85-1409 WMITE - CITV CLERK
PINK - FINANCE GITY OF SAINT PAITL Council y�! ��/�Q
BLUERV - MAYORTMENT File NO• � �� /
�
j , Coun i Resolution
Presented By �
Referred To �r ��"I� L� Committee: Date �� — ����
Out of Committee By Date
1. On September 17, 1985, the Port Authority of the City of St. Paul adopted
Resolution No. 2518 giving preliminary approval of the issuance of $2,460,000 in
industrial development revenue bonds to finance the construction of a 40,000 Sq. Ft.
offa.ce, production and etorage facility at the intersection of Snelling Avenue and Energy
Park Drive in Energy Park, St. Paul, Minnesota for Merrill Corporation. Miller &
Schroeder Financial, Inc. has agreed to underwrite the 30 year bond issue.
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 Ca.ty of Saint Paul, subject 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. 2518 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 determi.ned 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.
COUKCILME[V Requested by Department of:
Yeas :��.� Nays
Drew �_ [n Favor
Masanz
NfCOSia ,�,,/
scne�be� '�/' __ Against BY
Tedesco
Wilson
DCT 1 7 1985 Form Approv by City Attorney
Adopted by Council: Date � ��
Certified Pas e ouncil Se et BY �
sy
t#pprov �Navor. Dat O.CT i � 1985 App by Mayoc for Submis on to ouncil
By �
PU�I����D 0��T ,`� � 1�$5
St. Paul Port Authority DEPARTMENT �' �� �9 N 2229
0
D. G. Dunshee, E. A. Kraut CONTAGT
2�L�_SF,Rh PHONE �
September 17, 1985 DATE 1 Q/� e�,r
ASSIGN NUMBER FOR ROUTING ORDER (Clip All Locations for Signature) :
1 Department Director 3 Director of Management/Mayor
Finance and Management Services Director 4 City Clerk
Budget Director Merrill Corporation
� City Attorney $2,460,000 Revenue Bond Issue
WHAT WILL BE ACHIEVED BY TAKING ACTION ON THE ATTACHED MATERIALS? (Purpose/
Rationale) :
The purpose of the bond issue is to finance the construction of a 40,000 Sq. Ft. office,
production and storage fac�lity tor Merrill Corporation to be located at the intersection
of Snelling Avenue and Energy Park Drive in Energy Eark, St. Paul, Minnesota, Merrill
Corporation is now the sixth Yargest financial printing firm in the United States.
�����`�S
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COST/BENEFIT, BUDGETARY AND PERSONNEL IMPACTS ANTICIPATED:
The amount of the revenue bond issue is $2,460,000 and it will be for a term of 30
years. There will be 50 new jobs created as a xesult 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
$10,000)
Funding Source:
Activity Number:
ATTACHMENTS (List and Number All Attachments) :
1. Staff Memorandum
�'���'{;���33
2. Draft City Council Resolution �C�� j �1�8�
3. Port Authority Resolution'' No. 2518
rv1/��^;Z�; or"FlCE
cc: Richard Thorpe
DEPARTMENT REVIEW CITY ATTORNEY REVIEW
X 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
P O R T � � G� �'.s'-is�o�
� AUTHORITY
OF THE CITY OF ST. PAUL .
Memorandum
TO: BOARD OF COMMISSIONEKS DATE: Sept. 13, 1985
(Meeting September 17, 1985)
FROM: Uonald G. llunshee
SUB.IECT: Public Hearing - Preliminary and Underwriting Agreements
$2,460,000 876 Revenue Bond Issue - Merrill Corporation - Energy Park
Resolution No. 2518
Public Sale Hearing - Sale of Land - Merrill Corporation
Resolution No. 2519
1. The Company
Merrill Corporation is a financial printing company founded in St. Paul
in 1968. They have enjoyed a 90 percent growth rate in the last three
years, while the industry as a whole has only expanded 12 percent
growth. Merrill is now the sixth largest financial printing firm in
the United States. The reason for this rapid growth and need for
expansion is that the company implemented a variety of computer-based
systems designed to automate the mechanics of the financial printing
process. These systems included computerized phototypesetting systems,
high speed digital facsimile transmission systems, and word processing
conversion systems that enable Merrill to translate the text encoded on
virtually any diskette or tape into a format that can be used by
Merrill's computerized typesetting equipment. Besides the St. Paul
headquarters facility they have offices in New York, Washington D. C. ,
Chicago, Denver, San lliego and Los Angeles.
Merrill Corporation has been the prime financial printer of the Port
Authority's Official Statements and bonds in recent years.
2. The Project
_The Company is currently located at 1731 University Avenue and last
year outgrew that facility making it necessary to lease additional
office space in an adjacent building. Business has continued to
increase to the point they plan to build a new 40,000 Sq. Ft. off ice,
production and storage facil.ity in �:nergy Park.
The building would be constructed at the intersection of Snelling
Avenue and Energy Park Drive immediately South of the Ramsey County Ice
Arena. The Port Authority would lease the site containing 148,569 Sq.
Ft. at a rate of $2.25 per Sq. Ft. plus 10% interest for a 30 year
term. The annual rent would be $36,239.04 payable monthly in advance
in the amount of $3,019.92 beginning in the ninth month.
At the present time the Company employs 280 people including 180 in St.
Paul on three shifts. A new facility would permit them to increase
employment by 20 the first year and 40 to 50 in three years. They have
agreed to sign the First Source Employment and Training Agreement.
' � � �_��if���
BOARD OF CUMMISSIONERS
Meeting September 17 , 1985
Merrill Corporation
Page 2
3. Financing
The proposed financing would be done as an 876 industrial development
revenue bond issue for a 30 year term. The Company will be funding the
debt service reserve in cash in the amount of $258,000. Proceeds from
the bond issue would be as f ollows:
Construction $2,200,000.00
Bond Issue Expense 28,350.00
Capitalized Interest (8 Months) 157 ,850.00
Discount 73,800.00
$2,460,000.00
The Port Authority would receive earnings on the sinking fund as well
as the customary fiscal and adminsitrative fees based on a formula of
.42% per million per year for the first ten years, .54� per million per
year for the second ten years and .66% per million per year for the
third ten years of the lease.
4. Underwriting
Miller & Schroeder Financial, Inc. has agreed to underwrite the 30 year
bond issue at an interest rate to be set the day the bonds are sold.
We anticipate the bonds will sell at the regular October, 1985
Commission meeting.
5. Terms of the Lease
The term of the lease would be for 30 years with the Corporation having
an option to purchase the land for one—half the original cost and the
building for 10% of the original bond issue cost at the end of the
term.
6. Recommendation
The Corporation and Staff inet with Councz.l 46 on September 9 and they
endorsed the project by unanimous vote. Staff has interviewed officers
of Merrill Corporation, reviewed their financ.ial statements and
recommends approval of the above Resolutions.
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• 5665
Resolution No. ���
RESOLUTION OF
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
WHEREAS, the purpose of Chapter 474, Minnesota
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 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
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
WHEREAS, The Port Authority of the City of Saint Paul
(the "Authority" ) has received from the K. F. Merrill
Corporation (hereinafter referred to as "Company" ) a request
that the Authority issue its revenue bonds (which may be in the
form of a single note) to finance the acquisition, installation
and construction of a 40,000 square foot office, production and
storage facility (hereinafter collectively called the
"Project" ) at the intersection of Snelling Avenue and Energy
Park Drive in Energy Park in the City of St. Paul, 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
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' Project will assist the City in achieving that objective. Said
Project will help to increase the assessed valuation of the
City and help maintain a positive relationship between assessed
valuation and debt and enhance the image and reputation of the
City; and
WHEREAS, the Project to be financed by revenue bonds
will result in substantial employment opportunities;
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 reduced, and the Company has also advised the
Authority that but for the revenue bond financing made
available by the Authority, and its resulting low borrowing
cost, the Project would not be undertaken;
WHEREAS, Miller & Schroeder Financial, 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;
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
the Company that the Authority finance the Project hereinbefore
described by the issuance 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 given 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 :
l. On the basis of information available to the
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
business within the meaning of Subdivision la of Section 474 .02
2
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, ` 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 Company would not
undertake the Project, and that the effect of the Project, if
undertaken, will be 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 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
will result in more intensive development and use of land
within the City and will eventually result in an increase in
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
Company in financing the Project.
2. Subject to the mutual agreement of the
Authority, the Company and the purchaser of the revenue bonds
as to the details of the lease or other revenue agreement as
defined in the Act, and 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
be in the form of a single note) in an amount not to exceed
approximately $2 ,460,000 (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 inemorandum to the
Commissioners 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
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• 4. There has heretofore been filed with the
Authority a form of Preliminary Agreement between the Authority
and Company, relating to the proposed construction and
financing of the Project and a form of the Underwriting
Agreement. The forms of the agreements have been examined by
the Commissioners . It is the purpose of the agreements to
evidence the commitment of the parties and their intentions
with respect to the proposed Project in order that the Company
may proceed without delay with the conanencement 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
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 Company, the staff of the Authority is authorized and
directed to continue negotiations with the Company so as to
resolve the remaining issues necessary to the preparation of.
the lease and other documents necessary to the adoption by the
Au�thority 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
1, to accept a final offer of the Underwriter made by the
Underwriter to purchase said bonds and to execute the
Underwriting Agreement setting forth such offer on behalf of
the Authority. Such acceptance shall bind the Underwriter 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) �nd 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
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. � 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 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, pursuant to Laws of Minnesota, 1976 ,
Chapter 234, to the issuance of the revenue bonds ( including
any interim note or 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 refund 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 resolution and said Preliminary Agreement and any
additional available information the City Council may request .
8 . The 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 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.
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Adopted September 17 , 1985 " , %
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Attest � `� �
Presid"en
The Poz�Authority of the City
of Saint Paul
L 4�.Z. Sec tary �
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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
September 17, 1985
Mr. James Bellus, Director
Planning and Economic Development Department
City of St. Paul
14th Floor, City flall Annex
St. Paul, Minnesota 55102
SUBJECT: Merrill Corporation
$2,460,000 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 a $2,460,000 revenue bond issue for Merrill Corporation to finance the
cosntruction of a 40,000 Sq. Ft. office, production and storage facility at
the intersection of Snelling Avenue and Energy Park Drive in Energy Park.
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 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 mi.srepresentation.
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. 2518 which authorized the sale of revenue bonds in the amount of
$2,460,000.
Your expeditious handling of this matter will be appreciated.
Y rs truly,
gene A. Kraut
Egecutive Vice President
EAK:DGD:sjs
EUGENE A KRAUT,C.I.D. �C� �y DONALD`�DUNSHEE.C.I.D. CHARLES M.TOWLE CUFFORD E.RAMSTED PERRY K FEDERS
EXECUTNE VICE PRESIDENT ASST.EXEC.VICE PRESIOEM DIRECTOR OF INDUSTRIAL OEVELOPMEM CHIEF ENGINEER DIRECTOR OF FNANCE
C.E.O.
RICHARD A GIERDAL WILLIAM E.McGNERN
PROPERN MFWAGER DIRECTOR Of PUBLIC RELATIONS
COMMISSIONERS GEORGE W.WINTER WIU.IAM WILSON ARTHUR N.GOODMAN VICTOR P.REIM RAYMOND E.LANGEVIN CHRIS NICOSIA JEAN M.WE5
PRESIDENT V10E PRESIDENT $ECRFfARV TREASURER COMMISSIONER COMMISSIONER COMMISSIONEf
C.I.D. Certified Industrial Developer
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F P► � �,� % C i'��`�1 T�71 j��'�� O i 1 FINANCE, AIANAGEMENT � PERSONNEL
� �. C�-I A! P.�� James Scheibel �
1 . Approva 1 of mi nutes from meet i ng hel d October 2, 1985.���aV�-� ' �
2. Ordinance amending Chapters 369, 370, and 310 of the Legislative Code pertainino to �
buitding trades business licenses and certificates of compete.ncy. (Community
Serv i ces) . (La i d over f rom 9/26/85) �P1�.0�11�3. �
3. Resolution amending the 1985 budget by transferring $965.00 from Contingent ¢�;�'��•��!
Reserve-Specified to General Govt. Accounts-Surety Bond Premiums. (Finance Dept.)
4. Resolution authorizing an agreement with Zimmerman Realty for rentai of office space
. a t 195�+ Un i vers i ty Ave. for Publ i c Hea 1 th D i v i s i on. (Hea 1 th Deot.) /�1���1��
5. Resolution consenting to the issuance of Port Authority Industrial Developme�t Re��enue
Bonds in the amt. of $765,000 to finance construction of an office, manufacturin�
and warehous ing faci l i ty for EMC Corp. at York � Case Ave. P D) (����t� �
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� �� .' �a�q.:C�t+��Mtitt+�`�#�� �� �+11�iT�t't��`�f Po�t �4�L�t,;.;��S�ustrial Development Revenue
. goc�d� .t�,,fi,t� �na�'��f '�'2,�fi�f'1,Q�Y�'°to f i nance cons truct i on o� a � ff i ce, product i on
"'��se�^�rr�er- �faci i i ty ��►t'=1�k`i�r��I1 Cc��: fr�'�E�"�r F#�s�;. (PED)
7. Discussion of financing package for Block L (KTCA) . JU'C �LTtb�•
8. Ord i nance amend i ng Chapter 26 of the Admi n i strat i ve Code perta i n i ng to mandatary =";f„��
retirement for employees in the uniformed division of the Fire Dept. (Fire Dept.�
MOOT ISSUE TO BE REMOVED FROM COMMITTEE LIST OF ITEMS TO BE DEALT WI�TH:
Ordinance pertaining to the hotel-motel tax and use of furtds by the Civic
Center Authori ty. _ ���l�,�,j "�? R�p�1� �p� �.•�ST.
CITY HALL SEVENTH FLOOI'� � . ,
SAINT PAIJL. rill\ESOT.� SSIO_