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272935 �NM17E - CITV CLERIC �y � PINK - FINANCE COUIICII �G/�� CANARV - DEPARTMENT G I TY OF SA I�NT PAIT L File NO. � ��'�� r BLUE - MAVOR Council Resolution Presented By Referred To Committee: Date Out of Committee By Date WHEREAS: l. On April 17, 1979, the Port Authority of the City of Saint Paul adopted Resolution No. 1487, giving preliminary approval to the issuance of revenue bonds in the initial principal amount of approxi- mately $3,420,000 to finance the construction of a 160,000 square foot distribution center for Central Warehouse Company, Inc. , located at 739 Va�dalia; 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 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; now, there- fore, be it 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. 1487, the exact details of which, including but not limited to provisions relating to maturities, interest rates, discount, redemption, and 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 (includ- ing refunding bonds) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for which the aforesaid COU[VC[LMEN Requested by Department of: Yeas Nays � Butler y� [n Favor Hunt ��' � Levine __�__ Against BY +�� D�eac Showalter Tede MAY 1 0 1979 Form Approved by City Attorney Adopted Council: Date Cert ied Yassed Counci Sec tary BY / r ,' t#ppro Mavor. Date _ , Appr v y Mayor for Sub ' si to uncil By _ By M�18�ttm Ma�l '� 9 �9?9 _ __ _ � PORT AUTHORITY � 2�'�q�� OF THE CITY OF ST. PAUL Memo�andum TO: BOARD OF COMMISSIONERS . �A� April 10, 1979 (April 17, 1979 Regular Meeting) FROM: J.F. Fa ue f � � . SUBJEGT: CENTRAL WARENOUSE COMPANY, .INC. PUBLIC SALE NEARING RESOLUTION N0. 1486 PRELIMINARY & UNDERWRITING AGREEMENT $3,420,000 REVENUE BOND ISSUE . RESOLUTION N0. 1487 1 . THE COMPANY Central Warehouse Company, Inc. , located at 739 Vandalia, has operated a publi�c warehousing facility in St. Paul since the early 1900's. Their present location js in the heart of the original commercial/industrial district of the City. They employ 115 people which will increase by 10 or more depending on the corrnnodities handled in the new facility. 2. THE PROJECT The company proposes to demolish 140,000 square feet of existing structures built in 1905 and rebuild on the same site a 160,000 square foot modern � distribution center. The company owns the site and all the adjacent buildings within the block designated as the industria1 development district. The new facility to be constructed wi11 be freestanding, however, with separate utilities, rail , and truck access. 3. FINANCING Financial statements for the years 1976 through 1978 are attached. The projected bond issue will be for $3,420,000 with the proceeds allocated as follows: � Construction $3,006,400 Legal & Misc. Expenses 27,000 Capita1ized Interest -0- Debt Service Reserve 284,000 Underwriting 102 600 TOTAL 3, ,000 • • ' �'��:'�.�C 1 BOARD OF COMMISSIONERS April 10, 1979 Page -2- The debt reserve in the amount of $284,000, while borrowed from the bond proceeds, will be retired by the Port Authority, subject to the Authority being able to invest the principal amount of the�reserve at an interest rate sufficient to generate the debt service. Upon termina-� tion of the bond issue, the entire amount of the reserve will revert to the Port Authority. 4. UNDERWRITING Miller & Schroeder Municipals have agreed to underwrite a revenue bond issue of $3,�20,000 for a term of 30 years. The interest rate on the bond issue will be determined at the time of closing. 5. TERMS OF THE LEASE Terms and conditions of the lease wi11 be similar to other Port Authority revenue bond agreements done under Resolution No. 876. The term will be for 30 years. The agreement will contain a provision for a fiscal and administrative fee for the first 10 years at $684 per month and the � last 20 years at $1 ,026 per month. Inasmuch as the company already owns the land, the purchase option upon termination will be for $1 . Monthly rentals will be in an amount sufficient to retire the bond issue with the exception of the debt reserve as previously indicated. It is estimated that the real estate taxes for the facility will be approximately $96,000 per year, On March 26, the Port Authority notified District 12 and others on the Early Notiflcation System list that the Port Authority was proposing a project in their District, Under the guidelines adopted by the Port . Authorlty Board in Octoaer, 1977, we are required to give 30 day`s notice; howeYer, MC. Bratnober of Central Warehouse has asked if the project could be considered by the Commission at the meeting on April 17, which would be 8 d�ys short of the full 30 day's notice. Staff inet on Thursday, April 5, with the Physical Development Corr�tittee of District 12 and an Wednesday, April 11 , with the full District Council to explain the project. We have received approYal of the project by the full District Council with the knowledge the fu11 30 day's notice had not been met. 6, RECQMMENDATIONS . Staff has interviewed the principals of the company, reviewed the ftnancial �tatements, dnd t^ecommends approval �f Resolution Nos. 1486 and 1487. - JFF:ca .. , • • ' - . iG �(�G:'1P�� . Resolution No. 1487 �.. RESOLUTION OF � �� THE PORT AUTSORITY OF THE CITY OF SAINT PAUL ' � WHEREAS, 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 i.s to promote the welfare of the state by the active attraction and encouragement and development of econom�- cally .sound industry and commerce to prevent so fa'r as possible the emergence of bli.ghteci and �mazginal lands and areas of chroni.c unemployment and to aid in the development of existing areas of bli.g_ht, marginal land and persistent unemployment; and WHEREAS, factors necessitating the acti.ve promotion . and developr�ent of economi.cally sound industry and commerce are the i.ncreasing concentration of populati.on in the metropolitan areas and the rapi.dly ra.s i.ng a.ncrease i.n the amount and cost of � governmental services required to meet the needs of the � increased population and the need for development of land use whi.ch wi.11 provide an adequate tax base to finance these �increased costs and access to employment opportuni.ti.es for such population; and - WHEREAS, The Port_Authority of the City of Sai.nt Paul � (the "Authori.ty") has recei.ved from the Central Warehouse Company (hereinafter referred to as "Company" ) a request that the Authority i.ssue its revenue bonds to finance the acqu�isi.tion, a.nstallati.on and construction of a faci.li.ty for use as a warehouse and .di.stributa.on center for public warehousa.ng (hereinafter collectively called the "Project" ) i.n the City of St. Paul, all as i.s more fully aescribed i.n the � staff report on file; and WHEREAS, the Authority desires to faci.l'itate the � selecti.ve development of the conmunity, to retai.n and improve its tax base and to help i.t provide the range of servi.ces and ' employment opportunities required by i.ts population, and said Project. wxll assi.st the Ci.ty in achieving that objecti.ve. Saxd Project will help to i.ncrease the assessed valuation of the City and help maintain a positi.ve relati.onship between assessed valuation and debt and enhance the i.mage and reputation of the Ci.ty; and � ., � - . ��r(� `"" . � . . ��. 1`� . WFiEREAS, the Project to be financed by revenue bonds will result in substantial employment opportunities in the Proj ect; � . .- . . .:�. . WHEREAS, the Authority has been advised by repre- sentatives of the Company �that conventional, commercial ' � f inancing 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 signif icantly reduced, but the Company has a?so advised this Authority that with the aid of revenue bond financing, and its resulting low borrowing cost, the Project is economically more feasible; and . WHEREAS, Miller & Schroeder Municipals, Inc. (the . "Underwriter") has made a proposa�l in an agreement (the "Underwriting Agreement" ) relating to the purchase bf the revenue bonds to be issued to finance the Proje�t. 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 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 Proje.ct, 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 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 anc7 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. 2. • Subject to the mutual agreer�ent of the � Authority, the Company and the purchaser of the revenue bonds as to the details of the lease and other ciocuments necessary �v y � . . ��9:�� . . 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 i.ssuance of revenue bonds of the � Authority i.n an. amount not to exceed approxi.unately $3,420,000 (other than such addi.ti.onal revenue bonds as are needed to complete the -Project) i.s authorizer� to fi.nance the costs of the Project. . 3. There has heretofore been fi.led with the . � . ' Authori.ty a form of Prel�.mi.nary Agreement between the Authori.ty and Company, relati.ng to the proposed constructi.on and ' financing of the Project and a form of the Underwriting Agreement. The forr.i of sai.d Agreements have been examined by the Commissioners. It is the purpose of said Agreements to evi.dence the commi.tment of the parties and their intenti.ons - with respect to the proposed Project i.n order that the Company ' . may proceecl wi.thout delay wi.th the commencement of the acqui.sa.tion, i.nstallati.on and construction of the Project with the assurance that there has been suff icient "off i:ci.al acti.on" under Section 103(b) of the Internal Revenue Code of 1954, as amended, to allow for the issuance of industrial revenue bond�s to finance the enti.re cost of the Project upon agreement being reached as to the ulti.mate details of the Project and a.ts . financi.ng. Said Agreements are hereby approved, and the . President and Secretary of the Author.i.ty are hereby authora.zed . and di.rected �to execute said Agreements. - _ , 4. Upon execution of the Preli.minary Agreement - by �the Company, the staff of the� Authori.ty are authori.zed and di.rected to conti.nue negoti.ations wxth the Company so as to resolve the remaini.ng i.ssues necessary to the preparation of the lease and other documents necessary to the adoption by the . Authori.ty of xts final bond resolution and the i.ssuance and delivery_ of the revenue bonds; provi.ded that the Pres�dent (or . Vice-President i.f the President a.s absent) and the Secretary � � � (or Assistant Secretary i.f the Secretary i.s absent) of the Authority, or i�f either of such officers (and hi.s alternati.ve) are absent, the Treasurer of the Authority i.n lieu of such absent officers, are hereby authori.zed i.n accordance with � the provisions of Minnesota Statutes, Secti.on 475. 06, Subdi.vision - 1, to accept a final offer of the Underwri.ters made by the � Underwriters to purchase said bonds and to execute an . , underwri.ti.ng agreement setti.ng forth such offer on behalf of . the Authority. Such acceptance shall bi.nd the Underwra.ters to said offer but shall be subject to approval and ratifi.cation by � the Port Authori.ty in a formal supplemental bond resolution to be adopted pri.or to the delivery of said revenue bonds. • � , � � �� 5. The revenue bonds 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 sY�all not constitute or give rise to a pecuniary liability of the Authority or the City or a charge , against their general credit or taxing gowers 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 or interest . thereon. 6. In order to facilitate completion of the � revenue bond financing herein contemplated, the City Courrcil is hereby requested to consent, pursuant to Laws of Minnesota, 1976, Chapter 234, to the issuance of the revenue bonds herein contemplated and any additional bonds which tY�e 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 avthorized 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. _. . . . . . . . . . . _ . . .. Adopted April 17, 1979 Attest . � � President � � � � � � - The Port Authority of the City , of Saint Paul Secretary � . . . . . '�` '' !Y�' (. A �� x �,� � y , i �`:;�v �,:� �'M�4�g� •. � '� � r.R t t'a�.:3 �.� �''. . _ 3 ��#�yr ��'�i��'' S � ��a°;i � =�� • '. 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