275686 WHITE - C�TV CLERK C011I1C11 f� • V�V�
PINK - FINANCE G I TY OF SA I NT PALT L
CANARV - DEPARTMENT
BIUE - MAVOR �Ile NO.
ouncil Resolution
Presented B �
Referred To Committee: Date
Out of Committee By Date
WHEREAS:
� 1. On August 26, 1980, the Port Authority of the City of Saint Paul adopted
Resolution No. 1696 giving preliminary approval to the issuance of revenue bonds
in the initial principal amount of approximately $1 ,620,000.00 to finance the
acquisition of the John Morrell building at 2523 Wabash Avenue for Hartzell Corp-
oration's Ragon Electronics Division. In addition to remodeling the existing
building they propose to construct a new 16,000 Sq. Ft. corporate office.
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 conse�t of the City Gouncil 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 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. 1696, 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 Requested by Department of:
Yeas Nays �
Butler [n Favor
Hozza
�tr�tt �'
Levine � __ Against BY
Maddox
Showalter
TedesCo Form App o d by City A torne
SFP � � t i�i�'
Adopted by Counor : Date —�e--r�.��—
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Certified P� sed by ouncil Secr�Cary By
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App ve Mavor: Date � � ��o`^ Ap rov y Mayor for Su i to Council
By —
����E� S E P 2 7 1980
p 4 R ,r � �����s
��► UTHORITY
OF THE CITY OF ST. PAUL
_
. A�iemorcndum .
TO: BOARD OF COMMISSIONE �A� August 22, 1980
(Special Meetin Au u t 6, 1980)
FROM: Donald G. Dunshee
f
SUBJC�T: HARTZELL CORPORATION
$1 ,620,000.00 REVENUE BOND ISSUE
PUBLIC SALE HEARING - RESOLUTION N0. 1695
PRELIMINARY AND UNDERWRITING AGREEMENTS - RESOLUTION N0. 1696
1 . THE COMPANY
Hartzell Corporation was started in 1949 in Prior Lake, Minnesota and
the Company has expanded rapidly in the past thirty years with annual
sales exceeding $47,000,000 and total employment of more than 1,000
in 1979. The Company is primarily engaged in manufacturing zinc and
aluminum die casting, plastic injection molding, window and hardware
equipment and light electronic assembly products.
_ 2. THE PROJECT
The Corporation proposes to locate its Ragon Electronics division in
the existing John Morrell building at 2523 Wabash Avenue. The building
would be remodeled and they prapose to construct a new 16,000 Sq. Ft.
corporate office. The remodeling would consist of the removal of the
meat racks, cleaning and sealing of the floor, installation of unit
heaters in the warehouse, installation of sprinklers throughout the
building and remodeling the existing office space and meeting rooms
for light electronic assembly area. In addition to the interior modif-
ications the exterior brick, block and roof would be repaired and the site
newly landscaped. In addition to the acquisition and remodeling they
propose to construct a new two-story, 16,000 Sq. Ft. corporate office
which would permit the Company to transfer their office employees from
leased space on Larpenteur Avenue. The new office would be of brick
exterior and fully sprinkled.
There would be an initial employment of 65 in the building with 35 coming
from leased space in Arden Hills and 30 from leased space on Larpenteur
Avenue. They plan to transfer additional operations from leased space
in Minneapolis next year into a portion of the warehouse area with total
employment to be 100 once the entire facility is utilized.
Under amendment to Chapter 474 the Port Authority published notices in the
Legal Ledger and St. Paul Dispatch Pioneer Press on May 9 and 11 respectively
that the proposed project would be considered by the Port Authority Commission
on Tuesday, August 26. If the project is approved by the Commission on
Tuesday, August 26, a formal application will be submitted to the Commissioner
of Securities before the bond issue is closed.
. . � ���s
HARTZELL CORPORATION
Ragust 22, 1980
Page 2
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 $ 675,000.00
Remodeling 200,000.00
; New Office 601 ,475.00
, Bond Issue Expense 20,000.00
Capitalized Interest 74,925.00
Debt Service Reserve✓ Funded b Company ($164,762.50)
Discouni. 48,�0.00
$1 ,620,000.00
In addition to the monthly rent, the Company will pay a fiscal and
administrative fee as follows:
First 10 Years $300 per month per million issued
Second 10 Years $400 per month per million issued
Final 10 Years $500 per month per million issued
4. UNDERWRITING
Miller & Schroeder Municipals has agreed to underwrite a bond issue for a
term of 30 years commencing January 1 , 1981 and terminating December 31 ,
2010. The interest rate for the bond issue will be set ten days prior
to closing.
5. TERMS OF THE LEASE
The proposed lease is for a term of 30 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 and twentieth year for lOq
plus discharging the outstanding bonds.
6. RECOMMMENOATION
Staff has reviewed the project in detail along with the financial statements
of the Corporation and recommends approval of Resolutions 1695 and 1696
authorizing the issuance of $1 ,620,000.
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. Resolution No. .� 1696 �
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�. RESOLUTION� OF - ' .
THE -PORT AUTHORITY OF THE CITY OF "SAINT PAUL � � �
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. � WHEREA�r -�the _purpose of �Chapter 474, Minnesota .
Statutes, known as '-�he Minnesota Aiunicipal Industrial Develop- .
ment A� (hereinafter called "Act") as found and determined by .
the legislature �s to promote the �aelfare of the state by the
: active attract;on and encouragement and development of economi-
� cally sound ir,dustry a;�d _corunerce to prevent so far as •possible
the energence. of -blighted and marginal lands and areas of
chronic uneraployr.te:�t ani3 to aid in the development of existing -
areas of blight, riarginal land and persistent unemployment; .and �
�j�'dEREnS, factors necessitating the active promotion
and develo�ment oi economically sound industry and conmerce are
the increasing �onc?ntration of population in the metropolitan
areas and the rapidly rising increase in the amount and cost of .
� • governmental �servi�es reqizired to meet the needs of the �
increased� popuiatiorr and the need .for developr�ent of land use . -
which zrill provide .an adequate tax base to finance these �
increased costs and a�ccess to employr,tent opportunities for such '
� _ population; and .
�• .k�fiEREAS,- The Port Authority of the City of Saint Paul -
. (the "Authority") has� received from the Hartzell Corpora- -
. tion (here.inafter �referred to as "Company" ) a request that the
Authority issue its revenue bonds to finance the� acquisition
and renodeling of an e�isting building and the construction of
a 22,000 s'quare foot aadition to said. building for the general
warehouse operations .of the Compan�� (hereinafter collectively .
/ called the "Project") in the City of St. Paul, all as is more •
1 fully described in the staff report on file; and .
. WHEREAS, the Authority desires to facilitate •�the �
selective developnent of the cor,uaunity, to retain and inprove
its tax base and to help it provide the range of services and
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employment opportunities required by its population, and said �
P.roject will assist the City in achieving that objective. Said
Prd.ject 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
' City; - �
WHEREAS, the .Anthority has been advised .by repre-
sen�tatives of the Company that conventional, commercial
financing to pay-_�he -capital cost of the Project is available
only on a .linited �bas.is 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 wi�h the aid of revenue bond financing, and its
resulting low borr-owing cost, the Project is economically more
feasible;
WH�REAS, MiTler & Schroeder Municipals, Inc. .(the
"Underw.r.iter°) _bas- made a proposal in an agreer.ient (the -
"Underwriting egreenent") relating to the purchase of the .
revenue bonds to _be- issued to finance the Project;
WHEREAS,- th� Authority, pursuant to Minnesota '
� Statutes, Section. 474.Q1, Subdivision 7b did publish a notice,
a copy of which _�aith. pr.00f 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 .
Commissione�s were reviewed, .and all persons who appeared at � .
the hearing were given an �opportunity to express their views
with respect -to �he proposal. .
NOW, THEREFORE, BE IT RESOLVED by the Commissioners
of the Port Authority of the City of Saint Paul, Minnesota as
follows: .
l. 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
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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 avai].ability 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 f �
prevention of the emeryence 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 ertployment 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. Corapany 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 anount
� not to exceed approximately $1,620,000 �(other than such
additional reven.ue bonds as are needed to comnlete 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 nemorandum to the Commissioners which was presented to
the Corimissionersj 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 zs hereby authorized and directed to submit the
proposal for the above described Project to the Commissioner of •
Securities, requesting his approval, and other officers, � .
er�ployees and agents of the AUTHORITY are hereby authorized to
provide the Corunissioner 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
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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 6een 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 de-lay 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 deer.ted appropriate, any interin note or notes to �
. propide �emporar�C financing thereof) to finance the ,entire cost
. of the Pro.ject 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. IIpon execution of the Preliminary Agreement by
the Companyr. -t-he :staff of the Authority are authorized and
directed to continue negotiations -with the Company so as to
resolve- the renaixiing .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 bonds; provided that the President (or
Vice-Presi�ent i£ the _President is absent) and the Secretary
{or Ass istant -Secretary if the Secretary is absent) of the
Authority,. or i� either of such officers (and his alternative)
are absent, -�the -Treasure.r of the Authority in lieu of such
absent officers,_ are hereby authorized in accordance with the
provisions of i�innesota Statutes, Section 475.06, Subdivision
l, to accept a final offer of the Underwriters made by the
Underwriters to purchase said bonds and to execute an ,
underwriting agreeraent 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. , .
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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. ,
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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 .
f inance the Project �and in preparing a draf t 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 fron and after the publication of notice of the
. hearing, are in a1T respects ratified and confirmed.
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� AaoPtea August 26� i9so . i; `
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Attest � ` � �-�
Presiden�
The Port Authority of� the City .
, � of Sai�it Paul ' .
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� ��'�. Secre ary �
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PORT AUTHORITY OF THE CITY OF SAINT PAUL
.,.,.�..�; 25 WEST FOURTH STREET • SUITE 1305 • ST. PAUL, MINN. 55102 • PHONE (612) 224-5686
August 26, 1980
Mr. Gary Stout
Di rector
Planning & Economic Development
Departmen t
City of St. Paul
� 14th Floor City Mall Annex
St. Paul , Minnesota : .55102
SUBJECT: HARTZELL CORPORATION
$1 ,620,000.00 REVENUE BOND ISSUE
Dear Gary:
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 to finance the acquisition of the John
Morrell. building at .2523 Wabash Avenue for Hartzell Corporation's Ragon
Electronics Division. In addition to remodeling the existing building
they propose to construct a new 16,000 Sq. Ft. corporate office.
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. 1696 which authorized the sale of bonds in the amount
of $1 ,620,000.00.
Your expeditious handling of this matter will be appreciated.
Yours truly,
ugene A. Kraut �
Assistant Executive
Vice President
EAK:s js
cc: R. Broeker
ROBERT F.SPRAFKA EUGENE A.KRAUT,C.I.D. DONALD G.DUNSHEE,C.I.D. CLIFFORD E.RAMSTED RONALD O.SCHEiT
EXECUfIVE VICE PRESIDENT ASSIST,4NT EXECUiNE VICE PRESIDENT DIRECTOR.IND STRWL DEVELOPtv1ENT CHIEf ENGINEER � CH�cFACCOUNTANT
COMMISSIONERS GEORGE W.WINTER RUBY HUNT ARTHUR N.GOODMAN G.RICHARD SLADE DAVID HOZZA LOUIS H. MEYERS WILLIAM J.SEIFE
PRESIDENT . VICEPRESIDENT SECREfARY iREASJ6ER
� � .�:.:'.i
C.I.D. Cerfified Industrial Deve'oper
r,s� ". :. ..- �Z'TY OF ►.�'. .t�..II�T'�L' �AZT�.
,;�'` - .
?�`.' ��i1� .�..r OI+�+ICE OF rJ.'$E CITY CflUNCIL �����
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Date : September 19, 1980
C0 �1 � ���'EE F� EPQ �1�
TO : S�int Raut City Cou�cil
FR�� � Cotnmi�te� on Finance, Management & Pe�sonnel
George McMahon , choiFinan, makes the followinq '
report on C.F. .[� Ordir�ance
(1) [x� Resofution
� Ot�her
T t�'LE :
The Finance Committee, at its meeting of September 18, 1980,
recommended approval of the following: --- --
1. Resolution approving issuance of revenue bonds of approximately
$1,600,000 to finance acquisition of the John Morrell building,
2523 Wabash Avenue, for Hartzell Corporation's Ragon
Electronics Division. � �
CITY HALL SEVENTH FLOOR SAINT PAUL, SIINNFSC)7.� SSIO?
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9i8/76
EXPLANATIQN �QF A�IINTSTRATIVE ORDERS,
�- RESOLUTIONS, AND ORDINA�ICES :
< , . � �
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Date: Au ust 26, 1 ,
9 �a° RLCEIVED
. T0: MA EORGE;r LATIMER ���' 2 �"' 19� .
MAY01Y� � �
FR: � E, p ; •
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RE: FtARTZ L CU TI�1 � :
�1 ,620.f11�. REYENUE BQND ISSUE �
RES{�llfTIt�t :li�. 1696 � �
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ACTION REQUESTED; ;
In accordanqe with the taws of M �
innesota, Chapter 234, it is requested that the
City CouncilA, by Resolution, a draft copy of which is a�ttached hereto, approve
the issuancd of revenue bonds in the amount of approxin�tely �l',620,Oti�.00 to
finance tFre �acquisition of the JoMn Nbrrell building at �2523 Wa6ash Avenue for
Hartze1l Co�poration's Ragon ETectronics Divi�sipn. In addition to remadeltng the exist-
� ing building they propose to construct a new 16,000 Sq. Ft. corporate office. i °
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PURPOSE AND RATi�N1ALE FOR THIS ACTION: - �
The purpose� of the bond issue is ta finance th� �cquisition of the John Mbrrell {
bu3lding a� 2523 W�bash Avenue for Hartzell Corporation's Ra�n Electronics Divisi�. , `
In additior� to r�odelfng the existing building they propose to construct a new ,
16;t�0 Sq. :Ft. corporate office. Tfiere r�roul:d be initial employment of 65 in the
building ar�d this would reach 100 once tMe entire facility is utilfzed. The ter�r
of the bon� issue is 30 years.
ATTACWMENTS: ` r
Staff Mle�randum ' �
Draft City� C�uncil Resolution
Port Autl�rity Resolution No. 1696
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