281036 WHITE - C�TV CLERK �����
PINK - FINANCE � *
CANARY - DEPARTMENT GITY OF SAINT PAUL COUflCll
BLUE - MAVOR File NO.
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� uncil Resolution
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Presented By
c�Referred To �� �����C Committee: Date � �— ���
Out of Committee By Date
WHEREAS:
1 . On September 20, 1983, the Port Authority adopted Resolution No.2195 giving
preliminary approval to the issuance of industrial development revenue bonds in the amount
of approximately $770,000 for Ted A. Davies Sublease to Sales Marketing, Inc. to finance
the construction of a new 17,900 Sq. Ft. office and distribution center located in
Riverview Industrial Park. The building would be located on the West Lafayette Freeway
Frontage Road South of Fillmore Avenue. 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 Pau1 , sMall 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.2195, 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.
COUIVCILMEN Requested b e�artment of:
Y ea s N a ys --y��=�,\
Fletcher � 3�
Ga°� [n Favor
Masanz
Nicosia ' /
schetbei v _ Against BY " -
Tedesco
1AFi1Mw-
OCT 1 8 1983 Form Approved by Ci�rney
Adopted by Council: Date �
Certified a• ed by Council Se ry B
A Br b Nlavor: Da OCT�83 Ap r ed y Mayor for Su sio o Council
P Y —
By _
�usc�s�Fa �C� � 9 1983
O R T . ' 2�1 C��6
� AUTHORITY
OF THE CITY OF ST. PAUL
Memorandum
TO: BOARD OF COMMISSIONERS DATE: September 15, 1983
(Meeting September 20, 1983)
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FROM: Donald G. Dunshee
SUBJECT: .
PUBLIC HEARING - PRELIMINARY AND UNDERWRITING AGREEMENTS
TED A. DAVIES SUBLEASE TO SALES MARKETING INC.
$770,000 REVENUE BOND ISSUE
RESOLUTION N0. 2195
PUBLIC SALE HEARING - SALE OF LAND - TED A. DAVIES SUBLEASE TO
SALES MARKETING, INC.
RESOLUTION N0. 2196
1 . Company
Sales Marketing, Inc. was started on October 2, 1968, in St. Paul
as a sales promotion and premium marketing company. The Firm
outgrew its original location in St. Paul and purchased its
present building at 3329 University Avenue SE in Minneapolis.
The Firm is involved in sales promotion, developing premium
programs for banks and savings and loan institutions and providing
a general premium business for all types of companies. .
2. The Project
The Company proposes to construct a 17,900 Sq. Ft. office and storage
facility in Riverview Industrial Park on an 82,692 Sq. Ft. site. The
building would contain 8,500 Sq. Ft. of office space and 9,400 Sq. Ft.
of storage area.
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:
Construction $601 ,737.00
Bond Issue Expense 18,288.00
Capitalized Interest (6 Months) 39,463.00
Debt Service Reserve 87,412.00
Discount 23,100.00
$770,000.00
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BOARD OF COMMISSIONERS
SEPTEMBER 20, 1983 MEETING
SALES MARKETING, INC.
PAGE 2
The Port Authority would receive earnings on the debt service reserve
and sinking funds as well as the customary fiscal and administrative
fees based on the formula of $350 per month for the first ten years,
$450 per month for the second ten years and $550 per month for the
last ten years.
4. Underwriting
Miller & Schroeder Municipals have agreed to underwrite the bonds with
the interest rate to be set at the time the bonds are so1d. We anticipate
selling the bonds in October and closing by November l , 1983.
5. Term of the Lease
The lease would be for a term of thirty years with the corporation having
an option to purchase the building at the end of the 30th year for 10%
of the original bond issue cost or at the end of the lOth and 20th years
for 10% of the original bond issue cost plus retirement of any outstanding
bonds. The land would be leased based on a rate of $1 .65 per Sq. Ft. at �an
interest rate of 10% over the term. The monthly land rent would be
$1 ,225.66. We originally had been asking $2.25 per Sq. Ft. for the
land, however, due to the additional cost for piling of $94,737, the
land price has been adjusted by $49,725 to help offset that expense.
The option to purchase the land would be as followss
lOth Year $159,534.37
20th Year $113,953.12
30th Year $ 68,371 .88
6. Recorr�nendati on
The lease would be directly to Ted A. Davies the President and Owner of
the Company with a sublease to the Corporation for the term of the bond
issue. fdr. Davies would personally guarantee the bonds.
Staff recommends approval of Resolutions 2195 and 2196.
sj s3b
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Resolution No. ���%` `�
RESOLUTION OF
THE PORT AUTHORZTY OF THE CITY OF SAINT PAUL
WHEREAS, the purpose of Chapter 474, �Iinnesota .
Statutes, known as the �Sinnesota 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 svund industry and commerce to prevent so f3r as possible
the emeryence of blighted and marginal lands and areas of
chronic unemployment and to aid in the develooment of existing
areas of blight, marginal land and persistent une�nployment� and
�dHEREAS, factors necessitating the active promotion
and development of economically sound industry and commerce are
the increasing concentration of pooulation in the metropolit�n
areas and the rapidly rising increase in the amount and cost of
governmental. services requir�d to meet the needs of the
increased population and the nesd for development of land use
which will provide an adequate tax base to finance these
increased costs and access to employment opoortunities for such
population; and
i+VHEREAS, The Port Authority ot the �ity of Saint Paul
(the "Authority") has received from the Sales 'rtarketing, Inc. ,
a Minnesota cornoration (hereinafter referred to as "Company" )
a request that the Authority issuz its revenue bonds to finance
tne acquisition, installation and construction of facilities
for office space and a storage area (hereinafter collectively
called the "Project" ) in the Riverview Industrial Park in the
City of St. Paul, all as is more fully described in the staff
report on file; and
WHEREP,S, the Authority desires to facilitate the
selective development of the community, to retain and i.mprove
its tax base 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
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
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WHEREAS, the Project to be financed 'Qy revenue bonds
will result in su�astantial employment opaoortunities in the
Project;
�VHEREAS, the Authority has been advised 'oy 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 borrowing
that the 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 financing, and its
resulting low borrowing cost, the Project is economically more
feasible;
tVFiEREAS, Miller & Schroeder �Iunicipals, Inc. (the
"Jnderwriter") has made a proposal in an agreement (the
"Underwriting Agreement" ) relating to the purchase of tiie
revenue bonds to be issueci to finance the Project;
+Vf�REAS, the Authority, pursuant to Minnesota
Statutes, Section 474.01, Subdivision 7b did publish a notice,
a copy of which with proof of publicativn is on file in the
office of the Authority, of a public hearing on the pro�osai of
the Company that the Authority finance the Project hereinbe.fore
described by the issuance of its industrial revenue bonds; and
� '�REAS, the Authority did conduct a public hearing
pursuant to said notice, at which hearing th� recommendations
containec3 in the Authority' s staff inemorandum to t'ne
Commissioners were reviewed, and all persons who appeared at
the hearing were given an opportunity to express their views
witii respect to the proyc�osal.
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 infonnation available to the
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
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
�s1 Q3s
_ will help to prevent chronic unemployment, and will hel� the
City to retain and improve its tax base and ��rovide the range
of services and employment opportunities required 'fly its
population, and wiZl help to prevent the movement of talented .
and educated persocls 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 dev8lopment 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 t'ne
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 agreeinent 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 apnroximately $770,000.00 (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 incorvorated herein by reference and
approved.
3. In accordance with Subdivision 7a of Section
474.01, Minnesota Statutes, the Executiv� Vice-President of the
AUTHORITY is hereby authorized and dirzcted to submit the
�roposal for the above descri'oed Project to the Cominissioner of
Securities, requesting his approval, and other officers,
employees and agents of the AUTKORITY are hereby authorized to
provide the Coramissioner with such preliminary information as
he may require.
4. There has heretofore been filed with the
Authority a form of Preliminaxy Agreement between the Authority
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 Comrni.ssioners. It is the purpose of said Agreements to
evidence the commitment of the �arties and their intentions
with resnect 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
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prc�vide temporary financing thereof) to finance t'ne entir� cost
of the Project upon agreement being reached as to the ultim3te
details of the Project and its financing. Said Agre�ents are
hereby approved, and the President and Secretary of t'ne
Authority are hereby authorized and directed to execute said
Agreements.
5. Upon execu�tion 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 th�
Authority of its final 'oond resolution and the issuance and
delivery of the revenue bonds; provided that the President (or
Vice-Pres.ident if the Pr�sident 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 ansent, 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 acceotance shall bind the Underwrit�rs 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 'flonds.
6. 'I'he revenue bonds (i.ncluding any interim note or
notes) and interes�t thereon shall not constitute an
indebtedness ot the Authority or the City of Saint Paui within
the meaning of any constitutional or statutory Iimitation 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 neitk�er 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 t�iinnesota. 1976,
Chapter 234, to the issuance of tne revenue 'AOnds (including
any interim note or notes) herein contemplated and any
additional bonds which the Authority may prior to issuance or
from time to time thereaftex deem necessary to complete the
Project or to refund such revenue bon3s; and for such purpose
the Executive Vice President of the Authority is hereby
authorized and 3irected to forward to the City Council copies
of this resolution and said Preliminary Agreement and any
additional available information the City Council may request.
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8. The actions of the Executive Vice-Przsident of
the Authority in causiny gublic notice of the public 'nearing
and in describing the general nature of the Project and
estimating the principal arnount 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 September 20, 1983 � ' '
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Attest � �G--� �
Presil�
The Port-�Authority of tile City
/ of Saint Paul
Z .ti liG�
`Secretary '
� ���.��s
St. Paul Port Authori ty DEPARTI•1ENT
Donald G. Dunshee or ONTACT
�qe��e$ . Craut PHONE
Se tember 20 1983 DATE r ��� � �
p �
(Routing and Explanation Sheet)
Assi n Number for Routin Order Cli All Locations for M oral Si nature :
Department Director
City Attorney
Ma�yor �
4 Finance and Management Servi es Director F^�-'"�
5 City Clerk S�F�' 2 6 �1g83
Budget Director
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What Will be Achieved by Taking Action on the Attached Materials? (Purpose/Rationale):
The purpose of the bond issue is to finance the construction of a new 97,900 Sq. Ft. office
and distribution center in Riverview Industrial Park for Ted A. Davies Sublease to Sales
Marketing, Inc. The lease would be for a term of thi.rty years with the Corporation having
an option to purchase the building at the end of the lOth, 20th and 30th years. The
construction of the new building would be financed by an industrial development revenue
bond issue in the amount of $770,000. Sales Marketing, Inc. currently employes 33 people
and this would be increased to 43 peopl.e upon completion of the new facility.
Financial , Budgetary and Personnel Impacts Anticipated:
� RECEIVED
Funding Source and Fund Activity Number Charged or Credited: S E P 2 3 1�
CITY ATTORN,EY
Attachments (List and Number all Attachments) :
Staff Memorandum
Draft City Council Resolution
Port Authority Resolution No. 2195
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)
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Agenda
/ Finance, Management � Personnel Committee
� October 13, 1983
Page 3
24. Resolution for issuance of revenue bonds in the amount of $770,000 for Ted
A. Davies Sublease to Sales Marketing, Inc. to finance construction of a
new office and distribution center in Riverview Industrial Parl. ���o
25. Resolution establishin� a commission to study the role and compensation of
Council members and the Legislative Aides as well as the staffing of Council
offices and Council Research Center,!'�� ��1�������� �fP�./ ������
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