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86-631 M�NITE - C�TV CLERK PINK - FINANCE G I TY O F SA I NT PA U L Cou�cil /�' / CANARV - DEPARTMENT File. NO. [``� T � BLUE - MAVOR ounci Resolution � r f { �S Presented By Referred To Committee: Dat Out of Committee By Dat WHEREAS: 1. On April 22, 1986 the Port Authority of the City of Sain Paul adopted Resolution No. 2637 giving preliminary approval to the issuance of revenue b nds in the initial principal amount of $750,000 to finance the construction of a 9,6 0 square foot addition to Scanlan International , Inc. 's current headquarters and distrib tion center and to remodel some areas in their existing structure at One Scanlon Pla a in Riverview Industrial Park in St. Paul . Miller & Schroeder Financial , Inc. as agreed to underwrite the revenue bond issue for a term of 23 years. 2. Laws of Minnesota 1976, Chapter 234, provides that any i sue of revenue bonds authorized by the Port Authority of the City of Saint Paul , shall be issued only with the consent of the City Council of the City of Saint Paul , by resolut on adopted in accordance with law; 3. The Port Authority of the City of Saint Paul has request d that the City Council give its requisite consent 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 aul . RESOLVED, by the City Council of the City of Saint Paul , tha in accordance with Laws of Minnesota 1976, Chapter 234, the City Council hereby consents o the issuance of the aforesaid revenue bonds for the purposes described in the aforesa d Port Authority Resolution No. 2637 the exact details of which, including, but no 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, purs ant to resolution adopted by the Port Authority, and the City Council hereby author zes the issuance of any additional bonds (including refunding bonds) by the Port Authorit , found by the Port Authority to be necessary for carrying out the purposes for which the aforesaid bonds are issued. COUNCILMEN Requested by Department Yeas � Nays �1°°"` In Favor Rettman Scheibel sor,�a� __ Against BY f.r...o Wilson MAY 2 0 1986 Form Approved b City Att rn y � Adopted by Council: Date Certified P• ••ed by Council Secretary BY sy- �-.- _ Approved Mavor D �_�� � AY 2 � 19 Approved by Mayor for 'ssion to Council ' By � � . PUBIISHE P�jaY 3119$6 St. Paul Port Authority DEPARTMENT �� N� 3 6 3� J.E. Terrell . �.A. Kraut CONTACT 224-5686 PHONE 4-22-86 � DATE �e�� e e ASSIGN NUM�ER FOR ROUTING ORDER (Clip All Locations for Signature) : 1 Department Director 3 Director of Management/Mayor Finance and Management Services Director 4 City Clerk Budget Director Scan1an In rnational , Inc. ity Attorney $750,000 Re enue Bond Issue W AT WILL BE ACHIEVED BY TAKING ACTION ON THE ATTACHED MATERIALS? (Purp se/ Rati nale) : The purpose of the bond issue is to finance the construction of a 9 600 square foot addition to Scanlan International , Inc. 's current headquarters and istribution center and to remodel some areas in their existing structure at One Scanlon Plaza in Riverview Industrial Park in St. Paul . Scanlan International , I c. is a surgical instrument manufacturer that has maintained operations in St. Paul ince 1920. COST/BENEFIT, BUDGETARY AND PERSONNEL IMPACTS ANTICIPATED: The amount of the revenue bond issue is $750,000 and will be for a erm of 23 years. The company expects to increase their employment from 35 full-time mployees to 49 employees over the next 18 months when the expansion is complete . FINANCING SOURCE AND BUDGET ACTIVITY NUMBER CHARGED OR CREDITED: (Mayor' signa- ture t re- Total Amount of Transaction: quired if under $10,0 ) Funding Source: Activity Number: ATTACHMENTS (List and Number All Attachments) : 1. Staff Memorandum 2. Draft City Council Resolution 3. Port Authority Resolution No. 2637 cc: Jacqui Shoholm DEPARTMENT REVIEW CITY ATTORNEY RE IEW / X Yes No Council Resolution Required? Resolution Requi ed? X Yes No Yes X No Insurance Required? Insurance Suffic ent? X Yes No Yes X No Insurance Attached: (SEE REVERSE SIDE FOR INSTRUCTIONS) � Revised 12/84 � � --~. �a.��,a.�_ `�.� ;��,. �:,� _ `� � �� ��/ Y � � PORT AUTHORITY OF THE CITY OF SAINT PAUL OLL FREE (800) 328-8417 25 WEST FOURTH STREET • SUITE 1305 • ST. PAUL, MINN, 55102 • PHONE (612) 224-5686 A�ril 22, 1986 Mr. James Bellus, Director Planning and Economic Development Department City of St. Paul 14th Floor, City Hall Annex St. Paul , Minnesota 55102 SUBJECT: SCANLAN INTERNATIONAL, INC. $750,000 REVENUE BOND ISSUE Dear Jim: We submit herewith for your review and referral to the off ce of the Mayor, City Council and City Attorney's office details pertaininq to the issuance of $750,000 in revenue bonds to finance the construction o a 9,600 square foot addition to Scanlan International , Inc. ' s current hea quarters and distribution center and to remodel some areas in their exi tinQ structure at One Scanlon Plaza in Riverview Industrial Park in St. P ul . The Port Authority staff has conducted a thorouqh evaluati n of the firms and/or individuals that are involved in this project or in which the orincioals have an interest. This investigation has inclu ed detailed credit analysis, Dun and Bradstreet reports, direct communication with representatives of financial institutions with whom the Qa ticipants have done business and data base checks to determine if any pri cipal (s) have been in any way involved in legal proceedinqs as a result f securities fraud, extortion, embezzlement or financial misrenresentation. In addition to the staff inemorandum, we are attachinq a dr ft copy of the pr000sed City Council resolution and a copy of Port Authority Resolution No. 2637 which authorized the sale of bonds in the amount f $750,000. Your expeditious handling of this matter will be appreciat . urs truly, \ - � ��� �_z�--�, Euqene A.—R'raut EAK:ajc Executive Vice resident cc. Mayor Latimer EUGENE A KRAUT,C.I.D. DONALD G.DUNSHEE,C.I.D. CHARLES M.TOWLE CLIFFOR E.RAMSTED PERRY K.FEDERS EXECUiNE VICE PRESIDENT PSSI EXEC.VICE PRESIDENT DIRECTOR OF INDUSTRIAL DEVELOPMENT CHIEF NGINEER DIRECTOR OF FINANCE C.E.O. RICHARD A GIERDAL WILLIAM E.McGIVERN PROPERTV MANAGER DIRECTOR OF PUBUC REIATIONS COMMISSIONERS GEORGE W.WINTER WILLIAM WILSON ARTHUR N.GOODMAN VICTOR P.REIM RAYMOND E. GEVIN CHRIS NICOSIA JEAN M.WES- PRESIDENT VICE PRESIDENT SECRETARV TRFASURER COMMISSION R COMMISSIONER COMMISSIONEF. . C.I.D. Certified Industrial Developer �� O R T. (��-- �� � AUTHORI '� Y OF THE CITY OF ST. PAUL Memorondum TO: BOARD OF COMMISSIONERS D TE qpril 17, 1986 (Regular Meetinq April 22, 1986) ,� FROM: James E. Terrell �� .�,,;.,.., SUBJECT: SCANLAN INTERNATIONAL, INC. LEASE AMENDMENT PUBLIC HEARING - PRELIMIPJARY � UNDEP,WRITING AGREEMENTS $75Q,000 RESOLUTION 876 REVENUE BOND ISSUE I RESOLUTION No. 2637 1. THE COMPANY Scanlan International , Inc. is a surqical instrument anufacturer that has maintained o�erations in St. Paul since 1920. The Co uany is located at One Scanlan Plaza in the Riverview Industrial Park where t's headQUarters have been since 1980. This facility was financed by a Res lution 876 bond issue in 1979 with a 30 year term on a �arcel of 57,778 sQU re feet. The Comaany's growth and plans for exoansion of their international marketinQ efforts have created the need for this addi ion to their facility. Scanlan's products, hiqh quality surqical instruments are sold in over 60 countries. 2. THE PROJECT The Company oroposes to construct a 9,6Q(l square foot addition to their current headquarters and distribution center and to r model some areas in the existing structure. The additional space would b ' utilized for manufacturinq and shinoinv and the remodelinq of the xistinq buildinQ would expand office soace and add additional area for resea ch and develoqment. In July of 1979, the Port Authority Commissioners aop oved a land lease and bond issue for the construction of the 10,200 square oot existinq facilitv. The lease on this facility allows for purchase ootion on the land and buildina in 1989, 1999 and 2009. The prouosed lease mendment would include oqtions to ourchase the buildinq addition in the same years. In 1979 the Comoany had 9 employees with a projected rowth to 14 emoloyees as a result of expansion in the new facility. The Com any currently has 35 full time employees at this location and has indicate that the exoansion would increase emoloyment by 14 persons over a 12 to 8 month period. In addition to the prouosed buildinq addition and rem delinQ, Port Authorit.y staff �s w�rking witi� Scarilan I�t�rnatior�ai t� be des qnated a Foreian Trade Sub-zone by the U.S. Department of Commerce. This de iqnation will allow Scanlan to qreatl,y increase its exportinq activities nd arovide lonq term qrowth and emoloyment ootential . ' � BOA'RD`OF COMMISSIONERS �'� �j° _ � � �� A�ril 17, 1986 Page -2- 3. FINANCING The proposed financinQ would be done as a Resolution 876 ndustrial development revenue bond issue for a 23 year term. Proce ds from the bond issue would be as follows: Buildinq Construction & Remodelinq $600,0 Q Debt Service Reserve 76,5 0 Construction Period Interest - 6 Months 31,5 0 Bond Issuance Cost 19,0 0 Bond Discount $ 23,0 0 TOTAL . $750,0 0 The Port Authority would receive earninqs on the debt ser ice reserve and sinking fund as well as the customary fiscal and administ ative fees based on a rate of $35Q per month for the first ten years, $45� per month for the second ten years and $550 per month for the remainder of he lease. 4. UNDERWRITING Miller & Schroeder Financials, Inc. has agreed to underwr te the 23 year bond issue at an interest rate to be set the date the bon s are sold. We anticioate the bonds will sell at the reqular Mav 1986 Co ission meetinq. 5. TERMS OF THE LEASE The term of the lease would be for 23 years, with the Com an,y having the ootion to ourchase the buildinu for 10% of the oriqinal b nd issue at the end of the term. 6. RECOMMENDATION Staff has interviewed officers of Scanlan International , eviewed their financial statements and recommends a�proval of Resolutio No. 2637 . JET:a,jc I � .� . �r= �� ��� 565A Resolut on No. �� RESOLUTION OF THE PORT AUTHORITY Or' THE CITY OF S1�INT ' L�AUL WHEREAS, the purpose of Chapter 474, M nnesota Statutes, known as the Minnesota Municipal Indus rial llevelop- ment Act (hereinafter called "Act" ) as found and determinea by the legislature is to promote the welfare of the state by ttie active attraction and encouragement and developm nt of economi- cally sound industry and commerce to prevent so ar as possible the emergence of blighted and marginal lands and areas ot chronic unemployment and to aid in ttie developme t of existiny areas of blight, marginal land and persistent un mployment; and WHEREAS, factors necessitating tne act ve promotion and development of economically sound industry a d commerce are the increasing concentration of population in th metro�olitan areas and the rapidly rising increase in the amo nt and cost of governmental services required to meet tiie needs of the increased population and the need for developmen of land use which will provide an adequate tax base to finan e triese increased costs and access to employment oNportu , ities tor sucn population; and WHEREAS, The Port Authority of the Cit or Saint Paul (the "Authority" ) has received from the Sc3nlan nternational, Inc. (hereinafter referred to as "Company" ) a re uest tiiat tne Authority issue its revenue bonds to finance the acquisition, installation and construction of an approximatel 9, 60U sc�uara foot addition to the Company' s current neadquart rs and distribution center (hereinaft2r collectively ca led tne "Project") at Riverview Industrial Park in the C ty of 5t. Paul, all as is more fully described in tne staf report un file; and WHEREAS, the Authority desires to faci itate the selective development of the community, to retai and im�rove its tax base and to help it provide ttie ranye of services and employment opportunities required by its populat on, and said . . ���10-�0�� of the Act; that the Project furthers the purpo es stated in Section 474.U1 of the Act and, but for the will ''ngness of the Authority to furnish such financing, the Compan would not undertake tne Project, and that the effect of t e Project, if undertaken, will be to encourage the developmen of economically sound industry and commerce and as ist in the prevention of the emergence of blighted and mar inal land, and will help to prevent chronic unemployment, and ill help the City to retain and improve its tax base and �ro ide the range of services and employ.nent opportunities requir d by its oopulation, and will help to prevent the moveme t of talented and educated persons out of the state and to ar as within the state where their services may not be as effect ' vely used and will result in more intensive development and u e of land within the City and will eventually result in a increase in the City' s tax base; and that it is in the best interests of the port district and the people uf the City of Saint Paul and in furtrierance of the yeneral �lan of developme t to assist trie Company in financiny the Project. 2 . Subject to the mutual ayreement f the Authority, the Company and the purchaser of the revenue bonds as to the details of the lease or other revenue agreement as defined in the Act, and otlier documents necessa y to evidence and effect the financing of the Project and the issuance of the revenue bonds, the Project is hereby approved a d authorized and the issuance of revenue bonds of the Author ty in an amount not to exceed approximately $750, U�U (other tha such additional revenue bonds as are needed to compl te the Project) is authorized to tinance the costs of the Proje t and the recommendations of the Ruthority' s staff, as se forth in the staff inemorandum to the Commissioners which was presented to the Commissioners, are incorporated herein by r ference and approved. 3 . In accordance with Subdivision 7 of Section 474.01 , Minnesota Statutes, the Executive Vice- resident of the AUTHURITY is hereby authorized and directed to ubmit the proposal for the at�ove �iescribec� Project to the Commissioner of Energy and Economi� '��a�eloprient, requesting his approval, and other officers, empLoyees and agents of the AUT URITY are hereby authorized t�� ;>r�viae the Commissioner w th such preliminary infortnati�n as he �nay require. 2 I - � . � �-�-��� • 4. There has heretofore been filed w' th tne Authority a form of Prelir,linary Agreement betwee tne Authority and Company, relating to the proposed constructi n and financtng of the Project and a form of the Unde riting Agreement. The forms of the ayreements have bee examined by the Commissioners. It is the purpose of the ayr ements to evidence the commitment of the parties and their!, intentions with respect to the proposed Project in order t ' t the Company may proceed without delay with the commencement f the acquisition, installation and construction of t Project with the assurance that there has been sufficient "o icial action" under Section 103(b) of the Internal Revenue Co of 1y54, as amended, to allow for the issuance of industrial ravenue bc�nds (including, if deemed appropriate, any interim te or notes to provide temporary financing tnereof) to finance the entire cost of the Project upon agreement being reached as the ultiinate details of the Project and its financing. Said greements are hereby approved, and the President and Secretar of the Authority are hereby authorized and directed to execute said Agreements. 5 . Upon execution of tne Preliminar Ayreement by the Company, the staff of the Authority is auth rized and directed to continue negotiations with the Comp• ny so as to resolve the remaining issues necessary to the p eparation of the revenue agreement and other documents neces ary to the adoption by the Authority of its final bond res lution and the issuance and delivery of the revenue bonds; pro ided that the President (or Vice-President if the President i absent) and the Secretary (or Assistant Secretary if ttie Se retary is absent) of the Authority, or if either of such fficers (and his alternative) are absent, the Treasurer o= t� e Authority in lieu of such absent officers, are nereby author' zed in accordance with the provisions of �linnesota Sta utes, Section 475.06, Subdivision 1, to accept a final offer f the Underwriter made by the Underwriter to �ourchase said bc�nds and to execute an Underwritiny Agreement setting fo th such otfer on behalf of the Authority. Sucn acceptance sh 11 bind the Underwriter to said offer but shall be subject o ap�roval ar�d ratification by the Port Authority in a formal upplemental bond resolution to be adopted prior to the deli ery of said revenue bonds. 6. The revenue bonds (including any interir,z note or notes) and interest thereon shall not constitut an indebtedness of the Authority or t�ie City of Sa' nt Paul within the meaning of any constitutional or statutory imitation ana shall not constitute or give rise to a pecuniar liability of 3 - y ' ` � /f��/�-��� _ � � • . the Authority or the City or a charge against t eir general credit or taxing powers and neither the full fa th and credit nor the taxing powers of the Authority or the C ty is pledged for the payment of the bonds (and interim note r notes) or interest thereon. 7 . In order to facilitate completio of the revenue bond financing herein contemplated, the City Co cil is hereby requested to consent, pursuant to Laws of Minne ota, 1976, C`hapter 234, to the issuance of the revenue bon s ( including any interim note or notes) herein conteniplated nd any additional bonds which the Authority may prior o issuance or from time to time thereatter deem necessary to omplete the Project or to refund such revenue bonds; and fo such purpose the Executive Vice President of the Authority i hereby authorized and. directed to forward to the City ouncil copies of this resolution and said Preliminary Agreeme t and any additional available information the City Counc' 1 may� request. 8. The actions of the Executive Vic -President of the Authority in causing public notice of the p blic hearin� and in describing the general nature of the Pro ect and estimating the principal amount of bonds to be ' ssued to finance the Project and in preparing a draft of the proposed application to the Commissioner of Energy and E onomi.c Development, State of Minnesota, for approval o the Project, which has been available for inspection by the ublic at the office of the Authority from and after tiie publ ' cation of notice of the hearing, are in all respects rati ied and confirmed. Adopted April 22 , 1986 ' C � � % i � ��� . i � � Attest � Presi e The Po Authority f the City ot S� t Paul . , . . Secr ry 4 i - - . (�= �� - ��� CITY OF ►�AINT PAUL I =,��s��,� OFFICE OF THE CITY COIINCIL I ���uwa��ae s�����n�� .� Oote ; • Ma 19, 1986 COMM (TTEE REPORT �� TO = Saint PQU I City Council F� � M � C o m m it t e e 0 h C i ty Deve i opment and T lansport�t i on cMaiR . William L. Wilson 1 . Scan i an I.ra�rnat_i ona 1 Revenue Bond (Cormn i ttee r����'.'��i ) Th i s i tem i s on he May 20 Council agenda. 2. An interim ordinance initiating a s udy for a possible amendment to the Zoning Code Irelating to maximum size for accessory structures, such as garages , in residentially zoned dis ricts (Cammittee recommends approval ) This i em is on the May 20 Council agenda. 3. Consideration of Guidelines for UDAG le Loan Fund: Commerical Real Estate Progra HRA (Passed out of committee without recom ndation) . . CTTY HAi.i- SEVE.*ITH FLOOR SAI T PAUL, MINNESOTA 55102 ��.