274697 WMITE - CITV CLERK y� y���
PINK - FINANCE E� �A
GANARV - OEPARTMENT G ITY OF SA I NT PAUL F le ci1NO. � ij
BI.UE - MAVOR
o�ncil Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
WHEREAS:
1 . On March 25, 1980, the Port Authorjty of the City of Saint Paul adopted
Resolution No. 1624, giving preliminary approval to the issuance of revenue bonds in the
in9tial principal amount of approx9mately $1 ,000,000 to finance the acquisition and in-
stallation of pollution control equlpment necessary to meet air emission standar�s-.as
stipulated by the Minnesota Pollution Control Agency at the Olympia/Hamn's brewing
facility in St. Paul .
2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds
authorized by the Port Authority of the Cjty 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 facil9tate the issuarrce 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. 1624, the exact detajls 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 Requested by Department of:
Yeas M�H�N Nays
Hozza --�- �n Favor
Hunt
Levine _ � __ Against BY
Maddox
Showalter
Tedesc A� g 1980 Form Approved by City Attorney
Adopted b ouncil: Date �
Cer ied Passe y C n .il Secretary
BY ���� �D
�1p y :Vlavor: Dat �R 1 0 1980 Appr y Mayor for Submis 'on o Council
gy By
M�t.tSNED A P R 1 9 1980
P�4 R T . �'�����
AUTHORITY �
OF THE CITY OF ST. PAUL
� Memorandum � �
TO: BOARD QF COMMISSIONERS DAT� March 20, 1980
(March 25, 1980 Regular Meeting)
FROM: �,F. Faue �
/ ,
SUBJECT: OLYMPIA BREWING COMPANY
PUBLIC HEARING - SALE OF BQNDS
$1 ,000,000 POLLUTZON CONTROL REVENUE BOND ISSUE
RESOLUTION N0. 1624
1 . THE COMPANY & THE PROJECT
Olympia Brewing Company, with headquarters in Olympia, Washington,
operates the Olympia/Harr�n's brewing facility in St. Pau1 . The Port
Authority Commission approved a $1 ,000,000 issue for Olympia in October, �
1975, proceeds of which were used to install equipment to upgrade and
increase the capacity of the brewery. Bonds at that time were issued
as a Revenue Agreement with the company as a credit and no obligation
to the Port Authority. .
At the present time, the company is required to install certain items of
pollutlon control equipment necessary to meet air emission standards as
stipulated by the Minnesota Pollution Control Agency. The bond issue to
cover acquisition, installation of equipment and related expenses will
be $1 ,000,000. Construction is expected to start in the early summer
of 1980 and be completed by December, 1980.
The Port Authority notified Districts 4 and 5 on February 22, 1980, and
met with.them on Tuesday, March 1_8, to answer several questions they had
raised Zn regard to the following: �
a. The company burned coal until February, 1979, at which time they
were directed by the Pollution Contro] Agency to install equipment
to eliminate pollutants generated by the coal plant. The company
has the specifications from the PCA and is in the process of sub-
mitting the permit as required to insure that the equipment meets
the PCA`s specifications.
b. Coal will arrive by rail car as it did in the past and will be
stored inside the �existing building. They consume approximately
one car per day. There is no outside storage and no additional
storage will be built.
` � ' ������
BOARD OF COMMISSIONERS �
March 20, 1980 �
Page -2-
c. Regarding additional structures, a bag house will be constructed
on the side of the existing power plant, all of which are on the
interior of the site and not visible from the neighborhood.
d. Regarding any impact on the open space, Swede Ho11ow, no activities
will be taking place that are not there already, including rail
traffic. No additional structures will be built that have a direct
impact on the open space. �
At our meeting with District 5, the answers to the questions were satis-
factory to the members in attendance.
2. FINANCING �
Miller & Schroeder Municipals have agreed to underwrite the $1 ,000,000
industrial revenue bond issue. The issue will be structured as a loan
agreement wherein the company`s financial statement provides the credit
for the bonds and the credit or obligation of the Port Authority is not
pledged. The anticipated term of the underwriting agreement 1s 15 years.
The Port Authority will receiYe its normal fiscal and administrative fees
a� follows:
First l0 Years - $300/month (or) $3,600/year �
Remai,nder of Term - $400�month (or) $4,800/year
The cost breakdown for the issue is as follows:
Construction and Installation $ 970,000
Legal and- Placement Expenses 30 000
TOTAL ,000,000
The corporate f1nancial statement for fiscal year 1979 is in the final
stages of completion. Submitted for your review is a 10-year summary
from their certified audit for fiscal year 1978 prepared by Deloitte,
Haskins & Sells. A copy of th� Consolidated Balance Sheet of the 3rd
quarter ended September 30, 1979 indicating a stockholders equity of
$75,909,000 is also attached. .
3. RECOMMENDATIONS
The Port Authority published public notice in the Legal Ledger and St. Paul
Dispatch-Pioneer Press on March 8 and March 10 respectively as required
under .the amendment to Chapter 474. If the proj�ct is approved by the
C�mmisslon, a formal applicatlon will be submitted to the Commissioner
of Securities.
Staff has interviewed representatives of the company and met wlth the
District DeYelopment Councll . The installation af the equipment is neces-
sary� in order to meet the stipulations of the Minnesota Pollution Control
Agency. It does not add value qr tax base to the facility nor would it
create a►�y addltional employment, but it does achieve the necessary air .
emission requirements. Staff recommends approval of Resolution_ No. 1624.
JFF:ca
Attach.
Resolu�ion No. 1624
RESOLUTION OF
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
WHEREAS, the purpose of Chapter 474, Minnesota �
Statutes, known as the �•�iinnesota I�unicipal 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 promotian
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 Olympia Brewing Company
(hereinafter referred to as "Company" ) a request ti�at the
Authority issue its revenue bonds (which may be in the form of
a single note) to finance the acquisition, installation and
construction of facilities for the abatement and control of air
pollution (hereinafter called the "Project" ) to be used in
connection �vith a revenue producing enterprise located in the
City of St. Paul , all as is moY�e fully described in the staff
report on file; and
WHEREAS, the Authority has been advised by the
Company that in order for the Company to operate said
enterprise at full capacity, it is necessary for the Company to
com;nence acquisition and construction of the Projecr to enable
said enterprise to meet state and federal pollution control
standards; and
WHEREAS, 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 - �
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 the Project and subsequent
operation of its enterprise would be significantly reduced, but
the Company has also advised this Authority that with the aid
of revenue bond financing, and its resulting low borrowing
cost, the Project is economically more feasible;
WHEREAS, Miller & Schroeder Municipals, Inc. (the
"Placement Agent" ) has made a proposal in an agreement (the
"Placement Agreement") relating to the purchase of the revenue
bonds to be issued to finance the Project;
WHEREAS, the Authority, pursuant to i�linnesota
� 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 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, 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
Author:ity 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
6usiness 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 by
helping the Company to meet state and federal pollution control
standards, thereby allowing the Company to make �maximum
utlization of its existing plant capacity resulting in the
maintenance of the assessea value of the Company and assisting
in the maintenance of current employment levels all of which
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 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 (which may be in the for� of a
single note) in an amount not to exceed approximately
$1,000,000 (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
Comr.iissioners 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 Placement 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 corunencement of the
acquisition, installation and construction of the Project with
the assurance that there has been sufficient "officia:l 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
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 revenue agreement and other documents necessary to the
adoption by the Authority of its final bond resolution and the
� issuance and delivery of the 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,
Chapter 234, to the issuance of the revenue bonds (incluaing
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
4, . � ♦
- the Executive Vice President of the Authority is hereby
authorized and directed to forwara to the City Council copies
of this resolution and saia Preliminary Agreement and any
additional available information the City Council may request.
8. The actions of the Executive Vice-President of
the Authority in causinq 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 March 25, 1980 ` � . �
L/ �/
. � �� t� `
Attest. � l
' en .
The �or Authority of the City
of Saint Paul
retary
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