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Authorizing the early release of approved STAR funds for the Schmidt Rathskeller Project.
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WHEREAS, the West 7th Fort Road Federation (“Federation”) is a small neighborhood-based, private, non-profit development organization that is redeveloping a portion of the former Schmidt Brewery complex for commercial purposes (the “Project”), including the “Rathskeller” office building, the Keg and Case Storage building, and several ancillary outlots; and
WHEREAS, the Federation is undertaking the Project in conjunction with Dominium Development & Acquisition, LLC’s (“Dominium’s”) efforts to redevelop most of the remainder of the Schmidt Brewery site into approximately 220 units of affordable rental housing; and
WHEREAS, in early 2011, the Federation was awarded $1,895,715 in Jobs Bill TIF funding from the Saint Paul Housing and Redevelopment Authority (“HRA”) for the first phase of their redevelopment efforts: Property acquisition, stabilization of the Rathskeller building, pollution mitigation, and various pre-development activities; and
WHEREAS, on December 21, 2011 the Saint Paul City Council approved Resolution #11-2577 that provided a $200,000 Neighborhood STAR grant to the West 7th Fort Road Federation for use on Phase II of the Project, the completed redevelopment of the Rathskeller building; and
WHEREAS, on July 18, 2012 the Saint Paul City Council approved Resolution #12-1305 that provided a $400,000 Neighborhood STAR loan to the West 7th Fort Road Federation for use on Phase II of the Project; and
WHEREAS, although the City often approves STAR funding for projects early in the development process, the Department of Planning and Economic Development (“PED”), which administers the Neighborhood STAR program, typically only releases public funds when all other necessary funding is in place and construction commences; and
WHEREAS, the Federation is requesting that the City provide early access to the 20% ($120,000) of the STAR funding that is intended to be used for eligible “soft costs” related to the Project; and
WHEREAS, these eligible soft costs are necessary in 2013 in order to: 1) meet tax, insurance, and maintenance obligations ($80,000); 2) secure the Property in advance of the re-opening of Webster Street ($15,000); and 3) continue predevelopment efforts related to the completion of Phase II ($25,000); and
WHEREAS, the City holds the first mortgage on this property; and
WHEREAS, the Federation has no current ability to pay necessary holding costs, such as property taxes, insurance, and maintenance costs, all of which need to be paid to maintain the value of the City’s collateral; and
WHEREAS, the additional holding costs, beyond what was originally budgeted, are due primarily to the delays in Dominium’s housing project because ownership of a portion of the Property was not certain until Dominium closed, and leasing activities were unproductive until it was clear that the housing piece was moving forward; and
WHEREAS, the City has determined that there is a significant public purpose in the successful redevelopment of the Schmidt property; and
WHEREAS, there have been many accomplishments toward the successful redevelopment of the Schmidt property over the past year, and advancing funds to allow the continuation of necessary predevelopment activities will increase the likelihood that this redevelopment will occur; now, therefore be it
RESOLVED, the Council of the City of Saint Paul hereby authorizes the Department of Planning and Economic Development to provide early access to the Federation to the 20% ($120,000) of the STAR funding that is intended to be used for eligible “soft costs” related to the Project; and be it
FURTHER RESOLVED, these eligible soft costs relate to: 1) meeting tax, insurance, and maintenance obligations ($80,000); 2) securing the Property in advance of the re-opening of Webster Street ($15,000); and 3) continuing predevelopment efforts related to the completion of Phase II ($25,000); and be it
FINALLY RESOLVED, staff of the Department of Planning and Economic Development are further authorized and directed to proceed with all other actions necessary to implement this Resolution.