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98-486Council File #� 10 � �V� 0 R I G I N A�. Green Sheet # to � I 3�4 RESOLUTION `� CfTY OF SAINT PAUL, MfNNESOTA .�[� = Presented Referred To Committee: Date RESOLUTION APPROVING AND AUTHORIZING THE ISSUANCE OF A LOAN TO WELLINGTON MANAGEMENT, INC. THROUGH THE STAR LOAN PROGRAM, DISTRICT 12 2 WHEREAS, Wellington Management, Inc., a Minnesota Corporation, has requested a$175,000 loan through 3 the STAR loan program for building improvements and renovations; and 4 5 WHEREAS, the project consists of the renovation of the existing Inland Supply Building at the wrner of 6 Energy Park Drive and Raymond Avenue for lease as general office space. The build out for a new tenant 7 includes renovation of the entire building. The total cost of the project is $590,000 which includes $380,000 8 for building renovation and improvements and 210,000 for building acquisirion; and 9 10 WHEREAS, the proposed terms for the loan include monthly payments over a twenty year term, matuting in i l 2018, with loan repayment from rental income; loan will be evidenced by a full recourse Promissory Note 12 from Wellington Management, Inc. to City; collateral will consist of a subordinate security interest in the reai 13 estate and an assignment of leases; and a personal guaranty from Stephen Wellington; and 14 15 WHEREAS, the bonower wiil comply with all federal, state and local laws and policies but not limited to 16 prevailing wage standards for construction (Davis-Bacon), affirmative action/equal opporhznity and targeted 17 business programs; and 18 19 20 21 22 23 24 ZS 26 27 Z8 �9 30 S1 '�2 3 4 WAEREAS, the primary public purpose of the project is job retention, also support of commercial activity and stabilize market value NOW, THEREFORE BE IT RESOLVED, by the Council of the City of Saint Paul, that (1) approval is hereby granted for a loan in the amount of $175,000.00 from the STAR loan Fund for building improvements and renovations, under the terms described herein, and with such additional terms and conditions as the Darector of the Department of Planning and Economic Development deems necessary and appropriate; (2) that the Director of the Department of Planning and Economic Development and other appropriate City officials are authorized to execute the necessary documents in connection with the loan, in form acceptable to the City Attorney, on behalf of the City; and � � 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 $8 59 60 61 6 64 65 66 67 68 69 70 71 �2 73 74 75 76 77 78 �9 8� 81 82 83 R� -4.$6 (3) that the Mayor, pursuant to Sec. 10.07.01 of the City Charter, recommends the following changes to the 1998 budget. Current Budget Spending Plan: Fund 930 City Sales T� Capital Ptojects P7-930-90398-0547-77999 $5,609,000 Undesignated Adapted Budget - Neighborhoods P7-930-90305-0547-77182 $0 Inland Supply Building Project Net Change ORIGINAL Change ($175,000) 175 00 $0 Amended Budget $5,434,000 $175,000 ✓ r �� ii �u� Adopted by Council: Date Adoption Certified by Cou By: a- Approved by Mayor: ate By � --------- — — Secretary Requested by Department of: Plannincr & onomic nevelo men By: � Form Approve City By: Approved o f r BY � ________ _� ssion to Council � ��4 RSON&PHONE C�`G3r�eh `-�F�Y � �� q,�� N 1'� =i) - r�e GREEN .._., 0 TOTAL # OF SIGNATURE PACaES No 65134 ,,,{., �n.u,m.wea.o� ,,�, an,cw�.. _ �GlfAifORIEV_L� ❑G!/ClFR1I S � nuxcw.s�xcesou� �'� � '�� ❑ wuxua�amwucrc ��..,�..�„ V ❑ {CUP ALL LOCATIONS FOR SIGNATURE) /�� - j �,p�-d,�...� � ��e<a� ��- PLANNING CAMMISSION CIB COMMITTEE CIVIL SERVICE COMMISSION Gi�.d.� � ��t1� .)7o arA Nas this PersoNfi�m ever wor%eE untler a canfrect forMis dePartment? YES NQ Has Mis PersoNfi�m e+er 6ew� a citY �P�oYee? YES NO Ooes ihis Pg��m+ P�ess a sldN not normalryP�ssed bY any curteM citY emPlq'ee? YES NO 1s thre persoNfirm a fargeted vendoR YES NC1 L�a�.- v�.�.Jf �y ��yf�. Ma�-�'�� ,.� �- �v� -f�- �r�w T-v� tv�,-� �j/1� L � � �� t�.,rK Da-c`�� ,` ,�.�<t' �*�r� � .b�c� ;h.�o,rovice/a-�-� vecu,�tl�`e�' U � _ , � �� '� ° _ �.� . � �AY 22 1938 #�;� � � . _ ^` � � �Q� �t1AY0R'�,C�FF4CE � � ef C- �'�r� �,.tua- TAL AMOUriT OF 7RANSACTION f f�'�F Or� C•� VDINGSOURCE J I/� �NCW.INFORMATON (IXPWN� COSTfREVENUEBUD6ETED(CIRCLEONq AMNITY NUMBER YES NO �J57U�E�NS{ P9'�._,C �lG�103 �IF�d3 � .Y� ONJ� V b+? Y< DEPARTMENT OFPLANNING & ECONOMIC DEVELOPMENT P¢mela Y['heelock, Dirutor 1.11 S OF SAllVT PAl1L Morm Coleman, Mayar Interdenartmental Memorandum To: From: Date: Re: City Council John O'Brien May 20, 1998 Wellington Management, Inc. STAR Program PROJECT SUMMARY 25 Wesz Fourth Street SRtRi P¢ut, MNSSIO2 qg-4 j6 Tetephane: 61 2-2 66 665 5 Facsimfte: b12-228-32b1 The project consists of the acquisition and renovation of the Inland Supply Building located at Raymond Avenue and Energy Park Drive. The property address as 1096 Raymond Avenue. The building is a fifty year old, 7,250 square foot industrialtwarehouse facility. At present, the building is empty and the lot is used to store truck trailers. The building will be renovated for office space use only and leased to commercial business office use. The renovation will inciude the building exterior with new entries to the building; new windo�vs to replace the existing and the loading dock doors; the parking lot will be paved and landscaping will be installed. Interior improeements will include new HVAC, carpeting and wall partitions for offices. Total project costs including renovation and acquisition are $590,OOQ. Staff recommends approval of a STAR loan in the amount of $175,000, to be used for eligible project costs. It is recommended that this loan be risk rated Substandard. BUSINESS PROFILE Weilington Management, Ina (The "borrower"), is a real estate development and property management campany established in 1984 by Stephen Wellington. The firm employs tweive and is located in the Gilbert Building in Lowertown, St. Paul. At present, g �1-45'6 the borrower manages over 1,600,000 square feet of commercial space in 4$ buildings within the metro area. The bonower has developed two of the four comers at the intersection of Energy Park Drive and Raymond Ave. These projects are the Park Crossing Apartments, a low- income nineteen unit building currently owned and operated by Project for Pride in Living. The other project is the Park Crossing Retail Center which is owned and managed by the bonower. �:1•�� The company is privately held with Stephen Wellington holding 100% of issued stock. �OURCES AND USES OF FUNDS Sources: St. Anthony Park Bank STAR Funds Wellington Management, Inc. Total Sources of Funds $300,000 $175,000 1 5 OQ $590,Q00 Uses: Acquisition Renovation Total Uses $210,000 380 000 $590,000 LOAN PROFILE The loan is for $175,000 to be used for building improvements. The recommended interest rate is 6.5% with a repayment term of 30 years rather than 20 years. The loan will balloon at the end of 20 years. As with all STAR loans, the �rst year of the loan will have no interest accrued and no principal payment. The monthly payment will be $1,106.12. Collateral will consist of a 2nd real estate mortgage on the project property and a personai guaranty by 5tephen Wellington. A valuation of the property using a"cap" rate of 10.5 based upon the lease with the American Cancer Society, is $446,428. Total debt will be $475,000. St. Anthony Park State Bank will have a lst real estate mortgage in the amount of $300,000. PUBLIC PURPOSE Public purpose is obtained through the renovation of a vacant building wluch will increase the tax base; The proposed building tenant, has considered moving to a suburban location and this project would retain approximately 25 jobs and provide opportunity far the tenant to expand their employment levei. qF -�Yb RECOMMENDATION Staff, Credit Committee and the STAR Board recommend approval of this loan based upon an interest rate of 6.5%, the bonowers record of successful building development and property management, and the ability to repay debt from the project. The risk rating is recommended to be Substandard as the building will be fully leased with sufficient cash flow to repay debt. The loan could achieve an Acceptable risk rating if the building value is found (appraisal ordered) to exceed the valuation prepared by Staff and which provides a coverage ratio of no more than 90% debt-to-value. ��svti� � qP- 486 ¢ ��s � � n 9 a y �_°� 12 �A?4 q '9 * � WESTMtDWAY�-� May 29, 1998 ST. ANTHONY PARK COMMUNITY COUNCI�, 890 Cromwell • St. Paul, Minnesota 55114 292-7884 Ms. Marie Franchet[e PED 1300 City Hall Annex zs �a�sc roarc•a 5�:ee� St. Paul, MN 55101 Dear Marie: At its May 13, 1998 meeting the St. Anthony Park Community Council voted unanimousiy to support Mr. Steve Wellington's request for a STAR loan in the amount of $175,000 for the renovation of the inland Supply building located at the northwest comer of Raymond Avenue aad Energy Pazk Drive. Mr. Wellington has an excelfent track record in St. Pauf of developing and improving properties. His intcraction and involvement with the St. Anthony Park Community Council has always been very positive. Wellington Management is an asset to our ncigfiborhood. The recent redevelopment of ihe Snelling Business Center is a good example of his commiUnent to maintaining and improving the commercial and retail space in and around Si. Anthony Pazk. The !nland Suppiy Buiiding has been vacant for some time. It is an eyesore in an azea that has already seen subsiantial investment with the Park Crossing and the Proyect for Pride in Living developments. Additionaily, it is ihe wish of the neighborhood to abide by the South St. Anthony Park Small Area Plan which calls for a decrease in industrial uses. 1'his project compiies with the small area plan, and provides much needed commercial space for a tenant eager to move. We are excited at the prospect of the Inland Supply Building being renovated and reused. Please feei free to contact me if you have additional questions. Warmest regards, St. Anthony Pazk Community Council �� '� Heather M. Worthington Executive Director cc: Steve Weilington, Weliington Management ? Councilmember iay Benanav � r ' Council File #� 10 � �V� 0 R I G I N A�. Green Sheet # to � I 3�4 RESOLUTION `� CfTY OF SAINT PAUL, MfNNESOTA .�[� = Presented Referred To Committee: Date RESOLUTION APPROVING AND AUTHORIZING THE ISSUANCE OF A LOAN TO WELLINGTON MANAGEMENT, INC. THROUGH THE STAR LOAN PROGRAM, DISTRICT 12 2 WHEREAS, Wellington Management, Inc., a Minnesota Corporation, has requested a$175,000 loan through 3 the STAR loan program for building improvements and renovations; and 4 5 WHEREAS, the project consists of the renovation of the existing Inland Supply Building at the wrner of 6 Energy Park Drive and Raymond Avenue for lease as general office space. The build out for a new tenant 7 includes renovation of the entire building. The total cost of the project is $590,000 which includes $380,000 8 for building renovation and improvements and 210,000 for building acquisirion; and 9 10 WHEREAS, the proposed terms for the loan include monthly payments over a twenty year term, matuting in i l 2018, with loan repayment from rental income; loan will be evidenced by a full recourse Promissory Note 12 from Wellington Management, Inc. to City; collateral will consist of a subordinate security interest in the reai 13 estate and an assignment of leases; and a personal guaranty from Stephen Wellington; and 14 15 WHEREAS, the bonower wiil comply with all federal, state and local laws and policies but not limited to 16 prevailing wage standards for construction (Davis-Bacon), affirmative action/equal opporhznity and targeted 17 business programs; and 18 19 20 21 22 23 24 ZS 26 27 Z8 �9 30 S1 '�2 3 4 WAEREAS, the primary public purpose of the project is job retention, also support of commercial activity and stabilize market value NOW, THEREFORE BE IT RESOLVED, by the Council of the City of Saint Paul, that (1) approval is hereby granted for a loan in the amount of $175,000.00 from the STAR loan Fund for building improvements and renovations, under the terms described herein, and with such additional terms and conditions as the Darector of the Department of Planning and Economic Development deems necessary and appropriate; (2) that the Director of the Department of Planning and Economic Development and other appropriate City officials are authorized to execute the necessary documents in connection with the loan, in form acceptable to the City Attorney, on behalf of the City; and � � 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 $8 59 60 61 6 64 65 66 67 68 69 70 71 �2 73 74 75 76 77 78 �9 8� 81 82 83 R� -4.$6 (3) that the Mayor, pursuant to Sec. 10.07.01 of the City Charter, recommends the following changes to the 1998 budget. Current Budget Spending Plan: Fund 930 City Sales T� Capital Ptojects P7-930-90398-0547-77999 $5,609,000 Undesignated Adapted Budget - Neighborhoods P7-930-90305-0547-77182 $0 Inland Supply Building Project Net Change ORIGINAL Change ($175,000) 175 00 $0 Amended Budget $5,434,000 $175,000 ✓ r �� ii �u� Adopted by Council: Date Adoption Certified by Cou By: a- Approved by Mayor: ate By � --------- — — Secretary Requested by Department of: Plannincr & onomic nevelo men By: � Form Approve City By: Approved o f r BY � ________ _� ssion to Council � ��4 RSON&PHONE C�`G3r�eh `-�F�Y � �� q,�� N 1'� =i) - r�e GREEN .._., 0 TOTAL # OF SIGNATURE PACaES No 65134 ,,,{., �n.u,m.wea.o� ,,�, an,cw�.. _ �GlfAifORIEV_L� ❑G!/ClFR1I S � nuxcw.s�xcesou� �'� � '�� ❑ wuxua�amwucrc ��..,�..�„ V ❑ {CUP ALL LOCATIONS FOR SIGNATURE) /�� - j �,p�-d,�...� � ��e<a� ��- PLANNING CAMMISSION CIB COMMITTEE CIVIL SERVICE COMMISSION Gi�.d.� � ��t1� .)7o arA Nas this PersoNfi�m ever wor%eE untler a canfrect forMis dePartment? YES NQ Has Mis PersoNfi�m e+er 6ew� a citY �P�oYee? YES NO Ooes ihis Pg��m+ P�ess a sldN not normalryP�ssed bY any curteM citY emPlq'ee? YES NO 1s thre persoNfirm a fargeted vendoR YES NC1 L�a�.- v�.�.Jf �y ��yf�. Ma�-�'�� ,.� �- �v� -f�- �r�w T-v� tv�,-� �j/1� L � � �� t�.,rK Da-c`�� ,` ,�.�<t' �*�r� � .b�c� ;h.�o,rovice/a-�-� vecu,�tl�`e�' U � _ , � �� '� ° _ �.� . � �AY 22 1938 #�;� � � . _ ^` � � �Q� �t1AY0R'�,C�FF4CE � � ef C- �'�r� �,.tua- TAL AMOUriT OF 7RANSACTION f f�'�F Or� C•� VDINGSOURCE J I/� �NCW.INFORMATON (IXPWN� COSTfREVENUEBUD6ETED(CIRCLEONq AMNITY NUMBER YES NO �J57U�E�NS{ P9'�._,C �lG�103 �IF�d3 � .Y� ONJ� V b+? Y< DEPARTMENT OFPLANNING & ECONOMIC DEVELOPMENT P¢mela Y['heelock, Dirutor 1.11 S OF SAllVT PAl1L Morm Coleman, Mayar Interdenartmental Memorandum To: From: Date: Re: City Council John O'Brien May 20, 1998 Wellington Management, Inc. STAR Program PROJECT SUMMARY 25 Wesz Fourth Street SRtRi P¢ut, MNSSIO2 qg-4 j6 Tetephane: 61 2-2 66 665 5 Facsimfte: b12-228-32b1 The project consists of the acquisition and renovation of the Inland Supply Building located at Raymond Avenue and Energy Park Drive. The property address as 1096 Raymond Avenue. The building is a fifty year old, 7,250 square foot industrialtwarehouse facility. At present, the building is empty and the lot is used to store truck trailers. The building will be renovated for office space use only and leased to commercial business office use. The renovation will inciude the building exterior with new entries to the building; new windo�vs to replace the existing and the loading dock doors; the parking lot will be paved and landscaping will be installed. Interior improeements will include new HVAC, carpeting and wall partitions for offices. Total project costs including renovation and acquisition are $590,OOQ. Staff recommends approval of a STAR loan in the amount of $175,000, to be used for eligible project costs. It is recommended that this loan be risk rated Substandard. BUSINESS PROFILE Weilington Management, Ina (The "borrower"), is a real estate development and property management campany established in 1984 by Stephen Wellington. The firm employs tweive and is located in the Gilbert Building in Lowertown, St. Paul. At present, g �1-45'6 the borrower manages over 1,600,000 square feet of commercial space in 4$ buildings within the metro area. The bonower has developed two of the four comers at the intersection of Energy Park Drive and Raymond Ave. These projects are the Park Crossing Apartments, a low- income nineteen unit building currently owned and operated by Project for Pride in Living. The other project is the Park Crossing Retail Center which is owned and managed by the bonower. �:1•�� The company is privately held with Stephen Wellington holding 100% of issued stock. �OURCES AND USES OF FUNDS Sources: St. Anthony Park Bank STAR Funds Wellington Management, Inc. Total Sources of Funds $300,000 $175,000 1 5 OQ $590,Q00 Uses: Acquisition Renovation Total Uses $210,000 380 000 $590,000 LOAN PROFILE The loan is for $175,000 to be used for building improvements. The recommended interest rate is 6.5% with a repayment term of 30 years rather than 20 years. The loan will balloon at the end of 20 years. As with all STAR loans, the �rst year of the loan will have no interest accrued and no principal payment. The monthly payment will be $1,106.12. Collateral will consist of a 2nd real estate mortgage on the project property and a personai guaranty by 5tephen Wellington. A valuation of the property using a"cap" rate of 10.5 based upon the lease with the American Cancer Society, is $446,428. Total debt will be $475,000. St. Anthony Park State Bank will have a lst real estate mortgage in the amount of $300,000. PUBLIC PURPOSE Public purpose is obtained through the renovation of a vacant building wluch will increase the tax base; The proposed building tenant, has considered moving to a suburban location and this project would retain approximately 25 jobs and provide opportunity far the tenant to expand their employment levei. qF -�Yb RECOMMENDATION Staff, Credit Committee and the STAR Board recommend approval of this loan based upon an interest rate of 6.5%, the bonowers record of successful building development and property management, and the ability to repay debt from the project. The risk rating is recommended to be Substandard as the building will be fully leased with sufficient cash flow to repay debt. The loan could achieve an Acceptable risk rating if the building value is found (appraisal ordered) to exceed the valuation prepared by Staff and which provides a coverage ratio of no more than 90% debt-to-value. ��svti� � qP- 486 ¢ ��s � � n 9 a y �_°� 12 �A?4 q '9 * � WESTMtDWAY�-� May 29, 1998 ST. ANTHONY PARK COMMUNITY COUNCI�, 890 Cromwell • St. Paul, Minnesota 55114 292-7884 Ms. Marie Franchet[e PED 1300 City Hall Annex zs �a�sc roarc•a 5�:ee� St. Paul, MN 55101 Dear Marie: At its May 13, 1998 meeting the St. Anthony Park Community Council voted unanimousiy to support Mr. Steve Wellington's request for a STAR loan in the amount of $175,000 for the renovation of the inland Supply building located at the northwest comer of Raymond Avenue aad Energy Pazk Drive. Mr. Wellington has an excelfent track record in St. Pauf of developing and improving properties. His intcraction and involvement with the St. Anthony Park Community Council has always been very positive. Wellington Management is an asset to our ncigfiborhood. The recent redevelopment of ihe Snelling Business Center is a good example of his commiUnent to maintaining and improving the commercial and retail space in and around Si. Anthony Pazk. The !nland Suppiy Buiiding has been vacant for some time. It is an eyesore in an azea that has already seen subsiantial investment with the Park Crossing and the Proyect for Pride in Living developments. Additionaily, it is ihe wish of the neighborhood to abide by the South St. Anthony Park Small Area Plan which calls for a decrease in industrial uses. 1'his project compiies with the small area plan, and provides much needed commercial space for a tenant eager to move. We are excited at the prospect of the Inland Supply Building being renovated and reused. Please feei free to contact me if you have additional questions. Warmest regards, St. Anthony Pazk Community Council �� '� Heather M. Worthington Executive Director cc: Steve Weilington, Weliington Management ? Councilmember iay Benanav � r ' Council File #� 10 � �V� 0 R I G I N A�. Green Sheet # to � I 3�4 RESOLUTION `� CfTY OF SAINT PAUL, MfNNESOTA .�[� = Presented Referred To Committee: Date RESOLUTION APPROVING AND AUTHORIZING THE ISSUANCE OF A LOAN TO WELLINGTON MANAGEMENT, INC. THROUGH THE STAR LOAN PROGRAM, DISTRICT 12 2 WHEREAS, Wellington Management, Inc., a Minnesota Corporation, has requested a$175,000 loan through 3 the STAR loan program for building improvements and renovations; and 4 5 WHEREAS, the project consists of the renovation of the existing Inland Supply Building at the wrner of 6 Energy Park Drive and Raymond Avenue for lease as general office space. The build out for a new tenant 7 includes renovation of the entire building. The total cost of the project is $590,000 which includes $380,000 8 for building renovation and improvements and 210,000 for building acquisirion; and 9 10 WHEREAS, the proposed terms for the loan include monthly payments over a twenty year term, matuting in i l 2018, with loan repayment from rental income; loan will be evidenced by a full recourse Promissory Note 12 from Wellington Management, Inc. to City; collateral will consist of a subordinate security interest in the reai 13 estate and an assignment of leases; and a personal guaranty from Stephen Wellington; and 14 15 WHEREAS, the bonower wiil comply with all federal, state and local laws and policies but not limited to 16 prevailing wage standards for construction (Davis-Bacon), affirmative action/equal opporhznity and targeted 17 business programs; and 18 19 20 21 22 23 24 ZS 26 27 Z8 �9 30 S1 '�2 3 4 WAEREAS, the primary public purpose of the project is job retention, also support of commercial activity and stabilize market value NOW, THEREFORE BE IT RESOLVED, by the Council of the City of Saint Paul, that (1) approval is hereby granted for a loan in the amount of $175,000.00 from the STAR loan Fund for building improvements and renovations, under the terms described herein, and with such additional terms and conditions as the Darector of the Department of Planning and Economic Development deems necessary and appropriate; (2) that the Director of the Department of Planning and Economic Development and other appropriate City officials are authorized to execute the necessary documents in connection with the loan, in form acceptable to the City Attorney, on behalf of the City; and � � 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 $8 59 60 61 6 64 65 66 67 68 69 70 71 �2 73 74 75 76 77 78 �9 8� 81 82 83 R� -4.$6 (3) that the Mayor, pursuant to Sec. 10.07.01 of the City Charter, recommends the following changes to the 1998 budget. Current Budget Spending Plan: Fund 930 City Sales T� Capital Ptojects P7-930-90398-0547-77999 $5,609,000 Undesignated Adapted Budget - Neighborhoods P7-930-90305-0547-77182 $0 Inland Supply Building Project Net Change ORIGINAL Change ($175,000) 175 00 $0 Amended Budget $5,434,000 $175,000 ✓ r �� ii �u� Adopted by Council: Date Adoption Certified by Cou By: a- Approved by Mayor: ate By � --------- — — Secretary Requested by Department of: Plannincr & onomic nevelo men By: � Form Approve City By: Approved o f r BY � ________ _� ssion to Council � ��4 RSON&PHONE C�`G3r�eh `-�F�Y � �� q,�� N 1'� =i) - r�e GREEN .._., 0 TOTAL # OF SIGNATURE PACaES No 65134 ,,,{., �n.u,m.wea.o� ,,�, an,cw�.. _ �GlfAifORIEV_L� ❑G!/ClFR1I S � nuxcw.s�xcesou� �'� � '�� ❑ wuxua�amwucrc ��..,�..�„ V ❑ {CUP ALL LOCATIONS FOR SIGNATURE) /�� - j �,p�-d,�...� � ��e<a� ��- PLANNING CAMMISSION CIB COMMITTEE CIVIL SERVICE COMMISSION Gi�.d.� � ��t1� .)7o arA Nas this PersoNfi�m ever wor%eE untler a canfrect forMis dePartment? YES NQ Has Mis PersoNfi�m e+er 6ew� a citY �P�oYee? YES NO Ooes ihis Pg��m+ P�ess a sldN not normalryP�ssed bY any curteM citY emPlq'ee? YES NO 1s thre persoNfirm a fargeted vendoR YES NC1 L�a�.- v�.�.Jf �y ��yf�. Ma�-�'�� ,.� �- �v� -f�- �r�w T-v� tv�,-� �j/1� L � � �� t�.,rK Da-c`�� ,` ,�.�<t' �*�r� � .b�c� ;h.�o,rovice/a-�-� vecu,�tl�`e�' U � _ , � �� '� ° _ �.� . � �AY 22 1938 #�;� � � . _ ^` � � �Q� �t1AY0R'�,C�FF4CE � � ef C- �'�r� �,.tua- TAL AMOUriT OF 7RANSACTION f f�'�F Or� C•� VDINGSOURCE J I/� �NCW.INFORMATON (IXPWN� COSTfREVENUEBUD6ETED(CIRCLEONq AMNITY NUMBER YES NO �J57U�E�NS{ P9'�._,C �lG�103 �IF�d3 � .Y� ONJ� V b+? Y< DEPARTMENT OFPLANNING & ECONOMIC DEVELOPMENT P¢mela Y['heelock, Dirutor 1.11 S OF SAllVT PAl1L Morm Coleman, Mayar Interdenartmental Memorandum To: From: Date: Re: City Council John O'Brien May 20, 1998 Wellington Management, Inc. STAR Program PROJECT SUMMARY 25 Wesz Fourth Street SRtRi P¢ut, MNSSIO2 qg-4 j6 Tetephane: 61 2-2 66 665 5 Facsimfte: b12-228-32b1 The project consists of the acquisition and renovation of the Inland Supply Building located at Raymond Avenue and Energy Park Drive. The property address as 1096 Raymond Avenue. The building is a fifty year old, 7,250 square foot industrialtwarehouse facility. At present, the building is empty and the lot is used to store truck trailers. The building will be renovated for office space use only and leased to commercial business office use. The renovation will inciude the building exterior with new entries to the building; new windo�vs to replace the existing and the loading dock doors; the parking lot will be paved and landscaping will be installed. Interior improeements will include new HVAC, carpeting and wall partitions for offices. Total project costs including renovation and acquisition are $590,OOQ. Staff recommends approval of a STAR loan in the amount of $175,000, to be used for eligible project costs. It is recommended that this loan be risk rated Substandard. BUSINESS PROFILE Weilington Management, Ina (The "borrower"), is a real estate development and property management campany established in 1984 by Stephen Wellington. The firm employs tweive and is located in the Gilbert Building in Lowertown, St. Paul. At present, g �1-45'6 the borrower manages over 1,600,000 square feet of commercial space in 4$ buildings within the metro area. The bonower has developed two of the four comers at the intersection of Energy Park Drive and Raymond Ave. These projects are the Park Crossing Apartments, a low- income nineteen unit building currently owned and operated by Project for Pride in Living. The other project is the Park Crossing Retail Center which is owned and managed by the bonower. �:1•�� The company is privately held with Stephen Wellington holding 100% of issued stock. �OURCES AND USES OF FUNDS Sources: St. Anthony Park Bank STAR Funds Wellington Management, Inc. Total Sources of Funds $300,000 $175,000 1 5 OQ $590,Q00 Uses: Acquisition Renovation Total Uses $210,000 380 000 $590,000 LOAN PROFILE The loan is for $175,000 to be used for building improvements. The recommended interest rate is 6.5% with a repayment term of 30 years rather than 20 years. The loan will balloon at the end of 20 years. As with all STAR loans, the �rst year of the loan will have no interest accrued and no principal payment. The monthly payment will be $1,106.12. Collateral will consist of a 2nd real estate mortgage on the project property and a personai guaranty by 5tephen Wellington. A valuation of the property using a"cap" rate of 10.5 based upon the lease with the American Cancer Society, is $446,428. Total debt will be $475,000. St. Anthony Park State Bank will have a lst real estate mortgage in the amount of $300,000. PUBLIC PURPOSE Public purpose is obtained through the renovation of a vacant building wluch will increase the tax base; The proposed building tenant, has considered moving to a suburban location and this project would retain approximately 25 jobs and provide opportunity far the tenant to expand their employment levei. qF -�Yb RECOMMENDATION Staff, Credit Committee and the STAR Board recommend approval of this loan based upon an interest rate of 6.5%, the bonowers record of successful building development and property management, and the ability to repay debt from the project. The risk rating is recommended to be Substandard as the building will be fully leased with sufficient cash flow to repay debt. The loan could achieve an Acceptable risk rating if the building value is found (appraisal ordered) to exceed the valuation prepared by Staff and which provides a coverage ratio of no more than 90% debt-to-value. ��svti� � qP- 486 ¢ ��s � � n 9 a y �_°� 12 �A?4 q '9 * � WESTMtDWAY�-� May 29, 1998 ST. ANTHONY PARK COMMUNITY COUNCI�, 890 Cromwell • St. Paul, Minnesota 55114 292-7884 Ms. Marie Franchet[e PED 1300 City Hall Annex zs �a�sc roarc•a 5�:ee� St. Paul, MN 55101 Dear Marie: At its May 13, 1998 meeting the St. Anthony Park Community Council voted unanimousiy to support Mr. Steve Wellington's request for a STAR loan in the amount of $175,000 for the renovation of the inland Supply building located at the northwest comer of Raymond Avenue aad Energy Pazk Drive. Mr. Wellington has an excelfent track record in St. Pauf of developing and improving properties. His intcraction and involvement with the St. Anthony Park Community Council has always been very positive. Wellington Management is an asset to our ncigfiborhood. The recent redevelopment of ihe Snelling Business Center is a good example of his commiUnent to maintaining and improving the commercial and retail space in and around Si. Anthony Pazk. The !nland Suppiy Buiiding has been vacant for some time. It is an eyesore in an azea that has already seen subsiantial investment with the Park Crossing and the Proyect for Pride in Living developments. Additionaily, it is ihe wish of the neighborhood to abide by the South St. Anthony Park Small Area Plan which calls for a decrease in industrial uses. 1'his project compiies with the small area plan, and provides much needed commercial space for a tenant eager to move. We are excited at the prospect of the Inland Supply Building being renovated and reused. Please feei free to contact me if you have additional questions. Warmest regards, St. Anthony Pazk Community Council �� '� Heather M. Worthington Executive Director cc: Steve Weilington, Weliington Management ? Councilmember iay Benanav � r '