271267 WH17E - CITV CLERK �E�� �}��F�
PINK - FINANCE G I TY OF SA I NT �A �1 L COUtICIl M �.,,v
CANARV - DEPARTMENT
BLUE � - MAVOR' Flle NO.
ouncil Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
WHEREAS:
1. On May 14, 1974, the Port Authority of the City of Saint Paul adopted Resolution
No. 893, giving preliminary approval to the issuance of revenue bonds in the initial
principal amount of approximately $935,000 to finance the construction of a 50,000 square
foot facility for Interior Wood Products, Inc. in Midway Industrial Park.
2. On May 30, 1978, the Port Authority of the City of Saint Paul adopted Resolution
No. 1352, giving preliminary approval to the issuance of revenue bonds in the initial
principal amount of approximately $410,000 to finance a 21 ,000 square foot addition to
Interior Wood Products, Inc. 's present warehouse facility in Midway Industrial Park.
3. 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;
4. 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.
5. It is estimated that the initial principal amount of said bonds will be approximately
$410,000 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 hereby consents to the issuance of the aforesaid
revenue bonds for the purposes described in the aforesaid Port Authority Resolution No. 1352
in the initial principal amount of $410,000 at a net interest cost of not to exceed 8�, 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 b n b the Po t Au bo i f und b t e Port Authori y to be necessary for
COUNCI�LMEN
Yeas Nays Requested by Department of:
Butler �
Hozza [n Favor
��
�t � __ Against BY
� Maddox
� Showalter
Tedesco
_ JUN_�� Form Approved by City At!orney
Adopted by� Council: Date }�----
Certified b}� Counci e retar BY-
��t""^it �
l -
Ap o � by 17avor: D JUN 1 6 1978 Appro by Mayor for Submi io o Council
By BY
LtsNEO Jv N � a 'g7a
'�B
. �n
�� ����
� � �� �,
. Resolution Na. 1352
RESOLUTIOi�T OF
THE PORT AUTHORITY OF THE CITY OF SAINT PAUL
WHEREAS , the purpose of Chapter 474 , P•Iinnesata
Statutes, kno�vn as the Minnesota Municipal Tndustrial Develop-
ment Act (hereinafter called "Act") as found and determined ?ay
the legislature is to promote the welfare of the state by the
active attraction and encouragement and developnent of economi--
cally sound industry and comm�rce to pxevent so far as possible
the emergence of blighted arid marginal lands and areas of chronic
unemployment and to aid in the developn�ent of existing areas
of blight, marginal land and persistent unemployment; and
WHEREAS, factors necessitating the active promotion
and development of economically sound industry and commexce are
�e increasing concentration of population in the metropolitan
areas ar^ the rapidly rising increase in the amoun� and cast
- of governn,er_tal services required to meet the needs of the
incre�sed population and the need for development of land use
which �•�ill provide an adequate tax base to finance these increas-
ed costs and access to employment opportunities for such popu--
lation; and �
WHER.c.AS , The Port Authority of the City of Saint Paul
(the "Authority") has received from Interior tiJood Produets,
Inc. (hereinafter re�erred to as "Company") a request that
the Authority issue its rev2nue bonds to finance the acquisition,
installation and construction of additional �aarehousing
_ facilities for an existing project previously financed by
revenue bonds of the Authority (said additional facilities
hereinafter called the "Project") in the City of St. Paul,
all as is more fully described in the staff report on
file; and
4�FILREAS, the Authority desires to facilitate the
selective development of the community, to retain and improve
its tax base ancl to help it provide the range of services and
eriployrnent opportunities required by its population, and said
Project will assist the City in achieving that objective. Saa.d
Projec� will help to increase the assessed valuation of the City
and help maintain a positive relationship be�c•:een assesscd valua-
tion and debt and enhance the image and reputation of the City;
a�d
WHERE�S, the Project to be financed by revenue
� bonds �aill result in substantial employmznt opportunities
• in the Project;
. WHEREAS, the Authority has been advisea 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 a� 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 borro.oing cost, thz Project is econom-
ically more feasible; and �
WHEREAS, Miller & Schroeder Nunicipals, Inc. (the
"Underwriter") has made a proposal in an agreem�nt (the
"Underc�riting Agreement") relating to the purchase of the
revenue bonds to be issued to finance the Project.
NOW, THEREFORE, BE IT RESOLVED by the Cornmissioners
of the Port Authority of t�e City of Saint Paul, �Minnesota
as follows :
1. On the basis ot informata.on available ta the
Authorit�� it appears, and the Authority hereby finds, that.
said �ro�ec� constitutes properties, used or useful a.n
con�ec�ion �ai�li one or more revenue produc�.ng enterprises .
�engaqed in any business within the m�aning of Subdivision 1
of Section 47�. 02 of the Act; that the availability of the
financing under the Act and willingness of the Z�uthoraty 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 eeonomically sound ir_dustry 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 i�ax base and
provide the range of services and employment opportunities
requized by its population, and wi11 help to prevent the
movement of talented and educated p�rsons out of the state
and to areas within the state where their sexva.ces may not
be as effectively used and ��ill resul� in more intensive
development and use of land �aithin the City and wi11
eventually result in an increase in the City' s tax base.
2. Subject to the mutual aqreement of the
Authority, the Company and the purchaser of the revenu�
bonds as to the details of the amendment to the existing
lease between the Authority and the Company (formerly
. �����°�
Northwestern Flooring and Lumber Company) and other documents
�necessary to eviderice and effect the financing of the Project�
and the issuance of the revenue bonds, the �Pr_oject is hereby
approved and authorized and the issuance of revenue bonds
� of the Authority in an amount not to exceed approximately
$410, 000 (other than such additional revenue bonds as are
needed to complet� the Project) is authorized to finance the
costs of the Project.
3. 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 t�e Project and a form of the Underwriting
Agreement. The form af 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 th� assurance that there has been sufficient
"official action" under Section 103 (b) of the Snternal
Revenue Code of 1954, as amended, to allow for the issuanc�
of industrial revenue bonds to finance the entire cost of
the Project upon agreement being reach�d as to the ulti-
:;�ate d�ta�ls of the Project and its financing. Said
Agree�:,z;_�� �re hzreby approved, and the President and
Secretary c� the Authority are hereby authorized and �
directed to execute said Agreements.
4. Upon execution of the Pre]_iminary Agreement
by the Company, the staff of the �luthority are authorized
and directed to continue negotiations with the Company so as
to resolve the remaining issues necessary to the preparation
of the amendment to 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.
5. The revenue bonds and interest thereon '
shall not constitute an indebtedness of the Authority o�e
the City of Saint Paul. within the meaning of any consti-
tutional or statutory limitation and sha11 not constitute
or give rise to a pecuniary liabili.ty of the Authori.ty or
the City or a charge against their general credit or taxing
powers and neither the full faith and credit nor the
ta�ing poc•�ers of the Authority or the City is pledged for
the payment of the bonds (and interim note or notes) or
interest thereon.
6. In order to facilitate completion of the
reveriue 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
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 Ex�cu-
tive Vice President of the Authority is hereby authorized
and directed to for�vard to the City Council copies of this
resolution and said Preliminary Agreement and any addi-
, tional available information the City Council may request.
Adopted May 30, 1978 � �
� � � `
Attest �� �` � ��«-
Pres '�d nt
The Port Authority of the City
of Saint Paul
Secretary „ '
_.------ • �y �� l ! , : ��
, .. �.?-��-:< i i(�r���
, //� . . �L:�'1��:_� ��� �
PRELIi9II�ARY AGREEMENT
� THIS AGREEMEiJT, made and entered into as of this
30th day of I�Zay, 1978, by ana between the PORT AUTHORITY OF
THE CITY OF SAINT PAUL, a public corporation organized and
existing under the provisions of Minnesota Statutes,
Chapter 458, and a redevelogment agency within the meani.ng of
Dlinnesota Statutes, Chapter 474, hereinafter called "Port
Authority" , and INTERIOR tVOOD PRODUCTS, INC. , a corporation
organized under the laws of Minnesotar hereinafter called
"Company" ;
WITNESSETH: � �
j`:H�.:F.F?,S :
A. The Comnany and Port Authority intend that
additional warehouse facilities (her_ein-
after called "Additional Facilities") b�
acquired, constructed and installed �
� on premises described in Exhibit A attached
hereto and incorporated herein by reference,
said facility and premises, including
existinq facilities located thereon,
being hereinafter called "Praject";
B. The parties hereto intend, subject to the
terms, covenants and conditions herein con-
tained, to enter into an amendmznt to an
%
existing lease of .the pxemises between
the �Port Authority ancl Company (formerly
called Northwestern Flooring and Lumber
Company) (hereinafter called "Lease
Amendment") in the form and tenor
customary with respect to industrial
revenue bond financing in the State of
Minnesota and to finance the acquisition,
instal.lation and construction of the
Additional Facilities through the. issuance
by the Port Authority of Industrial
Development Revenue Bonds (hereinafter
called Bonds) on a parity with outstandi.nq
revenue bonds of the Port Authority
heretofore issued to finance the exa.sting
facilities in the Project, all pursuant
to Minnesota Statutes, Chapter 474,
NOW THEREFORE, in consideration of the mutual covenants
herein contained, it is hereby agreed by and between the parties
hereto as follows :
1. The Company and the Port Authority agree. to nego-
tiat.e the Lease Amendment in a form and tenor customary with
respect to industrial revenue bond financing in the State of
Minnesota, including without limitation the provision for the
following:
� • . .
(a) The L�ase F,mendment term shall comraence
: on the nominal date of the Bonds and shalJ. extend
�. through the final maturity date of the �3onds.
(b) The Company shall agree under the �ease
Amendment to make monthl.y payments in the amounts
and at such times as are set out in said negotiated
Lease Amendment, but in any event sufficient to
� pay when due debt service on the Bonds. �
(c) Tnterest on earnings derived from the
investment of the monthly payments and other monies
in the Bond Fund•�and any Reserve established £or the
Bonds shall inure to the benefit of the Port
�uth�rity. �
• (d) The Company agrees that prior to the
commencement of the construction of any part of the
Additional Facilities, the Company will cause to be
filed with the Port Authority and approved by its
duly authorized agent the Plans and Specifi.cati.ons
for the entire Additional Facilities certified by an
engineer registered in the State of Minnesota and
that with respect to at least that part of the
Additional Facilities the Company then wishes to
undertake the Company will first cause to be filec3
with the Port Authority and approved by its dixly
designated agent, (i) al1 payment and performance
bonds for the ��orl-. to be undertaY.en� (ii) a].l �
. - ,
construction contracts, including any installation
contract, (iii) such builders riskr installation
� floater, and liability insuranc� as v�ill fully
protect the Company, contractar and Port Authority
(who shall be named as an additional insured or loss
payees) as their �.nterests sha11 appear, against
risk of loss or damage to the Project and Project
premises and against claims which may arise from the
construction, acquisition and installation of the
Project, and (iv) waivers from the general contrac�ar
and all subcontfactors and suppliers of all rights
against the Port Authority for damages ta property
e�:C2A'� such rights as they may have to proceeds of
such insurance. All construction contx'acts entered
into for constructing the Project d�scxibed herein
shall include provisions that the wages paid to
skilled and unskilled labor shall not be less than
the prevailing wage rates currently in effect in the
City of Saint Paul.
2. Upon negotiation of the details of said Lease
Amendment and final determination of the terms of the Bonds,
the Port Authority shall thereafter issue said Bonds in accor-
dance with the terms and conditions set forth in an underwriting
agreement and the Lease Amendment; providec� th at:
.
(a) Details of the sale and issuance of the
Bonds to be issued by the Port Authority shall be
. subject to final approval by the Company and the
Port Authority.
(b) Issuance of said Bonds shall. be subject to
the issuance of the approving opinion of Briggs and
Morgan, Professional Association, Bond Counsel for the
Port Authority and for the City of Sai.nt Paul, and
the furnishing of all documents, resolutions, agree-
ments, financial information, certifications� and
. representations ,necessary to the sale and delivery of_
the Bonds, including those ��hich are customarily used
and those which are custor.►ary and necessary to comply
t;i`h all state and federal 1aws, regulations, rulix�gs.
and decisions.
3. Regardless of ��;hether or not for any reason the
Bonds are. issued, the Company shall upon deriand neverthe2ess
promptly pay or reimburse the Port Authority for the payment of
all. out-of-pocket expenses incurred by the Port Authority in
connection with the Project including ��ithout limitation a11 �
Bond Counsel and other legal iees incurred in the preparation
of this Preliminary Agree;:lent, the negotiated Lease Amendnlent,
the underF�riting agreement, other related documents, and all
costs incident to any environr,iental studies required to be
hereafter made in connectio:� �•�ith the Additional Facilities.
� 4, This Agreement is subject to the approval of
the Bonds by the City Council of the City of Saint Paul as
provided by Chapter 234 of the Laws of Minnesota for 1976.
IN T�VITNESS WHEREOF, the parties hereto have caused
these presents to be executed as of the day and year first
above written.
In the Presence of: PO'_2T AUTHORITY OF THE CITY
OF SAINT PAUL
� � ' ,
. . /
• �c, �_.� � �
�y� '� i l_r..,_. �
.: �
By
. xts
_ (Corporate Seas)
In the Presence of: It�TERIOR L�JOOD PP.ODUCTS, INC,
By
Its .
By _
I t-s
�Corporate Seal) � .
� � �,,..j OM Ol : 12/19?5 _
. - , . ��`�� �a'� ( Rev.: 9/8/76
. . y .. y .'. . .
EXPLANATION OF ADMINISTRATIVE ORQERS, �'"'�" � �
..�w��r �� yi�����'�".
RESOLUTIONS, AND ORDINANCES '"��
; . �,,,.�-�,. 4 �-����°..-,
. � ,�
Date: May 31 , 1978 . . �
- . - = _ _ _ - >=:s.
T0: MAYOR GEORGE'�LATIMER - .-'
- : _
.___ � -
FR: E• A: Kraut_, . Paul. Port .Authority _
RE: INTERIOR WOOD PRODUCTS, INC. EXPANSION--$410,000 �
MIDWRY INDUSTRIAL PARK � �
RESOLUTrQN N0. 1352 � -- - -
ACTION REQUESTED: � � . -
In accordance with the Laws of Minnesota, Chapter 234, it is requested that the City Council ,
by Resolution, a draft copy of which is attached hereto, approve the issuance of approxjmately
$410,000 in revenue bonds for the purpose of financing a 21 ,000 square foot additian to
Interior Wood Products, Inc. 's present facility in Midway Industrial Park.
PURPOSE AND RA7IONALE FOR THIS ACTION: '
The purpose of the bond issue is to finance the 21 ,000 square foot addition ta Interior �
Wood Products, Inc. 's present warehouse facility in Midway Industrial Park.
This bo�d issue would be done on the basis of Interior Wood Products' financial statement
and not that of the Port Authority's; therefore, it would not be issued under Resolution
No. 876. � � �
ATTACHMENTS: : �
Staff Memorandum
Draft City Council Resolution .
Port Authority Resolution No. 1352 . .
Preliminary Agreement
�--4 R T
AUTHORITV ��`.��,`��'�
OF THE CITY OF ST. PAUL �
Memorandum
f�: Board af Corr�nissioners DA7E: May 25, 1978
Meeting May 30, 1978
FROM: D. G. Du e�'�
i �
SUBJECT: INTERIOR WOOD PRODUCTS, INC. EXPANSION--$410,000
MIDWAY INDUSTRIAL PARK
RESOLUTION N0. 1352
In May 1974 the Port Authority Commission approved the issuance of a �935,000
industrial development revenue bond issue to finance the construction of a
50,000 square foot facility in Midway Industrial Park. This issue was done
based on the financial statement of the corporation and not under Reso]ution
No. 876. When this project was approved in 1974 the Port Authority did not
own the industrial park, thus it was considered an off-site project.
ihe company has asked the Corrnnission to consider the issuance of an additional
$410,000 in industrial development revenue bonds to finance a 21 ,000 square
foot addition to the present warehouse facility. This bond issue would also
be done on the financial statement of the corporation and not the Port
Authority's. Proceeds from the bond issue would be as follows:
Construction $323,600
Expenses 15,000
Capitalized Interest during Construction - 6 Months 15,375
Debt Service Reserve 39,625
Discount 16,400
TOTAL $414,000
The bond issue would be for a term of 26 years terminating July 1 , 2004,
which is the same as the current lease.
The company would also have options to purchase the addition for $1 .00 at
the end of the term (July 1 , 2004) , whichis the same provision they have
in the existing lease.
In addition, since this is an off-site project that is not funded under
Resoluiton No. 876 there would be a fiscal and administrative fee of $82.00
per month during the term of the bond .issue, or $984.00 per year.
On May 15 staff notified District Councils 11 and 12 of the proposed project.
As of this date, we have not received any comments either written or oral
regarding the expansion.
Staff recommends approval .