88-1086 WHITE - C�7V CLERK
P!4:�K - FINANCE COUflCIl �r
CANARV - DE�ARTMENT (j I'ry OF SA I NT PAU L
BLUE - MAVOR File NO. ._1S./�' ID��o
i Council Resolution ��
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Presente By - s� � __- .
Referred To �v-S/(�l �r II,� �-C-�l� ��v Committee: Date �'J'��
Out �f Committee By Date
WHEREAS: !
1 . On June 21, 1988, the Pprt Authority of the City of Saint Paul adopted Resolutlon
No. 2981, giving prel �minary app ova{ to the issuance of tax exempt revenue bonds in the
initial principal amount of appr�ximately $650,000 to finance the construction of a 27,070 �
square foot ''production facility at the intersection of Chester Street and the East
Lafayette Fr�eeway Frontage Road in Raverview Industrial Park for SPRC, Inc. Miller and
Schroeder Filnancial has agreed to underwrite the tax exempt revenue bond issue for a term
of 30 years.
2. Laws of Minnesota 1976, IChapter 234, provides that any issue of revenue bonds
authorized by the Port Awthority of the City of Saint Paul , shall be issued only with the
consent of -hhe City Council of the City of Saint Paul , by resolution adopted in accordance
with law;
3. The Port Authority of the City of Saint Paul has requested that the City Council
give its requisite consent pursu nt to said law to facilitate the issuance of said revenue
bonds by the Port Authority of t�e City of Saint Paul , subJect to fir�al approval of the
details of said issue by the Port Authority of the City of Saint Paul .
RESOLV�D, by the City Council 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 fo� the urposes described in the aforesaid Port Authority
Resolution No. 2981 the exact de�ails 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 resolation
adopted by �he Port Authority, and the City Council hereby authorizes the issuance of any
additional onds ( including refunding bonds) by the Port Authority, found by the Port
Authority ta be necessary for carrying out the purposes for which the aforesaid bonds are
issued. I
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Yeas COUNCILME Na s I Requested by Departm'ent
-0�wr�a'v(r y
�lisseia ('r�'3wt7X. �
Rettma i �� FaVO[
Scheibel � � +
Sonnen __ Ag8ltiSt BY
�edese��iMdJd
Wilson �� � � .g}pQ
����� Form Approved by City Attorney
Adopted by Council: Date �
� �Certified Yas e b uncil Secr r BY" -��'`
gl.
Approv Mavor: Date �—
l � 8 '�88 Appro ed M ission to Cou il
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By —
Ptl�IiSHE� A U G 6 19 88
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St. Paul Po t Authori t DEPARTMENT ��a� �� OsO78
J.A. Campob sso, ,E.A. Kraut CONTACT
PHONE
June 21 19 8 DATE Q,r►�r� : ,, e
SIGN NUhBE FOR ROUTING ORDER i All Locatians.:�or Si nature :
1 Departme t Director ` 3 Director of Management/Mayor
Finance d Management Servic � Director � � City Clerk
� Budget Di eCto1' ' � Wm. Wi1s�n, u�,in� R Fenn_ �ev_ COmm.
2 City Att �ey �
�: SPRC_ Inc. .
$65U 000 TPrX..EXEMPT RE.IIENUE BOND I.SSUE
WHAT WILL BE CHIEVED BY TA�ING A ION ON THE ATTACkIED MATERIALS? �Purpose/
.
Rationale) : �
The purp�se f tfie bond issue is o finance the construction of a 27,070 square foot production
facility at he -intersection of este�^ Street and the East Lafaye�te Freeway Frohtage Road in
Riverview I ustraal Park for �SP C, Inc. SRRC, Inc. is a non-profit organization established
to help peo e deal with disabil ',ties or other barriers so they can achieve independence. -
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CQST BENEFIT BUDGETARY AND PERSO L IMPACTS ANTICIPATED:
The amount o the revenue bond i �,ue is $650,000 and wil� be for a term of 30 years. Additional
funds in the amount of $620,OQ0 i!11 come from the United Way's building fund.
�PRC present y employs 75-90� seriq sly disabled and/or disadvantaged people to conduct` light
assembly and packaging operations.
FINANCING SOU CE AND BUDGET ACTIVI NUMBER CHARGED OR CREDITED: (Mayor's signa-
ture not re-
Total Amou t of "Transaction: N� quired if under
" �10,000)
Funding So rce: .
Activity N ber: � .
ATTACHMENTS ist and Number A11 A achments :
1. Staff Me randum �
2. Draft Ci Council Resolutionl; _
3. Port Auth rity Resolution No. ' 981
cc. J. Sholho �
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DEPARTMENT REV EW CITY ATTORMEY R�VIEW
X Yes No ouncil Resolution R ired? ' Resolution Required? �Yes No
Yes X No nsurance Required? Insurance'Sufficient? X Yes No
Yes �No nsurance Attached:
� ' � (SEE •REVER SIDE FOR INSTRUCTIONS�
Revised 12/84 �
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. � FAX (612) 223-5198
PQRT AUTHORIN OF THE CIN OF SAINT PAUL TOLL FREE (800) 328-8417
�� � 1900 AMHOIST TOWER • �45 ST. PETER STREET • ST. PAUL, MN. 55102 • PHONE (612) 224-5686
' J u ne 21, 1988
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Mr. Ken Johnson, Diirector
; Planning and Economic Development Department
' C 1 ty of St. Pau I -
13th Floor - City Hlall Annex
St. Paul , Minnesota 55102 ��„��
SUBJECT: SPRC, INC.
$650,000 TAX EXEMPT REVENUE BOND ISSUE
Dear Ken:
We submit herewith for your review and referrai to the office of the
Mayor, City Council' and City Attorney's office detaifs pertaining to the
, issuance of $650,000 in tax exempt revenue bonds to finance the con-
struction of a 27,070 square foot production facility at the intersec-
tion of Chester Strleet and the East Lafayette Freeway Frontage Road in
i Riverview Industrial Park for SPRC, Inc.
The Port Authortty staff has conducted a thorough evaluation of the
i firms and/or individuals that are involved in this proJect or in which
the principais have an interest. This investigation has included '�
detailed credit ana�lysis, direct communication with representatives of
' financial institutions with whom the participants have done business and
data base checks toidetermine if any principal (s) have been in any way
involved in legal p'roceedings as a result of securities fraud, extor-
' tion, 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. 2981iwhich authorized the sale of tax exempt revenue
bonds in the amount of $650,000.
Your expeditious hahdling of this matter will be appreciated.
urs truly,
,
" ! V.��..��
' E gene A. Kraut
EAK:ca Executive Vice President
cc. Mayor Latimer
EUGENE A.KRAUT,C.I.D� PERRY K.FEDERS,C.PA CHARLES M.TON/LE IAWRENCE H.LANGER,P.E. PATRICK E.DEAN,C.PA.
EXECUTNE VICE PRESIDENT,C.E.O. ASST.IXEC.VICE PRESIOENT,C.F.O. DIRECTOR INDUSTRIAI DEVELOPMENT CHIEF ENGINEER FINANCE DtRECTOR
JAMES F.FAUE,C.I.D. I RICHARD A.GIERDAL WIILIAM E.McGNERN
DIRECTOR REAL ESfATE OPERAM)NS PROPERTV�MNAGER DIRECTOR PUBLIC RELATIONS
COMMISSIONERS: IGEORGE W.WINTER WILIIANI R.PETERSON ARTHUR N.GOODMAN JEAN M.WEST VICTOR P.REIM JAMES SCHEIBEL ROBERT C.LONG
PRESIDENf VICE PRESIDENT SECRETARY ASST.SECREfAR1' 1RE?SURER ASSf.TREPSURER COMMISSIONER
! C.I.D.CERTIFIED INDUSTRIAL DEVELOPER
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507BB
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Resolution No. v?q�/
�, RESOLUTION OF
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
WHEREA$, one of the purposes of Minnesota Statutes,
Chapter 469 (her�inafter called "Act" ) , as found and
determined by th� legislature is to promote the welfare of the
state by the acti�ve, promotion, attraction, encouragement and
development of ec�onomically sound industry and commerce to
prevent so far as possible the emergence of blighted and .
marginal lands and areas of chronic unemployment and to aid in '
the development of existing areas of blight, marginal land and
persistent unemployment; and
�' WHEREAS, factors necessitating the active promotion
', and development of economically sound industry and commerce
iare the increasing concentration of population in the
Imetropolitan areas and the rapidly rising increase in the
amount and cost of governmental services required to meet the
needs of the increased population and the need for development
of land use which will provide an adequate tax base to finance
these increased costs and access to employment opportunities r
for such population; and
WHEREA$, The Port Authority of the City of Saint
Paul (the "Autho�tity" ) has received from the SPRC, Inc.
(hereinafter ref�rred to as "Company" ) a request that the
Authority issue �ts revenue bonds (which may be in the form
of a single note to finance the acquisition, installation and
construction of �production, office and warehouse facilities
for its light as�embly and packaging operations (hereinafter
collectively called the "Project" 1 at Chester Street and Fast
Lafayette Freeway Frontage Road in Riverview Industrial �ark
in the City of St. Paul, all as is more fully described in the
staff report on file; and
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WHEREAS', the Authority desires to facilitate the
selective development of the community, to retain and improve
its tax base and 'to help it provide the range of services and
employment opportunities required by its population, and said
Project will assist the City in achieving that objective.
Said Project will' help to increase the assessed valuation of
the City and help maintain a positive relationship between
assessed valuation and debt and enhance the image and
reputation of th� City; and
WHEREAS', the Project to be financed by revenue bonds
will result 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 high costs of borrowing
that the economic feasibility of operating the Project would
be significantly reduced;
WHEREAS„ Miller & Schroeder Financial, Inc. (the
"Underwriter" ) ha�,s made a proposal in an agreement (the
"Underwriting Agr'eement" ) relating to the purchase of the
revenue bonds to Ibe issued to finance the Project;
WHEREAS', the Authority, pursuant to Minnesota
Statutes, Section 469 . 154 , Subdivision 4 did publish a notice,
a copy of which w,ith proof of publication is on file in the
office of the Aut'hority, of a public hearing on the proposal
of the Company that the Authority finance the Project
hereinbefore descxxxribed by the issuance of its industrial
revenue bonds; and
WHEREAS, the Authority did conduct a public hearing
pursuant to said notice, at which hearing the recommendations
contained in the Authority' s staff inemorandum to the
Commissioners wer�e reviewed, and all persons who appeared at
the hearing were given an opportunity to express their views
with respect to the proposal.
NOW, TH�REFORE, BE IT RESOLVED by the Commissioners
of the Port Authoirity of the City of Saint Paul , Minnesota as
follows:
1. On the basis of information available to the
Authority it appe�ars, and the Authority hereby finds, that
said Project cons'titutes properties, used or useful in
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connection with one or more revenue producing enterprises
engaged in any b�asiness within the meaning of Subdivision 2 of
Section 469 . 153 di the Act; that the Project furthers the
purposes stated in Section 469 . 153 of the Act that the effect
, of the Project, if undertaken, will be to encourage the
Idevelopment of economically sound industry and commerce and
assist in the prevention of the emergence of blighted and
marginal land, and will help to prevent chronic unemployment,
and will help th� City to retain and improve its tax base and
provide the range! of services and employment opportunities
required by its population, and will help to prevent the
,movement of talented and educated persons out of the state and
!to areas within the state where their services may not be as
effectively used and will result in more intensive development
and use of land within the City and will eventually result in
an increase in tY�'e City' s tax base; and that it is in the best
interests of the port district and the people of the City of
Saint Paul and in furtherance of the general plan of
,development to assist the Company in financing the Project.
2 . Subject to the mutual agreement of the �
Authority, the Company and the purchaser of the revenue bonds
as to the detailsiof the lease or other revenue agreement as
defined in the Acit, and other documents necessary to evidence
and effect the financing of the Project and the issuance of
jthe revenue bonds, the Project is hereby approved and
'authorized and the issuance of revenue bonds of the Authority
(which may be in the form of a single note) in an amount not
to exceed approximately $650,000 (other than such additional
revenue bonds as pre needed to complete the Project) is
authorized to fin�nce the costs of the Project and the
recommendations of the Authority' s staff, as set forth in the
,staff inemorandum to the Commissioners which was presented to
'the Commissioners, are incorporated herein by reference and
approved.
3 . Inlaccordance with Subdivision 3 of Section �
469. 154 , Minnesot� Statutes, the Executive Vice-President of
the AUTHORITY is hereby authorized and directed to submit the
�roposal for the above described Project to the Commissioner
of Trade and Economic Development, requesting his approval,
and other officers, employees and agents of the AUTHORITY are
hereby authorized to provide the Commissioner with such
preliminary infor�nation as he may require.
4. There has heretofore been filed with the
�luthority a form of Preliminary Agreement between the
Authority and Company, relating to the proposed construction
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and financing of the Project and a form of the Underwriting
Agreement. The forms of the agreements have been examined by
the Commissioners. It is the purpose of the agreements to
evidence the commitment of the parties and their intentions
with respect to the proposed Project in order that the Company
', may proceed without delay with the commencement of the
lacquisition, installation and construction of the Project with
I, the assurance that there has been sufficient "official action"
'� within the meaning of the Internal Revenue Code of 1986 , as
amended, to allow for the issuance of industrial revenue bonds
( including, if deemed appropriate, any interim note or notes
to provide temporary financing thereof) to finance the entire
cost of the Project upon agreement being reached as to the
ultimate details of the Project and its financing. Said
Agreements are hereby approved, and the President and
Secretary of the Authority are hereby authorized and directed
to execute said �greements.
5 . U�on execution of the Preliminary Agreement by
the Company, the staff of the Authority is authorized and
directed to contiinue negotiations with the Company so as to
resolve the remaining issues necessary to the preparation of
the lease and other documents necessary to the adoption by the
Authority of its final bond resolution and the issuance and
'delivery o� the revenue bonds; provided that the President (or
Vice-President if the President is absent) and the Secretary
', (or Assistant Secretary if the Secretary is absent) of the
IAuthority, or if either of such officers (and his alternative)
lare absent, tYie Treasurer of the Authority in lieu of such
�,absent officers, are hereby authorized in accordance with the
,provisions of Minnesota Statutes, Section 475 . 06 , Subdivision
1, to accept a final offer of the Underwriter made by the
Underwriter to purchase said bonds and to execute an
Underwriting Agreement setting forth such offer on behalf of
the Authority. S�uch acceptance shall bind the Underwriter to
said offer but sh�all be subject to approval and ratification
by the Authority ,in a formal supplemental bond resolution to
be adopted prior 'to the delivery of said revenue bonds.
6 . Thle revenue bonds ( including any interim note
or notes) and intlerest thereon shall not constitute an
indebtedness of t�'he Authority or the City of Saint Paul within
the meaning of any constitutionat or statutory limitatinn an�
shall not constitute or give rise to a pecuniary liabilit ;� ��f
the Authority or the City or a charge against their general
credit or taxing powers and neither the full faith and credit
nor the taxing powers of the Authority or the City is pledged
�for the payment of the bonds (and interim note or notes) or
i�interest thereon.
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7. In order to facilitate completion of the
revenue bond financing herein contemplated, the City Council
is hereby requested to consent, pursuant to Laws of Minnesota ,
1976, Chapter 234, to the issuance of the revenue bonds
( including any in'�terim note or notes) herein contemplated and
any additional bonds which the Authority may prior to issuance
or from time to time thereafter deem necessary to complete the
. Project or to ref'und such revenue bonds; and for such purpose
the Executive Vic�e President of the Authority is hereby
authorized and directed to forward to the City Council copies
of this resolution and said Preliminary Agreement and any
additional available information the City Council may request.
8 . The actions of the Executive Vice-President of
the Authority in 'causing public notice of the public hearing
and in describing the general nature of the Project and
estimating the principal amount of bonds to be issued to
finance the Project and in preparing a draft of the proposed
application to th�e Commissioner of Trade and Economic
Development, Stat,e of Minnesota, for approval of the Project,
which has been available for inspection by the public at the
office of the Authority from and after the publication of
notice of the hearing, are in all respects ratified and
confirmed. �
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Adopted June 21, 1988 -
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Attest ' �..
Pres ' nt
P rt Authority of the City
of S int Paul •
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�-�z� S c etary
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AUTHORITY .
• OF THE CITY OF ST. PAUL
Memorandum
TO: BOARD OF COMMISSIWNERS DAT� June 16, 1988
(June 21, 1988 IRegular Meeting)
FROM: J.A. Campobasso
SUBJECT: SPRC, I NC. '
PUBLIC HEARING - �RELIMINARY AND UNDERWRITING AGREEMENT
$650,000 REVENUE BOND ISSUE
RIV ERVIEW INDUSTRJAL PARK
RESOLUTION N0. 291B1
PUBLIC SALE HEARIMG - SAL E OF LAND .
RESOLUTION N0. 2982
I . THE COMPANY
SPRC, Inc. is a non-profit organization establlshed in 1948 to help people
• deal with disabilities or other barriers so they can achieve independence
and self-reliance. Their workshops empioy seriously dlsabled and/or dis-
advantaged people to conduct light assembly and packaging operations. The
workshops subcontract with local companies such as Unisys, 3M and Plastics
Inc. in providing these services often handling the overload needs of
various companies. They presently employ 60 disabled people and supple-
ment the work ,force with 15-30 additional employees as their production
demands increase.
SPRC�s workshc►ps are in three location: 21,000 square feet at 319 Eagle
Street, 6,000 square feet at 139 State Street and 6,420 square feet at
340-342 Chest�r Street; the latter two locations are in Rivervlew In-
dustrial- Park. The company has signed a First Source Agreement and has
agreed �o work with the City's Job Creation and Training Office in filling
permanent full'�-time staff openings.
2. THE PROJECT
SPRC, Inc. is proposing to construct a 27,070 square foot production
facility in whlch they would house ail of their workshop activities. The
facility woul � include approximately 1,920 square feet of office, II ,000
square feet o$ production and 14, 150 square feet of warehouse. The total
project cost is $1 ,333,474.
The Port Authority would Iease them a site containing 78,940 square feet
� at a rate of $2.50 per square foot plus 10� interest for a 30-year term.
A credit of $1 .25 per square foot for soil correction costs wiil be ai-
lowed which w111 result in an actual lease payment of $1 .25 per square
foot with monthly payments of $894.65 and an annual payment of $10,735.76.
The project wili be located at the intersection of Chester Street and the
East Lafayette Freeway Frontage Road in Riverview Industrial Park.
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• I BOARD OF COMMISSIONERS
J u ne I 6, 1988
Page - 2 - '
3. FINANCING
The proposed financing would be done as an 876 industrial development
revenue bond issue for a 30-year term. Proceeds of the bond issue would
be as follows: ,
Constructlon $609,400
Construction Period Interest 27,600
Bond D i scou nt � �33,�000
TOTAL $650,000
SPRC will pay the remaining proJect costs of $620,000 from the United
Way's buiiding �und. They wiil also provide a letter of credit for the
debt service re�erve estimated at $63,474. SPRC's equity participation
, represents 51� of total proJect costs.
The Port Authority would receive earnings on the sinking fund as well as
its customary fFSCaI and administrative fees based on I� of the face value
, of the bonds annually for the life of the proJect.
4. UNDERWRITING
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Miller b Schroeder Financial, Inc. has agreed to underwrite the 30-year
' bond issue at an interest rate to be set at the time the bonds are sold.
We anticipate the bonds to be sold at the regular July, 1988, meeting.
5. TERMS OF THE LEASE
The term of the lease would be for 30 years with options to purchase as
outlined below: ''
' Land Bulldin�
10 Years- ' $115, 120.83 10� of the original bond issue
20 Years $ 82,229. 17 10$ of the original bond issue
30 Years S 49,337.50 10� of the originai bond issue
The building pu�-chase option includes the outstanding principal balance as
well as 10� of the orlglnal bond issue.
I 6. RECONBNENDATIONS
Staff has discussed the proJect with WESCO (West Side Citizen's
' Organization), and they have expressed support for it. Staff has inter
viewed the officers of the company, reviewed their financiai statements
� and recommends �pproval of Resolution Nos. 2981 and 2982.
I ; Members: U �����
Biif Wilson� chair G�'�
� �„�:�t�;�� CITY OF SAINT PAUL Tom Dimond
;:til !ia tl
OFFICE OF THE CITY COIINCIL Klkl $01111@tl
� Date: Jjuly 14, 1988
WILL[AM L. VNILSON .
Councilman i MARK VOERDING
Committee Report RE���v�o ��.�.�o. ��.
To: Saint Paul Ci ' S19a�
ty Councii �U�1
� .�� ��ERK
� From : Housing arhd Economic Developme�i� C�mmittee
� Bill Wilson� Chair
1. Discussion on Airport Noise
NO CpMMITTEE ACTZON REQUIRED
2.. Discussion of Economic Development Issues Related to LR� Develbpment in the Midway
Area COMMITTEE RECOI�IIKE:IDED TWO WEEK LAYOVER
3. Amenj3ments to Lower Cathedral Hill Plan and Resolution adopting the amended Lower
Cathedral Hill Plan as p�rt of the City Comprehensive Plan (CF 88-789)
COMMITTEE RECOMMENDED APPROVAL, WITH AMENDMENTS TO THE PLAN
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4. Discussion and Briefing dn Planning Commission Task Force on Community -
Resiyiential Facilities
NO COMMITTEE ACTION REQU�RED .
5. Ordi�ance creating a new chapter of the Legislative Code pertaining to
replacement housing. (C�j 88-997)
COMMITTEE RECOMMENDED TWO WEER LAYOVER
6. Resolution approving thelappointments by the Mayor of Paul Finsness and
Larr}t Witte to serve on the Truth-In-Aousing Board of Evaluators, terms to
expire March 25, 1991. (jCF _88-1024) �
COMM�TTEE RECOMMENDED APPROVAL
7• �s.�€��spproving tax �exempt revenue bond issue ($650,ff00 - SPRC, Inc.)
(GF-�$-]:b86) COMMIT'�EE RECOrIlKENDED APPROVAL
8. Ordi�ance amending Chapter 81 of the Administrative Code providing for changing
the derinition of handica�ped persons, expanding charge of the Set-Aside
Committee and delegating ule-making authority to the Purchase Division. (CF 88-928)
COMMI'ITTEE RECOMMENDED APPROVAL OF ORDINANCE (CF 88-928), WITH AMEiVDMENTS,
INCLUDING WITHDRAWAL OF C}F. 88-450
9. Resol�ution designating No�west Bank Minnesota, National Association, as the
Depository for the City's ' general and payroll accounts and approving execution
of th'� agreement relating to banking services for a period of two years.
(CF 88-998) I
COMMIiTEE RECOMMENDED APPI�OVAL, WITH AMENDMENTS
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CITY HALL j SEVENTH FLOOR SAINT PAUL, MINNESOTA 55102. 612/298-4646
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