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97-465' ' Council File # q� + �{�� creen Sheet # ��Z !�' � �' � � � � RESOLUTION �,�,a, ��s� �_ TY NT PAUL, MtNNESfJTA 1� Presented By Reterred To Committee: IIate WHEREAS: 1. The Port Autharity of the City of Saint Paui ttne "POrt Authority") has given its approvai to the issuance of approximately S2,000,000 of its industrial Development Revenue Bond tBro-Tex Company, inc. Projectl Series 1997 (tne "Bond"), to finance the costs to be incurred by Bro-Tex Company, tnc. in connection with tne acquisition and instaliation of manufacturing equipment to be located in tne City of Saint Paul, Minnesota tthe "Project"t; and 2. laws of Minnesota 1976, Ghapter 234, pravides that any issue of revenue Sond authorized by the Port Authority shail be issued only with the consent of the City C�uncil of the City of Saint Paui, by resolution adopted in accordance with law; and 3. Approval of the issuance of the proposed Bond by the City Councit is afso required by Section 147(fl of the internal Revenue Code of 1986, as amended; and 4. To meet the requirements of both state and federai law, the Port Authority has requested that the City Councit gives its requisite approval to the issuance of tne proposed Bond by the Port Authority, subject to final approval of the details of said Bond bY the Port Authority. a�-y�5 NOW, THEREFORE, BE IT RESOLVED by the Council of tne City of Saint Paul that, in accordance with the requirements of Section 147tfl of the internaf Revenue Code af 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, tne CiLy Council hereby approves the issuance of the aforesaid Bond by the Port Authority for the purposes described in the Port Autharity resolution adopted Aprii 29, 1997, the exact detaiis of which, inciuding but not limited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of additional Bond are to be determined by the Part Authority, and the City Council herebY authorizes the issuance of any additional Bond (including refunding Bond) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for which the aforedescribed Bond is issued. Adopted: , 1997 1521895 Request Departmen[ of: �'r /'s � Adopted by Covncil: Date � � { Adoption Certified 6y Councit Secretary BY� �•��,_�co-,� Approvec�G ll�ay : at \ ° 3y: V/ I Fomt A�pproved by City Attomey B �'_ �-�`--�` (` � � " /� Q Approv v y Ma o for Sub ' sion to Council By: / Saint Paul Port W. Drehmei 1997 9� - yt.5 )RTE fN1TIATE� N° _ 13112 4-14-97 GREEN SHE INffiAiJD E INfT1AUDATE — � DEPARTMENTOIRECTOfl � CINCOUNCIL N MBEfl FOfl � CITY ATIORNEY � CItY CLERK AOUTING O�OGET OIqECTOR O FIN. S MGT. SERVICES DIR. 0 �� MA'/OR IOR ASSISTANn ❑ TOTAL # OF SIGNATURE PAGES (CLIP ALl LOCATIONS FOR SIGNATURE) Approval of the issuance of an approximate $2,000,000 tax-exempt conduit bond issue for the aequisition and instatlation of manufaeturing eqnipment for Bro-Te ; Co�pany, Ine. RECOMMENOATIONS: ApOrove (AJ or Rejact (!� _PLINNWGCAMMISSION _CIVIISERVICE __ CIB COMMftTEE A Part AL —sTp� _ Bd. Of _ DISTRiCT COURT _ SUPPORiS WNICH COUNqL O&1EC71VE? PERSONAL SERYiCE CAN7RACTS MUST ANSWER TNE FOLLOWING QUEST{ONS: 7. Has this person)firm ever worketl under a contract fw this department? YES NO 2. Has fhis personlfirm ever been a ciry employee? YES NO 3. Does this person7firm possess a skill noi normally possessed by any curreM city emD�o1'ee? YES NO Exptain ail yes answers on separate shaet and attach to green sheet The issuance of a tax-exempt conduit bond issue will allow the aequisition and installation of a new line of equipment at Bro-Tex Comgany's existing manufacturing locat9on at 800 Hampden Avenue, St. Paui, Minnesota. A�VANTAGES IF APPROVEO: ' As a result of this new line of equipment, it is anticipated that 22 new jobs will he created in the first two years of operations. None �?'�!?�'� �?+��.ti."s� '�?��` �� u N �� _�_...�_��.�, Che new jobs ereated by the addition of the financed equipment may not be ereated. AMOUNT OF TRANSACTION $ 2� OOO � OOO Port Authority Tax-Exempt �souRCe Conduit Bond Issue L iNFORMATION' (EXPLAIN) COSTIREYENUE BUDGE7ED (CIBCLE ONE) ACTIYITY NUMBER YES NO v SAINT PAUL PORT AUTHORI'T� � .�� . �� TO: BOARD OF COMMISSfONERS (Aprii 29, 1997 Regular Meeting) FROM: Gregory W. Drehmel C�� Lorrie J. Louder "� Kenneth R. Johnson °I'�-`I`S DATE: April 16, 1997 SUBJECT: PUBLIC HEARING - BRO-TEX COMPANY, INC Authorization for an Approximate $2,000,000 Tax-Exempt Conduit Bond lssue RESOI.UTION NO. ACTION REQUESTED: Approval of finai resolution authorizing the issuance of an approximate $2,000,000 conduit bond issue to Bro-Tex Company, Inc. PROJECT SUMMARY: Estimated Amount: $2,000,000 Type: Tax-Exempt lndustrial Development Bond Term: 8 Years. lnterest only for the first 7 monthly payments and principai and interest monthly thereafter. lssuer: Borrower: LenderlPurchaser: Guarantor: Placement Agent: Borrowe�'s Counsel: Lender/Purchasers Counsef: Issuer Bond Counsel: Escrow Agent: Port Authority of the City of Saint Paul Bro-Tex Company, Inc GE Capitai Public Finance, Inc. Roger H. Greenberg Piper Jaffray Inc. Winthrop & Weinstine, P.A. Kutak Rock Leonard, Street & Deinard, P.A. National City Bank __ -- _ — _� -.�� —.-=. .- - _- - -.- _ , Bra-Tex Company, Inc Board Memorandum � Aprii 16, 1997 Page 2 BACKGROUND: �� • l� Bro-Tex is currently located at 800 Hampden Avenue, Saint Paul. The company is seeking to expand their current production capacity and has plans to instaii a new line of manufacturing equipment. The company reprocesses synthetic fibers for the automotive industry and manufactures and converts paper and cloth wipers. THE PROJECT: Bro-Tex is propos'sng to purchase a new line of equipment that woufd include equipment for automating the company's cutting, biending, feeding, and cieaning ragifabric reprocessing business at the company's current business address. The company has requested that the Port Authority review financing aftematives tor the acquisit+on of new manufacturing equipment. THE BONDS: The Bonds will be issued in the approxima#e principal amount of $2,000,040 and wi(l bear interest at a fixed rate of 6.35°lo if closed into escrow by May 13, 1997. No prepayments wiil be allowed for the first 36 months. During the term of the fnancing no ownership changes wiil be ailowed of Bro-Tex except for intra-family transfers. GE Capitai's commitment to lend expires on May 13, 1997. EMFLOYMENT IN{PACT: The company believes it wiil create 22 new jobs in the first fima years of operafions, as a resuit of this new line of equipment. THE COLLATERAL: A first lien by G.E. Capital Pubiic Finance, Inc. an the new fiber production line of equipment. it is expected that the equipment wii! be delivered and accepted by May 13, 1998, at which time the escrow account wili be closed. GE Gapitai wiii require a piedge of additionai coilateral of $300,000 cash or marketable securities by Bro-Tex Company, inc. or Roger Greenberg. Bro-Tex Gompany, Inc Board Memorandum Aprii 16, 1997 Page 3 � � � � v � GE Capital wii! afso require a negative piedge of securities heid by Roger Greenberg with a minimum value of $2,000,000. GE Capita! will a)so require the following cash flow coverage covenant. Cash flow coverage not less than 2.0:1 for fhe ca(endar year ending 12l31197 and 2.5:1 on an annual basis thereafter. ESTIMATED SOURCES ND USES OF FUNDS: Sources of Funds• Bond Proceeds Estimated Borrower Funds Tota! Sources of Funds Uses of Funds: Equipment Purchase Estimated Costs of fssuance Total Uses of Funds $2,�00,000 10.000 $2,010,000 �,sso,00a 50.000 $2,Q10,OOQ RECOMMENDATiON• Recommend approval of the above-referenced Resoiution. GWD:ak ¢aklgreg�Oter.bm.aoc _ _ _ " _ -._T __.. _ . � . __�>. -- ... �,_ .. - � — _' _— ", '_ _ _� _ . _ _ _ . . — � q�-y�s Resolution No. RESOLUTION OF TFIE PORT AUTHORITY OF THE �ITY OF SAINT PAUL (Bro-Teg Company, Inc.] WHEREAS, it has been proposed that the Port Authority of the City of Saint Paul (the "Port Authoriry") issue iis Indushial Development Revenue Bond (Bro-Tex Company, Inc. Project) Series 1997 (the "Bond") in an aggregate principal aznount of approximately $2,OOQ000, and that the proceeds of such Bond be loaned to Bro-Tex Company, Inc., a Minnesota corporation (the "Borrower'� to fmance the acquisirion and installation of manufacturing equipment (the "Project"� to be owned and operated by the Bonower in the City of Saint Paul, Minnesota (the "City"). WI-�REAS, the Port Authority desires to facilitate the selective development of the City of Saint Paul and the meh�o east community, to retain and improve its tax base and to help it provide the range of services and employment opportunities required by its population, and the Project will assist in achieving that objective by increasing the assessed valuation of the metro east community; helping to maintain a positive relationship between assessed valuarion and debt; and enhancing the image and reputation of the meiro east community. WFIEREAS, the Project will result in additional employment opportunities �n the City af Saint Paul and the metro east community. WHEREAS, the Port Authoriry has been advised by representatives of the Borrower that long term convenrionai, commerciat financing to pay the capital cost of the Project is available only on a limited basis and at such high wsts of borrowing that the economic feasibility of operating the Project would be significanfly reduced, and that it has been acting to date in anficipation that the Port Authority would favorably consider this fmancing proposal. WI3EREAS, the Project and 3ts financing has received an allocation of bonding authority from the State of Minnesota Depariment of Finance. WHEREAS, the Port Authority's Credit Committee and Board have previously adopted their Resolutions No. 26 and 3612, respectively, giving preliminary approvai to the proposed issuance of a revenue bond for the Project. WF�REAS, pursuant to the requirements of Section 147(fl of the Internai Revenue Code of 1986, as amended, and pursuant to a notice published by the Port Authority not less than 15 days prior to the public hearing, a public hearing has been held on the date hereof on the issuance of the Bond, at which public hearing all persons were given an oppommiry to speak. WIIEREAS, the Bond will be issued and secured by the terms of a Loan Agreement (the "Loan Agreement") between the Port Authority, the Bonower and GE Capital Fubiic Finance, Ina, 1521895 q1-'i �5 the purchaser of the Bond (the "Purchaser") and the Bond and the interest on the Bond sha11 be payable solely from the revenue pledged therefor, and shall not constitute a debt of the Port Authority within the meaning of any constitutional or statutory limitarion of indebtedness, nor sha11 the Bond constitute or give rise to a pecuniary liability of the Port Authority or the Ciry or a charge against their general credit or taxing powers and shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Port Authority or the City other than their interest in said Project. WF�REAS, it is intended that interest on the Bond be excluded from gross income of the holders thereof for federal income taac purposes. NOW, THEREFORE, BE IT RESOLVED BY 1T� BOAR.D OF COMNIISSIONERS OF Tf� PORT AUTHORITY OF Tf� CITY OF SAINT PAUL, AS FOLLOWS: 1. On the basis of information available to the Port Authority it appears, and the Port Authority hereby finds, that: the Project consritutes properties, used or useful in connection with one or more revenue producing enterprises engaged in any business within the meaning of Minnesota Statutes, Sections 469152 to 469.165 (the "Act"); the Project furthers the purposes stated in the Act; and it is in the best interests of the port district and the people of the Ciry of Saint Paul and in furtherance of the general plan of development to assist the Company in financing the Project. 2. For the purpose of financing the Project, and paying certain costs o� issuance and other eapenses in connection with the issuance of the Bond, and provided that the Project and its finanoing receive approval by the Department of Trade and Economic Development ("DTED'�, the Fort Authority hereby authorizes the issuance, sale and delivery of the Bond in an aggregate principal amount of approximately $2,000,000. The Bond shall bear interest at such rates, shall be numbered, shali be dated, shali mature, shail be subject to redemption prior to maturity, and shali be in such form and have such other details and provisions as may ba prescribed in the Loan Agreement, substantially in the form now on file in the offices of the Port Authoriry. 3. Neither the Bond, nor the interest thereon, shall constitute an indebtedness of the Port Authority or the City within the meaning of any constitutional or statutory debt limitation; nor shall they constitute ar give rise to a pecuniary liability of the City, the Port Authority ar a charge against their general taxing powers and neither the full faith and credit nor the general taxing powers of the Ciry or the Port Authority is piedged to the payment of the Bond or interest thereon. 4. Forms of ihe fallowing documents have been submitted to the Port Authoriry for review and/or approvat in connecYion with the sale, issuance and delivery of the Bond: a. the Loan Agreement; b. the Bond; and 1521895 1� - yt5 a the Escrow Agreement to be entered into between the Port Authority, the Borrower, the Purchaser and National City Bank as the escrow agent. (collecrively, the "Documents"). >. It is hereby found, detemrined and declazed that: a. The issuance and sale of the Bond, the execution and delivery by the Port Authority of the Documents and the performance of all covenants and agreements of the Port Authority contained in the Documents, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Bocuments and the Bond valid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Secrions 469.152 through 469.165, as amended (the "Act")• > b. It is desirable that the Bond be issued by the Port Authority upon the genezal terms set forth in the Documents, as applicable; c. Under the provisions of and as provided in the Documents, the Bond is not to be payable from or a chazge upon any funds other than the revenues pledged to the payment thereof; no holder of the Bond shall ever have the right to compei any exercise by the City or the Port Authority of its taxing powers to pay the Bond or the interest or premium thereon, or to enforce payment thereof against any properiy of ti�e City or the Port Authority excepi the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bond shall not constitute a charge, lien or encumbrance, legal or equitable, upon any properry of the City or the Port Authoriry except the interests of the Port Authority and the Ciry which ha�e been pledged to the Trustee under the Indenture; the Bond shall recite that it is issued without moral obligauon on the part of the State or its politicai subdivisions, and that the Bond, including interest thereon, is payable solely from the revenues pledged to the payment thereof; and the Bond shall not constitute a debt of the City or the Port Authority within the meaning of any consYitutional or statutory limitation. 6. The forms of the Documents and e7:hibits thereto are approved substanrially in the forms submitted and on file in the offices of Port Authority, with such subsequent changes as may be approved by Port Authority staff and Bond Counsei as contemplated by paragraph 8. The Chair and Secretary of the Port Authority, or such other officer as may be appropriate in the absence of either the Chair or Secretary, aze hereby authorized and directed to execute the Documents (to the extent the Port Authority is a party thereto) in substantially the forms submitted, as modified pursuant to paragraph 8, and any other documents and certificates which in the opinion of Port Authority staf£and Bond Counsel aze necessary to the transacrion herein described The execution of any instrument bp the appropriate officer or officers of the Port Authority herein authorized sha11 be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transaction herein described by individuals who were at the time of execution ihereof the authorized officers of the Port Authority shall bind the iszis9s 3 �1�-y�S Port Authority, notwithsranding zhat such individuais or any of them has ceased to hold such o�ce or offices prior to the authentication and delivery of the Bond. Copies of all of the documents necessary ta the transaction described shall be delivered, filed and recorded as provided herein and in the Indenttu�e. 7. The President and other officers of the Port Authority are authorized and directed to prepaze and fiunish to the Placement Agent and Bond Counsel certified copies of proceedings and recards of the Port Authority relating to the issuance of the Bond and other transactions herein cantemplated, and such other affidavits and cerrificates as may be required to show the facts relating to the legality of the Bond and the other transactions herein contempiated as such facts appear from the books and records in the officers' custody and control or as otheiwise known to them; and ali such certified copies, certificates and affidavits, including any heretofore furnished, shail constitute representations of the Port Authoriry as to the truth of all statements contained therein. 8. The approval hereby given to the various Documents referred to above includes approval of such additional details therein as may be necessaty and appropriate, and such modifications thereof, deletions therefrom and addirions thereto as may be necessazy and appropriate and approved by the Port Authority's President and Chief Financial Officer; and includes approval of, among other things: a. establishment of the final principal amount of the Bond; b. the establishment of the maturity schedule and call provisions to be applicable to the Bond; and c. such related instruments as may be required to satisfy the conditions of any purchaser of the Bond. 9. The Port Authority to approve, execute and deliver future amendmenis to financing documents entered into by the Port Authority in connection �vith the issuance of the Bond and the other transactions herein contemplated, is hereby delegated to the President of the Port Authority, provided that: (a) such amendments either do not require the consent of the holder o£ the Boad or such consent as may be required has been obtained; (b) such aznendments do not materially adversely affect the interests of the Port Authority as the issuer of the Bond; (c) such amendments do not contravene or violate any policy of the Port Authority; and (d) such amendments are acceptable in form and substance to Bond Counsel. The execution of any instrument by the President of the Port Authority shail be conclusive evidence of the approval of such ins�truments in accordance with the terms hereof. 10. No covenant, sripulation, obligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the Boazd of Commissioners of the Port Authority, or any officer, agent or employee of the Port Authority in that persons individuai capacity, and neither the Board of Commissioners nor any iszie9s 4 , . q'� - y`5 officer executing the Bond shall be liable personally on the Bond or be subject to any personal liability or accountabiIiry by reason of the issuance thereof. Adopted: Aprii 29, 1997 PORT AUTHORITY OF TI� CITY OF SAII�3T PAUL By Its Chair ATTEST: By Its Secretary 1521895 5 �� .�--. t1TN OP THE CITY OF SAINT PAUI ,,.,., �...�,.,ARK TOWERS • 345 ST. PEiER STREEf Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Na11 Annex 25 West Fourth Street St. Paul, Minnesota 55102 • ST. PAUL, MN 55102-16b1 April 14, 1997 RE: $2,OOQ,000 TAX-EXEMPT CONDUIT BOND 4SSUE BRO-TEX GOMPANY, INC. �� . Dear Ms. �lock: � FAX (612) 223-5198 TOLL Fl2EE (800) 328-8417 • PHONE (612) 224-Sb8b q �.N�S We submit for your review and referral to the office ofi the Mayor, City Council, and City Attorney's office, detaiis pertaining to the issuance of a tax-exempt conduit bond issue in the amount of $2,000,000 to finance the acquisition and instaltation of a new fiber production line at Bro-Tex Company's existing manufacturing location at 800 Hampden Avenue, Saint Paul, Minnesota. The Port Authority has received an indusfriai revenue bond allocafion from the State of Minnesota Smali issue Pooi, as the project is manufa�turing. The City of Saint PauPs entitiement allocation wiA not be affected by this application. The cfosing deadline, because of the aliocation, is June 10, 1997. in addition to the staff memorandum, we are attaching a draft copy of the proposed City Council Resolution and a copy of the Resolution conducti�g the required pubiic hearing and authorizing the saie ofi ihe revenue bond issue in the amount of $2,DOQ,OQO that wiil be considered by the Port Authority's Board on April 29, 1997. City Council action will be required after the Port Authority's Board meeting of Aprii 29, 1997. Your expeditious handling of this matter will be appreciated. KRJ:ak Attachment cc: Mayor Coleman g:aklgreglErote�v doc Sincerey, �G Kenneth R. Johnson President ' ' Council File # q� + �{�� creen Sheet # ��Z !�' � �' � � � � RESOLUTION �,�,a, ��s� �_ TY NT PAUL, MtNNESfJTA 1� Presented By Reterred To Committee: IIate WHEREAS: 1. The Port Autharity of the City of Saint Paui ttne "POrt Authority") has given its approvai to the issuance of approximately S2,000,000 of its industrial Development Revenue Bond tBro-Tex Company, inc. Projectl Series 1997 (tne "Bond"), to finance the costs to be incurred by Bro-Tex Company, tnc. in connection with tne acquisition and instaliation of manufacturing equipment to be located in tne City of Saint Paul, Minnesota tthe "Project"t; and 2. laws of Minnesota 1976, Ghapter 234, pravides that any issue of revenue Sond authorized by the Port Authority shail be issued only with the consent of the City C�uncil of the City of Saint Paui, by resolution adopted in accordance with law; and 3. Approval of the issuance of the proposed Bond by the City Councit is afso required by Section 147(fl of the internal Revenue Code of 1986, as amended; and 4. To meet the requirements of both state and federai law, the Port Authority has requested that the City Councit gives its requisite approval to the issuance of tne proposed Bond by the Port Authority, subject to final approval of the details of said Bond bY the Port Authority. a�-y�5 NOW, THEREFORE, BE IT RESOLVED by the Council of tne City of Saint Paul that, in accordance with the requirements of Section 147tfl of the internaf Revenue Code af 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, tne CiLy Council hereby approves the issuance of the aforesaid Bond by the Port Authority for the purposes described in the Port Autharity resolution adopted Aprii 29, 1997, the exact detaiis of which, inciuding but not limited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of additional Bond are to be determined by the Part Authority, and the City Council herebY authorizes the issuance of any additional Bond (including refunding Bond) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for which the aforedescribed Bond is issued. Adopted: , 1997 1521895 Request Departmen[ of: �'r /'s � Adopted by Covncil: Date � � { Adoption Certified 6y Councit Secretary By: - ��M�-_ Approvec�G ll�ay : at \ ° 3y: V/ I Fomt A�pproved by City Attomey B �'_ �-�`--�` (` � � " /� Q Approv v y Ma o for Sub ' sion to Council B � Saint Paul Port W. Drehmei 1997 9� - yt.5 )RTE fN1TIATE� N° _ 13112 4-14-97 GREEN SHE INffiAiJD E INfT1AUDATE — � DEPARTMENTOIRECTOfl � CINCOUNCIL N MBEfl FOfl � CITY ATIORNEY � CItY CLERK AOUTING O�OGET OIqECTOR O FIN. S MGT. SERVICES DIR. 0 �� MA'/OR IOR ASSISTANn ❑ TOTAL # OF SIGNATURE PAGES (CLIP ALl LOCATIONS FOR SIGNATURE) Approval of the issuance of an approximate $2,000,000 tax-exempt conduit bond issue for the aequisition and instatlation of manufaeturing eqnipment for Bro-Te ; Co�pany, Ine. RECOMMENOATIONS: ApOrove (AJ or Rejact (!� _PLINNWGCAMMISSION _CIVIISERVICE __ CIB COMMftTEE A Part AL —sTp� _ Bd. Of _ DISTRiCT COURT _ SUPPORiS WNICH COUNqL O&1EC71VE? PERSONAL SERYiCE CAN7RACTS MUST ANSWER TNE FOLLOWING QUEST{ONS: 7. Has this person)firm ever worketl under a contract fw this department? YES NO 2. Has fhis personlfirm ever been a ciry employee? YES NO 3. Does this person7firm possess a skill noi normally possessed by any curreM city emD�o1'ee? YES NO Exptain ail yes answers on separate shaet and attach to green sheet The issuance of a tax-exempt conduit bond issue will allow the aequisition and installation of a new line of equipment at Bro-Tex Comgany's existing manufacturing locat9on at 800 Hampden Avenue, St. Paui, Minnesota. A�VANTAGES IF APPROVEO: ' As a result of this new line of equipment, it is anticipated that 22 new jobs will he created in the first two years of operations. None �?'�!?�'� �?+��.ti."s� '�?��` �� u N �� _�_...�_��.�, Che new jobs ereated by the addition of the financed equipment may not be ereated. AMOUNT OF TRANSACTION $ 2� OOO � OOO Port Authority Tax-Exempt �souRCe Conduit Bond Issue L iNFORMATION' (EXPLAIN) COSTIREYENUE BUDGE7ED (CIBCLE ONE) ACTIYITY NUMBER YES NO v SAINT PAUL PORT AUTHORI'T� � .�� . �� TO: BOARD OF COMMISSfONERS (Aprii 29, 1997 Regular Meeting) FROM: Gregory W. Drehmel C�� Lorrie J. Louder "� Kenneth R. Johnson °I'�-`I`S DATE: April 16, 1997 SUBJECT: PUBLIC HEARING - BRO-TEX COMPANY, INC Authorization for an Approximate $2,000,000 Tax-Exempt Conduit Bond lssue RESOI.UTION NO. ACTION REQUESTED: Approval of finai resolution authorizing the issuance of an approximate $2,000,000 conduit bond issue to Bro-Tex Company, Inc. PROJECT SUMMARY: Estimated Amount: $2,000,000 Type: Tax-Exempt lndustrial Development Bond Term: 8 Years. lnterest only for the first 7 monthly payments and principai and interest monthly thereafter. lssuer: Borrower: LenderlPurchaser: Guarantor: Placement Agent: Borrowe�'s Counsel: Lender/Purchasers Counsef: Issuer Bond Counsel: Escrow Agent: Port Authority of the City of Saint Paul Bro-Tex Company, Inc GE Capitai Public Finance, Inc. Roger H. Greenberg Piper Jaffray Inc. Winthrop & Weinstine, P.A. Kutak Rock Leonard, Street & Deinard, P.A. National City Bank __ -- _ — _� -.�� —.-=. .- - _- - -.- _ , Bra-Tex Company, Inc Board Memorandum � Aprii 16, 1997 Page 2 BACKGROUND: �� • l� Bro-Tex is currently located at 800 Hampden Avenue, Saint Paul. The company is seeking to expand their current production capacity and has plans to instaii a new line of manufacturing equipment. The company reprocesses synthetic fibers for the automotive industry and manufactures and converts paper and cloth wipers. THE PROJECT: Bro-Tex is propos'sng to purchase a new line of equipment that woufd include equipment for automating the company's cutting, biending, feeding, and cieaning ragifabric reprocessing business at the company's current business address. The company has requested that the Port Authority review financing aftematives tor the acquisit+on of new manufacturing equipment. THE BONDS: The Bonds will be issued in the approxima#e principal amount of $2,000,040 and wi(l bear interest at a fixed rate of 6.35°lo if closed into escrow by May 13, 1997. No prepayments wiil be allowed for the first 36 months. During the term of the fnancing no ownership changes wiil be ailowed of Bro-Tex except for intra-family transfers. GE Capitai's commitment to lend expires on May 13, 1997. EMFLOYMENT IN{PACT: The company believes it wiil create 22 new jobs in the first fima years of operafions, as a resuit of this new line of equipment. THE COLLATERAL: A first lien by G.E. Capital Pubiic Finance, Inc. an the new fiber production line of equipment. it is expected that the equipment wii! be delivered and accepted by May 13, 1998, at which time the escrow account wili be closed. GE Gapitai wiii require a piedge of additionai coilateral of $300,000 cash or marketable securities by Bro-Tex Company, inc. or Roger Greenberg. Bro-Tex Gompany, Inc Board Memorandum Aprii 16, 1997 Page 3 � � � � v � GE Capital wii! afso require a negative piedge of securities heid by Roger Greenberg with a minimum value of $2,000,000. GE Capita! will a)so require the following cash flow coverage covenant. Cash flow coverage not less than 2.0:1 for fhe ca(endar year ending 12l31197 and 2.5:1 on an annual basis thereafter. ESTIMATED SOURCES ND USES OF FUNDS: Sources of Funds• Bond Proceeds Estimated Borrower Funds Tota! Sources of Funds Uses of Funds: Equipment Purchase Estimated Costs of fssuance Total Uses of Funds $2,�00,000 10.000 $2,010,000 �,sso,00a 50.000 $2,Q10,OOQ RECOMMENDATiON• Recommend approval of the above-referenced Resoiution. GWD:ak ¢aklgreg�Oter.bm.aoc _ _ _ " _ -._T __.. _ . � . __�>. -- ... �,_ .. - � — _' _— ", '_ _ _� _ . _ _ _ . . — � q�-y�s Resolution No. RESOLUTION OF TFIE PORT AUTHORITY OF THE �ITY OF SAINT PAUL (Bro-Teg Company, Inc.] WHEREAS, it has been proposed that the Port Authority of the City of Saint Paul (the "Port Authoriry") issue iis Indushial Development Revenue Bond (Bro-Tex Company, Inc. Project) Series 1997 (the "Bond") in an aggregate principal aznount of approximately $2,OOQ000, and that the proceeds of such Bond be loaned to Bro-Tex Company, Inc., a Minnesota corporation (the "Borrower'� to fmance the acquisirion and installation of manufacturing equipment (the "Project"� to be owned and operated by the Bonower in the City of Saint Paul, Minnesota (the "City"). WI-�REAS, the Port Authority desires to facilitate the selective development of the City of Saint Paul and the meh�o east community, to retain and improve its tax base and to help it provide the range of services and employment opportunities required by its population, and the Project will assist in achieving that objective by increasing the assessed valuation of the metro east community; helping to maintain a positive relationship between assessed valuarion and debt; and enhancing the image and reputation of the meiro east community. WFIEREAS, the Project will result in additional employment opportunities �n the City af Saint Paul and the metro east community. WHEREAS, the Port Authoriry has been advised by representatives of the Borrower that long term convenrionai, commerciat financing to pay the capital cost of the Project is available only on a limited basis and at such high wsts of borrowing that the economic feasibility of operating the Project would be significanfly reduced, and that it has been acting to date in anficipation that the Port Authority would favorably consider this fmancing proposal. WI3EREAS, the Project and 3ts financing has received an allocation of bonding authority from the State of Minnesota Depariment of Finance. WHEREAS, the Port Authority's Credit Committee and Board have previously adopted their Resolutions No. 26 and 3612, respectively, giving preliminary approvai to the proposed issuance of a revenue bond for the Project. WF�REAS, pursuant to the requirements of Section 147(fl of the Internai Revenue Code of 1986, as amended, and pursuant to a notice published by the Port Authority not less than 15 days prior to the public hearing, a public hearing has been held on the date hereof on the issuance of the Bond, at which public hearing all persons were given an oppommiry to speak. WIIEREAS, the Bond will be issued and secured by the terms of a Loan Agreement (the "Loan Agreement") between the Port Authority, the Bonower and GE Capital Fubiic Finance, Ina, 1521895 q1-'i �5 the purchaser of the Bond (the "Purchaser") and the Bond and the interest on the Bond sha11 be payable solely from the revenue pledged therefor, and shall not constitute a debt of the Port Authority within the meaning of any constitutional or statutory limitarion of indebtedness, nor sha11 the Bond constitute or give rise to a pecuniary liability of the Port Authority or the Ciry or a charge against their general credit or taxing powers and shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Port Authority or the City other than their interest in said Project. WF�REAS, it is intended that interest on the Bond be excluded from gross income of the holders thereof for federal income taac purposes. NOW, THEREFORE, BE IT RESOLVED BY 1T� BOAR.D OF COMNIISSIONERS OF Tf� PORT AUTHORITY OF Tf� CITY OF SAINT PAUL, AS FOLLOWS: 1. On the basis of information available to the Port Authority it appears, and the Port Authority hereby finds, that: the Project consritutes properties, used or useful in connection with one or more revenue producing enterprises engaged in any business within the meaning of Minnesota Statutes, Sections 469152 to 469.165 (the "Act"); the Project furthers the purposes stated in the Act; and it is in the best interests of the port district and the people of the Ciry of Saint Paul and in furtherance of the general plan of development to assist the Company in financing the Project. 2. For the purpose of financing the Project, and paying certain costs o� issuance and other eapenses in connection with the issuance of the Bond, and provided that the Project and its finanoing receive approval by the Department of Trade and Economic Development ("DTED'�, the Fort Authority hereby authorizes the issuance, sale and delivery of the Bond in an aggregate principal amount of approximately $2,000,000. The Bond shall bear interest at such rates, shall be numbered, shali be dated, shali mature, shail be subject to redemption prior to maturity, and shali be in such form and have such other details and provisions as may ba prescribed in the Loan Agreement, substantially in the form now on file in the offices of the Port Authoriry. 3. Neither the Bond, nor the interest thereon, shall constitute an indebtedness of the Port Authority or the City within the meaning of any constitutional or statutory debt limitation; nor shall they constitute ar give rise to a pecuniary liability of the City, the Port Authority ar a charge against their general taxing powers and neither the full faith and credit nor the general taxing powers of the Ciry or the Port Authority is piedged to the payment of the Bond or interest thereon. 4. Forms of ihe fallowing documents have been submitted to the Port Authoriry for review and/or approvat in connecYion with the sale, issuance and delivery of the Bond: a. the Loan Agreement; b. the Bond; and 1521895 1� - yt5 a the Escrow Agreement to be entered into between the Port Authority, the Borrower, the Purchaser and National City Bank as the escrow agent. (collecrively, the "Documents"). >. It is hereby found, detemrined and declazed that: a. The issuance and sale of the Bond, the execution and delivery by the Port Authority of the Documents and the performance of all covenants and agreements of the Port Authority contained in the Documents, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Bocuments and the Bond valid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Secrions 469.152 through 469.165, as amended (the "Act")• > b. It is desirable that the Bond be issued by the Port Authority upon the genezal terms set forth in the Documents, as applicable; c. Under the provisions of and as provided in the Documents, the Bond is not to be payable from or a chazge upon any funds other than the revenues pledged to the payment thereof; no holder of the Bond shall ever have the right to compei any exercise by the City or the Port Authority of its taxing powers to pay the Bond or the interest or premium thereon, or to enforce payment thereof against any properiy of ti�e City or the Port Authority excepi the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bond shall not constitute a charge, lien or encumbrance, legal or equitable, upon any properry of the City or the Port Authoriry except the interests of the Port Authority and the Ciry which ha�e been pledged to the Trustee under the Indenture; the Bond shall recite that it is issued without moral obligauon on the part of the State or its politicai subdivisions, and that the Bond, including interest thereon, is payable solely from the revenues pledged to the payment thereof; and the Bond shall not constitute a debt of the City or the Port Authority within the meaning of any consYitutional or statutory limitation. 6. The forms of the Documents and e7:hibits thereto are approved substanrially in the forms submitted and on file in the offices of Port Authority, with such subsequent changes as may be approved by Port Authority staff and Bond Counsei as contemplated by paragraph 8. The Chair and Secretary of the Port Authority, or such other officer as may be appropriate in the absence of either the Chair or Secretary, aze hereby authorized and directed to execute the Documents (to the extent the Port Authority is a party thereto) in substantially the forms submitted, as modified pursuant to paragraph 8, and any other documents and certificates which in the opinion of Port Authority staf£and Bond Counsel aze necessary to the transacrion herein described The execution of any instrument bp the appropriate officer or officers of the Port Authority herein authorized sha11 be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transaction herein described by individuals who were at the time of execution ihereof the authorized officers of the Port Authority shall bind the iszis9s 3 �1�-y�S Port Authority, notwithsranding zhat such individuais or any of them has ceased to hold such o�ce or offices prior to the authentication and delivery of the Bond. Copies of all of the documents necessary ta the transaction described shall be delivered, filed and recorded as provided herein and in the Indenttu�e. 7. The President and other officers of the Port Authority are authorized and directed to prepaze and fiunish to the Placement Agent and Bond Counsel certified copies of proceedings and recards of the Port Authority relating to the issuance of the Bond and other transactions herein cantemplated, and such other affidavits and cerrificates as may be required to show the facts relating to the legality of the Bond and the other transactions herein contempiated as such facts appear from the books and records in the officers' custody and control or as otheiwise known to them; and ali such certified copies, certificates and affidavits, including any heretofore furnished, shail constitute representations of the Port Authoriry as to the truth of all statements contained therein. 8. The approval hereby given to the various Documents referred to above includes approval of such additional details therein as may be necessaty and appropriate, and such modifications thereof, deletions therefrom and addirions thereto as may be necessazy and appropriate and approved by the Port Authority's President and Chief Financial Officer; and includes approval of, among other things: a. establishment of the final principal amount of the Bond; b. the establishment of the maturity schedule and call provisions to be applicable to the Bond; and c. such related instruments as may be required to satisfy the conditions of any purchaser of the Bond. 9. The Port Authority to approve, execute and deliver future amendmenis to financing documents entered into by the Port Authority in connection �vith the issuance of the Bond and the other transactions herein contemplated, is hereby delegated to the President of the Port Authority, provided that: (a) such amendments either do not require the consent of the holder o£ the Boad or such consent as may be required has been obtained; (b) such aznendments do not materially adversely affect the interests of the Port Authority as the issuer of the Bond; (c) such amendments do not contravene or violate any policy of the Port Authority; and (d) such amendments are acceptable in form and substance to Bond Counsel. The execution of any instrument by the President of the Port Authority shail be conclusive evidence of the approval of such ins�truments in accordance with the terms hereof. 10. No covenant, sripulation, obligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the Boazd of Commissioners of the Port Authority, or any officer, agent or employee of the Port Authority in that persons individuai capacity, and neither the Board of Commissioners nor any iszie9s 4 , . q'� - y`5 officer executing the Bond shall be liable personally on the Bond or be subject to any personal liability or accountabiIiry by reason of the issuance thereof. Adopted: Aprii 29, 1997 PORT AUTHORITY OF TI� CITY OF SAII�3T PAUL By Its Chair ATTEST: By Its Secretary 1521895 5 �� .�--. t1TN OP THE CITY OF SAINT PAUI ,,.,., �...�,.,ARK TOWERS • 345 ST. PEiER STREEf Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Na11 Annex 25 West Fourth Street St. Paul, Minnesota 55102 • ST. PAUL, MN 55102-16b1 April 14, 1997 RE: $2,OOQ,000 TAX-EXEMPT CONDUIT BOND 4SSUE BRO-TEX GOMPANY, INC. �� . Dear Ms. �lock: � FAX (612) 223-5198 TOLL Fl2EE (800) 328-8417 • PHONE (612) 224-Sb8b q �.N�S We submit for your review and referral to the office ofi the Mayor, City Council, and City Attorney's office, detaiis pertaining to the issuance of a tax-exempt conduit bond issue in the amount of $2,000,000 to finance the acquisition and instaltation of a new fiber production line at Bro-Tex Company's existing manufacturing location at 800 Hampden Avenue, Saint Paul, Minnesota. The Port Authority has received an indusfriai revenue bond allocafion from the State of Minnesota Smali issue Pooi, as the project is manufa�turing. The City of Saint PauPs entitiement allocation wiA not be affected by this application. The cfosing deadline, because of the aliocation, is June 10, 1997. in addition to the staff memorandum, we are attaching a draft copy of the proposed City Council Resolution and a copy of the Resolution conducti�g the required pubiic hearing and authorizing the saie ofi ihe revenue bond issue in the amount of $2,DOQ,OQO that wiil be considered by the Port Authority's Board on April 29, 1997. City Council action will be required after the Port Authority's Board meeting of Aprii 29, 1997. Your expeditious handling of this matter will be appreciated. KRJ:ak Attachment cc: Mayor Coleman g:aklgreglErote�v doc Sincerey, �G Kenneth R. Johnson President ' ' Council File # q� + �{�� creen Sheet # ��Z !�' � �' � � � � RESOLUTION �,�,a, ��s� �_ TY NT PAUL, MtNNESfJTA 1� Presented By Reterred To Committee: IIate WHEREAS: 1. The Port Autharity of the City of Saint Paui ttne "POrt Authority") has given its approvai to the issuance of approximately S2,000,000 of its industrial Development Revenue Bond tBro-Tex Company, inc. Projectl Series 1997 (tne "Bond"), to finance the costs to be incurred by Bro-Tex Company, tnc. in connection with tne acquisition and instaliation of manufacturing equipment to be located in tne City of Saint Paul, Minnesota tthe "Project"t; and 2. laws of Minnesota 1976, Ghapter 234, pravides that any issue of revenue Sond authorized by the Port Authority shail be issued only with the consent of the City C�uncil of the City of Saint Paui, by resolution adopted in accordance with law; and 3. Approval of the issuance of the proposed Bond by the City Councit is afso required by Section 147(fl of the internal Revenue Code of 1986, as amended; and 4. To meet the requirements of both state and federai law, the Port Authority has requested that the City Councit gives its requisite approval to the issuance of tne proposed Bond by the Port Authority, subject to final approval of the details of said Bond bY the Port Authority. a�-y�5 NOW, THEREFORE, BE IT RESOLVED by the Council of tne City of Saint Paul that, in accordance with the requirements of Section 147tfl of the internaf Revenue Code af 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, tne CiLy Council hereby approves the issuance of the aforesaid Bond by the Port Authority for the purposes described in the Port Autharity resolution adopted Aprii 29, 1997, the exact detaiis of which, inciuding but not limited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of additional Bond are to be determined by the Part Authority, and the City Council herebY authorizes the issuance of any additional Bond (including refunding Bond) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for which the aforedescribed Bond is issued. Adopted: , 1997 1521895 Request Departmen[ of: �'r /'s � Adopted by Covncil: Date � � { Adoption Certified 6y Councit Secretary By: - ��M�-_ Approvec�G ll�ay : at \ ° 3y: V/ I Fomt A�pproved by City Attomey B �'_ �-�`--�` (` � � " /� Q Approv v y Ma o for Sub ' sion to Council B � Saint Paul Port W. Drehmei 1997 9� - yt.5 )RTE fN1TIATE� N° _ 13112 4-14-97 GREEN SHE INffiAiJD E INfT1AUDATE — � DEPARTMENTOIRECTOfl � CINCOUNCIL N MBEfl FOfl � CITY ATIORNEY � CItY CLERK AOUTING O�OGET OIqECTOR O FIN. S MGT. SERVICES DIR. 0 �� MA'/OR IOR ASSISTANn ❑ TOTAL # OF SIGNATURE PAGES (CLIP ALl LOCATIONS FOR SIGNATURE) Approval of the issuance of an approximate $2,000,000 tax-exempt conduit bond issue for the aequisition and instatlation of manufaeturing eqnipment for Bro-Te ; Co�pany, Ine. RECOMMENOATIONS: ApOrove (AJ or Rejact (!� _PLINNWGCAMMISSION _CIVIISERVICE __ CIB COMMftTEE A Part AL —sTp� _ Bd. Of _ DISTRiCT COURT _ SUPPORiS WNICH COUNqL O&1EC71VE? PERSONAL SERYiCE CAN7RACTS MUST ANSWER TNE FOLLOWING QUEST{ONS: 7. Has this person)firm ever worketl under a contract fw this department? YES NO 2. Has fhis personlfirm ever been a ciry employee? YES NO 3. Does this person7firm possess a skill noi normally possessed by any curreM city emD�o1'ee? YES NO Exptain ail yes answers on separate shaet and attach to green sheet The issuance of a tax-exempt conduit bond issue will allow the aequisition and installation of a new line of equipment at Bro-Tex Comgany's existing manufacturing locat9on at 800 Hampden Avenue, St. Paui, Minnesota. A�VANTAGES IF APPROVEO: ' As a result of this new line of equipment, it is anticipated that 22 new jobs will he created in the first two years of operations. None �?'�!?�'� �?+��.ti."s� '�?��` �� u N �� _�_...�_��.�, Che new jobs ereated by the addition of the financed equipment may not be ereated. AMOUNT OF TRANSACTION $ 2� OOO � OOO Port Authority Tax-Exempt �souRCe Conduit Bond Issue L iNFORMATION' (EXPLAIN) COSTIREYENUE BUDGE7ED (CIBCLE ONE) ACTIYITY NUMBER YES NO v SAINT PAUL PORT AUTHORI'T� � .�� . �� TO: BOARD OF COMMISSfONERS (Aprii 29, 1997 Regular Meeting) FROM: Gregory W. Drehmel C�� Lorrie J. Louder "� Kenneth R. Johnson °I'�-`I`S DATE: April 16, 1997 SUBJECT: PUBLIC HEARING - BRO-TEX COMPANY, INC Authorization for an Approximate $2,000,000 Tax-Exempt Conduit Bond lssue RESOI.UTION NO. ACTION REQUESTED: Approval of finai resolution authorizing the issuance of an approximate $2,000,000 conduit bond issue to Bro-Tex Company, Inc. PROJECT SUMMARY: Estimated Amount: $2,000,000 Type: Tax-Exempt lndustrial Development Bond Term: 8 Years. lnterest only for the first 7 monthly payments and principai and interest monthly thereafter. lssuer: Borrower: LenderlPurchaser: Guarantor: Placement Agent: Borrowe�'s Counsel: Lender/Purchasers Counsef: Issuer Bond Counsel: Escrow Agent: Port Authority of the City of Saint Paul Bro-Tex Company, Inc GE Capitai Public Finance, Inc. Roger H. Greenberg Piper Jaffray Inc. Winthrop & Weinstine, P.A. Kutak Rock Leonard, Street & Deinard, P.A. National City Bank __ -- _ — _� -.�� —.-=. .- - _- - -.- _ , Bra-Tex Company, Inc Board Memorandum � Aprii 16, 1997 Page 2 BACKGROUND: �� • l� Bro-Tex is currently located at 800 Hampden Avenue, Saint Paul. The company is seeking to expand their current production capacity and has plans to instaii a new line of manufacturing equipment. The company reprocesses synthetic fibers for the automotive industry and manufactures and converts paper and cloth wipers. THE PROJECT: Bro-Tex is propos'sng to purchase a new line of equipment that woufd include equipment for automating the company's cutting, biending, feeding, and cieaning ragifabric reprocessing business at the company's current business address. The company has requested that the Port Authority review financing aftematives tor the acquisit+on of new manufacturing equipment. THE BONDS: The Bonds will be issued in the approxima#e principal amount of $2,000,040 and wi(l bear interest at a fixed rate of 6.35°lo if closed into escrow by May 13, 1997. No prepayments wiil be allowed for the first 36 months. During the term of the fnancing no ownership changes wiil be ailowed of Bro-Tex except for intra-family transfers. GE Capitai's commitment to lend expires on May 13, 1997. EMFLOYMENT IN{PACT: The company believes it wiil create 22 new jobs in the first fima years of operafions, as a resuit of this new line of equipment. THE COLLATERAL: A first lien by G.E. Capital Pubiic Finance, Inc. an the new fiber production line of equipment. it is expected that the equipment wii! be delivered and accepted by May 13, 1998, at which time the escrow account wili be closed. GE Gapitai wiii require a piedge of additionai coilateral of $300,000 cash or marketable securities by Bro-Tex Company, inc. or Roger Greenberg. Bro-Tex Gompany, Inc Board Memorandum Aprii 16, 1997 Page 3 � � � � v � GE Capital wii! afso require a negative piedge of securities heid by Roger Greenberg with a minimum value of $2,000,000. GE Capita! will a)so require the following cash flow coverage covenant. Cash flow coverage not less than 2.0:1 for fhe ca(endar year ending 12l31197 and 2.5:1 on an annual basis thereafter. ESTIMATED SOURCES ND USES OF FUNDS: Sources of Funds• Bond Proceeds Estimated Borrower Funds Tota! Sources of Funds Uses of Funds: Equipment Purchase Estimated Costs of fssuance Total Uses of Funds $2,�00,000 10.000 $2,010,000 �,sso,00a 50.000 $2,Q10,OOQ RECOMMENDATiON• Recommend approval of the above-referenced Resoiution. GWD:ak ¢aklgreg�Oter.bm.aoc _ _ _ " _ -._T __.. _ . � . __�>. -- ... �,_ .. - � — _' _— ", '_ _ _� _ . _ _ _ . . — � q�-y�s Resolution No. RESOLUTION OF TFIE PORT AUTHORITY OF THE �ITY OF SAINT PAUL (Bro-Teg Company, Inc.] WHEREAS, it has been proposed that the Port Authority of the City of Saint Paul (the "Port Authoriry") issue iis Indushial Development Revenue Bond (Bro-Tex Company, Inc. Project) Series 1997 (the "Bond") in an aggregate principal aznount of approximately $2,OOQ000, and that the proceeds of such Bond be loaned to Bro-Tex Company, Inc., a Minnesota corporation (the "Borrower'� to fmance the acquisirion and installation of manufacturing equipment (the "Project"� to be owned and operated by the Bonower in the City of Saint Paul, Minnesota (the "City"). WI-�REAS, the Port Authority desires to facilitate the selective development of the City of Saint Paul and the meh�o east community, to retain and improve its tax base and to help it provide the range of services and employment opportunities required by its population, and the Project will assist in achieving that objective by increasing the assessed valuation of the metro east community; helping to maintain a positive relationship between assessed valuarion and debt; and enhancing the image and reputation of the meiro east community. WFIEREAS, the Project will result in additional employment opportunities �n the City af Saint Paul and the metro east community. WHEREAS, the Port Authoriry has been advised by representatives of the Borrower that long term convenrionai, commerciat financing to pay the capital cost of the Project is available only on a limited basis and at such high wsts of borrowing that the economic feasibility of operating the Project would be significanfly reduced, and that it has been acting to date in anficipation that the Port Authority would favorably consider this fmancing proposal. WI3EREAS, the Project and 3ts financing has received an allocation of bonding authority from the State of Minnesota Depariment of Finance. WHEREAS, the Port Authority's Credit Committee and Board have previously adopted their Resolutions No. 26 and 3612, respectively, giving preliminary approvai to the proposed issuance of a revenue bond for the Project. WF�REAS, pursuant to the requirements of Section 147(fl of the Internai Revenue Code of 1986, as amended, and pursuant to a notice published by the Port Authority not less than 15 days prior to the public hearing, a public hearing has been held on the date hereof on the issuance of the Bond, at which public hearing all persons were given an oppommiry to speak. WIIEREAS, the Bond will be issued and secured by the terms of a Loan Agreement (the "Loan Agreement") between the Port Authority, the Bonower and GE Capital Fubiic Finance, Ina, 1521895 q1-'i �5 the purchaser of the Bond (the "Purchaser") and the Bond and the interest on the Bond sha11 be payable solely from the revenue pledged therefor, and shall not constitute a debt of the Port Authority within the meaning of any constitutional or statutory limitarion of indebtedness, nor sha11 the Bond constitute or give rise to a pecuniary liability of the Port Authority or the Ciry or a charge against their general credit or taxing powers and shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Port Authority or the City other than their interest in said Project. WF�REAS, it is intended that interest on the Bond be excluded from gross income of the holders thereof for federal income taac purposes. NOW, THEREFORE, BE IT RESOLVED BY 1T� BOAR.D OF COMNIISSIONERS OF Tf� PORT AUTHORITY OF Tf� CITY OF SAINT PAUL, AS FOLLOWS: 1. On the basis of information available to the Port Authority it appears, and the Port Authority hereby finds, that: the Project consritutes properties, used or useful in connection with one or more revenue producing enterprises engaged in any business within the meaning of Minnesota Statutes, Sections 469152 to 469.165 (the "Act"); the Project furthers the purposes stated in the Act; and it is in the best interests of the port district and the people of the Ciry of Saint Paul and in furtherance of the general plan of development to assist the Company in financing the Project. 2. For the purpose of financing the Project, and paying certain costs o� issuance and other eapenses in connection with the issuance of the Bond, and provided that the Project and its finanoing receive approval by the Department of Trade and Economic Development ("DTED'�, the Fort Authority hereby authorizes the issuance, sale and delivery of the Bond in an aggregate principal amount of approximately $2,000,000. The Bond shall bear interest at such rates, shall be numbered, shali be dated, shali mature, shail be subject to redemption prior to maturity, and shali be in such form and have such other details and provisions as may ba prescribed in the Loan Agreement, substantially in the form now on file in the offices of the Port Authoriry. 3. Neither the Bond, nor the interest thereon, shall constitute an indebtedness of the Port Authority or the City within the meaning of any constitutional or statutory debt limitation; nor shall they constitute ar give rise to a pecuniary liability of the City, the Port Authority ar a charge against their general taxing powers and neither the full faith and credit nor the general taxing powers of the Ciry or the Port Authority is piedged to the payment of the Bond or interest thereon. 4. Forms of ihe fallowing documents have been submitted to the Port Authoriry for review and/or approvat in connecYion with the sale, issuance and delivery of the Bond: a. the Loan Agreement; b. the Bond; and 1521895 1� - yt5 a the Escrow Agreement to be entered into between the Port Authority, the Borrower, the Purchaser and National City Bank as the escrow agent. (collecrively, the "Documents"). >. It is hereby found, detemrined and declazed that: a. The issuance and sale of the Bond, the execution and delivery by the Port Authority of the Documents and the performance of all covenants and agreements of the Port Authority contained in the Documents, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Bocuments and the Bond valid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Secrions 469.152 through 469.165, as amended (the "Act")• > b. It is desirable that the Bond be issued by the Port Authority upon the genezal terms set forth in the Documents, as applicable; c. Under the provisions of and as provided in the Documents, the Bond is not to be payable from or a chazge upon any funds other than the revenues pledged to the payment thereof; no holder of the Bond shall ever have the right to compei any exercise by the City or the Port Authority of its taxing powers to pay the Bond or the interest or premium thereon, or to enforce payment thereof against any properiy of ti�e City or the Port Authority excepi the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bond shall not constitute a charge, lien or encumbrance, legal or equitable, upon any properry of the City or the Port Authoriry except the interests of the Port Authority and the Ciry which ha�e been pledged to the Trustee under the Indenture; the Bond shall recite that it is issued without moral obligauon on the part of the State or its politicai subdivisions, and that the Bond, including interest thereon, is payable solely from the revenues pledged to the payment thereof; and the Bond shall not constitute a debt of the City or the Port Authority within the meaning of any consYitutional or statutory limitation. 6. The forms of the Documents and e7:hibits thereto are approved substanrially in the forms submitted and on file in the offices of Port Authority, with such subsequent changes as may be approved by Port Authority staff and Bond Counsei as contemplated by paragraph 8. The Chair and Secretary of the Port Authority, or such other officer as may be appropriate in the absence of either the Chair or Secretary, aze hereby authorized and directed to execute the Documents (to the extent the Port Authority is a party thereto) in substantially the forms submitted, as modified pursuant to paragraph 8, and any other documents and certificates which in the opinion of Port Authority staf£and Bond Counsel aze necessary to the transacrion herein described The execution of any instrument bp the appropriate officer or officers of the Port Authority herein authorized sha11 be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transaction herein described by individuals who were at the time of execution ihereof the authorized officers of the Port Authority shall bind the iszis9s 3 �1�-y�S Port Authority, notwithsranding zhat such individuais or any of them has ceased to hold such o�ce or offices prior to the authentication and delivery of the Bond. Copies of all of the documents necessary ta the transaction described shall be delivered, filed and recorded as provided herein and in the Indenttu�e. 7. The President and other officers of the Port Authority are authorized and directed to prepaze and fiunish to the Placement Agent and Bond Counsel certified copies of proceedings and recards of the Port Authority relating to the issuance of the Bond and other transactions herein cantemplated, and such other affidavits and cerrificates as may be required to show the facts relating to the legality of the Bond and the other transactions herein contempiated as such facts appear from the books and records in the officers' custody and control or as otheiwise known to them; and ali such certified copies, certificates and affidavits, including any heretofore furnished, shail constitute representations of the Port Authoriry as to the truth of all statements contained therein. 8. The approval hereby given to the various Documents referred to above includes approval of such additional details therein as may be necessaty and appropriate, and such modifications thereof, deletions therefrom and addirions thereto as may be necessazy and appropriate and approved by the Port Authority's President and Chief Financial Officer; and includes approval of, among other things: a. establishment of the final principal amount of the Bond; b. the establishment of the maturity schedule and call provisions to be applicable to the Bond; and c. such related instruments as may be required to satisfy the conditions of any purchaser of the Bond. 9. The Port Authority to approve, execute and deliver future amendmenis to financing documents entered into by the Port Authority in connection �vith the issuance of the Bond and the other transactions herein contemplated, is hereby delegated to the President of the Port Authority, provided that: (a) such amendments either do not require the consent of the holder o£ the Boad or such consent as may be required has been obtained; (b) such aznendments do not materially adversely affect the interests of the Port Authority as the issuer of the Bond; (c) such amendments do not contravene or violate any policy of the Port Authority; and (d) such amendments are acceptable in form and substance to Bond Counsel. The execution of any instrument by the President of the Port Authority shail be conclusive evidence of the approval of such ins�truments in accordance with the terms hereof. 10. No covenant, sripulation, obligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the Boazd of Commissioners of the Port Authority, or any officer, agent or employee of the Port Authority in that persons individuai capacity, and neither the Board of Commissioners nor any iszie9s 4 , . q'� - y`5 officer executing the Bond shall be liable personally on the Bond or be subject to any personal liability or accountabiIiry by reason of the issuance thereof. Adopted: Aprii 29, 1997 PORT AUTHORITY OF TI� CITY OF SAII�3T PAUL By Its Chair ATTEST: By Its Secretary 1521895 5 �� .�--. t1TN OP THE CITY OF SAINT PAUI ,,.,., �...�,.,ARK TOWERS • 345 ST. PEiER STREEf Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Na11 Annex 25 West Fourth Street St. Paul, Minnesota 55102 • ST. PAUL, MN 55102-16b1 April 14, 1997 RE: $2,OOQ,000 TAX-EXEMPT CONDUIT BOND 4SSUE BRO-TEX GOMPANY, INC. �� . Dear Ms. �lock: � FAX (612) 223-5198 TOLL Fl2EE (800) 328-8417 • PHONE (612) 224-Sb8b q �.N�S We submit for your review and referral to the office ofi the Mayor, City Council, and City Attorney's office, detaiis pertaining to the issuance of a tax-exempt conduit bond issue in the amount of $2,000,000 to finance the acquisition and instaltation of a new fiber production line at Bro-Tex Company's existing manufacturing location at 800 Hampden Avenue, Saint Paul, Minnesota. The Port Authority has received an indusfriai revenue bond allocafion from the State of Minnesota Smali issue Pooi, as the project is manufa�turing. The City of Saint PauPs entitiement allocation wiA not be affected by this application. The cfosing deadline, because of the aliocation, is June 10, 1997. in addition to the staff memorandum, we are attaching a draft copy of the proposed City Council Resolution and a copy of the Resolution conducti�g the required pubiic hearing and authorizing the saie ofi ihe revenue bond issue in the amount of $2,DOQ,OQO that wiil be considered by the Port Authority's Board on April 29, 1997. City Council action will be required after the Port Authority's Board meeting of Aprii 29, 1997. Your expeditious handling of this matter will be appreciated. KRJ:ak Attachment cc: Mayor Coleman g:aklgreglErote�v doc Sincerey, �G Kenneth R. Johnson President