The URL can be used to link to this page

90-1254 h � � � � � � � � '` Council File #� �� . R Green Sheet $ ��/� �` RESOLUTION �� ITY OF SAINT PAUL, MINNESOTA ;�'v�� t ,,�,,,. Pre ented By v eferred To � >�-z.i � ac'�4_ �-U . Committee: Date r�x'il'i{� WHEREAS : 1 . On June 26, 1990, the Port Authority of the City of Saint Paul adopted Resolution No. 3234, giving preliminary approval to Chargo Printing for the issuance of tax-exempt bonds in the initial principal amount not to exceed $700, 000 to f i nance the construct ion of an approxi matel y 20,000 square foot manufacturing facility in Empire Builder Industrial Park, St. Paul , Minnesota. Miller and Schroeder Financiai , inc. has agreed to underwrite the revenue bond lssue for a term of 30 years. 2. The Port Author i ty of the Ct ty of Sa i nt Paul has submitted an application for an industrial development bond ailocation from the State of Minnesota Competitive Pooi as the proJect is industrial . The City of Saint Paul ' s entitiement allocation will not be affected by this application. � 3. Laws of Minnesota 1976, Chapter 234, provldes that any issue of revenue bonds authorized by the Port Authority of the City of Saint Paul , shall be issued oniy wlth the consent of the City Council of the City of Saint Paul , by resolution adopted in accordance with law ; 4. The Port Authority of the City of Saint Paul has requested that the City Council give its requisite consent pursuant to said law to facilitate the issuance of said revenue bonds by the Port Authority of the City of Saint Paul , subJect to final approval of the details of said issue by the Port Authority of the City of Saint Paul . 0 R�I G�I N A L � . . ��Q�-�� ., . Page -2- RESOLVED, by the City Councii of the City of Saint Paul , that in accordance with Laws of Minnesota 1976, Chapter 234, the City Council hereby consents to the issuance of the aforesaid revenue bonds for the purposes described in the aforesaid Port Authority Resolution No. 3234 the exact details of which, including, but not limited to, provisions relating to maturities, interest rates, discount, redemption, and for the issuance of additional bonds are to be determined by the Port Authority, pursuant to resol ut ton adopted by the Port Author i ty, and the C i ty Counc i I hereby authorizes the issuance of any additionai bonds ( including refunding bonds ) by the Port Authority, found by the Port Authority to be necessary for carrying out the purposes for which the aforesaid bonds are issued. Yeas Navs � Requested by Department of: s.mon oswztz —�— �� on �— �/ saca ee � ettman ❑ne �` _ z son --T By: �� Adopted by Council: Date AUG 2 � lggp Form Approved by City Attorney By. L� `--� �j Adoption Certified by Council Secretary � BY� :� ��✓ � Approved by Mayor for Submission to 1990 Council Approved by Mayor: Date _ _ ( f By: ,c��e�` BY� � ��.Q-�C_.-�- ��p S E P - 1 1�90 � . . � . � � ��v-��.�� DEPARTI4ENT/OFFICElCOUNCIL DATE INITIATED N� _11113 st. Paul Port Authority s/27/so GREEN SHEET CO TACT PERSON&PHONE INI AT INITIAUDATE Q DEPARTMENT DIRECTOR � d CITY COUNCII David Stokes/James B@11US ASSIGN �, CITYATTORNEY ��_�d' �CITYCLERK NUMBER FOR MUST BE ON COUNCIL AGENDA BY(DATE) ROUTING �BUDCiET DIRECTOR �FIN.&MOT.SERVICES DIR. July 19, 1990 ORDER �MAYOR(OR ASSISTANT) �COU11C11 P� TOTAL#OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) ACTION REQUESTED: Approval of the issuance in an amount not to exceed $700,000 in tax-exempt bonds for Chargo Printing, Inc. HECOMMENDATIONS:Approve(A)or Reject(R) PERSONAL SERVICE CONTRACTS MUST ANSWER THE FOLLOWING�UESTIONB: _PLANNING COMMISSION _ CIVIL SERVICE COMMISSION �• Has this person/firm ever worked under a contract for thfs department? _CIB COMMITTEE _ YES NO 2. Has this person/firm ever been a city employee? _STAFF - YES NO _DISTRiCT COURT - 3. Does this ersonlfirm p possess a skill not normally possessed by any current city employee? SUPPORT3 WHICH COUNCIL OBJECTIVE7 YES NO Explain all yes answers on separate sheet and attach to green sheet INITIATING PROBLEM,ISSUE,OPPORTUNITY(Who,What,When,Where,Why): The issuance of tax-exempt bonds will allow Chargo Printing to construct a 20,000 sq.ft. new facility in Empire Builder Industrial Park. This will allow them to keep their 30 employees in St. .Paul and also will provide them an opportunity to add another 10 employees over the next 1 1/2 yeaxs. ADVANTACiE3 1F APPROVED: If approved, the new facility in the Scattered Site Tax Increment District will generate tax revenue for that purpose. It will also retain employment and create new employment opportunities and help a small St. Paul business continue to grow and expand. RECEi DISADVANTAGiES IFAPPROVED: None JUL 11 1990 CITY ATTOF�� DISADVANTAOES IF NOT APPROVED: The company will not be able to proceed with the construction of their new facility. The new tax base would not be created and the firm would not create new jobs in st. Paui. RECEIVED - �vu�� ;��9� C�� JUL1319A0 �u, 13�y�u .. CITY CLERK TOTAL AMOUNT OF TRANSACTI N S In an amount IlOt t0 COST/REVENUE BUDGETED(CIRCLE ONE) YES NO exceed �700,000 in tax-exempt bonds FUNDING SOURCE Port Authority Bond Issue ACTIVITY NUMBER FINANCIAL INFORMATION:(EXPLAIN) �� , . . . NOTE: COMPI.ETE DfRECTiONS ARE INCLUDED IN THE GREEN SHEET INSTRUCTIONAL ' MANUAL AVAILABLE IN THE PURCHASING�JFFICE(PHONE NO.298-4225). . , ROUTING ORDER: Below are correct routings for the five most frequent types of documents: CONTRACTS(assumes authorized budget exists) COUNCIL RESOLUTION(Amend Budgets/Accept.Grants) 1. Outside Agency 1. Department Director 2. Department Director 2. City Attorney 3. City Attorney 3. Budget Director 4. Mayor(for contracts over$15,000) 4. MayodAssistant 5. Human Rights(for contracts over$50,000) 5. City Council 6. Finance and Management Services Director 6. Chief Accountant, Finance and Management Services 7. Finance Accounting ADMINISTRATIVE ORDERS(Budget Revision) COUNCIL RESOLUTION (all others,and Ordinances) 1. Activity Manager 1. Department Director 2. Department Accountant 2. City Attorney 3. Department Director 3. Mayor Assistant 4. Budget Director 4. City Council 5. City Clerk 6. Chief Accountant, Finance and Management Services ADMINISTRATIVE ORDERS(all others) 1. Department Director 2. City Attorney 3. Finance and Management Services Director 4. City Clerk TOTAL NUMBER OF SIGNATURE PAGES lndicate the#of pages on which signatures are required and paperclip or flag eech of these pages. ACTION REQUESTED Describe what the projecUrequest seeks to accomplish in either chronologi- cal order or order of importance,whichever is most appropriate for the issue. Do not write�omplete sentences. Begin each item in your list with e verb. RECOMMENDATIONS Complete if the issue in question has been presented before any body, public or private. . SUPPORTS WHICH COUNCIL OBJECTIVE? Indicate which Council objective(s)your projecUrequest supports by listing the key word(s)(HOUSING, RECREATION, NEIQHBORHOODS, ECONOMIC DEVELOPMENT, BUDGET,SEWER SEPARATION). (SEE COMPLETE LIST IN INSTRUCTIONAL MANUAL.) PERSONAL SERVICE CONTRACTS: This information will be used to determine the city's liability for workers compensation claims,taxes and proper civil service hiring rules. " INITIATING PROBLEM, ISSUE, OPPORTUNITY Explain the situation or conditions that created a need for your project or request. ADVANTAGES IF APPROVED indicate whether this is simply an annual budget procedure required by law/ charter or whether there are specific ways in which the City of Saint Paul and its citizens will benefit from this projecUaction. DISADVANTAGES IF APPROVED What negative effects or major changes to existing or past processes might this project/request produce if it is passed(e.g.,traffic delays, noise, tax increases or assessments)?To Whom?When? For how long? DISADVANTAGES IF NOT APPROVED What will be the negative consequences if the promised action is not approved? Inability to deliver service?Continued high traffic, noise, accident rate? Loss of revenue? FINANCIAL IMPACT Although you must tailor the information you provide here to the issue you are addressing, in general you must answer two questions:How much is it going to cost?Who is going to pay? � CITY OF SAINT PAUL - aii!'I11 Ii i� - OFFICE OF THE CITY COUNCIL CITY HALL-7th FLOOR-SAINT PAUL,MINNESOTA 55102 612-298-5506 TOM DIMOND COUNCILMEMBER Members: Tom Dimond, Chair Paula Maccabee Oave Thune Date: August 8, 1990 COMMITTEE REPORT HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE 1 .✓ Approval of the July 25, 1990, Housing and Economic Development Committee meeting. COMMITTEE APPROVED, 3-0 2��`' Sibley Apartments -- (Galtier Plaza) -- Redevelopment Company contract terms (Property Tax Abatement -- Laid Over in HED 7-25-90) . COMMITTEE RECOMMENDED APPROVAL WITH AMENDMENTS, 3-0 (HRA) 3�1� 730 North Fairview Avenue. COMMITTEE RECOMMENDED APPROVAL, 3-0 (HRA) V 4.�.� � Approval of funding to construct a parking lot on HRA parcel at 141-E, the southwest corner of Selby and Dale, Summit-University Planning Council , District 8 (Referred from HRA 7-10-90; Laid Over in HED 7-25-90) . THIS ITEM WILL BE LAID OVER TO THE AUGUST 29, 1990, HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE MEETING 5.r1� Authorization to amend joint power agreement budget for North End Partnership �� URAP, Industrial Park, District 6 (Laid Over in HED 7-25-90) . COMMITTEE RECOMMENDED APPROVAL AS AMENDED, 4-0 (HRA) 6. Resolution 90-1344 -- Approving the Neighborhood Partnership Program Fourteenth Cycle projects (Referred from Council 8-7-90) . COMMITTEE RECOMMENDED APPROVAL, 3-0, WITH STAFF TO REPORT BACK ON DIFFERENT SOURCES OF REVENUE FOR FUTURE PROJECTS Chair, Housing and Redevelopment Authority, Committees: Public Works; �Iousing and Economic Development; Finance. .��s 100ao„�oeycleahle �'�o -/�� HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE COMMITTEE REPORT -- AUGUST 8, 1990 PAGE TWO 7. Request for Subordinate Financing, TCHDC Scattered Site Project (Referred from HRA 7-24-90) . COMMITTEE RECOMMENDED APPROVAL AS AMENDED, 3-0 (HRA) 8. Ordinance 90-1134 -- An ordinance amending Chapter 61 of the Legislative Code pertaining to maintaining the residential and open space character of parkways and protecting them from encroachment by commercial and/or industrial buildings - Text Amendments VII (Referred from Council 7-5-90) . THIS ITEM WILL BE LAID OVER TO THE AUGUST 29, 1990, HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE MEETING 9. Ordinance 90-1135 -- An ordinance amending Chapters 60 and 62 of the Legislative Code pertaining to allowing the shared use of institutional parking spaces in residential zones with nearby businesses - Text Amendments VII (Referred from Council 7-5-90) . THIS ITEM WILL BE LAID OVER TO THE AUGUST 29, 1990, HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE MEETING 10. Resolution 90-1159 -- A Resolution Concerning Levies for City and County Public Works and Parks in Saint Paul (Referred from Council 7-10-90) . COMMITTEE RECOMMENDED APPROVAL, 3-0 11 . Resolution 90-1297 -- Authorizing Public Housing Agency to acquire 40 single- family and duplex units for use as low-income and rental units (Referred from Council 7-31-90) . COMMITTEE RECOMMENDED APPROVAL AS AMENDED, 3-0 12. Resolution 90-1254 -- Approving the issuance in an amount not to exceed $700,000 in Port AUthority tax-exempt bonds for Chargo Printing, Inc. , to construct a new facility in Empire Builder Industrial Park ( om C�eEix�cil �-- �4-90,1 COMMITTEE RECOMMENDED APPROVAL, 3-0 , , � /1�� . /!�C 1 � ` ��"��5� � � � � � , ��' FAX(612) 223-5198 � PORT AUTHORITY OF THE CIN OF SAINT PAUL TOLL FREE(800) 328-8417 � � 1900 LANDMARK TOWERS • 345 ST. PETER STREET • ST. PAUL, MN 55102-1661 • PHONE(612) 224-5686 June 27, 1990 Mr. Dan CorneJo, Director Pianning and Economic Development City of St. Paul 13th Floor, City Hail Annex St. Paul , Minnesota 55102 SUBJECT: piARGO PRINTING, INC. IN AN AMOUNT NOT TO EXCEED 5700,000 IN A TAX-EXEMPT REVENUE BOND ISSUE Dear Dan: We submit herewith for your review and referral to the office of the Mayor, City Council and City Attorney�s office details pertaining to the issuance of an amount not to exceed $700,000 1n tax-exempt revenue bonds to finance the construction of an approximately 20,000 square foot manufacturing facility in Empire Builder Industrial Park, St. Paul , Minnesota. The Port Author ity subm itted an appl ication for an i ndustr i al revenue bond allocation from the State of Minnesota Competitive Pool as the proJect is industrial , and secured an aliocation. The City of Saint Paul 's entitiement allocation will not be affected by this appiication. The Port Author ity staff has conducted a thorough eval uation of the f irm and individuals that are involved in this proJect or in which the principals have an interest. This investigation has included detailed credit analysis, Dun and Bradstreet reports, direct communication with representatives of financial institutions with whan the participants have done business and data base checks to determine if any principal (s) have been in any Nay involved in legal proceedings as a result of securities fraud, extortion, embezzlement or financial misrepresentation. In addition to the staff inemorandum, we are attaching a draft copy of the proposed City Council resolution and a copy of Port Authority Resolution No. 3234, which authorized the sale of revenue bonds in an amount not to exceed 5700,000. Your expeditious handling of this matter will be appreciated. Sincerely, � 1'w` James J. Bellus Executive V1ce President JJB:aJc cc: Mayor Scheibel , , - . �90�� Resolution No. � RESOLUTION OF TIiE PORT AUTI�iORITY OF THE CITY OF SAINT PAUL WHEREAS, one of the purposes of Minnesota Statutes, Chapter 469 (hereinafter called "Act") , as found and determined by the legislature is to promote the welfara ot tha state by the active, promotion, attraction, encouraqement and development of economically sound industry and commerce to prevent so far as possible the emerqence of bliqhted and marqinal lands and areas of chronic unemployment and to aid in the development of existinq areas of bliqht, marqinal land and persistent unemployment; and WHEREAS, factors necessitatinq the active promotion and development of economically sound industry and commerce are the increasinq concentration of population in the metropolitan areas and the rapidly risinq increase in the amount and cost of qovernmental services required to meet the nesds of the increased population and tha need for development of land use which will provide an adequate tax base `to financa these increased costs and access to employment opportunities for such population; and WHEREAS, the Port Authority of the City of Saint Paul (the "Authority") has received from Charqo Printinq, Inc. (hereinafter referred to as "Company") a request that the Author- ity issue its revenue bonds (which may be in the form of a single note) to finance the acquisition, installation and construction of a 20,000 square foot printinq facility (hereinafter collectively called the "Project") on Site 2 in Empire Builder Industrial Park in the City of St. Paul, all as ia more fully describad in tha staff report on file; and WHEREAS, the Authority desires to lacilitata the selective development of the community, to retain and improve its tax base and to help it provide the ranqa o! services and employment opportunities required by its population, and said Project will assist the City in achievinq that objective. Said Project will help to increase the assessed valuation o! the City 37'9�► �'yo-ia.�� and help maintain a positive relationship between assessed valuation and dabt and enhance the imaqe and reputation of the City; and WHEREAS, the Project to be financed by revenue bonds will rasult in substantial employment opportunities in the Project; WHEREAS, the Authority has been advised by repre- sentatives of the Company that conventional, commercial financing to pay the capital cost of the Project is available only on a limited basis and at such hiqh costs of borrowinq that the economic feaeibility of operatinq the Project would be siqnificantly reduced; WHEREAS, Miller & Schroeder Financial, Inc. (the "Underwriter") has made a proposal in an aqreement (the "Underwritinq Aqreement") relatinq to the purchase of the revenue bonds to be issued to finance the Project; WHEREAS, the Authority, pursuant to Minnasota Statutes, Section 469.154, Subdivision 4, did publish a notice, a copy of which with proof of publication ia on file in the o!lice of the Authority, ot a public hearinq on tha proposal ot the Company that tha Authority finance the Project hereinbafore deacribed by the issuance of its industrial revenue bonds; and WHEREAS, the Authority did conduct a public hearinq pursuant to said notice, at which hearinq the racommendations contained in the Authority's staff inemorandum to the Commissioners were reviewed, and all persons who appeared at the hearinq were qiven an opportunity to express their views with respect to the proposal. NOW, TIiEREFORE, BE IT RESOLVED by the Commissioners of the Port Authority of the City of Sa3nt Paul, Minnesota as follows: 1. On the basis of information available to the Authority it appsars, and the Authority hereby finds, that said Project constitutas properties, used or useful in connection with one or mor� revenus producinq enterprisea enqaqad in any buainess within tha msaninq ot Subdivision 2 of Section 469.153 of the Act; that tha Project furthers tha purposes atated fn Section 469.153 0! the Act, and that the effsct o! tho Project, if undertaken, will ba to encouraqe the devalopment of economically sound industry and commerce and assist in the pravention o! the emerqence o! bliqhted and marqinal land, and will halp to prevent chronic unemployment, and will help tha City to retain and 379i 2 . , , . , �-�o-��-�� improve ita tax base and provide the ranqe of aervices and employment opportunities required by ita population, and will ' help to prevent ths movement of talented and educated persons out ot the state and to areas within the state where their services may not ba as effectively used and will result in more intensive development and use of land within ths City and will evantually result in an increase in the City�s tax base; and that it is in the beat intereata of the port district and the people of the City of Saint Paul and in furtherance ot tha qeneral plan of developmant to assist the Company in financinq tha Project. 2. Subject to the mutual aqreement of the Authority, the Company and the purchaser of the revenue bonds as to the details of the lease or other revenue aqreement as defined in the Act, and other documents necessary to evidence and effect the financinq of the Project and the issuancs o! the revenue bonds, � the Project is hereby approved and authorized and the isauance of revenue bonda of the Authority (which may be in the form ot a sinqle note) in an amount not to exceed approximately $700,000 (other than such additional revenua bonds as ara naeded to complete the Project) is authorized to finance tha costs o! the Projact and the recommendations ot tha Authority's stail, as set forth in the staff inemorandum to the Commissioners which was presented to tha Commissioners, are incorporated hsrain by reference and approved. 3. In accordance with Subdivision 3 of Minnesota Statutes, Section 469.154, the Executive Vice-Preaident of the AUTHORITY is hereby authorized and directed to submit the proposal for the above described Project to the Commisaioner of Trade and Economic Development, requestinq his approval, and other officers, employees and aqents of tha AtJTIiORITY are hereby authorized to provide the Commissioner with such preliminary information as he may require. 4. Thera has heretofore been filed with the Authority a form of Preliminary Aqreement between tha Authority and Company, relatinq to the proposed construction and financinq of the Project and a lorm of the Underwritinq Aqreament. The forms of the aqrasmants hava been examined by tha Commissionars. It is the purposs ot tha aqr�ements to evidence tha commitmsnt of the partias and their intentions with respect to tha proposed Project in ordar that the Company may proceed without delay with the commancemant o! tha acquisition, installation and construction of the Project with ths assurance that there has been su!licient "otficial action" within the meaninq ot th4 Internal Ravsnus Code ot 1986, as amended, to allow for the issuancs o! industrial revenue bonds (includinq, if deemed appropriate, any intarim note or notes to provide temporary financinq thereo!) to finance the 3T9i 3 ' ' �,�yo--/�✓�� entire cost of the Proiect upon aqreemant bainq reached as to the ' ultimats d�tails ot the Project and its tinancinq. Said Aqraements ar• hsreby approved, and the Presidant and Secretary ot the Authority are hereby authorized and directed to execute said Aqreements. 5. Upon execution of the Preliminary Aqreement by the Company, the staff of the Authority ia authorized and directed to contfnue neqotiations with the Company so as to rssolve the remaininq issues necessary to tha preparation o! th� lease and other documents necassary to the adoption by tha Authority of its final bond resolution and the issuance and dalivery of the revenua bonds; provided that the President (or Vica-President if the President is absent) and the Secretary (or Assistant Secretary if the Secretary is absent) ot the Authority, or if �ither ot such officers (and his alternative) are absent, the Treasurer of the Authority in lieu o! such abaent ofticera, are hereby authorized in accordance with the provisions o! Minnesota Statutes, Section 475.06, Subdiviaion 1, to accept a tinal offer of the Underwriter made by the Underwriter to purchase said bonds and to execute an Undsrwritinq Aqreement sattinq lorth such offer on behal! ot the Authority. Such acceptance shall bind the Underwriter to said offer but shall be subjact to approval and ratitication by tha Authority in a formal supplemental bond resolution to be adopted prior to the dslivery o! aaid ravenue bonda. 6. Th� revenue bonds (includinq any interim note or notes) and intereat thereon shall not constitute an indebtedness of the Authority or the City of Saint Paul within the meaninq of any constitutional or statutory limitation and shall not constitute or qive riae to a pecuniary liability of the Authority or the City or a charqe aqainst their general credit or taxinq powers and neither the full faith and credit nor tha taxinq powere of the Authority or the City is pledqed !or ths payment of the bonds (and interim nota or notes) or interest thsreon. 7. In order to facilitate completion of the revenue bond financinq herein contemplated, the City Council is hereby requestad to consent, pursuant to Laws o! Minnesota, 1976, Chapter 234, to ths iseuance of the rsvenus bonds (includinq any intarim not� or notsa) herein contemplated and any additional bonds which th� Authority may prior to issuance or from time to time thersalt�r desm necessary to complete tho Project or to . relund such rsvanuo bonds; and for such purpose the Executive Vice President of tha Authority is hereby authorized and directed to forward to tha City Council copies o! this resolution and said Preliminary Aqreement and any additional available intormation the City Council may request. 3� 4 � � . � . � ;��-id�� ► 8. The actions of the Executive Vice-President of the Authority in causinq public notice of the public hearinq and in describinq the qeneral nature of the Project and estimatinq the principal amount of bonds to be issued to finance the Project and in preparinq a draft ot the proposed application to the Commissioner of Enerqy and Economic Development, State of Minnesota, for approval of the Project, which as been available for inspection by the public at the o e ot th Authority from and after the publication of notic of the hear q, ara in all respects ratified and confirmed. Adopted June 26, 1990. President Attest The Port Authority ot the City of Saint Paul �.t�� L-t�I 1 D�� secr taity 37'9f► , 5 � ► � P �ORT �y��as � AUTHORITY OF THE CITY OF ST. PAUL Memora�calurn TO: BOARD OE COMMISSIONERS �A�' June 12, 1990 (June 26, 1990 Regular Meeting) James J. Bellus � FROM: David M. Stoke�� SUBJECT,: � pRINPING, YNG� PUBLIC HBARING: PRSLIMINARY AI�ID IINDBRWRITING AGRSBl�NrS IN AN A!lDUNP NOT TO B%CEF.ID $700,000 - TA%S%BI�T RBVSNUS BOND ISSUB ffi�IRB BIIILDBR IAIDUSTRIAL PARK, SITS 2 RSSOLDTION N0. 3234 POBLIC HEARING: SALE OF LAND RSSOLDTION N0. 3235 NAIVRS OF THB PROJSCT The firm is proposing to construct a 20,000 square foot printing facility on 1.9 acres (82,764 square feet) on Site 2 in Empire Builder Industrial Park. The facility will include 6, 000 square feet of finished office space and 14,000 square feet of manufacturing space. BUSINSSS HIST'ORY Chargo Printing is a high-quality, medium format, lithographic commercial printing company. The firm does four color printing for sheet-fed printing up to 28" wide. Chargo does not do instant or web printing. It was founded in 1919 as Gottlieb Printing as a letter-press printer. It operated under that name until the early 1960's when it was renamed Chargo Printing. The firm was purchased in 1983 by Scott Lidberg. The firm w as located on the fifth floor of the Rossmor Building in 1,700 square feet with two employees. In 1985 the firm moved to 4, 700 square feet of space, and again in 1988 moved into 8,700 square feet. Since 1983 annual sales have risen from $163,000 to $3 million, and Chargo now employs 31 people. FINANCING Sources and Uses of Funds: Uses: * Land $186,000 New Construction 740,000 Construction Period Interest 26,080 Bond Discount 14,850 Issuance Expense 19,800 Fixed Asset Total $986,730 � � �yo-�� BOARD OF COA'Il�iISSIONERS June 12, 1990 . Page -2- Sources: Port Authority Loan $780,000 Equity ** 206,730 Eized Asset Total $986,730 * Does not include debt service reserve. ** Borrower will provide $98,673 cash equity at closing. The balance, $108, 057 will come from Enterprise Zone tas credits. Due to timing difference between closing and receipt of Enterprise Zone credits, Port Authority will make an interim loan to Chargo and have $108,057 of Enterprise Zone credits assigned to the Port Authority. Enterprise Zone credits will be available in 1991. Bond Issue: Uses: Principal Amount of Bonds: $660,000 Less Debt Service Resezve: 66,000 Loan to Borrower: $594,000 Interest Rate: Estimated Taa-Esempt Bond Interest Rate: 8.50� Port Authority Fee: 0.50� Credit Enhancement Fee: to be determined Estimated Total Annual Interest Rate: Credit Enhancement Fee: This is the annual cost to the borrower to maintain the debt service reserve. It is the difference between the reserve's coupon rate and the interest earned on the reserve. It is estimated to be when taa-exempt bonds are used. Shortfalls will be added to the borrower's total debt service. Term: 30 Years Amortization: 30 Years Reserve: $66,000 (The Reserve will be funded by bond proceeds, and the Borrower will receive the interest earnings on the Reserve. ) Land Lease: The land is being leased to the firm based upon a price of $186,000 for 1.9 acres and an effective interest rate of 10.OX. ; � ��y�� BOARD OF COI�iISSIONERS June 12, 1990 Page -3- Total Port Authority Debt (ezcluding debt sezvice reserve) : Land Lease $186,000 Building Lease 594,000 Total $780,000 BNTSRPRISS ZONS TA% CRSDITS Enterprise Zone tas credits of $192,000 have been offered to the firm by the Port Authority, the administrator of the program in Saint Paul. Of the $192, 000, $108, 057 will be used as equity to fund the new facility and the balance, $83,943, will be used to fund operations, including retiring some debt on egisting equipment. The firm will receive the credits when it files its 1990 taa statement with the State of Minnesota in 1991. It is expected that the firm will receive the credit by sometime during the summer of 1991. Bonds will not be issued until the Enterprise Zone credits receive final approval from the state. Final approval of the credits is egpected from the state by the middle of August. The interim loan will carry an annual interest rate of lO. OX. It will be dispersed from the construction fund with the other funds and repaid with accrued interest when the credits are made available from the state. Since Chargo Printing is solely responsible for any soil correction that may arise, the firm may allocate some of its Enterprise Zone credits to defray a portion of the soil correction cost. P[TBLIC P'[JRPOSS ANALYSIS The firm currently employs 30 people and plans to add 10 within 1 1/2 years of the expansion. These jobs are highly skilled, require extensive training and are well paid. Chargo Printing is expanding in Empire Builder Industrial Park, which is in the City's Scattered Site Tag Increment District. The property will increase the area's taa base by approsimately $36,000 per year, and the Taz Increment District egists until 2013. . �yo ,�� BOARD OE COMMISSIONERS June 12, 1990 , . Page -4- PORT ADTHORITY PORTFOLIO IN PRINTING A1�ID PRINPINCrRffi�A1'SD INDUSTRIBS Printing is a growing industry in Minnesota, and is the second largest industry, by employment, in the state. The Saint Paul Port Authority has financed nine businesses in the printing and printing-related industries. The outstanding balance on these loans total $22, 120,000, or 3.6X of all bonds payable to the Port Authority. To contrast this with the industry's importance in the state, this industry is the third largest industry in Minnesota. Also, 4.7x of the state's employment is in this industry. Relating the industry by number of establishments, 10. 2� of business establiehments in the state, and 12.4X in the metropolitan area. are in the printing industry. UI�IDBRWRITING Miller and Schroeder Financial has agreed to undexwrite the 30 year bond issue at a rate to be set at the time the bonds are sold. We anticipate that the bonds will be sold at the regular July Board meeting. RSCO?�IDATIONS Staff have met with the owner of the company, reviewed the company's financial condition and prospects for growth. District 7 Planning Council's Physical Committee has met and recommended that the District Council support this project. Also, the Loan Committee of the Board of Commissioners has reviewed this company and recommends approval of the loan. Staff recommend approval of Resolution Nos. 3234 and 3235 . DMS:ajc 2/CHARBDMM