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Minutes 5/23/2006 PORT AUTHORITY OF THE CITY OF SAINT PAUL .e.�`� 0i�. �l GAO MINUTES OF THE REGULAR BOARD MEETINGpp6 MAY 23, 2006 -/ The regular meeting of the Port Authority Board was held on May 23, 2006 at 2:00 p.m. in - the Board Room of the Port Authority of the City of Saint Paul, 1900 Landmark Towers, 345 St. Peter Street, St. Paul, Minnesota. The following Commissioners were present: - Mike Goldner - Joan Grzywinski - Kathy Lantry - Dick Anfang - John Regal - Dan Bostrom Also present were the following: - Ken Johnson - Laurie Hansen - Laurie Siever - Lorrie Louder - Tom Collins - Pat Dean - Pete Klein - Bruce Gehrke - Terry Garvey, General Counsel - Mike Galvin, Briggs & Morgan - Lee Nelson, Upper River Services - Robyn Hansen, Leonard, Street & Deinard - Ellen Sampson, Leonard, Street & Deinard APPROVAL OF MINUTES Commissioner Lantry made a motion to approve the minutes from the April 25, 2006 regular Board meeting. The motion was seconded by Commissioner Bostrom and carried unanimously. A copy of the April minutes is on file at the office of the Saint Paul Port Authority. Commissioner Grzywinksi arrived. CONFLICT OF INTEREST Commissioner Grzywinski indicated she would recuse herself from voting on Resolution No. 4172 as she is on the Wilder Board. None of the other Commissioners had a conflict of interest with the items on the agenda. 36574.v1 NEW BUSINESS ADMINISTRATIVE COMMITTEE RESOLUTION NO. 4171 REPORT FROM COUNSEL: 876 FUND Commissioner Anfang stated the Administrative Committee reviewed Resolution No. 4171 and asked Robyn Hansen to address the Board. Robyn Hansen addressed the Board stating she presented a full report to the Administrative Committee on May 16 on behalf of her firm, Leonard, Street & Deinard, and Briggs & Morgan. The report was prepared in response to a letter the Port Authority received from Pat Dean and it was their attempt to answer, on behalf of the Port Authority, the questions that had been raised. At the Administrative Committee meeting Robyn accurately stated that the report had been prepared by Scott Knudson and her. She and Scott Knudson, of Briggs & Morgan had no disagreements in preparing the report; however, Robyn clarified for the record—that the report is an opinion of Leonard, Street & Deinard, but Briggs & Morgan had not gone through the opinion process, therefore it cannot be said it is an opinion by Briggs & Morgan. At the Administrative Committee meeting, Pat Dean presented another letter and counsel was asked by the Administrative Committee to respond to that letter and let the Board know whether anything in that letter changed the conclusions or opinions in their notebook. Robyn prepared a new letter, sent it by email to the Board and gave Pat Dean a copy before this meeting. The attorneys have concluded that nothing in Pat Dean's new points have changed the conclusions reached in their report. It is Leonard, Street & Deinard's opinion that the 876 Bond Fund has no claim on the money from the sale of the Radisson hotels. Chair Goldner asked Mike Galvin of Briggs & Morgan if he wanted to address the Board on behalf of his firm. Mr. Galvin stated that Briggs & Morgan concur on both the report and opinion. Chair Goldner informed the Board that it has come to his attention that Mr. Dean has filed with the Port Authority a Federal Freedom of Information Act request for certain documents related to this transaction. This has just occurred today and has been referred to counsel and management for evaluation. Commissioner Anfang made a motion to approve Resolution No. 4171. Commissioner Grzywinski seconded the motion. Chair Goldner asked Mr. Dean if he wanted to address the Board. Mr. Dean addressed the Board and restated his assertions and identified the chart which is included in every official statement and has been the main crux of the situation on where the money flows. He also referred to correspondence by Eugene Kraut in which Mr. Kraut stated the Port Authority was the trustee for the 876 Fund. 36574.v1 Mr. Goldner asked Mr. Dean if he had any other new information to present that he hasn't already presented. Mr. Dean again referred to the flow chart he extracted from an official statement. He also questioned whether the hotel partnership had ever been dissolved. "The Port Authority still owes the general partnership money today." The partnership that the Port Authority invested with in 1987, as far as he knows, was never dissolved, is still out there and owed money. Mr. Dean thanked the Board again for the opportunity to address them. Chair Goldner thanked Mr. Dean. Commissioner Lantry stated this was a very broad issue. Clearly this issue has been looked at legally. It is difficult as Commissioners to decide if reasonable steps have been taken to make sure that all of the questions have been addressed and answered satisfactorily. She thinks they have. She asked Mr. Garvey if he has been a part of this process and is he in concurrence with Leonard, Street & Deinard and Briggs & Morgan. Mr. Garvey stated that he has been part of the process and is in concurrence with both firms. Commissioner Lantry stated it is her opinion that the Board's job is to make sure they have looked at an issue thoroughly to see if there are any legal issues. Having two law firms and our own Assistant City Attorney look at it, she is comfortable thinking that the Board has taken the matter seriously and going against that opinion would be very difficult. Commissioner Regal stated he read in Mr. Dean's letter that he is not representing the 876 bondholders. He asked if we have heard from any 876 bondholders or anticipate hearing from them. Chair Goldner stated we have no reason to believe we will hear from anybody. We have not heard from anybody over all of these years. He cannot speak for the future. He does not know what Mr. Dean knows that he doesn't know, but we have no indication of such a thing. Chair Goldner asked for all those in favor of the motion, upon which the motion was carried unanimously. A copy of Resolution No. 4171 is on file at the office of the Saint Paul Port Authority. CREDIT COMMITTEE RESOLUTION NO. 4172 PUBLIC HEARING AMHERST H. WILDER FOUNDATION (WILDER) AUTHORIZATION FOR AN APPROXIMATE $33,310,000 CONDUIT TAX EXEMPT BOND ISSUE Commissioner Grzywinski made a motion stating that Resolution No. 4172 had been reviewed by the Credit Committee and recommended for approval by the Board. 36574.v1 Chair Goldner stated that in accordance with Minnesota law, a public hearing must be held to hear any comments from the public regarding Resolution No. 4172. No one requested to address the Board; therefore, Chair Goldner declared the public hearing closed and proceeded with the vote. The motion was carried by a 4-0 vote with Commissioner Grzywinski recusing herself from voting. A copy of Resolution No. 4172 is on file at the office of the Saint Paul Port Authority. INFORMATIONAL REPORT FIRST QUARTER DEVELOPMENT AND REO TEAM PRODUCTION Ms. Louder reviewed the production report with the Board. There being no further business, the meeting stood adjourned at 2:21 p.m. 44.1 Michael Goldn Chair 36574.v1