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84-1340 WHITE - CITV CLERK PINK - FINANCE G I TY OF SA I NT PALT L Council CANARV - DEPARTMENT File NO. �'y- �3�� BLUE - MAYOR 1 � � Co nci .Resolution Presented By � Referred To Committee: Date Out of Committee By Date 1. On September 18, 1984, the Port Authority of the City of Saint Paul adopted Resolution No. 2347 giving preliminary approval to the issuance of industrial development revenue bonds in the initial principal amount of $2,900,000.00 to finance the acquisition, remodeling and expansion of the former Gateway Truck Terminal at 2230 Kasota Avenue in St. Paul, Minnesota for Boundary View III. 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. 2347 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 �e�F�a�,s � N � �� Drew [n Favor Masanz Nicosia B � , c�;�� � Scheibei _ Against Y �-����� ���'—' Tedesco Wilson Adopted by Council: Date D�I - 2 1984 Form Approved by City Attorney Certified Pa.s d y nc.'1 Se tary BY' �'��C1�- �"�' , By . � Approved by Mavor: Date _ �CT — � �qR� Approved y May r for 'ssion to Council By _ PttBLISHED OCT 13 1984 , • �d'Sl/�'i10,.. St. Paul Port Ruthori ty EPARTt,1ENT ''� r�� : r�� ee or �ONTACT 224-5686 PHONE . Se�tem�er i, 1�E4 DATE �v�� �� � (Routing and Explanation Sheet) Assign Number for Routing Order (Clip All Locations for Mayoral Signature�_:_ � Department Director � � City Attorney � � Girector of Management/Mayor EC��vE� R RF 4 Fi nance and Management Servi ces Di rector SEP Z '� '19�4 S, CF/� 5 Ci ty C1 erk F�° FO _ B� ' c or Mp,YOR'S QFFICEC/hI �� ,�� �rA�lO '�N�y �Jhat Will be Achieved by Taking Action on the Attached Materials? (Purpose/Rationale): The purpose of the bond issue is to finance the acqui,sition, remodelang and expansion of the former Gateway Truck Terminal at 2230 Kasota Avenue in St. Paul for Boundary `View III. The facility would be subleased to Knox Lumber Company for use as- a corporate office and warehouse. The Partnership (Boundary lliew III) will be adding 30,000 Sq. Ft. of office and 12,000 Sq. Ft. of warehouse to the existing building which naw c�ntains 57,000 Sq. Ft. The Company presently employs 125 people and the expansion would incrEase tMat number by 25. Financial , �udgetary and Personnel Impacts Anticipated: Funding Source and Fund Activity Nurr�er Charged or Credited: Attachments (List and Number all Attachments) : Staff Memorandum Draft City Council Resolution Port Authority Resolution No. 2347 UEPARTMENT REVIEW CITY ATTORNEY REVIEW X Yes No Council Resolution Required? Resolution Required? X Yes No Yes X No Insurance Required? Insurance Sufficient? X Yes _ No Yes X No Insurance Attached? Revision of October, 1982 (�ee Reverse Side for Instructions) . � ��_�//--i��� PORT AUTHORITY OF THE CITY OF SAINT PAUL 25 WEST FOURTH STREET • SUITE 1305 • ST. PAUL, M1NN. 55102 • PHONE (612) 224-5686 September 18, 1984 Mr. James Bellus Director Planning and Economic Development Department City of St. Paul 14th Floor, City Hall Annex St. Paul, Minnesota 55102 SUBJECT: BOUNDARY VIEW III $2,900,000.00 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 af a $2,900,000.00 revenue bond issue to finance the acquisition, remodeling and expansion of the former Gateway Truck Terminal at 2230 Kasota Avenue in St. Paul, Minnesota for Boundary View III. The facility would be subleased to Knox Lumber Company for use as a corporate office and warehouse. 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. 2347 which authorized the sale of industrial development revenue bonds in the amount of $2,900,000.00. Your expeditious handling of this matter will be appreciated. T�Yours truly, i � � � ; �ugene A. Kraut Executive Vice President EAK:DGD:sjs cc. Mayor Latimer BERT F. SPRAFKA EUGENE A I(RAUT,C.I.D. DONAID G. DUNSHEE, C.I.D. CLIFFORD E. RAMSTED PERRY K FEDERS :UINE VICE PRESIDEM GENERALMANAGERANO DIRECTOR.INDUSTRIAL DEVELOPMENT CHIEF ENGINEER DIRECTOROFRNANCE ASST.EXEC.VICE PRESIDEM �MMISSIONERS GEORGE W.WINTER WIWAM WILSON ARTHUR N. GOODMAN VICTOR P. REIM JEAN M. WEST CHRIS NICOSIA WILLIAM J. SEIFERT PRESIDENT V10E PRESIDEM �REfAR1' TREASURER C.I.D. Certified Industrial Developer !� O R T � G�� ��%�y° � AU � HORITY OF THE CITY OF ST. PAUL Memorandum TO: gOARD OF COMMISSIONERS DATE:Sept. 14, 1984 ,. (Meeting September 18, 1984) FROM: Donald G. Dunshee SUBJECT: Public Hearing - Preliminary and Underwriting Agreement ' Boundary View III $2,900,000.00 Revenue Bond Issue 2230 Kasota Avenue Resolution No. 2347 Public Sale Hearing - Sale of Land - Boundary View III Resolution No. 2349 � Public Hearing - Creation of Industrial Development District Boundary View III Resolution No. 2348 1. The Company Boundary View III is a partnership consisting of Mr. Gunther Schaaf and Mr. Theodore C. Johnson who plan to acquire, remodel and expand the former Gateway Truck Terminal at 2230 Kasota Avenue. The facility would be subleased to Knox Lumber Company as a corporate office and warehouse for a five year term with a five year option. 2. The Project The existing building contains 57,000 Sq. Ft. of office and warehouse space and the Partnership proposes to add a 30,000 Sq. Ft. office addition and 12,000 Sq. Ft. of warehouse. Knox Lumber Company is presently located at 801 Transfer Road, occupies 68,000 Sq. Ft. in that plant and will be utilizing the entire 99,000 Sq. Ft. building. The Company presently employs 125 people and projects that when the remodeling and expansion has been completed, they will add an additional 25 employees. Knox does not have sufficient land area for expansion at their present location and had originally contemplated a transfer of all of the warehouse operations to Dakota County and leaving only 10,000 Sq. Ft. of office space in the Midway. This project will permit the Company to remain in St. Paul. , � @� �y�3ya 1 Boundary View III Board Memorandum September 14, 1984 Page 2 3. Financing The proposed financing 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: Acquisition $ 900,000.00 Expansion and Remodeling 1,733,000.00 Bond Issue Expense 30,000.00 Capitalized Interest During Construction 10 1/4%(6 Months) 150,000.00 Debt Service Reserve (Funded in Cash By Company—$315,000) Discount 87,000.00 $2,900,000.00 The Port Authority would receive earnings on the sinking fund as well as the customary fiscal and administrative fees based on a formula of .42y 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. Mr. Gunther Schaaf and Mr. Theodore C. Johnson will be personally guaranteeing the bond issue. They will be fundfng the debt service reserve in cash at closing. It is estimated that amount would be $315,000.00. William Muske has recently appraised the property and has placed a current market value of $930,000 on it. He has projected that after the expansion and improvements have been completed, the property will have a market value of $2,900,000. 4. Underwriting Miller & Schroeder Municipals, Inc. had 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 will sell at the regular October, 1984 Commission meeting. . . f��- �'y—�3yo Boundary View III Board Memorandum ` September 4, 1984 Page 3 S. Terms of the Lease ' The term of the lease would be for 30 years with the Corporation having an option to purchase the building for l0y of the original bond issue cost at the end of the term. 6. Recommendation The Partnership and Staff inet with the District 12 Council on August 2 and they supported the project by a unanimous vote. Staff has interviewed the Partnership, reviewed their financial statements and recommends approval of the Preliminary and Underwriting Agreements and the Creation of an Industrial Development District by Resolutions 2347, 2348 and 2349. sjs � , . _ � ����.��'v Resolution No. � RESOLUTION OF _ THE PORT AUTHORITY OF THE CITY OF SAINT PAUL WHEREAS, the purpose of Chapter 474, Minnesota Statutes, knawn as the Minnesota Municipal Industrial Develop- ment Act (hereinafter called "Act" ) as found and determ=ned by the legislature is to promote the welfare of the� state by the active attraction and encouragement and development af 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 o£ 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 Boundary View III, a Minnesota partnership consisting of Gunther Schaaf and Theodore Johnson (hereinafter referred to as "Company" ) a request that the Authority issue its revenue bonds to finance the acquisition of the Former Gateway Truck Terminal facility at 2230 Kasota Avenue in the City of St. Paul and the remodeling • and expansion of that facility for lease to Knox Lumber Company (hereinafter collectively called the "Project") 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 . - ��s�i��� � 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 in the Project; WHEREAS, the Authority has been advised by repre- sentatives of the Company that conventional, commercial financing to pay the capital cost of the Project is available only on a limited basis and at such high costs of borrawing that the economic feasibility of operating the Project would be significantly reduced, but the Company has also advised this Authority that but for revenue bond financing, and its resulting low borrowing cost, the Project would not be undertaken; WHEREAS, Miller & Schroeder Municipals, Inc. (the "Undezwriter" ) 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 Coimnissioners � 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 2 . , - �,� �y��'y� � business within the meaning of Subdivision 1(a) of Section 474.02 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 Qroject, if undertaken, will be to encourage the develop- ment of economically sound industry and coimnerce 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 t:�e best interests of the port district and the people of tr.e 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 $2,900,000 (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 Co�nissioner with such preliminary information as he may require. 3 , � �� /�y� . 4. There has heretofore been filed with the Authority a form of Preliminary Agreement between the Au�hority and Company, relating to the proposed construction and financing of the Project and a form of the Underwriting Agreement. The form of said Agreements have been examined by the Commissioners. 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 allaw 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 Presidpnt 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) 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 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 4 � � ����y��6 R 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 pawers and neither the full faith and credit nor the taxing pawers 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 ssid 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. / � i � Adopted September 18, 1984 ` , j � / Attest ' �� ��� : Pres�d=ntJ �, �' The Port A� hority of the City � of Saint Praul .� ,�/ , i��sz��i�c� �' ecretary 5