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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 . � , . _ � � . . ����`��� ., 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 , � . . 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 . � . . . 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 ..� �+���`�,�.� �',f..,�'X �v., �����' t OFFIC� OF TH� CI'rY COIINCiL - k:,�,,.. ' '.. IZ '' ``'"��'��" 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 �..„