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10-292WITHDRAWN 4/28/2010 Council File # 10-292 Green Sheet # 3102296 RESOLUTION 30 �� �, CITY OF SAINT PAUL, MINNESOTA Presented by 1 2 3 4 5 City Council Resolution 6 [eCullet Project] 7 8 9 WHEREAS: 10 11 1. The Port Authority of the City of Saint Paul (the "Port Authority") has given its approval l2 to the issuance of approximately $3,000,000 of its Tax-Exempt Solid Waste Disposal Revenue 13 Bonds (eCullet Project) Series 2010-1 (the "Bonds"), to finance the costs to be incurred by a wholly 14 owned subsidiary of eCullet Inc., a California corporation, in connection with the acquisition and 15 installation of glass recycling equipment to be located in the City of Saint Paui, Minnesota (the 16 "ProjecY'); and 17 18 2. Minnesota Statutes, Section 469.084, provides that any issue of revenue Bonds 19 authorized by the Port Authority shall be issued only with the consent of the City Council of the City 20 of Saint Paul, by resolution adopted in accordance with law; and 21 22 3. Approval of the issuance of the proposed Bonds by the City Council is also required 23 by Section 147(fl of tne lnterna4 Revenue Code of 1986, as amended; and 24 25 4. To meet the requirements of both state and federal law, the Port Authority has 26 requested that the City Council gives its requisite approval to the issuance of the proposed Bonds 27 by the Port Authority, subject to final approval of the details of said Bonds by the Port Authority. 28 29 NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paul that, in 30 accordance with the requirements of Section 147(fl of the Internal Revenue Code of 1986, as 31 amended, and in accordance with Minnesota Statutes, Section 469.084, the City Council hereby 32 approves the issuance of the aforesaid Bonds by the Port Authority for the purposes described in 33 the Port Authority resolution adopted March 23, 2010, the exact details of which, including but not 34 limited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of 35 additionai Bonds are to be determined by the Port Authority, and the City Council hereby authorizes 36 the issuance of any additional bonds (including refunding bonds) by the Port Authority found by the 37 Port Authority to be necessary for carrying out the purposes for which the aforedescribed Bond is 38 issued. 39 40 Adopted: March 24, 2010 sosss.�� 10-292 Bostrom Yeas Navs Absent Requeste partmen oE � � By: the Office Stark Thune Adopted by Councii: Date Adoption Certified by Council Secretary By: _ . _ __ _ Approved by Mayor: Date By: � By: �_ Approved by By: G-r Submission to Council � ,, �► �°_21�„ Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet DepartmenUOffice/Council: Date Initiated: PA _PortAUthority ,Z�,R2o,o Green Sheet NO: 3102296 Conpct Person & Phone: Departrnent Sent To Person Inifial/Date LaurieHansen � o orta�wo' 0 2245686 1� Iauuin & Ec000mic Develo me De ariment D'uector 3 �L �/� � 2 or'sO�ce Ma or/usistant i .,3' �(� Must Be on Councii Agenda by (Date): Number 3 ouncil C1' Council 24-MAR-10 For Routing 4 ' Clerk Ci Clerk Doc.Type:RESOLUTION Order 5 0 E-Document Required: Y Document Contact: Carol Abbas/Laura Contact Phone: 224-5686 Total # of Signature Pages _(Clip All Locations for Signature) Action Requested: Appsoval of the Port Au[hority's issuance of $3 million in fax exempt, conduit, revenue bonds for cCullet Minnesota, SPC Recommendations: Approve (A) or Reject (R): Personal Service Contrects Must Answer the Following Questions: Planning Commission 7. Has this person/firm ever worked under a contract for this department? CI8 Committee Yes No Civil Service Commission 2. Has this person/firm ever been a city employee? Yes No 3. Does this person/firm possess a skill not normally possessed by any current city employee? Yes No Expiain all yes answers on separate sheet and attach to green sheet. Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why): cCullet is a[echnology-based glass processor preparing post consumer recyclables and waste to produce fumace ready cullet glass. eCullet has located a faciliry in Saint Paul to establish its second commercially operational facility. Advantages If Approved: Bond issue will provide needed financing for construction and installation of glass recycling equipment and the creation of 30 new jobs in Sanit Paul. Disadvantages If Approved: Non Disadvantages If Not Approved: cCullet will not locate in Saint Paul. ToWlAmountof $3,000,000.00 CosVRevenue Bud eted: Transaction: 9 Funding Source: COI1dUlf ROVettUE BO(ld Activity Number: Financial Information: (Explain) March 12, 2010 12:55 PM Page 1 SAINT PAUL PORT AUTHORI'I'Y MEMOItANDUM 10-292 TO: CREDIT COMMITTEE DATE: Mar. 10, 2010 (March 16, 2010 Regular Meeting) FROM: Laurie J. Hansen SUBJECT: eCULLET MINNE OTA, SPE — FINAL APPROVA� OF ISSUANCE OF UP TO $3,000,000 TAX EXEMPT CONDUIT BONDS Action Reauested: Finai approval of the issuance of up to $3,000,000 tax-exempt conduit revenue bonds for eCullet Minnesota, SPE. Pubfic Purpose: The proposed financing will enable eCullet Minnesota, SPE to start a glass recycling operation and add 30 jobs in Saint Paul. Business Subsidv: Not applicable Backpround: eCuliet is a technology based giass processor preparing post consumer recyclabies and waste to produce furnace-ready cuffet glass. li is headquartered in Paio Alto, CA and has operations in Oakland (test facility) and Seattle. It currently has 50 employees, and the Saint Paul facility will be its second commercially operational facility. Proposal: eCullet pfans on purchasing approximately $3,000,000 of processing and sorting equipment and installing it in a leased facility at 2075 EIIis Avenue. See the attached for terms of the bond issue. Policy Exceptions: None Disclosure: The Port Authority Commissioners by SEC rules are obligated to disclose any risks or facts you may be aware of that would affect the probability of repayment of these bonds. Recommendation: Approval of the issuance of approximately $3,000,000 of tax-exempt conduit revenue bonds for eCullet Minnesota, SPE. LJH:ca Attach. 10-292 eCULLET,SPE TERMS OF TAX EXEMPT CONDUIT BONDS Action ReQUested: Approval of final resolution authorizing the issuance of approximately $3,000,000 of tax exempt conduit revenue bonds for eCullet Minnesota, SPE Proiect Summarv: Series 2010-1. �3,000,000. Anticipated issue dated April 1, 2010. Tvpe: Tax exempt, fixed rate, conduit Solid Waste Disposal Revenue Bonds Issuer: Saint Paul Port Authority 8orrower: eCullett Minnesota, SPE Guarantor: eCuliet, inc. Trustee: US Bank National Association Underwriter: Piper Jaffray Borrower's Counsel: Squire, Sanders & Dempsey, LLP Underwriter's Counsel: Kennedy & Graven Bond Counsel: Leonard, Street & Deinard The Borrower: The Borrower, eCullet Minnesota SPE, was organized in 2010 for the purpose of owning and operating the Project. The Borrower will construct and install glass recycling equipment in a faciliiy located in Saint Paul, Minnesota, for the purpose of turning used glass containers into customer-ready cullet. The Guarantor: The Guarantor (eCullet, Inc.) is a California corporation. The Guarantor was organized in 2007 and is a developer and owner/operator of glass recycling facilities. The Guarantor has developed proprietary and patent-protected technologies for the recycling of glass that utilize an optical sorting system coupied with pneumatic jets to color sort glass while removing contaminants. Currently the Guarantor operates giass recycling facilities in Oakland, California and Seattle, Washington. 50563.v1 2 10-292 The Proiect: The proceeds of the Bonds will be loaned by the Issuer to the Borrower pursuant to the Loan Agreement and used by the Borrower along with Borrower funds to :(i) finance the construction and installation of glass recycling equipment to be located in Saint Paul, Minnesota (the "ProjecY'); (ii) fund certain reserves for the bonds; (ii) fund capitalized interesf on the Bonds; and (iv) pay fhe costs of issuance of the Bonds. Estimated Sources and Uses of Funds: Sources of Funds Bond Proceeds Borrower Equity Contribution �nterest Earnings Total Sources of Funds Uses of Funds Construction and Installation Deposit to Debt Service Reserve Fund Capitalize interest Fund Costs of Issuance and Miscellaneous Costs Total Uses of Funds $2,825,000 944,600 8, 800 $3,778,40a $3,190,000 282,500 65,000 240, 900 $3,778,400 Fees: The Port Authority will receive a fee of .25% of the principal amount of the bonds at ciosing and .25% of the principal amount of the bonds on each anniversary of issuance. Conduit Financinq: The bonds wili be a conduit financing of the Authority and will not constitute or give rise to a liability of the Authority, the City of Saint Paul, or the State of Minnesota or a charge against their general credit or taxing powers. Recommendation: Approval of authorizing issuance of the approximately $3,000,000 tax exempt conduit revenue bond issue for eCullet Minnesota, SPE. 50563.v1 3 10-292 Resolution No. RESOLUTION OF THE PORT AUTHORITY OF THE CITY OF SAINT PAUL [eCullet] WHEREAS, it has been proposed that the Port Authoriry of ihe City of Saint Paul (the "Port Authority") issue its TaY Exempt Solid Waste Disposal Revenue Bonds (eCullet Project) Series 2010-1 (the "Bonds") in an agb egate principal amount not to exceed $3,000,000, and that the proceeds of such Bonds be loaned to a wholly owned subsidiary of eCullet Ina, a California corporation, to be formed (the `Borrower"), to finance (i) the acquisition and installation of glass recycling equipment to be used in connection with a glass processing facility (the "ProjecP') to be owned and operated by the Borrower in the City of Saint Paul, Minnesota (the "City"), (ii) certain costs of issuance of the Bonds, (iii) capitalized interest on the Bonds and (iv) a Debt Service reserve for the Bonds. WHEREAS, the Port Authority desires to facilitate the selective development of the City of Saint Paul and the metro east community, to retain and improve its tas base and to help it provide the range of services and employment opportwiities required by its population, and the Project will assist in achieving that objective by increasing the assessed valuation of the metro east community, helping to maintain a positive relationship between assessed valuarion and debt, and enhancing the image and reputation of the metro east communiry. WHEREAS, the Project will result in additional employment opportunities in the City of Saint Paul and the metro east community. WHEREAS, the Port Authority has been advised by representatives of the Bonower that long term conventional, commercial 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 would be significanfly reduced, and that it has been acting to date in anricipation that the Port Authority would favorably consider this financing proposal. WHEREAS, the Project and its financing has received an allocation of bonding authority from the State of Minnesota Department of Finance. WHEREAS, the Port Authority's Credit Committee has previously adopted a resolution giving preliminary approval to the proposed issuance of revenue bonds far the Project. WHEREAS, pursuant to the requirements of Section 147( fl of the Intemal Revenue Code of 1986, as amended, and pursuant to a notice 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 Bonds, at which public hearing all persons were given an opportunity to speak. WHEREAS, the Bonds will be issued and secured by the terms of an Indenture of Trust (the "Indenture"), between the Port Authority and U.S. Bank Nationai Association, as trustee (the "Trustee"). 6668183v2 10-292 WHEREAS, the Bonower and Port Authority will enter into a Loan Agreement dated the same date (fhe "Loan A�eemenY') among the Port Authoriry and the Borrower, in wkaich the Bonower agrees, among otker things, to make payments to the Port Authorit}� to cover debt service on the Bonds. VJHEREAS, the Bonds and the interest on the Bonds shall be payable solely from the revenue and collateral pledged therefor, and shall not constitute a debt of the Port Authority within the meaning of any constihxtional or statutory limitation of indebtedness, nor shall the Bonds constitute or give rise to a pecuniary liability of the Port Authority or the City or a charge against their general credit or taxing powers and shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Port Authority or the City other than its interest in said Project. WHEREAS, it is intended that interest on the Bonds be excluded from a oss income of the holders thereof for federal income tax purposes. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE PORT AUTHORITY OP THE CITY OF SAINT PAUL, AS FOLLOWS: 1. On the basis of information available to the Port Authority it appeazs, and the Port Authority hereby finds, that: the Project constitutes properties, used or useful in connection with one or more revenue producing enterprises engaged in any business within the meaning of Minnesota Statutes, Sections 469.152 to 469.165 (the "Act"); the Project furthers the purposes stated in the Act; and it is in the best interests of the port district and the people of the City of Saint Paul and in fixrtherance of the general plan of development to assist the Bonower in financing the 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 Bonds, and provided that the Project and its financing receive approval by the Departrnent of Employment and Economic Development ("DEED"), the Port Authority hereby authorizes the issuance, sale and delivery of the Bonds in an aggregate principal amount not to exceed $3,000,000. The Bonds shall bear interest at such rates, sha11 be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, and sha11 be in such form and have such other details and provisions as map be prescribed in the Indenture, substantially in the form now on file in the offices of the Port Authority. 3. Neither the Bonds, nor the interest thereon, shall constitute an indebtedness of the Port Authority or the City within the meaning of any constitutional or statutory debt limitation; nor shall they constitute or give rise to a pecuniary liability of the City, the Port Authority or a charge against their general taYing powers and neither the full faith and credit nor the gene�al taacing powers of the City ar the Port Authority is pledged to the payment of the Bond or interest thereon. 4. Forms of the following documents have been submitted to the Port Authority for review and/or approval in connection with the sale, issuance and delivery of the Bonds: a. the Indenture; b. the Loan Agreement; c. the Bonds; 6668183v2 2 10-292 d. the Preliminary Officiat Statement used to market the Bonds (the `Officiai StatemenP'); e. the T� Regulatory A�eement to be entered into among the Port Authority, the Borrower and the Trustee; and f. the Bond Purchase Agreement to be entered into among the Bonower, the Port Authority and Piper Jaffray & Co. (collectively, the "Documents"). 5. It is hereby found, determined and declared that: a. The issuance and sale of the 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, and of a11 other acts and things required under the Constitution and laws of the State of Minnesota to make the Docuxnents and the Bonds valid and binding obligafions of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Sections 469.152 through 469.165, as amended (the "Act"); b. It is desirable that the Bonds be issued by the Port Authority upon the general terms set forth in the Documents, as applicable; c. 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 or the Port Autharity 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 and the City which have been piedged to the Trustee under the Indenture; the Bonds shalt not constitute a charge, lien or encumbrance, legal or equitable, upon 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 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 or the Port Authority within the meaning of any constitutional or statutory limitation. 6. The forms of the Documents and e�ibits 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 and Chief Financial Officer of the Port Authority, or such other officer as may be appropriate in the absence of either the President or Chief Financial Officer, are hereby authorized and directed to execute the Documents (to the extent the Port Authority is a pariy thereto) in substantially the forms submitted, as modified pursuant to paragraph 8, and any other documents and certificates which in the opinion of Port Authority staff and Bond Counsel are necessary or desirable to the transaction herein described, nrovided that the Bonds shall be executed by the 666S183v2 3 io-292 Chair and Secretary of the Port Authority. 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 indi��iduals who were at the time of execurion thereof the authorized officers of the Port Authoriry shall bind the Port Authority, notwithstandin� that such individuals or any of them has ceased to hold such office or offices prior to the authentication and delivery of the Bonds. Copies of all of the documents necessary to the transaction described shall be delivered, filed and recorded as provided herein and in the Indenture. 7. The President and other officers of the Port Authority aze authorized and directed to prepare and furnish to the Underwriter and Bond Counsel certified copies of proceedings and records of the Port Authority relating to the issuance of the Bonds and other transacfions herein contemplated, and such other affidavits and certificates as may be required to show the facts relating to the legality of the 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 known to them; and all such certified copies, certificates and affidavits, including any heretofore fumished, shali constitute representations of the Port Authoraty as to the truth of all statements contained therein. 8. The approval hereby given to the various Documents referred to above includes approval of such additional details therein as may be necessary and appropriate, and such modifications thereof deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Port Authority's President and Chief Financial Officer; and includes approval of, among other things: a. establishment of the final principal amount of the Bonds; b. the establishxnent of the maturity schedule and call provisions to be applicable to the Bonds; and c. such related instnxments as may be required to satisfy the conditions of any purchaser of the Bonds. 9. The Port Authority hereby consents to the distribution of the Official Statement, as such O�cial Statement is finalized with the participarion of Port Authority management and Bond Counsel. The proposal of the Underwriter to purchase the Bonds upon the terms and conditions set forth in the Bond Purchase Agreement is hereby found and deternuned to be reasonable and are hereby accepted. 10. The authority to approve, execute and deliver future amendments to financing documents entered into by the Port Authority in connection 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 holder of the Bonds or such consent as may be required has been obtained; (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 conh ar violate any policy of the Port Authority; and (d) such amendments are acceptable in form and substance to Bond Counsel. The execufion of any instntment by the President of the Port Authority shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. 6668183v2 4 10-292 11. 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 officer, agent or employee of the Port Authority in that persons individual capacity, and neither the Board of Commissioners nor any officer executing the Bonds sha11 be liabte personally on the Bonds or be subject to any personal liability or accountabilit�� by reason of the issuance thereof. Adopted: March 23, 2010. ATTEST: By Its Secretaiy PORT AliTHOl2ITY OF THE CITY OF SAINT PAUL Bv Its Chair 6668183v2 5