274698 M�HITE - C�TV CLERK CQ{]RC1I 'I�• 4s�8
PINK - - FINANCE G I TY OF SA I NT PAU L �
CANARY - DEPARTMENT
BLUE - MAVOR File NO•
,
Cou cil Resolution
Presented By '��
Referred To ` Committee: Date
Out of Committee By Date
WHEREAS:
1 . On March 25, 1980, the Port Authority of the Ci�`y o�f Saint Paul adopted
Resolu£ion No. 1623, giving preliminary approval to the issuance of a tax exempt mortgage
note in the initial principal amount of $1 ,850,000 to finance the construction of two
office/warehouse facilities totaling approximately 71 ,000 square feet for M-M Development
Corporation on a 4.6 acre site to be acquired from the Burlington-Northern Railroad.
2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds
authorized by the Port Authorjty of the City of Saint Paul , shall be issued only with the
consent of the City Councll 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 a976, 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. 1623, the exact details of which, including, but not limited to, provisions relating
to maturities, interest rates, discount, redemption, and for the issuance of additional
bqnds 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 Requested by Department of:
�H�o�za. —L— [n Favor
Hunt
Levine a __ Against BY
Maddox
Showalter
Tedesco ppR g 1984 Form Appr ved by Cit Attorney
Adopted by ncil• Date „ •
Certi Pass y Cou .ecretafy By- ~iG'�zY"— � � ll�
/�1pp by 1Aavor: Dat — APR � g I9SO App o d y Mayor for Submi i n Council
gy — BY
�..tSttED APR � 9 1980
�► o � T � �- � ��
,�►�tJTHORITY . � • 2�����
OF THE CITY OF ST. PAUL �
. Memorandutn � � .
To: BOARD OF COMMISSIONERS D�TE: March 1��, 1980
(March 25, 1980 Regular Meeting)
FROM: J.F. Faue .
SUB.tEC?: M-M DEVELOPMENT CORPORATION
PUBLIC HEARZNG - SALE OF BONDS
$1,850,000 TAX EXEMPT MORTGAGE NOTE
RESOLUTION N0. 1623
1 . THE COMPANY & THE PROJECT
M-M Development Corporation, a Minnesota corporation, is a development
and construction company. They build for their own account multi-tenant
spec office�warehouse and other industrial facilities as well as build to ,
suit for owner occupied industrial facilities. The company is presently
located at 680 Kasota Avenue, M�nneapolis, Minnesota.
The company praposes to build a multi-tenant facility comprised of two
buildings totaling approximately 71 ,000 square feet on a 4.6 acre site
they are acquiring from the Burlington-Northern Railroad. An office/
warehouse facllity of 31 ,200 square feet will become the new corporate
headquarters for M-M Development and also serve as a storage and service
facility for their various equipment. The second facility on this site
will be mu1t1-tenant officejwarehouse comprised of approximately 40,000
square feet.
The company has entered an offer to purchase with the Burlington-Northern
for the acquisition of the site. The offer is contingent upon approval of
industrial revenue bond financing. The total project �s expected to
generate employment for approximately 100 people. In their reTocation of
� the corporate headquarters to the new office facility, they will transfer
35 members of their corporate staff. The estimated value of the project is
approximately $2,400,000, including the acquisition of the land, $1 ,850,000
of which will be provided from the proceeds of a tax exempt mortgage note,
the balance to be equity participation by the company. The project is ex-
pected to generate in excess of $50,OOQ per year in new real estate taxes
for the City of St. Paul .
2. FINANCING •
Financing for the construction of the project is proposed through the
private placement of a tax exempt mortgage note wherein the credit of
the Port Authority is not offered as a security to the issue. The under-
writer, Miller & Schroeder Municipals, will obtain the permanent mortgage
. � � . .
.
r Board of Corr�ni ssi oners � �
March 19, 1980 .
Page -2- . .
at which time the project will again be presented to the Port Authority
for the final resolution and approval of the tax exempt mortgage note.
All expenses required for the issuance of the note such as legal , under-
writing, and other miscellaneous costs are to be borne by the company.
The Port Authority will collect its normal fiscal and administrative
fees in the following amounts: �
First 10 Years - $555.00/month (or) $ 6,660/year
Second 10 Years - $740.00/month (or) $ 8,880/year
Third 10 Years - $925.00�month (or) $11 ,100/year
Financial statements of the company are attached for your information
as well as a brochure outlining the company's development activities.
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 project is approved by the
Gommission, a formal application will be submitted to the Commissioner
of �ecuriti.es_, �
. Early notification to District 12 was submitted February 22, 1980. The
Port Authority staff and members of the corporation met with the District
12 Gommunity Council on March 6, The District had na objection to the
project per se but did raise some questions relative to the pond that is
on the site and whether or not it would be maintained in its natural
state. The campany assured the District that it was not their intention
to fill the pond as they con�idered it an amenity to the overall develop-
ment. The company has submitted a letter dated March 13 stating that they
intend to preserve the pond in its natural state. A copy of the letter is
attached. It should be noted that the majority of the pond lies outside
the slte on railroad owned property.
Utility service to the site must be provided from Minneapolis as St. Paul
does not at the present time have� the necessary utilities extended on the
west side of Highway 280. Attached is a letter from Mr. Roy Bredahl , Jr.
indlcating the C1ty of St. Paul Public Works Department's compliance with
the utllities to be served from Minneapolis. Also attached are copies of
correspondence from the Minneapolis Public Works Department.
Staff has interviewed principals of the company and worked closely with
the underWriter and members of the District Council . The project provides
employment opportunities for the citlzens of St. Paul and generates addi-
tional investment and real estate taxes. Staff recommends approval of
Resolution No. 1623. '
JFF:ca
Attach.
. � 2"����8
Resolution No. 1623
RESOLUTION OF
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
WHEREAS, the purpose of Chapter 474, hlinnesota
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 . comr.lerce 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 t�-M Development Corporation
(hereinafter referred to as "Company" ) a request that the
Authority issue its revenue note to finance the acquisition,
installation and construction of a multi-tenant office
warehouse 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
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
. ._ . .i.. .. .. ,.... ._ . . . .. .. . ..._.. ._...._......
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 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
note to be issued to finance the Project; . _
WHEREAS, the Authority, pursuant to i�7innesota
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 note; 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
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 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 unemployr�ent, and will -help the
City to retain and improve its tax base and provide the range
of services and employr,ient opportunities required by its
population, and will help to prevent the movement of talented
and educated persons out of the state and to areas caithin 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 af 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
note the Project is hereby approved and authorized and the �
issuance of the revenue note of the Authority shall in an
amount not to exceed approximately $1,850,000 (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 Cor.tmissioners, 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 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
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 loan agreement and other documents necessary to the �
adoption by the Authority of its final bond resolution and the
issuance and delivery of the revenue note.
6. The revenue note ( including any interim note or
notes) and interest thereon shall not constitute an
indebtedness of the Authority or the City of Saint Paul within
th� meaning of any constitutianal 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 note (and interim note or notes) or
interest thereon.
?. In order to facilitate completion of the revenue
bond financing herein contemplated, the City Council is hereby
requested to consent, pursuant to Laws of P�innesota, 1976,
Chapter 234, to the issuance of the revenue note ( 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 note; and for such purpose
� ' the Executive Vice President of the Authority is hereby 2�����
� authorized and directed to forward to the City Council copies
of this resolution and said �Preliminary Agreement and any
additional available inforrnation 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 clescribing the general nature of the Project and
estimating the principal amount of the note to be issued to
finance the Project anc7 . in preparing a draft of the proposed
application to the Commissioner of Securities, State of _
t�tinnesota, 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 riarch�.�, 1980 /
. • , � L `
Attest � � ` ���` .
e s ' e.'}�
� � The Por�E Authority of the City
of Saint Paul .
ecretary , �
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