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)