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05-366Council File # OS- 3�°�e RESOLU710N CITY Presented by Referred To i WHEREAS: PAUL, MINNESOTA 2) City Council Resofution [Camada Limited Partnership] Green Sheet # #fl39�"s 3 aaV [�8 Committee Date 3 1. The Port Authority of the Ciry of Saint Paul (the "Port Authority') has given its a approval to the issuance of its $3,500,000 Variable Rate Demand Industrial Development s Revenue Bonds (Camada Limited Partnership Project) Series 2005-6 (the "Sonds") in the 6 aggregate principal amount of $3,500,000. The proceeds of the Bonds will be loaned to � Camada Limited Partnership, and used to finance the acquisition and installation of s manufacturing equipment at facilities located at 274 Fillmore Avenue and 345 Plato 9 Boulevard East, in the City of Saint Paui, Minnesota (the "City') and 2354 English Street in io Maplewood, Minnesota, all of which facilities are occupied by Vomela Specialty Company. 11 1z 2. Laws ofi Minnesota 1976, Chapter 234, provides that any issue of revenue 13 bonds authorized by the Port Authority shall be issued oniy with the consent of the City 1a Council of the City of Saint Paul, by resolution adopted in accordance with law. is 16 3. Approval of the issuance of the proposed Bonds by the City Council is also 1� required by Section 147(fl of the internaf Revenue Code ofi 1986, as amended. 1s 19 20 21 zz 23 24 25 26 2� 2s 29 30 31 32 33 34 35 36 37 38 4. To meet the requirements of both state and federal law, the Port Authority has requested that the City Council gives its requisite approval to the issuance of the proposed Bonds by the PortAuthority, subject to final approval of the details of said Bonds by the Port Authority. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paul that, in accordance with the requirements of Section 147(� of the Intemal Revenue Gode of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Council hereby approves the issuance of the aforesaid Bonds bythe PortAuthorityfor the purposes described in the Port Authority resolution adopted April 26, 2005, the exact details of which, including but not limited to, provisions relating to principal amount, maturities, interest rates, discount, redemption, and the issuance of additional bonds are to be determined by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refunding bonds) bythe PortAuthorityfound bythe Port Authorityto be necessaryfor carrying outthe purposes forwhich the aforedescribed Bonds areissued. Adopted: Aprii 27, 2005 33858.v1 �- 3b(� Yeas Nays Absent Benanav � Bostrom �i Aatiis v Helgen � �� � Montgomery ✓� Thune ✓' � C7 O Date ��� � a� � aQOS Requested by Departrnent of: 33858.v1 B ,/ � Green Sheet Green Sheet dS Green Sheet Green Sheet Green Sheet Green Sheet � DepartrnenUoffice/council: , Date Initiated: ". PA — P�Antfiority '14-APR-0S Green Shee# NO: 3026108 CoMact Person & Phode• � �oartme�rt SerH To Person Initia 0 rt A th " � A55ign 1 lann' &EconomicDevdo Must Be on Council Agenda by (Date): Number 2 a �, � 27-APR-05 F Routing 3 ounN Order 4 5 Total # of Signature Pages �(Clip All Loptions for Signature) . Adion Requestad: Approval of the issuauce of $3,500,000 of conduit tas exempt revenue bonds for Camada Limited Partnership Recommendations: Approve.(A) or Reject (R): Personal Service Contracts Must Answer the Following Questions: Planning Commission 1. Has this person/firtn ever worked under a contract for this departmenY? CIB Committee Yes No � � Civil Service Co 2. Has this person/firm ever Deen a diy employee? �— �6 r l�-uJC�,P �'�""� Yes No . 3. Dces this person/firm possess a skill not normally possessed by any . , current city employee? � Yes No Explain all yes answers on separete sheet and attach to gree� sheet ' Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why): Camada Limited Partnerslup requires additional equipment to support sales growth and market demand. AdvaMages If Approved: The issuance of the bonds wiTl allow Camada Lisnited Partnership to grow their business and expand their employment base in Saint Paul. DisadvantageslfApproved: � None DisadvanWges If Not Approved: " The company may not be as competitive and may not gain market sbare resulting in fewer employment opporhmities for Saint Paul residents. Total Amount of 3 00000 CosURevenue Budgefed: � � Transaction: � ) Funain� source: port Authority Variable A��Y�a/ H�mber: 3 nno ^^-- Fi nancial Information: Rate Tax Exempt ��E?��"sa r��..-,v�:-'. (Explain) COtldUit Bo �iPR 15 2��5 DS - 3 lolo SAINT PAUL PORT AUTHORITY MEMORANI'IlIM TO: FROM: Credit Committee (Meeting of April 19, 2005) Bruce Gehrke Lorrie Loude Kenneth R.Johnson DATE: Aprii 08, 2005 SUB,jECT: CAMADA LIMITED PARTNERSHIP - VOMELA SPEGIALTY COMPANY Authorization for Issuance of Tax Exempt Conduit Bonds in the Amount of $3,500,000 for Purchase of New Equipment. ACTION REQUESTED: Provide final approvai for the Port Authority to issue $3,500,000 of conduit variable rate tax-exempt bonds for the purchase of new equipment. Approximately $2,500,000 of the equipment will be located at the two Saint Paul production facilities and the remaining $1,000,000 will be used in their Maplewood location. PU641C PURPOSE: The proposed financing will enable Vomela to retain its current workforce leveis (250 employees in Minnesota) and to add additional employees over time. BUSINESS SUBSIDY: Not applicable. BACKGROUND: Vomela was founded in 1947 and has been under the current ownership since 1990. Sales for 2004 were approximately $60 million with 380 employees at year end. The company has developed a core competency in printing graphics on vinyl. Its largest revenue segment is producing graphics for original equipment manufacturers of recreational vehicles, snowmobiles, ATVs and watercraft. Camada Limited Partnership, which is controlled by the owner of Vomela, is the owner of the real estate and equipment and leases it to Vomela. in 1995, the Port Authority approved a$1,500,000 tax-exempt revenue note for the purchase of Vomela's current facility at 274 Fillmore. In 2002, the Port Authority issued $3,700,000 of new tax-exempt conduit bonds for the refinancing of the 1995 bonds and the purchase ofi new equipment. 33834.v133'164.1. OS- 3�� Credit Committee April 8, 2005 Page 2 CURRENT STATUS: in January of this year, the Board provided its aufhorization for application and preliminary approval for the issuance of these bonds. The certificate of allocation was received from the Sate of Minnesota on March 9, 2005. The documents are now in "substantially final form", allowing the Board to provide its final approval. PROPOSAL: Type of Notes: Rate: Security: Term: Issuer: LOC Bank: Placement Agent: Bond Counsel: Borrower's Counsel Placement Counsel: Bank Counsel: 7rustee: Variable Rate Demand industrial Development Revenue Bonds Initially the "all in" rate wil{ be approximately 3.40% Letter of Credit. The tetter of Credit Bank is secured by a first position in the assets of the borrower and the operating company. 7 years Saint Paul Port Authority Wells Fargo Bank, N.A. Wells Fargo Brokerage Services, LLC. Leonard, Street and Deinard Winthrop & Weinstine, P.A. Briggs & Morgan Gray, Plant and Mooty Wells Fargo Corporate Trust Structure: The bonds will be conduit financing of the Port Authority and will not give rise to a liability of the Port, the City of Saint Paul, or the State ofi Minnesota or a charge against their general credit or taxing power. The bondholders will only have rights against revenue sources that are expressiy pledged to payment of the bonds per the indenture agreement. The Port Authority will receive fees in the amount of .25% ($8,750) at inception and 25% annually, based on outstanding balance, for the life of the bonds. 33834.v133164.1. Credit Committee April 8, 2005 Page 3 os - 3�� WORKFORCE IMPLICATIONS: Vomela empioys 250 individuals in Minnesota, and the purchase of new equipmenf will ailow it to gain market share, maintain its competitive edge, and grow its workforce in the years ahead. DISCLOSURES: The Port Authority Commissioners by SEC rules are obligated to disciose any risks or facts they may be aware of that would affect the probability of repayment of these bonds. RECOMMENDATION: We recommend the final approval of issuance of $3,500,000 of conduit variable rate tax exempt bonds. 33834.v933'164.'I. DS ' 3 � ResoIution No. RESOLUTION OF TF� PORT AiTT`HORITY OF TI� CITY O� SAINT PAUL [Camada Limited Partnership] WHEREAS: 1. The Port Authority of the City of Saint Paul (the "Port Authorit�� has previously issued its $3,255,000 TaY Exempt Variable Rate Demand Industrial Development Revenue Refunding Bonds (Camada Limited Parinership Project), Series 2002-11 (the "2002 Bonds") to provide funds to Caznada Limited Parinership (the `Borrower") to refund revenue bonds issued by the Port Authority in 1995 to finuice a facility located at 274 Fillmore Avenue (the `Building") in the City of Saint Pau1, Minnesota (the "Cit}�') and to finance the purchase and installation of equipment to be used in the Building. The Building and equipment are leased by the Borrower to Vomela Specialty, Inc. (the "TenanY'). 2 The 2002 Bonds were issued pursuant to an Indenture of Trust dated as of December 1, 2002 (the "2402 Indenture") between the Port Authority and Wells Fargo Bank, National Association, as hustee {the "Trustee") and are payable primarily from draws made on an irrevocable letter of credit issued by Wells Fargo Banl:, National Association (the `Bank'� pursuant to a Reimbursement Agreement to be dated as of May 1, 2005 (the "2002 Reimbursement AgreemenY') between the Borrower and the Bank. 3. It is now proposed that, pursuant to the authority granted by Minnesota Statutes, Section 469.152 to 469.165, as amended (the "AcY'), the Port Authority issue its revenue bonds, in one or more series, in an amount not to exceed $3,500,000 (the "2005 Bonds") in order to finance the acquisition and installation by the Borrower of manafacturing equipment to be installed and used by the Tenant at the Building and at facilities located at 345 Plato Boulevazd East in Saint Pau1, Minnesota and 2354 English Sireet in Mapiewood, Minnesota (the "ProjecY'} a11 of which are occupied by the Tenant. 4. The Project has received an allocation of bonding authority from the State of Minnesota Depaxtment of Employment and Economic Development. 5. The Port Authority's Credit Committee and Board have previously adopted resolutions giving preliminary approval to the proposed issuance of the 2005 Bonds. 6. Pursuant to the requirements of Secrion 147(fl of the Internal Revenue Code of 1986, as amended, and pursuant to notices published by the Port Authority not less than 15 days prior to each public hearing, public hearings have been held by both the Port Authority and the Maplewood City Council on the issuance of the 2005 Bonds, at which public hearings a11 persons were given an opportunity to speak. Following the public hearing held by the Maplewood City Council, the Ciry of Maplewood approved the issuance of the 2005 Bonds by the Port Authority. 2473738v1 � " �fo 7. The 2005 Bonds will be issued and secured by the terms of a supplement to the Indenture dated as of May l, 2005 (the "SupplemenY' and together with the 2002 Indenture the "Indenture"), and the 2002 Bonds and the 2005 Bonds will be payable primarily from draws made on a Irrevocable I,etter of Credit issued by the Bank pursuant to a Reimbursement Agreement to be dated as ofMay 1, 2005 (the "2005 Reimbursement Agreement") . 8. In connection with the issuance of the 2002 Bonds, the Bonower and the Port Authority entered into a L,oan Agreement dated as of December 1, 2002 (the "2002 AgreemenP') which will be amended in connection with the issuance of the 2005 Bonds by the First Amendment to Loan Agreement dated as of May 1, 2005 (the "2005 Agreement", and together with the 2002 Agreement the "L.oan AgreemenY'). Pursuant to the Loan Agreement the Borrower will agree to maintain the Letter of Credit and make all payments due either to the Bank or on account of the Bonds. 9. As with the 2002 Bonds, the 2005 Bonds and the interest on the Z005 Bonds shall be payable solely from the revenue pledged therefor and the 2005 Bonds shall not constitute a debt of the Port Authority within the meaning of any constitutional or statutory limitation of indebtedness, nar shall the Bonds constitute nor give rise to a pecuniary liability of the Port Authority ar the City or a charge against their general credit or tat;ing powers and shali not constitute a chazge, lien or encumbrance, legal or equitable, upon any property of the Port Authority or the City other than their interest in said Project. 10. It is intended that interest on the 2005 Bonds be excluded from gross income of the holders thereof for federal income taY purposes. NOW THEREFORE, BE IT RESOLUED by the Board of Commissioners of the Port Authority of the City of Saint Paul, Minnesota, as follows: A. On the basis of informarion available to the Port Authority it appears, and the Port Authority hereby finds, that the Project furthers the purposes stated in the Act, and is in the best interests of the port district and the people of the City. B. For the purpose of financing the Project, and paying certain costs of issuance and other expenses in connection with the issuance of the 2005 Bonds, and provided that the Project and its financing receive approval by tke Depaxtment of Employxnent and Economic Development ("DEED'�, the Port Authority hereby authorizes the issuance, sale and delivery of the 2005 Bonds in an aggregate principal amount of approximately $3,500,000 under the 2005 Indenture. The 2005 Bonds shatl beaz interest at such rates, shall be numbered, shall be dated, shall mature, shall be subject to redempfion prior to maturity, and shall be in such form and have such other details and provisions as may be deternuned by the Port Authority and inciuded in the 2005 Indenture. Far purposes of these detemunations, the President and the Chief Financial Officer of the Port Authority aze hereby authorized to detetmine the final terms of the 2005 Bonds. 2413738v1 2 �S- 3G� C. Forms of the following documeats have been submitted to the Port Authority for review and/or approval in connection with the sale, issuance and delivery of the 2005 Bonds: the 2005 Indenture; 2. the 2005 Agreement; the form of the 2005 Bonds; and 4. the Bond Purchase Agreement to be entered into by and among the Port Authority, the Borrower and Wells Pargo Broker Services, LLC (collectively, the "Documents"). D. It is hereby found, detennined and declared that: 1. The issuance and sale of the 2005 Bonds, the execution and delivery by the Port Authority of the Docuxnents, as applicable, and the performance of all covenants and agreements of the Port Authority contained in the Documents, as applicable, and of all other acts and things required under the Constitufion and laws of the State of Minnesota to make the Documents and the 2005 Bonds valid and binding obligations of the Port Authority in accordance with their terms, are authorized by Act; 2. It is desirable that the 2005 Bonds be issued by the Port Authority upon the general texxns set forth in the Documents, as applicable; 3. Under the provisions of and as provided in the Documents, the Bonds are not to be payable from or a charge upon any funds other than the revenues pledged to the payment thereof; no holder of the Bonds shall ever have the right to compel any exercise by the City ar the Port Authoriry of its taxing powers to pay the Bonds or the interest or premium thereon, or to enforce payment thereof against any property of the City or the Port Authority except the interests of the Port Authority which have been pledged to the Trustee under the Indenture; the Bonds sha11 not constitute a chazge, lien or encumbrance, legal or equitable, upon as�y property of the City or the Port AuthoriTy except the interests of the Port Authority which have been pledged to the Trustee under the Indenture; the Bonds shail each recite that they are issued without moral obligation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the City of Saint Paui or the Port Authority within the meaning o£ any constitutional or stahxtory limitarion. E. The forms of the Docusnents and e�ibits thereto are approved substantially in the forms submitted and on file in the offices of the Port Authority, with such subsequent changes as may be approved by Port Authority inanagement and Bond Counsel as contemplated by paragraph G. The Chair and Secretary of the Port Authority, or such other officer as may be appropriate in the absence of either the Chair or Seeretary, are hereby authorized to execute the Documents (to the 2413738v1 DS- 3�G extent the Port Authority is a pariy thereto) in substantially the forms submitted, as modified pursuant to patagraph G, and any other documents and cer[ificates which in the opinion of Port Authority inauagement and Bond Counsel are necessary to the transaction herein described. The execution of any instrument by the appropriate officer or officers of the Port Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transaction herein described by individuals who were at the time of execution thereof the authorized officers of the Port Authority shall bind the Port Authority, noturithstanding that such individuais or any of them has ceased to hold such office or offices prior to the authentication and delivery of the 2005 Bonds. Copies of ail of the documents necessary to the transacrion described shall be delivered, filed and recorded as provided herein and in the Indenture. F. The Chair and Secretary and other officers of the Port Authority are authorized and directed to prepaze and furnish to Bond Counsel certified copies of proceedings and records of the Port Authority relating to the issuance of the 2005 Bonds and other transactions herein contemplated, and such other affidavits and certificates as may be required to show the facts relating to the legality of the 2005 Bonds and the other transactions herein contempiated as such facts appear from the books and records in the af5cers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore fiunished, shall constitute representations of the Port Authority as to the truth of all statements contained therein. G. The approval hereby given to the various Bocuments referred to above includes approval of such additional details therein as may be necessary and appropriate, and such modifications thereof, deletions therefrom and addifions thereto as may be necessary and appropriate and approved by the Port Authority's President and Chief Financial Officer, in agreement with the appropriate repzesentatives of the Tenant, the Underwriter and the Bank; and includes approval of, among other things: 1. establishment of the final principal amount of the 2005 Bonds, and the interest rate to be borne thereby; 2. the establishment of the maturity schedule and call provisions to be applicable to the 2005 Bonds; and 3. such related instruments as may be required to safisfy the conditions of any purchaser of the 2005 Bonds. H. The Port Authority hereby consents to the distribution of an Official Statement to be used 'm connection with the establishment of the interest rate on the Bonds, as such official statement is finalized with the participation of Port Authority management and Bond Counsel. I. The authority to approve, execute and deliver future amendments to financing documents entered into by the Port Authority in connecrion with the issuance of the Bonds and the other transactions herein contemplated, is hereby delegated to the President of the Port Authority, provided that: (a) such amendments either do not require the consent of the holders of the Bonds or, 2413738v1 4 if required, the consent of the required percentage of the holders of the Bonds has been obtained with respect to such amendment; (b) such amendments do not materially adversely affect the interests of the Port Authority as the issuer of the Bonds; (c) such amendments do not conira�ene or violate any policy of the Port Authority; and {d) such amendments are acceptable in form and substauce to Bond Counsel. The execution of any instnunent by the President of the Port Authority shall be conclusive evidence of the agproval of such instrmuents in accordance with the terms hereof. J. No covenant, stipulation, obligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the Board of Commissioners of the Port Authority, or any o�cer, agent or employee of the Port Authority in that persons individual capacity, and neither the Boazd of Commissioners nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Adopted: Apri126, 2005. PORT AUTHORITY OF THE CITY OP SAINT PAUL � By t Its Chair ATTEST: By� Its Secre 2473738v1 7900 Landmark Towers 345 St. Peter Street Saint Paul, Minnesota 55702-1661 QORT J� 9 Q a a = r � 2 � 'b S b April 19, 2005 Ms. Susan Kimberly, Director Planning & Economic Development Department 1300 City Hall Annex 25 West Fourth Street Saint Paul, Minnesota 55102 SUBJECT: CAMADA LIMITED PARTNERSHIP Dear Ms. Kimberly: DS- 3�1P Tel: 651-224-5686 Fax: 657-223-5198 Toll Free: 800-328-8477 wwwsppamm We submit for your review and referral to the office of the Mayor, City Council, and City Attorney's office, details pertaining to the issuance of conduit variable rate tax-exempt bonds in the approximate amount of $3,500,000 to finance the purchase of new equipment to be located at Camada's two Saint Paul production facilities and at their Maplewood location. The City of Saint Paul's entitlement allocation will not be affected by this application. In addition to the staff memorandum, we are attaching a draft copy of the proposed City Council Resolution and a copy of the Resolution conducting the required public hearing and authorizing the sa{e of the conduit variable rate tax- exempt bonds in the approximate amount of $3,600,000 that will be considered by the Port Authority's Board on Aprii 26, 2005. City Council action will be required after the Port Authority's Board meeting of April 26, 2005. Your expeditious handling of this matter wilf be appreciated. Sincerely, � '� "�; ' , �.,�� �-----__ � Kenneth R.Johnson President KRJ:ca Attachment ca Mayor Kelly Bruce Gehrke 33860.v I � S- 3�L Saint Paul Port Au�hori Bruce Gehrke 4/13J05 GREEN SHEET i n °, --. No V�. � April 27, 2005 NUNB@t F�It TOTAL # OF SIGNATURE PAGES �.�,.�.�� ��«„�. � arc,.rone�v ❑ crtr«auc _ ❑ AMtYYLiERNCFi Wl ❑ ALKNLtE0.VlACC16 �r1lYOlelortAlS4fAlli) ❑ (CLIP ALL LOCATIONS FOR SIGNATURE) Approval of the issuance of $3,500,000 of conduit tax-exempt revenue bonds for Camada Limited Partnership. o� PLANNING COMMISSION CIB COMMITTEE CNIL SERVICE CAMMISSION Port Authoritv RsonaISERV[CE C�NiRACiS MUSTANSWER THE FOLLOWING QUES7ION5: Hes Mis persoNfirm evervrorketl uMer a cronfract for thie tlepartment� YES NO Has ihis petm�mi ever been a dtY employee7 VES NO Does this persoMrm possess a sidll nat namaltypossessey by any current city empioyee? YES NO is m� ce�so�vr� e �ro�ea �mon vES rro Camada Limited Partnership requires additional equipment to support sales growth and market demand. The issuance of the bonds will allow Camada Litnited Partnership to grow their business and expand their employment base in Saint Pual. None The company may not be as competitive and may not gain market share resulting in fewer employment opportunities for Saint Paul residents. OTAL AMOUNT oF iRAN5ACT1pN S 3, 500 .000 COST/REVENUH BUDfiEPED (CIRCLE ONE) ves No Port Authority Variable Rate UN�INGSOURCE Tax-Ex2mpt Conduit Bonds ncrnmrwwee�st INFORMATON (pfpLA1NJ � � 3�v(o Council File # RESOLUTION CITY OF SAINT PAUL, MINNESOTA Presented Referred To Green Sheet # 103915 Committee Date City Council Resolution [Camada Limited Partnership) '�iN:L�.��eF9i 3 1. The Port Authority of the City of Saint Paul (the "Port Authority') has given its 4 approva! to the issuance a4 its $3,500,000 Variable Rate Demand Industrial Development s Revenue Bonds (Camada Limited Partnership Project) Series 2005-6 (the "Bonds") in the 6 aggregate principal amount of $3,500,000. The proceeds of the Bonds wiil be loaned to � Camada Limited Partnership, and used to finance the acquisition and installation of s manufacturing equipment at facilities located at 274 Filimore Avenue and 345 Plato 9 Boulevard East, in the City of Saint Paul, Minnesota (the "City') and 2354 English Street in io Mapiewood, Minnesota, all ofwhich facilities are occupied byVomela SpecialtyCompany. i1 i2 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue i3 bonds authorized by the Port Authority shail be issued only with the consent of the City 14 Council of the City of Saint Paui, by resolution adopted in accordance with law. 15 16 3. Approvaf of the issuance of the proposed Sonds bythe City Council is afso i� required by Section 147(f} of the Intemal Revenue Code of 1986, as amended. is i9 4. To meet the requirements of both state and federal Iaw, the Port Authority 2o has requested that the City Council gives its requisite approval to the issuance of the 21 proposed Bonds by the Port Authority, subject to final approval of the details of said Bonds 22 by the Port Authority. 23 24 2s 26 27 2s 29 30 31 32 33 34 35 36 37 38 NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paul that, in accordance with the requirements of Section 147(fl of the Internal Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Councii herebyapproves the issuance of the aforesaid Bonds bythe PortAuthorityfor the purposes described in the Port Authoriiy resolution adopted Aprii 26, 2005, the exact details of which, including but not limited to, provisions relating to principal amount, maturities, interest rates, discount, redemption, and the issuance of additionai bonds are to be determined by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refunding bonds) bythe PortAuthorityfound bythe Port Authority to be necessary for carrying out the purposes forwhich the aforedescribed Bonds are issued. Adopted: April 27, 2005 33858.v1 OS - 3�Co Yeas Nays Absent Benanav Bosfrom Hazris Helgen Lantry Montgomery Thune Adopted by Council: Date Adoption Certified by Council Secretary BY= ApprovedbyMayor: Date By: Requested by Department of: � Form Approved by City Attorney � Approved by Mayor for Submission to Covncil � 33858.v1 O S - 3�� SAINT PAUL PORT AUTHORI'1'Y MEMORANDUM TO: FROM: Credit Committee (Meeting of April 19, 2005) Bruce Gehrke Lorrie Loude Kenneth R. Johnson DATE: April 08, 2005 SUBJECT: CAMADA LIMITED PARTNERSHIP - VOMELA SPECIALTY COMPANY Authorization for Issuance of Tax Exempt Conduit Bonds in the Amount of $3,500,000 for Purchase of New Equipment. ACTION REQUESTED: Provide final approval for the Port Authority to issue $3,500,000 of conduit variable rate tax-exempt bonds for the purchase of new equipment. Approximately $2,500,000 of the equipment will be located at the two Sa+nt Pau{ production facilities and the remaining $1,000,000 wili be used in their Maplewood location. PUBLIC PURPOSE; The proposed financing wilf enable Vomela to retain its current workforce leveis (250 employees in Minnesota) and to add additional employees over time. BUSINESS SUBSIDY: Not applicabfe. BACKGROUND: Vomela was founded in 1947 and has been under the current ownership since 1990. Sales for 2004 were approximately $60 million with 380 employees at year end. The company has developed a core competency in printing graphics on vinyl. Its largest revenue segment is producing graphics for original equipment manufacturers of recreational vehicles, snowmobiles, ATVs and watercraft. Camada Limited Partnership, which is controlled by the owner of Vomela, is the owner ofi the reaf estate and equipment and leases it to Vomela. ln 199b, the Port Authority approved a$1,500,000 tax-exempt revenue note for the purchase of Vomela's current facility at 274 Fillmore. In 2002, the Port Authority issued $3,700,000 of new tax-exempt conduit bonds for the refinancing of the 1995 bonds and the purchase of new equipment. 33834.v133t64.t. �S- 36� Credit Committee April 8, 2005 Page 2 CURRENT STATUS: In January of fhis year, the Board provided its authorization for application and preliminary approval for the issuance of these bonds. The certificate of allocation was received from the Sate of Minnesota on March 9, 2005. The documents are now in "substanfialiy final form", aliowing the Board to provide its final approval. PROPOSAL: Type of Notes: Rate: Security: Term: Issuer: LOC Bank: Placement Agent: Bond Counsel: Variable Rate Demand Industrial Development Revenue Bonds Initially the "all in" rate will be approximately 3.40% Letter of Credit. The Letter of Credit Bank is secured by a first position in the assets of the borrower and the operating company. 7 years Saint Paul Port Authority Wells Fargo Bank, N.A. Welis Fargo Brokerage Services, LLC. Leonard, Street and Deinard Borrower's Counsef Winthrop & Weinstine, P.A. Piacement Counsel Bank Counsel: Trustee: Briggs & Morgan Gray, Piant and Mooty Wells Fargo Corporate Trust Structure: The bonds will be conduit financing of the Port Authority and will not give rise to a liability of the Port, the City of Saint Paul, or the State of Minnesota or a charge against their general credit or taxing power. The bondholders will only have rights against revenue sources that are expressly pledged to payment of the bonds per the indenture agreement. The Port Authority will receive fees in the amount of .25% ($8,750} at inception and .25°{0 annually, based on outstanding balance, for the life of the bonds. 33834.v133164.1. Credit Committee April 8, 20d5 Page 3 oS 3�� WORKFORCE iMPLICATIONS: Vomela employs 250 individuals in Minnesofa, and the purchase of new equipment will aflow it to gain market share, maintain its competitive edge, and grow its workfiorce in the years ahead. DISCLOSURES: The Port Authority Commissioners by SEC rules are obligated to disclose any risks or facts they may be aware of that would affect the probability of repayment of these bonds. RECOMMENDATION: We recommend the final approval of issuance of $3,500,000 of conduit variable rate tax exempt bonds. 33834.v133164."I. OS- 3b� Resolution No. RESOLLTTION OF Tf� PORT AUTHORTTY OF TF� CTI'Y OF SAINT PAUL [Camada L'united Partnership] 1 ' 1. The Port Authority of the City of Saint Paul (the "Port Authorit}�') has previously issued its $3,255,Q00 Tax Exempt Variable Rate Demand Industrial Development Revenue Refunding Bonds (Camada Limited Partnership Project), Series 2002-ll (the "2002 Bonds") to provide funds to Camada Lixnited Partnership (the `Borrower") to refund revenue bonds issued by the Port Authority in 1995 to finance a facility located at 274 Fillmare Avenue (the "Building") in the City of Saint Paul, Minnesota (the "Cit�') and to finance the purchase and installation of equipment to be used in the Building. The Building and equipment aze leased by the Borrower to Vomela Specialty, Ina (the "Tenant"). 2 The 2002 Bonds were issued pursuant to an Indenture of Trust dated as of December 1, 2002 (the "2002 Indenture'� between the Port Authority and Wells Fargo Bank, National Association, as trustee (the "Tnzstee") and are payable primarily from draws made on an irrevocable letter of credit issued by Wells Fazgo Bank, National Associafion (the `Bank") pursuant to a Reimbursement Agreement to be dated as of May 1, 2005 (the "2002 Reimbursement AgreemenY') between the Bonower and the Bank. 3. It is now proposed that, pursuant to the authority granted by Minnesota Statutes, Section 469.152 to 469.165, as amended (the "Act'�, the Port Authority issue its revenue bonds, in one or more series, in an amount not to exceed $3,500,000 (the "2005 Bonds") in order to finance the acquisition and installation by the Bonower of manufacturing equipment to be installed and used by the Tenant at the Building and at facilities located at 345 Plato Boulevazd East in Saint Paul, Miuitesota and 2354 English Street in Maplewood, Minnesota (the "ProjecP') a11 of which aze occupied by the Tenant. 4. The Project has received an allocation of bonding authority from the State of Minnesota Department of Employment and Economic Development. 5. The Port Authority's Credit Committee and Board have previously adopted resolutions giving prelnninary approval to the proposed issuance of the 2005 Bonds. 6. Pursuant to the requirements of Section 147(fl of the Internal Revenue Code of 1986, as amended, and pursuant to notices published by the Port Authority not less than 15 days prior to each public hearing, public hearings have been held by both the Port Authority and the Maplewood City Council on the issuance of the 2005 Bonds, at which public hearings all persons were given an opporttuuty to speak. Following the public hearing heid by the Maplewood City Council, the City of Maplewood approved the issuance of the 2005 Bonds by the Port Authority. ?A13738v1 OS"- 3�� 7. The 2005 Bonds will be issued and secured by the tem�s of a supplement to the Indenture dated as of May i, 2005 (the "SupplemenY' and together with the 2002 Indenture the "Indenture'�, and the 2002 Bonds aud the 2005 Bonds will be payable primarily from draws made on a Irrevocable Letter of Credit issued by the Bank pursuant to a Reimbursement Agreement to be dated as of May 1, 2005 (the "2005 Reimbursement Agreement") . 8. In connection with the issuance of the 2002 Bonds, the Borrower and the Port Authority entered into a Loan Agreement dated as of December 1, 2002 (the "2002 AgreemenY') which will be amended in connecrion with the issuance of the 2005 Bonds by the First Amendment to Loan Agreement dated as of May 1, 2005 (the "2005 Agxeement", and together with the 2002 Agreement the "Loan AgreemenY'). Pursuant to the Loan Agreement the Borrower will agree to maintain the Letter of Credit and make a11 payments due either to the Bank or on account of the Bonds. 9. As with the 2002 Bonds, the 2005 Bonds and the interest on the 2005 Bonds shall be payable solely from the revenue pledged therefor and the 2005 Bonds shall not constitute a debt of the Port Authority within the meaning of any consritutional or statutory limitation of indebtedness, nor shall the Bonds constitute nor a ve rise to a pecuniary liability of the Port Authority or the City or a chazge against their general credit or tasing powers and shall not constihxte a charge, lien or encumbrance, legal or equitable, upon any properiy of the Port Authority or the City other than their interest in said Project. 10. It is intended that interest on the 2005 Bonds be excluded from gross income of the holders thereof far federal income tas purposes. NOW TF3EREFORE, BE TT RESOLVED by the Board of Comxnissioners of the Port Authority of the City of Saint Paul, Minnesota, as follows: A. On the basis of information available to the Port Authority it appears, and the Port Authority hereby finds, that the Project Purthers the purposes stated in the Act, and is in the best interests of the port district and the people of the City. B. For the purpose of financing the Pro}eet, and paying certain costs of issuance and other expenses in connection with the issuance of the 2005 Bonds, and provided that the Project and its financing receive approval by the Department of Employment and Economic Development ("DEED"), the Port Authority hereby authorizes the issuance, sale and delivery of the 2005 Bonds in an ageregate principal amount of approximately $3,500,000 under the 2005 Indenture. The 2005 Bonds shall bear interest at such rates, shall be numbered, shall be dated, shali mature, shall be sub}ect to redemption prior to maturity, and shall be in such form and haue such other details and provisions as may be detenuined by the Port Authority and included in the 2005 Indenture. For purposes of these determinations, the President and the Chief Financial Officer of the Port Authority are hereby authorized to deternvne the final terms of the 2005 Bonds. 2413738v1 2 OS- 3�0� C. Forms of the foIlowing documents haue been submitted to the Port Authority for review and(or approval in connecrion with the sale, issuance and delivery of the 2005 Bonds: 1. 2. 3. 4. the Bond Purchase Agreement to be entered into by and among the Port Authority, the Borrower and Wells Fargo Broker Services, LLC (collectively, the "Documents"). A. It is hereby found, determined and declared that: 1. The issuance and sale of the 2005 Bonds, the execution and delivery by the Port Authority of the Documents, as applicable, and the performance of all covenants and agreements of the Port Authority contained in the Documents, as applicable, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Documents and the 2005 Bonds valid and binding obligations of the Port Authority in accordance with their terms, are authorized by Act; 2. It is desirabie that the 2005 Bonds be issued by the Port Authority upon the general terms set forth in the bocuments, as applicable; 3. Under the provisions of and as provided in the Documents, the Bonds are not to be payable from or a chazge upon any funds other than the revenues pledged to the payment thereof; no holder of the Bonds shall ever have the right to compei any exercise by the City or the Port Authority of its taxing powers to pay the Bonds or the interest or premium thereon, or to enforce payment thereof against any property of the City or the Port Authority except the interests of the Port Authority which have been pledged to the Trustee under the Indenture; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Ciry ar the Port Authority except the interests of the Port Authority which have been pledged to the Trustee under the Indenture; the Bonds shall each recite that they are issued without moral obligation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the City of Saint Paul or the Port Authority within the meaning of any constitutional or statutory Iunitation. E. The forms of the Documents and e�chibits thereto aze approved substantially in the forms submitted and on file in the offices of the Port Authority, with such subsequent changes as may be approved by Port Authority management and Bond Counsel as contemplated by paragraph G. The Chair and Secretary of the Port Authority, or such other officer as may be appropriate in the absence of either the Chair or Secretary, aze hereby authorized to execute the Documents (to the the 2005 Indenture; the 2005 Agreement; the form of the 2005 Bonds; and 2413738v1 � �� DS-3�� extent the Port Authority is a party thereto) in suhstanrially the forms submitted, as modified pursuaut to paza�aph G, and any other documents and certificates which in the opinion of Port Authority management and Bond Counsei aze necessary to the fransaction herein described. The execution of any inshument hy the appropriate officer or officers of the Port Authority herein authorized shall be conclusive evidence of the approval of such docuxnents in accordance with the tetms hereof. The execurion of any documents necessary for the transaction herein described by individuals who were at the tixne of execurion thereof the authorized officers of the Port Authority shall bind the Port Authority, notwithstanding that such individuals ar any of them k�as ceased to hold such office or offices prior to the authentication and delivery of the 2005 Bonds. Copies of all of the documents necessary to the transacrion described shall be delivered, filed and recarded as provided herein and in the Indenture. F. The Chair and Secretary and other officers of the Port Authority are authorized and directed to prepaze and fiunish to Bond Counsel certified copies of proceedings and records of the Port Authority relating to the issuance of the Z005 Bonds and other transactions herein contemplated, and such other affidavits and certificates as may be required to show the facts relating to the legality of the 2�05 Bonds and the other transactions herein contemplated as such facts appeaz from the books and records in the officers' custody and control or as otherwise l�own to them; and all such certified copies, certificates and affidavits, including any heretofore fiunished, shall constitute representations of the Port Authority as to the truth of all statements contained therein. G. The approval hereby given to the various Documents refened to above includes approval of such additional details therein as may be necessary and appropriate, and such modifications thereof, deletions therefrom and addirions thereto as may he necessary and appropriate and approved by the Port Authority's President and Chief Financial Qfficer, in agreement with the appropriate representarives of the Tenant, the Undenvriter and the Bank; and includes approval of, among other things: l. establishxnent of the final principal amount of the 2005 Bonds, and the interest rate to be borne thereby; 2. the estabiishment of the maturity schedule and call provisions to be applicable to the 20Q5 Bonds; and 3. such related instruments as may be required to satisfy the conditions of any purchaser of the 2005 Bonds. H. The Port Authority hereby consents to the dish of an Official 5tatement to be used in connection with the establishment of the interest rate on the Bonds, as such official statement is finalized with the participation of Port Authority management and Bond Counsel. L The authority to approve, execute and deliver £uture axnendments to financing documents entered into by the Port Authority in connection with the issuance of the Bonds and the other h herein contemplated, is hereby delegated to the President of the Port Authority, provided that: (a} such amendments either do not require the consent of the holders of the Bonds or, 2413738v1 4 DS- 3� if required, the consent of the required percentage of the holders of the Bonds has been obtained with respect to such amendment; (b) such amendments do not maferially adversely affect the interests of the Port Authority as the issuer of the Bonds; (c) such amendments do not contravene or violate any policy of the Port Authority; and (d) such amendments aze acceptable in form aad substance to Bond Counsel. The execution of any insinunent by the President of tl�e Port Authority shall be conclusive evidence of the approval of such insiawnents in accordance with the terms hereof. 3. �o covenant, sripulafion, obligafion or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the Board of Commissioners of the Port Authority, or any officer, agent or employee of the Port Authority in that persons individual capacity, and neither the Boazd of Commissioners nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Adopted: Apri126, 2005. PORT AU'I`HORITY OF'�I� CITY OF SAINT PAUL By Its Chair ATTEST: By Its Secretary 2413738v1