07-204Council File # Q 7 �O�
Green Sheet # D 7�'�i 3
��
City Council Resolution
[filsner Carton Co. Project]
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WHEREAS:
1. The Port Authority of the City of Saint Paul (the "Port Authority") has given its approval to the issuance of
approximately $1,800,000 of its Industrial Development Revenue Bond (Tilsner Carton Co. Project) Series 2007-3
(the "Bond"), to finance the costs to be incurred by Tilsner Carton Co. in connection with the acc{uis+tion and
installation of manufacturing equipment to be located in the City of Saint Paul, Minnesota (the "ProjecY'); and
2. Minnesota Statutes, Section 469.084, provides that any issue of revenue Bonds authorized by the
Port Authority shall be issued only with the consent of the City Council of the City of Saint Paul, by resolution
adopted in accordance with law; and
3. Approval of the issuance of the proposed Bond by the City Council is also required by Section
147(f) of the Intemal Revenue Code of 1986, as amended; and
4. To meet the requirements of both state and federal law, the Port Authority has requested that the
City Council gives its requisite approvai to the issuance of the proposed Bond by the Port Authority, subject to final
approval of the details of said Bond 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(f) of the Intemal Revenue Code of 1986, as amended, and in accordance with
Minnesota Statutes, Section 469.084, the City Council hereby approves the issuance of the aforesaid Bond by the
Port Authority for the purposes described in the Port Authority resolution adopted February 27, 2007, the exact
details of which, including but not limited to, provisions relating to 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) by the Port Authority found by the Port
Authority to be necessary for carrying out the purposes for which the aforedescribed Bond is issued.
Adopted: March 7, 2007
Yeas Nays Absent
Benanav
Bostrom �
Harris �
Helgen �
Lanhy �
Montgomery �
Thune �/
�
Adopted by Council: Date 3 �7���
Adoption Certified by Council Secretary
$Y� 1' � `.�Sdi7
Approvedb�r r: Date � (j a
38 By.
Form Appr ed by City Attorney
BY: ��/-���/. c. � �
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Form A roved � yor for ubmisslo to Council
By:
� Green. Sheet Green Sheet
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Green $heet Green Sheet Green Sheet Green Sheet �
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� Departmenf/officelcouncil: i Date Initiated:
PA -PattA��ori ! 23FEB ! Green Sheet NO: 3037253
Contact Person & Phone: �
Pete Klein
2245686 �
! Must Be on Council Agenda by (Date): i
i
Doc. Type: RESOLUTION
, E-Document Required: Y
, DocumentConWCt: CarolAbbas
ConWct Phone: 224-5686
0 Port Aot6oritv I ✓' �/ �
1 �Plaunio¢ & Economic Develoomei Deparhnent Director � l �d�/
2 'MaYOr's Office '
3 Council I
4 1 i
5
ToWI # of Signature Pages _(Clip All Locations for Signature)
�, Approval of the issuance of $1,�8868,000 of conduit fixed rate tax-exempt bonds for Tilsner Carton Company
', �r,soo,00a
tlations: Approve (A) or R
Planning Commission
CIB Commdfee
Civii Service Commission
1. Has fhis persoNfirm ever worked under a contract for this department�
Yes No
2. Has this persoNfirm ever been a city employee?
Yes No
3. Does this persoNfirm possess a skill not normally possessed by any
current city employee?
Yes No
Explain all yes answers on separate sheet and attach to green sheet
Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why):
Tilsner Carton Company requires additional equipment to support sales growth and mazket demand.
�� Advantages if Approved:
! The issuance of the bonds will allow Tilsner Carton Company to expand their business and increase their employment base in St. Paul.
i
' Disadvantages it Approved:
, None
�
�� Disadvantages If Not Approved:
; The company may not be as competitive and may not gain mazket share resulting in fewer employment opportumties for St. Paul
i residents-
IINI�IVIl�llO� };xk%*xlttt3
Transaction:
CosNRevenue Budgeted:
Fundiny source: port Authority Conduit Fixed A����tY Number:
Financial Information: rate tax-exempt bonds
(6cplain) Amount of Transaction: $1,800,00.00
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Assign
Number
For
Routing
OMer
February 23, 2007 2:08 PM' Page 1
7900 LandmarkTOwers
345 St. Peter Street
Saint Paul, Minnesota
55702-1661
P�RT
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February 27, 2007
Ms. Cecile Bedor, Director
Pianning & Economic Development Department
1300 City Hall Annex
25 Wesf Fourth Street
Saint Paul, MN 55102
SUBJECT: TILSNER CARTON COMPANY
Dear M edor: �'`��
o � a o�
Tel: 651-224-5686
Fax�651-223-5198
Tall Free: 800328-5417
wwwsppa.com
We submit for your review and referral to the office of the Mayor, City Council,
and City Attorney's o�ce, details pertaining to the issuance of conduit fixed rate
tax-exempt bonds in the approximate amount of $1,800,000 to finance the
purchase of new equipment to be located at 162 York Avenue in Saint Paul. The
City of Saint Paul's entitiement allocafion wiil not be affected by this appiication.
In addition to the staff memorandum, we are attaching a draft copy of the
proposed City Councif Resolution and a copy of the Resolution conducfing the
required public hearing and authorizing the sale of the conduit fixed rate tax-
exempt bonds in the approximate amount of $1,800,000 that will be considered
by the Port Authority's Board on February 27, 2007. City Council action will be
required after the Port Authority's Board meeting of February 27, 2007.
Your expeditious handling of this matter will be appreciated.
Sincerely,
��
�G �'�'r.
Kenneth R.Johnson
President
KRJ:amk
Attachment
cc: Mayor Coleman
Pete Klein
38326.v1
SAINT PAUL
PORT AUTHORITY
MEMORANDUM
TO: BOARD OF COMMISSiONERS
(Regular Meeting of February 27, 2007)
FROM: Peter M. Klein j�—
Laurie J. Hansen
Kenneth R. Johnson��
° � ���
DATE: Feb. 23, 2007
SUBJECT: TILSNER CARTON COMPANY, INC.
Public Hearing – Sale of Bonds
Authorization of the Issuance of Conduit Fixed Rate Tax-Exempt Bonds
in the Approximate Amount of $1,800,000
RESOLUTION NO. 4206,
Action Requested:
Provide final approval for the Port Authority to issue approximafely $1,800,000 of conduit fixed
rafe tax-exempt bonds to be used for the purchase of equipment for the facility located at 162
York Avenue, St. Paui.
Pubfic Purpose:
The proposed financing will enabie Tilsner Carton Company, Inc., to retain its current workforce
levels, in excess of 100 employees. An additionaf five empioyees could be added over time.
Business Subsidv:
N/A
Policv Exception:
N/A
Backqround:
Tilsner Carton has been in business for 85 years in Saint Paul. It is a manufacturer and
distributor of cardboard packing, pailets, shipping supplies and display materials to customers
located throughout the United States and Canada. Meridian Display and Merchandising
Company, Inc, is a wholly-owned subsidiary of Tilsner Carton that designs and manufactures
cusfom and in-stock corrugated point of purchase displays.
Ti(sner Carton is 100% owned by Joel Tilsner, who started working for the company in 1978.
Tilsner Carton was started by his grandfather.
Current Status:
Last month the Board provided its preliminary approval for fhe issuance of these 6onds and
authorized the application for tax-exempt bonding authority from the Sfate. The Minnesota
Department of Finance has now given its authorization.
38275.v130950.1.
BOARD OF COMMISSIONERS Q � �0,�(
February 23, 2007 /
Page -2-
Proposal:
Type of Bonds: Conduit Fixed Rate Tax-Exempt lndustrial Development
Revenue Bonds
Rate:
Security:
Term:
Issuer:
Borrower:
Bond Counsel:
Borrower's Counsel:
Le�der:
Lender's Counsel:
Escrow Agent:
5.29%
UCC filing on equipmenf and fhe personaf guarantee of Joel
Tiisner
7 Years
Saint Paul Port Authority
Tilsner Carton Company, Inc.
Leonard, Street and Deinard
Parsinen, Kaplan, Rosenberg & Gotlieb, P.A.
G E Capital Public Finance, Inc.
Kutak Rock, LLP
TBD
Conduit Financinq:
The bonds will be a conduit financing of the Authority and wiil not constitute or give rise to a
(iability of the Authority, fhe City of Saint Paui or the Stafe of Minnesota or a charge against
their general credit or taxing powers. The bondholders will not have the right to demand
paymenf on the bonds out of any funds to be raised from taxation or from any revenue
sources other than those expressiy pledged to payment of the bonds pursuant to the
indenture. The Port Authority will receive fees in the amount of 1/4th of a point ($4,500.00) at
inception and 1/4th of a point on the outstanding balance, annually, for the life of the bonds.
Workforce Implications•
Tiisner Carton currently employs 109 individuals in Saint Paul. An additional five employees
could be added as a result of the proposed equipment purchase at a wage rate between
$15.00 and $18.00 per hour.
Disclosure:
The Port Authorify Commissioners by SEC rules are obligated to disclose any risks or facts
you may be aware of that would affect the probabilify of repayment on these bonds.
Recommendation:
We recommend the finai approval for the issuance of approximately $1,800,000 of conduit
fixed rate tax-exempt industriai development revenue bonds.
PMK:amk
38275.v130950.1.
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Resolution No. 4 2 0 6
RESOLUTION OF THE
PORT AUTHORTTY OF THE CITy OF SAINT pAUL
['TiLsner Carfon Co.]
WHEREAS, it has been proposed that the Port Authority of the City of Saint Paul (t.�e "Port
Authorit�') issue its Industrial Development Revenue Bond (Tilsner Carton Co. Pro}ect} Series
2007-3 (the "Bond") in an aggregate principal amount of approximately $1,800,000, and that the
proceeds of such Bond be loaned fo Tilsner Carton Co, a Mnmesota corporation (the "Bonower")
to finauce the acquisition and installation of manufactuting eqnipment (the "Project'� to be owned
and operated by the Borrower in the City of Saint Paul, Minnesota (the "City'�.
WHEREAS, the Port Authority desires to facilitate the selective development of the City of
Saint Paui and the metro east community, to retain and 'unprove its tax base and to help it provide
the range of services and employment opporinnities required by its population, and tl�e Project will
assist in achieving that objecrive by increasing the assessed valuation of the metro east community;
helping to maintain a posifive relationship between assessed valuation and debt; and enhancing the
image and reputation of the metro east commuraty,
Wt�REAS, the Project will result in additional employment opportwuties in the City of
Saint Paul an& the meiro east community,
WHEREAS, the Port Authority has been advised by representatives of the Bortower that
long term eonventional, commercial financing to pay the capital cost of the Project is auailable only
on a limited basis and at such high costs of borrowing that the economic feasibility of operating the
Project would be significantly reduced, and that it has been acting to date in anticipation that the
Port Authority would favorably consider this finaneing proposal.
WHEEREAS, the Project and its financing has received an allocation of boncling authority
&om the State ofMinnesata Depariment ofFinance.
WHEREAS, the Port Authority Boazd has previously adopted a resolution giving
prelitninary approval to the proposed issuance ofrevenue bonds for the Project.
WE�REAS, pursuant to the requirements of Section 147(fl of the Internal Revenue Code of
1986, as amended, and pursuant to a nofice published by the Port Authority not less than 15 days
prior to the public hearing, a public hearing has been held on the date hereof on the issuance of the
Bond, at which public hearing a11 persons were given axi opportunity to speak.
WHEREAS, the Bond will be issued and secured by the terms of a I,oan Agreement (the
"Loan Agreement") among the Port Authorify, the Borrower and GE Capital Public Finance, Inc.,
the purchaser of the Bond (the "Purchaser"), and the Bond and the interest on the Bond shall be
payable solely from the revenue and collateral piedged tharefor, and sha12 not constitnte a debt of
the Port Authority within fhe meaning of any constitutional or statutory limitation of indebtedness,
nor shall the Bond constitute or give rise to a pecuniary liability of the Port Authority or fhe City or
a charge aaainst their generdl credit or tasing powers and shall not constitute a chazge, lien or
36771972
encumbrance, legat or equitable, upon any property of the Port Authority or the City other than its
interest in said Project.
WI�REAS, it is intended fhat interest on the Bond be excluded from gross income of the
hoiders thereof for federal inc�me tax purposes.
N�W, TT�REFORE, BE TT RESOLVED BY TF� BOARD OF COMIvIISSIONERS OF
THE PORT AiJTFiORIT'Y OF THE CTTI' OF SAII�T PAUL, AS FpLLOWS:
1• On the basis of information available to the Port Autfiority it appears, and the Port
Authority hereby finds, that: the project constitutes properties, used or usefut in connection with
one or more revenue producing enterprtses engaged in any bttsmess wifh� fhe meanxng of
Nliunesota Statutes, Sections 469.152 to 469.165 (tt�e "Act"}; the Project furthers the putposes
stated in the Act; and it is in the best interests of the port distriet and the people af the City of Saiat
Pau1 and in fintherauce of the general plan of developmenf fo assisf the Compauy in finan�ing �e
Project
2- For the purpose of financing the Project, and paying certain costs of issuance and
other expenses in connection with the issuance of the Bond, and pmvided fhat the Project and its
financing receive approval by the Department of Employment and Econoxnic Development
(`9�EED") the Port Autfiority hereby authozizes fhe issuance, sate and delivery of the Bond in an
aggregate principal amount of approximately $1,800,000. The Bond shall bear interest at such
rates, sha11 be nwnbered, shalI be dated, shatl maiure, shall be subject to redemption prior to
maturity, and shail be in such form and have such other detaiis and provisions as may be prescribed
in the I,oan Agreement, substanfially in the foxm now on file in the offices ofthe PorE Authority.
3. Neither the Bond, nor the interest thereon, shall constitute an indehtedness of the
Port Authority or the City within the meaillng of any constitutional or stahxtory debt limitation; nor
shall they constitute or give rise to a pecuuiary Iiabi]ity of the City, fhe Port Authority or a chazge
against their general ta�cing powers and neither the full faith and credit nor the general taYing
poweis of fhe City or fhe Port Authority is pledged to the payment of the Bond or interest thereon.
4. Forms of tke fo2lowing documents Iiave been submifted to the Port Authority for
review and/or appmval in connection with the sale, issaance and delivery of the Bond:
�. the Loan Agreement;
b• the Bond;
a the Escrow Agreement ta be enfered into among the Port Aufhority, the
Borrower, the Purchaser and Marshall and Ilsley Trust Company, N.A. as the escrow agent;
and
d• the Tas Regulatory Agreexnent to be entered iuto among the Port Authority,
the Borrower and the Purchaser.
(collectively, the "Documents").
r� .
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5. It is hereby found, determined and declared that;
a The issuance and sale of the Bond, the execution and delivery by the Port
Authorify of the Documents and the performance of all covenants aud a�eements of the
Port Authority contained in the Documents, and of all other acts and things required under
fhe Constiiuiion and laws of the State of Minnesota to make tl�e Documents and the Bond
valid and binding obligarions of the Port Authority in accordance witkc theit terms, are
authorized by Mumesota Statufes, Sections 469.152 through 469.165, as amended (the
"Act"J•
,
b. It is desirable ffiat the Bond be issued by the Port Authority ugon the general
terms set forth in the Documents, as applicable;
c. Under the provisions of and as provided in the Documents, the Bond is not
to be payable from or a chazge upon any funds other than the revenues pledged to the
payment thereof; no kolder of the Bond shall ever have the right to compeI any exercise
by the City or the Port Authority of its taxing powers to pay the Bond or the interest or
premium thereon, or to enforce payment thereof against any property of the Ciiy or. the
Port Authority except the interests of the Port Authority and the City which have been
pledged to the Ptu�chaser uuder the L.oan Agreement; the Bond shall not consCitute a
charge, lien or encumbrance, legal or equitable, upon any property of tke City or the Port
Authority except the interests of the Port Authority and the City which have been pledged
fo the Purchaser under the Loan Agreement; the Bond shall recite that if is issued without
moral obligafion on the part of the State or its politicat subdivisions, and that the Bond,
including interest thereon, is payable solely from the revenues pledged to the payment
ihereof; and the Bond shalI not constitute a debt of the City or fhe Port Authority within
the meaning of any constitutional or statutory limitation.
6- The forms of the Documents and exhibits thereto are approved substantially in the
forms submitted and on file in the offices of Port Authority, with such subsequent changes as may
be approved by Port Authority staff and Bond Counsel as contemplated by paragraph 8. The
President of the Port Authority, or such other officer as may be appropriate in the absence of either
the President and Chief Financial Officer, is hereby authorized and directed to execute the
Documents (to the extent the Port Authority is a pariy thereto) in substantialiy the forms submitted,
as modified pursuant to pazagaph 8, and any ofher documents and certificates which in the opinion
of Port Authority staff and Bond Counsel aze necessary to the fransaction herein described 'Fhe
execution of any insirument by the appropriate officer or officers of the Port Authority herein
authoriaed shall be conclusive evidence of the approval of such documents in accordance with the
terxns hereof. The execntion 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, notwithstanding that such individuals or any of them has ceased to
hold such office or offices prior to the authenfication and delivery of the Bond. Copies of all of the
documents necessary to the transacrion described sha11 be delivered, filed aud recorded as provided
herein and in the Indenture.
7• The President and other officers of the Port Authority aze autharized and directed to
prepare and fiirnish to the Purchaser, tha Eserow Agent and Bond Counsel certified copies of
proceedings and records of the Port Authority relafing to the issuance of the Bond and other
F�
transactions herein contemplated, and such ofher a�davits and certit�cates as may be reqaired fo
show the facts relating to tfie legality of the Bond and the other transactions herein conternplated as
such facts appear fi the books and records in the officers' cusfody and control or as otherwise
Iaiown to them; and all such certified copies, certificates and affidavits, including any heretofore
fiunished, sha11 constitute representations of the Part Aufihority as to fl�e truth of all statements
contained therein.
8- The approval hereby given to ttxe various Documents referred to above includes
approval of such addifional details therein as may be necessary and appropriate, and such
modificaiions thereof, deletions theref=om and additiotts thereto as may be necessary an@
appi'opriate and approved by fhe Port Authority's President; and includes appmval of, arriong other
things:
a establisfiment of the final principal amount of ttze Bond;
b• the establishment of the maturity schedule and call provisions to be
applicable to the Bond; and
a such related instrurnents as may be required to satisfy the conditions of any
purchaser of the Bond.
9• The authorify to approve, execute and deliver fuftue amendmenfs to financing
documents entered into by the Port Authority in connection with the issuauce of the Bond 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 conse� of the holder of the Bond or
such consent as may be requited has been obtained; (b) such amendments do nof rnaterially
adverseIy affec4 t�e interests of the Port Authority as the issuer of the Bond; (c) such amendments
do not coniravene or violate any policy of the Port Authority; aad (d) such amendments aze
accegtable in form and substance fo Bond Counsel. The execution of aay ins�ent by the
President of the Port Aizthority sha11 be conclusive evidence of the approval of such inshuments in
accordance wittt tha temis hereo£
10. No covenant, sfipulation, obligation or agreement contained herein or in the
Documents shall be deemed Yo 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 fhe Port
Authoriry in that persons indiv�dual capacity, and neither the Boazd of Commissioners nor any
officer executing the Bond shall be liable personally on the Bond or be subject to any persopat
Iiabiliiy or accountability by reason of the issuance thereof.
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Adopted: February 27, 2007
POR'T AIJTHORIT'Y OF THE CITY
OF SALNT PAUL
By
Its Chazr
ATTEST:
By—�I�� �
Its Secretary
� 1900 LandmarkTowers
345 St. Peter Street
Saint Paul, Minnesota
55102-1661
� pORr
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February 27, 2007
Ms. Cecile Bedor, Director
Planning & Economic Development Department
1300 City Hall Annex
25 West Fourth Street
Saint Paul, MN 55102
SUBJECT: TILSNER CARTON COMPANY
Dear M dor: ��'
0 7 ao /� /
Tel: 651-224-5686
Fax: 651-223-5198
Tall Free: 800-328-8417
www.sppa.com
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 fixed rate
tax-exempt bonds in fhe approximate amount of $1,800,000 to finance the
purchase of new equipment to be located at 162 York Avenue in Saint Paul. The
City of Saint Paul's entitiement allocation will not be affected by this application.
!n add'+tion ta the staifi 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 sale of the conduit fixed rate tax-
exempt bonds in the approximate amount of $1,800,000 that wili be considered
by the Port Authoritys Board on February 27, 2007. City Council action will be
required after the Port Authority's Board meeting of February 27, 2007.
Your expeditious handling of this matter will be appreciated.
Sincerely,
�
-'"��, -°'�"���..
�
Kenneth R.Johnson
President
KRJ:amk
Attachment
cc: Mayor Coleman
Pete Klein
38326.v1
� � -��
Saint
Authori
Pete Klein 651-224-5686
7UST BEON CWNCILAGENDA BY (OAT�
March 7, 2007
/�RSIGN
xuxeae wrt
RovnHc
7
TOTAL # OF SIGNATURE PAGES 1
GREEN SHEET
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�MYOR/ORAf9ElINt} ❑
(CLIP ALL LOCATIONS FOR SIGNATURE)
Approval of the issuance of $1,800,000 0£ conduit £ixed rate tax-exempt bonds
for Tilsner Carton Company.
or
PLANNING COMMISSION
CIB COMMITfEE
CNIL SERVICE COMMISSION
Pprt A �th[�Yi {-V
PA4S�C4:�:i•i Ii:SF.1
Has this persoNfirtn ever worked u�er a contract fw Nis departmenC7
YES NO
Has Mis peisorJlirtn ever been a dty empbyee7
YES NO
Does this pe�soNfirm possess a sldll rrot noimallypossessey bY �Y c+�� city emPloyee7
7ES NO
Is this D�rtn a targetetl vendoYt
YES NO
Tilsner,Carton Company requires addit'ional equipment'to,support saies �rotv�h
and market demand.
The issuance of the bonds will allow Tilsner Carton Company to expand their
business and increase their employment base in Saint Paul.
None
(E
The company may not be as competitive and may not gain market share resulting
in fewer employment opportunities for Saint Paul residents.
OTAL AMOUNT OF TftAN5ACT10N 5�- i$ O O, O O O COSifREYENUE BUDGE4EC (G0.CLE Ok� Y6g NO
Port Authority Conduit
UNDINGSOURCE Fixed Rate Tax-Exemnt Bonds ACTIVINBlUMBEit
(��M