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280460 WHITE - CI7V CLERK COUIICII �������� PINK - FINANCE GITY OF SAINT PAUL CANARV - DEPARTMENT BLUE - MAVOR File NO. � .Cguncil Resolution Presented By �i�✓ ll��� Referred To Committee: Date Out of Committee By Date WHEREAS: 1 . On June 2, 1983, the Port Authority adopted Resolution No. 2149 giving preliminary approval to the issuance of industrial development revenue bonds in the amount of approximately $2,000,000 for Heartland Press Inc. to finance the acquisition and remodeling of an existing building valued at approximately $1 ,600',000 located at 274 Fillmore Avenue East in Riverview Industrial Park. 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. 2149, 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 Yeas Nays Requested b De rtment of: Fletcher � �e��ne [n Favor Masanz Nicosia Scheibel _ � __ A gai ns t BY Tedesco Wilson Adopted by Council: Date — ,lUN 9 1983 Form Appro ed by City Attorney Certified P _se Council cre � B '-���+ '��� b� �� B � r l�1pp e y ;Vlavor. Dat _ JU� � O A p v d by-M�e�ror for S is :io`f5 to Council � y� - — „ � PUBLISNED J Uf� 1� 1983 ,� !� O R T . . . ���3{�4b(� ' AUTHORITY OF THE CITY OF ST. PAUL Memorandum TO: BOARD OF COMMISSIONERS DATE: May 31 , 1983 (Special Meeting June���1983) i_ �; �� \ FROM: Dona'�d G. Dunshee � SUBJECT: HEARTLAND PRESS, INC. SUBSIDIARY OF COLWELL/GENERAL PUBLIC HEARING - PRELIMINARY AND UNDERWRITING AGREEMENT $1 ,600,000 REVENUE BOND ISSUE - RIVERVIEW INDUSTRIAL PARK RESOLUTION N0. 2149 . PUBLIC SALE HEARING - SALE OF LAND RESOLUTION N0. 2150 1 . The Company Heartland Press, Inc. is a wholly owned subsidiary of Colwell/General . The Company operates ten commercial printing plants throughout the Midwest and West Coast and has been in business since 1920. They wish to purchase the North Central Publishing Company business and plant in Riverview Industrial Park and move one of their existing Minneapolis printing operations into the St. Paul facility. 2. The Project The North Central Publishing Company building contains 50,434 Sq. Ft. and is situated on a 150,000 Sq. Ft. parcel in Riverview Industrial Park. The Company entered into a land lease in May, 1965, and constructed the plant with private financing. On March 17, 1981 , an MAI appraisal was done on the land and building by Newcombe & Hansen Appraisals, Inc. of Minneapolis. They established a market value of $1 ,600,000. In addition to purchasing the facility the Company would spend approximately $200,000 in remodeling and improvements to the structure. 3. Financing The proposed financing would be done as an 876 industrial development revenue bond issue with a thirty year term. Proceeds from the bond issue would be as follows: Plant acquisition $1 ,327,000 Remodeling 200,000 Bond issue expense 25,000 Debt service reserve (Letter of Credit) Discount 48,000 $1 ,600,000 ,` . . �����b l� I HEARTLAND PRESS, INC. SPECIAL BOARD MEETING JUNE 2 - MAY 31 , 1983 PAGE 2 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 at the regular June 21 Commission Meeting and the issue would close early in July. 5. Terms of the Lease The term of the lease would be for thirty years with the Company having an option to purchase the 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. At the time the Port Authority entered into the thirty year land lease with The North Central Publishing Company they were provided with an option to purchase for the first five years of the lease with that option expiring in 1970. We recommend that Heartland Press, Inc. be given an option to purchase the land at the end of the current bond issue term for the same option price as The North Central Publishing Company had in 1970. This option price is $93,750 based on a per square foot cost of $.62 1/2 per square foot. The current monthly rent of $537.18 will continue until 2013. In addition to the Port Authority receiving fiscal and administrative fees and sinking fund earnings for the next thirty years we will also be receiving an additional eighteen years of land rent plus option to purchase monies for the land and building. 6. Recommendation Staff has interviewed officers of the Corporation, reviewed their financial statements and the appraisal on the building. At the present time Colwell/ General and Colwell Industries, Inc. . are two separate corporations. Mr. Tom Colwell , Chariman of the Board and Chief Executive Officer plans to merge the two companies by Ju1y l , 1983 providing even a stronger corporate structure. Staff recommends approval of Resolution Numbers 2149 and 2150. sjs y �8t�4b�� Resolution No. •�'-- ; RESOLUTION OF THE PORT AUTHORITY OF THE CITY OF SAINT PAUL WHEREAS, the purpose of Chapter 474, Minnesota Statutes, known as the P4innesota 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 development of 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 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 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 W�iEREAS, The Port Authority of the City of Saint Paul (the "Authority") has received from Heartland Press, Inc. (hereinafter referred to as "Company" ) a request that the Authority issue its revenue bonds to finance the acquisition and renovation of an existing printing facility (hereinafter collectively called the "Project") located at '.� ;%�=�� `:' c;', in the City of St. Paul, all as is more fully described in the staff report on file; and 'v�HEREAS, 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 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 reput3tion of the City; and . . ��f���4� 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 avaiTable only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, but the Company has also advised the Authority that with the aid of revenue borid financing, and its resulting low borrowing cost, the Project is economically more feasible; WHEREAS, Miller & Schroeder Municipals, Inc. (the "Underwriter") 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; WFiEREAS, 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 res�ect to the proposal. NOW, THEREFORE, BE IT RESOLVED by the Commissioners . of the Port Authority of the City of Saint Paul, Minnesota 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 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 willingness 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 emergence of blighted and marginal land, and 2 y ����.� 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 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 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 $1, 600,000 (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 Securities, 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. 4. There has heretofore been filed with the Authority a form of Preliminary Agreement between the Authority and Company, relating to the proposed acquisition, 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 comrnencement 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 3 . . r ����:� 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 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 l, 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 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 powers and neither the full faith and credit nor the taxing powers 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 said Preliminary Agreement and any additional available information the City Council may request. 4 � �� +����t� � � . 8. The actions of the Executive Vice-President of the Authority in causing public notice of the public Mearing 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 Securities, 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. Adopted June 2, 1983 �,%� � ; � %) L%� / /� i � �' 1 �� ,� �,� �� � Attest �. � �� , � _.�� �� Pre ' ` The Port Authority of the City of Sair�t Paul �; ;; � / 'j' � � 4 _ ,< Secretary ,- � � 5 St. Paul Port Autharity pEPART(,1EaT ��� Donald G. Dunshee or r.ONTACT Ea�gett " ' . 224-5686 PHONE �I'1 �� June 2, 1983 DATE ree � �� . (Routing and Explanation Sheet) Assign Number for Routing Order (Clip All Locations for Mayoral Signature): RECEIVED �Department Di rector JU PJ b� 1983 2 Caty Attorney � - �� CITY ATTORNEY 3 %Mayor 4 Fi nance and Management Servi ces Di rector �;��'��;Y;':��;���j 5 City Clerk JUN 7 1983 ° Budget Director I��Y�E�S ��i=���� ��hat Will be Achieved by Taking Action on the Attached Materials? (Purpose/Rationale): The purpose of the bond issue is to ,fi.nance the acquisition and remodeling of an existing andustrial building at 274 Fillmore Avenue East in Riverview Industrib�l Park for Heartland Press Inc. The faciiity 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 $],60Q,000. The initial employment in the facility will be 100 with the new facility having sufficient expansion room for the employment to increase in the future. 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. 2149 UEPAHTMENT 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)