The URL can be used to link to this page

270677 f a �`J WHITE — C�TV CLERK COUACII ��F��sy •y PINK — FINANCE GITY OF SAINT PAUL CANARY — DEPARTMENT BLUE — MAVOR File NO. � Council Resolution Presented By �'�—� Referred To Committee: Date Out of Committee By Date WHEREAS: 1 . On February 21 , 1978, the Port Authority of the City of Saint Paul , adopted Resolutimn No. 1314, giving preliminary approval to the issuance of revenue bonds in the initial prin- cipal amount of approximately $4,360,000 to finance construction of the Padco, Inc. facility. 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 resdlution 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 . I 4. It is estimated that the initial principal amount of said bonds will be approxi- mately $4,360,000 and that the net interest cost applicable to said issue will not exceed 8�, now, therefore, 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 her.eb-y� consents to the issuance of the aforesaid revenue bonds for the purposes described in the aforesaid Port Authority Resolution No. 1314 in the initial principal amount of $4,360,000 at a net interest cost of not to exceed 8�, the exact details of which, including, but not limited to, provisions r�elating to maturities, interest rates, discount, redemption, and for the issuance of additional bonds, are to be determined by the Port Authority, pursuant to resolution adopted by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refunding bonds) by the Port Authority, found by the Port Authority to be necessary for carrying out the purposes for which the aforesaid bonds are issued. a COUNCILMEN Requested by Department of: Yeas Nays Butler � �n Favor Hozza Hunt � ��-- Levine � � Against BY � o ��i��v Roedler S ylvester Tedesco M� c� �g�$ Form ved by City Attorney � Adopted by ncil: Date ` Certi d Pas•e Counc S etary • � �� 0 1978 Appro e by Mayor for Subm s ion o Council Ap by Mayor. t — � � BY — -- By QGS��sHEO MAR 1 8 1978 � _ � ��'�,�;�"�„� . . . , � ' Resolut�.on No. 1314 � RESOLUTION OF THE PORT AUTHORITY OF THE CITY OF SAINT PAUI, WHEREAS, the purpose of Chapter 474, Minnesota Statutes, known as the Mi.nnesota 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 poss�.ble the emergence of blighted and marginal lands and areas o€ chronic unemployment and to aid in the development of existing axeas of blight, marginal land and persistent unemployment; and WHEREAS, factors necessitating the active promotion and development of economically sound industry and commerce are the increasing concentration of population in the metrQpolitari areas and the rapidly rising ir�crease 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 wi11 provide an adequate tax base to finance these increas- ed costs and access to employment opportunities for such popu- lation; and WHEREAS, The Port Authority of the City of Saint Paul (the "Authority") has received from Padco, Inc. (hereinafter referred to as "Company") a request that the Authority issue its revenue bonds (which sha11 be divided into two separate issues) to finance the acquisita.on, installation and construction of manufacturing, warehouse and office facilities (herein- after called the "Project") in the City of St. Paul, a11 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 af services and employment opportunitie� required by its population, and said project wi11 assist the City in achieving that objective. Said Pxoject will help to increase the assessed valuation of the City and help maintain a positive relationship betv�een assessed valua- tion and debt and enhance the image and reputation of �the City; and , . . . WHEREAS, the Froject to be financed by revenue bonds �vi11 result in substantial employment opportunities in the � Project; . WHEREAS, the Authority has been advised by repre- sentatives of the Company that canventional, commerciaZ 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 �f revenue bond financing, and its resulting low borrowing cost, the Praject is econom- ically more feasible; and „ WHEREAS, Miller & Schroeder Municipals, Inc. (the Underwriter ) has made a groposal in separate agreements far the respective bond issues (collective the "Underwriting Agree- ment") relating to the purchase of the revenue bonds to be issued to finance the Project. NOW, THEREFORE, BE IT RESOLVED by the Commissianers 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 canstitutes 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 wil7.ingness 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 develop- ment of economically sound industry and commerce and assist in the prevention of the emergence of blighted and ma.rginal 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 wi11 help to prevent the movement of talented and educated persons out of the state and to areas withi.n 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 even�ually result in an increase in the City' s tax base. 2. Subject to the mutual agreement of the Authority, the Company and the purchaser of the revenue bonds as to the details of the revenue agreement o.r agree- ments as defined in the Act, and other documents necessa�y to evidence and effect the financing of the Project and the issuance of the revenue bonds, the Project is hereby approved and author�zed and the issuance of revenue� bonds of the Authority in twa separate series as contemplated in the Undexwriting Agreement, in an aggregate amount not to exceed approximately $4,360, 000 (other than such additional revenue bands as are needed to complete the Project) is authorized to finance the costs of the Project. 3. There has herefiofore been filed �aith the Authority a form of PreZiminary Agreement between the Authority and Company, relating to the proposed construc�ior� 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 ar�d their intentions with respect to the proposed Project in order that the Company may proceed without delay with the commencement of the acquisiti.on, installation and constructian of the Project with the assurance that there -has been sufficient "of�icial action" under Section 103 (b� of the Tnternal Revenue Code of 1954, as amended, to allow for the issuance of industrial revenue bonds (including, if deemed appropra.ate,� any interim note or notes to provide te�nporary financing thereof) to finance the entire cost of �he Project upon agreement being reached as to the ultima�e details of the Project and its �inancing. Said Agreements are hereby approved, and the President and Secretary of the Authority are hereby authorized and directed to execute said Agree^ ments. 4. Upon execution of the Preliminary Agreement by the Company, the staff ot 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 revenue agreement(s) and other docui►lents necessary to the adoption by the Authority o� its final bond resolutions 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 he�eby authorized in accordance with the provisions af P�iinnesat,a Statutes, Section 475. 60, Subdivision 1, to accept a final offer of the Underwriters to purchase the revenue bonds at such time as such offer is made by the Under��riters to purchase said bonds and to execute a final 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 with respect to each issue of revenue bonds to be adopted prior to the delivery of said revenue bonds. 5, The revenue bonds (including any interitn 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 � limitatio� and sha11 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 inte'rest thereon. 6. In order to �acilitate 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 ot 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 re�fund such revenue bonds� and for such purpose the Executive Vice President of the Authority is hereby authorized and directed to forward to the City Gouncil copies of this resolution and said Preliminary Agreement and any additional available information the City Council may request. Adopted February 2 , 1978 , � '' � / � C � /��Gc:�- —" Attest , / Qresi ent ' The Port Authority of the City � � of aint Paul ecretary ,.r (�1'`�; 'F-r'1'-� BR�\C:H OFFICES: � `a �i� t i , Lafolla.California 9203) � . � . 12UU Prusyect Strtri,Suite li0 (7I�j 459�?661 ' . . ' . Chicago.111inois60604 ( . � � 20l Sou1h I.a Salle Strent,Suite 7U9 ' . � (7i'_I�a6-94i6 � . - �. i � 1V�[il��r � 5chro�c��r IO�unicipals, Inc. . - NORTHIYESTERN FINA�'CIAL CENTER, 7900 XERXES AVEI�UE SOUTH, MINNEAPOLIS, MII�NESOTA 55431 70L1.FREF:�tIN\ESOTA 8068ss-GOO2 TEL.612-831-1500 TOL6 FREE OTHF.R Sl'ATES 800.32&8122 February 14, 1978 Hanorabl.e Board of Commissioners . Port Authority of the City of Saint Paul - 1130 Minnesota Building � Saint Pau7., Minnesota 55101 . and � Padco, Inc. � 2220 Southeast Elm S�reet ' Minneapolis, Minnesota 55414 Ladies and Gentlemen: You have advised us that it has been proposed that the Part . Authority of the City of Saint Paul (the "Issuer") issu.e its , • Revenue Bonds (the "Bonds") under the provisions o .f Chapters 458 and 474 Minnesota Revised Statutes of the Port Authority of the City of Saint Paul to finance a project to be leased by the Issuer to Padco, Inc. (the °Company") . On the basis of information furnished us to date with respect to the project to be financed by the issuance of the Bands, and . upon the terms and conditions as generally set forth in this letter and more specifically described in the Addendum attach�d hereto and fully made a part hereof by reference thereto, we hereby agree to purchase $1, 000,00� principal amQUnt of the Bonds on the following basis: A. The Bonds shall bear a date of Apzil 1, 1978, and shall mature approximately 30 years from and after the date thereof, with amortization of the Bonds ta be provided for on a level basis whereby the sum of prin- cipal and interest payments due in each year is essentially constant over the term of the Bonds. The Bonds shall mature in the years beginning April 1, 1979, thraugh Apri1 1, 2008. The first interest coupon shall be payable October l, 1978. � � • 1 �,- . � � , . � ; Fort Authority of the City of Saint Paul • Padco, Inc. February 14, 1978 , Page Two B. The interest rates with respect to the Bonds shall be determined in the manner as specifically provided and set forth in paragraph 2 of the attached Addendum. C. The proceeds of sale .of the Bonds shall be a110- � cated approximately as follows: Acguisition and Construction $ 960, 000.00 . Legal expenses and other costs � �O,OOQ.00 of issuance (estimated) 30,OOO.QO Underwriter' s discount Total $ 1, 000,000.00 D, We will pay $970,000 for the Bonds upon their � delivery to us, together with accrued interest to a now anticipated Closing Date Qf April 11, 1978, all as mare specifically provided and set forth in paragraph 3 of the attached Addendum. F. Notwithstanding anything herein contained to the contrary, all of the terms, covenants and conditions of the Addendum attached hereto and made a part hereof shall be fully applicable to the issuance of the Bonds as if such terms, covenants and conditions were full� set forth herein, and to the extent of any conflict between the terms, covenants and conditions of said Addendum and the general description of the transaetion as contained in this letter, the provisions of said Addendum shall be controlling and binding upon all parties hereto. . If the foregoing proposa}. is acceptable to both of you, � please indicate by �ndorsing a copy hereof, with the copy so endorsed to be returned to us. Until and unless accepted by both of you, this proposal may be withdrawn by us at any time by a telegram addressed to both of you. If this I ``:� , ; , . � . � Port Authority of the Czty � of Saint Paul - Padco, Inc. . � February 14, 1978 Page Three proposal is accepted but �or any reason Bonds are not issued � and delivered as herein contemplated, the Issuer shall be reimbursed by the Company for all expenses theretofore incurred by the Issuer in connection with the proposed project. ' Very truly yours, MIL�ER & SCHROEDER MUNICTPALS, INC. By Accepted by the Port Authority of the City of Sairit Paul " this day of February, 1978. By . . And Accepted by Padco, Ina. this day af February, 1978. By Its Attest: . � ADDENDUM THIS ADDENDUM shall be and is hereby made a pa�t of that certain letter dated the 14th day of February, 1978� addressed by Miller & Schroeder Municipals, Tnc. (the � °Underwriter") to Port Authority of the City of Saint Paul (the "Issuer") and Padco, Inc. (the "Company") , and relate� � to the proposed issuance and purchase of approximately� $1,OOQ, 000 Revenue Bonds (the "Bonds" ) to be issued by the Issuer to finance a project (the "Project") to be leased to the Company. . 1. The Company agrees to fully comply with and assume all expenses incurred in fully complying with all regulatory requirements imposed by t�e Securities Division of the . Minnesota Department of Commerce or such other regulatory authority as may have jurisdic�ion herein arising out of or . ' incurred in conjunction witYt the issuance of the Bonds, including, �ut not limited to, all expenses incurred and required in the preparation and filing .of such interim and . annual financial information and reports as may be required � to maintain the registration of t3�e Bonds, copie5 of all of which the Company agrees to promptly furnish to the Under- writer at such time as the same may be filed in the Offic� of the Securities Division of the Minnesota Department of Commerce. - � 2. The Bonds are to bear interest payable semi- annuall,y at a rate or rates to be determined by the Issuer and the Underwriter on or before March 30, 1978. Notwith- - . standing the fin�l rate or rates of interest to be borne by. the Bonds, the Underwriter reserves the right to xeoffer the Bonds to the public at prices other than the par value thereof� including a premium over par or a discount below par, as the Underwriter, in its sole judgment and discretfon, . may deem necessary. 3. The Underwriter will pay for the Bonds upon their delivery to it if the Bonds are delivered on or before the anticipated Closing Date as specified in the letter to which this Addendum is attached and made a part thereof hy �reference thereto. The Bonds are to be accompanied by the unqualified approving opinion of Briggs and Morgan, Professional Associata.on, . whose opinion shall state in substance that the Bonds are valid and binding special obligations of the Tssuer under the Lease payable from revenues pledged to the Common Revenue Bond Fund and stating that interest payable on the Bonds in the hands of a person not a user of the Project is - 1 - . on the date of their issuance exempt from Federal income taxes under then existing laws, regulations, � decisions and rul.ings. 'Yau agree to cooperate in obtaining this opinion and will also furnish an opinion ot your counsel as to your . authoritiy to enter into this transaction. 4. You agree to cooperate with us, Bond counsel, counsel for the Underwriter and such others as may be appro- priate in the preparation of documer�ts and proceedings reasonably necessary to the completion of this transaction, . � and the Gompany shall make available to the Underwriter such - information and documents with respect to its financial affairs and operations as requested. � 5. Sefore delivery of the Bonds to the Underwriter, appropriate afficers of the Issuer shall have reviewed the Official Statement prepared to .offer the Bonds for sale so that they will be prepared upon delivery of the Bonds to the Underwriter to certify that the information furnished by them contained therein as o� the date thereof is true and correct and does not contain any untrue statement or misleading statement of a material fact nor omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and authorizing use of • the Official Statement by the Underwriter. 6. � Between the date hereaf and the date of delivery of the Bonds to the Underwriter, there shall not have been any material adverse change in the business, properties, financial position or results of operation of the Company, nor shall� there be pending or threatened on such date any � legal proc�edings to which the Issuer or the Company is a party and which will have �a material adverse effect on the transactions contemplated by the Lease and reso�ution, except any such action of which we shall have been advised prior to the date hereof. . 7. The Company agrees to indemnify and hold the , Underwriter harmless from and against any and a11 claims, demands, actions, causes of action, dan�tages, liabilities and . judgments (including attorneys' fees and expenses) arising from or in any way connected with any statement or information contained in the Official Statement concerning or related to the Company, the Project and/or the use of Bond proceeds. 8. The Company will pay all expenses in connection with the proposed offering, including, among others, fees and expenses of Company counsel, counse], for the Issuer, . Bond counsel, Blue Sky counsel, Blue Sky fees, Accountants, . - 2 - . . � and Investment Rating Agency fees, together with all costs and expenses incurred in conjunction with the preparation � and printing of all documents requi�ed to consummate this offering including, but not limited to, the Official State- ment, all of the same to be paid by the Company without regard to whether the Bonds as contemplated herein are issued. The Company and the Underwriter acknowledge that � they� have estimates of the fees and expenses of (a) Bond counsel, (b) Blue Sky counsel, (c) Blue Sky fees, (d) � investment rating agency fees, (e) au�litors, (f) the normal costs and expenses incurred in conjunction with the preparation • and printing of all documents required to consummate the � offering, including (1) the official statement, and (2) �the printing of the Bonds. The fees of Underwriter' s counsel shall be paid by the Underwriter. 9. The Port Authority of the City of Saint Paul and the City Council of the City of Saint Paul agree to da such thzngs and to take such action as may be required to dischazge - all obligations and honor all covenants made or entered into by the Port Authority with Padco, Xnc. in connection with the issuance, by the Port Authority of its revenue bonds to finance a project for Padco, Inc. , including but not li.mited � to: (a) supervision of the covenants rel.ating ta rents, insurance, repairs, maintenance and taxes; (b) management of � separate accounts as required by the Bond authorizinq � resolutions; and (c) auditing of Port Authority accounts by a qualified Certified Public Accauntant. . 10. Upon delivery of the Bonds to the Underwriter, the Underwriter shall pa.y to the Issuer the purchase price of � the Bonds plus accrued interest from their date of issue to � the Closing Date all as more specifically p�rovided in Paragraph D of the letter to which this Addendum is attached and made � a part thereof by reference thereto, provided the Official Statement with respect to this Bond offering required to _ permit public sales to individuals in the State of Minnesota has been acCepted for registration. If not so accepted for registration prior to the Closing Date, we may accept and • place the Bonds at our option, but are not required to do so. The Underwriter shall apply for the registration of the Bonds as soon as practicable after the date hereof_ and the representatives of the Issuer and the Underwriter sha11 diligently pursue the registr�tion of the Bonds. . - 3 - . .. 9��.\CH OF'FlCES: • [a'olla.Catifornia 920�7 � � . 1?04 Pruspect Street.Suite li0 " . (ili!�59•2661 , � - C:tiwgo.Illinois 60603 � . . 20)South La Salle Strest,Suite�Oy � (s:3)3i6-�}:�s . - . i � � Miller & Schr�ed�r N�unicipals, Inc. � I�ORTHI'VES'TERN FIi�ANCIAL CEI�TER, 7900 XER}�ES AVEI�'UE SOUTH, MINNEAPOLIS, MINNESOTA 5543] TOiL FR�E�1iV'�ESO'CA 800.862-600? TEL.612•831-I500 TOLL FREE OTHF.R STATES E00-32&8122 February 14, 1978 Horiorable Board of Commissioners Port Authority of the City of , Saint Paul • 1130 Minnesota Building Saint Paul, Minnesota 55101 � and . : Padco, Inc. • . 2220 Southeast Elm Street Minneapolis, Minnesota 55414 � Ladies and Gentlemen: � . � You have advised us that it has been proposed that the Port Authority of the City of Saint Paul (the "Issuer" ) issue its Industrial Development Revenue Bonds (the "Bonds" ) under the provisions of Chapters 458 and 474 Minnesota Revised Statutes and Bond Resolution No. 876 of the Port Authority o€ the City of Saa.nt Paul to finance a projECt with Padco, Inc. (the "Company") . On the basis of information furnished us to date with respect to the project to be financed by the issuance of the Bonds, and upon the terms and cond�itions as generally set forth in this letter and more speci£ically . described in .the Addendum attached hereto and fully made a part hereof by reference thereto, we hereby agree, as your exclusive agent, to use our best efforts to privately place $3,360, 000 principal amount of the Bonds on the folTowing basis: A. The Bonds shall bear a date of Apri1 l, 1978 , and shall mature approximately 30 years from and atter the date thereof, with amortization of the Bonds to be provided for on a level basis whereby the sum of prin- cipal and interest payments due in each year is essentially constant over the term of the Bonds. The Bor�ds shall mature in the years beginning Apri1 1, 1979 , through April 1, 2008. The first interest coupon shall be payable October I, 1978. � ! �` . , , � Port Authority of the City of Saint Paul Padco, Inc. � ' February 14, 1978 � � Page Two B. The Bonds shall be subject to redemption and pre- payment in whole or in part upon terms mutually acceptabl.e � to the parties hereto. C. The interest rate with respect to the Bonds shall be based upon the mutual. agreement of the parties hereto. � - D. Our fee for this placement is to be $108,OU0, which amount shall be payable to us upon receipt of Bond proceeds in the amount of $3, 360, 000 by the Issue� at the closing and the deposit of such funds in the Construction Fund and the Bond Fund. � E. Notwithstanding anything herein contained to the coritrary, all of the terms, covenants and conditions of the Addendum attached hereto and made a part hereof shall be fu11y applicable to the issuance of the Bonds as if such terms, covenants and conditions were fully set forth herein, and to the extent o€ any conflict . between the terms, covenants and conditions of said Addendum and the general description of the transaction as contained in this letter, the provisions of said Addendum shall be cpntrolling and binding upon all _ parties hereto. " If the foregoing proposal is acceptable to both of you, � please indicat� by endorsing a copy hereof, with the copy so endorsed to be returned to us. Very truly yours, MILLER & SCHROEDER MUNICIPALS, INC. By _ ! � � Port Authority af the City of Saint Pau1 � Padco, Inc. February 14, 1978 . . Page �Three Accepted by the Port Authority �o� the City of Saint Paul this day of February, 1978. By And Accepted by Padco, Inc. this day of February, 1978. By � Its Attest: . . ' , . ADDENDUM T�iIS ADDENDUM shall be and is hereby made a pa�t of that certain letter dated the 14th day of February, 1978, . addres5ed by Miller & Schroeder Municipals, Inc. to Port Authority of the City of Saint Paul (the °Issuer") and Padco, Inc. (the "Company") , and relates to the proposed issuance of $3, 360,000 Industrial Development Revenue Bonds - (the "Bands") to be issued by the Issuer to finance a project (the "Project") under a Lease with the Company. 1. To the extent appZicable, the Compan� agrees tQ fully comply with and assume all expenses incurred in fully complying with all regulatory requirements imposed by the Securities Division of the Minnesota Department of Commerce or such other regulatory authority as ma.y have jurisdiction herein arising out of or incurred in conjunction with the issuance of the Bonds. 2. The Bonds are. to be accompanied by the �unqualified � approving opinion of Briggs and Morgan, Professional Association, . whose opinion shall state .in substance that the Bonds are valid and binding special obligations Qf the Issuer. You agree to cooperate in obtaining this opinion and will also furnish an opinion of your counsel as to your authority to enter. into this transaction. . 3. You agree to caoperate with us, our counsel, Bond counsel and such others as may be appropriate in the preparation of documents and proceedings reasonably necessary to the � completion of this transaction, and the Company shall make � available to us such information and documents with respect to its financial affairs and operations as requested. 4. Prior to the placement of the Bonds, appropriate officers of the Issuer shall have reviewed the Confidential Offering Memorandum prepared to offer the Bonds for sale so that they will be prepared to certify that the information � furnished by them contained therein as of the date thereof is true and correct and does not contain any untrue statement� or misZeading statement of a material fact nor amit to state � any material fact required to be stated therein or necessary to make the statements therein not misleading, and autho- rizing use of the Confidential Offering Memorandum by us. 5. Between the date hereof and the date of delivery of the Bonds, there shall not have been any material adverse change in the business, properties, financial position ar . results of operation of the Company, nor ,shall there be - 1 - pending or threatened on such date any legal proceedings to which the Issuer or the Company is a party and which will have a material adverse effect on the transactions contem- glated by . the Lease and Bond Resolution, except any such action of �which we shall have been advised prior to the date hereof. � 6. The Company agrees to indemnify and hold us harmless from. �nd against any and all claims, demands, actions, causes of action, damages, liabilities and judgments (including attorneys' fees and expenses) arising from or in any way connected with any statement or information contained in the Confidential Offering Memorandum concerning or related to the Company, the Project and/or the use of. Bond proceeds. 7. The Company will pay all expenses in connection � with the proposed offering, including, among others, fees and expenses of Company counsel, counsel for the Issuer, � Bond counsel, Blue Sky counsel, Blue Sky fees, Accountants, and Investment Rating Agency fees, together with all costs and expenses incurred in conjunction with the preparation and printing of all documents required to consummate this offering, including, but not limited to, the Confidential Offering Memorandum, all of the same to be paid by the - Company without� regard to whether the Bonds as contemplated herein are issued. The Company and the Underwriter acknowledge that they have estimates of the fees and expenses of (a) Bond counsel, (b) Blue Sky counsel, (c) Blue Sky fees, (d) Investment Rating Agency fees, (e) auditors, (f) the normal . costs and expenses incurred in canjunction with th.e preparation and printing of all documents required� to consummate the offering, including (1) the Confidential Offering Memorandum, and (2) the printing of the Bonds. The fees of Underwriter's counsel shall be paid by the Underwriter. 8. The Port �Authority of the City of Saint Paul and the City Council of the City of Saint Paul agree to do such things and to take such action as may be required to discharge all obligations and honor all covenants �made or entered into by the Port Authority with Padco, Inc, in connection with the issuance, by the Port Authority of its revenue bonds to finance a project for Padco, Inc. , including but not limited to: (a) supervision of the covenants relating to rents, insurance, repairs, maintenance and taxes; (b) management of separate accounts as required by the Sond authorizing resolutions; and (c) auditing of Port Authority accounts by a qualified Certified Public Accountant. _ 2 _ s P Q R 'T ��" ��" � 3 . AUTHORITY OF THE CITY OF 5T. PAUL Memo�andum 70: Board of�Comni oners DATE February 21 , 1978 � FROM: D. G. Dunshe SUB,lECT: PADCO, INC. . PRELIP�IINARY AND UyDERWRITING AGREEMENTS _ REVENUE BOND FINANCING $4,360,000 PUBLIC SALE HEARING 1. THE COMPANY Padco, Inc. was incorporated in Minnesota and has been in busines� -since . 1962. They started operations in St. Paul and moved to Minneapolis in 1976. At the present time they lease approximately 160,000 square feet of space in several buildings in Minneapolis near Minnesata 280 and Kasata Avenue. The company has designed, developed and has produced a variety of foam rubber paint pad applicators which are distributed rtationally and internationally. In addition to the current production and distribution - facilities in Minneapolis, they also have a wholly-owned subsidiary in - Toronto, Canada. At the present time foam rubb�r paint pad applicators represent approxi- mately 20� of the total paint applicator market in the United States. Uf this 20% market, Padco's share is approximately 75q. Their maja.r customers include K-Mart, Zayre, Coast to Coast, Uni.ted Hardware, Warner's Hardware, True Value Hardware, Montgomery Wards, Our Own Hardware, F.O.K. , Payless Cashways, knox, G. C. Murphy, and others. In addition to marketing products under their own label , they also produce components for competitors as well as produce applicators for the private label market. In the last three years the paint pad market has grown at such a rate that their emplQyment has increased from 75 employees to the current level of 400. If they are able to consolidate their operations in one facility, as opposed to being scattered in several buildings, it will permit tMem to have a more efficient operation and provide additional employment far St. Paul . At the present time Padco has subcontracted all of the production work for the components of the paint pads and simply receives the finished product at their own facilities, assembles and packages the paint pad � kits and distributes them to customers. If they construct a new facility they plan to incorporate some plastic injection molding operations in their building to provide more efficiency in their operation. Board of Cammissio�ers February 21 , 1978 Page -2- 2. THE PROJ ECT Th� company proposes to construct a 200,000 square foot, 2-story office, . manufacturing and warehousing faeility on an 8.27-acre tract of land. currently awned by the Burlington Northern Railroad. The site contains 359,511 square feet and would be purchased from the Burlington Northern Railroad with proceeds �from the bond issue at a rate of 9�¢ per square foot, or $324,235.00. Th� site is located west of P+iinnesota 280 and north of Kasota ,4venue. The topography of the site is such that rail service is available on the lower level and truck dock facilities are available to both levels of the proposed building. The plan calls for 10,000 square feet of air-conditioned office space on each level . The exterior of the building would be precast concrete. The entire site would be developed in landscaped area, paved parking area and truck and rail loading zones. The Port Authority would insure through provisions in the lease that the site is maintained in an attract.ive way similar to the buildings currentl.y located in Riverview Industrial Park. The staff, company and the proposed contractor have met with repre- sentatives of District I2 and have received their support for the project in that location. Under the new St. Paul Zoning Code the property is zoned I-2 (heavy industrial ). Under the regulations of the Environmental Quality Board they require an environmental assessment for any industrial project containing more than 175,000 square feet of industrial space. Padco's building will contain 200,000 square feet of spaee, thus, an assessmznt is required. The Port Authority has prepared an environmental assessment warksheet for review by the Environmental Quality Baard and other governmental agencies. Approval by the Environmental Quality Board will be obtained before any construction on the project commences. 3. FINANCING On the basis o� staff review of the project, we are proposing that revenue bonds in the amount of $4,360,000 be issued with the proceeds �o be used as follotivs: Land � 324,235.00 Building 3,8?5,765.00 Bond Issue Expense 30,000.00 Discount 130,000.00 Debt Service Reserve - - - - $4,360,000.00 I Board cf Commissioners • February 21 , 1978 Page -3- Because of tne current capital expenditures the company has incurred in the aast three years and those they anticipate incurring in the next three years, it is impossible to cansider a tax exempt bond issue, thus the oniy way tne project can be financed is tnrough the issuance of . �1 ,000,000 in tax exempt and a3,360,000 in taxable revenue bonds. The taxable bond issue would be guaranteed by the Port Authority under Resolution No. 876 and the �1 ,000,0�0 tax exempt issue would be under ResoTutian No. 1270. � Staff has been working �rith the company for the past eight months and has � been in competition with Minn�apolis on tne project. In order to provide. a financing pr�gram that is acceotabTe to the corporation, w� propose the funding of tne debt service reserve in the amount of $400,000 by the Port . Authority with interest. earnings on those reserves to inure. to the Port Authority and the company to pay 8-1/2% to the Port Authority on those funds over tr�e final 25 years of the bond issue. The funding of the debt service reserve Hrould come as a result of a transfer of existing Fcc�n�ulated P�et Revenue funds to an escro�y account for the bond issue. The company would have tne right under the debt service reserve agreement to fund it at any time during the 30 years themselves, thus returning the original Port Authority reserve fund back to us, a�d the company would receive as rent credit any _ interest earnings an the debt service they fund. - � Staff realizes the funding of the debt service reserve is a departure from nornal �rocedures, hawever, because of the number of jobs that a�ould be bro�ght to St. Paul by the project and the expansian plans of the carparation, stafr feels tha� the funding would be to the benefit of the city. Attached are the past three years financial statements and a 6-year pro for�a tivhich includes figures for 1977. Padco has a ca]endar audit year and the final 1977 figures have not been completed. Attached is an 8-ranth 1977 statement. 4. UNDER'�lRITING AGREEP�ENT � ��{iTler & Schroeder Municipals have agreed to underwrite t��o revenue bond issues totaling �4,3b0,a00 for a term of 30 years. There wauld be a tax exempt issue of $1 ,G00,000 and a taxable revenue bond issu� of $3,3o0,00Q. The interest rate for the bond issues will be determined within 10 days of the closing of the bond issues. A copy of the underwriting agreements is enclased for your review. 5. TE�'�IS OF THE LE.�SE The terms and conditions of the lease agreement will be similar to the custorary Port Autnority leases. This agreement will contain a fiscal an�i administrative fee equal to �872.00 per month or $10,464.00 annually. The interest on the sinking fund and reserve f�r►d will inure to the benefit of the Port Authority. The Port Authority will earn 89� on the lon� term . � Board of Co*�missioners February 21 , 1978 Page -4- investment of th� debt service reserve over the term of the bond issues and r�il1 also receive 8-1/2% interest from the company for the use of that money �over the final 25 years of the lease. Thus, we will earn 8% for the first five years of the bond issues and 16-1/2q for the final 25 years on the $400,000 debt service. � . The company wi11 have an option to purchase th� land and building for $1 .00 at the end of the lease period or at any time when the bonds are fully retired. A Public Sale Notice was published on February l0, 1978. ' It is estimated that total annual new real estate taxes for the city from the facility will be approxinately $90,000 per year over the term of the lease. This represents a total new tax of $2,700,000 over the term. 6. RECOP+11�1ENDATIOiV Staff has reviewed the financial statements of the corporation, inter- viewed its officers, and discussed the proposal with the com�any's bankers, and recommends approval of the preliminary agreement and underwriting agreements for the issuance of $4,3b0,OQ0 in ir�dustrial development revenue bonds. DGD:jmo Attach. � � � s �,�� I�' - �� f� s J i., r ,-:� � �� '�t r . �� .� �� .��,,�, .: . k?. ' _ � ': � - , r . . . ., � �� ' � � �A �� cu . _ � ; � '� r d � 1 f.� � � j �� u'�`'� .�� s # � � � F ::r� ; � �e � " ; � � '� "<Y�� . , 'R,.` 4��..� t "" d{ ' �M �� F ' E � 4 ��. �'�"'`A � �- � ,� � } - �. Y� � F,y a3A t�u� 1 '- _ [ � � '� �f k� . . p .�P._. "r��b�4� s��,� � r . . u'ar l'�� r 4 , : � '��r� `� 5��) i` ' � � � �',�. � T �',� � °'�a t'��. �� ' . . ` ;� `�rr . � ,y7��. � � A 5{ , y�j`1::, ,�� V. � .. � � ��'�' Kt��d�' .� t * ke� , r 3A �� - � .-�. . . • . : l � t � �� t ��, �f� �t� t.�'� �� f , , � �� ' � , �' i 'e ' �,�i �� , ��v r,�� ::. �: '' „=l'��'� . �i ; _ " r�s ��r,A �s.��',-��a � ar :. a# � t - � -_ .E �c k � �; � %;,.c �y. �+¥..s.,`,�' ��3, x �"} `t �• a� ,s° � ��'� ; � :.�` �� ; � - �` �� ' k � �i" ��: � { { c �� \' � - � � �: - : . . . . . . , . , � a . . . : . . . , � _:, . . . .. ..�..: . � r u , : ., _. . . . ,:. , � }v� s \ � f ar�,�� '� ' ` � � " � - �: : { � � � � �r k '�� ,�M �t �.. , . . , . .. .. r •` r ��.'i : . �rs ..'�"� .... ,.,�, �� °-R �: � '`��. � v. ��"�i�� a rgt � - �� „ � �� ' „� � , '��, � :+d�t�' E��" �'�` ��x��`� � � : ��°�'� , �. , . � , � '� 1�y� y Y w { �� F ..��.:',Yft ��1�`�:.,. �;`�' ��.�� E�I'iw $ �{r �� 'L`� F d F �r . ,.. . � �. � � �� :F �t 7-�w�� Jn �,,,, � � �'�� '.�� d�� t r �� ,Sd� ;�'4,� �`��E'��" ��"�,i� �A t� 1� ! �,y�� ,rt � � f g "al4G t�" .• �' �7i�7��}►.� �� ,�'y'��++�j � � � � ,. } f $: �r� �z a �'' � -�'i� '�1`� �7C �'�'��i�#s�lsi47 �' i��1 ' �,'�'' *� �i � ��„(. � .�j�{.. ,� � � ��} � ,� � iy�' L�,, �� '.Q. -�.Tyj'jy� � �� '-`^'�� ` : X - i 4 �� 1 j�� *�'�� l��N � `��.��v �'�' �(.�. � .�� t*:: ��'� .M ` ..` : 3r •. - � " ,�� - j� { { � � � Y��(*.� y, i E;: f � � Y 4 � } '� �� ?�� - � � � � �` � t , ��,� � r, €� �,. �, � � � a � r �, e&�, � � _ � �� ` �`'3 q� x��..� x �, t i �. ��°° � �.- �'g„c � Y -�,� „ , � � $ .��.� �!�/�!• �t ` a , � "�µ�£� �� ' '.� t � � ,.� ^` � Z t ' _ - . . � : ' _ '� x �=`£ ��' ��Y _ �=�i�� u �''�� `� '��#�:� � ��`� f �2. �'�'� � � � �� q � .� � �� x � � � �� '� ��a 7 . . > �� = � � �� :� �� ; �� < � � �-� ��" ��,•�� > � �� ' �� , �. s ,: � � � � � <<� � : Y F� . ' � . t � "�- � '¢�: �, , , �" .� , . , . . . . + , , . . ,s . . - �' .� , , ". . . . , . - , . . .� . .: ,", `�� ',,, . � h .,s. � '�� . � 1 � � . � r � s � � . � { s �} ��' �:��,. N rh ,. ",+�,�` t ' ;��s �" < ��*�x i a - � i a a e �:; ��r 4 � , d E 4 a A � '�^y'" . . T � � d-' ��'. ,{ � � � at � � '"� e`u5«..� Y I k �''�y. �. _ ". �,� �t �_ � . h _ � i y t9 � �,D � ; � � .. _ . ➢ �� t �� 4 �Fk � � � �"�` '�'r��f�� ' ; q �'�G � S � Y # �� .1 �� ;� �.� � �"� �...' .:��w��° � i k � �8 a�� S� § "�€`} , � ta��s i t� z-�,.�^�.- .. '�.'��, � � S. . �.'� ' . �� . � � � ; y +' �-�' � - ,� _ � � �,.�,f.�� '�'�hi � ,� _ :>:' �-w��3' y �.-_ z 't- r _ � � ��; �� s h x : t �}�,� ' t �� k t c µ` y�.�°�� #.�f - �, .,� �a '#` �'�� t r� � , �� f � { 1 � �� , .-�- . ,: �� . '� � '' ., � : . -. � � � �� t ; � , - �, ; . ,� . ,r �, .�.r 5 " �� „.">. : � . , � .,'. . rt .. . _ : - ... ,,,. < . �.... .,..., . . �_ - . .. . - ..�. , .,��.1 ..�.. _.,...a_a-» ,b .� 4 a"'�`��1. .. . ...._..ve..s....r.�..�.`.�,.-..iw,r..c:...�-ee.�i�Man*�Laovr.,M..�rrr.,.a•�.+�": -�re•**s+�«�+s•��.....e...l.'Y � . � � ` , 5 lst � f � 2nd � / � �' , 3rd �(� �_ Adop ted �� Yeas Nays BUTLER HOZZA � �, � xuxT �i��7� . � ' LEVINE � ) . l/ ROEDLER � TEDESCO (PRESIDENT SYLVESTER) J