84-1323 WHITE - CITV CLERK
PINK - FINANCE GITY OF SAINT PALTL Council / � �j
CANARV - DEPARTMENT File NO.� �j >��
BLUE - MAVOR �
�
^ `Co n � Resolution
Presented By
, � ^
V Re e To �� C Committee: Date �
Out of Committee By Date
WHEREAS:
1. On August 21, 1984 the Port Authority of the City of Saint Paul adopted
Resolution No. 2322 giving preliminary approval to the issuance of revenue bonds in the
initial principal amount of $1,325,000 to finance the construction of a 25,000 square foot
office, warehouse and distribution facility in Energy Park for P.M. Properties, Inc. , a
partner&hip composed o£ principal $t�e�c:�alders _of_.Craighead & Associates, Inc. The
project will be subleased to Craighead & Assa�iates dba Power/Mation. , The bonds will be
underwritten �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, 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. 2322 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 by Department of:
Yeas Nay �
�� ��y�� �,�
°feN1 In Favor
Masanz
scheibel � __ Against BY c' J� �`� �^' Ir2 �—�L'�
Tedesco
�Alilaa�
Adopted by Council: Date SEP 2 7 1984 Form Approved by City Attorney
Certified Pa. -e b Council S ret r BY-� -'�����- d- ( � �"�`�'��
Bl, , � 3 � �y
F1pp by 1�lavor: D e �r'� — � 19�'t qpproved b May for 'on to Council
By
PUSLISHfQ QGT � 19
;— + - I � . . , . �" �'�l�,� �3
St. Paul Por � �
t Authori t_v DEPARTI,IENT
C.M. Towle,__E.A. Kraut rONTACT
224-5686 PHONE � � � '
August 22, 1984 DATE ��/�
' (Routing and Explanation Sheet)
Assi n Number for Routin Order Cli All Locations al Si nature :
Department Di rector ✓ A�� 3 1 1984
S F P 1984
2 Ci ty Attorney OFFIC� OF T E i,z�_CTOR CITY ATrORNEY
3 Girector of Management/Mayor o�PAr;�rr��EN �F F--;�q�,,rE
� AND MANAG� ��N r 5tk����s
Finance and Management Services Director
5 City Clerk
Budget Director P•M. PROPERTIES INC./CRAIGHEAD & ASSOCIATES
dba POWERJMATION
$1 ,325,000 REVENUE BOND ISSUE
t�hat Will be Achieved by iaking Action on the Attached Materials? (Purpose/Rationale):
The purpose of the bond issue is to finance the construction of a 25,000 square foot
office, warehouse and distribution facility in Energy Park for P.M. Properties, Inc„
a partnership composed of principal stockholders of Craighe�d & Associates, Inc. The
project wiTl be subleased to Craighead & Associates dba Power/Mation. Power/Mation is
a manufacturer's representative for a wide variety of electronic and electromechanically
controlled devices. They also wareMouse, distribute & dQ 1tght assemb7y work of these
products.
Financial , �udgetary and Personnel Impacts Anticipated:
The amou►1t of the bond issue is $1 ,325,000 and will be for a term of 30 years. The
project will create approximately 16 new jobs in addition to the 51 existing jobs.
Funding Source and Fund Activity Nur�er Charged or Credited:
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Attachments (List and Number all Attachments) :
1 . Staff inemorandum' �
2. Draft City Gouncil Resotution �
3. Port Authority Resolution No. 2322
cc. D. Thorpe
UEPARTMENT REVIEW CITY ATTORNEY REVIEW
X Yes No Council Resolution Required? Resolution Required? X Yes No
Yes X No Insurance RequiredF Insurance Sufficient? X Yes _ No
Yes X No Insurance Attached?
Revision of October, 1982
(See Reverse Side for Instructions)
� O R T � , . �=�y-i.���
' AUTHORITY -
OF THE CITY OF ST. PAUL
Memorandun�
TO: BOARD OF COMMISSIONERS pqj[�ug. 15, 1984
(Aug. 21, 1984 Regu]_ar Meetiag)
FROM: C.M. Tow �
SUBJECT:PUBLIC HEARING — PRELIMINARY & UNDEBWRITING AGREEMENTS
P.M. PROPERTIES, INC.
SUBLEASE TO CRAIGHEAD & ASSOCIATES dba POWER/MATION DIV.
$1,325,000 REVENUE BOND ISSUE
ST. PAUL ENEBGY PARK
RESOLUTION N0. 2322
PUBLIC SALE IiEARING — SALE OF LAND — P.M. PROPERTIES, INC.
RESOLUTION N0. 2323
1. THE COMPANY
The Power/Mation Division of Craighead & Associates, Inc. is a
manufacturer's representative for a wide variety of electronic and
electromechanically controlled devices. Theq also warehouse,
distribute and do light assembly work of these products. The company
started in St. Paul in 1961, moved to Minneapolis in 1963 and have been
at their current location in St. Paul since 1973.
Their principal customers are 3M, Honeywell, General Mills, Kimberly
Clark and others with no one account generating more than lOX of their
sales.
2. THE PROJECT
P.M. Properties, Inc. will be a partnership composed of principal
stockholders of Craighead & Associates, Inc. , and the partnership will
personally guarantee the issue. They plan to construct a 25,000 square
foot office, warehouse and distribution facility on a 75,000 square
foot site in Energy Park immediately south and west of Litho
S�pecialtiies, Inc. and Bandana Square.
The Port Authority will lease them a site of 75,000 square feet at a
rate of $1.50 per square foot plus 10% interest for a 30—year term.
The annual rent would be $11,513, or $959.48 per month, starting one
year after occupancy.
At the present time, the company employs 75 people with 50 employed at
their current location. The would expect an employment increase of 10
people within the first several years and smaller increases in years to
come. They have agreed to sign the First Source Employment and
Training Agreement.
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BOARD OF COMMISSIONERS
- Aug. 15, 1984
Page —2—
3. FINANCING
The proposed finaaciag would be done as an 876 industrial development
revenue bond issue for a 30—year term. Proceeds from the bond issue
would be as follows:
Building $ 975,000
Bond Issuance Expense 25,000
Capitalized Interest — One Year 139,000
Debt Service Reserve 146,000
Underwriter's Discount 40,000
TOTAI. BOND ISSUE $1,325,000
The Port Authority would receive earnings on the debt service reserve
after the fifth year with full earnings on the sinking fund as well as
the customary fiscal and administrative fees based oa a formula of .42%
per million per year for the first ten years, .54X per million per year
for the second ten years and .66X per millioa per year for the third
ten years of the lease.
4. UNDERWRITING
Miller & Schroeder Municipals, Inc. has agreed to underwrite the 30—
year bond issue at an interest rate to be set the date the bonds are
sold. We anticipate the bonds would be sold at the regular September
Commission meeting.
5. TERMS OF THE LEASE
The term of the lease would be for 30 years with the company having an
option to purchase the land for one—half the original cost at the end
of the term and ten and twenty—year options to acquire the building for
lOX of the original bond issue cost plus retirement of outstanding
bonds and lOX of the original bond issue at the end.
6. RECOMMENDATIONS
The company and staff inet with Council 46 on June 11 and they endorsed
the pro3ect by unanimous vote. Staff has interviewed officers of the
Power/Mation Division of Craighead & Associates, reviewed their
financial statements and recommends approval of Resolution Nos. 2322
and 2323 .
CMT:ca
Attach.
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4v
Resolution No. �3��—
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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 c►evelognent of economi-
cally sound industry and commerce to prevent so far as possible
the emergence of blighted and marginal lands and areas of
chronic une�tployment and to aid in the development of existing
areas of blight, i:iarginal land and persistent unemployment; and
WHEREAS, factors necessitating the active promotion
and developr�►ent of economically sound industry and canmerce are
the increasing concentration of population in the metropolitan
areas and the rapidly rising increase in the amount and cost of
goverrimental 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
pupulation; and
WHEREAS, The Port Authority of the City of Saint Paul
(the "Authority") has received from P. M. Properties
(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 25,000 square foot office, warehouse and
distribution facility (hereinafter collectively called the
"Project") in Energy Park in the City of St. Paul, which
Project will be leased to the Power/Mation Division of
Craighead & Associates, all as is more fully described in the
staff report on file; and
WHEREAS, the Authority desires to facilitate the
selective develo�cnent 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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P=oject will assist the City in achieving that objective. Said
Project wi.11 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 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 limi.ted basis and at such -high costs of borrowing
that the economic feasibility of operating tYte Project would be
significantly reduced, but the Company has also advised this
Authority that but for the aid of revenue bond financing, and
its resulting law borrowing cost, the Project would not be
undertaken;
tiVHEREAS, Miller & Schroeder Municipals, Inc. (the
"Underwriter") has made a proposal in an agreement (the
"UndeYwriting Agreement"-) relating to the purchase of the
revenue bonds to be issued to finance the �roject;
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 recoanmendations
contained in the Authority' s staff inemorandum to the
Coanmi.ssioners were reviewed, and all persons who appeared at
the hearing were given an opportunity to express their views
with respect to the proposal.
NO��, THEREFORE, BE IT RESOLVFD by the Commissioners
of the Port Authority o€ the City of Saint Paul, t�ii.nnesota as
follows:
1. 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 1 of Section 474.02
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of the Act; that the Project furthers the purposes stated in
- Section 474.01 of the Act, that but for the availability of the
financing under the Act and 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 develognent 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 preve�nt the movement of taler}�ed
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 develoFxnent 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 doc�nents 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 $1, 325,000 (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 inenwrandum 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, Pti.nnesota Statutes, the Executive Vice-President of the
AUTHORITY is hereby authorized and directed to submit the
proposal for the above described Project to the Co�nr.iissioner of
r^.nergy and Economi.c 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.
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4. There has heretofore been filed r�ith the
_ Authority a form of Preliminary Agreement between the Authority
and Compa�, relating to the proposed construction and
financing of the Project and a form of the Underwriting
Agreeaaent. The form of said Agreements have been examined by
the Cosnmissioners. 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 Company
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 temporaxy financing thereof) to finance the entire cost
of the Project upon agreement being reached as to the ultimate
details of the P=oject-_ 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 Secretaxy 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 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 'Jnderwriters 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 t'ne 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
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credit or taxing pawers and neither the full faith and credit
nor the ta�cing powers of the Authority or the City is pledged
_ for the payment of the bonds (and interim note or notes) or
interest thereon.
�• In order to facilitate completion of the revenue
bond financing herein conternplated, 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 de�n 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 fo�aard to the City Council copies
of this resolution and said Preliminary Agreement and any
additional availabie 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
estirnating the principal amount of bonds to be issued to
finance the Project and in preparing a draft of the proposed
aphlication to the Comntis-sioner of Energy and Fconomic Develop-
ment, State of Minnesota, for approval of the Project, which '
has been available for inspection by the public at the office
of the Authority fram and after the publication of notice of
the hearing, are in all respects ratified and confirmed.
Adopted August 21, 1994
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Attest � � ',, ��
/,/: Pre
�
, The Port uthority of the City
�j �� of Sain Paul
'��iL tG�� � � ��s�' , ..
� �- 1��u'��;
- Secretary -
, ' , � �' c%,�c�����
Finance Committee Agenda
September 20, I984
Page 2
9. Resolution consenting to the issuance of Port Authority Revenue bonds in the
amount of $4,750,000 to finance the construction of an 80,000 square foot cooler
and freezer facility in Riverview Industrial Park for GRL Cold Storage.
10. Resolution consenting to the issuance of Port Authority Revenue bonds in the
amount of $1,100,000 to finance leasehold improvements at 450 N. Syndicate for
the C. Angus Wurtele, Clarkson Lindley � Mary iVurtele Vaughan Trusts.
11. Resolution consenting to the issuance of Port Authority Revenue bonds in the
ramount of $1,325,000 to finance the construction of a 25,000 sq. ft. office, .
-warehouse and distribution facility in Energy Park for P.M. Properties, Inc.
�'to be subleased to Craighead F� Associates, Inc. dba Power/Mation:
12. Resolution consenting to the issuance of Port Authority Revenue bonds in the amount
of �5,000,000 to finance the construction of a 72, 170 sq. ft. building in Energy
Park for Partnership Technology, Inc. , a subsidiary of 6Vinfield Developments, Inc.
13. Resolution consenting to the issuance of Port Authority Revenue bonds in the amount
of 5600, 000 to finance the construction of a 2,500 sq. ft. truck and garage rep air
facility and a 2, 100 sq. ft. crooler addition to the building at 370 University A�re.
for Old Home Foods, Inc.
14. Resolution consenting to the issuance of Port Authority Revenue bonds in the amount
of �1,000,000 to finance the rehabilitation of an existing 90,000 sq. ft. facility
at 800 Hampden in St. Paul and to expand it by 40,000 sq: ft. for Roger Greenberg
dba Bro-Tex, Inc.
15. Resolution consenting to the issuance of Port Authority Revenue bonds in the amount
o£ $1,400,000 to finance the construction of a 40,000 sq. ft. warehouse addition
to the building at 403 Fillmore Avenue East in Riverview Industrial Park for Kaplan
Paper Box Co. , Inc.
16. Ordinance amending Sections 34.K F� 34. L in the Civil Service Rules by establishing
the classification Associate Director of Personnel in the Unclassified Ser;�ice.
(Personnel)
17. Resolution amending the Salary Plan and Rates of Compensation Resolution regarding
the Associate Director of Personnel classification. (Personnel)
18. Resolution revising the class specification for �Vater Laborer in the Civil Service
Rules. (Personnel)
19. Resolution approving 1984-1985 Agreemenr betiveen the ISD #625 and the Teamsters
Local 320 representing Food Service Personnel. (Personnel)
20. Ordinance amending Chapter 183 of the St. Paul Legislative Code and pertaining to
the set-aside program Prohibiting acts regarding the same, and vesting investigative
responsibilities in the Human Rights Department ►aith respect to the set-aside program.
21. Issuance of Industrial Revenue Bonds for Continental Safety Building. (PED)