279995 WH17E - C�TV CLERK ��� ■���
PINK - FINANCE COURCII tj
CANARY - DEPARTMENT G I TY OF SA I NT PALT L
BLUE - MAVOR File NO.
,
Go ncil Resolution
Presented By �'�'��1���
Referred To Committee: Date
Out of Committee By Date
WHEREAS,
1 . On February 22, 1983, the Port Authority adopted Resolution No. 2099 giving pre-
liminary approval to the issuance of revenue bonds in the initial principal amount of approx-
mately $1 ,000,000 to finance District Heating conversion and retrofit costs for Straus.
Knitting Mills located at 350 Sibley Street.
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 1aw;
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. 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 by Department of:
Fletcher � � _
�evine [n Favor
Masanz
NiCOSia
�setieibe�— _ __ A gai n s t BY
Tedesco
Wilson
MAR 1 7 �gg� Form App d by City Attorney
Adopted by Council: Date
t–�
/ �a� �,/'�,
Certified s•e Council re BY
By n r� ,�=rs7� '�'�-•-{ �
6lpproved b ';Vlavo : Date � • ~�_,� Approved by Mayor for Submission to Council
���� �F _ �
By �_ N ���G__� By
pttsusHED MAR 2 6 1983
1�iITY OF SAINT PA.UL �"'�99�5
-�,...�;• _
OFFICE OF THF. CITY COIINCIL
��siis�i'•�r .
--.=�--�'� D d t e ; March 10, 1983
CON1M (TT � E RE PORT
TO = Saint Pau ! Cifiy Councit
- F R O M = C o rn m i t t e e O h F INANCE, MANAGEMENT �, PERSONNEL
C N A I R James Scheibe 1
Resolution authoriz�ing the issuance of revenue bonds to finance the
conversion of the existing heating system of Straus Knitting Mills,l���t1fl� 3-O..
Resolution replacing the title and class spec. for Traffic Signman
with the title and class spec. for Traffic Sign Worker. A'P�OUfC,p 3^b.
Resolution authorizing the .acceptance of a UDAG for the St. Paul Union
Depot. �PROVTr.p 3-0.
Resolution approving securities pledged by Minnesota State Bank. �ROVf.I� 3-�Q.
Resolution approving an "Early Retirement" provision of the "90 Retirement
P 1 an." i.1�k1 p (3 V� O N f� w E:E,iL .'
NOT ON PREPARED AGENDA:
_ Resolution approving budget amendments to the Innovative Neighborhood
Energy Conservation Program for facilities.and activities as listed.���� 3"a
Resolution authorizing an agreement with the U . S . Dept . of the
Interior to accept Resource Expansion Grant of $122 ,000. ig�pP�OV�
`3'-�.
CITY HALL SEVENTH FLOOR SAINT PAU4 MINNESOTA 55102
.�r.u
�j . . ga -��-
�M .
Port Authoritv DEPARTI.,ENT �'��9995
B M�uc/F Krdut.—.rONTACT
_ 224-56R6 PHONE � � '�ED ,
Feb. 22 1983 DATE �v�
�
(Routing and Explanation Shee � 2`4 19�
Assign Number for Routing Order (Clip All Locations for Mayoral Signature):
partment Director
City Attorney SUBJEGT: STRAUS KNITTING MILLS
o�� ay 3 DISTRICT HEATING CONVERSION
�_ nt ayo
� Finance and Management Services Director - ,
z ..._. _, .0 . _ _ . �
_� City Clerk �,
Budget Director FFo 1 �� i�83
What Will be Achieved by Taking Action on the Attached Materials? (Purpose/Rationale):
The purpose for the revenue bond issue is to finance the �onversion of the existing
heating system of Straus Knitting Mills, located at 350 Sibley, to the central
energy system for powntown St. Paul , commonly referred to as the District
Heating System. The amount of the bond issue is $1 ,000,000.
Financial , Budgetary and Personnel Irrq�acts Anticipated:
Conversion to District Heating will result in the reduced consumption of energy
in St. Paul and also reduce the cost of energy to Straus Knitting Mills thereby
contributing to the profitability of the company which in turn will enhance their
growth potential in St. Paul .
Funding Source and Fund Activity Nu�er Charged or Credited:
Attachments (List and N,umber all Attachments1 :
1 . Staff Memorandum
2. Draft City Council Resolution
3. Port Authority Resolution No. 2099
cc. R. Thor e Man ower Services
DEPARTMENT REVIEW CITY ATTORNEY REVIEW
X Yes No Council Resolution Required? Resolution Required? � Yes No
Yes X No Insurance Required? Insurance Sufficient? � Yes _ No
Yes X No Insurance Attached?
Revision of October, 1982
(See Reverse Side for �Instructions)
PORT � � '" ���
AUTHORITY � �9
OF THE CITY OF ST. PAUL
Memorandum
TO: BOARD OF COMMISSIONERS DATE: Feb. 17, 1983
(Feb. 22, 198 R ular Meeting)
'�? +
;i- `
��' ! : . �1 � .
FROM: B.A. Maus (; �
� `
SUBJECT: STRAUS KNITTING MILLS
PUBLIC HEARING - PRELIMINARY & UNbERWRITING AGREEMENT
$1 ,000,000 REVENUE BOND ISSUE
DISTRICT HEATING
RESOLUTION N0. 2099
1. THE COMPANY
Straus Knitting Mills has been a St. Paul company since 1917 employing
approximately 100 people in the Downtown area. The firm makes wristlets
for use on hospital gowns, tubular elastic yardage for surgical requirements
and other medical uses, and knit cloth for hot moisture packs. They
also make knit yardage for over-the counter sale and special fabrics
for athletic use. The major portion of their business is providing
conventional knit trimmings for garments of all kinds.
2. THE PROJECT
Straus Knitting Mills is currently connected to the District Steam
System in St. Paul . Steam service to the property wi11 be discontinued
in the fall of 1985; therefore, Straus Knitting will have to find an
alternative source of energy. Straus Knitting has contracted with
Ellerbe & Associates to design a system using both steam boilers to
produce process steam and heat energy for the building. The use of
the District Hot Water System would make the manufacturing operation
work more efficiently. Also included in the project are improvements
to make the building energy efficient.
3. FINANCING
Staff is recommending approval of a District Heating loan in the same
form as previously approved by the Board. The loan would be for 20
years and the Port Authority would collect a fiscal and administrative
fee of $400 a month. Bond proceeds would be distributed as foTlows :
Construction - $ 772,555.00
Bond Issuance Expense - 25,000.00
Capitalized Interest - 6 Months 49,045.00
Reserve 123,400.00
Discount 30 000.00
TOTAL BOND ISSUE 1 ,000,000.00
BOARD OF COMMISSIONERS
Feburary 17, 1983
Page -2-
A financial statement for 1981 and 1982 for Straus Knitting Mills is
enclosed with this packet. In reviewing both the income statement and
the balance sheet, the income and the stockholder's equity would indicate
that there is a su�f�cient cash flow and net worth to justify the loan.
It is especially important to note that there is only $40,000 in long
term debt against the building. The company has agreed to a first mortgage
on the property.
4. RECOMMENDATIONS
Staff has met with officials of the company and inspected the property.
Approval of Resolution No. 2099 is recommended.
BAM:ca
�, ��� � � � � 2fi799�5
� a
Resolution No.�-�G i'`�' .
RESOLUTION OF
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
WHEREAS, the purpose of Chapter 474, Minnesota
Statutes, known as the Minnesota Municipal Industrial Develop-
ment Act (hereinafter called "Act") as found and deteranined 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
T�REAS, 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 tor development of land use
which wi.11 provide an adequate tax base to finance these
increased costs and access to employment oppvrtunities for such
population; and
WHEREAS, Laws of Minnesota 1981, Chapter 334, Section
7, Subdivision 3, specifically permits a municipality to
authorize by ordinance any redevelopment agencies to exercise
any and all of the powers granted to the redevelopment agency
under any law for the purpose of financing all or any portion
"any conversion facilities for modifying the users ' heating or
warming system to use the heat energy converted from the steam
or hot water furnished by [a] district heating system,
including but without limitation, the payment of interest
during construction and for a reasonable time thereafter and
the establishment of reserve for bonds, and for working
capital" ; and Section 8 of said Chapter 33� has expanded the
definition of "project" under Chapter 474 to include "any
. � � 2�799g5
property, real os personal, used or useful in connection with a
district heating system, consisting of the use of one or more
energy conservation facilities to produce hot water or steam to
be used in the homes and businesses, including co-generation
facilities, distribution lines, service facilities and retrofit
facilities for modifying the users ' heating or watsr systems to
use the heat energy converted fr�n the steam or hot water"; and
WHEREAS, the Housing and Redevelopment Authority of
the City of Saint Paul, Minnesota (the "HRA" ) has entered into
a revenue agreement with District Heating Development Company
and� issued revenue bonds to acquire and construct a district
heating system to provide for the use of hot water to be made
available to various building awners located in the downtown
area of the City of Saint Paul, Minnesota, a number of building
owners have heretofore applied for and have received from the
Port Authority of the City of Saint Paul (the "Authority" )
preliminary approval of Port Authority financing through the -
issuance of one or more series of revenue bonds of facilities,
equipment and improvements for modifying the building owners'
heating or water systems in their buildings to use the heat
energy converted from hot water to be furnished from the
district heating system and for energy conservation purposes
within the building; and an additional building owner, Straus
�Cnitting Mills, Inc. , a Minnesota corporation (the "Company" ) ,
has applied to the Authority to issue revenue bonds (the
"Bonds" ) to finance similar conversion improvements (the .
"Project") for its building, all as is more fully described in
Staff Report on file; and
WHEREAS, the Authority desires to provide a reliable
and efficient source of energy for building in the downtown
area, to conserve energy and 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 reputation of the
City; and
WHEREAS, the Project to be financed by the Bonds will
result in substantial employment opportunities in the Project;
� WHEREP,S, the Authority has been advised by 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 law borrowing cost, the Project is economically more
feasible;
WHEREP,S, 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;
WHEREAS, the Authority, oursuant 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
'�1HEREAS, 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 respect 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 pr�ducing 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 tne
Project, if undertaken, will be to provide a reliable and
efficient energy source for buildings in the downtown area, to
conserve enerc3Y, to encourage the development of economically
' � . �p�����
sound industry and commerce and assist in the prevention of the
emergence of blighted and marginal land, and will help to
prevent chronic unemployment, and will help the �ity 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 pe=sons
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 develop�aent 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 t� the mutual agreement of the Authority
and the Company as to details of the financing as provided in
the Loan Agreement hereinafter described, the Project is hereby
approved and authorized and the issuance of revenue bonds of
the Authority in one or more series in an amount not to exceed
approximately $11,100,000 (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 Commi.ssioners, are
incorporated herein by reference and approved.
3. In accordance with Subdivision 7a of Section
474.01, Minnesota Statutes, the ExecutivP Vice-Przsident 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 Loan Agreement between the Authority and
each building owner, including the Company, relating to the
proposed construction and financing of conversion facilities
such as 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 commencement ot 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
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; provided that in lieu of the Loan Agreement the
staff may provide for the execution of a preliminary agreement
and financing lease in the customary form used for revenue
bonds issued under Authority Resolution No. 876, as amended.
5. Upon execution of the Loan Agreement (or
preli,minary agreement and lease) 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 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 t'he 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 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 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.
• •�� + . �i}���g„f�
�3
7. In order to facilitate completion of the revenue
bond financing 'nerein contemplated, the City Council is 'nereby
requested to consent, pursuant to Laws of i�innesota, 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 the form of said' Loan Agreement and any
additional available information the City Council may request.
8. The actions of the Executive Vice-President of
the Authority in causing public notice of the public 'nearing
and in describing the general nature of the Project and
esti.mating 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
av3ilable for inspection by the nublic at the office of the
Authority from and after the publication of notice of the
hearing, 3re in all respects ratified and confirmed.
Adopted �,�� ����-- , 1982
L
' �/ '
Attest � L � ��'��
/� Pr i
The Po Authority of the City
-, � of S nt Paul
� '
i i
- ���% , ��''.-!Ll/'
��S etary
- � ���.�'�
�`99�5
PORT AUTHORITY OF THE CITY OF SAINT PAUL
25 WEST FOURTH STREET • SUITE 1305 • ST. PAUL, MINN. 55102 • PHONE (612) 224-5686
February 22, 1983
Mr. James Bellus.
Di rector
Planning & Economic Development Department
City of St. Paul
14th Floor - City Hall Annex
St. Paul , Minnesota 55102
SUBJECT: STRAUS KNITTING MILLS
DISTRICT HEATING
Dear Jim:
We submit herewith for your review and referral to the office
of the Mayor, City Council , and the City Attorney's office
details pertaining to the issuance of a $1 ,000,000 revenue
bond issue to finance District Heating conversion and retrofit
costs for Straus Knitting Mills located at 350 Sibley Street.
In addition to the staff inemorandum, we are attaching a draft
copy of the proposed City Council Resolution and a copy of
Port Authority Resolution No. 2099 which authorized the sale
of revenue bonds.
Your expeditious handling of this matter will be appreciated.
Yours truly,
Eugene A. Kraut
General Manager
EAK:ca
cc. R. Broeker
OBERT F. SPRAFKA EUGENE A KRAUT,C.I.D. DONALD G. DUNSHEE, C.I.D. CLIFfORD E. RAMSiED RONALD O. SCHETTLF
(ECUfNE VICE PRESIOEM GENERAIM/WAGERAND DIRECTOR.INDUSfRIAI DEVELOPMENT CH�EF ENGWEER CHIEF ACCOUMANT
ASST.E%EC.VICE PRESIDEM
OMMISSIONERS GEORGE W.WINTER WILLIAM WILSON ARTHUR N. GOODMAN VICTOR P. REIM JEAN M. WEST CHRIS NICOSIA WILLIAM J. SEIFER�
PRESIDENT VICEPRESIOENT SECRETARV iREA$URER
C,I.D. Certified Industrial Developer