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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 �:�� , . , Presented By � ` � 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. + . . ����o� 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. � � �,c�y-��o� 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. �� ,�o� 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 , � _ � F � � �y-��o� � �� . � ; � �� � �� � 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 . � � ��-��o� 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 � ���/G a� 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 2 ��~��°� � 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 3 � , . ��cy--1G d� f 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 . Pre ident S Se tary 4 .