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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: , . � . �. ' ; ' ,, %,�J�; �; _. `i�;`:�; 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. ,, . • � �-�/��� , -- 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. . � - � ~ � _ : . _ ��-//.�-�=3 4v Resolution No. �3��— ___..__ 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 � . _ • ' . : /l� �(�-/.�..L`� (! ` _. 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 ' ` • � . . � �� �y- �3�� 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. � � ' � ' � _ (��/�i.�-�� 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 > . . _ - - - . 1���-i���� . 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 —_� , � � 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)