87-328 WHITfi��CLERK
PINK - FINANCE COIIflCIl Q
CANARY - DEPARTMENT G I TY OF SA I NT PAU.L File NO. v / ��
BLUE - MAVOR
J � � Council Resolutian
Presented By
Referred To Committee:' Date
Out of Committee By Date
RESOLVED, by the C ty Council o�E the City of Saint Paul, that in accordance with Laws
of Minnesota 1976, Cha er 234, the !City Council hereby nsents to the issuance of the
aforesaid reven� bond for the purposes described in th aforesaid Port Authority
R,esolution No. 2798 exact details of which, includi g, but not limited to, provisions
relating to matur'ities interest ra�es, discount, redemp ion, and for the issuance of
additional bonds are t be determin¢d by the Port Author ty, pursuant to resolution
adopted by the Port Au hority, and �he City Council here y authorizes the issuance of any
additional bonds (incl ing refundi#ig bonds) by the Port Authority, found by the Port
Authority to be necess ry for carry�ng out the purposes or which the aforesaid b�nds are
issued.
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COUNC[LMEN Requestec� by Department of:
Yeas Drew Nays �
Nicosia ln Favor
Rettman
Scheibel
Sonnen � _ Against BY
sa�
Wilson � 1987
MAk 1-� Form Approved by City Attorney
Adopted by Council: Dat ,
Certified Ya_se ouncil S ry BY
By�
A►pprov Ylavor: Date _�MAR 13 ►�U7 APP���e May f Sub`ini sion to Counc'
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By
PUBl.ISHED MAR 2 1 1987
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. P 1 Port Authorit DE R MENT _ _.
�U.A. Campobasso, E.A. Kraut CO TA T
224-5686 PH NE
Februar 24, 1987 DA E ' e � Qi �
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ASSIGN NUh�ER FOR ROUTING OR ER Cli 1 Locations for Si nat re ,;
� Department Director 3 Di' ector of Management/Mayor
Finance and Management S rvices Di c or � � Ci y Clerk
� Budget Director �: gzo 00o x� rruE o z svE
2 , Clt�/ AttOY'�@J/ N PROPERTIES (SUBLEASE TO ADDCO MEG.
AI3D NICHOLSON.COMPANY)
WHAT WILL BE ACHIEVED BY TA NG ACTION 0 THE ATTACHED TERI S? (Purpose/
Rationale) :
The purpose of the bond is e is to f n nce the construction of a 24,9Q8 square foot '
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manufacturing facilitg in pire Buid e Industrial Park for 3N Properties. 3N Properties is
a partnership comprised of Timothy, J f and John Nicholson. 3N Properties will sublease
the facility to ADDCO Manu acturing d Nicholson Comp�ny. �
RECENED
COST BENEFIT BUDGETARY AN PERSONNEL I ACTS ANTICIPATED: FEB 2 `r 1��7 ('
} •�yt.rl,r;tl:
The amount of the revenue ond issue i $910,000 and w�.11 b for a term o�A��Rj�ear�. There
will be approximately 7 n jobs cre t d as a result of thi project.
The Port Authority will s mit an ap 1 cation for an indust ial revenue bond allocgtion
from the State of Minneso a Competit'v Pool as the project is industrial. The Ci'�ty of �
Saint Paul's entitlement llocation i 1 not be affected by this application. �
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FINANCING SOURCE AND BUDGE ACTIVITY N ER CHARGED OR CREDI ED: (Mayor's signa- �'
ture not re- �.
Tota1� Amount of"Transa ion: quired if under
��o,000)
. Funding Source:
Activity Number: • i
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ATTACHMENTS List and Num er Al1 At ac ents : I'
1. Staff Memorandum • !
2. Draft City Council R solution �
3. Port Authority Reso1 tion No. ' �
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�cc. J. Shoholm � I
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DEPARTMENT REVIEW GI Y ATTORNEY REVIEW
�Yes No Council Re olution R qu'red? ' Re olution Required? �Yes No
Yes x No Insurance equired? I urance Sufficient? �Yes No
Yes X No Insurance ttached:
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(SEE •REVE S SIDE FOR INSTRWCTIO S)
Revised 12/84
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PORT AUTHORIN OF T E CIN OF SAINT PAUL TOLL FREE(800) 328-8417
1900 AMHOIST TOWER • 345 ST. PEtER STREET • ST PAUL, MN. 55102 • PHONE(612)224-5686
Febnrary 24, 1987
RECE[VED
Mr. James Bel , Director F E B 2 '�� ���;�I
Planning and nanic DeveloFment Department
City of St. P ul MAYU�r s "''i"`�
13th Floor, C'ty Hall Annex
St. Paul, Min esota 55102
SUBJECT: (S�IBLEA.SE TO ADDCO MANU�ACTtTRING &
NI LSCN QON�ANY)
Dear Jim:
We submit he ith for ynur review and referral to the offic� of the Mayor,
City Council nd City Attorney's offioe details pertaining to the issuance
of $910,000 ' revenue bonds to finance the vonstruction of a 24,908 square
foot manufac uring facility in anpire Builder Industrial Park for 3N
Properties�. 3N Propertie� is a partnership comprised of Timothy, Jeff and
John Nichol n. 3N Properties will sublease the facility to ADDCO
Manufacturi and Nicholson Canpany.
The Port Aut rity will submit an application for an industrial revenue
bond allocat on fran the State of Minnesota Ccmpetitive Pool as the project
is industria . The City of Saint Paul's entitle�nent allocation will not be
affected by is application.
The Port Au rity staff has conducted a thorcyugh evaluation of tl� firms
and/or indi iduals that are involved in this �roject or in which the
principals ve an interest. This investigation has included detailed
credit anal sis, Dun and Bradstreet reports, direct c�armunication with
representat ves of financial institutions witk� whan the participants have
• done busine s and data base checks to determi�e if any principal(s) have
been in any way involved in legal proceedings as a result of securities
fraud, exto ion, embezz�.ement or financial misrepresentation.
EUGENE A KRAUT,C.I.D. DONAL G.DUNSHEE,C.I.D. CHARLES M.TOWLE CLIFFORD E.RAMSTED.P.E. PERRY K.FEDERS C.P.A.
EXECUTIVE VICE Pf2ESIDEM ASST. EC.V10E PRESIDENT DIRECTOR OF INDUSTRIAL DEVELOF�AENT CHIEF ENGINEER DiRECTOR OF FINANCE
RICHARD A GIERDAL WIWAM E.McGNERN nssr raEaSURER
PROPERN MANV+�ER DIRECTOR OF PUBLIC REIATIONS
COMMISSIONERS GEORGE W.WINTER WILLIAM WILSON ARTHUR N.GOODMAN VICTOR P.REIM RAYMOND E.LANGEVIN CHRIS NICOSIA JEAN M.WEST
PRESIDENT VICE PRESIDENT � SECREfARV TREASURBt COMMISSIONER COMMISSIONER COMMISSIONER
C.I.D. Certified Industrial Developer
�c��-.��Y
Mr. James Bellu
February 24, 19 7
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In addition to he staff randun, we are attacl�ing a draft copy of the
proposed City uncil resolu ion and a copy of Port Authority R�esolution
No. which uthorized th sale of revenue bonds in the amount of
$910,000.
Yaur expeditiou handling of this matter will be appreciated.
Yours truly,
er�e A. Kraut
Executive Vice President
EAK:ca
cc. May�or Lat' r .
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Resollation No. ��
RESOLUTION 0 THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
WHE EAS, the purpose of Minnesot� Statutes, Chapter
474, known as the Minnesota Municipal Industrial Development
Act (hereinaf er called "'Act" ) as found and determined by the
legislature i to promote the welfare of the state by the
active attrac ion and encouragement and development of
economically ound industry and commerae to prevent so far as
possible the mergence of blighted and marginal lands and
areas of chro ic unemployment and to aid in the development ot
existing area of blight, marginal land and persistent
unemployment; and
WH REAS, factors necessitating the active promotion
and developm nt of economically sound indwstry and commerce
are the incr asing concentration of population in the
metropolitan areas and the rapidly rising increase in the
amount and c st of governmental services required to meet the
needs of the increased population and theineed for development
of land use hich will provide an adequatle tax base to finance
these increa ed costs and access to emplayment opportunities
for such pop lation; and
WH REAS, the Port Authority of the City of 5aint
Paul (the " thority" ) has received from 3N Properties,
general par nership (hereinafter referrec� te as "Company") a
request tha the Autho�ity issue its revenue bonds (which may
be in the f rm of a singie note) to finance the acquisition,
installatio and constxuction of a 24,908 square foot
manufacturi g facility to be subleased tc ADDCO Manufacturing
Company and Nicholson Company (hereinafter collectively called
the "Projec ") in Empire Builder Industrial Park in the City
of St. Paul all as is more fully described in the staff
. report on f le; and
W EREAS, the Authority desires to facilitate the
selective d velopment of the community, to retain and improve
its tax ba e and to help it provide the range of services and
employment opportunities required by it� population, and said
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employment opp rtunities required by its population, and said
Project will a sist the City in achieving that objective.
Said Project will help to increase the assessed valuation of
the City and lp maintain a positive relationship between
assessed valu tion and c�ebt and enhance the image and
reputation of the Cit�r; and
wHE EAS, the Project to be financed by revenue bonds
will result i substantial employment opportunities in the
Project;
WHE EAS, the Authority has been advised by repre- �
sentatives of the Compan,y that convention�l, commercial
financing to ay the cap�ital cost of the Project is available
only on a lim' ted basis and at such high costs of borrowing
that the eco mic feasibility of operating the Project would
be significa tly reduced, but the Company has also advised
this Authori y that but for revenue bond financing, and its
resulting lo borrowing cost, the Project would not be
undertaken;
WH REAS, Miller & Schroeder Financial, Inc. (the - .
"Underwriter ) has made a proposal in an agreement (the
"Underwritin Agreement" ) relating to the purchase of the
revenue bond to be issued to finance the Project;
WH REAS, the Authority, pursuant to Minnesota
Statutes, Se tion 474.01, Subdivision 7b did publish a notice,
a copy of w ich with proof of publicatior� is on file in the
office of t Authorit�r, of a public hea�ing on the proposal
of the Comp ny that the Authority finance the Project
hereinbefor described by the issuance of its industrial
revenue bon s; and
EREAS, the Authority did con�3uct a public hearing
pursuant to said notice; at which hearing the recommendations
contained i the Authority's staff inemorandum to the
Commissione s were rev.iewed, and all persons who �ppeared at
the hearing were given an opportunity to express their views
with respec t� the proposal.
W, THEREFORE, BE IT RESOLVED by the Commissioners
of the Por Authority of the City of Sa�nt Paul, Minnesota as
follows:
. On the basis of information available to the
Authority t appears, and the Authority hereby finds, that
said Proje t constitu'tes properties, used or useful in
connection with one or more revenue producing enterprises
engaged in any business within the meaning of Subdivision 1 of
Section 47 .02 of the Act; that the Project furthers the
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purposes state in Section 474 . 01 of the Act and, but for the
willingness of the Authority to furnish such financing, the
Company would ot undertake the Project, a�d that the effect
of the Projec , if undertaken, will be to encourage the
development o economically sound industry and commerce and
assist in the prevention of the emergence Cf blighted and
marginal land, and will help to prevent chronic unemployment,
and will help the City to retain and improve its tax base and
provide the r nge of ser�✓ices and employment opportunities
required by i s population, and will help to prevent the
movement of t lented and educated persons out of the state and
to areas with n the state where their services may not be as
effectively u ed and will result in more intensive development
and use of la d within the City and will eventually result in
an increase i the City�s tax base; and that it is in the best
interests of he port district and the peaple of the City of
Saint Paul an in furtherance of the gene al plan of
development t assist the Company in fina cing the Project.
2. Subject to the mutual agre ment of the
Authority, t e Company and the purchaser f the revenue bonds
as to the de ails of the lease or other r venue agreement as
defined in t e Act, and other documents n cessary to evidence
and effect t e financing of the Project ahd the issuance of
the revenue onds, the Project is hereby approved and
authorized a d the issuance of either taxlable or tax exempt
revenue bond of the Authority in an amou�nt not to exceed
approximatel $910,000 {other than such a�dditional revenue
bonds as are needed to complete the Projqct) is authorized to
finance the osts of the Project and the recommendations of
the Authorit �s staff, as set forth in the staff inemorandum to
the Commissi ners which was presented to the Commissioners,
are incorpor ted herein by reference and approved.
3. In accordance with Subdivision 7a of Section
474.01, Min sota .Statutes, the Executiv� Vice-President of
the AUTHORI Y is hereby authorized and d�rected to submit the
proposal fo the above described Project to the Commissioner
of Energy a d Economic Development, requesting his approval,
and other o ficers, employees and agents; of the AUTHORITY are
hereby auth rized to provide the Commiss'ioner with such
preliminary information as he may requirle.
4 There has heretofore beeh filed with the
Authority a form of Preliminary Agreement between the
Authority a d Company, relating to the proposed construction
' and financi g of the Project and a form of the Underwriting
Agreement. The forms of the agreements have been examined by
the Commis ioners. It is the purpose of the agreements to
evidence t e commitment of the parties and their intentions
with respe t to the proposed Project in order that the Company
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may proceed wi hout delay with the commencement of the
acquisition, i stallation and construction of the Project wi_th
the assurance that there has been sufficier�t "official action"
under Section 103 (b) of the Internal Revenwe Code of 1954, as
amended, to a low for the issuance of .indu�trial revenue bonds
(including, i deemed appropriate, any interim note or notes
to provide te porary financing thereof) to finance the entire
cost of the P oject upon agreement being reached as to the
ultimate deta ' ls of the Project and its fitiancing. Said
Agreements ar hereby approved, and the President and
Secretary of he Authority are hereby authprized and directed
to execute sa d Agreements. ;
5. Upon execution of the Preli inary Agreement by
the Company, he staff of the Authority is authorized and
directed to c ntinue neg�tiations with th Company so as to
resolve the r maining issues necessary to �the preparation of
the lease and other documents necessary tq the adoption by the
Authority of ' ts final bond resolution anc� the issuance and
delivery of t e revenue bonds; provided t at the President (or
Vice-Presiden if the President is absent and the Secretary
(or Assistant Secretary if the Secretary s absent) of the �
Authority, or if either of such officers and his alternative)
are absent, e Treasurer of the Authorit� in lieu of such
absent offic rs, are hereby authorized in� accordance with the
provision� o Minnesota Statutes, Section' 475.06, Subdivision
1, to accept a final offer of the Underwr�ter made by the
Underwriter o purchase said bonds and tolexecute an
Underwriting Agreement �etting forth such; offer on behalf of
the Authorit . Such acceptanee shall bind the Underwriter to
said offer b t shall be subject to approv 1 and ratification
by the Port uthority in a formal supplem�ental bond resolu-
tion to be a opted prior to the delivery !of said revenue
bonds.
6. The revenue bonds (including any interim note
or notes) an interest thereon shall not constitute an
indebtedness of the Authority or the City of Saint Paul within
the meaning f any constitutional or sta�utory limitation and
shall not co stitute or give rise to a pecuniary liability of
the Authorit or the City or a charge ag�inst their general
credit or ta ing powers and neither the �ull faith and credit
nor the tax'ng powers of the Authority o� the City is pledged
for the pay ent of the bonds (and interim note or notes) or
interest th reon.
7 In order to facilitate completion of the
revenue bon financing herein contemplated, the City Council
is hereby r quested to consent, pursuant to Laws of Minnesota,
1976, Chapt r 234, to the issuance of the revenue bonds
(including ny interim note or notes) herein contemplated and
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or from time to time thereafter deem necessary to complete the
Project or to r fund such revenue bonds; and for such purpose
the Executive Vi ce �resident of the Authority is hereby
authorized and irected to forward to the City Council copies
of this resolut'on and said Preliminary Agraement and any
additional avai able information the City Council may request.
8. he actions of the Executive Vice-President of
the Authority in causing public notice of the public hearing
and in describ'ng the general nature of the Project and
. estimating the principal amount of bonds to be issued to
finance the Pr ject and irn preparing a draft of the proposed
application to the Commis�ioner of Energy and Economic
Development, S ate of Minnesota, for approval of the Project,
which has been available for inspection by the public at the
office of the uthority from and aftsr the publication of
notice of the earing, ar� in all respects ratified and
confirmed.
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Adopted Febru ry 24, 1987�� � ,
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Attest ' �� _
Presiden`l��
� The Port thority of the City
� of Saint/ aul
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� ecretary �
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PORT
' AUTHORIT
OF THE CITY OF ST. PAUL
Memorandum
TO: gp�p OF OONIl�II SIONERS DATE: Feb. 20, 1987
(Feb. 24, 19 7 Regular Meeting
FROM: J.A. Campobas
SUBJECT: � PROPERTIES SUBLEASE TO NICHOLSON OOr'1PANY ANp ApDCp MANUFACTURING
PUBLIC HEARIN - PRELIMINARY AND UNDERWRITING AGREEMEIJTS
$910,000 BOiVD ISSUE
EN�IRE BUIL� INDUSTRIAL PARK
RESOLUTION NO. 2798
PUBLIC SALE ING - SALE OF LAND
RESOLIfrION NO. 2 7 9 9
1. THE P RSHIP/CONIPANY'
3N Proper ies is a Minnesota partnership co�prised of Timothy, Jeff and
John Nic lson. The three jointly own ADDO� Manufacturing Canpany and
along wit their father they own Nicholson �ompany.
ADD00 man factures trailer-mounted r I
prog a�nn�ble message signs and hand
and elect ical controls for industrial mach'nes. Nicholson Ccxnnany
custanize diesel & gasoline engines for t industrial trade. The
canpanies have grown to a point where the e isting 11,000 square foot
facility t 1650 Carroll Avenue in St. Pa is no longer adequate.
The facil'ty will also house twr� other oanpanies owned by the partners:
T & J En rprises manufactures rubber hood latches, and Synetics
Inforn►at' n Systems, Tnc. , a subsidiary of ADDO� Manufacturing, is a
wholesal r of canputer hardware and software specializing in
inter ny relations. These tw�o small cdanpanies will occupy
approx' tely 2$ of the new facility.
ADD00 & he Nicholson Canpany presently have 31 full time esnployees and
with the r expansion are anticipating creating 7 new p�sitions within
the next tw�o years. They have entered into the City's First Source
Agreemen and have hired three employees to date under the program.
2. THE PRQT
3N Prope ies plans to initially construct a 24,908 square foot
facility which will include 4,300 square fieet of office, 17,664 square
feet of nufacturing/warehouse space and 2,944 square feet of
mezzanin and will sublease it to ADDO� Manufacturing and Nicholson
Cctnpany. The plans allow for an addition to be constructed to the west
as the ny oontinues to grow.
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B(aARD OF �NA�IIS ONERS
February 20, 19
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The Port Au hority would lease them a site containing 92,178 square
feet at a r te of $2.00 per square foot plus 0$ interest for a 30-year
tenn. This lease will r�sult in a ntionthly pa nt of $1,657.32 and an
annual pa nt of $19,887.81. Payments will nce October 1, 1987.
The project will be located west of the Empir Builder Business
Development Center in EYnpire Builder Industri 1 Park. A payment of
$11,061.36 o G.N. Butler & Associates will made at closing based on
a 6$ cor�anis ion on the land sale.
The c�mpani s have sutmitted an Enterprise Zo e application in which
credits wil go to them for filling new posit'ons through the City's
Job Creatio and Training Office and for the ew investment in the
facility. i
The Port Au hority will sutmit this project t the State of Minnesota's
revenue bo canpetitive pool for allocation s an industrial project.
Authorizati n to issue t�e bonds should be r ived by March 16 wi�th
bond sale ojected for the March 17 Board ting.
3. FINANCING
The propo financing Would be done as an 876 industrial development
revenue bo issue for a 30-year term. Proceeds fran the bond issue
wr�uld be a follows:
Constructi , $771,347
Debt Servi e Reserve 84,053
Capitalize Interest - 6 Months 36,400
Bond Issua ce Cost ; 18,200
�� $910,000
The partne ship has agreed to pay bond issuance and disc�unt oosts
bey�ond tho e incorporateci in the bond issue. The additional cost is
estimated t $29,100.
The Port A thority would receive earnings on the debt service reserve
and sinkin funds as well as the custanary fiscal and ac�iinistrative
fees based on a rate of $350 per mpnth for the first ten years, $450
per month or the seoond ten years and $550 �er mr�nth for the third ten
� years of t lease.
4. UNDERWRITI
Miller & S hrceder Financial, Inc. has agr to underwrite the thirty-
year bond issue at an i,nterest rate to be s t at the time the bonds are
sold. We nticipate the bonds will be sold at the regular March, 1987,
meeting.
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BOARD OF CO[�IISSI ERS
February 20, 198
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5. TERMS OF THE E
The term of e lease would be for thirty years with options as
outlined bel .
Land Bu i ld i;ng
10 Years $�15,082.00 10$ of the original bond issue
20 Years $1�53,630.00 10$ of the original bond issue
30 Years $ 92,178.00 10$ o� the original bond issue
The building urchase opt�on includes the outs�anding principal balance
as well as 1 $ of the oric�inal bond issue. I
6. RECOI�Il�IENOATI S '
Staff has me with Distrilt 7 an
Q d they w�ere supportive of the project.
Staff has al met preliminarily with District,6 on January 28 and will
be meeting w'th them again on February 25 to d�scuss the site plan and
project.
Staff has in erviewed the officers of the ny, reviewed their
personal fin ncial and corporate financial sta enents. The partners
will be per nally guaranteeing the bond issue Staff recormiends
approval of solution Nos. 2798 and 2799.
JAC:ca
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