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84-810 WHITE - CITV CIERK PINK - FINANCE G I TY OF SA I NT PA U L Council /]. BLUERy - MAVORTMENT File NO. �� c'/� � Co �cil Resolution Presented By . �Referred To Committee: Date -�C —�Oz —8� Out of Committee By Date WHEREAS: 1. On May 15, 1984, the Port Authority of the City of Saint Paul adopted Resolution No. 2280 giving preliminary approval to the issuance of industrial development revenue bonds in the initial principal amount of $2,075,000 to finance the acquistion and remodeling of the former Dnnaldson (Torit) manufacturing building located at 1133 Rankin Street in St. Paul, Minnesota for porothy M. Huestis dba D.S.B. Realty, a Minnesota Partnership, subleased to Road Rescue, Inc./L.P. Gas Equipment, Inc. The bonds will be underwriten by Miller & Schroeder Municipals, Inc. 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. 2280 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. COUNCILMEN Requested� D artment of: Yeas Nays � Fletcher ✓'�j �'"'°"�Q'�� —i In Favor Masanz ' Nicosfa scnetbei b __ Against BY Tedesco Wilson J�N � 9 ��8� Form Approved by City Attorney Adopted by Council: Date �� Certified P . Cou c' ,ec ary BY • By A d by Mavor. D e UN 7 C pQi- Approv y Mayor for Submi to ouncil P�18L{SHED J UN 3 0 �984 " 1�.�`�� . St. Paul �ort Authority • V ona . uns ee or EPARTt,tENT �.e� � �„��.+ �ONTACT (612)224-5686 PHONE �� May 15, 1984 DATE �v � (Routing and Explanation Sheet) Assi n N er for Routin Order Cli All Locations for Ma oral Si nature : 1 Department Director CEIVED Ci ty Attorney MAY 3 p �ggt� 3 Girector of Management/Mayor CITY AT 4 Fi nance and Management Servi ces Di rector CN� $ �. TORN� �' �C �i� • 5 Ci ty Cl erk �` (�� [� Budget Di rector ��AY�'� ly�,` MArnR's�� , ,�, ,,_ ��. ��hat Will be Achieved by Taking Action on the Attached Materials? (Purpose/Rationale�: The purpose of the bond issue is to finance the acquisition and remodeling of an existing building at 1133 Rankin Street in St. Paul , Minnesota by Dorothy M. Huestis dba D.S.B. Realty, a Minnesota Partnership, subleased to Road Rescue, Inc./L.P. Gas Equipment, Inc. The Project would be financed by an industrial devel:opment revenue bond issue in the amount of $2,075,000 which would be underwritten by Miller & Schroeder Municipals, Inc. The lease would be for a term of thirty years with an option to purchase the building for 10% of the bond issue cost plus retirement of any outstandi.ng bonds. The Firm currently employs 58 ��inanciala �udgetarydand Personnel ImpactseAnticipate�ompletion of the project. Funding Source and Fund Activity Number Charged or Credited: Attachments (List and Number all Attachments)_ Staff Memorandum Draft City Council Resolution Port Authority Resolution No. UEPARTMENT REYIEW CITY ATTORNEY REVIEW X Yes No Council Resolution Required? Resolution Required? X Yes No . Yes � No Insurance Required? Insurance Sufficient? X Yes _ No Yes � No Insurance Attached? Revision of October, 1982 (See Reverse Side for Instructions) p�'.':., ..�`� . Cz2`Y OF S�.rrT�r I'�.ur� //�/�//�� -�'�� .`'.,'1'.y�,t��. V/ r� '� �:; � '�-;;, '�; OI+`Ir`ICIv OIn '.rFII: CITY COUI�CIL �,:f... �+'.Ra'•J'1�� ,t� . = �°';_'Q""`:-t-_ D d f e : June 14, 1984 E' , �s��. , j� r�:n��..,..� r`� � COMM (TTEE REPORT T0 = Saint Paul Cit� Councit F(� � � = C o rn t�i t t e e O h FINANCE, htANAGEMENT � PERSONNEL - ' � C l�A(R James Scheibel �. Approval of minutes from meeting held Jime 7, 1984 2. Resolution amending the 1982 Capital Improvement Budgets and transferring $25,000 from Snelling Avenue Signal-Selb to ' Hewitt to So. Lexington Parkway-Signal Revision. 3. Resolution approving additions to the 1984 budget and appropriating " $15,840 to the Financin a t�o the Spending Plans of Public Works Engineer's Office I 4. Resolution approving additions to the 1984 budget and appropriating - $2;859 to the Financing and to the Spending Plans of General Government - The Rand Study. ��I�� 5. Letter of the Mayor transmitting budget requests from the Citizen Participation Distri_cts for the period beginning July 1, 1984, and ending June 30, 1985.v�� - .� . � '�� ' - L'1 �"'�; _� �r �^�r";��r,�+-�. �� J �� '� v t�3C,lC Aj O� NOT ON PREPARED AGENDA: ��U-�--- «��`•` ! ' Resal��.,an rov' tlae. ,d��sale to finance t�e ui_sition . � �P �S . �, .. �i � o f th� t�Idir�g'a�C �133 ltanitin ��. ��'n u'� `sci��nt o£ �2,D76,000. ' Resolution approving a budget amendment transferring funds to cover a coTr�plete, comprehensive pay evaluation study. ....� � � . � / C ,/�� Y' l �l � �it, � � � . � .�---� � CITY HALL SEVENTH FLOOR SA1NI'PAUL, Ai1NNESOTA 55102 . .�,.�� ORT . � � �y-�i° � AUTHORITY OF THE ClTY OF ST. PAUL Memora�durn TO: gOARD OF COMMISSIONERS �A� May 15, 1984 (MEETING MAY 15, 1984) FROM: Donald G. Dunshee � SUBJECT:public flearing - Preliminary and Underwriting Agreement - $2,075,000 Revenue Bond Issue - Dorothy M. Huestis dba D.S.B. Realty, a Minnesota Partnership, subleased to Road Rescue, Inc./L. P. Gas Equipment, Inc. - Off-Site - Resolution No. 2280 Public Hearing - Creation of Industrial Development District - Dorothy M. Huestis dba D.S.B. Realtq, a Minnesota Partnership, subleased to Road Rescue, Inc./L. P. Gas Equipment, Inc. - Off-Site - Resolution No. 2281 Public Sale Hearing - Sale of Land - Dorothy M. Huestis dba D.S.B. Realty, a Minnesota Partnership, subleased to Road Rescue, Inc./L. P. Gas Equipment, Inc.- Off-Site - Resolution No. 2282 1. The Company In 1957 Bill and Dorothy Huestis started L. P. Gas Equipment, Inc. on Cleveland Avenue in St. Paul. They distributed equipment and products rela�ed to the propane industry. In 1976 the Metropolitan Transit . Commission purchased their building and they relocated to their present facility at 2161 University Avenue. A company that had previously rented space in the building called RV Industries had �ust gone out of the business of converting vans into commercial vehicles and ambulances. The Huestis's formed a new company called Road Rescue, Inc. to take over the van conversion business and they have expanded that business to the point that they had more than $3,000,000 in sales last year. The Firm presently occupies three separate buildings at University and Vandalia and because of increased business needs to find a larger, more efficient plant. 2. The Pro3ect The Company proposes to acquire and remodel the former ponaldson (Torit) manufacturing building located at 1133 Rankin Street in St. Paul. That facility contains 91,620 Sq. Ft. , has rail trackage and is situated on 6.03 acres. All of the existing L. P. Gas Equipment, Inc. and Road Rescue, Inc. operations would be transferred to the new site. The property would be purchased from Donaldson Company, Inc. for $1,707,000 with $256,000 to be spent for remodeling and improvements. An MAI appraisal was done on August 4, 1983, by American Appraisal Company which placed a value of $1,935,000 on the building. • �F �y- �/d BOARD OF COMMISSIONERS MAY 15, 1984 DOROTIiY M. HEUSTIS ET AL PAGE 2 3. Financing The proposed financing would be done as an 876 industrial development revenue bond issue with a 30—year term. Proceeds from the bond issue would be as follows: Building acquisition $1,707,000.00 Remodeling 256,000.00 Capitalized Interest (1 month) 24,750.00 Bond Issue Expense 25,000.00 Discount 62,250.OU Debt Service Reserve (Funded in Cash by Company) � The Partnership would be selling their existing building and upon the sale deposit in cash the debt service reserve. In the meantime the Port Authority would take a second mortgage on their existing structure which has an appraisal value of $1,000,000 and outstanding mortgages of $515,000. Besides the second mortgage, we would also require that a Letter of Credit be made available at closing for the debt service reserve in case the property did not sell. The Port Authoritq would receive earnings on the sinking fund as well as the customary fiscal and administrative fees based on a formula of .42X per million per year for the first ten years, .54% per million per year for the second ten years and .66X per million per year for the third ten years of the lease. 4. Underwriting � Miller and Schroeder Municipals has agreed to underwrite the bond issue with the interest rate to be set at the time the bonds are sold. We anticipate the bonds to sell in June and the issue to close around July 1. 5. Term of the Lease The lease would be for a term of thirty years to Dorothy M. Huestis dba D.S.B. Realty, a Minnesota Partnership, subleased to Road Rescue, Inc./L. P. Gas Equipment, Inc. with subleases running coterminous with the lease. The debt will be personally guaranteed by Dorothy M. Huestis and William D. Huestis. The Partnership would have an option to purchase the building for 10� of the bond issue cost plus retirement of any outstanding bonds. At the present time the two companies employ 58 people and they expect that employment to increase by 20 to 30 people within five years. . . � �y_ �io . BOARD OF COIrIlriISSIONERS � MAY 15, 1984 DOROTIiY M. HEUSTIS ET AL PAGE 3 6. Recommendation The Staff inet with the District 15 Council on Monday, May 14 and they unanimously endorsed the pro�ect. As part of the project it is necessary to create an industrial development district. Staff has interviewed members of the Partnership, reviewed their financial statements and recommends approval of Resolutions 2280, 2281 and 2282. sjs . . �� y_�� 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 Dorothy B. Huestis d/b/a D.S.B• �Realty Company, 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 four ponaldson (Torit) Manufacturing Building at 1133 Ranken (hereinafter collectively called the "Project" ) in the City of St. Paul, all as is more fully described in the staff report on file; and WI�REAS, 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 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 . 1�= 8y��° WHEREP,S, the Project to be financed by revenue bonds will result in substantial employment opportunities in the Project; v�i�iEREAS, the Authority has been advised by repre- sentatives of the Company that conventional, conunercial 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, but the Company has also advised this Authority that with the aid of revenue bond financing, and its resulting l�a borrowing cost, the Project is economically more I feasible; 1 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; 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 appear�, 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 Subdi.vision 1(a) of Section 474.02 of the Act; that the Project furthers the purposes stated in Section 474.01 of the Act, that the availability of the financing under the Act and willingness of the Authority to furnish such financing will be a substantial inducement to the Company to 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 2 . �= ��/D 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 in an amount not to exceed approximately $2,075,000 (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 Securities, 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 form of Preliminary Agreement between the Authority . and Company, relating to the proposed construction and financing of the PrQject and a form of the Underwriting Agreement. The form of said Agreements have been examined by � the Commissioners. Zt 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 Company may proceed without delay with the con�nnencement 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 3 _ � ��D 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 are 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 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) �f 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 Underwriters made by the Underwriters to purchase said bonds and to execute an underwriting agreement setting forth such offer on behalf of the Authority. Such acceptance shall bind the Underwriters 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 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 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. 4 , . . � �y �i o 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 t12e publication of notice of the hearing, are in all respects ratified and confirmed. J , , Adopted May 15, 1984 . Attest �� Presiden' The Port uthority of the City �� of Sain Paul �" �t��L' , �LU�'�dC ecreta 5 . . �-�� d EXHIBIT A Block 5, Palisade Addition, Ramsey County, Mianesota, lying southwesterly of Rankia Street being part of the Southwest Quart�r of Section 15, Township 28, Range 23, Ramseq County, Minnesota. Also including vacated Alley I, and Block 5 of Kentucky Terrace, Ramsey County, Minnesota, and in said Palisade Addition except for Lots 15 and 16, a11 of vacated Rockwood Avenue adjacent and part of vacated Springfield Street. Also, Lots 15 and 16 of said Palisade Addition. Also that part of Lots 15 and 16, Block 12, said Palisade Additioa lying northerly of the railroad right of way. , '� �! ��i�� ' �%' l I (' i/J�'.��=. WHITE - CI TY CIERK _ _ . . ... - ' _. .- _ _ . _ . ___-._-__ ._- PINK - FINANCE CANARV - DEPARTMEN7 CIZ.y O� SAINT PAUL CO�IQCII DLUE - MAVOR � File N 0. Co ncil Resolution �resented By ' � ,� Referred To Committee: Date Out of Committee By Date WHEREAS: 1. On May 15, 1984, the Port Authority of the City of Saint Paul adopted Resolution No. 228p giving preliminary approval to the issuance of industrial development revenue bonds in the initial principal amount of $2,075,000 to finance the acquistion and remodeling of the former ponaldson (Torit) manufacturing building located at 1133 Rankin ' Street in St. Paul, Minnesota for porothy M. Huestis dba D.S.B. Realt Partnership, subleased to Road Rescue Inc./L. Y, a Minnesota i � P. Gas Equipment, Inc. The bonds will be un erwriten by Miller & Schroeder Municipals, Inc. 2• Laws of Minnesota 1976, Chapter 234 � authorized by the Port Authority of the City�of rSaintsPault shallsbeeissuedvonly withsth consent of the City Council of the City of Saint Paul b �` with law; y resolution adopted in accordance E � 3. The Port Authority of the City of Saint Paul has requested � give its requisite consent pursuant to said law to facilitate the issuancehofCsaidCrevcil bonds by the Port Authority of the City of Saint Paul, subject to final a details of said issue by the Port Authority of the enue � pproval of the i City of Saint Paul. RESOLVED, by the City Council of the City of Saint Paul, that in accordance of Minnesota 1976, Chapter 234, the City Council hereby consents to the issua aforesaid revenue bonds for the purposes described in the aforesaid With Laws Resolution No. 2280 the exact details of which, including, but not limited to nce of the Port Authority relating to maturities, interest rates, discount, redemption, and for the issuance of additional bonds are to be determined by the Port Authorit ' PrOVisions adopted by the Port Authority, and the City Council herebyyauthorizes the rissuanceno additional bonds (including refunding bonds) b Authority to be necessary for carrying out theypurposestfortwhichytheoaforesaide Port any issued. bonda are COUNCILMEN . S Nays Requested��tment of: Fletcher Galles Masanz �� FBVOC Nicosia Scheibel Tedesco � Against By Wilson >ted by Council: Date Form Approved by City Attorney fied Passed by Council Secretary g � , y � ' {