lease ar the City loan; and WHEREAS, following its repossession of the Project, the Authority entered into an Agreement dated April 14, 1987 with the City under which the Authority agreed to provide for xepayment, but only to the extent funds defined as "unrestricted" might become available; and WI�EREAS, the Authority experienced substantial losses on other real estate developments and was not able to make the UDAG Loan payments to the City in a timely manner; and WIIEREAS, the Authority and the City entered into a new Agreement dated 5eptember 19, 1991 which provided for a payxnent of $35Q000 to be made to the City at that time, and for a schedule of payments to be made to the City beginniug in December, 199b; and WHEREAS, the Authority paid the City $350,000 in September, 1991, howevet the Authority did not have funds defined as "unrestricted" available to make the $180,000 payment scheduled fox December 31, 1996; and i WHEREAS, the Authority has been assisting the City with efforts to relocate the Plastics, Inc. Manufacturing plant to a new site within the City of Saint Paul in connection with the Science Museum of Minnesota development project; and 9'�^� IZ3�-- 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 VJHEREAS, the Authority owns a parcel of land (the "Authority Parcel"), as legally described in E�ibit A, of appro�mately 41,400 square feet at the northeast corner of Kellogg Boulevazd and West Seventh Street, which parcel is adjacent to property owned by the City and by the Housing and Redevelopment Authority, is currently operated as a pazking lot, and which has potential for redevelopment; and WF�REAS, the Authority Parcel has substantiai value to the City both in the form of revenues from operation of the parking lot and in the form of development potential in combination with the City and HRA owned parcels; and WHEREAS, the Authority and the City wish to fully discharge the obligations contained in the 1991 Agreement; and Wf�REAS, City staff and the Port Authority have negotiated a settlement of these obligations whereby the Port Authority would convey the Authority Parcel to the HRA and would agree to include in its 1998 Development Program budget the amount of $300,000 for use in the Plastics Inc. manufacturing plant to a site within the City of Saint Paul. 60 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul, Minnesota as 61 follows: 62 63 1. 64 65 66 2. 67 68 69 70 3. 71 That the terms of the above described settiement of the 1991 Agreement with the St. Paul Port Authority is hereby approved. That staff of the Department of Planning and Economic Development are authorized to accept conveyance of the parcel of land at Kellogg Boulevard and West Seventh Street on behalf of the Housing and Redevelopment Authority. That the appropriate officers of the City and HRA are authorized to execute the necessary documents in connection therewith. Requested by Department of: Pla zin �coromic Develo ment BY' �_ ��_ Adoption Certified 6y Council Secretary BY � � � c� ��oi...e._ i Approved by Mayor: D�ate — �v� SY: �� ' �'v \ / • Form Approved by City Attorney By: 1 4�.2� Approved a r or Submi s'on to Council By: �,. `t� -�s��- 9J23/97 { G REEN Pamela WheelockJSteve 6-6641 TOTAL # OF SIGI�lATURE PAGES r10 61226 � LJ oa ��*c" l� " L.f asra°'� — � � arc�nomtv r � � � ertraauc _ ❑ ww,auamv¢FSOn � ❑ waucwamvruero 0 �,��„�..� � Zq ❑ 1 (CUP ALL LOCATIONS fOR SIGNATURE) Approval of City Council Resolution atCached. PLANNING COMMISSION CIB COMMl7TEE CIVIL SERVICE COMMISSION Economic Develogment �� "i�€� �'� 91 gg� RECE�VED s�-e � SEP 25 �997 rs°rv� RSONAL SERVICE CANTiACTS MU Fqs fhis persoNfirm ever vro�ICeA untler 9 canhact for this departmenYt YES NO Hee th� P�Nfimr eMer heen e dlY empbyee7 . YES NO .Does fhis persoNfirm pmseas a sldll hM normallypoesessed bY anY a�M ci(y emp�oyee? YES NO Is this persaWrm a tarpeted ve�rT VES NO Iry111N11ry1s YRV6LCM IOJUC� VYI'VRI UIY111 �YYIIO� YYIICI� YYIICII� YYfICIC. YYfI)j , - _ , Approves settlement of Port Authority obligations to fhe City under a 1991 Agreemgnt selated to the financing of the St. Paul Hotel in 19$1.- SetClement involves acceptinga 41,400 sq., ft: parcel of land at the northeast corner of Kellogg Blvd. and W. Seventh Street. Land would be conveyed to HRA. (see attached memo) - aov,vyrnc�.s�arw�ovEo v Settles a contingent obligation of the Port Authority by accepting property which will produce a current•income stream from parking operations. Property also has development potential, particularly in combinatino with adjacent City and HRA land. �ISADVANTAGESIFAPPROVED None 7SADVANTAGES IF NOT APPRC Uncertainty rega OTAL AM1mUNT OF TRANSAC7 UNDNlG SOURCE IN{WCNL INFORMATON (IXPWN) !ng when the city would receive consideration under the 1991 A¢rea s N/A Cp3T/REVRlUE BUDQETED (qRCLE ONE) - VES NO AC7IYITYNUMBER !R/ � � �� AAI �� -► �.� � Interdepartmental Memorandum CITY OF SAINT PAUL September 22, 1997 TO: Pamela Wheelock FR: Steve Thompson� RE: St. Paul Hotel UDAG/Attached City Council Resolution This memo describes the background and purpose of the attached City Council Resolution accepting a parcel of land at Kellogg Boulevard and West Seventh Street from the St. Paul Port Authority as satisfaction of the Port Authority's obligations under a 1991 Agreement with the City. The 1991 Agreement related to a UDAG loan originally made by the City to the St. Paul Hotel Limited Partnership for renovation of the hotel in 1981. BACKGROUND In 1981, at the request of the City, the Port Authority financed the acquisition and renovation of the St. Paul Hotel for an entity knovm as the St. Pau1 Hotel Limited Parinership. The Port Authority issued in excess of $10 million in industrial development revenue bonds, and entered into a lease of the project, as lessor, with the Partnership as tenant. In addition to the Port Authority's fmancing, the City provided the Partnerskup with a$2.6 million loan funded from the proceeds of a Federal Urban Development Action Grant (UAAG). The City entered into a loan agreement with the Parinership dated March 31, 1981. The loan was secured by a mortgage on the Partnership's leasehold interest in the project. In February, 1986 the Partnership defaulted on its obliga6ons to the Port Authority and the City, surrendered possession of the project to the Port Authority, and did not make further payments under the lease or the City loan. At this point, security for the UDAG loan was extinguished as a result of the lease cancellation. Following its repossession of the project, the Port Authority entered into an Agreement with the City dated April 14, 1987 under which the Port agreed to provide for repayment of the UDAG, but only to the extent funds defined as "unrestricted" might become available. The Port made a $100,000 payment to the City in 1987. Thereafter, the Port experienced substantiallosses on other real estate developments and was not able to make payments to the City. In 1991, the Port Authority and the City entered into a new Agreement which provided for a 9� -��-3�- $350,000 payment to the City, which was made in September, 1991, and a schedule of payments to begin in December, 1996. The Port Authority did not have funds defined as "unrestricted" available to make the $180,000 payment scheduled for December 31, 1996, and is not likely to have unrestricted funds available in the forseeable future. PROPOSAL PED staff and the Port Authority have agreed on a proposal which wouid discharge the balance of payments contained in the 1991 Agreement. The present value of these payments, if unrestricted funds were available to make them as scheduled, is approximately $1,647,000. The Port Authoriry owns a pazcel of land of approximately 41,400 square feet at the northeast corner of Kellogg Boulevard and West Seventh Street which is adjacent to properry owned by the City of Saint Paul and the Housing and Redevelopment Authority (FIRA). The property is currently improved and operated as a parking lot, and has potentiai for development, particularly in combination with the City and HRA land. The Port Authority pazcel has substantial value to the City in the form of revenues from its operation as a parking lot and in the form of development potential in combination with the other City controlled properiy. Staff estimates that operation of the pazking lot would generate net income of approxunately $153,90Q per year. The Port Authority would agree to convey the parcel to HRA to satisfy the obligations of the 1991 Agreement. Additionally, the Port Authority would agree to include in its 1998 Development Program budget the amount of $30Q,000 for use in the relocation of the Plastics Inc. manufacturing plant to a site withiu the City of Saint Paul. The PED Credit Committee has reviewed the value of the Kellogg/West Seventh properiy and recommends approval of the proposal. RECOMMENDATION Staff recommends adoption of the attached Resolufion approving the terms of the above described settlement of the 1991 Agreement with the St. Paul Port Authority, directing stafF of the Department of Planning and Economic Development to accept conveyance of the parcel of land at Kellogg Boulevard and West Seventh Street on behalf of the Housing and Redevelopment Authority (HRA), and authorizing the appropriate officers of the City and HRA to execute the necessary documents in connection therewith. qPED l4\S YSlSFL4RED\SGIISPHSiAFF.RPT >; ;�: } t� n �.: �' ,�` � : _ � ;: _ ,.. i � ��. _ ;; :� � �: . i . . (� � : - �' - -�. L l,kli� � ,'� f q� -��. ( � i � ^ � � { i /.n'(. /? � �• f�;l: C! ' // // 1 � / ' / � � � <...�—.� ` � ' / \ � � � \ � r`-,7=L 7 ` - 1 � �_ �, `\ 1 i . i� i � i� !,� / it . \\ �\ � � � ♦ ,.1 . � /.� � .. \ .. . � i � � ' � � _ `, a .1. ^-4 ' J \ � �'♦ .r `�� `\ Ci�� l.?i�I `\ � � '.��. �. � n . � ♦ ' ✓..L � ��PP�%�"Li = g � • ?;:�%r 1 L� , � � . ti � � .�.�- �____ � , • �_� _ ___�___ .., . - ,_.__ , , • _____ _/ . . - __ ------�- --. � ,�` \ � . � ,�'�, � ;;�; . , i � •. `��=---� � - --�----- � , � '• _" u � � ,_` - _ . � � � . . , .� . � � �' � ' � . � . ,� � \ � � , . � - R . � i � f '� ., � �,�' i _ �� /� , �, l �� , �� ,� /// �.-�i_ r ,� l ! 1 -sC� �.v�nCr�, r:.r�'Y� {� -.v�-:�� Yf ,�! 2 I �` � � t� , r �� )�. � - i'�� t : ;. '� �.i �� ;:;;'-, �� `.�,J ; . � _ �. : - �:: �:J : ' :W ; : .`_L 1 • i � - � . '; � . V '� •...r � �i , .' ' � _'� _ � , i � �� _r�_ ---'�%/ _ _�) — -' � . . . . . � : . . � � �.��^��.f .� , � .. (;ti.i%1 ' G%'C,l�l � �y�� t_(G ��z��-=;: - - ` �. � ��"� ' " -� a� -»-� �- AGREEMENT [Saint Paul Hotel] THIS AGREEMENT entered into this _ day of , 1997 between the PORT AUTHORITY OF TT� CITY OF SAINT PALTL (the "Authority") and the CITY OF SAINT PAITL (the "City"). WITNESSETH: WFIEREAS, at the request of the City, in 1981 the Authority financed the acquisition and renovation of the St. Paul Hotel (the "ProjecP') for an entity known as St. Paul Hotel L'united Partnership (the "Partnership"); and W,E�REAS, in connection with said financing the Authority issued in excess of $10,000,000 in industrial development revenue bonds for the Project, and entered into a lease of the project, as lessor, with the Partnership as tenant; and WHEREAS, itt addition to the Authority's financing, the Clty provided the Partnership with a Loan in the principal amount of $2,6Q0,000, which Loan was funded by the City from the proceeds of a i3nited States Department of Urban Development Action Crrant (UDAG) No. B-80- AA-27-0018 (the "UDAG Loan"); and WI3EREAS, the City entered into a loan agreement with the Partnership dated March 30, 1981 relating to the UDAG Loan, which loan agreement was secured by a mortgage on the Partnership's leasehold interest in the Project; and WI3EREAS, as of February 28, 1986 the Partnership defaulted in its obligations to the Authority and to the City, surrendered possession of the Project to the Authority, and did not make further payments under the lease or the City loan; and VJfIEREAS, following its repossession of the Project, the Authority entered into an Agreement dated April 14, 1987 with the City under which the Authority agreed to provide for repayment, but only to the extent funds defined as"unrestricted" might become available; and WHEREAS, the Authority experienced substantial losses on other real estate developments and was not able to make the UDAG Loan payments to the City in a timely manner; and WHEREAS, the Authority and the City entered into a new Agreement dated September 19, 1991 which provided for a payment of $350,000 to be made to the City at that time, and for a schedule of payments to be made to the City beginning in December, 1996; and WI�REAS, the Authority paid the City $350,000 in September, 1991, however the Authority did not have funds defined as"unrestricted" available to make the $180,000 payment scheduled for December 31, 1996; and q�-�a�� VJIIEREAS, the Authority has been assisting the City with efforts to relocate the Piastics, Inc. Manufacturing plant to a new site within the City of Saint Paul in connection with the Science Museum of Minnesota development project; and WHEREAS, the Authority owns a parcel of land (the "Authority Parcel"), as legally described in E�ibit A, of approximately 41,400 square feet at the northeast corner of Kellogg Boulevard and West Seventh Street, which pazcel is adjacent to properry owned by the City and by the Housing and Redevelopment Authority, is currently operated as a pazking lot, and which has potenfial for redevelopment; and WHEREAS, the Authority Parcei has substantial value to the City both in the form of revenues from operation of the parking lot and in the form of development potential in combination with the City and HRA owned pazcels; and WHEREAS, the Authority and the City wish to fully discharge the obligations contained in the 1991 Agreement. NOW, THEREFORE, in consideration of the above premises the Authority and City agree as follows: The Authoriry agrees to convey marketable title and possession of the Authority Parcel to the Housing and Redevelopment Authority of the City of Saint Paul within 60 days of the date hereof. 2. The Authoriry agrees to inciude in its 1998 Development Programs budget the amount of $300,000 for use in assisting in the relocation of the Plastics, Inc. manufacturing plant to a site within the City of Saint Paul. 3. This Agreement supersedes in all respects the Agreement dated September 19, 1991, including all prior agreements in connection with the UDAG Loan, and performance by the Authority of the actions described in Pazagraphs 1. and 2. above will fully discharge the Authority's obiigations in connection with the UDAG Loan and all prior agreements related thereto. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the date and year first above written. 1'I-1}�� as to PORT AUTHORITY OF THE CITY OF SAINT PAUL � CITY OF SA1NT PAUL Its Assistant City 9�.�}� z.. EXHIBIT A [Legal Description] ._�.:. � � A° ROBERTA MEGARD CouncIImember MEMORANDUM DATE: TO: FROM: SUBJECT: 310 City Hall Saiat Paul, MN 55102 612l266-8640 Fae 612f 266-8574 Intemet roberta.meaard@stpaul.gov October 10, 1997 �� --1 a7a" ANN D. CIESLAK T.egislative Aide Ken Johnson, St. Paul Port Authority Pamela Wheelock, Planning and Economic Development Chris Hansen, Civic Centre � Councilmember Roberta Meg�—� � �. _ <�b�� Proposed settlement of 1991 Agreement related to the fmancing of the St. Paul Hotel - Council Resolution #97-1232 Please provide a written response to the following questions. Port Authoritv: 1. Why does the Port Authority wish to convey this property to the City at this time? The parcel has been generating parking revenue. Could the Port Authority have used these revenues to meet ttzeir payment obligations to the city? Are parking revenues restricted ? Civic Center 3. Explain how the Civic Center, which has operated the parking lo# and received the bulk of the revenue will compensate for the loss of revenue? Has this been budgeted in the 1998 Civic Center budget? ED: 4. The Port Authority owes the City $1.6 million. If the Council accepts this settlement, does the city have any further obligations, or repayment requirements on the $1.6 million of UDAG funds that were used? Port AuthoritvJCivic Center/PED• 5. Staff estimates the parcel will generate $153,900 per year. Please provide the CITY OF S,AINT PAUL OFFICE OF'Y'HE CITY COUNCII. S�A6 Priutetl on Recyded Pz4er q� -1'y'�'�° revenue the parcel has generated in the last three years. Also please provide a staff recommendation for these revenues for 1998. 6. Are staff awaze of any other plans for this parcel? The City Council laid this resolution over to the October 15 Council Meeting. I know my colleagues would appreciate receiving a copy of your response. Also, you would be welcome to attend the Councii meeting to answer any further questions. Thank you. CC: Council President Thune Councilmembers Attachment Council File # �0�3 �. Green Sheet # _� �. � � � �,; � `�° ` ��` �' u,:<<�N��t;=,z Presented By CITY �F' SA�[VT PAUL, Referred To � \ Committee: Date �q , � 4 WFIEREAS, at the request of the City, in 1981 the St. Paul Port Authority (the "Authority") financed the 5 acquisition and renovation of the St. Paul Hotel (the "ProjecP') for an enfity known as St. Paul Hotel Limited 6 Partnership (the "Parinership"); and 10 11 12 13 14 15 16 ]7 ]8 19 20 21 22 23 24 25 26 27 �g ?9 30 �1 2 0 WFIEREAS, in connection with said financing the Authority issued in excess of $10,000,000 in industrial development revenue bonds for the Project, and entered into a lease of the project, as lessor, with the Partnership as tenant; and WHEREAS, in addition to the Authority's fuiancing, the City provided the Partnership with a Loan in the principal amount of $2,600,000, which Loan was funded by the Ciry from the proceeds of a United States Deparhnent of Urban Development Ac6on Grant (UDAG) No. B-80-AA-27-0018 (the "UDAG Loan"); and WHEREAS, the City entered into a loan agreement with the Partnership dated March 30, 1981 relating to the UDAG Loan, which loan agreement was secured by a mortgage on the Partnerslvp's leasehold interest in the Project; and WHEREAS, as of February 28, 1986 the Partnership defaulted in its obligations to the Authority and to the Ciry, surrendered possession of the Project to the Authority, and did not make further payments under the lease ar the City loan; and WHEREAS, following its repossession of the Project, the Authority entered into an Agreement dated April 14, 1987 with the City under which the Authority agreed to provide for xepayment, but only to the extent funds defined as "unrestricted" might become available; and WI�EREAS, the Authority experienced substantial losses on other real estate developments and was not able to make the UDAG Loan payments to the City in a timely manner; and WIIEREAS, the Authority and the City entered into a new Agreement dated 5eptember 19, 1991 which provided for a payxnent of $35Q000 to be made to the City at that time, and for a schedule of payments to be made to the City beginniug in December, 199b; and WHEREAS, the Authority paid the City $350,000 in September, 1991, howevet the Authority did not have funds defined as "unrestricted" available to make the $180,000 payment scheduled fox December 31, 1996; and i WHEREAS, the Authority has been assisting the City with efforts to relocate the Plastics, Inc. Manufacturing plant to a new site within the City of Saint Paul in connection with the Science Museum of Minnesota development project; and 9'�^� IZ3�-- 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 VJHEREAS, the Authority owns a parcel of land (the "Authority Parcel"), as legally described in E�ibit A, of appro�mately 41,400 square feet at the northeast corner of Kellogg Boulevazd and West Seventh Street, which parcel is adjacent to property owned by the City and by the Housing and Redevelopment Authority, is currently operated as a pazking lot, and which has potential for redevelopment; and WF�REAS, the Authority Parcel has substantiai value to the City both in the form of revenues from operation of the parking lot and in the form of development potential in combination with the City and HRA owned parcels; and WHEREAS, the Authority and the City wish to fully discharge the obligations contained in the 1991 Agreement; and Wf�REAS, City staff and the Port Authority have negotiated a settlement of these obligations whereby the Port Authority would convey the Authority Parcel to the HRA and would agree to include in its 1998 Development Program budget the amount of $300,000 for use in the Plastics Inc. manufacturing plant to a site within the City of Saint Paul. 60 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul, Minnesota as 61 follows: 62 63 1. 64 65 66 2. 67 68 69 70 3. 71 That the terms of the above described settiement of the 1991 Agreement with the St. Paul Port Authority is hereby approved. That staff of the Department of Planning and Economic Development are authorized to accept conveyance of the parcel of land at Kellogg Boulevard and West Seventh Street on behalf of the Housing and Redevelopment Authority. That the appropriate officers of the City and HRA are authorized to execute the necessary documents in connection therewith. Requested by Department of: Pla zin �coromic Develo ment BY' �_ ��_ Adoption Certified 6y Council Secretary BY � � � c� ��oi...e._ i Approved by Mayor: D�ate — �v� SY: �� ' �'v \ / • Form Approved by City Attorney By: 1 4�.2� Approved a r or Submi s'on to Council By: �,. `t� -�s��- 9J23/97 { G REEN Pamela WheelockJSteve 6-6641 TOTAL # OF SIGI�lATURE PAGES r10 61226 � LJ oa ��*c" l� " L.f asra°'� — � � arc�nomtv r � � � ertraauc _ ❑ ww,auamv¢FSOn � ❑ waucwamvruero 0 �,��„�..� � Zq ❑ 1 (CUP ALL LOCATIONS fOR SIGNATURE) Approval of City Council Resolution atCached. PLANNING COMMISSION CIB COMMl7TEE CIVIL SERVICE COMMISSION Economic Develogment �� "i�€� �'� 91 gg� RECE�VED s�-e � SEP 25 �997 rs°rv� RSONAL SERVICE CANTiACTS MU Fqs fhis persoNfirm ever vro�ICeA untler 9 canhact for this departmenYt YES NO Hee th� P�Nfimr eMer heen e dlY empbyee7 . YES NO .Does fhis persoNfirm pmseas a sldll hM normallypoesessed bY anY a�M ci(y emp�oyee? YES NO Is this persaWrm a tarpeted ve�rT VES NO Iry111N11ry1s YRV6LCM IOJUC� VYI'VRI UIY111 �YYIIO� YYIICI� YYIICII� YYfICIC. YYfI)j , - _ , Approves settlement of Port Authority obligations to fhe City under a 1991 Agreemgnt selated to the financing of the St. Paul Hotel in 19$1.- SetClement involves acceptinga 41,400 sq., ft: parcel of land at the northeast corner of Kellogg Blvd. and W. Seventh Street. Land would be conveyed to HRA. (see attached memo) - aov,vyrnc�.s�arw�ovEo v Settles a contingent obligation of the Port Authority by accepting property which will produce a current•income stream from parking operations. Property also has development potential, particularly in combinatino with adjacent City and HRA land. �ISADVANTAGESIFAPPROVED None 7SADVANTAGES IF NOT APPRC Uncertainty rega OTAL AM1mUNT OF TRANSAC7 UNDNlG SOURCE IN{WCNL INFORMATON (IXPWN) !ng when the city would receive consideration under the 1991 A¢rea s N/A Cp3T/REVRlUE BUDQETED (qRCLE ONE) - VES NO AC7IYITYNUMBER !R/ � � �� AAI �� -► �.� � Interdepartmental Memorandum CITY OF SAINT PAUL September 22, 1997 TO: Pamela Wheelock FR: Steve Thompson� RE: St. Paul Hotel UDAG/Attached City Council Resolution This memo describes the background and purpose of the attached City Council Resolution accepting a parcel of land at Kellogg Boulevard and West Seventh Street from the St. Paul Port Authority as satisfaction of the Port Authority's obligations under a 1991 Agreement with the City. The 1991 Agreement related to a UDAG loan originally made by the City to the St. Paul Hotel Limited Partnership for renovation of the hotel in 1981. BACKGROUND In 1981, at the request of the City, the Port Authority financed the acquisition and renovation of the St. Paul Hotel for an entity knovm as the St. Pau1 Hotel Limited Parinership. The Port Authority issued in excess of $10 million in industrial development revenue bonds, and entered into a lease of the project, as lessor, with the Partnership as tenant. In addition to the Port Authority's fmancing, the City provided the Partnerskup with a$2.6 million loan funded from the proceeds of a Federal Urban Development Action Grant (UAAG). The City entered into a loan agreement with the Parinership dated March 31, 1981. The loan was secured by a mortgage on the Partnership's leasehold interest in the project. In February, 1986 the Partnership defaulted on its obliga6ons to the Port Authority and the City, surrendered possession of the project to the Port Authority, and did not make further payments under the lease or the City loan. At this point, security for the UDAG loan was extinguished as a result of the lease cancellation. Following its repossession of the project, the Port Authority entered into an Agreement with the City dated April 14, 1987 under which the Port agreed to provide for repayment of the UDAG, but only to the extent funds defined as "unrestricted" might become available. The Port made a $100,000 payment to the City in 1987. Thereafter, the Port experienced substantiallosses on other real estate developments and was not able to make payments to the City. In 1991, the Port Authority and the City entered into a new Agreement which provided for a 9� -��-3�- $350,000 payment to the City, which was made in September, 1991, and a schedule of payments to begin in December, 1996. The Port Authority did not have funds defined as "unrestricted" available to make the $180,000 payment scheduled for December 31, 1996, and is not likely to have unrestricted funds available in the forseeable future. PROPOSAL PED staff and the Port Authority have agreed on a proposal which wouid discharge the balance of payments contained in the 1991 Agreement. The present value of these payments, if unrestricted funds were available to make them as scheduled, is approximately $1,647,000. The Port Authoriry owns a pazcel of land of approximately 41,400 square feet at the northeast corner of Kellogg Boulevard and West Seventh Street which is adjacent to properry owned by the City of Saint Paul and the Housing and Redevelopment Authority (FIRA). The property is currently improved and operated as a parking lot, and has potentiai for development, particularly in combination with the City and HRA land. The Port Authority pazcel has substantial value to the City in the form of revenues from its operation as a parking lot and in the form of development potential in combination with the other City controlled properiy. Staff estimates that operation of the pazking lot would generate net income of approxunately $153,90Q per year. The Port Authority would agree to convey the parcel to HRA to satisfy the obligations of the 1991 Agreement. Additionally, the Port Authority would agree to include in its 1998 Development Program budget the amount of $30Q,000 for use in the relocation of the Plastics Inc. manufacturing plant to a site withiu the City of Saint Paul. The PED Credit Committee has reviewed the value of the Kellogg/West Seventh properiy and recommends approval of the proposal. RECOMMENDATION Staff recommends adoption of the attached Resolufion approving the terms of the above described settlement of the 1991 Agreement with the St. Paul Port Authority, directing stafF of the Department of Planning and Economic Development to accept conveyance of the parcel of land at Kellogg Boulevard and West Seventh Street on behalf of the Housing and Redevelopment Authority (HRA), and authorizing the appropriate officers of the City and HRA to execute the necessary documents in connection therewith. qPED l4\S YSlSFL4RED\SGIISPHSiAFF.RPT >; ;�: } t� n �.: �' ,�` � : _ � ;: _ ,.. i � ��. _ ;; :� � �: . i . . (� � : - �' - -�. L l,kli� � ,'� f q� -��. ( � i � ^ � � { i /.n'(. /? � �• f�;l: C! ' // // 1 � / ' / � � � <...�—.� ` � ' / \ � � � \ � r`-,7=L 7 ` - 1 � �_ �, `\ 1 i . i� i � i� !,� / it . \\ �\ � � � ♦ ,.1 . � /.� � .. \ .. . � i � � ' � � _ `, a .1. ^-4 ' J \ � �'♦ .r `�� `\ Ci�� l.?i�I `\ � � '.��. �. � n . � ♦ ' ✓..L � ��PP�%�"Li = g � • ?;:�%r 1 L� , � � . ti � � .�.�- �____ � , • �_� _ ___�___ .., . - ,_.__ , , • _____ _/ . . - __ ------�- --. � ,�` \ � . � ,�'�, � ;;�; . , i � •. `��=---� � - --�----- � , � '• _" u � � ,_` - _ . � � � . . , .� . � � �' � ' � . � . ,� � \ � � , . � - R . � i � f '� ., � �,�' i _ �� /� , �, l �� , �� ,� /// �.-�i_ r ,� l ! 1 -sC� �.v�nCr�, r:.r�'Y� {� -.v�-:�� Yf ,�! 2 I �` � � t� , r �� )�. � - i'�� t : ;. '� �.i �� ;:;;'-, �� `.�,J ; . � _ �. : - �:: �:J : ' :W ; : .`_L 1 • i � - � . '; � . V '� •...r � �i , .' ' � _'� _ � , i � �� _r�_ ---'�%/ _ _�) — -' � . . . . . � : . . � � �.��^��.f .� , � .. (;ti.i%1 ' G%'C,l�l � �y�� t_(G ��z��-=;: - - ` �. � ��"� ' " -� a� -»-� �- AGREEMENT [Saint Paul Hotel] THIS AGREEMENT entered into this _ day of , 1997 between the PORT AUTHORITY OF TT� CITY OF SAINT PALTL (the "Authority") and the CITY OF SAINT PAITL (the "City"). WITNESSETH: WFIEREAS, at the request of the City, in 1981 the Authority financed the acquisition and renovation of the St. Paul Hotel (the "ProjecP') for an entity known as St. Paul Hotel L'united Partnership (the "Partnership"); and W,E�REAS, in connection with said financing the Authority issued in excess of $10,000,000 in industrial development revenue bonds for the Project, and entered into a lease of the project, as lessor, with the Partnership as tenant; and WHEREAS, itt addition to the Authority's financing, the Clty provided the Partnership with a Loan in the principal amount of $2,6Q0,000, which Loan was funded by the City from the proceeds of a i3nited States Department of Urban Development Action Crrant (UDAG) No. B-80- AA-27-0018 (the "UDAG Loan"); and WI3EREAS, the City entered into a loan agreement with the Partnership dated March 30, 1981 relating to the UDAG Loan, which loan agreement was secured by a mortgage on the Partnership's leasehold interest in the Project; and WI3EREAS, as of February 28, 1986 the Partnership defaulted in its obligations to the Authority and to the City, surrendered possession of the Project to the Authority, and did not make further payments under the lease or the City loan; and VJfIEREAS, following its repossession of the Project, the Authority entered into an Agreement dated April 14, 1987 with the City under which the Authority agreed to provide for repayment, but only to the extent funds defined as"unrestricted" might become available; and WHEREAS, the Authority experienced substantial losses on other real estate developments and was not able to make the UDAG Loan payments to the City in a timely manner; and WHEREAS, the Authority and the City entered into a new Agreement dated September 19, 1991 which provided for a payment of $350,000 to be made to the City at that time, and for a schedule of payments to be made to the City beginning in December, 1996; and WI�REAS, the Authority paid the City $350,000 in September, 1991, however the Authority did not have funds defined as"unrestricted" available to make the $180,000 payment scheduled for December 31, 1996; and q�-�a�� VJIIEREAS, the Authority has been assisting the City with efforts to relocate the Piastics, Inc. Manufacturing plant to a new site within the City of Saint Paul in connection with the Science Museum of Minnesota development project; and WHEREAS, the Authority owns a parcel of land (the "Authority Parcel"), as legally described in E�ibit A, of approximately 41,400 square feet at the northeast corner of Kellogg Boulevard and West Seventh Street, which pazcel is adjacent to properry owned by the City and by the Housing and Redevelopment Authority, is currently operated as a pazking lot, and which has potenfial for redevelopment; and WHEREAS, the Authority Parcei has substantial value to the City both in the form of revenues from operation of the parking lot and in the form of development potential in combination with the City and HRA owned pazcels; and WHEREAS, the Authority and the City wish to fully discharge the obligations contained in the 1991 Agreement. NOW, THEREFORE, in consideration of the above premises the Authority and City agree as follows: The Authoriry agrees to convey marketable title and possession of the Authority Parcel to the Housing and Redevelopment Authority of the City of Saint Paul within 60 days of the date hereof. 2. The Authoriry agrees to inciude in its 1998 Development Programs budget the amount of $300,000 for use in assisting in the relocation of the Plastics, Inc. manufacturing plant to a site within the City of Saint Paul. 3. This Agreement supersedes in all respects the Agreement dated September 19, 1991, including all prior agreements in connection with the UDAG Loan, and performance by the Authority of the actions described in Pazagraphs 1. and 2. above will fully discharge the Authority's obiigations in connection with the UDAG Loan and all prior agreements related thereto. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the date and year first above written. 1'I-1}�� as to PORT AUTHORITY OF THE CITY OF SAINT PAUL � CITY OF SA1NT PAUL Its Assistant City 9�.�}� z.. EXHIBIT A [Legal Description] ._�.:. � � A° ROBERTA MEGARD CouncIImember MEMORANDUM DATE: TO: FROM: SUBJECT: 310 City Hall Saiat Paul, MN 55102 612l266-8640 Fae 612f 266-8574 Intemet roberta.meaard@stpaul.gov October 10, 1997 �� --1 a7a" ANN D. CIESLAK T.egislative Aide Ken Johnson, St. Paul Port Authority Pamela Wheelock, Planning and Economic Development Chris Hansen, Civic Centre � Councilmember Roberta Meg�—� � �. _ <�b�� Proposed settlement of 1991 Agreement related to the fmancing of the St. Paul Hotel - Council Resolution #97-1232 Please provide a written response to the following questions. Port Authoritv: 1. Why does the Port Authority wish to convey this property to the City at this time? The parcel has been generating parking revenue. Could the Port Authority have used these revenues to meet ttzeir payment obligations to the city? Are parking revenues restricted ? Civic Center 3. Explain how the Civic Center, which has operated the parking lo# and received the bulk of the revenue will compensate for the loss of revenue? Has this been budgeted in the 1998 Civic Center budget? ED: 4. The Port Authority owes the City $1.6 million. If the Council accepts this settlement, does the city have any further obligations, or repayment requirements on the $1.6 million of UDAG funds that were used? Port AuthoritvJCivic Center/PED• 5. Staff estimates the parcel will generate $153,900 per year. Please provide the CITY OF S,AINT PAUL OFFICE OF'Y'HE CITY COUNCII. S�A6 Priutetl on Recyded Pz4er q� -1'y'�'�° revenue the parcel has generated in the last three years. Also please provide a staff recommendation for these revenues for 1998. 6. Are staff awaze of any other plans for this parcel? The City Council laid this resolution over to the October 15 Council Meeting. I know my colleagues would appreciate receiving a copy of your response. Also, you would be welcome to attend the Councii meeting to answer any further questions. Thank you. CC: Council President Thune Councilmembers Attachment Council File # �0�3 �. Green Sheet # _� �. � � � �,; � `�° ` ��` �' u,:<<�N��t;=,z Presented By CITY �F' SA�[VT PAUL, Referred To � \ Committee: Date �q , � 4 WFIEREAS, at the request of the City, in 1981 the St. Paul Port Authority (the "Authority") financed the 5 acquisition and renovation of the St. Paul Hotel (the "ProjecP') for an enfity known as St. Paul Hotel Limited 6 Partnership (the "Parinership"); and 10 11 12 13 14 15 16 ]7 ]8 19 20 21 22 23 24 25 26 27 �g ?9 30 �1 2 0 WFIEREAS, in connection with said financing the Authority issued in excess of $10,000,000 in industrial development revenue bonds for the Project, and entered into a lease of the project, as lessor, with the Partnership as tenant; and WHEREAS, in addition to the Authority's fuiancing, the City provided the Partnership with a Loan in the principal amount of $2,600,000, which Loan was funded by the Ciry from the proceeds of a United States Deparhnent of Urban Development Ac6on Grant (UDAG) No. B-80-AA-27-0018 (the "UDAG Loan"); and WHEREAS, the City entered into a loan agreement with the Partnership dated March 30, 1981 relating to the UDAG Loan, which loan agreement was secured by a mortgage on the Partnerslvp's leasehold interest in the Project; and WHEREAS, as of February 28, 1986 the Partnership defaulted in its obligations to the Authority and to the Ciry, surrendered possession of the Project to the Authority, and did not make further payments under the lease ar the City loan; and WHEREAS, following its repossession of the Project, the Authority entered into an Agreement dated April 14, 1987 with the City under which the Authority agreed to provide for xepayment, but only to the extent funds defined as "unrestricted" might become available; and WI�EREAS, the Authority experienced substantial losses on other real estate developments and was not able to make the UDAG Loan payments to the City in a timely manner; and WIIEREAS, the Authority and the City entered into a new Agreement dated 5eptember 19, 1991 which provided for a payxnent of $35Q000 to be made to the City at that time, and for a schedule of payments to be made to the City beginniug in December, 199b; and WHEREAS, the Authority paid the City $350,000 in September, 1991, howevet the Authority did not have funds defined as "unrestricted" available to make the $180,000 payment scheduled fox December 31, 1996; and i WHEREAS, the Authority has been assisting the City with efforts to relocate the Plastics, Inc. Manufacturing plant to a new site within the City of Saint Paul in connection with the Science Museum of Minnesota development project; and 9'�^� IZ3�-- 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 VJHEREAS, the Authority owns a parcel of land (the "Authority Parcel"), as legally described in E�ibit A, of appro�mately 41,400 square feet at the northeast corner of Kellogg Boulevazd and West Seventh Street, which parcel is adjacent to property owned by the City and by the Housing and Redevelopment Authority, is currently operated as a pazking lot, and which has potential for redevelopment; and WF�REAS, the Authority Parcel has substantiai value to the City both in the form of revenues from operation of the parking lot and in the form of development potential in combination with the City and HRA owned parcels; and WHEREAS, the Authority and the City wish to fully discharge the obligations contained in the 1991 Agreement; and Wf�REAS, City staff and the Port Authority have negotiated a settlement of these obligations whereby the Port Authority would convey the Authority Parcel to the HRA and would agree to include in its 1998 Development Program budget the amount of $300,000 for use in the Plastics Inc. manufacturing plant to a site within the City of Saint Paul. 60 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul, Minnesota as 61 follows: 62 63 1. 64 65 66 2. 67 68 69 70 3. 71 That the terms of the above described settiement of the 1991 Agreement with the St. Paul Port Authority is hereby approved. That staff of the Department of Planning and Economic Development are authorized to accept conveyance of the parcel of land at Kellogg Boulevard and West Seventh Street on behalf of the Housing and Redevelopment Authority. That the appropriate officers of the City and HRA are authorized to execute the necessary documents in connection therewith. Requested by Department of: Pla zin �coromic Develo ment BY' �_ ��_ Adoption Certified 6y Council Secretary BY � � � c� ��oi...e._ i Approved by Mayor: D�ate — �v� SY: �� ' �'v \ / • Form Approved by City Attorney By: 1 4�.2� Approved a r or Submi s'on to Council By: �,. `t� -�s��- 9J23/97 { G REEN Pamela WheelockJSteve 6-6641 TOTAL # OF SIGI�lATURE PAGES r10 61226 � LJ oa ��*c" l� " L.f asra°'� — � � arc�nomtv r � � � ertraauc _ ❑ ww,auamv¢FSOn � ❑ waucwamvruero 0 �,��„�..� � Zq ❑ 1 (CUP ALL LOCATIONS fOR SIGNATURE) Approval of City Council Resolution atCached. PLANNING COMMISSION CIB COMMl7TEE CIVIL SERVICE COMMISSION Economic Develogment �� "i�€� �'� 91 gg� RECE�VED s�-e � SEP 25 �997 rs°rv� RSONAL SERVICE CANTiACTS MU Fqs fhis persoNfirm ever vro�ICeA untler 9 canhact for this departmenYt YES NO Hee th� P�Nfimr eMer heen e dlY empbyee7 . YES NO .Does fhis persoNfirm pmseas a sldll hM normallypoesessed bY anY a�M ci(y emp�oyee? YES NO Is this persaWrm a tarpeted ve�rT VES NO Iry111N11ry1s YRV6LCM IOJUC� VYI'VRI UIY111 �YYIIO� YYIICI� YYIICII� YYfICIC. YYfI)j , - _ , Approves settlement of Port Authority obligations to fhe City under a 1991 Agreemgnt selated to the financing of the St. Paul Hotel in 19$1.- SetClement involves acceptinga 41,400 sq., ft: parcel of land at the northeast corner of Kellogg Blvd. and W. Seventh Street. Land would be conveyed to HRA. (see attached memo) - aov,vyrnc�.s�arw�ovEo v Settles a contingent obligation of the Port Authority by accepting property which will produce a current•income stream from parking operations. Property also has development potential, particularly in combinatino with adjacent City and HRA land. �ISADVANTAGESIFAPPROVED None 7SADVANTAGES IF NOT APPRC Uncertainty rega OTAL AM1mUNT OF TRANSAC7 UNDNlG SOURCE IN{WCNL INFORMATON (IXPWN) !ng when the city would receive consideration under the 1991 A¢rea s N/A Cp3T/REVRlUE BUDQETED (qRCLE ONE) - VES NO AC7IYITYNUMBER !R/ � � �� AAI �� -► �.� � Interdepartmental Memorandum CITY OF SAINT PAUL September 22, 1997 TO: Pamela Wheelock FR: Steve Thompson� RE: St. Paul Hotel UDAG/Attached City Council Resolution This memo describes the background and purpose of the attached City Council Resolution accepting a parcel of land at Kellogg Boulevard and West Seventh Street from the St. Paul Port Authority as satisfaction of the Port Authority's obligations under a 1991 Agreement with the City. The 1991 Agreement related to a UDAG loan originally made by the City to the St. Paul Hotel Limited Partnership for renovation of the hotel in 1981. BACKGROUND In 1981, at the request of the City, the Port Authority financed the acquisition and renovation of the St. Paul Hotel for an entity knovm as the St. Pau1 Hotel Limited Parinership. The Port Authority issued in excess of $10 million in industrial development revenue bonds, and entered into a lease of the project, as lessor, with the Partnership as tenant. In addition to the Port Authority's fmancing, the City provided the Partnerskup with a$2.6 million loan funded from the proceeds of a Federal Urban Development Action Grant (UAAG). The City entered into a loan agreement with the Parinership dated March 31, 1981. The loan was secured by a mortgage on the Partnership's leasehold interest in the project. In February, 1986 the Partnership defaulted on its obliga6ons to the Port Authority and the City, surrendered possession of the project to the Port Authority, and did not make further payments under the lease or the City loan. At this point, security for the UDAG loan was extinguished as a result of the lease cancellation. Following its repossession of the project, the Port Authority entered into an Agreement with the City dated April 14, 1987 under which the Port agreed to provide for repayment of the UDAG, but only to the extent funds defined as "unrestricted" might become available. The Port made a $100,000 payment to the City in 1987. Thereafter, the Port experienced substantiallosses on other real estate developments and was not able to make payments to the City. In 1991, the Port Authority and the City entered into a new Agreement which provided for a 9� -��-3�- $350,000 payment to the City, which was made in September, 1991, and a schedule of payments to begin in December, 1996. The Port Authority did not have funds defined as "unrestricted" available to make the $180,000 payment scheduled for December 31, 1996, and is not likely to have unrestricted funds available in the forseeable future. PROPOSAL PED staff and the Port Authority have agreed on a proposal which wouid discharge the balance of payments contained in the 1991 Agreement. The present value of these payments, if unrestricted funds were available to make them as scheduled, is approximately $1,647,000. The Port Authoriry owns a pazcel of land of approximately 41,400 square feet at the northeast corner of Kellogg Boulevard and West Seventh Street which is adjacent to properry owned by the City of Saint Paul and the Housing and Redevelopment Authority (FIRA). The property is currently improved and operated as a parking lot, and has potentiai for development, particularly in combination with the City and HRA land. The Port Authority pazcel has substantial value to the City in the form of revenues from its operation as a parking lot and in the form of development potential in combination with the other City controlled properiy. Staff estimates that operation of the pazking lot would generate net income of approxunately $153,90Q per year. The Port Authority would agree to convey the parcel to HRA to satisfy the obligations of the 1991 Agreement. Additionally, the Port Authority would agree to include in its 1998 Development Program budget the amount of $30Q,000 for use in the relocation of the Plastics Inc. manufacturing plant to a site withiu the City of Saint Paul. The PED Credit Committee has reviewed the value of the Kellogg/West Seventh properiy and recommends approval of the proposal. RECOMMENDATION Staff recommends adoption of the attached Resolufion approving the terms of the above described settlement of the 1991 Agreement with the St. Paul Port Authority, directing stafF of the Department of Planning and Economic Development to accept conveyance of the parcel of land at Kellogg Boulevard and West Seventh Street on behalf of the Housing and Redevelopment Authority (HRA), and authorizing the appropriate officers of the City and HRA to execute the necessary documents in connection therewith. qPED l4\S YSlSFL4RED\SGIISPHSiAFF.RPT >; ;�: } t� n �.: �' ,�` � : _ � ;: _ ,.. i � ��. _ ;; :� � �: . i . . (� � : - �' - -�. L l,kli� � ,'� f q� -��. ( � i � ^ � � { i /.n'(. /? � �• f�;l: C! ' // // 1 � / ' / � � � <...�—.� ` � ' / \ � � � \ � r`-,7=L 7 ` - 1 � �_ �, `\ 1 i . i� i � i� !,� / it . \\ �\ � � � ♦ ,.1 . � /.� � .. \ .. . � i � � ' � � _ `, a .1. ^-4 ' J \ � �'♦ .r `�� `\ Ci�� l.?i�I `\ � � '.��. �. � n . � ♦ ' ✓..L � ��PP�%�"Li = g � • ?;:�%r 1 L� , � � . ti � � .�.�- �____ � , • �_� _ ___�___ .., . - ,_.__ , , • _____ _/ . . - __ ------�- --. � ,�` \ � . � ,�'�, � ;;�; . , i � •. `��=---� � - --�----- � , � '• _" u � � ,_` - _ . � � � . . , .� . � � �' � ' � . � . ,� � \ � � , . � - R . � i � f '� ., � �,�' i _ �� /� , �, l �� , �� ,� /// �.-�i_ r ,� l ! 1 -sC� �.v�nCr�, r:.r�'Y� {� -.v�-:�� Yf ,�! 2 I �` � � t� , r �� )�. � - i'�� t : ;. '� �.i �� ;:;;'-, �� `.�,J ; . � _ �. : - �:: �:J : ' :W ; : .`_L 1 • i � - � . '; � . V '� •...r � �i , .' ' � _'� _ � , i � �� _r�_ ---'�%/ _ _�) — -' � . . . . . � : . . � � �.��^��.f .� , � .. (;ti.i%1 ' G%'C,l�l � �y�� t_(G ��z��-=;: - - ` �. � ��"� ' " -� a� -»-� �- AGREEMENT [Saint Paul Hotel] THIS AGREEMENT entered into this _ day of , 1997 between the PORT AUTHORITY OF TT� CITY OF SAINT PALTL (the "Authority") and the CITY OF SAINT PAITL (the "City"). WITNESSETH: WFIEREAS, at the request of the City, in 1981 the Authority financed the acquisition and renovation of the St. Paul Hotel (the "ProjecP') for an entity known as St. Paul Hotel L'united Partnership (the "Partnership"); and W,E�REAS, in connection with said financing the Authority issued in excess of $10,000,000 in industrial development revenue bonds for the Project, and entered into a lease of the project, as lessor, with the Partnership as tenant; and WHEREAS, itt addition to the Authority's financing, the Clty provided the Partnership with a Loan in the principal amount of $2,6Q0,000, which Loan was funded by the City from the proceeds of a i3nited States Department of Urban Development Action Crrant (UDAG) No. B-80- AA-27-0018 (the "UDAG Loan"); and WI3EREAS, the City entered into a loan agreement with the Partnership dated March 30, 1981 relating to the UDAG Loan, which loan agreement was secured by a mortgage on the Partnership's leasehold interest in the Project; and WI3EREAS, as of February 28, 1986 the Partnership defaulted in its obligations to the Authority and to the City, surrendered possession of the Project to the Authority, and did not make further payments under the lease or the City loan; and VJfIEREAS, following its repossession of the Project, the Authority entered into an Agreement dated April 14, 1987 with the City under which the Authority agreed to provide for repayment, but only to the extent funds defined as"unrestricted" might become available; and WHEREAS, the Authority experienced substantial losses on other real estate developments and was not able to make the UDAG Loan payments to the City in a timely manner; and WHEREAS, the Authority and the City entered into a new Agreement dated September 19, 1991 which provided for a payment of $350,000 to be made to the City at that time, and for a schedule of payments to be made to the City beginning in December, 1996; and WI�REAS, the Authority paid the City $350,000 in September, 1991, however the Authority did not have funds defined as"unrestricted" available to make the $180,000 payment scheduled for December 31, 1996; and q�-�a�� VJIIEREAS, the Authority has been assisting the City with efforts to relocate the Piastics, Inc. Manufacturing plant to a new site within the City of Saint Paul in connection with the Science Museum of Minnesota development project; and WHEREAS, the Authority owns a parcel of land (the "Authority Parcel"), as legally described in E�ibit A, of approximately 41,400 square feet at the northeast corner of Kellogg Boulevard and West Seventh Street, which pazcel is adjacent to properry owned by the City and by the Housing and Redevelopment Authority, is currently operated as a pazking lot, and which has potenfial for redevelopment; and WHEREAS, the Authority Parcei has substantial value to the City both in the form of revenues from operation of the parking lot and in the form of development potential in combination with the City and HRA owned pazcels; and WHEREAS, the Authority and the City wish to fully discharge the obligations contained in the 1991 Agreement. NOW, THEREFORE, in consideration of the above premises the Authority and City agree as follows: The Authoriry agrees to convey marketable title and possession of the Authority Parcel to the Housing and Redevelopment Authority of the City of Saint Paul within 60 days of the date hereof. 2. The Authoriry agrees to inciude in its 1998 Development Programs budget the amount of $300,000 for use in assisting in the relocation of the Plastics, Inc. manufacturing plant to a site within the City of Saint Paul. 3. This Agreement supersedes in all respects the Agreement dated September 19, 1991, including all prior agreements in connection with the UDAG Loan, and performance by the Authority of the actions described in Pazagraphs 1. and 2. above will fully discharge the Authority's obiigations in connection with the UDAG Loan and all prior agreements related thereto. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the date and year first above written. 1'I-1}�� as to PORT AUTHORITY OF THE CITY OF SAINT PAUL � CITY OF SA1NT PAUL Its Assistant City 9�.�}� z.. EXHIBIT A [Legal Description] ._�.:. � � A° ROBERTA MEGARD CouncIImember MEMORANDUM DATE: TO: FROM: SUBJECT: 310 City Hall Saiat Paul, MN 55102 612l266-8640 Fae 612f 266-8574 Intemet roberta.meaard@stpaul.gov October 10, 1997 �� --1 a7a" ANN D. CIESLAK T.egislative Aide Ken Johnson, St. Paul Port Authority Pamela Wheelock, Planning and Economic Development Chris Hansen, Civic Centre � Councilmember Roberta Meg�—� � �. _ <�b�� Proposed settlement of 1991 Agreement related to the fmancing of the St. Paul Hotel - Council Resolution #97-1232 Please provide a written response to the following questions. Port Authoritv: 1. Why does the Port Authority wish to convey this property to the City at this time? The parcel has been generating parking revenue. Could the Port Authority have used these revenues to meet ttzeir payment obligations to the city? Are parking revenues restricted ? Civic Center 3. Explain how the Civic Center, which has operated the parking lo# and received the bulk of the revenue will compensate for the loss of revenue? Has this been budgeted in the 1998 Civic Center budget? ED: 4. The Port Authority owes the City $1.6 million. If the Council accepts this settlement, does the city have any further obligations, or repayment requirements on the $1.6 million of UDAG funds that were used? Port AuthoritvJCivic Center/PED• 5. Staff estimates the parcel will generate $153,900 per year. Please provide the CITY OF S,AINT PAUL OFFICE OF'Y'HE CITY COUNCII. S�A6 Priutetl on Recyded Pz4er q� -1'y'�'�° revenue the parcel has generated in the last three years. Also please provide a staff recommendation for these revenues for 1998. 6. Are staff awaze of any other plans for this parcel? The City Council laid this resolution over to the October 15 Council Meeting. I know my colleagues would appreciate receiving a copy of your response. Also, you would be welcome to attend the Councii meeting to answer any further questions. Thank you. CC: Council President Thune Councilmembers Attachment