275656 ITV CLERK �������
FINANCE GITY OF SAINT PALTL Council
- DEPARTMENT File NO.
.JE - MAVOR �
Co�ncil Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
WHEREAS:
1 . On August 19, 1980, the Port Authority of the C�ty of Saint Paul adopted Resolution
No. 1687 giving pre19m9nary approval to the issuance of revenue bonds in the initial principal
amount of approximately $1 ,000,000 to finance the construction of 25,000 square feet of addi-
t�onal warehousing space for Anchor Paper Company, Tnc. at 480 Broadway in St. Paul.
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 C�ty 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 requis�te 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 f1na1 approval of the
details of said issue by the Port Authority of the City of Saint Paul. _
RESQIVED, by the C1ty Councll 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. 1687, the exact details of which, including, but not limited to, provisions relating to
maturities, interest rates, discount, redemption, and for the 9ssuance of additional bonds
are to be determined by the Port Authority, pursuant to resolution adopted by the Port
Authority, and the City Councjl hereby authorizes the issuance of any additional bonds
(including refunding bands) by the Port Authority, found by the Port Authority to be neces-
sary for carrying out the purposes for which the aforesaid bonds are issued.
COUNC[LMEN Requested by Department of:
Yeas Nays
tler Hunt �
Ho z In Favor
Hun Levine �i.�/
� Maddox � __ Against BY °T Z�
dd x McMahon
owalter Showalter 6 1980
edesco Tedesco SEP � Form Ap r ved by City Aft ey
Adopted by Council:yy�lson Date
Certifie I? s• d by Counc' ecr ry By � � O
By
t�p by IVlavor• � � 7 i980 Ap ov by Mayor f r iss'on to Council
By B
���fl SEP 2 7 �qRn
,.�
P� C� RT . ,
AUTHORITY �����
OF THE CITY OF ST. PAUL
Memorandum
TO: BOARD OF COMMISSIONERS � �'°`j� August 14, 1980
(August 19, 1980 Regular Meeting)
1
FROM: J.F. Faue
SUBJEG"f: pUBLIC HEARING - SAI.E OF LAND & BUILDING
ANCHOR PAPER COMPANY, INC.
RESOLUTTON N0. 1686
PUBLIC HEARING SALE OF BONDS
PRELIMINARY & UNDERWRITING AGREEMENTS
� $1 ,000,000 REVENUE BOND ISSUE
ANCHOR PAPER COMPANY, INC.
RESOLUTION N0. 1687
1 . THE COMPANY .
Anchor Paper Company, Inc. , located at 480 Broadway in St. Paul ,
proposes to expand their existing facility by adding approximately
25,000 square feet. The company has been located at its present
location for several years. They employ approximately 50 people
at the present time, and if this expansion is approved, wi11 add
approximately 10 additional employees. The company is in the
business of wholesaling industrial and fine papers to local and
regional accounts.
The company owns the site for the expansion (4 lots). The existing
structure and four additional lots are under mortgage with the First
Bank of St. Paul . The mortgage balance as of August 1 , 198p, is
$130,375.21 payable monthly in the amount of $3,718.24 with termina-
tion January 1 , 1984. The First has agreed in principal to provide
the Port Authority with the right to cure any defaults by the tenant.
This would allow the Port Authority to have control over the existing
and expanded facility in the event that the tenant should default on
its mortgage.
The existing property was appraised by Muske and updated as of June 20,
1980. The appraisal indicates a value of the existing property of
$330,000.
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BOARD OF COMMISSIONERS
August 14, 1980
Page -2-
2. THE PROJECT
The project calls for the construction of approximately 25,000 square
feet of additional warehousing. It is occasioned by the company's
needing not only expanded but modern facilities to handle their rapidly
growing business. The company is in the process of interviewing con-
tractors and identifying the exact contract amount at the present
time. This will be completed in the next few days. Based on preliminary
information, a bond issue of $1 ,000,000 will provide adequate funds for
construction and the related issue expenses. The specific construction
amount will be known before the final resolution authorizing the sale of
bonds is approved. We would anticipate that this amount would require a
bond issue of something less than $1 ,000,000. Inasmuch as the facility
to be built will be attached to the existing structure, heating, mechanical
� and other systems will be integrated; and there will be some other improve-
ments to the existing structure.
3. FINANCING
Miller & Schroeder Municipals have agreed to underwrite the proposed bond
� issue in an amount not to exceed $1 ,000,000. The allocation of the pro-
ceeds based on this amount would be as follows:
Construction $ 799,500
Debt Service Reserve 100,500
Capitalized Interest - 6 Months 45,0�0
Legal , Printing & Misc. Expenses 25,Q00
Underwriting 30,000
TOTA� , 0 ,0
Based on 9% interest, a monthly debt service of $8,144, or $97,728 annually,
wou]d be required. In addition, a fiscal and administrative fee would be
charged as follows: $300 per month, or $3,600 annually, for the first 10
yearss $400 per month, or $4,800 annually, for the second 10 years; and
$500 per month, or $6,000 annually, for the remainder of the term. The
term is for 30 years and provides a purchase option for 10% of the principal
amount of the bonds. The certified audit for the company for the years 1977,
1978 and 1979 is attached.
4, RECOMMENDATIONS
The Port Authority published public notice in the Legal Ledger and St. Paul
Dispatch/Pioneer Press on August 9 and 11 respectively as required under the
amendment to Chapter 474. If the project is approved by the Commission, a
formal application will be su4mitted to the Commissioner of Securities.
Early notice was sent to District 4 on July 18. To date, we have had no
written or verbal response.
Staff has interviewed officers of the company, reviewed their financial
statements and recommends approval of Resolution Nos. 1686 and 1687.
JFF:ca
Attach.
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' Resolution No. 1687
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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-
ment Act (here-ina-fter 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 comr.terce to prevent so far as possible
the emergence of blighted and marginal lands and areas of
chronic une?�ployment� and to aid in the development of existing
areas of blight, marginal. land and persistent unemployment; and
WF��EAS, factors necessitating the active promotion
ancl deve].opment of economically sound industry and commerce are
the increasing concentration of population in the metropolitan
areas ancl the _ra�idly rising increase in the amount and cost of
_ governmen tal services required to meet the needs of the
increased .popuZation and the' need for development of land use
which will provicle an adequate tax base to finance these
increas�d cos.ts and access to employment opportunities for such
popula�ion; and
WH�REAS, The Port Authority of the City of Saint Paul
(�he "Authority") has received from Hamel F. Hartinger
(hereinafter referred to as "Applicant") a request that the
. Authority issue its revenue bonds to finance the acquisition,
installation and construction of an ac7dition to the Anehor
Paper Company Facility (hereinaf ter called the "Project")
currently located in the C�,ty 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
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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 the
Applicant 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 Applicant 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;
T�IHEREAS, Miller & Schroeder Municipals, Inc. (the
"Underwriter") has made a proposal in an agreement (the
"Underwriting Agreement") relating to the purchase of the
revenue bonds tio 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 Applicant 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 Comriissioners
of the Port Authority of the City of Saint Paul, Minnesota as
fol�lows: " �
1. On the basis of inforr.iation 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
. ���s5s
� � 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
Applicant to undertake the Project, and that the effect of the
Pro�ect, if undertaken, will be to encourage the development of
econor;iically 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 er.tployment opportunities required by its
population, and wi].I 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
witliin the City and wiTl 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
Applicant in .financing the Project.
2. Subject ta the mutual agreement of the
Authority, the .Ap�Iicant and the purchaser of the revenue bonds
as to the details .of the lease or other revenue agreement as
defined in the Ac�, and o_ther docur.lents necessary to evidence
and ef fect the �ir.ancing of the Proj ect and the issuance of the
revenue bonds, Lhe Project is hereby approved and authorized
and the issuanc�_ of revenue bonds of the Authority in an amount
not to exceed _agproximately $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 "
recomr.►endations of �he Authority's staff, as set forth in the
staff inernorandum �ta- the Commissioners which was presented to
the Commissionersr are incorporated herein by reference and
approved.
, 3. rn ac.cordance 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 AUTHOR�ITY are hereby authorized to
prqvide the Corunissioner with �such preliminary information as
he may require.
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� 4. There has heretofore been filed with the
Authority a form of Preliminary Agreement between the Authority
the Applicant and Anchor Paper Cor�pany, 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 comr.titment of the parties and
their intentions with respect to the proposed Project in order
that the Applicant riay proceed without delay with the
comnencement 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
appr•opriate, 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 Agreer.ients.
5. Upon execution of the Prelim�.nary Agreement by
the Applicant and .Anchor Paper Company, the staff of the
Authority are autnorized and directed to continue negotiations
with the Applicant and Anchor Paper Company so as to resolve
the re�aining issues necessary to the preparation of the lease
and other c3ocunlents necessary to the adoption by the Authority
of its iinal bond resolution and the 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 �reasurer of the Authority in lieu of such
absent office-rs, are hereby authorized in accordance with the
provisions of Minnesota Statutes, Section 475.06, Subdivision
1, to acc�pt a final offer of the Underwriters made by the
Underwriters 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 indebted-
ness 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
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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 Lac�s of Minnesota, 1976,
Chapter 234, to the issuance of the revenue bonds ( including
any inter.im note or. notes) herein contemplated and any � ' -
additional bonds which the Authority may prior to issuance or -
from time 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 Prelininary Agreement and any
additional available information the City Council may request.
8._ The: actions of the Executive Vice-President of
the Autnority -in .�ausing gublic 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_..Proj ecz 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 insr�ection by the public at the office of the
Author?�y fron and after the publication of notice of the
hearing, are in a11 respects ratified and confirmed.
Adopted �A�g�st 19 j 1980 //
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Attest , \ j �
Presider�t
_ The Port Authority of the City
.
�� . of. Saint Paul �
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`� ecretary "
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, . �, /yi.�-P� �'� �Q-O��,:'
� . � � OM Ol: 12 19a►5 ;;
- �. , Rev. . 918/ fi
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� EXPLANATIQN OF ADMTNISTRA7IVE ORDERS, ; . �
� RfSOLUTiONS, ANO ORDINANCES �`;�
� ' l�r�tJ#Jt�j .
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� Date: August 19, 1�80 � � � `�/ � �
�►E C
.,- �-. - - , �
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TO: MAYOR 6E0 E �ATIMER . ��v,.��, ; nr� �:E i
fR: E.A. Kr�u � � . � � �
�; ANCHOR PAPER �MPANY, TNC. _
� �1 ,Of�,000 RE�IENUE BOND ISSUE �
RESOLUTION N0� 1687
_
� - . } . . � � ' � .
ACTItNV RfQUESTED • �
: In accordance w�th �he Laws e�f Mlnnesota, Chdpter 234, �t �s .requested that �tF� C1ty
Councilf by Res�lut on, a draft copy of which 1s attached hereto, approve tt� tssaance
of revenue bonds 1n the a�mcittnt af approxlmatety �1 ,OO�D,000 to finance th� constructfon
of 25,0� square fe t of a�ddltional warehousing sp�ce for Anchor Paper Canp�ny, Inc. �
at 480 Broa�dway 1� t. Pau1:
�
PURPOSE 14ND RATIONA�E fOR THIS ACTI4N: � �
�
: The purpase of the nd �ssue �s to flnance the con��ructlan oP 25,000 squnre feet of
additional warehous ng for qncfior Pap�r Ccmtpany on proptrty they awn a�t �30 Broadway
1n St. Pau1. The t rm of th� bond lssue is 30� ye�rs. They e�1oy approxlmately 5�
peop�e at the prese t t1n�, and the pro�ect'wi11 gener�te emptcyment for an•addition�l
10 people. ;
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$
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ATTACHMENTS: `
t . �
,
Staff Memornntfam �
Drnft City Cauncl1 R�esolutlon .
, Pvrt Author�ty Resal�ut��n No. 1f87
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i �
.�,.-; ---� �z�� a� �.�3�� �.AVi. -
;`�-� OFF`ICE OF THE GZTY GOIINCIL ����`�
�:- '�^ -��Y.
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_"-+��y
� ,�� Date : September 12, 1980
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cor� �n ��-r� � � � � o �� _
TO : Soin� Pou4 City Councii
FROI1l� = C��'i'1t'111f��'C Ot1 FINANCE, M,ANA6EPIENT & PERSONiVEL -
George McMahon , chaifman, makes the fal iovring
report on C.F. [� Orciinance
(8) X[� Resotutic�r�
� Other
�' t`fLE : �
At its meeting of September 11 , 1980, the Finance Committee recommended approval
of the following: � .- � -
1. Resolution amending 1979 Capital Improvement Budget for Mattocks SchooT
Demolition (11318-Gt4) • � _ - - .
2. Resolution transferring funds from t�Jorkers' Compensation Account to Tort
Liability Account to cover court costs and costs of judgments again�t the city -
for the rer�ainder of 1980 (11322-GM) � � �- - � -
3. RQsolution approving appropriation of an additional $20,00�' to the.� Lexington-
Hamline Housing Development Corporation for program operation:-
4. Resolution approving the application of Richard K. Parr for abatement, submitted
on behalf of the Nousing and Redevelopment Authority (11327-Gt1}
5. Resolution transferring $122,927 from ��Jorkers' Compensation to. various activities: .;:; :;
in the Division of Parks and Recreation to cover utility costs. � _ �
6. Resolution approving 1981 HRA Tax levy Budgets. � �
7. Resolution approving issuance of revenue bonds of approximately $1 ,00�,000 ta
finance construction of additional warehousing space for Anchor Paper Company, Inc. , �
480 Broadway (11329-GM) _
8. Resolution approving issuance of revenue bonds of approximately $72�,�J00 to
finance construction of office building for Mully Properties at 1a15 Suburban
(11328-GM).
CITY HALL SEVENTH FLOOR SAINT PAUL, MINDtE50TA SSI02
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