85-1253 M�HITE - C�TV CLERK �
PINK - FINANCE ITY OF SAINT PAUL � Council /I I� / �
CANARV - DEPARTMENT File NO. �L/ �`�✓ �
BLUE - MAVOR
� �- ncil Resolution
Presented By
V Referred To �I ��'�' � ��l���m��Committee: Date � � � 'U -��
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Out of Committee By Date
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WHEREAS:
1. On August 20, 1985e the Port Authority of the City of Saint Paul adopted
Resolution No. 2506 giving �reliminary approval to the issuance of revenue bonds in the
initial principal amount of $1,610,000 to finance the acquisition and rehabilitation of a
65,000 square foot building'Iat 1717 University Avenue in St. Paul for MBM Partners. MBM
Partners is a partnership cpmposed of Adrian Marsden, other family members and officers of
Marsden Building Maintenanc�e Company. MBM Partners will sublease the facility to Marsden
Building Maintenance Company and American Security Corporation for use as their
headquarters building. Mi1�1er & Schroeder Municipals has agreed to underwrite the revenue
bond issue for a term of 20 years.
2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds
authorized by the Port Auth;ority of the City of Saint Paul, shall be iasued 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 thle 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. 2506 the ex�ct details of which, including, but not limited to, provisions
relating to maturities, in�erest 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 $or carrying out the purposes for which the aforesaid bonds are
issued.
COUNCILMEN '��
Yeas Nays Requested b�e�par��t of:
Drew
Masanz In Favor
fV�cos�a
scne�bEi __ Against BY
So�nen
Tedesco '
Wi� n ', SEP 1 7 1985 Form Approved by City Attorney
Adopted by �ouncil: Date —�— �
Certified Ya s d y ou cil cr ry BY
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cCp (
�lppro y Mavor. Date �3Gr ,� � ���„�� App o d by Mayor for Submiss' to ncil
By _ — B
PUBLISHED S�P 2 t� 1985
DEPARTMENT ��%�`S�N� 2257
C M. Towl�e E.A. Kraut � CONTACT
2 4-5686 PHONE �
Au ust 20, 1985 DATE 1 Q,/� e�
ASSIGN NUMBER FOR ROUTING ORDER Cli All Locations for Si nature :
� Department Director 3 Director of Management/Mayor
Finance and Management Servi es Director 4 City Clerk
Budget Director MBM Par�ners� S�blease �o Mar_sden
� City Attorney � Buildin Maintenance Com an
1 ,610,000 Revenue bond issue
WHAT WILL BE ACHIEUED BY TAKING CTION ON THE ATTACHED MATERIALS? (Purpose/
Rationale):
The purpose of t1�e revenue bond ssue is to finance the acquisition and rehabilitation of
a 65,000 square foot buildin��,� - :�il at 1717 University Avenue in St. Paul for MBM Partners.
MBM Partners is a partnership co posed of Adrian Marsden, other family members and officers
of Marsden Building Maintenance ompany. MBM Partners will sublease the building to Marsden
Building Maintenance Company and American' Security Corporatlion for use as their headquarters.
COST/BENEFIT, BUDGETARY AND PERS NNEL IMPACTS ANTICIPATED:
The amount of the revenue bond i sue is $1 ,610,000 and will be for a term of 20 years. There
will be 20 new jobs created as a result of this project.
FINANCING SOURCE AND BUDGET ACTI ITY 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 All Attachments : ���E�il/�p
1 . Staff Memorandum Q�G 2 3
2. Draft City Council Resolutio 1985
3. Port Authority Resolution No. 2506 ��AY�k,� o�F���
cc. R. Thorpe
DEPARTMENT REVIEW CITY ATTORNEY REVIEW
�Yes No Council Resolution Required? Resolution Required? �Yes No
Yes X No Insurance Required Insurance Sufficient? X Yes No
Yes X No Insurance Attached
(SEE RE ERSE SIDE FOR INSTRUCTIONS)
Revised 12/84
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AU7' HOR � T1(
OF THE CITY OF ST. PAUL '
MemoraAdum
TO: BOARD OF COMMISSIONERS DATE: �ug. 1, 1985
(Aug. 20, 1985 Re�gular Meeting)
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FROM: C.M. � �
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SUBJECT: MBM PARTNERS - SUBL�ASE TO MARSDEN BUILDING MAINTENANCE COMPAAtY
PUBLIC HEARING - PR.ELI�IINARY AND UNDERGTRITING AGREEMENT
$1,610,000 RESOLUTIbN 876 REVENUE BOND ISSUE
OFF-SITE
RESOLUTION N0. 2506
PUBLIC HEARING - SA�E OF LAND
RESOLUTION N0. 2507
1. THE PROJECT ,
MBM Partners is' requesting financing to acquire and rehabilitate the
Farmer's Union Ibuilding located at 1717 University Avenue. MBM
Partners will siublease this 65,000 square foot building to Marsden
Building Maintenance Company and it will serve as their principal
headquarters bu�ilding. Full-time employment at this facility will
exceed 200 people and operate on a 24-hour basis.
2. THE COMPANY
MBM Partners wi�.l be a partnership composed of Adrian �tarsden, other
family members,land officers of Marsden Building �Iaintenance Company.
The building wi�l also house the American Security Corporation. These
companies are cµrrently located in two buildings at 317 York Avenue in
St. Paul. Mars�ien Building Maintenance is the largest in its field in
the metropolita� area and provides building maintenance services for
vost of the lar er office projects in the Twin Cities. �larsden employs
400 people on a full-time basis and 1,400 on a part-time basis.
American Security has 300 full time and 200 part-time employees for a
combined employ�nent of over 2,300 in the metropolitan area. Combined
sales will exce�d $22 million in 1985.
3. FINANCING '
The proposed fipancing will be an 876 industrial development revenue
bond issue for � 20-year term. Proceeds of the bond issue would be as
follows: '
+ � . ' . � �'� �� /�.�3
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BOARD OF COMMISSIONERS
August 15, 1985
Page —2—
3uilding A quisition & Rehabilitation $1,500,000
Debt Servi e Reserve — Funded by Company (185,000)
Capitalize�i Interest During Construction 38,000
Bond Issua�ce Cost 23,000
Bond Disco' nt 49,000
TOTAL $1,610,000
The building is being purchased for $1,855,000, and the Muske Company
has appraised it, for $1,900,000.
The Port Authori y will receive full earnings on the sinking fund as
well as our cust mary fiscal and administrative fees. The company will
have the option o buy the property in 10 years for 10% of the bond
issue plus retir ment of outstanding bonds and at 20 years for 10% of
the bond issue.
9drian Marsden, he principal partner, will personally guarantee the
lease, and the st�blease to t�Iarsden Building Maintenance Company will
extend through the term of the bond issue.
4. UNDERWRITING ,
Miller & Schroeder Munici�als have agreed to underwrite the 20—year
bond issue at an interest rate to be set at the time the bonds are
sold. We anticipate the bonds will be sold at our regular September
Commission meetiri�.
5. RECOMMENDATIONS
Staff has interv�ewed officers of the corporation, reviewed their
financial statem�nts and recommends approval of Resolution Nos. 2506
and 2507.
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C�iT:c a
Attach.
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Resolution vo . .>�':-� t'
RESOLUTION OE
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
WHEREAS, the purpose of Chapter 474, Hinnesota �
Statutes , known as the Minnesota Municipal Industrial Develop-
ment Act ( hereinaFter called "Act" ) as found and determined by
the legislature is to promote the welfare of the state by the
active attraction �and encouragement and development of economi-
cally sound indust$y and commerce to prevent so far as possible
the emergence of blighted and marginal lands and areas of
chronic unemploymet�t and to aid in the development of existing
areas of blight , m�rginal 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
areas and the rapidly rising increase in the amount and cost of
governmental s2rvi�es required to meet the needs of the
increased oopulati4�n 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 sucn
population; and
WHEREAS, The Port Authority of the City of Saint Paul
( the "Authority" ) '�as received from MBM Partners , a Minnesota
partnership ( hereinafter referred to as "Company" ) a request
that the Authority issue its revenue bonds to finance the
acquisition and renovation of the Farner' s Union Building
(hereinafter colle�tively called the "Project" ) at 1717
University Avenue in the City of St . Paul , all as is more fully
descr ibed in the staf f report on f ile ; 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 ics population , and said
Project will assisit the City in achieving that objective. Said
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� Project will help �o increase t:�e assessed valuation of the
City and help ;nain�ain a positive relationship between assessed
valuation and debt and enhance the image and reputation oE the
Ci ty ; and �
WHEREAS, the Project to be financed by revenue bonds
will result in sub�tantial employment opQortunities in the
Project; '
WHEREAS, the Authority has been advised by repre-
sentatives of the Company that conventional , commercial
financing to pay the capital cost of the Project is available
only on a limited basis and at such high costs of borrowing
that the economic feasibility of operating the Project would be
significantly reduGed , but the Company has also advised this
Authority that but' for revenue bond financing , and its
resulting low borr�wing cost , the Project would not be
undertaken;
WHEREAS, IMiller & Schroeder Municipals , Inc . ( the
"Underwriter" ) has made a proposal in an agreement ( the
"Underwriting �greement" ) relating to tne purchase of the
revenue bonds to b� issued to finance the Project ;
WHEREAS, Ithe Authority, pursuant to Minnesota
Statutes , Section 474 .01, Subdivision 7b did publish a notice ,
a copy of which wiith proof of publication is on file in the
office oE the Authbrity , of a public hearing on the proposal of
the Company that the Authority finance the Project hereinbefore
described by the i�suance of its industrial revenue bonds ; and
WHEREAS,� the Authority did conduct a public hearing
pursuant to said notice , at which hearing the recommendations
contained in the Authority' s staff inemorandum to the�
Commissioners were reviewed , and all persons who appeared at
the hearing were gliven an opportunity to express their views
with respect to the proposal .
NOW, THEREFORE, BE IT RESOLVED by the Commissioners
of the Port Authority of the City of Saint Paul , Minnesota as
follows :
1 . On �the basis of information available to the
�uthority it appeajrs , and the Authority hereby finds , that said
Project constitutas proQerties , used or useful in connection
with one or more revenue producing enterprises engaged in any
business within tl�e meaning of Subdivision la of Section 474. 02
of the Act ; that Che Project furthers the purposes stated in
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Section 474 . Oi of the Act and , but for the willingness of the
Authority to furni5h such financing , the Company would not
undertake the Project , and that the e�fect of the Pr�ject, if
undertaken , will b� to encourage the development of
economically sound industry and commerce and assist in the
prevention of the emergence of blighted and marginal land , and
will help to prevent chronic unemoloyment , and will hel� the
City to retain and improve its tax base and provide the range
of services 3nd em�loyment opportunities required by its
pooulation , and wi�l help to prevent the movement of talented
and educated perso s out of the state and to areas within the
state where their �ervices may not be as effectively used and
will result in mor� intensive development and use of land
within the City an�3 wi11 eventually result in an increase in
the City' s tax bas� ; 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
Company in f inanc ing the Proj ec t .
2. Subject to the mutual agreement of the
Authority , the Com�any and the purchaser of the revenue bonds
as to the details '�f the lease or other revenue agreement as
defined in the Act;, and other documents necessary to evidence
and effect the fin�ancing of the Project and the issuance of the
revenue bonds , thel Project is hereby approved and authorized
and the issuance o,f revenue bonds of the Authority in an amount
not to exceed apprioximately 51 , 610 ,000 (other than such
additional revenue� bonds as are needed to complete the Project)
is authorized to finance the costs of the Project and the
recommendations of the Authority' s staff , as set forth in the
staff inemorandi.un to the Cammissioners which was presented to
the Commissioners , are incorporated herein by reference and
approved .
3. In accordance with Subdivision 7a of Section
474. 01, Minnesota Statutes , the Executive Vice-President of the
AUTHORITY is hereby authorized and directed to submit the
proposal for the above described Project to the Commissioner of
Energy and Economic Development, requesting his approval , and
other officers , employees and agents of the AUTHORITY are
hereby authorized to provide the Commissioner with such
preliminary information as he may require .
4. There has heretofore been filed with the
Authority a for.n �f Prel iminary agreement between the �uthority
and Company , rela ing to the proposed construction and
financing of the �roject and a form of the Underwriting
Agreement. The fc�rm of said Agreements have been examined by
the Commissioners ' It is the purpose of sa id Ayreements to
evidence the comm tment of the parties and their intentions
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' with respect to the proposed Project in order that the Company
may proceed without delay with the commencement of the
acquisition, installation and construction of the Dr�ject with
the assurance that there has 5een suf f icient "off icial action"
under Section 103 ( b) of the Internal Revenue Code of 1954 , as
amended , to allow I�or the issuance of industrial revenue bonds
( including , if deemed appropriate , any interim note or notes to
provide temporary �inancing thereof) to finance the entire cost
of the Project upo agreement being reached as to the ultimate
deta ils of the Pro ' ect and its f inanc ing . Sa id Agreements are
hereby approved , a d the President and Secretary of the
Authority are here y authorized and directed to execute said
Agreements .
5. Upon execution of the Preliminary Agreement by
the Company , the staFf of the Authority are authorized and
directed to contin',ue negotiations with the Company so as to
resolve the remain'ing issues necessary to tne preparation of
the lease and other doc�.unents necessary to the adoption by the
Authority of its final oond resolution and the issuance and
delivery of the revenue bonds ; provided that the President ( or
Vice-President iF tthe 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 Tr'easurer of the Authority in lieu of such
absent officers , are hereby authorized in accordance with the
provisions of Minruesota Statutes , Section 475. 06, Subdivision
1 , to acceot a final offer of the Underwriters made by the
Underwriters to pwrchase said bonds and to execute an
underwriting agree;ment setting forth such offer on behalf of
the Authority . Su,�ch acceptance shall bind the Underwriters to
said offer but shajll be subject to approval and ratification by
the Port Authorit� in a formal supplemental bond resolution to
be adopted pr ior o the del ivery o f sa id revenue bonds .
6. Th� 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
the meaning of any constitutional or statutory limitation and
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 powers and neither the full faith and credit
nor the taxing powers of the Authority or the City is pledged
for the payment o� the bonds ( and interim note or notes) or
interest tnereon .
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� 7. In order to facilitate completion of the revenue
bond f inanc ing here in contemplated , the Ci ty Counc il is hereby
requested to consent , pursuant to Laws of �linnesota , 1976 ,
Chapter 234 , to th� issuance of the revenue bonds ( including
any interim note o�r notes) herein contemplated and any
additional bonds which the Authority may prior to issuance or
from time to time thereafter deem necessary to complete the
Project or to refujnd such revenue bonds ; and for such purpose
the Executive Vice President of the Authority is hereby
authorized and directed to forward to the City Council copies
of this resolutior� and said Preliminary Agreement and any
additional availab'le information the City Council may request .
8. Th � actions of the Executive Vice-President of
the Authority in causing public notice of the public hearing
and in describing the general nature of the Project and
estimating the pri.ncipal 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, Stat of Kinnesota , for approval of the Project,
which has been ava�ilable for inspection by the public at the
office of the Aut ority from and after the publication of
notice of the hea ing , are in all respects ratified and
conf irmed .
Adopted August 24, 1985
Attest
Pres ident
The Port Authority of the City
of Saint Paul
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4:, ;_ , ..._� Sec e ary
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PORT AUTHORITY OF tHE CITY OF SAINT PAUL TOLL FREE (800) 328-8417
25 WEST FOURTH STREET • SUITE 1305 • ST, PAUL, MINN. 55102 • PHONE (612) 224-5686
August 20, 1985
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Mr. James Bellus, D�rector ���'���-�-''``�4 t:���
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Planning and Econom�.c Development Department �
City of St. Paul AU�� �' I���
14th Floor, City Hall Annex �.e, ;
St. Paul, Minnesota 55102 fe��a{�"'`'',, � "_ '
�`�.�t.
SUBJECT: MBM PARTN�RS -- SUBLEASE TO MARSDEN BUILDING MAINTENANCE COMPANY
$1,610,000 REVENUE BOND ISSUE
Dear Jim:
We submit herewith �or your review and referral to the office of the �fayor,
City Council and City Attorney's office details pertaining to the issuance
of $1,610,000 in re�enue bonds to finance the acquisition and
rehabilitation of a' 65,000 square foot building located 1717 University
Avenue in St. Paul �or �IBM Partners. MBM Partners is a partnership
composed of Adrian Marsden, other family members and officers of Marsden
Building Maintenance Company. MBM Partners will sublease the facility to
Marsden Building Ma'ntenance Company and American Security Corporation for
use as their headqu�rters building.
The Port Authority �Staff has conducted a thorough evaluation of the firms
and/or individuals that are involved in this project or in which the
principals have an I�nterest. This investigation has included detailed
credit analysis, Du�z and Bradstreet reports, direct communication with
representatives of financial institutions with whom the participants have
done business and dlata base checks to determine if any principal(s) have
been in any way inv�olved in legal proceedings as a result of securities
fraud, extortion, �mbezzlement or financial misrepresentation.
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In addition to the staff inemorandum, we are attaching a draft copy of the
proposed City Coundil resolution and a copy of Port Authority Resolution
No. 2506 which authorized the sale of revenue bonds in the amount of
$1,610,000.
Your expeditious handling of this matter will be appreciated.
r�Yours truly,
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I ' Eugene . Kraut
EAK:ca Executi e Vice President
EUGENE A.KRAUT,C.I.D.CC. Mayo�o�r,�S��vsH�E,C.I.D. CHARLES M.TOWLE CLIFFORD E.RAMSTED PERRY K.FEDERS
EXECUTNE VICE PRESIDENT ASSi.EXEC.V�CE PRE IDENT DIRECTOR OP INOUSTRIAL DEVEIOPMENT CHIEF ENGINEER DIRECTOR OF FINANCE
C.E.O.
RI�HARD A GIERDAL WILLIAM E.McGiVERN
IbROPERN MANA6ER DIRECTOR OF PUBUC RELATION$
COMMISSIONERS GEORGE W.WINTER WILLIAM WILSON ARTHUR N.GOODMAN VICTOR P.REIM RAVMOND E.LANGEVIN CHRIS NICOSIA JEAN M.WES
PRESIDENT VICE PRESIOENT SECRETARV TREASURER COMMISSIONER COMMISSIONER COMMISSIONEi
, C.I.D. Certified Industrial Developer
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�ITY O1�` S�INT P�,.UL
� bFFTCE OB` TH� CITY COIINCIL
«.�,.........
at�'.�.,�_{
� D a�e ; September 13, 1985
CoM,M (TTEE RE PoRT
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T4 = Socnt Paul City Council
F R O M = C o rn m it�e� O h L i ty Deve I opment and Transportat i on
CNAIR
, William L. Wilson
1 . Resolu�ion approving issuance of Port Authority
R�venu Bonds in the amount of �1 ,61Q,000 to finance
the a�Cquisition of the building at 1717 University
Avenue for Mi3M Partners. (Committee recommends
approvpl )
2. Review of the Initiative regarding the St. Paul
Right to Overnight Shelter Act (Committee sends
to Council without recommendation)
3. Review of an ordinance creating a Shelter Board for
- the City of St. Paul (Committee recommends approval )
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CITY HALL SEVENTH�,OOR SAII�IT PAUL, MINNESOTA 55102
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