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98-64ORI�INAL Presented by Refeaed To WHEREAS: RESOLUTION CITY OF SAINT PAUL, MINNESOTA Council File # _3S_— �o �"' Green Sheet # �L� Committee Date The Port Authority of the City of Saint Paul (the "Authorit}�') has given its approval to the issuance of up to $3,175,000 of its Variable Rate Demand Industrial Development Revenue Bonds (Bix Fruit Company Project) Series 1998A (the "Series A Bonds") and Taxable VariaUle Rate Demand Industrial Development Revenue Bonds (Bix Fruit Company Project) Series 1998B (the "Series B Bonds" and, together with the Series A Bonds, ihe "Bonds'), to finance the costs to be incurred by Randy D. Wilcox and Lisa 7. Wilcox, individual residents of the State of Minnesota (together, tUe `Borrowe�') in connection with the acquisition, construction and equipping of a manufacturing wazehouse and office facility to be located in the City of Saint Paul, Minnesota (the "ProjecP� and to be owned by the Borrower and leased to Bix Fmit Company, Inc.; and 2. Iaws of Minnesota 1976, Chapter 234, provides ihat any issue of revenue bonds authorized by the Authority shall be issued only with the consent of the City CouncIl of the City of Saint Paul, by resolu6on adopted in accordance with law; and 3. Approval of the issuance of the proposed Bonds by the City Council is also required by Section 147(� of the Intemal Revenue Code of 1986, as amended; and 4. To meet the requirements of both state and federal law, ffie Port Authority has requested that the City Council gives its requisite approval to the issuance of the proposed Bonds by the Port Authority, subject to final approval of the details of said Bonds by the Port Authority. NOW, THEREFORE, BE TT RESOLVED by the Council of the City of Saint Paul that, in acwrdance with the requirements of Section 147(� of the Intemal Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Council hereby approves the issuance of the aforesaid Bonds by the Port Authority for the purposes described in the Port Authority /2 resolution adopted January 27, 1998, the exact details of wtrich, including but not limited to, pmvisions relating to maturities, interest rates, discoum, redemption, and the issuance of additional bonds are to be determined by ffie Port Authority, and the City Council hereby authorizes the issuance of any addifional bonds (including refunding bonds) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for w]uch the aforedescn'bed Bonds aze issued. �� Adopted: Januazy 28,1998 �lt�l�'� . , . � -i ;:�,�.�� __i i��__ ��__' I � - � . � �__1 ��__ . � � �__ ��__ I�oe�l Adopted by Council: Date�M �$' _�qq8' Adoption Certified by Council Secre By: Approved by Mayor: � BY Reque � y Deparhnent oE � � �� By: Form Approved By: � % Approved By: aa�-�� iPAFTMENT/OFFICE/COUNGIL DATE INITIATED st. Pau� Port Authority � 2o-9a GREEN SHEE 1�1°• _13117 )NTACT PERSON & PH�NE INITIAlNA7E INITIAVDATE � DEPARTMENT DiREC(OR � CYTY COUNCIL Peter M. Kiein, 224-5686 NUNBERFOR �CINATfORNEY �CIT'CLERK JST BE ON COUNCILAGENDA BY (DATE) pQ�N� � gU�GEf DIflECTOR O FIN. & MGT. SERVICES DIR. Januarv Z8 1998 OHOEP mMAYOR(ORASSISTANn � TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) TION REQUESTED: Approval of the issuance of an approximate $3,175,000 tax-exempt and taxable conduit bond issue to Randy and Lisa Wilcox (Bix Fruit Company, Inc.) for the construction of a new office and productian facility of approximately 63,000 sq. ft. in Arlington Business Center. _ PIANNING COMMISSION _ CIVIL SEqVICE CAMMISSION _CBGOMMfTfEE �,, Port AUthoritv _ STAFF _ __ DISTRICTCAURT _ SUPPORTS WHICH COUNCIL O&IECTIVE7 PERSONAL SERVICE CONiRACiS MUSTANSWER THE FOLLOWING pUESTIONS: 7. Has this person/firm ever worked untler a contract for this department? YES NO 2. Has this personRirm ever been a city employee? YES NO 3. Does this person/firm possess a skill not nortnally possessed by any current city employee? YES NO Explain sll yes answers on separate sheet antl attach to green sheet INITIATING PAOBLEM, ISSUE, OPPORTUNIIY (Who, What, When, Where, Why): The issuance of a bond issue will allow the construction of a new office and production facility in Arlington Business Center. As a result of the new office and production facility, it is anticipated that 52 new jobs will be created in the first two years of operations. DISADVANTAGES IF APPROVED. None. The new jobs created by tfiis new facility will not be created. ,4. ,.+.::.: Y JAPi 21 19�� 70TAL AMOUNT OF TRANSAC710N $ 3� 1�5 � OOO COST/REVENUE BUDGETED (CIRCLE ONE) YES NO Port Authority Taxable and FUNDINGSOURCE Non-taxable Conduit Bond Issue pCTIVITYNUMBER FINANCIAL INFORMATION: (EXPLAIN) . SAINT PAUL PORT AUTHORITY s�i �� • ; : .0 .a� TO: Credit Committee DATE: Jan. 12, 1998 (January 20, 1998 Regular Credit Committee Meeting) FROM: Peter M. Klein l�' Lorrie J. Louder Kenneth R.Johnson SUBJECT': RANDY AND LISA WILCOX (BIX FRUIT COMPANY, INC.) - AUTHORIZATION FOR AN APPROXIMATE $3,175,000 TAX EXEMPT AND TAXABLE BOND ISSUE ACTION REQUESTED: G��-�o`� Approval of final resolution authorizing the issuance of an approximate $3,175,000 conduit bond issue to Randy and Lisa Wilcox (Bix Fruit Company, tnc.). PROJECT SUMMARY: Estimated Amount: Type: Term: Issuer: Borrower: Trustee: Letter of Credit Bank: Placement Agents: Remarketing Agent: Borrower's Counsel: Placement Agents' Counsel: $3,175,000 - Series A - $1,200,000 Tax Exempt - Series B - $1,975,000 Taxabie Variable Rate Demand Industriai Development Revenue Bonds Series A - 20 years Series B -15 years Port Authority of the City of Saint Paul Randy and Lisa Wilcox (Bix Bruit Company, Inc.) Firstar Trust Firstar Bank Miller & Schroeder Financiai, Inc. Piper Jaffray, Inc. Miller & Schroeder Financial, Inc. Andy Bond, Esq. Oppenheimer, Wolff & Donnelly January 12, 1998 Page -2- Letter of Credit Bank Counsel: Bond Counsef: Winthrop & Weinstine Leonard, Street & Deinard BACKGROUND: The Borrower: q� Bi�c Fruit Company, Inc. is a wholesaler of fruits vegetables and related foodservice products. The company seils principaliy to restaurants, schools, hosp'itals and country clubs. It has a varied customer base of approximately 450 accounts and is not dependent on any targe customer for its continued success. The company has a sustained record of growth and profits since it was purchased by Randy Wilcox in 1980. The large and varied customer base stabilizes its business during cycles in the economy and it has never experienced an employee layoff. The company had 1996 revenues of $15 million. It presently operates out of a 20,000 square foot facility in the Midway area. The Borrower ln August, Randy and Lisa Wilcox purchased a site +n the Arlington Susiness Center for the construction of a new facility of approximately 63,000 square feet. The Bonds: The Bonds will be issued in the approximate principal amount of $3,175,000 and will bear interest at a variable rate estabiished weekly by the Remarketing Agent. The maximum interest rate is 10% for any tax exempt bonds and 18% for the taxable bonds. The Proiect: The proceeds of the Sonds will be loaned to the Borsower, and used to construct a new approximate 63,000 square foot office and production facility in the Saint Paul Port Authority's Arlington Business Center. The availability of this financing will enabie Bix Fruit Company to expand its present production capacity and consolidate its operations. As a result, new jobs will also be created to support the revenue and production increases. Em I�oyment Impact: With the acquisition of the institutional division of Beckman Produce, the company expects to immediately double its revenues and increase its work force from 108 to at least 150. These 42 positions wi11 be transfecred from the Beckman operation. The company wi11 atso add 52 new full-time positions within 10 years. At the current average wage for all employees of $11.06 per hour plus benefits, this is a retention of $3,500,000 in annual wages and a creation of $1,100,000 in annual wages. January 12,1998 Page -3- . . .. Retained in Saint Paul Transferred from Acquired Company Anticipated Future Positions ' 108 42 � 202 The Letter of Credit Bank: The initial letter of credit will be provided by Firstar Bank. Estimated Sources and Uses of Funds: Sources of Funds: Bond Proceeds Estimated Borrower Funds Total Sources of Funds Uses of Funds: Building Construction Equipment Estimated Costs of Issuance Total Uses of Funds SECURITY FOR THE BONDS: $3,175.000 500.000 $3,675,000 $2,700,000 800,000 175.000 $3,675,000 �'.�- - �� $2,500,000 1,000,000 1.100.000 • .�� q� -G'� Conduit Financin� The bonds will be conduit financing of the Authority and will not constitute or give rise to a liability of the Authority, the City of Saint Paul or the State of Minnesota or a charge against their general credit or taxing powers. No bondholder will have the right to demand payment of the bonds out of any funds to be raised from taxation or from any revenue sources other than those expressly pledged to payment of the bonds pursuant to the indenture. Tfiis includes the amounts drawn on the letter of credit and amounts payable by the borrower under the loan agreement. Loan Agreement: Under the indenture, the Authority has pledged its interest in the loan agreement to the trustee to secure the bonds. The trustee is authorized to exercise the rights of the Authority and to enforce the obligations of the borrower under the loan agreement. J�nuary 12, 1998 Page -4- �� I �� Letter of Credit: Payment of the principal amount and purchase price of the bonds, and up to approximately 53 days interest thereon (measured at the 10% maximum rate for any tax exempt bonds and 18% for the taxable bonds) Hrill be secured initially by the initial letter of credit or, under certain circumstances a substitute letter of credit. The trustee is required to present a draft under the letter of credit to pay principai and interest when due on the bonds. The bonds are offered primarily on the basis of the financial strength of the bank and not on the basis of the financial strength of the bonower. The {etter of credit witf have an initiai term of one year, and wiff be renewable annually thereafter, unless the bank provides at least 45 days notice that it will not renew. if the letter ofi credit is not renewed or reptaced, the bonds will be subject to mandatory redemption, and the trustee is instructed to draw on the letter of credit, before it expires, to pay principal and interest then due. 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 bonds. RECOMMENDATION: Recommend approval of authorizing issuance of the approximate $3,175,000 conduit bond issue on behalf of Randy and Lisa Wilcox (Bix Fruit Company, Inc.). PMK:jmo g:pnMnatareccaoc q�-�`� Resolution No. RESOLUI`ION OF T'HE PORT AUTHORITY OF THE CTTY OF SAINT PAUL 1�,/.1 : 1. It has been pmposed that the Port Authority of the City of Saint Paul (the "Port Authorit�') issue its Variable Rate Demand Industrial Development Revenue Bonds (Bix Fnrit Company Project) Series 1998A (the "Series A Bonds") and Taxable Variable Rate Demand Industriai Development Revenue Bonds (Bix Fnut Company Project) Series 1998B (the "Series B Bonds" and, together with the Series A Bonds, the `Bonds") in an aggregate principal amount not to exceed $3,175,000 and that the proceeds of such Bonds be loaned to Randy D. Wilcox and Lisa J. Wilcox, individual residents of the State of Minnesota (collectively, the "Borrower") to finance the acquisition, conshuction and equipping of a manufacrixriug, wazehouse and office facility (the "Project") in the City of Saint Paul, Minnesota (the "City'�, to be owned by the Borrower and leased to Bix Fnrit Company, Inc.. 2. The Authority desires to facilitate the selective development of the City of Saint Paul and the metro east couununity, to retain and improve its taac base and to help it provide the range of services and employment opportwuties required by its population, and the Project will assist in achieving that objective by increasing the assessed valuation of fhe metro east community; helping to maintain a positive relarionship between assessed valuation and debt; and enhancing the im�e and reputation of the meuo east community. 3. The Project will result in addifionai employment opporhxnities in the City of Saint Paul and the metro east community. 4. The Authority has been advised by the Borrower that long term conventional, commercial financing to pay the capital cost of the Project is auailable only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, and that it has been acting to date in anticipation that the Authority would favorably consider this financing pmposal. 5. The Project and its financing has received an allocation of bonding authority from the State of 1vlinnesota Department of Finance. 6. The Authority's Credit Committee and Boazd have previously adopted their Resolutions No. 32 and 3657, respectively giving prelimuiary approval to the proposed issuance of revenue bonds. 7. Pursuant to the requirements of Section 147(fl of the Intemal Revenue Code of 1986, as amended, and pursuant to a notice published by the Port Authority not less than 15 days prior to the public hearing, a public hearing has been held on the date hereof on the issuance of the Bonds, at which public hearing all persons were given an opportunity to speak. 1624034.01 °l�-`y 8. The Bonds will be issued and secured by the terms of an Indenture of Trust (the "Indeniure"� between the Port Authority and Firstar Bank of Minnesota, National Association in Saint Paul, Minnesota (the "Tn�stee") and will be payable primarily from draws made on two itxevocable letteis of credit issued by Firstar Bank Milwaukee, N.P,. (the "Credit Enhancer'� pursuaut to a Letter of Credit Reimbursement Agreement to be dated as of January 1, 1998 (the "Letter of Credit Agreemen�� betw�n the Borrower and Firstar Bank of Minnesota, National Association, an affiliate of the Credit Enhancer (the "Bank'�. 9. The Borrower and the Port Authority will also enter into a Loan Agreement (the "Loan AgeemenP� in which the Borrower will agree to maintain the Letters of Credit and make all payments due either to the Bank or on account of the Bonds. 10. The Bonds and the interest on the Bonds shall be payable solely from the revenue pledged therefor and the Bonds shaJl not constitute a debt of the Port Authority within the meaning of any constitutional or statutory limitation of indebtedness, nor shall the Bonds constitute nor give rise to a pecuniary liability of the Port Authority or the City or a charge against their general credit or taxing powers and shall not constihrte a chazge, lien or encumbrauc�, legal or equitable, upon any properry of the Port Authority or the City other than their interest in said Project. 11. It is intended that interest on the Series A Bonds be excluded from gross income of the holders thereof for federal income tax purposes. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF CONIMISSIONERS OF TI� PORT AUTHORITY OF Tf� CITY OF SAINT PAUL, AS FOLLOWS: A. On the basis of information available to the Port Authority it appears, and the Port Authority hereby finds, that: the Project constitutes properties, used or useful in connection with one or more revenue producing enterprises engaged in any business within the meaning of Minnesota Statutes, Secfions 469.152 to 469.165 (the "AcP'); the Pmject furthers the purposes stated in the Act; and it is in the best interests of the port di strict and the people of the City of Saint Paul and in furtherance of the general plan of development to assist the Barrower in financing the Project. B. For the purpose of financing the Project, and paying certaiu costs of issuance and other expenses in connection with the issuance of the Bonds, and pmvided that the Pmject and its finaucing receive approval by the Deparhnent of Trade and Economic Development ("DTED"), the Port Authority hereby anthorizes the issuance, sale and delivery of the Bonds in an aggregate principal amount not to exceed $3,175,000. Each Series of Bonds shall be in such principal amounts as shall be determined by the President of the Port Authority and Bond Counsel, provided that the aggregate principal amount of Series A Bonds shall not exceed $1,200,000. The Bonds shail bear interest at such rates, shall be numbered, shall be dated, shall inature, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as may be prescribed in the Indenture, substantially in the form now on file in the offices of the Port Authority. C. Neither the Bonds, nor the interest thereon, shall constitute an indebtedness of the Port Authority or the City within the meairing of any constitutional or statutory debt limitation; nor 167A034.01 qf -�y shall they constitute or give rise to a pecuniary liability of the City, the Port Authority or a charge 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 Bonds or interest thereon. D. Forms of the following documents have been submitted to the Port Authority for review andlor approval in connection with the sale, issuance and delivery of the Bonds: 1. the Bond Placement Agreement to be entered into between the Port Authority, the Borrower, Miller & Schroeder Financial, Inc. and Piper Jaffray Inc. (collectively, the "Placement AgenP') (the "Bond Placement AgreemenP'); 2. the Indenture; 3. the Loan Agreement dated as of January l, 1998 to be entered into between the Port Authority and the Borrower; 4, the Bonds; 5. the Preliminary Placement Memorandum to be used in mazketing the Bonds (the "Official Statemenf�; 6. the Remazketing Agreement dated as of January 1, 1998 to be entered into by and between Miller & Schroeder Financial, Inc. (the "Remazketing AgenP') and the Boaower (the "Remarketing AgreemenP�; and 7. the Reimbursement Agreement and forms of the Letters of Credit (collectively, the "Documents"). E. It is hereby found, determined and declazed that: 1. The issuance and sale of the Bonds, the execution and delivery by the Port Authority of the Documents and the performauce of all covenants and agreements of the Port Authority cornained in the Documents, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Documents and the Bonds valid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Sections 469.152 through 469.165, as amended (the "AcP'); 2. It is desirable that the Bonds be issued by the Port Authority upon the general terms set forth in the Documents, as applicable; 3. Under the provisions of and as provided in the Documents, the Bonds 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 Bonds shall ever have the right to compel any exercise by the City or the Port Authority of its taxing powers to pay the Bonds or the interest ox premium thereon, or to enforce payment thereof against any property of the City or the 1624034.01 ��'�� Port Authority except the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bonds shall 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 and the City which have been pledged to the Trustee under the Indenture; the Bonds shall each recite that they are issued without moral obligation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the City or the Port Authority withiu the meaning of any constitutional or statutory limitation. F. The forms of the Documents and e�ibits thereto aze approved substantially in the forms submitted and on file in the offices of Port Authority, with such subsequent changes as may be approved by Port Authority staff and Bond Counsel as contemplated by paragraph H. 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, are 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 pazagraph H, and any other documents and certificates which in the opinion of Port Authority staff and Bond Counsel are necessary to the transaction herein described The execution of any instrument by the appropriate officer or officers of the Port Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transaction herein described by individuals who were at the time of execution thereof the authorized officers of the Port Authority shall bind the Port Authority, notwithstanding that such individuals or any of them has ceased to hold such office or offices prior to the authentication and delivery of the Bonds. Copies of all of the documents necessary to the transaction described shall be delivered, filed and recorded as pmvided herein and in the Indenture. G. The President and other officers of the Port Authority aze authorized and directed to prepaze and fiunish to the Placement Agent and Bond Counsel certified copies of proceedings and records of the Port Authority relating to the issuance of the Bonds and other transactions herein contemplated, and such other affidauits and certificates as may be required to show the facts relating to the legality of the Bonds and the other transactions herein contemplated as such facts appeaz from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the Port Authority as to the truth of all statements contained therein. H. The approval hereby given to the various Documents referred to above includes approval of such additional details therein as may be necessary and appropriate, and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Port Authority's President and Chief Financial Officer; and includes approval of, among other things: 1. establishment of the final principal aznount of the Bonds and the interest rate to be borne thereby for the 'vnitial period; r vid that the maximum aggregate principal amouni of the Series A Bonds shall not exceed $1,200,000, and the maX;mum aggregate principal amount of the Series A Bonds and the Series B Bonds together shall not exceed 1624034.01 �� -�� $3,175,000; and provided further that the maximum interest rate on the Series A Bonds shall not exceed 10.00% per annum, and the maximum interest rate on the Series B Bonds shall not exceed 18.00%; 2. the establishment of the maturity schedule and call provisions to be applicable to ffie Bonds; and 3. such related instruments as may be required to satisfy the conditions of any purchaser of the Bonds. I. The Port Authority hereby consents to the distribution of the Official Statement, as such Official Statement is fusalized with the participation of Port Authority staff and Bond Counsel. The proposal of the Placement Agent to place the Bonds upon the terms and conditions set forth in the Bond Placement Agreement is hereby found and determined to be reasonable and is heTeby accepted. J. The authority to approve, execute and deliver future amendments to financing documents entered into by the Port Authority in connection with the issuance of the Bonds and the other transactions herein contemplated, is hereby delegated to the President of the Port Authority, provided that: (a) such amendments do not require the consent of the holders of the Bonds; (b) such amendments do not materially adversely aff'ect the interests of the Port Authority as the issuer of the Bonds; (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 instnunent by the President of the Port Authority shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. K No covenant, stipulation, obligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the Boazd of Commissioners of the Port Authority, or any officer, agent or employee of the Port Authority in that persons individual capacity, and neither the Boazd of Commissioners nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Adopted: January 27, 1998 PORT AUTHORITY OF TF� CITY OF SAINT PAUL By Its Chair ATTEST: By Its Secretary 1624034.01 ° �F'�y. Pmposed City Council Resolution 1.�.1 L : 1. The Port Authority of the City of Saint Paul (the "Authority") has given its appmval to the issuance of up to $3,175,000 of its Variable Rate Demand Indush�ial Development Revenue Bonds (Bix Fnrit Company Project) Series 1998A (the "Series A Bonds") and Taatable Variable Rate Demand Industrial Development Revenue Bonds (Biz Fntit Company Project) Series 1998B (the "Series B Bonds" and, together with the Series A Bonds, the "Bonds"), to finance the costs to be incuned by Randy D. Wilcox and Lisa J. Wilco� individual residents of the State of Minnesota (together, the `Borrower") in connection with the acquisition, construction and equipping of a manufacturing, warehouse and office facility to be located in the City of Saint Paul, Mu�uesota (the "Project") and to be owned by the Borrower and leased to Bix Fnrit Company, Inc.; and 2. Laws of Minnesota 1976, Chapter 234, provades that any issue of revenue bonds authorized by the Authority shall be issued only with the consent of the City Council of the City of Saint Paul, by resolution adopted in accordance with law; and 3. Approval of the issuance of the proposed Bonds by the City Council is also required by Section 147(fl of the Internal Revenue Code of 1986, as amended; and 4. To meet the requirements of both state and federal law, the Port Authority has requested that the City Council gives its requisite approval to the issuance of the proposed Bonds by the Port Authority, subject to final approval of the details of said Bonds by the Port Authority. NOW, THEREFORE, BB IT RESOLVED by the Council of the City of Saint Paul that, in accordance with the requirements of Section 147(� of the Intemal Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Council hereby approves the issuance of the aforesaid Bonds by the Port Authority for the purposes described in the Port Authority resolution adopted January 27, 1998, the exact details of which, including but not limited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of additional bonds aze 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 canying out the purposes for which the aforedescribed Bonds aze issued. Adopted: January 28, 1998 1624034.01 21TY OF THE CITY OF SAINi PAUL �:� �y FAX (612) 223-5198 TOLLFREE(800)328-8417 ,,.,., .,v.�,.,ARK TOWERS • 345 ST. PEfER STREET • ST. PAUL MN 55102-1661 • PHONE (612) 224-5686 Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Hali Annex 25 West Fourth Street St. Paul, Minnesota 55102 ��°� January 20, 1998 RE: $3,175,000 TAX-EXEMPT AND TAXABLE CONDUIT BOND ISSUE RANDY AND LISA WILCOX (BIX FRUIT COMPANY, INC.) .�+'� Dear Ms. el ck: � We submit for your review and referrai to the office of the Mayor, City Council, and City Attorney's office, details pertaining to the issuance of a tax-exempt and taxabie conduit bond issue in the approximate amount of $3,175,000 to finance the construction of a new office and production facility of approximately 63,000 square feet in the Arlington Business Center, St. Paul, Minnesota. The Port Authority has received an industrial revenue bond aflocation from the State of Minnesota Small Issue Pool, as the project is manufacturing. The City of Saint Paul's entitlement allocation will not be affeeted by this application. In addition to the staff memorandum, we are aitaching a draft copy ofi the proposed City Council Res�lution and a copy of the Resolution conducting the required public hearing and authorizing the sale of the revenue bond issue in the amount of $3,175,000 that will be considered by the Port Authority's Board on January 27, 1998. City Council action wil( be required after the Port Authority's Board meeting of January 27, 1998. Your expeditious handling of this matter will be appreciated. KRJ:jmo Attachment cc: Mayor Coleman g:pmklbix-dy Sincerel , �� . Kenneth R. Johnson President ;: <�.. * J(;,d � 1 �:%�$ ORI�INAL Presented by Refeaed To WHEREAS: RESOLUTION CITY OF SAINT PAUL, MINNESOTA Council File # _3S_— �o �"' Green Sheet # �L� Committee Date The Port Authority of the City of Saint Paul (the "Authorit}�') has given its approval to the issuance of up to $3,175,000 of its Variable Rate Demand Industrial Development Revenue Bonds (Bix Fruit Company Project) Series 1998A (the "Series A Bonds") and Taxable VariaUle Rate Demand Industrial Development Revenue Bonds (Bix Fruit Company Project) Series 1998B (the "Series B Bonds" and, together with the Series A Bonds, ihe "Bonds'), to finance the costs to be incurred by Randy D. Wilcox and Lisa 7. Wilcox, individual residents of the State of Minnesota (together, tUe `Borrowe�') in connection with the acquisition, construction and equipping of a manufacturing wazehouse and office facility to be located in the City of Saint Paul, Minnesota (the "ProjecP� and to be owned by the Borrower and leased to Bix Fmit Company, Inc.; and 2. Iaws of Minnesota 1976, Chapter 234, provides ihat any issue of revenue bonds authorized by the Authority shall be issued only with the consent of the City CouncIl of the City of Saint Paul, by resolu6on adopted in accordance with law; and 3. Approval of the issuance of the proposed Bonds by the City Council is also required by Section 147(� of the Intemal Revenue Code of 1986, as amended; and 4. To meet the requirements of both state and federal law, ffie Port Authority has requested that the City Council gives its requisite approval to the issuance of the proposed Bonds by the Port Authority, subject to final approval of the details of said Bonds by the Port Authority. NOW, THEREFORE, BE TT RESOLVED by the Council of the City of Saint Paul that, in acwrdance with the requirements of Section 147(� of the Intemal Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Council hereby approves the issuance of the aforesaid Bonds by the Port Authority for the purposes described in the Port Authority /2 resolution adopted January 27, 1998, the exact details of wtrich, including but not limited to, pmvisions relating to maturities, interest rates, discoum, redemption, and the issuance of additional bonds are to be determined by ffie Port Authority, and the City Council hereby authorizes the issuance of any addifional bonds (including refunding bonds) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for w]uch the aforedescn'bed Bonds aze issued. �� Adopted: Januazy 28,1998 �lt�l�'� . , . � -i ;:�,�.�� __i i��__ ��__' I � - � . � �__1 ��__ . � � �__ ��__ I�oe�l Adopted by Council: Date�M �$' _�qq8' Adoption Certified by Council Secre By: Approved by Mayor: � BY Reque � y Deparhnent oE � � �� By: Form Approved By: � % Approved By: aa�-�� iPAFTMENT/OFFICE/COUNGIL DATE INITIATED st. Pau� Port Authority � 2o-9a GREEN SHEE 1�1°• _13117 )NTACT PERSON & PH�NE INITIAlNA7E INITIAVDATE � DEPARTMENT DiREC(OR � CYTY COUNCIL Peter M. Kiein, 224-5686 NUNBERFOR �CINATfORNEY �CIT'CLERK JST BE ON COUNCILAGENDA BY (DATE) pQ�N� � gU�GEf DIflECTOR O FIN. & MGT. SERVICES DIR. Januarv Z8 1998 OHOEP mMAYOR(ORASSISTANn � TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) TION REQUESTED: Approval of the issuance of an approximate $3,175,000 tax-exempt and taxable conduit bond issue to Randy and Lisa Wilcox (Bix Fruit Company, Inc.) for the construction of a new office and productian facility of approximately 63,000 sq. ft. in Arlington Business Center. _ PIANNING COMMISSION _ CIVIL SEqVICE CAMMISSION _CBGOMMfTfEE �,, Port AUthoritv _ STAFF _ __ DISTRICTCAURT _ SUPPORTS WHICH COUNCIL O&IECTIVE7 PERSONAL SERVICE CONiRACiS MUSTANSWER THE FOLLOWING pUESTIONS: 7. Has this person/firm ever worked untler a contract for this department? YES NO 2. Has this personRirm ever been a city employee? YES NO 3. Does this person/firm possess a skill not nortnally possessed by any current city employee? YES NO Explain sll yes answers on separate sheet antl attach to green sheet INITIATING PAOBLEM, ISSUE, OPPORTUNIIY (Who, What, When, Where, Why): The issuance of a bond issue will allow the construction of a new office and production facility in Arlington Business Center. As a result of the new office and production facility, it is anticipated that 52 new jobs will be created in the first two years of operations. DISADVANTAGES IF APPROVED. None. The new jobs created by tfiis new facility will not be created. ,4. ,.+.::.: Y JAPi 21 19�� 70TAL AMOUNT OF TRANSAC710N $ 3� 1�5 � OOO COST/REVENUE BUDGETED (CIRCLE ONE) YES NO Port Authority Taxable and FUNDINGSOURCE Non-taxable Conduit Bond Issue pCTIVITYNUMBER FINANCIAL INFORMATION: (EXPLAIN) . SAINT PAUL PORT AUTHORITY s�i �� • ; : .0 .a� TO: Credit Committee DATE: Jan. 12, 1998 (January 20, 1998 Regular Credit Committee Meeting) FROM: Peter M. Klein l�' Lorrie J. Louder Kenneth R.Johnson SUBJECT': RANDY AND LISA WILCOX (BIX FRUIT COMPANY, INC.) - AUTHORIZATION FOR AN APPROXIMATE $3,175,000 TAX EXEMPT AND TAXABLE BOND ISSUE ACTION REQUESTED: G��-�o`� Approval of final resolution authorizing the issuance of an approximate $3,175,000 conduit bond issue to Randy and Lisa Wilcox (Bix Fruit Company, tnc.). PROJECT SUMMARY: Estimated Amount: Type: Term: Issuer: Borrower: Trustee: Letter of Credit Bank: Placement Agents: Remarketing Agent: Borrower's Counsel: Placement Agents' Counsel: $3,175,000 - Series A - $1,200,000 Tax Exempt - Series B - $1,975,000 Taxabie Variable Rate Demand Industriai Development Revenue Bonds Series A - 20 years Series B -15 years Port Authority of the City of Saint Paul Randy and Lisa Wilcox (Bix Bruit Company, Inc.) Firstar Trust Firstar Bank Miller & Schroeder Financiai, Inc. Piper Jaffray, Inc. Miller & Schroeder Financial, Inc. Andy Bond, Esq. Oppenheimer, Wolff & Donnelly January 12, 1998 Page -2- Letter of Credit Bank Counsel: Bond Counsef: Winthrop & Weinstine Leonard, Street & Deinard BACKGROUND: The Borrower: q� Bi�c Fruit Company, Inc. is a wholesaler of fruits vegetables and related foodservice products. The company seils principaliy to restaurants, schools, hosp'itals and country clubs. It has a varied customer base of approximately 450 accounts and is not dependent on any targe customer for its continued success. The company has a sustained record of growth and profits since it was purchased by Randy Wilcox in 1980. The large and varied customer base stabilizes its business during cycles in the economy and it has never experienced an employee layoff. The company had 1996 revenues of $15 million. It presently operates out of a 20,000 square foot facility in the Midway area. The Borrower ln August, Randy and Lisa Wilcox purchased a site +n the Arlington Susiness Center for the construction of a new facility of approximately 63,000 square feet. The Bonds: The Bonds will be issued in the approximate principal amount of $3,175,000 and will bear interest at a variable rate estabiished weekly by the Remarketing Agent. The maximum interest rate is 10% for any tax exempt bonds and 18% for the taxable bonds. The Proiect: The proceeds of the Sonds will be loaned to the Borsower, and used to construct a new approximate 63,000 square foot office and production facility in the Saint Paul Port Authority's Arlington Business Center. The availability of this financing will enabie Bix Fruit Company to expand its present production capacity and consolidate its operations. As a result, new jobs will also be created to support the revenue and production increases. Em I�oyment Impact: With the acquisition of the institutional division of Beckman Produce, the company expects to immediately double its revenues and increase its work force from 108 to at least 150. These 42 positions wi11 be transfecred from the Beckman operation. The company wi11 atso add 52 new full-time positions within 10 years. At the current average wage for all employees of $11.06 per hour plus benefits, this is a retention of $3,500,000 in annual wages and a creation of $1,100,000 in annual wages. January 12,1998 Page -3- . . .. Retained in Saint Paul Transferred from Acquired Company Anticipated Future Positions ' 108 42 � 202 The Letter of Credit Bank: The initial letter of credit will be provided by Firstar Bank. Estimated Sources and Uses of Funds: Sources of Funds: Bond Proceeds Estimated Borrower Funds Total Sources of Funds Uses of Funds: Building Construction Equipment Estimated Costs of Issuance Total Uses of Funds SECURITY FOR THE BONDS: $3,175.000 500.000 $3,675,000 $2,700,000 800,000 175.000 $3,675,000 �'.�- - �� $2,500,000 1,000,000 1.100.000 • .�� q� -G'� Conduit Financin� The bonds will be conduit financing of the Authority and will not constitute or give rise to a liability of the Authority, the City of Saint Paul or the State of Minnesota or a charge against their general credit or taxing powers. No bondholder will have the right to demand payment of the bonds out of any funds to be raised from taxation or from any revenue sources other than those expressly pledged to payment of the bonds pursuant to the indenture. Tfiis includes the amounts drawn on the letter of credit and amounts payable by the borrower under the loan agreement. Loan Agreement: Under the indenture, the Authority has pledged its interest in the loan agreement to the trustee to secure the bonds. The trustee is authorized to exercise the rights of the Authority and to enforce the obligations of the borrower under the loan agreement. J�nuary 12, 1998 Page -4- �� I �� Letter of Credit: Payment of the principal amount and purchase price of the bonds, and up to approximately 53 days interest thereon (measured at the 10% maximum rate for any tax exempt bonds and 18% for the taxable bonds) Hrill be secured initially by the initial letter of credit or, under certain circumstances a substitute letter of credit. The trustee is required to present a draft under the letter of credit to pay principai and interest when due on the bonds. The bonds are offered primarily on the basis of the financial strength of the bank and not on the basis of the financial strength of the bonower. The {etter of credit witf have an initiai term of one year, and wiff be renewable annually thereafter, unless the bank provides at least 45 days notice that it will not renew. if the letter ofi credit is not renewed or reptaced, the bonds will be subject to mandatory redemption, and the trustee is instructed to draw on the letter of credit, before it expires, to pay principal and interest then due. 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 bonds. RECOMMENDATION: Recommend approval of authorizing issuance of the approximate $3,175,000 conduit bond issue on behalf of Randy and Lisa Wilcox (Bix Fruit Company, Inc.). PMK:jmo g:pnMnatareccaoc q�-�`� Resolution No. RESOLUI`ION OF T'HE PORT AUTHORITY OF THE CTTY OF SAINT PAUL 1�,/.1 : 1. It has been pmposed that the Port Authority of the City of Saint Paul (the "Port Authorit�') issue its Variable Rate Demand Industrial Development Revenue Bonds (Bix Fnrit Company Project) Series 1998A (the "Series A Bonds") and Taxable Variable Rate Demand Industriai Development Revenue Bonds (Bix Fnut Company Project) Series 1998B (the "Series B Bonds" and, together with the Series A Bonds, the `Bonds") in an aggregate principal amount not to exceed $3,175,000 and that the proceeds of such Bonds be loaned to Randy D. Wilcox and Lisa J. Wilcox, individual residents of the State of Minnesota (collectively, the "Borrower") to finance the acquisition, conshuction and equipping of a manufacrixriug, wazehouse and office facility (the "Project") in the City of Saint Paul, Minnesota (the "City'�, to be owned by the Borrower and leased to Bix Fnrit Company, Inc.. 2. The Authority desires to facilitate the selective development of the City of Saint Paul and the metro east couununity, to retain and improve its taac base and to help it provide the range of services and employment opportwuties required by its population, and the Project will assist in achieving that objective by increasing the assessed valuation of fhe metro east community; helping to maintain a positive relarionship between assessed valuation and debt; and enhancing the im�e and reputation of the meuo east community. 3. The Project will result in addifionai employment opporhxnities in the City of Saint Paul and the metro east community. 4. The Authority has been advised by the Borrower that long term conventional, commercial financing to pay the capital cost of the Project is auailable only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, and that it has been acting to date in anticipation that the Authority would favorably consider this financing pmposal. 5. The Project and its financing has received an allocation of bonding authority from the State of 1vlinnesota Department of Finance. 6. The Authority's Credit Committee and Boazd have previously adopted their Resolutions No. 32 and 3657, respectively giving prelimuiary approval to the proposed issuance of revenue bonds. 7. Pursuant to the requirements of Section 147(fl of the Intemal Revenue Code of 1986, as amended, and pursuant to a notice published by the Port Authority not less than 15 days prior to the public hearing, a public hearing has been held on the date hereof on the issuance of the Bonds, at which public hearing all persons were given an opportunity to speak. 1624034.01 °l�-`y 8. The Bonds will be issued and secured by the terms of an Indenture of Trust (the "Indeniure"� between the Port Authority and Firstar Bank of Minnesota, National Association in Saint Paul, Minnesota (the "Tn�stee") and will be payable primarily from draws made on two itxevocable letteis of credit issued by Firstar Bank Milwaukee, N.P,. (the "Credit Enhancer'� pursuaut to a Letter of Credit Reimbursement Agreement to be dated as of January 1, 1998 (the "Letter of Credit Agreemen�� betw�n the Borrower and Firstar Bank of Minnesota, National Association, an affiliate of the Credit Enhancer (the "Bank'�. 9. The Borrower and the Port Authority will also enter into a Loan Agreement (the "Loan AgeemenP� in which the Borrower will agree to maintain the Letters of Credit and make all payments due either to the Bank or on account of the Bonds. 10. The Bonds and the interest on the Bonds shall be payable solely from the revenue pledged therefor and the Bonds shaJl not constitute a debt of the Port Authority within the meaning of any constitutional or statutory limitation of indebtedness, nor shall the Bonds constitute nor give rise to a pecuniary liability of the Port Authority or the City or a charge against their general credit or taxing powers and shall not constihrte a chazge, lien or encumbrauc�, legal or equitable, upon any properry of the Port Authority or the City other than their interest in said Project. 11. It is intended that interest on the Series A Bonds be excluded from gross income of the holders thereof for federal income tax purposes. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF CONIMISSIONERS OF TI� PORT AUTHORITY OF Tf� CITY OF SAINT PAUL, AS FOLLOWS: A. On the basis of information available to the Port Authority it appears, and the Port Authority hereby finds, that: the Project constitutes properties, used or useful in connection with one or more revenue producing enterprises engaged in any business within the meaning of Minnesota Statutes, Secfions 469.152 to 469.165 (the "AcP'); the Pmject furthers the purposes stated in the Act; and it is in the best interests of the port di strict and the people of the City of Saint Paul and in furtherance of the general plan of development to assist the Barrower in financing the Project. B. For the purpose of financing the Project, and paying certaiu costs of issuance and other expenses in connection with the issuance of the Bonds, and pmvided that the Pmject and its finaucing receive approval by the Deparhnent of Trade and Economic Development ("DTED"), the Port Authority hereby anthorizes the issuance, sale and delivery of the Bonds in an aggregate principal amount not to exceed $3,175,000. Each Series of Bonds shall be in such principal amounts as shall be determined by the President of the Port Authority and Bond Counsel, provided that the aggregate principal amount of Series A Bonds shall not exceed $1,200,000. The Bonds shail bear interest at such rates, shall be numbered, shall be dated, shall inature, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as may be prescribed in the Indenture, substantially in the form now on file in the offices of the Port Authority. C. Neither the Bonds, nor the interest thereon, shall constitute an indebtedness of the Port Authority or the City within the meairing of any constitutional or statutory debt limitation; nor 167A034.01 qf -�y shall they constitute or give rise to a pecuniary liability of the City, the Port Authority or a charge 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 Bonds or interest thereon. D. Forms of the following documents have been submitted to the Port Authority for review andlor approval in connection with the sale, issuance and delivery of the Bonds: 1. the Bond Placement Agreement to be entered into between the Port Authority, the Borrower, Miller & Schroeder Financial, Inc. and Piper Jaffray Inc. (collectively, the "Placement AgenP') (the "Bond Placement AgreemenP'); 2. the Indenture; 3. the Loan Agreement dated as of January l, 1998 to be entered into between the Port Authority and the Borrower; 4, the Bonds; 5. the Preliminary Placement Memorandum to be used in mazketing the Bonds (the "Official Statemenf�; 6. the Remazketing Agreement dated as of January 1, 1998 to be entered into by and between Miller & Schroeder Financial, Inc. (the "Remazketing AgenP') and the Boaower (the "Remarketing AgreemenP�; and 7. the Reimbursement Agreement and forms of the Letters of Credit (collectively, the "Documents"). E. It is hereby found, determined and declazed that: 1. The issuance and sale of the Bonds, the execution and delivery by the Port Authority of the Documents and the performauce of all covenants and agreements of the Port Authority cornained in the Documents, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Documents and the Bonds valid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Sections 469.152 through 469.165, as amended (the "AcP'); 2. It is desirable that the Bonds be issued by the Port Authority upon the general terms set forth in the Documents, as applicable; 3. Under the provisions of and as provided in the Documents, the Bonds 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 Bonds shall ever have the right to compel any exercise by the City or the Port Authority of its taxing powers to pay the Bonds or the interest ox premium thereon, or to enforce payment thereof against any property of the City or the 1624034.01 ��'�� Port Authority except the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bonds shall 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 and the City which have been pledged to the Trustee under the Indenture; the Bonds shall each recite that they are issued without moral obligation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the City or the Port Authority withiu the meaning of any constitutional or statutory limitation. F. The forms of the Documents and e�ibits thereto aze approved substantially in the forms submitted and on file in the offices of Port Authority, with such subsequent changes as may be approved by Port Authority staff and Bond Counsel as contemplated by paragraph H. 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, are 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 pazagraph H, and any other documents and certificates which in the opinion of Port Authority staff and Bond Counsel are necessary to the transaction herein described The execution of any instrument by the appropriate officer or officers of the Port Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transaction herein described by individuals who were at the time of execution thereof the authorized officers of the Port Authority shall bind the Port Authority, notwithstanding that such individuals or any of them has ceased to hold such office or offices prior to the authentication and delivery of the Bonds. Copies of all of the documents necessary to the transaction described shall be delivered, filed and recorded as pmvided herein and in the Indenture. G. The President and other officers of the Port Authority aze authorized and directed to prepaze and fiunish to the Placement Agent and Bond Counsel certified copies of proceedings and records of the Port Authority relating to the issuance of the Bonds and other transactions herein contemplated, and such other affidauits and certificates as may be required to show the facts relating to the legality of the Bonds and the other transactions herein contemplated as such facts appeaz from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the Port Authority as to the truth of all statements contained therein. H. The approval hereby given to the various Documents referred to above includes approval of such additional details therein as may be necessary and appropriate, and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Port Authority's President and Chief Financial Officer; and includes approval of, among other things: 1. establishment of the final principal aznount of the Bonds and the interest rate to be borne thereby for the 'vnitial period; r vid that the maximum aggregate principal amouni of the Series A Bonds shall not exceed $1,200,000, and the maX;mum aggregate principal amount of the Series A Bonds and the Series B Bonds together shall not exceed 1624034.01 �� -�� $3,175,000; and provided further that the maximum interest rate on the Series A Bonds shall not exceed 10.00% per annum, and the maximum interest rate on the Series B Bonds shall not exceed 18.00%; 2. the establishment of the maturity schedule and call provisions to be applicable to ffie Bonds; and 3. such related instruments as may be required to satisfy the conditions of any purchaser of the Bonds. I. The Port Authority hereby consents to the distribution of the Official Statement, as such Official Statement is fusalized with the participation of Port Authority staff and Bond Counsel. The proposal of the Placement Agent to place the Bonds upon the terms and conditions set forth in the Bond Placement Agreement is hereby found and determined to be reasonable and is heTeby accepted. J. The authority to approve, execute and deliver future amendments to financing documents entered into by the Port Authority in connection with the issuance of the Bonds and the other transactions herein contemplated, is hereby delegated to the President of the Port Authority, provided that: (a) such amendments do not require the consent of the holders of the Bonds; (b) such amendments do not materially adversely aff'ect the interests of the Port Authority as the issuer of the Bonds; (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 instnunent by the President of the Port Authority shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. K No covenant, stipulation, obligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the Boazd of Commissioners of the Port Authority, or any officer, agent or employee of the Port Authority in that persons individual capacity, and neither the Boazd of Commissioners nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Adopted: January 27, 1998 PORT AUTHORITY OF TF� CITY OF SAINT PAUL By Its Chair ATTEST: By Its Secretary 1624034.01 ° �F'�y. Pmposed City Council Resolution 1.�.1 L : 1. The Port Authority of the City of Saint Paul (the "Authority") has given its appmval to the issuance of up to $3,175,000 of its Variable Rate Demand Indush�ial Development Revenue Bonds (Bix Fnrit Company Project) Series 1998A (the "Series A Bonds") and Taatable Variable Rate Demand Industrial Development Revenue Bonds (Biz Fntit Company Project) Series 1998B (the "Series B Bonds" and, together with the Series A Bonds, the "Bonds"), to finance the costs to be incuned by Randy D. Wilcox and Lisa J. Wilco� individual residents of the State of Minnesota (together, the `Borrower") in connection with the acquisition, construction and equipping of a manufacturing, warehouse and office facility to be located in the City of Saint Paul, Mu�uesota (the "Project") and to be owned by the Borrower and leased to Bix Fnrit Company, Inc.; and 2. Laws of Minnesota 1976, Chapter 234, provades that any issue of revenue bonds authorized by the Authority shall be issued only with the consent of the City Council of the City of Saint Paul, by resolution adopted in accordance with law; and 3. Approval of the issuance of the proposed Bonds by the City Council is also required by Section 147(fl of the Internal Revenue Code of 1986, as amended; and 4. To meet the requirements of both state and federal law, the Port Authority has requested that the City Council gives its requisite approval to the issuance of the proposed Bonds by the Port Authority, subject to final approval of the details of said Bonds by the Port Authority. NOW, THEREFORE, BB IT RESOLVED by the Council of the City of Saint Paul that, in accordance with the requirements of Section 147(� of the Intemal Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Council hereby approves the issuance of the aforesaid Bonds by the Port Authority for the purposes described in the Port Authority resolution adopted January 27, 1998, the exact details of which, including but not limited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of additional bonds aze 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 canying out the purposes for which the aforedescribed Bonds aze issued. Adopted: January 28, 1998 1624034.01 21TY OF THE CITY OF SAINi PAUL �:� �y FAX (612) 223-5198 TOLLFREE(800)328-8417 ,,.,., .,v.�,.,ARK TOWERS • 345 ST. PEfER STREET • ST. PAUL MN 55102-1661 • PHONE (612) 224-5686 Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Hali Annex 25 West Fourth Street St. Paul, Minnesota 55102 ��°� January 20, 1998 RE: $3,175,000 TAX-EXEMPT AND TAXABLE CONDUIT BOND ISSUE RANDY AND LISA WILCOX (BIX FRUIT COMPANY, INC.) .�+'� Dear Ms. el ck: � We submit for your review and referrai to the office of the Mayor, City Council, and City Attorney's office, details pertaining to the issuance of a tax-exempt and taxabie conduit bond issue in the approximate amount of $3,175,000 to finance the construction of a new office and production facility of approximately 63,000 square feet in the Arlington Business Center, St. Paul, Minnesota. The Port Authority has received an industrial revenue bond aflocation from the State of Minnesota Small Issue Pool, as the project is manufacturing. The City of Saint Paul's entitlement allocation will not be affeeted by this application. In addition to the staff memorandum, we are aitaching a draft copy ofi the proposed City Council Res�lution and a copy of the Resolution conducting the required public hearing and authorizing the sale of the revenue bond issue in the amount of $3,175,000 that will be considered by the Port Authority's Board on January 27, 1998. City Council action wil( be required after the Port Authority's Board meeting of January 27, 1998. Your expeditious handling of this matter will be appreciated. KRJ:jmo Attachment cc: Mayor Coleman g:pmklbix-dy Sincerel , �� . Kenneth R. Johnson President ;: <�.. * J(;,d � 1 �:%�$ ORI�INAL Presented by Refeaed To WHEREAS: RESOLUTION CITY OF SAINT PAUL, MINNESOTA Council File # _3S_— �o �"' Green Sheet # �L� Committee Date The Port Authority of the City of Saint Paul (the "Authorit}�') has given its approval to the issuance of up to $3,175,000 of its Variable Rate Demand Industrial Development Revenue Bonds (Bix Fruit Company Project) Series 1998A (the "Series A Bonds") and Taxable VariaUle Rate Demand Industrial Development Revenue Bonds (Bix Fruit Company Project) Series 1998B (the "Series B Bonds" and, together with the Series A Bonds, ihe "Bonds'), to finance the costs to be incurred by Randy D. Wilcox and Lisa 7. Wilcox, individual residents of the State of Minnesota (together, tUe `Borrowe�') in connection with the acquisition, construction and equipping of a manufacturing wazehouse and office facility to be located in the City of Saint Paul, Minnesota (the "ProjecP� and to be owned by the Borrower and leased to Bix Fmit Company, Inc.; and 2. Iaws of Minnesota 1976, Chapter 234, provides ihat any issue of revenue bonds authorized by the Authority shall be issued only with the consent of the City CouncIl of the City of Saint Paul, by resolu6on adopted in accordance with law; and 3. Approval of the issuance of the proposed Bonds by the City Council is also required by Section 147(� of the Intemal Revenue Code of 1986, as amended; and 4. To meet the requirements of both state and federal law, ffie Port Authority has requested that the City Council gives its requisite approval to the issuance of the proposed Bonds by the Port Authority, subject to final approval of the details of said Bonds by the Port Authority. NOW, THEREFORE, BE TT RESOLVED by the Council of the City of Saint Paul that, in acwrdance with the requirements of Section 147(� of the Intemal Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Council hereby approves the issuance of the aforesaid Bonds by the Port Authority for the purposes described in the Port Authority /2 resolution adopted January 27, 1998, the exact details of wtrich, including but not limited to, pmvisions relating to maturities, interest rates, discoum, redemption, and the issuance of additional bonds are to be determined by ffie Port Authority, and the City Council hereby authorizes the issuance of any addifional bonds (including refunding bonds) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for w]uch the aforedescn'bed Bonds aze issued. �� Adopted: Januazy 28,1998 �lt�l�'� . , . � -i ;:�,�.�� __i i��__ ��__' I � - � . � �__1 ��__ . � � �__ ��__ I�oe�l Adopted by Council: Date�M �$' _�qq8' Adoption Certified by Council Secre By: Approved by Mayor: � BY Reque � y Deparhnent oE � � �� By: Form Approved By: � % Approved By: aa�-�� iPAFTMENT/OFFICE/COUNGIL DATE INITIATED st. Pau� Port Authority � 2o-9a GREEN SHEE 1�1°• _13117 )NTACT PERSON & PH�NE INITIAlNA7E INITIAVDATE � DEPARTMENT DiREC(OR � CYTY COUNCIL Peter M. Kiein, 224-5686 NUNBERFOR �CINATfORNEY �CIT'CLERK JST BE ON COUNCILAGENDA BY (DATE) pQ�N� � gU�GEf DIflECTOR O FIN. & MGT. SERVICES DIR. Januarv Z8 1998 OHOEP mMAYOR(ORASSISTANn � TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) TION REQUESTED: Approval of the issuance of an approximate $3,175,000 tax-exempt and taxable conduit bond issue to Randy and Lisa Wilcox (Bix Fruit Company, Inc.) for the construction of a new office and productian facility of approximately 63,000 sq. ft. in Arlington Business Center. _ PIANNING COMMISSION _ CIVIL SEqVICE CAMMISSION _CBGOMMfTfEE �,, Port AUthoritv _ STAFF _ __ DISTRICTCAURT _ SUPPORTS WHICH COUNCIL O&IECTIVE7 PERSONAL SERVICE CONiRACiS MUSTANSWER THE FOLLOWING pUESTIONS: 7. Has this person/firm ever worked untler a contract for this department? YES NO 2. Has this personRirm ever been a city employee? YES NO 3. Does this person/firm possess a skill not nortnally possessed by any current city employee? YES NO Explain sll yes answers on separate sheet antl attach to green sheet INITIATING PAOBLEM, ISSUE, OPPORTUNIIY (Who, What, When, Where, Why): The issuance of a bond issue will allow the construction of a new office and production facility in Arlington Business Center. As a result of the new office and production facility, it is anticipated that 52 new jobs will be created in the first two years of operations. DISADVANTAGES IF APPROVED. None. The new jobs created by tfiis new facility will not be created. ,4. ,.+.::.: Y JAPi 21 19�� 70TAL AMOUNT OF TRANSAC710N $ 3� 1�5 � OOO COST/REVENUE BUDGETED (CIRCLE ONE) YES NO Port Authority Taxable and FUNDINGSOURCE Non-taxable Conduit Bond Issue pCTIVITYNUMBER FINANCIAL INFORMATION: (EXPLAIN) . SAINT PAUL PORT AUTHORITY s�i �� • ; : .0 .a� TO: Credit Committee DATE: Jan. 12, 1998 (January 20, 1998 Regular Credit Committee Meeting) FROM: Peter M. Klein l�' Lorrie J. Louder Kenneth R.Johnson SUBJECT': RANDY AND LISA WILCOX (BIX FRUIT COMPANY, INC.) - AUTHORIZATION FOR AN APPROXIMATE $3,175,000 TAX EXEMPT AND TAXABLE BOND ISSUE ACTION REQUESTED: G��-�o`� Approval of final resolution authorizing the issuance of an approximate $3,175,000 conduit bond issue to Randy and Lisa Wilcox (Bix Fruit Company, tnc.). PROJECT SUMMARY: Estimated Amount: Type: Term: Issuer: Borrower: Trustee: Letter of Credit Bank: Placement Agents: Remarketing Agent: Borrower's Counsel: Placement Agents' Counsel: $3,175,000 - Series A - $1,200,000 Tax Exempt - Series B - $1,975,000 Taxabie Variable Rate Demand Industriai Development Revenue Bonds Series A - 20 years Series B -15 years Port Authority of the City of Saint Paul Randy and Lisa Wilcox (Bix Bruit Company, Inc.) Firstar Trust Firstar Bank Miller & Schroeder Financiai, Inc. Piper Jaffray, Inc. Miller & Schroeder Financial, Inc. Andy Bond, Esq. Oppenheimer, Wolff & Donnelly January 12, 1998 Page -2- Letter of Credit Bank Counsel: Bond Counsef: Winthrop & Weinstine Leonard, Street & Deinard BACKGROUND: The Borrower: q� Bi�c Fruit Company, Inc. is a wholesaler of fruits vegetables and related foodservice products. The company seils principaliy to restaurants, schools, hosp'itals and country clubs. It has a varied customer base of approximately 450 accounts and is not dependent on any targe customer for its continued success. The company has a sustained record of growth and profits since it was purchased by Randy Wilcox in 1980. The large and varied customer base stabilizes its business during cycles in the economy and it has never experienced an employee layoff. The company had 1996 revenues of $15 million. It presently operates out of a 20,000 square foot facility in the Midway area. The Borrower ln August, Randy and Lisa Wilcox purchased a site +n the Arlington Susiness Center for the construction of a new facility of approximately 63,000 square feet. The Bonds: The Bonds will be issued in the approximate principal amount of $3,175,000 and will bear interest at a variable rate estabiished weekly by the Remarketing Agent. The maximum interest rate is 10% for any tax exempt bonds and 18% for the taxable bonds. The Proiect: The proceeds of the Sonds will be loaned to the Borsower, and used to construct a new approximate 63,000 square foot office and production facility in the Saint Paul Port Authority's Arlington Business Center. The availability of this financing will enabie Bix Fruit Company to expand its present production capacity and consolidate its operations. As a result, new jobs will also be created to support the revenue and production increases. Em I�oyment Impact: With the acquisition of the institutional division of Beckman Produce, the company expects to immediately double its revenues and increase its work force from 108 to at least 150. These 42 positions wi11 be transfecred from the Beckman operation. The company wi11 atso add 52 new full-time positions within 10 years. At the current average wage for all employees of $11.06 per hour plus benefits, this is a retention of $3,500,000 in annual wages and a creation of $1,100,000 in annual wages. January 12,1998 Page -3- . . .. Retained in Saint Paul Transferred from Acquired Company Anticipated Future Positions ' 108 42 � 202 The Letter of Credit Bank: The initial letter of credit will be provided by Firstar Bank. Estimated Sources and Uses of Funds: Sources of Funds: Bond Proceeds Estimated Borrower Funds Total Sources of Funds Uses of Funds: Building Construction Equipment Estimated Costs of Issuance Total Uses of Funds SECURITY FOR THE BONDS: $3,175.000 500.000 $3,675,000 $2,700,000 800,000 175.000 $3,675,000 �'.�- - �� $2,500,000 1,000,000 1.100.000 • .�� q� -G'� Conduit Financin� The bonds will be conduit financing of the Authority and will not constitute or give rise to a liability of the Authority, the City of Saint Paul or the State of Minnesota or a charge against their general credit or taxing powers. No bondholder will have the right to demand payment of the bonds out of any funds to be raised from taxation or from any revenue sources other than those expressly pledged to payment of the bonds pursuant to the indenture. Tfiis includes the amounts drawn on the letter of credit and amounts payable by the borrower under the loan agreement. Loan Agreement: Under the indenture, the Authority has pledged its interest in the loan agreement to the trustee to secure the bonds. The trustee is authorized to exercise the rights of the Authority and to enforce the obligations of the borrower under the loan agreement. J�nuary 12, 1998 Page -4- �� I �� Letter of Credit: Payment of the principal amount and purchase price of the bonds, and up to approximately 53 days interest thereon (measured at the 10% maximum rate for any tax exempt bonds and 18% for the taxable bonds) Hrill be secured initially by the initial letter of credit or, under certain circumstances a substitute letter of credit. The trustee is required to present a draft under the letter of credit to pay principai and interest when due on the bonds. The bonds are offered primarily on the basis of the financial strength of the bank and not on the basis of the financial strength of the bonower. The {etter of credit witf have an initiai term of one year, and wiff be renewable annually thereafter, unless the bank provides at least 45 days notice that it will not renew. if the letter ofi credit is not renewed or reptaced, the bonds will be subject to mandatory redemption, and the trustee is instructed to draw on the letter of credit, before it expires, to pay principal and interest then due. 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 bonds. RECOMMENDATION: Recommend approval of authorizing issuance of the approximate $3,175,000 conduit bond issue on behalf of Randy and Lisa Wilcox (Bix Fruit Company, Inc.). PMK:jmo g:pnMnatareccaoc q�-�`� Resolution No. RESOLUI`ION OF T'HE PORT AUTHORITY OF THE CTTY OF SAINT PAUL 1�,/.1 : 1. It has been pmposed that the Port Authority of the City of Saint Paul (the "Port Authorit�') issue its Variable Rate Demand Industrial Development Revenue Bonds (Bix Fnrit Company Project) Series 1998A (the "Series A Bonds") and Taxable Variable Rate Demand Industriai Development Revenue Bonds (Bix Fnut Company Project) Series 1998B (the "Series B Bonds" and, together with the Series A Bonds, the `Bonds") in an aggregate principal amount not to exceed $3,175,000 and that the proceeds of such Bonds be loaned to Randy D. Wilcox and Lisa J. Wilcox, individual residents of the State of Minnesota (collectively, the "Borrower") to finance the acquisition, conshuction and equipping of a manufacrixriug, wazehouse and office facility (the "Project") in the City of Saint Paul, Minnesota (the "City'�, to be owned by the Borrower and leased to Bix Fnrit Company, Inc.. 2. The Authority desires to facilitate the selective development of the City of Saint Paul and the metro east couununity, to retain and improve its taac base and to help it provide the range of services and employment opportwuties required by its population, and the Project will assist in achieving that objective by increasing the assessed valuation of fhe metro east community; helping to maintain a positive relarionship between assessed valuation and debt; and enhancing the im�e and reputation of the meuo east community. 3. The Project will result in addifionai employment opporhxnities in the City of Saint Paul and the metro east community. 4. The Authority has been advised by the Borrower that long term conventional, commercial financing to pay the capital cost of the Project is auailable only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced, and that it has been acting to date in anticipation that the Authority would favorably consider this financing pmposal. 5. The Project and its financing has received an allocation of bonding authority from the State of 1vlinnesota Department of Finance. 6. The Authority's Credit Committee and Boazd have previously adopted their Resolutions No. 32 and 3657, respectively giving prelimuiary approval to the proposed issuance of revenue bonds. 7. Pursuant to the requirements of Section 147(fl of the Intemal Revenue Code of 1986, as amended, and pursuant to a notice published by the Port Authority not less than 15 days prior to the public hearing, a public hearing has been held on the date hereof on the issuance of the Bonds, at which public hearing all persons were given an opportunity to speak. 1624034.01 °l�-`y 8. The Bonds will be issued and secured by the terms of an Indenture of Trust (the "Indeniure"� between the Port Authority and Firstar Bank of Minnesota, National Association in Saint Paul, Minnesota (the "Tn�stee") and will be payable primarily from draws made on two itxevocable letteis of credit issued by Firstar Bank Milwaukee, N.P,. (the "Credit Enhancer'� pursuaut to a Letter of Credit Reimbursement Agreement to be dated as of January 1, 1998 (the "Letter of Credit Agreemen�� betw�n the Borrower and Firstar Bank of Minnesota, National Association, an affiliate of the Credit Enhancer (the "Bank'�. 9. The Borrower and the Port Authority will also enter into a Loan Agreement (the "Loan AgeemenP� in which the Borrower will agree to maintain the Letters of Credit and make all payments due either to the Bank or on account of the Bonds. 10. The Bonds and the interest on the Bonds shall be payable solely from the revenue pledged therefor and the Bonds shaJl not constitute a debt of the Port Authority within the meaning of any constitutional or statutory limitation of indebtedness, nor shall the Bonds constitute nor give rise to a pecuniary liability of the Port Authority or the City or a charge against their general credit or taxing powers and shall not constihrte a chazge, lien or encumbrauc�, legal or equitable, upon any properry of the Port Authority or the City other than their interest in said Project. 11. It is intended that interest on the Series A Bonds be excluded from gross income of the holders thereof for federal income tax purposes. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF CONIMISSIONERS OF TI� PORT AUTHORITY OF Tf� CITY OF SAINT PAUL, AS FOLLOWS: A. On the basis of information available to the Port Authority it appears, and the Port Authority hereby finds, that: the Project constitutes properties, used or useful in connection with one or more revenue producing enterprises engaged in any business within the meaning of Minnesota Statutes, Secfions 469.152 to 469.165 (the "AcP'); the Pmject furthers the purposes stated in the Act; and it is in the best interests of the port di strict and the people of the City of Saint Paul and in furtherance of the general plan of development to assist the Barrower in financing the Project. B. For the purpose of financing the Project, and paying certaiu costs of issuance and other expenses in connection with the issuance of the Bonds, and pmvided that the Pmject and its finaucing receive approval by the Deparhnent of Trade and Economic Development ("DTED"), the Port Authority hereby anthorizes the issuance, sale and delivery of the Bonds in an aggregate principal amount not to exceed $3,175,000. Each Series of Bonds shall be in such principal amounts as shall be determined by the President of the Port Authority and Bond Counsel, provided that the aggregate principal amount of Series A Bonds shall not exceed $1,200,000. The Bonds shail bear interest at such rates, shall be numbered, shall be dated, shall inature, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as may be prescribed in the Indenture, substantially in the form now on file in the offices of the Port Authority. C. Neither the Bonds, nor the interest thereon, shall constitute an indebtedness of the Port Authority or the City within the meairing of any constitutional or statutory debt limitation; nor 167A034.01 qf -�y shall they constitute or give rise to a pecuniary liability of the City, the Port Authority or a charge 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 Bonds or interest thereon. D. Forms of the following documents have been submitted to the Port Authority for review andlor approval in connection with the sale, issuance and delivery of the Bonds: 1. the Bond Placement Agreement to be entered into between the Port Authority, the Borrower, Miller & Schroeder Financial, Inc. and Piper Jaffray Inc. (collectively, the "Placement AgenP') (the "Bond Placement AgreemenP'); 2. the Indenture; 3. the Loan Agreement dated as of January l, 1998 to be entered into between the Port Authority and the Borrower; 4, the Bonds; 5. the Preliminary Placement Memorandum to be used in mazketing the Bonds (the "Official Statemenf�; 6. the Remazketing Agreement dated as of January 1, 1998 to be entered into by and between Miller & Schroeder Financial, Inc. (the "Remazketing AgenP') and the Boaower (the "Remarketing AgreemenP�; and 7. the Reimbursement Agreement and forms of the Letters of Credit (collectively, the "Documents"). E. It is hereby found, determined and declazed that: 1. The issuance and sale of the Bonds, the execution and delivery by the Port Authority of the Documents and the performauce of all covenants and agreements of the Port Authority cornained in the Documents, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Documents and the Bonds valid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Sections 469.152 through 469.165, as amended (the "AcP'); 2. It is desirable that the Bonds be issued by the Port Authority upon the general terms set forth in the Documents, as applicable; 3. Under the provisions of and as provided in the Documents, the Bonds 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 Bonds shall ever have the right to compel any exercise by the City or the Port Authority of its taxing powers to pay the Bonds or the interest ox premium thereon, or to enforce payment thereof against any property of the City or the 1624034.01 ��'�� Port Authority except the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bonds shall 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 and the City which have been pledged to the Trustee under the Indenture; the Bonds shall each recite that they are issued without moral obligation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the City or the Port Authority withiu the meaning of any constitutional or statutory limitation. F. The forms of the Documents and e�ibits thereto aze approved substantially in the forms submitted and on file in the offices of Port Authority, with such subsequent changes as may be approved by Port Authority staff and Bond Counsel as contemplated by paragraph H. 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, are 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 pazagraph H, and any other documents and certificates which in the opinion of Port Authority staff and Bond Counsel are necessary to the transaction herein described The execution of any instrument by the appropriate officer or officers of the Port Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transaction herein described by individuals who were at the time of execution thereof the authorized officers of the Port Authority shall bind the Port Authority, notwithstanding that such individuals or any of them has ceased to hold such office or offices prior to the authentication and delivery of the Bonds. Copies of all of the documents necessary to the transaction described shall be delivered, filed and recorded as pmvided herein and in the Indenture. G. The President and other officers of the Port Authority aze authorized and directed to prepaze and fiunish to the Placement Agent and Bond Counsel certified copies of proceedings and records of the Port Authority relating to the issuance of the Bonds and other transactions herein contemplated, and such other affidauits and certificates as may be required to show the facts relating to the legality of the Bonds and the other transactions herein contemplated as such facts appeaz from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the Port Authority as to the truth of all statements contained therein. H. The approval hereby given to the various Documents referred to above includes approval of such additional details therein as may be necessary and appropriate, and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Port Authority's President and Chief Financial Officer; and includes approval of, among other things: 1. establishment of the final principal aznount of the Bonds and the interest rate to be borne thereby for the 'vnitial period; r vid that the maximum aggregate principal amouni of the Series A Bonds shall not exceed $1,200,000, and the maX;mum aggregate principal amount of the Series A Bonds and the Series B Bonds together shall not exceed 1624034.01 �� -�� $3,175,000; and provided further that the maximum interest rate on the Series A Bonds shall not exceed 10.00% per annum, and the maximum interest rate on the Series B Bonds shall not exceed 18.00%; 2. the establishment of the maturity schedule and call provisions to be applicable to ffie Bonds; and 3. such related instruments as may be required to satisfy the conditions of any purchaser of the Bonds. I. The Port Authority hereby consents to the distribution of the Official Statement, as such Official Statement is fusalized with the participation of Port Authority staff and Bond Counsel. The proposal of the Placement Agent to place the Bonds upon the terms and conditions set forth in the Bond Placement Agreement is hereby found and determined to be reasonable and is heTeby accepted. J. The authority to approve, execute and deliver future amendments to financing documents entered into by the Port Authority in connection with the issuance of the Bonds and the other transactions herein contemplated, is hereby delegated to the President of the Port Authority, provided that: (a) such amendments do not require the consent of the holders of the Bonds; (b) such amendments do not materially adversely aff'ect the interests of the Port Authority as the issuer of the Bonds; (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 instnunent by the President of the Port Authority shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. K No covenant, stipulation, obligation or agreement contained herein or in the Documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the Boazd of Commissioners of the Port Authority, or any officer, agent or employee of the Port Authority in that persons individual capacity, and neither the Boazd of Commissioners nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Adopted: January 27, 1998 PORT AUTHORITY OF TF� CITY OF SAINT PAUL By Its Chair ATTEST: By Its Secretary 1624034.01 ° �F'�y. Pmposed City Council Resolution 1.�.1 L : 1. The Port Authority of the City of Saint Paul (the "Authority") has given its appmval to the issuance of up to $3,175,000 of its Variable Rate Demand Indush�ial Development Revenue Bonds (Bix Fnrit Company Project) Series 1998A (the "Series A Bonds") and Taatable Variable Rate Demand Industrial Development Revenue Bonds (Biz Fntit Company Project) Series 1998B (the "Series B Bonds" and, together with the Series A Bonds, the "Bonds"), to finance the costs to be incuned by Randy D. Wilcox and Lisa J. Wilco� individual residents of the State of Minnesota (together, the `Borrower") in connection with the acquisition, construction and equipping of a manufacturing, warehouse and office facility to be located in the City of Saint Paul, Mu�uesota (the "Project") and to be owned by the Borrower and leased to Bix Fnrit Company, Inc.; and 2. Laws of Minnesota 1976, Chapter 234, provades that any issue of revenue bonds authorized by the Authority shall be issued only with the consent of the City Council of the City of Saint Paul, by resolution adopted in accordance with law; and 3. Approval of the issuance of the proposed Bonds by the City Council is also required by Section 147(fl of the Internal Revenue Code of 1986, as amended; and 4. To meet the requirements of both state and federal law, the Port Authority has requested that the City Council gives its requisite approval to the issuance of the proposed Bonds by the Port Authority, subject to final approval of the details of said Bonds by the Port Authority. NOW, THEREFORE, BB IT RESOLVED by the Council of the City of Saint Paul that, in accordance with the requirements of Section 147(� of the Intemal Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Council hereby approves the issuance of the aforesaid Bonds by the Port Authority for the purposes described in the Port Authority resolution adopted January 27, 1998, the exact details of which, including but not limited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of additional bonds aze 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 canying out the purposes for which the aforedescribed Bonds aze issued. Adopted: January 28, 1998 1624034.01 21TY OF THE CITY OF SAINi PAUL �:� �y FAX (612) 223-5198 TOLLFREE(800)328-8417 ,,.,., .,v.�,.,ARK TOWERS • 345 ST. PEfER STREET • ST. PAUL MN 55102-1661 • PHONE (612) 224-5686 Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Hali Annex 25 West Fourth Street St. Paul, Minnesota 55102 ��°� January 20, 1998 RE: $3,175,000 TAX-EXEMPT AND TAXABLE CONDUIT BOND ISSUE RANDY AND LISA WILCOX (BIX FRUIT COMPANY, INC.) .�+'� Dear Ms. el ck: � We submit for your review and referrai to the office of the Mayor, City Council, and City Attorney's office, details pertaining to the issuance of a tax-exempt and taxabie conduit bond issue in the approximate amount of $3,175,000 to finance the construction of a new office and production facility of approximately 63,000 square feet in the Arlington Business Center, St. Paul, Minnesota. The Port Authority has received an industrial revenue bond aflocation from the State of Minnesota Small Issue Pool, as the project is manufacturing. The City of Saint Paul's entitlement allocation will not be affeeted by this application. In addition to the staff memorandum, we are aitaching a draft copy ofi the proposed City Council Res�lution and a copy of the Resolution conducting the required public hearing and authorizing the sale of the revenue bond issue in the amount of $3,175,000 that will be considered by the Port Authority's Board on January 27, 1998. City Council action wil( be required after the Port Authority's Board meeting of January 27, 1998. Your expeditious handling of this matter will be appreciated. KRJ:jmo Attachment cc: Mayor Coleman g:pmklbix-dy Sincerel , �� . Kenneth R. Johnson President ;: <�.. * J(;,d � 1 �:%�$