87-689 W1MITE - CiTV CLERK „
PINK - FINANCE G I TY OF SA I NT PA U L Council �' / g�}
CANARV - DEPARTMENT /�
BLUE - MAVOR File NO. �r �
; , ouncil Resolution ,; -�6 �.
Presented By /� "
Referred To Committee: Date
Out of Committee By Date
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1. On April 21, 1987 the Port Authority of the City of Saint Paul
adopted Resolution No. 2819 giving preliminary approval to the issuance of
taxable revenue bonds in the initial principal aanount of approximately
$1,500,000 to finance the oonstruction of a 22,000 square foot office,
sllowr+oom, and distribution facility on a 1.58 acre site on Energy Park
I�ive, east of Snelling Avenue for Mr. Thanas M. Olson. Mr. Olson will
sublease the premises to Dytec North, Inc. - 10,000 sq.ft., Plmto
Electronic Controls, Inc. - 10,000 sq.ft., and Chargo Printing Canpany -
18,500 sq.ft., and Mr. Olson will sublease the remaining 3,500 sq. ft.
Miller & Shroeder Financial, Inc. will underwrite the 30-year taxable
revernie ,bond issue.
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2. Laws of Minnesota 1976, Chapter 234, provides that any issue of
revenue b�nds authorized by the Port Authority of the City of Saint Paul,
shall be issued only with the oonsent of the City Council of the City of
Saint Paul, by resolution adopted in acoordance with law;
3. The Port Authority of the City of Saint Paul has requested that
the City Council give its requisite o�nsent pursuant to said law to
facilitate the issuance of said revenue bonds by the Port Authority of the
City of Saint Paul, subject to final approval of the details of said issue
by the Port Authority of the City of Saint Paul.
RESOLVED, by the City Couneil of the City of Saint Paul, that in
accordance with Laws of Minnesota 1976, Chapter 234, the City Council
hereby consents to the issuance of the aforesaid revenue bonds for the
purposes described in the aforesaid Port Authority Resolution No. 2819 the
exact details of which, including, but not limited to, provisions relating
to maturities, interest rates, discount, reci�nption, and for the issuance
of additional bonds are to be determined by the Port Authority, pursuant to
resolution adopted by the Port Authority, and the City Council hereby
authorizes the issuance of any additional b�nds (including refunding bonds)
by the Port Authority, found by the Port Authority to be necessary for
carrying out tl�e purposes for which the aforesaid bonds are issued.
COUNCILMEN Requeste Department oE:
Yeas orew Nays
'�1°°"'' � [n Favor
Rettman
8eiwiHaL
�,�. �'__ Against BY
raa��o
wilson
Adopted by Council: Date �AY � �t �7 Form Appro d by City Atto^y
Certified Pa s Cuunc.il Secr ry BY �
By
App o d y Mavor: Date _ �A� � � 87 App y Mayor for o Council
BY - — BY
Pti�l{SlI�D i�i AY 2 � 1987
St. Paul Port Authority DE PARTMENT ��� N� 3 6 41
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J.E. Terrell, E.A. Kraut CONTACT
224-5686 PHONE
April 21, 1987 DATE 1 Q��� �r ,,.
ASSIGN NUMBER FOR ROUTING ORDER (Clip All Locations for Signature) :
epartment Director 3 Director of Management/Mayor
Finance and Management Services Director 4 City Clerk
Budget Director nytec rtorth, Inc.
� City Attorney 1,500,000 Taxable Revenue Bond Issue
WHAT WILL BE ACHIEVED BY TAKING ACTION ON TFJE ATTACHED MATERIALS? (Purpose/
The purpose of the bond issue is to finance the construction Rationale) :
of a 22,000 square foot office, showroom, and distribution facility on a 1.58 acre site
on Energy Park Drive, east of Snelling Avenue for Mr. Thomas M. Olson. Mr. Olson will
sublease the premises to Dytec North, Inc. - 10,000 sq.ft. , Photo Electronic Controls, Inc. -
10,000 sq.ft. , Chargo Printing Company - 18,500 sq.ft. and Mr. Olson will sublease the remaining
3,500 sq.ft.
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COST/BENEFIT, BUDGETARY AND PERSONNEL IMPACTS ANTICIPATED: ,�`�) �
The amount of the taxable revenue bond issue is $1,500,000 and will be for a term of 30 years.
Dytec North and Photo Electronic Controls have combined employment of 35 persons and expect to
employ 15 to 18 more persons over the next two years. Chargo Printing currently employs 20
persons and expects to increase employment by 30-40 persons over the next five years.
FINANCING SOURCE AND BUDGET ACTIVITY NUMBER CHARGED OR CREDITED: (Mayor's signa-
ture not re-
Total Amount of Transaction: quired if under
$10,000)
Funding Source:
Activity Number:
ATTACHMENTS (List and Number All Attachments) :
1. Staff Memorandum
2. Draft City Council Resolution
3. Port Authority Resolution No. 2819
cc: Jacqui Shoholm
DEPARTMENT REVIEW CITY ATTORNEY REVIEW �
�Yes No Council Resolution Required? Resolution Required? X Yes No
Yes X No Insurance Required? Insurance Sufficient? x Yes No
Yes X No Insurance Attached:
(SEE REVERSE SIDE FOR INSTRUCTIONS)
Revised 12/84
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PORT AUTHORIN OF THE CITY OF SAINT PAUL TOLL FREE(800)328-8417
1900 AMHOIST TOWER • 345 ST. PETER STREET • ST. PAUL, MN. 55102 • PHONE(612)224-5686
April 21, 1987
Mr. JaQnes Bellus, Director RECEIVED
Planning and Econanic Developnent Department
City of St. Paul
14th Floor, City Hall Annex Rf�Fjy� APR 27 1987
St. Paul, Minnesota 55102
5��: MR. THOMA.S M oL� APR 2819 C I TY ATTO R N EY
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(SUBLEASE Z�0 DYTEC NORTEi, INC.) �Y�p.,�
$1,500,000 TAXABLE REVENUE BOND ISSUE.'Jp/����
Dear Jim:
WIe su�mit herewith for your review and referral to the office of the May�or,
City Council and City Attorney's offioe details pertaining to the issuance �
of $1,500,000 in taxable revenue bonds to finance the oonstruction of a
22,000 square foot office, showroo�n, and distribution facility on a 1.58
acre site on Energy Park Drive, east of Snelling Aven�ae for Mr. Thomas M.
Olson. Mr. Olson will sublease the premises to Dytec North, Inc. - 10,000
sq.ft. , Photo Electronic Controls, Inc. - 10,000 sq.ft. , Chargo Printing
Ccmpany - 18,500 sq.ft., and Mr. Olson will sublease the resnaining 3,500
sq.f t.
The Port Authority staff has oonducted a thorough evaluation of the firms
and/or individuals that are involved in this project or in which the
principals have an interest. This investigation has included detailed
credit analysis, Dun and Bradstreet reports, direct cannunication with
representatives of financial institutions with whan the participants have
done business and data base checks to determine if any principal(s) have
been in any way involved in legal proceedings as a result of securities
fraud, extortion, snbezzlenent or financial misrepresentation.
In addition to the staff inemorandun, w�e are attaching a draf t copy of the
proposed City Council resolution and a copy of P�rt Authority Resolution
No. 2819 which authorized the sale of taxable revenue bonds in the amount
of $1,500,000.
Your expeditious handling of this matter will be appreciated.
Y urs truly,
ugene A. Kra t
EAK:ajc Executive Vice President
cc. Mayor Latimer
EUGENE A KRAUL C.I.D. DONALD G.DUNSHEE,C.I.D. CHARLES M.TOWLE CLIFFORD E.RAMSTED,P.E. PERRY K.FEDERS C.PA
EXECUTIVE VICE PRESIDENT ASSL EXEC.VICE PRESIDENT DIRECTOR OF INDUSTRIAL DEVELOPMENT CHIEF ENGiNEER DiRECTOR OF FiNANCE
ASST.TREASURER
RICHARD A GIERDAL WILLIAM E.McGNERN
PROPERN MANP�GER DIRECTOR OF PUBLIC RELATIONS � �
COMMISSIOfJERS GEORGE W.WINTER WILLIAM WILSON ARTHUR N.GOODMAN VICTOR P.REIM RAYMOND E.IANGEVIN CHRIS NICOSIA JEAN M.WEST
PRESIDENT VICE PRESIDENT SECRETARY TREASURER COMMISSIONER COMMISSIONER COMMISSIONER
C.I.D.Certified Industrial Develor�er
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PORT
AUTHORITY
OF THE CITY OF ST. PAUL
Memorandum
TO: � pF �IggIp�gg DATE: p,pril 15, 1987
April 21, 19$�l�e�lar Meeting
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FROM: J.E. Terrel
SUBJECT: pUgylC HEARING - PRELIMINARY A1�ID UI�IDEF�nIRITING AC�tEIIKII�S
$1,500,000.00 RF50LUrI0N 876 TAXABLE RF,'VEN[)E BO1�ID ISSUE
THOMA�S M. OISON (SUBL,EASE - DYTDC NO1�I'H, INC.)
E[�RGY PARK
RESOLUTION N0. 2819
PUBLIC SALE HEARING - SALE OF I�1TID
THCIN�S M. OLSON (SUBLEASE - DYTF7C NO1�I'H, INC.)
RESOLITrION N0. 2820
1. 7� (7Q�ANY
Dytec North, Inc. was founded in 1976 by Thomas M. Olson, its current
president. The Company began its operations in the Griggs Midway
Building in St. Paul, where they are currently located.
The Company is engaged in the distribution and value added resale of high
quality ca�rcnercial line printers, bar cale readers and printers and micro
systems and laser printers for heavy comanercial and ir�ustrial use.
Dytec North, Inc. and its affiliated car�pany, Photo Electronic Control,
Inc., both owned 100� by Mr. Olson, had combined sales in 1986 of
approximately $10,000,000.00 and expects steady growth over the next
several years. '
2. � PROJBGT
Mr. Olson has requested that the Port Authority finance the construction
of a 22,000 square foot office, shawroan and distribution facility on a
1.58 acre site on Energy Park Driv�e, east of Snelling Avenue.
Mr. Olson will lease the facility froan the Port Authority and in turn
sublease the premises approximately as follows:
Dytec North, Inc. and 10,000 sq. ft.
Photo Electronic Controls, Inc.
Chargo Printing Coanpany 8.500 sq. ft.
18,500 sq. ft.
The remaining 3,500 square feet will be subleased by Mr. Olson
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BOAIm OF OC[+M'IISSIOI�RS
April 21, 1987 Regular M�eeting
Page 2
to a consortium of printers representatives that Mr. Olson has some
involvement with. This business will act as a clearing house of
information for co�nercial printing activities and will also house and
display some of the equipment sold by Dytec North.
Dytec North and Photo Electronic Controls have canbined employment of 35
persons and expect to employ 15 to 18 more persons over the next two
years. Chargo printing currently er�loys 16 persons at its headquarters
and 4 persons at its smaller outlet stores and expects to increase
employment by 30 - 40 persons over the next five years. Mr. Olson's two
companies will sic� subleases coterminous with the bond issue. Chargo
Printing will execute a three year lease with options for rene�wal for at
least an additional tw�o years, at which time Mr. Olson projects that his
co�anies would be able to occupy the entire Energy Park facility.
3. FII�ANC�II�1G
The proposed f inancing would be done as a Taxable 876 Industrial
Development Revenue Bond Issue for a 30 year term. Proceeds fro�n the
bond issue would be as follows:
Building Construction $1,213,292.00
Debt Service Reserve 162,058.00
Construction Period Interest 74,750.00
Bond Issuance Expense 20,000.00
Bond Discount 29,900.00
Bond Issue $1,500,000.00
The Port Authority w�ould receive earni.ngs on the debt service reserve and
sinking fund, as well as the customary f iscal and administrative fees
based on 1$ of the bond issue. The lease will be executed by Mr. Olson
and the bond issue will be guaranteed by Dytec North and Photo Electronic
Controls.
4.
Miller and Schroeder Financial, Inc. has agreec] to underwrite the 30 year
bond issue at interest rates to be set on the date the bonds are sold.
We anticipate the bonds will sell at the Regular May, 1987 Coimnission
Meeting.
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B�RD OF QONA4ISSIONERS
April 21, 1987 Regular Meeting
Page 3
5. Z�lS � � I�SB
The term of the lease would be for 30 years with Mr. Olson having an
option to purchase the land for one half of the original cost, and the
building for 10$ of the original bond issue cost at the end of the term.
The lease will also provide for purchase options at 10 and 20 year
intervals. The Port Authority would lease Mr. Olson the site containing
68,166 square feet at a rate of $2.75 per square foot plus 10$ interest
for a thirty year term.
6. R'�OQl��IQ�T
Early notice for District 10 was published on January 23, 1987. Staff
has contacted District 10 and there is no opposition to this project.
The campanies subleasing the property from Mr. Olson have agreed to sign
First Source F�nployment and Training Agreements. Staff has interviewed
Mr. Olson, reviewed his financial statements and those of his Co�npany's
and recatunends approval of the above resolutions.
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544Y
Resolution No. -���J
RESOLUTION OF �
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
WHERERS, the purpo�� of Chapter 474 , Minnesota
Statutes, known as the Minnesota Municipal Industrial Develop-
ment Act (hereinafter called "Act" ) as found and determined by
the legislature is to promote the welfare of the state by the
active attraction and encouragement and development of
economically 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, Eactors necessitating the active promotion
and development oE economically sound industry and commerce
are the increasing concentration of population in the
metropolitan 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
for such population; and .
WHEREAS, The Port Authority of the City of Saint
Paul ( the "Authority" ) has received from Thomas M. Olson
(hereinafter referred to as "Olson" ) a request that the -
Authority issue its revenue bonds to finance the acquisition,
installation and construction of a 22 , 000 square foot office,
showroom and distribution facility ( hereinafter collectively
called the "Project" ) on Energy Park in the City of St. Paul ,
all as is more fully described in the staff report on file;
and
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
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Project wi11 assist the Ci.ty in achieving that objective.
Said Project wi11 help to incr�ase thc assessed valuation oE
the City and help maintain a posil. ive relationship between
assessed valuation and debt and enhance the image and
reputation oE the 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 Olson
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, but
Olson has also advised this Authority that but for revenue
bond financing, and its resulting low borrowing cost, the
Project would not be undertaken;
WHEREAS, Miller & Schroeder Financial , Inc. ( the
"Underwriter" ) has made a proposal in an agreement ( the
"Underwriting Agreement" ) relating to the purchase of the
revenue bonds to be issued to finance the Project;
WHEREAS, the Authority, pursuant to Minnesota
Statutes, Section 474 . 01 , Subdivision 7b did publish a notice,
a copy of which with proof of publication is on file in the
office of the Authority, of a public hearing on the proposal
of Olson that the Authority finance the Project hereinbefore
described 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 were reviewed, and al1 persons who appeared at
the hearing were given an opportunity to express their views
with respect to the proposal.
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 of information available to the �
Authority it appears, and the Authority hereby finds, that
said Project constitutes properties, used or useful in
connection with one or more revenue producing enterprises
engaged in any business within the meaning of Subdivision la
of Section '474 . 02 of the Act; that the Project furthers the
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purposes stated in Section 474 . 01 of the Act and, but for the
willingness of the Authority to Furnish such financing, Olson
would not undertake the Project , and that the effect of the
Project, if undertaken, wi11 be to encourage the development
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 the
City to retaih 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
the 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
Olson in financing the Project.
2. Subject to the mutual agreement of the
Authority, Olson and the purchaser of the revenue bonds as to
the details of the lease or other revenue agreement as defined
in the Act, and other documents necessary to evidence and
effect the financing of the Project and the issuance of the
revenue bonds , the Project is hereby approved and authorized
and the issuance of revenue bonds of the Authority in an
amount not to exceed approximately 51 , 500 , 000 (other than such
additional revenue bonds as are needed to complete the
Project) is authorized to finance 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 . In accordance with Subdivision 7a of Section
474 . 01 , Minnesota Statutes, the Executive Vice-President of
the AUTHORITY is hereby authorized and directed to submit the
proposal for the above described Project to the Commissioner
of Energy 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 information as he may require.
4 . There has heretofore been filed with the
Authority a form of Preliminary Agreement between the
Authority and Olson, relating to the proposed construction and
financing of the Project and a form of the Underwriting ,
Agreement. The forms of the agreements have been examined by
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the Commissioners. Said Agreements are hereby approved , and
the President and Secretary oF the �uthority are hereby
authorized and directed to execute said Agreements .
5 . Upon execution of the Preliminary Agreement by
Olson, the staff of the Authority is authorized and directed
to continue negotiations with Olson 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 of 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 Authority, or if
�ither of such officers (and his alternative) are absent, the
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. Such
acceptance shall bind the Underwriter to said offer but shall
be subject to approval and ratification by the Port Authority
in a formal supplemental bond resolution to be adopted prior
to the delivery of said revenue bonds.
6 . The revenue bonds tincluding any interim note
or notes) and interest thereon shall constitute a general
obligation and an indebtedness of the Port Authority but shall
not constitute an indebtedness of the City of Saint Paul
within the meaning of any constitutional or statutory
limitation and shall not constitute or give rise to a
pecuniary liability of the City or a charge against its
general credit or taxing powers and neither the full faith and
credit nor the taxing powers of the City is pledged for the
. . payment of the bonds (and interim note or notes) or intezest
thereon.
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 interim note or notes) herein contemplated and
any additionel bonds which the Authority may prior to issuance
or from time to time thereafter deem necessary to complete the
Project or to refund such revenue bonds; and for such purpose
the Executive Vice 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.
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8 . The actions oE the Ex���utive Vice-President of
the Authority in causing public notice of the public hearing
and in describing the general nature oE the Project and
estimating the principal amount of bonds to be is5ued to
finance the Project and in preparing a draft of the proposed
application to the Commissioner of Energy and Economic
Development, State 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 April 21 , 1987 ,, � �
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Attest
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Pr i ent
The ort Authority of the City
of aint Paul
�2��• Se r tary 1
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