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273514 WHITE - CITV CLERK COl1i1C1I 2'�3514 � PINK - - FINANCE G I TY OF SA I NT PAU L CANARY - DEPARTMENT BLUE - MAVOR File NO• Co ncil Resolution Presented By Referred To Committee: Date Out of Committee By Date WHEREAS: 1 . On July 24, 1979, the Port Authority of the City of Saint Paul adopted Resolution No. 1528, giv9ng preliminary approval to the issuance of revenue bonds in the initial principal amount of approx9mately $550,000 to finance the construction of a 10,200 square foot office and distribution facility for Scanlan International , Inc. on Parcel E-3 in Riverview Tndustrial Park. 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 Council of the City of Saint Paul , by resolution adopted 9n accordance with law; 3. The Port Author�ty 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 Author�ty 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 C1ty Council of the City of Sa�nt Paul , that in accordance with Laws of Minnesota 1916, 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. 1528, the exact details of which, lncluding, but not limited to, provisions relating to maturities, �nterest rates, d�scount, 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 �ssuance of any addltional 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: r�g�{}�► � Hozza [n Favor Hunt � _ � __ Against BY , �,/ Maddox Sh r desco Form Approved by City Attorney Ad ed by Counci Date d��= � 1979 ertified Pa_ by Council S�cretary BX "' t�pprov d by � or: te _�C— APP d by Mayor for u s�ion to Council r�uv By B etlB�tS�ED AU� 2 51979 _ , �... : . �,�. �� _ � . _ � - . : . . ��.�,� d 4 u .. ,. . .. . _ �' "' t ��a�� .. O!'1�O� : " 12/1975 � ��. �.�,� -� ` - ,�� . �. �.q. �;.� _ �. ��:. �.� �� , �� . � '� Rev. �9/8/76 , . .. . ., �.... � . , .. , _. _. ,� ;,;��,��z��..�, �,��;�. _ . _ .� , , .:: . �"� �;�� .�:�:�,�.,y,.� EXPLANAT:ION. OF�OMINISTRATIVE ORDERS,. .:r�,.��z,,:: �:;. ,��n��;t . .. ,.: . ... .; �. ;_ RESOL{JTTONS, 'AND ORDINANCES . . .._ .�.:, �- . , .. ��. , � � - �.�a�, �. �:. - . � . . 4� - �:,, t"cr�+« z ,��i�.��: �, .. ' . . .., . .. . < . . ,..: ,�- �-,c�'#t,��:�,�> ''aw.�a., i'�` _ T^ 'y+� . ' 4- . . . - m � .�,f �: ..'� .. . . _ . f ..� 5� . �' , . ' .. - �s�drw..;� «wn M ea r4.�� sl*�.�+. ,;•�w�Nrn! �.iu d¢�+aa+l� . �• �r,,;�u, }f1w.-�-�. . '.�.. ��-.,;;;>t �Y+€,. �x: .c »�`.j�>�� .. - �5� �+_.. -. a.-�a.,,�, �?� `'7�_'. �A��w3 k?� �-.�.- •_ . {' '� '4`r�s€'"� `,r�, �.r c .. � ; . ,.x 7y_ . Date. 9A}n3 �i t� ��,Ct's:�� 'm d �t '+�¢�'y� S �-': July 24, 1979 �. � s� ° T �r �. �� t x t�r tr r»�x-:t ..:- . . .:- .., '.-�' . ��.F, . °....s+�� , .°�i..+-�L.as.�. _. .. � � � ' .g �g. � J-+:�e �;«�. �r;."$' � .�'��$.�;ti� _ . , , � .y. ' _" �_�v � �� w�..d.3L. � ,�}, =�. �: `.e,... � •'=- �'" + . wran��Y��S.� S.S �a � + : "'�I 3 '� _ s. 'P'°_ �, . . TO: MAYOR RGE�LATIMER �Y .� ':�. � .� ',�, _ � - _ r,;� �:��•� � . ,.� �. _ y �� •�� :. �FR: _:E:A..�ICr . Pau7 �ort Aut6or� _��.� _ - _ _ - :x �.�_>�.,�.��.� : :� �_. : -. -: - . :_ . =� --':�'�„` _ _ - , . -- - _ -� ��,.e..;,;.�.;,�. .�� —�_� ;�,,,� �—.- •_ "� :,. � RE: SCANLAN INTERNATIONAL, .INC.� �t��-. �� .,��._ _� .,. �� - . ,�.� PRELIMINARY AGREEMENT - .$550,"OOO;REVENUE��BOND ISSUE � �4 �` RESOLUTION N0. 1528� : .��.,��, � ��-�. n .. :; � _x :,� � :_ � ��.�� _ t :, _ , : .. . , .. � �: ��,� . ;... ,. �. ... .�,�. ' . _ �� . ... . . . . . . . . . ,. ,... ,-+J2vS m,�'S-..x.�' �-' . � .. . ...�. . � . . .. . . ' . . � .. � ., �� y 1_ .. _ .. . . , � . � . _ 'S .: 3��+ :.,�.,vK p . ..,:. .� . . ,� , � , ACTION, REQUESTED: :; __ „= .., �.�� . . . �� >,. t�,�, � �,,�,ra,�. .,.,�t „ . ., . . In accordance with the .laws of Minnes�ta; ��hapter 234, "it ix requested that the City . -� ° Council , by Resolution, .a draft�.copy.o,f. whjch is attached .here�o, approve the issuance:.� ; of approximately $550,000 in �revenue bonds.:for the purpose of f3nancing the construction - of a 10,200 square foot'office and distribut�on;facility fior Scanlan-International , Inc.. on Parcel E-3 -In Riverv9ew Industr�al :Park. �-�'�°� �'�"�°.�. . � •• � �� . ,.: .._ . _ ��-: ..��,� ..... � . � � .. � R 3 .d' .. .'�,°h�a� _ . . - ... -�._ ... : ., . ..'- . :'.:'r . , :. .. . � . . .' . ":_ ., a. o'''_'Sci ..."=��.,�2`Y��. ' _ . �.,, .�. . �� .. . . . .. � : 1 - '.C��r. ��i�'�` y'` 6r,�� . � . _ _ _ ��'a' ,�, ,�� 1,»U . .... ,::..,..�.�- ��a- . _ ,z, ,� `�� ^:is- - , � , . � . , ,;�'�, .,,: ; �,�»� �':m�`. _ ;, . _ - � � .. � . ;.�,.e� r �� .,. �� - - � � - - � '�.-� �.,�;,�e r t.�.��.,�; . � � PURPOSE AND RATIONALE fOR THIS ACTION+�`� ��' `�`- , � �` �� :: ,. ..: � - - _ _ � ��_�-��. -� �: �_ :�- � ��., .d,. _ . �. , . . _ , � .�__ � .. The purpose �of�:��the bond ejssue�as.to�:finance the constr�ction of a 10,200 square�foot � office and di.stribution-faci7ityfor�a:-term o#<_30 years for scanlan ��nternational , Inc.�� on Parcel E-3 (57,778 square �feet) �n:�tiverview "Tndustrial Park. The company presently .; � � employs 9 peoplerwith 5 new emplvyees�to be;added when .the building is completed. .. ,_ � -��. ��- � _ � .��.�, � - �..�, z ,,�_ ��,� � �..�� %«��. . _ �.�� . � ,_ a, r..�> � ._ , . „ ... . . _ . . , . . , ,��...r.>� a , . Y � .. .. _�� . : , . ,_::.,.. _..: } ._ �: , . , ...- . , , _.. ;. �.� �._.. .. . . :. ,- .�,, .,. . ��. � .�_� � ��: . ��.�, �. �.�. ... ,,r.�,��,. ..�:,,� .�>��,-� ��. �:��° .., � _ _ _ _ . _;. . . . ., F w - ..s �t.;,,;�.:� : , _ • , . . . . _..�_' _ .�:.,; ... . ��; �::��. _ ...: �.,.:,. r _ : : { .:,. . •:-,. . r... , ��-t�T ... . . .., - ATTACHMENTS: � '��.-�=�`�,� ` �� ` � . ; ; : .. . _�-f �.> ur . _.�..�.��.�,.�.� ..�,E;:�- ..._„�a,�...�:v � _ Staff Memorandum :_- - y : � , . Draft City Counc�tl Reso1 ution T�� _ Port Authority Resolution No ]5,,,,�2f,�8 r� � 'Y ... .. rrR,y�ry�s� r� �p�r�^FE,.�x+'kT�+mk"A�� 'ac.�k ..�,Y„3." _ „i� '. . . � ... � .y�e '� .p�.x;}..�:. 3, �g �y .�yy�y .� � ' . , . . o .. Wi's4�.P�,t`�c�.lS' _��+.+�/'S,'+i°:^%8+_'[C"'Sm ^„_Y,d-"�,"�� +�:... . . . . .�� - . , . . . : . �... , �,_: _ a - , _....,,.s�.,s�«.a..:h,e.T��'�',�'��;�.%�;'�„a��,,�.�. .,�'"'_ _ . _ . 3'' .. . ,:_..... 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WHITE - CITY CIERK PINK ' - FINAN�E C�nCII CANARY - OEPARTMENT GITY OF SAINT PAUL � BI.U`E - MAVOR File �O. Council Resolution Presented By Referred To Committee: Date � Out of Committee By Date • , WHEREAS: 1 . On July 24, 1979, �the Port Authority of the City of Saint Paul adopted Resolution No. 1528, giving prel9minary approval to the issuance of revenue bonds in the initial principal amount of approximately $550,000 to finance the construct9on of a 10,200 square foot office and d9stribution facility for Scanlan International , Inc. on Parcel E-3 in Riverview Industrial Park. . 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Port Author�ty 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 Part Authority of the City of Sa9nt Paul has requested that the City Council give its requ�s�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 final approval of the details of said lssue by the Port Authority of the City of Saint Paul . RESOLVED, by the City Council of the City of Sa9nt Paul , that in accordance with Laws . of MinnesQta 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. 1528, .the exact details of which, including, but not limited to, provisions relating to maturities, �interest�rates, d�iscount, 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 Gity 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. COUNCILMEfV Requested by Department of: Yeas Nays Butler In Favor Hozza Hunt Levine A gai n s t BY Maddox Showalter Tedesco Form Approved by City Attorney Adopted by Council: Date Certified Passed by Council Secretary BY gy. Approved by 17avor. Date Approved by Mayor for Submission to Council By _ _ By �Q R T AUTHORITY OF THE CITY OF ST. PAUL Memoranderm � TO: BOARD OF COMMISSIONERS OATE July 20, 1979 (July 24, 1979 Regular Meeting) FROM: �,F. Faue , SUB,lECT: SCANLAN INTERNATIONAL, INC. PUBLIC NOTICE OF SALE - LAND RESOLUTION N0. 1527 PRELIMINARY & UNDERWRITING AGREEMENTS $550,000 REVENUE BOND ISSUE RESOLUTION N0. 1528 1 . THE CO�IPANY Scanlan International , Inc. , located at 200 West Plato Boulevard, has maintained operations in St. Paul for approximately 50 years. . They are engaged primarily in the design, manufacture and distribu- *ion of surgical instruments. The company presently leases space and employs 9 Neople. The proposed expansion results from recent growth and projected increases over the next five years. 2. THE PROJECT . The campany has selected Parcel E-3 (57,778 square feet) in Riverview Zndustrial Park fronting on State and Florida Streets. The proposed bullding 1s approxi�nately 10,200 square feet in size and wiil serve as the corporate �►eadquarters and distribution center. Fifty to seventy-five percent of the building will be devoted to office space and the balance for storage and clean rooms. The building. at this time provides for expan- sion, and the company expects to fully utilize the facility totally for their own purposes within the next three years. Approximately 5 new employee� will be added as a result of the initial expansion as soon as the building is completed. 3. FINANCING A Port Authority revenue bond issue is proposed to finance the construction of the facility as follows: Construction $465,000.00 Legal , Printing & Misc. Expenses 15,000.00 Capltalized Interest - - 0 - Debt Service Reserve 53,000.00 Underwriting 17,000.00 Total 550,000.00 • � . BOARD OF COMMISSIONERS July 20, 1979 Page -2- The company antfcipates additional improvements to the facility to prepare for expanding business requirements. At closing, the company will deposit with the Port Authority $50,000 in cash or certified check which will be held in escrow by the Port Authority and released pending the receipt and approval of leasehold improvement plans and current, updated financial statements indicating the company's improved financial condition. Interest earnfings on this additional escrow account will accrue to the benefit of the company. Should the improvements not be forthcoming, the escrow account may be returned to the company after five years. Financial statements and a brief history of the company are attached. 4. UNDERWRITTNG Miller & Schroeder Municipals will underwrite the proposed issue. 5. TERMS OF THE LEASE The proposed lease js for 30 years with options to purchase the building for $55,000 and the land for $36,400 upon termination for a total pur- chase price of $91 ,40Q. The Port Authority will receive a fiscal and admintstrative fee based on the est�mated bond issue as follows: lst 10 Years - $165/month (or) $1 ,980/year 2nd 10 Years - $220/month (or� $2,640/year � 3rd 10 Years - $275/month (or� $3,300/year 3 The site canta�ns 57,778 square feet and is valued at $1 .75 per square foot. Clear zone restrictions from the airport presently impact about 1/2 of thls site, and we have been informed that in the next year, ex- tension of the zone will totally lmpact the site precluding any future building. SubsQil canditions requlre piling and a structural flaor for the proposed deYeloQment costing an addjtional $80,000. In view of the above, a price t^eductton of 50� per square foot to an adjusted value of $1 .25 per square foot is recommended. 6. RECOMMENDATIONS Early notice was sent to District 3 in April of 1979, and we have not receifed any comments to this date. The Pot^t Authority published notice in the Legal Ledger and St. Paul Dispatch-Pioneer Press on July 6, 1979 as rec�uired under the amendment of Chapter 474 stating the projeet would be considered by the Port Authority Commission on Tuesday, July 24, 1979. If the project is approved by the Commission, a formal application wtll be submitted to the Commissioner of Securities. The project represents an attractive addition to Riverview Industrial Park prov1dtng additlonal employment and permanent facilities for a small but �ro�cing comp�ny, It is estimated the project will generate approximately 12,000 per year in new real estate tdxes. Staff recommends approval . 3FF:ca N �P , � , . �-_�L._.� . . . � Resolution No.� 1528 RESOLUTIOI�] OF THE PORT AUTHORITY OF THE CITY OF SAINT PAUL WHEREAS, the purpose of Chapter 474, i�innesota 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 ar�d 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 commerce a�e the increasing concentration of population in the metropolitan . areas and the rapidly rising increase in the amount and cost of goverrunental 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 acces�s to employment opportunities for such � population; and - WHEREAS, The Port Authority of the City of Saint Paul (the "Authority") has received from Scanlan International, Inc. (hereinafter referred to as "Company" ) a request that the Authority issue its revenue bonds to finance the acquisition, installation and construction of an office and distribution facility (hereinafter collectively called the "Project") in the Riverview Industrial Park 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 em�loyment 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 . r' � , . . 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 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 lease 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 amount not to exceed approximately $550,000 (other than such additional revenue bonds as are needed to complete the Project) is authorized to finance the costs of the Project. . 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 Underwriting 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 anc3 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 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-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 Treasurer of the Authority in lieu of such absent officers, are hereby authorized in accordance with the provisions of Minnesota Statutes, Section 475.06, Subdivision 1, to accept 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 indebtedness of the Authoxity 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 completiori of the revenue bond financing herein contemplated, the City Council is hereby � requested to consent, pursuant to Laws of P�Iinnesota, 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 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 "Underwriter") has made a proposal in an agreement (the "Underwriting Agreement" ) relating to the purchase of the revenue bonds to be issued to finance the Project; WHEREAS, the Authority, pursuant to Minnesota Statutes, Section 474. 01, Subdivision 7b did place 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 bonc3s; and � WHEREAS, the Authority did conduct a public hearing pursuant to said notice at which hearing all persons who appeared at the hearing were given an opportunity to express their vie��s with respect to the proposal. NOW, THEREFORE,rBE IT RESOLVED by the Commissioners of the Port Authority of the City of Saint Paul, P�iinnesota 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 la 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 anc3 commerce and assist in the prevention of the ernergence of blighted and marginal land, and /� 4 � , ^ 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. 8. The actions of the Executive Vice-Presiden t 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 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 July 24, 1979 li/ �/ � � � � � / . /-' A t te s t � � �� ---� / P i n� The Por�t Authority of the City of Saint Paul ti�L Secretary � �Y�� r 'y t'a+'�-�.m r"v�'G+R, �"C'� =''n, d� ,: � Y'm .� �� :�4 �1e .� . �y"4`^p ." -k z'� ;a�.�` �x �:' r�-:��i�4{ � '�,."9 '�S rr . I � ��, '�Z �t� w k e� � � 5 � de �`'. 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' .s � '.. ,j it, ,��iP�x ��t�'� �'S�� k" a �,,�„��`w"`� �.k� s�� *� "� .� ' � 1 ° 1 � � f� "� � .c a- r t a 4��, �`;.� �"' a`�k '�"� �� z�' 2 r� - _ "� �'`�- �, ¢ � a]. m. x , K r { � :.r �x ��.,r �' W,, �'f t�'� f 4x��t � ��3�'�' - �� ` �+ .1 .. �k rA� �^ x, �^6}� ». y „ _ .-, . ._..�., t .,.�t+a,.. � . _ '". . ,x "S,.a �.. ��$,k a,a.� � . R` QRT ` AUTHORiTY �'��'� OF THE CITY OF ST. PAUL Memorandum � TO: BOARD 4F COMMISSIONERS OATE July 20, 1979 (July 24, 1979 Regular Meeting) FROM: J.F. Faue � SUB,lECi: SCANLAN INTERNATIONAL, TNC. PUBLIC NOTICE OF SALE - LANO RESOLUTION N0. 1527 PRELIMINARY & UNDERWRITING AGREEMENTS $550,000 REVENUE BOND ISSUE RESOLUTION N0. 1528 1 . THE CONIPANY Scanlan International , Inc. , located at 200 West Plato Boulevard, has maintained operations in St. Paul for approximately 50 years. , They are engaged primarily in the design, manufacture and distribu- tion of surgical instruments. The company presently leases space and employs 9 �,eople. The proposed expansion results from recent growth and projected increases over the next five years. 2. THE PROJECT . The company has selected Parcel E-3 (57,778 square feet) in Riverview Industrial Park fronting on State and Florida Streets. The proposed building is approxi�nately 10,200 square feet in size and will serve as the corporate headquarters and distriaution center. Fifty to seventy-five percent of the hullding will be devoted to office space and the balance for storage and clean rooms. The building. at this time provides for expan- sion, and the company expects to fully utilize the facility totally for their own purposes within the next three years. Approximately 5 new employees will be added as a result of the initial expansion as soon as the building is completed. 3. FINANCING A Port Authority revenue bond issue is proposed to finance the construction of the facillty as follows: Construction $465,000.00 Legal , Printing & Misc. Expenses 15,000.00 Capitalized Interest - 0 - Debt SerYice Reserve 53,000.00 Underwriting 17,000.00 Total 550,000.00 , � � BOARD OF COMMISSIONERS July 20, 1979 � Page -2- The company anticipates additional improvements ta the facility to prepare for expanding business requirements. At closing, the company will deposit with the Port Authority $50,000 in cash or certified check which will be held in escrow by the Port Authority and released pending the receipt and approval of leasehold improvement plans and current, updated financial statements indicating the company's improved financial condition. Interest earnings on this additional escrow account will accrue to the benefit of the company. Should the improvements not be forthcoming, the escrow account may be returned to the company after five years. Financial statements and a brief history of the company are attached. 4. UNpERWRITING Mi11er & Schroeder Municipals will underwrite the proposed issue. 5. TERMS OF THE LEASE The proposed lease �s for 30 years with options to purchase the building for $55,000 and the land for $36,400 upon termination for a total pur- chase price of $91 ,400. The Port Authority will receive a fiscal and admtn�strative fee base� on the estimated bond issue as follows: lst 10 Years - $165/month (or� $1 ,980/year 2nd 10 Years - $220/month (or $2,640/year � 3rd 10 Years - $275/month (ar� $3,300/year 3 The site contains 57,778 square feet and is valued at $1 .75 per square foot. Clear zone restrictions from the airport presently impact about 1/2 of thls site, and we have been informed that in the next year, ex- tension of the zone will totally impact the site precluding any future building. Subsoil conditians require piling and a structural floor for the proposed deyelopment costing an addltional $80,000. In view of the above, a price reductlon of 50� per square foot to an adjusted value of $1 .25 per square foot is recommended, 6. RECOMMENDATIONS Early notice was sent to District 3 in April of 1979, and we have not received any comments to this date. The Port Authority published notice in the Legal Ledger and St. Paul Dispatch-Ptoneer Press on July 6, 1979 as re�uired under the amendment of Chapter 474 stating the project would be considered by the Port Authority Commission on Tuesday, July 24, 1979. If the project is approved by the Commtssion, a formal appllcation will be submitted to the Commissioner of Securities. The project represents an attractive addition to Riverview Industrial Park proYlding additional employment and permanent facilities for a small but gro�ing com�any. It is estimated the project will generate approximately $12,OOQ per year ln new real estate tdxes. Staff recommends approval . JFF:ca 4 ' ., _ _ , U� � PORT AUTHORITY OF THE CIN OF SAINT PAUL ,��^ 25 WEST FOURTH STREET SUITE 1305 � 1 � ST. PAUL, MINNESOTA 55102 (612) 224-5686 A`�w..� T' ' � �� ` L �,r; L._._.! r _,,r-t Y:. � ��,'__ ...,•1�=D \ u.� �UL 2 6 1979 � J ��-1 July 24, 197J�� ; � % `��/ .�� • � �� Mr. Gary Stout �`�, f�' Director Department of Planning & Economic Development Lowry Annex St. Paul , Minnesota 55102 SUBJECT: SCANLAN INTERNATIONAL, INC. $550,000 REVENUE BOND ISSUE Dear Gary: We submit herewith for your review and referral to the office of the Mayor, C�ty Council and the City Attorney's office details pertaining to the issuance of revenue bonds to finance the construction of a 10,200 square foot office and distribution facility for Scan1an International , Inc. on Parcel E-3 in Riverview Industrial Park. 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. 1528 which authorized the sale of bonds in the amount of $550,000. Your expeditious hand1ing of this matter will be appreciated. `Yours truly, �"' �� \} / �p ` .�: ��-..� �Y_��.,-?�L� t w ' � '^�.�1.��/ : Eugene�A. Krau�� `� � Assistant Executive Vice President EAK:ca cc. R. Broeker lOBERT F.SPRAFKA EUGENE A KRAUT,C.I.D. DONALD G.DUNSHEE,C.I.D. CLIFFORD E.RAMSTED RONALD O.SC- �%ECUfNEVICEPRESIDEM ASSISTFUJTEXECUfNEVICEPRESIDENT DIRECiOR.INDUSTRIALDFVELOPMENT CHIEFENGINEER CHIEfACCWNfAi• ";OMMISSIONERS GEORGE W.WINTER ROSALIE L.BUTLER ARTNUR N.GOODMAN G RICHARD SLADE RUBY HUNT LOUIS H. MEYERS WILUAM J. : Pr�sroENt viCEatESioervt sECnerArrv rRFtisuaFr