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:
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M ahon MeS8�1Z A ainst By
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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 � `�
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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.- ����-��
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�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)