280354 WHITE - C�TV CLERK qy/ �(�!./�-►(',�
PINK - FINANCE COIIIICIl ��,�t.•- /�
CANARV - DEPARTMENT GITY OF SAINT PAUL File NO•
BLUE - MAVOR
, Co , ncil Resolution
Presented By
Referred To �K�� Committee: Date � —
Out of Committee By Date
WHEREAS:
l . On April 19, 1983, the Port Authority adopted Resolution No. 2119 giving
preliminary approval to the issuance of tax exempt revenue bonds in the amount of
approximately $3,105,000 for EAC Industries, Inc. (Ideal Security Hardware Corporation)
to finance the acquisition and remodeling of an existing building valued at approximately
$3,500,000 located at 45 E Maryland in St. Pau1. The bonds will be publicly sold with
the lead Underwriter being 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. 2119, 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 b Department of:
Yeas Nays �
Fletcher �
�ev�ne [n Favor
Masanz �
Nicosia
sche� _ __ Against BY '
i�Lilsoo_
Adopted by Council: Date — �� � 4 �� Form Approv y City Attorney
� �� ��
Certifie �ssed Council re�tary BY"� `'
, - c�—��a— ��
By, �
�.��P� 0 z l�((�r T
�1pp v by Mavor: Da e _��, a3 Approved by r for Su missio to Council
BY - - BY -1
G�
FUBLiSHED JUN 4 1983
,,PORT . �
L � . � � � �������
AUTHORITY
OF THE CITY OF ST. PAUL
Memorandum
TO: BOARD OF COMMISSIONE DATE: April 15, 1983
(MEETING APRIL 19, 1 83
FROM: Donald G. Dunshee
SUBJECT: EAC INDUSTRIES, INC - IDEAL SECURITY HARDWARE CORPORATION
PUBLIC HEARING - CREATION OF INDUSTRIAL DEVELOPMENT DISTRICT
RESOLUTION N0. 2120
PUBLIC HEARING - PRELIMINARY AND UNDERWRITING AGREEMENT
$3,105,000 876 REVENUE BOND ISSUE - OFF-SITE
RESOLUTION N0. 2119
PUBLIC SALE HEARING - SALE OF LAND
RESOLUTION N0. 2121
1 . The Company
EAC Industries, Inc. is a diversified manufacturing company that
produces hardware, home security products, electrical , electronic
and electro-mechanical equipment and graphic arts products. The
Company was organized in 1958 and its common stock is listed on
the American Stock Exchange. One of its subsidiaries, Ideal
Security Hardware Corporation is located in St. Paul and plans
to relocate their existing manufacturing operation into a 240,000
Sq. Ft. industrial complex at 45 E Maryland Avenue. This is
property currently owned by Standard Oil Company of Indiana and
was used as a manufacturing facility for their Amoco plastics
division. The buildings are situated on a 23 acre site served
by the Burlington Northern Railroad.
Ideal Security Hardware Corporation has operated an office and
manufacturing facility in St. Paul for more than 40 years. They are
a national manufacturer of high quality door locks and latches that
are distributed on a national and international basis. Ideal currently
operates out of three buildings, two of which they own and one they
lease near the intersections of Sibley and Ninth Streets.
2. The Project
The Company proposes to acquire the Standard Oil buildings and remodel
those buildings to permit them to relocate their entire manufacturing
operation. At the present time Ideal Security Hardware Corporation
is occupying more than 270,000 Sq. Ft. of space in St. Paul plus a
fourth building now located in Roseville whose product line wi11 be
moved into the new location.
� ' . .
BOARD OF COMMISSIONERS
EAC INDUSTRIES, INC.
APRIL 15, 1983
Page 2
Ideal currently owns a five-story plus basement office and manufacturing
facility at 215 E 9th Street which contains 80,088 Sq. Ft. They also own
a second building which is a six-story plus full basement warehouse located
at 236 E 9th Street. That building contains 65,060 Sq. Ft. In addition
to the two buildings they also own two parking lots at the intersection
of E 9th Street and Sibley Street which contain 18,755 Sq. Ft.
Mr. William Muske prepared an MAI appraisal on the property February 15,
1983 and established a current market value of $168,000 broken down as
follows:
Building 1 - 215 E 9th Street $ 580,000.00
Building 2 - 236 E 9th Street 440,000.00
Parking Lot 1 - 7,025 Sq. Ft. 56,000.00
Parking Lot 2 - 11 ,730 Sq. Ft. 92,000.00
$1 ,168,000.00
The City of St. Paul and the Lowertown Development Corporation have
identified the two existing Idea1 Security buildings as properties that
they wish to convert for housing use. The City will be submitting a
UDAG application this month to permit the City to purchase the two
buildings and two parking lots and develop the property for housing
use. Staff is asking for authorization to appropriate $1 ,150,000 from
the property sale and rental fund to purchase the two buildings and
two parking lots from the Company at bond closing. When the UDAG Grants
are approved we would be reimbursed for our appropriation. If the UDAG
Grants are not approved we would then work with the City to find a dev-
oper for the project so the buildings could be sold to the HRA and the
developer.
The Standard Oil property that Ideal would be moving into was appraised
by Johnson, Child, Martin and Associates, Inc. , an MAI appraiser, who on
March 25, 1981 , placed a value of $3,520,000 on the property.
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:
Plant acquisition, remodeling,
engineering & design fees $2,832,000
Bond issue expense 30,000
Capitalized interest - 6 months 150,000
Discount 93,000
$3,105,000
BOARD OF COMMISSIONERS
EAC INDUSTRIES, INC.
APRIL 15, 1983
Page 3
The debt service reserve would be funded by the Corporation in cash
or a letter of credit at bond closing. The Port Authority would
receive earnings on the sinking fund as well as the customary fiscal
and administrative 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 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 early July and the issue to close
around July 15, 1983.
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 and building for 10� of the
original bond issue cost at the end of the term or for 10� of the
original bond issue cost plus retirement of any outstanding bonds
at the end of the tenth or twentieth year.
6. Recommendation
Staff has interviewed officers of EAC Industries, Inc. and Ideal
Security Hardware Corporation, reviewed the financial statements
of the Corporation and reviewed the appraisals for the two buildings.
The Company currently employs approximately 240 people in St. Paul
and those jobs would all be relocated to the new facility which will
provide sufficient plant area to allow the Company to expand their
product line and increase employment.
On April 5 Staff and the Company met with the District 6 Planning
Council who unanimously passed a resolution approving and encouraging
the Port Authority to proceed with the project.
In order for the Port Authority to issue revenue bonds it is necessary
to create an industrial development district for the project.
Staff recommends approval of Resolutions 2119, 2120 and 2121 .
sjs
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,
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.,
Resolution No. ,�/ / �'
RESOLUTION OF
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
WHEREAS, the purpose of Chapter 474, i�Iinnesota
Statutes, knawn as the Minnesota Municipal Industrial DeveI.op-
ment Act (hereinafter called "Act") as found and detsrmined by
the legislature is to promote the welfare of the state by the
active attraction and encouragement and development of economi-
call� sound industry and comraerce to orevent so far as possible
the ernergence of blig�ited 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 rapi3ly rising increase in the amount and cost of
gover:unental services required to meet the needs of tlle
increased population and the need for development of land use ,
which will provid� an adequate tax base to finance these
increased costs and access to employment opp�rtunities for suc:z
��opulation; and
WHEREAS, The Port Authority of the City of Saint Paul
(the "Authority") has received from the Ideal Security Hardware
Corporation (hereinaft�r referred to as "Company" ) a request
that the Authority issue its revenue bonds to finance t'nz
acquisition and renovation of facilities curren�ly located at
45 Fast Maryland Avenue ('ner_einafter collectively called the
"Project" ) in the City of St. Paul for its use as an office and
manufacturing facility, all as is more fully described in the
staff report on file; and
� WHER�AS, in connection with its purchase of and
relocation to the Project, the Company has expressed a desire
to sell two buildings and two par]cing lots which it currently
occupies in the City of Saint Paul, at or near the intersection
of Sibl�y and Ninth Streets (the "Company Buildings" ) ; and
WHEREAS, the Authority desir�s to facilitate the
selective development of the community, to retain and improve
. its tax 'Aase and to help it provide the range of services an3
employment opportunities required by its population, and said
Project will assist the City in achieving that objective. Said
Praject will help to increase the assessed valuation of the
City anci help maintain a positive relationship between assessed
valuation and debt and en'nance the image and reputation of th e
City; and
WHEREAS, the Project to be financed by revenue bonds
will result in substantial employment opportunities in the
Project;
WHERLAS, the Authority has 'oeen advised by repre-
sentatives of the Company that conventional, commercial
tinancing to pay the capital cost of tiie Project is available
only on a limited 'vasis and at such 'nig'n costs of borrowing
t'nat t'ne 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 financa.ng, and its
resulting law borrowing cost, the Project is economically more
feasible;
tiVHER�AS, Mi11er & Schroeder Munica.pals, Inc. (the
"Underwriter") has made a propos�l in an agreement (the
"Underwriting Agreement" ) relating to the purchase of the
revenue bonds to be issued to finance the Project; ,
TnIHEREAS, the Autho.rity, pursuant to �iinnesota
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 pronosal of
the Company that the Authority finance the Project hereinbefore
described by the issuance of its industrial revenue bonds; and
'vJHERr:AS, the Authority did conduct a public hearing
pursuant to said notice, at whic'n hearing t'ne recortunendations
contained in the Authority' s staff inemorandum to tiie
Commi.ssioners were reviewed, and all persons who appeared at
the hearing were given an opportunity to express their views
with respect to tlze proposal; and
WHEREAS, the Authority has been notified by The
Housing and Redevelopment Authority, of the City of Saint Paul
(the "HRA" ) tht is is interested in converting tkie Company
Buildings to housing, and would like to work with the Authority
to find an appropriate develooer.
2
NOW, THEI2EFORE, BE IT RESOT�VED by the Commissioners
- of the Port Authority of the City of Saint Paul, i�iinnesota as
follows:
1. On the basis of info.rmation available to tlze
Authority it appears, and the Authority hereby finds, that said
Project constitutes properties, used or useful in connection
with one or mor� revenue producing enterprises engaged in any
busin�ss within the meaning of Subdivision la 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 willingne3s 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 Pmergence of blighted and marginal land, and
will help tc� nrevent chronic unemployment, and will help the
City to retain and improve its tax 'r�ase and provid� t�ie range
of services and employment opnortunities required by its
pooulation, and will help to prevent the movem�nt o£ tal�nted
and educated persons out of the state and to areas within the
state where their services rnay 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 t'ne City of Saint Paul and
in furtherance of the general plan of development to assist the
Company in financing the I?roject. •
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 excesd approximately $3,105,000 (other t'nan such
additional revenue bonds as are neede3 to comnle�te 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 Commi.ssioners which was presented to
the Commissioners, are incornorated herein by re�erence 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
3
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proposal for tiie above described Project to the Commissioner of
Energy Planning and Economic Development, requesting his
approval, and other ofFicers, employees and agents of tlze
AUTHORITY�are 'nereby 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 Agreexnent between t'ne Authority
and Company, relating to the proposed construction and
financing of t'ne Project and a form of the Underwriting
Agreement. The form of said Agreements have been examined by
the Commi.ssioners. It is the purpose of said Agreements to
evidence the commi.tment of the parties and their intentions
wit'n respect to the proposed Project in order that the Con�any
may proceed without delay with the commencement of the
acquisition, installation and construction of the Project with
the assurance t'nat there has been sufficient "official action"
under Section 103(U) of the Internal Revenue Code of 1954, as
amended, to allow for t'ne issuance of industrial revenue bon3s
(including, if deemed appropriate, any interim note or noLes 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 are authorized and '
directed to con•tinue negotiations with t'ne 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 t'ne issuance and
delivery of tne revenue bonds; pxovided 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 authori�ed 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 t� execute an
underwriting agreement setting forth suc'n offer on behalf of
the Authority. Such acceptance shall bind the Underwriters to
said offer Uut 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.
4
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6. The revenue bonds (including any interim note or
notes) and interest thereon shall not constitute an
indebtedness of the Authority or t'ne �ity of Saint Paul within
� the meaning of any constitutional or statutory limitation and
shall not constitute or give ris� to a pecuniary liability of
the Authority or the City or a charge aqainst t'neir general
credit o.r taxing powers and neither the full fait'n and credi-t
nor the taxing powers of the Auth�rity or the City is pledged
for t'ne 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 �linnesota, 1976,
Chapter 234, to the issuance of the revenue bonds (including
any interim note o.r notes) herein contemplated and any
additional bonds which the Authority may prior to issuance or
from time to time tiiereait�.r deem necessary to comnlete t'ne
Project or to refund suc1i revenue 'AOnds; and for suc'n 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-Prasident of
the Authority in causing public notice of the public hearing
and in descri'4ing the general nature of the Project and
estimating the principal amount of bonds to be issued to ,
finance t'ne Project and in preparing a draft of the proposed
apnlication to the Commissioner of Securities, State of
Minnesota, for approval o£ the Project, which has been
avaiZable 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.
9. The Authority hereby appropriates $1,150,000 from
the pronerty sale az�d rental fund to be used to purchase the
Company Buildings and staFf is authorized to continue to
negotiate with the HRA to fund an appro�riate developer for
those buildings .
Adopted April I9, 1983
,
C� ,
Attest �
Presi t
The P t Authority of the City
of Saint Paul
�., " �
% ;� -
�.:�_`- Secretary
5
� Honorable George Latimer
St.' Paul P'ort Authority DEPARTh1ENT � � " ' Mayor of the City of St. Paul
Donald G. Dunshee or ONTACT St? Pau1 ,HNiinnesota 55102
224-5686 PHONE
April 79, 1983 DATE re e � r "�� ► V v .
�i���
(Routing and Explanation Shee�:] .:
Assign Number for Routing Order (Clip All Locations for Ma�yoral Signature):
1 Department Director
2 City Attorney
3 Di rector of Management/Mayor ;��.,��,j��,�
4 Fi nance and Management Servi ces Di rector A�t� 2 5 I�$3
5 City Clerk
Budget Di rector ��"`�'���' '���1��
What 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
industrial building at 45 E Maryland, St. Paul , for EAC Industries, Ine. (Ideal Security
Hardware Corporation). The facility would be leased for a 30 year term with options to
purchase the building. The acquisition and remodeling would be financed by an industrial
development revenue bond issue in the amount of $3,105,000. The initial employment in the
facility will be 240 with the new facility having sufficient expansion room for the
employment to increase in the future.
Financial , Budgetary and Personnel Impacts Anticipated:
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. 2119
DEPAI2TMENT 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
(See Reverse Side for 'Instructions)
��''�°`_ �� � CITY OP` SAINT P11UL
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�',f..,�'X �v.,
�����' t OFFIC� OF TH� CI'rY COIINCiL
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'' ``'"��'��" D Q t e ; May k'S, 1983
.
��.
� COM�M (TT � E . RE PORT
T� = Sa�nt Pqu l City Counci 1
F R O M = C o rn m i t t e e O h F�NANCE, MANAGEMENT F, PERSONAL
CM A I R James Scheibel
1. Approval of minutes from meeting held May 5, 1983.
2. Resolution revising the class s ecs for the title of Veh' �G_
� Supervisor. (Personal) � �� ��^ � �� ��
3. Resoli�tion approving a Memorandum of Agreement between the City of St. Paul
and Carpenters District Council. (Personnel) !4 pproved
4. Resolution establishing new title and class specs for Extension Services
Supervisor. (Personnel) �-pproved.
S. Resolution establishing .title and class specs for Microcomputer Repairperson.
(Personnel) ��}�� D�JF�
6. Resolution amending Salary Plan and Rates of Compensation for Aficrocomputer
Repairperson. (Personnel) Lj� (� �U�I�
7. Resolution authorizing an agreement with Ramsey County whereby the City will
furnish health supervision services to individuals in their homes as requested
with reimbursement from the County. (Community Services) �-�(��''QVE'� ,
8. Resolution authorizing an agreement with HUD whereby HUD will grant monies in
the furtherance of a study concerning innovations and public service financing.
(Finance) �}p�roved
9. Resolutian authorizing amendments to the 1983 General Revenue Fund Budget as
outlined on the resolution. (Budget Director's Office) �.��rp Ve�
10. Resolution approving the issuance of revenue bonds to finance conversion of
heating systems to the District Heating System. (PED) �-��V"Q U�Q�
l�. Resolution approving issuance of taz exempt revenue bonds for acquisition and
remodeling of EAC Industries, Inc. (PED) �prov,ed,
CITY :-iALL � SEVENTH FLOOR SAINT PAUL, MINNFSOTA 55102
�..„