97-1168Sw�, �-�.-�G - ,ot � � q �
Council File # �� — � 1 �$
Green Sheet #
Ordinance #
ORDINANCE /7
�AINT PAUL, MINNESOTA
Presented by
Referred To
Committee Date
An ordinance granting authority to the Port Authority of the City of Saint Paul to
issue and sell bonds in the aggregate principal amount which will produce net available
funds to be applied to the costs of the Project of $13,80�,QQQ, but in any event not to
exceed the initial principal amount of $14,650,000, and any bonds to refund such bonds,
to secure such bonds with a pledge of the full faith, credit and resources of the City of
Saint Paul, and to use the proceeds derived from the sale of such bonds to pay the cost and
expense necessarily to be incurred by said Port Authority for acquisition of land,
clearance, remediation, and improvements in the Plasrics, Inc. Redevelopment Tax
Increment Dishict pursuant to the provisions and by authority of Minnesota Statutes,
Chapter 469, as amended, and prescribing the amount and form of such bonds and the
manner far establishing the rate of interest thereon; and authorizing the execution af a
Joint Powers Agreement in connection with the Project, which will provide for the
conh of funds to the Project.
WHEREAS, on September 23, 1997 the Port Authority of the City of Saint Paul {the "Port
Authority") adopted its Resolution No. 3656, finding that certain lands were blighted and marginal
properties within the meaning of Minnesota Statutes, Sections 469.048 et seq., and establishing and
creating the Citgo(Shepard Road Industrial Development District; and
WHEREAS, the City of Saint Paui, Minnesota (the "City"), has authority under Minnesota
Statutes, Section 469.178, Subd. 2, to issue general obiigation bonds payable from taa� increments of a tax
increment district created by the Port Authority, and the Port Authority has authority under Minnesota
Statutes, Secrion 469.060, to issue bonds for its purposes in anticipafion of income from any source which
aze secured by the fu11 faith, credit and resources of the City, and pursuant to this Ordinance, the Port
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Authority wiil issue bonds to which are pledged both t� increments and the full faith, credit and
resources of the City (the "Series A Bonds'� ; and
VJF�REAS, the Port Authority has authority under Minnesota Statues, Sections 469.060 and
475.61 to undertake a program of issuing temporary obligations to be refunded by long-term obligations
at a later date, and which are secured by the full faith, credit and resources of the City; and pursuant to
this Ordinance, the Port Authority will issue bonds to which aze pledged the fuil faith, credit and
resources of the City and the proceeds of any grants received by the Port Authority or the City for the
Project, as defined below (the "Series B Bonds," and together with the Series A Bonds, the "Bonds"); and
WIIEREAS, the Port Authority has requested the authorization of the Council of the City of Saint
Paul (the "Councii"), pursuant to Minnesota Statutes, Section 469.060, for the issuance and sale by the
Port Authority of the Bonds in the aggregate principal amount which will produce net available funds to
be appiied to the costs of the Project of at least $13,800,000 but in any event not to exceed the initial
principal amount of $14,650,000, and for the pledge of the fuli faith, credit and resources of the City to
the payment of such Bonds, which Series A Bonds will also be secured by tas increments to be derived
from the Plasrics, Inc. Redevelopment Tax Increment Financing District (the "District"), and which Series
B Bonds will also be secured by any grants obtained by the City or flie Port Authority in connection with
the Project, as defined below; and
WHEREAS, the establishment of the District was approved by the Ciry by resolurion adopted on
September 24, 1997; and
Wf�REAS, the Bonds will be issued for the ptuposes of paying or reimbursing the costs and
expenses necessarily incurred by the Port Authority for acquisition, clearance, remediation, and
improvements within the Dishict which aze to be undertaken to facilitate the construction of a
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manufachuing and distribution facility in the District for Plastics, Inc., and the move of Plastics, Inc.,
from its current location at Chestnut and Ryan Streets to the Dishict (the "Project"), and then for all other
purposes authorized by authoriry of Minnesota Statutes, Chapter 469, as amended (the "AcP'), with
respect to the Project; and
WHEREAS, it is the preference of the City to avoid the collection of generai tax levies to pay the
Bonds prior to the time tax increments are received from the District, and for the Port Authority, as issuer
of the Bonds, to avoid such tas levies by capitalizing interest and rolling over temporary obligations (as in
a commercial paper program), and by levying pursuant to Minnesota Statutes, Secfion 475.61; and
WHEREAS, the Council of the City (the "Council"), being duly advised 'm the premises, fmds
and detemvnes that it is necessary and appropriate that the Port Authority issue and sell bonds of the Port
Authority in the aggregate initial principal amount not to exceed $14,650,000 for the purposes as stated
above; and
WHEREAS, on the basis of the foregoing, it is now the intenrion of the Council to grant authority
to the Port Authority far the issuance of the Bonds, to prescribe the manner for establishing the amount,
maturity schedule, rates of interest, and the ntaximum rate of interest, to be bome by the Bonds; to
authorize the Port Authority to establish the date, denomination, place of payment and other details of the
Bonds, including the form of the Bonds, in the manner provided 'm this Ordinance; and to authorize and
consent to the pledge by the Port Authority of the full faith, credit and resources of the City to the
payment of the Bonds as the same shall be issued and sold by the Port Authority, pursuant to the authoriry
of the Act, and pursuant to the authority granted by this Ordinance; and
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WI�REAS, in connection with the crearion of the District and the financing of the Project, it is
proposed that the City and the Port Authority enter into a Joint Powers A�eement to set forth the duries
and responsibiliries of each in connecfion with the Project:
NOW, TF�REFORE, TI-� COUNCIL OF TI� CITY OF SAINT PAUL DOES ORDAIN:
Section 1
Authorization of Bonds. That subject to, and in accordance with, the applicable provisions, terms
and conditions of this ordinance and those contained in Section 469.060 of the Aci, authority is hereby
granted to the Port Authority far the issuance and sale of its Bonds in the aggregate principal amount set
forth in Section 2 and the use of the proceeds of such Bonds first for the acquisition, clearance,
remediation and consiruction of improvements on land within the District as contemplated by the Tax
Increment Financing Plan for the Bistrict (the "Plan"), and then for all other purposes authorized by the
Act with respect to the Project.
Section 2
Establishing_Terms of the Bonds. That the Port Authority is hereby authorized to establish the
date, denomination, place of payment, form and details of the Bonds, provided that the Bonds shall be
issued and sold by the Port Authority as tax exempt andlor taxable Bonds in one or more series, in the
manner provided and allowed by law; the Series A Bonds in the principal amount of approximately
$6,6QQ,Q00 (which, after subtracting costs of issuance and capitalized interest, will provide net available
funds for the Project in ihe amount of $6,150,000) shail be secured by a first lien pledge of the tax
increments to be received by the Port Authority from the District, and the Series B Bonds shali be secured
by a pledge of any grant proceeds received by the Port Authority or the Ciiy with respect to the Project;
the nutial principai amount of the Bonds sha11 not exceed $14,650,000; the Bonds sha11 mature in the
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atnounts and years and beaz interest at the rate ar rates per annum, including rates which vary in
accordance with a formula, established by the offer to purchase the Bonds which is determined to be the
most favorable by a Pricing Committee comprised of the President and the Chief Financial Officer of the
Port Authority and the Treasurer and the Deputy Mayor of the City, provided that the average annual
weighted interest rate of the Bonds shall not exceed nine percent (9%) per annum payable semi-annually
unless such higher average annual weighted interest is specifically approved by a resolufion adopted by a
majority of the members of the Council; and the proceeds from the issuance and sale of the Bonds as
received by said Port Authority shall be used first to pay or reimburse the costs of the acquisition,
clearance, remediation and construction of improvements on land within the District as described in the
Plan, and then for all other purposes authorized by the Act with respect to the Project. T'he Bonds may be
made subject to redemption and prepayment at the option of the Port Authority at such time and price or
prices as shall be determined by the Port Authority and approved by the Fricing Committee described
above and upon such notice as is required by law. It is recognized that Secfion 469.060 of the Act
provides that the Bonds must be in the amount and form and bear interest at the rate set by the Council,
that the Port Authority with the consent of the Council shall set the date, denominations, place of
payment, form, and details of the Bonds and that the Council is required to decide whether the issuance of
the Bonds by the Port Authority is proper and if so, the amount of Bonds to issue, and that the Council is
required to give specific consent in the Ordinance to the pledge of the City's full faith, credit and
resources to the Bonds. The standards and delegation to the Pricing Committee set forth herein are
intended as such full required acrion of the Council, and except as provided herein no fiirther approval of
the Council is required for the issuance or refunding of the Bonds under Secrion 464.060 of the Act.
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Section 3
Pled�e of Full Faith and Credit. That as security for the prompt and faithful payment of both
principal and interest of said Bonds in an amount not to exceed $14,650,000 (except upon a refunding
authorized by Section 6 hereo fl, the Port Authority is hereby authorized to pledge the full faith, credit and
resources of the City of Saint Paut; and such Bonds, both in respect of the principal amount of the same
and with respect to the interest thereon, may be paid by the Port Authority from tax levies provided
therefor in accordance with Section 4 hereof.
Section 4
Taix .e . That the Port Authority, in the event of the issuance of any said Bonds authorized
hereunder, sha11 before the issuance of the same, levy for each yeaz, until the principal and interest are
paid in full, a direct annual tax on a11 the taxable property in said City of Saint Paul, in an amount not less
than 5% in excess of the sum required to pay the principal and interest of the same when and as such
principal and interest mature and, after such Bonds have been delivered to the purchasers, such ta�t shall
be urepealable until all such indebtedness is paid, and after the issuance of such Bonds no fiuther action
by said Port Authority shall be necessary to authorize the extensions, assessments and collection of such
tax. That the Secretary of said Port Authority shall forthwith furnish a certified copy of such levy to the
County Auditor of Ramsey County, Minnesota, the county in which said Port Authority and said City are
located, together with full informarion regarding the Bonds of said Port Authority for which the tax is
levied and such County Auditar sha11 eatend and assess the ta�c so levied, and shall do so annually untii
the principal and interest have been paid in full. That any surplus resulting from the excess levy therein
provided sha11 be transferred to a sinking fund after the principal and interest for which the t� was levied
and collected has been paid; provided, that said Port Authority shall, on or befare September 15 in any
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yeaz, by appropriate action cause its Secretary to certify to the said Counry Auditor the amount on hand
and available in its own treasury or in hust from tas increments derived from the Plastics, Inc.
Redevelopment TaY Increment Financing District, grants of federal or state funds received for the Project,
earnings or other income, including any amounts in the sinking fund, which it will use to pay the principal
and interest or both on each specified issue of the Bonds and the County Auditor shall reduce the levy for
that year herein provided for by that amount. That the amount of funds so acquired sha11 be set aside by
said Port Authority and be used for no other purpose than for the repayment of the principal and interest
on such Bonds. That a11 taxes being authorized to be levied under Minnesota Statutes, Section 469.060,
as amended, shall be coilected and remitted to the Port Authority by the Couniy Treasurer in accordance
with provisions of law governing the collection of other taxes and shall be used solely for the payment of
such Bonds when due.
Notwithstanding the foregoing provisions of this Section 4, taxes may be levied and canceled
or omitted in the manner provided by Minnesota Statutes, Section 475.61, to the extent legally
permissible.
Section 5
No Further Council Action. That said Port Authority may provide for the exercise of the authority
hereby granted for its issuance and sale of the Bonds in the aggtegate principal amount as provided in
Sections 2 and 6 hereof, for the aforesaid purposes, and ihe pledge of the full faith, credit and resources of
said City of Saint Paul, as security far the payment of the same, by its appropriate resolution, and without
further action of the Council. The authority to set the final principal amount, maturity amounts and
interest rates on the Bonds has been delegated to the Pricing Committee as provided in Section 2 hereof.
That in exercising the faregoing authority, the Port Authority shall make due compliance with all
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applicable requirements for this ordinance, said Section 469.060, Mimiesota Statues, as amended,
Sections 469.174 through 469.179, as amended, Chagter 475, Minnesota Statutes, as amended, and all
other applicable laws.
Section 6
Authorizarion of Refundine Bonds. Pursuant to and in accordance with the provisions, terms and
conditions of this Ordinance and the Act, authority is hereby granted to the Port Authority to issue and
sell Bonds as authorized by Minnesota Statutes, Section 469.060, in aggregate principal amounts
necessary for the purpose of securing funds as needed by the Port Authority to refund obligations issued
under this Ordinance, without any further action of the Council. The Pricing Committee shall have the
same role with respect to refunding bonds as is set forth in Section 2 for the nutial issuance of the Bonds.
The principal of the refunding bonds may exceed the principal of the bonds to be refunded to the extent
necessary and appropriate to pay interest thereon (including interest accruing as capital appreciation), to
pay costs of issuing the refunding bonds and to allow for discount upon sale, and to fund reserves and
capitalized interest for the refunding bonds.
Section 7
Joint Powers Agreement. In connecrion with the creation of the District and the financing of the
Project, the Council hereby approves the execution and delivery by the City of a Joint Powers Agreement,
to be entered into between the City and the Port Authority. The form of the Joint Powers Agreement is
approved substantially in the form submitted and on file in the offices of the City Council, with such
subsequent changes as may be approved by City staff, counsel and Bond Counsel as contemplated by this
Section 1. The Joint Powers Agreement shall contain provisions obligating ihe City to contribute certain
funds in the amount of $3,200,000 to the Project. The Mayor, City Clerk and the Director, Office of
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Financial Services, aze hereby authorized and directed to execute the doint Powers Agreement in
substantially the form submitted, as mod�ed pursuant to tlus Section 7, and any other documents and
certificates which in the opinion of the City staff, counsel and Bond Counsel aze necessary to the
transacrions herein described. The execution of any iustrument by the appropriate officer or officers of
the City herein authorized shall be conclusive evidence of the approval of such documents in accordance
with the terms hereof. The approval hereby given to the 3oint Powers Agreement 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
Director, Office of Financial Services of the City.
Secrion 8
Bffee6ve Date. That this ordinance shall take effect and be in force 34 days after the passage,
approval and publication. This ordinance is subject to the provisions of the Ciry's home rule charter
pertaining to the procedure for referendums on ordinances enacted by the governing body.
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1581542
Sv�s�:�..�e . td�Y` 97
Adopted by Councii:
Date Q r� � � \ °�`�
Adoption Certified by Council Secretary
By:
Apprc
By:
RequE
:
Form Approv Ci o y
By:
Approved by Mayor for Submission to Council
�
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Q�-11V1'
NOV � 11997
10
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Saint Paul Port Authori
9f1,i9, � GREEN SHEET
��— i tc�
N° _13499
INITIAVDA7E --�
.��.im.ircnavnarnvnc �OEPARTMENTOIRECTOR �GIT'CqUNGII _
K. 3ohnson, L. Hansen, B. Morin ^���N arvArroRwer / � CITYCLERK
NUMBEPFOR
NUST BE ON COUNCIL AGENOA BY (OATE) AOUTING ��ET OIRECTO � FIN. & MGL SERVICES DIR.
�R September Z4 1997 OHDEp (�MqyOR(ORASSISTANn �
l�
TOl'AL # OF SIGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATURE)
"'�'•""'°""°` Authorization £or the Port Authority to issue bonds in the principal amount nor
to exceed $14,650,000, which will produce at least $13,500,000 for project costs. Authorize
the Port Authority to pledge the City's general obligation to the £ull amount of these
bonds, a portion of which (approximately $6,000,000) wi11 also be secured by a first lien on
ApProve (A) or fleject (R)
_PV.NNIfJGCAMMISSION _CIVILSERVICECqMMISSION
_ CIB COMMITTEE _
pg STAFF _
_ DISTRICTCOUFT _
SUPPORTS WHICH COUNCIL O&IECTIVE>
Industrial Development
Whet,
PERSONAL SEAVICE CONTRACTS MUST ANSWER TME FOLLOWING QUESTIONS: taX
1. Has tPis per5on/firm ever worked under a contract tor this tlepartment? 1RCYEID
YES NO
2. Has this personflirm ever been a ciry employee?
YES NO
3. Does ihis persoNtirm possess a skill not normally possessetl by any current clry employee?
YES NO
Explafn at1 yes answers on separata sheef antl mtach to green sheet
Why):
Authorization of the issuance of this tax increment supported general obliqation debt
is necessary for the redevelopment and remediation of the Citqo site £or Plastics, Inc.
Plastics, Inc. will construct a 370,000 square foot manufacturing facility at the Citgo
site and retain and/or relocate 350 jobs in Saint Paul.
None
DISADVANTAGES
Plastics, Inc. will be forced to relocate out of the City of Saint Paul
DTALAMOUNT OFTRANSAC710N $ 16.650.000 COST/REVENUE BUDGETED(qRCLE ONE) VES
Tax Increment Financing, Note Payments,
1NDINGSOURCE POt2ritial GTant RECeig,t5. GO LeVV ACTNITYNUMBER
JANCIAL INFORMATION: (EXPLAIN)
NO
G�
LEONARD, STREET AND DEINARD
PROFESSIOYAL ASSOCIATIO!�'
October 22, 1997
Tammie S. Ptacek
612-291-3507
up3507 @emaill eonazd. com
VIA MESSENGER
Ms. Nancy Anderson
Council Reseazch
1 S West Kellogg Boulevard
310 City Hall
Saint Paul, Minnesota 55102
RE: Plastics Ordinance
Dear Ms. Anderson
As you know, the Ordinance for the Plastics project, is No. 17 on today's City Council agenda.
Enclosed please find the form of tkie Joint Powers Agreement to be considered by the City
Council in Section 7 of that Ordinance. The language of the Ordinance states that "the form of
the joint powers agreement is approved substantially in the form submitted and on file in the
offices of the City Council, with such subsequent changes as may be approved by City staff,
counsel and bond counsel as contemplated by this 5ection 7."
Please take whatever steps aze necessary to see that this document is on file, and is the docusnent
considered today by the City Council. Please call me if you have any questions.
Very truly yours,
LEONA�, 5TREET AND DEINARD
// vt�YS+�.t Q��` `�"'�._
�y � �n
Tarrimie S. Ptacek
/jl
Enclosure
cc's wio enc.: Carol Abbas
Tony Stemberger
Robyn Hansen
F I ��
22]O MINNESOiA WORLD �IhADE CENTER j0 EASi SEVENiH STREE"I SAINt PAUL� MINNESOTA SS IOI Z�1L �I2-222-7¢SS FAX 612-222-J6¢Q
1595264 O]
LAW OFFICES IN MINNEAPOLIS, SAINT PAUL AND MANKATO
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LS&D Draft 10122197
AGREEMENT RELATING TO PLASTICS, INC. PROJECT AND JOINT POWERS
AGREEMENT RELATING TO BONDS ISSUED THEREFOR
THIS AGREEMENT is entered into this day of 1997, by and
between the City of Saint Paul, Minnesota (the "City") and the Port Authority of the City of
Saint Paul (the "Port Authority").
RECITALS
A. On November 6, 1996, the City executed a Development Agreement (the
"Science Museum Development Agreement") with the Science Museum of Minnesota (the
"Science Museum"}, whereby the City and the Science Museum agreed to undertake the
construction of an approximately 300,000 square foot museum and 800 car pazking ramp on tlie
City's riverfront (the "Science Museum Project"). To facilitate the Science Museum Project, the
City has undertaken, in the Science Museum Development Agreement, to purchase certain
property, including the property on which Plastics, Inc. ("Plastics") presently operates a
manufacturing facility (the "Chestnut Site").
B. In order for the City to fully perform its undertakings under the Science Museum
Development Agreement, it is necessary to relocate Plastics.
C_ It is desirable, and in the best interests of the City, to provide a site for Plastics'
relocated manufactuting facility in the City, so that the approximately 250 yobs now supporked
by Plastics at the Chestnut Site, and an additional approximately 150 jobs now supported by
Plastics in Eagan, Minnesota, can be located in the City.
D. The Port Authority has identified an approximately 26-acre site located
approximately one mile to the west of downtown Saint Paul at Shepard Road and James Avenue
(the "Citgo Site"), as a possible site for the conshuction of a new manufacturing facility for
Plastics.
B. The proposed new Plastics facility (the "Plasrics Facility") will consist of an
approximately 375,000 square foot manufacturing and distribution facility which will have a
construction cost of approximately $12,480,000.
F. The Port Authority has created a Tax Increment Financing District encompassing
the Cifgo Site.
G. The Port Authority has proposed that the Plastics Facility be financed, in part, by
Bonds to be issued by the Port Authority in an initial principal amount of approximately
$16,650,000 (the `Bonds") as more fully set forth in this Agreement.
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H. The City proposes to (i) contribute to the Port Authority $2,700,000 from the
Science Museum budget for the purpose of acquisition of the Chestnut Site and $500,000 from
others sources in connection with the redevelopment of the Citgo Site and the relocation of
Plastics from the Chestnut Site to the Citgo Site, (ii) authorize the pledge of its full faith and
credit to the Series A Bonds and the Series B Bonds and, pursuant to the joint powers aspects of
this Agreement, cause the pledge of tas increments to the Series A Bonds, and (iii) through
certain reporting and consent rights granted to the City in this Agreement, determine that the
Budget (as defined herein) will be sufficient to accomplish the purposes of this Agreement.
L It is necessary and desirable to set forth the respective roles and responsibilities of
the City and the Port Authority in connection with the acquisition and preparation of the Citgo
Site, the issuance of the Bonds, and the relocation of Plastics, and this is the agreement
contemplated by Section 7 of the Ordinance (as defined herein).
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the parties hereby agree as follows:
Section 1. Authoritv. This Agreement is entered into under the authority of
Minnesota Staxutes, Sections 469.Q64, subdivision 1, and such other applicable statutory and
Charter provisions as aze consistent herewith. Section 3 of this Agreement is entered into
pursuant to Minnesota Statutes, Section 471.59.
Section 2. Definitions Capitalized terms used in this Agreement shall have the
meanings set forth in the preceding paragraphs or below, unless a different meaning clearly
appears from the conte�t:
Agreement: This Agreement, as the same may from time to time be amended or
supplemented.
Bond Indenture: The Indenture of Tzust between the Port Authority and the Bond
Trustee (and any related security agreements) pursuant to which the Bonds wi11 be issued and
secured.
Bond Trustee: The Trustee pursuant to the Bond Indenture.
Bonds: collectively, the Series A Bonds, the 5eries B Bonds and the NSP Note.
Budeet: The Plastics, Inc. Tax Increment Financing District Budget attached as Exhibit
A, as such Budget may be amended from time to time by the Port Authority in accordance with
this Agreement.
Cltv Contriburion: The $500,000 of City funds (other than Tax Increments and District
Revenues) to be contributed by the City to the Port Authority to be applied to Project Costs.
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Construction Fund: The fund required by Section 5(e) hereof, which will be held by the
Bond Trustee, and in which all funds to be applied to Project Costs shall be deposited.
Develo�ment Agreement: The Agreement to Convey Property and Development
Agreement dated as of , 1997 by and beriveen the Port Authority and Plastics.
District: The Plastics, Inc. Redevelopment Ta3c Increment Financing District, as set forth
in Appendix A to the Plan.
District Revenues: Any and all net revenues received by the Port Autharity from the sale
or lease of land within the Disuict and from the operation of public improvements provided for
in the Plan.
Memorandum of Intent: The Memorandum of Intent dated 7uly 14, 1997 between the
Port Authority and Plastics, as amended by the First Addendum to Memorandum of Intent dated
September 9, 1997.
NSP Note: the tax increment bonds to be issued by the Port Authority in the
approximate principal amount of $2,000,000, which will be secured by Tax Increments and by a
payment to ba made by Plasucs, which bonds shall be purchased by Northern SCates Power
Company, and any refunding or series of refundings thereof.
Ordinance: Ordinance No. 97-1168 adopted by the City authorizing the issuance by the
Port Authority of the 5eries A Bonds and the Series B Bonds.
Port Authoritv Contribution: The $500,000 of Port Authority funds (other than Tax
Increments and District Revenues) to be contributed and applied by the Port Authority to
Projects Costs.
Plan: the Tax Increment Financing Plan for the District which has been adopted by the
Port Authority and approved by the City, as amended fram time to time.
Proiect: the Port Authority's acquisition, site preparation, grading and filling,
demolition, environmental remediation, and other site improvements in the District required to
deliver the site to Flastics in the condition necessary for the construction of the Plastics Facility,
and the acquisition of the Chestnut Site.
Project Costs: All costs included as permissible capital costs in the Plan and the Budget,
including without limitation, the costs incurred in conneation with the Project by Yhe Port
Authority prior to the date of this Agreement.
Science Museum Contribution: the $2,700,000 previously approved by the City in the
Science Museum Budget to be applied to the purchase [by the City] of the Chestnut Site, and in
that regard, contributed to the Port Authority and applied to Project Costs.
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Series A Bonds: the General Obligation Tas Inczement Bonds to be issued by the Port
Authority pursuant to Minnesota Statutes, Section 469.060 and the joint powers agreement
contained in Section 3 hereof, in the approxunate principal amount of $6,600,000, which shall
be secured by Tax Increments and a City general obligation pledge, and any refunding or series
of refundings thezeof.
Series B Bonds: the General Obligation Bonds, to be issued by the Port Authority
pursuant to Minnesota Statutes, Sections 469.060, 475.79 and 475.61, Subdivision 6, initially in
the form of commercial paper [or some other forxn of temporary obligations], in the approximate
initial principal amount of [$7,900,000), which shall be secured by a City general obligation
pledge and the proceeds of any grants received by the City or the Port Authority in connection
with the Project, and any refunding or seties of refundings thereof.
Subdistrict Tax Increments: in the event a hazardous substance subdistrict is created
witlun the District, any tax increment derived from such hazardous substance subdistrict as a
result of a reduction in the original net tax capacity pursuant to Minnesota Statutes, Section
469.174, subdivision 7, paragraph (b), or as a result of the e�ension of the period for collection
of tax increment from the hazardous substance subdistrict provided for in Minnesota Statutes,
Section 464.176, Subdivision i, paragraph (g).
T� Increments: the tax increments derived from the District pursuant to Minnesota
Statutes, Section 469.177, and specifically including the Subdistrict Tax Increments
TaY Increment Bonds: collectively, the Series A Bonds and the NSP Note.
Section 3. Exercise of Joint Powers With Resoect to Series A Bonds
(a) Purpose and Statutory Authority. The Port Authority shall issue the Bonds
as contemplated by the Ordinance with respect to the Series A Bonds and the Series B
Bonds, and the resolution of the Port Authority with respect to the NSP Note. The Port
Authority and the City shall exercisejoint powers in issuing the Series A Bonds. With
regard to the Series A Bonds, the City has authority under Minnesota Statutes, Section
469.178, Subdivision 2, to issue general obligation bonds payable from tax increments
from the District created by the Port Authority, and the Port Authority has the authority
under Minnesota Statutes, Section 469.06Q to issue bonds for its purposes, in
anticipation of income from any source, which are secured by the full faith, credit and
resources of the City. The joint powers utilized in the issuance of the Series A Bonds,
include the City's power to levy taxes net of the estimated pledged revenues as provided
in Minnesota Statutes, Section 475.61, Subdivision 1.
(b) Method of Achievin� Purpose: Manner of ExercisingPowers. The City
and the Port Authority shall exercise their powers jointly by adopting, approving and
executing such common or concurrent resolutions, documents and agreements as shall be
necessary or convenient to the issuance of the Series A Bonds.
1550039 48 �
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Section 4. Actions under Ordinance. The Pricing Committee established by Section
2 of the Ordinance shall be involved in the initial issuance of the Series A Bonds and the Series
B Bonds, and any refunding or series of refundings thereof. It is understood that the Pricing
Committee performs functions of the City Council, and in the event of any inability of the
Pricing Committee to perForm its functions as required under the Ordinance, such matters will
revert to the Ciry Council for its action in setting the rate or consenting to the terms of the Series
A Bonds and the Sezies B Bonds.
Section 5. Port Authority Obli¢ations. The Port Authority has created, and sha11
administer and operate, the District in accordance with Minnesota Statutes, Sections 469.174 to
469.179. In connection with the creation, administration and operation of the District and the
financing of the Project, the Port Authority shall have the sole duty and responsibility to do the
following:
(a) use its best efforts to negotiate and execute purchase agreements with
Citgq and any other parties owning property in the District, to purchase, or obtain
necessary easements over, all of the property in the District;
(b) if necessarp, acquire through eminent domain property within the District
that cannot be acquired by negotiations, but is required for implementation of the Plan;
provided, however, that the Port Authority shall not be liable for noncompliance with
this paragraph (b) in the eeent there is a court challenge with regard to the public purpose
of the condemnation;
(c) negotiate and execute all necessary documents to transfer title to certain
property in the District to Plastics, including specifically any development agreement that
the Port Authority deems necessary in furtherance of the Project; provided, that the
Development Agreement shall require ritle to tbe Catgo Site to be transferred by the Port
Authority to Plastics on or before [August 15, 1999] (subject to Unavoidable Delay as
defined in the Development Agreement), and the Port Authority shall not amend the
Development Agreement with respect to that date, without the consent of the City;
(d) Enter into contracts for the demolition, clearance, grading and filling,
environmental remediation or other site improvements within the District;
(e) create the Construction Fund to be held and maintained by the Bond
Trustee for the Port Authority, in which funds obtained by the Port Authority for the
Project (including proceeds of the Bonds, the City Contribution, and the Port Authority
Contribution) shall be deposited; and from which funds shall be applied by the Port
Authority oniy for Project Costs or other eligible costs, but specif"ically excluding the
Seience Museum Contribution, which shall be applied by the City to the purchase of the
Chestnut Site;
7550039.08 5
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(fj to the extent necessary, create a separate fund to hold funds to be applied
to Project Costs which are received prior to the issuance of the Bonds, and transfer such
funds to the Bond Trustee upon issuance of the Bonds;
(g) provide the City with quarterly reports on the progress of the Project, in
the form attached hereto as Exhibit B, and with copies of all reports provided to or by the
Bond Trustee;
(h) deposit the Port Authority Contribution in the Construction Fund, at the
following tunes and in the following asnounts:
on or before Aun st 1, 1999 $300,000
on or before August 1, 2000 100,000
on or before August l, 2001 lOQ,000
(i) issue the Bonds in accordance with the Bond Indenture and the Ordinance,
levy such taYes for the payment of the Series A Bonds and the Series B Bonds as
required by law, pap costs of issuance in connection with the issuance of the Bonds from
the proceeds of the Bonds, and deposit the net proceeds of the Bonds in the Construction
Fund; provided, that to the e�ent Bond proceeds are insufficient to pay all costs of
issuance, the City shall be responsible for paying the fees of its counsel and its financial
advisor;
(j) receive and use District Revenues and Tax Increments pursuant to the
Pian and this Agreement;
(k) prepare and su6mit a11 reports with regazd to the District as required by
Minnesota Statutes, Sections 469.174 through 469.179, with a copy to the City;
(1) apply to the Department of Trade and Economic Development and the
Metropolitan Council ta obtain grants for pollution clean-up in the District, use its best
efforts to obtain such grants, and deposit proceeds of any such grants in the Construction
Fund for use in the payment of Project Costs, or to pay or prepay the 5eries B Bonds, as
provided in Section 9;
(m) perform the necessary staff work in connection with the preparation of an
application to be made by the City to obtain a grant in the approximate amount of
$SOQ000 from the Minnesota Investment Fund, and request the City to take the
necessary steps in order to apply for such grant, pursuant to Section 6(c);
(n) cause the Citgo Site to be included within the Crosby Lake Project Gemini
Zone, as authorized in the resolution of the City adopted on September 24, 1997;
(o) in the event the qualified local conuibution made in connection with the
District pursuant to Minnesota Statutes, Section 273.1399, Subdivision 6(d), is
1550039.08 6
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determined to be insufficient to avoid the LGAlHACA penalty, conuibute such
additional amounts from eliglble sources as are necessary in order to avoid such
LGA/HACA penalty;
(p) acquire ritle, either pwsuant to the Development Agreement or through
the use of eminent domain, to the Chestnut Site (as fuzther described in Exlubit C
hereto}, and convey the same to the City in accordance with the provisions of the
Development Agreement ; provided, however, that the terms of the Development
Agreement will be substantially the same as or more favorable to the Port Authority than
the terms of the Memorandum of Intent, and the timetable provided for, and the purchase
price of, the acquisition of the Chestnut Site set forth in the Development Agreement
may not be slower, or more expensive, than that set forth in the Memorandum of Intent,
without the consent of the City;
(q) exercise any and all of its powers which aze deemed necessary or convenient
by the Port Authority to administer or operate the District and to carry out the Project,
subject to the terms and conditions of this Agreement.
Section 6. City Obligations. The parties hereto agree that the City shall have the sole
duty and responsibility to do the following in connection with its contribution to the financing of
the Project:
(a) pay the City Contribution to the Port Authority for deposit in the
Construction Fund at the following times and in the following amounts'
on or before August 1, 1999 $300,000
on or before August 1, 2000 100,000
on or before August 1, 2001 100,000
(b) pay to the Port Authority at the time of acquisition of the Chestnut Site t4ie
Science Museum Contribution; [provided, that in the event the purchase agreement
entered into by the Port Authority in connecrion with the acquisition of the Citgo Site
requires an escrow to be funded at the time of closing, in an amount expected to cover
the costs of environmental remediation, the City shali provide to the Port Authority the
amount necessary to fund such escrow at the time required by the purchase agreement,
and such amount shall be deemed an advance of the Science Museum Contribution, and
will be repaid to the City in full upon issuance of the Bonds;]
' The Development Agreement could provide for the detailed procedures with regard to the Vansfer of title. At
ihis poini, the Ciry has suggested that title be transfened directly to the Ciry, with the City then leasing the
properry to the Port Authority, and the Port Authoriry subleasing to Plastics. This proposal needs to be discussed
rrith Bill Morin, �uho is out of the office unfll Tuesday.
z This assumes this agreement is entered into prior to the issuance of the Bonds.
155��39A8
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(c) take the actions requested by Port Authority staff pursuant to Section 5(m}
to apply for a grant in the approximate amount of $500,000 from the Minnesota
Investment Fund on or before March 1, 1998; and
(d) provide to the Port Authoriry upon request any information necessary to
the adminisuation of the Disuict and the filing of reports required by Minnesota Statutes,
Sections 469.174 through 469.179.
Section 7. Sources of Funds. The sources of funds for the implementation of the
Project, the payment of Project Costs and the administration and operation Qf the District include
Bond proceeds, Taa� Increments, District Revenues, the Port Authority Contribution, the City
Contribution, the Science Museum Contribution, federal and state grants, and such other funds
and revenues as may be made available for such purpose, and neither the Port Authority nor the
City shail be obligated to provide any additional funds for such purposes, except as might be
jointly agteed.
Section 8. Budget and Disbursements from Construction Fund. The Budget has been
approved by the Port Authority, and establishes a maximum principal amount and line item
amounts of Tax Increments, Bond proceeds or other amounts to be used for the Project; provided
that the Port Authority may, in its sole discretion, increase or decrease line items in the Budget
so long as ihe total Budget does not increase, and , provided furCher, that any such change is
consistent with the Plan as amended from time to time. In the event the total of the "Over
(Under) Projected" column shown on the quarterly report submitted to the City pursuam to
Secrion 5(g) is at any time a positive number in excess of $250,000, the Port Autharity shall not
make any additional expenditures in connection with the Project without the consent of the City.
In such event, the Port Authority and the City sha11 work together in good faith to determine
whether or not the Project shouid go forwazd, and in the event it is decided that the Project
should go forward, to identify and implement potential, and mutually agreeable, additional
sources of funding to allow completion of the Project. The Bond Tzustee, as directed by the Port
Authority, shall disburse funds from the Construction Fund in accordance with the Budget.
Contracts shall be let and purchases sha11 be made by the Port Authority subject to the same
procedures as govern the letting of other conuacts and the making of other purchases by the Port
Authority.
Section 9. LTse of TaY Increments. District Revenues, and Crrant Proceeds. (a) The
TaY Increments and District Revenues shall be applied for the following purposes and in the
following order of prioritp:
(i) payment of the Series A Bonds;
(ii) payment of the NSP Note;
(iii) payment of the administrative expenses of the Port Authority to the extent
allowed by law;
1550039.c18
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(iv) prepayment of the NSP Note; and
(v) payment of other eligible costs, with the consent of the City
(b) Debt service payments shall include all out of pocket costs, such as trustee,
paying agency and bond registrar fees and rebatable azbitrage payments incurted by the Port
Authority in carrying the Bonds and reimbursement of the Port Authority for any such payments
made from Port Authority funds.
(c) All TaY Increment shall vest in and be remitted duectly to the Port Authority or
the Bond Trustee as may be required by the Bond Indenture, and the Port Authority or such
Bond Trustee sha11 segegate the Tax Increments so received in one or more special accounts on
its official books and records to be used only in accordance with the Plan, the Budget, the Bond
Indenture, and this Agreement in accordance with the priorities and subject to the limitations
established in tkus Section 9.
(d) Notwithstanding anything in this Agreement to the contrary, the Port Authority
reserves the right to issue such other bonds and provide other financing for purposes of the Plan
and to undertake such other improvements and projects in the District, in addition to those
contained in or authorized by the Plan, as the Port Authority deems appropriate, provided,
however, such other bonds, financing and improvements or projects shall not be subject to
payment or reimbursement from Tax Increments or Disttict Revenues unless provided for in the
Budget and Plan, and with respect to Tas Increments, approved by the City if the Series A
Bonds or Series B Bonds remain outstanding. Prior to exercising the rights reserved to the Port
Authority under this pazagraph, for purposes of the Plan, the Port Authority shall notify the City
in writing of its intent to exercise said rights and shall consult with the City prior to issuing
bonds or providing other such Pmancing.
(e) Proceeds derived from state or federal grants obtained by the City or the Port
Authority in connection with the Project shall be applied first to pay or prepay an applicable
portion of the Series B Bonds, and thezeafter to the payment of Project Casts.
Section 10. Application of Subdistrict Tax Increments. In the event the Subdistrict is
created, Subdistrict TaY Increments shall be applied for costs of the Project as allowed by
Minnesota Statutes, Section 469.176, Subdivision 4e.
Section ll. Term of A�reement; Termination. This Agreement shall continue in
effect until terminated in accordance with this section. This Agreement may be terminated at
any time by agreement of the City and the Port Authority except that the relevant portion of this
Agreement may not be terminated while any Bonds are outstanding unless sufficient funds have
been irrevocably deposited in the debt service account or the escrow account to pay debt service
on the Bonds to maturity or date of redemption.
Section 12. Distribution of Funds and Pro e�rtv on Termination. Upon termination of
this Agreement, any Tax Increments received by the Port Authority in excess of the amount
issoose.os 9
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necessary to pay debt service on the Ta�c Increment Bonds and satisfy all other reimbursement
and funding requirements set forth in Section 9(a), clause (i) through (v), shall be (a) used, to the
e�tent permitted by 1aw and to the eatent that the District would remain exempt from the
LGAlIIACA penalty, to reimburse the Port Authority and the City for the'u contributions to the
Project, in the following order of priority: (i) the Science Museum Contributian; and (ii) pro
rata, to the City and the Port Authority, untii they have each been reunbursed for their respective
$500,000 contributions, and (b) to the e�tent any amounts remain after the application of clause
(a), transferted to and become the property of the Port Authority without payment of any further
consideration to the City and ail other property acquired and held by the Port Authority or the
City pursuant to this Agreement shall be retained by the pazty holding title thereto.
Section 13. Amendments. This Agreement may be amended by agreement of the City
and Port Authority in writing at any time. No amendment may impair the rights of the holders
of any of the Bonds unless consent is given in accordance with the Bond Indenture.
Section 14. Severabilitv. In the event any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provis3on hereof.
Section 15. No Joint Venture. The City has a limited involvement, as provided in this
Agreement, with the Project, and nothing in this Agreement shall be construed to create any
partnership or joint venture between the Port Authority and the City. Neither party hereto shall
have the right to bind or obligate the other in any way or manner unless otherwise provided for
herein.
1550039.08 1 �
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IN WIT`NESS WHEREOF, the City of Saint Paul has caused this Joint Powers
Agreement to be executed on its behalf by its Mayor, its City Clerk and its Director, Office of
Financial Services; and the Port Authority of the City of Saint Paul has caused this Agreement to
be executed on its behalf by its Chair and its Secretary, all as of the day and yeaz first above
written.
APPROVED AS TO FORM: CITY OF SAINT PAUL
Assistant City Attorney Mayor
City Cierk
Director, Office of Financial Setvices
issoo�s_oa 1 1
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PORT AUTHORITY OF 'I'I�
CITY OF SAINT PAUL
Chair
By
Secretary
Signature page to Joint Powers Agreement
1550039.08 1 �L
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[Budget]
issoos9.os A-1
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PORT AUTHORITY OF THE CITY OF SAINT PAUL
PLASTICS, INC. REDEVELOPMENT TAX INCREMENT DISTRICT
EXPENSE DETAIL THRU
Expense
Codes
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Council File # ( g"
Green Sheet # � �
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Presented by
Referred To
Ordinance #
�ORDINANCE
�SAIAIT PAU.L,�
I�l
�7
Date
An ordinance granting authority to the Port Authority of City of Saint Paul to issue and
seli bonds in the aggregate principat amount which will produce et available funds to be applied to
the costs of the Project of $13,800,000, but in any event no to exceed the principal amount of
$14,650,000, and any bonds to refund such bonds, to sec such bonds with a pledge of the full
faith, credit and resources of the City of Saint Paul, and to e the proceeds derived from the sale of
such bonds to pay the cost and expense necessarily t be incurred by said Port Authority for
acquisition of lands, clearance, remediation, and impro ements in the Plastics, Inc. Redevelopment
TaY Increment Dishict pursuant to the provisions by authority of Minnesota Statutes, Chapter
469, as amended, and prescribing the amount d form of such bonds and the manner for
establishing the rate ofinterestthereon.
WFIEREAS, on September 23, 1997 the Port
adopted its Resolution No. _, fmding that
of the City of Saint Paul (the "Port Authority")
were blighted and mazginal properties within the
meaning of Minnesota Statutes, Secfions 469.048 seq., and establishing and creating the CitgoJShepazd Road
Industrial Development District; and
WHEREAS, the City of Saint Pa , Minnesota (the "City"), has authority under Minnesota Statutes,
Section 469.178, Subd. 2, to issue
created by the Port Authority,
issue bonds far its purposes
obligation bonds payable from taY increments of a tax increment district
Port Authority has authority under Minnesota Statutes, Section 469.060, to
of income from any source which aze secured by the full faith, credit
and resources of the City, d pursuant to this Ordinance, the Port Authority will issue bonds to which aze pledged
both taY increments the full faith, credit and resources of the City; and
the Port Authority has requested the authorizaUon of the Council of the City of Saint Paul,
pursuant to N�uxesota Statutes, Secrion 469.Q60, for the issuance and sale by the Port Authority of its bonds in the
amount which will produce net available funds to be applied to the costs of the Ptoject of at
least $13,800,000 but in any event not to exceed the principal amount of $14,650,000 (the "Bonds") and for the
J� � 07 7 f
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pledge of the fuil faith, credit and resources of the City to the payment of such Bonds, which Bonds will
secured by tax increments to be derived from the Plasrics, Irtc. Redevelopment Tas Increment
be
District
(the "District"), and any grants obtained in connection with the Project, as defined below, the e blishment of
which was approved by the City by its Resolution No. adopted on September 24, 199 ; and
WI3EREAS, the Bonds will be issued for the purposes of paying or reimburs' the costs and expenses
necessarily incurred by the Port Authority for acquisirion, clearance,
District which are to be undertaken to facilitate the conshuction of a
District for Plastics, Inc., and the move of Plastics, Inc. from its current
improvements within the
and distribution facility in the
at Chestnut and Ryan Streets to
the District (the "Project"), and then for a11 other purposes authorized authority of Minnesota Statutes, Chapter
469, as amended (the "Act") with respect to the Project; and
WHEREAS, the Council of the City (the "Council" , being duly advised in the premises, finds and
detemunes that it is necessary and appropriate that the Po Authority issue and sell bonds of the Port Authority in
the aggregate principal amount not to exceed $14,650,0 0 for the purposes as stated above; and
WI�EREAS, on the basis of the foregoing, t is now the intention of the Council to �ant authority to the
Port Authority for the issuance of the
schedule, rates of interest, and tYte
Authoriry to establish the date,
of the Bonds; and to authorize and
of the City to the payment of
to prescribe the manner for establishing the amount, maturity
rate of interest, to be borne by the Bonds; to authorize the Port
place of paymem and other details of the Bonds, including the form
to the pledge by the Port Authority of the full faith, eredit and resources
as the same sha11 be issued and sold by the Port Authority, pursuant to the
authority of the Act, and pur�s{�aant to the authority granted by this Ordinance.
�� �-07-��
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NOW, TI-IEREFORE, THE COUNCIL OF THE CITY OF SAINT PAUL DOES ORDAIN:
Section 1
Authori7ation of Bonds. That subject to, and in accordance with, the applicable
condifions of this ordinance and those contained in Section 469.060 of the Act, authority is
Port Authority for the issuance and sale of its Bonds in the aggregate principal amount
the use of the proceeds of such Bonds fust for the acquisition, clearance,
-ovisi , terms and
iex y granted to the
�rth in Section 2 and
and consirucrion of
improvements on land within the District as contemplazed by the Tas Increm t Financing Plan for the District
(the "Plan"), and then for all other purposes authorized by the Act with resp t to the Project.
SecUon 2
Establishing Terms of the Bonds. That the Port Authori is hereby authorized to establish the date,
denomination, place of payment, form and details of the
by the Port Authority as taY exempt and{or taxable
allowed by law; the Bonds in an amount of
will provide net available funds for the Project in
of the taat increments to be received by the
be secured by a pledge of any gant
which shall be subordinate to, in order
ta�c increment bonds issued by the
with the District; the initial
the amounts and years
with a formulae
Pricing Commii
Treasurer and
shall not xcee
that the $onds sha11 be issued and sold
one or more series, in the manner provided and
$6,600,000 (which, after subtracring costs of issuance,
of $6,150,000) shall be secured by a first lien pledge
from the District, and the remainder of the Bonds shall
received with respect to the Project and by a lien on tax increments
(i) such first lien, (ii) the payment of $2,000,000 of subordinated
Authority and soid to NSP, and (iii) administrative chazges in connection
amount of the Bonds sha11 not exceed $14,650,000; the Bonds shall mature in
interest at the rate or rates per annum, including rates which vary in accordance
by the offer to purchase the Bonds which is deternuned to be the most favorable by a
of the President and the Chief Financial Officer of the Port Authority and the
Deputy Mayor of the City, provided that the average annual weighted interest rate of the Bonds
percent (_%) per annum payable semi-annually unless such higher average annuai
interest is specifically approved by a resolution adopted by a majority of the members of the Council;
f� �-�7-q7
a �- � 4c�8'
and the proceeds from the issuance and sale of the Bonds as received by said Port Authority hall be used first to
pay or reimburse the costs of the acquisition, cleazance, remediation and constri.lction f improvements on land
within the District as described in the Plan, and then for all other purposes authorized y the Act with respect to the
Project. The Bonds may be made subject to redemption and prepayment at
time and price or prices as sha11 be detemuned by the Port Authority
described above and upon such norice as is required by law. It is
provides that the Bands must be in the amount and form and
Port Authoriry with the consent of the Council shall set
details of the Bonds and that the Council is required to
Authority is proper and if so, the amount of
consent in the Ordinance to the pledge of the
delegation to the Pricing Committee set forth
except as provided herein no further
Section 469.060 of the Act.
o£the Port Authority at such
approved by the Pricing Committee
that Section 469.060 of the Act
at the rate set by the Council, that the
denominafions, place of payment, form, and
whether the issuance of the Bonds by the Port
issue, and that the Council is required to give specific
faith, credit and resources to the Bonds. The standards and
are intended as such full required action of the Council, and
of the Council is required for the issuance of the Bonds under
Secrion 3
That as security for the prompt and faithfiil payment of both principal and
interest of said Bonds in an
the full faith, credit and
amount of the same
provided therefor and
noi to exceed $14,650,000, the Port Authority is hereby authorized to pledge
of the City of Saint Paul; and such Bonds, both in respect of the principal
respect to the interest thereon, may be paid by the Pon Authority from tax levies
by the Act.
Section 4
That the Port Authority, in the event of the issuance of any said Bonds authorized hereunder,
sttall
issuance of the same, levy for each yeaz, until the principal and interest aze paid in full, a direct
on all the taYabie properry in said City of Saint Paul, in an amount not less than 5°lo in excess of the sum
required to pay the principal and interest of the same when and as such principal and interest mature and, after such
�;��f7-�7
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Bonds have been delivered to the purchasers, such taY sha11 be urepealable until all such indebtedness is paid, and
after the issuance of such Bonds no further action by said Port Authority shall be necessary to authorize the
extensions, assessments and collection of such tax. That the Secretary of said Port Authority shall
fiunish a certified copy of such levy to the County Auditor of Ramsey County, Mimiesota, the county in
said Port Authority and said Caty are located, together with full informarion regazding the Bonds of
Authority for which the tax is levied and such County Auditor shall extend and assess the taY so
do so annually until the principal and interest haue been paid in full. That any surplus
levy therein provided shail be transfened to a sinking fund after the principal and interest
levied and collected has been paid; provided, that said Port Authority may, on or before
by appropriate acfion cause its Secretary to certify to the said County Auditor the
its own traasury from tax increments derived from the Plastics, Inc.
District, gZants of federal or state funds received for the Project, earnings
in the sinkiug fund, which it will use to pay the principal and interest
and the County Auditor sha11 reduce the levy for that yeaz herein
�d Port
and shali
ig�from the excess
/
which the tas was
ber 15 in any year,
on hand and available in
Tas Increment Financing
income, including any amounts
on each specified issue of the Bonds
for by that amount. That the amount of
funds so acquired shall be set aside by said Port Authority an e used for no other purpose than for the repayment
of the principal and interest on such Bonds. That a11 taac being authorized to be levied under Minnesota Statutes,
Section 469.060, as amended, shall be collected remitted to the Port Authority by the County Treasurer in
accordance with provisions of law governing e collection of other taaces and shall be used solely for the payment
of such Bonds when due.
Section 5
o Further Council A on. That said Port Authority may provide for the exercise of the authority hereby
granted for its issuance
the aforesaid
sale of the Bonds in the aggregate principal amount as provided in Secrion 2 hereof, for
and the pledge of the fuii faith, credit and resotuces of said City of Saint Paul, as security
for the paym�nt of the same, by its appropriate resolution, and without fiuther action of the Council. The authority
to set the final principal amount, maturity amounts and interest rates on the Bonds has been delegated to the
�r � �l-i�-97
°t1- L l(.i�
Pricing Committee as provided in Section 2 hereof. That in exercising the foregoing authority, the Port Authority
shatl make due compliance with all applicable requirements for this ordinance, said Section 469.Q60,
Statues, as amended, Sections 469.174 through 469.179, as amended, Chapter 475, Minnesota
amended, and all other applicable laws.
Section 6
Authorization of Refunding Bonds. Pursuant to and in accordance with the
conditions of this Ordinance and the Act, authority is hereby granted to the Port
Bonds as authorized by Minnesota Staxutes, Secfion 469.060, in aggregate
purpose of securing funds as needed by the Port Authority to refund
The principal of the refunding bonds may exceed the principal
necessary and appropriate to pay interest thereon (including
costs of issuing the refunding bonds and to allow for
interest for the refunding bonds.
Effective Date. That this ordinance
publication.
terms and
to issue and sell
�
amounts necessary for the
issued under this Ordinance.
bonds to be refunded to the ea�tent
accruing as capitai appreciation), to pay
upon sa1e, and to fund reserves and capitalized
take effect and be in force 30 days after the passage, approval and
F�': ;"°i i r" ; L P p F
` r`' ¢ °-. t: t: r`�. F
Cd' d � c.o , o_, :.
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Adopted by Counci3: Date _ _ �
Adoption Certified by Council Secretary
By " — — — r-
Approved by Mayor: Date
�
e uested by Department of:
/!// Ld�M
By:
Form
By:
Apprc
By:
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An ordinaace gtanting authority to the Port Authority o£the City o#' Saint Paul
to issae azed sell bonds in the ag�egate PrinciPat amouat which wi)1 produce net
avaifable funds to be app&ed to the cosu of the Projea of $13,800,000, bvt in aay
event not to arcead tl�e iaitiai principal amamt of $i4,650,000, and any boads to
refuud such bonds, to secure such boads witfi a pledge of the full faitU, credit and
resovrces of the City of Saint Pau1, and to use the proceeds derived from the sate of
such bonds to gay tfle cost and exQense necessanly to be incaured by said Port
Authc�rity for acqtusitioa of � l� cIearance, remediatios� and impravemeats in the
Plastics, Tnc. Redevelopment Tax Iucrement Disaict ptusuant to the provisions and by
a�nhority of Mianesota Stawtes, Chapter 4b9, as amended, and prasaibing the
amouat aad form of soch boads and the manner for establishing the raze of int�est
the Proiect
VVHEREAS, on September 23, I9T7 ilte Port Authority of the City of Saiat Paui (the "Port
Authority") adopted its Resolrrtion No. = 3656, finding that certaia laads were blighted and naarginal
. ..- .. � � � � ,� .� ,• . ���:..: :� .� �.� r-: :. .�. � .. � ,• .�.
creaang the Citgo/Shepard Road Indurnial Development Disa�ic� and
Wt-IEREAS, rhe Caty of Saint Paz� Minnesota (rhe "Ciry"), has autf�ority umder Minnesota
Stahrtes, Section 469.178, Sabd. 2, to issue general obligation bonds payable from ta�c inttemeats of a
tax increrne� discrict created by the Pott Authority, and the Port Authoriry has authority under
Minnesota Siatutes, S�tion 4b9.060, to issue bonds foz its puiposes in aaiicipaTion of income from
any sovrce which are seaued by the full faith, rsedit and resources of the City, and pmsuant to this
Ordinauce, the Port Authority will issue bonds to which are pledged both tac uecrements and the fuU
faith, credit and resovrces of the City � t6e "Seeies A Bonds"1; aud
WHEREA.4. the Port Authoritv has authoriiv nnder 1Vlinnesota Siafues. Seaions
464.06Q and 4fi5.61 to andertake a pro�ram of issuing tempocary obliEatians to be refuuded by
longterm obGgalions at a iater date, aad wluch are secured by thc fult faith, credit and
cesouroes o#'t13e C�tq: aadpwrsvant ta tl+"ss �cdin�nce. the Port Authoritv veilt issue bonds to
tssuaz
�-, - ���Y
w3ucix are pfedged tlie fuli Iaith. eredit and reaources of tS�e CTtv and tht uZOOe�ds of anv rant�
r�eived by rhe Port Anthority or the (�tv for the Pmiect, as defiaed beiaw (_the "Series B
Bnnds" and t��fier with the Seties A Bonds. t6e "Sonds"�; smd
VVf3fEREAS, tke Port Audiority bas re�uested the authorization of the Councii of the City of
Saiat Paul # e uCoweeiP' pursuant to Mtnnesota Staurtes, Section 469.060, for the is�ance and
saIe by the Porc Authoiity of ^ the Bonrls in the aggregate princigal amozwt whicfi wilI produce n�t
avaiiahle funds to be applied to the costs of ihe Project of at least $I3,8QO,OQa but icz any event not to
exczed the initial principal amoum of $24,b5D,00�, and for rhe pledge of the fuil faitb, credit aad
resources of the City to the paymmt of such Bonds, which Series A Bonds will also be secured by tax
increwents to be derived from ttte Plastics, Inc. Redevelopm�t Tax Increwent Finaacing District (rke
"District"}, and which Series B Bonds will also be securai bv any ganis obYained � the C�iv or
the Port Authoritv in connection with the Pmjea, as define@ below^--�d
-- -�YHEliEA,S c4tab4shment of the District was approved bv tLe CY'tv by recolution
adouted on SeptemE�er 2d.1997; and
'WIiEREAS, the �onds will be issued for the axuposes oPpaying or resmbuning the �sts and
expenses aecessarily incurred by the Port Aurhoriry £or acqu;sition, cleazance, remediatioq and
imgrovements witEiin the Dis�ict which are to be undeitakea to facilitate the consauction of a
manufactusing and disGibution facility in ihe Disaid far Plastics, Tnc., and the move of Plasstitcs, Iuc.�
fsvm its auYenz location az ChesWut and Ryaa Streets to tfie Tlistrict (the "Project"), and then foz a31
other putposes authorizxd by authority of Minnesota Statutes, Chapter 469, as ameuded (the "Ac�')
with respect to the Project; and
isstsaz
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'C4'SEREAS. it is the pre#'erence of the GTts to avoid the collection of YeaeraI taz Ievies to
pav #he Bonds prior to the time taz incremeQts are received from the T?istric� and for t�e Port
Aathority. as issner of the Bonds. to avoid such taac levies bp ca�itat'v5ng iaterest and ro�iue
avrr tem,porsr� obti�,ations �as in a commerciat pa e�r FroYram}. and bv k�giag_pursaant m
?YTmmsata Statutes. SeeIIOU 475,6I: and
W'1TEnBAS, the Council of the City {the "CounciP'), being duly advised ia the preanises,
finds atx3 des�mines that M is necessary and appzopriate tftat the Port Authority issue aad sell bonds
of the Part rluthority in the aggregate ini6ai principal awcwnt not to ascced �I4,650,000 for the
gutposes as staLed above; and
WHEREAS, on the basis of the foregoing, it is aow the intention of the Coimcii to grant
auzhority to the Port Autliority for the issuance af tke Bonds; to �srescribe ttce manaer for establi�Fxing
the amount, maturity schedule, cates of interest, and the maximum rate of iater� ta be borne by the
Bonds; w authorize the Port Authority m essablish the daze, denomez�ation, place of payntent sud
other details of the �onds, 'sn�ludiug the fozm of the Bonds in the maaner provided in this
Ordimance and to authorize xnd consent to the pledge by the Port Auttmrity of the full faitb, credit
a¢d resoi�rces af the Ciry m ttze payment of the Bonds as rhe sau�e shaA 6e issued and sald by ihe Part
Aenhority, pursuanr to the authority o� rhe Act, aad puiswant to rhe aurlmrity ganted by this
Ordinance
WgER�AS. in cossnectsoa with t6e cueation of the Ttsstrict aad ttse fcnancia� of tbe
Praje.�x, it is proposed tl�at fhe G�ty and the Port Aat6ority enter ictto a Jaut 1"owers
A�reemezut to set forth the duties and resuonsSbilities of each i�rt connection vaith the Proiec�^
NdW, TH�12E�'OR�E, T'FTE CQUNCIL QF T'f�E CtTY �F SATN'f PA'CTL DflES QRDAIN:
4
tsstsrz
9'�-\\t��
Section 1
Auffiorizarion of Bonds. Thai sabject to, and in accordancs with, rhe apqlicable provisions,
terms and conditions oPthis ozdinxnce sad ihose comained in Sectian 459.069 of the Act, authority is
hereby graate� to the Port Autlzority for the issuance and sale o£ its $onds in ihe agg�egate }xincigal
amount set farth in Seaion 2 aud the use of the procee�s of such Bonds fust £oz the acquisitio�
cieazance, zemediztion and construction of improvements on laud within the Disirid as conte�.plated
by the 'Tax Increanent Financing Plan for the 17istrict {the "Pian") and then for all other P�u�poses
authorized by the Act witfi respect to the Project.
:. .�
FstablishinQ 7e�ms of the Bonds. That the Port Authority is hereby authozized ro estabiisb
the d2te, d�.ominatiou, place of payment, form and details of the Bonds, provided that the Bonds
shall be issued and soId by the Port A.uthority as tax �empt and/or ta�able Bomds i¢ one or more
sexies, in the manaer grovided and allowed by law, the Series A Baads in ^ the �riaciqal amount of
approximateiy $6,600 (which, after subuacting costs of issua�ce and canitatizrd 'ueteresi will
grovide uet available fvnds for the I'ro}�t in the amoeuit of $6,iSQ,006) shai! be secured by a first
lien pledge af the ta�c inczements to be zeceived by the Port Aufhoriry from ihe Bislnct, and the Q
Series B Bonds s3�all be secut�ti by a ptedge of any gant proceeds received by t5e Port Authorits
or the i weth zespect w the Prajact ; the initia� principai amoVat o£ the Bonds shall not exceed
$I4,650,Q00; the Bonds shall mazure in ihe amouats and yeazs aad bear interest at tlze zaze or rates per
annum, includu�g rates wbich vary in accordance with a^— ferm established by the offer to
purcbase the Boadc which is detercnined to be the most favorak�te by a Pricing Committes comprised
of tfie President aad the Chief Financxa! Officer of the Port Airthoriry and the Tseasluer aad the
5
�5&lsaz
`1� —\\�`�
Deputy Mapor of the Citp, ptovided that the av�e annual weighted iQtears-c rat� af Yhe Bonc}s shall
aot exceed ^— nine pexcent 9% per annum payable semi-aaaually unless such highex aveaage annual
weigh� interest is spe�ically approved by a resolution adopted by a majotiry of the memtxas of the
Councii; and the proceEds from ihe issuance and sate of the $onds as received by said Paiz Autt�ority
shall be vsed fust to pay or reimburse the costs of the acquisition, clearaace, F2�IC(II�QOk 2IICI
conshucrion of improvements oa land within the Distcict as described ia the Plan, aud then for ail
orher purposes authorized by the Act wirh respect to the Project. The Bonds may be made subject to
redemption and grepayment at ths option of the Port Authority az s�ch time and price or prices as
shall be detenmined by the Port Aeithortty and agproved by the priciag Co�nmiuse desciibed above
and upan such aotice as is ret�uirecl by faw. Tt is recogniz� that Sectzon 4b9.0b0 of the Act Qrovides
that the Bonds musc be in the amourn and fomx and bear interest at the raie set by the Covaci� that tfie
Port Auflmriry witfi tfie consent of the Cotuicil shall set the date, denominations, place of paymear,
foim, and details of the Bonds and that the Council is re�uired to decide whethe� the issuance of �,te
Bonds by the Port Authoriry is pmper and if so, the amotivat of Bonds to issue, aad d�at tEze Coi.mcil is
required to give specific consent in the Ordznance w the pledge of the Cizy's fuR faith, credit and
crswrrces to the Bonds. The stanc3ard, and delegation to the Pricing Committee set £orth herein are
intended as such full required aciioa of the CounciI, and except as provickd hesein no fvrther appsova.(
of tfie Council is required for the issuance or reifundi�� of ihe Bonds under SecYion 464.060 of thc
Act
Section 3
Pledge of FulI �'aith and Credit. Tf�at as seauity for the prompt and fazrhfui paymemt of both
pxincipal and interest of said Bonds in an aznount not io e�cceed $14,650,000 (ezcept �►a a
�saisaz
6
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refnndi� anf6or'v.ed bv Ser�on 6 hexeo�. the Port Authoziry is hereby aurkosized to gledge the
full faiih, craiiz and �ces o£ the City of Saiat Paul; aad such Bonds, boih ia respea of the
principal amount of the same and with respect to the imtecest thec�ou, may be paid by the Pon
.Aut6ority fram tax fevies providefl therefor ^ i�► accordauce with Sedion 4 hereof.
SecEion C
T�. That the Port Autlwrity, in the event of the issuance of any said Bonds authorizecl
hereunder, shall befoce the issuance of the saare, levy for each year, unrit the principat and znterest ue
paid 'an fail, a direct annua! tax on all the t�table propeity iu said City of Saint Paul, in an amount noL
less than 5% in excesa o£ the sum rec�vxed m pay the grinczpal aiad 'znteaest of t5e same when aud as
such principal and interesi matvre and, a£ter such Bonds have be�o deliverad to the pcuchaseis, such
t� skatl be isepeatable until all such indebtedness is Qaid, and aiier the issuance of such Bonds no
fiuther actiou by said Part Authority shall be necessary w aaxhorize the extensions, assessments and
call�tion af such ta�c. �at the Secxetary of said Pozt A.uthoazry shalt forthwith fiun'ssh a�ed
cag} af such lcvy to the Couacy Audztor of Ramsey Counry, Mannesor�, rhe councy in wb,ic3z sazd Port
Audzozity aad said CiCy are located, togeiher with full information regacding the Boads of said Port
Aurhority for which the tax is tevied and such Couniy Auditor slzal! extend arzd assess the tac so
Ievied, and shall do so annw�lly uatil the principal and interest have been paid in fistt_ That auy
surgius resuiting from t6e excess levy thereiu provided shall be LransfeFred to a sinking fimd afler the
principal and interest for which the ta�c was levied and collectad has been paid; gmvided, thaz said
Pozt A.uthoriry ^ La ! on or before September 15 ia aay qear, by a�propriate action cause its
Secretary to cestif}� to the said Coimty Auditor the amouut on I�aad and available in its own u�uy
or in hvst from � iacrem�is derived fivm the Plastics, 7ac. Redevelopment Tax I.ucrement
7
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..< <• � . 1. .. :�,. . �. .. . , • .:. � � �... ..:. �..,,•
iucluding any amounts in the sink'sng fi�nd, which it will nse to pay the pr'tncipal and iuterest or both
on each sQecified iss�e of the Boads and the Coiuity Auditor st�all redace ihe levy for that year hereia
provided for by that azuouut Tbat the amoum of funds so acc�uired shaf2 be set aside by said Po�t
Authority and be used for � other gurpose than fox the regaym�t of the pzincipal and anterest on
a :��t �. r.':, t' �• . �u� :� • s' �� na- s�:.�v. .� ' . a�t •�� !�1
as amended, stia2i be collected and remitted m the Poit Authority by the County Treas�uer in
accordance with pzovisions o� �aw governiug the coDection of other txces and shalI be used solely foz
the paymer�t of such Boads when dae.
Ptohvitlestauding t6e fare�ain� provisions af this Section 4, tazes may bc tevied and
cai+ceted or omitte�! in t6e manner provided by Minnesota Statutss, Section 4�S.bi, to the
ezteni le�Y t�er':ws.�ibte.
Section 5
No �urther Couaci� Action. ?'hat said Port Authority may provide €or the exercise of the
authority hereby ganted for its issuance and szQte of clse Bonds in the aggregace pxiucipal am,o�x as
provided in ^— Seclions 2 aad b �ereof, for �e aforesaid pittposes, aad the pledge of the full faitkS
credit and r�s�uces of said Ciry of 8aint Paul, as seauity for the gayment of the same, by its
appzopriaYe resolution, and withovt further action of ihe Council. The authority w set the final
• 1 �• :Il• y i1.I :(�� 16 .1� I w ..� •( 1" 1I�1 {: 1:41 l>!�; il ♦ 1� � 1♦
Couzmiuee as pmvided in Se�tion 2 hereof. Thas in e7cercising the foregoing aaxhority the P4rt
AuFhority shalt make due campiiance with all aQplicable requiremeats for flris ordinanc� said Section
8
isatsa2
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' ��� 11�.�Y. .t .w .�i � l�/A ♦• � • 41 '�� � .itl'.ira�s� (.� 4
ttw� - Y.1 .1�"ltit .1! . { l .!� r� '
�: 1�1 �
Authorization af Refundiap Bonds. Rusuaat to and in accoidance witti the provisions, temis
and canditzons of this Ordinaace aud the Act, authority is heseby gtanted m the Port Autboriry ta
issue and sell Bonds as autfioriz�ed by Minnesata Statutes, Section 4b9.t360 iu aggregate Pri�cipai
amounts neces.�ry for the piupose of seauing funds as needed by the Pon Authc>rity to refund
obligations issued under this Ordinanc�without anv fucxher action of the Counal. 'YLe Priti�
Committee shaU have the same roie with respect to refuading bonds as is set fortti in Section 2
for the initial issuance nf the Bondf. The principal of the refuuding bonds may exceed die psincspal
of the bomds to be refunded to the extent necessazy and appropriate w pay intezest thereon (including
int�rest accnung as capitai appreciation}, to pay costs of issuing the re.funding bonds amd to ailow for
ciiscount upon salc, and to fund reseivves and capitatized inrerest for rhe re�'unding bands.
Section 7
.Toint Powers elereemenL In connecIIOn a�ith the creaxion of the T)istrict aad the
�inaaci»r ot the Froiect. the Councit }eersby approves the eaecution and d�iverv bv the CStv of
s.Ioint poweTS A�reement, to be entered into betweex+ the CStv aud the Port Aat6oriEv The
form of ihe Joint Powers Aereement is a�praved subsiautially in t�e form submiited and on
fde in the ot#ices of the C�ty Counril. with such subs�uent ch�nges as may be approved b�
C�ty staff, caansr3 and Bond Couns�t as cantemplated bv tbis �rion 7. 'The JoinY powers
A¢reement shall eontain pravisions obleEadn� the Citv to contn'b¢te certain funds in the
amou�ut_af 53,20(i,1100 to the 1'mject. The Mayor, CTri Qerk and the Airector, (H'fice ot
9
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�� � � ���
B'wancial Services. are hercb,�aulhorrzed and direeted to ezecuie the 3oint Powers A�r�nt
ia subsfantiaIlv the form snbmitted. as mocGfeed oursuant to t�is SecQon 7 and �v otLer
dowmeats snd cerbi"cates wleich in the opiniQn of the CSty stafl' couasd and Bond Counsel are
n�sarr* to the transacIIOns hereia desceibed. Tim e.�cecn#ion of anv instrument bp the
apw o€bcee� ar MLcers of the CStv Lerein authorizal s► be condusive evidmoe of die
a�nrova! of such dowuunts in accordance with tht terms hereof The approval herebp Eiven
ta tEse Soint Powers AEreemea►t indudes aaurovat of such additional details therein as ma�be
�eccgsarv and appro�xiate, and such modifications th�eof deEetions thuefrom and additions
tliereto as mav 6e aea,aary and anaro,preate aud amrroved bv the Director dPflce of �nancial
�'C!tq-
tio 8
Effecave Date. That this ordinance sBall take etFect and be an fotce 30 days aRsr the passagq
appzoval aad pub&cation. _ This ordinance is subject to tke orovisions of the Citn's home ��r
charter certainin¢ to the urocedare far referendams on ordinaaca eaacted b�t,�
Qoverning bodv_
�sstsaz
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mM 70TRL PAGE.�11 **
` � `SAINT PAUL
PORT AUTHORITY
MEMORANL�UM
TO: Council President Thune and
?vlembers of the Citv Council-
PROM: Kenneth R. 7ohnson
Laurie 7. Hansen �(,�
William M. Morin �
DAT£: Szpt. 16, 199�
�-,-����
SLBJECT: RETEVTION OF PLASTICS, INC. AT THE CITGO SITE IN SAINT P�UL
Background
Tn December, 1996, as part of a Development Agreement with the Science Museum of
Minnesota (SNiM) to undertake a$100 million expansion of SMM, the City agreed to purchase
land in the Chestnut StreeUShepazd Road area which is the current site of Plastics, Inc. at 224
Ryan Avenue. The Development Aereement also required the City to turn the demolished
Plasrics site over to SMM by August 15, 199$, or incw certain damages.
For over a year, the Port Authority and HRA sYaff have been working to retain Plastics, Inc.,
wluch is a 58-year old intemational enterprise which manufactures plastic containers and
employs approximately 200 people at the Saint Paul site. Plastics also has operations in Ea�an
and Coon Rapids.
The Port Authority has worked with Plastics in studying the economic implications of over 20
possible sites to relocate the e�sting Plastics facility and consolidate it with the Eagan operations
in a new 370,�Q0 square foot manufacturing and warehouse faciliry. This would xetain ancllor
relocate appro�mately 350 well paying jobs for Saint PauL The most likely 20-acre plus site
and associated costs were shared with the I IRA Board in February.
In March, 1997, the HRA Board gave ciear direction in Resolution 97-3/26-6 that the $10.5
million expansion for Plastics at the Koc1�JMobil site at Otto and West Seventh was not
appropriate reuse and that residential redevelopment should be pursued for the KochlNlobil site.
Cunent Status
Since Apri1, the Port Authority has continued to work on retaining Plastics in Saint Paul and has
identified the Citgo site (just west of the NSP High Bridge site, see B�ibit Aj.
Council President Thune &
Viembers of the City Council
Septembe: 1b, 1997
Page -2-
�-,- �t��
The Port authority has reached agreement with Plastics and a private lender to undertake an
approxirnately �14.� million project on the Cit�o site. See E�ibit B for che business points of
the transacuon and E�ibit C for Plastics acceptance of the terms as outlined. The imancing pian
will include the issuance by the Port Authority of Tax Increment General Obligation Bonds, and
additional City Generai Obligation $onds against the 25-year Port Authority Tax Increment
District in an amount necessary to generate $13,80Q000 of bond proceeds available to pay
project costs. See E�ibit D for project financing plan.
Please note that cost of the project has increased significanfly since the Koch/Mobil site proposal
in March due to additional site preparation and remediarion costs of converting this 20-plus acre
abandoned tank farm and adverse impact of State law change on the commerciai property tax rate
which directly affects the amount of tax increment supported debt that can be issued.
Northem States Power Company (NSP) provides a program called Project Gemuu which
provides electric utility services at a reduced rate to new and eapanding manufacturing and
wholesale trade businesses within underutilized industriai zones. As part of the Plastics approval
process, the City Council will be requested to approve a noncontiguous expansion of the Crosby
Lake Froject Gemini zone to encompass the Citgo site for the Plastics expansion.
The SYate of Minnesota provides the Minnesota Investment Fund (MIF) to assist with economic
development projects that qualify based upon specific State Department of Trade and Economic
Development (DTED) criteria. As part of the Plastics approval process, the Ciry Council will be
requested to approve in concept ihe application to the State for $500,000, primarily in grant
funds, for this project. Additionally, the Met Council and DTED provide twice annual
application processes for funding of a portion of predevelopment and remediation project costs.
The Fort Authority wili apply for these grant funds as appropriate Yo diminish overall project
costs as further described in the project financing plan.
Public Purpose
Please see E�ibit E for the public purpose of retaining Plastics to Saint Paul.
I332A Resalution
Attached is a copy of the ��RA resolution which was approved on September 10 in support of a
series of Port Authority and City Council actions required to retain and expand Plastics on the
Citgo site in Saint Paul.
Council President Thune &
Vlembers ofthe City Council
September 16, 1997
Page -3-
City Council Resolurion
�� _ t l(•�'
Prior to consideration of the attached resolution (Exhibit F), the City Council is scheduled to
hold a public hearing on the creation of the tax increment financing district in connection with
this project. The attached City Council resolution approves the tax increment plan (a copy of
which is attached as Exhibit G) for the District and makes the necessary statutory findings and
elections in conneciion with the plan and the Districi, and approves other Ciry actions required to
complete this project, includina specificaily the issuance by the Port Authority of $2,000,000 of
second lien tax increment bonds (which are not secured by a city oeneral obligation pledge).
City Ordinance
The attached City Ordinance (E�ibit H) authorizes the Port Authority to issue bonds in a
principal amount not to exceed $14,400,000 (which will produce net availabie funds to be
applied to costs of the project of at least $13,800,000), and authorizes the Port Authority to
pledge the City's general obligation pledge to the full amount of these bonds. As described in
the ardinance, a portion of These bonds (approxunately $6,b00,000) will also be secured by a first
lien on tax increments.
Attachments:
I3RA Resolurion
E�ibit A- Citgo Site Map
Eaiubit B - Term 5heet
E�ibit C- Plastics Acceptance Letter and NSP Commitsnent
E�ibit D- Project Financing Sources & Uses
E�ibit E - Public Purpose
E�ibit F- City Council Resolution
E�ibit G - TIF Plan
E�ibit H - Ordinance
�ujh�PLAS_RPT
SEP 16'97 11�29 Fl? LSD-ST PfiUL 612 475 9347 TO 219#i15tt92235198 P.03 `��
1
*�P-15-1997 11=4a ST PHt1 ALFYWli�k'i 8 ECQJ 6i2 228 332a P.03iQ'7 q��
REVISEO
sponsor: ._ 9j20/37 4e04 P.M.
BESC�LUTIOti 2ip. 47 S/IO- 4
RESOLUTTON OF TE� HOUSING AND REDEVELQPMENT AIIIHORT€Y OF T�
C1[TY UP SAA�IT PA�TL, M€3�'3VESpTA SUPPORTIAIG THE PROPOSED
RELOCaTif3T� OF PLASTICS, ING TO THE CITGO s�'E
WHERFAS, aa I�ovember 26, I 996, the City Councii of the Cicy of Saint Paul (che
CounciP� adopied its Resolution No. CF 96-137b apgrov�ag a Devetopnzent Agreemcat for the
Science Mxueum Prolect (the "I?evelogmeni Agreement"j, which DcveIopment AgreemeaY
conrains an vndertakuig by fhe Cify of Saint Paul (rhe "Ciry"} to aequire the 3and at 714 ILyan
A�enue on wtuch P3asvcs, Tne. ("Plasties'� cutrendy apeiates a faciiety, and iemove the
scsuctures located tbereon, al! by August 15,1998; and
WIiEREAS, tfie Ciry, tha Hovsing and RedeveIopment Anihcriry of the C�ty of Saint
Paul (tho "HRA'�, and t}�e port Authority of ihe City of Saint Pau! (ttee "Port Authority"} have
been working �vith Ptastics both before and afrer the execution of the Aeveloptnenz Agrtemtnt to
fsnd a]ocation in ihe City of Saint Paut to which Ptastics coald relocaEq thus retainiag this
intemationa! manufacnuing enterprise, and its approxirnate3y 170 employees, in the City of Saint
PauI; and
WHER �AS, afrer consideting nvznerous sites in the City of Sainc Paal, the Ciry, the HItA
and the Port Authority, togethcr with representatives of Plasdcs, Inc., have deiernsined thai the
appm�imately 22 actc siie located west of rhe NSP high bridge, and commoaly imovro ss the
Citgo Site" is the most appropriate site for thc relacation of thc Ptasrics, Ine. facility currendy
located at 224 Ityan Aveaue, and the conso2idation with that facitity af tfie Plastics operations
cumntiy located in $agat3, Miimesoca; and
VJHEREAS, the Port Authority has negotiaced a Memorandum af Truent wit}� Piastics
���hich would provide for Piastics to retocace to the Citgo Site, asid ta consauct tfiereon a facility
contaiaing az least 370,404 rentabie square feet, with a markct vatue, at complrtion aad including
land, of no tess ihari $12,500,040; and
WHEREAS, Citgo is iate�ested in seiling the Citgo Site far an indumiat rense, snch as
the proposed n�r facility for I'Iasrics; and
tt'�iEREAS, tha relocation of the 17� jobs currentiy located at tfie Ytastics fari2ity at 22�
Ryan Avenue, and tEie e�panspon of that job baze co approximateiy ;50 we11 paz�ing jobs wbich
�vould be accomplished by tbe consolidation of the SaiM Paui azM Eagart plutics facilities at the
C�tgo Site, is important to the City of Saim Paul and iu caapayers.
it'OR' TH�REFORE, BE IT 12£SOLVED by tht Board of Gorfunissione� of tfie
Housing and Redeveiopment Authority of rhe Ci�}• of Saiut PauI, as follotss_
I. The HKA hereby supports the pzogosed relecatio� ofPfas�ics {rom iu a¢sant
Iocatiop at 234 Ryan Avenue to the Citgo Site, a�d the finaacina plan �vhich is attached ia
Fxhibit A and has beere developed for that relocauon, zli as more fuliy sec forih in ihe baud
�n• '
_��
SEP 15 '37 11�43 622 228 3314 Pf�.,E.603
SEP 16'97 11�29 FP. LSD-ST PRIA 612 475 9347 TO 219kki15t792235198 P.04
� SEP-25-19J1 11=45 S7 PatA �A�rfIrrG 8 ECLR�t 622 228 331a P.0ti07 v
• . �1 � ��Ll
2• HItA staff shaii a¢sist representatives of the City aad the Pozt Authoriry [a prcpaze
1he necessary docuraenptioa for the prompt creation af a Pon Authority Raisvelopment T'a
Tnerement District and Haurdons SubsTanee Subdisirice (coiFectrvcly rhe `�isuicc'� consiy�ang of
rhe Citgo Site, and the impleme[:tation of the project and finaaciag plan descn'bed ttzzzein az�a ia
this resolutioa.
3_ The HRf1 kereby zespectfuIly requescs that the CounciI schedute and hold a pub�ic
�earing on September 24,1997 to consider the approval of the tax incr�nent frnaacing pian {the
•`Plan`7 for thc Distritt and tt�� folIowiag that gubtic hca�ing, aad siso at thc Sepsmber 24,
i 497 Councit nseeeng, Lhe Counci{ cons'sder a zesolution whicJi apprpves ihe proposed r�jpcabaII
of �'lastics to the Cisgo site, aad the financing plaut in substantially the foan aaached hereta as
Fa;hibit A�vhich has been developed ia conncction with that relocation aad, in ttiat regard:
(a) makes the necessary statutory findings as mquired by 2aw for approvaI of
Plat{, agproves the Pian and accomplisfies the fizst reading of the ordinance necessary in
connection w�ih the issuance of the genenI obIigaGon boads described in ciause (b},
below;
(b) aPFroves ihe isn�ance by the Port Authority pf xpproxintately $ I3,800,AtJ0
of Port Authoriry bonds secured by the genetal obliga[ion pledgc af [tu Ciry, and a
$2,004,fl00 Subozdinated tax increment notc, as described ia the P2an znd the f,nanciag
P��:
(c) approvcs a nonr.onLinguous expansion of ihe �osby T.al;e project Gemini
Zone to oncomgass the Citgo site for the Pfastics expansion; snd
(d} establisbes this project as a"priority project" for pzugoses af spp3ying for
grant funds to the Depansrient of Trading and Ecenomic Devetepinent and sFie Minttesota
Invesanent Fund foc funds to fu�ance the project, and appzoves in coneept the app3icativu
to the State for SSOQ,000, in Minnesota Investtncnt Furtd funds fflr this project.
��? approves and authorizes executioa of amendmt.�rts to the I}evelopmeat
Agreement deted as ef No��embcr fi, I 996, and the Museum I.�ase dated as of tvlay 1,
1997, by and between the Ciry and T7ie Scie7ce Museum of Minaesota (°SMM'� which
(a} changes thz date of Augast 15,1998, which is the date by which the city is obIigated
to demol�sh, ciear and deIiver ihe pazcet currently pccupied by PtasEics, ta t�e date by
1�hich tha City is cont"sdent thaz (i) Plas#ics wili be retocated to the Citgo site, and (ii) the
Ciry «i1l have demolished and cieared the eaisting Flastics sites, and (b) and directs City
staff to ��-ork co2taborati�•eI�• with 3MM te compteu the SMM Projeci, recognizing the
re�ised deli�ery date far PI��tics at the Citgo site, without requcrins any additionai pubtic
fuads for the SMivi Projecc
isoeasa
SEP 25 '9? 11=43 6S2 228 3314 PF�E.004
SEP 16'97 11�30 FF? LSD—ST PRUL 612 475 9347 TO 219#Si53S92235198 P.HS
�EP—IS-1997 il�a5 ST PfalA PLANJING 8 ECO!'! 612 728 3314 P.05/97
/� • , J t � `� �
V {
�i. 3'he HRA haeFry further teqvests ihat the Port Authority consider adoptioa ofa
simiIar tesolution, at no �ater tfiaa its Octaber mceting, wbic$ wili providc thc PAit ApthoFitp's
appzova! of the P#an, the p�oposed reIocation of Plastics to the Citgo Site, a�d she fnancing plan
whiah has been developed in canaee�ioa iherewi�e, ait cons;stent witli ihe Cauacii accion
requesced in PaiagraPh 3, utctuding spe�cally:
(s) the issuance and sale of Port Authozity bonds descn'bed in paragiaph 3(!,),
ahove,
(b) the epprovai of the execution flf a forniai develapmenY agrrxment with
P3asties te provide for the reiocation of Plastics to the Gitgo Site, and tlu cynstreicFion
the�on of the groject desczibed above and in the Board reptrrt;
�srocss
�aii.�Lir�is�! . Yii:i�ciC�o::r9[:'a:y
SEP 16'97 11�30 FR LSD-ST PRUL 612 475 9347 TO 219#SSSft92235198 P.96
_, .- 5FP-IS-1997 Si�a6 ST PG� �Ara�IrG 8 ELUr� 6i2 728 33ia P.86�7
�� � �,� V1
ECHiBfTA
FLAlS dF FltiAfdCE pOR PLAS7tC REIOCATt4ti
PROJECf F1AfpNClNG
SOURCES
Tota1 Project Costs
-;.� ��•
\'�AR
�1VDED
SOURCES:
tnitiai C3.0. Bonds
Nofe to Pdvafe Lender
Scienee Musevm $uBgat
PEDlPort
6.0. Bond Sumasary:
TtF Support�d BondS
Maximum Non T{F SupportecJ G.O. Bottds
Totat G.O, $onds
Potantia! Graat Pands to ReYire G.O. 8ottds:
DTED/lvtet Couaa7
Minneso2a lnvestmerrt Fund
7otai PotenRal Grant Funds
Remairring Non 7iF G.O. Bonds
Totai Non T!F Supparted G.O. Sonds
S 13,800,000 1Q97
2.00O,WO �998
2,7QO,QOQ Done
7.00D.OQO 1999-ZOD7
1�
S 6,Z50.DOo
7,6$0,000
$ 13,800,00�
��
7897
1937
$ 5,577,D00 l997-1959
500,000 1998
6,077,000
1,5�3,000 '
S 7.SSD,000
��Y P�a1� ��rings wouSd 4e appl9et! to the City antl Ptastic,-, Inc. on a
iwo-;hirds. one-ihirrf basis, to the event thers are #ewer {ps np} � savings ulSmatel�
reatized, the Pert Authoriry a7sd PFD wii! exeR theb best eftorts to id�ntify and car+md(
other state, fcderal or prnrete sou�ces m retire th� amaunt
Financing F�ssumptions:
1. Crea6on of a 2b year redevetoprnerzi districL
2. No darrcages ar? paid to Science Museum due to delay in sRe deltvery peyorsd qugust 13, tggg,
Res. A-1
SEP 15 '97 12:aa 612 228 3314 P%�.086
SEP 16'97 11�31 FP. LSD-ST PRUL 612 475 9347 TO 219#115#92235198 P.07
,_� SEP-f5-1997 i1�46 ST PPoJL PLAMIING & ECON 612 233 331a P.0?i0'7
� \lLY
�R�
PLQt1 ttF F1NAEiCE Ft3A PlASFfC RELOCAt10N
P120:tECT FtNMtC(NG
USES
�ayments ta P1aat+cs:
OY�gin21 P18S27ps S$e
JncenfTve fot relocation of Eagep jobs
��ana}r sost reduction
Fasar.��easa satniay
Totai PaY+srents fo Plastics
iScvatopment Costs:
C�eo-tectl CO+iECtiOn
F.nvIronmenta! remetliadon
5+te improvemer�fs
Ali other casts
Tota! devetopment oosts
Totat Project Uses
3 2,704.Opp
1,200,flo0
' 2.055,OOQ
42f.QOp
S 8,3�6 pOp
S S,Et6o,Opp
2,800,000
2.977,000
2,497,dpo
S 13.f24.000
$18,500,OOp
8e5. A-2
TOTA� P.07
SEY 15 '97 it:d4 612 228 3314 PFI�.�?
SEP 16'97 11�28 FR LSD-5T PAUL 612 475 9347 TO 219#115#92?�5198 P.02
��S£P-SS-2937 11=a4 ST f�KY,JL RArNIt�'i & ECLN 612 223 33;a P_0287
� a ������
a
Hoc�sing and Redevelaprnent Ae�ft�ority of #he City of 8aint Paui, Minneso�
CERTIFICATE dF RECORDING SE£�E7ARY
7he undersigrtad hereby cerfifies as fo]lows:
1. That ehe is tha duly appoirrted. quaC�fted qssistant Secretary pf the
Nousing and Redevelopmertt Authw7Ey of the City of Ssint Paul,
Minnesota, herein calfed the "Loca! Pubtic Agency';
2• That ttte atfadteci RESOl.UTiON NO. 97-9H0-4 is a frt�e and cornecx
copy of ltie resotution as adopted on the 1 bth day of Seplember, 7857;
3. Thai ihe seat affixed below constitutes the etficiai seat of the L.oca� pubiic
f19e�Y � N�� Cattif+cate Es hereby exearted under sus� offiaaf seai;
and
4. Tnat the undersigned is dWy aufhorized to execxrte this Certificar�,
IN WiTNESS WNEREOF, I have hereuttto set my hand snd the seal of fhs said Housing and
RedeVetopment Auttwrity of tNs C�ty of Saint Paul, Minnesota, fhis 11th day of
September, 1997.
��' �/ � �,�e,�
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SEP 25 'S7 1I=42 612 22S 3314 Pp,R-"_002
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PLASTICS. INC.
REDEVELOPNIEi�3T AGI2EEMEl�iT
TERM SHEET
New Facility
Square Dollar
Feet Value
370,000 $12,500,000
Plastics wiil make the follow�ng annual payments:
Annual Estimated Taxes
Annual Loan Payment
TOTAL
$1.48/sq.ft. $ �47,600
$ .SOfsq.ft. $ 185 000
$1.98/sq.ft. $ 732,000
As taxes increase from $1.48 per square foot to $1.98 per square foot, the loan repayment
component decreases proportionately by the amount o£ the tas increase. The to#al annual
payment, however, remains at $732,600.
Totai payment does not exceed $1.98 per square foot until actuai taxes exceed $ i.98 per
square foot. No ceiling on actual taxes and the annual payment wili increase if actual
taxes exceed $1.98 per squaze foot.
Plastics will enter into the Port Authority standard Workforce Agreement to maintain at
least 300 jobs with an average salary of $917 per hour. Any penalties paid under this
agreement aze pledged, as further security for the NSP loan repayment.
Tas payments available after debt service on the senior TIF bonds are pledged to the NSP
loan.
9/16/97
�:Vjhlpiastics
'�.
, _ 5 � , Fachi.bit C
��.1���
MEMORANDUNI OF INTENT
Datad: July 14, 1997
This Memorandum of Intent ("Memorandum") is made by and between the Port Authority
of the City of St. Paul ("Port Authority") and Plastics, Inc. ("Plastics") to reflect concept approval
for the acquisition of Plastics' Ryan Avenue facility and its consolidation at the CITCO site below
described. This Memorandum of Intent is not a legal, binding obligation until a Development
Agreement has been executed and authorized by the Port Authority, Piastics, Inc., and the City of
St. Paul.
1. The Port Authority will provide at no cost to Plastics approximately 21 acres cunently
owned by CITCO, together with a peipetual easement over approximately three acres from NSP
(co!]ectively the "CITCO site") as shown generally on the site plan attached hereto, which will
include:
a. On or before August 31, 1997, the Port Authority, at its expense, shali
endeavor to enter into a purchase agreement with CITCO and acquire the necessary perpetual
easement from NSP.
b. On or about September 15, 1997, the Port Authority will, at its expense (or
at the eapense of CITCO), commence and do any and a!( environmental remediation required
by the 1vTinnesota Pollution Control Agency ("MPCA") and complete the same by
December 31, 1997, which shall include the procurement of a Certificate of Completion and
No Action/No Association letter in fortn reasonably acceptable to Plastics. P(astics may
comment and render input on the Remedial Action Plan as it is developed for the CITCO site.
c. The Port Authority wili, at its expense, provide engineered filI and rough grade
the site to increase its elevation to a height reasonably acceptable to the Port Authority and
Plastics, and in no case, less than an elevation of 716 MSL. Such work shall be substantially
completed by May 1, 1998. ,
d. The Port Authority, at its expense, and in coordination with Plastics'
contractor, commence the necessary piling at the CITCO site on or about May 1, 1998.
Plastics may designate which areas have higher priority and are to be completed first in such
piling process. All pilings shall become substantially compiete by September i, 1998. A.s part
of the piling process, Plastics' contractor will install the concrete piling caps; and the cost of
the same shall be reimbursed by the Port Authority to Plastics.
e. The CITCO site will be conveyed to Plasrics or its assigns by September 15,
1998.
SELI,ED 5�8956.7 C _ 1
,:
f. The Port Authority will pay or have paid on the CTTCO site al! real estate
taxes and special assessments levied or pending through the calendaz year of closing.
g. The site wili be properly zoned to allow manufacture and distriburion of plastic
products. There will be no restrictive covenants except those set forth in the Development
Agreement and as required by the MPCA The Port Authority shall endeavor to avoid the
impasirion of any restrictive covenants by the MPCA.
h. The Development Agreement shall allow the coverage of a 370,000 squaze
foot facility, together with related parking, on ffie CITCO site. If variances from City Code
are necessary, Port Authority wil! need to abtain them by December 31, 1997. Plastics will
provide a site plan noting aecessary variances to the Port Authority by September i, 1997.
i. The Port Authority wili provide reasonable cooperation to Plastics so that it
may structure the transaction in a manner to facilitate the qualified reinvestment of
condemnation proceeds for tax purposes.
j. At the option of Plastics, the Port Authority will need to obtain city and county
approval to plat the property into two separate parcels by March 1, 1998 if requested by
Plastics by January 1, 1448, one for the manufacturing portion, and one for the distribution
portion.
2. Plastics shall receive a total financial package in cash from the City and(or Port
Authority in the amount of $5,955,000, plus the CITCO site described above, plus the Rent
Differential described below_ This $5,955,Q00 includes payment in fu(1 for the Ryan Avenue property
and release of re]ocation claims, empioyment incentives for the relocation of approximately 160
empfoyees from Eagan to St. Paul, and occupancy cost reduction incentives. The City of St. Paul
may retain the salvage value of any equipment lett behind at the Ryan Avenue facility which cannot
be reasonably relocated to the new facility. The Development Agreement shall provide for
environmental assurances mutually acceptable to Plastics and the City so that conveyance of the Ryan
Avenue properiy is in a condition which is environmentally acceptable to the City. Plastics shall al]ow
the City's environmentai consultants to enYer Plastics' building for environmental testing at reasonable
times and upon reasonable notice during the pendency of the Development Agreement and lease
period. The City acknowledges that it intends to demolish the Ryan Avenue building and in doing
so will take the properry subject to such routine asbestos removal (if any) as may be required. Aside
from the environmental assurances, the Ryan Aveaue property will be so(d in an "as is condition."
3. All costs over and above the City's and Port Authority's agreed upon payment and
benefits to reIocate to the new facility are at the expense of the Plastics.
4. Plastics will build and lease andlor own an approximate 370,000 square foot facility
having an estimated market value including land, at completion, of no less than $12,500,000, No
minimum assessment agreement is required thereafter.
S. Real estate taxes as assessed on the new facility (currently estimated at $1.98 per
squaze foot} are the responsibility of Plastics andfor the new landlord.
��-llt
SELLED 508956.7 �- 2
�� .1��
6. Plzstics agces to move all of the jobs then located in the St. Paul and Eagan faciIities
to the new facility. Starting positions after the first year of employment shall be at least $9.15 pe=
hour, plus benefits.
7. The closing on the sale of the conveyance of the CITCO site from the Port Authority
shalI be schedule3 for September 15, 1998. $2,700,000 of the $5,955,000 compensation pacitage wiIl
be paid at such time to Plastics. Ti�e conveyance of the Ryan Aveirue facility to the City shall ocau
at the same time, but it shall be Ieased back to Plastics for $1.00 net (Plastics shall pay all real estate
taxes prorated an the calendar year basis, operating and maintenance e�cpenses) until the completion
of the new production facility, or no later than August 15, 1999, whichever is earlier; provided fiuther
that said date of August 15, 1999 shall be extended for delays caused by the City or the Port
Authority. Fxcept for delays caused by the City or the Port Authority, Plastics shall pay to the Port
Authority as liquidated damages for each day after August 15, 1999, that it has not vacated the Ryan
Avenue facility, a sum equal to that payable by the City of St. Paul to the Science Museum of
Nfu�nesota for such delay, subject to such force majeure clauses as may be available to the City. The
Port Authority's payments to Plastics sha11 be directly reduced by any such Iiquidated damages. The
balance of the funds shall be paid to Plastics as follows:
$2,055,000, payable in monthly draws according to the value of construction
completion at the new productionJdistribution facility, which draws may commence
in November, 1998;
$800,000, upon occupancy of the new production facility;
$200,Q00, upon the first anniversary of the occupancy of the new production facility;
and
$200,000, on the second anniversary of the occupancy of the new production facility.
Plastics may delay the completion of the warehouseldistribution portion of the new facility until
December 31, 1994.
8. The Port Authority will need to obtain by August 31, 1997, the necessary approvals
to cause the new facility to be a"Gemini Site" so that it qualifies for reduced utility charges from
NSP. Such reduced charges shall inure to the benefit of Plastics.
9. Plastics agrees for a period of ten years (the "10-year period") after consolidation to
the CITCO site ttiat it will not knowingly and intentionally relocate more than ten percent (10%) of
any jobs at the CITCO site to another location outside of St. Paul.
a. This does not prohibit job reductions for business reasons, to meet
competition, or for business efficiencies. A piant shutdown because of husiness losses or
inefficiencies is not a violation of the clause.
SELLED 508456.1
C-3
. . ��'```�,
b- If ihe Port Authority or City aIlege vioIation of this clause, written notice must
be given to Plastics, Inc. and Plastics, Inc. must be given nine months to cure any alleged
violation.
a• The clause will be conclusively deemed to have been fulfilleti if plastics, Inc.
has maincained at least an average of 300 employees at the facility during each year� � a f
whom after the first year of employment shall be paid not less than $9.15 per hour, plus
benefits• In addition, there will be no violahon ofthe clause if another company or companies
occupy the facility and the cumulative number of employees at the facility, whether they
belong to Plastics, Inc. or another company or companies, averages at least 300 employees
per year and wages are comparable or better to the rec}uired $9.15 per hour wage.
d• Th� remedy for vio(ation is ['�nited to moncy �� � p�tt Auchority
cat�n°t sc� m°°�Y aauy�$es unless it shows by cicar and coavincing �vidence that this clnuse
��� T� �O� °f �+8d shall bc timitcd to the following, catcu�atc� on an
aanuat basis: Sl20,000 timea a firaction whac the numerator is the numbar of jobs not in
compliance and the deaominator is 300.
e. The clause is subject to existing or future labor contracts.
10. Plastics will install "state ofthe arP' HVAC systems, with particular attention paid to
odar control equipment, in the new Pacility. Approval of the same by City staff shall be provided for
in the Development Agreement.
11. The parcies shall endeavor to enter into a non-contingent Development Agreement no
later than September 15, 1997.
12, In addition to the other amounts and expenses to be paid by the Port Authority, the
Port Authority shall also pay the differential in rent (the "Rent Differential") which Plastics may incur
in connection with its leasing of its warehouse facility in Eagan from Ianuary 1, 1999 through the
earlier of• (I) the date at which Plastics is obligated to relocate its Fagan warehouse facility to the
CITCO site or (2) the date upon which Plastics no longer has an obligation to pay rent at the Eagar.
warehouse (the "Extension Period"), Said Rent Differential shall be paid at such time and in suct,
am°unt as incurred by Plastics. The intention of this provision is that Plastics shall not be obIigated
io pay any rent, or payments in lieu thereof, during the Extension Period which exceed the rental
obligations which Plastics would have paid during the Extension Period if its rental rate and rental
obligations had not been increased from those in effect during 1998. Plastics shall utilize a11
commercially reasonable efforts and arguments with its present Iandlord so as to minimize the Rent
Differential, and shall keep the Port Authority infonned of the progress and content of such Rent
Differential negotiations.
13. The Port Authority will cooperate with Plastics to allow Plastics' due diligence with
respect to the CITCO site, including but not limited to issues regarding environmental, flood plan,
building location, truck circulation, fire safety, water pressure, coal dust, single point of ingress and
egress, and such other matters as Plastics deems in its reasonable discretion to investigate and
evaluate. Plastics will endeavor to complete said due diligence by August 31, 1997.
SEt,[.ED 508956,7 C- 4
SEI3.ED 508956.7
PORT AUTfIORITY QF TF� CITY OF ST. PAUL
��..-�� /
«� -
PLASTICS, INC.
By �^-_.. 7 � ( 6 �4 �
zts
c- s
°l1 ���'�
t
0�'�_ � ( (��'
FIltST ADDENDUi�1 TO MEMO1tANDL3M OF INTENT
DATED SEPTEMBER 9, 1997
This First Addeadum to Memorandum of Intent ("Addendum") is made by and between
the Port Authoriry of the City of Saint Paul ("Port Authority") and Plastics, Inc. ("Plastics") to
amend the Memorandum of Intent dated July 14, 1997 and previously executed between the Port
Authority and Plastics. This Addendum is not a legal, binding obligation until a Development
Agreement has been executed and authorized by the Port Authority, Piastics and the City of
Saint Paul.
The Memorandum of Intent is hereby amended by this Addendum, in the foliowing
ways:
1. Throughout the Memorandum of Intent references to the "CITCO site" or
"CITCO" shoutd be corrected to read "Citgo site" or "Citgo", respectively.
2. Pazagraphs 4 and 5 of the Memorandum of Intent are hereby amended in their
entirety to read as follows:
"4. Piastics wiil build and lease andlor own a facility at the Citgo site of an
estimated size of no less than 370,000 rentable square feet, having an estimated
mazket value inctuding land, at completion, of no less than �12,540,000. No
minimum assessment agreement is required thereafter.
5. Real estate taxes as assessed an the new facility are the responsibility of
Plastics andlor the new landiord. In addition to real estate taYes payable with
respect to the new facility, Plastics shall, for as long as it occupies the new
facility at tl�e Citgo site, make a separate payment to the Port Authority in an
amount which is equal to: (a) $1.98 per rentable squaze foot of the spaca in the
new facility building minus (b) taxes per rentable square foot actually payable
with respect to the new facility. [For iliustrative purposes only, if taxes are
payable on the new facility at $1.48 per rentable squaze foot, this separate
payment by Piastics to the Port Authority would be in an amount equal to $.50
per rentable squaze foot.] Plastics understands tba.t the Port Authority will pledge
t4us sepazate payment as security for the repayment of a note (the "Note") to be
issued by the Port Authority and purchased by NSP. The payment obligation of
Plastics under this pazagraph 5 shall also be subject to the following
qu�cations: (a) it shall terminate upon the soonest of: (i) the completion of 17
years of payments; (ri) ihe repayment of the Note; or (ui) Plastics ceasing to
occupy the new facility; (b) it shail not exceed the $.50 per rentable square foot
even if actual real estate taYes are less than $1.48 per rentable square foot; and (c)
it shall first be dus in the year in which taxes are payable (i.e, the year after full
assessment) on the basis of the completed, fu11y assessed, new faciliry."
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3. The Memorandum of Intent is hereby further amended by adding the following
additionat pazagraphs 14 and 15 to read as foilows:
"14. In addition to the financiai package described in the Memorandum of
Intent, Plastics shall aiso be entitied to a credit against the payment described in
paragraph 5 of the Memorandum of Intent, as amended by the Addendum, in an
amount equal to one-third of any deveiopment cost savings achieved by the Port
Authority with respect to the Port Authority's project costs, which project cosu
are described for purposes of this Memorandum of Intent to be the difference
between the actuai costs incurred by the Port Authority in connection with the
acquisition and prepazarion of the Citgo site, and the funding obtained by the Port
Authority for the payment of such costs, including a$1,577,000 source of
funding deemed from the Ciry of Saint Paul. Plastics' credits shall be in an
amount equal to one-third of such deveiopment cost savings, up to a maximum
credit of $500,000. The amount of this credit shall be held by the Port Authority
in an escrow account, and shail be applied to pay the payments which would
otherwise be required to be made by Plastics pursuant to paragraph 5."
"15. Contemporaneously with the execution of the Development Agreement,
Plastics shall enter into an agreement with I3orthern States Power Company
("NSP"), to be effective only upon the issuance by the Port Authority of iu
$2,000,000 ta�ble development note (the "Note"), and the purchase of such Note
by NSP, that inciudes the following conditions for as long as Plastics occupies the
new facility:
• a requirement ihat Plastics purchase at competitive mazket rates and
subject to Gemini site benefiu, a11 elecuical power and natural gas from
NSP until tfie maturity date of the Note, or such earlier time as the Note,
including all accrued interest, is fully paid.
• in the event of the full payment of the Note prior to the initial maturity
date of the Note, att assurance by Plastics that NSP has the right of first
refusal to any bona fide offer to provide electric and naturai gas service to
the Saint Paul facility made by any other energy supplier."
urfoszoi C^ 7
��-,��Y
This Addendum to Memorandum of Intent is dated as of the date fust above wriiten.
PORT AUTIiORITY OF THE CITY OF SAIlVT
PAUL
�,i4���
_ -�
f' � . .L
PLASTICS, INC.
'� �
BY� � nrw�+.u.c,�
Its:'� z: , _0�, �
unoaz.oi C-8
Northem States Power Comparry
4'f 4 Nicollet Mali
Minneapoi'�s, MinnesoTa 55401
Tekphone (612) 330-7769
September 8, 1497
Port Authority of the City of Saint Paul
1900 Landmark Tower
345 St. Peter Street
Saint Paul, Ivfinnesota 55102
Attention: Kenneth R Johnson, President
Re: Relocation of Plastics, Inc. to CTTGO Site
Dear Mr. 7ohnson:
Exhibit C
Paul E Pender 011- y 1`�
YcePresident-Flnanoe �
and Treasurer
This letter of intent is intended to evidence the intent of Northern States Power Company
("NSP") to purchase from the Port Authority of the City of Saint Paul (the "Port Authority") a
t�able Port Authority revenue bond in the initial principal amount of $2,000,000 (the "Bond") on
the terms and conditions generally outlined below:
Terms of Bond: The Bond will be issued on a taxable basis in the initial principat amount of
$Z,000,000. The Bond will beaz interest at the rate of 4% per annum, and
will be amortized over a period of 15 yeazs. Additional terms and
conditions of the Bond shall be subject to further discussions and
documentation between the Port Authority and NSP.
Purpose of Bond: The Port Authority shall use proceeds derived from the sale of the Bond to
NSP to pay costs incurred in connection with the relocation of Plastics,
Inc. ("Plastics") to the "CITGO site" in the City of Saint Paul, including
specifically, at its sole discretion, but without limitation, the costs of
acquiring the land comprising the CITGO site (the "ProjecP'); the cost of
preparing that site for Plastics' use in constructing a proposed 370,000
square foot facility; and any other costs and expenses incuaed by the Port
Authority in connection with the proposed relocation of Plastics to the
CITGO site.
Security for The Port Authority shall grant, or shall cause to be granted, the following
Repayment of security to NSP as security for repayment of the Bond:
Bond:
a lien against all taac increments generated by the Project which is
subordinate only to the general obligation tax increment bonds which
are expected to be issued in the approximate principal amount of
$6,150,000 to finance additional costs to be incurred in connection
with the relocation of Plastics;
C-9
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a first lien on the private loan payment that Plastics has agreed to make
to the Port Authority in an amourn equal to $1.98 per sqvare £oot
minus real estate tases actually paid with respect to the Project. [For
illush purposes only, it is currently anticipated that real estate
taxes will be payable with respect to the Project at $1.48 per square
foot, which would yield a private Ioan payment made by Plasrics in an
amount equal to $.50 per square foot. Further, since Plastics has
entered into a letter of irnent with the Port Authority pursuant to which
it has agreed to construct a facility of at least 370,000 squara feet, the
private loan payment, calculated at $.50 per square foot, would be
$185,000 per year];
• a first lien against any genalties payabie to the Port Authority by
PSastics in connection with the violarion of the Worl�orce
Development Agreement which Plastics has agreed to enter into in
connection with its relocation to the CTTCrO site.
Timing: It is anticipated that the Bond will be issued, by the Port Authority, and
purchased by NSP, no eazlier than January 1, 199$ and no later than
June 30, 1998. It is the intention of both the Port Authority and I3SP that
this Bond will not be issued until necessary to provide funds for the
relocation of Plastics, after all other available sources of funding have been
identified and committed.
Additional As a condition to NSP's purchase of the Bond, NSP and Plasdcs must
Conditions have entered into an agreement incIuding the foliowing conditions:
Precedent:
• a requirement that Plastics purchase all electrical power and natural gas
from NSP until the initially established maturity date of the Bond, or
such earlier date on which the principal and interest on the Bond have
been fully repaid;
in the event of the full payment of the Bond prior to the initial maturity
date of the Bond, assurance by Plastics that NSP has the right of first
refusal to any bona fide offer to provide electric and natural gas service
to the Plastics' Saint Paul facility wtuch is made by another energy
supplier.
This Letter of Intent is not a legal binding obligation of either NSP or the Port Authority, but is
merely evidence of the intent of both parties to negotiate in good faith to the issuance, sale and
purchase of the Bond on the terms described herein. NSP's obligations are subject to completion
of negotiations as to the terms of the Bond and the related security and energy supply agreements,
prior approval of those agreements by 23SP's Board of Directors or its designees, and, to the
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exte� applicable, to prior approval of the energy supply agreements by tfie Mmnesota Public
T3tilities Commission.
l�ISP understands NSP understands that the undertaking by the Port Authority to issue the Bond
descnbed above is subject to prior approval of the Bond, as well as all other aspects of the
proposed relocation ofPlasrics to the CITGO site, by the Board of Commissioners of the Port
Authority, and may further be subject to approval, in whole or in part, by the City Council of the
City of Saint Paul and the Board of Comsnissioners of the Housing and Redsvelopment Authority
of the City of Saint Paul, IvTinnesota.
NORTF�RN STATES POWER COMPANY
BY� , r,,��/ �/y! ��,_�
�aul E. Pender
�ce President - Finance and Treasurer
ACKNOWLEDGED AND AGREED:
The Port Authority of the City of Saint Paul does hereby accept the terms outlined in the
foregoing letter of intent, subject to the requirement that such terms be approved by the Port
Authority Board of Commissioners and, if necessary, by the City Council of the City of Saint Paul
and the Board of Commissioners of the Housing and Redevelopment Authority of the City of
Saint Paul, Mannesota.
PORT AUTHORITY OF TI� CITY OF SAINT
FAUL
By:
It resident
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PLASTICS
PROJECT FINANCING
SOURCES:
Initiat G.O. Bond Proceeds
Note to Psivate Lendes
Science Museum Budget
PED/Port
G.O. Bond Summary:
First Lien TIF Bonds
Subordinate Lien TIF Bonds
Total
USES:
Payments to Plastics:
Originai Plastics Site
Incentive for relocation of Eagan Jobs
Occupancy cost reduction
Eagan lease subsidy
Total payments to Plastics
Devefopment Costs:
Geo-tech correction
Environmental remediation
Site improvements
Ail other costs
Total development costs
Tota! Project Uses
$ 13,800,000
2,000,000
2,700,000
1,000,000
$ 19,500,000
Gross Cost of Issuance
Amount & Cap Interest
Exhibit D
Project
Proceeds
$ 6,655,000 $ 580,Q00 $ 6,075,000
7,995,0�0 269,00� 7,726,000
$ 14,650,000 $ 849,000 $ 13,801,000
$ 2,700,000
1,200,000
2,055,0�0
421,000
$ 6,376,000
$ 5,050,000
2,600,000
2,977,000
2,497,000
$ 13,124,000
$ 19,500,000
Financing Assumptions:
1. Creation of a 25 year redevelopment district.
2. No damages are paid to Science Museum due to delay in site delivery beyond August 15, 1998.
a�� -1 lt�
�. -
Public Pumose
1. Prevent Plasfics from Moving its Operations to Another State or
1Vlunicipality.
One of the primary goals of the Port Authority is to assist in the creation
and retention of livable wage manufacturing jobs in Saint Paul through
land redevelopment, business financing, and business services activities.
Plastics has been a long-tezm viable Saint Paul manufacturer which has
provided jobs to a substantial number of Saint Paul residents. This Project
will retain this company's existing jobs and wi11 afford the opportunity for
additional jobs to be relocated to the City through consolidation of
company operations. The redevelopment of the Citgo Site will capture
this expansion and will prevent both the direct loss of taY base and jobs in
Saint Paul and the opportunity cost of additional jobs provided through
company consolidation.
2. Provide Job Opportunities for Saint Paul Residents.
Plastics, Inc. wi11 be employing 370 individuals at this new location (I50
jobs will be coming from the Eagan facility). They will enter into the Port
Authority's Workforce Agreement that commits them for 10 yeazs to pay no
less than $9.15 per hour and maintain a workforce of at least 30Q. Failing to
meet these goals, Plastics, Inc. is subject to cash penalties that aze capped at
$120,Q00 per year.
The Port Authority operates a customized job training prograni (The
Employment Connection) which recruits neighborhood residenu and trains
them based upon the specific hiring needs of expanding companies. The
Employment Connection will be used to assist Plastics with its new hires as
the company continues to grow.
3. To Redevelop Unused, Underused, Inappropriately Used, or
Infrequently Used Property.
The Citgo Site has been underufilized for many years. The majority of the
azea comprising the site has been used most recently as a petroleum tank
farm, which has been abandoned. The tanks aze unused, empty, and
substandazd. This industrial (I-3) zoned properry has been contuninated and
has had a dehimental effect on the surrounding azea "Lhis Project will solve
several problems at once (soil contamination, blighting use, underutilizarion
of land, neighborhood eyesore, minimat jobs) and will greafly enhance the
site with its highest use, hundreds of jobs, massive increase in taa� base, and
a well landscaped site that will enhance the azea environment.
E-1
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4. Espand the Industrial Tag Base of the City of Saint PauL
It is expected that the ta�able market value of parcels in the District will
increase by approximately $10,400,000 once the Project is placed in service.
This value will come from the development of an approxunately 370,000
square foot manufacturing and distribirtion facility with an average
construction value of $33.'73 per square foot The taxabie value of the new
facility is assumed to be at 90% of the construction cost less the existing
base of $837,OQ0.
5. Facilitate the Eapansion and New Development of the Science Museum
The relocation of Plastics will allow for the major eapansion of the
renowned Science Museum. Underutilized urban core land adjacent to the
existing Plastics facility will be redeveloped with a culiural facility that wili
provide jobs and contribute to the economic, educational, and entertainment
vitality of the City and the Region.
6. Assist the City of Saint Paul Obligations Under Science Museum
Development Agreement
The City of Saint Paul is required to acquire all lands, including the existing
Plastics facility at the Chestnut Site, needed for the Science Museum project
as a condition of receiving a$30,000,000 grant from the State of Minnesota
for the Science Museum pro}ect The City's resolution on 23ovember 6,
1996, authorized this acquisition.
7. Hazardous Substance ltemediation
The Port Authority will incur remediation costs at the Citgo Site as specified
in a Response Action Plan to be approved by the MPCA. These activities
would eliminate areas of hazardous substances in the designated hazardous
substance sites.
E-2
Exhibit F ��_
{
Council File #
Green Sheet #
RESOLUTlON
CITY OF SAINT PAUL, MINNESOTA
Presented
Refezred To
Committee Date
RESOLUTION APPROVING THE TAX INCREMENT FINANCING PLAN
FOR THE PLASTICS, INC. REDEVELOPMENT TAX INCREMENT
FINANCING DISTRICT AND HA7.ARDOUS SUBSTANCE SUBDISTE2ICT,
AND AUTHORIZING (A) THE EXTENSION OF CROSBY LAKE PROJECT
GEMINI (B) THE ISSUANCE BY THE PORT AUTHORITY OF $2,000,000
SUBORDINATED TAX INCREMENT BONDS, AND (C) THE
ESTABLISHMENT OF Tf� PLASTICS PROJECT AS A"PRIORITY
PROJECT" FOR PURPOSES OF APPLYING FOR CERTAIN GItANT FUNDS,
ALL IN CONNECTION WITH THE RELOCATION OF PLASTICS, INC. TO
THE CITGO SITE
BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota, as follows:
Section 1. Reci s.
1.01. It has been proposed that the Port Authority of the City of Saint Paul (the "Port
Authority") establish the Plastics, Inc. Redevelopment Tas Increment Financing District (the
"DistricY') and a Hazardous Substance Subdistrict therein (the "HSS") and, in connection therewith
that the City of Saint Paul (the "City") approve the TaY Increment Financing Plan relating thereto,
all pursuant to and in accordance with Minnesota Statutes, Secrion 469.174 tlu 469.179,
inclusive; and Minnesota Statutes, Sections 469.048 through 469.068, inclusive; and
1.02. The Port Authority has investigated the facts and has caused to be prepared a
proposed Ta�c Increment Financing Pian (the "Plan") for the District and the HSS.
1.03. On November 6, 1996, pursuant to Council File No. 96-1376, the City Council
approved the execution of a Development Agreement with the Science Museum of Minnesota (the
"SMM") which zequires the City to acquire property which is necessary for the SMM's new
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riverfront facility. Plastics, Ina ("Piastics") is currenfly located on a portion of such property (the
"Chestnut Site") and needs to be relocated in order for the SMM project to move forward.
1.04. It has been proposed that the approximately 26-acre site located approximately one
mile to the west of downtown Saint Paul at Shepard Road and 7ames Avenue (the "Citgo Site") be
redeveloped for purposes of building an approximately 370,000 square foot manufacttu�ing and
distribution facility to be purchased by Plastics upon demolition of their current facility at the
Chestnut Site. The acquisirion, cleazance, remediation and improvement of the Chestnut Site and
the Citgo Site is collectively refened to herein as the "Project".
1.05. It has been proposed that the City contribute approximately $3,200,000 ($2,700,000
of which is already budgeted as part of the Science Museum Project) to the costs of the Project by
paying certain of the costs associated with the transfer of Plastics from the Chestnut Site, and its
facility in Eagan, to the new facility at the Citgo Site.
1.06. The Citgo Site is not presently located witivn the Crosby Lake Project Gemini
Zone. It has been proposed that a noncontiguous expansion of the Crosby Lake Project Gemini
Zone be approved in order to encompass the Citgo Site, and to provide electric utility service to
Plastics at a reduced rate.
1.07. It has also been proposed that: (a) the Port Authority issue bonds (the "Bonds") in a
principal amount which will produce net available funds to be applied to costs of the Project of at
least $13,800,000, but in any event not to exceed the principal amount of $14,650,OOQ to finance a
portion of the costs of the Pro}ect, including specifically the costs of acquisition, cleazance,
remediation and improvement of the Citgo Site, which bonds aze to be secured by the general
obligation of the City which will, in tiun, be secured by a first lien piedge of tax increments with
respect to approximately $6,60Q000 of the Bonds, and, with respect to the remainder of the Bonds
will be secured by a lien on tax increments subordinate to, in order of priority, such first lien
pledge, the payment of the NSP Bonds (as defined herein), and the payment of administrative
charges in connecrion with the District; (b) the Council consider adopting an ordinance authorizing
the issuance of said Bonds by the Port Authority under Minnesota Statutes, Section 469.060, and
pledging the City's general obligafion thereto; and (c) the Port Authority issue its $2,000,000
subordinated taac increment bonds (the "NSP Bonds") which will be secwed by a second lien on ta�c
increments, in order to finance additional costs of the Project.
1.08 The Port Authority andlor the City, as applicable, have performed a11 aciions required
by law to be performed prior to the establishment of the District and the HSS and the adoption of
the Plan relatang thereto, including, but not Innited to, notification of the County Commissioner an
whose district the District is located, Ramsey County and School District 230. 625 having ta�ng
jurisdiction over the properiy to be included in the District and the HSS, and the hoiding of a public
hearing after published notice as required by law.
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Section 2. Findings by.,the City for the Ap�roval of the TaY Increment Financing.,Plan for
the Plastics Inc Redevelo�ment Taat Increment Financin� District and the
Hazardous Substance Subdistrict therein.
2.01. The Council hereby finds that the District is a redevelopment district pursuant to
Minnesota Statutes, Section 469.174, Subd. 1Q, pazagraph (a), clause (1), and the ASS is a
hazardous substance subdistrict pursuant to the Minnesota Statutes, Section 469.175, Subd. 7. The
Port Authority shail make the findings necessary to qualify the HSS.
2.02. The Council hereby finds that the Dis�ict and the HSS, and the approval of the Plan
relating thereto, aze intended and, in the }udgment of this Council, the effect of such actions will be,
to provide an impetus for redevelopment in the District and to further the public purposes and
accomplish certain objectives as specified in the Plan.
2A3. The Council further finds that the proposed development or redevelopment in the
Dishict, in the opinion of the City, would not occ�tt solely through private invesiment within the
reasonably foreseeable future and that the increased mazket value on the site that could reasonably
be expected to occur without the use of ta�i increment financing (being $0) would be less than the
increase in the market value estimated to result from the proposed development (being
approximately $12,500,000) after subtracting the present value of the projected tax increments for
the maYimum duration of the District pernutted by the Plan (being approximately $8,500,000) and,
therefore, the use of tax increment financing is deemed necessary; that the Plan conforms to the
general plan for the development or redevelopment of the City as a whole; and that the Plan will
afford maxiumm oppornurity consisient with the sound needs of the City as a whole, £or the
development of the District by private enterprise.
2.04. The City does i�ot elect to compute the taac increments in accordance with Minnesota
Statutes, Section 469.177, subd. 3, clause (b), meaning that tax increments will be determined
before the application of the fiscal disparities provisions of Minnesota Statutes, Chapter 473F.
2.05. The City elects to make a qualifying local contribu6on in accordance with
Minnesota Statutes, Section 2731399, Subd. 6(d), in order to qualify the District for exemption
from state aid losses set forth in Section 273.1399.
2.06. The Council fiuther finds, declares and determines that the City made the above
find'angs stated in this Section 2 and has set forth the reasons and supporting facts for each
determination in writing, attached hereto as Attachment A.
Section 3. Ap�roval of the Plan. The Plan for the Dishict and the HSS is hereby approved
and adopted, and shall be placed on file in the office of the City Clerk.
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Section 4. Acknowle ent Re,�ding T� Increments. The Council acknowiedges that
the County Auditor will forwazd all taY increments from the District and the HSS to the Port
Authority.
Section 5. Approval of Project Gemini for District. The Crosby Lake Project Gemini Zone
is hereby expanded to encompass the azea of the District.
Section 6. 9rdinance Authorizing Issuance of Bonds. City staff is hereby authorized and
d'uected to submit an ordinance to the Council for its consideration, which authorizes the issuance
of the Bonds as described in paragraph 1.07 above.
Section 7. ��proval of Subordinated Tax Increment Bond .
7.01. Laws of Minnesota 1976, Chapter 234, 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, by resolution adopted in accordance with 1aw.
7.02. The Council hereby approves the issuance of the NSP Bonds by the Port Authority
for the purposes described herein and in the Plan, the �act details of which, including but 1'united
to, provisions relating to maturity and interest rate, are to be deternuned by ihe Port Authority, and
the Council hereby authorizes the issuance of any additional bonds or notes (including refunding
bonds or notes) by the Port Authority found by the Port Authority to be necessary for carrynig out
the purposes for which the NSP Bonds are issued.
Section 8. "Priority ProjecP' far DTED and MIF Funds. The Council hereby establishes
this Project as a"Priority Project" for the purposes of applying for g�ant funds from the Department
of Trade and Economic Development and the Minnesota Investment Pund for funds to finance the
Project, and the Council hereby approves in concept the application to the State of Minnesota for
$500,000 in Minnesota Investment Funds for this Project.
Section 9. Ratification of Prior Action . The prior actions of the City staff and Port
Authority staff in connection with the prepararion of the Plan, the distribution of the Plan to the
County and School District, and the publicafion of the notice of public hearing, are hereby ratified
and confirmed.
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.�, � .
RESOLUTION #
The reasons and facts supporting the findings for the adoption of the Tax Inerement Financing Plan (the
"Pian") for the Plastics, Inc. Redevelopment Ta�c Increment Financing District (the "District") as required plusuant
to Minnesota Statutes, Secrion 469175, Subdivision 3 are as follows:
1. Finding that the District is a redevetopment district as defined in Minnesota Statutes, Section 469.174,
Subd. 10, paragraph (a), clause (1).
The District consists of contiguous pazcels. The totai square footage of the District is approximately
1,143,000 square feet, and, and 70% of that number is 80Q100 square feet. The Citgo parcel within the Dishict is
875,269 squaze feet and is "occupied" by buildings, streets, utilities or other improvements, because at least 15%
(131,290 square feet) of the pazcel is covered by improvements (including above ground oiUgas storage tanks).
There are buildings in the District (_ of them storage tauks), (being _%) of which aze structurally
substandard because: [to be provided for each building or tank].
2. Finding that the proposed development, in the opinion of the Council, would not occur solely through
private imestment within the reasonably foreseeable future and, therefore, the use of tax increment financing is
deemed necessary and thctt the increased market value of the site fhat could reasonably be expected to occur
without the use of tar increment financing would be less than the increase in the market value estimated to resutt
from the proposed development after subtracting the present vatue of the projected tar increments for the
maximum duration of the district permitted by the ptan.
Due to the excessive costs for the clearance, grading, and soil and poilution remediation of the Citgo Site, this
project is feasible only through assistance, in part, from tas increment financing. The proposed development
consists of an approximately 370,000 square foot manufacturing and distriburion facility, the increase in mazket
value of which is estimated to be approximately $12,500,000. The value of development on the Citgo Site
expected to occur without the use of tax increment financing is $0, which is less than the estimated increase in
mazket value expected to be created by the proposed project (approximately $12,500,000) minus the present value
of the projected taY increments (appro�xnately $8,500,000).
3. Finding that the Tax Increment Financing Plan conforms to the general plan for the deveZopment or
redevelopment of the municipality as a whole.
The Citgo Site will be appropriately zoned for the Project. The proposed redevelopment is consistent with the
Saint Paul Mississippi River Corridor Pian which was originally adopted in 1981, and amended in 1987, and
concluded that this site should be developed with labor-intensive industrial uses.
ia�sr,�
9�-„�r
4. Finding that the Tax Increment Financing Plan for the District will afford maximum opportunity,
consistent with the sound needs of the City as a whole, for the deveZopment of the District by private enterprise.
The establishment of the District will result in the facilitarion of redevelopment in the azea of the City covered by
the District, will assist in the development of the new Science Museum of Minnesota, and will result in the
retention and creation of jobs for residents of the City.
�l��a`FsI'� �t.l��
� •. ��___
�___
�___
������
. :. . ����
'' ' ����
iiii'����'�
����
Adopted by Council: Date
Adoption Certified by Council Secretary
�
Approved by Mayor: Date
�
Requested by Department of:
�
Form Approved by City Attomey
�
Approved by Mayor for Submission to Council
By: _
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Exhibit G
r a7 _ ��VY
SAINT PAUL PORT AUTHORITY
TAX INCREMENT FINANCIl�TG PLAN FOR THE
PLASTTCS, INC. REDEVELOPMENT AND
HAZARDOUS SUBSTANCE SUBDISTRICT
TAX INCREMENT FINANCING DISTRICT
Introduction
The Science Museum of Minnesota (the "Science Museum") has identified a site for
consuuction of its new facility which necessitates the acquisiiion and demolition of the
manufacturing and distribution facility at the interse�tion of Chestnut Street and Ryan Avenue (the
"Chestnut Site") owned and operated by Plastics, Inc., a division of Anchor Hocldng ("Plastics").
Plastics currenfly has 200 employees at the Chestnut location, which is one of three operated by it
in the Twin Cities metro azea. Many of these employees are St. Paul residents. Staff from the Saint
Paui Port Authority and the Saint Paul Deparhnent of Planning and Economic Development have
worked closely with representatives from Plastics to identify a suitable St. Paul location for
relocating the Plastics facility. The site to be redeveloped for Plastics is the approximately 26-acre
underutilized peh�oleum tank farm and raiiroad spur track site located approximately one mile to the
west of downtown Saint Paul at Shepazd Road and James Avenue ("Citgo Site"). Citgo is the
current primary properry owner, and two small adjacent properties owned by Northem States
Power Co. (NSP) and the Union Pacific Railroad are also part of the District.
The acquisition, clearance, remediation, and improvement of the Citgo Site is referred to herein as
the "Project". T'he Port Authority's goal in undertaking this Project and creating an industrial
development district is to provide for the maximum job creation and retention and tax base possible
in St. Paul.
Creation of Redevelopment Tax Increment District; Statutory Authority
This tax increment plan relates to the creation, under Minnesota Statutes Section 469.174,
Subd. 10, of the Plastics, Inc. Redevelopment Taat Increment Financing Dishict (the "District"), and
the possibie creation within the Dishict of a Hazardous Substance Subdistrict (the "HSS"), pursuant
to Section 469.175, Subd. 7.
Need and Public Purpose
The Citgo Site
The Project wiil provide land necessary for Plastics to relocate and consolidate its Saint
Paul and Eagan operations an Saint Paul, and in doing so make way for the conshuction of the
Science Museum at the Chestnut Site. The City's tas base will be increased by the construction of
an approximately 370,000 square foot new manufacturing and distribution facility. Over 200 jobs
will be retained in, and 150 jobs relocated to, the City as a result of the Project for a total of 350
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jobs in the new facility. The development of the Citgo Site will also be a catalyst for the creafion of
additional job oppommities and tax base enhancements at the various other smaller sites located in
the Randolpt�/West Seventh atea.
The Citgo Site is the one acceptabie site in St. Paul out of the several proposed to Plastics,
due to site configuration and tiuZing issues. However, the Citgo Site, as is, is not suitable for
construction of the Plastics facility. Significant site and geotechnical improvements and pollution
remediation is required on this "brownfield site" before the faeility can be constructed.
The existing Plastics land and building at the Chesmut Site has an estunated market value
of $986,700, as valued by the County. The new Plastics facility at the Citgo Site will have a
construction cost of appro�mately $12,480,000.
The existing land use acuvities at the Citgo Site aze blighting and constitute an
underutilization of the land, are incompatible with the surrounding azea, and provide very m;nimai
job opportunities. Private development of the Citgo site has not been possible for a variety of
reasons. These reasons include excessive property costs for cleazance, grading, and soil conection
and pollution remediation. All of these conditions have resulted in a lack of private investment in
ttris area. As a result, the properiy has not provided employment opportunities and has not
contributed to its full potential to the tax base and general economy of the City, the School District,
the County, and the State.
It is necessary that the Saint Paul Port Authority exercise its statutory port authority powers
to develop, implement, and finance a program designed to encourage, ensure, and facilitate the job
and economic development of the properiy. Ttus redevelopment Project will further accomplish
the public purposes specified herein.
The Chesmut Site
The City is assisting in the redevelopment of the land encompassing the Chestnut Site by
facilitafing the development of the Science Museum's new river&ont facility in this area. The City
of Saint Paul on November 6, 1996, authorized the execution of a Development Agreement with
the Science Museum to undertake an appro�mately 300,000 square foot museum expansion and
800 caz parking ramp to bring approximately 1,500,000 museum visitors to the new river&ont
museum. The authorizing resolution authorized the City to purchase the former West Publishing
pazking lot and the existing Plastics property at the Chestnut Site as well as a number of smaller
parcels as part of this $90 plus million project. Addirionally, the Agreement directs the City to
construct Eagie Pazkway which will connect Shepazd Road to Kellogg on the westem edge of the
new Science Museum project. The needed right of way is through a portion of the existSng Plastics
facility at the Chestnut Site.
The mui&ple public purposes of providing for a major cultural facility development, job
creation and retention of vital manufacturing positions, blight removai, redevelopment of
underutilized land, and neighborhood azea enhancement will be achieved by this Project.
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Ob�ectives of the Port AuthoritX Rggarding Improvements in the Plastics Project Area
1. Prevent Piastics from Moving its Operations to Another State or
Municipality.
One of the primary goals of the Port Authority is to assist in the creation and
retention of livable wage manufacturing jobs in Saint Paui ttuough land
redevelopment, business financing, and business services activities. Plastics has
been a long-term viable Saint Paul manufacturer which has provided jobs to a
substantial number of Saint Paul residents. This Project will retain this
company's existing jobs and will afford the opportunity for additional jobs to be
relocated to the City through consolidation of company operations. The
redevelopment of the Citgo Site will capture this expansion and will prevent both
the direct loss of tax base and jobs in Saint Paul and the opportunity cost of
addirional jobs provided through company consolidation.
2. Provide Job Ogportunities for Saint Paul Residents.
Plastics, Inc. will be employing 350 jobs at this new location (150 jobs will be
coming from the Eagan facility). They will enter into the Port Authority's
Workforce Agreement that commits them for 10 years to pay no less than $4.15 per
hour and maintain a workforce of at least 300. Failing to meet these goals, Plastics,
Inc. is subject to cash penalties that are capped at $120,000 per yeaz.
The Port Authority operates a customized job training program (The Employment
Connection) which reeruits neighborhood residents and trains them based upon the
specific hiring needs of expanding companies. The Employment Connection will
be used to assist Plastics with its new hires as the company continues to grow.
3. To Redevelop Unused, i3nderused, Inappropriately Used, or Infrequently Used
Property.
The Citgo Site has been underutilized for many years. The majority of the area
comprising the site has been used most zecently as a petroleuxn tank fann, which has
been abandoned. The tanks aze unused, empty, and substandazd. This industrial (I-
3) zoned properiy has been contaminated and has had a detrimental effect on the
surrounding azea. This Project will solve several probiems at once (soil
contamination, blighting use, underutilization of land, neighborhood eyesore,
minimal jobs) and will greatly enhance the site with its highest use, hundreds of
jobs, massive increase in tax base, and a well landscaped site that will enhance the
area environment.
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4. Egpand the Industrial Tax Base of the City of Saint PauL
It is expected that the taYable market value of pazcels in the District will increase by
approximately $10,300,000 once the Project is placed in service. This value will
come from the development of an approximately 370,000 square foot
manufacturing and dishibution faciliTy with an average construction value of $33.73
per square foot. The increase in taxable value of the new facility is assumed to be at
90% of the construction cost less the existing base of $960,000.
5. Facilitate the Egpansion and New Development of the Science Museum
The relocation of Plastics will ailow for the major expansion of the renowned
Science Museum. Underutilized urban core land adjacent to the eacisting Plasfics
facility will be redeveloped with a culrival facility that will provide jobs and
contribute to the economic, educational, and entertainment vitality of the City and
the Region.
6. Assist the City of Saint Paul Obiigations Under Science Museum Development
Agreement
The City of Saint Paul is required to acquire all lands, including the existing Plastics
facility at the Chestaut Site, needed for the Science Museum pro}ect as a condition
of receiving a$30,000,000 grant from the State of Minnesota for the Science
Museum project. The City's resolution on November 6, 1996, authorized this
acquisition.
7. Hazardous Substance Remediation
The Port Authority will incur remediation costs at the Citgo Site as specified in a
Response Action Plan to be approved by the MPCA. Ttxese activities would
eliminate areas of hazardous substances in the designated hazardous substance sites.
Classification of the District.
The Port Authority and the City of Saint Paul, in determining the need to create a tax
increment financing district in accordance with Section 469.174, fmd that the District is a
redevelopment dishict pursuant to Minnesota Statutes, Section 469.174, Subd. 10, because parcels
consisting of 70% of the azea of the District aze occupied by buildings, streets, utilities or other
improvements and more than 50% of the buildings aze structurally substandazd to a degree
requiring substantial renovation or clearance. This finding is based upon the following facts: (.i.)
the total squaze footage of the Distdct is appro�nately 1,143,000 square feet, and 7Q°/a of that
number is 800,100 square feet; (ii) one pazcel within the Aistrict (the "Citgo" pazcel) is 875,269
square feet; (iii) the Citgo pazcel is "occupied" by buildings, streets, utilities or other improvements
because at least 15% (131,290 square feet) of the parcel is covered by improvements (including
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above-ground oiUgas storage tanks); (iv) at least 50% of such storage tanks aze functionally or
structurally defective and will be removed. Those tanks, which were installed on the site in
appro�mately eaziy 1960, were emptied and abandoned in the eazly 1990's, and have not been used
since.
In the event an HSS is created, prior to certification of the HSS, the Port Authority will also
find that the HSS is a hazazdous substance subdishict pursuant to Mimiesota Statutes, Section
469.175, Subd. 7.
In addition, the District meets the requirements of a redevelopment district pursuant to
Minnesota Statutes, Section 469.176, Subd. 4(j); because: at least 90% of the revenues derived
from tax increments from the District will be used to finance the cost of correcting the condirions
that allowed designarion of the District as a redevelopment district under Section 469.174, Subd. 10
described above, These costs, which aze estimated to be in excess of $10,000,000, include the cost
of acquiring properties in the District, site filling, grading and piling, and installarion of utilities,
roads, sidewaiks and pazking facilities for the site. Allocated admuristrative costs may also be
included in the qualifying costs. This total is more than 100% of the projected amount of the bond
issue ($6,655,000).
Descripfion of the Develo�ment Proeram for the Plastics Inc Redevelo�ment Pro�ect
The development program at the Citgo Site consists of the development of the Dishict to
provide a 37Q,OOQ square foot facility for use by Plastics in the District. This wili require acquiring
land, filling, grading, piling and compaeting the site, managing pollution remediation, incurring
financing related expenses and funding admuristrative funcuons, all as described in more detail
below:
1. Property Acquisition.
The approximate 26 acres of land at the Citgo Site will be purchased from Citgo,
Northern States Power Company and the Union Pacific Raikoad at an estimated
total purchase price of $88,000.
2. Polluted Soils Remediation.
Due to the historical uses of the Citgo Site as a petroleum tank farm and railroad
sput track, several pollutants are suspected in the soil. Remediation oversight cost is
anficipated to equal $2,600,000 at this time. This cost will be further defined when
additional testing is completed and a Response Action Plan (RAP) is approved by
the MPCA. The total cost will include legal advice, field testing, soil remediarion,
and MPCA activities.
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3. Installation of Site Improvements and IJtilities.
Site improvements will include demolition, engineering, street improvements,
utilities, fill, site grading, and landscaping. Total site improvement costs are
anticipated to equai appro�mately $2,977,000.
4. Geo-Technical Correction.
Geotechnical correction includes pilings at a total estimated cost of $5,050,000.
5. Contracts for Professional Services Essen6al to the Redevelopment Activifies.
Professional services will include land surveys and tifle work, real estate, legal, civil
engineering, geotechnical engineering, appraisals, and traffic engineering and
business park design. The total cost for professional services, other than bond
issuance costs, is estimated to be $9Q0,000.
6. Contingency
Project budget includes $1,508,000 for project contingencies.
7. Incur Costs and Expenses Connected With Financing Acrivifies.
Bond issuance costs plus other financing-related costs, including capitalized interest,
legal expenses, printing and underwniters discount, are anticipated to totai
approximately $1,164,000.
Descri_ption of Contracts Entered into at the Time of Preparation of the Plan
Section 469.175, Subd. 1(3), requires that a list of development activities that aze proposed
to take place as part of the Project for which contracts will be entered into at the time of the
approval of this plan, including the names of the parties to the contract, the activity govemed by the
contract, the cost stated in the contract, and the expected date of completion of that activity be listed
in the Plan; however, no contracts have been entered into at this time.
Descripfion of Other Types of Develanment Activities Which Can Reasonably Be Expected to
Take Place Within the Project Area
The end-user of the Citgo Site will be Plastics, Ina (a fifty-eight year old international
enterprise which manufactures glass and plastics containers) and its �liated companies, Anchor
Hocking and Newell Company. Activities in the District will include producfion, assembiy,
warehouse, distribution and attendant office space that lead to the creation and retention of living
wage jobs. A goal of this taac increment plan is to provide for the retention and relocation of at
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least 350 jobs, currentiy located in Saint Paul at the Chesmut Street Site, and in Eagan,
Minnesota.
Construction of the new Plastics facility is expected to commence in September, 1998. This
acrivity will be closely coordinated with that of the Science Museum site redevelopment, and will
take into account production process needs of Plastics.
Cost of the Proj.ect and Description of the Plastics. Ina Redevelogment Tax Increment
District.
The foilowing, as required by Secrion 469.175, Subd. 1(5), aze estunates of the (i) cost of
the Project, including aduiinistration expenses; (ii) amount of bonded indebtedness to be incurred;
(iii) sources of revenue to finance or otherwise pay public costs; (iv) the most recent net tas
capacity of taxable real property wittvn the taY increment financing district; (v) the estimated
captured net tas capacity of the ta�c increment financing district at completion; and (vi) the duration
of the tax increment financing district's existence.
1. Cost of the Project, Including Administrative Expenses.
The development cost of the Project is estimated at $13,123,000, plus administrative
chazges payable to the Port Authority in an amount up to 10% of the t� increment
receipts. Other costs of relocation, retention incentives, and occupancy cost
reductions aze $6,376,000, for a total project cost estimated at $19,500,000.
2. Amount of Bonded Indebtedness to be Incurred.
A. TaY Increment Bonds: The Port Authority shall be the issuer of one or more
series of tax exempt general obligation tax inczement bonds by the end of
the yeaz 1997 in the appro�mate gross amount of $6,655,000, wtuch after
allowing for capitalized interest and cost of issuance, result in net proceeds
of $6,075,000.
B. General Obli�ation Bonds: The Port Authority shall be the issuer of Cseneral
Obliga6on debt in an initial amount of approximately $7,995,000 million,
which will result in net proceeds of $7,725,000 to fund project costs. To the
eatent grant funds aze subsequenfly received, General Obligarion bonds
would be retired.
C. NSP Note: NSP wi111end $2,OOQ,000 to fund project costs. This loan wi11
beaz interest at 4% and will be amortized over 15 years. The loan will be
secured by a subordinate lien on t� increments and a loan payxnent to be
made by Plastics of up to $.50 per square foot.
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3. Sources of Revenue to Finance or Othernise Pay Public Costs.
The following aze the likely sources for funding the total Project, including the taac
increments which will be pledged to the bonded indebtedness:
A. Tax Inerements
T� increments from the redevelopment district, net of up to 10% for
adinuiishafive eacpenses, aze anricipated to equal $436,000 annually. If the
HSS is created, the addirional annual increment &om that subdis7ict is
anticipated to be approacimately $60,000 per year. All taY increments will be
first pledged to the payxnent of debt service on the $6,655,000 taY exempt
general obligation tax increment bonds, which after capitalized intezest and
cost of issuance generate $6,075,000 be used to pay qualifying project costs.
B. Pa�ment From Plasrics
Plastics has agreed to make a payment of up to $.50 per square foot, which
payment shall be pledged to the repayment of the NSP note described above.
C. City of Saint Paul & Saint Paul Port AuthoritX
The City of Saint Paul will fund an aggregate of $3,200,000 towazd the
Project, consisting of $500,000 for job relocation benefits and $2,700,000
for a rent abatement escrow and relocation of Plasucs.
The Saint Paul Port Authority will conhibute funds in the amount of
$SQ0,000 towazd the job relocafion incentive.
D. Investment income
Nominal investrnent eaziiings ate projected, the majority of which will be
utilized to fund project costs and capitalized interest on the bonds until taY
increments aze available to meet debt service on the bonds.
E. Pollution Funds
Poilution funds may be derived from the HSS, if it is created. Increments
from the HSS would support only that portion of the bonded indebtedness
amibutable to funding pollution remediation.
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4. The Most Recent Net Tax Capacity of Taxable Real Property Within the Taz
Increment Financing Distric�
At 7anuary 31, 1997, the total tax capacity of property parcels to be included in the
District was approximately $46,000. Of the $96Q000 total base market value,
$328,600, or 34% of the total, is attributabie to buildings, all of which will be
removed in connection with the redevelopment pursuant to this Plan. The $631,400
of mazket value attributabie to the Citgo, Union Pacific, and NSP land is assumed to
remain constant. The original tax capacity and tax rate aze calculated in accordance
with Minnesota Statutes, Section 469.174, Subd. 7 and Section 469.177, Subd. 1.
5. The Esfimated Captured Net T� Capacity of the Tax Increment Financing
District at Compiefion.
The new 370,000 square foot facility on the Citgo Site will have an aggregate
assumed estimated mazket value of $11,232,000. Applying a 3.40% tax capacity
rate results in estimated tax capacity of approximately $381,000 and a caphued net
taY capacity of $552,000 at January 2, 2001, the yeaz following expected completion
of construcdon of the new Piasrics facility. This captured t� capacity is calculated
in accordance with Minnesota Statutes, Secrion 469.174, Subd. 4 and 469.177,
Subd. 2.
6. The Original Tas Capacity and Captured Tax Capacity of the HSS
The original tax capacity of the HSS is $46,000. If incurred, remediation
expendiiures would exceed $46,000 and be deducted from the original tax capacity
resulting in the maxiinum caphxred tar, capacity allowed in the amount of $46,000.
7. The Duration of the Tax Increment Financing District's Existence.
The request for certification of the Dishict will be made in 1997. The first tax
increments are anticipated to be generated for taxes payable in the yeaz 2000. The
duraUOn of the District will run 25 yeazs from the first receipt by the Port Authority
of tax increments. Therefore, it is estimated that the Port Authority could collect tax
increments &om the District through the yeaz 2025. The maximum durarion of a
Hazardous Substance Subdishict is the lesser of (i) 25 years from the date additional
tax increment from the HSS is received, or (ii) the period necessary to recover the
costs of removal or remedial acrions specified in the development Response Action
Plan. The Port Authoriry does, however, reserve the right to decertify the District
and the HSS prior to the legally required date.
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Alternate Estimates of the Im�act af the Tax Increment Financing on the Net Tax Capacities
of All Taxing Jurisdictions.
The taYmg jurisdictions in which the District is located in whole or in part ate as foilows:
a Independent School Distriet #625, whose boundaries are cotemunous with those of
the City of Saint Paul.
b. The County of Ramsey, the total market value of which the City of Saint Paul
contributes approxixziately 45%.
c. The Housing and Redevelopment Authority of the City of Saint Paul, whose
boundaries aze cotemunous with those of the City of Saint Paul.
d. The Saint Paul Port Authority, the requesting authority, whose boundaries aze
coterminous with those of the City of Saint Paul and whose powers to levy and use
property taaces are limited.
e. Metropolitan authorities, such as the Meh�opolitan Council, Meh�opolitan Airports
Commission, Metropolitan Waste Control Commission, and the Metropolitan
Mosquito Control District. Of these, only the Metropolitan Council and the
Metropolitan Mosquito Control District currently levy taues on real estate.
The Port Authority is required by Minnesota Statutes Section 469.175, Subd. 1(a)(6) to
make statements relative to the altemate estimates of the impact of the tax increment financing
on the net tax capacities of all tasing jurisdictions in which the ta�c increment financing district is
located in whole or in part. For purposes of one statement, which is made in Statement A below,
the Port Authority shall assume that the estimated captured net t� capacity wouid be availabie to
the taYing jurisdictions without creation of the district. For purposes of the second statement,
made in Statement B below, the Port Authority shall assume that none of the estimated captured
net tax capacity would be available to the tasing jurisdictions without creation of the district.
Statement A.
Under the assumption that the estimated captured net tax capacity wouid be available to the taxing
jurisdictions without crearion of the District, creation of the District will serve to deny these tasing
jurisdictions the t�es from the captured net t� capacity in the amount estimated above under the
section entitled "The Esrimated Captured Net Tax capacity of the tax increment financing
District at Completion.". In addition, the ta�ces on the base value would also be lost in the event
the HSS is created as described above under the section enfifled "The Original Tax Capacity and
Captured Tax Capacity of the HSS". However, the demolition and cleazance of the Plastics
facility to make way for the Science Museum project would go forwazd without the creation of the
District, and the current Plastics facility at the Chestnut Site would be removed from the ta�c rolls in
any event.
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Statement B.
The Port Authority believes that none of the estimated captured net ta�c capacity would be available
to the taxing jurisdictions without creation of the District due to the expense of getring the Citgo
Site to a state in which it wouid be conducive to the generation of such increased value. In
particular, without creation of the District, Plastics would not be relocating to the Citgo Site.
Assiiming this to be true, the tasing jurisdictions would continue to receive the same amount of
taxes as they have currently been receiving based on the current net tax capacity of the District as
set forth above under the section entifled "The Most Recent Net Tax Capacity of Taxable Real
Property Within the Tax Increment Financing District", except for the demoliuon of the
Plaskics facility which would occur with or without crearion of the District. Once the taY increment
dishict terminates in 2025, the taxing jurisdictions will receive the taxes that they have received in
the past from the Citgo Site.
Studies and Aualysis Used to Determine Need for Tax Increment Financing
In Resoluuon No. adopted by the Port Authority on, [ October 28. 19971 and in
Resolution No. adopted by the City on [September 24. 19971, the Port Authority and the
City have deternuned on the basis of data collected and presented by Port Authority and City staff
that the proposed development or redevelopment of the Citgo Site wouid not reasonably be
expected to occur solely through private inveshnent within the reasonably foreseeable future, and
that the increase in the mazket value of this site that could reasonably be expected to occur without
the use of tas increment financing would be less than the increase in the market value estimated to
result from the proposed development after subtracting the present value of the projected tax
increments for the maximuxn duration of the district permitted by the plan. Any minimat private
investment that might occur without public redevelopment ac6viry would provide significantly less
than the increase in the mazket value estimated to result from the proposed Plastics development.
The studies and analyses used to make the determination that the proposed development
would not reasonably be expected to occur through private investment within the foreseeable
future, and therefore the use of tax increment is deemed necessaty, aze as follows:
• The Citgo Site is an industrial Brownfields site, a blighted, underutilized,
contaminated site that necessitates public redevelopment intervention in order to be
made marketable for private sector development that generates an acceptable number
of jobs and increased tax base.
• The Citgo site presents significant development challenges aside from contaminarion
because the site needs significant fill and pilings, grading, and infrastructure
development, unlike buildable sites elsewhere in the marketplace that do not require
public redevelopment intervention prior to construction.
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• The Saint Paul Mississippi River Corridor Plan, which was originally adopted in 1981
and amended in 1987, concluded that this site should be developed with labor-
intensive industrial uses.
Identificafion of All Parcels to be Included in the District.
Attached hereto in Appendix A is a list of the Property Identification Numbers for all
properties to be included in the District, a map showing the Project azea (the area of the Industrial
Development District to be created by the Port Authority), the District and the e�sting properties,
and a legai description identifying the boundaries of the District.
Hazardous Substance Subdistrict
In the event the HSS is created, certification of the HSS wiil allow taxes attributable to the
base value of the District to be used to reimburse or pay a11 or a portion of the pollution testing and
remediarion costs. As mentioned above in the section entitied "The Original Tax Capacity and
Captured Tax Capacity of the HSS", the HSS would cause taxes on the base value of the Dishict
to be lost until such time as the poliution costs are satisfied. Total taxes payable in 1997 were
appro�mately $66,000. As mentioned above, a Response Acrion Plan for the Citgo Site will be
completed and submitted to the MPCA for approvai prior to certification of the HSS. If an HSS is
created, the Port Authority would make the necessary finding that the development would not
reasonably be expected to occur solely through private investment and taY increment otherwise
available from the District and that the use of HSS was, therefore, deemed necessary.
Attached hereto as Append� B is a list of the Property Identification Numbers for all
properties to be included in the HSS, a map showing the HSS and a legal description identifying the
boundaries of the HSS.
District Administration and Annual Disclosure.
Admuristration of the District will be the responsibility of the Port Authority, acfing on
behalf of the Ciry of Saint Paul. The resolurions of the City and the Port Authority approving and
creating the District wiil direct the County to forward all tax inerement from the District to the Port
Authority. Tax increments will be deposited into interest bearing accounts sepazate and disiinct
from other funds of the Port Authority. Tax increments will be used only for acrivities described in
this taY increment plan.
The Port Authority on behalf of the City wiii report annually to the State Auditor, county
board, school board and Department of Revenue regazding activities in the District as required by
Secrion 469.175, subdivision 5 and subdivision 6 and will inciude informarion with regard to the
District in the data necessary to comply with subdivision 6a. With regazd to the local contribution
as discussed under the heading "Local Match Requirement" below, the City will file necessary
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reports required by the Deparnnent of Revenue in such form as the Deparkment of Revenue may
then require.
Modifications to District
In accordance with Minnesota Statutes, Secrion 469.175, Subd. 4, any reducrion or
enlargement of the geographic area of the Project or tas increment financing district; increase in
amount of bonded indebtedness to be incurred, including a determivarion to capitalize interest on
debt if that detemunation was not a part of the originai plan, or to increase or decrease the amount
of interest on the debt to be capitalized; increase in the portion of the captured t� capacity to be
retained by the Port Authority; increase in total estimated tax increment expenditures; or
designation of additional property to be acquired by the Port Authority shail be approved upon the
notice and after the discussion, public hearing and findings required for approval of the original
plan. The geographic azea of a taY increment financing district may be reduced, but shall not be
enlarged, after five yeazs following the date of certification of the originai tas capacity by the
county auditor.
Administrative Expenses
In accordance wiih Minnesota Statutes, Section 469.174, Subd. 14; and Minnesota Statutes,
Section 469.176, Subd. 3 administrative expenses means all expenditures of an authority other than
amounts paid for the purchase of land or amounts paid to contractors or others providing materials
and services, including azchitectural and engineering services, directly connected with the physical
development of the real property in the District, relocation benefits paid to or services provided for
persons residing or businesses located in the District or amounts used to pay interest on, fund a
reserve for, or sell at a discount bonds issued pursuant to Section 469.178. Administrative expenses
also include amounts paid for services provided by bond counsel, fiscal consultants, and plam�ing
or economic development consultants. Administrative expenses of the District will be paid to the
Port Authority from taY increments; provided that no tax increment sha11 be used to pay any
administrative e�cpenses for the Project which exceed ten percent of the total tax increment
expenditures authorized by the tax increment fmancing plan or the total tax increment expenditures
for the Project, whichever is less.
Pursuant to Minnesota Statutes, Secfion 469.176, Subd. 4h, ta�� increments may be used to
pay for the county's actual administrative expenses incurred in connection with the District. The
county may require payment of those expenses by February 15 of the year foilowing the yeaz the
expenses wereincurred.
Necessary Improvements in the District
No tax increment shall be paid to the Port Authority after three years from the date of
certificarion of the original net taY capacity by the County Auditor unless within the tYiree-year
period:
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(1) bonds have been issued in aid of the Project pursuant to Section 464.178 of the TIF
Act or any other law, except revenue bonds issued pursuant to ivlinnesota Statutes,
Section 469.159 to 469.165;
(2) the Port Authority has acquired property within the District; or
(3) the Port Authority has constructed or caused to be constructed public improvements
within the District.
The bonds must be issued, or the Port Authority must acquire property or construct or cause
public improvements to be constructed by appro�mately November, 2000.
• Pursuant to Minnesota Statutes, Section 469.176, Subd. 6:
If, after four years from the date of cert�cation of the original tc� capaciry of the taz
increment fznancing disirict pursuant to Minnesota Statutes. Section 469.177, no
demolition, rehabilitation or renovation ofproperty or other site preparation, including
qual�ed improvement of a street adjacent to a parcel but not installation of utility
service including sewer or water systems, has been commenced on a parcel located
within a tax increment fznancing district by the authority or by the owner of the parcel
in accordance with the tax increment fznancing plan, no additional tar increment may
be taken from that parcel and the original tax capacity of that parcel shall be excluded
from the original tax capacity of the tax increment flnancing district. If the authority or
the owner of the parcet subsequently commences demotition, rehabilitation or
renovation or other site preparation on that parcel including improvement of a street
adjacent to that parcel, in accordance with the tax increment frnancing plan, the
authority shall certify to the county auditor in the annual disclosure report that the
activity has commenced. 7Tze county auditor shadl cert� the tctt capacity thereof as
most recently cert�ed by the commissioner of revenue and add it to the original taz
capacity of the tax increment frnancing district. The county auditor must enforce the
provisions of this subdivision.. For purposes of this subdivision, qualified
improvements are limited to (1) construction or opening of a new street, (2) relocation
of a street, and (3) substantial reconstruction or rebuilding of an existing street.
The Port Authority or a properiy owner must begin making impravements to parcels within
the District by approximately November, 2001.
• Pursuant to Minnesota Statutes, Section 469.1763, Subd. 3, revenues derived from taY
increments are considered to have been spent on aza activity within the District only if
one of the following occurs:
1. Before or within fzve years after cert�cation of the District, the revenues are
actually paid to a third party with respect to the activity;
Ct�L!
a�-���.�'
2. Bonds, the proceeds of which must be used to finance the activity, are issued and
sold to a third party before or within frve years after certifzcation of the District, the
revenues are spent to repay the Bondr, and the proceeds of the &onds either are, on
the date of issuance, reasonably ezpected to be spent before the end of the latter of
(i) the frve year period, or (ii) a reasonable temporary period withfn the meaning of
the use of that term under Section 148(c)(I) of the Internal Revenue Code, or
deposited in a reasonabZy required reserve or replacement funa;�
3. Binding contracts with a third party are entered into for performance of the activity
before or within five years after certifzcation of the District and the revenues are
spent under the contractual obligation; or
4. Costs with respect to the activity are paid before or within frve years after
cert�cation of the District and the revenues are spent to reimburse a party for
payment of tke costs, including interest on unreimbursed costs.
Therefore, one of the above four events must occur by appro�mately November, 2002.
Use of Tax Increment
All revenues derived from tax inczement shall be used in accordance with this tax increment
financing plan and pursuant to Minnesota Statutes, including but not limited to Section 469.176,
Subds. 4, 4e and 4j.
Nofification of Prior Planned Improvements
Pursuant to Minnesota Statutes, Section 469.177, Subd. 4, the Port Authoriry has reviewed
the area to be included in the District and has found building permits issued during the 18 months
immediately preceding approvai of the Plan were for maintenance only.
capacity of the District should not change as a result of the valuafion
which the building permits have previously been issued.
Excess Tax Increments
Therefore, the originai tax
of any improvements for
Pursuant to Minnesota Statutes, Section 469176, Subd. 2, in any yeaz in which the t�
increment exceeds the amount necessary to pay the costs authorized by this taY increment plan,
including the amount necessary to cancel any tax levy as provided in Minnesota Staiutes, Section
475.61, Subd. 3, the Port Authority shall use the excess amount to do any of the following:
2.
3.
Frepay the outstanding bonds;
Dischazge the pledge of tax increment therefor;
Pay into an escrow account dedicated to the payment of such bonds; or
G-I S
a1-���r
4. Return the excess to the County Auditor for redistribution to the respective taxing
jurisdictions in proportion of their t� capacity rate.
Fiscal Disparifies
The Port Authority and the Ciry have elected to compute Fiscal Dispariries contribution for
the District in accordance with Secrion 469.177, subdivision 3, paragraph a
Locai Match Requirement
For taY inerement financing dishicts which request certificarion after June 30, 1994,
Minnesota Statutes, Secuon 273.1399, Subd. 6(d) provides that the Port Authoriry may be exempt
from local government aid or homestead and agricultural credit aid penalty if the Port Authority
and/or the City of Saint Paul makes a local contribution to the Project equal to five percent of the
tax increment. The Port Authority and the City intend to make the local contributions in lieu of the
state aid penalty. Five percent of the future value of the taY increments expected to be collected
from the District is appro�mately $691,000. The City and the Port Authority will make an up-front
local contribution (rather than a yeazly contribution) in the amounts identified above in paragraph C
under the heading "Sources of Revenue to finance or otherwise pay public costs". These amounts
aggregate $3,700,000 in local confribution. Pursuant to Section 273.1399, Subd. 6(d)(2), if the Port
Authority or the City fails to make the required contribution for any year, the state aid reducrion
will apply for that year. The state aid reduction wi11 be equal to the greater of (A) the required 1oca1
contribuflon (5% of tax increments collected that year) or (B) the amount of the aid reduction that
applies under Subdivision 3 of Section 273.1399.
9/17/97
g.\jmo\Ih\plas-Uf
G-16
SAINT PAUL PORT AUTHORITY
TAX INCREMENT FIIQANCING PLAN FOR T'HE
RANDOLPH AVENUE REDEVELOPMENT AND HA7.ART)OUS SUBSTANCE
SUBAISTRICT
TAX INCREMEI�IT FINAI�CING DISTRIGT
APPENDIX A
Properties fo be Inclnded in the Redevelopment Disfrict
Property Identification Number: 12-28-23-12-0034
Legal Description: Raznsey Coimty Tax Department Description as follows:
a ., _,.��r
Plat .01088 Subdivision of the I3VJ 1l4 of the NE 1/4 and Lot 2 of Section
Twelve of T28 R22 in the City of St Paul Revised Aescription No. 976 a
Specific Part of Sec 12 TN 28 RN 23
Property Identification Number: 12-28-23-11-0005
Legal Deseription: Part of Ramsey County Tax Department Description as follows:
The Westerly 150 feet of the following described property:
Plat .01043 I3orthern States Power Co's Plat, St Paul, Minn. Subj to Shepard Rd & Subj to Higb
Bridge ROW & No Part of Vac Hill St and McMillan St Adj & Ex Levee & Ex a 700 Ft MOL
Union Oil Parcel Adj to Shepard Rd; the Fol; Part of Govt Lots 1& 2 Lying NW1y of and Bllcs 4
Thru 6 I�Iorthem States Power Co's Plat, St Paul, Minn. Sub,j to Shepazd Rd & Subj to High
Bridge ROW & No Part of Vac Hill 5t and McMillan St Adj & Ex Levee & Ex A 700 Ft MOL
Union Oil Pazcel Adj to Shepard Rd; The fol; Part of Govt Lots 1& 2 Lying 23WIy of SEIy Levee
Line Lying SWIy of SWIy Line of Ei'igh Bridge ROW Lying SEIy of NWly ROW Line of Shepazd
Rd Lying Ely of a line Desc as Beg at Most NEIy Cor or Tract B 12LS 441 Th 23 27 Deg 32 Min OS
Sec W 70.26 Ft Th N 33 Deg 34 Min 26 Sec E 68.22 Ft Th N 27 Deg 02 Min 30 Sec W 60.56 Ft to
Sly ROW Line of Shepazd Rd & There Term & All of Tract C Reg Land Survey No. 441 & All of
Blks 1 and B1k 2 and Vac Gray St of McMillans Add & Ex N 218 Ft & Fx Stockyazd Track of CS
and PM and O Ry Co; Lots 15 and Lot 16 Paztition Add & Pa# of Blk 1 of JT McMillan Co Plat
Lying S of a Line Desc as Beg at a Pt on I�tL, of Sec 12 TN 28 RN 23 Dist 514.63 Ft E of NW Cor
of Govt Lot 1 Th S 60 Deg 29 Min W 141.6 Ft Th S 71 Deg 4b Min 30 Sec W 250.82 Ft Th S 65
Deg 18 Min W 166.96 Ft to a Pt on WL of SD Govt Lot 1 Dist 218 Ft S of NVJ Cor and There
Term & In SD Northem States Power Co Plat Biks 1 and 2 and Blks 4 Tluu Blk 6
Property Identification Number. 12-28-23-12-0035 �
Legal Description: Part of Ramsey County Tax Department Description as follows:
Plat .01088 Subdivision of the NW 1(4 of the I�tE 1(4 and Lot 2 of Section
Twelve of T28 R22 in the City of St Paul Revised Description No 1021 a
Specific Part of Sec 12 TTI 28 RI�i 23
G-17
SAI1�iT PAUL PORT AVI'HORITY
TAX IIQCREMENT PTNANCING PLAN FOR THE
RANDOLPH AVENUE REDEVELOPMEI�IT A1�D Aa7,eRDOUS SUBSTANCE
SUBDISTRICT
TAX INCREMENT FINAI�CIl�tG DLSTRICT
��.����
APPENDIX B
Proper[ies to be IncIuded in the Iiazardous Subsfance Subdisiricf
Property Identificatioa Number. 12-28-23-12-0034
Legal Description: Ramsey County Tax Department Description as follows:
Plat .01088 Subdivision of ihe NVJ 1/4 of the NE 1/4 and �,ot 2 of Section
Twelve of T28 R22 in the City of St Paul Revised Description 230. 976 a
Specific Part of Soc 12 TN 28 RN 23
Property Identification 23umber: 12-28-23-11-0005
Lega1 Description:
Part of Ramsey County T� Depariment Description as follows:
The Westerly 15Q feet of the following described property:
Plat .01043 Northem States Power Co's Piat, St Paul, Minn. Subj to Shepazd Rd & Subj to High
Bridge ROW & I3o Part of Vac Hill St and McMillan St Adj & Ex Levee & Ex a 700 Ft MOL
Union Oil Parcel Adj tA Shepazd Rd; the Fol; Part of Govt Lots 1& 2 Lying I1Wly of and Bllcs 4
Thru 6 Northem Sfates Power Co's Plat, St Paul, Mim�. Subj to Shepazd Rd & Subj to High
Bridge ROW & No Part of Vac Hill St and McMiAaa St Adj & Ex Levee & Ex A 700 Ft MOL
Union Oil Pazcel Ad,} to Shepazd Rd; 'Ihe fol; Part of Govt Lots 1& 2 Lying NWIy of Sfily Levee
Line Lying SWIy of SWIy Line of High Bridge ROW Lying SEIy of NWly ROW Line of Shepazd
Rd Lying Ely of a line Desc as Beg at Most NEIy Cor or Tract B RLS 441 Th N 27 Deg 32 Min OS
Sec W 70.26 Ft Th N 33 Deg 34 Min 26 Sec E 68_22 Ft Th N 27 Deg 02 Min 30 Sec W 60.56 Ft to
Sly ROW Line of Shepard Rd & There Teim & All of Tract C Reg Land Survey No. 441 & All of
Blks 1 and Bllc 2 and Vac Crray St of McMillans Add & Ex 13 218 Ft & Ex Stockyard Trnck of CS
and PM and O Ry Co; Lots 15 and Lot 16 Parfition Add & Pat of Bik 1 of TI' McMi11an Co Plat
Lying S of a Line Desc as Beg at a Pt on NL of Sec 12 TT3 28 FtN 23 Dist 514.63 Ft E of NW Cor
of Govt Lot 1 Th S 60 Deg 29 Min W 141.6 Ft Th S 71 Deg 46 Min 30 Sec W 250.82 Ft Th S 65
Deg 18 Min W 166.46 Ft to a Pt on WL of SD Govt Lot 1 Dist 218 Ft S of NW Cor and There
Term & In SD 23orthern States Power Co Plat Blks 1 and 2 and Blks 4 Thru Blk 6
Property Identification Number: 12-28-23-12-0035
Lega1 Description:
Part of Ramsey County Tax Depaztment Description as follows:
Plat .01088 Subdivision of the NVJ 114 of the NE 114 and Lot 2 of Section
Twelve of T28 R22 in the City of St Paul Revised Description No 1021 a
Specific Part of Sec 12 TN 28 RN 23
G-18
E�chibit H
Council File #
Green Sheet #
Ordinance #
ORDINANCE Q� "��
CITY OF SAINT PAUL, MINNESOTA
Presented by
Refeaed To
Date
An ordinance granting authority to the Port Authority of the City of Saint Paul to issue and
sell bonds in the aggregate principa! amount which will produce net available funds to be applied to
the costs of the Pmject of $13,800,000, but in any event not to exceed the principal amount of
$14,650,000, and any bonds to refund such bonds, to secure such bonds with a pledge of the full
faith, credit and resources of the City of Saint Paul, and to use the proceeds derived from the sale of
such bonds to pay the cost and expense necessarily to be incurred by said Port Authority for
acquisition of lands, clearance, remediation, and improvements in the Plastics, Inc. Redevelopment
Tax Increment Dis�ict pursuant to the provisions and by authority of Minnesota Statutes, Chapter
469, as amended, and prescribing the amount and form of such bonds and the manner for
establishing the rate of interest thereon.
WHEREAS, on September 23, 1997 the Port Authority of the City of Saint Paul (the "Port Authority")
adopted its Resolution No. __, finding that certain lands were blighted and mazginal properties within the
meaning of Minnesota Statutes, Sections 469.048 et seq., and establishing and creating the Citgo/Shepazd Road
Industrial Development District; and
WHEREAS, the City of Saint Paul, Miimesota (the "City"), has authority under Mimiesota Statutes,
Section 469.178, Subd. 2, to issue general obligation bonds payable from tax increments of a tax increment district
created by the Port Authority, and the Port Authority has authority under Minnesota Statutes, Section 469.060, to
issue bonds for its purposes in anticipation of income from any source wlrich are secured by the full faith, credit
and resources of the City, and pursuant to this Ordinance, the Port Authority will issue bonds to which are pledged
both taY increments and the full £aith, credit and resources of the City; and
WHEREAS, the Port Authority has requested the authorizateon of the Council of the City of Saint Paul,
pursuant to Minnesota Statutes, Section 469.060, for the issuance and sale by the Port Authority of its bonds in the
aggregate principal amount which will produce net available funds to be applied to the costs of the Project of at
least $13,800,000 but in any event not to exceed the principal amount of $14,650,000 (the "Bonds") and for the
9'1-���.Y
pledge of the full faith, credit and resources of the City to the payment of such Bonds, which Bonds will also be
secured by tax increments to be derived from the Plastics, Inc. Redevelopment Tax Increment Financing District
(the "District"), and any grants obtained in connection with the Project, as defined below, the establishment of
which was appmved by the City by its Resolution No. adopted on September 24, 1997; and
WHEREAS, the Bonds will be issued for the purposes of paying or reimbursing the costs and e�cpenses
necessarily incurred by the Port Authority for acquisition, clearance, remediation, and 'unprovements within the
District which are to be undertaken to facilitate the construction of a manufacturing and dishibution facility in the
District for Plastics, Inc., and the move of Plastics, Inc. from its current location at Chestnut and Ryan Streets to
the District (the "ProjecP'), and then for all other purposes authorized by authority of Minnesota Statutes, Chapter
469, as amended (the "Act") with respect to the Project; and
WHEREAS, the Council of the City (the "Council"), being duly advised in the premises, finds and
determines that it is necessary and appropriate that the Port Authority issue and sell bonds of the Port Authority in
the aggregate principal amount not to exceed $14,b50,000 for the purposes as stated above; and
WHEREAS, on the basis of the foregoing, it is now the intention of the Council to grant authority to the
Port Authority for the issuance of the Bonds; to prescribe the manner for establishing the amount, maturity
schedule, rates of interest, and the maximum rate of interest, to be bome by the Bonds; to authorize the Port
Authority to establish the date, denomination, place of payment and other details of the Bonds, including the form
of the Bonds; and to autharize and consent to the pledge by the Port Authority of the fuil faith, credit and resources
of the City to the payment of the Bonds as the same shall be issued and sold by the Port Authority, pursuant to the
authority of the Act, and pursuant to the authority gauted by this Ordinance.
� � a�-��V
NOW, TI-IEREFORE, Tf� COUNCIL OF TI� CTI'Y OF SAINT PAUL DOES ORDAIN:
Section 1
Authorization of Bonds. That subject to, and in accordance with, the applicable provisions, temis and
conditions of this ordinance and those contained in Section 469.060 of the Act, authority is hereby granted to the
Port Authority for the issuance and sale of its Bonds in the aggregate principal amount set forth in Section 2 and
the use of the proceeds of such Bonds first for the acquisition, clearance, remediation and construction of
improvements on land within the Dishict as contempiated by the Tax Increment Financing Plan for the District
(the "Plan"), and then for all other purposes authorized by the Act with respect to the Project.
Section 2
Establishin�Terms of the Bonds That the Port Authority is hereby authorized to establish the date,
denomination, place of payznent, form and details of the Bonds, provided that the Bonds shall be issued and sold
by the Port Authority as tax exempt and/or taxable Bonds in one or more series, in the manner provided and
allowed by law; the Bonds in an amount of appro�mately $6,600,000 (which, after subhacting costs of issuance,
wi11 provide net available funds for the Project in the amount of $6,150,000) sha11 be secured by a first lien pledge
of the tax increments to be received by the Port Authority from the Distcict, and the remainder of the Bonds shail
be secured by a pledge of any grant proceeds received with respect to the Project and by a lien on tas increments
w}uch shall be subordinate to, in order of priority, (i) such first lien, (ii) the payment of $2,000,000 of subordinated
tax increment bonds issued by the Port Authority and sold to NSP, and (iii) administrative charges in connection
with the District; the initial principal amount of the Bonds shall not exceed $14,650,000; the Bonds shall mature in
the amounts and years and bear interest at the rate or rates per annum, including rates which vary in accordance
with a formulae established by the offer to purchase the Bonds which is detennined to be the most favorable by a
Pricing Committee comprised of the President and the Chief Financial Officer of the Port Authority and the
Treasurer and the Deputy Mayor of the City, provided that the average annual weighted interest rate of the Bonds
shall not exceed _ percent (_%) per annuxn payable semi-annually unless such higher average annual
weighted mterest is specifically approved by a resolution adopted by a majority of the members of the Council;
°�'1- \ �C�I�
and the proceeds from the issuance and sale of the Bonds as received by said Port Authority shall be used first to
pay or reimburse the costs of the acquisition, clearance, remediation and construction of improvements on land
within the District as described in the Plan, and then for all other purposes authorized by the Act with respect to the
Project The Bonds may be made subject to redemption and prepayment at the option of the Port Authority at such
time and price or prices as shall be determined by the Port Authority and approved by the Pricing Committee
described above and upon such notice as is required by law. It is recognized that Section 469.060 of the Act
provides that the Bonds must be in the amount and form and beaz interest at the rate set by the Council, that the
Port Authority with the consent of the Council shall set the date, denominations, place of payment, form, and
details of the Bonds and that the Council is required to decide whether the issuance of the Bonds by the Port
Authority is proper and if so, the amount of Bonds to issue, and that the Council is required to give specific
consent in the Ordinance to the pledge of the City's full faith, credit and resources to the Bonds. The standards and
delegation to the Pricing Committee set forth herein are intended as such full required action of the Council, and
except as provided herein no further approval of the Council is required for the issuance of the Bonds under
Section 469.060 of the Act.
Seciion 3
Pledge of Full Faith and redit. That as security for the prompt and faithful payment of both principal and
interest of said Bonds in an amount not to exceed $14,650,000, the Port Authority is hereby authorized to pledge
the full faith, credit and resources of the City of Saint Paui; and such Bonds, both in respect of the principal
amount of the same and with respect to the interest thereon, may be paid by the Port Authority from tax levies
provided therefor and authorized by the Act.
Section 4
a�c Le . That the Port Authority, in the event of the issuance of any said Bonds authorized hereunder,
shall before the issuance of the same, levy for each year, until the principal and interest are paid in full, a direct
annual tax on all the taYable properry in said City of Saint Paul, in an amount not less than 5% in excess of the sum
required to pay the principal and interest of the same when and as such principal and interest mature and, after such
.
° t'1- � �LY
Bonds have been delivered to the purchasers, such taY shall be urepealable until all such indebtedness is paid, and
after the issuance of such Bonds no further action by said Port Authority shall be necessary to authorize the
extensions, assessments and collection of such t�. That the Secretary of said Port Authority shall forthwith
fiunish a certified copy of such levy to the County Auditor of Ramsey County, Minnesota, the county in wluch
said Port Authority and said City aze located, together with full information regarding the Bonds of said Port
Authority for which the tax is levied and such County Auditot shall eactend and assess the tax so levied, and shall
do so annually until the principai and interest have been paid in full. That any surplus resulting fzom the excess
levy therein provided shall be transferred to a sinking fund after the principal and interest for which the tax was
levied and coliected has been paid; provided, that said Port Authority may, on or before September 15 in any year,
by appropriate action cause its Secretary to certify to the said County Auditor the amount on hand and available in
its own treasucy from taY increments derived from the Plasrics, Inc. Redevelopmem T� Increment Financing
District, grants of federal or state funds received for the Project, earnings or other income, including any amounts
in the sinking fund, which it will use to pay the principal and interest or both on each specified issue of the Bonds
and the County Auditor shall reduce the levy for that yeaz herein provided for by that amount. That the amount of
funds so acquired shall be set aside by said Port Authoriry and be used for no other purpose than for the repayment
of the principal and interest on such Bonds. That all taxes being authorized to be levied under Minnesota Statutes,
Section 469.060, as amended, shatl be collected and remitted to the Port Authority by the County Treasurer in
accordance with provisions of law governing the collection of other taYes and shail be used solely for the payment
of such Bonds when due.
Section 5
No Further Council Action That said Port Authority may provide for the exercise of the authority hereby
granted for its issuance and sale of the Bonds in the aggregate principal aznount as provided in Section 2 hereof, for
the aforesaid purposes, and the pledge of the full faith, credit and resources of said City of Saint Paul, as security
for the payment of the same, by its appropriate resolution, and without further action of the Council. The authority
to set the finai principal amount, maturity amounts and interest rates on the Bonds has been delegated to the
�1_�\�Y
Pricing Committee as provided in Seetion 2 hereof. That in exercising the foregoing authority, the Port Authority
shall make due compliance with all applicable requirements for this ordinance, said Section 469.060, Minnesota
Statues, as amended, Sections 469.174 through 469.179, as amended, Chapter 475, Minnesota Statutes, as
amended, and all other applicable laws.
Section 6
Authorization of Refundin� Bonds. Pursuant to and in accordance with the provisions, terms and
conditions of this Ordinance and the Act, authority is hereby granted to the Port Authority to issue and sell
Bonds as authorized by Minnesota Statutes, Section 469.060, in aggregate principal amounts necessary for the
purpose of securing funds as needed by the Port Authority to refund obligations issued under this Ordinance.
The principal of the refunding bonds may exceed the principal of the bonds to be refunded to the extent
necessary and appropriate to pay interest thereon (including interest accruing as capital appreciation), to pay
costs of issuing the refunding bonds and to allow for discount upon sale, and to fund reserves and capitalized
interest for the refunding bonds.
Section 7
Effective Date. That this ordinance shall take effect and be in force 30 days after tUe passage, approval and
publication.
�![k�_�l►E1'� •��
��__
-• ,�___
�___ _, ,
•,� __
____
T
Adopted by Council: Date
Adoption Certified by Council Secretary
By:
Appzoved by Mayor. Date
BY=
��sted by Departrnent of
�
Form Approved by City Attorney
�
Approved by Mayor for Submission to Council
By:
�� ���`�
Sw�, �-�.-�G - ,ot � � q �
Council File # �� — � 1 �$
Green Sheet #
Ordinance #
ORDINANCE /7
�AINT PAUL, MINNESOTA
Presented by
Referred To
Committee Date
An ordinance granting authority to the Port Authority of the City of Saint Paul to
issue and sell bonds in the aggregate principal amount which will produce net available
funds to be applied to the costs of the Project of $13,80�,QQQ, but in any event not to
exceed the initial principal amount of $14,650,000, and any bonds to refund such bonds,
to secure such bonds with a pledge of the full faith, credit and resources of the City of
Saint Paul, and to use the proceeds derived from the sale of such bonds to pay the cost and
expense necessarily to be incurred by said Port Authority for acquisition of land,
clearance, remediation, and improvements in the Plasrics, Inc. Redevelopment Tax
Increment Dishict pursuant to the provisions and by authority of Minnesota Statutes,
Chapter 469, as amended, and prescribing the amount and form of such bonds and the
manner far establishing the rate of interest thereon; and authorizing the execution af a
Joint Powers Agreement in connection with the Project, which will provide for the
conh of funds to the Project.
WHEREAS, on September 23, 1997 the Port Authority of the City of Saint Paul {the "Port
Authority") adopted its Resolution No. 3656, finding that certain lands were blighted and marginal
properties within the meaning of Minnesota Statutes, Sections 469.048 et seq., and establishing and
creating the Citgo(Shepard Road Industrial Development District; and
WHEREAS, the City of Saint Paui, Minnesota (the "City"), has authority under Minnesota
Statutes, Section 469.178, Subd. 2, to issue general obiigation bonds payable from taa� increments of a tax
increment district created by the Port Authority, and the Port Authority has authority under Minnesota
Statutes, Secrion 469.060, to issue bonds for its purposes in anticipafion of income from any source which
aze secured by the fu11 faith, credit and resources of the City, and pursuant to this Ordinance, the Port
1
tsatsaz
S� ,. �o�Y�q7 9�7_ ))!��
Authority wiil issue bonds to which are pledged both t� increments and the full faith, credit and
resources of the City (the "Series A Bonds'� ; and
VJF�REAS, the Port Authority has authority under Minnesota Statues, Sections 469.060 and
475.61 to undertake a program of issuing temporary obligations to be refunded by long-term obligations
at a later date, and which are secured by the full faith, credit and resources of the City; and pursuant to
this Ordinance, the Port Authority will issue bonds to which aze pledged the fuil faith, credit and
resources of the City and the proceeds of any grants received by the Port Authority or the City for the
Project, as defined below (the "Series B Bonds," and together with the Series A Bonds, the "Bonds"); and
WIIEREAS, the Port Authority has requested the authorization of the Council of the City of Saint
Paul (the "Councii"), pursuant to Minnesota Statutes, Section 469.060, for the issuance and sale by the
Port Authority of the Bonds in the aggregate principal amount which will produce net available funds to
be appiied to the costs of the Project of at least $13,800,000 but in any event not to exceed the initial
principal amount of $14,650,000, and for the pledge of the fuli faith, credit and resources of the City to
the payment of such Bonds, which Series A Bonds will also be secured by tas increments to be derived
from the Plasrics, Inc. Redevelopment Tax Increment Financing District (the "District"), and which Series
B Bonds will also be secured by any grants obtained by the City or flie Port Authority in connection with
the Project, as defined below; and
WHEREAS, the establishment of the District was approved by the Ciry by resolurion adopted on
September 24, 1997; and
Wf�REAS, the Bonds will be issued for the ptuposes of paying or reimbursing the costs and
expenses necessarily incurred by the Port Authority for acquisition, clearance, remediation, and
improvements within the Dishict which aze to be undertaken to facilitate the construction of a
2
15sisaz
g�1 • ����
S v.b s�:-�..,.� e. -\01 �'� q+1
manufachuing and distribution facility in the District for Plastics, Inc., and the move of Plastics, Inc.,
from its current location at Chestnut and Ryan Streets to the Dishict (the "Project"), and then for all other
purposes authorized by authoriry of Minnesota Statutes, Chapter 469, as amended (the "AcP'), with
respect to the Project; and
WHEREAS, it is the preference of the City to avoid the collection of generai tax levies to pay the
Bonds prior to the time tax increments are received from the District, and for the Port Authority, as issuer
of the Bonds, to avoid such tas levies by capitalizing interest and rolling over temporary obligations (as in
a commercial paper program), and by levying pursuant to Minnesota Statutes, Secfion 475.61; and
WHEREAS, the Council of the City (the "Council"), being duly advised 'm the premises, fmds
and detemvnes that it is necessary and appropriate that the Port Authority issue and sell bonds of the Port
Authority in the aggregate initial principal amount not to exceed $14,650,000 for the purposes as stated
above; and
WHEREAS, on the basis of the foregoing, it is now the intenrion of the Council to grant authority
to the Port Authority far the issuance of the Bonds, to prescribe the manner for establishing the amount,
maturity schedule, rates of interest, and the ntaximum rate of interest, to be bome by the Bonds; to
authorize the Port Authority to establish the date, denomination, place of payment and other details of the
Bonds, including the form of the Bonds, in the manner provided 'm this Ordinance; and to authorize and
consent to the pledge by the Port Authority of the full faith, credit and resources of the City to the
payment of the Bonds as the same shall be issued and sold by the Port Authority, pursuant to the authoriry
of the Act, and pursuant to the authority granted by this Ordinance; and
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WI�REAS, in connection with the crearion of the District and the financing of the Project, it is
proposed that the City and the Port Authority enter into a Joint Powers A�eement to set forth the duries
and responsibiliries of each in connecfion with the Project:
NOW, TF�REFORE, TI-� COUNCIL OF TI� CITY OF SAINT PAUL DOES ORDAIN:
Section 1
Authorization of Bonds. That subject to, and in accordance with, the applicable provisions, terms
and conditions of this ordinance and those contained in Section 469.060 of the Aci, authority is hereby
granted to the Port Authority far the issuance and sale of its Bonds in the aggregate principal amount set
forth in Section 2 and the use of the proceeds of such Bonds first for the acquisition, clearance,
remediation and consiruction of improvements on land within the District as contemplated by the Tax
Increment Financing Plan for the Bistrict (the "Plan"), and then for all other purposes authorized by the
Act with respect to the Project.
Section 2
Establishing_Terms of the Bonds. That the Port Authority is hereby authorized to establish the
date, denomination, place of payment, form and details of the Bonds, provided that the Bonds shall be
issued and sold by the Port Authority as tax exempt andlor taxable Bonds in one or more series, in the
manner provided and allowed by law; the Series A Bonds in the principal amount of approximately
$6,6QQ,Q00 (which, after subtracting costs of issuance and capitalized interest, will provide net available
funds for the Project in ihe amount of $6,150,000) shail be secured by a first lien pledge of the tax
increments to be received by the Port Authority from the District, and the Series B Bonds shali be secured
by a pledge of any grant proceeds received by the Port Authority or the Ciiy with respect to the Project;
the nutial principai amount of the Bonds sha11 not exceed $14,650,000; the Bonds sha11 mature in the
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atnounts and years and beaz interest at the rate ar rates per annum, including rates which vary in
accordance with a formula, established by the offer to purchase the Bonds which is determined to be the
most favorable by a Pricing Committee comprised of the President and the Chief Financial Officer of the
Port Authority and the Treasurer and the Deputy Mayor of the City, provided that the average annual
weighted interest rate of the Bonds shall not exceed nine percent (9%) per annum payable semi-annually
unless such higher average annual weighted interest is specifically approved by a resolufion adopted by a
majority of the members of the Council; and the proceeds from the issuance and sale of the Bonds as
received by said Port Authority shall be used first to pay or reimburse the costs of the acquisition,
clearance, remediation and construction of improvements on land within the District as described in the
Plan, and then for all other purposes authorized by the Act with respect to the Project. T'he Bonds may be
made subject to redemption and prepayment at the option of the Port Authority at such time and price or
prices as shall be determined by the Port Authority and approved by the Fricing Committee described
above and upon such notice as is required by law. It is recognized that Secfion 469.060 of the Act
provides that the Bonds must be in the amount and form and bear interest at the rate set by the Council,
that the Port Authority with the consent of the Council shall set the date, denominations, place of
payment, form, and details of the Bonds and that the Council is required to decide whether the issuance of
the Bonds by the Port Authority is proper and if so, the amount of Bonds to issue, and that the Council is
required to give specific consent in the Ordinance to the pledge of the City's full faith, credit and
resources to the Bonds. The standards and delegation to the Pricing Committee set forth herein are
intended as such full required acrion of the Council, and except as provided herein no fiirther approval of
the Council is required for the issuance or refunding of the Bonds under Secrion 464.060 of the Act.
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Section 3
Pled�e of Full Faith and Credit. That as security for the prompt and faithful payment of both
principal and interest of said Bonds in an amount not to exceed $14,650,000 (except upon a refunding
authorized by Section 6 hereo fl, the Port Authority is hereby authorized to pledge the full faith, credit and
resources of the City of Saint Paut; and such Bonds, both in respect of the principal amount of the same
and with respect to the interest thereon, may be paid by the Port Authority from tax levies provided
therefor in accordance with Section 4 hereof.
Section 4
Taix .e . That the Port Authority, in the event of the issuance of any said Bonds authorized
hereunder, sha11 before the issuance of the same, levy for each yeaz, until the principal and interest are
paid in full, a direct annual tax on a11 the taxable property in said City of Saint Paul, in an amount not less
than 5% in excess of the sum required to pay the principal and interest of the same when and as such
principal and interest mature and, after such Bonds have been delivered to the purchasers, such ta�t shall
be urepealable until all such indebtedness is paid, and after the issuance of such Bonds no fiuther action
by said Port Authority shall be necessary to authorize the extensions, assessments and collection of such
tax. That the Secretary of said Port Authority shall forthwith furnish a certified copy of such levy to the
County Auditor of Ramsey County, Minnesota, the county in which said Port Authority and said City are
located, together with full informarion regarding the Bonds of said Port Authority for which the tax is
levied and such County Auditar sha11 eatend and assess the ta�c so levied, and shall do so annually untii
the principal and interest have been paid in full. That any surplus resulting from the excess levy therein
provided sha11 be transferred to a sinking fund after the principal and interest for which the t� was levied
and collected has been paid; provided, that said Port Authority shall, on or befare September 15 in any
issisaz
6
S•.hs�.-i-,..��—w���qR q�-��c�
yeaz, by appropriate action cause its Secretary to certify to the said Counry Auditor the amount on hand
and available in its own treasury or in hust from tas increments derived from the Plastics, Inc.
Redevelopment TaY Increment Financing District, grants of federal or state funds received for the Project,
earnings or other income, including any amounts in the sinking fund, which it will use to pay the principal
and interest or both on each specified issue of the Bonds and the County Auditor shall reduce the levy for
that year herein provided for by that amount. That the amount of funds so acquired sha11 be set aside by
said Port Authority and be used for no other purpose than for the repayment of the principal and interest
on such Bonds. That a11 taxes being authorized to be levied under Minnesota Statutes, Section 469.060,
as amended, shall be coilected and remitted to the Port Authority by the Couniy Treasurer in accordance
with provisions of law governing the collection of other taxes and shall be used solely for the payment of
such Bonds when due.
Notwithstanding the foregoing provisions of this Section 4, taxes may be levied and canceled
or omitted in the manner provided by Minnesota Statutes, Section 475.61, to the extent legally
permissible.
Section 5
No Further Council Action. That said Port Authority may provide for the exercise of the authority
hereby granted for its issuance and sale of the Bonds in the aggtegate principal amount as provided in
Sections 2 and 6 hereof, for the aforesaid purposes, and ihe pledge of the full faith, credit and resources of
said City of Saint Paul, as security far the payment of the same, by its appropriate resolution, and without
further action of the Council. The authority to set the final principal amount, maturity amounts and
interest rates on the Bonds has been delegated to the Pricing Committee as provided in Section 2 hereof.
That in exercising the faregoing authority, the Port Authority shall make due compliance with all
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applicable requirements for this ordinance, said Section 469.060, Mimiesota Statues, as amended,
Sections 469.174 through 469.179, as amended, Chagter 475, Minnesota Statutes, as amended, and all
other applicable laws.
Section 6
Authorizarion of Refundine Bonds. Pursuant to and in accordance with the provisions, terms and
conditions of this Ordinance and the Act, authority is hereby granted to the Port Authority to issue and
sell Bonds as authorized by Minnesota Statutes, Section 469.060, in aggregate principal amounts
necessary for the purpose of securing funds as needed by the Port Authority to refund obligations issued
under this Ordinance, without any further action of the Council. The Pricing Committee shall have the
same role with respect to refunding bonds as is set forth in Section 2 for the nutial issuance of the Bonds.
The principal of the refunding bonds may exceed the principal of the bonds to be refunded to the extent
necessary and appropriate to pay interest thereon (including interest accruing as capital appreciation), to
pay costs of issuing the refunding bonds and to allow for discount upon sale, and to fund reserves and
capitalized interest for the refunding bonds.
Section 7
Joint Powers Agreement. In connecrion with the creation of the District and the financing of the
Project, the Council hereby approves the execution and delivery by the City of a Joint Powers Agreement,
to be entered into between the City and the Port Authority. The form of the Joint Powers Agreement is
approved substantially in the form submitted and on file in the offices of the City Council, with such
subsequent changes as may be approved by City staff, counsel and Bond Counsel as contemplated by this
Section 1. The Joint Powers Agreement shall contain provisions obligating ihe City to contribute certain
funds in the amount of $3,200,000 to the Project. The Mayor, City Clerk and the Director, Office of
�ssisa2
Sv.1►s�'', —�p�g 1 '
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Financial Services, aze hereby authorized and directed to execute the doint Powers Agreement in
substantially the form submitted, as mod�ed pursuant to tlus Section 7, and any other documents and
certificates which in the opinion of the City staff, counsel and Bond Counsel aze necessary to the
transacrions herein described. The execution of any iustrument by the appropriate officer or officers of
the City herein authorized shall be conclusive evidence of the approval of such documents in accordance
with the terms hereof. The approval hereby given to the 3oint Powers Agreement 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
Director, Office of Financial Services of the City.
Secrion 8
Bffee6ve Date. That this ordinance shall take effect and be in force 34 days after the passage,
approval and publication. This ordinance is subject to the provisions of the Ciry's home rule charter
pertaining to the procedure for referendums on ordinances enacted by the governing body.
�� [xi����s�1�Y��"il�
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1581542
Sv�s�:�..�e . td�Y` 97
Adopted by Councii:
Date Q r� � � \ °�`�
Adoption Certified by Council Secretary
By:
Apprc
By:
RequE
:
Form Approv Ci o y
By:
Approved by Mayor for Submission to Council
�
a�m��aucn
Q�-11V1'
NOV � 11997
10
1581542
Saint Paul Port Authori
9f1,i9, � GREEN SHEET
��— i tc�
N° _13499
INITIAVDA7E --�
.��.im.ircnavnarnvnc �OEPARTMENTOIRECTOR �GIT'CqUNGII _
K. 3ohnson, L. Hansen, B. Morin ^���N arvArroRwer / � CITYCLERK
NUMBEPFOR
NUST BE ON COUNCIL AGENOA BY (OATE) AOUTING ��ET OIRECTO � FIN. & MGL SERVICES DIR.
�R September Z4 1997 OHDEp (�MqyOR(ORASSISTANn �
l�
TOl'AL # OF SIGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATURE)
"'�'•""'°""°` Authorization £or the Port Authority to issue bonds in the principal amount nor
to exceed $14,650,000, which will produce at least $13,500,000 for project costs. Authorize
the Port Authority to pledge the City's general obligation to the £ull amount of these
bonds, a portion of which (approximately $6,000,000) wi11 also be secured by a first lien on
ApProve (A) or fleject (R)
_PV.NNIfJGCAMMISSION _CIVILSERVICECqMMISSION
_ CIB COMMITTEE _
pg STAFF _
_ DISTRICTCOUFT _
SUPPORTS WHICH COUNCIL O&IECTIVE>
Industrial Development
Whet,
PERSONAL SEAVICE CONTRACTS MUST ANSWER TME FOLLOWING QUESTIONS: taX
1. Has tPis per5on/firm ever worked under a contract tor this tlepartment? 1RCYEID
YES NO
2. Has this personflirm ever been a ciry employee?
YES NO
3. Does ihis persoNtirm possess a skill not normally possessetl by any current clry employee?
YES NO
Explafn at1 yes answers on separata sheef antl mtach to green sheet
Why):
Authorization of the issuance of this tax increment supported general obliqation debt
is necessary for the redevelopment and remediation of the Citqo site £or Plastics, Inc.
Plastics, Inc. will construct a 370,000 square foot manufacturing facility at the Citgo
site and retain and/or relocate 350 jobs in Saint Paul.
None
DISADVANTAGES
Plastics, Inc. will be forced to relocate out of the City of Saint Paul
DTALAMOUNT OFTRANSAC710N $ 16.650.000 COST/REVENUE BUDGETED(qRCLE ONE) VES
Tax Increment Financing, Note Payments,
1NDINGSOURCE POt2ritial GTant RECeig,t5. GO LeVV ACTNITYNUMBER
JANCIAL INFORMATION: (EXPLAIN)
NO
G�
LEONARD, STREET AND DEINARD
PROFESSIOYAL ASSOCIATIO!�'
October 22, 1997
Tammie S. Ptacek
612-291-3507
up3507 @emaill eonazd. com
VIA MESSENGER
Ms. Nancy Anderson
Council Reseazch
1 S West Kellogg Boulevard
310 City Hall
Saint Paul, Minnesota 55102
RE: Plastics Ordinance
Dear Ms. Anderson
As you know, the Ordinance for the Plastics project, is No. 17 on today's City Council agenda.
Enclosed please find the form of tkie Joint Powers Agreement to be considered by the City
Council in Section 7 of that Ordinance. The language of the Ordinance states that "the form of
the joint powers agreement is approved substantially in the form submitted and on file in the
offices of the City Council, with such subsequent changes as may be approved by City staff,
counsel and bond counsel as contemplated by this 5ection 7."
Please take whatever steps aze necessary to see that this document is on file, and is the docusnent
considered today by the City Council. Please call me if you have any questions.
Very truly yours,
LEONA�, 5TREET AND DEINARD
// vt�YS+�.t Q��` `�"'�._
�y � �n
Tarrimie S. Ptacek
/jl
Enclosure
cc's wio enc.: Carol Abbas
Tony Stemberger
Robyn Hansen
F I ��
22]O MINNESOiA WORLD �IhADE CENTER j0 EASi SEVENiH STREE"I SAINt PAUL� MINNESOTA SS IOI Z�1L �I2-222-7¢SS FAX 612-222-J6¢Q
1595264 O]
LAW OFFICES IN MINNEAPOLIS, SAINT PAUL AND MANKATO
� - 1'
LS&D Draft 10122197
AGREEMENT RELATING TO PLASTICS, INC. PROJECT AND JOINT POWERS
AGREEMENT RELATING TO BONDS ISSUED THEREFOR
THIS AGREEMENT is entered into this day of 1997, by and
between the City of Saint Paul, Minnesota (the "City") and the Port Authority of the City of
Saint Paul (the "Port Authority").
RECITALS
A. On November 6, 1996, the City executed a Development Agreement (the
"Science Museum Development Agreement") with the Science Museum of Minnesota (the
"Science Museum"}, whereby the City and the Science Museum agreed to undertake the
construction of an approximately 300,000 square foot museum and 800 car pazking ramp on tlie
City's riverfront (the "Science Museum Project"). To facilitate the Science Museum Project, the
City has undertaken, in the Science Museum Development Agreement, to purchase certain
property, including the property on which Plastics, Inc. ("Plastics") presently operates a
manufacturing facility (the "Chestnut Site").
B. In order for the City to fully perform its undertakings under the Science Museum
Development Agreement, it is necessary to relocate Plastics.
C_ It is desirable, and in the best interests of the City, to provide a site for Plastics'
relocated manufactuting facility in the City, so that the approximately 250 yobs now supporked
by Plastics at the Chestnut Site, and an additional approximately 150 jobs now supported by
Plastics in Eagan, Minnesota, can be located in the City.
D. The Port Authority has identified an approximately 26-acre site located
approximately one mile to the west of downtown Saint Paul at Shepard Road and James Avenue
(the "Citgo Site"), as a possible site for the conshuction of a new manufacturing facility for
Plastics.
B. The proposed new Plastics facility (the "Plasrics Facility") will consist of an
approximately 375,000 square foot manufacturing and distribution facility which will have a
construction cost of approximately $12,480,000.
F. The Port Authority has created a Tax Increment Financing District encompassing
the Cifgo Site.
G. The Port Authority has proposed that the Plastics Facility be financed, in part, by
Bonds to be issued by the Port Authority in an initial principal amount of approximately
$16,650,000 (the `Bonds") as more fully set forth in this Agreement.
1550a39.08
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H. The City proposes to (i) contribute to the Port Authority $2,700,000 from the
Science Museum budget for the purpose of acquisition of the Chestnut Site and $500,000 from
others sources in connection with the redevelopment of the Citgo Site and the relocation of
Plastics from the Chestnut Site to the Citgo Site, (ii) authorize the pledge of its full faith and
credit to the Series A Bonds and the Series B Bonds and, pursuant to the joint powers aspects of
this Agreement, cause the pledge of tas increments to the Series A Bonds, and (iii) through
certain reporting and consent rights granted to the City in this Agreement, determine that the
Budget (as defined herein) will be sufficient to accomplish the purposes of this Agreement.
L It is necessary and desirable to set forth the respective roles and responsibilities of
the City and the Port Authority in connection with the acquisition and preparation of the Citgo
Site, the issuance of the Bonds, and the relocation of Plastics, and this is the agreement
contemplated by Section 7 of the Ordinance (as defined herein).
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the parties hereby agree as follows:
Section 1. Authoritv. This Agreement is entered into under the authority of
Minnesota Staxutes, Sections 469.Q64, subdivision 1, and such other applicable statutory and
Charter provisions as aze consistent herewith. Section 3 of this Agreement is entered into
pursuant to Minnesota Statutes, Section 471.59.
Section 2. Definitions Capitalized terms used in this Agreement shall have the
meanings set forth in the preceding paragraphs or below, unless a different meaning clearly
appears from the conte�t:
Agreement: This Agreement, as the same may from time to time be amended or
supplemented.
Bond Indenture: The Indenture of Tzust between the Port Authority and the Bond
Trustee (and any related security agreements) pursuant to which the Bonds wi11 be issued and
secured.
Bond Trustee: The Trustee pursuant to the Bond Indenture.
Bonds: collectively, the Series A Bonds, the 5eries B Bonds and the NSP Note.
Budeet: The Plastics, Inc. Tax Increment Financing District Budget attached as Exhibit
A, as such Budget may be amended from time to time by the Port Authority in accordance with
this Agreement.
Cltv Contriburion: The $500,000 of City funds (other than Tax Increments and District
Revenues) to be contributed by the City to the Port Authority to be applied to Project Costs.
1550039.08
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Construction Fund: The fund required by Section 5(e) hereof, which will be held by the
Bond Trustee, and in which all funds to be applied to Project Costs shall be deposited.
Develo�ment Agreement: The Agreement to Convey Property and Development
Agreement dated as of , 1997 by and beriveen the Port Authority and Plastics.
District: The Plastics, Inc. Redevelopment Ta3c Increment Financing District, as set forth
in Appendix A to the Plan.
District Revenues: Any and all net revenues received by the Port Autharity from the sale
or lease of land within the Disuict and from the operation of public improvements provided for
in the Plan.
Memorandum of Intent: The Memorandum of Intent dated 7uly 14, 1997 between the
Port Authority and Plastics, as amended by the First Addendum to Memorandum of Intent dated
September 9, 1997.
NSP Note: the tax increment bonds to be issued by the Port Authority in the
approximate principal amount of $2,000,000, which will be secured by Tax Increments and by a
payment to ba made by Plasucs, which bonds shall be purchased by Northern SCates Power
Company, and any refunding or series of refundings thereof.
Ordinance: Ordinance No. 97-1168 adopted by the City authorizing the issuance by the
Port Authority of the 5eries A Bonds and the Series B Bonds.
Port Authoritv Contribution: The $500,000 of Port Authority funds (other than Tax
Increments and District Revenues) to be contributed and applied by the Port Authority to
Projects Costs.
Plan: the Tax Increment Financing Plan for the District which has been adopted by the
Port Authority and approved by the City, as amended fram time to time.
Proiect: the Port Authority's acquisition, site preparation, grading and filling,
demolition, environmental remediation, and other site improvements in the District required to
deliver the site to Flastics in the condition necessary for the construction of the Plastics Facility,
and the acquisition of the Chestnut Site.
Project Costs: All costs included as permissible capital costs in the Plan and the Budget,
including without limitation, the costs incurred in conneation with the Project by Yhe Port
Authority prior to the date of this Agreement.
Science Museum Contribution: the $2,700,000 previously approved by the City in the
Science Museum Budget to be applied to the purchase [by the City] of the Chestnut Site, and in
that regard, contributed to the Port Authority and applied to Project Costs.
1550039 08
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Series A Bonds: the General Obligation Tas Inczement Bonds to be issued by the Port
Authority pursuant to Minnesota Statutes, Section 469.060 and the joint powers agreement
contained in Section 3 hereof, in the approxunate principal amount of $6,600,000, which shall
be secured by Tax Increments and a City general obligation pledge, and any refunding or series
of refundings thezeof.
Series B Bonds: the General Obligation Bonds, to be issued by the Port Authority
pursuant to Minnesota Statutes, Sections 469.060, 475.79 and 475.61, Subdivision 6, initially in
the form of commercial paper [or some other forxn of temporary obligations], in the approximate
initial principal amount of [$7,900,000), which shall be secured by a City general obligation
pledge and the proceeds of any grants received by the City or the Port Authority in connection
with the Project, and any refunding or seties of refundings thereof.
Subdistrict Tax Increments: in the event a hazardous substance subdistrict is created
witlun the District, any tax increment derived from such hazardous substance subdistrict as a
result of a reduction in the original net tax capacity pursuant to Minnesota Statutes, Section
469.174, subdivision 7, paragraph (b), or as a result of the e�ension of the period for collection
of tax increment from the hazardous substance subdistrict provided for in Minnesota Statutes,
Section 464.176, Subdivision i, paragraph (g).
T� Increments: the tax increments derived from the District pursuant to Minnesota
Statutes, Section 469.177, and specifically including the Subdistrict Tax Increments
TaY Increment Bonds: collectively, the Series A Bonds and the NSP Note.
Section 3. Exercise of Joint Powers With Resoect to Series A Bonds
(a) Purpose and Statutory Authority. The Port Authority shall issue the Bonds
as contemplated by the Ordinance with respect to the Series A Bonds and the Series B
Bonds, and the resolution of the Port Authority with respect to the NSP Note. The Port
Authority and the City shall exercisejoint powers in issuing the Series A Bonds. With
regard to the Series A Bonds, the City has authority under Minnesota Statutes, Section
469.178, Subdivision 2, to issue general obligation bonds payable from tax increments
from the District created by the Port Authority, and the Port Authority has the authority
under Minnesota Statutes, Section 469.06Q to issue bonds for its purposes, in
anticipation of income from any source, which are secured by the full faith, credit and
resources of the City. The joint powers utilized in the issuance of the Series A Bonds,
include the City's power to levy taxes net of the estimated pledged revenues as provided
in Minnesota Statutes, Section 475.61, Subdivision 1.
(b) Method of Achievin� Purpose: Manner of ExercisingPowers. The City
and the Port Authority shall exercise their powers jointly by adopting, approving and
executing such common or concurrent resolutions, documents and agreements as shall be
necessary or convenient to the issuance of the Series A Bonds.
1550039 48 �
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Section 4. Actions under Ordinance. The Pricing Committee established by Section
2 of the Ordinance shall be involved in the initial issuance of the Series A Bonds and the Series
B Bonds, and any refunding or series of refundings thereof. It is understood that the Pricing
Committee performs functions of the City Council, and in the event of any inability of the
Pricing Committee to perForm its functions as required under the Ordinance, such matters will
revert to the Ciry Council for its action in setting the rate or consenting to the terms of the Series
A Bonds and the Sezies B Bonds.
Section 5. Port Authority Obli¢ations. The Port Authority has created, and sha11
administer and operate, the District in accordance with Minnesota Statutes, Sections 469.174 to
469.179. In connection with the creation, administration and operation of the District and the
financing of the Project, the Port Authority shall have the sole duty and responsibility to do the
following:
(a) use its best efforts to negotiate and execute purchase agreements with
Citgq and any other parties owning property in the District, to purchase, or obtain
necessary easements over, all of the property in the District;
(b) if necessarp, acquire through eminent domain property within the District
that cannot be acquired by negotiations, but is required for implementation of the Plan;
provided, however, that the Port Authority shall not be liable for noncompliance with
this paragraph (b) in the eeent there is a court challenge with regard to the public purpose
of the condemnation;
(c) negotiate and execute all necessary documents to transfer title to certain
property in the District to Plastics, including specifically any development agreement that
the Port Authority deems necessary in furtherance of the Project; provided, that the
Development Agreement shall require ritle to tbe Catgo Site to be transferred by the Port
Authority to Plastics on or before [August 15, 1999] (subject to Unavoidable Delay as
defined in the Development Agreement), and the Port Authority shall not amend the
Development Agreement with respect to that date, without the consent of the City;
(d) Enter into contracts for the demolition, clearance, grading and filling,
environmental remediation or other site improvements within the District;
(e) create the Construction Fund to be held and maintained by the Bond
Trustee for the Port Authority, in which funds obtained by the Port Authority for the
Project (including proceeds of the Bonds, the City Contribution, and the Port Authority
Contribution) shall be deposited; and from which funds shall be applied by the Port
Authority oniy for Project Costs or other eligible costs, but specif"ically excluding the
Seience Museum Contribution, which shall be applied by the City to the purchase of the
Chestnut Site;
7550039.08 5
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(fj to the extent necessary, create a separate fund to hold funds to be applied
to Project Costs which are received prior to the issuance of the Bonds, and transfer such
funds to the Bond Trustee upon issuance of the Bonds;
(g) provide the City with quarterly reports on the progress of the Project, in
the form attached hereto as Exhibit B, and with copies of all reports provided to or by the
Bond Trustee;
(h) deposit the Port Authority Contribution in the Construction Fund, at the
following tunes and in the following asnounts:
on or before Aun st 1, 1999 $300,000
on or before August 1, 2000 100,000
on or before August l, 2001 lOQ,000
(i) issue the Bonds in accordance with the Bond Indenture and the Ordinance,
levy such taYes for the payment of the Series A Bonds and the Series B Bonds as
required by law, pap costs of issuance in connection with the issuance of the Bonds from
the proceeds of the Bonds, and deposit the net proceeds of the Bonds in the Construction
Fund; provided, that to the e�ent Bond proceeds are insufficient to pay all costs of
issuance, the City shall be responsible for paying the fees of its counsel and its financial
advisor;
(j) receive and use District Revenues and Tax Increments pursuant to the
Pian and this Agreement;
(k) prepare and su6mit a11 reports with regazd to the District as required by
Minnesota Statutes, Sections 469.174 through 469.179, with a copy to the City;
(1) apply to the Department of Trade and Economic Development and the
Metropolitan Council ta obtain grants for pollution clean-up in the District, use its best
efforts to obtain such grants, and deposit proceeds of any such grants in the Construction
Fund for use in the payment of Project Costs, or to pay or prepay the 5eries B Bonds, as
provided in Section 9;
(m) perform the necessary staff work in connection with the preparation of an
application to be made by the City to obtain a grant in the approximate amount of
$SOQ000 from the Minnesota Investment Fund, and request the City to take the
necessary steps in order to apply for such grant, pursuant to Section 6(c);
(n) cause the Citgo Site to be included within the Crosby Lake Project Gemini
Zone, as authorized in the resolution of the City adopted on September 24, 1997;
(o) in the event the qualified local conuibution made in connection with the
District pursuant to Minnesota Statutes, Section 273.1399, Subdivision 6(d), is
1550039.08 6
a� -1���'
determined to be insufficient to avoid the LGAlHACA penalty, conuibute such
additional amounts from eliglble sources as are necessary in order to avoid such
LGA/HACA penalty;
(p) acquire ritle, either pwsuant to the Development Agreement or through
the use of eminent domain, to the Chestnut Site (as fuzther described in Exlubit C
hereto}, and convey the same to the City in accordance with the provisions of the
Development Agreement ; provided, however, that the terms of the Development
Agreement will be substantially the same as or more favorable to the Port Authority than
the terms of the Memorandum of Intent, and the timetable provided for, and the purchase
price of, the acquisition of the Chestnut Site set forth in the Development Agreement
may not be slower, or more expensive, than that set forth in the Memorandum of Intent,
without the consent of the City;
(q) exercise any and all of its powers which aze deemed necessary or convenient
by the Port Authority to administer or operate the District and to carry out the Project,
subject to the terms and conditions of this Agreement.
Section 6. City Obligations. The parties hereto agree that the City shall have the sole
duty and responsibility to do the following in connection with its contribution to the financing of
the Project:
(a) pay the City Contribution to the Port Authority for deposit in the
Construction Fund at the following times and in the following amounts'
on or before August 1, 1999 $300,000
on or before August 1, 2000 100,000
on or before August 1, 2001 100,000
(b) pay to the Port Authority at the time of acquisition of the Chestnut Site t4ie
Science Museum Contribution; [provided, that in the event the purchase agreement
entered into by the Port Authority in connecrion with the acquisition of the Citgo Site
requires an escrow to be funded at the time of closing, in an amount expected to cover
the costs of environmental remediation, the City shali provide to the Port Authority the
amount necessary to fund such escrow at the time required by the purchase agreement,
and such amount shall be deemed an advance of the Science Museum Contribution, and
will be repaid to the City in full upon issuance of the Bonds;]
' The Development Agreement could provide for the detailed procedures with regard to the Vansfer of title. At
ihis poini, the Ciry has suggested that title be transfened directly to the Ciry, with the City then leasing the
properry to the Port Authority, and the Port Authoriry subleasing to Plastics. This proposal needs to be discussed
rrith Bill Morin, �uho is out of the office unfll Tuesday.
z This assumes this agreement is entered into prior to the issuance of the Bonds.
155��39A8
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(c) take the actions requested by Port Authority staff pursuant to Section 5(m}
to apply for a grant in the approximate amount of $500,000 from the Minnesota
Investment Fund on or before March 1, 1998; and
(d) provide to the Port Authoriry upon request any information necessary to
the adminisuation of the Disuict and the filing of reports required by Minnesota Statutes,
Sections 469.174 through 469.179.
Section 7. Sources of Funds. The sources of funds for the implementation of the
Project, the payment of Project Costs and the administration and operation Qf the District include
Bond proceeds, Taa� Increments, District Revenues, the Port Authority Contribution, the City
Contribution, the Science Museum Contribution, federal and state grants, and such other funds
and revenues as may be made available for such purpose, and neither the Port Authority nor the
City shail be obligated to provide any additional funds for such purposes, except as might be
jointly agteed.
Section 8. Budget and Disbursements from Construction Fund. The Budget has been
approved by the Port Authority, and establishes a maximum principal amount and line item
amounts of Tax Increments, Bond proceeds or other amounts to be used for the Project; provided
that the Port Authority may, in its sole discretion, increase or decrease line items in the Budget
so long as ihe total Budget does not increase, and , provided furCher, that any such change is
consistent with the Plan as amended from time to time. In the event the total of the "Over
(Under) Projected" column shown on the quarterly report submitted to the City pursuam to
Secrion 5(g) is at any time a positive number in excess of $250,000, the Port Autharity shall not
make any additional expenditures in connection with the Project without the consent of the City.
In such event, the Port Authority and the City sha11 work together in good faith to determine
whether or not the Project shouid go forwazd, and in the event it is decided that the Project
should go forward, to identify and implement potential, and mutually agreeable, additional
sources of funding to allow completion of the Project. The Bond Tzustee, as directed by the Port
Authority, shall disburse funds from the Construction Fund in accordance with the Budget.
Contracts shall be let and purchases sha11 be made by the Port Authority subject to the same
procedures as govern the letting of other conuacts and the making of other purchases by the Port
Authority.
Section 9. LTse of TaY Increments. District Revenues, and Crrant Proceeds. (a) The
TaY Increments and District Revenues shall be applied for the following purposes and in the
following order of prioritp:
(i) payment of the Series A Bonds;
(ii) payment of the NSP Note;
(iii) payment of the administrative expenses of the Port Authority to the extent
allowed by law;
1550039.c18
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(iv) prepayment of the NSP Note; and
(v) payment of other eligible costs, with the consent of the City
(b) Debt service payments shall include all out of pocket costs, such as trustee,
paying agency and bond registrar fees and rebatable azbitrage payments incurted by the Port
Authority in carrying the Bonds and reimbursement of the Port Authority for any such payments
made from Port Authority funds.
(c) All TaY Increment shall vest in and be remitted duectly to the Port Authority or
the Bond Trustee as may be required by the Bond Indenture, and the Port Authority or such
Bond Trustee sha11 segegate the Tax Increments so received in one or more special accounts on
its official books and records to be used only in accordance with the Plan, the Budget, the Bond
Indenture, and this Agreement in accordance with the priorities and subject to the limitations
established in tkus Section 9.
(d) Notwithstanding anything in this Agreement to the contrary, the Port Authority
reserves the right to issue such other bonds and provide other financing for purposes of the Plan
and to undertake such other improvements and projects in the District, in addition to those
contained in or authorized by the Plan, as the Port Authority deems appropriate, provided,
however, such other bonds, financing and improvements or projects shall not be subject to
payment or reimbursement from Tax Increments or Disttict Revenues unless provided for in the
Budget and Plan, and with respect to Tas Increments, approved by the City if the Series A
Bonds or Series B Bonds remain outstanding. Prior to exercising the rights reserved to the Port
Authority under this pazagraph, for purposes of the Plan, the Port Authority shall notify the City
in writing of its intent to exercise said rights and shall consult with the City prior to issuing
bonds or providing other such Pmancing.
(e) Proceeds derived from state or federal grants obtained by the City or the Port
Authority in connection with the Project shall be applied first to pay or prepay an applicable
portion of the Series B Bonds, and thezeafter to the payment of Project Casts.
Section 10. Application of Subdistrict Tax Increments. In the event the Subdistrict is
created, Subdistrict TaY Increments shall be applied for costs of the Project as allowed by
Minnesota Statutes, Section 469.176, Subdivision 4e.
Section ll. Term of A�reement; Termination. This Agreement shall continue in
effect until terminated in accordance with this section. This Agreement may be terminated at
any time by agreement of the City and the Port Authority except that the relevant portion of this
Agreement may not be terminated while any Bonds are outstanding unless sufficient funds have
been irrevocably deposited in the debt service account or the escrow account to pay debt service
on the Bonds to maturity or date of redemption.
Section 12. Distribution of Funds and Pro e�rtv on Termination. Upon termination of
this Agreement, any Tax Increments received by the Port Authority in excess of the amount
issoose.os 9
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necessary to pay debt service on the Ta�c Increment Bonds and satisfy all other reimbursement
and funding requirements set forth in Section 9(a), clause (i) through (v), shall be (a) used, to the
e�tent permitted by 1aw and to the eatent that the District would remain exempt from the
LGAlIIACA penalty, to reimburse the Port Authority and the City for the'u contributions to the
Project, in the following order of priority: (i) the Science Museum Contributian; and (ii) pro
rata, to the City and the Port Authority, untii they have each been reunbursed for their respective
$500,000 contributions, and (b) to the e�tent any amounts remain after the application of clause
(a), transferted to and become the property of the Port Authority without payment of any further
consideration to the City and ail other property acquired and held by the Port Authority or the
City pursuant to this Agreement shall be retained by the pazty holding title thereto.
Section 13. Amendments. This Agreement may be amended by agreement of the City
and Port Authority in writing at any time. No amendment may impair the rights of the holders
of any of the Bonds unless consent is given in accordance with the Bond Indenture.
Section 14. Severabilitv. In the event any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provis3on hereof.
Section 15. No Joint Venture. The City has a limited involvement, as provided in this
Agreement, with the Project, and nothing in this Agreement shall be construed to create any
partnership or joint venture between the Port Authority and the City. Neither party hereto shall
have the right to bind or obligate the other in any way or manner unless otherwise provided for
herein.
1550039.08 1 �
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IN WIT`NESS WHEREOF, the City of Saint Paul has caused this Joint Powers
Agreement to be executed on its behalf by its Mayor, its City Clerk and its Director, Office of
Financial Services; and the Port Authority of the City of Saint Paul has caused this Agreement to
be executed on its behalf by its Chair and its Secretary, all as of the day and yeaz first above
written.
APPROVED AS TO FORM: CITY OF SAINT PAUL
Assistant City Attorney Mayor
City Cierk
Director, Office of Financial Setvices
issoo�s_oa 1 1
�t'l - t���
PORT AUTHORITY OF 'I'I�
CITY OF SAINT PAUL
Chair
By
Secretary
Signature page to Joint Powers Agreement
1550039.08 1 �L
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[Budget]
issoos9.os A-1
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PORT AUTHORITY OF THE CITY OF SAINT PAUL
PLASTICS, INC. REDEVELOPMENT TAX INCREMENT DISTRICT
EXPENSE DETAIL THRU
Expense
Codes
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Council File # ( g"
Green Sheet # � �
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Presented by
Referred To
Ordinance #
�ORDINANCE
�SAIAIT PAU.L,�
I�l
�7
Date
An ordinance granting authority to the Port Authority of City of Saint Paul to issue and
seli bonds in the aggregate principat amount which will produce et available funds to be applied to
the costs of the Project of $13,800,000, but in any event no to exceed the principal amount of
$14,650,000, and any bonds to refund such bonds, to sec such bonds with a pledge of the full
faith, credit and resources of the City of Saint Paul, and to e the proceeds derived from the sale of
such bonds to pay the cost and expense necessarily t be incurred by said Port Authority for
acquisition of lands, clearance, remediation, and impro ements in the Plastics, Inc. Redevelopment
TaY Increment Dishict pursuant to the provisions by authority of Minnesota Statutes, Chapter
469, as amended, and prescribing the amount d form of such bonds and the manner for
establishing the rate ofinterestthereon.
WFIEREAS, on September 23, 1997 the Port
adopted its Resolution No. _, fmding that
of the City of Saint Paul (the "Port Authority")
were blighted and mazginal properties within the
meaning of Minnesota Statutes, Secfions 469.048 seq., and establishing and creating the CitgoJShepazd Road
Industrial Development District; and
WHEREAS, the City of Saint Pa , Minnesota (the "City"), has authority under Minnesota Statutes,
Section 469.178, Subd. 2, to issue
created by the Port Authority,
issue bonds far its purposes
obligation bonds payable from taY increments of a tax increment district
Port Authority has authority under Minnesota Statutes, Section 469.060, to
of income from any source which aze secured by the full faith, credit
and resources of the City, d pursuant to this Ordinance, the Port Authority will issue bonds to which aze pledged
both taY increments the full faith, credit and resources of the City; and
the Port Authority has requested the authorizaUon of the Council of the City of Saint Paul,
pursuant to N�uxesota Statutes, Secrion 469.Q60, for the issuance and sale by the Port Authority of its bonds in the
amount which will produce net available funds to be applied to the costs of the Ptoject of at
least $13,800,000 but in any event not to exceed the principal amount of $14,650,000 (the "Bonds") and for the
J� � 07 7 f
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pledge of the fuil faith, credit and resources of the City to the payment of such Bonds, which Bonds will
secured by tax increments to be derived from the Plasrics, Irtc. Redevelopment Tas Increment
be
District
(the "District"), and any grants obtained in connection with the Project, as defined below, the e blishment of
which was approved by the City by its Resolution No. adopted on September 24, 199 ; and
WI3EREAS, the Bonds will be issued for the purposes of paying or reimburs' the costs and expenses
necessarily incurred by the Port Authority for acquisirion, clearance,
District which are to be undertaken to facilitate the conshuction of a
District for Plastics, Inc., and the move of Plastics, Inc. from its current
improvements within the
and distribution facility in the
at Chestnut and Ryan Streets to
the District (the "Project"), and then for a11 other purposes authorized authority of Minnesota Statutes, Chapter
469, as amended (the "Act") with respect to the Project; and
WHEREAS, the Council of the City (the "Council" , being duly advised in the premises, finds and
detemunes that it is necessary and appropriate that the Po Authority issue and sell bonds of the Port Authority in
the aggregate principal amount not to exceed $14,650,0 0 for the purposes as stated above; and
WI�EREAS, on the basis of the foregoing, t is now the intention of the Council to �ant authority to the
Port Authority for the issuance of the
schedule, rates of interest, and tYte
Authoriry to establish the date,
of the Bonds; and to authorize and
of the City to the payment of
to prescribe the manner for establishing the amount, maturity
rate of interest, to be borne by the Bonds; to authorize the Port
place of paymem and other details of the Bonds, including the form
to the pledge by the Port Authority of the full faith, eredit and resources
as the same sha11 be issued and sold by the Port Authority, pursuant to the
authority of the Act, and pur�s{�aant to the authority granted by this Ordinance.
�� �-07-��
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NOW, TI-IEREFORE, THE COUNCIL OF THE CITY OF SAINT PAUL DOES ORDAIN:
Section 1
Authori7ation of Bonds. That subject to, and in accordance with, the applicable
condifions of this ordinance and those contained in Section 469.060 of the Act, authority is
Port Authority for the issuance and sale of its Bonds in the aggregate principal amount
the use of the proceeds of such Bonds fust for the acquisition, clearance,
-ovisi , terms and
iex y granted to the
�rth in Section 2 and
and consirucrion of
improvements on land within the District as contemplazed by the Tas Increm t Financing Plan for the District
(the "Plan"), and then for all other purposes authorized by the Act with resp t to the Project.
SecUon 2
Establishing Terms of the Bonds. That the Port Authori is hereby authorized to establish the date,
denomination, place of payment, form and details of the
by the Port Authority as taY exempt and{or taxable
allowed by law; the Bonds in an amount of
will provide net available funds for the Project in
of the taat increments to be received by the
be secured by a pledge of any gant
which shall be subordinate to, in order
ta�c increment bonds issued by the
with the District; the initial
the amounts and years
with a formulae
Pricing Commii
Treasurer and
shall not xcee
that the $onds sha11 be issued and sold
one or more series, in the manner provided and
$6,600,000 (which, after subtracring costs of issuance,
of $6,150,000) shall be secured by a first lien pledge
from the District, and the remainder of the Bonds shall
received with respect to the Project and by a lien on tax increments
(i) such first lien, (ii) the payment of $2,000,000 of subordinated
Authority and soid to NSP, and (iii) administrative chazges in connection
amount of the Bonds sha11 not exceed $14,650,000; the Bonds shall mature in
interest at the rate or rates per annum, including rates which vary in accordance
by the offer to purchase the Bonds which is deternuned to be the most favorable by a
of the President and the Chief Financial Officer of the Port Authority and the
Deputy Mayor of the City, provided that the average annual weighted interest rate of the Bonds
percent (_%) per annum payable semi-annually unless such higher average annuai
interest is specifically approved by a resolution adopted by a majority of the members of the Council;
f� �-�7-q7
a �- � 4c�8'
and the proceeds from the issuance and sale of the Bonds as received by said Port Authority hall be used first to
pay or reimburse the costs of the acquisition, cleazance, remediation and constri.lction f improvements on land
within the District as described in the Plan, and then for all other purposes authorized y the Act with respect to the
Project. The Bonds may be made subject to redemption and prepayment at
time and price or prices as sha11 be detemuned by the Port Authority
described above and upon such norice as is required by law. It is
provides that the Bands must be in the amount and form and
Port Authoriry with the consent of the Council shall set
details of the Bonds and that the Council is required to
Authority is proper and if so, the amount of
consent in the Ordinance to the pledge of the
delegation to the Pricing Committee set forth
except as provided herein no further
Section 469.060 of the Act.
o£the Port Authority at such
approved by the Pricing Committee
that Section 469.060 of the Act
at the rate set by the Council, that the
denominafions, place of payment, form, and
whether the issuance of the Bonds by the Port
issue, and that the Council is required to give specific
faith, credit and resources to the Bonds. The standards and
are intended as such full required action of the Council, and
of the Council is required for the issuance of the Bonds under
Secrion 3
That as security for the prompt and faithfiil payment of both principal and
interest of said Bonds in an
the full faith, credit and
amount of the same
provided therefor and
noi to exceed $14,650,000, the Port Authority is hereby authorized to pledge
of the City of Saint Paul; and such Bonds, both in respect of the principal
respect to the interest thereon, may be paid by the Pon Authority from tax levies
by the Act.
Section 4
That the Port Authority, in the event of the issuance of any said Bonds authorized hereunder,
sttall
issuance of the same, levy for each yeaz, until the principal and interest aze paid in full, a direct
on all the taYabie properry in said City of Saint Paul, in an amount not less than 5°lo in excess of the sum
required to pay the principal and interest of the same when and as such principal and interest mature and, after such
�;��f7-�7
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Bonds have been delivered to the purchasers, such taY sha11 be urepealable until all such indebtedness is paid, and
after the issuance of such Bonds no further action by said Port Authority shall be necessary to authorize the
extensions, assessments and collection of such tax. That the Secretary of said Port Authority shall
fiunish a certified copy of such levy to the County Auditor of Ramsey County, Mimiesota, the county in
said Port Authority and said Caty are located, together with full informarion regazding the Bonds of
Authority for which the tax is levied and such County Auditor shall extend and assess the taY so
do so annually until the principal and interest haue been paid in full. That any surplus
levy therein provided shail be transfened to a sinking fund after the principal and interest
levied and collected has been paid; provided, that said Port Authority may, on or before
by appropriate acfion cause its Secretary to certify to the said County Auditor the
its own traasury from tax increments derived from the Plastics, Inc.
District, gZants of federal or state funds received for the Project, earnings
in the sinkiug fund, which it will use to pay the principal and interest
and the County Auditor sha11 reduce the levy for that yeaz herein
�d Port
and shali
ig�from the excess
/
which the tas was
ber 15 in any year,
on hand and available in
Tas Increment Financing
income, including any amounts
on each specified issue of the Bonds
for by that amount. That the amount of
funds so acquired shall be set aside by said Port Authority an e used for no other purpose than for the repayment
of the principal and interest on such Bonds. That a11 taac being authorized to be levied under Minnesota Statutes,
Section 469.060, as amended, shall be collected remitted to the Port Authority by the County Treasurer in
accordance with provisions of law governing e collection of other taaces and shall be used solely for the payment
of such Bonds when due.
Section 5
o Further Council A on. That said Port Authority may provide for the exercise of the authority hereby
granted for its issuance
the aforesaid
sale of the Bonds in the aggregate principal amount as provided in Secrion 2 hereof, for
and the pledge of the fuii faith, credit and resotuces of said City of Saint Paul, as security
for the paym�nt of the same, by its appropriate resolution, and without fiuther action of the Council. The authority
to set the final principal amount, maturity amounts and interest rates on the Bonds has been delegated to the
�r � �l-i�-97
°t1- L l(.i�
Pricing Committee as provided in Section 2 hereof. That in exercising the foregoing authority, the Port Authority
shatl make due compliance with all applicable requirements for this ordinance, said Section 469.Q60,
Statues, as amended, Sections 469.174 through 469.179, as amended, Chapter 475, Minnesota
amended, and all other applicable laws.
Section 6
Authorization of Refunding Bonds. Pursuant to and in accordance with the
conditions of this Ordinance and the Act, authority is hereby granted to the Port
Bonds as authorized by Minnesota Staxutes, Secfion 469.060, in aggregate
purpose of securing funds as needed by the Port Authority to refund
The principal of the refunding bonds may exceed the principal
necessary and appropriate to pay interest thereon (including
costs of issuing the refunding bonds and to allow for
interest for the refunding bonds.
Effective Date. That this ordinance
publication.
terms and
to issue and sell
�
amounts necessary for the
issued under this Ordinance.
bonds to be refunded to the ea�tent
accruing as capitai appreciation), to pay
upon sa1e, and to fund reserves and capitalized
take effect and be in force 30 days after the passage, approval and
F�': ;"°i i r" ; L P p F
` r`' ¢ °-. t: t: r`�. F
Cd' d � c.o , o_, :.
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Adopted by Counci3: Date _ _ �
Adoption Certified by Council Secretary
By " — — — r-
Approved by Mayor: Date
�
e uested by Department of:
/!// Ld�M
By:
Form
By:
Apprc
By:
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An ordinaace gtanting authority to the Port Authority o£the City o#' Saint Paul
to issae azed sell bonds in the ag�egate PrinciPat amouat which wi)1 produce net
avaifable funds to be app&ed to the cosu of the Projea of $13,800,000, bvt in aay
event not to arcead tl�e iaitiai principal amamt of $i4,650,000, and any boads to
refuud such bonds, to secure such boads witfi a pledge of the full faitU, credit and
resovrces of the City of Saint Pau1, and to use the proceeds derived from the sate of
such bonds to gay tfle cost and exQense necessanly to be incaured by said Port
Authc�rity for acqtusitioa of � l� cIearance, remediatios� and impravemeats in the
Plastics, Tnc. Redevelopment Tax Iucrement Disaict ptusuant to the provisions and by
a�nhority of Mianesota Stawtes, Chapter 4b9, as amended, and prasaibing the
amouat aad form of soch boads and the manner for establishing the raze of int�est
the Proiect
VVHEREAS, on September 23, I9T7 ilte Port Authority of the City of Saiat Paui (the "Port
Authority") adopted its Resolrrtion No. = 3656, finding that certaia laads were blighted and naarginal
. ..- .. � � � � ,� .� ,• . ���:..: :� .� �.� r-: :. .�. � .. � ,• .�.
creaang the Citgo/Shepard Road Indurnial Development Disa�ic� and
Wt-IEREAS, rhe Caty of Saint Paz� Minnesota (rhe "Ciry"), has autf�ority umder Minnesota
Stahrtes, Section 469.178, Sabd. 2, to issue general obligation bonds payable from ta�c inttemeats of a
tax increrne� discrict created by the Pott Authority, and the Port Authoriry has authority under
Minnesota Siatutes, S�tion 4b9.060, to issue bonds foz its puiposes in aaiicipaTion of income from
any sovrce which are seaued by the full faith, rsedit and resources of the City, and pmsuant to this
Ordinauce, the Port Authority will issue bonds to which are pledged both tac uecrements and the fuU
faith, credit and resovrces of the City � t6e "Seeies A Bonds"1; aud
WHEREA.4. the Port Authoritv has authoriiv nnder 1Vlinnesota Siafues. Seaions
464.06Q and 4fi5.61 to andertake a pro�ram of issuing tempocary obliEatians to be refuuded by
longterm obGgalions at a iater date, aad wluch are secured by thc fult faith, credit and
cesouroes o#'t13e C�tq: aadpwrsvant ta tl+"ss �cdin�nce. the Port Authoritv veilt issue bonds to
tssuaz
�-, - ���Y
w3ucix are pfedged tlie fuli Iaith. eredit and reaources of tS�e CTtv and tht uZOOe�ds of anv rant�
r�eived by rhe Port Anthority or the (�tv for the Pmiect, as defiaed beiaw (_the "Series B
Bnnds" and t��fier with the Seties A Bonds. t6e "Sonds"�; smd
VVf3fEREAS, tke Port Audiority bas re�uested the authorization of the Councii of the City of
Saiat Paul # e uCoweeiP' pursuant to Mtnnesota Staurtes, Section 469.060, for the is�ance and
saIe by the Porc Authoiity of ^ the Bonrls in the aggregate princigal amozwt whicfi wilI produce n�t
avaiiahle funds to be applied to the costs of ihe Project of at least $I3,8QO,OQa but icz any event not to
exczed the initial principal amoum of $24,b5D,00�, and for rhe pledge of the fuil faitb, credit aad
resources of the City to the paymmt of such Bonds, which Series A Bonds will also be secured by tax
increwents to be derived from ttte Plastics, Inc. Redevelopm�t Tax Increwent Finaacing District (rke
"District"}, and which Series B Bonds will also be securai bv any ganis obYained � the C�iv or
the Port Authoritv in connection with the Pmjea, as define@ below^--�d
-- -�YHEliEA,S c4tab4shment of the District was approved bv tLe CY'tv by recolution
adouted on SeptemE�er 2d.1997; and
'WIiEREAS, the �onds will be issued for the axuposes oPpaying or resmbuning the �sts and
expenses aecessarily incurred by the Port Aurhoriry £or acqu;sition, cleazance, remediatioq and
imgrovements witEiin the Dis�ict which are to be undeitakea to facilitate the consauction of a
manufactusing and disGibution facility in ihe Disaid far Plastics, Tnc., and the move of Plasstitcs, Iuc.�
fsvm its auYenz location az ChesWut and Ryaa Streets to tfie Tlistrict (the "Project"), and then foz a31
other putposes authorizxd by authority of Minnesota Statutes, Chapter 469, as ameuded (the "Ac�')
with respect to the Project; and
isstsaz
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'C4'SEREAS. it is the pre#'erence of the GTts to avoid the collection of YeaeraI taz Ievies to
pav #he Bonds prior to the time taz incremeQts are received from the T?istric� and for t�e Port
Aathority. as issner of the Bonds. to avoid such taac levies bp ca�itat'v5ng iaterest and ro�iue
avrr tem,porsr� obti�,ations �as in a commerciat pa e�r FroYram}. and bv k�giag_pursaant m
?YTmmsata Statutes. SeeIIOU 475,6I: and
W'1TEnBAS, the Council of the City {the "CounciP'), being duly advised ia the preanises,
finds atx3 des�mines that M is necessary and appzopriate tftat the Port Authority issue aad sell bonds
of the Part rluthority in the aggregate ini6ai principal awcwnt not to ascced �I4,650,000 for the
gutposes as staLed above; and
WHEREAS, on the basis of the foregoing, it is aow the intention of the Coimcii to grant
auzhority to the Port Autliority for the issuance af tke Bonds; to �srescribe ttce manaer for establi�Fxing
the amount, maturity schedule, cates of interest, and the maximum rate of iater� ta be borne by the
Bonds; w authorize the Port Authority m essablish the daze, denomez�ation, place of payntent sud
other details of the �onds, 'sn�ludiug the fozm of the Bonds in the maaner provided in this
Ordimance and to authorize xnd consent to the pledge by the Port Auttmrity of the full faitb, credit
a¢d resoi�rces af the Ciry m ttze payment of the Bonds as rhe sau�e shaA 6e issued and sald by ihe Part
Aenhority, pursuanr to the authority o� rhe Act, aad puiswant to rhe aurlmrity ganted by this
Ordinance
WgER�AS. in cossnectsoa with t6e cueation of the Ttsstrict aad ttse fcnancia� of tbe
Praje.�x, it is proposed tl�at fhe G�ty and the Port Aat6ority enter ictto a Jaut 1"owers
A�reemezut to set forth the duties and resuonsSbilities of each i�rt connection vaith the Proiec�^
NdW, TH�12E�'OR�E, T'FTE CQUNCIL QF T'f�E CtTY �F SATN'f PA'CTL DflES QRDAIN:
4
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9'�-\\t��
Section 1
Auffiorizarion of Bonds. Thai sabject to, and in accordancs with, rhe apqlicable provisions,
terms and conditions oPthis ozdinxnce sad ihose comained in Sectian 459.069 of the Act, authority is
hereby graate� to the Port Autlzority for the issuance and sale o£ its $onds in ihe agg�egate }xincigal
amount set farth in Seaion 2 aud the use of the procee�s of such Bonds fust £oz the acquisitio�
cieazance, zemediztion and construction of improvements on laud within the Disirid as conte�.plated
by the 'Tax Increanent Financing Plan for the 17istrict {the "Pian") and then for all other P�u�poses
authorized by the Act witfi respect to the Project.
:. .�
FstablishinQ 7e�ms of the Bonds. That the Port Authority is hereby authozized ro estabiisb
the d2te, d�.ominatiou, place of payment, form and details of the Bonds, provided that the Bonds
shall be issued and soId by the Port A.uthority as tax �empt and/or ta�able Bomds i¢ one or more
sexies, in the manaer grovided and allowed by law, the Series A Baads in ^ the �riaciqal amount of
approximateiy $6,600 (which, after subuacting costs of issua�ce and canitatizrd 'ueteresi will
grovide uet available fvnds for the I'ro}�t in the amoeuit of $6,iSQ,006) shai! be secured by a first
lien pledge af the ta�c inczements to be zeceived by the Port Aufhoriry from ihe Bislnct, and the Q
Series B Bonds s3�all be secut�ti by a ptedge of any gant proceeds received by t5e Port Authorits
or the i weth zespect w the Prajact ; the initia� principai amoVat o£ the Bonds shall not exceed
$I4,650,Q00; the Bonds shall mazure in ihe amouats and yeazs aad bear interest at tlze zaze or rates per
annum, includu�g rates wbich vary in accordance with a^— ferm established by the offer to
purcbase the Boadc which is detercnined to be the most favorak�te by a Pricing Committes comprised
of tfie President aad the Chief Financxa! Officer of the Port Airthoriry and the Tseasluer aad the
5
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`1� —\\�`�
Deputy Mapor of the Citp, ptovided that the av�e annual weighted iQtears-c rat� af Yhe Bonc}s shall
aot exceed ^— nine pexcent 9% per annum payable semi-aaaually unless such highex aveaage annual
weigh� interest is spe�ically approved by a resolution adopted by a majotiry of the memtxas of the
Councii; and the proceEds from ihe issuance and sate of the $onds as received by said Paiz Autt�ority
shall be vsed fust to pay or reimburse the costs of the acquisition, clearaace, F2�IC(II�QOk 2IICI
conshucrion of improvements oa land within the Distcict as described ia the Plan, aud then for ail
orher purposes authorized by the Act wirh respect to the Project. The Bonds may be made subject to
redemption and grepayment at ths option of the Port Authority az s�ch time and price or prices as
shall be detenmined by the Port Aeithortty and agproved by the priciag Co�nmiuse desciibed above
and upan such aotice as is ret�uirecl by faw. Tt is recogniz� that Sectzon 4b9.0b0 of the Act Qrovides
that the Bonds musc be in the amourn and fomx and bear interest at the raie set by the Covaci� that tfie
Port Auflmriry witfi tfie consent of the Cotuicil shall set the date, denominations, place of paymear,
foim, and details of the Bonds and that the Council is re�uired to decide whethe� the issuance of �,te
Bonds by the Port Authoriry is pmper and if so, the amotivat of Bonds to issue, aad d�at tEze Coi.mcil is
required to give specific consent in the Ordznance w the pledge of the Cizy's fuR faith, credit and
crswrrces to the Bonds. The stanc3ard, and delegation to the Pricing Committee set £orth herein are
intended as such full required aciioa of the CounciI, and except as provickd hesein no fvrther appsova.(
of tfie Council is required for the issuance or reifundi�� of ihe Bonds under SecYion 464.060 of thc
Act
Section 3
Pledge of FulI �'aith and Credit. Tf�at as seauity for the prompt and fazrhfui paymemt of both
pxincipal and interest of said Bonds in an aznount not io e�cceed $14,650,000 (ezcept �►a a
�saisaz
6
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refnndi� anf6or'v.ed bv Ser�on 6 hexeo�. the Port Authoziry is hereby aurkosized to gledge the
full faiih, craiiz and �ces o£ the City of Saiat Paul; aad such Bonds, boih ia respea of the
principal amount of the same and with respect to the imtecest thec�ou, may be paid by the Pon
.Aut6ority fram tax fevies providefl therefor ^ i�► accordauce with Sedion 4 hereof.
SecEion C
T�. That the Port Autlwrity, in the event of the issuance of any said Bonds authorizecl
hereunder, shall befoce the issuance of the saare, levy for each year, unrit the principat and znterest ue
paid 'an fail, a direct annua! tax on all the t�table propeity iu said City of Saint Paul, in an amount noL
less than 5% in excesa o£ the sum rec�vxed m pay the grinczpal aiad 'znteaest of t5e same when aud as
such principal and interesi matvre and, a£ter such Bonds have be�o deliverad to the pcuchaseis, such
t� skatl be isepeatable until all such indebtedness is Qaid, and aiier the issuance of such Bonds no
fiuther actiou by said Part Authority shall be necessary w aaxhorize the extensions, assessments and
call�tion af such ta�c. �at the Secxetary of said Pozt A.uthoazry shalt forthwith fiun'ssh a�ed
cag} af such lcvy to the Couacy Audztor of Ramsey Counry, Mannesor�, rhe councy in wb,ic3z sazd Port
Audzozity aad said CiCy are located, togeiher with full information regacding the Boads of said Port
Aurhority for which the tax is tevied and such Couniy Auditor slzal! extend arzd assess the tac so
Ievied, and shall do so annw�lly uatil the principal and interest have been paid in fistt_ That auy
surgius resuiting from t6e excess levy thereiu provided shall be LransfeFred to a sinking fimd afler the
principal and interest for which the ta�c was levied and collectad has been paid; gmvided, thaz said
Pozt A.uthoriry ^ La ! on or before September 15 ia aay qear, by a�propriate action cause its
Secretary to cestif}� to the said Coimty Auditor the amouut on I�aad and available in its own u�uy
or in hvst from � iacrem�is derived fivm the Plastics, 7ac. Redevelopment Tax I.ucrement
7
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..< <• � . 1. .. :�,. . �. .. . , • .:. � � �... ..:. �..,,•
iucluding any amounts in the sink'sng fi�nd, which it will nse to pay the pr'tncipal and iuterest or both
on each sQecified iss�e of the Boads and the Coiuity Auditor st�all redace ihe levy for that year hereia
provided for by that azuouut Tbat the amoum of funds so acc�uired shaf2 be set aside by said Po�t
Authority and be used for � other gurpose than fox the regaym�t of the pzincipal and anterest on
a :��t �. r.':, t' �• . �u� :� • s' �� na- s�:.�v. .� ' . a�t •�� !�1
as amended, stia2i be collected and remitted m the Poit Authority by the County Treas�uer in
accordance with pzovisions o� �aw governiug the coDection of other txces and shalI be used solely foz
the paymer�t of such Boads when dae.
Ptohvitlestauding t6e fare�ain� provisions af this Section 4, tazes may bc tevied and
cai+ceted or omitte�! in t6e manner provided by Minnesota Statutss, Section 4�S.bi, to the
ezteni le�Y t�er':ws.�ibte.
Section 5
No �urther Couaci� Action. ?'hat said Port Authority may provide €or the exercise of the
authority hereby ganted for its issuance and szQte of clse Bonds in the aggregace pxiucipal am,o�x as
provided in ^— Seclions 2 aad b �ereof, for �e aforesaid pittposes, aad the pledge of the full faitkS
credit and r�s�uces of said Ciry of 8aint Paul, as seauity for the gayment of the same, by its
appzopriaYe resolution, and withovt further action of ihe Council. The authority w set the final
• 1 �• :Il• y i1.I :(�� 16 .1� I w ..� •( 1" 1I�1 {: 1:41 l>!�; il ♦ 1� � 1♦
Couzmiuee as pmvided in Se�tion 2 hereof. Thas in e7cercising the foregoing aaxhority the P4rt
AuFhority shalt make due campiiance with all aQplicable requiremeats for flris ordinanc� said Section
8
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' ��� 11�.�Y. .t .w .�i � l�/A ♦• � • 41 '�� � .itl'.ira�s� (.� 4
ttw� - Y.1 .1�"ltit .1! . { l .!� r� '
�: 1�1 �
Authorization af Refundiap Bonds. Rusuaat to and in accoidance witti the provisions, temis
and canditzons of this Ordinaace aud the Act, authority is heseby gtanted m the Port Autboriry ta
issue and sell Bonds as autfioriz�ed by Minnesata Statutes, Section 4b9.t360 iu aggregate Pri�cipai
amounts neces.�ry for the piupose of seauing funds as needed by the Pon Authc>rity to refund
obligations issued under this Ordinanc�without anv fucxher action of the Counal. 'YLe Priti�
Committee shaU have the same roie with respect to refuading bonds as is set fortti in Section 2
for the initial issuance nf the Bondf. The principal of the refuuding bonds may exceed die psincspal
of the bomds to be refunded to the extent necessazy and appropriate w pay intezest thereon (including
int�rest accnung as capitai appreciation}, to pay costs of issuing the re.funding bonds amd to ailow for
ciiscount upon salc, and to fund reseivves and capitatized inrerest for rhe re�'unding bands.
Section 7
.Toint Powers elereemenL In connecIIOn a�ith the creaxion of the T)istrict aad the
�inaaci»r ot the Froiect. the Councit }eersby approves the eaecution and d�iverv bv the CStv of
s.Ioint poweTS A�reement, to be entered into betweex+ the CStv aud the Port Aat6oriEv The
form of ihe Joint Powers Aereement is a�praved subsiautially in t�e form submiited and on
fde in the ot#ices of the C�ty Counril. with such subs�uent ch�nges as may be approved b�
C�ty staff, caansr3 and Bond Couns�t as cantemplated bv tbis �rion 7. 'The JoinY powers
A¢reement shall eontain pravisions obleEadn� the Citv to contn'b¢te certain funds in the
amou�ut_af 53,20(i,1100 to the 1'mject. The Mayor, CTri Qerk and the Airector, (H'fice ot
9
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�� � � ���
B'wancial Services. are hercb,�aulhorrzed and direeted to ezecuie the 3oint Powers A�r�nt
ia subsfantiaIlv the form snbmitted. as mocGfeed oursuant to t�is SecQon 7 and �v otLer
dowmeats snd cerbi"cates wleich in the opiniQn of the CSty stafl' couasd and Bond Counsel are
n�sarr* to the transacIIOns hereia desceibed. Tim e.�cecn#ion of anv instrument bp the
apw o€bcee� ar MLcers of the CStv Lerein authorizal s► be condusive evidmoe of die
a�nrova! of such dowuunts in accordance with tht terms hereof The approval herebp Eiven
ta tEse Soint Powers AEreemea►t indudes aaurovat of such additional details therein as ma�be
�eccgsarv and appro�xiate, and such modifications th�eof deEetions thuefrom and additions
tliereto as mav 6e aea,aary and anaro,preate aud amrroved bv the Director dPflce of �nancial
�'C!tq-
tio 8
Effecave Date. That this ordinance sBall take etFect and be an fotce 30 days aRsr the passagq
appzoval aad pub&cation. _ This ordinance is subject to tke orovisions of the Citn's home ��r
charter certainin¢ to the urocedare far referendams on ordinaaca eaacted b�t,�
Qoverning bodv_
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mM 70TRL PAGE.�11 **
` � `SAINT PAUL
PORT AUTHORITY
MEMORANL�UM
TO: Council President Thune and
?vlembers of the Citv Council-
PROM: Kenneth R. 7ohnson
Laurie 7. Hansen �(,�
William M. Morin �
DAT£: Szpt. 16, 199�
�-,-����
SLBJECT: RETEVTION OF PLASTICS, INC. AT THE CITGO SITE IN SAINT P�UL
Background
Tn December, 1996, as part of a Development Agreement with the Science Museum of
Minnesota (SNiM) to undertake a$100 million expansion of SMM, the City agreed to purchase
land in the Chestnut StreeUShepazd Road area which is the current site of Plastics, Inc. at 224
Ryan Avenue. The Development Aereement also required the City to turn the demolished
Plasrics site over to SMM by August 15, 199$, or incw certain damages.
For over a year, the Port Authority and HRA sYaff have been working to retain Plastics, Inc.,
wluch is a 58-year old intemational enterprise which manufactures plastic containers and
employs approximately 200 people at the Saint Paul site. Plastics also has operations in Ea�an
and Coon Rapids.
The Port Authority has worked with Plastics in studying the economic implications of over 20
possible sites to relocate the e�sting Plastics facility and consolidate it with the Eagan operations
in a new 370,�Q0 square foot manufacturing and warehouse faciliry. This would xetain ancllor
relocate appro�mately 350 well paying jobs for Saint PauL The most likely 20-acre plus site
and associated costs were shared with the I IRA Board in February.
In March, 1997, the HRA Board gave ciear direction in Resolution 97-3/26-6 that the $10.5
million expansion for Plastics at the Koc1�JMobil site at Otto and West Seventh was not
appropriate reuse and that residential redevelopment should be pursued for the KochlNlobil site.
Cunent Status
Since Apri1, the Port Authority has continued to work on retaining Plastics in Saint Paul and has
identified the Citgo site (just west of the NSP High Bridge site, see B�ibit Aj.
Council President Thune &
Viembers of the City Council
Septembe: 1b, 1997
Page -2-
�-,- �t��
The Port authority has reached agreement with Plastics and a private lender to undertake an
approxirnately �14.� million project on the Cit�o site. See E�ibit B for che business points of
the transacuon and E�ibit C for Plastics acceptance of the terms as outlined. The imancing pian
will include the issuance by the Port Authority of Tax Increment General Obligation Bonds, and
additional City Generai Obligation $onds against the 25-year Port Authority Tax Increment
District in an amount necessary to generate $13,80Q000 of bond proceeds available to pay
project costs. See E�ibit D for project financing plan.
Please note that cost of the project has increased significanfly since the Koch/Mobil site proposal
in March due to additional site preparation and remediarion costs of converting this 20-plus acre
abandoned tank farm and adverse impact of State law change on the commerciai property tax rate
which directly affects the amount of tax increment supported debt that can be issued.
Northem States Power Company (NSP) provides a program called Project Gemuu which
provides electric utility services at a reduced rate to new and eapanding manufacturing and
wholesale trade businesses within underutilized industriai zones. As part of the Plastics approval
process, the City Council will be requested to approve a noncontiguous expansion of the Crosby
Lake Froject Gemini zone to encompass the Citgo site for the Plastics expansion.
The SYate of Minnesota provides the Minnesota Investment Fund (MIF) to assist with economic
development projects that qualify based upon specific State Department of Trade and Economic
Development (DTED) criteria. As part of the Plastics approval process, the Ciry Council will be
requested to approve in concept ihe application to the State for $500,000, primarily in grant
funds, for this project. Additionally, the Met Council and DTED provide twice annual
application processes for funding of a portion of predevelopment and remediation project costs.
The Fort Authority wili apply for these grant funds as appropriate Yo diminish overall project
costs as further described in the project financing plan.
Public Purpose
Please see E�ibit E for the public purpose of retaining Plastics to Saint Paul.
I332A Resalution
Attached is a copy of the ��RA resolution which was approved on September 10 in support of a
series of Port Authority and City Council actions required to retain and expand Plastics on the
Citgo site in Saint Paul.
Council President Thune &
Vlembers ofthe City Council
September 16, 1997
Page -3-
City Council Resolurion
�� _ t l(•�'
Prior to consideration of the attached resolution (Exhibit F), the City Council is scheduled to
hold a public hearing on the creation of the tax increment financing district in connection with
this project. The attached City Council resolution approves the tax increment plan (a copy of
which is attached as Exhibit G) for the District and makes the necessary statutory findings and
elections in conneciion with the plan and the Districi, and approves other Ciry actions required to
complete this project, includina specificaily the issuance by the Port Authority of $2,000,000 of
second lien tax increment bonds (which are not secured by a city oeneral obligation pledge).
City Ordinance
The attached City Ordinance (E�ibit H) authorizes the Port Authority to issue bonds in a
principal amount not to exceed $14,400,000 (which will produce net availabie funds to be
applied to costs of the project of at least $13,800,000), and authorizes the Port Authority to
pledge the City's general obligation pledge to the full amount of these bonds. As described in
the ardinance, a portion of These bonds (approxunately $6,b00,000) will also be secured by a first
lien on tax increments.
Attachments:
I3RA Resolurion
E�ibit A- Citgo Site Map
Eaiubit B - Term 5heet
E�ibit C- Plastics Acceptance Letter and NSP Commitsnent
E�ibit D- Project Financing Sources & Uses
E�ibit E - Public Purpose
E�ibit F- City Council Resolution
E�ibit G - TIF Plan
E�ibit H - Ordinance
�ujh�PLAS_RPT
SEP 16'97 11�29 Fl? LSD-ST PfiUL 612 475 9347 TO 219#i15tt92235198 P.03 `��
1
*�P-15-1997 11=4a ST PHt1 ALFYWli�k'i 8 ECQJ 6i2 228 332a P.03iQ'7 q��
REVISEO
sponsor: ._ 9j20/37 4e04 P.M.
BESC�LUTIOti 2ip. 47 S/IO- 4
RESOLUTTON OF TE� HOUSING AND REDEVELQPMENT AIIIHORT€Y OF T�
C1[TY UP SAA�IT PA�TL, M€3�'3VESpTA SUPPORTIAIG THE PROPOSED
RELOCaTif3T� OF PLASTICS, ING TO THE CITGO s�'E
WHERFAS, aa I�ovember 26, I 996, the City Councii of the Cicy of Saint Paul (che
CounciP� adopied its Resolution No. CF 96-137b apgrov�ag a Devetopnzent Agreemcat for the
Science Mxueum Prolect (the "I?evelogmeni Agreement"j, which DcveIopment AgreemeaY
conrains an vndertakuig by fhe Cify of Saint Paul (rhe "Ciry"} to aequire the 3and at 714 ILyan
A�enue on wtuch P3asvcs, Tne. ("Plasties'� cutrendy apeiates a faciiety, and iemove the
scsuctures located tbereon, al! by August 15,1998; and
WIiEREAS, tfie Ciry, tha Hovsing and RedeveIopment Anihcriry of the C�ty of Saint
Paul (tho "HRA'�, and t}�e port Authority of ihe City of Saint Pau! (ttee "Port Authority"} have
been working �vith Ptastics both before and afrer the execution of the Aeveloptnenz Agrtemtnt to
fsnd a]ocation in ihe City of Saint Paut to which Ptastics coald relocaEq thus retainiag this
intemationa! manufacnuing enterprise, and its approxirnate3y 170 employees, in the City of Saint
PauI; and
WHER �AS, afrer consideting nvznerous sites in the City of Sainc Paal, the Ciry, the HItA
and the Port Authority, togethcr with representatives of Plasdcs, Inc., have deiernsined thai the
appm�imately 22 actc siie located west of rhe NSP high bridge, and commoaly imovro ss the
Citgo Site" is the most appropriate site for thc relacation of thc Ptasrics, Ine. facility currendy
located at 224 Ityan Aveaue, and the conso2idation with that facitity af tfie Plastics operations
cumntiy located in $agat3, Miimesoca; and
VJHEREAS, the Port Authority has negotiaced a Memorandum af Truent wit}� Piastics
���hich would provide for Piastics to retocace to the Citgo Site, asid ta consauct tfiereon a facility
contaiaing az least 370,404 rentabie square feet, with a markct vatue, at complrtion aad including
land, of no tess ihari $12,500,040; and
WHEREAS, Citgo is iate�ested in seiling the Citgo Site far an indumiat rense, snch as
the proposed n�r facility for I'Iasrics; and
tt'�iEREAS, tha relocation of the 17� jobs currentiy located at tfie Ytastics fari2ity at 22�
Ryan Avenue, and tEie e�panspon of that job baze co approximateiy ;50 we11 paz�ing jobs wbich
�vould be accomplished by tbe consolidation of the SaiM Paui azM Eagart plutics facilities at the
C�tgo Site, is important to the City of Saim Paul and iu caapayers.
it'OR' TH�REFORE, BE IT 12£SOLVED by tht Board of Gorfunissione� of tfie
Housing and Redeveiopment Authority of rhe Ci�}• of Saiut PauI, as follotss_
I. The HKA hereby supports the pzogosed relecatio� ofPfas�ics {rom iu a¢sant
Iocatiop at 234 Ryan Avenue to the Citgo Site, a�d the finaacina plan �vhich is attached ia
Fxhibit A and has beere developed for that relocauon, zli as more fuliy sec forih in ihe baud
�n• '
_��
SEP 15 '37 11�43 622 228 3314 Pf�.,E.603
SEP 16'97 11�29 FP. LSD-ST PRIA 612 475 9347 TO 219kki15t792235198 P.04
� SEP-25-19J1 11=45 S7 PatA �A�rfIrrG 8 ECLR�t 622 228 331a P.0ti07 v
• . �1 � ��Ll
2• HItA staff shaii a¢sist representatives of the City aad the Pozt Authoriry [a prcpaze
1he necessary docuraenptioa for the prompt creation af a Pon Authority Raisvelopment T'a
Tnerement District and Haurdons SubsTanee Subdisirice (coiFectrvcly rhe `�isuicc'� consiy�ang of
rhe Citgo Site, and the impleme[:tation of the project and finaaciag plan descn'bed ttzzzein az�a ia
this resolutioa.
3_ The HRf1 kereby zespectfuIly requescs that the CounciI schedute and hold a pub�ic
�earing on September 24,1997 to consider the approval of the tax incr�nent frnaacing pian {the
•`Plan`7 for thc Distritt and tt�� folIowiag that gubtic hca�ing, aad siso at thc Sepsmber 24,
i 497 Councit nseeeng, Lhe Counci{ cons'sder a zesolution whicJi apprpves ihe proposed r�jpcabaII
of �'lastics to the Cisgo site, aad the financing plaut in substantially the foan aaached hereta as
Fa;hibit A�vhich has been developed ia conncction with that relocation aad, in ttiat regard:
(a) makes the necessary statutory findings as mquired by 2aw for approvaI of
Plat{, agproves the Pian and accomplisfies the fizst reading of the ordinance necessary in
connection w�ih the issuance of the genenI obIigaGon boads described in ciause (b},
below;
(b) aPFroves ihe isn�ance by the Port Authority pf xpproxintately $ I3,800,AtJ0
of Port Authoriry bonds secured by the genetal obliga[ion pledgc af [tu Ciry, and a
$2,004,fl00 Subozdinated tax increment notc, as described ia the P2an znd the f,nanciag
P��:
(c) approvcs a nonr.onLinguous expansion of ihe �osby T.al;e project Gemini
Zone to oncomgass the Citgo site for the Pfastics expansion; snd
(d} establisbes this project as a"priority project" for pzugoses af spp3ying for
grant funds to the Depansrient of Trading and Ecenomic Devetepinent and sFie Minttesota
Invesanent Fund foc funds to fu�ance the project, and appzoves in coneept the app3icativu
to the State for SSOQ,000, in Minnesota Investtncnt Furtd funds fflr this project.
��? approves and authorizes executioa of amendmt.�rts to the I}evelopmeat
Agreement deted as ef No��embcr fi, I 996, and the Museum I.�ase dated as of tvlay 1,
1997, by and between the Ciry and T7ie Scie7ce Museum of Minaesota (°SMM'� which
(a} changes thz date of Augast 15,1998, which is the date by which the city is obIigated
to demol�sh, ciear and deIiver ihe pazcet currently pccupied by PtasEics, ta t�e date by
1�hich tha City is cont"sdent thaz (i) Plas#ics wili be retocated to the Citgo site, and (ii) the
Ciry «i1l have demolished and cieared the eaisting Flastics sites, and (b) and directs City
staff to ��-ork co2taborati�•eI�• with 3MM te compteu the SMM Projeci, recognizing the
re�ised deli�ery date far PI��tics at the Citgo site, without requcrins any additionai pubtic
fuads for the SMivi Projecc
isoeasa
SEP 25 '9? 11=43 6S2 228 3314 PF�E.004
SEP 16'97 11�30 FF? LSD—ST PRUL 612 475 9347 TO 219#Si53S92235198 P.HS
�EP—IS-1997 il�a5 ST PfalA PLANJING 8 ECO!'! 612 728 3314 P.05/97
/� • , J t � `� �
V {
�i. 3'he HRA haeFry further teqvests ihat the Port Authority consider adoptioa ofa
simiIar tesolution, at no �ater tfiaa its Octaber mceting, wbic$ wili providc thc PAit ApthoFitp's
appzova! of the P#an, the p�oposed reIocation of Plastics to the Citgo Site, a�d she fnancing plan
whiah has been developed in canaee�ioa iherewi�e, ait cons;stent witli ihe Cauacii accion
requesced in PaiagraPh 3, utctuding spe�cally:
(s) the issuance and sale of Port Authozity bonds descn'bed in paragiaph 3(!,),
ahove,
(b) the epprovai of the execution flf a forniai develapmenY agrrxment with
P3asties te provide for the reiocation of Plastics to the Gitgo Site, and tlu cynstreicFion
the�on of the groject desczibed above and in the Board reptrrt;
�srocss
�aii.�Lir�is�! . Yii:i�ciC�o::r9[:'a:y
SEP 16'97 11�30 FR LSD-ST PRUL 612 475 9347 TO 219#SSSft92235198 P.96
_, .- 5FP-IS-1997 Si�a6 ST PG� �Ara�IrG 8 ELUr� 6i2 728 33ia P.86�7
�� � �,� V1
ECHiBfTA
FLAlS dF FltiAfdCE pOR PLAS7tC REIOCATt4ti
PROJECf F1AfpNClNG
SOURCES
Tota1 Project Costs
-;.� ��•
\'�AR
�1VDED
SOURCES:
tnitiai C3.0. Bonds
Nofe to Pdvafe Lender
Scienee Musevm $uBgat
PEDlPort
6.0. Bond Sumasary:
TtF Support�d BondS
Maximum Non T{F SupportecJ G.O. Bottds
Totat G.O, $onds
Potantia! Graat Pands to ReYire G.O. 8ottds:
DTED/lvtet Couaa7
Minneso2a lnvestmerrt Fund
7otai PotenRal Grant Funds
Remairring Non 7iF G.O. Bonds
Totai Non T!F Supparted G.O. Sonds
S 13,800,000 1Q97
2.00O,WO �998
2,7QO,QOQ Done
7.00D.OQO 1999-ZOD7
1�
S 6,Z50.DOo
7,6$0,000
$ 13,800,00�
��
7897
1937
$ 5,577,D00 l997-1959
500,000 1998
6,077,000
1,5�3,000 '
S 7.SSD,000
��Y P�a1� ��rings wouSd 4e appl9et! to the City antl Ptastic,-, Inc. on a
iwo-;hirds. one-ihirrf basis, to the event thers are #ewer {ps np} � savings ulSmatel�
reatized, the Pert Authoriry a7sd PFD wii! exeR theb best eftorts to id�ntify and car+md(
other state, fcderal or prnrete sou�ces m retire th� amaunt
Financing F�ssumptions:
1. Crea6on of a 2b year redevetoprnerzi districL
2. No darrcages ar? paid to Science Museum due to delay in sRe deltvery peyorsd qugust 13, tggg,
Res. A-1
SEP 15 '97 12:aa 612 228 3314 P%�.086
SEP 16'97 11�31 FP. LSD-ST PRUL 612 475 9347 TO 219#115#92235198 P.07
,_� SEP-f5-1997 i1�46 ST PPoJL PLAMIING & ECON 612 233 331a P.0?i0'7
� \lLY
�R�
PLQt1 ttF F1NAEiCE Ft3A PlASFfC RELOCAt10N
P120:tECT FtNMtC(NG
USES
�ayments ta P1aat+cs:
OY�gin21 P18S27ps S$e
JncenfTve fot relocation of Eagep jobs
��ana}r sost reduction
Fasar.��easa satniay
Totai PaY+srents fo Plastics
iScvatopment Costs:
C�eo-tectl CO+iECtiOn
F.nvIronmenta! remetliadon
5+te improvemer�fs
Ali other casts
Tota! devetopment oosts
Totat Project Uses
3 2,704.Opp
1,200,flo0
' 2.055,OOQ
42f.QOp
S 8,3�6 pOp
S S,Et6o,Opp
2,800,000
2.977,000
2,497,dpo
S 13.f24.000
$18,500,OOp
8e5. A-2
TOTA� P.07
SEY 15 '97 it:d4 612 228 3314 PFI�.�?
SEP 16'97 11�28 FR LSD-5T PAUL 612 475 9347 TO 219#115#92?�5198 P.02
��S£P-SS-2937 11=a4 ST f�KY,JL RArNIt�'i & ECLN 612 223 33;a P_0287
� a ������
a
Hoc�sing and Redevelaprnent Ae�ft�ority of #he City of 8aint Paui, Minneso�
CERTIFICATE dF RECORDING SE£�E7ARY
7he undersigrtad hereby cerfifies as fo]lows:
1. That ehe is tha duly appoirrted. quaC�fted qssistant Secretary pf the
Nousing and Redevelopmertt Authw7Ey of the City of Ssint Paul,
Minnesota, herein calfed the "Loca! Pubtic Agency';
2• That ttte atfadteci RESOl.UTiON NO. 97-9H0-4 is a frt�e and cornecx
copy of ltie resotution as adopted on the 1 bth day of Seplember, 7857;
3. Thai ihe seat affixed below constitutes the etficiai seat of the L.oca� pubiic
f19e�Y � N�� Cattif+cate Es hereby exearted under sus� offiaaf seai;
and
4. Tnat the undersigned is dWy aufhorized to execxrte this Certificar�,
IN WiTNESS WNEREOF, I have hereuttto set my hand snd the seal of fhs said Housing and
RedeVetopment Auttwrity of tNs C�ty of Saint Paul, Minnesota, fhis 11th day of
September, 1997.
��' �/ � �,�e,�
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SEP 25 'S7 1I=42 612 22S 3314 Pp,R-"_002
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PLASTICS. INC.
REDEVELOPNIEi�3T AGI2EEMEl�iT
TERM SHEET
New Facility
Square Dollar
Feet Value
370,000 $12,500,000
Plastics wiil make the follow�ng annual payments:
Annual Estimated Taxes
Annual Loan Payment
TOTAL
$1.48/sq.ft. $ �47,600
$ .SOfsq.ft. $ 185 000
$1.98/sq.ft. $ 732,000
As taxes increase from $1.48 per square foot to $1.98 per square foot, the loan repayment
component decreases proportionately by the amount o£ the tas increase. The to#al annual
payment, however, remains at $732,600.
Totai payment does not exceed $1.98 per square foot until actuai taxes exceed $ i.98 per
square foot. No ceiling on actual taxes and the annual payment wili increase if actual
taxes exceed $1.98 per squaze foot.
Plastics will enter into the Port Authority standard Workforce Agreement to maintain at
least 300 jobs with an average salary of $917 per hour. Any penalties paid under this
agreement aze pledged, as further security for the NSP loan repayment.
Tas payments available after debt service on the senior TIF bonds are pledged to the NSP
loan.
9/16/97
�:Vjhlpiastics
'�.
, _ 5 � , Fachi.bit C
��.1���
MEMORANDUNI OF INTENT
Datad: July 14, 1997
This Memorandum of Intent ("Memorandum") is made by and between the Port Authority
of the City of St. Paul ("Port Authority") and Plastics, Inc. ("Plastics") to reflect concept approval
for the acquisition of Plastics' Ryan Avenue facility and its consolidation at the CITCO site below
described. This Memorandum of Intent is not a legal, binding obligation until a Development
Agreement has been executed and authorized by the Port Authority, Piastics, Inc., and the City of
St. Paul.
1. The Port Authority will provide at no cost to Plastics approximately 21 acres cunently
owned by CITCO, together with a peipetual easement over approximately three acres from NSP
(co!]ectively the "CITCO site") as shown generally on the site plan attached hereto, which will
include:
a. On or before August 31, 1997, the Port Authority, at its expense, shali
endeavor to enter into a purchase agreement with CITCO and acquire the necessary perpetual
easement from NSP.
b. On or about September 15, 1997, the Port Authority will, at its expense (or
at the eapense of CITCO), commence and do any and a!( environmental remediation required
by the 1vTinnesota Pollution Control Agency ("MPCA") and complete the same by
December 31, 1997, which shall include the procurement of a Certificate of Completion and
No Action/No Association letter in fortn reasonably acceptable to Plastics. P(astics may
comment and render input on the Remedial Action Plan as it is developed for the CITCO site.
c. The Port Authority wili, at its expense, provide engineered filI and rough grade
the site to increase its elevation to a height reasonably acceptable to the Port Authority and
Plastics, and in no case, less than an elevation of 716 MSL. Such work shall be substantially
completed by May 1, 1998. ,
d. The Port Authority, at its expense, and in coordination with Plastics'
contractor, commence the necessary piling at the CITCO site on or about May 1, 1998.
Plastics may designate which areas have higher priority and are to be completed first in such
piling process. All pilings shall become substantially compiete by September i, 1998. A.s part
of the piling process, Plastics' contractor will install the concrete piling caps; and the cost of
the same shall be reimbursed by the Port Authority to Plastics.
e. The CITCO site will be conveyed to Plasrics or its assigns by September 15,
1998.
SELI,ED 5�8956.7 C _ 1
,:
f. The Port Authority will pay or have paid on the CTTCO site al! real estate
taxes and special assessments levied or pending through the calendaz year of closing.
g. The site wili be properly zoned to allow manufacture and distriburion of plastic
products. There will be no restrictive covenants except those set forth in the Development
Agreement and as required by the MPCA The Port Authority shall endeavor to avoid the
impasirion of any restrictive covenants by the MPCA.
h. The Development Agreement shall allow the coverage of a 370,000 squaze
foot facility, together with related parking, on ffie CITCO site. If variances from City Code
are necessary, Port Authority wil! need to abtain them by December 31, 1997. Plastics will
provide a site plan noting aecessary variances to the Port Authority by September i, 1997.
i. The Port Authority wili provide reasonable cooperation to Plastics so that it
may structure the transaction in a manner to facilitate the qualified reinvestment of
condemnation proceeds for tax purposes.
j. At the option of Plastics, the Port Authority will need to obtain city and county
approval to plat the property into two separate parcels by March 1, 1998 if requested by
Plastics by January 1, 1448, one for the manufacturing portion, and one for the distribution
portion.
2. Plastics shall receive a total financial package in cash from the City and(or Port
Authority in the amount of $5,955,000, plus the CITCO site described above, plus the Rent
Differential described below_ This $5,955,Q00 includes payment in fu(1 for the Ryan Avenue property
and release of re]ocation claims, empioyment incentives for the relocation of approximately 160
empfoyees from Eagan to St. Paul, and occupancy cost reduction incentives. The City of St. Paul
may retain the salvage value of any equipment lett behind at the Ryan Avenue facility which cannot
be reasonably relocated to the new facility. The Development Agreement shall provide for
environmental assurances mutually acceptable to Plastics and the City so that conveyance of the Ryan
Avenue properiy is in a condition which is environmentally acceptable to the City. Plastics shall al]ow
the City's environmentai consultants to enYer Plastics' building for environmental testing at reasonable
times and upon reasonable notice during the pendency of the Development Agreement and lease
period. The City acknowledges that it intends to demolish the Ryan Avenue building and in doing
so will take the properry subject to such routine asbestos removal (if any) as may be required. Aside
from the environmental assurances, the Ryan Aveaue property will be so(d in an "as is condition."
3. All costs over and above the City's and Port Authority's agreed upon payment and
benefits to reIocate to the new facility are at the expense of the Plastics.
4. Plastics will build and lease andlor own an approximate 370,000 square foot facility
having an estimated market value including land, at completion, of no less than $12,500,000, No
minimum assessment agreement is required thereafter.
S. Real estate taxes as assessed on the new facility (currently estimated at $1.98 per
squaze foot} are the responsibility of Plastics andfor the new landlord.
��-llt
SELLED 508956.7 �- 2
�� .1��
6. Plzstics agces to move all of the jobs then located in the St. Paul and Eagan faciIities
to the new facility. Starting positions after the first year of employment shall be at least $9.15 pe=
hour, plus benefits.
7. The closing on the sale of the conveyance of the CITCO site from the Port Authority
shalI be schedule3 for September 15, 1998. $2,700,000 of the $5,955,000 compensation pacitage wiIl
be paid at such time to Plastics. Ti�e conveyance of the Ryan Aveirue facility to the City shall ocau
at the same time, but it shall be Ieased back to Plastics for $1.00 net (Plastics shall pay all real estate
taxes prorated an the calendar year basis, operating and maintenance e�cpenses) until the completion
of the new production facility, or no later than August 15, 1999, whichever is earlier; provided fiuther
that said date of August 15, 1999 shall be extended for delays caused by the City or the Port
Authority. Fxcept for delays caused by the City or the Port Authority, Plastics shall pay to the Port
Authority as liquidated damages for each day after August 15, 1999, that it has not vacated the Ryan
Avenue facility, a sum equal to that payable by the City of St. Paul to the Science Museum of
Nfu�nesota for such delay, subject to such force majeure clauses as may be available to the City. The
Port Authority's payments to Plastics sha11 be directly reduced by any such Iiquidated damages. The
balance of the funds shall be paid to Plastics as follows:
$2,055,000, payable in monthly draws according to the value of construction
completion at the new productionJdistribution facility, which draws may commence
in November, 1998;
$800,000, upon occupancy of the new production facility;
$200,Q00, upon the first anniversary of the occupancy of the new production facility;
and
$200,000, on the second anniversary of the occupancy of the new production facility.
Plastics may delay the completion of the warehouseldistribution portion of the new facility until
December 31, 1994.
8. The Port Authority will need to obtain by August 31, 1997, the necessary approvals
to cause the new facility to be a"Gemini Site" so that it qualifies for reduced utility charges from
NSP. Such reduced charges shall inure to the benefit of Plastics.
9. Plastics agrees for a period of ten years (the "10-year period") after consolidation to
the CITCO site ttiat it will not knowingly and intentionally relocate more than ten percent (10%) of
any jobs at the CITCO site to another location outside of St. Paul.
a. This does not prohibit job reductions for business reasons, to meet
competition, or for business efficiencies. A piant shutdown because of husiness losses or
inefficiencies is not a violation of the clause.
SELLED 508456.1
C-3
. . ��'```�,
b- If ihe Port Authority or City aIlege vioIation of this clause, written notice must
be given to Plastics, Inc. and Plastics, Inc. must be given nine months to cure any alleged
violation.
a• The clause will be conclusively deemed to have been fulfilleti if plastics, Inc.
has maincained at least an average of 300 employees at the facility during each year� � a f
whom after the first year of employment shall be paid not less than $9.15 per hour, plus
benefits• In addition, there will be no violahon ofthe clause if another company or companies
occupy the facility and the cumulative number of employees at the facility, whether they
belong to Plastics, Inc. or another company or companies, averages at least 300 employees
per year and wages are comparable or better to the rec}uired $9.15 per hour wage.
d• Th� remedy for vio(ation is ['�nited to moncy �� � p�tt Auchority
cat�n°t sc� m°°�Y aauy�$es unless it shows by cicar and coavincing �vidence that this clnuse
��� T� �O� °f �+8d shall bc timitcd to the following, catcu�atc� on an
aanuat basis: Sl20,000 timea a firaction whac the numerator is the numbar of jobs not in
compliance and the deaominator is 300.
e. The clause is subject to existing or future labor contracts.
10. Plastics will install "state ofthe arP' HVAC systems, with particular attention paid to
odar control equipment, in the new Pacility. Approval of the same by City staff shall be provided for
in the Development Agreement.
11. The parcies shall endeavor to enter into a non-contingent Development Agreement no
later than September 15, 1997.
12, In addition to the other amounts and expenses to be paid by the Port Authority, the
Port Authority shall also pay the differential in rent (the "Rent Differential") which Plastics may incur
in connection with its leasing of its warehouse facility in Eagan from Ianuary 1, 1999 through the
earlier of• (I) the date at which Plastics is obligated to relocate its Fagan warehouse facility to the
CITCO site or (2) the date upon which Plastics no longer has an obligation to pay rent at the Eagar.
warehouse (the "Extension Period"), Said Rent Differential shall be paid at such time and in suct,
am°unt as incurred by Plastics. The intention of this provision is that Plastics shall not be obIigated
io pay any rent, or payments in lieu thereof, during the Extension Period which exceed the rental
obligations which Plastics would have paid during the Extension Period if its rental rate and rental
obligations had not been increased from those in effect during 1998. Plastics shall utilize a11
commercially reasonable efforts and arguments with its present Iandlord so as to minimize the Rent
Differential, and shall keep the Port Authority infonned of the progress and content of such Rent
Differential negotiations.
13. The Port Authority will cooperate with Plastics to allow Plastics' due diligence with
respect to the CITCO site, including but not limited to issues regarding environmental, flood plan,
building location, truck circulation, fire safety, water pressure, coal dust, single point of ingress and
egress, and such other matters as Plastics deems in its reasonable discretion to investigate and
evaluate. Plastics will endeavor to complete said due diligence by August 31, 1997.
SEt,[.ED 508956,7 C- 4
SEI3.ED 508956.7
PORT AUTfIORITY QF TF� CITY OF ST. PAUL
��..-�� /
«� -
PLASTICS, INC.
By �^-_.. 7 � ( 6 �4 �
zts
c- s
°l1 ���'�
t
0�'�_ � ( (��'
FIltST ADDENDUi�1 TO MEMO1tANDL3M OF INTENT
DATED SEPTEMBER 9, 1997
This First Addeadum to Memorandum of Intent ("Addendum") is made by and between
the Port Authoriry of the City of Saint Paul ("Port Authority") and Plastics, Inc. ("Plastics") to
amend the Memorandum of Intent dated July 14, 1997 and previously executed between the Port
Authority and Plastics. This Addendum is not a legal, binding obligation until a Development
Agreement has been executed and authorized by the Port Authority, Piastics and the City of
Saint Paul.
The Memorandum of Intent is hereby amended by this Addendum, in the foliowing
ways:
1. Throughout the Memorandum of Intent references to the "CITCO site" or
"CITCO" shoutd be corrected to read "Citgo site" or "Citgo", respectively.
2. Pazagraphs 4 and 5 of the Memorandum of Intent are hereby amended in their
entirety to read as follows:
"4. Piastics wiil build and lease andlor own a facility at the Citgo site of an
estimated size of no less than 370,000 rentable square feet, having an estimated
mazket value inctuding land, at completion, of no less than �12,540,000. No
minimum assessment agreement is required thereafter.
5. Real estate taxes as assessed an the new facility are the responsibility of
Plastics andlor the new landiord. In addition to real estate taYes payable with
respect to the new facility, Plastics shall, for as long as it occupies the new
facility at tl�e Citgo site, make a separate payment to the Port Authority in an
amount which is equal to: (a) $1.98 per rentable squaze foot of the spaca in the
new facility building minus (b) taxes per rentable square foot actually payable
with respect to the new facility. [For iliustrative purposes only, if taxes are
payable on the new facility at $1.48 per rentable squaze foot, this separate
payment by Piastics to the Port Authority would be in an amount equal to $.50
per rentable squaze foot.] Plastics understands tba.t the Port Authority will pledge
t4us sepazate payment as security for the repayment of a note (the "Note") to be
issued by the Port Authority and purchased by NSP. The payment obligation of
Plastics under this pazagraph 5 shall also be subject to the following
qu�cations: (a) it shall terminate upon the soonest of: (i) the completion of 17
years of payments; (ri) ihe repayment of the Note; or (ui) Plastics ceasing to
occupy the new facility; (b) it shail not exceed the $.50 per rentable square foot
even if actual real estate taYes are less than $1.48 per rentable square foot; and (c)
it shall first be dus in the year in which taxes are payable (i.e, the year after full
assessment) on the basis of the completed, fu11y assessed, new faciliry."
I577062
C-6
�� - �t�,�
3. The Memorandum of Intent is hereby further amended by adding the following
additionat pazagraphs 14 and 15 to read as foilows:
"14. In addition to the financiai package described in the Memorandum of
Intent, Plastics shall aiso be entitied to a credit against the payment described in
paragraph 5 of the Memorandum of Intent, as amended by the Addendum, in an
amount equal to one-third of any deveiopment cost savings achieved by the Port
Authority with respect to the Port Authority's project costs, which project cosu
are described for purposes of this Memorandum of Intent to be the difference
between the actuai costs incurred by the Port Authority in connection with the
acquisition and prepazarion of the Citgo site, and the funding obtained by the Port
Authority for the payment of such costs, including a$1,577,000 source of
funding deemed from the Ciry of Saint Paul. Plastics' credits shall be in an
amount equal to one-third of such deveiopment cost savings, up to a maximum
credit of $500,000. The amount of this credit shall be held by the Port Authority
in an escrow account, and shail be applied to pay the payments which would
otherwise be required to be made by Plastics pursuant to paragraph 5."
"15. Contemporaneously with the execution of the Development Agreement,
Plastics shall enter into an agreement with I3orthern States Power Company
("NSP"), to be effective only upon the issuance by the Port Authority of iu
$2,000,000 ta�ble development note (the "Note"), and the purchase of such Note
by NSP, that inciudes the following conditions for as long as Plastics occupies the
new facility:
• a requirement ihat Plastics purchase at competitive mazket rates and
subject to Gemini site benefiu, a11 elecuical power and natural gas from
NSP until tfie maturity date of the Note, or such earlier time as the Note,
including all accrued interest, is fully paid.
• in the event of the full payment of the Note prior to the initial maturity
date of the Note, att assurance by Plastics that NSP has the right of first
refusal to any bona fide offer to provide electric and naturai gas service to
the Saint Paul facility made by any other energy supplier."
urfoszoi C^ 7
��-,��Y
This Addendum to Memorandum of Intent is dated as of the date fust above wriiten.
PORT AUTIiORITY OF THE CITY OF SAIlVT
PAUL
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PLASTICS, INC.
'� �
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unoaz.oi C-8
Northem States Power Comparry
4'f 4 Nicollet Mali
Minneapoi'�s, MinnesoTa 55401
Tekphone (612) 330-7769
September 8, 1497
Port Authority of the City of Saint Paul
1900 Landmark Tower
345 St. Peter Street
Saint Paul, Ivfinnesota 55102
Attention: Kenneth R Johnson, President
Re: Relocation of Plastics, Inc. to CTTGO Site
Dear Mr. 7ohnson:
Exhibit C
Paul E Pender 011- y 1`�
YcePresident-Flnanoe �
and Treasurer
This letter of intent is intended to evidence the intent of Northern States Power Company
("NSP") to purchase from the Port Authority of the City of Saint Paul (the "Port Authority") a
t�able Port Authority revenue bond in the initial principal amount of $2,000,000 (the "Bond") on
the terms and conditions generally outlined below:
Terms of Bond: The Bond will be issued on a taxable basis in the initial principat amount of
$Z,000,000. The Bond will beaz interest at the rate of 4% per annum, and
will be amortized over a period of 15 yeazs. Additional terms and
conditions of the Bond shall be subject to further discussions and
documentation between the Port Authority and NSP.
Purpose of Bond: The Port Authority shall use proceeds derived from the sale of the Bond to
NSP to pay costs incurred in connection with the relocation of Plastics,
Inc. ("Plastics") to the "CITGO site" in the City of Saint Paul, including
specifically, at its sole discretion, but without limitation, the costs of
acquiring the land comprising the CITGO site (the "ProjecP'); the cost of
preparing that site for Plastics' use in constructing a proposed 370,000
square foot facility; and any other costs and expenses incuaed by the Port
Authority in connection with the proposed relocation of Plastics to the
CITGO site.
Security for The Port Authority shall grant, or shall cause to be granted, the following
Repayment of security to NSP as security for repayment of the Bond:
Bond:
a lien against all taac increments generated by the Project which is
subordinate only to the general obligation tax increment bonds which
are expected to be issued in the approximate principal amount of
$6,150,000 to finance additional costs to be incurred in connection
with the relocation of Plastics;
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a first lien on the private loan payment that Plastics has agreed to make
to the Port Authority in an amourn equal to $1.98 per sqvare £oot
minus real estate tases actually paid with respect to the Project. [For
illush purposes only, it is currently anticipated that real estate
taxes will be payable with respect to the Project at $1.48 per square
foot, which would yield a private Ioan payment made by Plasrics in an
amount equal to $.50 per square foot. Further, since Plastics has
entered into a letter of irnent with the Port Authority pursuant to which
it has agreed to construct a facility of at least 370,000 squara feet, the
private loan payment, calculated at $.50 per square foot, would be
$185,000 per year];
• a first lien against any genalties payabie to the Port Authority by
PSastics in connection with the violarion of the Worl�orce
Development Agreement which Plastics has agreed to enter into in
connection with its relocation to the CTTCrO site.
Timing: It is anticipated that the Bond will be issued, by the Port Authority, and
purchased by NSP, no eazlier than January 1, 199$ and no later than
June 30, 1998. It is the intention of both the Port Authority and I3SP that
this Bond will not be issued until necessary to provide funds for the
relocation of Plastics, after all other available sources of funding have been
identified and committed.
Additional As a condition to NSP's purchase of the Bond, NSP and Plasdcs must
Conditions have entered into an agreement incIuding the foliowing conditions:
Precedent:
• a requirement that Plastics purchase all electrical power and natural gas
from NSP until the initially established maturity date of the Bond, or
such earlier date on which the principal and interest on the Bond have
been fully repaid;
in the event of the full payment of the Bond prior to the initial maturity
date of the Bond, assurance by Plastics that NSP has the right of first
refusal to any bona fide offer to provide electric and natural gas service
to the Plastics' Saint Paul facility wtuch is made by another energy
supplier.
This Letter of Intent is not a legal binding obligation of either NSP or the Port Authority, but is
merely evidence of the intent of both parties to negotiate in good faith to the issuance, sale and
purchase of the Bond on the terms described herein. NSP's obligations are subject to completion
of negotiations as to the terms of the Bond and the related security and energy supply agreements,
prior approval of those agreements by 23SP's Board of Directors or its designees, and, to the
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exte� applicable, to prior approval of the energy supply agreements by tfie Mmnesota Public
T3tilities Commission.
l�ISP understands NSP understands that the undertaking by the Port Authority to issue the Bond
descnbed above is subject to prior approval of the Bond, as well as all other aspects of the
proposed relocation ofPlasrics to the CITGO site, by the Board of Commissioners of the Port
Authority, and may further be subject to approval, in whole or in part, by the City Council of the
City of Saint Paul and the Board of Comsnissioners of the Housing and Redsvelopment Authority
of the City of Saint Paul, IvTinnesota.
NORTF�RN STATES POWER COMPANY
BY� , r,,��/ �/y! ��,_�
�aul E. Pender
�ce President - Finance and Treasurer
ACKNOWLEDGED AND AGREED:
The Port Authority of the City of Saint Paul does hereby accept the terms outlined in the
foregoing letter of intent, subject to the requirement that such terms be approved by the Port
Authority Board of Commissioners and, if necessary, by the City Council of the City of Saint Paul
and the Board of Commissioners of the Housing and Redevelopment Authority of the City of
Saint Paul, Mannesota.
PORT AUTHORITY OF TI� CITY OF SAINT
FAUL
By:
It resident
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PLASTICS
PROJECT FINANCING
SOURCES:
Initiat G.O. Bond Proceeds
Note to Psivate Lendes
Science Museum Budget
PED/Port
G.O. Bond Summary:
First Lien TIF Bonds
Subordinate Lien TIF Bonds
Total
USES:
Payments to Plastics:
Originai Plastics Site
Incentive for relocation of Eagan Jobs
Occupancy cost reduction
Eagan lease subsidy
Total payments to Plastics
Devefopment Costs:
Geo-tech correction
Environmental remediation
Site improvements
Ail other costs
Total development costs
Tota! Project Uses
$ 13,800,000
2,000,000
2,700,000
1,000,000
$ 19,500,000
Gross Cost of Issuance
Amount & Cap Interest
Exhibit D
Project
Proceeds
$ 6,655,000 $ 580,Q00 $ 6,075,000
7,995,0�0 269,00� 7,726,000
$ 14,650,000 $ 849,000 $ 13,801,000
$ 2,700,000
1,200,000
2,055,0�0
421,000
$ 6,376,000
$ 5,050,000
2,600,000
2,977,000
2,497,000
$ 13,124,000
$ 19,500,000
Financing Assumptions:
1. Creation of a 25 year redevelopment district.
2. No damages are paid to Science Museum due to delay in site delivery beyond August 15, 1998.
a�� -1 lt�
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Public Pumose
1. Prevent Plasfics from Moving its Operations to Another State or
1Vlunicipality.
One of the primary goals of the Port Authority is to assist in the creation
and retention of livable wage manufacturing jobs in Saint Paul through
land redevelopment, business financing, and business services activities.
Plastics has been a long-tezm viable Saint Paul manufacturer which has
provided jobs to a substantial number of Saint Paul residents. This Project
will retain this company's existing jobs and wi11 afford the opportunity for
additional jobs to be relocated to the City through consolidation of
company operations. The redevelopment of the Citgo Site will capture
this expansion and will prevent both the direct loss of taY base and jobs in
Saint Paul and the opportunity cost of additional jobs provided through
company consolidation.
2. Provide Job Opportunities for Saint Paul Residents.
Plastics, Inc. wi11 be employing 370 individuals at this new location (I50
jobs will be coming from the Eagan facility). They will enter into the Port
Authority's Workforce Agreement that commits them for 10 yeazs to pay no
less than $9.15 per hour and maintain a workforce of at least 30Q. Failing to
meet these goals, Plastics, Inc. is subject to cash penalties that aze capped at
$120,Q00 per year.
The Port Authority operates a customized job training prograni (The
Employment Connection) which recruits neighborhood residenu and trains
them based upon the specific hiring needs of expanding companies. The
Employment Connection will be used to assist Plastics with its new hires as
the company continues to grow.
3. To Redevelop Unused, Underused, Inappropriately Used, or
Infrequently Used Property.
The Citgo Site has been underufilized for many years. The majority of the
azea comprising the site has been used most recently as a petroleum tank
farm, which has been abandoned. The tanks aze unused, empty, and
substandazd. This industrial (I-3) zoned properry has been contuninated and
has had a dehimental effect on the surrounding azea "Lhis Project will solve
several problems at once (soil contamination, blighting use, underutilizarion
of land, neighborhood eyesore, minimat jobs) and will greafly enhance the
site with its highest use, hundreds of jobs, massive increase in taa� base, and
a well landscaped site that will enhance the azea environment.
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4. Espand the Industrial Tag Base of the City of Saint PauL
It is expected that the ta�able market value of parcels in the District will
increase by approximately $10,400,000 once the Project is placed in service.
This value will come from the development of an approxunately 370,000
square foot manufacturing and distribirtion facility with an average
construction value of $33.'73 per square foot The taxabie value of the new
facility is assumed to be at 90% of the construction cost less the existing
base of $837,OQ0.
5. Facilitate the Eapansion and New Development of the Science Museum
The relocation of Plastics will allow for the major eapansion of the
renowned Science Museum. Underutilized urban core land adjacent to the
existing Plastics facility will be redeveloped with a culiural facility that wili
provide jobs and contribute to the economic, educational, and entertainment
vitality of the City and the Region.
6. Assist the City of Saint Paul Obligations Under Science Museum
Development Agreement
The City of Saint Paul is required to acquire all lands, including the existing
Plastics facility at the Chestnut Site, needed for the Science Museum project
as a condition of receiving a$30,000,000 grant from the State of Minnesota
for the Science Museum pro}ect The City's resolution on 23ovember 6,
1996, authorized this acquisition.
7. Hazardous Substance ltemediation
The Port Authority will incur remediation costs at the Citgo Site as specified
in a Response Action Plan to be approved by the MPCA. These activities
would eliminate areas of hazardous substances in the designated hazardous
substance sites.
E-2
Exhibit F ��_
{
Council File #
Green Sheet #
RESOLUTlON
CITY OF SAINT PAUL, MINNESOTA
Presented
Refezred To
Committee Date
RESOLUTION APPROVING THE TAX INCREMENT FINANCING PLAN
FOR THE PLASTICS, INC. REDEVELOPMENT TAX INCREMENT
FINANCING DISTRICT AND HA7.ARDOUS SUBSTANCE SUBDISTE2ICT,
AND AUTHORIZING (A) THE EXTENSION OF CROSBY LAKE PROJECT
GEMINI (B) THE ISSUANCE BY THE PORT AUTHORITY OF $2,000,000
SUBORDINATED TAX INCREMENT BONDS, AND (C) THE
ESTABLISHMENT OF Tf� PLASTICS PROJECT AS A"PRIORITY
PROJECT" FOR PURPOSES OF APPLYING FOR CERTAIN GItANT FUNDS,
ALL IN CONNECTION WITH THE RELOCATION OF PLASTICS, INC. TO
THE CITGO SITE
BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota, as follows:
Section 1. Reci s.
1.01. It has been proposed that the Port Authority of the City of Saint Paul (the "Port
Authority") establish the Plastics, Inc. Redevelopment Tas Increment Financing District (the
"DistricY') and a Hazardous Substance Subdistrict therein (the "HSS") and, in connection therewith
that the City of Saint Paul (the "City") approve the TaY Increment Financing Plan relating thereto,
all pursuant to and in accordance with Minnesota Statutes, Secrion 469.174 tlu 469.179,
inclusive; and Minnesota Statutes, Sections 469.048 through 469.068, inclusive; and
1.02. The Port Authority has investigated the facts and has caused to be prepared a
proposed Ta�c Increment Financing Pian (the "Plan") for the District and the HSS.
1.03. On November 6, 1996, pursuant to Council File No. 96-1376, the City Council
approved the execution of a Development Agreement with the Science Museum of Minnesota (the
"SMM") which zequires the City to acquire property which is necessary for the SMM's new
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riverfront facility. Plastics, Ina ("Piastics") is currenfly located on a portion of such property (the
"Chestnut Site") and needs to be relocated in order for the SMM project to move forward.
1.04. It has been proposed that the approximately 26-acre site located approximately one
mile to the west of downtown Saint Paul at Shepard Road and 7ames Avenue (the "Citgo Site") be
redeveloped for purposes of building an approximately 370,000 square foot manufacttu�ing and
distribution facility to be purchased by Plastics upon demolition of their current facility at the
Chestnut Site. The acquisirion, cleazance, remediation and improvement of the Chestnut Site and
the Citgo Site is collectively refened to herein as the "Project".
1.05. It has been proposed that the City contribute approximately $3,200,000 ($2,700,000
of which is already budgeted as part of the Science Museum Project) to the costs of the Project by
paying certain of the costs associated with the transfer of Plastics from the Chestnut Site, and its
facility in Eagan, to the new facility at the Citgo Site.
1.06. The Citgo Site is not presently located witivn the Crosby Lake Project Gemini
Zone. It has been proposed that a noncontiguous expansion of the Crosby Lake Project Gemini
Zone be approved in order to encompass the Citgo Site, and to provide electric utility service to
Plastics at a reduced rate.
1.07. It has also been proposed that: (a) the Port Authority issue bonds (the "Bonds") in a
principal amount which will produce net available funds to be applied to costs of the Project of at
least $13,800,000, but in any event not to exceed the principal amount of $14,650,OOQ to finance a
portion of the costs of the Pro}ect, including specifically the costs of acquisition, cleazance,
remediation and improvement of the Citgo Site, which bonds aze to be secured by the general
obligation of the City which will, in tiun, be secured by a first lien piedge of tax increments with
respect to approximately $6,60Q000 of the Bonds, and, with respect to the remainder of the Bonds
will be secured by a lien on tax increments subordinate to, in order of priority, such first lien
pledge, the payment of the NSP Bonds (as defined herein), and the payment of administrative
charges in connecrion with the District; (b) the Council consider adopting an ordinance authorizing
the issuance of said Bonds by the Port Authority under Minnesota Statutes, Section 469.060, and
pledging the City's general obligafion thereto; and (c) the Port Authority issue its $2,000,000
subordinated taac increment bonds (the "NSP Bonds") which will be secwed by a second lien on ta�c
increments, in order to finance additional costs of the Project.
1.08 The Port Authority andlor the City, as applicable, have performed a11 aciions required
by law to be performed prior to the establishment of the District and the HSS and the adoption of
the Plan relatang thereto, including, but not Innited to, notification of the County Commissioner an
whose district the District is located, Ramsey County and School District 230. 625 having ta�ng
jurisdiction over the properiy to be included in the District and the HSS, and the hoiding of a public
hearing after published notice as required by law.
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Section 2. Findings by.,the City for the Ap�roval of the TaY Increment Financing.,Plan for
the Plastics Inc Redevelo�ment Taat Increment Financin� District and the
Hazardous Substance Subdistrict therein.
2.01. The Council hereby finds that the District is a redevelopment district pursuant to
Minnesota Statutes, Section 469.174, Subd. 1Q, pazagraph (a), clause (1), and the ASS is a
hazardous substance subdistrict pursuant to the Minnesota Statutes, Section 469.175, Subd. 7. The
Port Authority shail make the findings necessary to qualify the HSS.
2.02. The Council hereby finds that the Dis�ict and the HSS, and the approval of the Plan
relating thereto, aze intended and, in the }udgment of this Council, the effect of such actions will be,
to provide an impetus for redevelopment in the District and to further the public purposes and
accomplish certain objectives as specified in the Plan.
2A3. The Council further finds that the proposed development or redevelopment in the
Dishict, in the opinion of the City, would not occ�tt solely through private invesiment within the
reasonably foreseeable future and that the increased mazket value on the site that could reasonably
be expected to occur without the use of ta�i increment financing (being $0) would be less than the
increase in the market value estimated to result from the proposed development (being
approximately $12,500,000) after subtracting the present value of the projected tax increments for
the maYimum duration of the District pernutted by the Plan (being approximately $8,500,000) and,
therefore, the use of tax increment financing is deemed necessary; that the Plan conforms to the
general plan for the development or redevelopment of the City as a whole; and that the Plan will
afford maxiumm oppornurity consisient with the sound needs of the City as a whole, £or the
development of the District by private enterprise.
2.04. The City does i�ot elect to compute the taac increments in accordance with Minnesota
Statutes, Section 469.177, subd. 3, clause (b), meaning that tax increments will be determined
before the application of the fiscal disparities provisions of Minnesota Statutes, Chapter 473F.
2.05. The City elects to make a qualifying local contribu6on in accordance with
Minnesota Statutes, Section 2731399, Subd. 6(d), in order to qualify the District for exemption
from state aid losses set forth in Section 273.1399.
2.06. The Council fiuther finds, declares and determines that the City made the above
find'angs stated in this Section 2 and has set forth the reasons and supporting facts for each
determination in writing, attached hereto as Attachment A.
Section 3. Ap�roval of the Plan. The Plan for the Dishict and the HSS is hereby approved
and adopted, and shall be placed on file in the office of the City Clerk.
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Section 4. Acknowle ent Re,�ding T� Increments. The Council acknowiedges that
the County Auditor will forwazd all taY increments from the District and the HSS to the Port
Authority.
Section 5. Approval of Project Gemini for District. The Crosby Lake Project Gemini Zone
is hereby expanded to encompass the azea of the District.
Section 6. 9rdinance Authorizing Issuance of Bonds. City staff is hereby authorized and
d'uected to submit an ordinance to the Council for its consideration, which authorizes the issuance
of the Bonds as described in paragraph 1.07 above.
Section 7. ��proval of Subordinated Tax Increment Bond .
7.01. Laws of Minnesota 1976, Chapter 234, 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, by resolution adopted in accordance with 1aw.
7.02. The Council hereby approves the issuance of the NSP Bonds by the Port Authority
for the purposes described herein and in the Plan, the �act details of which, including but 1'united
to, provisions relating to maturity and interest rate, are to be deternuned by ihe Port Authority, and
the Council hereby authorizes the issuance of any additional bonds or notes (including refunding
bonds or notes) by the Port Authority found by the Port Authority to be necessary for carrynig out
the purposes for which the NSP Bonds are issued.
Section 8. "Priority ProjecP' far DTED and MIF Funds. The Council hereby establishes
this Project as a"Priority Project" for the purposes of applying for g�ant funds from the Department
of Trade and Economic Development and the Minnesota Investment Pund for funds to finance the
Project, and the Council hereby approves in concept the application to the State of Minnesota for
$500,000 in Minnesota Investment Funds for this Project.
Section 9. Ratification of Prior Action . The prior actions of the City staff and Port
Authority staff in connection with the prepararion of the Plan, the distribution of the Plan to the
County and School District, and the publicafion of the notice of public hearing, are hereby ratified
and confirmed.
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.�, � .
RESOLUTION #
The reasons and facts supporting the findings for the adoption of the Tax Inerement Financing Plan (the
"Pian") for the Plastics, Inc. Redevelopment Ta�c Increment Financing District (the "District") as required plusuant
to Minnesota Statutes, Secrion 469175, Subdivision 3 are as follows:
1. Finding that the District is a redevetopment district as defined in Minnesota Statutes, Section 469.174,
Subd. 10, paragraph (a), clause (1).
The District consists of contiguous pazcels. The totai square footage of the District is approximately
1,143,000 square feet, and, and 70% of that number is 80Q100 square feet. The Citgo parcel within the Dishict is
875,269 squaze feet and is "occupied" by buildings, streets, utilities or other improvements, because at least 15%
(131,290 square feet) of the pazcel is covered by improvements (including above ground oiUgas storage tanks).
There are buildings in the District (_ of them storage tauks), (being _%) of which aze structurally
substandard because: [to be provided for each building or tank].
2. Finding that the proposed development, in the opinion of the Council, would not occur solely through
private imestment within the reasonably foreseeable future and, therefore, the use of tax increment financing is
deemed necessary and thctt the increased market value of the site fhat could reasonably be expected to occur
without the use of tar increment financing would be less than the increase in the market value estimated to resutt
from the proposed development after subtracting the present vatue of the projected tar increments for the
maximum duration of the district permitted by the ptan.
Due to the excessive costs for the clearance, grading, and soil and poilution remediation of the Citgo Site, this
project is feasible only through assistance, in part, from tas increment financing. The proposed development
consists of an approximately 370,000 square foot manufacturing and distriburion facility, the increase in mazket
value of which is estimated to be approximately $12,500,000. The value of development on the Citgo Site
expected to occur without the use of tax increment financing is $0, which is less than the estimated increase in
mazket value expected to be created by the proposed project (approximately $12,500,000) minus the present value
of the projected taY increments (appro�xnately $8,500,000).
3. Finding that the Tax Increment Financing Plan conforms to the general plan for the deveZopment or
redevelopment of the municipality as a whole.
The Citgo Site will be appropriately zoned for the Project. The proposed redevelopment is consistent with the
Saint Paul Mississippi River Corridor Pian which was originally adopted in 1981, and amended in 1987, and
concluded that this site should be developed with labor-intensive industrial uses.
ia�sr,�
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4. Finding that the Tax Increment Financing Plan for the District will afford maximum opportunity,
consistent with the sound needs of the City as a whole, for the deveZopment of the District by private enterprise.
The establishment of the District will result in the facilitarion of redevelopment in the azea of the City covered by
the District, will assist in the development of the new Science Museum of Minnesota, and will result in the
retention and creation of jobs for residents of the City.
�l��a`FsI'� �t.l��
� •. ��___
�___
�___
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. :. . ����
'' ' ����
iiii'����'�
����
Adopted by Council: Date
Adoption Certified by Council Secretary
�
Approved by Mayor: Date
�
Requested by Department of:
�
Form Approved by City Attomey
�
Approved by Mayor for Submission to Council
By: _
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Exhibit G
r a7 _ ��VY
SAINT PAUL PORT AUTHORITY
TAX INCREMENT FINANCIl�TG PLAN FOR THE
PLASTTCS, INC. REDEVELOPMENT AND
HAZARDOUS SUBSTANCE SUBDISTRICT
TAX INCREMENT FINANCING DISTRICT
Introduction
The Science Museum of Minnesota (the "Science Museum") has identified a site for
consuuction of its new facility which necessitates the acquisiiion and demolition of the
manufacturing and distribution facility at the interse�tion of Chestnut Street and Ryan Avenue (the
"Chestnut Site") owned and operated by Plastics, Inc., a division of Anchor Hocldng ("Plastics").
Plastics currenfly has 200 employees at the Chestnut location, which is one of three operated by it
in the Twin Cities metro azea. Many of these employees are St. Paul residents. Staff from the Saint
Paui Port Authority and the Saint Paul Deparhnent of Planning and Economic Development have
worked closely with representatives from Plastics to identify a suitable St. Paul location for
relocating the Plastics facility. The site to be redeveloped for Plastics is the approximately 26-acre
underutilized peh�oleum tank farm and raiiroad spur track site located approximately one mile to the
west of downtown Saint Paul at Shepazd Road and James Avenue ("Citgo Site"). Citgo is the
current primary properry owner, and two small adjacent properties owned by Northem States
Power Co. (NSP) and the Union Pacific Railroad are also part of the District.
The acquisition, clearance, remediation, and improvement of the Citgo Site is referred to herein as
the "Project". T'he Port Authority's goal in undertaking this Project and creating an industrial
development district is to provide for the maximum job creation and retention and tax base possible
in St. Paul.
Creation of Redevelopment Tax Increment District; Statutory Authority
This tax increment plan relates to the creation, under Minnesota Statutes Section 469.174,
Subd. 10, of the Plastics, Inc. Redevelopment Taat Increment Financing Dishict (the "District"), and
the possibie creation within the Dishict of a Hazardous Substance Subdistrict (the "HSS"), pursuant
to Section 469.175, Subd. 7.
Need and Public Purpose
The Citgo Site
The Project wiil provide land necessary for Plastics to relocate and consolidate its Saint
Paul and Eagan operations an Saint Paul, and in doing so make way for the conshuction of the
Science Museum at the Chestnut Site. The City's tas base will be increased by the construction of
an approximately 370,000 square foot new manufacturing and distribution facility. Over 200 jobs
will be retained in, and 150 jobs relocated to, the City as a result of the Project for a total of 350
41-���Y
jobs in the new facility. The development of the Citgo Site will also be a catalyst for the creafion of
additional job oppommities and tax base enhancements at the various other smaller sites located in
the Randolpt�/West Seventh atea.
The Citgo Site is the one acceptabie site in St. Paul out of the several proposed to Plastics,
due to site configuration and tiuZing issues. However, the Citgo Site, as is, is not suitable for
construction of the Plastics facility. Significant site and geotechnical improvements and pollution
remediation is required on this "brownfield site" before the faeility can be constructed.
The existing Plastics land and building at the Chesmut Site has an estunated market value
of $986,700, as valued by the County. The new Plastics facility at the Citgo Site will have a
construction cost of appro�mately $12,480,000.
The existing land use acuvities at the Citgo Site aze blighting and constitute an
underutilization of the land, are incompatible with the surrounding azea, and provide very m;nimai
job opportunities. Private development of the Citgo site has not been possible for a variety of
reasons. These reasons include excessive property costs for cleazance, grading, and soil conection
and pollution remediation. All of these conditions have resulted in a lack of private investment in
ttris area. As a result, the properiy has not provided employment opportunities and has not
contributed to its full potential to the tax base and general economy of the City, the School District,
the County, and the State.
It is necessary that the Saint Paul Port Authority exercise its statutory port authority powers
to develop, implement, and finance a program designed to encourage, ensure, and facilitate the job
and economic development of the properiy. Ttus redevelopment Project will further accomplish
the public purposes specified herein.
The Chesmut Site
The City is assisting in the redevelopment of the land encompassing the Chestnut Site by
facilitafing the development of the Science Museum's new river&ont facility in this area. The City
of Saint Paul on November 6, 1996, authorized the execution of a Development Agreement with
the Science Museum to undertake an appro�mately 300,000 square foot museum expansion and
800 caz parking ramp to bring approximately 1,500,000 museum visitors to the new river&ont
museum. The authorizing resolution authorized the City to purchase the former West Publishing
pazking lot and the existing Plastics property at the Chestnut Site as well as a number of smaller
parcels as part of this $90 plus million project. Addirionally, the Agreement directs the City to
construct Eagie Pazkway which will connect Shepazd Road to Kellogg on the westem edge of the
new Science Museum project. The needed right of way is through a portion of the existSng Plastics
facility at the Chestnut Site.
The mui&ple public purposes of providing for a major cultural facility development, job
creation and retention of vital manufacturing positions, blight removai, redevelopment of
underutilized land, and neighborhood azea enhancement will be achieved by this Project.
G-2
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Ob�ectives of the Port AuthoritX Rggarding Improvements in the Plastics Project Area
1. Prevent Piastics from Moving its Operations to Another State or
Municipality.
One of the primary goals of the Port Authority is to assist in the creation and
retention of livable wage manufacturing jobs in Saint Paui ttuough land
redevelopment, business financing, and business services activities. Plastics has
been a long-term viable Saint Paul manufacturer which has provided jobs to a
substantial number of Saint Paul residents. This Project will retain this
company's existing jobs and will afford the opportunity for additional jobs to be
relocated to the City through consolidation of company operations. The
redevelopment of the Citgo Site will capture this expansion and will prevent both
the direct loss of tax base and jobs in Saint Paul and the opportunity cost of
addirional jobs provided through company consolidation.
2. Provide Job Ogportunities for Saint Paul Residents.
Plastics, Inc. will be employing 350 jobs at this new location (150 jobs will be
coming from the Eagan facility). They will enter into the Port Authority's
Workforce Agreement that commits them for 10 years to pay no less than $4.15 per
hour and maintain a workforce of at least 300. Failing to meet these goals, Plastics,
Inc. is subject to cash penalties that are capped at $120,000 per yeaz.
The Port Authority operates a customized job training program (The Employment
Connection) which reeruits neighborhood residents and trains them based upon the
specific hiring needs of expanding companies. The Employment Connection will
be used to assist Plastics with its new hires as the company continues to grow.
3. To Redevelop Unused, i3nderused, Inappropriately Used, or Infrequently Used
Property.
The Citgo Site has been underutilized for many years. The majority of the area
comprising the site has been used most zecently as a petroleuxn tank fann, which has
been abandoned. The tanks aze unused, empty, and substandazd. This industrial (I-
3) zoned properiy has been contaminated and has had a detrimental effect on the
surrounding azea. This Project will solve several probiems at once (soil
contamination, blighting use, underutilization of land, neighborhood eyesore,
minimal jobs) and will greatly enhance the site with its highest use, hundreds of
jobs, massive increase in tax base, and a well landscaped site that will enhance the
area environment.
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4. Egpand the Industrial Tax Base of the City of Saint PauL
It is expected that the taYable market value of pazcels in the District will increase by
approximately $10,300,000 once the Project is placed in service. This value will
come from the development of an approximately 370,000 square foot
manufacturing and dishibution faciliTy with an average construction value of $33.73
per square foot. The increase in taxable value of the new facility is assumed to be at
90% of the construction cost less the existing base of $960,000.
5. Facilitate the Egpansion and New Development of the Science Museum
The relocation of Plastics will ailow for the major expansion of the renowned
Science Museum. Underutilized urban core land adjacent to the eacisting Plasfics
facility will be redeveloped with a culrival facility that will provide jobs and
contribute to the economic, educational, and entertainment vitality of the City and
the Region.
6. Assist the City of Saint Paul Obiigations Under Science Museum Development
Agreement
The City of Saint Paul is required to acquire all lands, including the existing Plastics
facility at the Chestaut Site, needed for the Science Museum pro}ect as a condition
of receiving a$30,000,000 grant from the State of Minnesota for the Science
Museum project. The City's resolution on November 6, 1996, authorized this
acquisition.
7. Hazardous Substance Remediation
The Port Authority will incur remediation costs at the Citgo Site as specified in a
Response Action Plan to be approved by the MPCA. Ttxese activities would
eliminate areas of hazardous substances in the designated hazardous substance sites.
Classification of the District.
The Port Authority and the City of Saint Paul, in determining the need to create a tax
increment financing district in accordance with Section 469.174, fmd that the District is a
redevelopment dishict pursuant to Minnesota Statutes, Section 469.174, Subd. 10, because parcels
consisting of 70% of the azea of the District aze occupied by buildings, streets, utilities or other
improvements and more than 50% of the buildings aze structurally substandazd to a degree
requiring substantial renovation or clearance. This finding is based upon the following facts: (.i.)
the total squaze footage of the Distdct is appro�nately 1,143,000 square feet, and 7Q°/a of that
number is 800,100 square feet; (ii) one pazcel within the Aistrict (the "Citgo" pazcel) is 875,269
square feet; (iii) the Citgo pazcel is "occupied" by buildings, streets, utilities or other improvements
because at least 15% (131,290 square feet) of the parcel is covered by improvements (including
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above-ground oiUgas storage tanks); (iv) at least 50% of such storage tanks aze functionally or
structurally defective and will be removed. Those tanks, which were installed on the site in
appro�mately eaziy 1960, were emptied and abandoned in the eazly 1990's, and have not been used
since.
In the event an HSS is created, prior to certification of the HSS, the Port Authority will also
find that the HSS is a hazazdous substance subdishict pursuant to Mimiesota Statutes, Section
469.175, Subd. 7.
In addition, the District meets the requirements of a redevelopment district pursuant to
Minnesota Statutes, Section 469.176, Subd. 4(j); because: at least 90% of the revenues derived
from tax increments from the District will be used to finance the cost of correcting the condirions
that allowed designarion of the District as a redevelopment district under Section 469.174, Subd. 10
described above, These costs, which aze estimated to be in excess of $10,000,000, include the cost
of acquiring properties in the District, site filling, grading and piling, and installarion of utilities,
roads, sidewaiks and pazking facilities for the site. Allocated admuristrative costs may also be
included in the qualifying costs. This total is more than 100% of the projected amount of the bond
issue ($6,655,000).
Descripfion of the Develo�ment Proeram for the Plastics Inc Redevelo�ment Pro�ect
The development program at the Citgo Site consists of the development of the Dishict to
provide a 37Q,OOQ square foot facility for use by Plastics in the District. This wili require acquiring
land, filling, grading, piling and compaeting the site, managing pollution remediation, incurring
financing related expenses and funding admuristrative funcuons, all as described in more detail
below:
1. Property Acquisition.
The approximate 26 acres of land at the Citgo Site will be purchased from Citgo,
Northern States Power Company and the Union Pacific Raikoad at an estimated
total purchase price of $88,000.
2. Polluted Soils Remediation.
Due to the historical uses of the Citgo Site as a petroleum tank farm and railroad
sput track, several pollutants are suspected in the soil. Remediation oversight cost is
anficipated to equal $2,600,000 at this time. This cost will be further defined when
additional testing is completed and a Response Action Plan (RAP) is approved by
the MPCA. The total cost will include legal advice, field testing, soil remediarion,
and MPCA activities.
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3. Installation of Site Improvements and IJtilities.
Site improvements will include demolition, engineering, street improvements,
utilities, fill, site grading, and landscaping. Total site improvement costs are
anticipated to equai appro�mately $2,977,000.
4. Geo-Technical Correction.
Geotechnical correction includes pilings at a total estimated cost of $5,050,000.
5. Contracts for Professional Services Essen6al to the Redevelopment Activifies.
Professional services will include land surveys and tifle work, real estate, legal, civil
engineering, geotechnical engineering, appraisals, and traffic engineering and
business park design. The total cost for professional services, other than bond
issuance costs, is estimated to be $9Q0,000.
6. Contingency
Project budget includes $1,508,000 for project contingencies.
7. Incur Costs and Expenses Connected With Financing Acrivifies.
Bond issuance costs plus other financing-related costs, including capitalized interest,
legal expenses, printing and underwniters discount, are anticipated to totai
approximately $1,164,000.
Descri_ption of Contracts Entered into at the Time of Preparation of the Plan
Section 469.175, Subd. 1(3), requires that a list of development activities that aze proposed
to take place as part of the Project for which contracts will be entered into at the time of the
approval of this plan, including the names of the parties to the contract, the activity govemed by the
contract, the cost stated in the contract, and the expected date of completion of that activity be listed
in the Plan; however, no contracts have been entered into at this time.
Descripfion of Other Types of Develanment Activities Which Can Reasonably Be Expected to
Take Place Within the Project Area
The end-user of the Citgo Site will be Plastics, Ina (a fifty-eight year old international
enterprise which manufactures glass and plastics containers) and its �liated companies, Anchor
Hocking and Newell Company. Activities in the District will include producfion, assembiy,
warehouse, distribution and attendant office space that lead to the creation and retention of living
wage jobs. A goal of this taac increment plan is to provide for the retention and relocation of at
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least 350 jobs, currentiy located in Saint Paul at the Chesmut Street Site, and in Eagan,
Minnesota.
Construction of the new Plastics facility is expected to commence in September, 1998. This
acrivity will be closely coordinated with that of the Science Museum site redevelopment, and will
take into account production process needs of Plastics.
Cost of the Proj.ect and Description of the Plastics. Ina Redevelogment Tax Increment
District.
The foilowing, as required by Secrion 469.175, Subd. 1(5), aze estunates of the (i) cost of
the Project, including aduiinistration expenses; (ii) amount of bonded indebtedness to be incurred;
(iii) sources of revenue to finance or otherwise pay public costs; (iv) the most recent net tas
capacity of taxable real property wittvn the taY increment financing district; (v) the estimated
captured net tas capacity of the ta�c increment financing district at completion; and (vi) the duration
of the tax increment financing district's existence.
1. Cost of the Project, Including Administrative Expenses.
The development cost of the Project is estimated at $13,123,000, plus administrative
chazges payable to the Port Authority in an amount up to 10% of the t� increment
receipts. Other costs of relocation, retention incentives, and occupancy cost
reductions aze $6,376,000, for a total project cost estimated at $19,500,000.
2. Amount of Bonded Indebtedness to be Incurred.
A. TaY Increment Bonds: The Port Authority shall be the issuer of one or more
series of tax exempt general obligation tax inczement bonds by the end of
the yeaz 1997 in the appro�mate gross amount of $6,655,000, wtuch after
allowing for capitalized interest and cost of issuance, result in net proceeds
of $6,075,000.
B. General Obli�ation Bonds: The Port Authority shall be the issuer of Cseneral
Obliga6on debt in an initial amount of approximately $7,995,000 million,
which will result in net proceeds of $7,725,000 to fund project costs. To the
eatent grant funds aze subsequenfly received, General Obligarion bonds
would be retired.
C. NSP Note: NSP wi111end $2,OOQ,000 to fund project costs. This loan wi11
beaz interest at 4% and will be amortized over 15 years. The loan will be
secured by a subordinate lien on t� increments and a loan payxnent to be
made by Plastics of up to $.50 per square foot.
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3. Sources of Revenue to Finance or Othernise Pay Public Costs.
The following aze the likely sources for funding the total Project, including the taac
increments which will be pledged to the bonded indebtedness:
A. Tax Inerements
T� increments from the redevelopment district, net of up to 10% for
adinuiishafive eacpenses, aze anricipated to equal $436,000 annually. If the
HSS is created, the addirional annual increment &om that subdis7ict is
anticipated to be approacimately $60,000 per year. All taY increments will be
first pledged to the payxnent of debt service on the $6,655,000 taY exempt
general obligation tax increment bonds, which after capitalized intezest and
cost of issuance generate $6,075,000 be used to pay qualifying project costs.
B. Pa�ment From Plasrics
Plastics has agreed to make a payment of up to $.50 per square foot, which
payment shall be pledged to the repayment of the NSP note described above.
C. City of Saint Paul & Saint Paul Port AuthoritX
The City of Saint Paul will fund an aggregate of $3,200,000 towazd the
Project, consisting of $500,000 for job relocation benefits and $2,700,000
for a rent abatement escrow and relocation of Plasucs.
The Saint Paul Port Authority will conhibute funds in the amount of
$SQ0,000 towazd the job relocafion incentive.
D. Investment income
Nominal investrnent eaziiings ate projected, the majority of which will be
utilized to fund project costs and capitalized interest on the bonds until taY
increments aze available to meet debt service on the bonds.
E. Pollution Funds
Poilution funds may be derived from the HSS, if it is created. Increments
from the HSS would support only that portion of the bonded indebtedness
amibutable to funding pollution remediation.
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4. The Most Recent Net Tax Capacity of Taxable Real Property Within the Taz
Increment Financing Distric�
At 7anuary 31, 1997, the total tax capacity of property parcels to be included in the
District was approximately $46,000. Of the $96Q000 total base market value,
$328,600, or 34% of the total, is attributabie to buildings, all of which will be
removed in connection with the redevelopment pursuant to this Plan. The $631,400
of mazket value attributabie to the Citgo, Union Pacific, and NSP land is assumed to
remain constant. The original tax capacity and tax rate aze calculated in accordance
with Minnesota Statutes, Section 469.174, Subd. 7 and Section 469.177, Subd. 1.
5. The Esfimated Captured Net T� Capacity of the Tax Increment Financing
District at Compiefion.
The new 370,000 square foot facility on the Citgo Site will have an aggregate
assumed estimated mazket value of $11,232,000. Applying a 3.40% tax capacity
rate results in estimated tax capacity of approximately $381,000 and a caphued net
taY capacity of $552,000 at January 2, 2001, the yeaz following expected completion
of construcdon of the new Piasrics facility. This captured t� capacity is calculated
in accordance with Minnesota Statutes, Secrion 469.174, Subd. 4 and 469.177,
Subd. 2.
6. The Original Tas Capacity and Captured Tax Capacity of the HSS
The original tax capacity of the HSS is $46,000. If incurred, remediation
expendiiures would exceed $46,000 and be deducted from the original tax capacity
resulting in the maxiinum caphxred tar, capacity allowed in the amount of $46,000.
7. The Duration of the Tax Increment Financing District's Existence.
The request for certification of the Dishict will be made in 1997. The first tax
increments are anticipated to be generated for taxes payable in the yeaz 2000. The
duraUOn of the District will run 25 yeazs from the first receipt by the Port Authority
of tax increments. Therefore, it is estimated that the Port Authority could collect tax
increments &om the District through the yeaz 2025. The maximum durarion of a
Hazardous Substance Subdishict is the lesser of (i) 25 years from the date additional
tax increment from the HSS is received, or (ii) the period necessary to recover the
costs of removal or remedial acrions specified in the development Response Action
Plan. The Port Authoriry does, however, reserve the right to decertify the District
and the HSS prior to the legally required date.
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Alternate Estimates of the Im�act af the Tax Increment Financing on the Net Tax Capacities
of All Taxing Jurisdictions.
The taYmg jurisdictions in which the District is located in whole or in part ate as foilows:
a Independent School Distriet #625, whose boundaries are cotemunous with those of
the City of Saint Paul.
b. The County of Ramsey, the total market value of which the City of Saint Paul
contributes approxixziately 45%.
c. The Housing and Redevelopment Authority of the City of Saint Paul, whose
boundaries aze cotemunous with those of the City of Saint Paul.
d. The Saint Paul Port Authority, the requesting authority, whose boundaries aze
coterminous with those of the City of Saint Paul and whose powers to levy and use
property taaces are limited.
e. Metropolitan authorities, such as the Meh�opolitan Council, Meh�opolitan Airports
Commission, Metropolitan Waste Control Commission, and the Metropolitan
Mosquito Control District. Of these, only the Metropolitan Council and the
Metropolitan Mosquito Control District currently levy taues on real estate.
The Port Authority is required by Minnesota Statutes Section 469.175, Subd. 1(a)(6) to
make statements relative to the altemate estimates of the impact of the tax increment financing
on the net tax capacities of all tasing jurisdictions in which the ta�c increment financing district is
located in whole or in part. For purposes of one statement, which is made in Statement A below,
the Port Authority shall assume that the estimated captured net t� capacity wouid be availabie to
the taYing jurisdictions without creation of the district. For purposes of the second statement,
made in Statement B below, the Port Authority shall assume that none of the estimated captured
net tax capacity would be available to the tasing jurisdictions without creation of the district.
Statement A.
Under the assumption that the estimated captured net tax capacity wouid be available to the taxing
jurisdictions without crearion of the District, creation of the District will serve to deny these tasing
jurisdictions the t�es from the captured net t� capacity in the amount estimated above under the
section entitled "The Esrimated Captured Net Tax capacity of the tax increment financing
District at Completion.". In addition, the ta�ces on the base value would also be lost in the event
the HSS is created as described above under the section enfifled "The Original Tax Capacity and
Captured Tax Capacity of the HSS". However, the demolition and cleazance of the Plastics
facility to make way for the Science Museum project would go forwazd without the creation of the
District, and the current Plastics facility at the Chestnut Site would be removed from the ta�c rolls in
any event.
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Statement B.
The Port Authority believes that none of the estimated captured net ta�c capacity would be available
to the taxing jurisdictions without creation of the District due to the expense of getring the Citgo
Site to a state in which it wouid be conducive to the generation of such increased value. In
particular, without creation of the District, Plastics would not be relocating to the Citgo Site.
Assiiming this to be true, the tasing jurisdictions would continue to receive the same amount of
taxes as they have currently been receiving based on the current net tax capacity of the District as
set forth above under the section entifled "The Most Recent Net Tax Capacity of Taxable Real
Property Within the Tax Increment Financing District", except for the demoliuon of the
Plaskics facility which would occur with or without crearion of the District. Once the taY increment
dishict terminates in 2025, the taxing jurisdictions will receive the taxes that they have received in
the past from the Citgo Site.
Studies and Aualysis Used to Determine Need for Tax Increment Financing
In Resoluuon No. adopted by the Port Authority on, [ October 28. 19971 and in
Resolution No. adopted by the City on [September 24. 19971, the Port Authority and the
City have deternuned on the basis of data collected and presented by Port Authority and City staff
that the proposed development or redevelopment of the Citgo Site wouid not reasonably be
expected to occur solely through private inveshnent within the reasonably foreseeable future, and
that the increase in the mazket value of this site that could reasonably be expected to occur without
the use of tas increment financing would be less than the increase in the market value estimated to
result from the proposed development after subtracting the present value of the projected tax
increments for the maximuxn duration of the district permitted by the plan. Any minimat private
investment that might occur without public redevelopment ac6viry would provide significantly less
than the increase in the mazket value estimated to result from the proposed Plastics development.
The studies and analyses used to make the determination that the proposed development
would not reasonably be expected to occur through private investment within the foreseeable
future, and therefore the use of tax increment is deemed necessaty, aze as follows:
• The Citgo Site is an industrial Brownfields site, a blighted, underutilized,
contaminated site that necessitates public redevelopment intervention in order to be
made marketable for private sector development that generates an acceptable number
of jobs and increased tax base.
• The Citgo site presents significant development challenges aside from contaminarion
because the site needs significant fill and pilings, grading, and infrastructure
development, unlike buildable sites elsewhere in the marketplace that do not require
public redevelopment intervention prior to construction.
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• The Saint Paul Mississippi River Corridor Plan, which was originally adopted in 1981
and amended in 1987, concluded that this site should be developed with labor-
intensive industrial uses.
Identificafion of All Parcels to be Included in the District.
Attached hereto in Appendix A is a list of the Property Identification Numbers for all
properties to be included in the District, a map showing the Project azea (the area of the Industrial
Development District to be created by the Port Authority), the District and the e�sting properties,
and a legai description identifying the boundaries of the District.
Hazardous Substance Subdistrict
In the event the HSS is created, certification of the HSS wiil allow taxes attributable to the
base value of the District to be used to reimburse or pay a11 or a portion of the pollution testing and
remediarion costs. As mentioned above in the section entitied "The Original Tax Capacity and
Captured Tax Capacity of the HSS", the HSS would cause taxes on the base value of the Dishict
to be lost until such time as the poliution costs are satisfied. Total taxes payable in 1997 were
appro�mately $66,000. As mentioned above, a Response Acrion Plan for the Citgo Site will be
completed and submitted to the MPCA for approvai prior to certification of the HSS. If an HSS is
created, the Port Authority would make the necessary finding that the development would not
reasonably be expected to occur solely through private investment and taY increment otherwise
available from the District and that the use of HSS was, therefore, deemed necessary.
Attached hereto as Append� B is a list of the Property Identification Numbers for all
properties to be included in the HSS, a map showing the HSS and a legal description identifying the
boundaries of the HSS.
District Administration and Annual Disclosure.
Admuristration of the District will be the responsibility of the Port Authority, acfing on
behalf of the Ciry of Saint Paul. The resolurions of the City and the Port Authority approving and
creating the District wiil direct the County to forward all tax inerement from the District to the Port
Authority. Tax increments will be deposited into interest bearing accounts sepazate and disiinct
from other funds of the Port Authority. Tax increments will be used only for acrivities described in
this taY increment plan.
The Port Authority on behalf of the City wiii report annually to the State Auditor, county
board, school board and Department of Revenue regazding activities in the District as required by
Secrion 469.175, subdivision 5 and subdivision 6 and will inciude informarion with regard to the
District in the data necessary to comply with subdivision 6a. With regazd to the local contribution
as discussed under the heading "Local Match Requirement" below, the City will file necessary
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reports required by the Deparnnent of Revenue in such form as the Deparkment of Revenue may
then require.
Modifications to District
In accordance with Minnesota Statutes, Secrion 469.175, Subd. 4, any reducrion or
enlargement of the geographic area of the Project or tas increment financing district; increase in
amount of bonded indebtedness to be incurred, including a determivarion to capitalize interest on
debt if that detemunation was not a part of the originai plan, or to increase or decrease the amount
of interest on the debt to be capitalized; increase in the portion of the captured t� capacity to be
retained by the Port Authority; increase in total estimated tax increment expenditures; or
designation of additional property to be acquired by the Port Authority shail be approved upon the
notice and after the discussion, public hearing and findings required for approval of the original
plan. The geographic azea of a taY increment financing district may be reduced, but shall not be
enlarged, after five yeazs following the date of certification of the originai tas capacity by the
county auditor.
Administrative Expenses
In accordance wiih Minnesota Statutes, Section 469.174, Subd. 14; and Minnesota Statutes,
Section 469.176, Subd. 3 administrative expenses means all expenditures of an authority other than
amounts paid for the purchase of land or amounts paid to contractors or others providing materials
and services, including azchitectural and engineering services, directly connected with the physical
development of the real property in the District, relocation benefits paid to or services provided for
persons residing or businesses located in the District or amounts used to pay interest on, fund a
reserve for, or sell at a discount bonds issued pursuant to Section 469.178. Administrative expenses
also include amounts paid for services provided by bond counsel, fiscal consultants, and plam�ing
or economic development consultants. Administrative expenses of the District will be paid to the
Port Authority from taY increments; provided that no tax increment sha11 be used to pay any
administrative e�cpenses for the Project which exceed ten percent of the total tax increment
expenditures authorized by the tax increment fmancing plan or the total tax increment expenditures
for the Project, whichever is less.
Pursuant to Minnesota Statutes, Secfion 469.176, Subd. 4h, ta�� increments may be used to
pay for the county's actual administrative expenses incurred in connection with the District. The
county may require payment of those expenses by February 15 of the year foilowing the yeaz the
expenses wereincurred.
Necessary Improvements in the District
No tax increment shall be paid to the Port Authority after three years from the date of
certificarion of the original net taY capacity by the County Auditor unless within the tYiree-year
period:
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(1) bonds have been issued in aid of the Project pursuant to Section 464.178 of the TIF
Act or any other law, except revenue bonds issued pursuant to ivlinnesota Statutes,
Section 469.159 to 469.165;
(2) the Port Authority has acquired property within the District; or
(3) the Port Authority has constructed or caused to be constructed public improvements
within the District.
The bonds must be issued, or the Port Authority must acquire property or construct or cause
public improvements to be constructed by appro�mately November, 2000.
• Pursuant to Minnesota Statutes, Section 469.176, Subd. 6:
If, after four years from the date of cert�cation of the original tc� capaciry of the taz
increment fznancing disirict pursuant to Minnesota Statutes. Section 469.177, no
demolition, rehabilitation or renovation ofproperty or other site preparation, including
qual�ed improvement of a street adjacent to a parcel but not installation of utility
service including sewer or water systems, has been commenced on a parcel located
within a tax increment fznancing district by the authority or by the owner of the parcel
in accordance with the tax increment fznancing plan, no additional tar increment may
be taken from that parcel and the original tax capacity of that parcel shall be excluded
from the original tax capacity of the tax increment flnancing district. If the authority or
the owner of the parcet subsequently commences demotition, rehabilitation or
renovation or other site preparation on that parcel including improvement of a street
adjacent to that parcel, in accordance with the tax increment frnancing plan, the
authority shall certify to the county auditor in the annual disclosure report that the
activity has commenced. 7Tze county auditor shadl cert� the tctt capacity thereof as
most recently cert�ed by the commissioner of revenue and add it to the original taz
capacity of the tax increment frnancing district. The county auditor must enforce the
provisions of this subdivision.. For purposes of this subdivision, qualified
improvements are limited to (1) construction or opening of a new street, (2) relocation
of a street, and (3) substantial reconstruction or rebuilding of an existing street.
The Port Authority or a properiy owner must begin making impravements to parcels within
the District by approximately November, 2001.
• Pursuant to Minnesota Statutes, Section 469.1763, Subd. 3, revenues derived from taY
increments are considered to have been spent on aza activity within the District only if
one of the following occurs:
1. Before or within fzve years after cert�cation of the District, the revenues are
actually paid to a third party with respect to the activity;
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2. Bonds, the proceeds of which must be used to finance the activity, are issued and
sold to a third party before or within frve years after certifzcation of the District, the
revenues are spent to repay the Bondr, and the proceeds of the &onds either are, on
the date of issuance, reasonably ezpected to be spent before the end of the latter of
(i) the frve year period, or (ii) a reasonable temporary period withfn the meaning of
the use of that term under Section 148(c)(I) of the Internal Revenue Code, or
deposited in a reasonabZy required reserve or replacement funa;�
3. Binding contracts with a third party are entered into for performance of the activity
before or within five years after certifzcation of the District and the revenues are
spent under the contractual obligation; or
4. Costs with respect to the activity are paid before or within frve years after
cert�cation of the District and the revenues are spent to reimburse a party for
payment of tke costs, including interest on unreimbursed costs.
Therefore, one of the above four events must occur by appro�mately November, 2002.
Use of Tax Increment
All revenues derived from tax inczement shall be used in accordance with this tax increment
financing plan and pursuant to Minnesota Statutes, including but not limited to Section 469.176,
Subds. 4, 4e and 4j.
Nofification of Prior Planned Improvements
Pursuant to Minnesota Statutes, Section 469.177, Subd. 4, the Port Authoriry has reviewed
the area to be included in the District and has found building permits issued during the 18 months
immediately preceding approvai of the Plan were for maintenance only.
capacity of the District should not change as a result of the valuafion
which the building permits have previously been issued.
Excess Tax Increments
Therefore, the originai tax
of any improvements for
Pursuant to Minnesota Statutes, Section 469176, Subd. 2, in any yeaz in which the t�
increment exceeds the amount necessary to pay the costs authorized by this taY increment plan,
including the amount necessary to cancel any tax levy as provided in Minnesota Staiutes, Section
475.61, Subd. 3, the Port Authority shall use the excess amount to do any of the following:
2.
3.
Frepay the outstanding bonds;
Dischazge the pledge of tax increment therefor;
Pay into an escrow account dedicated to the payment of such bonds; or
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4. Return the excess to the County Auditor for redistribution to the respective taxing
jurisdictions in proportion of their t� capacity rate.
Fiscal Disparifies
The Port Authority and the Ciry have elected to compute Fiscal Dispariries contribution for
the District in accordance with Secrion 469.177, subdivision 3, paragraph a
Locai Match Requirement
For taY inerement financing dishicts which request certificarion after June 30, 1994,
Minnesota Statutes, Secuon 273.1399, Subd. 6(d) provides that the Port Authoriry may be exempt
from local government aid or homestead and agricultural credit aid penalty if the Port Authority
and/or the City of Saint Paul makes a local contribution to the Project equal to five percent of the
tax increment. The Port Authority and the City intend to make the local contributions in lieu of the
state aid penalty. Five percent of the future value of the taY increments expected to be collected
from the District is appro�mately $691,000. The City and the Port Authority will make an up-front
local contribution (rather than a yeazly contribution) in the amounts identified above in paragraph C
under the heading "Sources of Revenue to finance or otherwise pay public costs". These amounts
aggregate $3,700,000 in local confribution. Pursuant to Section 273.1399, Subd. 6(d)(2), if the Port
Authority or the City fails to make the required contribution for any year, the state aid reducrion
will apply for that year. The state aid reduction wi11 be equal to the greater of (A) the required 1oca1
contribuflon (5% of tax increments collected that year) or (B) the amount of the aid reduction that
applies under Subdivision 3 of Section 273.1399.
9/17/97
g.\jmo\Ih\plas-Uf
G-16
SAINT PAUL PORT AUTHORITY
TAX INCREMENT FIIQANCING PLAN FOR T'HE
RANDOLPH AVENUE REDEVELOPMENT AND HA7.ART)OUS SUBSTANCE
SUBAISTRICT
TAX INCREMEI�IT FINAI�CING DISTRIGT
APPENDIX A
Properties fo be Inclnded in the Redevelopment Disfrict
Property Identification Number: 12-28-23-12-0034
Legal Description: Raznsey Coimty Tax Department Description as follows:
a ., _,.��r
Plat .01088 Subdivision of the I3VJ 1l4 of the NE 1/4 and Lot 2 of Section
Twelve of T28 R22 in the City of St Paul Revised Aescription No. 976 a
Specific Part of Sec 12 TN 28 RN 23
Property Identification Number: 12-28-23-11-0005
Legal Deseription: Part of Ramsey County Tax Department Description as follows:
The Westerly 150 feet of the following described property:
Plat .01043 I3orthern States Power Co's Plat, St Paul, Minn. Subj to Shepard Rd & Subj to Higb
Bridge ROW & No Part of Vac Hill St and McMillan St Adj & Ex Levee & Ex a 700 Ft MOL
Union Oil Parcel Adj to Shepard Rd; the Fol; Part of Govt Lots 1& 2 Lying NW1y of and Bllcs 4
Thru 6 I�Iorthem States Power Co's Plat, St Paul, Minn. Sub,j to Shepazd Rd & Subj to High
Bridge ROW & No Part of Vac Hill 5t and McMillan St Adj & Ex Levee & Ex A 700 Ft MOL
Union Oil Pazcel Adj to Shepard Rd; The fol; Part of Govt Lots 1& 2 Lying 23WIy of SEIy Levee
Line Lying SWIy of SWIy Line of Ei'igh Bridge ROW Lying SEIy of NWly ROW Line of Shepazd
Rd Lying Ely of a line Desc as Beg at Most NEIy Cor or Tract B 12LS 441 Th 23 27 Deg 32 Min OS
Sec W 70.26 Ft Th N 33 Deg 34 Min 26 Sec E 68.22 Ft Th N 27 Deg 02 Min 30 Sec W 60.56 Ft to
Sly ROW Line of Shepazd Rd & There Term & All of Tract C Reg Land Survey No. 441 & All of
Blks 1 and B1k 2 and Vac Gray St of McMillans Add & Ex N 218 Ft & Fx Stockyazd Track of CS
and PM and O Ry Co; Lots 15 and Lot 16 Paztition Add & Pa# of Blk 1 of JT McMillan Co Plat
Lying S of a Line Desc as Beg at a Pt on I�tL, of Sec 12 TN 28 RN 23 Dist 514.63 Ft E of NW Cor
of Govt Lot 1 Th S 60 Deg 29 Min W 141.6 Ft Th S 71 Deg 4b Min 30 Sec W 250.82 Ft Th S 65
Deg 18 Min W 166.96 Ft to a Pt on WL of SD Govt Lot 1 Dist 218 Ft S of NVJ Cor and There
Term & In SD Northem States Power Co Plat Biks 1 and 2 and Blks 4 Tluu Blk 6
Property Identification Number. 12-28-23-12-0035 �
Legal Description: Part of Ramsey County Tax Department Description as follows:
Plat .01088 Subdivision of the NW 1(4 of the I�tE 1(4 and Lot 2 of Section
Twelve of T28 R22 in the City of St Paul Revised Description No 1021 a
Specific Part of Sec 12 TTI 28 RI�i 23
G-17
SAI1�iT PAUL PORT AVI'HORITY
TAX IIQCREMENT PTNANCING PLAN FOR THE
RANDOLPH AVENUE REDEVELOPMEI�IT A1�D Aa7,eRDOUS SUBSTANCE
SUBDISTRICT
TAX INCREMENT FINAI�CIl�tG DLSTRICT
��.����
APPENDIX B
Proper[ies to be IncIuded in the Iiazardous Subsfance Subdisiricf
Property Identificatioa Number. 12-28-23-12-0034
Legal Description: Ramsey County Tax Department Description as follows:
Plat .01088 Subdivision of ihe NVJ 1/4 of the NE 1/4 and �,ot 2 of Section
Twelve of T28 R22 in the City of St Paul Revised Description 230. 976 a
Specific Part of Soc 12 TN 28 RN 23
Property Identification 23umber: 12-28-23-11-0005
Lega1 Description:
Part of Ramsey County T� Depariment Description as follows:
The Westerly 15Q feet of the following described property:
Plat .01043 Northem States Power Co's Piat, St Paul, Minn. Subj to Shepazd Rd & Subj to High
Bridge ROW & I3o Part of Vac Hill St and McMillan St Adj & Ex Levee & Ex a 700 Ft MOL
Union Oil Parcel Adj tA Shepazd Rd; the Fol; Part of Govt Lots 1& 2 Lying I1Wly of and Bllcs 4
Thru 6 Northem Sfates Power Co's Plat, St Paul, Mim�. Subj to Shepazd Rd & Subj to High
Bridge ROW & No Part of Vac Hill St and McMiAaa St Adj & Ex Levee & Ex A 700 Ft MOL
Union Oil Pazcel Ad,} to Shepazd Rd; 'Ihe fol; Part of Govt Lots 1& 2 Lying NWIy of Sfily Levee
Line Lying SWIy of SWIy Line of High Bridge ROW Lying SEIy of NWly ROW Line of Shepazd
Rd Lying Ely of a line Desc as Beg at Most NEIy Cor or Tract B RLS 441 Th N 27 Deg 32 Min OS
Sec W 70.26 Ft Th N 33 Deg 34 Min 26 Sec E 68_22 Ft Th N 27 Deg 02 Min 30 Sec W 60.56 Ft to
Sly ROW Line of Shepard Rd & There Teim & All of Tract C Reg Land Survey No. 441 & All of
Blks 1 and Bllc 2 and Vac Crray St of McMillans Add & Ex 13 218 Ft & Ex Stockyard Trnck of CS
and PM and O Ry Co; Lots 15 and Lot 16 Parfition Add & Pat of Bik 1 of TI' McMi11an Co Plat
Lying S of a Line Desc as Beg at a Pt on NL of Sec 12 TT3 28 FtN 23 Dist 514.63 Ft E of NW Cor
of Govt Lot 1 Th S 60 Deg 29 Min W 141.6 Ft Th S 71 Deg 46 Min 30 Sec W 250.82 Ft Th S 65
Deg 18 Min W 166.46 Ft to a Pt on WL of SD Govt Lot 1 Dist 218 Ft S of NW Cor and There
Term & In SD 23orthern States Power Co Plat Blks 1 and 2 and Blks 4 Thru Blk 6
Property Identification Number: 12-28-23-12-0035
Lega1 Description:
Part of Ramsey County Tax Depaztment Description as follows:
Plat .01088 Subdivision of the NVJ 114 of the NE 114 and Lot 2 of Section
Twelve of T28 R22 in the City of St Paul Revised Description No 1021 a
Specific Part of Sec 12 TN 28 RN 23
G-18
E�chibit H
Council File #
Green Sheet #
Ordinance #
ORDINANCE Q� "��
CITY OF SAINT PAUL, MINNESOTA
Presented by
Refeaed To
Date
An ordinance granting authority to the Port Authority of the City of Saint Paul to issue and
sell bonds in the aggregate principa! amount which will produce net available funds to be applied to
the costs of the Pmject of $13,800,000, but in any event not to exceed the principal amount of
$14,650,000, and any bonds to refund such bonds, to secure such bonds with a pledge of the full
faith, credit and resources of the City of Saint Paul, and to use the proceeds derived from the sale of
such bonds to pay the cost and expense necessarily to be incurred by said Port Authority for
acquisition of lands, clearance, remediation, and improvements in the Plastics, Inc. Redevelopment
Tax Increment Dis�ict pursuant to the provisions and by authority of Minnesota Statutes, Chapter
469, as amended, and prescribing the amount and form of such bonds and the manner for
establishing the rate of interest thereon.
WHEREAS, on September 23, 1997 the Port Authority of the City of Saint Paul (the "Port Authority")
adopted its Resolution No. __, finding that certain lands were blighted and mazginal properties within the
meaning of Minnesota Statutes, Sections 469.048 et seq., and establishing and creating the Citgo/Shepazd Road
Industrial Development District; and
WHEREAS, the City of Saint Paul, Miimesota (the "City"), has authority under Mimiesota Statutes,
Section 469.178, Subd. 2, to issue general obligation bonds payable from tax increments of a tax increment district
created by the Port Authority, and the Port Authority has authority under Minnesota Statutes, Section 469.060, to
issue bonds for its purposes in anticipation of income from any source wlrich are secured by the full faith, credit
and resources of the City, and pursuant to this Ordinance, the Port Authority will issue bonds to which are pledged
both taY increments and the full £aith, credit and resources of the City; and
WHEREAS, the Port Authority has requested the authorizateon of the Council of the City of Saint Paul,
pursuant to Minnesota Statutes, Section 469.060, for the issuance and sale by the Port Authority of its bonds in the
aggregate principal amount which will produce net available funds to be applied to the costs of the Project of at
least $13,800,000 but in any event not to exceed the principal amount of $14,650,000 (the "Bonds") and for the
9'1-���.Y
pledge of the full faith, credit and resources of the City to the payment of such Bonds, which Bonds will also be
secured by tax increments to be derived from the Plastics, Inc. Redevelopment Tax Increment Financing District
(the "District"), and any grants obtained in connection with the Project, as defined below, the establishment of
which was appmved by the City by its Resolution No. adopted on September 24, 1997; and
WHEREAS, the Bonds will be issued for the purposes of paying or reimbursing the costs and e�cpenses
necessarily incurred by the Port Authority for acquisition, clearance, remediation, and 'unprovements within the
District which are to be undertaken to facilitate the construction of a manufacturing and dishibution facility in the
District for Plastics, Inc., and the move of Plastics, Inc. from its current location at Chestnut and Ryan Streets to
the District (the "ProjecP'), and then for all other purposes authorized by authority of Minnesota Statutes, Chapter
469, as amended (the "Act") with respect to the Project; and
WHEREAS, the Council of the City (the "Council"), being duly advised in the premises, finds and
determines that it is necessary and appropriate that the Port Authority issue and sell bonds of the Port Authority in
the aggregate principal amount not to exceed $14,b50,000 for the purposes as stated above; and
WHEREAS, on the basis of the foregoing, it is now the intention of the Council to grant authority to the
Port Authority for the issuance of the Bonds; to prescribe the manner for establishing the amount, maturity
schedule, rates of interest, and the maximum rate of interest, to be bome by the Bonds; to authorize the Port
Authority to establish the date, denomination, place of payment and other details of the Bonds, including the form
of the Bonds; and to autharize and consent to the pledge by the Port Authority of the fuil faith, credit and resources
of the City to the payment of the Bonds as the same shall be issued and sold by the Port Authority, pursuant to the
authority of the Act, and pursuant to the authority gauted by this Ordinance.
� � a�-��V
NOW, TI-IEREFORE, Tf� COUNCIL OF TI� CTI'Y OF SAINT PAUL DOES ORDAIN:
Section 1
Authorization of Bonds. That subject to, and in accordance with, the applicable provisions, temis and
conditions of this ordinance and those contained in Section 469.060 of the Act, authority is hereby granted to the
Port Authority for the issuance and sale of its Bonds in the aggregate principal amount set forth in Section 2 and
the use of the proceeds of such Bonds first for the acquisition, clearance, remediation and construction of
improvements on land within the Dishict as contempiated by the Tax Increment Financing Plan for the District
(the "Plan"), and then for all other purposes authorized by the Act with respect to the Project.
Section 2
Establishin�Terms of the Bonds That the Port Authority is hereby authorized to establish the date,
denomination, place of payznent, form and details of the Bonds, provided that the Bonds shall be issued and sold
by the Port Authority as tax exempt and/or taxable Bonds in one or more series, in the manner provided and
allowed by law; the Bonds in an amount of appro�mately $6,600,000 (which, after subhacting costs of issuance,
wi11 provide net available funds for the Project in the amount of $6,150,000) sha11 be secured by a first lien pledge
of the tax increments to be received by the Port Authority from the Distcict, and the remainder of the Bonds shail
be secured by a pledge of any grant proceeds received with respect to the Project and by a lien on tas increments
w}uch shall be subordinate to, in order of priority, (i) such first lien, (ii) the payment of $2,000,000 of subordinated
tax increment bonds issued by the Port Authority and sold to NSP, and (iii) administrative charges in connection
with the District; the initial principal amount of the Bonds shall not exceed $14,650,000; the Bonds shall mature in
the amounts and years and bear interest at the rate or rates per annum, including rates which vary in accordance
with a formulae established by the offer to purchase the Bonds which is detennined to be the most favorable by a
Pricing Committee comprised of the President and the Chief Financial Officer of the Port Authority and the
Treasurer and the Deputy Mayor of the City, provided that the average annual weighted interest rate of the Bonds
shall not exceed _ percent (_%) per annuxn payable semi-annually unless such higher average annual
weighted mterest is specifically approved by a resolution adopted by a majority of the members of the Council;
°�'1- \ �C�I�
and the proceeds from the issuance and sale of the Bonds as received by said Port Authority shall be used first to
pay or reimburse the costs of the acquisition, clearance, remediation and construction of improvements on land
within the District as described in the Plan, and then for all other purposes authorized by the Act with respect to the
Project The Bonds may be made subject to redemption and prepayment at the option of the Port Authority at such
time and price or prices as shall be determined by the Port Authority and approved by the Pricing Committee
described above and upon such notice as is required by law. It is recognized that Section 469.060 of the Act
provides that the Bonds must be in the amount and form and beaz interest at the rate set by the Council, that the
Port Authority with the consent of the Council shall set the date, denominations, place of payment, form, and
details of the Bonds and that the Council is required to decide whether the issuance of the Bonds by the Port
Authority is proper and if so, the amount of Bonds to issue, and that the Council is required to give specific
consent in the Ordinance to the pledge of the City's full faith, credit and resources to the Bonds. The standards and
delegation to the Pricing Committee set forth herein are intended as such full required action of the Council, and
except as provided herein no further approval of the Council is required for the issuance of the Bonds under
Section 469.060 of the Act.
Seciion 3
Pledge of Full Faith and redit. That as security for the prompt and faithful payment of both principal and
interest of said Bonds in an amount not to exceed $14,650,000, the Port Authority is hereby authorized to pledge
the full faith, credit and resources of the City of Saint Paui; and such Bonds, both in respect of the principal
amount of the same and with respect to the interest thereon, may be paid by the Port Authority from tax levies
provided therefor and authorized by the Act.
Section 4
a�c Le . That the Port Authority, in the event of the issuance of any said Bonds authorized hereunder,
shall before the issuance of the same, levy for each year, until the principal and interest are paid in full, a direct
annual tax on all the taYable properry in said City of Saint Paul, in an amount not less than 5% in excess of the sum
required to pay the principal and interest of the same when and as such principal and interest mature and, after such
.
° t'1- � �LY
Bonds have been delivered to the purchasers, such taY shall be urepealable until all such indebtedness is paid, and
after the issuance of such Bonds no further action by said Port Authority shall be necessary to authorize the
extensions, assessments and collection of such t�. That the Secretary of said Port Authority shall forthwith
fiunish a certified copy of such levy to the County Auditor of Ramsey County, Minnesota, the county in wluch
said Port Authority and said City aze located, together with full information regarding the Bonds of said Port
Authority for which the tax is levied and such County Auditot shall eactend and assess the tax so levied, and shall
do so annually until the principai and interest have been paid in full. That any surplus resulting fzom the excess
levy therein provided shall be transferred to a sinking fund after the principal and interest for which the tax was
levied and coliected has been paid; provided, that said Port Authority may, on or before September 15 in any year,
by appropriate action cause its Secretary to certify to the said County Auditor the amount on hand and available in
its own treasucy from taY increments derived from the Plasrics, Inc. Redevelopmem T� Increment Financing
District, grants of federal or state funds received for the Project, earnings or other income, including any amounts
in the sinking fund, which it will use to pay the principal and interest or both on each specified issue of the Bonds
and the County Auditor shall reduce the levy for that yeaz herein provided for by that amount. That the amount of
funds so acquired shall be set aside by said Port Authoriry and be used for no other purpose than for the repayment
of the principal and interest on such Bonds. That all taxes being authorized to be levied under Minnesota Statutes,
Section 469.060, as amended, shatl be collected and remitted to the Port Authority by the County Treasurer in
accordance with provisions of law governing the collection of other taYes and shail be used solely for the payment
of such Bonds when due.
Section 5
No Further Council Action That said Port Authority may provide for the exercise of the authority hereby
granted for its issuance and sale of the Bonds in the aggregate principal aznount as provided in Section 2 hereof, for
the aforesaid purposes, and the pledge of the full faith, credit and resources of said City of Saint Paul, as security
for the payment of the same, by its appropriate resolution, and without further action of the Council. The authority
to set the finai principal amount, maturity amounts and interest rates on the Bonds has been delegated to the
�1_�\�Y
Pricing Committee as provided in Seetion 2 hereof. That in exercising the foregoing authority, the Port Authority
shall make due compliance with all applicable requirements for this ordinance, said Section 469.060, Minnesota
Statues, as amended, Sections 469.174 through 469.179, as amended, Chapter 475, Minnesota Statutes, as
amended, and all other applicable laws.
Section 6
Authorization of Refundin� Bonds. Pursuant to and in accordance with the provisions, terms and
conditions of this Ordinance and the Act, authority is hereby granted to the Port Authority to issue and sell
Bonds as authorized by Minnesota Statutes, Section 469.060, in aggregate principal amounts necessary for the
purpose of securing funds as needed by the Port Authority to refund obligations issued under this Ordinance.
The principal of the refunding bonds may exceed the principal of the bonds to be refunded to the extent
necessary and appropriate to pay interest thereon (including interest accruing as capital appreciation), to pay
costs of issuing the refunding bonds and to allow for discount upon sale, and to fund reserves and capitalized
interest for the refunding bonds.
Section 7
Effective Date. That this ordinance shall take effect and be in force 30 days after tUe passage, approval and
publication.
�![k�_�l►E1'� •��
��__
-• ,�___
�___ _, ,
•,� __
____
T
Adopted by Council: Date
Adoption Certified by Council Secretary
By:
Appzoved by Mayor. Date
BY=
��sted by Departrnent of
�
Form Approved by City Attorney
�
Approved by Mayor for Submission to Council
By:
�� ���`�
Sw�, �-�.-�G - ,ot � � q �
Council File # �� — � 1 �$
Green Sheet #
Ordinance #
ORDINANCE /7
�AINT PAUL, MINNESOTA
Presented by
Referred To
Committee Date
An ordinance granting authority to the Port Authority of the City of Saint Paul to
issue and sell bonds in the aggregate principal amount which will produce net available
funds to be applied to the costs of the Project of $13,80�,QQQ, but in any event not to
exceed the initial principal amount of $14,650,000, and any bonds to refund such bonds,
to secure such bonds with a pledge of the full faith, credit and resources of the City of
Saint Paul, and to use the proceeds derived from the sale of such bonds to pay the cost and
expense necessarily to be incurred by said Port Authority for acquisition of land,
clearance, remediation, and improvements in the Plasrics, Inc. Redevelopment Tax
Increment Dishict pursuant to the provisions and by authority of Minnesota Statutes,
Chapter 469, as amended, and prescribing the amount and form of such bonds and the
manner far establishing the rate of interest thereon; and authorizing the execution af a
Joint Powers Agreement in connection with the Project, which will provide for the
conh of funds to the Project.
WHEREAS, on September 23, 1997 the Port Authority of the City of Saint Paul {the "Port
Authority") adopted its Resolution No. 3656, finding that certain lands were blighted and marginal
properties within the meaning of Minnesota Statutes, Sections 469.048 et seq., and establishing and
creating the Citgo(Shepard Road Industrial Development District; and
WHEREAS, the City of Saint Paui, Minnesota (the "City"), has authority under Minnesota
Statutes, Section 469.178, Subd. 2, to issue general obiigation bonds payable from taa� increments of a tax
increment district created by the Port Authority, and the Port Authority has authority under Minnesota
Statutes, Secrion 469.060, to issue bonds for its purposes in anticipafion of income from any source which
aze secured by the fu11 faith, credit and resources of the City, and pursuant to this Ordinance, the Port
1
tsatsaz
S� ,. �o�Y�q7 9�7_ ))!��
Authority wiil issue bonds to which are pledged both t� increments and the full faith, credit and
resources of the City (the "Series A Bonds'� ; and
VJF�REAS, the Port Authority has authority under Minnesota Statues, Sections 469.060 and
475.61 to undertake a program of issuing temporary obligations to be refunded by long-term obligations
at a later date, and which are secured by the full faith, credit and resources of the City; and pursuant to
this Ordinance, the Port Authority will issue bonds to which aze pledged the fuil faith, credit and
resources of the City and the proceeds of any grants received by the Port Authority or the City for the
Project, as defined below (the "Series B Bonds," and together with the Series A Bonds, the "Bonds"); and
WIIEREAS, the Port Authority has requested the authorization of the Council of the City of Saint
Paul (the "Councii"), pursuant to Minnesota Statutes, Section 469.060, for the issuance and sale by the
Port Authority of the Bonds in the aggregate principal amount which will produce net available funds to
be appiied to the costs of the Project of at least $13,800,000 but in any event not to exceed the initial
principal amount of $14,650,000, and for the pledge of the fuli faith, credit and resources of the City to
the payment of such Bonds, which Series A Bonds will also be secured by tas increments to be derived
from the Plasrics, Inc. Redevelopment Tax Increment Financing District (the "District"), and which Series
B Bonds will also be secured by any grants obtained by the City or flie Port Authority in connection with
the Project, as defined below; and
WHEREAS, the establishment of the District was approved by the Ciry by resolurion adopted on
September 24, 1997; and
Wf�REAS, the Bonds will be issued for the ptuposes of paying or reimbursing the costs and
expenses necessarily incurred by the Port Authority for acquisition, clearance, remediation, and
improvements within the Dishict which aze to be undertaken to facilitate the construction of a
2
15sisaz
g�1 • ����
S v.b s�:-�..,.� e. -\01 �'� q+1
manufachuing and distribution facility in the District for Plastics, Inc., and the move of Plastics, Inc.,
from its current location at Chestnut and Ryan Streets to the Dishict (the "Project"), and then for all other
purposes authorized by authoriry of Minnesota Statutes, Chapter 469, as amended (the "AcP'), with
respect to the Project; and
WHEREAS, it is the preference of the City to avoid the collection of generai tax levies to pay the
Bonds prior to the time tax increments are received from the District, and for the Port Authority, as issuer
of the Bonds, to avoid such tas levies by capitalizing interest and rolling over temporary obligations (as in
a commercial paper program), and by levying pursuant to Minnesota Statutes, Secfion 475.61; and
WHEREAS, the Council of the City (the "Council"), being duly advised 'm the premises, fmds
and detemvnes that it is necessary and appropriate that the Port Authority issue and sell bonds of the Port
Authority in the aggregate initial principal amount not to exceed $14,650,000 for the purposes as stated
above; and
WHEREAS, on the basis of the foregoing, it is now the intenrion of the Council to grant authority
to the Port Authority far the issuance of the Bonds, to prescribe the manner for establishing the amount,
maturity schedule, rates of interest, and the ntaximum rate of interest, to be bome by the Bonds; to
authorize the Port Authority to establish the date, denomination, place of payment and other details of the
Bonds, including the form of the Bonds, in the manner provided 'm this Ordinance; and to authorize and
consent to the pledge by the Port Authority of the full faith, credit and resources of the City to the
payment of the Bonds as the same shall be issued and sold by the Port Authority, pursuant to the authoriry
of the Act, and pursuant to the authority granted by this Ordinance; and
3
1581542
9�- >>`8'
S �..�os'rcan..�t. - �o,� � q�
WI�REAS, in connection with the crearion of the District and the financing of the Project, it is
proposed that the City and the Port Authority enter into a Joint Powers A�eement to set forth the duries
and responsibiliries of each in connecfion with the Project:
NOW, TF�REFORE, TI-� COUNCIL OF TI� CITY OF SAINT PAUL DOES ORDAIN:
Section 1
Authorization of Bonds. That subject to, and in accordance with, the applicable provisions, terms
and conditions of this ordinance and those contained in Section 469.060 of the Aci, authority is hereby
granted to the Port Authority far the issuance and sale of its Bonds in the aggregate principal amount set
forth in Section 2 and the use of the proceeds of such Bonds first for the acquisition, clearance,
remediation and consiruction of improvements on land within the District as contemplated by the Tax
Increment Financing Plan for the Bistrict (the "Plan"), and then for all other purposes authorized by the
Act with respect to the Project.
Section 2
Establishing_Terms of the Bonds. That the Port Authority is hereby authorized to establish the
date, denomination, place of payment, form and details of the Bonds, provided that the Bonds shall be
issued and sold by the Port Authority as tax exempt andlor taxable Bonds in one or more series, in the
manner provided and allowed by law; the Series A Bonds in the principal amount of approximately
$6,6QQ,Q00 (which, after subtracting costs of issuance and capitalized interest, will provide net available
funds for the Project in ihe amount of $6,150,000) shail be secured by a first lien pledge of the tax
increments to be received by the Port Authority from the District, and the Series B Bonds shali be secured
by a pledge of any grant proceeds received by the Port Authority or the Ciiy with respect to the Project;
the nutial principai amount of the Bonds sha11 not exceed $14,650,000; the Bonds sha11 mature in the
4
1581542
11q� ��-�«.�-
Sy�os"�':'�..,�e _ io jf
atnounts and years and beaz interest at the rate ar rates per annum, including rates which vary in
accordance with a formula, established by the offer to purchase the Bonds which is determined to be the
most favorable by a Pricing Committee comprised of the President and the Chief Financial Officer of the
Port Authority and the Treasurer and the Deputy Mayor of the City, provided that the average annual
weighted interest rate of the Bonds shall not exceed nine percent (9%) per annum payable semi-annually
unless such higher average annual weighted interest is specifically approved by a resolufion adopted by a
majority of the members of the Council; and the proceeds from the issuance and sale of the Bonds as
received by said Port Authority shall be used first to pay or reimburse the costs of the acquisition,
clearance, remediation and construction of improvements on land within the District as described in the
Plan, and then for all other purposes authorized by the Act with respect to the Project. T'he Bonds may be
made subject to redemption and prepayment at the option of the Port Authority at such time and price or
prices as shall be determined by the Port Authority and approved by the Fricing Committee described
above and upon such notice as is required by law. It is recognized that Secfion 469.060 of the Act
provides that the Bonds must be in the amount and form and bear interest at the rate set by the Council,
that the Port Authority with the consent of the Council shall set the date, denominations, place of
payment, form, and details of the Bonds and that the Council is required to decide whether the issuance of
the Bonds by the Port Authority is proper and if so, the amount of Bonds to issue, and that the Council is
required to give specific consent in the Ordinance to the pledge of the City's full faith, credit and
resources to the Bonds. The standards and delegation to the Pricing Committee set forth herein are
intended as such full required acrion of the Council, and except as provided herein no fiirther approval of
the Council is required for the issuance or refunding of the Bonds under Secrion 464.060 of the Act.
5
1S8li42
S�.�cs'h',�`c._'r� - to1k�q� °1 - I 1�.8'
Section 3
Pled�e of Full Faith and Credit. That as security for the prompt and faithful payment of both
principal and interest of said Bonds in an amount not to exceed $14,650,000 (except upon a refunding
authorized by Section 6 hereo fl, the Port Authority is hereby authorized to pledge the full faith, credit and
resources of the City of Saint Paut; and such Bonds, both in respect of the principal amount of the same
and with respect to the interest thereon, may be paid by the Port Authority from tax levies provided
therefor in accordance with Section 4 hereof.
Section 4
Taix .e . That the Port Authority, in the event of the issuance of any said Bonds authorized
hereunder, sha11 before the issuance of the same, levy for each yeaz, until the principal and interest are
paid in full, a direct annual tax on a11 the taxable property in said City of Saint Paul, in an amount not less
than 5% in excess of the sum required to pay the principal and interest of the same when and as such
principal and interest mature and, after such Bonds have been delivered to the purchasers, such ta�t shall
be urepealable until all such indebtedness is paid, and after the issuance of such Bonds no fiuther action
by said Port Authority shall be necessary to authorize the extensions, assessments and collection of such
tax. That the Secretary of said Port Authority shall forthwith furnish a certified copy of such levy to the
County Auditor of Ramsey County, Minnesota, the county in which said Port Authority and said City are
located, together with full informarion regarding the Bonds of said Port Authority for which the tax is
levied and such County Auditar sha11 eatend and assess the ta�c so levied, and shall do so annually untii
the principal and interest have been paid in full. That any surplus resulting from the excess levy therein
provided sha11 be transferred to a sinking fund after the principal and interest for which the t� was levied
and collected has been paid; provided, that said Port Authority shall, on or befare September 15 in any
issisaz
6
S•.hs�.-i-,..��—w���qR q�-��c�
yeaz, by appropriate action cause its Secretary to certify to the said Counry Auditor the amount on hand
and available in its own treasury or in hust from tas increments derived from the Plastics, Inc.
Redevelopment TaY Increment Financing District, grants of federal or state funds received for the Project,
earnings or other income, including any amounts in the sinking fund, which it will use to pay the principal
and interest or both on each specified issue of the Bonds and the County Auditor shall reduce the levy for
that year herein provided for by that amount. That the amount of funds so acquired sha11 be set aside by
said Port Authority and be used for no other purpose than for the repayment of the principal and interest
on such Bonds. That a11 taxes being authorized to be levied under Minnesota Statutes, Section 469.060,
as amended, shall be coilected and remitted to the Port Authority by the Couniy Treasurer in accordance
with provisions of law governing the collection of other taxes and shall be used solely for the payment of
such Bonds when due.
Notwithstanding the foregoing provisions of this Section 4, taxes may be levied and canceled
or omitted in the manner provided by Minnesota Statutes, Section 475.61, to the extent legally
permissible.
Section 5
No Further Council Action. That said Port Authority may provide for the exercise of the authority
hereby granted for its issuance and sale of the Bonds in the aggtegate principal amount as provided in
Sections 2 and 6 hereof, for the aforesaid purposes, and ihe pledge of the full faith, credit and resources of
said City of Saint Paul, as security far the payment of the same, by its appropriate resolution, and without
further action of the Council. The authority to set the final principal amount, maturity amounts and
interest rates on the Bonds has been delegated to the Pricing Committee as provided in Section 2 hereof.
That in exercising the faregoing authority, the Port Authority shall make due compliance with all
7
1581542
g� _ ����r
S�.bS�:����- ��i$�1q�
applicable requirements for this ordinance, said Section 469.060, Mimiesota Statues, as amended,
Sections 469.174 through 469.179, as amended, Chagter 475, Minnesota Statutes, as amended, and all
other applicable laws.
Section 6
Authorizarion of Refundine Bonds. Pursuant to and in accordance with the provisions, terms and
conditions of this Ordinance and the Act, authority is hereby granted to the Port Authority to issue and
sell Bonds as authorized by Minnesota Statutes, Section 469.060, in aggregate principal amounts
necessary for the purpose of securing funds as needed by the Port Authority to refund obligations issued
under this Ordinance, without any further action of the Council. The Pricing Committee shall have the
same role with respect to refunding bonds as is set forth in Section 2 for the nutial issuance of the Bonds.
The principal of the refunding bonds may exceed the principal of the bonds to be refunded to the extent
necessary and appropriate to pay interest thereon (including interest accruing as capital appreciation), to
pay costs of issuing the refunding bonds and to allow for discount upon sale, and to fund reserves and
capitalized interest for the refunding bonds.
Section 7
Joint Powers Agreement. In connecrion with the creation of the District and the financing of the
Project, the Council hereby approves the execution and delivery by the City of a Joint Powers Agreement,
to be entered into between the City and the Port Authority. The form of the Joint Powers Agreement is
approved substantially in the form submitted and on file in the offices of the City Council, with such
subsequent changes as may be approved by City staff, counsel and Bond Counsel as contemplated by this
Section 1. The Joint Powers Agreement shall contain provisions obligating ihe City to contribute certain
funds in the amount of $3,200,000 to the Project. The Mayor, City Clerk and the Director, Office of
�ssisa2
Sv.1►s�'', —�p�g 1 '
9�- t 1`P`
Financial Services, aze hereby authorized and directed to execute the doint Powers Agreement in
substantially the form submitted, as mod�ed pursuant to tlus Section 7, and any other documents and
certificates which in the opinion of the City staff, counsel and Bond Counsel aze necessary to the
transacrions herein described. The execution of any iustrument by the appropriate officer or officers of
the City herein authorized shall be conclusive evidence of the approval of such documents in accordance
with the terms hereof. The approval hereby given to the 3oint Powers Agreement 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
Director, Office of Financial Services of the City.
Secrion 8
Bffee6ve Date. That this ordinance shall take effect and be in force 34 days after the passage,
approval and publication. This ordinance is subject to the provisions of the Ciry's home rule charter
pertaining to the procedure for referendums on ordinances enacted by the governing body.
�� [xi����s�1�Y��"il�
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1581542
Sv�s�:�..�e . td�Y` 97
Adopted by Councii:
Date Q r� � � \ °�`�
Adoption Certified by Council Secretary
By:
Apprc
By:
RequE
:
Form Approv Ci o y
By:
Approved by Mayor for Submission to Council
�
a�m��aucn
Q�-11V1'
NOV � 11997
10
1581542
Saint Paul Port Authori
9f1,i9, � GREEN SHEET
��— i tc�
N° _13499
INITIAVDA7E --�
.��.im.ircnavnarnvnc �OEPARTMENTOIRECTOR �GIT'CqUNGII _
K. 3ohnson, L. Hansen, B. Morin ^���N arvArroRwer / � CITYCLERK
NUMBEPFOR
NUST BE ON COUNCIL AGENOA BY (OATE) AOUTING ��ET OIRECTO � FIN. & MGL SERVICES DIR.
�R September Z4 1997 OHDEp (�MqyOR(ORASSISTANn �
l�
TOl'AL # OF SIGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATURE)
"'�'•""'°""°` Authorization £or the Port Authority to issue bonds in the principal amount nor
to exceed $14,650,000, which will produce at least $13,500,000 for project costs. Authorize
the Port Authority to pledge the City's general obligation to the £ull amount of these
bonds, a portion of which (approximately $6,000,000) wi11 also be secured by a first lien on
ApProve (A) or fleject (R)
_PV.NNIfJGCAMMISSION _CIVILSERVICECqMMISSION
_ CIB COMMITTEE _
pg STAFF _
_ DISTRICTCOUFT _
SUPPORTS WHICH COUNCIL O&IECTIVE>
Industrial Development
Whet,
PERSONAL SEAVICE CONTRACTS MUST ANSWER TME FOLLOWING QUESTIONS: taX
1. Has tPis per5on/firm ever worked under a contract tor this tlepartment? 1RCYEID
YES NO
2. Has this personflirm ever been a ciry employee?
YES NO
3. Does ihis persoNtirm possess a skill not normally possessetl by any current clry employee?
YES NO
Explafn at1 yes answers on separata sheef antl mtach to green sheet
Why):
Authorization of the issuance of this tax increment supported general obliqation debt
is necessary for the redevelopment and remediation of the Citqo site £or Plastics, Inc.
Plastics, Inc. will construct a 370,000 square foot manufacturing facility at the Citgo
site and retain and/or relocate 350 jobs in Saint Paul.
None
DISADVANTAGES
Plastics, Inc. will be forced to relocate out of the City of Saint Paul
DTALAMOUNT OFTRANSAC710N $ 16.650.000 COST/REVENUE BUDGETED(qRCLE ONE) VES
Tax Increment Financing, Note Payments,
1NDINGSOURCE POt2ritial GTant RECeig,t5. GO LeVV ACTNITYNUMBER
JANCIAL INFORMATION: (EXPLAIN)
NO
G�
LEONARD, STREET AND DEINARD
PROFESSIOYAL ASSOCIATIO!�'
October 22, 1997
Tammie S. Ptacek
612-291-3507
up3507 @emaill eonazd. com
VIA MESSENGER
Ms. Nancy Anderson
Council Reseazch
1 S West Kellogg Boulevard
310 City Hall
Saint Paul, Minnesota 55102
RE: Plastics Ordinance
Dear Ms. Anderson
As you know, the Ordinance for the Plastics project, is No. 17 on today's City Council agenda.
Enclosed please find the form of tkie Joint Powers Agreement to be considered by the City
Council in Section 7 of that Ordinance. The language of the Ordinance states that "the form of
the joint powers agreement is approved substantially in the form submitted and on file in the
offices of the City Council, with such subsequent changes as may be approved by City staff,
counsel and bond counsel as contemplated by this 5ection 7."
Please take whatever steps aze necessary to see that this document is on file, and is the docusnent
considered today by the City Council. Please call me if you have any questions.
Very truly yours,
LEONA�, 5TREET AND DEINARD
// vt�YS+�.t Q��` `�"'�._
�y � �n
Tarrimie S. Ptacek
/jl
Enclosure
cc's wio enc.: Carol Abbas
Tony Stemberger
Robyn Hansen
F I ��
22]O MINNESOiA WORLD �IhADE CENTER j0 EASi SEVENiH STREE"I SAINt PAUL� MINNESOTA SS IOI Z�1L �I2-222-7¢SS FAX 612-222-J6¢Q
1595264 O]
LAW OFFICES IN MINNEAPOLIS, SAINT PAUL AND MANKATO
� - 1'
LS&D Draft 10122197
AGREEMENT RELATING TO PLASTICS, INC. PROJECT AND JOINT POWERS
AGREEMENT RELATING TO BONDS ISSUED THEREFOR
THIS AGREEMENT is entered into this day of 1997, by and
between the City of Saint Paul, Minnesota (the "City") and the Port Authority of the City of
Saint Paul (the "Port Authority").
RECITALS
A. On November 6, 1996, the City executed a Development Agreement (the
"Science Museum Development Agreement") with the Science Museum of Minnesota (the
"Science Museum"}, whereby the City and the Science Museum agreed to undertake the
construction of an approximately 300,000 square foot museum and 800 car pazking ramp on tlie
City's riverfront (the "Science Museum Project"). To facilitate the Science Museum Project, the
City has undertaken, in the Science Museum Development Agreement, to purchase certain
property, including the property on which Plastics, Inc. ("Plastics") presently operates a
manufacturing facility (the "Chestnut Site").
B. In order for the City to fully perform its undertakings under the Science Museum
Development Agreement, it is necessary to relocate Plastics.
C_ It is desirable, and in the best interests of the City, to provide a site for Plastics'
relocated manufactuting facility in the City, so that the approximately 250 yobs now supporked
by Plastics at the Chestnut Site, and an additional approximately 150 jobs now supported by
Plastics in Eagan, Minnesota, can be located in the City.
D. The Port Authority has identified an approximately 26-acre site located
approximately one mile to the west of downtown Saint Paul at Shepard Road and James Avenue
(the "Citgo Site"), as a possible site for the conshuction of a new manufacturing facility for
Plastics.
B. The proposed new Plastics facility (the "Plasrics Facility") will consist of an
approximately 375,000 square foot manufacturing and distribution facility which will have a
construction cost of approximately $12,480,000.
F. The Port Authority has created a Tax Increment Financing District encompassing
the Cifgo Site.
G. The Port Authority has proposed that the Plastics Facility be financed, in part, by
Bonds to be issued by the Port Authority in an initial principal amount of approximately
$16,650,000 (the `Bonds") as more fully set forth in this Agreement.
1550a39.08
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H. The City proposes to (i) contribute to the Port Authority $2,700,000 from the
Science Museum budget for the purpose of acquisition of the Chestnut Site and $500,000 from
others sources in connection with the redevelopment of the Citgo Site and the relocation of
Plastics from the Chestnut Site to the Citgo Site, (ii) authorize the pledge of its full faith and
credit to the Series A Bonds and the Series B Bonds and, pursuant to the joint powers aspects of
this Agreement, cause the pledge of tas increments to the Series A Bonds, and (iii) through
certain reporting and consent rights granted to the City in this Agreement, determine that the
Budget (as defined herein) will be sufficient to accomplish the purposes of this Agreement.
L It is necessary and desirable to set forth the respective roles and responsibilities of
the City and the Port Authority in connection with the acquisition and preparation of the Citgo
Site, the issuance of the Bonds, and the relocation of Plastics, and this is the agreement
contemplated by Section 7 of the Ordinance (as defined herein).
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the parties hereby agree as follows:
Section 1. Authoritv. This Agreement is entered into under the authority of
Minnesota Staxutes, Sections 469.Q64, subdivision 1, and such other applicable statutory and
Charter provisions as aze consistent herewith. Section 3 of this Agreement is entered into
pursuant to Minnesota Statutes, Section 471.59.
Section 2. Definitions Capitalized terms used in this Agreement shall have the
meanings set forth in the preceding paragraphs or below, unless a different meaning clearly
appears from the conte�t:
Agreement: This Agreement, as the same may from time to time be amended or
supplemented.
Bond Indenture: The Indenture of Tzust between the Port Authority and the Bond
Trustee (and any related security agreements) pursuant to which the Bonds wi11 be issued and
secured.
Bond Trustee: The Trustee pursuant to the Bond Indenture.
Bonds: collectively, the Series A Bonds, the 5eries B Bonds and the NSP Note.
Budeet: The Plastics, Inc. Tax Increment Financing District Budget attached as Exhibit
A, as such Budget may be amended from time to time by the Port Authority in accordance with
this Agreement.
Cltv Contriburion: The $500,000 of City funds (other than Tax Increments and District
Revenues) to be contributed by the City to the Port Authority to be applied to Project Costs.
1550039.08
a�-����'
Construction Fund: The fund required by Section 5(e) hereof, which will be held by the
Bond Trustee, and in which all funds to be applied to Project Costs shall be deposited.
Develo�ment Agreement: The Agreement to Convey Property and Development
Agreement dated as of , 1997 by and beriveen the Port Authority and Plastics.
District: The Plastics, Inc. Redevelopment Ta3c Increment Financing District, as set forth
in Appendix A to the Plan.
District Revenues: Any and all net revenues received by the Port Autharity from the sale
or lease of land within the Disuict and from the operation of public improvements provided for
in the Plan.
Memorandum of Intent: The Memorandum of Intent dated 7uly 14, 1997 between the
Port Authority and Plastics, as amended by the First Addendum to Memorandum of Intent dated
September 9, 1997.
NSP Note: the tax increment bonds to be issued by the Port Authority in the
approximate principal amount of $2,000,000, which will be secured by Tax Increments and by a
payment to ba made by Plasucs, which bonds shall be purchased by Northern SCates Power
Company, and any refunding or series of refundings thereof.
Ordinance: Ordinance No. 97-1168 adopted by the City authorizing the issuance by the
Port Authority of the 5eries A Bonds and the Series B Bonds.
Port Authoritv Contribution: The $500,000 of Port Authority funds (other than Tax
Increments and District Revenues) to be contributed and applied by the Port Authority to
Projects Costs.
Plan: the Tax Increment Financing Plan for the District which has been adopted by the
Port Authority and approved by the City, as amended fram time to time.
Proiect: the Port Authority's acquisition, site preparation, grading and filling,
demolition, environmental remediation, and other site improvements in the District required to
deliver the site to Flastics in the condition necessary for the construction of the Plastics Facility,
and the acquisition of the Chestnut Site.
Project Costs: All costs included as permissible capital costs in the Plan and the Budget,
including without limitation, the costs incurred in conneation with the Project by Yhe Port
Authority prior to the date of this Agreement.
Science Museum Contribution: the $2,700,000 previously approved by the City in the
Science Museum Budget to be applied to the purchase [by the City] of the Chestnut Site, and in
that regard, contributed to the Port Authority and applied to Project Costs.
1550039 08
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Series A Bonds: the General Obligation Tas Inczement Bonds to be issued by the Port
Authority pursuant to Minnesota Statutes, Section 469.060 and the joint powers agreement
contained in Section 3 hereof, in the approxunate principal amount of $6,600,000, which shall
be secured by Tax Increments and a City general obligation pledge, and any refunding or series
of refundings thezeof.
Series B Bonds: the General Obligation Bonds, to be issued by the Port Authority
pursuant to Minnesota Statutes, Sections 469.060, 475.79 and 475.61, Subdivision 6, initially in
the form of commercial paper [or some other forxn of temporary obligations], in the approximate
initial principal amount of [$7,900,000), which shall be secured by a City general obligation
pledge and the proceeds of any grants received by the City or the Port Authority in connection
with the Project, and any refunding or seties of refundings thereof.
Subdistrict Tax Increments: in the event a hazardous substance subdistrict is created
witlun the District, any tax increment derived from such hazardous substance subdistrict as a
result of a reduction in the original net tax capacity pursuant to Minnesota Statutes, Section
469.174, subdivision 7, paragraph (b), or as a result of the e�ension of the period for collection
of tax increment from the hazardous substance subdistrict provided for in Minnesota Statutes,
Section 464.176, Subdivision i, paragraph (g).
T� Increments: the tax increments derived from the District pursuant to Minnesota
Statutes, Section 469.177, and specifically including the Subdistrict Tax Increments
TaY Increment Bonds: collectively, the Series A Bonds and the NSP Note.
Section 3. Exercise of Joint Powers With Resoect to Series A Bonds
(a) Purpose and Statutory Authority. The Port Authority shall issue the Bonds
as contemplated by the Ordinance with respect to the Series A Bonds and the Series B
Bonds, and the resolution of the Port Authority with respect to the NSP Note. The Port
Authority and the City shall exercisejoint powers in issuing the Series A Bonds. With
regard to the Series A Bonds, the City has authority under Minnesota Statutes, Section
469.178, Subdivision 2, to issue general obligation bonds payable from tax increments
from the District created by the Port Authority, and the Port Authority has the authority
under Minnesota Statutes, Section 469.06Q to issue bonds for its purposes, in
anticipation of income from any source, which are secured by the full faith, credit and
resources of the City. The joint powers utilized in the issuance of the Series A Bonds,
include the City's power to levy taxes net of the estimated pledged revenues as provided
in Minnesota Statutes, Section 475.61, Subdivision 1.
(b) Method of Achievin� Purpose: Manner of ExercisingPowers. The City
and the Port Authority shall exercise their powers jointly by adopting, approving and
executing such common or concurrent resolutions, documents and agreements as shall be
necessary or convenient to the issuance of the Series A Bonds.
1550039 48 �
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Section 4. Actions under Ordinance. The Pricing Committee established by Section
2 of the Ordinance shall be involved in the initial issuance of the Series A Bonds and the Series
B Bonds, and any refunding or series of refundings thereof. It is understood that the Pricing
Committee performs functions of the City Council, and in the event of any inability of the
Pricing Committee to perForm its functions as required under the Ordinance, such matters will
revert to the Ciry Council for its action in setting the rate or consenting to the terms of the Series
A Bonds and the Sezies B Bonds.
Section 5. Port Authority Obli¢ations. The Port Authority has created, and sha11
administer and operate, the District in accordance with Minnesota Statutes, Sections 469.174 to
469.179. In connection with the creation, administration and operation of the District and the
financing of the Project, the Port Authority shall have the sole duty and responsibility to do the
following:
(a) use its best efforts to negotiate and execute purchase agreements with
Citgq and any other parties owning property in the District, to purchase, or obtain
necessary easements over, all of the property in the District;
(b) if necessarp, acquire through eminent domain property within the District
that cannot be acquired by negotiations, but is required for implementation of the Plan;
provided, however, that the Port Authority shall not be liable for noncompliance with
this paragraph (b) in the eeent there is a court challenge with regard to the public purpose
of the condemnation;
(c) negotiate and execute all necessary documents to transfer title to certain
property in the District to Plastics, including specifically any development agreement that
the Port Authority deems necessary in furtherance of the Project; provided, that the
Development Agreement shall require ritle to tbe Catgo Site to be transferred by the Port
Authority to Plastics on or before [August 15, 1999] (subject to Unavoidable Delay as
defined in the Development Agreement), and the Port Authority shall not amend the
Development Agreement with respect to that date, without the consent of the City;
(d) Enter into contracts for the demolition, clearance, grading and filling,
environmental remediation or other site improvements within the District;
(e) create the Construction Fund to be held and maintained by the Bond
Trustee for the Port Authority, in which funds obtained by the Port Authority for the
Project (including proceeds of the Bonds, the City Contribution, and the Port Authority
Contribution) shall be deposited; and from which funds shall be applied by the Port
Authority oniy for Project Costs or other eligible costs, but specif"ically excluding the
Seience Museum Contribution, which shall be applied by the City to the purchase of the
Chestnut Site;
7550039.08 5
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(fj to the extent necessary, create a separate fund to hold funds to be applied
to Project Costs which are received prior to the issuance of the Bonds, and transfer such
funds to the Bond Trustee upon issuance of the Bonds;
(g) provide the City with quarterly reports on the progress of the Project, in
the form attached hereto as Exhibit B, and with copies of all reports provided to or by the
Bond Trustee;
(h) deposit the Port Authority Contribution in the Construction Fund, at the
following tunes and in the following asnounts:
on or before Aun st 1, 1999 $300,000
on or before August 1, 2000 100,000
on or before August l, 2001 lOQ,000
(i) issue the Bonds in accordance with the Bond Indenture and the Ordinance,
levy such taYes for the payment of the Series A Bonds and the Series B Bonds as
required by law, pap costs of issuance in connection with the issuance of the Bonds from
the proceeds of the Bonds, and deposit the net proceeds of the Bonds in the Construction
Fund; provided, that to the e�ent Bond proceeds are insufficient to pay all costs of
issuance, the City shall be responsible for paying the fees of its counsel and its financial
advisor;
(j) receive and use District Revenues and Tax Increments pursuant to the
Pian and this Agreement;
(k) prepare and su6mit a11 reports with regazd to the District as required by
Minnesota Statutes, Sections 469.174 through 469.179, with a copy to the City;
(1) apply to the Department of Trade and Economic Development and the
Metropolitan Council ta obtain grants for pollution clean-up in the District, use its best
efforts to obtain such grants, and deposit proceeds of any such grants in the Construction
Fund for use in the payment of Project Costs, or to pay or prepay the 5eries B Bonds, as
provided in Section 9;
(m) perform the necessary staff work in connection with the preparation of an
application to be made by the City to obtain a grant in the approximate amount of
$SOQ000 from the Minnesota Investment Fund, and request the City to take the
necessary steps in order to apply for such grant, pursuant to Section 6(c);
(n) cause the Citgo Site to be included within the Crosby Lake Project Gemini
Zone, as authorized in the resolution of the City adopted on September 24, 1997;
(o) in the event the qualified local conuibution made in connection with the
District pursuant to Minnesota Statutes, Section 273.1399, Subdivision 6(d), is
1550039.08 6
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determined to be insufficient to avoid the LGAlHACA penalty, conuibute such
additional amounts from eliglble sources as are necessary in order to avoid such
LGA/HACA penalty;
(p) acquire ritle, either pwsuant to the Development Agreement or through
the use of eminent domain, to the Chestnut Site (as fuzther described in Exlubit C
hereto}, and convey the same to the City in accordance with the provisions of the
Development Agreement ; provided, however, that the terms of the Development
Agreement will be substantially the same as or more favorable to the Port Authority than
the terms of the Memorandum of Intent, and the timetable provided for, and the purchase
price of, the acquisition of the Chestnut Site set forth in the Development Agreement
may not be slower, or more expensive, than that set forth in the Memorandum of Intent,
without the consent of the City;
(q) exercise any and all of its powers which aze deemed necessary or convenient
by the Port Authority to administer or operate the District and to carry out the Project,
subject to the terms and conditions of this Agreement.
Section 6. City Obligations. The parties hereto agree that the City shall have the sole
duty and responsibility to do the following in connection with its contribution to the financing of
the Project:
(a) pay the City Contribution to the Port Authority for deposit in the
Construction Fund at the following times and in the following amounts'
on or before August 1, 1999 $300,000
on or before August 1, 2000 100,000
on or before August 1, 2001 100,000
(b) pay to the Port Authority at the time of acquisition of the Chestnut Site t4ie
Science Museum Contribution; [provided, that in the event the purchase agreement
entered into by the Port Authority in connecrion with the acquisition of the Citgo Site
requires an escrow to be funded at the time of closing, in an amount expected to cover
the costs of environmental remediation, the City shali provide to the Port Authority the
amount necessary to fund such escrow at the time required by the purchase agreement,
and such amount shall be deemed an advance of the Science Museum Contribution, and
will be repaid to the City in full upon issuance of the Bonds;]
' The Development Agreement could provide for the detailed procedures with regard to the Vansfer of title. At
ihis poini, the Ciry has suggested that title be transfened directly to the Ciry, with the City then leasing the
properry to the Port Authority, and the Port Authoriry subleasing to Plastics. This proposal needs to be discussed
rrith Bill Morin, �uho is out of the office unfll Tuesday.
z This assumes this agreement is entered into prior to the issuance of the Bonds.
155��39A8
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(c) take the actions requested by Port Authority staff pursuant to Section 5(m}
to apply for a grant in the approximate amount of $500,000 from the Minnesota
Investment Fund on or before March 1, 1998; and
(d) provide to the Port Authoriry upon request any information necessary to
the adminisuation of the Disuict and the filing of reports required by Minnesota Statutes,
Sections 469.174 through 469.179.
Section 7. Sources of Funds. The sources of funds for the implementation of the
Project, the payment of Project Costs and the administration and operation Qf the District include
Bond proceeds, Taa� Increments, District Revenues, the Port Authority Contribution, the City
Contribution, the Science Museum Contribution, federal and state grants, and such other funds
and revenues as may be made available for such purpose, and neither the Port Authority nor the
City shail be obligated to provide any additional funds for such purposes, except as might be
jointly agteed.
Section 8. Budget and Disbursements from Construction Fund. The Budget has been
approved by the Port Authority, and establishes a maximum principal amount and line item
amounts of Tax Increments, Bond proceeds or other amounts to be used for the Project; provided
that the Port Authority may, in its sole discretion, increase or decrease line items in the Budget
so long as ihe total Budget does not increase, and , provided furCher, that any such change is
consistent with the Plan as amended from time to time. In the event the total of the "Over
(Under) Projected" column shown on the quarterly report submitted to the City pursuam to
Secrion 5(g) is at any time a positive number in excess of $250,000, the Port Autharity shall not
make any additional expenditures in connection with the Project without the consent of the City.
In such event, the Port Authority and the City sha11 work together in good faith to determine
whether or not the Project shouid go forwazd, and in the event it is decided that the Project
should go forward, to identify and implement potential, and mutually agreeable, additional
sources of funding to allow completion of the Project. The Bond Tzustee, as directed by the Port
Authority, shall disburse funds from the Construction Fund in accordance with the Budget.
Contracts shall be let and purchases sha11 be made by the Port Authority subject to the same
procedures as govern the letting of other conuacts and the making of other purchases by the Port
Authority.
Section 9. LTse of TaY Increments. District Revenues, and Crrant Proceeds. (a) The
TaY Increments and District Revenues shall be applied for the following purposes and in the
following order of prioritp:
(i) payment of the Series A Bonds;
(ii) payment of the NSP Note;
(iii) payment of the administrative expenses of the Port Authority to the extent
allowed by law;
1550039.c18
�'►� �t��'
(iv) prepayment of the NSP Note; and
(v) payment of other eligible costs, with the consent of the City
(b) Debt service payments shall include all out of pocket costs, such as trustee,
paying agency and bond registrar fees and rebatable azbitrage payments incurted by the Port
Authority in carrying the Bonds and reimbursement of the Port Authority for any such payments
made from Port Authority funds.
(c) All TaY Increment shall vest in and be remitted duectly to the Port Authority or
the Bond Trustee as may be required by the Bond Indenture, and the Port Authority or such
Bond Trustee sha11 segegate the Tax Increments so received in one or more special accounts on
its official books and records to be used only in accordance with the Plan, the Budget, the Bond
Indenture, and this Agreement in accordance with the priorities and subject to the limitations
established in tkus Section 9.
(d) Notwithstanding anything in this Agreement to the contrary, the Port Authority
reserves the right to issue such other bonds and provide other financing for purposes of the Plan
and to undertake such other improvements and projects in the District, in addition to those
contained in or authorized by the Plan, as the Port Authority deems appropriate, provided,
however, such other bonds, financing and improvements or projects shall not be subject to
payment or reimbursement from Tax Increments or Disttict Revenues unless provided for in the
Budget and Plan, and with respect to Tas Increments, approved by the City if the Series A
Bonds or Series B Bonds remain outstanding. Prior to exercising the rights reserved to the Port
Authority under this pazagraph, for purposes of the Plan, the Port Authority shall notify the City
in writing of its intent to exercise said rights and shall consult with the City prior to issuing
bonds or providing other such Pmancing.
(e) Proceeds derived from state or federal grants obtained by the City or the Port
Authority in connection with the Project shall be applied first to pay or prepay an applicable
portion of the Series B Bonds, and thezeafter to the payment of Project Casts.
Section 10. Application of Subdistrict Tax Increments. In the event the Subdistrict is
created, Subdistrict TaY Increments shall be applied for costs of the Project as allowed by
Minnesota Statutes, Section 469.176, Subdivision 4e.
Section ll. Term of A�reement; Termination. This Agreement shall continue in
effect until terminated in accordance with this section. This Agreement may be terminated at
any time by agreement of the City and the Port Authority except that the relevant portion of this
Agreement may not be terminated while any Bonds are outstanding unless sufficient funds have
been irrevocably deposited in the debt service account or the escrow account to pay debt service
on the Bonds to maturity or date of redemption.
Section 12. Distribution of Funds and Pro e�rtv on Termination. Upon termination of
this Agreement, any Tax Increments received by the Port Authority in excess of the amount
issoose.os 9
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necessary to pay debt service on the Ta�c Increment Bonds and satisfy all other reimbursement
and funding requirements set forth in Section 9(a), clause (i) through (v), shall be (a) used, to the
e�tent permitted by 1aw and to the eatent that the District would remain exempt from the
LGAlIIACA penalty, to reimburse the Port Authority and the City for the'u contributions to the
Project, in the following order of priority: (i) the Science Museum Contributian; and (ii) pro
rata, to the City and the Port Authority, untii they have each been reunbursed for their respective
$500,000 contributions, and (b) to the e�tent any amounts remain after the application of clause
(a), transferted to and become the property of the Port Authority without payment of any further
consideration to the City and ail other property acquired and held by the Port Authority or the
City pursuant to this Agreement shall be retained by the pazty holding title thereto.
Section 13. Amendments. This Agreement may be amended by agreement of the City
and Port Authority in writing at any time. No amendment may impair the rights of the holders
of any of the Bonds unless consent is given in accordance with the Bond Indenture.
Section 14. Severabilitv. In the event any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provis3on hereof.
Section 15. No Joint Venture. The City has a limited involvement, as provided in this
Agreement, with the Project, and nothing in this Agreement shall be construed to create any
partnership or joint venture between the Port Authority and the City. Neither party hereto shall
have the right to bind or obligate the other in any way or manner unless otherwise provided for
herein.
1550039.08 1 �
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IN WIT`NESS WHEREOF, the City of Saint Paul has caused this Joint Powers
Agreement to be executed on its behalf by its Mayor, its City Clerk and its Director, Office of
Financial Services; and the Port Authority of the City of Saint Paul has caused this Agreement to
be executed on its behalf by its Chair and its Secretary, all as of the day and yeaz first above
written.
APPROVED AS TO FORM: CITY OF SAINT PAUL
Assistant City Attorney Mayor
City Cierk
Director, Office of Financial Setvices
issoo�s_oa 1 1
�t'l - t���
PORT AUTHORITY OF 'I'I�
CITY OF SAINT PAUL
Chair
By
Secretary
Signature page to Joint Powers Agreement
1550039.08 1 �L
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[Budget]
issoos9.os A-1
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PORT AUTHORITY OF THE CITY OF SAINT PAUL
PLASTICS, INC. REDEVELOPMENT TAX INCREMENT DISTRICT
EXPENSE DETAIL THRU
Expense
Codes
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Council File # ( g"
Green Sheet # � �
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Presented by
Referred To
Ordinance #
�ORDINANCE
�SAIAIT PAU.L,�
I�l
�7
Date
An ordinance granting authority to the Port Authority of City of Saint Paul to issue and
seli bonds in the aggregate principat amount which will produce et available funds to be applied to
the costs of the Project of $13,800,000, but in any event no to exceed the principal amount of
$14,650,000, and any bonds to refund such bonds, to sec such bonds with a pledge of the full
faith, credit and resources of the City of Saint Paul, and to e the proceeds derived from the sale of
such bonds to pay the cost and expense necessarily t be incurred by said Port Authority for
acquisition of lands, clearance, remediation, and impro ements in the Plastics, Inc. Redevelopment
TaY Increment Dishict pursuant to the provisions by authority of Minnesota Statutes, Chapter
469, as amended, and prescribing the amount d form of such bonds and the manner for
establishing the rate ofinterestthereon.
WFIEREAS, on September 23, 1997 the Port
adopted its Resolution No. _, fmding that
of the City of Saint Paul (the "Port Authority")
were blighted and mazginal properties within the
meaning of Minnesota Statutes, Secfions 469.048 seq., and establishing and creating the CitgoJShepazd Road
Industrial Development District; and
WHEREAS, the City of Saint Pa , Minnesota (the "City"), has authority under Minnesota Statutes,
Section 469.178, Subd. 2, to issue
created by the Port Authority,
issue bonds far its purposes
obligation bonds payable from taY increments of a tax increment district
Port Authority has authority under Minnesota Statutes, Section 469.060, to
of income from any source which aze secured by the full faith, credit
and resources of the City, d pursuant to this Ordinance, the Port Authority will issue bonds to which aze pledged
both taY increments the full faith, credit and resources of the City; and
the Port Authority has requested the authorizaUon of the Council of the City of Saint Paul,
pursuant to N�uxesota Statutes, Secrion 469.Q60, for the issuance and sale by the Port Authority of its bonds in the
amount which will produce net available funds to be applied to the costs of the Ptoject of at
least $13,800,000 but in any event not to exceed the principal amount of $14,650,000 (the "Bonds") and for the
J� � 07 7 f
a�-t�r,�
pledge of the fuil faith, credit and resources of the City to the payment of such Bonds, which Bonds will
secured by tax increments to be derived from the Plasrics, Irtc. Redevelopment Tas Increment
be
District
(the "District"), and any grants obtained in connection with the Project, as defined below, the e blishment of
which was approved by the City by its Resolution No. adopted on September 24, 199 ; and
WI3EREAS, the Bonds will be issued for the purposes of paying or reimburs' the costs and expenses
necessarily incurred by the Port Authority for acquisirion, clearance,
District which are to be undertaken to facilitate the conshuction of a
District for Plastics, Inc., and the move of Plastics, Inc. from its current
improvements within the
and distribution facility in the
at Chestnut and Ryan Streets to
the District (the "Project"), and then for a11 other purposes authorized authority of Minnesota Statutes, Chapter
469, as amended (the "Act") with respect to the Project; and
WHEREAS, the Council of the City (the "Council" , being duly advised in the premises, finds and
detemunes that it is necessary and appropriate that the Po Authority issue and sell bonds of the Port Authority in
the aggregate principal amount not to exceed $14,650,0 0 for the purposes as stated above; and
WI�EREAS, on the basis of the foregoing, t is now the intention of the Council to �ant authority to the
Port Authority for the issuance of the
schedule, rates of interest, and tYte
Authoriry to establish the date,
of the Bonds; and to authorize and
of the City to the payment of
to prescribe the manner for establishing the amount, maturity
rate of interest, to be borne by the Bonds; to authorize the Port
place of paymem and other details of the Bonds, including the form
to the pledge by the Port Authority of the full faith, eredit and resources
as the same sha11 be issued and sold by the Port Authority, pursuant to the
authority of the Act, and pur�s{�aant to the authority granted by this Ordinance.
�� �-07-��
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NOW, TI-IEREFORE, THE COUNCIL OF THE CITY OF SAINT PAUL DOES ORDAIN:
Section 1
Authori7ation of Bonds. That subject to, and in accordance with, the applicable
condifions of this ordinance and those contained in Section 469.060 of the Act, authority is
Port Authority for the issuance and sale of its Bonds in the aggregate principal amount
the use of the proceeds of such Bonds fust for the acquisition, clearance,
-ovisi , terms and
iex y granted to the
�rth in Section 2 and
and consirucrion of
improvements on land within the District as contemplazed by the Tas Increm t Financing Plan for the District
(the "Plan"), and then for all other purposes authorized by the Act with resp t to the Project.
SecUon 2
Establishing Terms of the Bonds. That the Port Authori is hereby authorized to establish the date,
denomination, place of payment, form and details of the
by the Port Authority as taY exempt and{or taxable
allowed by law; the Bonds in an amount of
will provide net available funds for the Project in
of the taat increments to be received by the
be secured by a pledge of any gant
which shall be subordinate to, in order
ta�c increment bonds issued by the
with the District; the initial
the amounts and years
with a formulae
Pricing Commii
Treasurer and
shall not xcee
that the $onds sha11 be issued and sold
one or more series, in the manner provided and
$6,600,000 (which, after subtracring costs of issuance,
of $6,150,000) shall be secured by a first lien pledge
from the District, and the remainder of the Bonds shall
received with respect to the Project and by a lien on tax increments
(i) such first lien, (ii) the payment of $2,000,000 of subordinated
Authority and soid to NSP, and (iii) administrative chazges in connection
amount of the Bonds sha11 not exceed $14,650,000; the Bonds shall mature in
interest at the rate or rates per annum, including rates which vary in accordance
by the offer to purchase the Bonds which is deternuned to be the most favorable by a
of the President and the Chief Financial Officer of the Port Authority and the
Deputy Mayor of the City, provided that the average annual weighted interest rate of the Bonds
percent (_%) per annum payable semi-annually unless such higher average annuai
interest is specifically approved by a resolution adopted by a majority of the members of the Council;
f� �-�7-q7
a �- � 4c�8'
and the proceeds from the issuance and sale of the Bonds as received by said Port Authority hall be used first to
pay or reimburse the costs of the acquisition, cleazance, remediation and constri.lction f improvements on land
within the District as described in the Plan, and then for all other purposes authorized y the Act with respect to the
Project. The Bonds may be made subject to redemption and prepayment at
time and price or prices as sha11 be detemuned by the Port Authority
described above and upon such norice as is required by law. It is
provides that the Bands must be in the amount and form and
Port Authoriry with the consent of the Council shall set
details of the Bonds and that the Council is required to
Authority is proper and if so, the amount of
consent in the Ordinance to the pledge of the
delegation to the Pricing Committee set forth
except as provided herein no further
Section 469.060 of the Act.
o£the Port Authority at such
approved by the Pricing Committee
that Section 469.060 of the Act
at the rate set by the Council, that the
denominafions, place of payment, form, and
whether the issuance of the Bonds by the Port
issue, and that the Council is required to give specific
faith, credit and resources to the Bonds. The standards and
are intended as such full required action of the Council, and
of the Council is required for the issuance of the Bonds under
Secrion 3
That as security for the prompt and faithfiil payment of both principal and
interest of said Bonds in an
the full faith, credit and
amount of the same
provided therefor and
noi to exceed $14,650,000, the Port Authority is hereby authorized to pledge
of the City of Saint Paul; and such Bonds, both in respect of the principal
respect to the interest thereon, may be paid by the Pon Authority from tax levies
by the Act.
Section 4
That the Port Authority, in the event of the issuance of any said Bonds authorized hereunder,
sttall
issuance of the same, levy for each yeaz, until the principal and interest aze paid in full, a direct
on all the taYabie properry in said City of Saint Paul, in an amount not less than 5°lo in excess of the sum
required to pay the principal and interest of the same when and as such principal and interest mature and, after such
�;��f7-�7
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Bonds have been delivered to the purchasers, such taY sha11 be urepealable until all such indebtedness is paid, and
after the issuance of such Bonds no further action by said Port Authority shall be necessary to authorize the
extensions, assessments and collection of such tax. That the Secretary of said Port Authority shall
fiunish a certified copy of such levy to the County Auditor of Ramsey County, Mimiesota, the county in
said Port Authority and said Caty are located, together with full informarion regazding the Bonds of
Authority for which the tax is levied and such County Auditor shall extend and assess the taY so
do so annually until the principal and interest haue been paid in full. That any surplus
levy therein provided shail be transfened to a sinking fund after the principal and interest
levied and collected has been paid; provided, that said Port Authority may, on or before
by appropriate acfion cause its Secretary to certify to the said County Auditor the
its own traasury from tax increments derived from the Plastics, Inc.
District, gZants of federal or state funds received for the Project, earnings
in the sinkiug fund, which it will use to pay the principal and interest
and the County Auditor sha11 reduce the levy for that yeaz herein
�d Port
and shali
ig�from the excess
/
which the tas was
ber 15 in any year,
on hand and available in
Tas Increment Financing
income, including any amounts
on each specified issue of the Bonds
for by that amount. That the amount of
funds so acquired shall be set aside by said Port Authority an e used for no other purpose than for the repayment
of the principal and interest on such Bonds. That a11 taac being authorized to be levied under Minnesota Statutes,
Section 469.060, as amended, shall be collected remitted to the Port Authority by the County Treasurer in
accordance with provisions of law governing e collection of other taaces and shall be used solely for the payment
of such Bonds when due.
Section 5
o Further Council A on. That said Port Authority may provide for the exercise of the authority hereby
granted for its issuance
the aforesaid
sale of the Bonds in the aggregate principal amount as provided in Secrion 2 hereof, for
and the pledge of the fuii faith, credit and resotuces of said City of Saint Paul, as security
for the paym�nt of the same, by its appropriate resolution, and without fiuther action of the Council. The authority
to set the final principal amount, maturity amounts and interest rates on the Bonds has been delegated to the
�r � �l-i�-97
°t1- L l(.i�
Pricing Committee as provided in Section 2 hereof. That in exercising the foregoing authority, the Port Authority
shatl make due compliance with all applicable requirements for this ordinance, said Section 469.Q60,
Statues, as amended, Sections 469.174 through 469.179, as amended, Chapter 475, Minnesota
amended, and all other applicable laws.
Section 6
Authorization of Refunding Bonds. Pursuant to and in accordance with the
conditions of this Ordinance and the Act, authority is hereby granted to the Port
Bonds as authorized by Minnesota Staxutes, Secfion 469.060, in aggregate
purpose of securing funds as needed by the Port Authority to refund
The principal of the refunding bonds may exceed the principal
necessary and appropriate to pay interest thereon (including
costs of issuing the refunding bonds and to allow for
interest for the refunding bonds.
Effective Date. That this ordinance
publication.
terms and
to issue and sell
�
amounts necessary for the
issued under this Ordinance.
bonds to be refunded to the ea�tent
accruing as capitai appreciation), to pay
upon sa1e, and to fund reserves and capitalized
take effect and be in force 30 days after the passage, approval and
F�': ;"°i i r" ; L P p F
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Cd' d � c.o , o_, :.
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Adopted by Counci3: Date _ _ �
Adoption Certified by Council Secretary
By " — — — r-
Approved by Mayor: Date
�
e uested by Department of:
/!// Ld�M
By:
Form
By:
Apprc
By:
q������
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An ordinaace gtanting authority to the Port Authority o£the City o#' Saint Paul
to issae azed sell bonds in the ag�egate PrinciPat amouat which wi)1 produce net
avaifable funds to be app&ed to the cosu of the Projea of $13,800,000, bvt in aay
event not to arcead tl�e iaitiai principal amamt of $i4,650,000, and any boads to
refuud such bonds, to secure such boads witfi a pledge of the full faitU, credit and
resovrces of the City of Saint Pau1, and to use the proceeds derived from the sate of
such bonds to gay tfle cost and exQense necessanly to be incaured by said Port
Authc�rity for acqtusitioa of � l� cIearance, remediatios� and impravemeats in the
Plastics, Tnc. Redevelopment Tax Iucrement Disaict ptusuant to the provisions and by
a�nhority of Mianesota Stawtes, Chapter 4b9, as amended, and prasaibing the
amouat aad form of soch boads and the manner for establishing the raze of int�est
the Proiect
VVHEREAS, on September 23, I9T7 ilte Port Authority of the City of Saiat Paui (the "Port
Authority") adopted its Resolrrtion No. = 3656, finding that certaia laads were blighted and naarginal
. ..- .. � � � � ,� .� ,• . ���:..: :� .� �.� r-: :. .�. � .. � ,• .�.
creaang the Citgo/Shepard Road Indurnial Development Disa�ic� and
Wt-IEREAS, rhe Caty of Saint Paz� Minnesota (rhe "Ciry"), has autf�ority umder Minnesota
Stahrtes, Section 469.178, Sabd. 2, to issue general obligation bonds payable from ta�c inttemeats of a
tax increrne� discrict created by the Pott Authority, and the Port Authoriry has authority under
Minnesota Siatutes, S�tion 4b9.060, to issue bonds foz its puiposes in aaiicipaTion of income from
any sovrce which are seaued by the full faith, rsedit and resources of the City, and pmsuant to this
Ordinauce, the Port Authority will issue bonds to which are pledged both tac uecrements and the fuU
faith, credit and resovrces of the City � t6e "Seeies A Bonds"1; aud
WHEREA.4. the Port Authoritv has authoriiv nnder 1Vlinnesota Siafues. Seaions
464.06Q and 4fi5.61 to andertake a pro�ram of issuing tempocary obliEatians to be refuuded by
longterm obGgalions at a iater date, aad wluch are secured by thc fult faith, credit and
cesouroes o#'t13e C�tq: aadpwrsvant ta tl+"ss �cdin�nce. the Port Authoritv veilt issue bonds to
tssuaz
�-, - ���Y
w3ucix are pfedged tlie fuli Iaith. eredit and reaources of tS�e CTtv and tht uZOOe�ds of anv rant�
r�eived by rhe Port Anthority or the (�tv for the Pmiect, as defiaed beiaw (_the "Series B
Bnnds" and t��fier with the Seties A Bonds. t6e "Sonds"�; smd
VVf3fEREAS, tke Port Audiority bas re�uested the authorization of the Councii of the City of
Saiat Paul # e uCoweeiP' pursuant to Mtnnesota Staurtes, Section 469.060, for the is�ance and
saIe by the Porc Authoiity of ^ the Bonrls in the aggregate princigal amozwt whicfi wilI produce n�t
avaiiahle funds to be applied to the costs of ihe Project of at least $I3,8QO,OQa but icz any event not to
exczed the initial principal amoum of $24,b5D,00�, and for rhe pledge of the fuil faitb, credit aad
resources of the City to the paymmt of such Bonds, which Series A Bonds will also be secured by tax
increwents to be derived from ttte Plastics, Inc. Redevelopm�t Tax Increwent Finaacing District (rke
"District"}, and which Series B Bonds will also be securai bv any ganis obYained � the C�iv or
the Port Authoritv in connection with the Pmjea, as define@ below^--�d
-- -�YHEliEA,S c4tab4shment of the District was approved bv tLe CY'tv by recolution
adouted on SeptemE�er 2d.1997; and
'WIiEREAS, the �onds will be issued for the axuposes oPpaying or resmbuning the �sts and
expenses aecessarily incurred by the Port Aurhoriry £or acqu;sition, cleazance, remediatioq and
imgrovements witEiin the Dis�ict which are to be undeitakea to facilitate the consauction of a
manufactusing and disGibution facility in ihe Disaid far Plastics, Tnc., and the move of Plasstitcs, Iuc.�
fsvm its auYenz location az ChesWut and Ryaa Streets to tfie Tlistrict (the "Project"), and then foz a31
other putposes authorizxd by authority of Minnesota Statutes, Chapter 469, as ameuded (the "Ac�')
with respect to the Project; and
isstsaz
q'1- \\��
'C4'SEREAS. it is the pre#'erence of the GTts to avoid the collection of YeaeraI taz Ievies to
pav #he Bonds prior to the time taz incremeQts are received from the T?istric� and for t�e Port
Aathority. as issner of the Bonds. to avoid such taac levies bp ca�itat'v5ng iaterest and ro�iue
avrr tem,porsr� obti�,ations �as in a commerciat pa e�r FroYram}. and bv k�giag_pursaant m
?YTmmsata Statutes. SeeIIOU 475,6I: and
W'1TEnBAS, the Council of the City {the "CounciP'), being duly advised ia the preanises,
finds atx3 des�mines that M is necessary and appzopriate tftat the Port Authority issue aad sell bonds
of the Part rluthority in the aggregate ini6ai principal awcwnt not to ascced �I4,650,000 for the
gutposes as staLed above; and
WHEREAS, on the basis of the foregoing, it is aow the intention of the Coimcii to grant
auzhority to the Port Autliority for the issuance af tke Bonds; to �srescribe ttce manaer for establi�Fxing
the amount, maturity schedule, cates of interest, and the maximum rate of iater� ta be borne by the
Bonds; w authorize the Port Authority m essablish the daze, denomez�ation, place of payntent sud
other details of the �onds, 'sn�ludiug the fozm of the Bonds in the maaner provided in this
Ordimance and to authorize xnd consent to the pledge by the Port Auttmrity of the full faitb, credit
a¢d resoi�rces af the Ciry m ttze payment of the Bonds as rhe sau�e shaA 6e issued and sald by ihe Part
Aenhority, pursuanr to the authority o� rhe Act, aad puiswant to rhe aurlmrity ganted by this
Ordinance
WgER�AS. in cossnectsoa with t6e cueation of the Ttsstrict aad ttse fcnancia� of tbe
Praje.�x, it is proposed tl�at fhe G�ty and the Port Aat6ority enter ictto a Jaut 1"owers
A�reemezut to set forth the duties and resuonsSbilities of each i�rt connection vaith the Proiec�^
NdW, TH�12E�'OR�E, T'FTE CQUNCIL QF T'f�E CtTY �F SATN'f PA'CTL DflES QRDAIN:
4
tsstsrz
9'�-\\t��
Section 1
Auffiorizarion of Bonds. Thai sabject to, and in accordancs with, rhe apqlicable provisions,
terms and conditions oPthis ozdinxnce sad ihose comained in Sectian 459.069 of the Act, authority is
hereby graate� to the Port Autlzority for the issuance and sale o£ its $onds in ihe agg�egate }xincigal
amount set farth in Seaion 2 aud the use of the procee�s of such Bonds fust £oz the acquisitio�
cieazance, zemediztion and construction of improvements on laud within the Disirid as conte�.plated
by the 'Tax Increanent Financing Plan for the 17istrict {the "Pian") and then for all other P�u�poses
authorized by the Act witfi respect to the Project.
:. .�
FstablishinQ 7e�ms of the Bonds. That the Port Authority is hereby authozized ro estabiisb
the d2te, d�.ominatiou, place of payment, form and details of the Bonds, provided that the Bonds
shall be issued and soId by the Port A.uthority as tax �empt and/or ta�able Bomds i¢ one or more
sexies, in the manaer grovided and allowed by law, the Series A Baads in ^ the �riaciqal amount of
approximateiy $6,600 (which, after subuacting costs of issua�ce and canitatizrd 'ueteresi will
grovide uet available fvnds for the I'ro}�t in the amoeuit of $6,iSQ,006) shai! be secured by a first
lien pledge af the ta�c inczements to be zeceived by the Port Aufhoriry from ihe Bislnct, and the Q
Series B Bonds s3�all be secut�ti by a ptedge of any gant proceeds received by t5e Port Authorits
or the i weth zespect w the Prajact ; the initia� principai amoVat o£ the Bonds shall not exceed
$I4,650,Q00; the Bonds shall mazure in ihe amouats and yeazs aad bear interest at tlze zaze or rates per
annum, includu�g rates wbich vary in accordance with a^— ferm established by the offer to
purcbase the Boadc which is detercnined to be the most favorak�te by a Pricing Committes comprised
of tfie President aad the Chief Financxa! Officer of the Port Airthoriry and the Tseasluer aad the
5
�5&lsaz
`1� —\\�`�
Deputy Mapor of the Citp, ptovided that the av�e annual weighted iQtears-c rat� af Yhe Bonc}s shall
aot exceed ^— nine pexcent 9% per annum payable semi-aaaually unless such highex aveaage annual
weigh� interest is spe�ically approved by a resolution adopted by a majotiry of the memtxas of the
Councii; and the proceEds from ihe issuance and sate of the $onds as received by said Paiz Autt�ority
shall be vsed fust to pay or reimburse the costs of the acquisition, clearaace, F2�IC(II�QOk 2IICI
conshucrion of improvements oa land within the Distcict as described ia the Plan, aud then for ail
orher purposes authorized by the Act wirh respect to the Project. The Bonds may be made subject to
redemption and grepayment at ths option of the Port Authority az s�ch time and price or prices as
shall be detenmined by the Port Aeithortty and agproved by the priciag Co�nmiuse desciibed above
and upan such aotice as is ret�uirecl by faw. Tt is recogniz� that Sectzon 4b9.0b0 of the Act Qrovides
that the Bonds musc be in the amourn and fomx and bear interest at the raie set by the Covaci� that tfie
Port Auflmriry witfi tfie consent of the Cotuicil shall set the date, denominations, place of paymear,
foim, and details of the Bonds and that the Council is re�uired to decide whethe� the issuance of �,te
Bonds by the Port Authoriry is pmper and if so, the amotivat of Bonds to issue, aad d�at tEze Coi.mcil is
required to give specific consent in the Ordznance w the pledge of the Cizy's fuR faith, credit and
crswrrces to the Bonds. The stanc3ard, and delegation to the Pricing Committee set £orth herein are
intended as such full required aciioa of the CounciI, and except as provickd hesein no fvrther appsova.(
of tfie Council is required for the issuance or reifundi�� of ihe Bonds under SecYion 464.060 of thc
Act
Section 3
Pledge of FulI �'aith and Credit. Tf�at as seauity for the prompt and fazrhfui paymemt of both
pxincipal and interest of said Bonds in an aznount not io e�cceed $14,650,000 (ezcept �►a a
�saisaz
6
a'1-\\��
refnndi� anf6or'v.ed bv Ser�on 6 hexeo�. the Port Authoziry is hereby aurkosized to gledge the
full faiih, craiiz and �ces o£ the City of Saiat Paul; aad such Bonds, boih ia respea of the
principal amount of the same and with respect to the imtecest thec�ou, may be paid by the Pon
.Aut6ority fram tax fevies providefl therefor ^ i�► accordauce with Sedion 4 hereof.
SecEion C
T�. That the Port Autlwrity, in the event of the issuance of any said Bonds authorizecl
hereunder, shall befoce the issuance of the saare, levy for each year, unrit the principat and znterest ue
paid 'an fail, a direct annua! tax on all the t�table propeity iu said City of Saint Paul, in an amount noL
less than 5% in excesa o£ the sum rec�vxed m pay the grinczpal aiad 'znteaest of t5e same when aud as
such principal and interesi matvre and, a£ter such Bonds have be�o deliverad to the pcuchaseis, such
t� skatl be isepeatable until all such indebtedness is Qaid, and aiier the issuance of such Bonds no
fiuther actiou by said Part Authority shall be necessary w aaxhorize the extensions, assessments and
call�tion af such ta�c. �at the Secxetary of said Pozt A.uthoazry shalt forthwith fiun'ssh a�ed
cag} af such lcvy to the Couacy Audztor of Ramsey Counry, Mannesor�, rhe councy in wb,ic3z sazd Port
Audzozity aad said CiCy are located, togeiher with full information regacding the Boads of said Port
Aurhority for which the tax is tevied and such Couniy Auditor slzal! extend arzd assess the tac so
Ievied, and shall do so annw�lly uatil the principal and interest have been paid in fistt_ That auy
surgius resuiting from t6e excess levy thereiu provided shall be LransfeFred to a sinking fimd afler the
principal and interest for which the ta�c was levied and collectad has been paid; gmvided, thaz said
Pozt A.uthoriry ^ La ! on or before September 15 ia aay qear, by a�propriate action cause its
Secretary to cestif}� to the said Coimty Auditor the amouut on I�aad and available in its own u�uy
or in hvst from � iacrem�is derived fivm the Plastics, 7ac. Redevelopment Tax I.ucrement
7
usisaz
q�-����
..< <• � . 1. .. :�,. . �. .. . , • .:. � � �... ..:. �..,,•
iucluding any amounts in the sink'sng fi�nd, which it will nse to pay the pr'tncipal and iuterest or both
on each sQecified iss�e of the Boads and the Coiuity Auditor st�all redace ihe levy for that year hereia
provided for by that azuouut Tbat the amoum of funds so acc�uired shaf2 be set aside by said Po�t
Authority and be used for � other gurpose than fox the regaym�t of the pzincipal and anterest on
a :��t �. r.':, t' �• . �u� :� • s' �� na- s�:.�v. .� ' . a�t •�� !�1
as amended, stia2i be collected and remitted m the Poit Authority by the County Treas�uer in
accordance with pzovisions o� �aw governiug the coDection of other txces and shalI be used solely foz
the paymer�t of such Boads when dae.
Ptohvitlestauding t6e fare�ain� provisions af this Section 4, tazes may bc tevied and
cai+ceted or omitte�! in t6e manner provided by Minnesota Statutss, Section 4�S.bi, to the
ezteni le�Y t�er':ws.�ibte.
Section 5
No �urther Couaci� Action. ?'hat said Port Authority may provide €or the exercise of the
authority hereby ganted for its issuance and szQte of clse Bonds in the aggregace pxiucipal am,o�x as
provided in ^— Seclions 2 aad b �ereof, for �e aforesaid pittposes, aad the pledge of the full faitkS
credit and r�s�uces of said Ciry of 8aint Paul, as seauity for the gayment of the same, by its
appzopriaYe resolution, and withovt further action of ihe Council. The authority w set the final
• 1 �• :Il• y i1.I :(�� 16 .1� I w ..� •( 1" 1I�1 {: 1:41 l>!�; il ♦ 1� � 1♦
Couzmiuee as pmvided in Se�tion 2 hereof. Thas in e7cercising the foregoing aaxhority the P4rt
AuFhority shalt make due campiiance with all aQplicable requiremeats for flris ordinanc� said Section
8
isatsa2
�-� -����
' ��� 11�.�Y. .t .w .�i � l�/A ♦• � • 41 '�� � .itl'.ira�s� (.� 4
ttw� - Y.1 .1�"ltit .1! . { l .!� r� '
�: 1�1 �
Authorization af Refundiap Bonds. Rusuaat to and in accoidance witti the provisions, temis
and canditzons of this Ordinaace aud the Act, authority is heseby gtanted m the Port Autboriry ta
issue and sell Bonds as autfioriz�ed by Minnesata Statutes, Section 4b9.t360 iu aggregate Pri�cipai
amounts neces.�ry for the piupose of seauing funds as needed by the Pon Authc>rity to refund
obligations issued under this Ordinanc�without anv fucxher action of the Counal. 'YLe Priti�
Committee shaU have the same roie with respect to refuading bonds as is set fortti in Section 2
for the initial issuance nf the Bondf. The principal of the refuuding bonds may exceed die psincspal
of the bomds to be refunded to the extent necessazy and appropriate w pay intezest thereon (including
int�rest accnung as capitai appreciation}, to pay costs of issuing the re.funding bonds amd to ailow for
ciiscount upon salc, and to fund reseivves and capitatized inrerest for rhe re�'unding bands.
Section 7
.Toint Powers elereemenL In connecIIOn a�ith the creaxion of the T)istrict aad the
�inaaci»r ot the Froiect. the Councit }eersby approves the eaecution and d�iverv bv the CStv of
s.Ioint poweTS A�reement, to be entered into betweex+ the CStv aud the Port Aat6oriEv The
form of ihe Joint Powers Aereement is a�praved subsiautially in t�e form submiited and on
fde in the ot#ices of the C�ty Counril. with such subs�uent ch�nges as may be approved b�
C�ty staff, caansr3 and Bond Couns�t as cantemplated bv tbis �rion 7. 'The JoinY powers
A¢reement shall eontain pravisions obleEadn� the Citv to contn'b¢te certain funds in the
amou�ut_af 53,20(i,1100 to the 1'mject. The Mayor, CTri Qerk and the Airector, (H'fice ot
9
I58f342
�� � � ���
B'wancial Services. are hercb,�aulhorrzed and direeted to ezecuie the 3oint Powers A�r�nt
ia subsfantiaIlv the form snbmitted. as mocGfeed oursuant to t�is SecQon 7 and �v otLer
dowmeats snd cerbi"cates wleich in the opiniQn of the CSty stafl' couasd and Bond Counsel are
n�sarr* to the transacIIOns hereia desceibed. Tim e.�cecn#ion of anv instrument bp the
apw o€bcee� ar MLcers of the CStv Lerein authorizal s► be condusive evidmoe of die
a�nrova! of such dowuunts in accordance with tht terms hereof The approval herebp Eiven
ta tEse Soint Powers AEreemea►t indudes aaurovat of such additional details therein as ma�be
�eccgsarv and appro�xiate, and such modifications th�eof deEetions thuefrom and additions
tliereto as mav 6e aea,aary and anaro,preate aud amrroved bv the Director dPflce of �nancial
�'C!tq-
tio 8
Effecave Date. That this ordinance sBall take etFect and be an fotce 30 days aRsr the passagq
appzoval aad pub&cation. _ This ordinance is subject to tke orovisions of the Citn's home ��r
charter certainin¢ to the urocedare far referendams on ordinaaca eaacted b�t,�
Qoverning bodv_
�sstsaz
]0
mM 70TRL PAGE.�11 **
` � `SAINT PAUL
PORT AUTHORITY
MEMORANL�UM
TO: Council President Thune and
?vlembers of the Citv Council-
PROM: Kenneth R. 7ohnson
Laurie 7. Hansen �(,�
William M. Morin �
DAT£: Szpt. 16, 199�
�-,-����
SLBJECT: RETEVTION OF PLASTICS, INC. AT THE CITGO SITE IN SAINT P�UL
Background
Tn December, 1996, as part of a Development Agreement with the Science Museum of
Minnesota (SNiM) to undertake a$100 million expansion of SMM, the City agreed to purchase
land in the Chestnut StreeUShepazd Road area which is the current site of Plastics, Inc. at 224
Ryan Avenue. The Development Aereement also required the City to turn the demolished
Plasrics site over to SMM by August 15, 199$, or incw certain damages.
For over a year, the Port Authority and HRA sYaff have been working to retain Plastics, Inc.,
wluch is a 58-year old intemational enterprise which manufactures plastic containers and
employs approximately 200 people at the Saint Paul site. Plastics also has operations in Ea�an
and Coon Rapids.
The Port Authority has worked with Plastics in studying the economic implications of over 20
possible sites to relocate the e�sting Plastics facility and consolidate it with the Eagan operations
in a new 370,�Q0 square foot manufacturing and warehouse faciliry. This would xetain ancllor
relocate appro�mately 350 well paying jobs for Saint PauL The most likely 20-acre plus site
and associated costs were shared with the I IRA Board in February.
In March, 1997, the HRA Board gave ciear direction in Resolution 97-3/26-6 that the $10.5
million expansion for Plastics at the Koc1�JMobil site at Otto and West Seventh was not
appropriate reuse and that residential redevelopment should be pursued for the KochlNlobil site.
Cunent Status
Since Apri1, the Port Authority has continued to work on retaining Plastics in Saint Paul and has
identified the Citgo site (just west of the NSP High Bridge site, see B�ibit Aj.
Council President Thune &
Viembers of the City Council
Septembe: 1b, 1997
Page -2-
�-,- �t��
The Port authority has reached agreement with Plastics and a private lender to undertake an
approxirnately �14.� million project on the Cit�o site. See E�ibit B for che business points of
the transacuon and E�ibit C for Plastics acceptance of the terms as outlined. The imancing pian
will include the issuance by the Port Authority of Tax Increment General Obligation Bonds, and
additional City Generai Obligation $onds against the 25-year Port Authority Tax Increment
District in an amount necessary to generate $13,80Q000 of bond proceeds available to pay
project costs. See E�ibit D for project financing plan.
Please note that cost of the project has increased significanfly since the Koch/Mobil site proposal
in March due to additional site preparation and remediarion costs of converting this 20-plus acre
abandoned tank farm and adverse impact of State law change on the commerciai property tax rate
which directly affects the amount of tax increment supported debt that can be issued.
Northem States Power Company (NSP) provides a program called Project Gemuu which
provides electric utility services at a reduced rate to new and eapanding manufacturing and
wholesale trade businesses within underutilized industriai zones. As part of the Plastics approval
process, the City Council will be requested to approve a noncontiguous expansion of the Crosby
Lake Froject Gemini zone to encompass the Citgo site for the Plastics expansion.
The SYate of Minnesota provides the Minnesota Investment Fund (MIF) to assist with economic
development projects that qualify based upon specific State Department of Trade and Economic
Development (DTED) criteria. As part of the Plastics approval process, the Ciry Council will be
requested to approve in concept ihe application to the State for $500,000, primarily in grant
funds, for this project. Additionally, the Met Council and DTED provide twice annual
application processes for funding of a portion of predevelopment and remediation project costs.
The Fort Authority wili apply for these grant funds as appropriate Yo diminish overall project
costs as further described in the project financing plan.
Public Purpose
Please see E�ibit E for the public purpose of retaining Plastics to Saint Paul.
I332A Resalution
Attached is a copy of the ��RA resolution which was approved on September 10 in support of a
series of Port Authority and City Council actions required to retain and expand Plastics on the
Citgo site in Saint Paul.
Council President Thune &
Vlembers ofthe City Council
September 16, 1997
Page -3-
City Council Resolurion
�� _ t l(•�'
Prior to consideration of the attached resolution (Exhibit F), the City Council is scheduled to
hold a public hearing on the creation of the tax increment financing district in connection with
this project. The attached City Council resolution approves the tax increment plan (a copy of
which is attached as Exhibit G) for the District and makes the necessary statutory findings and
elections in conneciion with the plan and the Districi, and approves other Ciry actions required to
complete this project, includina specificaily the issuance by the Port Authority of $2,000,000 of
second lien tax increment bonds (which are not secured by a city oeneral obligation pledge).
City Ordinance
The attached City Ordinance (E�ibit H) authorizes the Port Authority to issue bonds in a
principal amount not to exceed $14,400,000 (which will produce net availabie funds to be
applied to costs of the project of at least $13,800,000), and authorizes the Port Authority to
pledge the City's general obligation pledge to the full amount of these bonds. As described in
the ardinance, a portion of These bonds (approxunately $6,b00,000) will also be secured by a first
lien on tax increments.
Attachments:
I3RA Resolurion
E�ibit A- Citgo Site Map
Eaiubit B - Term 5heet
E�ibit C- Plastics Acceptance Letter and NSP Commitsnent
E�ibit D- Project Financing Sources & Uses
E�ibit E - Public Purpose
E�ibit F- City Council Resolution
E�ibit G - TIF Plan
E�ibit H - Ordinance
�ujh�PLAS_RPT
SEP 16'97 11�29 Fl? LSD-ST PfiUL 612 475 9347 TO 219#i15tt92235198 P.03 `��
1
*�P-15-1997 11=4a ST PHt1 ALFYWli�k'i 8 ECQJ 6i2 228 332a P.03iQ'7 q��
REVISEO
sponsor: ._ 9j20/37 4e04 P.M.
BESC�LUTIOti 2ip. 47 S/IO- 4
RESOLUTTON OF TE� HOUSING AND REDEVELQPMENT AIIIHORT€Y OF T�
C1[TY UP SAA�IT PA�TL, M€3�'3VESpTA SUPPORTIAIG THE PROPOSED
RELOCaTif3T� OF PLASTICS, ING TO THE CITGO s�'E
WHERFAS, aa I�ovember 26, I 996, the City Councii of the Cicy of Saint Paul (che
CounciP� adopied its Resolution No. CF 96-137b apgrov�ag a Devetopnzent Agreemcat for the
Science Mxueum Prolect (the "I?evelogmeni Agreement"j, which DcveIopment AgreemeaY
conrains an vndertakuig by fhe Cify of Saint Paul (rhe "Ciry"} to aequire the 3and at 714 ILyan
A�enue on wtuch P3asvcs, Tne. ("Plasties'� cutrendy apeiates a faciiety, and iemove the
scsuctures located tbereon, al! by August 15,1998; and
WIiEREAS, tfie Ciry, tha Hovsing and RedeveIopment Anihcriry of the C�ty of Saint
Paul (tho "HRA'�, and t}�e port Authority of ihe City of Saint Pau! (ttee "Port Authority"} have
been working �vith Ptastics both before and afrer the execution of the Aeveloptnenz Agrtemtnt to
fsnd a]ocation in ihe City of Saint Paut to which Ptastics coald relocaEq thus retainiag this
intemationa! manufacnuing enterprise, and its approxirnate3y 170 employees, in the City of Saint
PauI; and
WHER �AS, afrer consideting nvznerous sites in the City of Sainc Paal, the Ciry, the HItA
and the Port Authority, togethcr with representatives of Plasdcs, Inc., have deiernsined thai the
appm�imately 22 actc siie located west of rhe NSP high bridge, and commoaly imovro ss the
Citgo Site" is the most appropriate site for thc relacation of thc Ptasrics, Ine. facility currendy
located at 224 Ityan Aveaue, and the conso2idation with that facitity af tfie Plastics operations
cumntiy located in $agat3, Miimesoca; and
VJHEREAS, the Port Authority has negotiaced a Memorandum af Truent wit}� Piastics
���hich would provide for Piastics to retocace to the Citgo Site, asid ta consauct tfiereon a facility
contaiaing az least 370,404 rentabie square feet, with a markct vatue, at complrtion aad including
land, of no tess ihari $12,500,040; and
WHEREAS, Citgo is iate�ested in seiling the Citgo Site far an indumiat rense, snch as
the proposed n�r facility for I'Iasrics; and
tt'�iEREAS, tha relocation of the 17� jobs currentiy located at tfie Ytastics fari2ity at 22�
Ryan Avenue, and tEie e�panspon of that job baze co approximateiy ;50 we11 paz�ing jobs wbich
�vould be accomplished by tbe consolidation of the SaiM Paui azM Eagart plutics facilities at the
C�tgo Site, is important to the City of Saim Paul and iu caapayers.
it'OR' TH�REFORE, BE IT 12£SOLVED by tht Board of Gorfunissione� of tfie
Housing and Redeveiopment Authority of rhe Ci�}• of Saiut PauI, as follotss_
I. The HKA hereby supports the pzogosed relecatio� ofPfas�ics {rom iu a¢sant
Iocatiop at 234 Ryan Avenue to the Citgo Site, a�d the finaacina plan �vhich is attached ia
Fxhibit A and has beere developed for that relocauon, zli as more fuliy sec forih in ihe baud
�n• '
_��
SEP 15 '37 11�43 622 228 3314 Pf�.,E.603
SEP 16'97 11�29 FP. LSD-ST PRIA 612 475 9347 TO 219kki15t792235198 P.04
� SEP-25-19J1 11=45 S7 PatA �A�rfIrrG 8 ECLR�t 622 228 331a P.0ti07 v
• . �1 � ��Ll
2• HItA staff shaii a¢sist representatives of the City aad the Pozt Authoriry [a prcpaze
1he necessary docuraenptioa for the prompt creation af a Pon Authority Raisvelopment T'a
Tnerement District and Haurdons SubsTanee Subdisirice (coiFectrvcly rhe `�isuicc'� consiy�ang of
rhe Citgo Site, and the impleme[:tation of the project and finaaciag plan descn'bed ttzzzein az�a ia
this resolutioa.
3_ The HRf1 kereby zespectfuIly requescs that the CounciI schedute and hold a pub�ic
�earing on September 24,1997 to consider the approval of the tax incr�nent frnaacing pian {the
•`Plan`7 for thc Distritt and tt�� folIowiag that gubtic hca�ing, aad siso at thc Sepsmber 24,
i 497 Councit nseeeng, Lhe Counci{ cons'sder a zesolution whicJi apprpves ihe proposed r�jpcabaII
of �'lastics to the Cisgo site, aad the financing plaut in substantially the foan aaached hereta as
Fa;hibit A�vhich has been developed ia conncction with that relocation aad, in ttiat regard:
(a) makes the necessary statutory findings as mquired by 2aw for approvaI of
Plat{, agproves the Pian and accomplisfies the fizst reading of the ordinance necessary in
connection w�ih the issuance of the genenI obIigaGon boads described in ciause (b},
below;
(b) aPFroves ihe isn�ance by the Port Authority pf xpproxintately $ I3,800,AtJ0
of Port Authoriry bonds secured by the genetal obliga[ion pledgc af [tu Ciry, and a
$2,004,fl00 Subozdinated tax increment notc, as described ia the P2an znd the f,nanciag
P��:
(c) approvcs a nonr.onLinguous expansion of ihe �osby T.al;e project Gemini
Zone to oncomgass the Citgo site for the Pfastics expansion; snd
(d} establisbes this project as a"priority project" for pzugoses af spp3ying for
grant funds to the Depansrient of Trading and Ecenomic Devetepinent and sFie Minttesota
Invesanent Fund foc funds to fu�ance the project, and appzoves in coneept the app3icativu
to the State for SSOQ,000, in Minnesota Investtncnt Furtd funds fflr this project.
��? approves and authorizes executioa of amendmt.�rts to the I}evelopmeat
Agreement deted as ef No��embcr fi, I 996, and the Museum I.�ase dated as of tvlay 1,
1997, by and between the Ciry and T7ie Scie7ce Museum of Minaesota (°SMM'� which
(a} changes thz date of Augast 15,1998, which is the date by which the city is obIigated
to demol�sh, ciear and deIiver ihe pazcet currently pccupied by PtasEics, ta t�e date by
1�hich tha City is cont"sdent thaz (i) Plas#ics wili be retocated to the Citgo site, and (ii) the
Ciry «i1l have demolished and cieared the eaisting Flastics sites, and (b) and directs City
staff to ��-ork co2taborati�•eI�• with 3MM te compteu the SMM Projeci, recognizing the
re�ised deli�ery date far PI��tics at the Citgo site, without requcrins any additionai pubtic
fuads for the SMivi Projecc
isoeasa
SEP 25 '9? 11=43 6S2 228 3314 PF�E.004
SEP 16'97 11�30 FF? LSD—ST PRUL 612 475 9347 TO 219#Si53S92235198 P.HS
�EP—IS-1997 il�a5 ST PfalA PLANJING 8 ECO!'! 612 728 3314 P.05/97
/� • , J t � `� �
V {
�i. 3'he HRA haeFry further teqvests ihat the Port Authority consider adoptioa ofa
simiIar tesolution, at no �ater tfiaa its Octaber mceting, wbic$ wili providc thc PAit ApthoFitp's
appzova! of the P#an, the p�oposed reIocation of Plastics to the Citgo Site, a�d she fnancing plan
whiah has been developed in canaee�ioa iherewi�e, ait cons;stent witli ihe Cauacii accion
requesced in PaiagraPh 3, utctuding spe�cally:
(s) the issuance and sale of Port Authozity bonds descn'bed in paragiaph 3(!,),
ahove,
(b) the epprovai of the execution flf a forniai develapmenY agrrxment with
P3asties te provide for the reiocation of Plastics to the Gitgo Site, and tlu cynstreicFion
the�on of the groject desczibed above and in the Board reptrrt;
�srocss
�aii.�Lir�is�! . Yii:i�ciC�o::r9[:'a:y
SEP 16'97 11�30 FR LSD-ST PRUL 612 475 9347 TO 219#SSSft92235198 P.96
_, .- 5FP-IS-1997 Si�a6 ST PG� �Ara�IrG 8 ELUr� 6i2 728 33ia P.86�7
�� � �,� V1
ECHiBfTA
FLAlS dF FltiAfdCE pOR PLAS7tC REIOCATt4ti
PROJECf F1AfpNClNG
SOURCES
Tota1 Project Costs
-;.� ��•
\'�AR
�1VDED
SOURCES:
tnitiai C3.0. Bonds
Nofe to Pdvafe Lender
Scienee Musevm $uBgat
PEDlPort
6.0. Bond Sumasary:
TtF Support�d BondS
Maximum Non T{F SupportecJ G.O. Bottds
Totat G.O, $onds
Potantia! Graat Pands to ReYire G.O. 8ottds:
DTED/lvtet Couaa7
Minneso2a lnvestmerrt Fund
7otai PotenRal Grant Funds
Remairring Non 7iF G.O. Bonds
Totai Non T!F Supparted G.O. Sonds
S 13,800,000 1Q97
2.00O,WO �998
2,7QO,QOQ Done
7.00D.OQO 1999-ZOD7
1�
S 6,Z50.DOo
7,6$0,000
$ 13,800,00�
��
7897
1937
$ 5,577,D00 l997-1959
500,000 1998
6,077,000
1,5�3,000 '
S 7.SSD,000
��Y P�a1� ��rings wouSd 4e appl9et! to the City antl Ptastic,-, Inc. on a
iwo-;hirds. one-ihirrf basis, to the event thers are #ewer {ps np} � savings ulSmatel�
reatized, the Pert Authoriry a7sd PFD wii! exeR theb best eftorts to id�ntify and car+md(
other state, fcderal or prnrete sou�ces m retire th� amaunt
Financing F�ssumptions:
1. Crea6on of a 2b year redevetoprnerzi districL
2. No darrcages ar? paid to Science Museum due to delay in sRe deltvery peyorsd qugust 13, tggg,
Res. A-1
SEP 15 '97 12:aa 612 228 3314 P%�.086
SEP 16'97 11�31 FP. LSD-ST PRUL 612 475 9347 TO 219#115#92235198 P.07
,_� SEP-f5-1997 i1�46 ST PPoJL PLAMIING & ECON 612 233 331a P.0?i0'7
� \lLY
�R�
PLQt1 ttF F1NAEiCE Ft3A PlASFfC RELOCAt10N
P120:tECT FtNMtC(NG
USES
�ayments ta P1aat+cs:
OY�gin21 P18S27ps S$e
JncenfTve fot relocation of Eagep jobs
��ana}r sost reduction
Fasar.��easa satniay
Totai PaY+srents fo Plastics
iScvatopment Costs:
C�eo-tectl CO+iECtiOn
F.nvIronmenta! remetliadon
5+te improvemer�fs
Ali other casts
Tota! devetopment oosts
Totat Project Uses
3 2,704.Opp
1,200,flo0
' 2.055,OOQ
42f.QOp
S 8,3�6 pOp
S S,Et6o,Opp
2,800,000
2.977,000
2,497,dpo
S 13.f24.000
$18,500,OOp
8e5. A-2
TOTA� P.07
SEY 15 '97 it:d4 612 228 3314 PFI�.�?
SEP 16'97 11�28 FR LSD-5T PAUL 612 475 9347 TO 219#115#92?�5198 P.02
��S£P-SS-2937 11=a4 ST f�KY,JL RArNIt�'i & ECLN 612 223 33;a P_0287
� a ������
a
Hoc�sing and Redevelaprnent Ae�ft�ority of #he City of 8aint Paui, Minneso�
CERTIFICATE dF RECORDING SE£�E7ARY
7he undersigrtad hereby cerfifies as fo]lows:
1. That ehe is tha duly appoirrted. quaC�fted qssistant Secretary pf the
Nousing and Redevelopmertt Authw7Ey of the City of Ssint Paul,
Minnesota, herein calfed the "Loca! Pubtic Agency';
2• That ttte atfadteci RESOl.UTiON NO. 97-9H0-4 is a frt�e and cornecx
copy of ltie resotution as adopted on the 1 bth day of Seplember, 7857;
3. Thai ihe seat affixed below constitutes the etficiai seat of the L.oca� pubiic
f19e�Y � N�� Cattif+cate Es hereby exearted under sus� offiaaf seai;
and
4. Tnat the undersigned is dWy aufhorized to execxrte this Certificar�,
IN WiTNESS WNEREOF, I have hereuttto set my hand snd the seal of fhs said Housing and
RedeVetopment Auttwrity of tNs C�ty of Saint Paul, Minnesota, fhis 11th day of
September, 1997.
��' �/ � �,�e,�
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SEP 25 'S7 1I=42 612 22S 3314 Pp,R-"_002
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PLASTICS. INC.
REDEVELOPNIEi�3T AGI2EEMEl�iT
TERM SHEET
New Facility
Square Dollar
Feet Value
370,000 $12,500,000
Plastics wiil make the follow�ng annual payments:
Annual Estimated Taxes
Annual Loan Payment
TOTAL
$1.48/sq.ft. $ �47,600
$ .SOfsq.ft. $ 185 000
$1.98/sq.ft. $ 732,000
As taxes increase from $1.48 per square foot to $1.98 per square foot, the loan repayment
component decreases proportionately by the amount o£ the tas increase. The to#al annual
payment, however, remains at $732,600.
Totai payment does not exceed $1.98 per square foot until actuai taxes exceed $ i.98 per
square foot. No ceiling on actual taxes and the annual payment wili increase if actual
taxes exceed $1.98 per squaze foot.
Plastics will enter into the Port Authority standard Workforce Agreement to maintain at
least 300 jobs with an average salary of $917 per hour. Any penalties paid under this
agreement aze pledged, as further security for the NSP loan repayment.
Tas payments available after debt service on the senior TIF bonds are pledged to the NSP
loan.
9/16/97
�:Vjhlpiastics
'�.
, _ 5 � , Fachi.bit C
��.1���
MEMORANDUNI OF INTENT
Datad: July 14, 1997
This Memorandum of Intent ("Memorandum") is made by and between the Port Authority
of the City of St. Paul ("Port Authority") and Plastics, Inc. ("Plastics") to reflect concept approval
for the acquisition of Plastics' Ryan Avenue facility and its consolidation at the CITCO site below
described. This Memorandum of Intent is not a legal, binding obligation until a Development
Agreement has been executed and authorized by the Port Authority, Piastics, Inc., and the City of
St. Paul.
1. The Port Authority will provide at no cost to Plastics approximately 21 acres cunently
owned by CITCO, together with a peipetual easement over approximately three acres from NSP
(co!]ectively the "CITCO site") as shown generally on the site plan attached hereto, which will
include:
a. On or before August 31, 1997, the Port Authority, at its expense, shali
endeavor to enter into a purchase agreement with CITCO and acquire the necessary perpetual
easement from NSP.
b. On or about September 15, 1997, the Port Authority will, at its expense (or
at the eapense of CITCO), commence and do any and a!( environmental remediation required
by the 1vTinnesota Pollution Control Agency ("MPCA") and complete the same by
December 31, 1997, which shall include the procurement of a Certificate of Completion and
No Action/No Association letter in fortn reasonably acceptable to Plastics. P(astics may
comment and render input on the Remedial Action Plan as it is developed for the CITCO site.
c. The Port Authority wili, at its expense, provide engineered filI and rough grade
the site to increase its elevation to a height reasonably acceptable to the Port Authority and
Plastics, and in no case, less than an elevation of 716 MSL. Such work shall be substantially
completed by May 1, 1998. ,
d. The Port Authority, at its expense, and in coordination with Plastics'
contractor, commence the necessary piling at the CITCO site on or about May 1, 1998.
Plastics may designate which areas have higher priority and are to be completed first in such
piling process. All pilings shall become substantially compiete by September i, 1998. A.s part
of the piling process, Plastics' contractor will install the concrete piling caps; and the cost of
the same shall be reimbursed by the Port Authority to Plastics.
e. The CITCO site will be conveyed to Plasrics or its assigns by September 15,
1998.
SELI,ED 5�8956.7 C _ 1
,:
f. The Port Authority will pay or have paid on the CTTCO site al! real estate
taxes and special assessments levied or pending through the calendaz year of closing.
g. The site wili be properly zoned to allow manufacture and distriburion of plastic
products. There will be no restrictive covenants except those set forth in the Development
Agreement and as required by the MPCA The Port Authority shall endeavor to avoid the
impasirion of any restrictive covenants by the MPCA.
h. The Development Agreement shall allow the coverage of a 370,000 squaze
foot facility, together with related parking, on ffie CITCO site. If variances from City Code
are necessary, Port Authority wil! need to abtain them by December 31, 1997. Plastics will
provide a site plan noting aecessary variances to the Port Authority by September i, 1997.
i. The Port Authority wili provide reasonable cooperation to Plastics so that it
may structure the transaction in a manner to facilitate the qualified reinvestment of
condemnation proceeds for tax purposes.
j. At the option of Plastics, the Port Authority will need to obtain city and county
approval to plat the property into two separate parcels by March 1, 1998 if requested by
Plastics by January 1, 1448, one for the manufacturing portion, and one for the distribution
portion.
2. Plastics shall receive a total financial package in cash from the City and(or Port
Authority in the amount of $5,955,000, plus the CITCO site described above, plus the Rent
Differential described below_ This $5,955,Q00 includes payment in fu(1 for the Ryan Avenue property
and release of re]ocation claims, empioyment incentives for the relocation of approximately 160
empfoyees from Eagan to St. Paul, and occupancy cost reduction incentives. The City of St. Paul
may retain the salvage value of any equipment lett behind at the Ryan Avenue facility which cannot
be reasonably relocated to the new facility. The Development Agreement shall provide for
environmental assurances mutually acceptable to Plastics and the City so that conveyance of the Ryan
Avenue properiy is in a condition which is environmentally acceptable to the City. Plastics shall al]ow
the City's environmentai consultants to enYer Plastics' building for environmental testing at reasonable
times and upon reasonable notice during the pendency of the Development Agreement and lease
period. The City acknowledges that it intends to demolish the Ryan Avenue building and in doing
so will take the properry subject to such routine asbestos removal (if any) as may be required. Aside
from the environmental assurances, the Ryan Aveaue property will be so(d in an "as is condition."
3. All costs over and above the City's and Port Authority's agreed upon payment and
benefits to reIocate to the new facility are at the expense of the Plastics.
4. Plastics will build and lease andlor own an approximate 370,000 square foot facility
having an estimated market value including land, at completion, of no less than $12,500,000, No
minimum assessment agreement is required thereafter.
S. Real estate taxes as assessed on the new facility (currently estimated at $1.98 per
squaze foot} are the responsibility of Plastics andfor the new landlord.
��-llt
SELLED 508956.7 �- 2
�� .1��
6. Plzstics agces to move all of the jobs then located in the St. Paul and Eagan faciIities
to the new facility. Starting positions after the first year of employment shall be at least $9.15 pe=
hour, plus benefits.
7. The closing on the sale of the conveyance of the CITCO site from the Port Authority
shalI be schedule3 for September 15, 1998. $2,700,000 of the $5,955,000 compensation pacitage wiIl
be paid at such time to Plastics. Ti�e conveyance of the Ryan Aveirue facility to the City shall ocau
at the same time, but it shall be Ieased back to Plastics for $1.00 net (Plastics shall pay all real estate
taxes prorated an the calendar year basis, operating and maintenance e�cpenses) until the completion
of the new production facility, or no later than August 15, 1999, whichever is earlier; provided fiuther
that said date of August 15, 1999 shall be extended for delays caused by the City or the Port
Authority. Fxcept for delays caused by the City or the Port Authority, Plastics shall pay to the Port
Authority as liquidated damages for each day after August 15, 1999, that it has not vacated the Ryan
Avenue facility, a sum equal to that payable by the City of St. Paul to the Science Museum of
Nfu�nesota for such delay, subject to such force majeure clauses as may be available to the City. The
Port Authority's payments to Plastics sha11 be directly reduced by any such Iiquidated damages. The
balance of the funds shall be paid to Plastics as follows:
$2,055,000, payable in monthly draws according to the value of construction
completion at the new productionJdistribution facility, which draws may commence
in November, 1998;
$800,000, upon occupancy of the new production facility;
$200,Q00, upon the first anniversary of the occupancy of the new production facility;
and
$200,000, on the second anniversary of the occupancy of the new production facility.
Plastics may delay the completion of the warehouseldistribution portion of the new facility until
December 31, 1994.
8. The Port Authority will need to obtain by August 31, 1997, the necessary approvals
to cause the new facility to be a"Gemini Site" so that it qualifies for reduced utility charges from
NSP. Such reduced charges shall inure to the benefit of Plastics.
9. Plastics agrees for a period of ten years (the "10-year period") after consolidation to
the CITCO site ttiat it will not knowingly and intentionally relocate more than ten percent (10%) of
any jobs at the CITCO site to another location outside of St. Paul.
a. This does not prohibit job reductions for business reasons, to meet
competition, or for business efficiencies. A piant shutdown because of husiness losses or
inefficiencies is not a violation of the clause.
SELLED 508456.1
C-3
. . ��'```�,
b- If ihe Port Authority or City aIlege vioIation of this clause, written notice must
be given to Plastics, Inc. and Plastics, Inc. must be given nine months to cure any alleged
violation.
a• The clause will be conclusively deemed to have been fulfilleti if plastics, Inc.
has maincained at least an average of 300 employees at the facility during each year� � a f
whom after the first year of employment shall be paid not less than $9.15 per hour, plus
benefits• In addition, there will be no violahon ofthe clause if another company or companies
occupy the facility and the cumulative number of employees at the facility, whether they
belong to Plastics, Inc. or another company or companies, averages at least 300 employees
per year and wages are comparable or better to the rec}uired $9.15 per hour wage.
d• Th� remedy for vio(ation is ['�nited to moncy �� � p�tt Auchority
cat�n°t sc� m°°�Y aauy�$es unless it shows by cicar and coavincing �vidence that this clnuse
��� T� �O� °f �+8d shall bc timitcd to the following, catcu�atc� on an
aanuat basis: Sl20,000 timea a firaction whac the numerator is the numbar of jobs not in
compliance and the deaominator is 300.
e. The clause is subject to existing or future labor contracts.
10. Plastics will install "state ofthe arP' HVAC systems, with particular attention paid to
odar control equipment, in the new Pacility. Approval of the same by City staff shall be provided for
in the Development Agreement.
11. The parcies shall endeavor to enter into a non-contingent Development Agreement no
later than September 15, 1997.
12, In addition to the other amounts and expenses to be paid by the Port Authority, the
Port Authority shall also pay the differential in rent (the "Rent Differential") which Plastics may incur
in connection with its leasing of its warehouse facility in Eagan from Ianuary 1, 1999 through the
earlier of• (I) the date at which Plastics is obligated to relocate its Fagan warehouse facility to the
CITCO site or (2) the date upon which Plastics no longer has an obligation to pay rent at the Eagar.
warehouse (the "Extension Period"), Said Rent Differential shall be paid at such time and in suct,
am°unt as incurred by Plastics. The intention of this provision is that Plastics shall not be obIigated
io pay any rent, or payments in lieu thereof, during the Extension Period which exceed the rental
obligations which Plastics would have paid during the Extension Period if its rental rate and rental
obligations had not been increased from those in effect during 1998. Plastics shall utilize a11
commercially reasonable efforts and arguments with its present Iandlord so as to minimize the Rent
Differential, and shall keep the Port Authority infonned of the progress and content of such Rent
Differential negotiations.
13. The Port Authority will cooperate with Plastics to allow Plastics' due diligence with
respect to the CITCO site, including but not limited to issues regarding environmental, flood plan,
building location, truck circulation, fire safety, water pressure, coal dust, single point of ingress and
egress, and such other matters as Plastics deems in its reasonable discretion to investigate and
evaluate. Plastics will endeavor to complete said due diligence by August 31, 1997.
SEt,[.ED 508956,7 C- 4
SEI3.ED 508956.7
PORT AUTfIORITY QF TF� CITY OF ST. PAUL
��..-�� /
«� -
PLASTICS, INC.
By �^-_.. 7 � ( 6 �4 �
zts
c- s
°l1 ���'�
t
0�'�_ � ( (��'
FIltST ADDENDUi�1 TO MEMO1tANDL3M OF INTENT
DATED SEPTEMBER 9, 1997
This First Addeadum to Memorandum of Intent ("Addendum") is made by and between
the Port Authoriry of the City of Saint Paul ("Port Authority") and Plastics, Inc. ("Plastics") to
amend the Memorandum of Intent dated July 14, 1997 and previously executed between the Port
Authority and Plastics. This Addendum is not a legal, binding obligation until a Development
Agreement has been executed and authorized by the Port Authority, Piastics and the City of
Saint Paul.
The Memorandum of Intent is hereby amended by this Addendum, in the foliowing
ways:
1. Throughout the Memorandum of Intent references to the "CITCO site" or
"CITCO" shoutd be corrected to read "Citgo site" or "Citgo", respectively.
2. Pazagraphs 4 and 5 of the Memorandum of Intent are hereby amended in their
entirety to read as follows:
"4. Piastics wiil build and lease andlor own a facility at the Citgo site of an
estimated size of no less than 370,000 rentable square feet, having an estimated
mazket value inctuding land, at completion, of no less than �12,540,000. No
minimum assessment agreement is required thereafter.
5. Real estate taxes as assessed an the new facility are the responsibility of
Plastics andlor the new landiord. In addition to real estate taYes payable with
respect to the new facility, Plastics shall, for as long as it occupies the new
facility at tl�e Citgo site, make a separate payment to the Port Authority in an
amount which is equal to: (a) $1.98 per rentable squaze foot of the spaca in the
new facility building minus (b) taxes per rentable square foot actually payable
with respect to the new facility. [For iliustrative purposes only, if taxes are
payable on the new facility at $1.48 per rentable squaze foot, this separate
payment by Piastics to the Port Authority would be in an amount equal to $.50
per rentable squaze foot.] Plastics understands tba.t the Port Authority will pledge
t4us sepazate payment as security for the repayment of a note (the "Note") to be
issued by the Port Authority and purchased by NSP. The payment obligation of
Plastics under this pazagraph 5 shall also be subject to the following
qu�cations: (a) it shall terminate upon the soonest of: (i) the completion of 17
years of payments; (ri) ihe repayment of the Note; or (ui) Plastics ceasing to
occupy the new facility; (b) it shail not exceed the $.50 per rentable square foot
even if actual real estate taYes are less than $1.48 per rentable square foot; and (c)
it shall first be dus in the year in which taxes are payable (i.e, the year after full
assessment) on the basis of the completed, fu11y assessed, new faciliry."
I577062
C-6
�� - �t�,�
3. The Memorandum of Intent is hereby further amended by adding the following
additionat pazagraphs 14 and 15 to read as foilows:
"14. In addition to the financiai package described in the Memorandum of
Intent, Plastics shall aiso be entitied to a credit against the payment described in
paragraph 5 of the Memorandum of Intent, as amended by the Addendum, in an
amount equal to one-third of any deveiopment cost savings achieved by the Port
Authority with respect to the Port Authority's project costs, which project cosu
are described for purposes of this Memorandum of Intent to be the difference
between the actuai costs incurred by the Port Authority in connection with the
acquisition and prepazarion of the Citgo site, and the funding obtained by the Port
Authority for the payment of such costs, including a$1,577,000 source of
funding deemed from the Ciry of Saint Paul. Plastics' credits shall be in an
amount equal to one-third of such deveiopment cost savings, up to a maximum
credit of $500,000. The amount of this credit shall be held by the Port Authority
in an escrow account, and shail be applied to pay the payments which would
otherwise be required to be made by Plastics pursuant to paragraph 5."
"15. Contemporaneously with the execution of the Development Agreement,
Plastics shall enter into an agreement with I3orthern States Power Company
("NSP"), to be effective only upon the issuance by the Port Authority of iu
$2,000,000 ta�ble development note (the "Note"), and the purchase of such Note
by NSP, that inciudes the following conditions for as long as Plastics occupies the
new facility:
• a requirement ihat Plastics purchase at competitive mazket rates and
subject to Gemini site benefiu, a11 elecuical power and natural gas from
NSP until tfie maturity date of the Note, or such earlier time as the Note,
including all accrued interest, is fully paid.
• in the event of the full payment of the Note prior to the initial maturity
date of the Note, att assurance by Plastics that NSP has the right of first
refusal to any bona fide offer to provide electric and naturai gas service to
the Saint Paul facility made by any other energy supplier."
urfoszoi C^ 7
��-,��Y
This Addendum to Memorandum of Intent is dated as of the date fust above wriiten.
PORT AUTIiORITY OF THE CITY OF SAIlVT
PAUL
�,i4���
_ -�
f' � . .L
PLASTICS, INC.
'� �
BY� � nrw�+.u.c,�
Its:'� z: , _0�, �
unoaz.oi C-8
Northem States Power Comparry
4'f 4 Nicollet Mali
Minneapoi'�s, MinnesoTa 55401
Tekphone (612) 330-7769
September 8, 1497
Port Authority of the City of Saint Paul
1900 Landmark Tower
345 St. Peter Street
Saint Paul, Ivfinnesota 55102
Attention: Kenneth R Johnson, President
Re: Relocation of Plastics, Inc. to CTTGO Site
Dear Mr. 7ohnson:
Exhibit C
Paul E Pender 011- y 1`�
YcePresident-Flnanoe �
and Treasurer
This letter of intent is intended to evidence the intent of Northern States Power Company
("NSP") to purchase from the Port Authority of the City of Saint Paul (the "Port Authority") a
t�able Port Authority revenue bond in the initial principal amount of $2,000,000 (the "Bond") on
the terms and conditions generally outlined below:
Terms of Bond: The Bond will be issued on a taxable basis in the initial principat amount of
$Z,000,000. The Bond will beaz interest at the rate of 4% per annum, and
will be amortized over a period of 15 yeazs. Additional terms and
conditions of the Bond shall be subject to further discussions and
documentation between the Port Authority and NSP.
Purpose of Bond: The Port Authority shall use proceeds derived from the sale of the Bond to
NSP to pay costs incurred in connection with the relocation of Plastics,
Inc. ("Plastics") to the "CITGO site" in the City of Saint Paul, including
specifically, at its sole discretion, but without limitation, the costs of
acquiring the land comprising the CITGO site (the "ProjecP'); the cost of
preparing that site for Plastics' use in constructing a proposed 370,000
square foot facility; and any other costs and expenses incuaed by the Port
Authority in connection with the proposed relocation of Plastics to the
CITGO site.
Security for The Port Authority shall grant, or shall cause to be granted, the following
Repayment of security to NSP as security for repayment of the Bond:
Bond:
a lien against all taac increments generated by the Project which is
subordinate only to the general obligation tax increment bonds which
are expected to be issued in the approximate principal amount of
$6,150,000 to finance additional costs to be incurred in connection
with the relocation of Plastics;
C-9
o��-ll(�
a first lien on the private loan payment that Plastics has agreed to make
to the Port Authority in an amourn equal to $1.98 per sqvare £oot
minus real estate tases actually paid with respect to the Project. [For
illush purposes only, it is currently anticipated that real estate
taxes will be payable with respect to the Project at $1.48 per square
foot, which would yield a private Ioan payment made by Plasrics in an
amount equal to $.50 per square foot. Further, since Plastics has
entered into a letter of irnent with the Port Authority pursuant to which
it has agreed to construct a facility of at least 370,000 squara feet, the
private loan payment, calculated at $.50 per square foot, would be
$185,000 per year];
• a first lien against any genalties payabie to the Port Authority by
PSastics in connection with the violarion of the Worl�orce
Development Agreement which Plastics has agreed to enter into in
connection with its relocation to the CTTCrO site.
Timing: It is anticipated that the Bond will be issued, by the Port Authority, and
purchased by NSP, no eazlier than January 1, 199$ and no later than
June 30, 1998. It is the intention of both the Port Authority and I3SP that
this Bond will not be issued until necessary to provide funds for the
relocation of Plastics, after all other available sources of funding have been
identified and committed.
Additional As a condition to NSP's purchase of the Bond, NSP and Plasdcs must
Conditions have entered into an agreement incIuding the foliowing conditions:
Precedent:
• a requirement that Plastics purchase all electrical power and natural gas
from NSP until the initially established maturity date of the Bond, or
such earlier date on which the principal and interest on the Bond have
been fully repaid;
in the event of the full payment of the Bond prior to the initial maturity
date of the Bond, assurance by Plastics that NSP has the right of first
refusal to any bona fide offer to provide electric and natural gas service
to the Plastics' Saint Paul facility wtuch is made by another energy
supplier.
This Letter of Intent is not a legal binding obligation of either NSP or the Port Authority, but is
merely evidence of the intent of both parties to negotiate in good faith to the issuance, sale and
purchase of the Bond on the terms described herein. NSP's obligations are subject to completion
of negotiations as to the terms of the Bond and the related security and energy supply agreements,
prior approval of those agreements by 23SP's Board of Directors or its designees, and, to the
C-10
������
exte� applicable, to prior approval of the energy supply agreements by tfie Mmnesota Public
T3tilities Commission.
l�ISP understands NSP understands that the undertaking by the Port Authority to issue the Bond
descnbed above is subject to prior approval of the Bond, as well as all other aspects of the
proposed relocation ofPlasrics to the CITGO site, by the Board of Commissioners of the Port
Authority, and may further be subject to approval, in whole or in part, by the City Council of the
City of Saint Paul and the Board of Comsnissioners of the Housing and Redsvelopment Authority
of the City of Saint Paul, IvTinnesota.
NORTF�RN STATES POWER COMPANY
BY� , r,,��/ �/y! ��,_�
�aul E. Pender
�ce President - Finance and Treasurer
ACKNOWLEDGED AND AGREED:
The Port Authority of the City of Saint Paul does hereby accept the terms outlined in the
foregoing letter of intent, subject to the requirement that such terms be approved by the Port
Authority Board of Commissioners and, if necessary, by the City Council of the City of Saint Paul
and the Board of Commissioners of the Housing and Redevelopment Authority of the City of
Saint Paul, Mannesota.
PORT AUTHORITY OF TI� CITY OF SAINT
FAUL
By:
It resident
C-11
��.���Y
PLASTICS
PROJECT FINANCING
SOURCES:
Initiat G.O. Bond Proceeds
Note to Psivate Lendes
Science Museum Budget
PED/Port
G.O. Bond Summary:
First Lien TIF Bonds
Subordinate Lien TIF Bonds
Total
USES:
Payments to Plastics:
Originai Plastics Site
Incentive for relocation of Eagan Jobs
Occupancy cost reduction
Eagan lease subsidy
Total payments to Plastics
Devefopment Costs:
Geo-tech correction
Environmental remediation
Site improvements
Ail other costs
Total development costs
Tota! Project Uses
$ 13,800,000
2,000,000
2,700,000
1,000,000
$ 19,500,000
Gross Cost of Issuance
Amount & Cap Interest
Exhibit D
Project
Proceeds
$ 6,655,000 $ 580,Q00 $ 6,075,000
7,995,0�0 269,00� 7,726,000
$ 14,650,000 $ 849,000 $ 13,801,000
$ 2,700,000
1,200,000
2,055,0�0
421,000
$ 6,376,000
$ 5,050,000
2,600,000
2,977,000
2,497,000
$ 13,124,000
$ 19,500,000
Financing Assumptions:
1. Creation of a 25 year redevelopment district.
2. No damages are paid to Science Museum due to delay in site delivery beyond August 15, 1998.
a�� -1 lt�
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Public Pumose
1. Prevent Plasfics from Moving its Operations to Another State or
1Vlunicipality.
One of the primary goals of the Port Authority is to assist in the creation
and retention of livable wage manufacturing jobs in Saint Paul through
land redevelopment, business financing, and business services activities.
Plastics has been a long-tezm viable Saint Paul manufacturer which has
provided jobs to a substantial number of Saint Paul residents. This Project
will retain this company's existing jobs and wi11 afford the opportunity for
additional jobs to be relocated to the City through consolidation of
company operations. The redevelopment of the Citgo Site will capture
this expansion and will prevent both the direct loss of taY base and jobs in
Saint Paul and the opportunity cost of additional jobs provided through
company consolidation.
2. Provide Job Opportunities for Saint Paul Residents.
Plastics, Inc. wi11 be employing 370 individuals at this new location (I50
jobs will be coming from the Eagan facility). They will enter into the Port
Authority's Workforce Agreement that commits them for 10 yeazs to pay no
less than $9.15 per hour and maintain a workforce of at least 30Q. Failing to
meet these goals, Plastics, Inc. is subject to cash penalties that aze capped at
$120,Q00 per year.
The Port Authority operates a customized job training prograni (The
Employment Connection) which recruits neighborhood residenu and trains
them based upon the specific hiring needs of expanding companies. The
Employment Connection will be used to assist Plastics with its new hires as
the company continues to grow.
3. To Redevelop Unused, Underused, Inappropriately Used, or
Infrequently Used Property.
The Citgo Site has been underufilized for many years. The majority of the
azea comprising the site has been used most recently as a petroleum tank
farm, which has been abandoned. The tanks aze unused, empty, and
substandazd. This industrial (I-3) zoned properry has been contuninated and
has had a dehimental effect on the surrounding azea "Lhis Project will solve
several problems at once (soil contamination, blighting use, underutilizarion
of land, neighborhood eyesore, minimat jobs) and will greafly enhance the
site with its highest use, hundreds of jobs, massive increase in taa� base, and
a well landscaped site that will enhance the azea environment.
E-1
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4. Espand the Industrial Tag Base of the City of Saint PauL
It is expected that the ta�able market value of parcels in the District will
increase by approximately $10,400,000 once the Project is placed in service.
This value will come from the development of an approxunately 370,000
square foot manufacturing and distribirtion facility with an average
construction value of $33.'73 per square foot The taxabie value of the new
facility is assumed to be at 90% of the construction cost less the existing
base of $837,OQ0.
5. Facilitate the Eapansion and New Development of the Science Museum
The relocation of Plastics will allow for the major eapansion of the
renowned Science Museum. Underutilized urban core land adjacent to the
existing Plastics facility will be redeveloped with a culiural facility that wili
provide jobs and contribute to the economic, educational, and entertainment
vitality of the City and the Region.
6. Assist the City of Saint Paul Obligations Under Science Museum
Development Agreement
The City of Saint Paul is required to acquire all lands, including the existing
Plastics facility at the Chestnut Site, needed for the Science Museum project
as a condition of receiving a$30,000,000 grant from the State of Minnesota
for the Science Museum pro}ect The City's resolution on 23ovember 6,
1996, authorized this acquisition.
7. Hazardous Substance ltemediation
The Port Authority will incur remediation costs at the Citgo Site as specified
in a Response Action Plan to be approved by the MPCA. These activities
would eliminate areas of hazardous substances in the designated hazardous
substance sites.
E-2
Exhibit F ��_
{
Council File #
Green Sheet #
RESOLUTlON
CITY OF SAINT PAUL, MINNESOTA
Presented
Refezred To
Committee Date
RESOLUTION APPROVING THE TAX INCREMENT FINANCING PLAN
FOR THE PLASTICS, INC. REDEVELOPMENT TAX INCREMENT
FINANCING DISTRICT AND HA7.ARDOUS SUBSTANCE SUBDISTE2ICT,
AND AUTHORIZING (A) THE EXTENSION OF CROSBY LAKE PROJECT
GEMINI (B) THE ISSUANCE BY THE PORT AUTHORITY OF $2,000,000
SUBORDINATED TAX INCREMENT BONDS, AND (C) THE
ESTABLISHMENT OF Tf� PLASTICS PROJECT AS A"PRIORITY
PROJECT" FOR PURPOSES OF APPLYING FOR CERTAIN GItANT FUNDS,
ALL IN CONNECTION WITH THE RELOCATION OF PLASTICS, INC. TO
THE CITGO SITE
BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota, as follows:
Section 1. Reci s.
1.01. It has been proposed that the Port Authority of the City of Saint Paul (the "Port
Authority") establish the Plastics, Inc. Redevelopment Tas Increment Financing District (the
"DistricY') and a Hazardous Substance Subdistrict therein (the "HSS") and, in connection therewith
that the City of Saint Paul (the "City") approve the TaY Increment Financing Plan relating thereto,
all pursuant to and in accordance with Minnesota Statutes, Secrion 469.174 tlu 469.179,
inclusive; and Minnesota Statutes, Sections 469.048 through 469.068, inclusive; and
1.02. The Port Authority has investigated the facts and has caused to be prepared a
proposed Ta�c Increment Financing Pian (the "Plan") for the District and the HSS.
1.03. On November 6, 1996, pursuant to Council File No. 96-1376, the City Council
approved the execution of a Development Agreement with the Science Museum of Minnesota (the
"SMM") which zequires the City to acquire property which is necessary for the SMM's new
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riverfront facility. Plastics, Ina ("Piastics") is currenfly located on a portion of such property (the
"Chestnut Site") and needs to be relocated in order for the SMM project to move forward.
1.04. It has been proposed that the approximately 26-acre site located approximately one
mile to the west of downtown Saint Paul at Shepard Road and 7ames Avenue (the "Citgo Site") be
redeveloped for purposes of building an approximately 370,000 square foot manufacttu�ing and
distribution facility to be purchased by Plastics upon demolition of their current facility at the
Chestnut Site. The acquisirion, cleazance, remediation and improvement of the Chestnut Site and
the Citgo Site is collectively refened to herein as the "Project".
1.05. It has been proposed that the City contribute approximately $3,200,000 ($2,700,000
of which is already budgeted as part of the Science Museum Project) to the costs of the Project by
paying certain of the costs associated with the transfer of Plastics from the Chestnut Site, and its
facility in Eagan, to the new facility at the Citgo Site.
1.06. The Citgo Site is not presently located witivn the Crosby Lake Project Gemini
Zone. It has been proposed that a noncontiguous expansion of the Crosby Lake Project Gemini
Zone be approved in order to encompass the Citgo Site, and to provide electric utility service to
Plastics at a reduced rate.
1.07. It has also been proposed that: (a) the Port Authority issue bonds (the "Bonds") in a
principal amount which will produce net available funds to be applied to costs of the Project of at
least $13,800,000, but in any event not to exceed the principal amount of $14,650,OOQ to finance a
portion of the costs of the Pro}ect, including specifically the costs of acquisition, cleazance,
remediation and improvement of the Citgo Site, which bonds aze to be secured by the general
obligation of the City which will, in tiun, be secured by a first lien piedge of tax increments with
respect to approximately $6,60Q000 of the Bonds, and, with respect to the remainder of the Bonds
will be secured by a lien on tax increments subordinate to, in order of priority, such first lien
pledge, the payment of the NSP Bonds (as defined herein), and the payment of administrative
charges in connecrion with the District; (b) the Council consider adopting an ordinance authorizing
the issuance of said Bonds by the Port Authority under Minnesota Statutes, Section 469.060, and
pledging the City's general obligafion thereto; and (c) the Port Authority issue its $2,000,000
subordinated taac increment bonds (the "NSP Bonds") which will be secwed by a second lien on ta�c
increments, in order to finance additional costs of the Project.
1.08 The Port Authority andlor the City, as applicable, have performed a11 aciions required
by law to be performed prior to the establishment of the District and the HSS and the adoption of
the Plan relatang thereto, including, but not Innited to, notification of the County Commissioner an
whose district the District is located, Ramsey County and School District 230. 625 having ta�ng
jurisdiction over the properiy to be included in the District and the HSS, and the hoiding of a public
hearing after published notice as required by law.
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Section 2. Findings by.,the City for the Ap�roval of the TaY Increment Financing.,Plan for
the Plastics Inc Redevelo�ment Taat Increment Financin� District and the
Hazardous Substance Subdistrict therein.
2.01. The Council hereby finds that the District is a redevelopment district pursuant to
Minnesota Statutes, Section 469.174, Subd. 1Q, pazagraph (a), clause (1), and the ASS is a
hazardous substance subdistrict pursuant to the Minnesota Statutes, Section 469.175, Subd. 7. The
Port Authority shail make the findings necessary to qualify the HSS.
2.02. The Council hereby finds that the Dis�ict and the HSS, and the approval of the Plan
relating thereto, aze intended and, in the }udgment of this Council, the effect of such actions will be,
to provide an impetus for redevelopment in the District and to further the public purposes and
accomplish certain objectives as specified in the Plan.
2A3. The Council further finds that the proposed development or redevelopment in the
Dishict, in the opinion of the City, would not occ�tt solely through private invesiment within the
reasonably foreseeable future and that the increased mazket value on the site that could reasonably
be expected to occur without the use of ta�i increment financing (being $0) would be less than the
increase in the market value estimated to result from the proposed development (being
approximately $12,500,000) after subtracting the present value of the projected tax increments for
the maYimum duration of the District pernutted by the Plan (being approximately $8,500,000) and,
therefore, the use of tax increment financing is deemed necessary; that the Plan conforms to the
general plan for the development or redevelopment of the City as a whole; and that the Plan will
afford maxiumm oppornurity consisient with the sound needs of the City as a whole, £or the
development of the District by private enterprise.
2.04. The City does i�ot elect to compute the taac increments in accordance with Minnesota
Statutes, Section 469.177, subd. 3, clause (b), meaning that tax increments will be determined
before the application of the fiscal disparities provisions of Minnesota Statutes, Chapter 473F.
2.05. The City elects to make a qualifying local contribu6on in accordance with
Minnesota Statutes, Section 2731399, Subd. 6(d), in order to qualify the District for exemption
from state aid losses set forth in Section 273.1399.
2.06. The Council fiuther finds, declares and determines that the City made the above
find'angs stated in this Section 2 and has set forth the reasons and supporting facts for each
determination in writing, attached hereto as Attachment A.
Section 3. Ap�roval of the Plan. The Plan for the Dishict and the HSS is hereby approved
and adopted, and shall be placed on file in the office of the City Clerk.
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Section 4. Acknowle ent Re,�ding T� Increments. The Council acknowiedges that
the County Auditor will forwazd all taY increments from the District and the HSS to the Port
Authority.
Section 5. Approval of Project Gemini for District. The Crosby Lake Project Gemini Zone
is hereby expanded to encompass the azea of the District.
Section 6. 9rdinance Authorizing Issuance of Bonds. City staff is hereby authorized and
d'uected to submit an ordinance to the Council for its consideration, which authorizes the issuance
of the Bonds as described in paragraph 1.07 above.
Section 7. ��proval of Subordinated Tax Increment Bond .
7.01. Laws of Minnesota 1976, Chapter 234, 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, by resolution adopted in accordance with 1aw.
7.02. The Council hereby approves the issuance of the NSP Bonds by the Port Authority
for the purposes described herein and in the Plan, the �act details of which, including but 1'united
to, provisions relating to maturity and interest rate, are to be deternuned by ihe Port Authority, and
the Council hereby authorizes the issuance of any additional bonds or notes (including refunding
bonds or notes) by the Port Authority found by the Port Authority to be necessary for carrynig out
the purposes for which the NSP Bonds are issued.
Section 8. "Priority ProjecP' far DTED and MIF Funds. The Council hereby establishes
this Project as a"Priority Project" for the purposes of applying for g�ant funds from the Department
of Trade and Economic Development and the Minnesota Investment Pund for funds to finance the
Project, and the Council hereby approves in concept the application to the State of Minnesota for
$500,000 in Minnesota Investment Funds for this Project.
Section 9. Ratification of Prior Action . The prior actions of the City staff and Port
Authority staff in connection with the prepararion of the Plan, the distribution of the Plan to the
County and School District, and the publicafion of the notice of public hearing, are hereby ratified
and confirmed.
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.�, � .
RESOLUTION #
The reasons and facts supporting the findings for the adoption of the Tax Inerement Financing Plan (the
"Pian") for the Plastics, Inc. Redevelopment Ta�c Increment Financing District (the "District") as required plusuant
to Minnesota Statutes, Secrion 469175, Subdivision 3 are as follows:
1. Finding that the District is a redevetopment district as defined in Minnesota Statutes, Section 469.174,
Subd. 10, paragraph (a), clause (1).
The District consists of contiguous pazcels. The totai square footage of the District is approximately
1,143,000 square feet, and, and 70% of that number is 80Q100 square feet. The Citgo parcel within the Dishict is
875,269 squaze feet and is "occupied" by buildings, streets, utilities or other improvements, because at least 15%
(131,290 square feet) of the pazcel is covered by improvements (including above ground oiUgas storage tanks).
There are buildings in the District (_ of them storage tauks), (being _%) of which aze structurally
substandard because: [to be provided for each building or tank].
2. Finding that the proposed development, in the opinion of the Council, would not occur solely through
private imestment within the reasonably foreseeable future and, therefore, the use of tax increment financing is
deemed necessary and thctt the increased market value of the site fhat could reasonably be expected to occur
without the use of tar increment financing would be less than the increase in the market value estimated to resutt
from the proposed development after subtracting the present vatue of the projected tar increments for the
maximum duration of the district permitted by the ptan.
Due to the excessive costs for the clearance, grading, and soil and poilution remediation of the Citgo Site, this
project is feasible only through assistance, in part, from tas increment financing. The proposed development
consists of an approximately 370,000 square foot manufacturing and distriburion facility, the increase in mazket
value of which is estimated to be approximately $12,500,000. The value of development on the Citgo Site
expected to occur without the use of tax increment financing is $0, which is less than the estimated increase in
mazket value expected to be created by the proposed project (approximately $12,500,000) minus the present value
of the projected taY increments (appro�xnately $8,500,000).
3. Finding that the Tax Increment Financing Plan conforms to the general plan for the deveZopment or
redevelopment of the municipality as a whole.
The Citgo Site will be appropriately zoned for the Project. The proposed redevelopment is consistent with the
Saint Paul Mississippi River Corridor Pian which was originally adopted in 1981, and amended in 1987, and
concluded that this site should be developed with labor-intensive industrial uses.
ia�sr,�
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4. Finding that the Tax Increment Financing Plan for the District will afford maximum opportunity,
consistent with the sound needs of the City as a whole, for the deveZopment of the District by private enterprise.
The establishment of the District will result in the facilitarion of redevelopment in the azea of the City covered by
the District, will assist in the development of the new Science Museum of Minnesota, and will result in the
retention and creation of jobs for residents of the City.
�l��a`FsI'� �t.l��
� •. ��___
�___
�___
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. :. . ����
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iiii'����'�
����
Adopted by Council: Date
Adoption Certified by Council Secretary
�
Approved by Mayor: Date
�
Requested by Department of:
�
Form Approved by City Attomey
�
Approved by Mayor for Submission to Council
By: _
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Exhibit G
r a7 _ ��VY
SAINT PAUL PORT AUTHORITY
TAX INCREMENT FINANCIl�TG PLAN FOR THE
PLASTTCS, INC. REDEVELOPMENT AND
HAZARDOUS SUBSTANCE SUBDISTRICT
TAX INCREMENT FINANCING DISTRICT
Introduction
The Science Museum of Minnesota (the "Science Museum") has identified a site for
consuuction of its new facility which necessitates the acquisiiion and demolition of the
manufacturing and distribution facility at the interse�tion of Chestnut Street and Ryan Avenue (the
"Chestnut Site") owned and operated by Plastics, Inc., a division of Anchor Hocldng ("Plastics").
Plastics currenfly has 200 employees at the Chestnut location, which is one of three operated by it
in the Twin Cities metro azea. Many of these employees are St. Paul residents. Staff from the Saint
Paui Port Authority and the Saint Paul Deparhnent of Planning and Economic Development have
worked closely with representatives from Plastics to identify a suitable St. Paul location for
relocating the Plastics facility. The site to be redeveloped for Plastics is the approximately 26-acre
underutilized peh�oleum tank farm and raiiroad spur track site located approximately one mile to the
west of downtown Saint Paul at Shepazd Road and James Avenue ("Citgo Site"). Citgo is the
current primary properry owner, and two small adjacent properties owned by Northem States
Power Co. (NSP) and the Union Pacific Railroad are also part of the District.
The acquisition, clearance, remediation, and improvement of the Citgo Site is referred to herein as
the "Project". T'he Port Authority's goal in undertaking this Project and creating an industrial
development district is to provide for the maximum job creation and retention and tax base possible
in St. Paul.
Creation of Redevelopment Tax Increment District; Statutory Authority
This tax increment plan relates to the creation, under Minnesota Statutes Section 469.174,
Subd. 10, of the Plastics, Inc. Redevelopment Taat Increment Financing Dishict (the "District"), and
the possibie creation within the Dishict of a Hazardous Substance Subdistrict (the "HSS"), pursuant
to Section 469.175, Subd. 7.
Need and Public Purpose
The Citgo Site
The Project wiil provide land necessary for Plastics to relocate and consolidate its Saint
Paul and Eagan operations an Saint Paul, and in doing so make way for the conshuction of the
Science Museum at the Chestnut Site. The City's tas base will be increased by the construction of
an approximately 370,000 square foot new manufacturing and distribution facility. Over 200 jobs
will be retained in, and 150 jobs relocated to, the City as a result of the Project for a total of 350
41-���Y
jobs in the new facility. The development of the Citgo Site will also be a catalyst for the creafion of
additional job oppommities and tax base enhancements at the various other smaller sites located in
the Randolpt�/West Seventh atea.
The Citgo Site is the one acceptabie site in St. Paul out of the several proposed to Plastics,
due to site configuration and tiuZing issues. However, the Citgo Site, as is, is not suitable for
construction of the Plastics facility. Significant site and geotechnical improvements and pollution
remediation is required on this "brownfield site" before the faeility can be constructed.
The existing Plastics land and building at the Chesmut Site has an estunated market value
of $986,700, as valued by the County. The new Plastics facility at the Citgo Site will have a
construction cost of appro�mately $12,480,000.
The existing land use acuvities at the Citgo Site aze blighting and constitute an
underutilization of the land, are incompatible with the surrounding azea, and provide very m;nimai
job opportunities. Private development of the Citgo site has not been possible for a variety of
reasons. These reasons include excessive property costs for cleazance, grading, and soil conection
and pollution remediation. All of these conditions have resulted in a lack of private investment in
ttris area. As a result, the properiy has not provided employment opportunities and has not
contributed to its full potential to the tax base and general economy of the City, the School District,
the County, and the State.
It is necessary that the Saint Paul Port Authority exercise its statutory port authority powers
to develop, implement, and finance a program designed to encourage, ensure, and facilitate the job
and economic development of the properiy. Ttus redevelopment Project will further accomplish
the public purposes specified herein.
The Chesmut Site
The City is assisting in the redevelopment of the land encompassing the Chestnut Site by
facilitafing the development of the Science Museum's new river&ont facility in this area. The City
of Saint Paul on November 6, 1996, authorized the execution of a Development Agreement with
the Science Museum to undertake an appro�mately 300,000 square foot museum expansion and
800 caz parking ramp to bring approximately 1,500,000 museum visitors to the new river&ont
museum. The authorizing resolution authorized the City to purchase the former West Publishing
pazking lot and the existing Plastics property at the Chestnut Site as well as a number of smaller
parcels as part of this $90 plus million project. Addirionally, the Agreement directs the City to
construct Eagie Pazkway which will connect Shepazd Road to Kellogg on the westem edge of the
new Science Museum project. The needed right of way is through a portion of the existSng Plastics
facility at the Chestnut Site.
The mui&ple public purposes of providing for a major cultural facility development, job
creation and retention of vital manufacturing positions, blight removai, redevelopment of
underutilized land, and neighborhood azea enhancement will be achieved by this Project.
G-2
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Ob�ectives of the Port AuthoritX Rggarding Improvements in the Plastics Project Area
1. Prevent Piastics from Moving its Operations to Another State or
Municipality.
One of the primary goals of the Port Authority is to assist in the creation and
retention of livable wage manufacturing jobs in Saint Paui ttuough land
redevelopment, business financing, and business services activities. Plastics has
been a long-term viable Saint Paul manufacturer which has provided jobs to a
substantial number of Saint Paul residents. This Project will retain this
company's existing jobs and will afford the opportunity for additional jobs to be
relocated to the City through consolidation of company operations. The
redevelopment of the Citgo Site will capture this expansion and will prevent both
the direct loss of tax base and jobs in Saint Paul and the opportunity cost of
addirional jobs provided through company consolidation.
2. Provide Job Ogportunities for Saint Paul Residents.
Plastics, Inc. will be employing 350 jobs at this new location (150 jobs will be
coming from the Eagan facility). They will enter into the Port Authority's
Workforce Agreement that commits them for 10 years to pay no less than $4.15 per
hour and maintain a workforce of at least 300. Failing to meet these goals, Plastics,
Inc. is subject to cash penalties that are capped at $120,000 per yeaz.
The Port Authority operates a customized job training program (The Employment
Connection) which reeruits neighborhood residents and trains them based upon the
specific hiring needs of expanding companies. The Employment Connection will
be used to assist Plastics with its new hires as the company continues to grow.
3. To Redevelop Unused, i3nderused, Inappropriately Used, or Infrequently Used
Property.
The Citgo Site has been underutilized for many years. The majority of the area
comprising the site has been used most zecently as a petroleuxn tank fann, which has
been abandoned. The tanks aze unused, empty, and substandazd. This industrial (I-
3) zoned properiy has been contaminated and has had a detrimental effect on the
surrounding azea. This Project will solve several probiems at once (soil
contamination, blighting use, underutilization of land, neighborhood eyesore,
minimal jobs) and will greatly enhance the site with its highest use, hundreds of
jobs, massive increase in tax base, and a well landscaped site that will enhance the
area environment.
G-3
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4. Egpand the Industrial Tax Base of the City of Saint PauL
It is expected that the taYable market value of pazcels in the District will increase by
approximately $10,300,000 once the Project is placed in service. This value will
come from the development of an approximately 370,000 square foot
manufacturing and dishibution faciliTy with an average construction value of $33.73
per square foot. The increase in taxable value of the new facility is assumed to be at
90% of the construction cost less the existing base of $960,000.
5. Facilitate the Egpansion and New Development of the Science Museum
The relocation of Plastics will ailow for the major expansion of the renowned
Science Museum. Underutilized urban core land adjacent to the eacisting Plasfics
facility will be redeveloped with a culrival facility that will provide jobs and
contribute to the economic, educational, and entertainment vitality of the City and
the Region.
6. Assist the City of Saint Paul Obiigations Under Science Museum Development
Agreement
The City of Saint Paul is required to acquire all lands, including the existing Plastics
facility at the Chestaut Site, needed for the Science Museum pro}ect as a condition
of receiving a$30,000,000 grant from the State of Minnesota for the Science
Museum project. The City's resolution on November 6, 1996, authorized this
acquisition.
7. Hazardous Substance Remediation
The Port Authority will incur remediation costs at the Citgo Site as specified in a
Response Action Plan to be approved by the MPCA. Ttxese activities would
eliminate areas of hazardous substances in the designated hazardous substance sites.
Classification of the District.
The Port Authority and the City of Saint Paul, in determining the need to create a tax
increment financing district in accordance with Section 469.174, fmd that the District is a
redevelopment dishict pursuant to Minnesota Statutes, Section 469.174, Subd. 10, because parcels
consisting of 70% of the azea of the District aze occupied by buildings, streets, utilities or other
improvements and more than 50% of the buildings aze structurally substandazd to a degree
requiring substantial renovation or clearance. This finding is based upon the following facts: (.i.)
the total squaze footage of the Distdct is appro�nately 1,143,000 square feet, and 7Q°/a of that
number is 800,100 square feet; (ii) one pazcel within the Aistrict (the "Citgo" pazcel) is 875,269
square feet; (iii) the Citgo pazcel is "occupied" by buildings, streets, utilities or other improvements
because at least 15% (131,290 square feet) of the parcel is covered by improvements (including
G-4
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above-ground oiUgas storage tanks); (iv) at least 50% of such storage tanks aze functionally or
structurally defective and will be removed. Those tanks, which were installed on the site in
appro�mately eaziy 1960, were emptied and abandoned in the eazly 1990's, and have not been used
since.
In the event an HSS is created, prior to certification of the HSS, the Port Authority will also
find that the HSS is a hazazdous substance subdishict pursuant to Mimiesota Statutes, Section
469.175, Subd. 7.
In addition, the District meets the requirements of a redevelopment district pursuant to
Minnesota Statutes, Section 469.176, Subd. 4(j); because: at least 90% of the revenues derived
from tax increments from the District will be used to finance the cost of correcting the condirions
that allowed designarion of the District as a redevelopment district under Section 469.174, Subd. 10
described above, These costs, which aze estimated to be in excess of $10,000,000, include the cost
of acquiring properties in the District, site filling, grading and piling, and installarion of utilities,
roads, sidewaiks and pazking facilities for the site. Allocated admuristrative costs may also be
included in the qualifying costs. This total is more than 100% of the projected amount of the bond
issue ($6,655,000).
Descripfion of the Develo�ment Proeram for the Plastics Inc Redevelo�ment Pro�ect
The development program at the Citgo Site consists of the development of the Dishict to
provide a 37Q,OOQ square foot facility for use by Plastics in the District. This wili require acquiring
land, filling, grading, piling and compaeting the site, managing pollution remediation, incurring
financing related expenses and funding admuristrative funcuons, all as described in more detail
below:
1. Property Acquisition.
The approximate 26 acres of land at the Citgo Site will be purchased from Citgo,
Northern States Power Company and the Union Pacific Raikoad at an estimated
total purchase price of $88,000.
2. Polluted Soils Remediation.
Due to the historical uses of the Citgo Site as a petroleum tank farm and railroad
sput track, several pollutants are suspected in the soil. Remediation oversight cost is
anficipated to equal $2,600,000 at this time. This cost will be further defined when
additional testing is completed and a Response Action Plan (RAP) is approved by
the MPCA. The total cost will include legal advice, field testing, soil remediarion,
and MPCA activities.
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3. Installation of Site Improvements and IJtilities.
Site improvements will include demolition, engineering, street improvements,
utilities, fill, site grading, and landscaping. Total site improvement costs are
anticipated to equai appro�mately $2,977,000.
4. Geo-Technical Correction.
Geotechnical correction includes pilings at a total estimated cost of $5,050,000.
5. Contracts for Professional Services Essen6al to the Redevelopment Activifies.
Professional services will include land surveys and tifle work, real estate, legal, civil
engineering, geotechnical engineering, appraisals, and traffic engineering and
business park design. The total cost for professional services, other than bond
issuance costs, is estimated to be $9Q0,000.
6. Contingency
Project budget includes $1,508,000 for project contingencies.
7. Incur Costs and Expenses Connected With Financing Acrivifies.
Bond issuance costs plus other financing-related costs, including capitalized interest,
legal expenses, printing and underwniters discount, are anticipated to totai
approximately $1,164,000.
Descri_ption of Contracts Entered into at the Time of Preparation of the Plan
Section 469.175, Subd. 1(3), requires that a list of development activities that aze proposed
to take place as part of the Project for which contracts will be entered into at the time of the
approval of this plan, including the names of the parties to the contract, the activity govemed by the
contract, the cost stated in the contract, and the expected date of completion of that activity be listed
in the Plan; however, no contracts have been entered into at this time.
Descripfion of Other Types of Develanment Activities Which Can Reasonably Be Expected to
Take Place Within the Project Area
The end-user of the Citgo Site will be Plastics, Ina (a fifty-eight year old international
enterprise which manufactures glass and plastics containers) and its �liated companies, Anchor
Hocking and Newell Company. Activities in the District will include producfion, assembiy,
warehouse, distribution and attendant office space that lead to the creation and retention of living
wage jobs. A goal of this taac increment plan is to provide for the retention and relocation of at
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least 350 jobs, currentiy located in Saint Paul at the Chesmut Street Site, and in Eagan,
Minnesota.
Construction of the new Plastics facility is expected to commence in September, 1998. This
acrivity will be closely coordinated with that of the Science Museum site redevelopment, and will
take into account production process needs of Plastics.
Cost of the Proj.ect and Description of the Plastics. Ina Redevelogment Tax Increment
District.
The foilowing, as required by Secrion 469.175, Subd. 1(5), aze estunates of the (i) cost of
the Project, including aduiinistration expenses; (ii) amount of bonded indebtedness to be incurred;
(iii) sources of revenue to finance or otherwise pay public costs; (iv) the most recent net tas
capacity of taxable real property wittvn the taY increment financing district; (v) the estimated
captured net tas capacity of the ta�c increment financing district at completion; and (vi) the duration
of the tax increment financing district's existence.
1. Cost of the Project, Including Administrative Expenses.
The development cost of the Project is estimated at $13,123,000, plus administrative
chazges payable to the Port Authority in an amount up to 10% of the t� increment
receipts. Other costs of relocation, retention incentives, and occupancy cost
reductions aze $6,376,000, for a total project cost estimated at $19,500,000.
2. Amount of Bonded Indebtedness to be Incurred.
A. TaY Increment Bonds: The Port Authority shall be the issuer of one or more
series of tax exempt general obligation tax inczement bonds by the end of
the yeaz 1997 in the appro�mate gross amount of $6,655,000, wtuch after
allowing for capitalized interest and cost of issuance, result in net proceeds
of $6,075,000.
B. General Obli�ation Bonds: The Port Authority shall be the issuer of Cseneral
Obliga6on debt in an initial amount of approximately $7,995,000 million,
which will result in net proceeds of $7,725,000 to fund project costs. To the
eatent grant funds aze subsequenfly received, General Obligarion bonds
would be retired.
C. NSP Note: NSP wi111end $2,OOQ,000 to fund project costs. This loan wi11
beaz interest at 4% and will be amortized over 15 years. The loan will be
secured by a subordinate lien on t� increments and a loan payxnent to be
made by Plastics of up to $.50 per square foot.
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3. Sources of Revenue to Finance or Othernise Pay Public Costs.
The following aze the likely sources for funding the total Project, including the taac
increments which will be pledged to the bonded indebtedness:
A. Tax Inerements
T� increments from the redevelopment district, net of up to 10% for
adinuiishafive eacpenses, aze anricipated to equal $436,000 annually. If the
HSS is created, the addirional annual increment &om that subdis7ict is
anticipated to be approacimately $60,000 per year. All taY increments will be
first pledged to the payxnent of debt service on the $6,655,000 taY exempt
general obligation tax increment bonds, which after capitalized intezest and
cost of issuance generate $6,075,000 be used to pay qualifying project costs.
B. Pa�ment From Plasrics
Plastics has agreed to make a payment of up to $.50 per square foot, which
payment shall be pledged to the repayment of the NSP note described above.
C. City of Saint Paul & Saint Paul Port AuthoritX
The City of Saint Paul will fund an aggregate of $3,200,000 towazd the
Project, consisting of $500,000 for job relocation benefits and $2,700,000
for a rent abatement escrow and relocation of Plasucs.
The Saint Paul Port Authority will conhibute funds in the amount of
$SQ0,000 towazd the job relocafion incentive.
D. Investment income
Nominal investrnent eaziiings ate projected, the majority of which will be
utilized to fund project costs and capitalized interest on the bonds until taY
increments aze available to meet debt service on the bonds.
E. Pollution Funds
Poilution funds may be derived from the HSS, if it is created. Increments
from the HSS would support only that portion of the bonded indebtedness
amibutable to funding pollution remediation.
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4. The Most Recent Net Tax Capacity of Taxable Real Property Within the Taz
Increment Financing Distric�
At 7anuary 31, 1997, the total tax capacity of property parcels to be included in the
District was approximately $46,000. Of the $96Q000 total base market value,
$328,600, or 34% of the total, is attributabie to buildings, all of which will be
removed in connection with the redevelopment pursuant to this Plan. The $631,400
of mazket value attributabie to the Citgo, Union Pacific, and NSP land is assumed to
remain constant. The original tax capacity and tax rate aze calculated in accordance
with Minnesota Statutes, Section 469.174, Subd. 7 and Section 469.177, Subd. 1.
5. The Esfimated Captured Net T� Capacity of the Tax Increment Financing
District at Compiefion.
The new 370,000 square foot facility on the Citgo Site will have an aggregate
assumed estimated mazket value of $11,232,000. Applying a 3.40% tax capacity
rate results in estimated tax capacity of approximately $381,000 and a caphued net
taY capacity of $552,000 at January 2, 2001, the yeaz following expected completion
of construcdon of the new Piasrics facility. This captured t� capacity is calculated
in accordance with Minnesota Statutes, Secrion 469.174, Subd. 4 and 469.177,
Subd. 2.
6. The Original Tas Capacity and Captured Tax Capacity of the HSS
The original tax capacity of the HSS is $46,000. If incurred, remediation
expendiiures would exceed $46,000 and be deducted from the original tax capacity
resulting in the maxiinum caphxred tar, capacity allowed in the amount of $46,000.
7. The Duration of the Tax Increment Financing District's Existence.
The request for certification of the Dishict will be made in 1997. The first tax
increments are anticipated to be generated for taxes payable in the yeaz 2000. The
duraUOn of the District will run 25 yeazs from the first receipt by the Port Authority
of tax increments. Therefore, it is estimated that the Port Authority could collect tax
increments &om the District through the yeaz 2025. The maximum durarion of a
Hazardous Substance Subdishict is the lesser of (i) 25 years from the date additional
tax increment from the HSS is received, or (ii) the period necessary to recover the
costs of removal or remedial acrions specified in the development Response Action
Plan. The Port Authoriry does, however, reserve the right to decertify the District
and the HSS prior to the legally required date.
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Alternate Estimates of the Im�act af the Tax Increment Financing on the Net Tax Capacities
of All Taxing Jurisdictions.
The taYmg jurisdictions in which the District is located in whole or in part ate as foilows:
a Independent School Distriet #625, whose boundaries are cotemunous with those of
the City of Saint Paul.
b. The County of Ramsey, the total market value of which the City of Saint Paul
contributes approxixziately 45%.
c. The Housing and Redevelopment Authority of the City of Saint Paul, whose
boundaries aze cotemunous with those of the City of Saint Paul.
d. The Saint Paul Port Authority, the requesting authority, whose boundaries aze
coterminous with those of the City of Saint Paul and whose powers to levy and use
property taaces are limited.
e. Metropolitan authorities, such as the Meh�opolitan Council, Meh�opolitan Airports
Commission, Metropolitan Waste Control Commission, and the Metropolitan
Mosquito Control District. Of these, only the Metropolitan Council and the
Metropolitan Mosquito Control District currently levy taues on real estate.
The Port Authority is required by Minnesota Statutes Section 469.175, Subd. 1(a)(6) to
make statements relative to the altemate estimates of the impact of the tax increment financing
on the net tax capacities of all tasing jurisdictions in which the ta�c increment financing district is
located in whole or in part. For purposes of one statement, which is made in Statement A below,
the Port Authority shall assume that the estimated captured net t� capacity wouid be availabie to
the taYing jurisdictions without creation of the district. For purposes of the second statement,
made in Statement B below, the Port Authority shall assume that none of the estimated captured
net tax capacity would be available to the tasing jurisdictions without creation of the district.
Statement A.
Under the assumption that the estimated captured net tax capacity wouid be available to the taxing
jurisdictions without crearion of the District, creation of the District will serve to deny these tasing
jurisdictions the t�es from the captured net t� capacity in the amount estimated above under the
section entitled "The Esrimated Captured Net Tax capacity of the tax increment financing
District at Completion.". In addition, the ta�ces on the base value would also be lost in the event
the HSS is created as described above under the section enfifled "The Original Tax Capacity and
Captured Tax Capacity of the HSS". However, the demolition and cleazance of the Plastics
facility to make way for the Science Museum project would go forwazd without the creation of the
District, and the current Plastics facility at the Chestnut Site would be removed from the ta�c rolls in
any event.
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Statement B.
The Port Authority believes that none of the estimated captured net ta�c capacity would be available
to the taxing jurisdictions without creation of the District due to the expense of getring the Citgo
Site to a state in which it wouid be conducive to the generation of such increased value. In
particular, without creation of the District, Plastics would not be relocating to the Citgo Site.
Assiiming this to be true, the tasing jurisdictions would continue to receive the same amount of
taxes as they have currently been receiving based on the current net tax capacity of the District as
set forth above under the section entifled "The Most Recent Net Tax Capacity of Taxable Real
Property Within the Tax Increment Financing District", except for the demoliuon of the
Plaskics facility which would occur with or without crearion of the District. Once the taY increment
dishict terminates in 2025, the taxing jurisdictions will receive the taxes that they have received in
the past from the Citgo Site.
Studies and Aualysis Used to Determine Need for Tax Increment Financing
In Resoluuon No. adopted by the Port Authority on, [ October 28. 19971 and in
Resolution No. adopted by the City on [September 24. 19971, the Port Authority and the
City have deternuned on the basis of data collected and presented by Port Authority and City staff
that the proposed development or redevelopment of the Citgo Site wouid not reasonably be
expected to occur solely through private inveshnent within the reasonably foreseeable future, and
that the increase in the mazket value of this site that could reasonably be expected to occur without
the use of tas increment financing would be less than the increase in the market value estimated to
result from the proposed development after subtracting the present value of the projected tax
increments for the maximuxn duration of the district permitted by the plan. Any minimat private
investment that might occur without public redevelopment ac6viry would provide significantly less
than the increase in the mazket value estimated to result from the proposed Plastics development.
The studies and analyses used to make the determination that the proposed development
would not reasonably be expected to occur through private investment within the foreseeable
future, and therefore the use of tax increment is deemed necessaty, aze as follows:
• The Citgo Site is an industrial Brownfields site, a blighted, underutilized,
contaminated site that necessitates public redevelopment intervention in order to be
made marketable for private sector development that generates an acceptable number
of jobs and increased tax base.
• The Citgo site presents significant development challenges aside from contaminarion
because the site needs significant fill and pilings, grading, and infrastructure
development, unlike buildable sites elsewhere in the marketplace that do not require
public redevelopment intervention prior to construction.
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• The Saint Paul Mississippi River Corridor Plan, which was originally adopted in 1981
and amended in 1987, concluded that this site should be developed with labor-
intensive industrial uses.
Identificafion of All Parcels to be Included in the District.
Attached hereto in Appendix A is a list of the Property Identification Numbers for all
properties to be included in the District, a map showing the Project azea (the area of the Industrial
Development District to be created by the Port Authority), the District and the e�sting properties,
and a legai description identifying the boundaries of the District.
Hazardous Substance Subdistrict
In the event the HSS is created, certification of the HSS wiil allow taxes attributable to the
base value of the District to be used to reimburse or pay a11 or a portion of the pollution testing and
remediarion costs. As mentioned above in the section entitied "The Original Tax Capacity and
Captured Tax Capacity of the HSS", the HSS would cause taxes on the base value of the Dishict
to be lost until such time as the poliution costs are satisfied. Total taxes payable in 1997 were
appro�mately $66,000. As mentioned above, a Response Acrion Plan for the Citgo Site will be
completed and submitted to the MPCA for approvai prior to certification of the HSS. If an HSS is
created, the Port Authority would make the necessary finding that the development would not
reasonably be expected to occur solely through private investment and taY increment otherwise
available from the District and that the use of HSS was, therefore, deemed necessary.
Attached hereto as Append� B is a list of the Property Identification Numbers for all
properties to be included in the HSS, a map showing the HSS and a legal description identifying the
boundaries of the HSS.
District Administration and Annual Disclosure.
Admuristration of the District will be the responsibility of the Port Authority, acfing on
behalf of the Ciry of Saint Paul. The resolurions of the City and the Port Authority approving and
creating the District wiil direct the County to forward all tax inerement from the District to the Port
Authority. Tax increments will be deposited into interest bearing accounts sepazate and disiinct
from other funds of the Port Authority. Tax increments will be used only for acrivities described in
this taY increment plan.
The Port Authority on behalf of the City wiii report annually to the State Auditor, county
board, school board and Department of Revenue regazding activities in the District as required by
Secrion 469.175, subdivision 5 and subdivision 6 and will inciude informarion with regard to the
District in the data necessary to comply with subdivision 6a. With regazd to the local contribution
as discussed under the heading "Local Match Requirement" below, the City will file necessary
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reports required by the Deparnnent of Revenue in such form as the Deparkment of Revenue may
then require.
Modifications to District
In accordance with Minnesota Statutes, Secrion 469.175, Subd. 4, any reducrion or
enlargement of the geographic area of the Project or tas increment financing district; increase in
amount of bonded indebtedness to be incurred, including a determivarion to capitalize interest on
debt if that detemunation was not a part of the originai plan, or to increase or decrease the amount
of interest on the debt to be capitalized; increase in the portion of the captured t� capacity to be
retained by the Port Authority; increase in total estimated tax increment expenditures; or
designation of additional property to be acquired by the Port Authority shail be approved upon the
notice and after the discussion, public hearing and findings required for approval of the original
plan. The geographic azea of a taY increment financing district may be reduced, but shall not be
enlarged, after five yeazs following the date of certification of the originai tas capacity by the
county auditor.
Administrative Expenses
In accordance wiih Minnesota Statutes, Section 469.174, Subd. 14; and Minnesota Statutes,
Section 469.176, Subd. 3 administrative expenses means all expenditures of an authority other than
amounts paid for the purchase of land or amounts paid to contractors or others providing materials
and services, including azchitectural and engineering services, directly connected with the physical
development of the real property in the District, relocation benefits paid to or services provided for
persons residing or businesses located in the District or amounts used to pay interest on, fund a
reserve for, or sell at a discount bonds issued pursuant to Section 469.178. Administrative expenses
also include amounts paid for services provided by bond counsel, fiscal consultants, and plam�ing
or economic development consultants. Administrative expenses of the District will be paid to the
Port Authority from taY increments; provided that no tax increment sha11 be used to pay any
administrative e�cpenses for the Project which exceed ten percent of the total tax increment
expenditures authorized by the tax increment fmancing plan or the total tax increment expenditures
for the Project, whichever is less.
Pursuant to Minnesota Statutes, Secfion 469.176, Subd. 4h, ta�� increments may be used to
pay for the county's actual administrative expenses incurred in connection with the District. The
county may require payment of those expenses by February 15 of the year foilowing the yeaz the
expenses wereincurred.
Necessary Improvements in the District
No tax increment shall be paid to the Port Authority after three years from the date of
certificarion of the original net taY capacity by the County Auditor unless within the tYiree-year
period:
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(1) bonds have been issued in aid of the Project pursuant to Section 464.178 of the TIF
Act or any other law, except revenue bonds issued pursuant to ivlinnesota Statutes,
Section 469.159 to 469.165;
(2) the Port Authority has acquired property within the District; or
(3) the Port Authority has constructed or caused to be constructed public improvements
within the District.
The bonds must be issued, or the Port Authority must acquire property or construct or cause
public improvements to be constructed by appro�mately November, 2000.
• Pursuant to Minnesota Statutes, Section 469.176, Subd. 6:
If, after four years from the date of cert�cation of the original tc� capaciry of the taz
increment fznancing disirict pursuant to Minnesota Statutes. Section 469.177, no
demolition, rehabilitation or renovation ofproperty or other site preparation, including
qual�ed improvement of a street adjacent to a parcel but not installation of utility
service including sewer or water systems, has been commenced on a parcel located
within a tax increment fznancing district by the authority or by the owner of the parcel
in accordance with the tax increment fznancing plan, no additional tar increment may
be taken from that parcel and the original tax capacity of that parcel shall be excluded
from the original tax capacity of the tax increment flnancing district. If the authority or
the owner of the parcet subsequently commences demotition, rehabilitation or
renovation or other site preparation on that parcel including improvement of a street
adjacent to that parcel, in accordance with the tax increment frnancing plan, the
authority shall certify to the county auditor in the annual disclosure report that the
activity has commenced. 7Tze county auditor shadl cert� the tctt capacity thereof as
most recently cert�ed by the commissioner of revenue and add it to the original taz
capacity of the tax increment frnancing district. The county auditor must enforce the
provisions of this subdivision.. For purposes of this subdivision, qualified
improvements are limited to (1) construction or opening of a new street, (2) relocation
of a street, and (3) substantial reconstruction or rebuilding of an existing street.
The Port Authority or a properiy owner must begin making impravements to parcels within
the District by approximately November, 2001.
• Pursuant to Minnesota Statutes, Section 469.1763, Subd. 3, revenues derived from taY
increments are considered to have been spent on aza activity within the District only if
one of the following occurs:
1. Before or within fzve years after cert�cation of the District, the revenues are
actually paid to a third party with respect to the activity;
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2. Bonds, the proceeds of which must be used to finance the activity, are issued and
sold to a third party before or within frve years after certifzcation of the District, the
revenues are spent to repay the Bondr, and the proceeds of the &onds either are, on
the date of issuance, reasonably ezpected to be spent before the end of the latter of
(i) the frve year period, or (ii) a reasonable temporary period withfn the meaning of
the use of that term under Section 148(c)(I) of the Internal Revenue Code, or
deposited in a reasonabZy required reserve or replacement funa;�
3. Binding contracts with a third party are entered into for performance of the activity
before or within five years after certifzcation of the District and the revenues are
spent under the contractual obligation; or
4. Costs with respect to the activity are paid before or within frve years after
cert�cation of the District and the revenues are spent to reimburse a party for
payment of tke costs, including interest on unreimbursed costs.
Therefore, one of the above four events must occur by appro�mately November, 2002.
Use of Tax Increment
All revenues derived from tax inczement shall be used in accordance with this tax increment
financing plan and pursuant to Minnesota Statutes, including but not limited to Section 469.176,
Subds. 4, 4e and 4j.
Nofification of Prior Planned Improvements
Pursuant to Minnesota Statutes, Section 469.177, Subd. 4, the Port Authoriry has reviewed
the area to be included in the District and has found building permits issued during the 18 months
immediately preceding approvai of the Plan were for maintenance only.
capacity of the District should not change as a result of the valuafion
which the building permits have previously been issued.
Excess Tax Increments
Therefore, the originai tax
of any improvements for
Pursuant to Minnesota Statutes, Section 469176, Subd. 2, in any yeaz in which the t�
increment exceeds the amount necessary to pay the costs authorized by this taY increment plan,
including the amount necessary to cancel any tax levy as provided in Minnesota Staiutes, Section
475.61, Subd. 3, the Port Authority shall use the excess amount to do any of the following:
2.
3.
Frepay the outstanding bonds;
Dischazge the pledge of tax increment therefor;
Pay into an escrow account dedicated to the payment of such bonds; or
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4. Return the excess to the County Auditor for redistribution to the respective taxing
jurisdictions in proportion of their t� capacity rate.
Fiscal Disparifies
The Port Authority and the Ciry have elected to compute Fiscal Dispariries contribution for
the District in accordance with Secrion 469.177, subdivision 3, paragraph a
Locai Match Requirement
For taY inerement financing dishicts which request certificarion after June 30, 1994,
Minnesota Statutes, Secuon 273.1399, Subd. 6(d) provides that the Port Authoriry may be exempt
from local government aid or homestead and agricultural credit aid penalty if the Port Authority
and/or the City of Saint Paul makes a local contribution to the Project equal to five percent of the
tax increment. The Port Authority and the City intend to make the local contributions in lieu of the
state aid penalty. Five percent of the future value of the taY increments expected to be collected
from the District is appro�mately $691,000. The City and the Port Authority will make an up-front
local contribution (rather than a yeazly contribution) in the amounts identified above in paragraph C
under the heading "Sources of Revenue to finance or otherwise pay public costs". These amounts
aggregate $3,700,000 in local confribution. Pursuant to Section 273.1399, Subd. 6(d)(2), if the Port
Authority or the City fails to make the required contribution for any year, the state aid reducrion
will apply for that year. The state aid reduction wi11 be equal to the greater of (A) the required 1oca1
contribuflon (5% of tax increments collected that year) or (B) the amount of the aid reduction that
applies under Subdivision 3 of Section 273.1399.
9/17/97
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SAINT PAUL PORT AUTHORITY
TAX INCREMENT FIIQANCING PLAN FOR T'HE
RANDOLPH AVENUE REDEVELOPMENT AND HA7.ART)OUS SUBSTANCE
SUBAISTRICT
TAX INCREMEI�IT FINAI�CING DISTRIGT
APPENDIX A
Properties fo be Inclnded in the Redevelopment Disfrict
Property Identification Number: 12-28-23-12-0034
Legal Description: Raznsey Coimty Tax Department Description as follows:
a ., _,.��r
Plat .01088 Subdivision of the I3VJ 1l4 of the NE 1/4 and Lot 2 of Section
Twelve of T28 R22 in the City of St Paul Revised Aescription No. 976 a
Specific Part of Sec 12 TN 28 RN 23
Property Identification Number: 12-28-23-11-0005
Legal Deseription: Part of Ramsey County Tax Department Description as follows:
The Westerly 150 feet of the following described property:
Plat .01043 I3orthern States Power Co's Plat, St Paul, Minn. Subj to Shepard Rd & Subj to Higb
Bridge ROW & No Part of Vac Hill St and McMillan St Adj & Ex Levee & Ex a 700 Ft MOL
Union Oil Parcel Adj to Shepard Rd; the Fol; Part of Govt Lots 1& 2 Lying NW1y of and Bllcs 4
Thru 6 I�Iorthem States Power Co's Plat, St Paul, Minn. Sub,j to Shepazd Rd & Subj to High
Bridge ROW & No Part of Vac Hill 5t and McMillan St Adj & Ex Levee & Ex A 700 Ft MOL
Union Oil Pazcel Adj to Shepard Rd; The fol; Part of Govt Lots 1& 2 Lying 23WIy of SEIy Levee
Line Lying SWIy of SWIy Line of Ei'igh Bridge ROW Lying SEIy of NWly ROW Line of Shepazd
Rd Lying Ely of a line Desc as Beg at Most NEIy Cor or Tract B 12LS 441 Th 23 27 Deg 32 Min OS
Sec W 70.26 Ft Th N 33 Deg 34 Min 26 Sec E 68.22 Ft Th N 27 Deg 02 Min 30 Sec W 60.56 Ft to
Sly ROW Line of Shepazd Rd & There Term & All of Tract C Reg Land Survey No. 441 & All of
Blks 1 and B1k 2 and Vac Gray St of McMillans Add & Ex N 218 Ft & Fx Stockyazd Track of CS
and PM and O Ry Co; Lots 15 and Lot 16 Paztition Add & Pa# of Blk 1 of JT McMillan Co Plat
Lying S of a Line Desc as Beg at a Pt on I�tL, of Sec 12 TN 28 RN 23 Dist 514.63 Ft E of NW Cor
of Govt Lot 1 Th S 60 Deg 29 Min W 141.6 Ft Th S 71 Deg 4b Min 30 Sec W 250.82 Ft Th S 65
Deg 18 Min W 166.96 Ft to a Pt on WL of SD Govt Lot 1 Dist 218 Ft S of NVJ Cor and There
Term & In SD Northem States Power Co Plat Biks 1 and 2 and Blks 4 Tluu Blk 6
Property Identification Number. 12-28-23-12-0035 �
Legal Description: Part of Ramsey County Tax Department Description as follows:
Plat .01088 Subdivision of the NW 1(4 of the I�tE 1(4 and Lot 2 of Section
Twelve of T28 R22 in the City of St Paul Revised Description No 1021 a
Specific Part of Sec 12 TTI 28 RI�i 23
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SAI1�iT PAUL PORT AVI'HORITY
TAX IIQCREMENT PTNANCING PLAN FOR THE
RANDOLPH AVENUE REDEVELOPMEI�IT A1�D Aa7,eRDOUS SUBSTANCE
SUBDISTRICT
TAX INCREMENT FINAI�CIl�tG DLSTRICT
��.����
APPENDIX B
Proper[ies to be IncIuded in the Iiazardous Subsfance Subdisiricf
Property Identificatioa Number. 12-28-23-12-0034
Legal Description: Ramsey County Tax Department Description as follows:
Plat .01088 Subdivision of ihe NVJ 1/4 of the NE 1/4 and �,ot 2 of Section
Twelve of T28 R22 in the City of St Paul Revised Description 230. 976 a
Specific Part of Soc 12 TN 28 RN 23
Property Identification 23umber: 12-28-23-11-0005
Lega1 Description:
Part of Ramsey County T� Depariment Description as follows:
The Westerly 15Q feet of the following described property:
Plat .01043 Northem States Power Co's Piat, St Paul, Minn. Subj to Shepazd Rd & Subj to High
Bridge ROW & I3o Part of Vac Hill St and McMillan St Adj & Ex Levee & Ex a 700 Ft MOL
Union Oil Parcel Adj tA Shepazd Rd; the Fol; Part of Govt Lots 1& 2 Lying I1Wly of and Bllcs 4
Thru 6 Northem Sfates Power Co's Plat, St Paul, Mim�. Subj to Shepazd Rd & Subj to High
Bridge ROW & No Part of Vac Hill St and McMiAaa St Adj & Ex Levee & Ex A 700 Ft MOL
Union Oil Pazcel Ad,} to Shepazd Rd; 'Ihe fol; Part of Govt Lots 1& 2 Lying NWIy of Sfily Levee
Line Lying SWIy of SWIy Line of High Bridge ROW Lying SEIy of NWly ROW Line of Shepazd
Rd Lying Ely of a line Desc as Beg at Most NEIy Cor or Tract B RLS 441 Th N 27 Deg 32 Min OS
Sec W 70.26 Ft Th N 33 Deg 34 Min 26 Sec E 68_22 Ft Th N 27 Deg 02 Min 30 Sec W 60.56 Ft to
Sly ROW Line of Shepard Rd & There Teim & All of Tract C Reg Land Survey No. 441 & All of
Blks 1 and Bllc 2 and Vac Crray St of McMillans Add & Ex 13 218 Ft & Ex Stockyard Trnck of CS
and PM and O Ry Co; Lots 15 and Lot 16 Parfition Add & Pat of Bik 1 of TI' McMi11an Co Plat
Lying S of a Line Desc as Beg at a Pt on NL of Sec 12 TT3 28 FtN 23 Dist 514.63 Ft E of NW Cor
of Govt Lot 1 Th S 60 Deg 29 Min W 141.6 Ft Th S 71 Deg 46 Min 30 Sec W 250.82 Ft Th S 65
Deg 18 Min W 166.46 Ft to a Pt on WL of SD Govt Lot 1 Dist 218 Ft S of NW Cor and There
Term & In SD 23orthern States Power Co Plat Blks 1 and 2 and Blks 4 Thru Blk 6
Property Identification Number: 12-28-23-12-0035
Lega1 Description:
Part of Ramsey County Tax Depaztment Description as follows:
Plat .01088 Subdivision of the NVJ 114 of the NE 114 and Lot 2 of Section
Twelve of T28 R22 in the City of St Paul Revised Description No 1021 a
Specific Part of Sec 12 TN 28 RN 23
G-18
E�chibit H
Council File #
Green Sheet #
Ordinance #
ORDINANCE Q� "��
CITY OF SAINT PAUL, MINNESOTA
Presented by
Refeaed To
Date
An ordinance granting authority to the Port Authority of the City of Saint Paul to issue and
sell bonds in the aggregate principa! amount which will produce net available funds to be applied to
the costs of the Pmject of $13,800,000, but in any event not to exceed the principal amount of
$14,650,000, and any bonds to refund such bonds, to secure such bonds with a pledge of the full
faith, credit and resources of the City of Saint Paul, and to use the proceeds derived from the sale of
such bonds to pay the cost and expense necessarily to be incurred by said Port Authority for
acquisition of lands, clearance, remediation, and improvements in the Plastics, Inc. Redevelopment
Tax Increment Dis�ict pursuant to the provisions and by authority of Minnesota Statutes, Chapter
469, as amended, and prescribing the amount and form of such bonds and the manner for
establishing the rate of interest thereon.
WHEREAS, on September 23, 1997 the Port Authority of the City of Saint Paul (the "Port Authority")
adopted its Resolution No. __, finding that certain lands were blighted and mazginal properties within the
meaning of Minnesota Statutes, Sections 469.048 et seq., and establishing and creating the Citgo/Shepazd Road
Industrial Development District; and
WHEREAS, the City of Saint Paul, Miimesota (the "City"), has authority under Mimiesota Statutes,
Section 469.178, Subd. 2, to issue general obligation bonds payable from tax increments of a tax increment district
created by the Port Authority, and the Port Authority has authority under Minnesota Statutes, Section 469.060, to
issue bonds for its purposes in anticipation of income from any source wlrich are secured by the full faith, credit
and resources of the City, and pursuant to this Ordinance, the Port Authority will issue bonds to which are pledged
both taY increments and the full £aith, credit and resources of the City; and
WHEREAS, the Port Authority has requested the authorizateon of the Council of the City of Saint Paul,
pursuant to Minnesota Statutes, Section 469.060, for the issuance and sale by the Port Authority of its bonds in the
aggregate principal amount which will produce net available funds to be applied to the costs of the Project of at
least $13,800,000 but in any event not to exceed the principal amount of $14,650,000 (the "Bonds") and for the
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pledge of the full faith, credit and resources of the City to the payment of such Bonds, which Bonds will also be
secured by tax increments to be derived from the Plastics, Inc. Redevelopment Tax Increment Financing District
(the "District"), and any grants obtained in connection with the Project, as defined below, the establishment of
which was appmved by the City by its Resolution No. adopted on September 24, 1997; and
WHEREAS, the Bonds will be issued for the purposes of paying or reimbursing the costs and e�cpenses
necessarily incurred by the Port Authority for acquisition, clearance, remediation, and 'unprovements within the
District which are to be undertaken to facilitate the construction of a manufacturing and dishibution facility in the
District for Plastics, Inc., and the move of Plastics, Inc. from its current location at Chestnut and Ryan Streets to
the District (the "ProjecP'), and then for all other purposes authorized by authority of Minnesota Statutes, Chapter
469, as amended (the "Act") with respect to the Project; and
WHEREAS, the Council of the City (the "Council"), being duly advised in the premises, finds and
determines that it is necessary and appropriate that the Port Authority issue and sell bonds of the Port Authority in
the aggregate principal amount not to exceed $14,b50,000 for the purposes as stated above; and
WHEREAS, on the basis of the foregoing, it is now the intention of the Council to grant authority to the
Port Authority for the issuance of the Bonds; to prescribe the manner for establishing the amount, maturity
schedule, rates of interest, and the maximum rate of interest, to be bome by the Bonds; to authorize the Port
Authority to establish the date, denomination, place of payment and other details of the Bonds, including the form
of the Bonds; and to autharize and consent to the pledge by the Port Authority of the fuil faith, credit and resources
of the City to the payment of the Bonds as the same shall be issued and sold by the Port Authority, pursuant to the
authority of the Act, and pursuant to the authority gauted by this Ordinance.
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NOW, TI-IEREFORE, Tf� COUNCIL OF TI� CTI'Y OF SAINT PAUL DOES ORDAIN:
Section 1
Authorization of Bonds. That subject to, and in accordance with, the applicable provisions, temis and
conditions of this ordinance and those contained in Section 469.060 of the Act, authority is hereby granted to the
Port Authority for the issuance and sale of its Bonds in the aggregate principal amount set forth in Section 2 and
the use of the proceeds of such Bonds first for the acquisition, clearance, remediation and construction of
improvements on land within the Dishict as contempiated by the Tax Increment Financing Plan for the District
(the "Plan"), and then for all other purposes authorized by the Act with respect to the Project.
Section 2
Establishin�Terms of the Bonds That the Port Authority is hereby authorized to establish the date,
denomination, place of payznent, form and details of the Bonds, provided that the Bonds shall be issued and sold
by the Port Authority as tax exempt and/or taxable Bonds in one or more series, in the manner provided and
allowed by law; the Bonds in an amount of appro�mately $6,600,000 (which, after subhacting costs of issuance,
wi11 provide net available funds for the Project in the amount of $6,150,000) sha11 be secured by a first lien pledge
of the tax increments to be received by the Port Authority from the Distcict, and the remainder of the Bonds shail
be secured by a pledge of any grant proceeds received with respect to the Project and by a lien on tas increments
w}uch shall be subordinate to, in order of priority, (i) such first lien, (ii) the payment of $2,000,000 of subordinated
tax increment bonds issued by the Port Authority and sold to NSP, and (iii) administrative charges in connection
with the District; the initial principal amount of the Bonds shall not exceed $14,650,000; the Bonds shall mature in
the amounts and years and bear interest at the rate or rates per annum, including rates which vary in accordance
with a formulae established by the offer to purchase the Bonds which is detennined to be the most favorable by a
Pricing Committee comprised of the President and the Chief Financial Officer of the Port Authority and the
Treasurer and the Deputy Mayor of the City, provided that the average annual weighted interest rate of the Bonds
shall not exceed _ percent (_%) per annuxn payable semi-annually unless such higher average annual
weighted mterest is specifically approved by a resolution adopted by a majority of the members of the Council;
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and the proceeds from the issuance and sale of the Bonds as received by said Port Authority shall be used first to
pay or reimburse the costs of the acquisition, clearance, remediation and construction of improvements on land
within the District as described in the Plan, and then for all other purposes authorized by the Act with respect to the
Project The Bonds may be made subject to redemption and prepayment at the option of the Port Authority at such
time and price or prices as shall be determined by the Port Authority and approved by the Pricing Committee
described above and upon such notice as is required by law. It is recognized that Section 469.060 of the Act
provides that the Bonds must be in the amount and form and beaz interest at the rate set by the Council, that the
Port Authority with the consent of the Council shall set the date, denominations, place of payment, form, and
details of the Bonds and that the Council is required to decide whether the issuance of the Bonds by the Port
Authority is proper and if so, the amount of Bonds to issue, and that the Council is required to give specific
consent in the Ordinance to the pledge of the City's full faith, credit and resources to the Bonds. The standards and
delegation to the Pricing Committee set forth herein are intended as such full required action of the Council, and
except as provided herein no further approval of the Council is required for the issuance of the Bonds under
Section 469.060 of the Act.
Seciion 3
Pledge of Full Faith and redit. That as security for the prompt and faithful payment of both principal and
interest of said Bonds in an amount not to exceed $14,650,000, the Port Authority is hereby authorized to pledge
the full faith, credit and resources of the City of Saint Paui; and such Bonds, both in respect of the principal
amount of the same and with respect to the interest thereon, may be paid by the Port Authority from tax levies
provided therefor and authorized by the Act.
Section 4
a�c Le . That the Port Authority, in the event of the issuance of any said Bonds authorized hereunder,
shall before the issuance of the same, levy for each year, until the principal and interest are paid in full, a direct
annual tax on all the taYable properry in said City of Saint Paul, in an amount not less than 5% in excess of the sum
required to pay the principal and interest of the same when and as such principal and interest mature and, after such
.
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Bonds have been delivered to the purchasers, such taY shall be urepealable until all such indebtedness is paid, and
after the issuance of such Bonds no further action by said Port Authority shall be necessary to authorize the
extensions, assessments and collection of such t�. That the Secretary of said Port Authority shall forthwith
fiunish a certified copy of such levy to the County Auditor of Ramsey County, Minnesota, the county in wluch
said Port Authority and said City aze located, together with full information regarding the Bonds of said Port
Authority for which the tax is levied and such County Auditot shall eactend and assess the tax so levied, and shall
do so annually until the principai and interest have been paid in full. That any surplus resulting fzom the excess
levy therein provided shall be transferred to a sinking fund after the principal and interest for which the tax was
levied and coliected has been paid; provided, that said Port Authority may, on or before September 15 in any year,
by appropriate action cause its Secretary to certify to the said County Auditor the amount on hand and available in
its own treasucy from taY increments derived from the Plasrics, Inc. Redevelopmem T� Increment Financing
District, grants of federal or state funds received for the Project, earnings or other income, including any amounts
in the sinking fund, which it will use to pay the principal and interest or both on each specified issue of the Bonds
and the County Auditor shall reduce the levy for that yeaz herein provided for by that amount. That the amount of
funds so acquired shall be set aside by said Port Authoriry and be used for no other purpose than for the repayment
of the principal and interest on such Bonds. That all taxes being authorized to be levied under Minnesota Statutes,
Section 469.060, as amended, shatl be collected and remitted to the Port Authority by the County Treasurer in
accordance with provisions of law governing the collection of other taYes and shail be used solely for the payment
of such Bonds when due.
Section 5
No Further Council Action That said Port Authority may provide for the exercise of the authority hereby
granted for its issuance and sale of the Bonds in the aggregate principal aznount as provided in Section 2 hereof, for
the aforesaid purposes, and the pledge of the full faith, credit and resources of said City of Saint Paul, as security
for the payment of the same, by its appropriate resolution, and without further action of the Council. The authority
to set the finai principal amount, maturity amounts and interest rates on the Bonds has been delegated to the
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Pricing Committee as provided in Seetion 2 hereof. That in exercising the foregoing authority, the Port Authority
shall make due compliance with all applicable requirements for this ordinance, said Section 469.060, Minnesota
Statues, as amended, Sections 469.174 through 469.179, as amended, Chapter 475, Minnesota Statutes, as
amended, and all other applicable laws.
Section 6
Authorization of Refundin� Bonds. Pursuant to and in accordance with the provisions, terms and
conditions of this Ordinance and the Act, authority is hereby granted to the Port Authority to issue and sell
Bonds as authorized by Minnesota Statutes, Section 469.060, in aggregate principal amounts necessary for the
purpose of securing funds as needed by the Port Authority to refund obligations issued under this Ordinance.
The principal of the refunding bonds may exceed the principal of the bonds to be refunded to the extent
necessary and appropriate to pay interest thereon (including interest accruing as capital appreciation), to pay
costs of issuing the refunding bonds and to allow for discount upon sale, and to fund reserves and capitalized
interest for the refunding bonds.
Section 7
Effective Date. That this ordinance shall take effect and be in force 30 days after tUe passage, approval and
publication.
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Adopted by Council: Date
Adoption Certified by Council Secretary
By:
Appzoved by Mayor. Date
BY=
��sted by Departrnent of
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Form Approved by City Attorney
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Approved by Mayor for Submission to Council
By:
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