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99-84ORIGINAL Presented by Referred To WHEREAS: A .m��ti� �� . ay,�5q� RESOLUTION CITY OF SAINT PAUL, MIIVNESOTA Council File # �� - 8� Green Sheet # � 3 � a a• a� Committee Date �3,c� da 7 "I7ie Port Authority of the Ciry of Saint Paul (the "Authority") has given its approval to the issuance of up to {�$99,&99jbf iu Industrial Development Revenue Bonds (Siewert Properties, LLC Project) Series 1999 (the "Bonds"), to fmance the cosu to be incurred by Siewert Properties, LLC, a Minnesota ]imited liability corparation (the "Borrower") in connection with the acquisition, conshuction and equipping of a manufacturing, warehouse and office facility to be located in the Ciry of Saint Paul, Minnesota (the "Projecf' ) and to be owned by the Borrower and leased to Ideal Printers, Inc.; and 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Authority shall be issued only with the consent of the Ciry Council of the Ciry of Saint Paul, by resolution adopted in acwrdance with law; and 3. Approval of the issuance of the proposed Bonds by the City Council is also required by Section 147(� of the Intemal Revenue Code of 1986, as amended; and 4. To meet the requirements of both state and federal law, the Port Authoriry has requested that the City Council gives its requisite approval to the issuance of the proposed Bonds by the Port Authority, subject to fmal approval of the details of said Bonds by the Port Authority. NOW, THEREFORE, BE IT RESOLVED by the Council of the Ciry of Saint Paul that, in accordance with the requirements of Section 147( fl of the Intemal Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the Ciry Council hereby approves the issuance of the aforesaid Bonds by the Port Authoriry for the purposes described in the Port Authoriry resolution adopted August 25, 1998, the exact details of which, including but not limited to, provisions relating to matwiries, interest rates, discount, redemption, and the issuance of addirional bonds aze to be determined by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refunding bonds) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for which the aforedescribed Bonds are issued. Adopted: January � 1999 �ORIGINAL eas a s sent enanav / i/ ey � OSffOID / ✓ o eman � ams � �� ✓ ei er � �( d O Adopted by Council: Date �� y \��y -� Adoption Certified by Council Secretary BY� _�c� _� .�.,—l�o� a Approved by Mayor: Date � �� By: Requested by Deparhnent o£ P�� By: � Form Approved City Attomey B �„ ,� (� "� J- / �- � �'/' Approved b Mayor for Submission to Council By: ��,_S+� "e�✓ / L ��G�" ( �y�� q9-8y G:\DATA\MAI\COUNCIL\SIECTYRE.DOC q9-g� DEPARTMENTIOFFICFJCOUNqL DATE WITIATED Melanie A. Isakson, Port Authority �-�z-99 GREEN SHEET N4 _ 13122 COMACT PERSON & PHONE INIT Dg MfTIAL/DATE DEPARTMENTDIRECTOR �^ �{ pTYGOUNpL Melanie A. Isakson, (651)224-Sb86 nssicx �CINATTORNEY aCITYCLERK MUSTBE ON CAUNCIL ACaENDA BY (DATE) NUMBEFt FOR � BUDGET DIflECTOR O FlN. 8 MGT. SEFVICES DIR. POUTING Tanuary 27, 1999 OADER � MAYOR (OR ASSISTANT) O TOTAL # OF SIGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATURE) AGTION RE�UESTED. Authorization for an approximate $2,800,000 tax exempt and taxable bond issue for 5iewert Properties, LLC (Ideal Printers, Inc.). RECAMMENDA710NS: Approv¢ (a) « Fieject (F) pERSONAL SERVICE CONTRACTS MUST ANSWER THE FOLLOWING QUESTIONS: _ PLANNING COMMISSION Cu EqvICE Cp�,�MISSIp N 1. Has this persoNtirm ever worked untler a contract tor ihis departmeni? _ CIB COMMffTEE A ISOardEillLL1oT1L YES NO P STAFF Credit Committee 2. Has ihis personRirm evef been a ciry employee? — YES NO _ DIS7RiCT COURT _ 3. Does this person/firm possess a skill not normally possessed by any current city employee? SUPPORTS WHICH COUNCIL O&IECTIVE? YES NO Explain all yes answeYS on separate sheet and attach to green sheet Economic Development INITIATING PR�&,EM, lSSUE, OPP�RTUNITY (Who, What, When, Where, Why): Aoward and Rhoda Siewert established Ideal Printers in 1979. The Siewerts have concluded they need a larger facility to accommodate growth. They will occupy 2.9 acres in Williams Hill Business Park. They will enter the Port Authority's Customized Job Training Work Force Agreenent at closing and wi11 fi11 70% of its newly created jobs with residents of the City of Saine Paul. Siewert Properties, LLC expects to occupy the site by 1ate, 1999, ADVAMAGES IF AP7AO�E0: Siewert Properties, LLC will initially employ 54 jobs at the site and has agreed to add an ac3ditional 39 full-time positions ehroughout the ten year term of the Work Force Agreement. This exceeds the Port's development criteria of one job per 1,000 Sq. Ft. of building. They vrill be occupying land in Williams Hill Business Park, therefore, adding to the tax base of the City of Saint Paul, DISADVANTA6ES IFAPPflOVED: N/A �Q?:°�,��5: 1':ciw�.. _. ..: - - a. �ds �g 6� ca �':°�'. 3 "d Sd vn �w�v � DISADVANTAGES IF NOiAPPROVED: Loss of approximately 100 jobs and tax revenue Eor L'�e Czty of_Sai,r Paul.- TOTAL AMOUNT OFTRANSACTION S 2� gOO � OOO COS7/REVENUE BUDGETED (CIRCLE ONE) YES NO Port Authorit Taxa6le and Non-Taxable FUNDINGSOURCE Condlllt Borid 1SSUe ACTIVITYNUMBER FINANCIAL WFORMATION. (EXPLAIN) F e''b. .� �� 1 5q 9 .C•`�'� c�,.�,,,�; i � � �, �2'�, � � ¢�� `� , Resolution No. 3761 � • RESOLUTION OF �°t-- �� `� Tf� PORT AUTHORITY OF TE� CITY OF SAINT PAUL [SIEWERT PROPERTIFS, LLC] P.I.s : 1. It ]�as been proposed that the Port Authority of the City of Saint Paul (the "Port Authority") issue its Variable Rate Demand Industrial Development Revenue Bonds (Ideal Printing, Inc. Project) Series 1999 1(the "Series 1 Bonds'� and T�able Variable Rate Demand Industrial Development Revenue Bonds (Ideal Printing, Inc. Project) Series 1999 2(the "Series 2 Bonds" and, together with the Series 1 Bonds, the "Bonds") in an aggregate principal amount of approximately $3,000,000 and that the proceeds of such Bonds be loaned to Siewert Properties, LLC, a Minnesota limited liability company (the "Borrower") to refinance certain equipment and to fmance the acquisition, construction and equipping of a manufacturing, warehouse 3nd office facility (the "Project") in the City of Saint Paul, Minnesota (the "City"), to be owned by the Borrower and leased to Ideal Printing, Inc. • 2. The Authority desires to facilitate the selective development of the City of Saint Paul and the metro east community, to retain and improve its tax base and to help it provide the range of services and employment opporhmities required by its population, and the Project will assist in achieving that objective by increasing the assessed valuation of the metro east community; helping to maintain a positive relationship between assessed valuation and debt; and enhancing the image and reputation of the metro east community. 3. The Project will result in additional employment opportunities in the City of Saint Paul and the metro east community. 4. The Authority has been advised by the Borrower that long term conventional, commerciai fmancing to pay the capital cost of the Project is available only on a lunited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, and that it has been acting to date in anticipation that the Authority would favorably consider this financing proposal. 5. The Project and its fmancing has received an allocation of bonding authority from the State of Minnesota Depat�(ment of Finance. 6. The Authority's Credit Committee and Boazd have previously adopted their Resolutions No. 37 and 3725, respectively giving preliminary approval to the proposed • issuance of revenue bonds. �nassa.oi � ��,ati�l9�� t 7. Pursuant to the requirements of Section 147( fl of the Intemai Revenue Code "` • of 1986, as amended, and pursuant to a notice published by the Port Authoriry not less than 15 days prior to the public hearing, a public hearing has been held on the date hereof on the issuance of the Bonds, at which public hearing all persons were given an opportunity to ��- NOW, Tf�REFORE, BE IT RESOLVED by the Boazd of Commissioners of the Port Authority ofthe City of Saint Paul, Minnesota as follows: 1. The Authority hereby ratifies its prior resolution giving preliminary approval to the Project and the issuance of the Bonds extends its continuing authorization to stafF to prepare and negotiate documents necessary to the financing and to apply or Project approval from the Minnesota Department of Trade and Economic Development. 2. Approval of this resolution is not a commitment from the Authority, and final approval of this Project, and the issuance of revenue bonds to fmance the Project, is subject to fiuther review by the Authority following submission of a full applicauon by the Company and satisfaction of the conditions and approvals described in pazagraph 2 of Resolution 3725. „ Adopted: February 23, 1999 . ATTEST: / Secretary (,Z�� PORT AUTHORITY OF THE CITY OF SAINT PAUL BY� G�=(�Ga'�o�. ,ot iG��=(�� Its Vice Chair massa.ot � SAINT PAUI. PORT ALJTHORITY MEMORANDUM TO: Board of Commissioners (Regular Meeting February 23, 1999) FROM: Melanie A. Isakson ��'`� Lorrie Louder Kenneth R.Johnson r-�, a �, � �-� � aa-g`� �-�� eo,� �; 1 /�� , � a �/ F�.a�, l��.q DATE: February 16, 1999 SUBJECT: PUBLIC HEARING - SIEWERT PROPERTIES, LLC (IDEAL PRINTERS, INC.) PRELIMINARY AUTHORIZATION FOR AN APPROXIMATE $3,000,000 TAX EXEMPT AND TAXABLE BOND ISSUE RESOLUTION NO. 3761 ACTION REQUESTED • Approval of preliminary public hearing resolution authorizing the continuation of negotiations with respect to an approximate $3,000,000 conduit bond for Siewert Properties, LLC (Ideal Printers, Inc.). Attached is a report outlining the terms of the tax exempt and taxable bond issue. We recommend approval of this resolution. C� sjs Attachment G:�DATAVv1A11F1 LESWIIRATECISI EW ERT. DOCG:\DATA�AAAI�FI LESVv11 RATEC\SI EVJERT.DOC 2/11 /99 � � , �q � SIEWERT PROPERTIES, LLC Z) (Ideal Printers, Inc.) �� .�-`t, �`� q • Action Reauested: Approval of final resolution authorizing the issuance of an approximate $3,000,000 conduit bond issued to Siewert Properties, LLC Project Summarv: Series 1999-1 -$1,140,000 tax exempt Series 1999-2 - $ 1,860,000 taxable Tvue: Variable rate demand industrial development revenue bonds Term: $1,930,000 - 25 Years $1,070,000 - 7 Years Issuer Borrower• Trustee Letter of Credit Bank Placement Aaents: • Remarketinq Agent: Borrowers Counsel Saint Paul Port Authority Siewert Properties, LLC Firstar Bank of Minnesota, National Association M&{ Marsha{{ & Ilsley Sank — Correspondent lendes for Alliance Bank ' Piper Jaffray, Inc. Piper Jaffray, Inc. Miller & Schroeder Financial, Inc. Steven Jacobs — Private Practice Placement Agent's Counsel: Oppenheimer Wolff & Donnelly Letter of Credit Bank Counse Bond Counsei: The Borrower Von Briesen, Purtell & Roper Leonard Street & Deinard The Borrower, Siewert Properties, LLC, is owned and controlled by Howard and Rhoda Siewert who are the owners of Ideal Printers, Inc. (the "Company"). The "Borrowe�" exists for the purpose of owning the real estate and specific equipment located in the Williams Hill Business Park. • Ideal Printers, Inc. (the "Company")is the operating entity, which will support the debt through an Assignment of a Master Lease of the project. Siewert Properties, LLC February 16, 1999 Page 2 C� 'R� �'� �� . ��l � l`�4`I The Company Howard and Rhoda Siewert established Ideal Printers in 1979 with six full-time employees in North Minneapolis. In 1982, they purchased a building and relocated to Saint Paul with 15 employees. ideal oufgrew thaf building and moved to its current leased location in the Midway area in 1986 with 20 employees. They currently occupy 32,000 Sq. Ft. where they employ 51 peopie. The owner of their current building is not interested in selling its building, so to accommodate their future expansion plans, Ideal Printers, Inc. has decided to build a larger facility. Ideal Printers is a six-color printing firm and is very respected in the Twin Cities print industry. In 1998, Ideal Printers' gross sales were $7,400,000. Key customers include Andersen Windows, Honeywell, Jostens and Medtronic. The Project: The Bonds proceeds will be loaned to the borrower and used to construct a new 53,00'0 square foot manufacturing, warehouse and office facility described as the "Project", and to refinance recently purchased equipment. • The "Borrower" Siewert Properties, LLC will lease the "ProjecY' to the "Company", and empioy 51 people as of the occupancy date. At the end of the first year, the number of employees will exceed the Port's development criteria of onejob per 1,000 square feet of building. Employment Impact: The company expects to almost double its manufacturing area and increase its workforce to: 54 after year one 57 after year two 60 after year three 64 after year four 68 after year five 72 after year six 77 after year seven 82 after year eight 87 after year nine 93 after year ten • The company agrees to pay new entry level hires a minimum of $8.00 per hour plus benefits which increases to $9.00 per hour plus benefits within a year. The average wage of all employees, excluding officers and shareholders is $19.00 per hour plus benefits. Siewert Properties, LLC February 16, 1999 Page 3 • Fees: The Port Authority will receive 1/8% at the inception on the original outstanding and 1/8% on the outstanding balance annually thereafter. Security for the Bonds Conduit Financina:The bonds will be conduit financing of the Authority and will not constitute or give rise to a liability ofi the Authority, the City of Saint • Paul, or the State of Minnesota or a charge against their general credit or taxing powers. No bondholder will have the right to demand payment on the bonds out of any funds to be raised from taxation or from any revenue sources other than those expressly pledged to payment of the bonds pursuant to the indenture. This includes the amounts drawn on the Letter of Credit and amounts payable by the Sources of Funds: Bonds Proceeds Tax exempt Bond Proceeds Taxable Total $3,000,000 Total ��_�� F� . ay � t�tq �i 1,930,000 900,000 170,000 $3,000,000 The Bonds: The Bonds will be issued in the approximate principai amount of $3,000,000 and will bear interest at a variable rate established weekly by the Remarketing Agent. The maximum interest rate is 12% for any tax exempt bonds and 18% for the taxable bonds $1,140,000 $1,860,000 Uses of Funds Construction Equipment Fees borrower under the loan agreement. Loan Agreement: Under the indenture the Authority has pledged its interest in the loan agreement to the trustee to secure the bonds. The trustee is authorized to exercise the rights of the Authority and to enforce the obligations of the borrower under the loan agreement. • Letter of Credit: The bonds are offered primarily on the basis of the financial strength of the Letter of Credit bank and not on the basis of the financial strength of the borrower or the company. The Letter of Credit wiil have an initial term of one year and will be extended for up to ten consecutive one year periods at the request of the Borrower and upon satisfaction of certain conditions. If the Letter of Credit is not renewed or replaced the bonds will be subject to mandatory redemption and the trustee is instructed to draw on the Letter of Credit before it expires to pay principal and interest then due. Siewert Properties, LLC � �� February 16, 1999 '��.b . �-�I < <q4 � Page 4 • Disclosure: The Port Authority Commissioners by SEC rules are obligated to disclose any risks of facts you may be aware of that would affect the probability of repayment on these bonds. Recommendation: Recommend approval of authorizing issuance of the approximate $3,000,000 conduit bond issue on behalf of Siewert Properties, LLC. sjs O.SPPA DELLIDATA�DATAW1Ai/siewcr � � q9-8y RIN OF THE CITY Of SAINT PAUL .,,,,, ., .,..,,..ARK TOWERS • 345 ST. PETER STREET • ST. PAUL, MN 55102-1661 January 20, 1999 Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Hali Annex 25 West Fourth Street Saint Paul, Minnesota 55102 RE: $2,800,000 TAX-EXEMPT AND TAXABLE CONDUIT BOND ISSUE SIEWERT PROPERTIES, LLC Dear Ms. Wheelock: FAX (651) 223-5198 TOLL FREE <800) 328-8417 • PHONE (651) 224-5686 We submit for your review and referral to the offce of the Mayor, City Council, and City Attorney's office, details pertaining to the issuance of a tax-exempt and taxable conduit bond issue in the approximate amount of $2,800,000 to finance the construction of a new facility of approximately 53,000 square feet in the Williams Hill Business Park, Saint Paul, Minnesota. The Port Authority has received an industrial revenue bond allocation from the State of Minnesota Smail Issue Pool, as the project is manufacturing. The City of Saint Paul's entitlement allocation will not be affected by this appiication. In addition to the staff memorandum, we are attaching a draft copy of the proposed City Council Resolution and a copy of the Resolution conducting the required public hearing and authorizing the sale of the revenue bond issue in the amount of $2,800,000 that will be considered by the Port Authority's Board on January 26, 1999. City Councii action will be required after the Port Authority's Board meeting of January 26, 1999. Your expeditious handling of this matter will be appreciated. Sinc ��v`�`�G�� Kenneth R.Johnson President KRJ:sjs Attachment cc: Mayor Coleman G:\DATAVviAI\COUNCIL\I DEALPAM. DOCG\DATAWIAI\COUNCI L\I DEALPAM. DOC DRAFT FOR DISCUSSION Resolution No. RESOLU'ITON OF THE PORT AUTHORITY OF THE CITY OF SAINT PAUL WHEREAS: �q-�y 1. It has been proposed that the Port Authority of the City of Saint Paul (the "Port Authority") issue its T�able and Tax-Exempt Industrial Development Revenue Bonds (Siewert Properties, LLC Project) Series 1999 (the "Bonds") in an aggregate principal amount not to exceed $1,400,000 and that the proceeds of such Bonds be loaned to the Siewert Properties, LLC, a Minnesota limited liability corporation (the `Borrower") to finance the acquisition, construction and equipping of a manufacturing, warehouse and office facility (the "ProjecP') in the City of Saint Paul, Minnesota (the "City"), to be owned by the Bosower and leased to Ideal Printers, Inc. 2. The Authority desires to facilitate the selective development of the City of Saint Paul and the metro east community, to retain and improve its taY base and to help it provide the range of services and employment opportunities required by its population, and the Project will assist in achieving that objective by increasing the assessed valuation of the metro east community; helping to maintain a positive relationship between assessed valuation and debt; and enhancing the image and reputation of the metro east community. 3. The Project will result in additional employment oppornurities in the City of Saint Paul and the metro east community. 4. The Authority has been advised by the Borrower that long term conventional, commercial financing to pay the capital cost of the Project is available only on a limited basis and at such high costs of bonowing that the economic feasibility of operating the Project would be significantly reduced, and that it has been acting to date in anticipation that the Authoriry would favorably consider this financing proposal. 5. The Project and its financing has received an allocation of bonding authority from the State of Minnesota DeparLment of Finance. 6. The Authority's Credit Committee and Boazd have previously adopted their Resolutions No. 37 and 3725, respectively giving preliminary approval to the proposed issuance of revenue bonds. 7. Pursuant to the requirements of Section 147(fl of the Intemal Revenue Code of 1986, as amended, and pursuant to a notice published by the Port Authority not less than 15 days prior to the public hearing, a public hearing has previously been held on the issuance of the Bonds, at which public hearing all persons were given an opportunity to speak. I762010.01 d 8. The Bonds will be issued and secured by the terms of an Indenture of Trust (the `'Indenture") between the Port Authority and (the "Trustee") and will be payable prunarily from draws made on an irrevocable letter of credit issued by (the `Bank") pursuant to a Letter of Credit and Reunbursement Agreement to be dated as of , 1999 (the "Letter of Credit Agreement") between the Borrower and the Bank. 9. The Borrower and the Port Authority will also enter into a Loan Agreement (the "Loan Agreement") in which the Borrower will agree to maintain the Letter of Credit and make all payments due either to the Bank or on account of the Bonds. 10. The Bonds and the interest on the Bonds shall be payable solely from the revenue pledged therefor and the Bonds shall not constitute a debt of the Port Authority within the meaning of any constitutional or statutory limitation of indebtedness, nor shall the Bonds constitute nor give rise to a pecuniary liability of the Port Authority or the City or a chazge against their general credit or taxing powers and shall not constitute a chazge, lien or encumbrance, legal or equitable, upon any properry of the Port Authority or the City other than their interest in said Project. qq —$'i 11. It is intended that interest on the Series A Bonds be excluded from gross income of the holders thereof for federal income tax purposes. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE PORT AUTHORITY OF THE CITY OF SAINT PAUL, AS FOLLOWS: A. On the basis of information available to the Port Authority it appears, and the Port Authority hereby finds, that: the Project constitutes properties, used or useful in connection with one or more revenue producing enterprises engaged in any business within the meaning of Minnesota Statutes, Sections 469.152 to 469.165 (the "Act"); the Project furthers the purposes stated in the Act; and it is in the best interests of the port dishict and the people of the Ciry of Saint Paul and in fiu�therance of the general plan of development to assist the Borrower in financing the Project. B. For the purpose of financing the Project, and paying certain costs of issuance and other expenses in connection with the issuance of the Bonds, and provided that the Project and its financing receive approvai by the Department of Trade and Economic Development ("DTED"), the Port Authority hereby authorizes the issuance, sale and delivery of the Tax-Exempt and Taxable Bonds in an aggregate principal amount not to exceed $1,400,000. The Bonds shall bear interest at such rates, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as may be prescribed in the Indenture, substantially in the form now on file in the offices of the Port Authority. C. Neither the Bonds, nor the interest thereon, shall constitute an indebtedness of the Port Authority or the City within the meaning of any consritutional or statutory debt limitation; nor shall they constitute or give rise to a pecuniary liability of the City, the Port Authority or a chazge against their general taYing powers and neither the full faith and credit nor the general taxing powers of the City or the Port Authority is pledged to the payment of the Bonds or interest thereon. \�SPPA_DELL�DATA�DATA�MAACOl1NCIUparessie.doc 1762010.01 a9-g4 D. Forms of the following documents have been submitted to the Port Authority for review and/or approval in connection with the sale, issuance and delivery of the Bonds: L the Bond Placement Agreement to be entered into between the Port Authority, the Borrower, Miller & Schroeder Financial, Inc. and Piper Jaffiay Inc. (collectively, the "Placement AgenY') (the "Bond Placement Agreement"); 2. the Indenture; 3. the Loan Agreement; 4. the Bonds; 5. the Preliminary Placement Memorandum to be used in mazkering the Bonds (the "Official StatemenP'); 6. the Remazketing Agreement dated as of , 1999 to be entered into by and beriveen (the "Remarketing Agent") and the Bonower (the "Remarketing AgreemenP'); and 7. the Reimbursement Agreement and form of the Letter of Credit (collectively, the "Documents"). E. It is hereby found, determined and declazed that: 1. The issuance and sale of the Bonds, the execution and delivery by the Port Authority of the Documents, as applicable, and the performance of all covenants and agreements of the Port Authority contained in the Documents, as applicable, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Documents and the Bonds valid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Sections 469.I52 through 469.165, as amended (the "Act"); 2. It is desirable that the Bonds be issued by the Port Authority upon the general terms set forth in the Documents, as applicable; 3. Under the provisions of and as provided in the Documents, the Bonds aze not to be payable from or a chazge upon any funds other than the revenues pledged to the payment thereof; no holder of the Bonds shall ever have the right to compel any exercise by the City or the Port Authority of its taxing powers to pay the Bonds or the interest or premium thereon, or to enforce payment thereof against any property of the City or the Port Authority except the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City or the Port Authority except the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bonds shall each recite that they are issued without USPPA_DELUDATA�DATAVNAI\COl7NCIL\paressie.doc ] 762010 O] 99-�y moral obligation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, aze payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the City or the Port Authority within the meaning of any constitutional or statutory lunitarion. F. The forms of the Documents and exhibits thereto aze approved substantially in the forms submitted and on file in the offices of the Port Authority, with such subsequent changes as may be approved by Port Authority staff and Bond Counsel as contemplated by paragraph H. The Cl�air and Secretary of the Port Authority, or such other officer as may be appropriate in the absence of either the Chair or Secretary, are hereby authorized and directed to execute the Documents (to the ea�tent the Port Authority is a pariy thereto) in substantially the forms submitted, as modified pursuant to pazagraph H, and any other documents and certificates which in the opuuon of Port Authority staff and Bond Counsel aze necessary to the transaction herein described The execution of any instrument by the appropriate officer or officers of the Port Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transaction herein described by indaviduals who were at the time of execution thereof the authorized officers of the Port Authority shall bind the Port Authority, notwithstanding that such individuals or any of them has ceased to hold such office or o�ces prior to the authentication and delivery of the Bonds. Copies of all of the documents necessary to the transaction described sha11 be delivered, filed and recorded as provided herein and in the Indenture. G. The President and other officers of the Port Authority are authorized and directed to prepare and furnish to the Placement Agent and Bond Counsel certified copies of proceedings and records of the Port Authority relating to the issuance of the Bonds and other transactions herein contemplated, and such other affidavits and certificates as may be required to show the facts relating to the legaliry of the Bonds and the other transactions herein contemplated as such facts appear from the books and records in the o�cers' custody and control or as otherwise known to them; and all such certified copies, certificates and afFidavits, including any heretofore fucnished, shall constitute representations of the Port Authority as to the truth of all statements contained therein. H. The approval hereby given to the various Documents referred to above includes approval of such additional details therein as may be necessary and appropriate, and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Port Authority's President and Chief Financial Officer; and includes approval of, among other things: 1. establishment of the final principal amount of the Bonds and the interest rate to be borne thereby for the inirial period; provided that the maYimum aggregate principal amount of the Bonds shall not exceed $1,400,000; and provided further that the maYimum interest rate on the Bonds sha11 not exceed % per annum for the Series A and % per annum for the Series B Bonds; 2. the establistunent of the maturity schedule and call provisions to be applicable to the Bonds; and \\SPPA_DELUDATA�DATAVvIAnCOl7NCIL\paressie.doc 17620IO.Oi q9 -8y 3. such related instruments as may be required to satisfy the conditions of any purchaser ofthe Bonds. I. The Port Authority hereby consents to the distribution of the Official Statement, as such Official Statement is finalized with the participation of Port Authority staff and Bond Counsel. The proposal of the Placement Agent to place the Bonds upon the terms and conditions set forth in the Bond Placement Agreement is hereby found and detemuned to be reasonable and is hereby accepted. J. The authority to approve, execute and deliver future amendments to financing documents entered into by the Port Authority in connection with the issuance of the Bonds and the other transacrions herein contemplated, is hereby delegated to the President of the Port Authority, provided that: (a) such amendments either do not require the consent of the holders of the Bonds, or the consent of the required percentage of the holders of the Bonds has been obtained with respect to such amendment; (b) such amendments do not materially adversely affect the interests of the Port Authority as the issuer of the Bonds; (c) such amendments do not contravene or violate any policy of the Port Authoriry; and (d) such amendments aze acceptable in form and substance to Bond Counsel. The execution of any inshwnent by the President of the Port AuthoriTy shall be conclusive evidence of the approval of such inshuments in accordance with the terms Hereof. K. No covenant, stipulation, obligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the Boazd of Commissioners of the Port Authority, or any officer, agent or employee of the Port Authority in that persons individual capacity, and neither the Board of Commissioners nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Adopted: 1999 PORT AUTHORITY OF THE CITY OF SAINT PAUL By Its Chair ATTEST: By Its Secretary \\SPPA_DELUDATA\DATAU-IpnCOUNCIL\paressie.doc ll62010.01 SAINT PAUL POKT AUTHORITY MEMORANDUM � '�♦ CREDIT COMMITTEE (Meeting January 19, 1999) � Melanie A. Isakson � Lorrie Louder Kenneth R.Johnson DATE: °t°l -�y January 14, 1999 SUBJECT: SIEWERT PROPERTIES, LLC (IDEAL PRINTERS, INC.) AUTHORIZATION FOR AN APPROXIMATE $2,800,000 TAX EXEMPT AND TAXABLE BOND ISSUE ACTION REQUESTED Approval of final resolution authorizing the issuance of an approximate $2,800,000 conduit bond issued to Siewert Properties, LLC (ideai Printers, Inc.). Attached is a report outlining the terms of the tax exempt and taxable bond issue. We recommend approval of this transaction. sjs Attachment G:\DATANAAIIFILESVvi IRATECISIE W ERT. DOCG:\DATA�MAIIFILESWI IRATEC4SI EW ERT.DOC Siewert Properties, LLC (Credit Committee Meeting) January 14, 1999 Page 2 of owning the reai estate and spec�c equipment located in the Williams Hill Business Park. The operating entity, Ideai Printers, Inc will support the debt through an Assignment of a Master Lease of the project. The Companv Howard and Rhoda Siewert established Ideal Printers in 1979 with six fuil-time empioyees in North Minneapolis. In 1982, they purchased a building and relocated to Saint Paul with 15 employees. Ideal outgrew that building and moved to its current leased location in the Midway area in 1986 with 20 employees. They currently occupy 32,000 Sq. Ft. where they employ 51 peopie. The owner of their current building is not interested in selling its building, so to accommodate their future expansion plans, Ideal Printers, Inc. has decided to build a larger facility. Ideal Printers is a six-color printer and very respected in tlie Twin Cities print industry. In 1997, ideai Printers' gross sales were $6,000,000. The Project: Emplovment Impact: Key customers include Anderson Windows, Honeywell, Jostens and Medtronic. Initially, the company will transfer 51 jobs to the site and has agreed to the foilowing employment increases. The Bonds proceeds will be loaned to the borrower and used to construct a new 53,000 square foot manufacturing, warehouse and office facility described as the "Project", and to refinance recently purchased equipment. q� �� The "Borrower" Siewert Properties, LLC will lease the "Project" to the "Company", and employ 51 people as of the occupancy date. The company expects to almost doubie its manufacturing area and increase its workforce to: 54 after year one 57 after year two 60 after year three 64 after year four 68 after year five 72 after year six 77 afteryearseven Siewert Properties, LLC (Credit Committee Meeting) January 14, 1999 q� -�'y Page 4 payment of the bonds pursuant to the indenture. This includes the amounts drawn on the Letter of Credit and amounts payable by the borrower under the loan agreement. Loan Agreement: Under the indenture the Authority has piedged its interest in the loan agreement to the frustee to secure the bonds. The trustee is authorized to exercise the rights of the Authority and to enforce the obligations of the borrower under the loan agreement. Letter of Credit: The bonds are offered primarily on the basis of the financial strength of the Letter of Credit bank and not on the basis of the financial strength of the borrower or the company. The Letter of Credit will have an initial term of one year and will be extended for up to ten consecutive one year periods at the request of the Borrower and upon satisfaction of certain conditions. If the Letter of Credit is not renewed or replaced the bonds will be subject to mandatory redemption and the trustee is instructed to draw on the Letter of Credit before it expires to pay principal and interest then due. Disciosure: The Port Authority Commissioners by SEC rules are obligated to disclose any risks of facts you may be aware of that wouid affect the probability of repayment on these bonds. Recommendation: Recommend approval of authorizing issuance of the approximate $2,800,000 conduit bond issue on behalf of Siewert Properties, LLC. sjs \\SPPA DELL�DATA�DATAWiAUSiewcr ORIGINAL Presented by Referred To WHEREAS: A .m��ti� �� . ay,�5q� RESOLUTION CITY OF SAINT PAUL, MIIVNESOTA Council File # �� - 8� Green Sheet # � 3 � a a• a� Committee Date �3,c� da 7 "I7ie Port Authority of the Ciry of Saint Paul (the "Authority") has given its approval to the issuance of up to {�$99,&99jbf iu Industrial Development Revenue Bonds (Siewert Properties, LLC Project) Series 1999 (the "Bonds"), to fmance the cosu to be incurred by Siewert Properties, LLC, a Minnesota ]imited liability corparation (the "Borrower") in connection with the acquisition, conshuction and equipping of a manufacturing, warehouse and office facility to be located in the Ciry of Saint Paul, Minnesota (the "Projecf' ) and to be owned by the Borrower and leased to Ideal Printers, Inc.; and 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Authority shall be issued only with the consent of the Ciry Council of the Ciry of Saint Paul, by resolution adopted in acwrdance with law; and 3. Approval of the issuance of the proposed Bonds by the City Council is also required by Section 147(� of the Intemal Revenue Code of 1986, as amended; and 4. To meet the requirements of both state and federal law, the Port Authoriry has requested that the City Council gives its requisite approval to the issuance of the proposed Bonds by the Port Authority, subject to fmal approval of the details of said Bonds by the Port Authority. NOW, THEREFORE, BE IT RESOLVED by the Council of the Ciry of Saint Paul that, in accordance with the requirements of Section 147( fl of the Intemal Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the Ciry Council hereby approves the issuance of the aforesaid Bonds by the Port Authoriry for the purposes described in the Port Authoriry resolution adopted August 25, 1998, the exact details of which, including but not limited to, provisions relating to matwiries, interest rates, discount, redemption, and the issuance of addirional bonds aze to be determined by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refunding bonds) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for which the aforedescribed Bonds are issued. Adopted: January � 1999 �ORIGINAL eas a s sent enanav / i/ ey � OSffOID / ✓ o eman � ams � �� ✓ ei er � �( d O Adopted by Council: Date �� y \��y -� Adoption Certified by Council Secretary BY� _�c� _� .�.,—l�o� a Approved by Mayor: Date � �� By: Requested by Deparhnent o£ P�� By: � Form Approved City Attomey B �„ ,� (� "� J- / �- � �'/' Approved b Mayor for Submission to Council By: ��,_S+� "e�✓ / L ��G�" ( �y�� q9-8y G:\DATA\MAI\COUNCIL\SIECTYRE.DOC q9-g� DEPARTMENTIOFFICFJCOUNqL DATE WITIATED Melanie A. Isakson, Port Authority �-�z-99 GREEN SHEET N4 _ 13122 COMACT PERSON & PHONE INIT Dg MfTIAL/DATE DEPARTMENTDIRECTOR �^ �{ pTYGOUNpL Melanie A. Isakson, (651)224-Sb86 nssicx �CINATTORNEY aCITYCLERK MUSTBE ON CAUNCIL ACaENDA BY (DATE) NUMBEFt FOR � BUDGET DIflECTOR O FlN. 8 MGT. SEFVICES DIR. POUTING Tanuary 27, 1999 OADER � MAYOR (OR ASSISTANT) O TOTAL # OF SIGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATURE) AGTION RE�UESTED. Authorization for an approximate $2,800,000 tax exempt and taxable bond issue for 5iewert Properties, LLC (Ideal Printers, Inc.). RECAMMENDA710NS: Approv¢ (a) « Fieject (F) pERSONAL SERVICE CONTRACTS MUST ANSWER THE FOLLOWING QUESTIONS: _ PLANNING COMMISSION Cu EqvICE Cp�,�MISSIp N 1. Has this persoNtirm ever worked untler a contract tor ihis departmeni? _ CIB COMMffTEE A ISOardEillLL1oT1L YES NO P STAFF Credit Committee 2. Has ihis personRirm evef been a ciry employee? — YES NO _ DIS7RiCT COURT _ 3. Does this person/firm possess a skill not normally possessed by any current city employee? SUPPORTS WHICH COUNCIL O&IECTIVE? YES NO Explain all yes answeYS on separate sheet and attach to green sheet Economic Development INITIATING PR�&,EM, lSSUE, OPP�RTUNITY (Who, What, When, Where, Why): Aoward and Rhoda Siewert established Ideal Printers in 1979. The Siewerts have concluded they need a larger facility to accommodate growth. They will occupy 2.9 acres in Williams Hill Business Park. They will enter the Port Authority's Customized Job Training Work Force Agreenent at closing and wi11 fi11 70% of its newly created jobs with residents of the City of Saine Paul. Siewert Properties, LLC expects to occupy the site by 1ate, 1999, ADVAMAGES IF AP7AO�E0: Siewert Properties, LLC will initially employ 54 jobs at the site and has agreed to add an ac3ditional 39 full-time positions ehroughout the ten year term of the Work Force Agreement. This exceeds the Port's development criteria of one job per 1,000 Sq. Ft. of building. They vrill be occupying land in Williams Hill Business Park, therefore, adding to the tax base of the City of Saint Paul, DISADVANTA6ES IFAPPflOVED: N/A �Q?:°�,��5: 1':ciw�.. _. ..: - - a. �ds �g 6� ca �':°�'. 3 "d Sd vn �w�v � DISADVANTAGES IF NOiAPPROVED: Loss of approximately 100 jobs and tax revenue Eor L'�e Czty of_Sai,r Paul.- TOTAL AMOUNT OFTRANSACTION S 2� gOO � OOO COS7/REVENUE BUDGETED (CIRCLE ONE) YES NO Port Authorit Taxa6le and Non-Taxable FUNDINGSOURCE Condlllt Borid 1SSUe ACTIVITYNUMBER FINANCIAL WFORMATION. (EXPLAIN) F e''b. .� �� 1 5q 9 .C•`�'� c�,.�,,,�; i � � �, �2'�, � � ¢�� `� , Resolution No. 3761 � • RESOLUTION OF �°t-- �� `� Tf� PORT AUTHORITY OF TE� CITY OF SAINT PAUL [SIEWERT PROPERTIFS, LLC] P.I.s : 1. It ]�as been proposed that the Port Authority of the City of Saint Paul (the "Port Authority") issue its Variable Rate Demand Industrial Development Revenue Bonds (Ideal Printing, Inc. Project) Series 1999 1(the "Series 1 Bonds'� and T�able Variable Rate Demand Industrial Development Revenue Bonds (Ideal Printing, Inc. Project) Series 1999 2(the "Series 2 Bonds" and, together with the Series 1 Bonds, the "Bonds") in an aggregate principal amount of approximately $3,000,000 and that the proceeds of such Bonds be loaned to Siewert Properties, LLC, a Minnesota limited liability company (the "Borrower") to refinance certain equipment and to fmance the acquisition, construction and equipping of a manufacturing, warehouse 3nd office facility (the "Project") in the City of Saint Paul, Minnesota (the "City"), to be owned by the Borrower and leased to Ideal Printing, Inc. • 2. The Authority desires to facilitate the selective development of the City of Saint Paul and the metro east community, to retain and improve its tax base and to help it provide the range of services and employment opporhmities required by its population, and the Project will assist in achieving that objective by increasing the assessed valuation of the metro east community; helping to maintain a positive relationship between assessed valuation and debt; and enhancing the image and reputation of the metro east community. 3. The Project will result in additional employment opportunities in the City of Saint Paul and the metro east community. 4. The Authority has been advised by the Borrower that long term conventional, commerciai fmancing to pay the capital cost of the Project is available only on a lunited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, and that it has been acting to date in anticipation that the Authority would favorably consider this financing proposal. 5. The Project and its fmancing has received an allocation of bonding authority from the State of Minnesota Depat�(ment of Finance. 6. The Authority's Credit Committee and Boazd have previously adopted their Resolutions No. 37 and 3725, respectively giving preliminary approval to the proposed • issuance of revenue bonds. �nassa.oi � ��,ati�l9�� t 7. Pursuant to the requirements of Section 147( fl of the Intemai Revenue Code "` • of 1986, as amended, and pursuant to a notice published by the Port Authoriry not less than 15 days prior to the public hearing, a public hearing has been held on the date hereof on the issuance of the Bonds, at which public hearing all persons were given an opportunity to ��- NOW, Tf�REFORE, BE IT RESOLVED by the Boazd of Commissioners of the Port Authority ofthe City of Saint Paul, Minnesota as follows: 1. The Authority hereby ratifies its prior resolution giving preliminary approval to the Project and the issuance of the Bonds extends its continuing authorization to stafF to prepare and negotiate documents necessary to the financing and to apply or Project approval from the Minnesota Department of Trade and Economic Development. 2. Approval of this resolution is not a commitment from the Authority, and final approval of this Project, and the issuance of revenue bonds to fmance the Project, is subject to fiuther review by the Authority following submission of a full applicauon by the Company and satisfaction of the conditions and approvals described in pazagraph 2 of Resolution 3725. „ Adopted: February 23, 1999 . ATTEST: / Secretary (,Z�� PORT AUTHORITY OF THE CITY OF SAINT PAUL BY� G�=(�Ga'�o�. ,ot iG��=(�� Its Vice Chair massa.ot � SAINT PAUI. PORT ALJTHORITY MEMORANDUM TO: Board of Commissioners (Regular Meeting February 23, 1999) FROM: Melanie A. Isakson ��'`� Lorrie Louder Kenneth R.Johnson r-�, a �, � �-� � aa-g`� �-�� eo,� �; 1 /�� , � a �/ F�.a�, l��.q DATE: February 16, 1999 SUBJECT: PUBLIC HEARING - SIEWERT PROPERTIES, LLC (IDEAL PRINTERS, INC.) PRELIMINARY AUTHORIZATION FOR AN APPROXIMATE $3,000,000 TAX EXEMPT AND TAXABLE BOND ISSUE RESOLUTION NO. 3761 ACTION REQUESTED • Approval of preliminary public hearing resolution authorizing the continuation of negotiations with respect to an approximate $3,000,000 conduit bond for Siewert Properties, LLC (Ideal Printers, Inc.). Attached is a report outlining the terms of the tax exempt and taxable bond issue. We recommend approval of this resolution. C� sjs Attachment G:�DATAVv1A11F1 LESWIIRATECISI EW ERT. DOCG:\DATA�AAAI�FI LESVv11 RATEC\SI EVJERT.DOC 2/11 /99 � � , �q � SIEWERT PROPERTIES, LLC Z) (Ideal Printers, Inc.) �� .�-`t, �`� q • Action Reauested: Approval of final resolution authorizing the issuance of an approximate $3,000,000 conduit bond issued to Siewert Properties, LLC Project Summarv: Series 1999-1 -$1,140,000 tax exempt Series 1999-2 - $ 1,860,000 taxable Tvue: Variable rate demand industrial development revenue bonds Term: $1,930,000 - 25 Years $1,070,000 - 7 Years Issuer Borrower• Trustee Letter of Credit Bank Placement Aaents: • Remarketinq Agent: Borrowers Counsel Saint Paul Port Authority Siewert Properties, LLC Firstar Bank of Minnesota, National Association M&{ Marsha{{ & Ilsley Sank — Correspondent lendes for Alliance Bank ' Piper Jaffray, Inc. Piper Jaffray, Inc. Miller & Schroeder Financial, Inc. Steven Jacobs — Private Practice Placement Agent's Counsel: Oppenheimer Wolff & Donnelly Letter of Credit Bank Counse Bond Counsei: The Borrower Von Briesen, Purtell & Roper Leonard Street & Deinard The Borrower, Siewert Properties, LLC, is owned and controlled by Howard and Rhoda Siewert who are the owners of Ideal Printers, Inc. (the "Company"). The "Borrowe�" exists for the purpose of owning the real estate and specific equipment located in the Williams Hill Business Park. • Ideal Printers, Inc. (the "Company")is the operating entity, which will support the debt through an Assignment of a Master Lease of the project. Siewert Properties, LLC February 16, 1999 Page 2 C� 'R� �'� �� . ��l � l`�4`I The Company Howard and Rhoda Siewert established Ideal Printers in 1979 with six full-time employees in North Minneapolis. In 1982, they purchased a building and relocated to Saint Paul with 15 employees. ideal oufgrew thaf building and moved to its current leased location in the Midway area in 1986 with 20 employees. They currently occupy 32,000 Sq. Ft. where they employ 51 peopie. The owner of their current building is not interested in selling its building, so to accommodate their future expansion plans, Ideal Printers, Inc. has decided to build a larger facility. Ideal Printers is a six-color printing firm and is very respected in the Twin Cities print industry. In 1998, Ideal Printers' gross sales were $7,400,000. Key customers include Andersen Windows, Honeywell, Jostens and Medtronic. The Project: The Bonds proceeds will be loaned to the borrower and used to construct a new 53,00'0 square foot manufacturing, warehouse and office facility described as the "Project", and to refinance recently purchased equipment. • The "Borrower" Siewert Properties, LLC will lease the "ProjecY' to the "Company", and empioy 51 people as of the occupancy date. At the end of the first year, the number of employees will exceed the Port's development criteria of onejob per 1,000 square feet of building. Employment Impact: The company expects to almost double its manufacturing area and increase its workforce to: 54 after year one 57 after year two 60 after year three 64 after year four 68 after year five 72 after year six 77 after year seven 82 after year eight 87 after year nine 93 after year ten • The company agrees to pay new entry level hires a minimum of $8.00 per hour plus benefits which increases to $9.00 per hour plus benefits within a year. The average wage of all employees, excluding officers and shareholders is $19.00 per hour plus benefits. Siewert Properties, LLC February 16, 1999 Page 3 • Fees: The Port Authority will receive 1/8% at the inception on the original outstanding and 1/8% on the outstanding balance annually thereafter. Security for the Bonds Conduit Financina:The bonds will be conduit financing of the Authority and will not constitute or give rise to a liability ofi the Authority, the City of Saint • Paul, or the State of Minnesota or a charge against their general credit or taxing powers. No bondholder will have the right to demand payment on the bonds out of any funds to be raised from taxation or from any revenue sources other than those expressly pledged to payment of the bonds pursuant to the indenture. This includes the amounts drawn on the Letter of Credit and amounts payable by the Sources of Funds: Bonds Proceeds Tax exempt Bond Proceeds Taxable Total $3,000,000 Total ��_�� F� . ay � t�tq �i 1,930,000 900,000 170,000 $3,000,000 The Bonds: The Bonds will be issued in the approximate principai amount of $3,000,000 and will bear interest at a variable rate established weekly by the Remarketing Agent. The maximum interest rate is 12% for any tax exempt bonds and 18% for the taxable bonds $1,140,000 $1,860,000 Uses of Funds Construction Equipment Fees borrower under the loan agreement. Loan Agreement: Under the indenture the Authority has pledged its interest in the loan agreement to the trustee to secure the bonds. The trustee is authorized to exercise the rights of the Authority and to enforce the obligations of the borrower under the loan agreement. • Letter of Credit: The bonds are offered primarily on the basis of the financial strength of the Letter of Credit bank and not on the basis of the financial strength of the borrower or the company. The Letter of Credit wiil have an initial term of one year and will be extended for up to ten consecutive one year periods at the request of the Borrower and upon satisfaction of certain conditions. If the Letter of Credit is not renewed or replaced the bonds will be subject to mandatory redemption and the trustee is instructed to draw on the Letter of Credit before it expires to pay principal and interest then due. Siewert Properties, LLC � �� February 16, 1999 '��.b . �-�I < <q4 � Page 4 • Disclosure: The Port Authority Commissioners by SEC rules are obligated to disclose any risks of facts you may be aware of that would affect the probability of repayment on these bonds. Recommendation: Recommend approval of authorizing issuance of the approximate $3,000,000 conduit bond issue on behalf of Siewert Properties, LLC. sjs O.SPPA DELLIDATA�DATAW1Ai/siewcr � � q9-8y RIN OF THE CITY Of SAINT PAUL .,,,,, ., .,..,,..ARK TOWERS • 345 ST. PETER STREET • ST. PAUL, MN 55102-1661 January 20, 1999 Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Hali Annex 25 West Fourth Street Saint Paul, Minnesota 55102 RE: $2,800,000 TAX-EXEMPT AND TAXABLE CONDUIT BOND ISSUE SIEWERT PROPERTIES, LLC Dear Ms. Wheelock: FAX (651) 223-5198 TOLL FREE <800) 328-8417 • PHONE (651) 224-5686 We submit for your review and referral to the offce of the Mayor, City Council, and City Attorney's office, details pertaining to the issuance of a tax-exempt and taxable conduit bond issue in the approximate amount of $2,800,000 to finance the construction of a new facility of approximately 53,000 square feet in the Williams Hill Business Park, Saint Paul, Minnesota. The Port Authority has received an industrial revenue bond allocation from the State of Minnesota Smail Issue Pool, as the project is manufacturing. The City of Saint Paul's entitlement allocation will not be affected by this appiication. In addition to the staff memorandum, we are attaching a draft copy of the proposed City Council Resolution and a copy of the Resolution conducting the required public hearing and authorizing the sale of the revenue bond issue in the amount of $2,800,000 that will be considered by the Port Authority's Board on January 26, 1999. City Councii action will be required after the Port Authority's Board meeting of January 26, 1999. Your expeditious handling of this matter will be appreciated. Sinc ��v`�`�G�� Kenneth R.Johnson President KRJ:sjs Attachment cc: Mayor Coleman G:\DATAVviAI\COUNCIL\I DEALPAM. DOCG\DATAWIAI\COUNCI L\I DEALPAM. DOC DRAFT FOR DISCUSSION Resolution No. RESOLU'ITON OF THE PORT AUTHORITY OF THE CITY OF SAINT PAUL WHEREAS: �q-�y 1. It has been proposed that the Port Authority of the City of Saint Paul (the "Port Authority") issue its T�able and Tax-Exempt Industrial Development Revenue Bonds (Siewert Properties, LLC Project) Series 1999 (the "Bonds") in an aggregate principal amount not to exceed $1,400,000 and that the proceeds of such Bonds be loaned to the Siewert Properties, LLC, a Minnesota limited liability corporation (the `Borrower") to finance the acquisition, construction and equipping of a manufacturing, warehouse and office facility (the "ProjecP') in the City of Saint Paul, Minnesota (the "City"), to be owned by the Bosower and leased to Ideal Printers, Inc. 2. The Authority desires to facilitate the selective development of the City of Saint Paul and the metro east community, to retain and improve its taY base and to help it provide the range of services and employment opportunities required by its population, and the Project will assist in achieving that objective by increasing the assessed valuation of the metro east community; helping to maintain a positive relationship between assessed valuation and debt; and enhancing the image and reputation of the metro east community. 3. The Project will result in additional employment oppornurities in the City of Saint Paul and the metro east community. 4. The Authority has been advised by the Borrower that long term conventional, commercial financing to pay the capital cost of the Project is available only on a limited basis and at such high costs of bonowing that the economic feasibility of operating the Project would be significantly reduced, and that it has been acting to date in anticipation that the Authoriry would favorably consider this financing proposal. 5. The Project and its financing has received an allocation of bonding authority from the State of Minnesota DeparLment of Finance. 6. The Authority's Credit Committee and Boazd have previously adopted their Resolutions No. 37 and 3725, respectively giving preliminary approval to the proposed issuance of revenue bonds. 7. Pursuant to the requirements of Section 147(fl of the Intemal Revenue Code of 1986, as amended, and pursuant to a notice published by the Port Authority not less than 15 days prior to the public hearing, a public hearing has previously been held on the issuance of the Bonds, at which public hearing all persons were given an opportunity to speak. I762010.01 d 8. The Bonds will be issued and secured by the terms of an Indenture of Trust (the `'Indenture") between the Port Authority and (the "Trustee") and will be payable prunarily from draws made on an irrevocable letter of credit issued by (the `Bank") pursuant to a Letter of Credit and Reunbursement Agreement to be dated as of , 1999 (the "Letter of Credit Agreement") between the Borrower and the Bank. 9. The Borrower and the Port Authority will also enter into a Loan Agreement (the "Loan Agreement") in which the Borrower will agree to maintain the Letter of Credit and make all payments due either to the Bank or on account of the Bonds. 10. The Bonds and the interest on the Bonds shall be payable solely from the revenue pledged therefor and the Bonds shall not constitute a debt of the Port Authority within the meaning of any constitutional or statutory limitation of indebtedness, nor shall the Bonds constitute nor give rise to a pecuniary liability of the Port Authority or the City or a chazge against their general credit or taxing powers and shall not constitute a chazge, lien or encumbrance, legal or equitable, upon any properry of the Port Authority or the City other than their interest in said Project. qq —$'i 11. It is intended that interest on the Series A Bonds be excluded from gross income of the holders thereof for federal income tax purposes. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE PORT AUTHORITY OF THE CITY OF SAINT PAUL, AS FOLLOWS: A. On the basis of information available to the Port Authority it appears, and the Port Authority hereby finds, that: the Project constitutes properties, used or useful in connection with one or more revenue producing enterprises engaged in any business within the meaning of Minnesota Statutes, Sections 469.152 to 469.165 (the "Act"); the Project furthers the purposes stated in the Act; and it is in the best interests of the port dishict and the people of the Ciry of Saint Paul and in fiu�therance of the general plan of development to assist the Borrower in financing the Project. B. For the purpose of financing the Project, and paying certain costs of issuance and other expenses in connection with the issuance of the Bonds, and provided that the Project and its financing receive approvai by the Department of Trade and Economic Development ("DTED"), the Port Authority hereby authorizes the issuance, sale and delivery of the Tax-Exempt and Taxable Bonds in an aggregate principal amount not to exceed $1,400,000. The Bonds shall bear interest at such rates, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as may be prescribed in the Indenture, substantially in the form now on file in the offices of the Port Authority. C. Neither the Bonds, nor the interest thereon, shall constitute an indebtedness of the Port Authority or the City within the meaning of any consritutional or statutory debt limitation; nor shall they constitute or give rise to a pecuniary liability of the City, the Port Authority or a chazge against their general taYing powers and neither the full faith and credit nor the general taxing powers of the City or the Port Authority is pledged to the payment of the Bonds or interest thereon. \�SPPA_DELL�DATA�DATA�MAACOl1NCIUparessie.doc 1762010.01 a9-g4 D. Forms of the following documents have been submitted to the Port Authority for review and/or approval in connection with the sale, issuance and delivery of the Bonds: L the Bond Placement Agreement to be entered into between the Port Authority, the Borrower, Miller & Schroeder Financial, Inc. and Piper Jaffiay Inc. (collectively, the "Placement AgenY') (the "Bond Placement Agreement"); 2. the Indenture; 3. the Loan Agreement; 4. the Bonds; 5. the Preliminary Placement Memorandum to be used in mazkering the Bonds (the "Official StatemenP'); 6. the Remazketing Agreement dated as of , 1999 to be entered into by and beriveen (the "Remarketing Agent") and the Bonower (the "Remarketing AgreemenP'); and 7. the Reimbursement Agreement and form of the Letter of Credit (collectively, the "Documents"). E. It is hereby found, determined and declazed that: 1. The issuance and sale of the Bonds, the execution and delivery by the Port Authority of the Documents, as applicable, and the performance of all covenants and agreements of the Port Authority contained in the Documents, as applicable, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Documents and the Bonds valid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Sections 469.I52 through 469.165, as amended (the "Act"); 2. It is desirable that the Bonds be issued by the Port Authority upon the general terms set forth in the Documents, as applicable; 3. Under the provisions of and as provided in the Documents, the Bonds aze not to be payable from or a chazge upon any funds other than the revenues pledged to the payment thereof; no holder of the Bonds shall ever have the right to compel any exercise by the City or the Port Authority of its taxing powers to pay the Bonds or the interest or premium thereon, or to enforce payment thereof against any property of the City or the Port Authority except the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City or the Port Authority except the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bonds shall each recite that they are issued without USPPA_DELUDATA�DATAVNAI\COl7NCIL\paressie.doc ] 762010 O] 99-�y moral obligation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, aze payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the City or the Port Authority within the meaning of any constitutional or statutory lunitarion. F. The forms of the Documents and exhibits thereto aze approved substantially in the forms submitted and on file in the offices of the Port Authority, with such subsequent changes as may be approved by Port Authority staff and Bond Counsel as contemplated by paragraph H. The Cl�air and Secretary of the Port Authority, or such other officer as may be appropriate in the absence of either the Chair or Secretary, are hereby authorized and directed to execute the Documents (to the ea�tent the Port Authority is a pariy thereto) in substantially the forms submitted, as modified pursuant to pazagraph H, and any other documents and certificates which in the opuuon of Port Authority staff and Bond Counsel aze necessary to the transaction herein described The execution of any instrument by the appropriate officer or officers of the Port Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transaction herein described by indaviduals who were at the time of execution thereof the authorized officers of the Port Authority shall bind the Port Authority, notwithstanding that such individuals or any of them has ceased to hold such office or o�ces prior to the authentication and delivery of the Bonds. Copies of all of the documents necessary to the transaction described sha11 be delivered, filed and recorded as provided herein and in the Indenture. G. The President and other officers of the Port Authority are authorized and directed to prepare and furnish to the Placement Agent and Bond Counsel certified copies of proceedings and records of the Port Authority relating to the issuance of the Bonds and other transactions herein contemplated, and such other affidavits and certificates as may be required to show the facts relating to the legaliry of the Bonds and the other transactions herein contemplated as such facts appear from the books and records in the o�cers' custody and control or as otherwise known to them; and all such certified copies, certificates and afFidavits, including any heretofore fucnished, shall constitute representations of the Port Authority as to the truth of all statements contained therein. H. The approval hereby given to the various Documents referred to above includes approval of such additional details therein as may be necessary and appropriate, and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Port Authority's President and Chief Financial Officer; and includes approval of, among other things: 1. establishment of the final principal amount of the Bonds and the interest rate to be borne thereby for the inirial period; provided that the maYimum aggregate principal amount of the Bonds shall not exceed $1,400,000; and provided further that the maYimum interest rate on the Bonds sha11 not exceed % per annum for the Series A and % per annum for the Series B Bonds; 2. the establistunent of the maturity schedule and call provisions to be applicable to the Bonds; and \\SPPA_DELUDATA�DATAVvIAnCOl7NCIL\paressie.doc 17620IO.Oi q9 -8y 3. such related instruments as may be required to satisfy the conditions of any purchaser ofthe Bonds. I. The Port Authority hereby consents to the distribution of the Official Statement, as such Official Statement is finalized with the participation of Port Authority staff and Bond Counsel. The proposal of the Placement Agent to place the Bonds upon the terms and conditions set forth in the Bond Placement Agreement is hereby found and detemuned to be reasonable and is hereby accepted. J. The authority to approve, execute and deliver future amendments to financing documents entered into by the Port Authority in connection with the issuance of the Bonds and the other transacrions herein contemplated, is hereby delegated to the President of the Port Authority, provided that: (a) such amendments either do not require the consent of the holders of the Bonds, or the consent of the required percentage of the holders of the Bonds has been obtained with respect to such amendment; (b) such amendments do not materially adversely affect the interests of the Port Authority as the issuer of the Bonds; (c) such amendments do not contravene or violate any policy of the Port Authoriry; and (d) such amendments aze acceptable in form and substance to Bond Counsel. The execution of any inshwnent by the President of the Port AuthoriTy shall be conclusive evidence of the approval of such inshuments in accordance with the terms Hereof. K. No covenant, stipulation, obligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the Boazd of Commissioners of the Port Authority, or any officer, agent or employee of the Port Authority in that persons individual capacity, and neither the Board of Commissioners nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Adopted: 1999 PORT AUTHORITY OF THE CITY OF SAINT PAUL By Its Chair ATTEST: By Its Secretary \\SPPA_DELUDATA\DATAU-IpnCOUNCIL\paressie.doc ll62010.01 SAINT PAUL POKT AUTHORITY MEMORANDUM � '�♦ CREDIT COMMITTEE (Meeting January 19, 1999) � Melanie A. Isakson � Lorrie Louder Kenneth R.Johnson DATE: °t°l -�y January 14, 1999 SUBJECT: SIEWERT PROPERTIES, LLC (IDEAL PRINTERS, INC.) AUTHORIZATION FOR AN APPROXIMATE $2,800,000 TAX EXEMPT AND TAXABLE BOND ISSUE ACTION REQUESTED Approval of final resolution authorizing the issuance of an approximate $2,800,000 conduit bond issued to Siewert Properties, LLC (ideai Printers, Inc.). Attached is a report outlining the terms of the tax exempt and taxable bond issue. We recommend approval of this transaction. sjs Attachment G:\DATANAAIIFILESVvi IRATECISIE W ERT. DOCG:\DATA�MAIIFILESWI IRATEC4SI EW ERT.DOC Siewert Properties, LLC (Credit Committee Meeting) January 14, 1999 Page 2 of owning the reai estate and spec�c equipment located in the Williams Hill Business Park. The operating entity, Ideai Printers, Inc will support the debt through an Assignment of a Master Lease of the project. The Companv Howard and Rhoda Siewert established Ideal Printers in 1979 with six fuil-time empioyees in North Minneapolis. In 1982, they purchased a building and relocated to Saint Paul with 15 employees. Ideal outgrew that building and moved to its current leased location in the Midway area in 1986 with 20 employees. They currently occupy 32,000 Sq. Ft. where they employ 51 peopie. The owner of their current building is not interested in selling its building, so to accommodate their future expansion plans, Ideal Printers, Inc. has decided to build a larger facility. Ideal Printers is a six-color printer and very respected in tlie Twin Cities print industry. In 1997, ideai Printers' gross sales were $6,000,000. The Project: Emplovment Impact: Key customers include Anderson Windows, Honeywell, Jostens and Medtronic. Initially, the company will transfer 51 jobs to the site and has agreed to the foilowing employment increases. The Bonds proceeds will be loaned to the borrower and used to construct a new 53,000 square foot manufacturing, warehouse and office facility described as the "Project", and to refinance recently purchased equipment. q� �� The "Borrower" Siewert Properties, LLC will lease the "Project" to the "Company", and employ 51 people as of the occupancy date. The company expects to almost doubie its manufacturing area and increase its workforce to: 54 after year one 57 after year two 60 after year three 64 after year four 68 after year five 72 after year six 77 afteryearseven Siewert Properties, LLC (Credit Committee Meeting) January 14, 1999 q� -�'y Page 4 payment of the bonds pursuant to the indenture. This includes the amounts drawn on the Letter of Credit and amounts payable by the borrower under the loan agreement. Loan Agreement: Under the indenture the Authority has piedged its interest in the loan agreement to the frustee to secure the bonds. The trustee is authorized to exercise the rights of the Authority and to enforce the obligations of the borrower under the loan agreement. Letter of Credit: The bonds are offered primarily on the basis of the financial strength of the Letter of Credit bank and not on the basis of the financial strength of the borrower or the company. The Letter of Credit will have an initial term of one year and will be extended for up to ten consecutive one year periods at the request of the Borrower and upon satisfaction of certain conditions. If the Letter of Credit is not renewed or replaced the bonds will be subject to mandatory redemption and the trustee is instructed to draw on the Letter of Credit before it expires to pay principal and interest then due. Disciosure: The Port Authority Commissioners by SEC rules are obligated to disclose any risks of facts you may be aware of that wouid affect the probability of repayment on these bonds. Recommendation: Recommend approval of authorizing issuance of the approximate $2,800,000 conduit bond issue on behalf of Siewert Properties, LLC. sjs \\SPPA DELL�DATA�DATAWiAUSiewcr ORIGINAL Presented by Referred To WHEREAS: A .m��ti� �� . ay,�5q� RESOLUTION CITY OF SAINT PAUL, MIIVNESOTA Council File # �� - 8� Green Sheet # � 3 � a a• a� Committee Date �3,c� da 7 "I7ie Port Authority of the Ciry of Saint Paul (the "Authority") has given its approval to the issuance of up to {�$99,&99jbf iu Industrial Development Revenue Bonds (Siewert Properties, LLC Project) Series 1999 (the "Bonds"), to fmance the cosu to be incurred by Siewert Properties, LLC, a Minnesota ]imited liability corparation (the "Borrower") in connection with the acquisition, conshuction and equipping of a manufacturing, warehouse and office facility to be located in the Ciry of Saint Paul, Minnesota (the "Projecf' ) and to be owned by the Borrower and leased to Ideal Printers, Inc.; and 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Authority shall be issued only with the consent of the Ciry Council of the Ciry of Saint Paul, by resolution adopted in acwrdance with law; and 3. Approval of the issuance of the proposed Bonds by the City Council is also required by Section 147(� of the Intemal Revenue Code of 1986, as amended; and 4. To meet the requirements of both state and federal law, the Port Authoriry has requested that the City Council gives its requisite approval to the issuance of the proposed Bonds by the Port Authority, subject to fmal approval of the details of said Bonds by the Port Authority. NOW, THEREFORE, BE IT RESOLVED by the Council of the Ciry of Saint Paul that, in accordance with the requirements of Section 147( fl of the Intemal Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the Ciry Council hereby approves the issuance of the aforesaid Bonds by the Port Authoriry for the purposes described in the Port Authoriry resolution adopted August 25, 1998, the exact details of which, including but not limited to, provisions relating to matwiries, interest rates, discount, redemption, and the issuance of addirional bonds aze to be determined by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refunding bonds) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for which the aforedescribed Bonds are issued. Adopted: January � 1999 �ORIGINAL eas a s sent enanav / i/ ey � OSffOID / ✓ o eman � ams � �� ✓ ei er � �( d O Adopted by Council: Date �� y \��y -� Adoption Certified by Council Secretary BY� _�c� _� .�.,—l�o� a Approved by Mayor: Date � �� By: Requested by Deparhnent o£ P�� By: � Form Approved City Attomey B �„ ,� (� "� J- / �- � �'/' Approved b Mayor for Submission to Council By: ��,_S+� "e�✓ / L ��G�" ( �y�� q9-8y G:\DATA\MAI\COUNCIL\SIECTYRE.DOC q9-g� DEPARTMENTIOFFICFJCOUNqL DATE WITIATED Melanie A. Isakson, Port Authority �-�z-99 GREEN SHEET N4 _ 13122 COMACT PERSON & PHONE INIT Dg MfTIAL/DATE DEPARTMENTDIRECTOR �^ �{ pTYGOUNpL Melanie A. Isakson, (651)224-Sb86 nssicx �CINATTORNEY aCITYCLERK MUSTBE ON CAUNCIL ACaENDA BY (DATE) NUMBEFt FOR � BUDGET DIflECTOR O FlN. 8 MGT. SEFVICES DIR. POUTING Tanuary 27, 1999 OADER � MAYOR (OR ASSISTANT) O TOTAL # OF SIGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATURE) AGTION RE�UESTED. Authorization for an approximate $2,800,000 tax exempt and taxable bond issue for 5iewert Properties, LLC (Ideal Printers, Inc.). RECAMMENDA710NS: Approv¢ (a) « Fieject (F) pERSONAL SERVICE CONTRACTS MUST ANSWER THE FOLLOWING QUESTIONS: _ PLANNING COMMISSION Cu EqvICE Cp�,�MISSIp N 1. Has this persoNtirm ever worked untler a contract tor ihis departmeni? _ CIB COMMffTEE A ISOardEillLL1oT1L YES NO P STAFF Credit Committee 2. Has ihis personRirm evef been a ciry employee? — YES NO _ DIS7RiCT COURT _ 3. Does this person/firm possess a skill not normally possessed by any current city employee? SUPPORTS WHICH COUNCIL O&IECTIVE? YES NO Explain all yes answeYS on separate sheet and attach to green sheet Economic Development INITIATING PR�&,EM, lSSUE, OPP�RTUNITY (Who, What, When, Where, Why): Aoward and Rhoda Siewert established Ideal Printers in 1979. The Siewerts have concluded they need a larger facility to accommodate growth. They will occupy 2.9 acres in Williams Hill Business Park. They will enter the Port Authority's Customized Job Training Work Force Agreenent at closing and wi11 fi11 70% of its newly created jobs with residents of the City of Saine Paul. Siewert Properties, LLC expects to occupy the site by 1ate, 1999, ADVAMAGES IF AP7AO�E0: Siewert Properties, LLC will initially employ 54 jobs at the site and has agreed to add an ac3ditional 39 full-time positions ehroughout the ten year term of the Work Force Agreement. This exceeds the Port's development criteria of one job per 1,000 Sq. Ft. of building. They vrill be occupying land in Williams Hill Business Park, therefore, adding to the tax base of the City of Saint Paul, DISADVANTA6ES IFAPPflOVED: N/A �Q?:°�,��5: 1':ciw�.. _. ..: - - a. �ds �g 6� ca �':°�'. 3 "d Sd vn �w�v � DISADVANTAGES IF NOiAPPROVED: Loss of approximately 100 jobs and tax revenue Eor L'�e Czty of_Sai,r Paul.- TOTAL AMOUNT OFTRANSACTION S 2� gOO � OOO COS7/REVENUE BUDGETED (CIRCLE ONE) YES NO Port Authorit Taxa6le and Non-Taxable FUNDINGSOURCE Condlllt Borid 1SSUe ACTIVITYNUMBER FINANCIAL WFORMATION. (EXPLAIN) F e''b. .� �� 1 5q 9 .C•`�'� c�,.�,,,�; i � � �, �2'�, � � ¢�� `� , Resolution No. 3761 � • RESOLUTION OF �°t-- �� `� Tf� PORT AUTHORITY OF TE� CITY OF SAINT PAUL [SIEWERT PROPERTIFS, LLC] P.I.s : 1. It ]�as been proposed that the Port Authority of the City of Saint Paul (the "Port Authority") issue its Variable Rate Demand Industrial Development Revenue Bonds (Ideal Printing, Inc. Project) Series 1999 1(the "Series 1 Bonds'� and T�able Variable Rate Demand Industrial Development Revenue Bonds (Ideal Printing, Inc. Project) Series 1999 2(the "Series 2 Bonds" and, together with the Series 1 Bonds, the "Bonds") in an aggregate principal amount of approximately $3,000,000 and that the proceeds of such Bonds be loaned to Siewert Properties, LLC, a Minnesota limited liability company (the "Borrower") to refinance certain equipment and to fmance the acquisition, construction and equipping of a manufacturing, warehouse 3nd office facility (the "Project") in the City of Saint Paul, Minnesota (the "City"), to be owned by the Borrower and leased to Ideal Printing, Inc. • 2. The Authority desires to facilitate the selective development of the City of Saint Paul and the metro east community, to retain and improve its tax base and to help it provide the range of services and employment opporhmities required by its population, and the Project will assist in achieving that objective by increasing the assessed valuation of the metro east community; helping to maintain a positive relationship between assessed valuation and debt; and enhancing the image and reputation of the metro east community. 3. The Project will result in additional employment opportunities in the City of Saint Paul and the metro east community. 4. The Authority has been advised by the Borrower that long term conventional, commerciai fmancing to pay the capital cost of the Project is available only on a lunited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, and that it has been acting to date in anticipation that the Authority would favorably consider this financing proposal. 5. The Project and its fmancing has received an allocation of bonding authority from the State of Minnesota Depat�(ment of Finance. 6. The Authority's Credit Committee and Boazd have previously adopted their Resolutions No. 37 and 3725, respectively giving preliminary approval to the proposed • issuance of revenue bonds. �nassa.oi � ��,ati�l9�� t 7. Pursuant to the requirements of Section 147( fl of the Intemai Revenue Code "` • of 1986, as amended, and pursuant to a notice published by the Port Authoriry not less than 15 days prior to the public hearing, a public hearing has been held on the date hereof on the issuance of the Bonds, at which public hearing all persons were given an opportunity to ��- NOW, Tf�REFORE, BE IT RESOLVED by the Boazd of Commissioners of the Port Authority ofthe City of Saint Paul, Minnesota as follows: 1. The Authority hereby ratifies its prior resolution giving preliminary approval to the Project and the issuance of the Bonds extends its continuing authorization to stafF to prepare and negotiate documents necessary to the financing and to apply or Project approval from the Minnesota Department of Trade and Economic Development. 2. Approval of this resolution is not a commitment from the Authority, and final approval of this Project, and the issuance of revenue bonds to fmance the Project, is subject to fiuther review by the Authority following submission of a full applicauon by the Company and satisfaction of the conditions and approvals described in pazagraph 2 of Resolution 3725. „ Adopted: February 23, 1999 . ATTEST: / Secretary (,Z�� PORT AUTHORITY OF THE CITY OF SAINT PAUL BY� G�=(�Ga'�o�. ,ot iG��=(�� Its Vice Chair massa.ot � SAINT PAUI. PORT ALJTHORITY MEMORANDUM TO: Board of Commissioners (Regular Meeting February 23, 1999) FROM: Melanie A. Isakson ��'`� Lorrie Louder Kenneth R.Johnson r-�, a �, � �-� � aa-g`� �-�� eo,� �; 1 /�� , � a �/ F�.a�, l��.q DATE: February 16, 1999 SUBJECT: PUBLIC HEARING - SIEWERT PROPERTIES, LLC (IDEAL PRINTERS, INC.) PRELIMINARY AUTHORIZATION FOR AN APPROXIMATE $3,000,000 TAX EXEMPT AND TAXABLE BOND ISSUE RESOLUTION NO. 3761 ACTION REQUESTED • Approval of preliminary public hearing resolution authorizing the continuation of negotiations with respect to an approximate $3,000,000 conduit bond for Siewert Properties, LLC (Ideal Printers, Inc.). Attached is a report outlining the terms of the tax exempt and taxable bond issue. We recommend approval of this resolution. C� sjs Attachment G:�DATAVv1A11F1 LESWIIRATECISI EW ERT. DOCG:\DATA�AAAI�FI LESVv11 RATEC\SI EVJERT.DOC 2/11 /99 � � , �q � SIEWERT PROPERTIES, LLC Z) (Ideal Printers, Inc.) �� .�-`t, �`� q • Action Reauested: Approval of final resolution authorizing the issuance of an approximate $3,000,000 conduit bond issued to Siewert Properties, LLC Project Summarv: Series 1999-1 -$1,140,000 tax exempt Series 1999-2 - $ 1,860,000 taxable Tvue: Variable rate demand industrial development revenue bonds Term: $1,930,000 - 25 Years $1,070,000 - 7 Years Issuer Borrower• Trustee Letter of Credit Bank Placement Aaents: • Remarketinq Agent: Borrowers Counsel Saint Paul Port Authority Siewert Properties, LLC Firstar Bank of Minnesota, National Association M&{ Marsha{{ & Ilsley Sank — Correspondent lendes for Alliance Bank ' Piper Jaffray, Inc. Piper Jaffray, Inc. Miller & Schroeder Financial, Inc. Steven Jacobs — Private Practice Placement Agent's Counsel: Oppenheimer Wolff & Donnelly Letter of Credit Bank Counse Bond Counsei: The Borrower Von Briesen, Purtell & Roper Leonard Street & Deinard The Borrower, Siewert Properties, LLC, is owned and controlled by Howard and Rhoda Siewert who are the owners of Ideal Printers, Inc. (the "Company"). The "Borrowe�" exists for the purpose of owning the real estate and specific equipment located in the Williams Hill Business Park. • Ideal Printers, Inc. (the "Company")is the operating entity, which will support the debt through an Assignment of a Master Lease of the project. Siewert Properties, LLC February 16, 1999 Page 2 C� 'R� �'� �� . ��l � l`�4`I The Company Howard and Rhoda Siewert established Ideal Printers in 1979 with six full-time employees in North Minneapolis. In 1982, they purchased a building and relocated to Saint Paul with 15 employees. ideal oufgrew thaf building and moved to its current leased location in the Midway area in 1986 with 20 employees. They currently occupy 32,000 Sq. Ft. where they employ 51 peopie. The owner of their current building is not interested in selling its building, so to accommodate their future expansion plans, Ideal Printers, Inc. has decided to build a larger facility. Ideal Printers is a six-color printing firm and is very respected in the Twin Cities print industry. In 1998, Ideal Printers' gross sales were $7,400,000. Key customers include Andersen Windows, Honeywell, Jostens and Medtronic. The Project: The Bonds proceeds will be loaned to the borrower and used to construct a new 53,00'0 square foot manufacturing, warehouse and office facility described as the "Project", and to refinance recently purchased equipment. • The "Borrower" Siewert Properties, LLC will lease the "ProjecY' to the "Company", and empioy 51 people as of the occupancy date. At the end of the first year, the number of employees will exceed the Port's development criteria of onejob per 1,000 square feet of building. Employment Impact: The company expects to almost double its manufacturing area and increase its workforce to: 54 after year one 57 after year two 60 after year three 64 after year four 68 after year five 72 after year six 77 after year seven 82 after year eight 87 after year nine 93 after year ten • The company agrees to pay new entry level hires a minimum of $8.00 per hour plus benefits which increases to $9.00 per hour plus benefits within a year. The average wage of all employees, excluding officers and shareholders is $19.00 per hour plus benefits. Siewert Properties, LLC February 16, 1999 Page 3 • Fees: The Port Authority will receive 1/8% at the inception on the original outstanding and 1/8% on the outstanding balance annually thereafter. Security for the Bonds Conduit Financina:The bonds will be conduit financing of the Authority and will not constitute or give rise to a liability ofi the Authority, the City of Saint • Paul, or the State of Minnesota or a charge against their general credit or taxing powers. No bondholder will have the right to demand payment on the bonds out of any funds to be raised from taxation or from any revenue sources other than those expressly pledged to payment of the bonds pursuant to the indenture. This includes the amounts drawn on the Letter of Credit and amounts payable by the Sources of Funds: Bonds Proceeds Tax exempt Bond Proceeds Taxable Total $3,000,000 Total ��_�� F� . ay � t�tq �i 1,930,000 900,000 170,000 $3,000,000 The Bonds: The Bonds will be issued in the approximate principai amount of $3,000,000 and will bear interest at a variable rate established weekly by the Remarketing Agent. The maximum interest rate is 12% for any tax exempt bonds and 18% for the taxable bonds $1,140,000 $1,860,000 Uses of Funds Construction Equipment Fees borrower under the loan agreement. Loan Agreement: Under the indenture the Authority has pledged its interest in the loan agreement to the trustee to secure the bonds. The trustee is authorized to exercise the rights of the Authority and to enforce the obligations of the borrower under the loan agreement. • Letter of Credit: The bonds are offered primarily on the basis of the financial strength of the Letter of Credit bank and not on the basis of the financial strength of the borrower or the company. The Letter of Credit wiil have an initial term of one year and will be extended for up to ten consecutive one year periods at the request of the Borrower and upon satisfaction of certain conditions. If the Letter of Credit is not renewed or replaced the bonds will be subject to mandatory redemption and the trustee is instructed to draw on the Letter of Credit before it expires to pay principal and interest then due. Siewert Properties, LLC � �� February 16, 1999 '��.b . �-�I < <q4 � Page 4 • Disclosure: The Port Authority Commissioners by SEC rules are obligated to disclose any risks of facts you may be aware of that would affect the probability of repayment on these bonds. Recommendation: Recommend approval of authorizing issuance of the approximate $3,000,000 conduit bond issue on behalf of Siewert Properties, LLC. sjs O.SPPA DELLIDATA�DATAW1Ai/siewcr � � q9-8y RIN OF THE CITY Of SAINT PAUL .,,,,, ., .,..,,..ARK TOWERS • 345 ST. PETER STREET • ST. PAUL, MN 55102-1661 January 20, 1999 Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Hali Annex 25 West Fourth Street Saint Paul, Minnesota 55102 RE: $2,800,000 TAX-EXEMPT AND TAXABLE CONDUIT BOND ISSUE SIEWERT PROPERTIES, LLC Dear Ms. Wheelock: FAX (651) 223-5198 TOLL FREE <800) 328-8417 • PHONE (651) 224-5686 We submit for your review and referral to the offce of the Mayor, City Council, and City Attorney's office, details pertaining to the issuance of a tax-exempt and taxable conduit bond issue in the approximate amount of $2,800,000 to finance the construction of a new facility of approximately 53,000 square feet in the Williams Hill Business Park, Saint Paul, Minnesota. The Port Authority has received an industrial revenue bond allocation from the State of Minnesota Smail Issue Pool, as the project is manufacturing. The City of Saint Paul's entitlement allocation will not be affected by this appiication. In addition to the staff memorandum, we are attaching a draft copy of the proposed City Council Resolution and a copy of the Resolution conducting the required public hearing and authorizing the sale of the revenue bond issue in the amount of $2,800,000 that will be considered by the Port Authority's Board on January 26, 1999. City Councii action will be required after the Port Authority's Board meeting of January 26, 1999. Your expeditious handling of this matter will be appreciated. Sinc ��v`�`�G�� Kenneth R.Johnson President KRJ:sjs Attachment cc: Mayor Coleman G:\DATAVviAI\COUNCIL\I DEALPAM. DOCG\DATAWIAI\COUNCI L\I DEALPAM. DOC DRAFT FOR DISCUSSION Resolution No. RESOLU'ITON OF THE PORT AUTHORITY OF THE CITY OF SAINT PAUL WHEREAS: �q-�y 1. It has been proposed that the Port Authority of the City of Saint Paul (the "Port Authority") issue its T�able and Tax-Exempt Industrial Development Revenue Bonds (Siewert Properties, LLC Project) Series 1999 (the "Bonds") in an aggregate principal amount not to exceed $1,400,000 and that the proceeds of such Bonds be loaned to the Siewert Properties, LLC, a Minnesota limited liability corporation (the `Borrower") to finance the acquisition, construction and equipping of a manufacturing, warehouse and office facility (the "ProjecP') in the City of Saint Paul, Minnesota (the "City"), to be owned by the Bosower and leased to Ideal Printers, Inc. 2. The Authority desires to facilitate the selective development of the City of Saint Paul and the metro east community, to retain and improve its taY base and to help it provide the range of services and employment opportunities required by its population, and the Project will assist in achieving that objective by increasing the assessed valuation of the metro east community; helping to maintain a positive relationship between assessed valuation and debt; and enhancing the image and reputation of the metro east community. 3. The Project will result in additional employment oppornurities in the City of Saint Paul and the metro east community. 4. The Authority has been advised by the Borrower that long term conventional, commercial financing to pay the capital cost of the Project is available only on a limited basis and at such high costs of bonowing that the economic feasibility of operating the Project would be significantly reduced, and that it has been acting to date in anticipation that the Authoriry would favorably consider this financing proposal. 5. The Project and its financing has received an allocation of bonding authority from the State of Minnesota DeparLment of Finance. 6. The Authority's Credit Committee and Boazd have previously adopted their Resolutions No. 37 and 3725, respectively giving preliminary approval to the proposed issuance of revenue bonds. 7. Pursuant to the requirements of Section 147(fl of the Intemal Revenue Code of 1986, as amended, and pursuant to a notice published by the Port Authority not less than 15 days prior to the public hearing, a public hearing has previously been held on the issuance of the Bonds, at which public hearing all persons were given an opportunity to speak. I762010.01 d 8. The Bonds will be issued and secured by the terms of an Indenture of Trust (the `'Indenture") between the Port Authority and (the "Trustee") and will be payable prunarily from draws made on an irrevocable letter of credit issued by (the `Bank") pursuant to a Letter of Credit and Reunbursement Agreement to be dated as of , 1999 (the "Letter of Credit Agreement") between the Borrower and the Bank. 9. The Borrower and the Port Authority will also enter into a Loan Agreement (the "Loan Agreement") in which the Borrower will agree to maintain the Letter of Credit and make all payments due either to the Bank or on account of the Bonds. 10. The Bonds and the interest on the Bonds shall be payable solely from the revenue pledged therefor and the Bonds shall not constitute a debt of the Port Authority within the meaning of any constitutional or statutory limitation of indebtedness, nor shall the Bonds constitute nor give rise to a pecuniary liability of the Port Authority or the City or a chazge against their general credit or taxing powers and shall not constitute a chazge, lien or encumbrance, legal or equitable, upon any properry of the Port Authority or the City other than their interest in said Project. qq —$'i 11. It is intended that interest on the Series A Bonds be excluded from gross income of the holders thereof for federal income tax purposes. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE PORT AUTHORITY OF THE CITY OF SAINT PAUL, AS FOLLOWS: A. On the basis of information available to the Port Authority it appears, and the Port Authority hereby finds, that: the Project constitutes properties, used or useful in connection with one or more revenue producing enterprises engaged in any business within the meaning of Minnesota Statutes, Sections 469.152 to 469.165 (the "Act"); the Project furthers the purposes stated in the Act; and it is in the best interests of the port dishict and the people of the Ciry of Saint Paul and in fiu�therance of the general plan of development to assist the Borrower in financing the Project. B. For the purpose of financing the Project, and paying certain costs of issuance and other expenses in connection with the issuance of the Bonds, and provided that the Project and its financing receive approvai by the Department of Trade and Economic Development ("DTED"), the Port Authority hereby authorizes the issuance, sale and delivery of the Tax-Exempt and Taxable Bonds in an aggregate principal amount not to exceed $1,400,000. The Bonds shall bear interest at such rates, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as may be prescribed in the Indenture, substantially in the form now on file in the offices of the Port Authority. C. Neither the Bonds, nor the interest thereon, shall constitute an indebtedness of the Port Authority or the City within the meaning of any consritutional or statutory debt limitation; nor shall they constitute or give rise to a pecuniary liability of the City, the Port Authority or a chazge against their general taYing powers and neither the full faith and credit nor the general taxing powers of the City or the Port Authority is pledged to the payment of the Bonds or interest thereon. \�SPPA_DELL�DATA�DATA�MAACOl1NCIUparessie.doc 1762010.01 a9-g4 D. Forms of the following documents have been submitted to the Port Authority for review and/or approval in connection with the sale, issuance and delivery of the Bonds: L the Bond Placement Agreement to be entered into between the Port Authority, the Borrower, Miller & Schroeder Financial, Inc. and Piper Jaffiay Inc. (collectively, the "Placement AgenY') (the "Bond Placement Agreement"); 2. the Indenture; 3. the Loan Agreement; 4. the Bonds; 5. the Preliminary Placement Memorandum to be used in mazkering the Bonds (the "Official StatemenP'); 6. the Remazketing Agreement dated as of , 1999 to be entered into by and beriveen (the "Remarketing Agent") and the Bonower (the "Remarketing AgreemenP'); and 7. the Reimbursement Agreement and form of the Letter of Credit (collectively, the "Documents"). E. It is hereby found, determined and declazed that: 1. The issuance and sale of the Bonds, the execution and delivery by the Port Authority of the Documents, as applicable, and the performance of all covenants and agreements of the Port Authority contained in the Documents, as applicable, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Documents and the Bonds valid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Sections 469.I52 through 469.165, as amended (the "Act"); 2. It is desirable that the Bonds be issued by the Port Authority upon the general terms set forth in the Documents, as applicable; 3. Under the provisions of and as provided in the Documents, the Bonds aze not to be payable from or a chazge upon any funds other than the revenues pledged to the payment thereof; no holder of the Bonds shall ever have the right to compel any exercise by the City or the Port Authority of its taxing powers to pay the Bonds or the interest or premium thereon, or to enforce payment thereof against any property of the City or the Port Authority except the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City or the Port Authority except the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bonds shall each recite that they are issued without USPPA_DELUDATA�DATAVNAI\COl7NCIL\paressie.doc ] 762010 O] 99-�y moral obligation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, aze payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the City or the Port Authority within the meaning of any constitutional or statutory lunitarion. F. The forms of the Documents and exhibits thereto aze approved substantially in the forms submitted and on file in the offices of the Port Authority, with such subsequent changes as may be approved by Port Authority staff and Bond Counsel as contemplated by paragraph H. The Cl�air and Secretary of the Port Authority, or such other officer as may be appropriate in the absence of either the Chair or Secretary, are hereby authorized and directed to execute the Documents (to the ea�tent the Port Authority is a pariy thereto) in substantially the forms submitted, as modified pursuant to pazagraph H, and any other documents and certificates which in the opuuon of Port Authority staff and Bond Counsel aze necessary to the transaction herein described The execution of any instrument by the appropriate officer or officers of the Port Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transaction herein described by indaviduals who were at the time of execution thereof the authorized officers of the Port Authority shall bind the Port Authority, notwithstanding that such individuals or any of them has ceased to hold such office or o�ces prior to the authentication and delivery of the Bonds. Copies of all of the documents necessary to the transaction described sha11 be delivered, filed and recorded as provided herein and in the Indenture. G. The President and other officers of the Port Authority are authorized and directed to prepare and furnish to the Placement Agent and Bond Counsel certified copies of proceedings and records of the Port Authority relating to the issuance of the Bonds and other transactions herein contemplated, and such other affidavits and certificates as may be required to show the facts relating to the legaliry of the Bonds and the other transactions herein contemplated as such facts appear from the books and records in the o�cers' custody and control or as otherwise known to them; and all such certified copies, certificates and afFidavits, including any heretofore fucnished, shall constitute representations of the Port Authority as to the truth of all statements contained therein. H. The approval hereby given to the various Documents referred to above includes approval of such additional details therein as may be necessary and appropriate, and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Port Authority's President and Chief Financial Officer; and includes approval of, among other things: 1. establishment of the final principal amount of the Bonds and the interest rate to be borne thereby for the inirial period; provided that the maYimum aggregate principal amount of the Bonds shall not exceed $1,400,000; and provided further that the maYimum interest rate on the Bonds sha11 not exceed % per annum for the Series A and % per annum for the Series B Bonds; 2. the establistunent of the maturity schedule and call provisions to be applicable to the Bonds; and \\SPPA_DELUDATA�DATAVvIAnCOl7NCIL\paressie.doc 17620IO.Oi q9 -8y 3. such related instruments as may be required to satisfy the conditions of any purchaser ofthe Bonds. I. The Port Authority hereby consents to the distribution of the Official Statement, as such Official Statement is finalized with the participation of Port Authority staff and Bond Counsel. The proposal of the Placement Agent to place the Bonds upon the terms and conditions set forth in the Bond Placement Agreement is hereby found and detemuned to be reasonable and is hereby accepted. J. The authority to approve, execute and deliver future amendments to financing documents entered into by the Port Authority in connection with the issuance of the Bonds and the other transacrions herein contemplated, is hereby delegated to the President of the Port Authority, provided that: (a) such amendments either do not require the consent of the holders of the Bonds, or the consent of the required percentage of the holders of the Bonds has been obtained with respect to such amendment; (b) such amendments do not materially adversely affect the interests of the Port Authority as the issuer of the Bonds; (c) such amendments do not contravene or violate any policy of the Port Authoriry; and (d) such amendments aze acceptable in form and substance to Bond Counsel. The execution of any inshwnent by the President of the Port AuthoriTy shall be conclusive evidence of the approval of such inshuments in accordance with the terms Hereof. K. No covenant, stipulation, obligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the Boazd of Commissioners of the Port Authority, or any officer, agent or employee of the Port Authority in that persons individual capacity, and neither the Board of Commissioners nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Adopted: 1999 PORT AUTHORITY OF THE CITY OF SAINT PAUL By Its Chair ATTEST: By Its Secretary \\SPPA_DELUDATA\DATAU-IpnCOUNCIL\paressie.doc ll62010.01 SAINT PAUL POKT AUTHORITY MEMORANDUM � '�♦ CREDIT COMMITTEE (Meeting January 19, 1999) � Melanie A. Isakson � Lorrie Louder Kenneth R.Johnson DATE: °t°l -�y January 14, 1999 SUBJECT: SIEWERT PROPERTIES, LLC (IDEAL PRINTERS, INC.) AUTHORIZATION FOR AN APPROXIMATE $2,800,000 TAX EXEMPT AND TAXABLE BOND ISSUE ACTION REQUESTED Approval of final resolution authorizing the issuance of an approximate $2,800,000 conduit bond issued to Siewert Properties, LLC (ideai Printers, Inc.). Attached is a report outlining the terms of the tax exempt and taxable bond issue. We recommend approval of this transaction. sjs Attachment G:\DATANAAIIFILESVvi IRATECISIE W ERT. DOCG:\DATA�MAIIFILESWI IRATEC4SI EW ERT.DOC Siewert Properties, LLC (Credit Committee Meeting) January 14, 1999 Page 2 of owning the reai estate and spec�c equipment located in the Williams Hill Business Park. The operating entity, Ideai Printers, Inc will support the debt through an Assignment of a Master Lease of the project. The Companv Howard and Rhoda Siewert established Ideal Printers in 1979 with six fuil-time empioyees in North Minneapolis. In 1982, they purchased a building and relocated to Saint Paul with 15 employees. Ideal outgrew that building and moved to its current leased location in the Midway area in 1986 with 20 employees. They currently occupy 32,000 Sq. Ft. where they employ 51 peopie. The owner of their current building is not interested in selling its building, so to accommodate their future expansion plans, Ideal Printers, Inc. has decided to build a larger facility. Ideal Printers is a six-color printer and very respected in tlie Twin Cities print industry. In 1997, ideai Printers' gross sales were $6,000,000. The Project: Emplovment Impact: Key customers include Anderson Windows, Honeywell, Jostens and Medtronic. Initially, the company will transfer 51 jobs to the site and has agreed to the foilowing employment increases. The Bonds proceeds will be loaned to the borrower and used to construct a new 53,000 square foot manufacturing, warehouse and office facility described as the "Project", and to refinance recently purchased equipment. q� �� The "Borrower" Siewert Properties, LLC will lease the "Project" to the "Company", and employ 51 people as of the occupancy date. The company expects to almost doubie its manufacturing area and increase its workforce to: 54 after year one 57 after year two 60 after year three 64 after year four 68 after year five 72 after year six 77 afteryearseven Siewert Properties, LLC (Credit Committee Meeting) January 14, 1999 q� -�'y Page 4 payment of the bonds pursuant to the indenture. This includes the amounts drawn on the Letter of Credit and amounts payable by the borrower under the loan agreement. Loan Agreement: Under the indenture the Authority has piedged its interest in the loan agreement to the frustee to secure the bonds. The trustee is authorized to exercise the rights of the Authority and to enforce the obligations of the borrower under the loan agreement. Letter of Credit: The bonds are offered primarily on the basis of the financial strength of the Letter of Credit bank and not on the basis of the financial strength of the borrower or the company. The Letter of Credit will have an initial term of one year and will be extended for up to ten consecutive one year periods at the request of the Borrower and upon satisfaction of certain conditions. If the Letter of Credit is not renewed or replaced the bonds will be subject to mandatory redemption and the trustee is instructed to draw on the Letter of Credit before it expires to pay principal and interest then due. Disciosure: The Port Authority Commissioners by SEC rules are obligated to disclose any risks of facts you may be aware of that wouid affect the probability of repayment on these bonds. Recommendation: Recommend approval of authorizing issuance of the approximate $2,800,000 conduit bond issue on behalf of Siewert Properties, LLC. sjs \\SPPA DELL�DATA�DATAWiAUSiewcr