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276566' �- .P C��ft T . AUTHORITY ���s� OF THE CITY OF S7. PAUL MemorQndum 70: BOARD OF COMMISSI�ERS DATE February 27, 1981 (Meeting March,5, �� � FROM: Donald G. Dunshec� � SUBJEGT: PUBLIC HEARING - PRELIMINARY AND UNDERWRITING AGREEMENT - WILLIAM C. NORRIS SUBLEASE TO FAST GROW INCORPORATED - $1 ,345,000.00 REVENUE BOND ISSUE - RIVERVIEW INDUSTRIAL AREA WEST RESOLUTION N0. 1788 PUBLIC SALE HEARING - SALE OF LAND - WILLIAM C. NORRIS - SUBLEASE TO FAST GROW INCORPORATED RESOLUTION N0. 1789 l . THE COMPANY Fast Grow Incorporated is a new company that will be formed by William C. Norris and his son, Roger to operate a new controlled environmental agricultural company in a new building to be constr- ucted on South Wabasha near Water Street. Mr. Norris is presently Chairman of the Board and Chief Executive Officer of Control Data Corporatio�� Control Data Corporation has acquired a process called Geniponics from General Electric Company and will be licensing the growing process to companies throughout the United States. Fast Grow Incorporated will be one of the licenses for the Twin City Metropolitan Area and Ramsey County. 2. THE PROJECT The Company would construct a 24,000 Sq. Ft. facility to produce lettuce and tomatoes for resale to restaurants and supermarkets in the area as well as tree seedlings for sale to forestry companies. The new building would be a Fabcon type, would be landscaped and provide off-street parking for the 15 to 20 new employees that would be hired. In addition to the construction of a new building the project would include 10 year financing for approximately $700,000 in equipment for the building which would be amortized over the first 10 years of the 20 year lease. Under amendment to Chapter 474 the Port Authority published notices in the Legal Ledger and St. Paul Dispatch/Pioneer Press on February 7, 1981 , and February 17, 1981 , respectively that the proposed proejct would be con- sidered by the Port Authority Commission on Thursday, March 5, 1981 . If the project is approved by the Commission on Thursday, March 5, 1981 , a formal application will be submitted to the Commissioner of Securities before the bond issue is closed. i�... ` . . , r� O V�Y� ♦ BOARD OF COMMISSIONERS (March 5, 1981) Fast Grow Incorporated ' Page 2 On January 17, 1981 we notified District 3 of the proposed project and have discussed the project and projected employment with the Community organizer for the district. We have received no oral or written opposition to the project. 3. FINANCING The proposed financing of the facility would be done under Resolution No. 876. Proceeds from the bond issue would be as follows: Acquisition $ 115,000.00 Building 399,537.50 Equipment 700,000.00 Debt Service Reserve Escrowed* Capitalized Interest - six months 70,112.50 Bond Issue Expense 20,000.00 Discount 40,350.00 �1 ,345,000.00 *Company funds reserve initially at $200,050.00. After the first ten years reserve drops to $97,250.00. In addition to the monthly rent, the Company will pay a fiscal and admin- istrative fee as follows: First 10 Years $300 per month per million issued Second 10 Years $400 per month per million issued In view of the fact that this is a new corporation, Mr. Norris has agreed to personally guarantee the bonds for the life of the issue plus providing a cash debt service reserve for the project. 4. UNDERWRITING Miller & Schroeder Municipals has agreed to underwrite a bond issue for a term of 20 years commencing March 1 , 1981 . The interest rate for tre bond issue will be set ten days prior to closing. 5. TERMS OF THE LEASE The proposed lease is for a term of 20 years and provides an option to purchase at the end of the lease for 10� of the bond issue cost. In addition to the option to purchase at the end of the lease, the company would have an option at the end of the tenth year for 10� plus discharging the outstanding bonds. i �_ r ����� BOARD OF COMMISSIONERS . (March 5, 1981) Fast Grow Incorporated Page 3 6. RECOMt�IENDATION Staff has reviewed the project in detail along with the proforma and personal statement of William C. Norris and recommends approval of Resolutions 1788 and 1789 authorizing the issuance of a �,1 ,345,000.00 bond issue. sjs . ` � � Resolution No. 1788 ��5�� RESOLUTION OF THE PORT AUTHORITY OF THE CITY OF SAINT PAUL WHEREAS, tlze purpose of Chapter 474, Minnesota Statutes, knawn as the Minnesota 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 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 WHEREAS, factors necessitating the active promotion and development of economically sound indus�ry 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 n�eds of the increased population and the need for develop:nent of land use wYiich will provide an adequate tax base to finance these increased costs and access to employment opportunities for such population; and WHEREAS, The Port Authority of the City of Saint Paul (the "Authority") has received from William C. Norris and Roger Norris, a request that the Authority issue its revenue bonds on behalf of a corporation to be formed under the laws of the State of Minnesota and identified as Fast Gro,a Incorporated (hereinafter referred to as "Company") to finance the acquisition, installation and construction of facilities for a controlled environmental agricultural facility (hereinafter called the "Project") in the City of St. Paul, all as is more fully described in the staff report on file; and �WfiEREAS, the Authority desires 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 • f �� , 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 revenue bonds will result in substantial employment opportunities in the Project; WHEREAS, 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 the Authority that with the aid of revenue bond financing, and its resulting low borrowinq cost, the Project is economi.cally more feasible; � "� . WHEREAS, 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, 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 proposal 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 w2zich 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 producing enterprises engaged in any ,. ' •_I ����� , business with'in 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 will help to prevent chronic unemployment, and will help the City 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 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 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 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 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 approximately $1,345,000 (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 Com�nissioners, 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 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 forrn of Preliminary Agreement between the Authority and Company, relating to the proposed construction and financing of the Project and a form of the Undezwriting • ' ` � �C�C�t�t� , 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 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 (includirig, 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. 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 tY►e 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 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 l, to accept a final offer of the Underwriters made by the TJnderwriters 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 P ort 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. , , �65�� . . , . 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 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 said Preliminary 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 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 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 c firmed. ; i Adopted March 5, 1981 ` Attest � P t The Port thority of the City � of Saint Paul L C.�.�!'� �"�/�`'L-�i S.�cretary �:: ✓I. 'f.. � lJl l .L ��, ��.�1V r.l �.t].�.J 1..� f>r�w ��� �;"�- O�'FIt7E OF TIIF CITY GOIIIITCIL � ` l :�:.a', `�; ����i.t>� � : �� � �.e. � pt.� . ;I`: 17111+1s'!if!'+'• i . 4:;,� +i.t�sa�aCW;;: �� �' . f.�,. ;;� Da i e : March 19, 1981 _ __ _ _ `�ti.; �. �. _.. CC� �3 � fT� � � � � P � �� T0 : Saint PQ�( Cifi� Co�ncil �ROO�+,� � CatTttTit�$�� Q€� FINANCE, MAPIAGEMENT & PERSONNEL George P•1cMahon , choi�-man, makes the following report on C. F. _� Qrdinance (8) X[� Resolutian � Other � ���� : At its meeting of March 19, 1981 , the Finance Committee recommended approval of the following: , 1 . Resolution approving budget amendments in CD Years III , IV, V,. and VI for CD Year III Selective Clearance and CD Year IV Rehab Grants projects, CD Year V Tree Removal and CD Year VI Tree Planting Project. " 2. Resolution approving budget amendments in CD Year VI to provide additional $20,000 for Handicapped Accessibility for city buildings and services program. 3. Resolution appraving transfer of funds to fund new positions of Electrical Inspector and Plumbing Inspector to work in National Housing Serviee areas. 4. Resolution approving mortgages pledged by Guaranty State Bank of St. Paul as collateral to protect city funds held in said bank. (11699-GM) 5. Resolution revising minimum qualifications for Building Maintenance Supervisor--Fire Department. (11755-Gh1) 6. Resolution authorizing Minnesota Mutual Life Insurance Company to pay dividends on premiums paid by employees. (11807-GM) 7. Resolution approving issuance of approximately $2,50�,000 of revenue bonds by the Port Authority to finance construction of facility for Hartzell Corporation. (11798-GM) 8. Resolution aQproving issuance of approximately $1 ,345,OJJ of revenue bonds by the Port Authority to finance acquisition of site on South l�labasha Avenue for construction of industrial facility by IrJilliam C. Plorris. (118�J0-GM) (CONTINUED . . . ) CiTY HALi. SEVEtiT�I FLOO� SAINT PAUL, 1dI��lESOTA 51102 . � �� F rn �.. � � gG.- � � � � . OM Ol: t2/19 5 , Rev.:, _9�J8/76 EXPCANATION QF ADMINISTRATIYE ORDER5, ' RESO�.UTIONS, ANQ ORDINANCES � s�.� f` _ �r-rr���� �ate: t�.�����r;��� �:�.. .. , T0: MAYO GEORGE LATIMER ���������� �fw;' 1 �1981 FR: � E. A. � , _.... RE: WILLIAM C. N4RRIS SUBLEASE TO FAST GROW INCORFORATED RIVERVIEW INDUSTRIAL AREA WEST $1 ,345,000.00 REVENUE BOND ISSUE . ACTION REQUESTED: In accordance with the Laws of Mi�nnesota, Chapter 234, it is requested that the � City Council, by Resolution, a draft copy of whicfi is attached he�eto, approve the issuance of a revenue bond issue in the amount af approximate'�y �1,345,000.00 to finance the acquisitian of a site on South Wabasha Avenue previvusly ormed by • Kaplan Paper Box Company for construction of a new industrial facfility by William � C. Norris. Mr. 1�orris would sublease the land and building to a new company fie . is forming called Fas�-Grow �ncorporated The corporat�on would lease the exfsting two-story Kaplan Paper Box facility south of vacated Fairfield Avenue and c�nstruct a new building. In addition to the construction of the new building �the�project would include 10 year financing of approximately $700.000 in equipmer�t for the building. - PURROSE AND RATIONALE FOR THIS ACTION: � � � The purpose of the revenue bond issue is to finance the acquisition of a site on � South Wabasha Avenue previously owned by Kaplan Paper Box Compar4Y for constructic� of � rtew industrial facility by William C. Norris. The building woutd be of Fabcon �riar, �� �e �.ar�scaped and provide off-street parking. The ffrm r�ould use 6eriiponics �w� � produce tree seedlings and selected salad v�getables for resale to resta�� � superniarl�ets in the area. Approximately 15 to 20 new jobs will be creat�d as a resutt of this project. ATTACHMENTS: ` Staff Memorandum Oraft City Council Resolution Port Authority Reso]ution No. 1788 � .