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99-855OR�GINAL coun�il Rile # ` l \ - 8S5 Green Sheet # /00 �? . Presented by PROPOSED RESOLUTION CITY OF SAINT PAUL, M{NNESOTA Referred To Committee Date �� 1. The Port Authority of the City of Saint Paui (the "Authority") has given its approval to the issuance of up to $2,000,000 of its Industrial Deveiopment Revenue Bonds (Carison Refrigeration Company Project) Series 1999-4 (the "Bonds"), to finance the costs to be incurred by JDK Partners LLC, a Minnesota Iimited liability corporation (the "Borrower") in conneetion with the construetion and equipping of an approximately 55,000 square foot manufacturing facility (the "ProjecY') to be located in Williams Hili Industriai Park, in the City of Saint Paui, Minnesota (the "City"), to be owned by the Borrower a�d leased to Carison Refigeration Company, a Minnesota corporation. 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Authority shail be issued only with the consent of the City Councii of the City of Saint Paul, by resolution adopted in accordance with law; and 3. Approval of the issuance of the proposed Bonds by the City Councii 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 Authority has requested that the City Council gives its requisite approval to the issuance of the proposed Bonds by the Port Authority, subject to final approval of the detaiis of said Bonds by the Port Authority. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paui that, in accordance with the requirements of Section 147(� of the Irrtemaf Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Councif hereby approves the issuance of the aforesaid Bonds by the Port Authority for the purposes described in the Port Authority resolution adopted August 24, 1999, the exact details of which, inciuding but not limited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of additional bonds are 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: September_,, 1999 ORlClNAL �� r�� :. . �� . eel Adopted by Councii: Date �M� $ ��°�q°� Adoption Certified by Council Secretary BY: �_ a- - � ,-.��.�� Approved by Maypc:� Date c=�� By: Requested by Department of: / � . � By: " aq_gss G:\DATA\MAI\BOARD\CARLCOUN.doc Form Appro�ved City Attorney B �' G`-.--' `�: C�� Melanie A. Isakson, Port Melanie A. Isakson (651)2 9/1/99 S�,_�r- TOTAL # OF SIGNATURE PAGES 8/24/99 GREEN SHEET ov�r�ro.ECroie FoR ❑ arcwnaxlEr ❑ arvaEnlc ❑�.,�,�. ❑.,��,,,�� p�.��,��, ❑ (CLIP ALL LOCATIONS FOR SIGNATUREj Approval of final resolution authorizing the issuance of an approximate $2,000,000 conduit bond issue for JKD Partners, LLC. (Carlson Refrigeration Company). PLANNtNG COMMISS{ON CIB COMMITTEE CIVIL SERVICE CQMMISSION Port Authority Board Has this persoMfirm erer vrorfred untler a conVad for this tlepa�tment'7 YES PIO Has this v��rm ever be�.m a dbi em7lovee9 YES NO Does Mis persorvhim possess a skill not rarmallYpossessetl by anY cunerd city emPbyee? YES NO Is Nis peisoNfirm a farpeted vendo? YES NO Garlson Refxigeration, a Minneapolis union company, manufactures and installs custom wood products. These include checkout and service counters and display fixtures for grocery, convenience and liquor stores. Carlson also distributes and installs various related products such as store shelving, coolers, and refrigeration equipmenr. They c rrentl lease approximatelX_35,0��_Sq. of production and warzhou�e„��orage_at «�_,.,. a,�F__._.. �- - IF one Carlson Refrigeration will employ 41 people as of the occupancy date. The company expects to increase its woxkforce by ten within two years and have a total o£ b6 employees within ten years. The location of Carlson Refrigeration Company in the new Williams Hill Business Center will increase the City's taxes by $160,000. None If Carlson Refrigeration Company did not locate in Williams Hill Business Center, it would mean the loss of taxes and jobs for the City of Saint Paul 90UNTOFTRANSACTIONS �2�000,000 Port Authority Tax Exempt Conduit sourtce Bond Issue iNFORMATON �EtPWN) COST/RE1/ENUE BUIXiEfED (CIRCLE ON� ACTIVT' NUTABER ° �q �BSs /DO a�� No �'8" ancou¢a YES NO Cour�S� Res��°c?� Gente� ,. , .�,_ c�q _g�s5 FAX (657) 223-5198 PORT AUTHORIN OF THE CITY OF SAINT PAUL TOLL FREE (800) 328-8417 1900 LANDMARK 70WERS • 345 ST. PETER STREET • ST. PAUL, MN 55102-16b1 • PHONE <657) 224-5686 August 24, 1999 Mr. Brian Sweeney, Director Planning & Economic Development Department 1300 City Hall Annex 25 West Fourth Street Saint Paul, Minnesota 55102 RE: $2,000,000 TAX-EXEMPT CONDUIT BOND ISSUE JKD PARTNERS, LLC. (CARL30N REFRIGERATION COMPANY) Dear Mr. Sweeney: We submit for your review and referral to the office of the Mayor, City Council, and City Attorney's office, details pertaining to the issuance of a tax-exempt conduit bond issue in the approximate amount of $2,000,000 to finance the construction of a 50,000 Sq. Ft. o�ce and manufacturing facility, in Williams Will Business Genter in Saint Paul, Minnesota. The City of Saint Paul's entitlement allocation will not be affected by this application. 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 tax-exempt conduit bond issue in the approximate amount of $2,000,000 that witl be considered by the Port Authority's Board on August 24, 1999. City Council action will be required after the Port Authority's Board meeting of August 24, 1999. Your expeditious handling of this matter will be appreciated. Sincerely i Kenneth R. Johnson President KRJ:sjs Attachment cc: Mayor Cofeman 1\SPPA_DELL\DATA\DATAWIAI�BOARD\SWEENY. DOC\\SPPA_DELL�DATA�DATA\MAI�BOARD\SWEENY.DOC �q _ g�SS SAINT PAUL PoRT Av�rxox�rY MEMORANDUM TO: BOARD OF COMMISSIONERS DATE: (Reguiar Board Meeting August 24, 1999) FROM: Melanie A. Isak n`7�' ��'� Lorrie Louder � � Kenneth R. Johnson�/,� August 17, 1999 SUBJECT: PUBLIC HEARING - JKD PARTNERS, LLC (CARLSON REFRIGERATION COMPANY) FINAL AUTHORIZATION FOR AN APPROXIMATE $2,000,000 TAX-EXEMPT CONDUIT BOND ISSUE RESOLUTION NO. 3�94 ACTION REQUESTED Approval of final resolution authorizing an approximate $2,000,000 conduit bond for JKD Partners, LLC (Carlson Refrigeration Company), Attached is a report outfining the terms of the tax exempt bond issue. We recommend approval of this resolution. sjs Attachment 8-17-99 JKD PARTNERS, LLC (Carlson Refrigeration Company) Action Reauested: Approval of final resolution authorizing the issuance of an approximate $2,000,000 conduit bond issued to JKD Partners, LLC Proiect Summary: Series 1999�, $2,000,000 tax exempt Tvae: Variable rate demand industriai development revenue bonds 7erm: $2,000,000 - 20 Years Issuer Borrower Trustee Letter of Credit Bank Placement Agents: Saint Paul Port Authority JKD Partners, LLC Firstar Bank of Minnesota, National Association Firstar Bank of Milwaukee, NA US Bancorp Piper JafFray Remarketins� Piper Jaffray, Inc. Agent: Miller & Schroeder Financial, Inc. Dougherty Summit Securities, LLC Borrowers Fabyanski, Westra and Hart, P.A. Counsel Piacement AaenYs Counsel: Kennedy and Graven Chartered Letter of Credit Bank Counse Bond Counsei• Dorsey and Whitney Leonard Street & Deinard The Borrower: The Borrower is organized as a limited liability company to own the real estate which will be leased to the operating entity, Carlson Refrigeration Company. The Comaanv: Carison Refrigeration, founded in 1983, is a union company that manufactures and instalis custom wood products. These include checkout and service counters and display fixtures for grocery, convenience and liquor stores. Carison also distributes and installs various related products such as store shelving, coolers, and refrigeration equipment. Their primary customers include Rainbow Foods, Cub Foods, Byerlys and SuperAmerica stores. JKD Partners Page 2 �q -�'SS They currenfly lease approximately 35,000 square feet of production and warehouse storage at three different Minneapoiis focations. They are planning to build a 5�,000 square foot office and manufacturing facility at an estimated cost of $2,300,000. The Project: The Bonds proceeds wiil be loaned io the borrower and used to construct a r�ew 50,000 square foot manufaeturing, warehouse and office facility described as the "ProjecY'. The "Borrowe�', JKD Partners, LLC will lease to Carlson ftefrigeration Company who wifl employ 41 people as of the occupancy date. Employment {m act: The company expects to increase its workforce by ten within two years, and increasing to a total of 66 employees within ten years. The average wage of all employees, excluding officers and shareholders is $9.00 per hour plus benefits. Sources of Funds: Uses of Funds Bonds Proceeds Tax Exempt $2,000,000 Construction $2,307,000 Equity $ 407.000 Fees $ 100,000 Total $2,407,000 Total $2,407,000 The Bonds: The Bonds will be issued in the principal amount of $2,000,000 and wili bear interest at a variable rate established weekly by the Remarketing Agent. Fees: The Port Authority will receive 1/8% at loan closing based on the original outstanding and 1/8% on the outstanding balance annually thereafter. Conduit Financinq:The bonds will be conduit financing of the Authority and wiil not constitute or give rise to a �iability of the Authority, the City of Saint Pauf, 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 piedged to G:\DATAWIAI�BOARD\CARLSON. DOCG:�DATAW1AI160ARD\CARLSON.DOC JKD Partners Page 3 payment of the bonds pursuant to the indenture. This inciudes the amounts drawn on the Letter of Credit and amounts payable by the borrower under the loan agreement. Loan Agreement Under the indenture the Authoriiy 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. �etter 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 satisfactiort of certain cond+tions. 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. Disctosure: The Port Author+ty 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 approvaf of authorizing issuance of a$2,000,000 conduit bond issue ort behalf of JKD Partners, LLC, sjs G:�DATAWIAI�BOARD\CARLSON.DOCG:�DATAWIAI�BOARD\CARLSON.00C Q g _gsS Resolution �o. 3794 RESOLUTION OF THE PORT �U"I'HORITY OF THE CITY OF S?,L'VT P�UL WI�RE�.S: l. It has been proposed that the Port Authority of the City of Saint Paul (the "Port authority") issue its Variable Rate Demand Industrial Development Reveaue Bonds (Carison Refri�eration Company Project) Series 1999-4 (the "Bonds'� in an a��egate principal amount not to zxceed �2,000,000 and chat the proceeds of such Bonds be loaned to JKD Parniers LLC, a _l�Iuulesota limited liability company (the "Bosower") to finance the construction and equipping of an approximately »,000 square foot manufachu-ing facility (the "Project") to be located in Williams Hill Industrial Park, in the City of Saint Paul, Minnesota (the "City"), to be owned by the Borrower and leased to Carlson Refri�eration Company, a Minnesota corporation. 2. The Authority desires to facilitate the selecrive 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 oppommities required by its population, and the Project will assist in achievin� that objective by increasin; the assessed valuation of the metro east community; helping to maintain a positive relationsiup between assessed valuation and debt; and enhancing the image and reputation of the metro east community. 3. The Project wiii result in additional employment opporhxnities in the City of Saint Paul and the metro east community. 4. The Authority has been advised by the Bonower 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 borrowing that the economic feasibility of operatan� the Project would be significantly reduced, and that it has been actin� to date in anticipation that the Authority would iavorably consider this financing proposal. �. "Phe Project and its financing has received an allocation ofbonding authority from the State of VSinnesota Department of Finance. 6. The Authority's Credit Committee and Boazd have previously adopted its Resolutions No. 39 and 3784, respectively giving preluninary 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 aznended, and pursuant to a notice publashed by the Port Authoriry not less than 15 days prior to the public hearing, a public hearin� has previousiy been held on the issuance of the Bonds, at which public hearing all persons were given an opportuniry to speak. 8. The Bonds will be issued and secured by the terms of an Indenture of Tmst (the "Indenture") between the Port Authority and Firstar Bank, N. A. (the "Trustee") and will be payable prirnarily from draws made on an irrevocable letter of credit issued by Firstar Bank of 13C09?2v1 (13GGQ01!.DOC) qq -SSS �Iilwaukee, N.A. (the `Bank") pursuant to a Letter of Credit and Reunbursement ��eement to be dated as of September l, 1999 (the "Letter of Credit A�eemenY') between the Borrower and the Bank. 9. The Borrower and the Port authority will also enter into a Loan A�eement (the "Loan A�eement"} in �uhich 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 shali 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 consuturional or statutory limitation of indebtedness, nor shall the Bonds consritute nor �ive rise to a pecuniary liability of the Port Authoriry or the City or a chaz�e against their �eneral credit or taxing powers and shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Port Authority or the Ciry other than their interest in said Project. 11. It is intended that interest on the Bonds be excluded from �oss income of the holders thereof for federal income tax purposes. NOW, THEREFORE, BE IT RESOLVEA BY THE BOARD OF CONINIISSIONERS OF TI-� PORT AUTHORITY OF THE CITY OF SAI'�i IT PAUL, AS FOLLOWS: A. On the basis of informarion available to the Port Authoriry it appeazs, and the Port Authority hereby finds, that: the Project constitutes properties, used or useful in connecrion with one or more revenue producing enterprises enga�ed in any business within the meazung of Minnesota Statutes, Secrions 469.152 to 469.16� (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 City of Saint Paul and in fiutherance of the �eneral 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 financin� receive approval by the Department of Trade and Economic Development ("DTED"), the Port Authority hereby authorizes the issuance, sale and delivery of the Bonds in an ago egaYe principal amount not to exceed $2,000,000. The Bonds shall bear interest at such rates, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturiry, 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 Authoriry. C. Neither the Bonds, nor the interest thereon, shall constitute an indebtedness of the Port Authoriry or the City within ihe meaning of any constitutional or statutory debt 1'unitation; nor shall they constitute or give rise to a pecuniary liability of the Ciry, the Port Authority or a chazge against their general taxing powers and neither the full faith and credit nor the jeneral taxing powers of the City or the Port Authority is pledged to the payment of tl�e Bonds or interest thereon. D. Forms of the foliowing documents have been submitted to the Port Authority for review and/or approval in connection with the sale, issuance and delivery of the Bonds: 1. the Bond Purchase A�eement to be entered into between the Port Authority, the Borrower, U.S. Bancorp Piper Jaffray Inc., Miller & Schroeder Financial, Inc. and 184092?vl Q3GGQ01!.DOC) 1]620I0.07 �q -8'SS Dougherry Sumnut Sec,uiues LLC (collectively, the "LTndenvriter") (the "Bond Purcnase �greemeat'�; 2. the Indenture; 3. the Loan A�eement; 4. the Bonds; 5. rhe Prelizninary Official Statement to be used in marketing the Bonds (the "Official StatemenY'); 6. the Remarketing A�eement to be entered into by and between U.S. Bancorp Piper Jaffray Inc. (the "Remarketing Agent") and the Borrower (the "Remarketing Agreement"); and 7. the Reimbursement A�reement and form of the Letter of Credit (collectively, the "Documents"). E. It is hereby found, deteTmined and declared 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 Authoriry contained in the Documents, as applicable, and of all other acts and things required under the Constitution and laws of the State of ivlinnesota 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 469.1�2 through 469.165, as amended (the "AcY'); 2. It is desirabie that the Bonds be issued by the Port Authority upon the �eneral terms set forth in the Documents, as applicable; 3. Under the provisions of and as provided in the Documents, the Bonds are not to be payable from or a char�e 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 char�e, lien or encumbrance, le�al or equitable, upon any properiy 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 aze issued without moral obli�ation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, are 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 limitation. IS4092?vl (13GGQ01! DOC) 17b20t0.01 ° - YS.S F. The forms of the Documents and e�ibits thereto are approved substzntially in the forms submitted and on file in the offic�s of the Pon Authoriry, with sucn subsequeat changes as may be approved by Port �urhority staff and Bond Counsel as contemplated by parasaph H. The Chair and Secretary of the Pon Authoriry, or such other officer as may be appropriate in the absence of either the Chair or Secretary, aze hereby authorized and directed to �ecute the Documenu (to the extent the Pon Authoriry is a party thereto) in substantially the forms submitted, as modified pursuant to para�aph H, and any other documents and cenificates which in the opinion of Port :�uthority stafF and Bond Counsel are necessary to the transacrion herein described The execution of any instrument by the appropriate officer or officers of the Port Authority herein authorized sha11 be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transacrion herein described by individuals 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 offices prior to the authenticarion and delivery of the Bonds. Copies of all of the documents necessary to the transaction described shall be delivered, filed and recorded as provided herein and in the Indenture. G. T`he President and other offlcers of the Port Authority aze authorized and directed to prepaze and fiunish to the Underwriter 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 legality oi the Bonds and the other t�ansactions herein contemplated as such facts appear from the books and records in the officers' custody and control or as otherwise la7own to them; and all such certified copies, certificates and affidavits, including any heretofore fumished, shall constimte representations of the Port Authoriry as to the truth of all statements contained therein. H. The approval hereby given to the various Documents refened 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 aporoval of, among other things: 1. establishment of the finai principal amount of the Bonds and the interest rate to be borne thereby for the initial period; provided that the m�imum ag�egate principal amount of the Bonds shall not exceed �2,000,000; and provided further that the masimum interest rate on the Bonds shall not exceed 12% per annum; 2. the establishment of the maturity schedule and call provisions to be applicable to the Bonds; and 3. such related instruments as may be required to satisfy the conditions of any purchaser o£the Bonds. I. The Port Authoriry hereby consents to the distribution of the Official Statement, as such Official Statement is fmalized with the participation of Port Authority staff and Bond Counsel. The proposal of the Underwriter to purchase the Bonds upon the terms and conditions set forth in the Bond Purchase Agreement is hereby found and determined to be reasonabie and is hereby accepted. isao9za�i (i3ccQot+.DOC) I762010.01 �q _ �sS J. The authority to approve, execute and deliver future amendments to financin� documenu entered into by the Port aurhority in connecrion with the issuance of the Bonds and the other transacrions herein contempiated, is hereby delegated to the President of the Port authority, proo that (a) such amendments either do not require the consent of the holders of the Bonds, or if required, 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 inte:ests of the Port Authoriry as the issuer of the Bonds; (c) such amendments do not contravene or violate any policy of the Port Authority; and (d) such amendments are acceptable in form and substance to Bond Counsel. The execution of any instrument by the President of the Port Authority shail be conclusive evidence of the approval of such instruments in accordance with the terms hereof. K. No covenant, stipulation, o6ligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obli�ation or agreement of any member of the Board of Commissioners of the Port Authority, or any officer, agent or employee of the Port Authority in that persons individual capaciry, and neither the Board of Commissioners nor any officer executing the Bonds shail be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Adopted: August 24, 1999 PORT AUTHORI'I'Y OF TF� CITY OF SAINT PAUL By ��- �1�. �� Its Chair ATTEST: -� � " B ��-�� - Its� Secretary ltss'+. 1840922v1 (l3GGQ01!.DOC) 1762010.07 OR�GINAL coun�il Rile # ` l \ - 8S5 Green Sheet # /00 �? . Presented by PROPOSED RESOLUTION CITY OF SAINT PAUL, M{NNESOTA Referred To Committee Date �� 1. The Port Authority of the City of Saint Paui (the "Authority") has given its approval to the issuance of up to $2,000,000 of its Industrial Deveiopment Revenue Bonds (Carison Refrigeration Company Project) Series 1999-4 (the "Bonds"), to finance the costs to be incurred by JDK Partners LLC, a Minnesota Iimited liability corporation (the "Borrower") in conneetion with the construetion and equipping of an approximately 55,000 square foot manufacturing facility (the "ProjecY') to be located in Williams Hili Industriai Park, in the City of Saint Paui, Minnesota (the "City"), to be owned by the Borrower a�d leased to Carison Refigeration Company, a Minnesota corporation. 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Authority shail be issued only with the consent of the City Councii of the City of Saint Paul, by resolution adopted in accordance with law; and 3. Approval of the issuance of the proposed Bonds by the City Councii 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 Authority has requested that the City Council gives its requisite approval to the issuance of the proposed Bonds by the Port Authority, subject to final approval of the detaiis of said Bonds by the Port Authority. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paui that, in accordance with the requirements of Section 147(� of the Irrtemaf Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Councif hereby approves the issuance of the aforesaid Bonds by the Port Authority for the purposes described in the Port Authority resolution adopted August 24, 1999, the exact details of which, inciuding but not limited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of additional bonds are 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: September_,, 1999 ORlClNAL �� r�� :. . �� . eel Adopted by Councii: Date �M� $ ��°�q°� Adoption Certified by Council Secretary BY: �_ a- - � ,-.��.�� Approved by Maypc:� Date c=�� By: Requested by Department of: / � . � By: " aq_gss G:\DATA\MAI\BOARD\CARLCOUN.doc Form Appro�ved City Attorney B �' G`-.--' `�: C�� Melanie A. Isakson, Port Melanie A. Isakson (651)2 9/1/99 S�,_�r- TOTAL # OF SIGNATURE PAGES 8/24/99 GREEN SHEET ov�r�ro.ECroie FoR ❑ arcwnaxlEr ❑ arvaEnlc ❑�.,�,�. ❑.,��,,,�� p�.��,��, ❑ (CLIP ALL LOCATIONS FOR SIGNATUREj Approval of final resolution authorizing the issuance of an approximate $2,000,000 conduit bond issue for JKD Partners, LLC. (Carlson Refrigeration Company). PLANNtNG COMMISS{ON CIB COMMITTEE CIVIL SERVICE CQMMISSION Port Authority Board Has this persoMfirm erer vrorfred untler a conVad for this tlepa�tment'7 YES PIO Has this v��rm ever be�.m a dbi em7lovee9 YES NO Does Mis persorvhim possess a skill not rarmallYpossessetl by anY cunerd city emPbyee? YES NO Is Nis peisoNfirm a farpeted vendo? YES NO Garlson Refxigeration, a Minneapolis union company, manufactures and installs custom wood products. These include checkout and service counters and display fixtures for grocery, convenience and liquor stores. Carlson also distributes and installs various related products such as store shelving, coolers, and refrigeration equipmenr. They c rrentl lease approximatelX_35,0��_Sq. of production and warzhou�e„��orage_at «�_,.,. a,�F__._.. �- - IF one Carlson Refrigeration will employ 41 people as of the occupancy date. The company expects to increase its woxkforce by ten within two years and have a total o£ b6 employees within ten years. The location of Carlson Refrigeration Company in the new Williams Hill Business Center will increase the City's taxes by $160,000. None If Carlson Refrigeration Company did not locate in Williams Hill Business Center, it would mean the loss of taxes and jobs for the City of Saint Paul 90UNTOFTRANSACTIONS �2�000,000 Port Authority Tax Exempt Conduit sourtce Bond Issue iNFORMATON �EtPWN) COST/RE1/ENUE BUIXiEfED (CIRCLE ON� ACTIVT' NUTABER ° �q �BSs /DO a�� No �'8" ancou¢a YES NO Cour�S� Res��°c?� Gente� ,. , .�,_ c�q _g�s5 FAX (657) 223-5198 PORT AUTHORIN OF THE CITY OF SAINT PAUL TOLL FREE (800) 328-8417 1900 LANDMARK 70WERS • 345 ST. PETER STREET • ST. PAUL, MN 55102-16b1 • PHONE <657) 224-5686 August 24, 1999 Mr. Brian Sweeney, Director Planning & Economic Development Department 1300 City Hall Annex 25 West Fourth Street Saint Paul, Minnesota 55102 RE: $2,000,000 TAX-EXEMPT CONDUIT BOND ISSUE JKD PARTNERS, LLC. (CARL30N REFRIGERATION COMPANY) Dear Mr. Sweeney: We submit for your review and referral to the office of the Mayor, City Council, and City Attorney's office, details pertaining to the issuance of a tax-exempt conduit bond issue in the approximate amount of $2,000,000 to finance the construction of a 50,000 Sq. Ft. o�ce and manufacturing facility, in Williams Will Business Genter in Saint Paul, Minnesota. The City of Saint Paul's entitlement allocation will not be affected by this application. 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 tax-exempt conduit bond issue in the approximate amount of $2,000,000 that witl be considered by the Port Authority's Board on August 24, 1999. City Council action will be required after the Port Authority's Board meeting of August 24, 1999. Your expeditious handling of this matter will be appreciated. Sincerely i Kenneth R. Johnson President KRJ:sjs Attachment cc: Mayor Cofeman 1\SPPA_DELL\DATA\DATAWIAI�BOARD\SWEENY. DOC\\SPPA_DELL�DATA�DATA\MAI�BOARD\SWEENY.DOC �q _ g�SS SAINT PAUL PoRT Av�rxox�rY MEMORANDUM TO: BOARD OF COMMISSIONERS DATE: (Reguiar Board Meeting August 24, 1999) FROM: Melanie A. Isak n`7�' ��'� Lorrie Louder � � Kenneth R. Johnson�/,� August 17, 1999 SUBJECT: PUBLIC HEARING - JKD PARTNERS, LLC (CARLSON REFRIGERATION COMPANY) FINAL AUTHORIZATION FOR AN APPROXIMATE $2,000,000 TAX-EXEMPT CONDUIT BOND ISSUE RESOLUTION NO. 3�94 ACTION REQUESTED Approval of final resolution authorizing an approximate $2,000,000 conduit bond for JKD Partners, LLC (Carlson Refrigeration Company), Attached is a report outfining the terms of the tax exempt bond issue. We recommend approval of this resolution. sjs Attachment 8-17-99 JKD PARTNERS, LLC (Carlson Refrigeration Company) Action Reauested: Approval of final resolution authorizing the issuance of an approximate $2,000,000 conduit bond issued to JKD Partners, LLC Proiect Summary: Series 1999�, $2,000,000 tax exempt Tvae: Variable rate demand industriai development revenue bonds 7erm: $2,000,000 - 20 Years Issuer Borrower Trustee Letter of Credit Bank Placement Agents: Saint Paul Port Authority JKD Partners, LLC Firstar Bank of Minnesota, National Association Firstar Bank of Milwaukee, NA US Bancorp Piper JafFray Remarketins� Piper Jaffray, Inc. Agent: Miller & Schroeder Financial, Inc. Dougherty Summit Securities, LLC Borrowers Fabyanski, Westra and Hart, P.A. Counsel Piacement AaenYs Counsel: Kennedy and Graven Chartered Letter of Credit Bank Counse Bond Counsei• Dorsey and Whitney Leonard Street & Deinard The Borrower: The Borrower is organized as a limited liability company to own the real estate which will be leased to the operating entity, Carlson Refrigeration Company. The Comaanv: Carison Refrigeration, founded in 1983, is a union company that manufactures and instalis custom wood products. These include checkout and service counters and display fixtures for grocery, convenience and liquor stores. Carison also distributes and installs various related products such as store shelving, coolers, and refrigeration equipment. Their primary customers include Rainbow Foods, Cub Foods, Byerlys and SuperAmerica stores. JKD Partners Page 2 �q -�'SS They currenfly lease approximately 35,000 square feet of production and warehouse storage at three different Minneapoiis focations. They are planning to build a 5�,000 square foot office and manufacturing facility at an estimated cost of $2,300,000. The Project: The Bonds proceeds wiil be loaned io the borrower and used to construct a r�ew 50,000 square foot manufaeturing, warehouse and office facility described as the "ProjecY'. The "Borrowe�', JKD Partners, LLC will lease to Carlson ftefrigeration Company who wifl employ 41 people as of the occupancy date. Employment {m act: The company expects to increase its workforce by ten within two years, and increasing to a total of 66 employees within ten years. The average wage of all employees, excluding officers and shareholders is $9.00 per hour plus benefits. Sources of Funds: Uses of Funds Bonds Proceeds Tax Exempt $2,000,000 Construction $2,307,000 Equity $ 407.000 Fees $ 100,000 Total $2,407,000 Total $2,407,000 The Bonds: The Bonds will be issued in the principal amount of $2,000,000 and wili bear interest at a variable rate established weekly by the Remarketing Agent. Fees: The Port Authority will receive 1/8% at loan closing based on the original outstanding and 1/8% on the outstanding balance annually thereafter. Conduit Financinq:The bonds will be conduit financing of the Authority and wiil not constitute or give rise to a �iability of the Authority, the City of Saint Pauf, 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 piedged to G:\DATAWIAI�BOARD\CARLSON. DOCG:�DATAW1AI160ARD\CARLSON.DOC JKD Partners Page 3 payment of the bonds pursuant to the indenture. This inciudes the amounts drawn on the Letter of Credit and amounts payable by the borrower under the loan agreement. Loan Agreement Under the indenture the Authoriiy 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. �etter 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 satisfactiort of certain cond+tions. 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. Disctosure: The Port Author+ty 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 approvaf of authorizing issuance of a$2,000,000 conduit bond issue ort behalf of JKD Partners, LLC, sjs G:�DATAWIAI�BOARD\CARLSON.DOCG:�DATAWIAI�BOARD\CARLSON.00C Q g _gsS Resolution �o. 3794 RESOLUTION OF THE PORT �U"I'HORITY OF THE CITY OF S?,L'VT P�UL WI�RE�.S: l. It has been proposed that the Port Authority of the City of Saint Paul (the "Port authority") issue its Variable Rate Demand Industrial Development Reveaue Bonds (Carison Refri�eration Company Project) Series 1999-4 (the "Bonds'� in an a��egate principal amount not to zxceed �2,000,000 and chat the proceeds of such Bonds be loaned to JKD Parniers LLC, a _l�Iuulesota limited liability company (the "Bosower") to finance the construction and equipping of an approximately »,000 square foot manufachu-ing facility (the "Project") to be located in Williams Hill Industrial Park, in the City of Saint Paul, Minnesota (the "City"), to be owned by the Borrower and leased to Carlson Refri�eration Company, a Minnesota corporation. 2. The Authority desires to facilitate the selecrive 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 oppommities required by its population, and the Project will assist in achievin� that objective by increasin; the assessed valuation of the metro east community; helping to maintain a positive relationsiup between assessed valuation and debt; and enhancing the image and reputation of the metro east community. 3. The Project wiii result in additional employment opporhxnities in the City of Saint Paul and the metro east community. 4. The Authority has been advised by the Bonower 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 borrowing that the economic feasibility of operatan� the Project would be significantly reduced, and that it has been actin� to date in anticipation that the Authority would iavorably consider this financing proposal. �. "Phe Project and its financing has received an allocation ofbonding authority from the State of VSinnesota Department of Finance. 6. The Authority's Credit Committee and Boazd have previously adopted its Resolutions No. 39 and 3784, respectively giving preluninary 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 aznended, and pursuant to a notice publashed by the Port Authoriry not less than 15 days prior to the public hearing, a public hearin� has previousiy been held on the issuance of the Bonds, at which public hearing all persons were given an opportuniry to speak. 8. The Bonds will be issued and secured by the terms of an Indenture of Tmst (the "Indenture") between the Port Authority and Firstar Bank, N. A. (the "Trustee") and will be payable prirnarily from draws made on an irrevocable letter of credit issued by Firstar Bank of 13C09?2v1 (13GGQ01!.DOC) qq -SSS �Iilwaukee, N.A. (the `Bank") pursuant to a Letter of Credit and Reunbursement ��eement to be dated as of September l, 1999 (the "Letter of Credit A�eemenY') between the Borrower and the Bank. 9. The Borrower and the Port authority will also enter into a Loan A�eement (the "Loan A�eement"} in �uhich 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 shali 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 consuturional or statutory limitation of indebtedness, nor shall the Bonds consritute nor �ive rise to a pecuniary liability of the Port Authoriry or the City or a chaz�e against their �eneral credit or taxing powers and shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Port Authority or the Ciry other than their interest in said Project. 11. It is intended that interest on the Bonds be excluded from �oss income of the holders thereof for federal income tax purposes. NOW, THEREFORE, BE IT RESOLVEA BY THE BOARD OF CONINIISSIONERS OF TI-� PORT AUTHORITY OF THE CITY OF SAI'�i IT PAUL, AS FOLLOWS: A. On the basis of informarion available to the Port Authoriry it appeazs, and the Port Authority hereby finds, that: the Project constitutes properties, used or useful in connecrion with one or more revenue producing enterprises enga�ed in any business within the meazung of Minnesota Statutes, Secrions 469.152 to 469.16� (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 City of Saint Paul and in fiutherance of the �eneral 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 financin� receive approval by the Department of Trade and Economic Development ("DTED"), the Port Authority hereby authorizes the issuance, sale and delivery of the Bonds in an ago egaYe principal amount not to exceed $2,000,000. The Bonds shall bear interest at such rates, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturiry, 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 Authoriry. C. Neither the Bonds, nor the interest thereon, shall constitute an indebtedness of the Port Authoriry or the City within ihe meaning of any constitutional or statutory debt 1'unitation; nor shall they constitute or give rise to a pecuniary liability of the Ciry, the Port Authority or a chazge against their general taxing powers and neither the full faith and credit nor the jeneral taxing powers of the City or the Port Authority is pledged to the payment of tl�e Bonds or interest thereon. D. Forms of the foliowing documents have been submitted to the Port Authority for review and/or approval in connection with the sale, issuance and delivery of the Bonds: 1. the Bond Purchase A�eement to be entered into between the Port Authority, the Borrower, U.S. Bancorp Piper Jaffray Inc., Miller & Schroeder Financial, Inc. and 184092?vl Q3GGQ01!.DOC) 1]620I0.07 �q -8'SS Dougherry Sumnut Sec,uiues LLC (collectively, the "LTndenvriter") (the "Bond Purcnase �greemeat'�; 2. the Indenture; 3. the Loan A�eement; 4. the Bonds; 5. rhe Prelizninary Official Statement to be used in marketing the Bonds (the "Official StatemenY'); 6. the Remarketing A�eement to be entered into by and between U.S. Bancorp Piper Jaffray Inc. (the "Remarketing Agent") and the Borrower (the "Remarketing Agreement"); and 7. the Reimbursement A�reement and form of the Letter of Credit (collectively, the "Documents"). E. It is hereby found, deteTmined and declared 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 Authoriry contained in the Documents, as applicable, and of all other acts and things required under the Constitution and laws of the State of ivlinnesota 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 469.1�2 through 469.165, as amended (the "AcY'); 2. It is desirabie that the Bonds be issued by the Port Authority upon the �eneral terms set forth in the Documents, as applicable; 3. Under the provisions of and as provided in the Documents, the Bonds are not to be payable from or a char�e 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 char�e, lien or encumbrance, le�al or equitable, upon any properiy 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 aze issued without moral obli�ation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, are 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 limitation. IS4092?vl (13GGQ01! DOC) 17b20t0.01 ° - YS.S F. The forms of the Documents and e�ibits thereto are approved substzntially in the forms submitted and on file in the offic�s of the Pon Authoriry, with sucn subsequeat changes as may be approved by Port �urhority staff and Bond Counsel as contemplated by parasaph H. The Chair and Secretary of the Pon Authoriry, or such other officer as may be appropriate in the absence of either the Chair or Secretary, aze hereby authorized and directed to �ecute the Documenu (to the extent the Pon Authoriry is a party thereto) in substantially the forms submitted, as modified pursuant to para�aph H, and any other documents and cenificates which in the opinion of Port :�uthority stafF and Bond Counsel are necessary to the transacrion herein described The execution of any instrument by the appropriate officer or officers of the Port Authority herein authorized sha11 be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transacrion herein described by individuals 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 offices prior to the authenticarion and delivery of the Bonds. Copies of all of the documents necessary to the transaction described shall be delivered, filed and recorded as provided herein and in the Indenture. G. T`he President and other offlcers of the Port Authority aze authorized and directed to prepaze and fiunish to the Underwriter 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 legality oi the Bonds and the other t�ansactions herein contemplated as such facts appear from the books and records in the officers' custody and control or as otherwise la7own to them; and all such certified copies, certificates and affidavits, including any heretofore fumished, shall constimte representations of the Port Authoriry as to the truth of all statements contained therein. H. The approval hereby given to the various Documents refened 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 aporoval of, among other things: 1. establishment of the finai principal amount of the Bonds and the interest rate to be borne thereby for the initial period; provided that the m�imum ag�egate principal amount of the Bonds shall not exceed �2,000,000; and provided further that the masimum interest rate on the Bonds shall not exceed 12% per annum; 2. the establishment of the maturity schedule and call provisions to be applicable to the Bonds; and 3. such related instruments as may be required to satisfy the conditions of any purchaser o£the Bonds. I. The Port Authoriry hereby consents to the distribution of the Official Statement, as such Official Statement is fmalized with the participation of Port Authority staff and Bond Counsel. The proposal of the Underwriter to purchase the Bonds upon the terms and conditions set forth in the Bond Purchase Agreement is hereby found and determined to be reasonabie and is hereby accepted. isao9za�i (i3ccQot+.DOC) I762010.01 �q _ �sS J. The authority to approve, execute and deliver future amendments to financin� documenu entered into by the Port aurhority in connecrion with the issuance of the Bonds and the other transacrions herein contempiated, is hereby delegated to the President of the Port authority, proo that (a) such amendments either do not require the consent of the holders of the Bonds, or if required, 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 inte:ests of the Port Authoriry as the issuer of the Bonds; (c) such amendments do not contravene or violate any policy of the Port Authority; and (d) such amendments are acceptable in form and substance to Bond Counsel. The execution of any instrument by the President of the Port Authority shail be conclusive evidence of the approval of such instruments in accordance with the terms hereof. K. No covenant, stipulation, o6ligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obli�ation or agreement of any member of the Board of Commissioners of the Port Authority, or any officer, agent or employee of the Port Authority in that persons individual capaciry, and neither the Board of Commissioners nor any officer executing the Bonds shail be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Adopted: August 24, 1999 PORT AUTHORI'I'Y OF TF� CITY OF SAINT PAUL By ��- �1�. �� Its Chair ATTEST: -� � " B ��-�� - Its� Secretary ltss'+. 1840922v1 (l3GGQ01!.DOC) 1762010.07 OR�GINAL coun�il Rile # ` l \ - 8S5 Green Sheet # /00 �? . Presented by PROPOSED RESOLUTION CITY OF SAINT PAUL, M{NNESOTA Referred To Committee Date �� 1. The Port Authority of the City of Saint Paui (the "Authority") has given its approval to the issuance of up to $2,000,000 of its Industrial Deveiopment Revenue Bonds (Carison Refrigeration Company Project) Series 1999-4 (the "Bonds"), to finance the costs to be incurred by JDK Partners LLC, a Minnesota Iimited liability corporation (the "Borrower") in conneetion with the construetion and equipping of an approximately 55,000 square foot manufacturing facility (the "ProjecY') to be located in Williams Hili Industriai Park, in the City of Saint Paui, Minnesota (the "City"), to be owned by the Borrower a�d leased to Carison Refigeration Company, a Minnesota corporation. 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Authority shail be issued only with the consent of the City Councii of the City of Saint Paul, by resolution adopted in accordance with law; and 3. Approval of the issuance of the proposed Bonds by the City Councii 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 Authority has requested that the City Council gives its requisite approval to the issuance of the proposed Bonds by the Port Authority, subject to final approval of the detaiis of said Bonds by the Port Authority. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paui that, in accordance with the requirements of Section 147(� of the Irrtemaf Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Councif hereby approves the issuance of the aforesaid Bonds by the Port Authority for the purposes described in the Port Authority resolution adopted August 24, 1999, the exact details of which, inciuding but not limited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of additional bonds are 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: September_,, 1999 ORlClNAL �� r�� :. . �� . eel Adopted by Councii: Date �M� $ ��°�q°� Adoption Certified by Council Secretary BY: �_ a- - � ,-.��.�� Approved by Maypc:� Date c=�� By: Requested by Department of: / � . � By: " aq_gss G:\DATA\MAI\BOARD\CARLCOUN.doc Form Appro�ved City Attorney B �' G`-.--' `�: C�� Melanie A. Isakson, Port Melanie A. Isakson (651)2 9/1/99 S�,_�r- TOTAL # OF SIGNATURE PAGES 8/24/99 GREEN SHEET ov�r�ro.ECroie FoR ❑ arcwnaxlEr ❑ arvaEnlc ❑�.,�,�. ❑.,��,,,�� p�.��,��, ❑ (CLIP ALL LOCATIONS FOR SIGNATUREj Approval of final resolution authorizing the issuance of an approximate $2,000,000 conduit bond issue for JKD Partners, LLC. (Carlson Refrigeration Company). PLANNtNG COMMISS{ON CIB COMMITTEE CIVIL SERVICE CQMMISSION Port Authority Board Has this persoMfirm erer vrorfred untler a conVad for this tlepa�tment'7 YES PIO Has this v��rm ever be�.m a dbi em7lovee9 YES NO Does Mis persorvhim possess a skill not rarmallYpossessetl by anY cunerd city emPbyee? YES NO Is Nis peisoNfirm a farpeted vendo? YES NO Garlson Refxigeration, a Minneapolis union company, manufactures and installs custom wood products. These include checkout and service counters and display fixtures for grocery, convenience and liquor stores. Carlson also distributes and installs various related products such as store shelving, coolers, and refrigeration equipmenr. They c rrentl lease approximatelX_35,0��_Sq. of production and warzhou�e„��orage_at «�_,.,. a,�F__._.. �- - IF one Carlson Refrigeration will employ 41 people as of the occupancy date. The company expects to increase its woxkforce by ten within two years and have a total o£ b6 employees within ten years. The location of Carlson Refrigeration Company in the new Williams Hill Business Center will increase the City's taxes by $160,000. None If Carlson Refrigeration Company did not locate in Williams Hill Business Center, it would mean the loss of taxes and jobs for the City of Saint Paul 90UNTOFTRANSACTIONS �2�000,000 Port Authority Tax Exempt Conduit sourtce Bond Issue iNFORMATON �EtPWN) COST/RE1/ENUE BUIXiEfED (CIRCLE ON� ACTIVT' NUTABER ° �q �BSs /DO a�� No �'8" ancou¢a YES NO Cour�S� Res��°c?� Gente� ,. , .�,_ c�q _g�s5 FAX (657) 223-5198 PORT AUTHORIN OF THE CITY OF SAINT PAUL TOLL FREE (800) 328-8417 1900 LANDMARK 70WERS • 345 ST. PETER STREET • ST. PAUL, MN 55102-16b1 • PHONE <657) 224-5686 August 24, 1999 Mr. Brian Sweeney, Director Planning & Economic Development Department 1300 City Hall Annex 25 West Fourth Street Saint Paul, Minnesota 55102 RE: $2,000,000 TAX-EXEMPT CONDUIT BOND ISSUE JKD PARTNERS, LLC. (CARL30N REFRIGERATION COMPANY) Dear Mr. Sweeney: We submit for your review and referral to the office of the Mayor, City Council, and City Attorney's office, details pertaining to the issuance of a tax-exempt conduit bond issue in the approximate amount of $2,000,000 to finance the construction of a 50,000 Sq. Ft. o�ce and manufacturing facility, in Williams Will Business Genter in Saint Paul, Minnesota. The City of Saint Paul's entitlement allocation will not be affected by this application. 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 tax-exempt conduit bond issue in the approximate amount of $2,000,000 that witl be considered by the Port Authority's Board on August 24, 1999. City Council action will be required after the Port Authority's Board meeting of August 24, 1999. Your expeditious handling of this matter will be appreciated. Sincerely i Kenneth R. Johnson President KRJ:sjs Attachment cc: Mayor Cofeman 1\SPPA_DELL\DATA\DATAWIAI�BOARD\SWEENY. DOC\\SPPA_DELL�DATA�DATA\MAI�BOARD\SWEENY.DOC �q _ g�SS SAINT PAUL PoRT Av�rxox�rY MEMORANDUM TO: BOARD OF COMMISSIONERS DATE: (Reguiar Board Meeting August 24, 1999) FROM: Melanie A. Isak n`7�' ��'� Lorrie Louder � � Kenneth R. Johnson�/,� August 17, 1999 SUBJECT: PUBLIC HEARING - JKD PARTNERS, LLC (CARLSON REFRIGERATION COMPANY) FINAL AUTHORIZATION FOR AN APPROXIMATE $2,000,000 TAX-EXEMPT CONDUIT BOND ISSUE RESOLUTION NO. 3�94 ACTION REQUESTED Approval of final resolution authorizing an approximate $2,000,000 conduit bond for JKD Partners, LLC (Carlson Refrigeration Company), Attached is a report outfining the terms of the tax exempt bond issue. We recommend approval of this resolution. sjs Attachment 8-17-99 JKD PARTNERS, LLC (Carlson Refrigeration Company) Action Reauested: Approval of final resolution authorizing the issuance of an approximate $2,000,000 conduit bond issued to JKD Partners, LLC Proiect Summary: Series 1999�, $2,000,000 tax exempt Tvae: Variable rate demand industriai development revenue bonds 7erm: $2,000,000 - 20 Years Issuer Borrower Trustee Letter of Credit Bank Placement Agents: Saint Paul Port Authority JKD Partners, LLC Firstar Bank of Minnesota, National Association Firstar Bank of Milwaukee, NA US Bancorp Piper JafFray Remarketins� Piper Jaffray, Inc. Agent: Miller & Schroeder Financial, Inc. Dougherty Summit Securities, LLC Borrowers Fabyanski, Westra and Hart, P.A. Counsel Piacement AaenYs Counsel: Kennedy and Graven Chartered Letter of Credit Bank Counse Bond Counsei• Dorsey and Whitney Leonard Street & Deinard The Borrower: The Borrower is organized as a limited liability company to own the real estate which will be leased to the operating entity, Carlson Refrigeration Company. The Comaanv: Carison Refrigeration, founded in 1983, is a union company that manufactures and instalis custom wood products. These include checkout and service counters and display fixtures for grocery, convenience and liquor stores. Carison also distributes and installs various related products such as store shelving, coolers, and refrigeration equipment. Their primary customers include Rainbow Foods, Cub Foods, Byerlys and SuperAmerica stores. JKD Partners Page 2 �q -�'SS They currenfly lease approximately 35,000 square feet of production and warehouse storage at three different Minneapoiis focations. They are planning to build a 5�,000 square foot office and manufacturing facility at an estimated cost of $2,300,000. The Project: The Bonds proceeds wiil be loaned io the borrower and used to construct a r�ew 50,000 square foot manufaeturing, warehouse and office facility described as the "ProjecY'. The "Borrowe�', JKD Partners, LLC will lease to Carlson ftefrigeration Company who wifl employ 41 people as of the occupancy date. Employment {m act: The company expects to increase its workforce by ten within two years, and increasing to a total of 66 employees within ten years. The average wage of all employees, excluding officers and shareholders is $9.00 per hour plus benefits. Sources of Funds: Uses of Funds Bonds Proceeds Tax Exempt $2,000,000 Construction $2,307,000 Equity $ 407.000 Fees $ 100,000 Total $2,407,000 Total $2,407,000 The Bonds: The Bonds will be issued in the principal amount of $2,000,000 and wili bear interest at a variable rate established weekly by the Remarketing Agent. Fees: The Port Authority will receive 1/8% at loan closing based on the original outstanding and 1/8% on the outstanding balance annually thereafter. Conduit Financinq:The bonds will be conduit financing of the Authority and wiil not constitute or give rise to a �iability of the Authority, the City of Saint Pauf, 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 piedged to G:\DATAWIAI�BOARD\CARLSON. DOCG:�DATAW1AI160ARD\CARLSON.DOC JKD Partners Page 3 payment of the bonds pursuant to the indenture. This inciudes the amounts drawn on the Letter of Credit and amounts payable by the borrower under the loan agreement. Loan Agreement Under the indenture the Authoriiy 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. �etter 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 satisfactiort of certain cond+tions. 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. Disctosure: The Port Author+ty 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 approvaf of authorizing issuance of a$2,000,000 conduit bond issue ort behalf of JKD Partners, LLC, sjs G:�DATAWIAI�BOARD\CARLSON.DOCG:�DATAWIAI�BOARD\CARLSON.00C Q g _gsS Resolution �o. 3794 RESOLUTION OF THE PORT �U"I'HORITY OF THE CITY OF S?,L'VT P�UL WI�RE�.S: l. It has been proposed that the Port Authority of the City of Saint Paul (the "Port authority") issue its Variable Rate Demand Industrial Development Reveaue Bonds (Carison Refri�eration Company Project) Series 1999-4 (the "Bonds'� in an a��egate principal amount not to zxceed �2,000,000 and chat the proceeds of such Bonds be loaned to JKD Parniers LLC, a _l�Iuulesota limited liability company (the "Bosower") to finance the construction and equipping of an approximately »,000 square foot manufachu-ing facility (the "Project") to be located in Williams Hill Industrial Park, in the City of Saint Paul, Minnesota (the "City"), to be owned by the Borrower and leased to Carlson Refri�eration Company, a Minnesota corporation. 2. The Authority desires to facilitate the selecrive 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 oppommities required by its population, and the Project will assist in achievin� that objective by increasin; the assessed valuation of the metro east community; helping to maintain a positive relationsiup between assessed valuation and debt; and enhancing the image and reputation of the metro east community. 3. The Project wiii result in additional employment opporhxnities in the City of Saint Paul and the metro east community. 4. The Authority has been advised by the Bonower 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 borrowing that the economic feasibility of operatan� the Project would be significantly reduced, and that it has been actin� to date in anticipation that the Authority would iavorably consider this financing proposal. �. "Phe Project and its financing has received an allocation ofbonding authority from the State of VSinnesota Department of Finance. 6. The Authority's Credit Committee and Boazd have previously adopted its Resolutions No. 39 and 3784, respectively giving preluninary 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 aznended, and pursuant to a notice publashed by the Port Authoriry not less than 15 days prior to the public hearing, a public hearin� has previousiy been held on the issuance of the Bonds, at which public hearing all persons were given an opportuniry to speak. 8. The Bonds will be issued and secured by the terms of an Indenture of Tmst (the "Indenture") between the Port Authority and Firstar Bank, N. A. (the "Trustee") and will be payable prirnarily from draws made on an irrevocable letter of credit issued by Firstar Bank of 13C09?2v1 (13GGQ01!.DOC) qq -SSS �Iilwaukee, N.A. (the `Bank") pursuant to a Letter of Credit and Reunbursement ��eement to be dated as of September l, 1999 (the "Letter of Credit A�eemenY') between the Borrower and the Bank. 9. The Borrower and the Port authority will also enter into a Loan A�eement (the "Loan A�eement"} in �uhich 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 shali 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 consuturional or statutory limitation of indebtedness, nor shall the Bonds consritute nor �ive rise to a pecuniary liability of the Port Authoriry or the City or a chaz�e against their �eneral credit or taxing powers and shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Port Authority or the Ciry other than their interest in said Project. 11. It is intended that interest on the Bonds be excluded from �oss income of the holders thereof for federal income tax purposes. NOW, THEREFORE, BE IT RESOLVEA BY THE BOARD OF CONINIISSIONERS OF TI-� PORT AUTHORITY OF THE CITY OF SAI'�i IT PAUL, AS FOLLOWS: A. On the basis of informarion available to the Port Authoriry it appeazs, and the Port Authority hereby finds, that: the Project constitutes properties, used or useful in connecrion with one or more revenue producing enterprises enga�ed in any business within the meazung of Minnesota Statutes, Secrions 469.152 to 469.16� (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 City of Saint Paul and in fiutherance of the �eneral 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 financin� receive approval by the Department of Trade and Economic Development ("DTED"), the Port Authority hereby authorizes the issuance, sale and delivery of the Bonds in an ago egaYe principal amount not to exceed $2,000,000. The Bonds shall bear interest at such rates, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturiry, 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 Authoriry. C. Neither the Bonds, nor the interest thereon, shall constitute an indebtedness of the Port Authoriry or the City within ihe meaning of any constitutional or statutory debt 1'unitation; nor shall they constitute or give rise to a pecuniary liability of the Ciry, the Port Authority or a chazge against their general taxing powers and neither the full faith and credit nor the jeneral taxing powers of the City or the Port Authority is pledged to the payment of tl�e Bonds or interest thereon. D. Forms of the foliowing documents have been submitted to the Port Authority for review and/or approval in connection with the sale, issuance and delivery of the Bonds: 1. the Bond Purchase A�eement to be entered into between the Port Authority, the Borrower, U.S. Bancorp Piper Jaffray Inc., Miller & Schroeder Financial, Inc. and 184092?vl Q3GGQ01!.DOC) 1]620I0.07 �q -8'SS Dougherry Sumnut Sec,uiues LLC (collectively, the "LTndenvriter") (the "Bond Purcnase �greemeat'�; 2. the Indenture; 3. the Loan A�eement; 4. the Bonds; 5. rhe Prelizninary Official Statement to be used in marketing the Bonds (the "Official StatemenY'); 6. the Remarketing A�eement to be entered into by and between U.S. Bancorp Piper Jaffray Inc. (the "Remarketing Agent") and the Borrower (the "Remarketing Agreement"); and 7. the Reimbursement A�reement and form of the Letter of Credit (collectively, the "Documents"). E. It is hereby found, deteTmined and declared 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 Authoriry contained in the Documents, as applicable, and of all other acts and things required under the Constitution and laws of the State of ivlinnesota 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 469.1�2 through 469.165, as amended (the "AcY'); 2. It is desirabie that the Bonds be issued by the Port Authority upon the �eneral terms set forth in the Documents, as applicable; 3. Under the provisions of and as provided in the Documents, the Bonds are not to be payable from or a char�e 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 char�e, lien or encumbrance, le�al or equitable, upon any properiy 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 aze issued without moral obli�ation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, are 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 limitation. IS4092?vl (13GGQ01! DOC) 17b20t0.01 ° - YS.S F. The forms of the Documents and e�ibits thereto are approved substzntially in the forms submitted and on file in the offic�s of the Pon Authoriry, with sucn subsequeat changes as may be approved by Port �urhority staff and Bond Counsel as contemplated by parasaph H. The Chair and Secretary of the Pon Authoriry, or such other officer as may be appropriate in the absence of either the Chair or Secretary, aze hereby authorized and directed to �ecute the Documenu (to the extent the Pon Authoriry is a party thereto) in substantially the forms submitted, as modified pursuant to para�aph H, and any other documents and cenificates which in the opinion of Port :�uthority stafF and Bond Counsel are necessary to the transacrion herein described The execution of any instrument by the appropriate officer or officers of the Port Authority herein authorized sha11 be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transacrion herein described by individuals 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 offices prior to the authenticarion and delivery of the Bonds. Copies of all of the documents necessary to the transaction described shall be delivered, filed and recorded as provided herein and in the Indenture. G. T`he President and other offlcers of the Port Authority aze authorized and directed to prepaze and fiunish to the Underwriter 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 legality oi the Bonds and the other t�ansactions herein contemplated as such facts appear from the books and records in the officers' custody and control or as otherwise la7own to them; and all such certified copies, certificates and affidavits, including any heretofore fumished, shall constimte representations of the Port Authoriry as to the truth of all statements contained therein. H. The approval hereby given to the various Documents refened 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 aporoval of, among other things: 1. establishment of the finai principal amount of the Bonds and the interest rate to be borne thereby for the initial period; provided that the m�imum ag�egate principal amount of the Bonds shall not exceed �2,000,000; and provided further that the masimum interest rate on the Bonds shall not exceed 12% per annum; 2. the establishment of the maturity schedule and call provisions to be applicable to the Bonds; and 3. such related instruments as may be required to satisfy the conditions of any purchaser o£the Bonds. I. The Port Authoriry hereby consents to the distribution of the Official Statement, as such Official Statement is fmalized with the participation of Port Authority staff and Bond Counsel. The proposal of the Underwriter to purchase the Bonds upon the terms and conditions set forth in the Bond Purchase Agreement is hereby found and determined to be reasonabie and is hereby accepted. isao9za�i (i3ccQot+.DOC) I762010.01 �q _ �sS J. The authority to approve, execute and deliver future amendments to financin� documenu entered into by the Port aurhority in connecrion with the issuance of the Bonds and the other transacrions herein contempiated, is hereby delegated to the President of the Port authority, proo that (a) such amendments either do not require the consent of the holders of the Bonds, or if required, 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 inte:ests of the Port Authoriry as the issuer of the Bonds; (c) such amendments do not contravene or violate any policy of the Port Authority; and (d) such amendments are acceptable in form and substance to Bond Counsel. The execution of any instrument by the President of the Port Authority shail be conclusive evidence of the approval of such instruments in accordance with the terms hereof. K. No covenant, stipulation, o6ligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obli�ation or agreement of any member of the Board of Commissioners of the Port Authority, or any officer, agent or employee of the Port Authority in that persons individual capaciry, and neither the Board of Commissioners nor any officer executing the Bonds shail be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Adopted: August 24, 1999 PORT AUTHORI'I'Y OF TF� CITY OF SAINT PAUL By ��- �1�. �� Its Chair ATTEST: -� � " B ��-�� - Its� Secretary ltss'+. 1840922v1 (l3GGQ01!.DOC) 1762010.07