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276178 WNITE - CITY CLERK PINK - FINANCE COUtICll r�-r i 3_��' Rr:� CANARY - DEPARTMENT G I T Y O F S A I N T PA U L B6UE - MAYOR File N O. ���� � Council Resolution Presented �-- Referred To Committee: Date Out of Committee By Date WHEREAS: 1 . On December 16, 1980, the Port Authority of the City of Saint Paul adopted Resolution No. 1759 giving preliminary approval to the issuance of a $7,000,000 Revenue Bond Issue to finance the expansion and remodeling of a large durum flour mill that International Multifoods Corporation operates at $05 North Rice Street. The rr�dernization would include appropriations to correct sanitary and air emission efficiency which when complete will bring the facility in total compliance with EPA and OSHA standards; 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 bond issue 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 ; 4. RESOLVED, by the City Council of the City of Saint Paul , that in accordance with L�ws of Minnesota 1976, Chapter 234, the City Council hereby consents to the issuance of the aforesaid bonds for the purposes described in the aforesaid Port Authority Resolution No. 1759 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 Requestgd by Department of: Hunt � .t_� ' Levine � [n Favor Maddox _I McMahon jr B snowa�ter _ Against Y Tedesco �Ison JAN � 3 1981 Form Appr ed by Cit tto Adopted b ouncil: Date � � / O � � Certif d Vasse y Council Secretary BY l' —u � Appr y Mayor: D t, �� App d by Mayor for m si n to�Council By - — B p� JAN 2 4198 P �O R T� � AUTHORITY ��,����� OF THE CITY OF ST. P�1UL Memorondum TO: BOARD OF COMMISSIONE DATE December 12, 1980 Meeting (December 16, 80) FRO�: Donald G. Dunshee SUBJECT: INTERNATIONAL MULTIFOODS CORPORATION PUBLIC HEARING - PRELIMINARY AND UNDERWRITING AGREEMENTS SALE OF $7,000,000 REVENUE BOND ISSUE - RESOLUTION N0. 1759 1 . THE COMPANY International Multifoods Corporation is based in Minneapolis and had annual sales of $1 ,012,242,000 in the fiscal year of 1980. The Company operates two grain milling facilities in St. Paul and proposes a major expansion on one of the mills. 2. THE PROJECT International Multifoods Corporation operates a large durum flour (pasta flour) mill at 805 North Rice Street. If the expansion is -:..� approved it will permit an increase of 43� in the capacity of the mill (from 5600 cwt to 8000 cwt per day) and will include a com- plete modernization of the existing facil.ity. The modernization would include appropriations to correct sanitary and air emission efficiency which when complete will bring the facility in total compliance with EPA and OSHA standards. These improvements will add significantly to the efficiency of the mill and permit them to remain competitive in the pasta industry. The majority of the cost (approximately 75%) will be used for purchase of machinery and equipment. The balance of the work will involve an addition of the building to house a new locker and lunch room for employees as well as accommodations for added machinery and equipment. The facility presently employes 33 people and it is estimated the expansion will result in the creation of five new full time jobs. 3. FINANCING AND UNDERWRITING . The Company has asked that the Port Authority consider issuing revenue bonds to finance this proposed expansion. If the financing is approved it would be done in one of three ways: (1 ) A short term tax exempt note with a long term placement at a later time. (2) A tax exempt long term mortgage. (3) A Port Authority backed 876 bond issue. Because of the extremely high interest rates at this time the Company has not selected the type of financing they wish to pursue. Regardless of the type of financing they use, the Port Authority would receive its customary fiscal and administrative fee based on the following schedule: • � � � ��� l� INTERNATIONAL MULTIFOODS CORPORATION December 12, 1980 Page 2 First 10 Years $300 per month per million issued Second 10 Years $400 per month per million issued Final 10 Years $500 per month per million issued Miller & Schroeder will underwrite the bond issue no matter what type of financing the Company selects. The interest rate will be set ten days prior to the bond sale. 4. TERMS OF THE LEASE If the financing is done under Resolution 876 the term would be for thirty years. If the project is done on either a tax exempt placement or an interim note, those terms would not be set at this time. 5. RECOMMENDATION Staff has reviewed the project in detail and interviewed the officers of the Company and recommends approval of Resolution 1759. sjs � , n� � . l:°: -:.. .-: _ � , . �::__::: . � � �1`�1.�l� Resolution No. 1759 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- r�ent Act (hereinafter called "Act" ) as found and deterr.►ined by the legislature is to promote the welfare of the state by the active attraction and encouraqement and c3evelopr�ent of econoMi- cally sound industrv and commerce to prevent so far as possible the er�ergence of bl ighted and marg inal lands and areas of chronic unemplo_yr�ent and to aid in the developr.ient of existing areas of blight, r�arginal land and persistent unemployMent; and WHEREAS, factors necessitating the active promotion and developr�ent of econonically sound industry and commerce are . the increasing concentration of •population in the r�etropolitan 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 developr�ent of land use which will provide an adequate tax base to finance these --- increased costs and access to employnent opportunities for such population; and WHEREAS, The Port Authority of the City of Saint Paul (the "Authority" ) has received from International AZultifoods Corporation (hereinafter rei-:rred to as "Company" ) a request that the Authority issue its revenue bonds (which r�ay be in the form of a single note) to finance the expansion of an existing grain r�illing f acility in the City of Saint Paul, which expansion will include the correction of sanitary and an eMission efficiency as required by OSHA and EPA standards, in addition to the purchase of machiner_y and equipment and the - construction of added facilities (hereinafter collectively called the "Project" ) all as is r�ore fully described in the staff report on file; and . , � �,.:.. �.:'::.: .. . • � � ��.���� WHEREAS, the Authority desires to facilitate the selective developr�ent of the cor�r►unity, to retain and� improve its tax base and to help it provide the range �f services and employMent onportunities required bv its population, and said Project will assist the Citv 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 ir.►age and reputation of the City; and • " WHEREAS, the Project to be financed by revenue bonds will result in substantial employr�ent opportunities in the � Project; WHEREAS, the Authority has been advised by repre- sentatives of the Company that conventional, cor�mercial 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 Cor�pany has also advised this Authority that with the aid of revenue bond financing, and its resulting low borrowing cost, the Project is econornically more feasible; �4HEREAS, Miller & Schroeder Municipals, Inc. ( the "Underwriter") has made a proposal in an agreer,►ent (the "Underwriting Aqreement" ) relating to the purchase of the revenue bonds to be issued to finance the Project; -:.:� WfiEREAS, the Authority, pursuant to Minnesota Statiites, Section 474.01, Subdivision 7b did publish a notice, a copv of which with proof of publication is on file in the off_ice of the Authority, of a public hearing on the proposal of the Company that the Authority finance the Proj�ct 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 reconnendations contained in the Authority' s staff ineMOrandur� to the ' ComMissioners were revie�aed, and all persons who appeared at the hearing were given an opportunity to express their views with respect to the proposal. ' , � ��::::: • .. � T . � �:::', . .. �� 1.,�� RJj.-... . � ° �►r�.��l� 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 encouraqe the development of economicallv sound industrv and comr�erce and assist in the prevention of the emergence of blighted and r�arginal land, and will help to prevznt chronic unemployment, and will help the City to retain and improve its tax base and provide the range of services and er�plovr�ent 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 r�ay not be as effectively used and will result in More intensive develoPr�ent 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 r�utual agreer�ent of the Authority, the Company and the purchaser of the revenue bonds as to the details of the lease or other revenue agreer�ent 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 (which r�ay . be in the form of a single note) in . an amount not to exceed approximately $7,000, 000 (other than such additional revenue bonds as are needed to complete the Project) is authorized to - f.inance the costs of the Project and� the recor�mendations of the Authority' s staff, as set forth in the staff ineMOrandum to the Cor�Missioners �which was presented to the ComMissioners, are incorporated herein by reference and approved. � . � , , , �::_:�::: . � �:�::�::: � . �;i��:�f�� 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 Cor.imissioner of Securities, requesting his approval, and other o£ficers, emplovees and agents of the AUTHORITY are herebv authorized to provide the Cor�r.►issioner with such preliminary information as he Mav require. 4. There has heretofore been filed with the Authority a form of Prelininary Agreer.►ent 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 beer� examined by the Comr�issioners. It is the purpose of said Agreer�ents to evidence the commitment of the parties and their intentions with respect to the proposed Project in order that the Cor�pany 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 allow for the issuance of industrial revenue bonds ( including, ?f deemed appropriate, any interirn note or notes to provide temporary financing thereof) to finance the entire cost of the Project upon agreer�ent 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 ' V--- Agreements. � . 5. Upon execution of the Preliminary Agree�ent by the Company, the staff of the Authoritv are authorized and directed to continue negotiations with the Company so as to resolve the renaininq issues necessary to the preparation of the revenue aqreement and other docu�ents necessary to the acloption by the Authorityo uf its final bond resolution and the issuance and delive ry of the revenue bonds; provided that the President (or Vice-President if the President is absent) anc3 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 1, to accept a final offer of the Underwriters made by the Underwriters to. purchase said bonds and to execute an underwriting agreer�ent 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. ^ _' , �:=:.�:' ���:�::: . . r � � . _.. ;���1'!� � 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 tir.►e to time thereafter deer� 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 AqreeMent and anv additional a��ailable information the City Council May request. � 8. The actions of the Executive Vice-President of the Authority in causing public notice of the public hearing � and in describing the general nature of the Project and estimating the principal ar�ount of bonds to be issued to -..: finance the Project and in preparing a draft of the proposed application to the Cor�r�issioner 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 December 16, 1980 � Attest • President The Port Authority of the City . of Saint Paul Secretarv . . ::.... � - • , .�t y,,� . . � . ��� , � ����':'� �`:"�` ' ���.� �V � � � 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 r�eaning 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 cred�it 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 A4innesota, 1976, Chapter 234, to the issuance of the revenue bonds ( including any interim note .or notes) herein contemplated and_ any additional bonds which the Authoritv may prior to issuance or from tir.►e to time thereafter deer� 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 Aqreement and anv additional available information the City Council r�ay request. � 8. The actions of the Executive Vice-President of the Authority in causing public notice of the public hearing and in describing the general nature of the Project and estimating the principal ar.►ount of bonds to be issued to --- _.. finance the P�roject and in preparing a draft of the proposed application to the Cor�r�issioner 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 December 16, 1980 / � ;� /' � � / , ., ,: Attest \ �,G / ' `!��.l.r.� �/ � � Presiderrt . The Port A thority of the City of Saint Paul � � � �� ` c. ' _ ��'�• Secretarv /' � f,m d- PC- o'�-�- �8/-y�. , 0 ��_ ., , . OM Ol : 12/i 975 . � Rev. : 9/8/���V��� EXPLANATIQN QF ADMINIS7RATIVE ORDERS, . RESOlUTIONS, AND ORDINANCES tr � - ' ��,�;F�M � � ���► . oEC� ������ . December �6, �9�0 . ��` .: _ Date. �c�Ft�c� : T0. MAY GEORGE LATIMER ���' �' � � FR: E• • �_ PIANNING & ECONOMIC ! DEVELOPMENT, RE: INTER TIDNAL MULTIFOODS CORPORATION $7,000,000 REVENUE BOND ISSUE '�� ACTION REQUESTfD: • � In accordance with the Laws of.Minnesota, Chapter 234, it is requested that the °�ity Council, by Resolution, a draft copy of which is attach�d hereto: approve the issuance of a revenue bond issue in the amount of approxtmately $7,000,�0 to finance the expans�ion and moderr�ization of a large durum flour mill operated by International Multifoods at '805 North Rice Street. This project would increase� the capacity of the mill by 43� and rvould bring the facilfty in total c+�liance with ERA and OSHA standards. PURPOSE A�ND RATIQNALE FOR THIS ACTION: �� � � The purpase of. �Che revenue bond issue is to finance the expansion and moderniZatian of the flour mill operated tiy I��rnational Multifoods to siqnificantly increarse the efficiency of the mill and permit them to remain competitive in the pasta industry. Approximately five new jobs will be created as a result of this project. ATTACHMENTS: Staff Memorandum Draft City Council Resolution Port Authority Resalution No. 1759 '