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98-245Council File # l Q "' d. "t 5 ORIGINAL Presented By Referred To Green 5heet # �� RESOL TI �IVT , MiNNESOTA �� Committee: Date 3 WFIEREAS, in June, 1996 the City Council appropriated $382,800 to the Housing and 4 Redevelopment Authority (HRA) Vacant Building Program from the Cultural STAR Program for 5 acquisition of the Jemne Building located at 305 St. Peter Street; and 7 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 ?5 ?6 �� WHEREAS, I�RA. acquired the buildang and, in September, 1997, advertised the building for sale for private redevelopment; and WFIEREAS, a proposal was received from Wold Architects for purchase and renovation of the Jemne Building for use as its corporate headquarters at an estimated total project cost of approximately $1.5 million on the condition that a$250,000 grant to be applied against renovation costs were available from the Cultural STAR Program; and WHEREAS, on December 30, 1997, the I3.RA Boazd granted Wold Architects tentative developer stafus for a 60 day period in which to apply to the Cultural STAR Program for grant funds; and WHEREAS, the Cultural STAR Board reviewed the proposal and recommended that a$250,000 grant be made for the project from the proceeds to be realized from the sale of the building, with a condition that ali remaining sale proceeds be returned to the Cultural STAR Program; and WHEREAS, the Director of the Department of Pianning and Economic Development recommends the compromise that the Cultural STAR grant be $181,25Q from the $382,800 to be returned to the Program from proceeds of the sale of the building, and the balance of the $250,000 gap be met through a$68,750 reduotion in HRA's sale price of the building; and WHEREAS, the Mayor, pursuant to Section I OA71 of the Charter of the City of Saint Paul, does certify that there are available £or appropriation total revenues in excess of those estimated in the 1998 budget; and WHEREAS, the Mayor recommends that the following additions be made to the 1998 budget. NOW, THEREFORE, BE IT 12ESOLVED by the Council of the City of Saint Paul, that the 1998 budget as heretofore adopted and amended by this Council, be hereby fiu amended as follows: 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 ORIGiNAL FINAI�CING PLAN P7-930-90309-6922-77077 Sharein Sale Proceeds of Jemne Building P7-93�-4Q309-9831-77077 Contribution to Fund Balance SPENDING PLAN P7-930-90310-0547-77077 Cultural Capital Investment-Grants- Jemne Building °t�-ays Cunent Change Budget -0- 382,8�0 -0- (201,550) -0- 181,250 -0- 181,250 -0- 181,250 Amended Budget 382,800 (201,550� 181,250 181,250 181,250 FINALLY RESOLVED, by the City Council, that the disbursement of the above Cultural Cnant in the amount of $181,250 is subject to the receipt by the City of the share in sale proceeds of the .Temne Building in the amount of $382,800. by Department ? O O Adopted by Council: Date ._�� Adoption Certified by Council Secretary By: Approved by yo : Date 1 � Y By: Planni�yg�&�E ld"" pment By: ( ) �� Director �,� � Form Approved by Cit Attorney BY: �/ S� l7� , � �'-Q`�/ uncil . . ♦ + PED Steve Thompson 6-6641 � BE ON COUNCIL AGENDA BY (DA'f� DATEdRWTED 3-10-98 �� ROUi1NG �Tf.�� TOTAL # OF SIGNATURE PAGES i GREEN SHEET � I� No 64202 an�cana� z «n.,.a� ti 3 � �Q «n«F.K _ 30 � � 1 / L / - ❑ �,,.,�,,.�� wvortloRnsmsrt� /LJ� ❑ - TT - � � (CLIP ALL LOCATIONS FOR SIGNATURE) Approval of City Council Resolution appropriating $181,250 from the Cultural STAR Program for a grant to Wold Architects for renovaYion of Jemne Suilding at 305 St. Peter St following purchase of building from HRA. Funds to make this grant will come from proceeds of sale. PLANNWG COMMISSION CIB CAMMITfEE CIVIL SERVICE CAMMISSION RSONAL SERViCE CONTRAGfS MUSTANSWER 7HE FOLLOWING QUESTIONS: Has this person/fiIm ever wrorketl under a conVact fw fhis tlepartment7 � YES NO Has this peisoNfirm ever been a aty empbyee'T YES NO Dces Mis personlBrm possess a s�v71 not normatlypossessetl by any current city employee7 YES NO is th�s persoNfirm a tarpeted vendo/1 YES NO Wold Architects was designated tentative developer for purchase of Jemne Building by HRA Board on 12j30/97. Wold applied for Cultural STAR grant of $250,000 to assist with renovation. Cultural STAR Program will receive $382,800 from proceeds of sale. PED Director recommends $250,000 gap be met with $181,250 STAR grant and $68,750 reduction in purchase price to Wold. HRA will also consider final approval of sale on 3/25/98. Jemne Building wi11 be retured to service and will go on tax ro11s. Wold expects employment incre ��(� ��ial�� which will serve as its corporate headquarters. i ��. s r � ��,. APPROVED MAR 2 199� None �a t� s:Y.. .. - - fi n �. - �,�",,� "` =��e � � > t.; �, c, Jemne Building will be sold and must be maintained by HRA. fOTALAMOUNTOFTRAN5ACT10Ni 181,250 B��y�� ndmej � Np 'UNDINGSOURCE STAR - Fund 930 A�rn�Ty�nxs�t P7-930-90310-0547-77077 1 �Ivl �NNNGAL INFORMATON (E7W WNj Grant will only be made if Jemne Building is sold by HRA and Cultural STt$R Program receives $382,800 from proceeds of sale, � ��S��uE �r�r�a^d ;, � �._ . s 4�� HOUSING AND REDE VfiLOPMENT AUTHOl21TY �� CITY OF SAINT' PAUL Norm Coleman, Mayor March 6, 1998 Lois West Chair, Cuitural STAR Board 1400 City Hail Annex Saint Paul, MN 55102 PamelaWheelocl�ExecutiveDireclo� /Ky�� " 25 Wut Fourth Street Telephone: 612-266fi655 SaintPauT,MN55102 Facsimite:6J2-228-326! RE: Cultural Staz Funding for Renovation of Jemne Building by Wold Architects Dear Lois: The purpose of this letter is to ask your concurrence with my recommendation for the funding of the grant request from Wold Architects for the proposed purchase and renovation of the Jemne Buiiding. I wouid also like to speak to the concerns you raised in your February 20, 19981etter to the City Council about the Cultural STAR ailocation process and the fact that the Wold request was referred to the Cultutal STAR Board outside the annual funding cycle. First, PEA and the Cultural STAR Board agree that Wold Architects wouid be excellent custodians of the 3emne Buiiding and would bring financial stability to maintain operations at the building over the long term. We also share the conclusion that a funding gap does e�st for the project as a result of the adaptation of the building to a studio(office use. Therefore, I support your recommendation that the City Council approve a grant of $25Q,000 far the Woid project. My concern is that HRA's economic development programs are loan pragrams and not grant programs. The effect of the condition of approval described in your letter is that HRA's econom3c development program would be funding $145,000 of the grant (its entire investrnent in the property), and the Cultural STAR Program, which does permit grants, woutd be funding only $105,000 of the $250,400 grant. Admittedly, the funding of the acquisition of the Jemne Building was unusuai, with the City Council appropriating Cultural STAR funds to the HRA for purchase of the building. In light of those circumstances, and in the spirit of compromise, I would ask your concurrence with the following recommendation for meeting the $250,000 request: Of the $527,800 in public capital investment in the building, $382,800 (72S%) came from the Cultural STAR Program and $145,000 (27.5°fo) came from HRA. I recommend using these proportions for meeting the $250,000 gap as follows: q�-a�� (i) 72.5% of the gap is met with a Cultural STAR grant of $181,250 to be applied to renovation costs, with the balance of $201,550 of the original investment returned for allocation in Cycle 4 of the Cultural STAR Program; and (2) 27.5% of the gap is met with a$b8,75Q reduction in fIRA's sale price for the building to $459,078. The $250,000 gap for the Wold project is met with the combination of the reduced Cultural STAR grant and the sale price reduction. With respect to the issue of the request that your Board consider STAR funding for the Wold project outside the regulaz funding cycle, I can appreciate your concern. I do not consider that this project has the scale and complexity of the Science Museum of Mnnesota or Block 39 projects which I believe aze special cases. However, I know you can also appreciate my dilemma. We advertised the sale of the Jemne Building in 5eptember, 1997 with a fixed price of $527,828 in order that the Culturai STAR and HRA investments in the building wouid be recovered. The Wold proposal was not only the best offer we received in terms of financial capacity and readiness to proceed, it was also the lowest in terms of requested public subsidy (the other proposal received was cantingent on a$1 miliion grant). Unless the building is sold by HRA, the Cultural STAR funds currently invested are not available to be allocated to the Woid project or any other pro}ect. Therefore, it was my judgement that the request should be reviewed and acted upon as it was received. This would not have been my conclusion but for this relationship. With respect to your concerns about the allocation process for the Science Museum of Minnesota and Lawson SofiwaretBlock 39 projects, I look forwazd to a continued dialogue with you and the City's elected officials regarding how we best bring scarce public resources to beaz on major housing, economic development and community development projects where the combination of scale and the number of layered financing sources involved requires an integrated approach to financing structure. I know we can all benefit from this dialogue as we work together to achieve our common objectives far the improvement of the City. I look foruard to hearing from you and hope that you will support the above recommendation for a combined Cultural STAR and HRA package to assist the Jemne Buiiding project by Wold Architects. Thank you for your many efforts. �� xecuhve llirecYor cc: Mayor Coleman February 20, 1998 Council President Bostrom and members of the Saint Paul City Council Third Fiooi, City Hall Saust Paul, Minnesota 55102 FLE: Jemne Building and Wold Architects' grant request Dear Council President Bostrom and members of the Councii: S -�� - q�• a�.s � SAIMPAUI STAR PROGRAM �1 As requested on December 30, 1997, by the Housing and Redevelopment Authority, the Cultural STAR Board has reviewed �Vold Architects' request for a$250,000 grant toward the cost of purchasing and renovating the Jemne building. In the course of our deliberations several positive attributes for this project emerged, including: GVold Architects' ability to rehabilitate and maintain the buiiding in a manner befitting its historic nature; and the fact that the majority of funding requested will be used for permanent improvements to the building, including mechanical and exterior improvements. However, the Cultural STAR Board has two basic reservations about this proposal. First, the notion of making a grant of this size directly to a private company is troubling. City staff did discuss the possibility of a$380,000 loan in lieu of the proposed g1 However, Wold Architects' concluded that a reduced interest loan could not substitute for the grant requested, and that the acquisitionlrehabilitation would not be practical under those terms. Our second concem is fundamental to the very process by which this request comes to us. The Boazd continues fo be troubled about the decisions that we have been asked to make outside the publicly- announced Cultural STAR process. We would have greatly prefened that the Wold Architects' proposal be taken up as part of the.Cycle 4 Cultural STAR process due to commence in March. Nonetheless, in the interest of securing the future of this important downtown azchitectuzal resource, tl�e $oard'has voted to recommend a grant of $250.,Od0. The $oard does so, provided that the net of $277,828 realized by the sale to Wold Architects (the difference between the sale price to Wold -$577,828 - and the grant amount) be returned to the Cultural STAR program as partial reimbursement far the CulYural STAR loan fo the HRA to purchase the building. The Cultural STAR Board continues to be dedicated to the mission and goals of the cultural STAR program. However, we request that a policy discussion be convened regazding the use of Cultural STAR funds and the responsibilities of the City Council, Board and City staf£ We prefer that representatives from both the City Council and the Mayor's office be invited. � We stand at the ready to work with you to develop a common understanding of the future process of committino Cultural STAR funds. Respectfuily, Ci%%�� Lois West, Chair, Saint Paul Cultural STAR Board c.c. Mayor Coleman y . i a�-a�s � SAINTPAVI STAR PROGRAM �1 Grant to Wold Architects for Acquisition of the 3emne Building -(2/10/98) WHEREAS, the Saint Paul City Council, by Resolution 96-6/26-3, dated June 26,1996, appropriated $380,800 from the Culrival STAR Fund for the Housing and Redevelopment Authority's acquisition of the Jemne Building; and WHEREAS, the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, on December 30, 1997, granted Wo1d Architects 60 day tentative developer status as a potential owner-occupant of the Jemne Building; and WHEREAS, the Saint Paul City Council directed Wold Architects to apply for a$250,000 grant to assist in the acquisition and rehabilitation of the Jemne Building; and WHEREAS, the Wold Architects completed an application for such a grant and made presentation to the Culturai STAR Board; and WHEREAS, the Cuitural STAR Board did consider the $250,000 grant proposal; NOW, THEREFORE, B� IT RESOLVED, the Saint Paul Cultural STAR BQard recommends that Wold Architects be awazded a$250,000 grant far the acquisition and rehabilitation of the Jemne Buitding, provided that atl proceeds of the sale upon the Jemne Buiiding be applied towazd payment af the afarementioned $380,800 Cultural STAR Board loan to the Housi�g and Redevelopment Authority, resulting in a net of $277,828 to be used for loans and grants for Cycle 4 of the Cultural STAR program; and BE IT FURTHER RE50LVED, the Cultural STAR Board expresses its concern about the integrity of the established Culturai STAR allocatlon process, recounting the processes empioyed far the Science Museum of Minnesota, Lawson Software and now the Jemne Building projects. Council File # l Q "' d. "t 5 ORIGINAL Presented By Referred To Green 5heet # �� RESOL TI �IVT , MiNNESOTA �� Committee: Date 3 WFIEREAS, in June, 1996 the City Council appropriated $382,800 to the Housing and 4 Redevelopment Authority (HRA) Vacant Building Program from the Cultural STAR Program for 5 acquisition of the Jemne Building located at 305 St. Peter Street; and 7 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 ?5 ?6 �� WHEREAS, I�RA. acquired the buildang and, in September, 1997, advertised the building for sale for private redevelopment; and WFIEREAS, a proposal was received from Wold Architects for purchase and renovation of the Jemne Building for use as its corporate headquarters at an estimated total project cost of approximately $1.5 million on the condition that a$250,000 grant to be applied against renovation costs were available from the Cultural STAR Program; and WHEREAS, on December 30, 1997, the I3.RA Boazd granted Wold Architects tentative developer stafus for a 60 day period in which to apply to the Cultural STAR Program for grant funds; and WHEREAS, the Cultural STAR Board reviewed the proposal and recommended that a$250,000 grant be made for the project from the proceeds to be realized from the sale of the building, with a condition that ali remaining sale proceeds be returned to the Cultural STAR Program; and WHEREAS, the Director of the Department of Pianning and Economic Development recommends the compromise that the Cultural STAR grant be $181,25Q from the $382,800 to be returned to the Program from proceeds of the sale of the building, and the balance of the $250,000 gap be met through a$68,750 reduotion in HRA's sale price of the building; and WHEREAS, the Mayor, pursuant to Section I OA71 of the Charter of the City of Saint Paul, does certify that there are available £or appropriation total revenues in excess of those estimated in the 1998 budget; and WHEREAS, the Mayor recommends that the following additions be made to the 1998 budget. NOW, THEREFORE, BE IT 12ESOLVED by the Council of the City of Saint Paul, that the 1998 budget as heretofore adopted and amended by this Council, be hereby fiu amended as follows: 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 ORIGiNAL FINAI�CING PLAN P7-930-90309-6922-77077 Sharein Sale Proceeds of Jemne Building P7-93�-4Q309-9831-77077 Contribution to Fund Balance SPENDING PLAN P7-930-90310-0547-77077 Cultural Capital Investment-Grants- Jemne Building °t�-ays Cunent Change Budget -0- 382,8�0 -0- (201,550) -0- 181,250 -0- 181,250 -0- 181,250 Amended Budget 382,800 (201,550� 181,250 181,250 181,250 FINALLY RESOLVED, by the City Council, that the disbursement of the above Cultural Cnant in the amount of $181,250 is subject to the receipt by the City of the share in sale proceeds of the .Temne Building in the amount of $382,800. by Department ? O O Adopted by Council: Date ._�� Adoption Certified by Council Secretary By: Approved by yo : Date 1 � Y By: Planni�yg�&�E ld"" pment By: ( ) �� Director �,� � Form Approved by Cit Attorney BY: �/ S� l7� , � �'-Q`�/ uncil . . ♦ + PED Steve Thompson 6-6641 � BE ON COUNCIL AGENDA BY (DA'f� DATEdRWTED 3-10-98 �� ROUi1NG �Tf.�� TOTAL # OF SIGNATURE PAGES i GREEN SHEET � I� No 64202 an�cana� z «n.,.a� ti 3 � �Q «n«F.K _ 30 � � 1 / L / - ❑ �,,.,�,,.�� wvortloRnsmsrt� /LJ� ❑ - TT - � � (CLIP ALL LOCATIONS FOR SIGNATURE) Approval of City Council Resolution appropriating $181,250 from the Cultural STAR Program for a grant to Wold Architects for renovaYion of Jemne Suilding at 305 St. Peter St following purchase of building from HRA. Funds to make this grant will come from proceeds of sale. PLANNWG COMMISSION CIB CAMMITfEE CIVIL SERVICE CAMMISSION RSONAL SERViCE CONTRAGfS MUSTANSWER 7HE FOLLOWING QUESTIONS: Has this person/fiIm ever wrorketl under a conVact fw fhis tlepartment7 � YES NO Has this peisoNfirm ever been a aty empbyee'T YES NO Dces Mis personlBrm possess a s�v71 not normatlypossessetl by any current city employee7 YES NO is th�s persoNfirm a tarpeted vendo/1 YES NO Wold Architects was designated tentative developer for purchase of Jemne Building by HRA Board on 12j30/97. Wold applied for Cultural STAR grant of $250,000 to assist with renovation. Cultural STAR Program will receive $382,800 from proceeds of sale. PED Director recommends $250,000 gap be met with $181,250 STAR grant and $68,750 reduction in purchase price to Wold. HRA will also consider final approval of sale on 3/25/98. Jemne Building wi11 be retured to service and will go on tax ro11s. Wold expects employment incre ��(� ��ial�� which will serve as its corporate headquarters. i ��. s r � ��,. APPROVED MAR 2 199� None �a t� s:Y.. .. - - fi n �. - �,�",,� "` =��e � � > t.; �, c, Jemne Building will be sold and must be maintained by HRA. fOTALAMOUNTOFTRAN5ACT10Ni 181,250 B��y�� ndmej � Np 'UNDINGSOURCE STAR - Fund 930 A�rn�Ty�nxs�t P7-930-90310-0547-77077 1 �Ivl �NNNGAL INFORMATON (E7W WNj Grant will only be made if Jemne Building is sold by HRA and Cultural STt$R Program receives $382,800 from proceeds of sale, � ��S��uE �r�r�a^d ;, � �._ . s 4�� HOUSING AND REDE VfiLOPMENT AUTHOl21TY �� CITY OF SAINT' PAUL Norm Coleman, Mayor March 6, 1998 Lois West Chair, Cuitural STAR Board 1400 City Hail Annex Saint Paul, MN 55102 PamelaWheelocl�ExecutiveDireclo� /Ky�� " 25 Wut Fourth Street Telephone: 612-266fi655 SaintPauT,MN55102 Facsimite:6J2-228-326! RE: Cultural Staz Funding for Renovation of Jemne Building by Wold Architects Dear Lois: The purpose of this letter is to ask your concurrence with my recommendation for the funding of the grant request from Wold Architects for the proposed purchase and renovation of the Jemne Buiiding. I wouid also like to speak to the concerns you raised in your February 20, 19981etter to the City Council about the Cultural STAR ailocation process and the fact that the Wold request was referred to the Cultutal STAR Board outside the annual funding cycle. First, PEA and the Cultural STAR Board agree that Wold Architects wouid be excellent custodians of the 3emne Buiiding and would bring financial stability to maintain operations at the building over the long term. We also share the conclusion that a funding gap does e�st for the project as a result of the adaptation of the building to a studio(office use. Therefore, I support your recommendation that the City Council approve a grant of $25Q,000 far the Woid project. My concern is that HRA's economic development programs are loan pragrams and not grant programs. The effect of the condition of approval described in your letter is that HRA's econom3c development program would be funding $145,000 of the grant (its entire investrnent in the property), and the Cultural STAR Program, which does permit grants, woutd be funding only $105,000 of the $250,400 grant. Admittedly, the funding of the acquisition of the Jemne Building was unusuai, with the City Council appropriating Cultural STAR funds to the HRA for purchase of the building. In light of those circumstances, and in the spirit of compromise, I would ask your concurrence with the following recommendation for meeting the $250,000 request: Of the $527,800 in public capital investment in the building, $382,800 (72S%) came from the Cultural STAR Program and $145,000 (27.5°fo) came from HRA. I recommend using these proportions for meeting the $250,000 gap as follows: q�-a�� (i) 72.5% of the gap is met with a Cultural STAR grant of $181,250 to be applied to renovation costs, with the balance of $201,550 of the original investment returned for allocation in Cycle 4 of the Cultural STAR Program; and (2) 27.5% of the gap is met with a$b8,75Q reduction in fIRA's sale price for the building to $459,078. The $250,000 gap for the Wold project is met with the combination of the reduced Cultural STAR grant and the sale price reduction. With respect to the issue of the request that your Board consider STAR funding for the Wold project outside the regulaz funding cycle, I can appreciate your concern. I do not consider that this project has the scale and complexity of the Science Museum of Mnnesota or Block 39 projects which I believe aze special cases. However, I know you can also appreciate my dilemma. We advertised the sale of the Jemne Building in 5eptember, 1997 with a fixed price of $527,828 in order that the Culturai STAR and HRA investments in the building wouid be recovered. The Wold proposal was not only the best offer we received in terms of financial capacity and readiness to proceed, it was also the lowest in terms of requested public subsidy (the other proposal received was cantingent on a$1 miliion grant). Unless the building is sold by HRA, the Cultural STAR funds currently invested are not available to be allocated to the Woid project or any other pro}ect. Therefore, it was my judgement that the request should be reviewed and acted upon as it was received. This would not have been my conclusion but for this relationship. With respect to your concerns about the allocation process for the Science Museum of Minnesota and Lawson SofiwaretBlock 39 projects, I look forwazd to a continued dialogue with you and the City's elected officials regarding how we best bring scarce public resources to beaz on major housing, economic development and community development projects where the combination of scale and the number of layered financing sources involved requires an integrated approach to financing structure. I know we can all benefit from this dialogue as we work together to achieve our common objectives far the improvement of the City. I look foruard to hearing from you and hope that you will support the above recommendation for a combined Cultural STAR and HRA package to assist the Jemne Buiiding project by Wold Architects. Thank you for your many efforts. �� xecuhve llirecYor cc: Mayor Coleman February 20, 1998 Council President Bostrom and members of the Saint Paul City Council Third Fiooi, City Hall Saust Paul, Minnesota 55102 FLE: Jemne Building and Wold Architects' grant request Dear Council President Bostrom and members of the Councii: S -�� - q�• a�.s � SAIMPAUI STAR PROGRAM �1 As requested on December 30, 1997, by the Housing and Redevelopment Authority, the Cultural STAR Board has reviewed �Vold Architects' request for a$250,000 grant toward the cost of purchasing and renovating the Jemne building. In the course of our deliberations several positive attributes for this project emerged, including: GVold Architects' ability to rehabilitate and maintain the buiiding in a manner befitting its historic nature; and the fact that the majority of funding requested will be used for permanent improvements to the building, including mechanical and exterior improvements. However, the Cultural STAR Board has two basic reservations about this proposal. First, the notion of making a grant of this size directly to a private company is troubling. City staff did discuss the possibility of a$380,000 loan in lieu of the proposed g1 However, Wold Architects' concluded that a reduced interest loan could not substitute for the grant requested, and that the acquisitionlrehabilitation would not be practical under those terms. Our second concem is fundamental to the very process by which this request comes to us. The Boazd continues fo be troubled about the decisions that we have been asked to make outside the publicly- announced Cultural STAR process. We would have greatly prefened that the Wold Architects' proposal be taken up as part of the.Cycle 4 Cultural STAR process due to commence in March. Nonetheless, in the interest of securing the future of this important downtown azchitectuzal resource, tl�e $oard'has voted to recommend a grant of $250.,Od0. The $oard does so, provided that the net of $277,828 realized by the sale to Wold Architects (the difference between the sale price to Wold -$577,828 - and the grant amount) be returned to the Cultural STAR program as partial reimbursement far the CulYural STAR loan fo the HRA to purchase the building. The Cultural STAR Board continues to be dedicated to the mission and goals of the cultural STAR program. However, we request that a policy discussion be convened regazding the use of Cultural STAR funds and the responsibilities of the City Council, Board and City staf£ We prefer that representatives from both the City Council and the Mayor's office be invited. � We stand at the ready to work with you to develop a common understanding of the future process of committino Cultural STAR funds. Respectfuily, Ci%%�� Lois West, Chair, Saint Paul Cultural STAR Board c.c. Mayor Coleman y . i a�-a�s � SAINTPAVI STAR PROGRAM �1 Grant to Wold Architects for Acquisition of the 3emne Building -(2/10/98) WHEREAS, the Saint Paul City Council, by Resolution 96-6/26-3, dated June 26,1996, appropriated $380,800 from the Culrival STAR Fund for the Housing and Redevelopment Authority's acquisition of the Jemne Building; and WHEREAS, the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, on December 30, 1997, granted Wo1d Architects 60 day tentative developer status as a potential owner-occupant of the Jemne Building; and WHEREAS, the Saint Paul City Council directed Wold Architects to apply for a$250,000 grant to assist in the acquisition and rehabilitation of the Jemne Building; and WHEREAS, the Wold Architects completed an application for such a grant and made presentation to the Culturai STAR Board; and WHEREAS, the Cuitural STAR Board did consider the $250,000 grant proposal; NOW, THEREFORE, B� IT RESOLVED, the Saint Paul Cultural STAR BQard recommends that Wold Architects be awazded a$250,000 grant far the acquisition and rehabilitation of the Jemne Buitding, provided that atl proceeds of the sale upon the Jemne Buiiding be applied towazd payment af the afarementioned $380,800 Cultural STAR Board loan to the Housi�g and Redevelopment Authority, resulting in a net of $277,828 to be used for loans and grants for Cycle 4 of the Cultural STAR program; and BE IT FURTHER RE50LVED, the Cultural STAR Board expresses its concern about the integrity of the established Culturai STAR allocatlon process, recounting the processes empioyed far the Science Museum of Minnesota, Lawson Software and now the Jemne Building projects. Council File # l Q "' d. "t 5 ORIGINAL Presented By Referred To Green 5heet # �� RESOL TI �IVT , MiNNESOTA �� Committee: Date 3 WFIEREAS, in June, 1996 the City Council appropriated $382,800 to the Housing and 4 Redevelopment Authority (HRA) Vacant Building Program from the Cultural STAR Program for 5 acquisition of the Jemne Building located at 305 St. Peter Street; and 7 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 ?5 ?6 �� WHEREAS, I�RA. acquired the buildang and, in September, 1997, advertised the building for sale for private redevelopment; and WFIEREAS, a proposal was received from Wold Architects for purchase and renovation of the Jemne Building for use as its corporate headquarters at an estimated total project cost of approximately $1.5 million on the condition that a$250,000 grant to be applied against renovation costs were available from the Cultural STAR Program; and WHEREAS, on December 30, 1997, the I3.RA Boazd granted Wold Architects tentative developer stafus for a 60 day period in which to apply to the Cultural STAR Program for grant funds; and WHEREAS, the Cultural STAR Board reviewed the proposal and recommended that a$250,000 grant be made for the project from the proceeds to be realized from the sale of the building, with a condition that ali remaining sale proceeds be returned to the Cultural STAR Program; and WHEREAS, the Director of the Department of Pianning and Economic Development recommends the compromise that the Cultural STAR grant be $181,25Q from the $382,800 to be returned to the Program from proceeds of the sale of the building, and the balance of the $250,000 gap be met through a$68,750 reduotion in HRA's sale price of the building; and WHEREAS, the Mayor, pursuant to Section I OA71 of the Charter of the City of Saint Paul, does certify that there are available £or appropriation total revenues in excess of those estimated in the 1998 budget; and WHEREAS, the Mayor recommends that the following additions be made to the 1998 budget. NOW, THEREFORE, BE IT 12ESOLVED by the Council of the City of Saint Paul, that the 1998 budget as heretofore adopted and amended by this Council, be hereby fiu amended as follows: 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 ORIGiNAL FINAI�CING PLAN P7-930-90309-6922-77077 Sharein Sale Proceeds of Jemne Building P7-93�-4Q309-9831-77077 Contribution to Fund Balance SPENDING PLAN P7-930-90310-0547-77077 Cultural Capital Investment-Grants- Jemne Building °t�-ays Cunent Change Budget -0- 382,8�0 -0- (201,550) -0- 181,250 -0- 181,250 -0- 181,250 Amended Budget 382,800 (201,550� 181,250 181,250 181,250 FINALLY RESOLVED, by the City Council, that the disbursement of the above Cultural Cnant in the amount of $181,250 is subject to the receipt by the City of the share in sale proceeds of the .Temne Building in the amount of $382,800. by Department ? O O Adopted by Council: Date ._�� Adoption Certified by Council Secretary By: Approved by yo : Date 1 � Y By: Planni�yg�&�E ld"" pment By: ( ) �� Director �,� � Form Approved by Cit Attorney BY: �/ S� l7� , � �'-Q`�/ uncil . . ♦ + PED Steve Thompson 6-6641 � BE ON COUNCIL AGENDA BY (DA'f� DATEdRWTED 3-10-98 �� ROUi1NG �Tf.�� TOTAL # OF SIGNATURE PAGES i GREEN SHEET � I� No 64202 an�cana� z «n.,.a� ti 3 � �Q «n«F.K _ 30 � � 1 / L / - ❑ �,,.,�,,.�� wvortloRnsmsrt� /LJ� ❑ - TT - � � (CLIP ALL LOCATIONS FOR SIGNATURE) Approval of City Council Resolution appropriating $181,250 from the Cultural STAR Program for a grant to Wold Architects for renovaYion of Jemne Suilding at 305 St. Peter St following purchase of building from HRA. Funds to make this grant will come from proceeds of sale. PLANNWG COMMISSION CIB CAMMITfEE CIVIL SERVICE CAMMISSION RSONAL SERViCE CONTRAGfS MUSTANSWER 7HE FOLLOWING QUESTIONS: Has this person/fiIm ever wrorketl under a conVact fw fhis tlepartment7 � YES NO Has this peisoNfirm ever been a aty empbyee'T YES NO Dces Mis personlBrm possess a s�v71 not normatlypossessetl by any current city employee7 YES NO is th�s persoNfirm a tarpeted vendo/1 YES NO Wold Architects was designated tentative developer for purchase of Jemne Building by HRA Board on 12j30/97. Wold applied for Cultural STAR grant of $250,000 to assist with renovation. Cultural STAR Program will receive $382,800 from proceeds of sale. PED Director recommends $250,000 gap be met with $181,250 STAR grant and $68,750 reduction in purchase price to Wold. HRA will also consider final approval of sale on 3/25/98. Jemne Building wi11 be retured to service and will go on tax ro11s. Wold expects employment incre ��(� ��ial�� which will serve as its corporate headquarters. i ��. s r � ��,. APPROVED MAR 2 199� None �a t� s:Y.. .. - - fi n �. - �,�",,� "` =��e � � > t.; �, c, Jemne Building will be sold and must be maintained by HRA. fOTALAMOUNTOFTRAN5ACT10Ni 181,250 B��y�� ndmej � Np 'UNDINGSOURCE STAR - Fund 930 A�rn�Ty�nxs�t P7-930-90310-0547-77077 1 �Ivl �NNNGAL INFORMATON (E7W WNj Grant will only be made if Jemne Building is sold by HRA and Cultural STt$R Program receives $382,800 from proceeds of sale, � ��S��uE �r�r�a^d ;, � �._ . s 4�� HOUSING AND REDE VfiLOPMENT AUTHOl21TY �� CITY OF SAINT' PAUL Norm Coleman, Mayor March 6, 1998 Lois West Chair, Cuitural STAR Board 1400 City Hail Annex Saint Paul, MN 55102 PamelaWheelocl�ExecutiveDireclo� /Ky�� " 25 Wut Fourth Street Telephone: 612-266fi655 SaintPauT,MN55102 Facsimite:6J2-228-326! RE: Cultural Staz Funding for Renovation of Jemne Building by Wold Architects Dear Lois: The purpose of this letter is to ask your concurrence with my recommendation for the funding of the grant request from Wold Architects for the proposed purchase and renovation of the Jemne Buiiding. I wouid also like to speak to the concerns you raised in your February 20, 19981etter to the City Council about the Cultural STAR ailocation process and the fact that the Wold request was referred to the Cultutal STAR Board outside the annual funding cycle. First, PEA and the Cultural STAR Board agree that Wold Architects wouid be excellent custodians of the 3emne Buiiding and would bring financial stability to maintain operations at the building over the long term. We also share the conclusion that a funding gap does e�st for the project as a result of the adaptation of the building to a studio(office use. Therefore, I support your recommendation that the City Council approve a grant of $25Q,000 far the Woid project. My concern is that HRA's economic development programs are loan pragrams and not grant programs. The effect of the condition of approval described in your letter is that HRA's econom3c development program would be funding $145,000 of the grant (its entire investrnent in the property), and the Cultural STAR Program, which does permit grants, woutd be funding only $105,000 of the $250,400 grant. Admittedly, the funding of the acquisition of the Jemne Building was unusuai, with the City Council appropriating Cultural STAR funds to the HRA for purchase of the building. In light of those circumstances, and in the spirit of compromise, I would ask your concurrence with the following recommendation for meeting the $250,000 request: Of the $527,800 in public capital investment in the building, $382,800 (72S%) came from the Cultural STAR Program and $145,000 (27.5°fo) came from HRA. I recommend using these proportions for meeting the $250,000 gap as follows: q�-a�� (i) 72.5% of the gap is met with a Cultural STAR grant of $181,250 to be applied to renovation costs, with the balance of $201,550 of the original investment returned for allocation in Cycle 4 of the Cultural STAR Program; and (2) 27.5% of the gap is met with a$b8,75Q reduction in fIRA's sale price for the building to $459,078. The $250,000 gap for the Wold project is met with the combination of the reduced Cultural STAR grant and the sale price reduction. With respect to the issue of the request that your Board consider STAR funding for the Wold project outside the regulaz funding cycle, I can appreciate your concern. I do not consider that this project has the scale and complexity of the Science Museum of Mnnesota or Block 39 projects which I believe aze special cases. However, I know you can also appreciate my dilemma. We advertised the sale of the Jemne Building in 5eptember, 1997 with a fixed price of $527,828 in order that the Culturai STAR and HRA investments in the building wouid be recovered. The Wold proposal was not only the best offer we received in terms of financial capacity and readiness to proceed, it was also the lowest in terms of requested public subsidy (the other proposal received was cantingent on a$1 miliion grant). Unless the building is sold by HRA, the Cultural STAR funds currently invested are not available to be allocated to the Woid project or any other pro}ect. Therefore, it was my judgement that the request should be reviewed and acted upon as it was received. This would not have been my conclusion but for this relationship. With respect to your concerns about the allocation process for the Science Museum of Minnesota and Lawson SofiwaretBlock 39 projects, I look forwazd to a continued dialogue with you and the City's elected officials regarding how we best bring scarce public resources to beaz on major housing, economic development and community development projects where the combination of scale and the number of layered financing sources involved requires an integrated approach to financing structure. I know we can all benefit from this dialogue as we work together to achieve our common objectives far the improvement of the City. I look foruard to hearing from you and hope that you will support the above recommendation for a combined Cultural STAR and HRA package to assist the Jemne Buiiding project by Wold Architects. Thank you for your many efforts. �� xecuhve llirecYor cc: Mayor Coleman February 20, 1998 Council President Bostrom and members of the Saint Paul City Council Third Fiooi, City Hall Saust Paul, Minnesota 55102 FLE: Jemne Building and Wold Architects' grant request Dear Council President Bostrom and members of the Councii: S -�� - q�• a�.s � SAIMPAUI STAR PROGRAM �1 As requested on December 30, 1997, by the Housing and Redevelopment Authority, the Cultural STAR Board has reviewed �Vold Architects' request for a$250,000 grant toward the cost of purchasing and renovating the Jemne building. In the course of our deliberations several positive attributes for this project emerged, including: GVold Architects' ability to rehabilitate and maintain the buiiding in a manner befitting its historic nature; and the fact that the majority of funding requested will be used for permanent improvements to the building, including mechanical and exterior improvements. However, the Cultural STAR Board has two basic reservations about this proposal. First, the notion of making a grant of this size directly to a private company is troubling. City staff did discuss the possibility of a$380,000 loan in lieu of the proposed g1 However, Wold Architects' concluded that a reduced interest loan could not substitute for the grant requested, and that the acquisitionlrehabilitation would not be practical under those terms. Our second concem is fundamental to the very process by which this request comes to us. The Boazd continues fo be troubled about the decisions that we have been asked to make outside the publicly- announced Cultural STAR process. We would have greatly prefened that the Wold Architects' proposal be taken up as part of the.Cycle 4 Cultural STAR process due to commence in March. Nonetheless, in the interest of securing the future of this important downtown azchitectuzal resource, tl�e $oard'has voted to recommend a grant of $250.,Od0. The $oard does so, provided that the net of $277,828 realized by the sale to Wold Architects (the difference between the sale price to Wold -$577,828 - and the grant amount) be returned to the Cultural STAR program as partial reimbursement far the CulYural STAR loan fo the HRA to purchase the building. The Cultural STAR Board continues to be dedicated to the mission and goals of the cultural STAR program. However, we request that a policy discussion be convened regazding the use of Cultural STAR funds and the responsibilities of the City Council, Board and City staf£ We prefer that representatives from both the City Council and the Mayor's office be invited. � We stand at the ready to work with you to develop a common understanding of the future process of committino Cultural STAR funds. Respectfuily, Ci%%�� Lois West, Chair, Saint Paul Cultural STAR Board c.c. Mayor Coleman y . i a�-a�s � SAINTPAVI STAR PROGRAM �1 Grant to Wold Architects for Acquisition of the 3emne Building -(2/10/98) WHEREAS, the Saint Paul City Council, by Resolution 96-6/26-3, dated June 26,1996, appropriated $380,800 from the Culrival STAR Fund for the Housing and Redevelopment Authority's acquisition of the Jemne Building; and WHEREAS, the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, on December 30, 1997, granted Wo1d Architects 60 day tentative developer status as a potential owner-occupant of the Jemne Building; and WHEREAS, the Saint Paul City Council directed Wold Architects to apply for a$250,000 grant to assist in the acquisition and rehabilitation of the Jemne Building; and WHEREAS, the Wold Architects completed an application for such a grant and made presentation to the Culturai STAR Board; and WHEREAS, the Cuitural STAR Board did consider the $250,000 grant proposal; NOW, THEREFORE, B� IT RESOLVED, the Saint Paul Cultural STAR BQard recommends that Wold Architects be awazded a$250,000 grant far the acquisition and rehabilitation of the Jemne Buitding, provided that atl proceeds of the sale upon the Jemne Buiiding be applied towazd payment af the afarementioned $380,800 Cultural STAR Board loan to the Housi�g and Redevelopment Authority, resulting in a net of $277,828 to be used for loans and grants for Cycle 4 of the Cultural STAR program; and BE IT FURTHER RE50LVED, the Cultural STAR Board expresses its concern about the integrity of the established Culturai STAR allocatlon process, recounting the processes empioyed far the Science Museum of Minnesota, Lawson Software and now the Jemne Building projects.