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271447 WHITE - CITV CLERK C�unCll 2r�� PINK - FINANCE '� � CANARY - DEPARTMENT G I TY OF SA I NT PAUL BLUE - MAVOR File NO. ouncil Resolution Presented By Referred To Committee: Date Out of Committee By Date WHEREAS: On Juqe �8, 1974, the Port Authority of the City of St Paul adqp�e� Resolution No. 901 , giving preliminary approval to the issuance of revenue bonds in the �nitial principal amount not to exceed $230,000 to finance the construction of a 10,000 square foot manufa�turing facility in Riverview Industrial Park for Rood Tool Company. 2. On June 20, 1978, the Port Authority of the City of Saint Paul adopted Resolution No. 1361 giving preliminary approval to the issuance of revenue bonds in the initial principal amount of approximately $230,000 to finance the first 10,000 square foot manufacturing addition to the Rood Tool Company facility in Riverview 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 tAe 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 approxi- mately $230,OOQ 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 bevenue bonds for the purposes described in the aforesaid Port Authority Resolution No. 1361 in the initial principal amount of $230,000 at a net interest cost of not to exceed 8%, the exact details of which, including, but not limited to, provisions relating to maturities, interest rates, discount, redemption, and for the issuance of additional bonds, are to be determined by the Port Authority, pursuant to resolution adopted by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refunding bonds) by the Port Authority, found by the Port Authority to be necessary for carrying out the purposes for which the aforesaid bonds are issued. COUNCILMEN Yeas Nay�s Requested by Department of: H Z '�'�°�`� �` [n Favor H � ihn�t -�- Le e ��» Against BY R e er M� S Ive er .�ede�N. �V�' � 8 �� Form Approved by City Attorney Adopted b�� unc l: Date — �ti'ffied Pa�_ d by Co 1 Se¢ret y BY- `°�' � � � ��'- Appro by Mayor for Su is io0.to Council App by :Vlavoc Da — BY — -- BY — PUBL�SHED �UL Z 9 1978 1 , � n - ' '::1F"^s . - ;- N� �� fi. i�: � y�� j� t Y � ;�,4�� ... � 4. ��igxN � �`.b,, � � � +f,x. �-- �; � y,�r$� r � . '��$ ,rS �Y�: _ 9�� S �' '> '��z v N 'x'� '�' � �r e* ., f _�«.r p��,*� : i �k� � ,��,�zr '��i & �� , ,� s� } +.� a�� . , , fi ��, � 2 tii�r.a _ .e .� �' '� .. ^ Y��' ��y .� .. ; .: -, ,.� � � � �a.��Y �. : . ,:� : �� i a �r y ' �i'''"�'�;�s' � ��V�r,YF .��II��uSI�� , x�'� `` "x ;n $ `;a- 2o y° 4` �, �� ,��2 !£ a F �{��y.y� � �'N �� 't 4 n'e' �` '�f"�`�S t� �'s��f �a7HF.V'F l �.� `' � -a z ��.�^`��rt 4 a��, �..r "i r + � � `�K' f j5 I '. � ( �C�F''A ��,�„d4f� 1 3 1� �?- 3 - . 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"�h,. �^, � � � k"r�fs�i,�tas'a'�' � a�,` ' y `I,°s s, .i��:. �:S ," �.`� d r'��,.ry �a�£t cS syi�e n �4 � � , t_ �� z.; .y .r . , .,._ ,. . ,__ .•� _ ___ _ . _,.__��_..�.._... _�...a..._. ..._.�_.._._._.s u .... .-' - '�- - .��_. ..... , :.�� ..,�Y,':'' ...n....�.x"�.�..., . , . .. i�oRT �� AUTH4RITY ��4~� OF THE CITY OF ST. PAUL Memo�andum 70: Board of Commissioners . DATE: �une 15, T978 �une Z0, 1978 Me ��.i ng � �� FROM: D.G. Dunshee � SUB.lECf: ROOD TOOL COMPANY PRELIMINARY AGREEMENT - SALE OF REVENUE BONDS - $230,000 RESOLUTION N0. 1361 In June 1974, the Port Authority Commission approved the issuance of $230,000 in industrial development revenue bonds to finance the construction of a 10,Q00 square foot manufacturing facility in Riverview Industrial Park for Rood Tool Company. At the time of the original proposal , the company indicated to the Commission that the building and site would permit two additional 10,000 square foot additions. Mr. Robert Rood of Rood Tool Comp any has asked that the Commission consider the issuance of an additional $230,000 in jndustrial development revenue bonds to finance. the first 10,00� square foot manufacturing addition. � At the time the original building was approved in 1974, the company employed 15 people on one shift. Present employment is 46 and Mr. Rood estTmates that once the addition is completed it will permit him to expand the work force to 100. The proposed bond issue would be for a term of 26 years, commencing July 1 , 197$ and terminating July 31 , 2004, which is the same termination date as the original lease. Under the terms of the proposed bond issue, Mr. Rood would �have an option to purchase the addition for 10% of the bond issue costs, or $22,000, on July 31�, 1979; Ju1y 31 , 1984; July 31 , 1989; July 31 , 1994; Ju1y 31 , 1999; and July 31 , 2004. Under the terms of the original lease ap- proved in 1974, the corporation has an option to renew the lease for 6 five- year terms at 40q of the base rent. We propose 6 five-year renewal options at the same percentage as in the or9ginal lease. Since the date of the original construction, corporate sales have increased by 42% to almost $1�,OOQ,000, and the net worth of the corporation has more than doubled to $243,253. The proceeds from the bond �ssue would be as follows: Construction $183,144 pebt Service Reserve 22,350 Capitalized Interest Quring Construction - 6 Months 5,606 Bond Issue Expense - 12,000 D�scount 6,900 TOTAL $230,000 - �� Board of Commissioners � June 15, 1978 Pag� -Z- On May 19, 1978 the staffi notified District 3 of the proposed expansion. As� of this date we have not received any comments, either written or oral , regarding the expansion. Staff recommends approval . � . DGD:jmo ' �� Resolution No. 1361 RESOLUTIOi� OF ' � THE PORT AUTHORITY OF THE CITX OF SAINT PAUL inT�-IEREAS, the purpose of �Chapter 474, P•Sinnesota Statutes, knowr� as the AZinnesota 1�lanicipal Industrial Develop- ment Act (hereinafter called. "Act") as found and deter,nined 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 cor,unerce to prevent so far as possible the emergence of blighted and marginal lands and areas of chronic � unemployment and to aid in the development of existing areas of blight, marginal land and persisten•t unemployment; and WHEREAS, factors necessitating the active promotion ar�d deveZopmznt of economically sound industry and commerce are the in�-reasing concentration of population i.n the metropolitan areas and the rapidly rising increase in the amount and cost -- of governmental services required to meet the needs of the increased popula�ion and the need for development of land use which will provide an adequate tax base to finance these increas- ed costs and access to employment opportunities �or such popu- lation; and • , WHERE�IS, The Port Authority of the City of . Saint Paul (the "Authority"} has received from Rood Tool Co. , Inc. (here-� inafter referred to as "Company") a request that the Author- ity issue its revenue bonds to finance the acquisition, installation and construction of additional facilities (the "Project") to the existing manufacturing plant and premises currently leased by the Cor.lpany from the Authority in the . City of St. Paul, all as is more fully describ°d in the 5taff � report on file; and ' WHEREAS, the Authority desires to facilitate the selective d�velopment of the community, to retain and imprave its tax base and to help it provide the range of services and employment opportunities required by its population, and said Pxoject �aill assist the City in achievina that objective. Said Project will help to increase the assessea valuation of the City and help mai.ntain a positive relationship betw�en assessed valua- tion and debt and enhan�e the image and repu�tation of the City; and � r �F�._IL�� / � WI-IERE�S, the Project to be financed by revenue bonds will r�sult in substantial� employment opportuni�ies in the Project; � � . �+iiER�,AS, the �uthority has been advised `>1 r�:-�re��n- tatives . o= the Company that conventional, eornm�rcia? � 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 �aould 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 Pro�ect is econom- � ically more feasible; and � . WHEREAS, Miller & Schraeder Municipals, Inc. (�he � "Unclerwriter") has made a proposal in an agreement (the "Underwriting Agreement") relating to the purch�.se o� the revenue bonds to be issued to finance the Project. NOSV, THEFtEFORE, BE IT RESOLVED by the Commissioners of the Port Authority of the City of Saint Paul, I�linnesota as follows : 1. On the basis of informa�ion available to the Authority it appears, and the Authority hereby finds, that � said Project constitutes properties, used or �useful in connec�iorS with one or more revenue producing enterprises engaged in ax�y business within the meaning of Subdivision la _,. of Section 474 .Q2 of the Act; that the availability of the financir.g under the Act and wil].ingness of the Authority to . furnish such financing ��ill be a substantial inclucem�nt to � _ the Company to undertake the Praject, and that the effect of the Project, if undertaken, will be to encourage the develop- ment of economically sound industry and comm�rce and assist in the prevention of the emergence of blighted and marginaZ land, and will help to prevent chronic unemploymen.t, and will help the City to retain ancl improve its tax base and provide the range of services and enployment 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 ttie staze where their services may nat be as effectively used and will result in more intensive development and use of land within the City and tvill eventually result in an increase i.n 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 an amendment to the existing lease and other documenis necessary to evidence and effect the financing - � �� / of the Project and the issuance of the xevenue bonds, the Project is hereby approved and authorized and the issuance of revenue bonds of the Authority in an amount not to exceed approximately $220, 000 (o�her than such additional - revenue bonds as are needed to conplete the Project) is . authozized to finance the costs of the Projec�. . 3. There has heretofore been filed with the Authority a form of Preliminary Agreement be�ween the Authority and Company, relating to the proposed constructa.on and financing of the Project and a forr► of the Under�ariting Agreement. The form of said Agreements have been examined by the Commissioners. It is the purpose of said Agreements to evidznce the commitment of the parties and their intentions with respect to the proposed Project in order that the . Company may proceed without de].ay with the commencement af the acquisition, installation and construction of the Px'oject with the assurance that there has been suffica.ent "official action" under Section 103 (b) of the Tnternal Revenue Cade of 19 5 4, as amerided, to al lo�•� f or the i s suance of industrial revenue bonds to finance the entire cost of the Project unon agreement being reached as to the ultimate details of the Project and its financing. Said Agreements are hereby approved, and the President and Secrezary of the ALthority are hereby authorized and directed to execute said Agreements. -- - 4. Upon e�:ecution of tne Preliminary Agreement by the Ca�pany, the staff of the Authoxity are authorized and directecl 4o continue negotiations t�rith the Company so as . to resolve the remaining issues necessary to the preparatian of the lease amendm�nt ana other docurcents necessar�� to the � adopLion by the Authority of its final bond resol�ovided d the issuance and delivery of thz revenue bonds; p that the Preszdent (or Vice-President if the President is " absent) and the Secretary (or Assistan� Secre�ary if the Secretary is absent) of the Authority, or if either of such officers (and his a.lternative) are absent, the Treasur�r of the Authority in lieu of such a.bsent officers, are her�by authorized in accordance with the provisions of P�iinnesota Statutes, Section 475.60, Subdivision l, to accept a final offer of the Undercariters to purchase �he revenue bonds at such time as such offer is made b�� the Underc•�riters to - purchase said bonds and to execute an under�•rriting agree- ment setting forth such offer on behalf of the Au�hority. Such acceptance shall bind the Ur_derwriters but shall be subject to approval and ratif ication by the Port Authority in a formal supplemental bond resolution to be adoptec� prior to the clelivery of said revznue bonds. ! w ' � . . � • �� • 5. The revenue bonds� and interest thereon shal.l nat constitute an inclebtedness of the Au�hority or the City of Saint Paul within the ntzaning of any constitutional or statutory limitatzon and shall not constitute or give rise to a pecuniary liability of the Authori�y or the City or a charge against their general credit or taxing powers and nei.ther the full faith and credit nor the taxing powers of � the Authority or the City is pledged for the payrlent of the bonds or interest thereon. 6. In order to facilitate co=:►pletion of the • revenue bond financing herein contemplated, the City Cauncil is hereby requested to consent, pursuan� to La��s of riinnesota� 1976 , Chapter 234, to the issuance of the revenuz bonds • herein contemplated and any additional bonds which the Authority may prior to issuance or from tirte to time thereafter deem necessary to complete the Project or to refund such revenue bonds; and for suc'n purpose the Execu- tive Vice President of the Authority is hereby authorized and directed to forward to the City Cour.cil copies of this resolution and. said Preliminary Agreem�n� and any addi- tional available information the City Council may request. . ; Adopted � � . � � . / \ _:. . Attest `"�G � ' ;�LG�. � Presx e � � The Po Au�.hority of the City of Saint Paul Secretary . ' b � PRELINITNARY AGREEMENT �� THIS aGREEriENT, made and entered into as of this 20tk� day of June, 1978, by and between the PORT AUTHORIlY OF THE CIT1' OF SAINT PAUL, a public corparation organized and eyisting under the provisions of Minnesota Statu�es, Chapter 458, and a redevelopment agency within the meaning of Minnesota Statutes, Chapter 474,� hereinafter called � "Port Authority" , and Rood Tool Co. � Inc. , a corporatian organized under the laws of P�tinnesota, hereinafter called "Company�►� 6�ITNESSETH: ��THEREAS: . A. The Company and Port Authority intend that the Authority provide financing for the construction of an addition (hereinafter call.ed the "Project" } to the existing manufacturing plant which is located on premises described in Exhibit A attached here�o and �vhich was financzd by the Authority' s Indus- trial Development Genzral Revenue Bor�ds, Series A (hereinafter called "Series A Bonds") and is, together ��ith the premises described in Exhibit A, being leased by the Authority to the Company under a Lease dated August 1, 1974 � (hereinafter called the "Lease") ; � ' � � . `��4� B. The parties hereto intend, subject to tbe terms, �covenants and conditions herein can- � tained, �to enter into a lease of the Project . which shall be in the for_m of an amendment to the Lease (hereinafter called the "Amendment to Lease"} in the form and tenor customary with respect to industrial revenue bond financing in the State of Minne- sota and to. finance the acquisitian, in- stallation and construction of the Project through the issuance by the Port Authority of Industrial Development Revenue Bonds (here-- inafter called Bonds) . � � NOW T�iEREFORE, in consideration of the mutual covenants � -- herein contain�d, it is hereby agreed by ancl betcaeen the parties hereto as follo��rs: l. The Company and the Port Authori.ty agree to nega- tiaice the Amandment to Lease in a form and tenor customary with respect to industrial revenue bond financing in the State of P�iinnesota, including ��ithout limitation the provision for the following: � (a) The Ar.�►encL-�ent to Lease term shall commence on the nominal date of the Bonds and � shall eytend through the final maturity date of the Bonds. � �~��`�� (b) The Company shall agree under the Amend- ment to Lease to make monthly payments in the . amounts and at such times as are set out in said negotiated Amendment to Lease, but in any event sufficient to pay when due debt sexvice on the Bonds. . (c) Interest on earnings derived from the investment of the monthly payments and other monies in the Bond Fund and any Reserve shall inure to the benefit of the Port Authority. . (d} The Company shall have the option to purchase the entire facilities covered by the Lease, as amended, (including the Project) at an amount re- quired to discharge the Bonds and Series A Bonds, _ including payment of Paying Agent and �scrow Agent fees and any other liabilities accrued under th.e Lease, as amended, plus such additional amount, if any, determined in the Lease, as amended, to be required to reimburse the Port Authority for its equity in the entire facilities. . (e) The Company sha11 be entitled to credit against its 1.ast installments af payments due during the term of the Amendment to Lease the princi.pa]. . amount of any surplus construction funds from the current issue transferred to the IIond I'una and any Reserve established out of bond �procee�3s. . (f) The Company shall agree to cause the Pro- ject to be maintained in good working order and free of liens to the eYtent provided in the Amend- ment to Lease. • �� / (g) The Company .shall agree to pracure on or before termination of the construction period and � maintain in its name and in the name of the Port . ' Authority, liability anc� property a.nsurance with . respect to the Project in amounts and against risks customary with respect to such prop°rties and business interruption or rental value insurance. � _ (h) The Company agrees that prior to the commencement of the construction of any part of the Project, the Company will cause to be filed with the Port Authority and approved by its duly authorized agent the Plans and Specifica�ions for the entire Project certified by an engineer registered in ' the State of Minnesota and that with respect to at least that part of the Project the Company then wishes to undertake the Company �aill first cause to be filed with the Port Authority and approved by its duly designated agent, (i) all payment and performance bonds for the work to be undertaken, (ii) all construc�ion contrac�s, . including any installation contract, (iii) such builders xisk, installation floater, and liabil- ity insurance as �•aill fully protect the Company, contractor and Port Authority (who shall b° named as an additional insurec3 or loss payees) as their interests shall appear� against risk of loss • � I . � . /d rf '�� I , or damage to the Project and Project premises and against claims which may arise from the construction, acquisita.on and installation of the Project, and (iv� • • waivers from the general contractor and all subcon- tractors and suppliers of all rights against the . Port Authority for damages to property except such rights as they may have to proceeds of such insurance. All construction contracts entered into for construc- ting the Project described herein shall include provisions that the wages paid to skilled and un-- skilled labor shall not be less than the prevailing wage rates currently in effect in the City of � Saint Paul. . (i) The Company shall agree to pay all taxes, � assessments, and other governmental charges that are or may become due with respect to the Project. 2. Prior to the commencement of construction of the Project, the Port Authority and the Company shall co_nplete and enter into a Project Agreement in substantially the form on file in the office of the Port Authori.ty or into the negotiated Amendment to Lease which may substantially incorporate by reference Articles 1 and 2 of such Project Agree;:lznt. � � � �'��4'� 3. Upon negotiation �of the d�tails of said Arnend- ment to Lease and final determination of the terms of the Bonds� the Port� Authority shall thereafter issue said Bonds in accor-- dance with th� terms and conditions set forth in an underwriting agreement� and the Amendment to Leas�; provided that: (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 �or the Port Authority and for the City of Saint Paul, and - the furnishing of all documents, resolutions, agree- ments, financial informa�ion, certifications, and representations necessary to the sale and delivery of the Bonds, including those which are customarily used and those cvhich are customary and necessary to com�l�r with all state and federal la�as, regulations, rulings and decisions. 4. Regardless of whether or not for any reason the Bonds are issued, the Company shall upon demand nevertheless promptly pay or reirnburse the Port Authority for the payment of all out-of-pocket expens�s incurred by the Port Authority in connection with the Project including �Yithout l�.mitation all Bond Counsel and other legal fees incurred in the preparation of this Preliminary Agreement, the negotiated 1lmendment to 7 � . ,� ' �~��L�� 1 4 � � Lease, the underwriting agreement, other related documents, and all costs incident to any environmental studies xequired to be hereafter made in connection with the Project. 5, 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 WITNESS 41�3EREOF, the parties hereto have caused these presents to be executed as. of the day and year first � above written. In the Presence of: PORT AU�'HORITY OF THE CITY OF SAINT P UL � . / `� / , � i� ; �j�, _ $y `'� �'� ` l��ti --� . j.._, , , . --� . -� � � Its Prejident --- j . _ . l/ . ' � By Its Secretary (Corporate Seal) • , � . •� • �._�L�� .� In the Presence of : ROOD TOOL CO. , ItdC. • By . . - . . Its President By . . . . . . . . . . . - . . Its Secretary (Corporate Seal)