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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 .