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277434 WHITE - CITY CLERK ��/'-1 A CANARY - DEPARTMENT COUIICII �r� � `��v s BLUE - MAYOR G�I T Y O F S A I N T PA IT L File N O. � n 'l Resolution Presented y Referred To Committee: Date Out of Committee By Date WHEREAS: 1 . On August 18, 1981 , the Port Authority of the City of Saint Paul adopted Resolution No. 1867, giving preliminary approval to the issuance of revenue bonds in the initial principal amount of approximately $4,015,000 to finance the construction of a 75,000 Sq. Ft. manufacturing facility on Parcel E-5 in Riverview Industrial Park for Viking Drill and Tool , Inc. 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 resolutio� 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 pur.poses described in the aforesaid Port Authority Resolution No. 1867 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 Depactment of: Hunt �� levine In Favot Maddox M`M� _ � __ Against BY Tedesco Wilson SEP 1 7 1981 Form Approve y City y Adopted by Council: Date — . F Certified a-s d by Co ncil cre BY < B Appr d a or: Dat P 1 � � 81 Appr v by Mayor for b i5`sion to Council , BY - B Y UBLISHED S E P 2 6 198 _� � RT � . , AUTHORITY �'���`� OF THE CITY OF ST. PAUL Memo�andum TO: BOARD OF COMMISSIONERS DATE August 14, 1981 (Meeting August 18, 81) FROM: Donald G. Dunshee SUBJECT: PUBLIC HEARING - SALE OF BONDS PRELIMINARY AND UNDERWRITING AGREEMENT VIKING DRILL AND TOOL, INC. - $4,d15,000 REVENUE BOND ISSUE RIVERVIEW INDUSTRIAL PARK RESOLUTION N0. 1867 PUBLIC SALE HEARING - SALE OF LAND VIKING DRILL AND TOOL, INC. RESOLUTION N0. 1868 1 . The Company Viking Drill and Tool , Inc. is presently located at 470 Kittson Street near the intersection of East Seventh Street and Lafayette Road. The Company owr�s tt�e facility which contains approximately 45,000 Sq. Ft. The plant is old and antiquated and they have out- grown the facility. The Firm manufactures high speed steel twist drills and sells to distributors and jobbers throughout the United States. At the present time they employ 130 people and operate on a,t Q shift basis. The Company projects employment will increase w�t�i�n ten years to 250. 2. The Project The Company proposes to construct a 75,000 Sq. Ft. manufacturing facility on Parcel E-5 in Riverview Industrial Park. This site contains 131 ,817 Sq. Ft. or slightly more than three acres. This site is located at the South end of the Park and is in an area that will be restricted once the airport regulations for the Downtown St. Paul Airport have been approved by the Metropolitan Airports Commission and the Minnesota Department of Transportation. Once those restrictions have been approved it would be impossible to develop the site with a facility that would have more than 45 employees. Prior to the time the Company made its corr�nittment to proceed with a new facility on the site they conducted soil tests and determined after analysis by their contractor and structural engineer it would , - ""'° ,� ���t�i BOARD OF COMMISSIONERS - VIKING DRILL AND TOOL, INC. (Meeting August 18, 1981 ) Page 2 cost approximately �400,000 to $600,000 to support the building with piling, grade beams and structural floor. The Company would relocate their entire operation from their present facility. This is the only manufacturing plant they have in the United States, however, they do lease warehouse space in various major cities. 3. Financing The proposed `inancing 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 $ 3,200,000.00 Bond Issue Expense 25,0�0.00 Capitalized Interest (6 Months) 207,000.00 - Debt Service Reserve 475,000.00 Discount 108,000.00 4,015,G00.00 The debt service reser-�e or� the bond issue would be self amortizing with the Port Autnority 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 fisca] and a�ninistrative fee based on the formula of .36� per million per year for the first 10 years, .48� per million per year for the second 10 years , and .60% per million per year for the final term of the lease. 4. Underwriting Mi11er and Schroeder Municipals has agreed to underwrite the bond issue with the interest rate to be set at the time the bon�s are sold. 5. Term of the Lease The term of the lease would be for thirty years with the Company having an option to purchase the land for $1 .00 and the building for $1 .00 plus retirement of any outstanding bonds at the end of the lOth, 20th and 30th years. The Company .wi]1 be spending approximately $500,000 of their ow�n money to install heat treating and oil cooling tanks and machinery in the building to accommodate their manufacturing operation. In view of the fact this is equipment, it is not included as part of the bond issue. � . � ��``��3� . Y, ! tk� H BOARD OF COMMISSIONERS VIKING DRILL AND TOOL, INC. (Meeting August 18, 1981) Page 3 Staff notified District 3 of the proposed project on May 15, 1981 . As of this date we have not received any oral or written communication on the project. 6. Recorrvnnendati on Staff has reviewed the project in detail , the financial statements of the Corporation, interviewed the officers and recommends approval of Resolutions 1867 and 1868. sjs -— '�'` . . n , J' ' G ` � v ���� Resolution No. 1867 , i RESOLUTION OF. THE PORT AUTHORITY OF THE CITY OF SAINT PAUL 4JHEREAS, the purpose of Chapter 474, Minnesota Statutes, known 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 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 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 ViY.ing Drill and Tool, Inc. , an Illinois Corporation (hereinafter referred to as "Company") a request that the Authority issue its revenue bonds (which may be in the form of a single note) to finance the acquisition, installation and construction of an approximately 75,000 square foot manufacturing facility (hereinafter collectively called the "Project" ) in the City of St. Paul, all as is more fully described in the staff report on file; and P�fiEREAS, 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 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 � � , ' � . . n►,,,,,��tl� �e•�� ��1fiEREAS, the Projeet to be financed by revenue bonds will result in substantial employment opportunities in the . Proj ect; WHEREAS, the Authority lias 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; 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; ��VfiEREAS, 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 4,THEREAS, 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, B� 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 � AutY�ority 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 encourage the development of economically sound industry and commerce and assist in the prevention of the emergence of blighted and marginal land, and . � . . . R � e��� 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 $4,015,000 (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 Comnissioners 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 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 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 evidence the commitment of the parties and their intentions with respect to the proposed Project in order that the Company may proceed F�ithout 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 appronriate, any interim note or notes to . � ���y� 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 tlze 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 b�nds; 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 lie� 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 Undenariters 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. 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, C1-iapter 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. , � � • /� • ,� F ' • l� � ���� 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 confirmed. Adopted August 18, 1981 `�i, 1 Attest � �' � Pr iden� � The t uthority of the City , ' , of Saint Paul S �retary , � , , � `�n!�� 1,��1 McMahon Geor9e �� '� Councilman Hall Room 716 �M�nn. 55102 ; ;, St. Paul, �. , �. , � ; PORT AUTHORITY OF THE CITY OF SAINT PAUL � 25 WEST FOURTH STREET • SUITE 1305 • ST. PAUL, MINN. 55102 • PHONE (612) 224-5686 August 18, 1981 Mr. James Bellus Director Planning and Economic Development Department City of St. Paul 14th Floor, City Hall Annex St. Paul , Minnesota 55102 SUBJECT: VIKING DRILL AND TOOL, INC. $4,015,000 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 revenue bonds in the amount of $4,015,000 to finance the construction of a 75,000 Sq. Ft. manufacturing facility on Parcel E-5 in Riverview Industrial Park for Viking Drill and Tool , 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. 1867 which authorized the sale of the revenue bonds in the amount of $4,015,000. Your expeditious handling of this matter will be appreciated. �\Yours truly, � , J � ugene A. Kraut Assistant Executive Vice President EAK:sjs cc: R. Broeker tOBERT F.SPf2AFKA EUGENE A KRAUT,C.I.D. DONALD G.DUNSHEE,C.I.D. CUFFORD E.RAMSTED RONALD O.SCHEITLE xECUnvE wCE PRESDE^lt ASSiSTnNT ExECUiIVE v�CE PRES�OEM pRECTOR.xaDUSx�Ai ONELOpbtEM G+�EF B�GiNEHt CwEF�4CCOUNinNf �OMMISSIONERS GEORGE W.WINTER GEORGE R. MCMAHON Af7THUR N.GOODMAN VICTOR P.REIM JEAN M.WEST WIWAM Wll,$pN. WILLIAM J.SEIFER7 PRESiDEt�T V10E PftESiDEM SECREIARV i�EAW2ER '�� C.I.D. Certified Industrial Developer _.: . ..�-, . _ • C1T�' . C)�+` ►..�i. .A.IivT P.A.�C7rL T:� � %� f�l' �:. 0���'IC�+ O�'+' TH.i+� CZTY COWi CIL � �;;"���,� ,��- � ;- f-: '"'�;, 3. r:*� - �,� �,�L' '� ��:s+e.., �tsiyi�Cr, � � . � . � - '�'-� Dafie ; September 14, 1981 ti� � � . s GQI�+l �� i � � � � � � � 0 � � r , . Tp : Sain�t Pout Cit� Coun�il � �R Q� � C O�rl'i I�(�� O�1 FINANCE, MANAGEMENT & PERSONNEL George McMahon � chaifman, makes the foll�ov�ing � - . repor4 on C..F. , - �_[� O�dinance (l�) Q Resolution . [� flfiher . . T i I'L E : � . At its meeting of September 10, 1981, the Finance Committee recommended approval _ of the following. � � _:'_-""�-�� _ � _ 1. Resolution approving settlement of an appeal of an assessment for tree removal. (12208-GM) 2. Resolution approving mortgages pledged by Midwest Federal Savings and Loan , Association to protect city funds held by Association. (12559-GM) � 3. Resolution changing grade of Police Dispatcher in Section 3.B from present � Grade 19 to Grade 23. 4. Resolutions for renewal of life and liealth insurance contracts for City and School District employees from October 1, 1981 to September 30, 1982. (12227 through 12236-GM) . _ _ 5. Resolution approving issuance of revenue bonds by Port Authority to finance �. construction o� manufacturing & warehousing facility for EMC Corporation. C12223-GM) • � ' ' 6. Resolution approving issuance of tax exempt mortgage note by Port Authority to finance pollution control equipment at Knappen Molasses facili�ty. (12224-GiK) 7. Resolution approving issuance of revenue bonds by Port Authority to finance construction of manufacturing facility for Viking Drill and Tool, Inc. on � Parcel E-5, in Riverview Industrial Park. (12225-GM) , 8. Resolution approving issuance of tax exempt mortgage note by Port Authority to finance construction of inedical office building attached to Midway Hospital . for the University Park Building Limited Partnership. (12226-GM) Ci-t'y jj�LL SEVE�iTH 'FLOOR SAIiv'T Pt1UL, tlIN\ESO"fA SSIOZ �::.�����% . . , , F>n� �- Pc # g/-��� � o�+ o�: �Z��g 5 . • Rev. : 9/8I76 _ : �`�43� , EXPLANATION Of A�INISTRATIVE ORDERS, RE50LU7IQNS, AND ORDINANCES pa e: August 18, 1981 �. RE�C�I��D - T0: MAYOR 6 GE LATIMER AUG Z 4 �98� MAYC��� n��a��F FR: E. A. Kr . Paul Port Authority �� VIKING D ILL AND TOOL, INC. $4,015,0 0 REVENUE BOND ISSUE ACTION REQUESTED: • In accordance with the Laws of Minnesota, Chapter 234, it is requested that the City Council, by Resolution, a draft copy of which is attached her,eto, approve the issuance of revenue bonds in the amount of approximately $4,015,000 to finance the construction of a 75,000 Sq. Ft. manufacturing facility on Parcel E-5 in Riverview Industrial Park. The .facility the Company presently owns contains 45,000 Sq. Ft. , is old and they have outgrown it. PURPOSE AND RATIONALE FOR THIS ACTIDN: � The purpose of the bond issue is to finance the construction of a 75,0�0 Sq. Ft. manufacturing facility for Viking Drill and Tool , Inc. on Parcel E-5 ir� Riyerview Industrial Park. This site contains 131,817 Sq. Ft. or slightly mare than three acres. The Firm manufactures high speed ste�l twist drills and sells ,ta �obbers and distributors throughout the United States. At the present tir� they e�plby 130 people and operate on a two shift basis. The Company projects employment will increase within ten years to 250. ATTAGHMENTS: ' Staff Memorandum . Draft City Council Resolution � Port Authority Resolution No. 1867 .