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279441 WI�ItTE - CITY CLERK PINK - FINANCE COUtICll ...a{ CANARY - DEPARTMENT G I T Y O F S A I N T �A U L j / BLUE - MAYOR File N O. � • q��� . .. ouncil Resolution � Presented By Y �'�`+� Referred To Committee: Date Out of Committee By Date WHEREAS: 1 . On October 26, 1982, the Port Authority of the City of Saint Paul adopted Resolution No. 2066 yiving preliminary approval to the issuance of approximately $1 ,500 ,000 in revenue bonds to finance the construction of a 46,�60 Sq. Ft. office and manufacturing facility in St. Paul Energy Park for Suntec Systems, Inc. The Company is a manufacturer of solar collectors for co��ercial and industrial use. 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. 2066, the exact details of which, including, but not limited to, provisions relating to maturities, interest rates, discount, redemption, and for the issuance of additional bonas 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 Requestgd rt of: un � � e Le� [n Favor ox �— M ahon MeS8�1Z A ainst By Sh alter N��� -- g T Wil n SchEibei T�desco N�V 9 �9a2 Form Approved y City Attorney Adopted by Council: Wi{so�ate — y� � Certified s y ou cil Secre B � `� G"' � By ._ Approved :N vo : D te V � � 1 2 Appr y Mayor for Submi 'on uncil By — B �'UB�iSi�ED NOV � U 1982 � ORT ' AUTHORITY �;�;��,�� OF THE CITY OF ST. PAUL Memorandum TO: BOARD OF COMMISSIONERS DATE October 26, 1982 (Meeting October 26, 1982) FROM: Donald G. Dunshee SUBJECT: PUBLIC HEARING - PRELIMINARY AND UNDERWRITING AGREEMENTS - $1 ,500,000 REVENUE BOND ISSUE - SUNTEC SYSTEMS, INC. - ENERGY PARK RESOLUTION N0. 2066 PUBLIC SALE HEARING - SALE OF LAND - SUNTEC SYSTEMS, INC. - ENERGY PARK RESOLUTION N0. 2067 1 . The Company Suntec Systems, Inc. was formed in 1977 and at the time it was established Sheldahl Inc. of Northfield owned approximately 95% of the common stock. Since that time Sheldahl has sold its interest in the Company. The Company' s stock is traded on the National Over The Counter Market. At the time the Company was formed they were authorized to issue 3,500,000 shares of which 2,825,000 shares are now outstanding. The Suntec Board of Directors at a meeting October 19 authorized the issuance of an additional 1 ,500,000 shares with that offering to take place in early December. At the present time the Company leases 13,200 Sq. Ft. in a building in Woodbury and an additional 10,000 Sq. Ft. on a month to month lease in Northfield. Both of these operations will be relocated to the new facility. Suntec presently employs 30 people but antic- ipates when the new building is in full operation they would operate on a four shift basis with 30 employees on each shift plus an office staff of an additional 30 people. This would result in 120 new jobs being created over the next two to three years. Suntec manufactures solar collectors for commercial and industrial use. They are selling these products on a national and international level . • 2. The Project The Company proposes to construct a 46,860 Sq. Ft. office and man- ufacturing facility on Parcel A-1 in St. Paul Energy Park. The site contains 148,569 Sq. Ft. or 3.41 acres. The site is located at the intersection of Snelling Avenue and Energy Park Drive, South of the Ice Arena. Gecause of increased business the Company began to search for a new site or building this summer. They narrowed their choices to the Energy Park Site or an existing leased building in Bloomington but have decided to pursue construction or a new building as opposed to continuing to lease space. ' BOARD OF COMMISSIONERS SUNTEC SYSTEMS, INC. OCTOQER 26, 1982 Page 2 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: Building $1 ,172,175.00 Bond Issue Expense 25,000.00 Capitalized Interest (6 Months) 80,625.00 Debt Service Reserve (Self-Amortizing) 177,100.00 Discount 45,000.00 $1 ,500,000.00 The debt service reserve on the bond issue would be self-amortizing with the Port Authority receiving the spread on the investment as well as the principal at the end of the bond issue. In addition to the monthly rent the Company would pay the customary fiscal and administrative fees based on the formula of .42% per million per year for the first 10 years, .54% per million per year for the second 10 years and .66% per million per year for the third 10 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. In view of the fact the Company wishes to start construction immediately, we would anticipate the bonds would be sold at the regular November 16 meeting. 5. Terms of the Lease The terms of the lease would be for 30 years with the Company having an option to purchase the land and building for $1 .00 at the end of the lease or $1 .00 plus retirement of any outstanding bonds at the end of the lOth or 20th year. The land would be leased based on a value of $2.00 per Sq. Ft. plus 10 1/2% interest or a monthly rent of $3,286.82. Because of the fact Suntec is a new Company just beginning to sell its products and the fact they are an energy related firm, the land rent would be deferred for the first five years of the term, however, the deferred amount would be amortized over the remaining 25 years of the lease so the Port Authority would not lose any revenue. . r '���`��� BOARD OF COMMISSIONERS SUNTEC SYSTEMS, INC. OCTOBER 26, 1982 Page 3 Staff inet with Council 46 on Monday, October 18 to review the project and Council 46 unanimously endorsed the project and congratulated the Port Authority on bringing an energy related business to the Park. 6. Recorr�nendati on Staff has reviewed the project in detail , the financial statements of the Corporation, interviewed officers of the Company and recommends approval of Resolutions 2066 and 2067. sjs � ,, Resolution L10. _''c��-t� � . ��o��f� l RESOLUTION OF THE PORT AUTHORITY O'r� THE CITY OF SAINT PAUL WHEREAS, the purpose of Chapter 474, Minnesota " Statutes, known as the Minnesota Municival Industrial Develop- ment Act (hereinafter called "Act" ) as found and determined by the legislature is to promote t'ne welfare of the state by the active attraction and encouragem�nt and development of economi- cally sound industry and commerce to prevent so far as possible the ernergence of blighted and marginal lands and areas of chronic unemployr,lent and to aid in the development of existing areas of blight, marginal land and persistent unemployment; and WI�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 for development of land use which will provide an adequate tax base to finance thes� increased costs and access to employment opportunities for such population; and WHEREAS, The Port Authority ot the City of Saint Paul (the "Authority" ) has received from Suntec Systems, Inc. (hereinafter referred to as "Company" ) a request t'nat t�ie Authority issue its revenue bonds to finance the acquisition, installation and construction of an approximately 46,860 square foot office and manufacturing facility (hereinafter collectively called the "Project" ) in Saint Paul Energy Park, in the City of St. Paul, all as is more fully described in the staff report on file; and WHEREAS, the Authority desires to facilitate the selective development of the community, to retain and improve its tax base and to help it providz 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 bet�veen assessed valuation and debt and enhance the inage and renutation of the City; and , • tiaHEREA�, the Project to be financed 'uy revenue bonds will result in substantial enploynlent opportunities in the Project; WHEREA5, the �uthority has 'neen advised by repre- sentatives of the Company that conventional, commercial financing to pay the caoital cost of the Project is available only on a limited basis and at such high costs of borrowin� that the economic feasibility of operating the Project would be significantly reduced, but the Comnany has also advised this Authority that with t'ne aid of revenue bond financing, and its resulting low borrowing cost, thz Project is ecoriomically more feasible; WHEREAS, Miller & Schroeder Municinals, 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, t'ne 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 provosal 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 - Conrnissioners were revie�ved, 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 producing enterprises engaged in any business within the meaning of Subdivision 1 of Section 474.02 of the Act; that t'ne Project furthers the purposes stated in Section 474.01 of the Act, t'nat 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 undzrtake the Project, and tiiat the effect of the Project, if undertaken, will be to encourage the development of economi.cally sound industry and commerce and assist in the nrevention of the emergence of blighted and marginal land, and will help to prevent chronic unemployment, and will heln tne City to retain and improve its tax base and provide the range of services and employment ooportunities required '�y 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 tha� 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 oi the revenue bonds, the Project is hereby approved and authorized and the issuance of revenue bonds of the Authority in an ��ount not to exceed approximately $1, 625, 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 Energy, Planning and Economic Development, 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 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 evid�nce the commitment of the parties and their intentions with respect to the proposed Project in order that the Company may proceed cvithout 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 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 oi 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 Presider� (or Vice-President if the President is absent) and the Secrecary (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 �innesota 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. &. The revenue bonds (including any interim note or notes) ar. � 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 oi t'ne revenue •bond financing herein contemplated, the City Council is 'nereby requested to consent, pursuant to Laws of b2innesota, 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 J rY ��. , '. - ��� � M . from time to tir!me thereafter deem necessary to cornplete the Project or to refund such revenue bonds; and for sucn pt�rpose the Executive Vice President of the Authority is hereby authorized and directed to forwar3 to the City Council conies of this resolution and said Preliminary Agreement and any adc�itional available information the City Council may request. 8. The actions of the Executive Vice-Pr2sident of the Authority in causing public notice of the public hearing 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 Com�nissioner 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 October 26, 1982 ��, ' /�/� .. ��� . Attest \. - r / Presiderft / The Port;fAuthority of the City � of Saint Paul / ���� , l-h-�• cretary � �� �` _ Councilman William Wilson v ��3 City Ha) � ,._, St' Pau� � Minnesota 55102 � (���� PORT AUTHORITY OF THE CITY OF SAINT PAUL R 25 WEST FOURTH STREET • SUITE 1305 • ST. PAUL, MINN. 55102 • PHONE (612) 224-5686 October 26, 1982 Mr. James Bellus Director Planning and Economic Development Department City of St. Paul 14th Floor, City Hall Annex St. Paul , Minnesota 55102 SUGJECT: SUNTEC SYSTEMS, INC. $1 ,500,000 REVENUE BOND ISSUE 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 ,500,000 revenue bond issue to finance a 46,860 Sq. Ft. office and manufacturing facility in St. Paul Energy Park for Suntec Systems, Inc. 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. 2066 which authorized the sale of revenue bonds in the amount of $1 ,500,000. Your expeditious handling of this matter will be appreciated. Yours truly, Eugene A. Kraut General Manager EAK:sj s cc: R. Broeker �OBERT F. SPRAFKA EUGENE A KRAUT,C.I.D. DONALD G. DUNSHEE, C.I.D. CLIFFORD E. RAMSTED RONALD O. SCHEffL! :XECUfNE VICE PRESIDEM GENERAI MANAGER ANO DIRECTOR.INDUSTRIAL DEVELOPDAEN? CNIEF ENGiNEER CHIEf PCCOUNTANT ASST.EXEC.VICE PRESIDEM :OMMISSIONERS GEORGE W. WINTER WILLIAM WILSON ARTHUR N. GOODMAN VICTOR P. REIM JEAN M. WEST CHRIS NICOSIA WILLIAM J. SEIF"cR PRESIDENT VICEPRESIOENT SECREfARY- TREASURER C.I.D. Certified Industrial Developer - ,f'f.., :� :,�:� " � CI't`Y OF S�. [NT P�TJL � � � OI�'P'IC� OF TFiIi. CITY (IUUNGIL ; �- �:;;::,�,:� � D a t e • s� ���� - . . November 5, ��� � -- - 4 - � COMMITTEE RE PORT _ TO = Sqin� PQU I City Council F R O M = C o m t3n i t t e e O h FINANCE, T1aNAGEbfENT �, PERSONNEL - C H A I R James Scheibe 1 1. Approval of minutes from meeting held October 28, 1982.�� 2. Resolution approving the application of J. William Donovan for the � Abatement of Taxes and Assessments per County Auditor's Report �2040i� '� . 3� � ' �.�.�.s.�{..�_ftinrlc frnm t}ir� TPxingtnn�a�rin� r � ^� - �2�'S7Zg'�Et�}-6� � rair� ci nn �t�6�.� Ps��Llf' ii7n?1Z5. 4. Resolution authorizing additions to the 1982 Fire Equipment Trust�`�=� � Fund Budget, 55001. 3i" S. Resolution approving an amendment to the 1982 - 1984 Agreement between�� the City and the St. Paul Supervisors Organization. �-__—=-'-�' 6. Resolution approving a two year Agreement between the City and the Boitermakers, Lodge 647.- ����-�� � C �7. Additional discussion of the ro osed assessment olic �—f�. '� ����`'EZ P P P Y�� ������.�__�_ _ � AGENDA ITEMS BROUGHT UP, NOT ON ORIGINALLY PREPARED FINANCE AGENDA: 8. ___._v___ -_ _,.:. of revenue bonds to finance the �_a.r .�..,_�....�,. , ,._-_�.,.�._ _._._�,.,_.�.. construction of an office an ufacturing facility for Suntec Systems,'�Znc. 9. Resolution authorizing proper city officials to executive amendatory district heating design loan agreements with the State of A4innesota and District Heating Development Company. �_.,.�,;�� � 10. Resolution to provide additional temporary financing for the Downtown District Heating Project and to amend the Downto►, and�eventh Place tax increment District #82 fin�-+cing plan. ��=a-�� Q CITr' NALL SEVENTH FLOOR SAINT PAUL, MINNFSOTA SS]02 ».r�„ �a.�- �� a'� ° St. Paul Port Authority DEPARTt•1ENT EuUene A. Kraut �ONTACT � d��� �612) 224-5686 PHONE ���� �� October 26, 1982 DATE (Routing and Explanation Sheet) Assign Number for Routing Urder (Clip All Locations for Ma,yoral Signature): 1 par ment Director /� r , � � Q � /� 2 C' torney � � � V� Q� 3 i tor of Management/Mayor � � J ,6` /) /�� 4 Fin e and Management Services Director � � L� � �� l� 5 Ci ty C1 erk ' �- � 6 1� � �� a-�-� Budget Director / �Ihat Will be Achieved by Taking Action on the Attached Materials? (PurposefRationale): Suntec Systems, Inc. proposes to build a 46,869 Sq. Ft. office and manufacturing facility on Parcel A-1 in St. Paul Energy Park. The site contains 3.41 acres and is located at the intersection of Snelling Avenue and Energy Park Drive. The Company is a manufacturer of solar co7lectors for commercial and industrial use. Approval by the City Council will permit the St. Paul Port Authority to sell the industrial development revenue bonds for the project. Financial , Budgetary and Personnel Irr�acts Anticipated: : The Suntec Systems, Inc. project will accomplish an expansion of the City's tax base by addition of facilities worth more than $1 ,500,000. Suntec presently employs 30 people and anticipates within 3 to 5 years having 150 people working in the plant. Funding Source and Fund Activity Nur�er Charged or Credited: Attachments (List and Number all Attachments) : 1 . Staff Memorandum 2. Draft City Council Resolution 3. Port Authority Resolution No. 2066 cc: R. Thorpe, Manpower Services DEPARTMENT 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)