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98-137Council File # R 8- 13� Green Sheet # � �j \ \ 8 � R I G� NA L CI`YpF SAINT PAULOMINNESOTA ' g PrasenteJ by Referred To C:I:17f:i71_�.`A C.ommittee Date 1. The Port Authority of the City of Saint Paul (the "Authorit}�� has given its approval to the issuance of its $2,350,000 Industrial Development Revenue Note (3N Properties Project) (the "Taac-Exempt Note'� and $650,000 Taxable Industrial Development Revenue Note (3N Praperties Project) (the "Ta�cable Note" and, together with the Ta�c-Exempt Note, the `23otes") to finance the costs to be incurred in connection with the acquisition, construction and equipping of a manufacturing, warehouse and office facility located at 240 Arlington Avenue within the City of Saint Paul (the "ProjecP') to be owned by 3N Properties and leased to Addco, Inc.; and 2. Approval of the issuance of the proposed Notes by the "applicable elected representarive" of the geographic azea in which the proposed Project is located is required by Secfion 147(� of the Internal Revenue Code of 1986, as amended, and the Port Authority has therefore requested that ffie Ciry CouncIl gives its requisite approval pursuant to said requiremenu to facilitate the issuance oIthe proposed Notes by the Port Authority, subject to final approval of the details of said Notes by We Port Authority; and NOW, TI�REFORE, BE IT RESOLVED by the Council of the City of Saint Paul that, in accordance with the requirements of Secrion 147(fl of the Internal Revenue Code of 1986, as amended, the City Council hereby approves the issuance of the aforesaid Notes by the Port Authority for the purposes described in the Port Authority resolurion adopted Febmary 24, 1998, the exact details of which, including but not limited to, provisions relating to maturity, interest rate, discount, prepayment, and the issuance of addirional bonds are to be determined by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refunding bonds) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for wluch the aforedescribed Notes are issued. ��:��, '�,-: ,... ��! �TI � 11 � 1 • ��__ ',I . � \I . � � � . ��__I ��' �� e� Adopted by CouncIl: Date � ssc .�-� ��p Adoption Certified by Council Secretary By: Approve Br• Req d by Departm nt of• ��isvt'`"�� CN 'v��'�J�t''"�"�" { f B�f: �/ f! Form Approved by City Attomey s ��..�..� j _ G .-_.' � a��- ��- Approved by a o for Submission t ci By: 98 •��'� ORlGINAL S Paul Port Authority 1NTAGT PERSON & PHONE Peter M. Klein 7- GREEN SHE dTVATfORNEY r • BUDGET OIRECTOR MAYOR (OR ASSISTAN'() FOR TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCAT10N5 FOR SiGNATURE) �t�-�3� N° _13118 INRIAVDATE — CITV COUNQI CENCLERK FIN. & MGi. SERVICES OIR. Approval of the issuance of approximately $3,000,000 of tax exempt and taxable notes to 3N Properties (ADDCO, Inc.) for the construction of a new office and production facility of approximately 77,000 square feet in Arlington Business Center. RECAMMENDATIONS: Approve (A) rn Rajec _PLANNWGCAMMISSION i __ q6 CAMMITTEE A • , __ STAFF _ , _ DISTRYCT CAUflT _ . SUPPORTS WFiICH COUNCIL OBJECTIYE? PERSONAL SEHVICE CONTRACTS MUSTANSWEfl THE FOLLOWING QUESTIONS: 1. Has this personhrm ever worked under a contract for this department? YES NO 2. Has this personRirm ever been a city employee? YES NO 3, �oes this persoNfirm possess a skill not normally pos5essetl by any cutrent city employee? YES NO Explain ali yes answsrs on separete sheet ana attach to green sheet The issuance of a bond issue will aliow the construction ofi a new office and production facility in Arlington Business Center. As a result of the new office and production facility, it is anticipated that 34 new jobs will be created in the first two years of operations. None. �?l!??ull ^��0�°:� vL?'t'i�t . s:�� ' : ' c he new jobs created by this new facility will not be created. � AMOUNT OF TRANSACTION $ 3 e OOO � OOO COST7REVEPIUE BUDGETED (CIRCLE ONE) YES NO �c sauece Port AuthoritY tax exempt and ACTIVITYNUMBER \LINFORMATION.(EXPLAIN) taxable conduit notes � �irr ��-�-- 9t-�� tIN OF THE CITY OF SAINT PAUL FAX (612) 223-5198 TOLL FREE (800) 328-8417 ��.,,, „ti.��.�ARKTOWERS • 345 ST. PFfER STREET • ST. PAUL MN 55102-16b1 • PHONE (612) 224-5b86 February 18, 1998 Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Hait Annex 25 West Fourth Street St. Paul, Minnesota 55102 RE: $3,000,000 TAX-EXEMPT AND TAXABLE CONDUIT NOTES 3N PROPERTIES (ADDCO, INC.) DearMs. eelv6�:�'' We submit for your review and referral to the office of the Mayor, City Council, and City Attorney's office, details pertaining to the issuance of tax-exempt and taacable conduit notes in the approximate amount of $3,000,000 to finance the construction of a new office and production facility of approximately 77,000 square feet in the Arlington Susiness Center, St. Paul, Minnesota. The Port Authority has received an industrial revenue bond allocation from the State of Minnesota Small Issue Pool, as the project is manufacturing. The City of Saint Paui's entitlement allocation will not be affected by this application. !n addition to the staff memorandum, we are attaching a draft copy of the proposed City Council Resolution and a copy of the Resolution conducting the required public hearing and authorizing the saie of the revenue bond issue in the amount of $3,000,000 that will be considered by the Port Authority's Board on February 24, 1998. City Council action will be required after the Port Authority's Board meeting of February 24, 1998. Your expeditious handiing of this matter wifi be appreciated. Sincerely ��---_____... Kenneth R. Johnson President KRJ:jmo Attachment cc: Mayor Coleman g:pmk44n-cty SAINT PAUL PORT AUTHORITY � .•� • ► TO: Credit Committee (February 17, 1998 Regular Meeting) FROM: Peter M. Klein � Lorrie J. Louder Kenneth R. Johnson DATE: Feb.10, 1998 SUBJECT: 3M PROPERTfES (ADDCO, INC.) - Authorization for the tssuance of Approximately $3,000,000 of Ta�c Exempt and Taxable Notes ��I«1di � : � � �18 • ��'� Approval of final resofution authorizing the issuance of an approximate $3,000,000 conduit note issue to 3N Properties (ADDCO, tnc.). PROJECT SUMMARY: Estimated Amount: Type: Term: Issuer: Borrower: Correspondent: Lender: Piacement Agent: Borrowers Counsel: Bond Counsel: BACKGROUND: $3,000,000 - Series 1 - $2,350,000 Tax Exempt - Series 2 - $650,000 Taxable Fixed Rate )ndustrial Development Revenue Notes 10 Years with a 28-year amortization Port Authority of tfie City of Sair�t Paul 3N Properties (ADDCO, Inc.) Eberhardt Company UNUM Life lnsurance Company and an affiliated ent+ty Piper Jaffray, Inc. Rider Bennett Law Firm Leonard, Street & Deinard I'he Borrower. 3N Properties has purchased a site in the Adington Business Center for the construction of a new facility of approximately 77,000 square feet. 3N Properties is the real estate holding entity for ADDCO, inc., and is currentiy located at 69 Empire Drive in Saint Paul in a 24,000 square foot buiiding. ADDCO was formed in 1953. Their business is manufacturing trailer- mounted programmable message signs and hand electrical controls for industrial machines. They also customize diesei and gasoline engines for the indusirial trade. February 10, 1998 Page -2- The Nates: The Notes wiil b� interest at a faed 10 years. r- �,$' •l�� issued in the approximate principai amount of $3,000,000 and wiU bear rate of 5.84°k for the tax-exempt notes and 7.30% for the taxable notes for The Project: The proceeds of the Notes will be loaned to the Borrower, and used to construct a new approximate 77,000 square foot office and production facility in the Sairrt Paui Port Authority's Arlington Business Center. The availabiliiy of th+s financing will enable ADDCO to expand its present production capacity. As a resuR, new jobs will also be created to support the revenue and production increases. In addition to this facility financing, there is $250,000 of equipment that will be financed on a tax-exempt basis through another lender. This wil{ {ikely be brought before the Credit Committee and Board of Gommissioners neact month. Em�lo.yment Im�act: This project is important because it retains the company and its jobs in Saint Paul as well as adds fufl-time positions. Under the Port Authority's Worfcforce and Employment Agreement ADDCO, Inc. witl trarisfer its curcent 91 full-t+me employees to the Arlington Business Center facility and add an additional 25 futl 4ime positions within three years. The company now anticipates creating 34 additional jobs in the first finro years of operations at the new faciiity. As a result of the construction of this new officelproduction facility, ADDCO has estimated that there will be an annual payrotf increase ofi $1,031,680 per year when fully operational. Most of the jobs will likely be professional positions paying an average of $15.00 per hour. The Lender. The lender will be UNUM Lffe Insurance Company for the taxable note and a UNUM aff+liate for the tax-exempt note. � -. . . - . . Sources of Funds: Note Proceeds Estimated Borrower Funds Total Sources of Funds tZses of Funds: Building Construction Estimated Costs of Issuance Total Uses of Funds �i� �� . � .�� . � �� $3,430,000 220,000 $3,650,000 February 10, 1998 Page -3- SECURfTY FOR THE NOTES: °ig -�3'1 Cgnduit Financina: The notes wifl be conduit financing of the Authority and wilf not constitute or give rise to a liability of the Aufhority, the C+ty of Saint Paul or the State of Minnesota or a charge against their general credit or tvcing powers. The note holder will not have the right to demand paymenf of the notes out of any funds to be raised from taxation or from any revenue sources ofher than those expressly pledged to payment of the notes pursuant to the loan agreement. The Port Authority wi11 receive fees in tfie amount of 1/8th of a point ($3,750.00) at inception and 1/8th of a point on the outstanding balance, annually, for the life of the notes. Loan Agreement: The Authority has pledged its interest in the loan agreement to UNUM to secure the notes. DISCLOSURE: Port Authority Commissioners, by S.E.C. rules, are obligated to disclose any risks or facts you may be aware of that would affect the probability of repayment of these notes. • ll 1 • • Recommend approval of authorizing issuance of the approximate $3,000,000 conduit notes issued on behalfi of 3N Properties (ADDCO, fnc.). PMK:jmo 9:lpmlCl3naaa�c °I� -��'1 Resoiution No. RESOLUTION OF THE PORT At7THORITY OF THE CTPY OF SAINT PAUL WHEREAS, it has been proposed that the Port Authoriry of the City of Saint Paui (the "Port Authority'� issue its Industriat Deveiopment Revenue Note (3N Properties Project) (the "Tax- Esempt Note'� and Taxable Industrial Developmeat Revenue Note (3N Properties Project) (the "Taxable 23ote" and, togeiher with the Tax-Fxempt I3ote, the "Notes'� in an aggregate principal amount not to exceed $3,000,000 and that the procezds of such Notes be loaned to 3N Properiies, a Minnesota general partnership (the "Borrawei'� to finance the acquisirion, construction and equipping of a manufacturing, warehouse and office facility (the "Project'� in the City of 5aint Paul, Minnesota {the "City'�, to be owned by the Borrower and leased to Addco, Inc. WHEREAS, proceeds of the Taac-Exempt Note will be loaned to the Boaower pursuant to a Loan Agreement (the "Tas-Exempt Loan Agreemern'� to be entered into between the Port Authority and the Borrower; and VTHEREAS, proceeds of the Taxable Note will be loaned to the Borrower pursuant to a Loan Agreement (the "Taxable Loan Agreement'� to be entered into between the Port Authority and the Bonower; and �Vf�EREAS, the Tax-Exempt Note will be purchased by NY Holdings 1994-1 ("NY Holdings"�, and the Taxable Note will be purchased by Unum Life Insurance Company of America ("iJnum'�; and WI�REAS, the payment of the Tax-Exempt Note will be secured by a fully recourse Mortgage and Security Agreament and Fixt�ue Financing Statement from the Borrower in favor of NY Holdings {the "l�tY Hoidings Mortgage"); and WHEREAS, the payment of the Taxable Note will be secured by a fully recourse Mortgage and Security Agreament and Fi�.ure Financing Statement from tYie Bonower in favor of Unum (the "Unum Mortgage"); and VJI-IEREAS, the Port Authority has received an ailocation of bonding authority far the Projeci from the Minnesota Department of Trade and Economic Developmeut as required by the Intemal Revenue Code of 1986, as amended, and Minn. Stat Ch. 474A; and W�REA5, the Port Authority's Credit Committee and Boazd have previously adopted their Resolution Nos. 30 and 3632, respectively, giving prelim.inary approval to the proposed issuance of revenue bonds for the Project; and WHEREAS, Port Authority staff has reviewed this proposat with the Credit Committee, all as more specifically set forth in the staff memoraudum on file, and the Credit Committee °Ig -ta�t recommends approval of this Resolution; the issuance of the I3otes; and the execution of all documents ouflined herein and in the staff memorandum, or otherwise necessary to the consummation of these tr-<msactions; and WfiEREAS, the Port Authority, pursuant ta Section 147(fl of the Code, pubiished a notice, a copy of which with proof of publication is on file in the office of the Port Authority, of a public hearing on the proposal to issue the Notes to finan.ce the Project; and WHEREAS, the Port Authority conducied a public hearing on the date hereof pursuant to said notice, at which hearing the recommendations contained in the Port Authority's staff memoraudum to the Board of Commissioners were reviewerl, and all persans who appeared at the hearing were given an opportunity to ezcgress their views with respect to the proposal; and NOW TI�REFORE, BE IT RESOLVED by the Boazd of Commissioners of ttie Port Authority of the City of Saint Pau1 as follows: 1. The issuance of the Notes ia an amount not to exceed $3,000,000, is hereby approved, subject to the Project and its financing receiving approval from the Degartment of Trade and Economic Development and the issuance of the Notes being approved by the Ciry Council of the City of Saint Paul, Minnesota (the "City'�, as described in paragraph 9, below. 2. Neither the Notes, nor the interest therean, shall constitute indebtedness of the Port Authority or ffie City within the meaning of any constitutional or statutory debt limitation; nor shall they constitute or give rise to a pecuniary liability of the City or the Port Authority or a chazge against their general taxing powers and neither the full faith and credit nor the general taxing powers of the City or the Port Authority is pledged to the payment of the Notes or interest thereon. 3. Forms of the following documents have been submitted to the Port Authority for review and/or approval in connection with the sale, issuance and deiivery of the Notes: (a) the Tax-Exempt Note; (b) the TaYable Note (c) the Tas-Bxempt Loan Agreement; (d) the Taa�able Loan Agreement; (e) the NY Holdings Mortgage; (fl the Unum Mortgage; (g) the Pledge of Loan Agreement, to be dated as of Mazch i, 199$ by and between the Port Authority and NY Holdings; and 1634553.01 2 °l$ -��'1 (h) the Pledge of Loan Agreement, to be dated as of March 1, 1998 by and between the Port Authority and Unum (collectively the "Documents'�. 4. It is hereby found, detemuned and deciared that: (a) The issuance and sale of the Notes, the execution and delivery by the Port Authority of the Documents, as applicable, and the performance of all covenants and agreements of the Port Authority contained in the Documents, and of all other acts and things required under the Constirirtion and laws of the State of Minnesota to make the Documeats and the Notes vaiid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Seotions 469.048 through 464.068 and 469.152 through 469.1651, as amended (the "Act"); (b) It is desirable that the Notes be issued by the Port Autliority upon the generai terms set forth in tlie Documents, as applicable; (c) Under the provisions of and as provided in the Documents, the Notes aze not to be payable from or a charge upon any funds other than the revenues pledged to the payment thereof; no holder of the Notes shall ever have the right to compei any exercise by the City or the Port Autharity of its ta�cing powezs to pay the Notes or the interest or premium thereon, or to enforce payment thereof against any property of the City or the Port Authority except the interests of the Port Authority wluch have been assigned to NY Holdings and Unum, the Notes s$ali not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City or the Port Authority except the interests of the Port Authority which have been assigned to NY Holdings and Unum; the Notes shail recite that they are issued without moral obligation on the part of the State or its political subdivisions, and that the Notes, including interest thereon, aze payable solely from the revenues pledged to the payment thereof; and the Notes shali not constitute debt of the City or the Port Authoriiy within the meaning of any constitutionai or statutory limitation. 5. The forms of the Documents and e�ibits thereto are approved substantially in the forms submitted and on file in the offices of the Port Authority, with such subsequent changes as may be approved by the Port Authority staff, counsei and Bond Counsel as contemplated by pazagraph 7. The Chair and Secretary of the Port Authority, or such other officers as may be appropriate in the absence of either the Chair or Secretary, are hereby authorized and directed to exeoute the Documents (to the extent the Port Authority is a party thereto) in substantially the fornis submitted, as modified pursvant to paragraph 7, and any other doeuments and certificates which in the opinion of Port Authority staff, counsel and Bond Counsei aze necessary to the transactions herein described. The execution of any insh�ument by the appropriate officer or officers of the Port Authority herein authorized shall be conciusive evidence of the approval of 1634553.01 3 q�-ti�� such documents in accordance with the terms hereof. Copies of all the documents necessary to the transaction described shall be delivered, filed and recorded as provided herein. 6. The President and other officers of the Port Authority are authorized and directed to prepaze and fumish to NY Holdings, Unum and Bond Counsel certified capies of proceedings and records of the Port Authority relating to the issuauce of the Notes and other trausactions herein contemplaYed, and such other affidavits and certificates as may be required to show the facrs relating to the legality of the Notes and the other transaciions herein contemplated as such facts appear from the books and records in the o�cers' custody and control or as otherwise lmown to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shali constitute representations of the Port Authority as to the truth of ali statements contained therein. 7. The approval hereby given to the various Documents referred to above inciudes approval of such additional details therein as may be necessazy and appropriate, and such modifications thereof, deletions therefrom and additions tiiereta as may be necessazy and appropriate and approved by the Port Authority's President and Chief Financiai Officer; and inciudes approval of, among other things: (a) establishment of the final principal amount of the Notes and the interest rates to be borne thereby; �rovided that the maximum principai amount of the Tas- Exempt Note shall not exceed $2,600,000, and the maxunum aggregate auaount of both the Taac-Exempt Note and the TaYable Note together shall not exceed $3,000,000; and nro, vided fi�h� that the maximum interest rate on the T�-Exempt Note shall not excead ^% per annum, and the maximum interest rate on the Tasable Note shall not exceed _% per annum; (b) the establishment of the maturity schednle and caii provisions to be applicable to the Notes; and (c) such related insmzments as may be required to satisfy the conditions of 1�II' Holdings and Unum. 8. The proposal of NY Hoidings and Unum to purchase the �iotes upon the terms and conditions set forth in the Documents and other materiais submitted by NY Holdings and Unum to the Port Awthority are hereby found and determined to be reasonable and aze hereby accepted. 9. The staff of the Port Authority is authorized to (a) submit the application for approvat of the Project by the Department of Trade and Ecanomic Development of the State of Minnesota as required by Minn. Stat. Sections 469.152 through 469.1651, and (b) take the steps necessary to obtain the approval of the issuance of the i�iotes by the Ciry Council of the City as required by Section 147{fl of the Internal Revenue Code of 198b, as amended. 1634553.01 4 °Ig -�3'1 10. The authority to approve, �ecute and deliver future amendments to financing documents entered into by the Port Authority in connection with the issuance of the Notes and the other transactions hereia contemplated, is hereby delegated to the President of the Port Authority, subjeci to ihe following conditions: (a) such amendments do not materially adversely affect the interests of the Port Authority as the issuer of the Notes; (b) such amendments do not contravene or violate any policy of the Port Authority; (c) such amendments are acceptable in form and substance to Bond Counsei; and (d) the Port Authority has received an opinion of Bond Counsei to the e$ect that the amendments will not adversely affect the tax-exempt character of interest on the T�-Exempt Note. The execution of any instrument by the President of the Port Anthority shail be conclusive evidence of the approval of such instrumenu in accort3ance with the terms hereof. 11. No covenant, stipulation, obligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipuiation, 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 �apacity, and neitlier the Boazd of Commissioners nor any officer executing the Notes shail be liable personally on the Notes or be subject to any personal liabiliry or accountability by reason of the issuance thereof. Adopted: February 24, 1998. ATTEST: By Its Secretaty 1634553.91 PORT AUTHORITY OF THE CITY OF SAINT PAUL By Its Chair 5 Council File # R 8- 13� Green Sheet # � �j \ \ 8 � R I G� NA L CI`YpF SAINT PAULOMINNESOTA ' g PrasenteJ by Referred To C:I:17f:i71_�.`A C.ommittee Date 1. The Port Authority of the City of Saint Paul (the "Authorit}�� has given its approval to the issuance of its $2,350,000 Industrial Development Revenue Note (3N Properties Project) (the "Taac-Exempt Note'� and $650,000 Taxable Industrial Development Revenue Note (3N Praperties Project) (the "Ta�cable Note" and, together with the Ta�c-Exempt Note, the `23otes") to finance the costs to be incurred in connection with the acquisition, construction and equipping of a manufacturing, warehouse and office facility located at 240 Arlington Avenue within the City of Saint Paul (the "ProjecP') to be owned by 3N Properties and leased to Addco, Inc.; and 2. Approval of the issuance of the proposed Notes by the "applicable elected representarive" of the geographic azea in which the proposed Project is located is required by Secfion 147(� of the Internal Revenue Code of 1986, as amended, and the Port Authority has therefore requested that ffie Ciry CouncIl gives its requisite approval pursuant to said requiremenu to facilitate the issuance oIthe proposed Notes by the Port Authority, subject to final approval of the details of said Notes by We Port Authority; and NOW, TI�REFORE, BE IT RESOLVED by the Council of the City of Saint Paul that, in accordance with the requirements of Secrion 147(fl of the Internal Revenue Code of 1986, as amended, the City Council hereby approves the issuance of the aforesaid Notes by the Port Authority for the purposes described in the Port Authority resolurion adopted Febmary 24, 1998, the exact details of which, including but not limited to, provisions relating to maturity, interest rate, discount, prepayment, and the issuance of addirional bonds are to be determined by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refunding bonds) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for wluch the aforedescribed Notes are issued. ��:��, '�,-: ,... ��! �TI � 11 � 1 • ��__ ',I . � \I . � � � . ��__I ��' �� e� Adopted by CouncIl: Date � ssc .�-� ��p Adoption Certified by Council Secretary By: Approve Br• Req d by Departm nt of• ��isvt'`"�� CN 'v��'�J�t''"�"�" { f B�f: �/ f! Form Approved by City Attomey s ��..�..� j _ G .-_.' � a��- ��- Approved by a o for Submission t ci By: 98 •��'� ORlGINAL S Paul Port Authority 1NTAGT PERSON & PHONE Peter M. Klein 7- GREEN SHE dTVATfORNEY r • BUDGET OIRECTOR MAYOR (OR ASSISTAN'() FOR TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCAT10N5 FOR SiGNATURE) �t�-�3� N° _13118 INRIAVDATE — CITV COUNQI CENCLERK FIN. & MGi. SERVICES OIR. Approval of the issuance of approximately $3,000,000 of tax exempt and taxable notes to 3N Properties (ADDCO, Inc.) for the construction of a new office and production facility of approximately 77,000 square feet in Arlington Business Center. RECAMMENDATIONS: Approve (A) rn Rajec _PLANNWGCAMMISSION i __ q6 CAMMITTEE A • , __ STAFF _ , _ DISTRYCT CAUflT _ . SUPPORTS WFiICH COUNCIL OBJECTIYE? PERSONAL SEHVICE CONTRACTS MUSTANSWEfl THE FOLLOWING QUESTIONS: 1. Has this personhrm ever worked under a contract for this department? YES NO 2. Has this personRirm ever been a city employee? YES NO 3, �oes this persoNfirm possess a skill not normally pos5essetl by any cutrent city employee? YES NO Explain ali yes answsrs on separete sheet ana attach to green sheet The issuance of a bond issue will aliow the construction ofi a new office and production facility in Arlington Business Center. As a result of the new office and production facility, it is anticipated that 34 new jobs will be created in the first two years of operations. None. �?l!??ull ^��0�°:� vL?'t'i�t . s:�� ' : ' c he new jobs created by this new facility will not be created. � AMOUNT OF TRANSACTION $ 3 e OOO � OOO COST7REVEPIUE BUDGETED (CIRCLE ONE) YES NO �c sauece Port AuthoritY tax exempt and ACTIVITYNUMBER \LINFORMATION.(EXPLAIN) taxable conduit notes � �irr ��-�-- 9t-�� tIN OF THE CITY OF SAINT PAUL FAX (612) 223-5198 TOLL FREE (800) 328-8417 ��.,,, „ti.��.�ARKTOWERS • 345 ST. PFfER STREET • ST. PAUL MN 55102-16b1 • PHONE (612) 224-5b86 February 18, 1998 Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Hait Annex 25 West Fourth Street St. Paul, Minnesota 55102 RE: $3,000,000 TAX-EXEMPT AND TAXABLE CONDUIT NOTES 3N PROPERTIES (ADDCO, INC.) DearMs. eelv6�:�'' We submit for your review and referral to the office of the Mayor, City Council, and City Attorney's office, details pertaining to the issuance of tax-exempt and taacable conduit notes in the approximate amount of $3,000,000 to finance the construction of a new office and production facility of approximately 77,000 square feet in the Arlington Susiness Center, St. Paul, Minnesota. The Port Authority has received an industrial revenue bond allocation from the State of Minnesota Small Issue Pool, as the project is manufacturing. The City of Saint Paui's entitlement allocation will not be affected by this application. !n addition to the staff memorandum, we are attaching a draft copy of the proposed City Council Resolution and a copy of the Resolution conducting the required public hearing and authorizing the saie of the revenue bond issue in the amount of $3,000,000 that will be considered by the Port Authority's Board on February 24, 1998. City Council action will be required after the Port Authority's Board meeting of February 24, 1998. Your expeditious handiing of this matter wifi be appreciated. Sincerely ��---_____... Kenneth R. Johnson President KRJ:jmo Attachment cc: Mayor Coleman g:pmk44n-cty SAINT PAUL PORT AUTHORITY � .•� • ► TO: Credit Committee (February 17, 1998 Regular Meeting) FROM: Peter M. Klein � Lorrie J. Louder Kenneth R. Johnson DATE: Feb.10, 1998 SUBJECT: 3M PROPERTfES (ADDCO, INC.) - Authorization for the tssuance of Approximately $3,000,000 of Ta�c Exempt and Taxable Notes ��I«1di � : � � �18 • ��'� Approval of final resofution authorizing the issuance of an approximate $3,000,000 conduit note issue to 3N Properties (ADDCO, tnc.). PROJECT SUMMARY: Estimated Amount: Type: Term: Issuer: Borrower: Correspondent: Lender: Piacement Agent: Borrowers Counsel: Bond Counsel: BACKGROUND: $3,000,000 - Series 1 - $2,350,000 Tax Exempt - Series 2 - $650,000 Taxable Fixed Rate )ndustrial Development Revenue Notes 10 Years with a 28-year amortization Port Authority of tfie City of Sair�t Paul 3N Properties (ADDCO, Inc.) Eberhardt Company UNUM Life lnsurance Company and an affiliated ent+ty Piper Jaffray, Inc. Rider Bennett Law Firm Leonard, Street & Deinard I'he Borrower. 3N Properties has purchased a site in the Adington Business Center for the construction of a new facility of approximately 77,000 square feet. 3N Properties is the real estate holding entity for ADDCO, inc., and is currentiy located at 69 Empire Drive in Saint Paul in a 24,000 square foot buiiding. ADDCO was formed in 1953. Their business is manufacturing trailer- mounted programmable message signs and hand electrical controls for industrial machines. They also customize diesei and gasoline engines for the indusirial trade. February 10, 1998 Page -2- The Nates: The Notes wiil b� interest at a faed 10 years. r- �,$' •l�� issued in the approximate principai amount of $3,000,000 and wiU bear rate of 5.84°k for the tax-exempt notes and 7.30% for the taxable notes for The Project: The proceeds of the Notes will be loaned to the Borrower, and used to construct a new approximate 77,000 square foot office and production facility in the Sairrt Paui Port Authority's Arlington Business Center. The availabiliiy of th+s financing will enable ADDCO to expand its present production capacity. As a resuR, new jobs will also be created to support the revenue and production increases. In addition to this facility financing, there is $250,000 of equipment that will be financed on a tax-exempt basis through another lender. This wil{ {ikely be brought before the Credit Committee and Board of Gommissioners neact month. Em�lo.yment Im�act: This project is important because it retains the company and its jobs in Saint Paul as well as adds fufl-time positions. Under the Port Authority's Worfcforce and Employment Agreement ADDCO, Inc. witl trarisfer its curcent 91 full-t+me employees to the Arlington Business Center facility and add an additional 25 futl 4ime positions within three years. The company now anticipates creating 34 additional jobs in the first finro years of operations at the new faciiity. As a result of the construction of this new officelproduction facility, ADDCO has estimated that there will be an annual payrotf increase ofi $1,031,680 per year when fully operational. Most of the jobs will likely be professional positions paying an average of $15.00 per hour. The Lender. The lender will be UNUM Lffe Insurance Company for the taxable note and a UNUM aff+liate for the tax-exempt note. � -. . . - . . Sources of Funds: Note Proceeds Estimated Borrower Funds Total Sources of Funds tZses of Funds: Building Construction Estimated Costs of Issuance Total Uses of Funds �i� �� . � .�� . � �� $3,430,000 220,000 $3,650,000 February 10, 1998 Page -3- SECURfTY FOR THE NOTES: °ig -�3'1 Cgnduit Financina: The notes wifl be conduit financing of the Authority and wilf not constitute or give rise to a liability of the Aufhority, the C+ty of Saint Paul or the State of Minnesota or a charge against their general credit or tvcing powers. The note holder will not have the right to demand paymenf of the notes out of any funds to be raised from taxation or from any revenue sources ofher than those expressly pledged to payment of the notes pursuant to the loan agreement. The Port Authority wi11 receive fees in tfie amount of 1/8th of a point ($3,750.00) at inception and 1/8th of a point on the outstanding balance, annually, for the life of the notes. Loan Agreement: The Authority has pledged its interest in the loan agreement to UNUM to secure the notes. DISCLOSURE: Port Authority Commissioners, by S.E.C. rules, are obligated to disclose any risks or facts you may be aware of that would affect the probability of repayment of these notes. • ll 1 • • Recommend approval of authorizing issuance of the approximate $3,000,000 conduit notes issued on behalfi of 3N Properties (ADDCO, fnc.). PMK:jmo 9:lpmlCl3naaa�c °I� -��'1 Resoiution No. RESOLUTION OF THE PORT At7THORITY OF THE CTPY OF SAINT PAUL WHEREAS, it has been proposed that the Port Authoriry of the City of Saint Paui (the "Port Authority'� issue its Industriat Deveiopment Revenue Note (3N Properties Project) (the "Tax- Esempt Note'� and Taxable Industrial Developmeat Revenue Note (3N Properties Project) (the "Taxable 23ote" and, togeiher with the Tax-Fxempt I3ote, the "Notes'� in an aggregate principal amount not to exceed $3,000,000 and that the procezds of such Notes be loaned to 3N Properiies, a Minnesota general partnership (the "Borrawei'� to finance the acquisirion, construction and equipping of a manufacturing, warehouse and office facility (the "Project'� in the City of 5aint Paul, Minnesota {the "City'�, to be owned by the Borrower and leased to Addco, Inc. WHEREAS, proceeds of the Taac-Exempt Note will be loaned to the Boaower pursuant to a Loan Agreement (the "Tas-Exempt Loan Agreemern'� to be entered into between the Port Authority and the Borrower; and VTHEREAS, proceeds of the Taxable Note will be loaned to the Borrower pursuant to a Loan Agreement (the "Taxable Loan Agreement'� to be entered into between the Port Authority and the Bonower; and �Vf�EREAS, the Tax-Exempt Note will be purchased by NY Holdings 1994-1 ("NY Holdings"�, and the Taxable Note will be purchased by Unum Life Insurance Company of America ("iJnum'�; and WI�REAS, the payment of the Tax-Exempt Note will be secured by a fully recourse Mortgage and Security Agreament and Fixt�ue Financing Statement from the Borrower in favor of NY Holdings {the "l�tY Hoidings Mortgage"); and WHEREAS, the payment of the Taxable Note will be secured by a fully recourse Mortgage and Security Agreament and Fi�.ure Financing Statement from tYie Bonower in favor of Unum (the "Unum Mortgage"); and VJI-IEREAS, the Port Authority has received an ailocation of bonding authority far the Projeci from the Minnesota Department of Trade and Economic Developmeut as required by the Intemal Revenue Code of 1986, as amended, and Minn. Stat Ch. 474A; and W�REA5, the Port Authority's Credit Committee and Boazd have previously adopted their Resolution Nos. 30 and 3632, respectively, giving prelim.inary approval to the proposed issuance of revenue bonds for the Project; and WHEREAS, Port Authority staff has reviewed this proposat with the Credit Committee, all as more specifically set forth in the staff memoraudum on file, and the Credit Committee °Ig -ta�t recommends approval of this Resolution; the issuance of the I3otes; and the execution of all documents ouflined herein and in the staff memorandum, or otherwise necessary to the consummation of these tr-<msactions; and WfiEREAS, the Port Authority, pursuant ta Section 147(fl of the Code, pubiished a notice, a copy of which with proof of publication is on file in the office of the Port Authority, of a public hearing on the proposal to issue the Notes to finan.ce the Project; and WHEREAS, the Port Authority conducied a public hearing on the date hereof pursuant to said notice, at which hearing the recommendations contained in the Port Authority's staff memoraudum to the Board of Commissioners were reviewerl, and all persans who appeared at the hearing were given an opportunity to ezcgress their views with respect to the proposal; and NOW TI�REFORE, BE IT RESOLVED by the Boazd of Commissioners of ttie Port Authority of the City of Saint Pau1 as follows: 1. The issuance of the Notes ia an amount not to exceed $3,000,000, is hereby approved, subject to the Project and its financing receiving approval from the Degartment of Trade and Economic Development and the issuance of the Notes being approved by the Ciry Council of the City of Saint Paul, Minnesota (the "City'�, as described in paragraph 9, below. 2. Neither the Notes, nor the interest therean, shall constitute indebtedness of the Port Authority or ffie City within the meaning of any constitutional or statutory debt limitation; nor shall they constitute or give rise to a pecuniary liability of the City or the Port Authority or a chazge against their general taxing powers and neither the full faith and credit nor the general taxing powers of the City or the Port Authority is pledged to the payment of the Notes or interest thereon. 3. Forms of the following documents have been submitted to the Port Authority for review and/or approval in connection with the sale, issuance and deiivery of the Notes: (a) the Tax-Exempt Note; (b) the TaYable Note (c) the Tas-Bxempt Loan Agreement; (d) the Taa�able Loan Agreement; (e) the NY Holdings Mortgage; (fl the Unum Mortgage; (g) the Pledge of Loan Agreement, to be dated as of Mazch i, 199$ by and between the Port Authority and NY Holdings; and 1634553.01 2 °l$ -��'1 (h) the Pledge of Loan Agreement, to be dated as of March 1, 1998 by and between the Port Authority and Unum (collectively the "Documents'�. 4. It is hereby found, detemuned and deciared that: (a) The issuance and sale of the Notes, the execution and delivery by the Port Authority of the Documents, as applicable, and the performance of all covenants and agreements of the Port Authority contained in the Documents, and of all other acts and things required under the Constirirtion and laws of the State of Minnesota to make the Documeats and the Notes vaiid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Seotions 469.048 through 464.068 and 469.152 through 469.1651, as amended (the "Act"); (b) It is desirable that the Notes be issued by the Port Autliority upon the generai terms set forth in tlie Documents, as applicable; (c) Under the provisions of and as provided in the Documents, the Notes aze not to be payable from or a charge upon any funds other than the revenues pledged to the payment thereof; no holder of the Notes shall ever have the right to compei any exercise by the City or the Port Autharity of its ta�cing powezs to pay the Notes or the interest or premium thereon, or to enforce payment thereof against any property of the City or the Port Authority except the interests of the Port Authority wluch have been assigned to NY Holdings and Unum, the Notes s$ali not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City or the Port Authority except the interests of the Port Authority which have been assigned to NY Holdings and Unum; the Notes shail recite that they are issued without moral obligation on the part of the State or its political subdivisions, and that the Notes, including interest thereon, aze payable solely from the revenues pledged to the payment thereof; and the Notes shali not constitute debt of the City or the Port Authoriiy within the meaning of any constitutionai or statutory limitation. 5. The forms of the Documents and e�ibits thereto are approved substantially in the forms submitted and on file in the offices of the Port Authority, with such subsequent changes as may be approved by the Port Authority staff, counsei and Bond Counsel as contemplated by pazagraph 7. The Chair and Secretary of the Port Authority, or such other officers as may be appropriate in the absence of either the Chair or Secretary, are hereby authorized and directed to exeoute the Documents (to the extent the Port Authority is a party thereto) in substantially the fornis submitted, as modified pursvant to paragraph 7, and any other doeuments and certificates which in the opinion of Port Authority staff, counsel and Bond Counsei aze necessary to the transactions herein described. The execution of any insh�ument by the appropriate officer or officers of the Port Authority herein authorized shall be conciusive evidence of the approval of 1634553.01 3 q�-ti�� such documents in accordance with the terms hereof. Copies of all the documents necessary to the transaction described shall be delivered, filed and recorded as provided herein. 6. The President and other officers of the Port Authority are authorized and directed to prepaze and fumish to NY Holdings, Unum and Bond Counsel certified capies of proceedings and records of the Port Authority relating to the issuauce of the Notes and other trausactions herein contemplaYed, and such other affidavits and certificates as may be required to show the facrs relating to the legality of the Notes and the other transaciions herein contemplated as such facts appear from the books and records in the o�cers' custody and control or as otherwise lmown to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shali constitute representations of the Port Authority as to the truth of ali statements contained therein. 7. The approval hereby given to the various Documents referred to above inciudes approval of such additional details therein as may be necessazy and appropriate, and such modifications thereof, deletions therefrom and additions tiiereta as may be necessazy and appropriate and approved by the Port Authority's President and Chief Financiai Officer; and inciudes approval of, among other things: (a) establishment of the final principal amount of the Notes and the interest rates to be borne thereby; �rovided that the maximum principai amount of the Tas- Exempt Note shall not exceed $2,600,000, and the maxunum aggregate auaount of both the Taac-Exempt Note and the TaYable Note together shall not exceed $3,000,000; and nro, vided fi�h� that the maximum interest rate on the T�-Exempt Note shall not excead ^% per annum, and the maximum interest rate on the Tasable Note shall not exceed _% per annum; (b) the establishment of the maturity schednle and caii provisions to be applicable to the Notes; and (c) such related insmzments as may be required to satisfy the conditions of 1�II' Holdings and Unum. 8. The proposal of NY Hoidings and Unum to purchase the �iotes upon the terms and conditions set forth in the Documents and other materiais submitted by NY Holdings and Unum to the Port Awthority are hereby found and determined to be reasonable and aze hereby accepted. 9. The staff of the Port Authority is authorized to (a) submit the application for approvat of the Project by the Department of Trade and Ecanomic Development of the State of Minnesota as required by Minn. Stat. Sections 469.152 through 469.1651, and (b) take the steps necessary to obtain the approval of the issuance of the i�iotes by the Ciry Council of the City as required by Section 147{fl of the Internal Revenue Code of 198b, as amended. 1634553.01 4 °Ig -�3'1 10. The authority to approve, �ecute and deliver future amendments to financing documents entered into by the Port Authority in connection with the issuance of the Notes and the other transactions hereia contemplated, is hereby delegated to the President of the Port Authority, subjeci to ihe following conditions: (a) such amendments do not materially adversely affect the interests of the Port Authority as the issuer of the Notes; (b) such amendments do not contravene or violate any policy of the Port Authority; (c) such amendments are acceptable in form and substance to Bond Counsei; and (d) the Port Authority has received an opinion of Bond Counsei to the e$ect that the amendments will not adversely affect the tax-exempt character of interest on the T�-Exempt Note. The execution of any instrument by the President of the Port Anthority shail be conclusive evidence of the approval of such instrumenu in accort3ance with the terms hereof. 11. No covenant, stipulation, obligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipuiation, 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 �apacity, and neitlier the Boazd of Commissioners nor any officer executing the Notes shail be liable personally on the Notes or be subject to any personal liabiliry or accountability by reason of the issuance thereof. Adopted: February 24, 1998. ATTEST: By Its Secretaty 1634553.91 PORT AUTHORITY OF THE CITY OF SAINT PAUL By Its Chair 5 Council File # R 8- 13� Green Sheet # � �j \ \ 8 � R I G� NA L CI`YpF SAINT PAULOMINNESOTA ' g PrasenteJ by Referred To C:I:17f:i71_�.`A C.ommittee Date 1. The Port Authority of the City of Saint Paul (the "Authorit}�� has given its approval to the issuance of its $2,350,000 Industrial Development Revenue Note (3N Properties Project) (the "Taac-Exempt Note'� and $650,000 Taxable Industrial Development Revenue Note (3N Praperties Project) (the "Ta�cable Note" and, together with the Ta�c-Exempt Note, the `23otes") to finance the costs to be incurred in connection with the acquisition, construction and equipping of a manufacturing, warehouse and office facility located at 240 Arlington Avenue within the City of Saint Paul (the "ProjecP') to be owned by 3N Properties and leased to Addco, Inc.; and 2. Approval of the issuance of the proposed Notes by the "applicable elected representarive" of the geographic azea in which the proposed Project is located is required by Secfion 147(� of the Internal Revenue Code of 1986, as amended, and the Port Authority has therefore requested that ffie Ciry CouncIl gives its requisite approval pursuant to said requiremenu to facilitate the issuance oIthe proposed Notes by the Port Authority, subject to final approval of the details of said Notes by We Port Authority; and NOW, TI�REFORE, BE IT RESOLVED by the Council of the City of Saint Paul that, in accordance with the requirements of Secrion 147(fl of the Internal Revenue Code of 1986, as amended, the City Council hereby approves the issuance of the aforesaid Notes by the Port Authority for the purposes described in the Port Authority resolurion adopted Febmary 24, 1998, the exact details of which, including but not limited to, provisions relating to maturity, interest rate, discount, prepayment, and the issuance of addirional bonds are to be determined by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refunding bonds) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for wluch the aforedescribed Notes are issued. ��:��, '�,-: ,... ��! �TI � 11 � 1 • ��__ ',I . � \I . � � � . ��__I ��' �� e� Adopted by CouncIl: Date � ssc .�-� ��p Adoption Certified by Council Secretary By: Approve Br• Req d by Departm nt of• ��isvt'`"�� CN 'v��'�J�t''"�"�" { f B�f: �/ f! Form Approved by City Attomey s ��..�..� j _ G .-_.' � a��- ��- Approved by a o for Submission t ci By: 98 •��'� ORlGINAL S Paul Port Authority 1NTAGT PERSON & PHONE Peter M. Klein 7- GREEN SHE dTVATfORNEY r • BUDGET OIRECTOR MAYOR (OR ASSISTAN'() FOR TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCAT10N5 FOR SiGNATURE) �t�-�3� N° _13118 INRIAVDATE — CITV COUNQI CENCLERK FIN. & MGi. SERVICES OIR. Approval of the issuance of approximately $3,000,000 of tax exempt and taxable notes to 3N Properties (ADDCO, Inc.) for the construction of a new office and production facility of approximately 77,000 square feet in Arlington Business Center. RECAMMENDATIONS: Approve (A) rn Rajec _PLANNWGCAMMISSION i __ q6 CAMMITTEE A • , __ STAFF _ , _ DISTRYCT CAUflT _ . SUPPORTS WFiICH COUNCIL OBJECTIYE? PERSONAL SEHVICE CONTRACTS MUSTANSWEfl THE FOLLOWING QUESTIONS: 1. Has this personhrm ever worked under a contract for this department? YES NO 2. Has this personRirm ever been a city employee? YES NO 3, �oes this persoNfirm possess a skill not normally pos5essetl by any cutrent city employee? YES NO Explain ali yes answsrs on separete sheet ana attach to green sheet The issuance of a bond issue will aliow the construction ofi a new office and production facility in Arlington Business Center. As a result of the new office and production facility, it is anticipated that 34 new jobs will be created in the first two years of operations. None. �?l!??ull ^��0�°:� vL?'t'i�t . s:�� ' : ' c he new jobs created by this new facility will not be created. � AMOUNT OF TRANSACTION $ 3 e OOO � OOO COST7REVEPIUE BUDGETED (CIRCLE ONE) YES NO �c sauece Port AuthoritY tax exempt and ACTIVITYNUMBER \LINFORMATION.(EXPLAIN) taxable conduit notes � �irr ��-�-- 9t-�� tIN OF THE CITY OF SAINT PAUL FAX (612) 223-5198 TOLL FREE (800) 328-8417 ��.,,, „ti.��.�ARKTOWERS • 345 ST. PFfER STREET • ST. PAUL MN 55102-16b1 • PHONE (612) 224-5b86 February 18, 1998 Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Hait Annex 25 West Fourth Street St. Paul, Minnesota 55102 RE: $3,000,000 TAX-EXEMPT AND TAXABLE CONDUIT NOTES 3N PROPERTIES (ADDCO, INC.) DearMs. eelv6�:�'' We submit for your review and referral to the office of the Mayor, City Council, and City Attorney's office, details pertaining to the issuance of tax-exempt and taacable conduit notes in the approximate amount of $3,000,000 to finance the construction of a new office and production facility of approximately 77,000 square feet in the Arlington Susiness Center, St. Paul, Minnesota. The Port Authority has received an industrial revenue bond allocation from the State of Minnesota Small Issue Pool, as the project is manufacturing. The City of Saint Paui's entitlement allocation will not be affected by this application. !n addition to the staff memorandum, we are attaching a draft copy of the proposed City Council Resolution and a copy of the Resolution conducting the required public hearing and authorizing the saie of the revenue bond issue in the amount of $3,000,000 that will be considered by the Port Authority's Board on February 24, 1998. City Council action will be required after the Port Authority's Board meeting of February 24, 1998. Your expeditious handiing of this matter wifi be appreciated. Sincerely ��---_____... Kenneth R. Johnson President KRJ:jmo Attachment cc: Mayor Coleman g:pmk44n-cty SAINT PAUL PORT AUTHORITY � .•� • ► TO: Credit Committee (February 17, 1998 Regular Meeting) FROM: Peter M. Klein � Lorrie J. Louder Kenneth R. Johnson DATE: Feb.10, 1998 SUBJECT: 3M PROPERTfES (ADDCO, INC.) - Authorization for the tssuance of Approximately $3,000,000 of Ta�c Exempt and Taxable Notes ��I«1di � : � � �18 • ��'� Approval of final resofution authorizing the issuance of an approximate $3,000,000 conduit note issue to 3N Properties (ADDCO, tnc.). PROJECT SUMMARY: Estimated Amount: Type: Term: Issuer: Borrower: Correspondent: Lender: Piacement Agent: Borrowers Counsel: Bond Counsel: BACKGROUND: $3,000,000 - Series 1 - $2,350,000 Tax Exempt - Series 2 - $650,000 Taxable Fixed Rate )ndustrial Development Revenue Notes 10 Years with a 28-year amortization Port Authority of tfie City of Sair�t Paul 3N Properties (ADDCO, Inc.) Eberhardt Company UNUM Life lnsurance Company and an affiliated ent+ty Piper Jaffray, Inc. Rider Bennett Law Firm Leonard, Street & Deinard I'he Borrower. 3N Properties has purchased a site in the Adington Business Center for the construction of a new facility of approximately 77,000 square feet. 3N Properties is the real estate holding entity for ADDCO, inc., and is currentiy located at 69 Empire Drive in Saint Paul in a 24,000 square foot buiiding. ADDCO was formed in 1953. Their business is manufacturing trailer- mounted programmable message signs and hand electrical controls for industrial machines. They also customize diesei and gasoline engines for the indusirial trade. February 10, 1998 Page -2- The Nates: The Notes wiil b� interest at a faed 10 years. r- �,$' •l�� issued in the approximate principai amount of $3,000,000 and wiU bear rate of 5.84°k for the tax-exempt notes and 7.30% for the taxable notes for The Project: The proceeds of the Notes will be loaned to the Borrower, and used to construct a new approximate 77,000 square foot office and production facility in the Sairrt Paui Port Authority's Arlington Business Center. The availabiliiy of th+s financing will enable ADDCO to expand its present production capacity. As a resuR, new jobs will also be created to support the revenue and production increases. In addition to this facility financing, there is $250,000 of equipment that will be financed on a tax-exempt basis through another lender. This wil{ {ikely be brought before the Credit Committee and Board of Gommissioners neact month. Em�lo.yment Im�act: This project is important because it retains the company and its jobs in Saint Paul as well as adds fufl-time positions. Under the Port Authority's Worfcforce and Employment Agreement ADDCO, Inc. witl trarisfer its curcent 91 full-t+me employees to the Arlington Business Center facility and add an additional 25 futl 4ime positions within three years. The company now anticipates creating 34 additional jobs in the first finro years of operations at the new faciiity. As a result of the construction of this new officelproduction facility, ADDCO has estimated that there will be an annual payrotf increase ofi $1,031,680 per year when fully operational. Most of the jobs will likely be professional positions paying an average of $15.00 per hour. The Lender. The lender will be UNUM Lffe Insurance Company for the taxable note and a UNUM aff+liate for the tax-exempt note. � -. . . - . . Sources of Funds: Note Proceeds Estimated Borrower Funds Total Sources of Funds tZses of Funds: Building Construction Estimated Costs of Issuance Total Uses of Funds �i� �� . � .�� . � �� $3,430,000 220,000 $3,650,000 February 10, 1998 Page -3- SECURfTY FOR THE NOTES: °ig -�3'1 Cgnduit Financina: The notes wifl be conduit financing of the Authority and wilf not constitute or give rise to a liability of the Aufhority, the C+ty of Saint Paul or the State of Minnesota or a charge against their general credit or tvcing powers. The note holder will not have the right to demand paymenf of the notes out of any funds to be raised from taxation or from any revenue sources ofher than those expressly pledged to payment of the notes pursuant to the loan agreement. The Port Authority wi11 receive fees in tfie amount of 1/8th of a point ($3,750.00) at inception and 1/8th of a point on the outstanding balance, annually, for the life of the notes. Loan Agreement: The Authority has pledged its interest in the loan agreement to UNUM to secure the notes. DISCLOSURE: Port Authority Commissioners, by S.E.C. rules, are obligated to disclose any risks or facts you may be aware of that would affect the probability of repayment of these notes. • ll 1 • • Recommend approval of authorizing issuance of the approximate $3,000,000 conduit notes issued on behalfi of 3N Properties (ADDCO, fnc.). PMK:jmo 9:lpmlCl3naaa�c °I� -��'1 Resoiution No. RESOLUTION OF THE PORT At7THORITY OF THE CTPY OF SAINT PAUL WHEREAS, it has been proposed that the Port Authoriry of the City of Saint Paui (the "Port Authority'� issue its Industriat Deveiopment Revenue Note (3N Properties Project) (the "Tax- Esempt Note'� and Taxable Industrial Developmeat Revenue Note (3N Properties Project) (the "Taxable 23ote" and, togeiher with the Tax-Fxempt I3ote, the "Notes'� in an aggregate principal amount not to exceed $3,000,000 and that the procezds of such Notes be loaned to 3N Properiies, a Minnesota general partnership (the "Borrawei'� to finance the acquisirion, construction and equipping of a manufacturing, warehouse and office facility (the "Project'� in the City of 5aint Paul, Minnesota {the "City'�, to be owned by the Borrower and leased to Addco, Inc. WHEREAS, proceeds of the Taac-Exempt Note will be loaned to the Boaower pursuant to a Loan Agreement (the "Tas-Exempt Loan Agreemern'� to be entered into between the Port Authority and the Borrower; and VTHEREAS, proceeds of the Taxable Note will be loaned to the Borrower pursuant to a Loan Agreement (the "Taxable Loan Agreement'� to be entered into between the Port Authority and the Bonower; and �Vf�EREAS, the Tax-Exempt Note will be purchased by NY Holdings 1994-1 ("NY Holdings"�, and the Taxable Note will be purchased by Unum Life Insurance Company of America ("iJnum'�; and WI�REAS, the payment of the Tax-Exempt Note will be secured by a fully recourse Mortgage and Security Agreament and Fixt�ue Financing Statement from the Borrower in favor of NY Holdings {the "l�tY Hoidings Mortgage"); and WHEREAS, the payment of the Taxable Note will be secured by a fully recourse Mortgage and Security Agreament and Fi�.ure Financing Statement from tYie Bonower in favor of Unum (the "Unum Mortgage"); and VJI-IEREAS, the Port Authority has received an ailocation of bonding authority far the Projeci from the Minnesota Department of Trade and Economic Developmeut as required by the Intemal Revenue Code of 1986, as amended, and Minn. Stat Ch. 474A; and W�REA5, the Port Authority's Credit Committee and Boazd have previously adopted their Resolution Nos. 30 and 3632, respectively, giving prelim.inary approval to the proposed issuance of revenue bonds for the Project; and WHEREAS, Port Authority staff has reviewed this proposat with the Credit Committee, all as more specifically set forth in the staff memoraudum on file, and the Credit Committee °Ig -ta�t recommends approval of this Resolution; the issuance of the I3otes; and the execution of all documents ouflined herein and in the staff memorandum, or otherwise necessary to the consummation of these tr-<msactions; and WfiEREAS, the Port Authority, pursuant ta Section 147(fl of the Code, pubiished a notice, a copy of which with proof of publication is on file in the office of the Port Authority, of a public hearing on the proposal to issue the Notes to finan.ce the Project; and WHEREAS, the Port Authority conducied a public hearing on the date hereof pursuant to said notice, at which hearing the recommendations contained in the Port Authority's staff memoraudum to the Board of Commissioners were reviewerl, and all persans who appeared at the hearing were given an opportunity to ezcgress their views with respect to the proposal; and NOW TI�REFORE, BE IT RESOLVED by the Boazd of Commissioners of ttie Port Authority of the City of Saint Pau1 as follows: 1. The issuance of the Notes ia an amount not to exceed $3,000,000, is hereby approved, subject to the Project and its financing receiving approval from the Degartment of Trade and Economic Development and the issuance of the Notes being approved by the Ciry Council of the City of Saint Paul, Minnesota (the "City'�, as described in paragraph 9, below. 2. Neither the Notes, nor the interest therean, shall constitute indebtedness of the Port Authority or ffie City within the meaning of any constitutional or statutory debt limitation; nor shall they constitute or give rise to a pecuniary liability of the City or the Port Authority or a chazge against their general taxing powers and neither the full faith and credit nor the general taxing powers of the City or the Port Authority is pledged to the payment of the Notes or interest thereon. 3. Forms of the following documents have been submitted to the Port Authority for review and/or approval in connection with the sale, issuance and deiivery of the Notes: (a) the Tax-Exempt Note; (b) the TaYable Note (c) the Tas-Bxempt Loan Agreement; (d) the Taa�able Loan Agreement; (e) the NY Holdings Mortgage; (fl the Unum Mortgage; (g) the Pledge of Loan Agreement, to be dated as of Mazch i, 199$ by and between the Port Authority and NY Holdings; and 1634553.01 2 °l$ -��'1 (h) the Pledge of Loan Agreement, to be dated as of March 1, 1998 by and between the Port Authority and Unum (collectively the "Documents'�. 4. It is hereby found, detemuned and deciared that: (a) The issuance and sale of the Notes, the execution and delivery by the Port Authority of the Documents, as applicable, and the performance of all covenants and agreements of the Port Authority contained in the Documents, and of all other acts and things required under the Constirirtion and laws of the State of Minnesota to make the Documeats and the Notes vaiid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Seotions 469.048 through 464.068 and 469.152 through 469.1651, as amended (the "Act"); (b) It is desirable that the Notes be issued by the Port Autliority upon the generai terms set forth in tlie Documents, as applicable; (c) Under the provisions of and as provided in the Documents, the Notes aze not to be payable from or a charge upon any funds other than the revenues pledged to the payment thereof; no holder of the Notes shall ever have the right to compei any exercise by the City or the Port Autharity of its ta�cing powezs to pay the Notes or the interest or premium thereon, or to enforce payment thereof against any property of the City or the Port Authority except the interests of the Port Authority wluch have been assigned to NY Holdings and Unum, the Notes s$ali not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City or the Port Authority except the interests of the Port Authority which have been assigned to NY Holdings and Unum; the Notes shail recite that they are issued without moral obligation on the part of the State or its political subdivisions, and that the Notes, including interest thereon, aze payable solely from the revenues pledged to the payment thereof; and the Notes shali not constitute debt of the City or the Port Authoriiy within the meaning of any constitutionai or statutory limitation. 5. The forms of the Documents and e�ibits thereto are approved substantially in the forms submitted and on file in the offices of the Port Authority, with such subsequent changes as may be approved by the Port Authority staff, counsei and Bond Counsel as contemplated by pazagraph 7. The Chair and Secretary of the Port Authority, or such other officers as may be appropriate in the absence of either the Chair or Secretary, are hereby authorized and directed to exeoute the Documents (to the extent the Port Authority is a party thereto) in substantially the fornis submitted, as modified pursvant to paragraph 7, and any other doeuments and certificates which in the opinion of Port Authority staff, counsel and Bond Counsei aze necessary to the transactions herein described. The execution of any insh�ument by the appropriate officer or officers of the Port Authority herein authorized shall be conciusive evidence of the approval of 1634553.01 3 q�-ti�� such documents in accordance with the terms hereof. Copies of all the documents necessary to the transaction described shall be delivered, filed and recorded as provided herein. 6. The President and other officers of the Port Authority are authorized and directed to prepaze and fumish to NY Holdings, Unum and Bond Counsel certified capies of proceedings and records of the Port Authority relating to the issuauce of the Notes and other trausactions herein contemplaYed, and such other affidavits and certificates as may be required to show the facrs relating to the legality of the Notes and the other transaciions herein contemplated as such facts appear from the books and records in the o�cers' custody and control or as otherwise lmown to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shali constitute representations of the Port Authority as to the truth of ali statements contained therein. 7. The approval hereby given to the various Documents referred to above inciudes approval of such additional details therein as may be necessazy and appropriate, and such modifications thereof, deletions therefrom and additions tiiereta as may be necessazy and appropriate and approved by the Port Authority's President and Chief Financiai Officer; and inciudes approval of, among other things: (a) establishment of the final principal amount of the Notes and the interest rates to be borne thereby; �rovided that the maximum principai amount of the Tas- Exempt Note shall not exceed $2,600,000, and the maxunum aggregate auaount of both the Taac-Exempt Note and the TaYable Note together shall not exceed $3,000,000; and nro, vided fi�h� that the maximum interest rate on the T�-Exempt Note shall not excead ^% per annum, and the maximum interest rate on the Tasable Note shall not exceed _% per annum; (b) the establishment of the maturity schednle and caii provisions to be applicable to the Notes; and (c) such related insmzments as may be required to satisfy the conditions of 1�II' Holdings and Unum. 8. The proposal of NY Hoidings and Unum to purchase the �iotes upon the terms and conditions set forth in the Documents and other materiais submitted by NY Holdings and Unum to the Port Awthority are hereby found and determined to be reasonable and aze hereby accepted. 9. The staff of the Port Authority is authorized to (a) submit the application for approvat of the Project by the Department of Trade and Ecanomic Development of the State of Minnesota as required by Minn. Stat. Sections 469.152 through 469.1651, and (b) take the steps necessary to obtain the approval of the issuance of the i�iotes by the Ciry Council of the City as required by Section 147{fl of the Internal Revenue Code of 198b, as amended. 1634553.01 4 °Ig -�3'1 10. The authority to approve, �ecute and deliver future amendments to financing documents entered into by the Port Authority in connection with the issuance of the Notes and the other transactions hereia contemplated, is hereby delegated to the President of the Port Authority, subjeci to ihe following conditions: (a) such amendments do not materially adversely affect the interests of the Port Authority as the issuer of the Notes; (b) such amendments do not contravene or violate any policy of the Port Authority; (c) such amendments are acceptable in form and substance to Bond Counsei; and (d) the Port Authority has received an opinion of Bond Counsei to the e$ect that the amendments will not adversely affect the tax-exempt character of interest on the T�-Exempt Note. The execution of any instrument by the President of the Port Anthority shail be conclusive evidence of the approval of such instrumenu in accort3ance with the terms hereof. 11. No covenant, stipulation, obligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipuiation, 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 �apacity, and neitlier the Boazd of Commissioners nor any officer executing the Notes shail be liable personally on the Notes or be subject to any personal liabiliry or accountability by reason of the issuance thereof. Adopted: February 24, 1998. ATTEST: By Its Secretaty 1634553.91 PORT AUTHORITY OF THE CITY OF SAINT PAUL By Its Chair 5