Missouri Development Finance Board

CHAIR: Marie J. Carmichael MEMBERS: John D. Starr Larry D. Neff John E. Mehner Kelley M. Martin Reuben A. Shelton Patrick J. Lamping Bradley G. Gregory EXECUTIVE DIRECTOR: Robert V. Miserez Missouri Development Finance Board MEETING MINUTES MISSOURI DEVELOPMENT FINANCE BOARD Governor Office Building 200 Madison Street, Room 1010 Jefferson City, Missouri FEBRUARY 21, 2012 EX-OFFICIO MEMBERS: Peter D. Kinder Lieutenant Governor Chris Pieper Acting Director, Economic Development Dr. Jon Hagler Director, Agriculture Sara Pauley Director, Natural Resources The Missouri Development Finance Board met in regular session on Tuesday, February 21, 2012, beginning at 10:30 a.m. Notice of the meeting was duly posted as required by RSMo Section 610.020 at the MDFB principal office. The following members and officers of the Board were present or absent at the meeting as follows: Marie J. Carmichael Chair Present John D. Starr Vice Chairman and Member Absent Larry D. Neff Secretary and Member Present* John E. Mehner Treasurer and Member Present* Kelley M. Martin Member Present Reuben A. Shelton Member Present Patrick J. Lamping Member Present* Bradley G. Gregory Member Present Peter D. Kinder Lieutenant Governor and Member Present* Chris Pieper Director, Dept. of Economic Development and Member Present Jon Hagler Director, Dept. of Agriculture and Member Present* Sara Pauley Director, Dept. of Natural Resources and Member Absent Robert V. Miserez Executive Director and Assistant Secretary Present *Participated via telephone conference call. Chair Carmichael called the meeting to order and declared a quorum was present. In addition to the above, those in attendance included: Board Staff: Board Counsel: Others Present: Krystal Davis, Kimberly Martin, Dawn Holt, Valerie Haller and Ryan Vermette David Queen Bernie Zarda, Premium Waters, Inc.; Matt Roney, Kit Bond Strategies; Hank Bellina, Arco Construction; Dennis Coleman and Mark Brady, St. Louis County Economic Council/St. Louis County Port Authority; Sam Fiorello and Karla Roeber, Donald Danforth Plant Science Center; and Lynne Shea, Missouri Department of Economic Development 200 Madison Street, Suite 1000 P.O. Box 567 Jefferson City, Missouri 65102 Telephone: (573) 751-8479 Fax: (573) 526-4418 Visit our Web site at www.mdfb.org

Chair Carmichael welcomed new Board member Chris Pieper, Acting Director of the Missouri Department of Economic Development. The agenda was rearranged as follows: I. Secretary s Report Secretary Neff Secretary Neff presented for approval the minutes from the January 17, 2012 meeting. The minutes were included in the Board materials distributed in advance of the meeting. There being no questions, corrections or additions, Secretary Neff made a motion to approve the minutes as presented. Member Shelton seconded the motion. The following roll call vote was recorded: Neff, Mehner, Martin, Shelton, Lamping, Gregory, Kinder, Pieper, Hagler and Carmichael II. Treasurer s Report Treasurer Mehner Treasurer Mehner presented for approval the Treasurer s Report as of and for the six months ended December 31, 2011. The Treasurer s Report was included in the Board materials distributed in advance of the meeting. There being no questions, corrections or additions, Treasurer Mehner made a motion to approve the Treasurer s Report as submitted. Secretary Neff seconded the motion. The following roll call vote was recorded: Neff, Mehner, Martin, Shelton, Lamping, Gregory, Kinder, Pieper, Hagler and Carmichael III. Department of Economic Development Report Director Pieper Director Pieper commented he looks forward to working with Board members and staff to continue to work on important economic development projects in the State. 2

IV. Department of Agriculture Report Director Hagler Director Hagler deferred his report. V. Department of Natural Resources Director Pauley This report was deferred. VI. Lieutenant Governor s Report Lt. Governor Kinder Lt. Governor Kinder deferred his report. VIII. New Business A. Premium Waters, Inc. BUILD Application Kimberly Martin Resolution of Intent Ms. Martin presented the BUILD application from Premium Waters, Inc., requesting up to $1,346,300 in BUILD Bonds to assist with the construction of a new facility to be located in Riverside, Missouri. Ms. Martin reported the Company has committed to create 100 new jobs over the next three years and will invest approximately $36 million. Ms. Martin introduced Bernie Zarda with Premium Waters, Inc. Mr. Zarda gave a brief PowerPoint presentation regarding the Company s history and operations. Mr. Zarda reported that the new facility in Riverside, MO, will consolidate its two existing facilities in Kansas City, MO, and Kansas City, KS. Mr. Zarda noted the project consists of creating 100 new jobs, retaining 25 jobs, and creating 75 temporary construction jobs. Mr. Zarda discussed the environmentally conscience building design, site plan, and location plan. Mr. Zarda showed an example production video and was available for questions. Member Martin questioned the Company s water source. Mr. Zarda responded that the Company has three water sources the Missouri American Water Department, natural springs, and a distiller onsite to produce distilled water. Member Martin made a motion to approve the application as submitted and adopt the following Resolution of Intent: RESOLUTION OF THE MISSOURI DEVELOPMENT FINANCE BOARD PRELIMINARILY APPROVING A PROJECT FOR PREMIUM WATERS, INC., AND DETERMINING THE INTENT OF THE BOARD TO ISSUE ITS BUILD MISSOURI REVENUE BONDS IN A PRINCIPAL AMOUNT OF APPROXIMATELY $1,346,300 TO FINANCE A PORTION OF THE COSTS OF THE PROJECT. 3

Member Shelton seconded the motion. The following roll call vote was recorded: Abstain: Neff, Mehner, Martin, Shelton, Lamping, Gregory, Kinder, Pieper and Carmichael Hagler VII. Old Business A. Hoover Universal, Inc. BUILD Kimberly Martin Final Authorizing Resolution Ms. Martin reported the Board preliminarily approved at its January 18, 2011 meeting BUILD Bonds for Hoover Universal, Inc., in an amount not to exceed $1,551,500 for the construction of a 170,000 square foot facility in Riverside, MO, and the purchase of equipment to produce automotive interior products. Ms. Martin reported that all financing terms remain as originally presented, and the Company will add a minimum of 110 new jobs and make an investment of more than $23 million at this location. Staff recommended approval of the Final Authorizing Resolution for Bonds not to exceed $1,551,500. Secretary Neff made a motion to adopt the following Final Authorizing Resolution: RESOLUTION AUTHORIZING THE MISSOURI DEVELOPMENT FINANCE BOARD TO ISSUE ITS BUILD MISSOURI REVENUE BONDS (HOOVER UNIVERSAL, INC. PROJECT), IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $1,551,500 FOR THE PURPOSE OF PROVIDING FUNDS TO MAKE A LOAN TO FINANCE A PORTION OF THE COSTS OF AN ECONOMIC DEVELOPMENT PROJECT FOR THE BENEFIT OF HOOVER UNIVERSAL, INC.; AUTHORIZING AND APPROVING CERTAIN DOCUMENTS IN CONNECTION WITH THE ISSUANCE OF SAID BONDS; AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION WITH THE ISSUANCE OF SAID BONDS. Treasurer Mehner seconded the motion. The following roll call vote was recorded: 4

Neff, Mehner, Martin, Shelton, Lamping, Gregory, Kinder, Pieper, Hagler and Carmichael B. City of Independence Public Infrastructure Bonds and Robert V. Miserez Refunding Bonds Electric Utility Capital Improvements Amendment to Resolution of Intent and Final Authorizing Resolution Mr. Miserez presented the request from the City of Independence to amend the application, Resolution of Intent, and Final Authorizing Resolution for public infrastructure bonds for electric utility capital improvements. The City is requesting another amendment for the electric utility capital improvements projects to include refunding bonds for the Series 2003 refunding bonds that presently have $1,865,000 outstanding. Mr. Miserez reported the City has reached an agreement with Kelson Holdings to purchase 12.3% of the existing natural gas fired electric generating facility in Cass County, MO. Mr. Miserez noted that since the Board adopted the Amending Resolution of Intent in November 2011 for the Dogwood facility acquisition, the City initiated litigation regarding an explosion of a gas turbine at the City s Blue Valley Power Plant. The City is seeking $33 million in damages plus punitive damages. Mr. Miserez reported that repayment is from the City annual appropriation pledge of electric utility revenues and general fund annual appropriation pledge. The City has been increasing electric rates since 2008 and the final approved rate increase will be in 2012. Mr. Miserez noted that an A- rating from Standard & Poor s is expected and the project is a conduit issue with the Board having no repayment obligation. Secretary Neff made a motion to adopt the following Amendment to Resolution of Intent and Final Authorizing Resolution: RESOLUTION AUTHORIZING THE ISSUANCE OF A SERIES OF INFRASTRUCTURE FACILITIES REVENUE BONDS FOR THE BENEFIT OF THE CITY OF INDEPENDENCE, MISSOURI, IN A PRINCIPAL AMOUNT NOT TO EXCEED $62,000,000; AMENDING A PRIOR RESOLUTION OF INTENT AND AUTHORIZING AND APPROVING CERTAIN DOCUMENTS AND ACTIONS IN CONNECTION WITH THE ISSUANCE OF SAID BONDS. Member Martin seconded the motion. The following roll call vote was recorded: 5

Neff, Mehner, Martin, Shelton, Lamping, Gregory, Kinder, Pieper, Hagler and Carmichael C. Shillington Box Company LLC Industrial Revenue Bonds Robert V. Miserez Resolution to Amend Bond Documents Mr. Miserez reported that in November 2011, the Board issued $3,725,154 in revenue bonds for Shillington Box Company LLC. Since that time, the Company has requested that the lender, GE Government Finance, substitute Forest Holdco, LLC as Guarantor, and release the original Guarantor, Forest Resources, LLC. Mr. Miserez reported that the Board is a conduit issuer with no bond repayment obligation. Staff recommended the adoption of the Resolution that authorizes the Board to enter into a First Amendment of Loan Agreement and Release of Guaranty. Member Martin made a motion to adopt the following Amending Resolution: RESOLUTION AUTHORIZING THE MISSOURI DEVELOPMENT FINANCE BOARD TO ENTER INTO A FIRST AMENDMENT TO LOAN AGREEMENT AND RELEASE OF GUARANTY IN CONNECTION WITH THE MODIFICATION OF CERTAIN TERMS RELATED TO THE BOARD S INDUSTRIAL DEVELOPMENT REVENUE BOND (SHILLINGTON BOX COMPANY LLC PROJECT), SERIES 2011; AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION WITH SAID AMENDMENT. Member Gregory seconded the motion. The following roll call vote was recorded: Neff, Mehner, Martin, Shelton, Lamping, Gregory, Kinder, Pieper, Hagler and Carmichael 6

D. 7th Street Garage Bond Debt Payoff Krystal Davis Staff Recommendation to Payoff this Debt Ms. Davis presented the request to approve the redemption of the 7th Street Garage (SSG) $9 million Bond debt. Ms. Davis noted that the bond debt payoff was discussed extensively at the 2011 Board Retreat and at the January 2012 Board meeting. Ms. Davis reported that the debt was privately placed with Pulaski Bank to enable the Board to extend financing for the SSG. Board staff anticipates a savings of approximately $340,000 annually by prepaying the debt before maturity. Ms. Davis noted the Board has the option to call the bonds in whole or in part at any time without penalty with at least 10 days prior written notice to the Bond Trustee. Staff recommended approval of the redemption of the $9 million bond debt. Member Shelton made a motion to approve the redemption and payment of Series 2010A Missouri Development Finance Board Infrastructure Facilities Revenue Bonds incurred to partially fund costs of constructing the Seventh Street Garage in the principal amount of $9,000,000 and accrued interest amount of approximately $32,000, the accrued amount estimated through March 30, 2012, and confirm its intent to fully Satisfy and Discharge bonds under Article XIII of the Bond Trust Indenture dated April 1, 2010. MDFB instructs staff to work with the Bond Trustee to deliver timely notice for redemption on March 30, 2012 and to deliver funds to facilitate the redemption on said date. Secretary Neff seconded the motion. The following roll call vote was recorded: Neff, Mehner, Martin, Shelton, Lamping, Gregory, Kinder, Pieper, Hagler and Carmichael VIII. New Business (cont d) B. St. Louis County Port Authority Donald Danforth Plant Robert V. Miserez Science Center BRDG Park Tax Credit for Contribution Application Mr. Miserez presented the Tax Credit for Contribution application from the St. Louis County Port Authority on behalf of the Donald Danforth Plant Science Center (Center) for $1 million in tax credits to leverage a $2 million contribution to MDFB from Wexford Danforth, LLC. 7

Mr. Miserez gave historical information on the project and noted that in 2008 the Board approved an application from the Port Authority for $2.4 million in credits to develop the Bio-Research Development and Growth (BRDG) Park as a multiphase development at the Center. Mr. Miserez noted that prior to 2008 the Board issued a substantial amount of credits that originally supported the creation of the Center. Mr. Miserez reported that the current request is an expansion of the original project and will provide for additional space to be owned and controlled by the Port Authority under a long-term lease with the Developer. Mr. Miserez noted the item was a preliminary presentation only and that no action would be taken. Mr. Miserez introduced Denny Coleman with the St. Louis County Port Authority. Mr. Coleman began a brief PowerPoint presentation highlighting the institutions and organizations that make up the mid-county plant science cluster, and what is being done at the local level to help finance and incentivize the growth in the cluster. Mr. Coleman introduced Sam Fiorello with the Center. Mr. Fiorello gave historical information on the Center and noted that the Center currently is the largest independent research institute in the world focusing on plant and ag science. Mr. Fiorello discussed the BRDG Park and the need for affordable space in a research-rich, science-based environment. Mr. Fiorello reported on the Tenant Improvement Fund, success of the Fund, and the 2011 signed leases and new tenants of the BRDG Park. Mr. Coleman discussed the request for funding to advance the Tenant Improvement Fund to complete the first phase building of the BRDG Park, which has projected outcomes of three to five new tenant companies and 46 new jobs with an average salary of $80,000. Mr. Coleman thanked the Board for their partnership and support. Mr. Fiorello commented that when all three of the buildings in the BRDG Park are completed, they will encompass approximately 450,000 square feet and provide approximately 1,200 jobs. Mr. Coleman noted that St. Louis County has incentivized the facility through Chapter 100 Bonds which provides tax abatement for the real property. Member Martin questioned if the infrastructure, i.e. streets, sidewalks, sewers, etc., was complete. Mr. Fiorello responded that most are in place; however, as they add incremental buildings they will need to address parking needs and possibly some additional infrastructure. Chair Carmichael thanked the representatives for their presentation. 8

IX. Executive Director s Report Mr. Miserez commented that the legislative session had begun and that Board staff would be tracking specific bills that could affect some of the Board s programs. X. Adjournment There being no further business before the Board, Member Shelton made a motion to adjourn the meeting. Member Martin seconded the motion. With unanimous consensus, Chair Carmichael declared the meeting adjourned. [Secretary Neff s Signature] 9