89-1606 WHITE - C�TV CLERK
PINK - FIN4NCE COURCII ///{�
CANARV - DEPARTMENT G I TY OF SA I NT PAITL (p//
BLUE - MAVOR File NO. �/r`�
, ci Res ution �:��
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Presented By
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Referred To � � Committee: Date
Out of Committee By Date
WHEREAS:
1 . On August 22, 1989, the Port A thority of the City of Saint Paul adopted
Resolution No. 3161 , giving preliminary approval to the issuance of taxable revenue bonds
in the lnitial principal amount of appr ximately $600,000 to finance the acquisition of a
27,500 square foot production facility located at 746 Selby Avenue for Expo Graphics, Inc.
in St. Paul , Minnesota. Miller and Sch eder Flnancial , Inc. has agreed to underwrite the
revenue bond issue for a term of 20 yea s.
2. Laws of Minnesota 1976, Chapte 234, provides that any issue of revenue bonds
authorized by the Port Authority of the ity of Saint Paul , shall be issued only with the
consent of the City Councll of the City f Saint Paul , by resolution adopted in accordance
with law;
3. The Port Authority of the City f Saint Paul has requested that the City Council
give its requisite consent pursuant to s id law to facilitate the issuance of said revenue
bonds by the Port Authority of the Clty f Saint Paul , subJect to final approval of the
details of said issue by the Port Authority of the City of Saint Paul .
RESOLVED, by the City Council of th City of Saint Paul , that in accordance with Laws
of Minnesota 1976, Chapter 234, the C'ity Council hereby consents to the issuance of the
aforesaid revenue bonds for the purposes described in the aforesaid Port Authority
Resolution No. 3161 the exact details� of which, including, but not limited to, provisions
relating to maturities, interest rates, iscount, redemption, and for the issuance of
additional bonds are to be determined by the Port Authority, pursuant to resotution
adopted by the Port Authority, and the C ty Council hereby authorizes the issuance of any
additional bonds ( including refunding bo ds) by the Port Authority, found by the Port
Authority to be necessary for carrying o t the purposes for which the af oresaid bonds are
issued.
COUNCIL MEMBERS Requested by partment of:
Yeas Nays � �
Dimond
��g [n Favor
Goswitz .�,
Rettman � B
Scheibel A gai n s t Y
Sonnen
Wilson
� � � 1989 Form Approve by City Attorney
Adopted by Council: Date �
Certified Pa. Counc' Secretary BY �
By -
F�pprov y Mavor. Dat
� � 3 � Appro by Mayor for Submi e�i�'
PUBLISl� S E P 2 3 19 8 9
St. Paul Port Authority DEPAR ME T � ��0°�° No 3642
J.E. Terrell , J.J. �ellus • CONTA T
224-5686 PHONE
August 22, 1989 DATE 1 „��� e e
ASSIGN NUN�ER FOR ROUTING ORDER Cli All oc tions for Si nature :
� Department Director 3 Director of Management/Mayor�� �
Finance and Management Services Direct r 4 City Clerk
Budget Director 5 Council Research
2 City Attorney Expo Graphics - $60�.00D Taxable IRB
WHAT WILL BE ACHIEVED BY TAKING ACTION ON E TTACHED MATERIALS? (Purpose/
Rationale) :
The purpose of the bond issue is to financ t e acquisition of a 27,500 square foot
production facility located at 746 Selby A en e for Expo Graphics, Inc. in St. Paul ,
Minnesota.
COST/BENEFIT BUDGETARY AND PERSONNEL IMPAC S NTICIPATED:
The amount of the. revenue bond issue is $6 0, 00 and will be for a term of 20 years.
There will be approximately eight to ten n w obs created as a result of this project.
FINANCING SOURCE AND BUDGET ACTIVITY NUMBER CH RGED OR CREDITED: (Mayor's signa-
ture not re-
Total Amount of Transaction: quired if under
$10,00Q)
Funding Source:
Activity Number:
ATTACHMENTS List and Number All Attachments :
1. Staff Memorandum
2. Draft Ci ty Counci 1 Resol uti on Council Research Center.
3. Port Authority Resolution No.
S t P 11989
cc: J. Shoholm
DEPARTMENT REVIEW CITY ATTORNEY REVIEW
X Yes No Council Resolution Required? Resolution Required? X Yes No
Yes X No Insurance Required? Insurance Suffi�ient? X Yes No
Yes X No Insurance Attached:
(SEE REVERSE SIDE F R NSTRUCTIONS)
Revised 12/84
HOW TO USE THE GREEN SHEET
The GREEN SHEET has several PURPOSES: `
1. to assist in routing documents and in securing required signatures
2. to brief the reviewers of documents on the impacts of approval '
3. to help ensure that necessary supporting materials are prepared, and, if
required, attached.
Providing complete information under the listed headings enables reviewers to make
decisions on the documents and eliminates follow-up contacts that may delay execution.
The COST/BENEFIT, BUDGETARY AND PERSONNEL IMPACTS heading provides space to explain
the cost/benefit aspects of the decision. Costs and benefits related both to City
budget (General Fund and/or Special Funds) and to broader financial impacts (cost
to users, homeowners or other groups affected by the action) . The personnel impact
is a description of change or shift of Full-Tiune Equivalent (FTE) positions.
If a CONTRACT amount is less than $10,000, the Mayor's signature is not required,
if the department director signs. A contract must always be first signed by the
outside agency before routing through City offices.
Below is the preferred ROUTING for the five most frequent types of documents:
CONTRACTS (assumes authorized budget exists)
1. Outside Agency 4. Mayor
2. Initiating Department 5. Finance Director
3. City Attorney 6. Finance Accounting
ADMINISTRATIVE ORDER (Budget Revision) ADMINISTRATIVE ORDERS (all others)
1. Activity Manager . l. Initiating Department
2. Department Accountant 2. City Attorney
3. Department Director 3. Director of Management/Mayor
4. Budget Director 4. City Clerk
5. City Clerk
6. Chief Accountant, F&MS
COUNCIL RESOLUTION (Amend. Bdgts./Accept. Grants) COUNCIL RESOLUTION (all others)
1. Department Director l. Initiating Department
2. Budget Director 2. City Attorney
3. City Attorney 3. Director of Management/Mayor
4. Director of Management/Mayor 4. City Clerk
5. Chair, Financ�, Mngmt. & Personnel Com. 5. City Council
6. City Clerk
7. City Council
8. Chief Accountant, F&MS
SUPPORTING MATERIALS. In the ATTACHMENTS section, identify all attachments. If the
Green Sheet is well done, no letter of transmittal need be included (unless signing
such a letter is one of the requested actions) .
Note: If an agreement requires evidence of insurance/co-insurance, a Certificate of
Insurance should be one of the attachments at time of routing.
Note: Actions which require City Council Resolutions include:
1. Contractual relationsYiip with another governmental unit.
2. Collective bargaining contracts.
3. Purchase, sale or lease of land.
4. Issuance of bonds by City.
5. Eminent domain.
6. Assumption of liability by City, or granting by City of indemnification.
7. Agreements with State or Federal Government under which they are providing
funding.
8. Budget amendments.
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PORT
� AUTHORITY
OF THE CITY OF ST. PAUL
Me orondum
TO: BOARD OF COMMISSIONERS DATE August 14, 1989
(August 22, 1989 Regular Meet ng)
FROM: '
J.J. Bellus
J.E. Terrell
SUBJECT:
EXPO GRAPHICS, INC.
PUBLIC HEARING - PRELIMINARY b NDERMRITING AGREEMENTS
5600,000 TAXABLE INDUSTRIAL DEV LOPMENT REVENUE BOND ISSUE
OFF-SITE
RESOLUTION N0. 3161
THE OOMPANY
Expo Graphics, inc. is a commerc al printing and bindery operation
specializing in the production a d binding of such materials as instructional
manuals, business forms and news etters. The Printing Division was founded in
the late 1950�s as an operating ivision of Control Data Corporation. The
division was expanded from a sin le press operation to its inception to a
multi-press, multi-color operati n which produces most of the technical
manuals generated by CDC's hardw re and software divisions and manufacturing
groups. The Bindery Division wa established in 1970 and is also an operating
division of CDC. The Bindery Di ision provides complete bindery and mailing
services including coliating, pu ching, cutting, gluing, shrink wrapping and
saddle stitching the printed mat rlals it services. In addition, the Bindery
Division utilizes its current wo k force to provide product fulfillment
services to clients who require on-print related products to be repackaged
and shipped to large groups of c stomers.
Expo Graphics, Inc. is a Minneso a Corporation, tormed in 19 89 to acquire the
assets of the CDC Printing Divis n located at 304 North Dale Street in Saint
Paul and the CDC Bindery Divisio located at 746 Selby Avenue in St. Paul .
The Company, which is owned by Richard M. Mangram and Neil C. Fleischhacker,
will continue to expand on its e tablished base of sales to CDC and to other
current cllents such as 3M, Hazel on, Lutheran Brotherhood and Tennant
Company.
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BOARD OF COMMISSIONERS
August 14, 1989
Page -2-
Expo Graphics, Inc. will commence ope ations with approximately 61 full-time
employees and 105 part-time employees Many of these full-time persons are
highly skilled technical or managerla personnel with 20 or more years of
expertence individually. Expo Graphi s will have employees in both its
printing and bindery areas that have een with CDC since the respective
operations were formed. Richard M. M ngram has managed the CDC bindery since
it opened in 1970. Neil C. Fleischha ker has over 33 years of experience in
the graphics and printing field and w s the past manager of the CDC printing
facility.
The Company has agreed to sign the Ci y's First Source Employment and Training
Agreement and is act(vely looking for ard to participating in the First Source
Program. Expo Graphics expects that ts employment will increase by eight to
ten persons over the next 18 to 24 mo ths.
THE PROJECT
Expo Graphics, Inc. is negotiating an Asset Purchase Agreement with Control
Data Corporation for the purchase of he assets of COC's Corporate Printing
Division and Corporate Bindery Divisi n, both located in St. Paul . The assets
to be purchased include inventory, ma hinery and equipment and the real estate
located at 746 Selby Avenue. Expo Gr phics will house its bindery operations
in this building containing 27,500 sq are feet. The purchase price of the
real estate is $500,000 and the purch se price for the remaining assets is
$225,000. The building is located on Selby Avenue on a slte containing 44,107
square feet of land. At the recommen ation of the Port Authority, Peter J.
Patchin and Associates, Inc. conducte an appraisal of the property and has
determined its fair market value to $625,000 as of June 22, 1989.
No leasehold improvements are contempl ted at this time since the bindery has
been occupying the facility in its en ity, since its construction in 1974 and
1979. The Printing Division will be sed in leased space at CDC World
Distribution headquarters on North Dal Street until permanent leased space
can be located.
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BOARD OF OOMMISSIONERS
August 14, 1989
Page -3-
FINANCING
The proposed financing would be done a a taxable 876 industrial development
revenue bond issue for a 20 year term. Proceeds from the bond issue would be
as follows:
Building Acquisition $490,000
Debt Service Reserve 73,000
Legai $ Underwriting Fees 37,000
Total Bond Issue $600,000
The Port Authority would receive earni gs on the Debt Service Reserve and
Sinking Fund as well as its customary $ A fees of $350.00 per month for the
tirst 10 years and $450.00 per month f r the second 10 years.
In addition to the proposed Port Auth ity financing, Expo Graphics, Inc. has
been approved by the Saint Paul Enterp ise Development Co�poration for a
$84,000 loan for equipment and operati g capitai . The Company has submitted
requests to representatives from local banking groups who have expressed
interest in providing the term loan an Iine of credit necessary for the
purchase of the balance of the machine y and equipment, as well as financing
for receivables. The Company's busine s plan indicates the need for a credit
facility of approximately $500,000 to rovide for the equipment purchase and
the receivables financing. In additio , the owners of the company will be
inJecting $100,000 of cash as equity i Expo Graphics, Inc. The Port
Authority's financing would be specifi ally contingent upon the Company
providing evidence of the required equ ty and evidence of a commitment from a
lender acceptable to the Port Authorit for a credit instrument of $500,000 or
greater, prior to bond sale.
SINDERWR I T I NG
Miller & Schroeder Financial , Inc. has agreed to underwrite the 20 year bond
issue at a rate to be set at the time he bonds are sold. We anticipate that
the bonds will be soid at our Regular eptember Board meeting.
r
BOARD OF COMMISSIONERS
August 14, 19 89
Page -4-
OPTIONS TO PURCHASE
The term of the lease would be for 20 years with options as outlined below:
Bui�di�a
Year 10 62,500
Year 20 62,500
REOOM�ENDAT I ONS
Early Notice for Dtstrict 8 was publl hed on July 21, 19 89. District 8 is
supportive of this proJect. Staff ha interviewed the Officers of the Company
and reviewed the company's financial tatements and recommends approval of the
Preliminary and Underwriting Agreemen , the Creation of the Industrial
District and the Sale of Land by Reso ution No. 3161 .
JET:aJc
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FAX(612) 223-5198
PORT AUTHORIN OF THE CIN OF SAINT PAUL TOLL FREE(800) 328-8417
��� 1900 LANDMARK TOWERS • 345 ST. PETER ST EET • ST. PAUL, MN 55102-1661 � PHONE(612) 224-5686
August 22, 1989
Mr. Kenneth Johnson, Director
Planning and Economic Development
City of St. Paul
13th Floor, City Hall Annex
St. Paul , Minnesota 55102
SUBJECT: EXPO GRAPHICS, INC.
$600,000 TAXABLE REVENUE B D ISSUE
Dear Ken:
We submit herewith for your review an referral to the offlce of the Mayor,
City Council and City Attorney�s offi e detalls pertaining to the lssuance of
$600,000 in taxable revenue bonds to finance the acquisition of a 27,500
square foot production facility loca d at 746 Selby Avenue in, St. Paul ,
Minnesota.
The Port Authority staff has conduct a thorough evaluation of the firms
and/or individuals that are involved in this proJect or in which the
princlpals have an interest. This i estigation has inciuded detailed credit
analysis, Dun and Bradstreet reports, direct communication with
representatives of financial institu tons with whom the participants have done
business and data base checks to det mine if any principal (s) have been in
any way lnvolved in legal proceeding as a resuit of securities fraud,
extortion, embezzlement or financial isrepresentation.
In addition to the staff inemorandum, e are attaching a draft copy of the
proposed City Council resolution and copy of Port Authority Reso�ution
No. 3161, whlch authorized the sale f revenue bonds in the amount of
$600,000.
Your expeditious handiing of this ma er will be appreciated.
Yours truly, ;
� �,�� ? 1
�,:'��''��"''e�' '�_,.��
, J�TI@S �-r-�A� �US
--Executive Vice President
JJB:aJc
cc: Mayor Latimer
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511D
Resolution No. �� �/
RES LUTION OF
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
WHEREAS, one of th purposes of Minnesota Statutes ,
Chapter 469 (hereinafter cal ed "Act" ) , as found and
determined by the legislatur is to promote the welfare of the
state by the active, promoti n, attraction, encouragement and
development of economically ound industry and commerce to
prevent so far as possible t e emergence of blighted and
marginal lands and areas of hronic unemployment and to aid in
the development of existing reas of blight, marginal land and
persistent unemployment; and
WHEREAS, factors n cessitating the active promotion
and development of economica ly sound industry and commerce
are the increasing concentra ion of population in the
metropolitan areas and the r pidly rising increase in the
amount and cost of governmen al services required to meet the
needs of the increased popul tion and the need for development
of land use which will provi e an adequate tax base to finance
these increased costs and ac ess to employment opportunities
for such population; and
WHEREAS, the Port uthority of the City of Saint
Paul ( the "Authority" ) has r ceived from Expo Graphics, Inc . ,
a Minnesota corporation (her inafter referred to as
"Company" ) , a request that t Authority issue its revenue
bonds (which may be in the fo m of a single note) to finance
the acquisition of facilities for its bindery operations
( hereinafter referred to as t e "Project" ) at 746 Selby Avenue
- in the City of St. Paul, all s is more fully described in the
staff report on file; and
wHEREAS, the Author'ty desires to facilitate the
selective development of the ommunity, to retain and improve
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its tax base and to help it ovide the range of services and
employment opportunities req ired by its population, and said
Project will assist the City in achieving that objective.
Said Project will help to inc ease the assessed valuation of
the City and help maintain a ositive relationship between
assessed valuation and debt d enhance the image and
reputation of the City; and
WHEREAS, the Projec to be financed by revenue bonds
will result in substantial e loyment opportunities in the
Project;
WHEREAS, the Autho ity has been advised by repre-
sentatives of the Company th t conventional, commercial
financing to pay the capital cost of the Project is available
only on a limited basis and t such high costs of borrowing
that the economic feasibilit of operating the Project would
be significantly reduced, bu the Company has also advised
this Authority that but for evenue bond financing, and its
resulting low borrowing cost, the Project would not be
undertaken;
WHEREAS, Miller & chroeder Financial, Inc . (the
"Underwriter" ) has made a pr posal in an agreement ( the
"Underwriting Agreement" ) re ating to the purchase of the
revenue bonds to be issued t finance the Project;
NOW, THEREFORE, BE IT RESOLVED by the Commissioners
of the Port Authority of the City of Saint Paul, Minnesota as
follows :
1 . On the basis f information available to the
Authority it appears, and th Authority hereby finds, that
said Project constitutes pro erties, used or useful in
connection with one or more evenue producing enterprises
engaged in any business with' n the meaning of Subdivision 2 of
Section 469 . 153 of the Act; hat the Project furthers the
purposes stated in Section 4 9 . 153 of the Act and that the
effect of the Project, if un ertaken, will be to encourage the
development of economically ound industry and commerce and
assist in the prevention of he emergence of blighted and
marginal land, and will help to prevent chronic unemployment,
and will help the City to re ain and improve its tax base and
provide the range of service and employment opportunities
required by its population, nd will help to prevent the
movement of talented and edu ated persons out of the state and
to areas within the state wh re their services may not be as
effectively used and will re ult in more intensive development
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and use of land within the C ' ty and will eventually result in
an increase in the City' s ta base; and that it is in the best
� interests of the port distri t and the people of the City of
Saint Paul and in furtheranc of the general plan of
development to assist the Co pany in financing the Project.
2 . Subject to th mutual agreement of the
Authority, the Company and t e purchaser of the revenue bonds
as to the details of the lea e or other revenue agreement as
defined in the Act, and othe documents necessary to evidence
and effect the financing of he Project and the issuance of
the revenue bonds, the Proje t is hereby approved and
authorized and the issuance f revenue bonds of the Authority
(which may be in the form of a single note) in an amount not
to exceed approximately 5600 000 (other than such additional
revenue bonds as are needed o complete the Project) is
authorized to finance the co ts of the Project and the
recommendations of the Autho ity' s staff, as set forth in the
staff inemorandum to the Comm ssioners which was presented to
the Commissioners, are incor orated herein by reference and
approved.
3 . There has her tofore been filed with the
Authority a form of Prelimin ry Agreement between the
Authority and Company, relat ng to the proposed acquisition
and financing of the Project and a form of the Underwriting
Agreement. The forms of the agreements have been examined by
the Commissioners . Said Agr ements are hereby approved, and
the President and Secretary f the Authority are hereby
authorized and directed to e ecute said Agreements .
4 . Upon executio of the Preliminary Agreement by
the Company, the staff of th Authority is authorized and
directed to continue negotia ions with the Company so as to
resolve the remaining issues necessary to the preparation of
the lease and other documeiit necessary to the adoption by the
Authority of its final bond esolution and the issuance and
delivery of the revenue bond ; provided that the President (or
Vice-President if the Presid nt is absent) and the Secretary
(or Assistant Secretary if t e Secretary is absent) of the
Authority, or if either of s ch officers (and his alternative)
are absent, the Treasurer of the Authority in lieu of such
absent officers, are hereby uthorized in accordance with the
provisions of Minnesota Stat tes , Section 475 . 06 , Subdivision
1, to accept a final offer o the Underwriter made by the
Underwriter to purchase said bonds and to execute an
Underwriting Agreement setti g forth such offer on behalf of
the Authority. Such accepta ce shall bind the Underwriter to
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said offer but shall be subj ct to approval and ratification
by the Authority in a formal supplemental bond resolution to
be adopted prior to the deli ery of said revenue bonds .
5 . The revenue b nds ( including any interim note
or notes) and interest there n shall not constitute an
indebtedness of the City of aint Paul within the meaning of
any constitutional or statut ry limitation and shall not
constitute or give rise to a pecuniary liability of the City
or a charge against its gene al credit or taxing powers and
neither the full faith and c edit nor the taxing powers of the
City is pledged for the paym nt of the bonds (and interim note
or notes ) or interest thereo . The revenue bonds shall
constitute an indebtedness a d pecuniary liability of the
Authority and the full faith and credit of the Authority will
be pledged for the payment o the Bonds and interest thereon.
6 . In order to f cilitate completion of the
revenue bond financing herei contemplated, the City Council
is hereby requested to conse t, pursuant to Laws of Minnesota,
1976 , Chapter 234 , to the is uance of the revenue bonds
( including any interim note r notes) herein contemplated and
any additional bonds which t e Authority may prior to issuance
or from time to time thereaf er deem necessary to complete the
Project or to refund such re enue bonds; and for such purpose
the Executive Vice President of the Authority is hereby
authorized and directed to f rward to the City Council copies
of this resolution and said reliminary Agreement and any
additional available informa ion the City Council may request .
Adopted August 22, 1989
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Pre ident
S
Se tary
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