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85-820 N�HITE - CITV CLERK PINK - FINANCE COUQCII OL CANARV - DEPARTMENT G I TY OF SA I NT PAUL File NO. u`" - ��� BLUE - MAYOR CQu ' Resolution Presented By � , � Referred To �1 I���C�l� Committee: Date � ��'�� Out of Committee By Date WHEREAS: i 1. On May 21, 1985 the Port Authority of the City of Saint Paul adopted Resolution No. 2465 giving preliminary approval to the issuance of revenue bonds in the initial , principal amount of $470,000 to finance the construction of a 12,000 square foot building I on Parcel E-11 in Riverview Industrial Park for Han C. and Sue F. Liu. Han C. and Sue F. � Liu will sublease the facility to RSC Corporation and Hanson's for use as their headquarters building. Miller & Schroeder Municipals has agreed to underwrite the revenue bond issue for a term of 30 years. ', 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Port Authority of the City of Saint Paul, shall be issued only with the consent of the City Council of the City of Saint Paul, by resolution adopted in accordance ' with law; 3. The Port Authority of the City of Saint Paul has requested that the City Council � give its requisite consent pursuant to said law to facilitate the issuance of said revenue �� bonds by the Port Authority of the City of Saint Paul, sub�ect to final approval of the details of said issue by the Port Authority of the City of Saint Paul. RESOLVED, by the City Council of the City of Saint Paul, that in accordance with Laws , of Minnesota 1976, Chapter 234, the City Council hereby consents to the issuance of the aforesaid revenue bonds for the purposes described in the aforesaid Port Authority Resolution No. 2465 the exact details of which, including, but not limited to, provisions relating to maturities, interest rates, discount, redemption, and for the issuance of ' additional bonds are to be determined by the Port Authority, pursuant to resolution , adopted 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 aforesaid bonds are '� issued. I COUIVC[LMEN Requested by Department of: Yeas Nays � Drew � Masanr In Favoc Nicos��� � � __ Against BY � Tedesco p -Nhhser* JUN � O �985 Form Appr ved by City Attorney , Adopted by Council: Date ^ ', Certified Pa.s uncil S ta BY -�"'^ - e � I By I �-����1�� 1 � 8�►PP Y Y � I Approved b A�lavor• D ed b Ma or for Sub sion to Council i By w PUB�ISHW J���'� 2 `�� 1985 � St. Paul P�r_� Au�hority DEPARTJ�IENT U��J`IN�� 2252 K.G. Dzugan, E.A. Kraut � • CONTaCT ' 224-5686 PHONE May 21, 1985 DATE �e�� �e ASSIGN NUh�ER FOR ROUTING ORDER (Clip All Locations for Signature) : � Department Director 3 Director of Management/Mayor ' Finance and Management Services Director 4 City Clerk Budget Director kIAN C & SUE F LIU, SUBLEASE TO RSC � City Attorney CORPORATION AND HANSONrS $470,000 REVENUE BOND ISSUE WHAT WILL BE ACHIEVED BY TAKING ACTION ON THE ATTACHED MATERIALS? (Purpose/ Rationale) : The purpose of the revenue borid issue is to finance the construction of a 12,000 square foot office and distribution fa�i�ity on Parcel E-11 in Riverview Industrial Park in St. Paul for Han C. and Sue F. Liu. Han C. and Sue F. Liu will sublease the facility to RSC Corporation and Hanson's for use as their headquarters building. COST/BENEFIT, BUDGETARY AND PERSONNEL IMPACTS ANTICIPATED: The amount �6f the revenue bond issue is $470,000 and will be for a term of 30 years. There will be six new jobs created as a result of this project. FINANCING SOURCE AND BUDGET ACTIVITY NUMBER CHARGED OR CREDITED: (Mayor's signa- ture not re- Total Amount of Transaction: quired if under $10,00Q) Funding Source: Activity Number: ATTACHMENTS (List and Number Al1 Attachments) : R�C�.i�v t� ] . Staff inemorandum MAY 2 3 i985 , 2. Draft City Council Resolution 3. Port Authority Resolution° No. 2465 (viAYGri'S Or"FiCE cc. R. Thorpe DEPARTMENT REVIEW CITY ATTORNEY REVIEW �Yes No Council Resolution Required? Resolution Required? X Yes No Yes �No Insurance Required? Insurance Sufficient? X Yes No Yes X No Insurance Attached: (SEE REVERSE SIDE FOR INSTRUCTIONS) Revised 12/84 � OR �' . . . �y�= ��� - AUTHORITY � OF THE CITY OF ST. PAUL Memo�andum TO: gOARD OF COMMISSIONERS �A� May 16, 1985 III (May 21, 1985 Regular Meeting) �' FROM: K.G. Dzugan =?.��� � ,I SUBJECT: �,J C. AND SUE F. LIU, SUBLEASE TO RSC CORPORATION AND HANSON'S PUBLIC HEARING — PRELIMINARY AND UNDERWRITING AGREEMENTS $470,000 RESOLUTION 876 REVENUE BOND ISSUE RIVERVIEW INDUSTRIAL PARK ' RESOLUTION N0. 2465 I PUBLIC HEARING — SALE OF LAND RESOLUTION N0. 2466 1. THE COMPANY � RSC Corporation is an importer and wholesaler of Reliance Fishing Rods. The company began in St. Paul in October, 1983. Mr. Han C. Liu, the President, purchased the distribution rights from a Mississippi company and relocated their operations to St. Paul in October of 1983. RSC Corporation is the sole U.S. distributor of Reliance Fishing Rods. RSC , also exports to several Central American countries. 'il Hanson's Company is an import—export company which began business in ! 1974. ' 2. THE PROJECT i The companies propose to construct a 12,000 square foot office and ' distribution facility on Parcel E-11 in Riverview Industrial Park. The lease would be with Han C. and Sue F. Liu, the Presidents of RSC Corporation and Hanson's respectively. They would sublease the space to the companies. The site contains 53,800 square feet of which 43,560 square feet would I be leased to the company at a rate of $1.50 per square foot plus 12y �II interest for a 30—year term. The remaining 10,340 square feet is a triangular portion of the site located at the southeasterly tip. This ' portion of the site cannot be built on and will be included in the , lease at no cost. The soil conditions on the site will require piling. '� The estimated cost of piling is $75,000. The Port Authority has agreed ', that the effective price of the land will be reduced by 40y of the cost i of piling. The final piling cost will be determined upon receipt of a report from a structural engineer which will contain the cost. Using the estimate of $75,000, this will reduce the effective price of the land to $.81 per square foot. ,. � , ., , � ��--��a i , . C,� . . �, BOARD OF COMMISSIONERS , May 16, 1985 Page —2— ', RSC Corporation currently employs four people and Hanson's employs 2 people. During the next two years, RSC Corporation expects to employ �, six additional people. Most of the fishing rods are currently imported; however, a small ! portion are currently manufactured in Oregon. It is possible that within two to three years -this manufacturing operation could be moved ! to St. Paul. If this were to happen, the building would need to be expanded and the pro�ect would have 30 additional employees. The 'I building is being designed with this expansion possibility in mind, and the site would accommodate the additional building space. At the present time, storm and sanitary sewer are not available to the I property. Sanitary and storm service will be extended to the property 'I from State Street. This will be done at Port Authority expense. The estimated cost of the sewer extension is $12,000. 3. FINANCING I The proposed financing would be done as an 876 industrial development revenue bond issue for a 30—year term. Proceeds from the bond issue I would be as follows: I Construction $360,000 I Debt Service Reserve 54,500 ! Capitalized Interest During Construction — 6 months 24,500 Bond Issuance Cost 17,000 ' Bond Discount 14,000 TOTAL $470,000 � The Port Authority would receive earnings on the debt service reserve I and sinking fund as well as the customary fiscal and administrative fees of $350 per month for the first ten years, $450 per month for the ', second ten years and $550 per month for the third ten years of the ! lease. . ' 4. UNDERWRITING ' Miller & Schroeder Municipals have agreed to underwrite the 30—year I'! issue at an interest rate to be set at the time bonds are sold. We anticipate the bonds will be sold at the regular June, 1985, Commission � meeting. , 5. TERMS OF THE LEASE I The term of the lease would be for 30 years with the company having an ' option to purchase the land for one half of the original cost and the building for 10% of the original bond issue cost at the end of the term. • • • ` � � �' � �^�/_ G�„/� i . °j ° �/t BOARD OF COMMISSIONERS May 16, 1985 I Page -3- i 6. RECOrIl�IENDATIONS � The Port Authority staff has notified District 3, and we have received I; no written or oral comments regarding the project. Staff has reviewed � the financial statements of the company and recommends approval of Resolution Nos. 246 5 and 246b. KGD:ca ' I Attach. I I � I , �I I � I �I � . . � ���a II' . � . �,�� � � 554S ' Resolution No. � �lO-� � RESOLUTION OF � THE PORT AUTHORITY OF THE CITY OF SAINT PAUL WHEREAS, the purpose of Chapter 47 4, Minnesota � Statutes, knawn as the Minnesota Municipal Industrial Develop- ' ment Act (hereinafter called "Act" ) as found and determined by the legislature is to promote the welfare of the state by the active attraction and encouragement and development of economi- cally sound industry and commerce to prevent so far as possible , the emergence of blighted and marginal lands and areas of � chronic unemployment and to aid in the development of existing ' areas of blight, marginal land and persistent unemployment; and WHEREAS, factors necessitating the active promotion and development of economically sound industry and commerce are ', the increasing concentration of population in the metropolitan I� areas and the rapidly rising increase in the amount and cost of ', governmental services required to meet the needs of the ' increased population and the need for development of land use which will provide an adequate tax base to finance these increased costs and access to employment opportunities for such population; and I WHEREAS, The Port Authority of the City of Saint Paul � (the "Authority" ) has received from Han C. Liu and Sue F. Liu (hereinafter collectively 'referred to as "Tenant" ) a request that the Authority issue its revenue bonds to finance the construction of a 12,000 square foot office and distribution , facility (hereinafter collectively called the "Project" ) at ' Parcel E-11, Riverview Industrial Park in the City of St. Paul, I all as is more fully described in the staff report on file; and ' - WHEREAS, the Authority desires to facilitate the selective development of the community, to retain and improve its tax base and to help it provide the range of services and employment opportunities required by its population, and said �I � ` . . � � 4� ` �`'7� I Project will assist the City in achieving that objective. Said , Project will help to increase the assessed valuation of the I City and help maintain a positive relationship between assessed valuation and debt and enhance the image and reputation of the I City; and WHEREAS, the Project to be financed by revenue bonds I will result in substantial employment opportunities in the , Project; ', WHEREAS, the Authority has been advised by repre- sentatives of the Tenant that conventional, commercial financing to pay the capital cost of the Project is available only on a limited basis: and at such high costs of borrawing that the economic feasibility of operating the Project would be significantly reduced, but the Tenant has also advised this ' Authority that but for revenue bond financing, and its ! resulting low borrowing cost, the Project would not be undertaken; � WHEREAS, Miller & Schroeder Municipals, Inc. (the "Underwriter" ) has made a proposal in an agreement (the "Underwriting Agreement" ) relating to the purchase of the revenue bonds to be issued to finance the Project; i WHEREAS, the Authority, pursuant to Minnesota Statutes, Section 474.01, Subdivision 7b did publish a notice, a copy of which with proof of publication is on file in the office of the Authority, of a public hearing on the proposal of I the Tenant that the Authority finance the Project hereinbefore described by the issuance of its industrial revenue bonds; and i '�IHEREAS, the Authority did conduct a public hearing I pursuant to said notice, at which hearing the recommendations I contained in the Authority' s staff inemorandum to the Commissioners were reviewed, and all persons who appeared at ' the hearing were given an opportunity to express their views with respect to the proposal. I NOW, THEREFORE, !3E IT RESOLVED by the Conanissioners of the Port Authority of the City of Saint Paul, Minnesota as ' follows:- � 1. On the basis of information available to the I�I Authority it appears, and the Authority hereby finds, that said Project constitutes properties, used or useful in connection with one or more revenue producing enterprises engaged in any i , � , I 2 � , � - . . ��_��-�� z� �� business within the meanin of Subdivision 1 a) of Section II� 9 � 474.02 of the Act; that the Project furthers the purposes stated in Section 474.01 of the Act and, but for the ' willingness of the Authority to furnish such financing, the � Tenant would not undertake the Project, and that the effect of ' the Project, if undertaken, will be to encourage the develop- ' ment of economically sound industry and commerce and assist in ' the prevention of the emergence of blighted and marginal land, and will help to prevent chronic unemployment, and will help � the City to retain and improve its tax base and provide the range of services and employment opportunities required by its , population, and will help to prevent the movement of talented � and educated persons out of the state and to areas within the ; state where their services may not be as effectively used and i will result in more intensive development and use of land � within the City and will eventually result in an increase in i the City' s tax base; and that it is in the best interests of the port district and the people of the City of Saint Paul and in furtherance of the general plan of development to assist the ! Tenant in financing the Project. � 2. Subject to the mutual agreement of the ; Authority, the Tenant and the purchaser of the revenue bonds as ' to the details of the lease or other revenue agreement as defined in the Act, and other documents necessary to evidence , and effect the financing of the Project and the issuance of the revenue bonds, the Project is hereby approved and authorized � and the issuance of revenue bonds of the Authority (which may i be in the form of a single note) in an amount not to exceed , approximately $470,000 (other than such additional revenue bonds as are needed to complete the Project) is authorized to f inance the costs of the Project and the recommendations of the Authority' s staff, as set forth in the staff inemorandum to the Conunissioners which was presented to the Commissioners, are incorporated herein by reference and approved. 3. In accordance with Subdivision 7a of Section 474.01, Minnesota Statutes, the Executive Vice-President of the AUTHORITY is hereby authorized and directed to submit the proposal for the above described Project to the Commissioner of Energy and Economic Development, requesting his approval, and other officers, employees and agents of the AUTHORITY are hereby authorized to provide the Commissioner with such preliminary information as he may require. 3 . , - ~. - � y.���� I 4. There has heretofore been filed with the Authority a form of Preliminary Agreement between the Authority ' and Tenant, relating to the proposed construction and financing , of the Project and a form of the Underwriting Agreement. The form of said Agreements have been examined by the Commissioners. It is the purpose of said Agreements to evidence the commitment of the parties and their intentions ' with respect to the proposed Project in order that the Tenant , may proceed without delay with the commencement of the acquisition, installation and construction of the Project with ! the assurance that there has been sufficient "official action" , under Section 103(b) of the Internal Revenue Code of 1954, as � amended, to allow for the issuance of industrial revenue bonds , (including, if deemed appropriate, any interim note or notes to , provide temporary financing thereof) to finance the entire cost i of the Project upon agreement being reached as to the ultimate details of the Project and its financing. Said Agreements are ' hereby approved, and the President and Secretary of the Authority are hereby authorized and directed to execute said � Agreements. ' 5. Upon execution of the Preliminary Agreement by ' the Tenant, the staff of the Authority are authorized and directed to continue negotiations with the Tenant so as to resolve the remaining issues necessary to the preparation of i the lease and other documents necessary to the adoption by the , Authority of its final bond resolution and the issuance and delivery of the revenue bonds; provided that the- President (or � Vice-President if the President is absent) and the Secretary , (or Assistant Secretary if the Secretary is absent) of the � Authority, or if either of such officers (and his alternative) �, are absent, the Treasurer of the Authority in lieu of such absent officers, are hereby authorized in accordance with the ' provisions of Minnesota Statutes, Section 475.06, Subdivision ;I 1, to accept a final offer of the Underwriters made by the Underwriters to purchase said bonds and to execute an i underwriting agreement setting forth such offer on behalf of , the Authority. Such acceptance shall bind the Undezwriters to ! said offer but shall be subject to approval and ratification by ; the Port Authority in a formal supplemental bond resolution to be adopted prior to the delivery of said revenue bonds. '�, 6. The revenue bonds (including any interim note or notes) and interest thereon shall not constitute an indebtedness of the Authority or the City of Saint Paul within I, the meaning of any constitutional or statutory limitation and I I 4 . . ��,� ��� � . - -. � --- � . • ' shall not constitute or give rise to a pecuniary liability of the Authority or the City or a charge against their general � credit or taxing pvwers and neither the full faith and credit nor the taxing powers of the Authority or the City is pledged ! for the payment of the bonds (and interim note or notes) or interest thereon. 7. In order to facilitate completion of the revenue bond financing herein contemplated, the City Council is hereby ' requested to consent, �ursuant to Laws of Minnesota, 1976, Chapter 234, to the issuance of the revenue bonds (including any interim note or notes) herein conte�lated and any i additional bonds which the Authority may prior to issuance or from time to time thereafter deem necessary to complete the � Project or to refund such revenue bonds; and for such purpose i the Executive Vice President of the Authority is hereby authorized and directed to forward to the City Council copies � of this resolution and said Preliminary Agreement and any additional available information the City Council may request. S. The actions of the Executive Vice-President of I the Authority in causing public notice of the public hearing � and in describing the general nature of the Project and ,, estimating the principal amount of bonds to be issued to finance the Project and in preparing a draft of the proposed , application to the Commissioner of Energy and Economic Development, State of Minnesota, for approval of the Project, '� which has been available for inspection by the public at the office of the Authority from and after the publication of ' notice of the hearing, are in all respects ratified and � confirmed. Ado ted Ma 21,• 1985 ' � ;� II P Y � � � ' �� • �� � � � � h AtteSt . ;' "� . �" ``"_ P res-ident The Port Authority of the City � �- r �� of Saint Paul I �rj/j/ ;rt`�-�-+��%�i,/ I �'�iSecretary . I . ;I 5 . . � , � ��� ��� �� ..�, ' j- ; , � PORT AUTHORITY OF TNE CITY OF SAINT PAUL TOLL FREE(800) 328-8417 I � 25 WEST FOURTH STREET • SUITE 1305 • ST. PAUL, MINN. 55102 • PHONE (612) 224-5686 i May 21, 1985 '� Mr. James Bellus, Director C3`�� Planning and Economic Development Department City of St. Paul ,�} �� � I 14th Floor, City Hall Annex � �,,,}�-- St. Paul, Minnesota 55102 ' SUBJECT: HAN C. & SUE F. LIU, SUBLEASE TO RSC CORPORATION AND HANSON'S I $470,000 REVENUE BOND ISSUE Dear Jim: � � We submit herewith for your review and referral to the office of the Mayor, ! City Council and City Attorney's office details pertaining to the issuance of $470,000 in revenue bonds to finance the construction of a 12,000 square foot office and distribution facility on Parcel E-11 in Riverview Industrial Park in St. Paul for Han C. and Sue F. Liu. Han C. and Sue F. Liu will sublease the facility to RSC Corporation and Hanson's for use as their headquarters building. I The Port Authority staff has conducted a thorough evaluation of the firms I and/or individuals that are involved in this project or in which the principals have an interest. This investigation has included detailed credit analysis, Dun and Bradstreet reports, direct communication with representatives of financial institutions with whom the participants have done business and data base checks to determine if any principal(s) have been in any way involved in legal proceedings as a result of securities fraud, extortion, embezzlement or financial misrepresentation. In addition to the staff inemorandum, we are attaching a draft copy of the proposed City Council resolution and a copy of Port Authority Resolution No. 2465 which authorized the sale of revenue bonds in the amount of $470,000. Your expeditious handling of this matter will be appreciated. �Yours truly, {,� ugen . ut EAK:ca Executive Vice President �c. Mayor Latimer _�1� :UGENE A KRAUT,C.I.D. DONALD G.DUNSHEE,C.I.D. CHARLES M.TOWLE CLIFFORD E.RAMSTED PERRY K.FEDERS EXECUTNE VICE PRESIDENT ASSL EXEC.VICE PRESIDENT DIRECTOR OF INOUSTRIAL DEVELOPMENT CHIEF ENGINEER DIRECTOR OF FINANCE C.E.O. RICHARD A GIERDAL WILLIAM E.McGIVERN PROPERN MANAGER DIRECIOR OF PUBUC RELATIONS �OMMISSIONERS GEORGE W.WINTER WIILIAM WILSON ARTHUR N.GOODMAN VICTOR P.REIM RAYMOND E.LANGEVIN CHRIS NICOSIA JEAN M.WEST PRESIDENT VICE PRESIDENT SECRETARV TREASURER COMMISSIONER COMMISSIpNER COMMISSIONER C.I.D. Certified Industrial Developer .���,: � ., ---- d � .1::��'�':;��, �TT'�" O� .,S AYNT� �.E�UL ����� �� f7:r,;f----��``�� ; :.:.-�� rti���� ♦ }.,jl orrrcr o� 2`kZI: CITY ca��c�r. � ;' ..,..:.::.;� � . �::�� s.' :�:,, j,:� . s����'=� =-�" �: . . - Y�`. ��-'� ,,,��.;� ' D o t'2 • JUNE 13, 19 8 5 �G.''�..,,,�; _ � ' . .�a • _ li .....��..-•- . COfVIf�/� f��" E � E� EPO �T ' . . . � . � . . TO I'� SQifl� P��.lI C1i� Co� ��i� - . . � � �� � ��� ' �d�.�I i i�� Q�? F2NANCE, MANAGEMENT & PERSONNEL I � ' C�A I SCHEIBEL • � R JAMES . ? . Approval of minutes from meetings he?d June 6 and June 7, I985. � 2. Qrcfinance ame�ding the Civil Service Rules pertaining to six unciassifie�+ � positions in the Depar�ment ot= Planning and Eco�omic Oevelopment ana striking in its entirety Section 34.C. (Personnel ) � � �-A�r� ���r GGI��;l ����rlvn�:,��, 3. Resolution amending the 1985 budget and adding $47,455 to the Financing(�ht.uj ��,.�, Pian and to the Spending Plan for Public Ne�ith NutritioniPublic Health.�-�,�� n � (Community Services) �j � U-� /'lJ��'��� ��r� � � Q_ RAsotution adoptin3 an ame�dment to the St_ Paul Capital Allocation + Po i i cy !?8b-1987. (PED) L�G� G�7Y���"YU/Q.�. ��_��r� . _ _._._ 5. Resol�,�tion consenting to tHe issuance of Port Authority Revenue Boncis in the amount ar $1 , 175,000 to finance new pollution control eq ipment for � FTA Systems, Incorporated in Energy Park. (Part Authority) �� ,,�/� - l/� 6. ti�e�svi trCtnn consenti ng to� the i ssuance of Port Author i ty I ndustr i a 1 Revenue . Bonas in the amount of �900,000 to finance remodeling to the former Car- • dozo Warehouse at Fifth � BroaCway for MarketHouse Limited Par�nership (Porfi Authority) , ��� 6ve� � j,..(���-� 7. I�e��uticsn consenting to the fssuance of Pc3rt Authority Revenue Bonds in the amount «zff �470,00U to finance construction or a buitding in Riverview Indus*_r" 1 Park for Han�C. and Sue F. Liu. (Porz Authority) pr�Ll��.. . . . 8. Resoluti n consenting to the issuance of Port Authority Revenue Bonds fn the amount of �Z,000,00� to finance the purchase of the former Nor�h- wester 9e1 Te!epnone Campany 8uilding at 223 Piato Boulevarcf. (P.A.) ���� 9- Publ ring, on Eiti�en Participation budgets, �� �GUG� NOT ON P ARED AGENDA: Resolution transferring $77,976 to the project to reconstruct Hamline Avenue from Hoyt to Larpenteur. ��.�ac��'� Resol tion trans�e� rring $126 ,000 to the F'illmore Avenue Project. -�r'�ve�=- R so�o � transferrin $132 000 to the White Bear Ave. Pavin Pro 'ect. e t /��� , g 7 C:TY HALL / ��p'�S�VENTF�i FLOOF: • - SAINT PAUL,�1I�tiESOT:\55IO2 ' �^u